Asking the Right Questions; J.K. Williams

380 Asking the Right Questions by John K. Williams T he distinguished scholars of the British Royal Academy once were asked why it is that, when a live frog is immersed in a container filled to the brim with water, the water does not overflow. A lengthy and vig 0rous discussion resulted. Rival theories ex plaining this phenomenon were elaborated and analyzed. At long last, however, one member of the Academy filled a beaker with water, lowered a frog into it, and the problem which had so perplexed the scholars was solved. The water did overflow! The asking of a flawed question had spawned countless flawed theo ries! In seeking to understand the freedom philos ophy, it can be helpful to consider not only the vision of a "good society" held by people em bracing this philosophy, but also the subtly dif ferent questions these people ask and seek to answer. Indeed, one helpful way of attracting people to the freedom philosophy is simply to raise the questions that give birth to that philos ophy. Let us consider some examples.

Nearly two and a half millennia ago the Greek philosopher Plato asked a question that he and numerous thinkers after him sought to answer. Putting Plato's question in contempo rary terms, we could phrase it thus: What social structures maximize the good that the best people can do, given that such people exercise political power? The Reverend Dr. John K. Williams has been a teacher and is a freelance writer and lecturer in North Melbourne, Vic toria, Australia. He was resident scholar at FEE from April to October of this year. Plato's answer, elaborated in The Republic, demanded the isolation and rigorous training of a genetically superior group of people he called "the Guardians." They would rule. To ensure that they would not be distracted from their task or open to corruption, both family life and per sonal possessions would be denied them. Such deprivations, however, would be a small price to pay: Freed from emotional ties and the desire to accrue wealth, they could devote themselves to the contemplation of truth and goodness.

Knowing the truth, and loving the good, they would be fit to govern. 1 Throughout the ages, many variants of Plato's question have been asked, and diverse answers given. • Jean Jacques Rousseau in France dreamed of rule by men with privileged access to what he called "the general will" of a community-a "will" wiser and more beneficent than any individual's will or any group of individual wills. • The "Radical Tories" of early nineteenth century Britain advocated rule by an aris tocratic elite, whose financial security and refined tastes would lift them above self interest and enable them to steer a nation in directions benefiting all.2 • Karl Marx depicted rule by class-con scious workers and a liberated intelli gentsia: Understanding that the ultimate goal of human history is the creation of a post-market, stateless society in which "class war" would be no more, their tem porary dictatorial rule would lead to the truly "good" society.

Aristotle's Question Yet a question raised by the great successor of Plato, Aristotle, has long haunted philoso phers: Who guards the guardians? Plato, of course, would have dismissed the question. It assumes that the Guardians need to be guarded, whereas in truth the Guardians are so wise and so good that no safeguards are needed. That confidence, however, Aristotle did not share. Neither did the classical liberals, the thinkers upon whose shoulders contemporary advocates of the freedom philosophy stand. They thus asked a very different question to that posed by Plato and his successors. ,'How, " asked the classical liberals, ' 'can men and women organize political life so that, should the least morally admirable members of a community acquire political power, the damage they could do would be minimized?" They did not assume that such people would gain power. But suppose they did. The point can be made another way. Oppo nents of classical liberalism shared a belief in human perfectibility. 3 They asserted that at some point in time a superior class would exist which would be free from the flaws of most human beings. This class would be fit to rule.

This belief was rejected by the classical lib erals. Writing in 1881 to Mary Gladstone, Lord Acton gave succinct expression to this view point: "The danger is not," he wrote, "that a particular class is unfit to govern. Every class is unfit to govern."4 Why? Because all human beings are finite and fallible. Hence, the classical liberals' vision of the role of government. That role is no less and no more the protection of the equal liberty-the equal rights-of all. All men and women are to be free to fonnulate their own peaceful.visions of the "good life" and to strive to make those visions a reality. No man or woman, no group of people-even the majority-is to be en trusted with the power coercively to "correct" the hopes and dreams of their fellows. The corollary to this is economic freedom. In the absence of omniscience-complete and perfect knowledge-the centrally planned, so cialist economy is a fantasy. No planners, how ever intelligent, could even begin to list the di verse and changing needs of the millions of human beings making up a modem nation, or somehow collate and synthesize all the informa tion diffused among these millions of people.

Edmund Opitz once summarized the key po litical precept of the freedom philosophy: "Never give to a friend in government power you would not willingly cede to an enemy in government. " And that precept is born of the question first raised. Instead of asking, "What politico-economic structures maximize the good that the best can do, assuming that the best enjoy political power?" we should ask, "What politico-economic structures minimize 381 the evil that the worst could do, were they to enjoy political power?" Means and Ends Typically, opponents of the freedom philos ophy believe themselves to be in possession of a detailed pattern to which a truly "just" so ciety must conform. They know what distribu tion of wealth is fair. They know how men and women should use their property. They possess a blueprint for perfection, or at least near per fection. Recent philosophers have called this view of "justice" the "end-pattern" understanding of justice. 5 The justice of a society is measured by the extent to which that society corresponds to the ideal pattern or blueprint.

The classical liberals, rather than asking what rules or laws make such outcomes pos sible, asked questions about rules and laws themselves. In large part this was born of their skepticism that any person or group of people is in posses sion of a detailed blueprint for a perfectly "just" society. Yet a further insight led them to raise the questions they did. Suppose one decides that in a "just" so ciety, great disparities of wealth should not exist. To achieve this end, wealth must be transferred from rich to poor. Clearly, a rule specifying two groups of people-the "rich" and the "poor" - is required, and institutions must be created to effect the transfer. Consider this rule in more general terms: Wealth shall be taken from group X and trans ferred to group Y. Given such a rule, and given the institutions making its enforcement pos sible, an obvious problem emerges. Who is to determine the identity of group X and group Y?

Clearly, those in political power. Why should we assume, however, that these people will de cide that group X shall be "the rich" and group Y shall be "the poor"? Why not a rule trans ferring wealth from the elderly to the young? From people of Jewish descent to Gentiles? In deed, why not from the poor to the rich? Every thing turns upon who happens to enjoy political power! Considerable evidence has been gathered by public choice theorists for saying that the mo382 THE FREEMAN. OCTOBER 1987 ment we accept rules discriminating between various groups in a community, wealth is in variably distributed from unorganized, infor mation-poor individuals and groups to well-or ganized, information-rich special interest groups.6 The ideal situation, from a politician's point of view, is to distribute wealth from people who do not know what they are paying to people who know precisely what they are re ceiving.

To use an example from Australia, high tariffs on textiles and clothing achieve just such an outcome. The owners of textile and clothing companies know precisely how such tariffs benefit them, as do unions involved in these in dustries. But most Australians have no idea that the tariffs cost the average Australian family some $900 a year. The politicians imposing the tariff alienate few of those who lose but are guaranteed the support of those who win. Thus is born the politics of the jungle. Politi cians carefully calculate. how many special in terest groups they must reward to be elected. These special interest groups shove their way to the government trough, utterly indifferent to the least organized, least politically significant members of society. And the entire sordid ex ercise is possible because rules discriminating between different sets of people are deemed proper! The classical liberals saw one and only one way to avoid this state of affairs. They insisted upon the Rule of Law-and they defined law very carefully. They did not identify the Rule of Law with rule by any edict passed by repre sentatives of the majority. Rather, they insisted that rule must be by general principles of just conduct, equally applicable to all people, in an unknown number of future instances.7 Consider a law against murder. It applies to all. It is irrelevant to ask to what ethnic, finan cial, religious, or other group a murderer be longs. Justice is blindfolded. When such a law was passed, it was impossible to predict in ad vance what persons would run afoul of the law.

Compare a government which passes a rule imposing a wealth tax. It is perfectly clear when the rule is passed just who will be af fected by it, and what reordering of the com munity will result. Two very different understandings of justice have emerged. The first focuses upon some ideal pattern, the "justice" or "injustice" of a society being measured by its conformity to that pattern. The question to be asked is what rules and institutions enforcing these rules are needed to achieve conformity to the pattern. The second meaning of justice focuses upon the form of the rules which govern a society. The question asked is whether those rules are laws classically defined-general rules equally applicable to all in an unknown number of fu ture instances-or edicts which single out par ticular groups, awarding them special privi leges or condemning them to carry special burdens. Once again, the question asked is all important!

The Problem of Poverty or the Problem of Wealth In thinking about the different questions people ask, it is worth noting that questions often arise when people are confronted by the unusual or the unfamiliar. A bird in flight occa sions no bewilderment; a man flapping his arms in full flight would. Today the big question asked by men and women anxious to solve the problem of poverty is, "Why poverty?" The question is legitimate. Yet I suggest that the intensity and frequency with which the question is asked indicates that poverty is perceived as the puzzling exception to the normal state of affairs. That abundance-material plenty-is taken for granted is perfectly understandable. Those of us living in relatively free-market economies have always known supermarkets with bulging freezers and groaning shelves. Yet, histori cally, the abundance we assume has been the exception rather than the rule. The life of all but a handful of men, women, and children who have walked this planet has been an unre lenting struggle for the material goods bare sur vival demands.

Two economic historians recently described historical reality by noting that the "economic lives of our ancestors . . . [were] of almost unrelieved wretchedness. The typical human society has given only a small number of people a humane existence, while the great majority have lived in abysmal squalor. We are led to forget the domineering misery of other times in part by the grace of literature, poetry, romance, and legend, which celebrate those who lived well and forget those who lived in the silence of poverty. The eras of misery have been mythologized and may even be remem bered as golden ages of pastoral simplicity. They were not." 8 The ex-Marxian French historian, Fernand Braudel, has authored a superb three-volume study, Civilization and Capitalism: 15th-18th Century. 9 It constitutes an antidote to the ro manticizing of humanity's economic past. As Braudel so devastatingly documents, Eu ropean nations from the fourteenth century until the eighteenth century were caught in what is sometimes called a "Malthusian trap." Fre quently, communities increased their produc tive outputs, technological innovations leading to more plenteous crops. That, if you like, was the "good news." The outcome, however, was an increase in life expectancy. There were more mouths to feed. The rate at which popula tion increased was greater than the rate at which economic growth occurred. In a few years, people were back where they had started.

Economic Escape Then something unprecedented happened. In sixteenth-century England and the Netherlands, economic growth became a reality. More food, for example, began to be produced. The popu lation of these two nations began to increase. So far, so familiar. But then came the historical shocker. As the population increased, eco nomic growth continued at a rate surpassing the population growth. Fewer children died. Life expectancy began to climb. Two nations actu ally had escaped the Malthusian trap! The economic lot of surrounding nations en joying equal or greater supplies of natural re sources and an equal or greater percentage of arable land remained as it always had been. Neither England nor the Netherlands was in possession of some new technological process. Nor could this marvel be ascribed to the acqui sition of colonies. For no obvious reason, six teenth-century England and the Netherlands ASKING THE RIGHT QUESTIONS 383 were beginning to experience the abundance we today take for granted. Why there? Why then?

The questions seemed unanswerable. At long last economic historians, particularly Fernand Braudel and another ex-Marxian French historian, Jean Baechler, have thrown light on these questions.10 In the sixteenth cen tury, England and the Netherlands indepen dently witnessed the birth of a new system of property rights, a system approximating what we today call private property rights. The legal and political structures defining and enforcing this system were taking form. And the specters of recurrent famine and destitution began to re treat. This system-private property rights-is the key to understanding a free market economy. Voluntary exchanges of goods and services are as old as human history. Markets where such exchanges can take place are not new Jerusalem of biblical days was a market city, as were all the great ancient cities. Private prop erty in a limited sense obtained before the emergence of the free market economy, being one of the few constants of human history. The notion that primitive peoples rejected the con cept of private property defies all available evi dence. For example, prior to the coming of white settlers, the natives of South Africa took private property for granted, even though, not surprisingly, different tribes had different rules as to what sort of property could be privately owned. 11 What is unique to the system of private prop erty rights at the heart of the free market economy is (1) the extension of private owner ship from some goods to virtually all goods, (2) the extension of the right to property from some class or caste of people to all people, and (3) the efficient enforcement of private property rights by governments. Do not misunderstand me: The system of private property rights which emerged in sixteenth-century England and the Netherlands did not display these fea tures in their fully developed form. But even if only embryonically present, the free market economy, and its handmaiden of limited gov ernment, began to grow.

Given that private property rights are funda mental to the operation of a market economy, 384 THE FREEMAN. OCTOBER 1987 the distinction between production and distri bution collapses. Admittedly, that may sound strange at first hearing. After all, did not even John Stuart Mill make the distinction? In the first chapter of Book II of his Principles of Po litical Economy Mill writes: The laws and conditions of the production of wealth partake of the character of physical truths. There is nothing optional or arbitrary in them. . . . [I]t is not so with the distribu tion of wealth. That is a matter of human in stitution solely. The things once there, man kind, individually or collectively, can do with them as they like. 12 The point is that the phrase, "the things once there" is incomplete. What is "there," so to speak, are owned things. At every stage of the productive process, what exists is owned, from machinery through raw materials through par tially completed goods to the final product. To speak of a distribution of wealth that somehow is distinct from the production of that wealth is to make the absurd statement that, at the end of the productive process, there is a huge pile of unowned goods.

Such thinkers as Adam Smith, Carl Menger, Ludwig von Mises, and Friedrich Hayek, to name just a few, have shown us how any at tempt to redistribute wealth disrupts the pro ductive process, so that the creation of wealth declines. But even in a hampered market, pro duction goes on. The United States continues to produce wealth even though the operation of the market has been sadly fettered. However, resources, particularly labor, are increasingly misallocated. The decisions of men and women whether to buy or to refrain from buying, to consume or to save, to invest in one industry or another, are more and more influenced by po litical decisions, rather than by price signals through the market. When people owning some good find that their liberty to peacefully use or dispose of that good is curtailed, they "own" that good in a very attenuated sense. An element of uncer tainty is introduced that affects people's deci sions and the productive process. Add to that what many of us perceive as the sheer immo rality of transgressing an individual's property rights, and a most disturbing state of affairs has been created. And all this is ultimately bred by confused thinking which separates the produc tive process of the market from the allocation of goods and services it creates.

Summary Let me summarize my three main points: • Ask not how to maximize the good that the best people can do with political power. Ask rather what economic and political structures minimize the evil that the worst people can do, were they to achieve polit ical power. • Ask not what laws are needed to impose upon a people some blueprint of an alleg edly "just" society. Ask rather what limi tations upon the law are needed if tyranny is to be avoided. • Ask not how wealth is to be distributed. Ask rather how it was that a world which hitherto had known only destitution sud denly witnessed the birth of nations where abundance prevailed; and, how what these nations learned can be used for the enrich ment of humanity and thus to the glory of God. 0 1. For a useful commentary on The Republic see Cross, R., and Woozley, A., Plato's Republic: A Philosophical Commentary (New York: St. Martin's Press, 1966).

2. A fascinating account of the "Tory radical" mentality is pro vided by Driver, C., Tory Radical: The Life of Richard Chandler (New York: Octagon, 1970). 3. See Passmore, J., The Perfectibility of Man (New York: Charles Scribner's Sons, 1970). 4. Cited in Green, J., The Cynic's Lexicon (New York: St. Martin's Press, 1984), p. 1. 5. Cf. Nozick, R., Anarchy, State and Utopia (Oxford: Basil Blackwell, 1974). Cf. Lucas, J., On Justice (Oxford: Oxford Uni versity Press, 1980). 6. Buchanan, J. and Tollison, R. (eds.), Theory ofPublic Choice: Political Applications of Economics (Ann Arbor: University of Michigan Press, 1972); Borcherding, T. (ed.), Budgets and Bureau crats: The Sources of Government Growth (Durham, NC: Duke University Press, 1977). 7. Hayek, F., Law, Legislation and Liberty, Vol. I (Rules and Order) and Vol. II (The Mirage of Social Justice) (Chicago: Chi cago University Press, 1973 and 1976). Cf. Dietze, G., Two Con cepts of the Rule of Law (Indianapolis: Liberty Fund, 1973).

8. Rosenberg, N. and Birdzell, L., How the West Grew Rich: The Economic Transformation of the Industrial World (New York: Basic Books, 1986), p. 3. 9. Braudel, F., Civilization and Capitalism: 15th-18th Century, three volumes, trans. S. Reynolds (New York: Harper and Row, 1984). 10. Baechler, J., The Origins of Capitalism, trans. by B. Cooper (Oxford: Basil Blackwell, 1975). 11. See Louw, L. and Kendall, F., South Africa: The Solution (Bisho: Amagi Publications, 1986), pp. 3-17. 12. Mill, J. S., Principles of Political Economy, seventh edition (New York: Kelly, reprinted 1979), p. 200.