Anthony de Jasay is one of the few genuinely original thinkers in contemporary political philosophy. Like James Buchanan, he begins from the public-choice approach. Unlike his eminent colleague, he endorses full laissez-faire.
To do so, he must confront a formidable obstacle. Most members of the public choice school contend that a state is necessary: they view libertarian anarchists such as Murray Rothbard as idle dreamers. The starting point of the school is self-interested rational actors. All social institutions, the school holds, must be explained in terms of individuals’ choices.
Absent a state, why would I ever keep an agreement I had made with you to do something for you in the future, in return for your present payment? A familiar argument from game theory shows that in many circumstances, defection pays. Only an external agency of coercion, the state, can enable a system of social cooperation to get off the ground.
Against this popular view, Mr. de Jasay deploys an ingenious argument. If we cannot trust rational individuals to keep their agreements, why should we trust the state to exercise its job of enforcement as rational actors intend? The agents of the state are themselves self-interested actors, no more altruistic than anyone else.
“It is crucial to the understanding of the putative resolution of the dilemma of contract [by an external agent].” Mr. de Jasay writes, “that while an enforcing agent can, under certain conditions, enable the parties to pass from n-person non-cooperative to (conflictually) cooperative games by entering into binding commitments, the interaction between the agent and either party remains a two-person non-cooperative game. Nothing proves the possibility of a binding contract between the parties and enforcing agent; there is no meta-agent that could, and would, enforce this contract” (pp. 18-19).
I have included this long quotation to give readers a taste of Mr. de Jasay’s style. He is a rigorous thinker, whose work demands close attention. And it appears that our author will have to exercise all his rigor and ingenuity to extricate himself from a predicament. Most public-choice theorists, to reiterate, argue that a state is needed to enforce contracts. Mr. de Jasay argues that a state will not solve the difficulty: an agreement to form a state will give rise to the same problems its establishment was supposed to resolve.
Has not our author printed himself into a corner? If individuals cannot enter into enforceable contracts, and the state cannot do so either, what is left? Are rational actors doomed to a Hobbesian war of all against all?
Our author discovers an escape. It is the initial argument of the public-choicers that is at fault. Contrary to James Buchanan and many lesser eminences, it is sometimes rational for self-interested agents to enter into binding contracts, and to keep them, without the aid of an external agent. No state is needed to generate law enforcement and other public goods.
How can this be? The argument to the contrary appears ironclad. Suppose I offer to trade you one of my apples for one of your oranges. Should you be dense enough to fork over your orange, why should I now give up my apple? If I do not, I shall have both an apple and an orange.
You, of course, are in fact no such dolt as our conjecture supposes. You realize what will happen and do not surrender your orange. Thus, no exchange at all takes place, even though, by hypothesis, each of us would have been better off had we been able to carry through this simple act of barter. For supposedly rational agents, we have not done very well. But how is the dilemma to be escaped?
Mr. de Jasay maintains that the argument just given errs by taking bargains one at a time. True enough, if only one exchange between two persons takes place, it will be rational for each to violate the terms of an agreement to exchange goods.
Take the money and run! You won’t be seeing your trading partner again. If, however, we do not confine our attention to single exchanges, “one-shot prisoner’s dilemmas” as the trade jargon has it, the situation looks entirely different. If you think it likely that you will be involved in a series of exchanges with someone, then it is indeed rational for you to keep your promises. If you do not, others will not make contracts with you in the future. The “rational” contractors we have imagined, who always find promise-breaking in their interest, are in fact short-sighted.
Further, if it is rational to keep bargains, why do we need a state? Our author’s earlier argument has shown that if agreements cannot be enforced, the state cannot help: his new argument shows that one does not need a state to enforce contracts. Why then establish one? It is either unneeded or futile. (Of course, if one is established through agreement, de Jasay’s second argument seems to show that this agreement can also be kept.)
I am inclined to believe, but am not at all sure, that Mr. de Jasay’s argument that the state is superfluous is correct, on the assumptions he sets forward. It all depends, it seems to me, on what view one takes about the force of the backward induction paradox under uncertainty. Fortunately for readers, I am not going to explain this, in large measure because I doubt my own grasp of the issues. Suffice it to say that, given his starting point, Mr. de Jasay makes a good case.
But is his starting point the best one to adopt? Mr. de Jasay attempts to derive all human institutions, to reiterate, from the behavior of rational self-interested actors. In particular, ethical principles, on this view, are not true in themselves: they must be derived from self-interested behavior that does not presuppose them.
If, then, I do not steal your wallet, I refrain not because I see that theft is intrinsically wrong. Rather, I see that it is in my self-interest to bind myself to a rule against theft, provided that enough others do the same.
This view rests squarely on ethical skepticism. If ethical principles are true, then the question of belief does not depend on self-interest. Just as I believe that “2+2=4” because I see that it is true, so, I should contend, I accept “theft is wrong” because I see that it is true.
Mr. de Jasay rejects this sort of ethical rationalism. In his view, no interpersonal agreement can be reached on “value judgments.” We can ask whether value judgments are consistent; but the individual value judgment, as such, is incapable of being assessed by reason. “It is perfectly possible for me to share your value judgments, but it is never intersubjectively compelling for you to share mine, never a matter of straight practical inference, and never a bow to the rules of rationality” (pp. 70-71).
Mr. de Jasay’s skepticism appears to land him in another predicament. He strongly supports the free market; but on his own view of ethics, why should anyone with value judgments of a different kind from his care about this? If I have authoritarian value judgments, why should I not try to impose them on Mr. de Jasay? From an objective point of view, these value judgments are no better, and no worse, than his own.
As you might expect, Mr. de Jasay has an ingenious response. In a situation where value judgments clash, we should adopt a position of “moral minimalism.” Is it not reasonable to assume that we should be free to act as we like, provided that I harm no one else? If I do not care for Mr. de Jasay’s writing style, the burden of proof is on me to show that he must change it. If I cannot do so, he is free to write as he wishes.
I cannot think that this proposal solves the difficulty posed by conflicting value judgments. Let us grant him his premise that you are at liberty to do something unless it can be shown that you are required not to do it. It does follow that you have a liberty-right to perform the act in question. That supposes that everyone else has an obligation not to interfere with you. And to show this requires showing that their liberties may be restricted. At most, our author shows that while absent argument to the contrary, I am free to act as I like, others are also free to try to stop me. That may be acting as they like.
Agree with him or not, one can always learn a great deal from the work of Anthony de Jasay. As Mr. N. Stephan Kinsella has noted, Mr. de Jasay is a master of criticism; perusers of his essays on Karl Popper and F.A. Hayek in this collection will encounter a polemicist of formidable gifts. Let us hope he does not see this review: if he does, I am in for it.