Human Nature, Anarchy, and Capitalism
© Kelley L. Ross, Ph.D., , March 27, 1998
Human Nature, Anarchy, and Capitalism
Liberty or Freedom is not, as the origin of the name may seem to imply, an exemption from all restraints, but rather the most effectual applications of every just restraint to all members of a free society whether they be magistrates or subjects.
Since I became persuaded of Classical Liberal (i.e. libertarian) ideas, something I have encountered frequently is the objection that these principles are unrealistic because they do not take human nature into account. Libertarianism, it seems, is based on the idea that people are intrinsically good, so that they can be trusted to treat each other well under conditions of complete freedom. Since people are not intrinsically good, they cannot be trusted with anything like complete freedom.
In 1992, when I announced my political conversion to my friends, one answer I got was the following statement, of December 1, 1992, from John Olmsted, whom I had then known for 23 years. John and his wife Eileen had helped look after my University of California group at the American University of Beirut in Lebanon, 1969-70. He is now a professor chemistry at California State University, Fullerton.
My philosophical objection to libertarian ideas is that they start from the premise that, in the absence of a political/social fabric, everything will work out for the best. It just doesn't work that way. Life in a libertarian world is, for the most part, nasty, brutish, and short. (If you don't believe that, move to...Yugoslavia, or Lebanon, or Somalia, or.... for awhile).
In a similar vein, as recently as February 2, 1997, I had an e-mail exchange with Kees W. Bolle, who was a professor of the history of religion at UCLA until his retirement, the author of The Freedom of Man in Myth [Vanderbilt University Press, 1968], and one of the members of my wife's dissertation committee. I have great respect and liking for Kees; nevertheless, we discovered that we disagreed about politics. Kees wrote:
Now I understand why Libertarianism is spelled with a capital. I wonder how it relates to religious experience. Serious. Or for that matter to the experience of greed on a very elementary level, as a characteristic of human beings.
Of course, "Libertarian" is only spelled with a capital letter to refer to the Libertarian Party, as "Democratic" is spelled with a capital letter to refer to the Democratic Party. I spell "Classical Liberal" here with capital letters because it is the proper name of a now unfamiliar school of thought, the heritage of Adam Smith, John Stuart Mill, and others, and thus requires some emphasis. But, more substantively, Kees's objection seems to be that libertarian principles are conceivable only in the absence of an "experience of greed on a very elementary level, as a characteristic of human beings." Hence, as John said, we must take into account that "people are no damn good."
I quote John and Kees because they are intelligent, learned, informed people, but not specialists in economics or political science. I take their views therefore as representive of much educated opinion in the United States. It is they, more than the specialists, who must be answered and persuaded if the mythology of the New Deal and the welfare state is to be exploded. At the same time, their misconceptions are similar to those of recognized scholars. Thus, the Pulitzer Prize winning U.S. historian Richard Hofstadter (1916-1970) said, in The American Political Tradition (1948), speaking of the American Founders:
They thought man was a creature of rapacious self-interest, and yet they wanted him to be free--free, in essence, to contend, to engage in an umpired strife, to use property to get property. They accepted the mercantile image of life as an external battleground, and assumed the Hobbesian war of each against all.
The reference to Hobbes is, as we shall see, characteristic in this debate. Hofstadter was typical of a school of historians who rejected Jacksonian Democracy because it was anti-intellectual and shunned the rule of the "best" that had been the promise of Federalism, or even of Jeffersonianism. I had a history professor at UCLA who paradoxically contended that the Jacksonian regime was even less "democratic" than what came before, because in so popular and vulgar a government, people did not know their own true interests well enough. The implication of the quote by Hofstadter is that raging self-interest, the Hobbesian war, is really inconsistency with freedom; and the implication of all the anti-Jacksonian historians is that people are better ruled by an intellectual elite who know their "true" interests and who do not allow them too much freedom to exploit each other. Thus, as with John, "people are no damn good."
I was reminded of John and Kees's kind of objection to libertarianism through an article in The Independent Review, A Journal of Political Economy, Volume II, Number 1, Summer 1997 (published by the Independent Institute), "Wreaking Hobbes on Mankind," by Philip Coates (pp. 109-116). Coates sees the falling away from Classical Liberal principles by people like John Gray and Robert Nozick as a consequence of their taking Thomas Hobbes's view of human nature too seriously. Hobbes, indeed, is very far from believing that people are intrinsically good or that they can be trusted to treat each other well under conditions of complete freedom (the "state of nature"). For Hobbes, freedom is granted at the discretion of the Sovereign only to the extent consistent with good public order, since that was sole real purpose of government in any case, to end the war of all against all (bellum omnium contra omnes) in the state of nature, where life was always "nasty, brutish, and short" (a famous phrase, invoked by John above). Gray and Nozick, consequently, seem to have been moved by the arguments that imperfect human nature is not consistent with libertarian principles.
Philip Coates himself argues that Hobbes's view of human nature was simply falsified by events and that Gray and Nozick have failed to note the historical sequel to the context of Hobbes's work. The English Civil War, which certainly looked like a war of all against all, and motivated many to wish for strong government just to end all the trouble, gave way to peace, but a peace based, not on absolute monarchy, but on a Liberal order where, in 1689, William and Mary accepted the principle of constitutional monarchy and granted the English "Bill of Rights" (the "Claim of Rights" in Scotland). This achievement, so durable that Edmund Burke could use it as the basis of a conservative ideology, was immortally described and celebrated by John Locke in his Second Treatise of Civil Government of 1690, unintentionally laying down the foundations for the American Revolution.
Coates's argument is fine as far as it goes, but it actually was not the view that motivated John Locke or the architects of the American Revolution and the United States Constitution. The irony of the viewpoint of John Olmsted and Kees Bolle above, or of Gray and Nozick, is that the Classical Liberal order itself used to be seen as justified precisely by the very imperfections of human nature which now are thought to turn against it; for the classical thinkers were the most acutely aware of something that more recent people seem to have forgotten:
Thus, in his "Farewell Address" of 1796, George Washington warned:
The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create whatever the form of government, a real despotism. A just estimate of the love of power, and proneness to abuse it, which predominates in the human heart is sufficient to satisfy us of the truth of this proposition.
Similarly, Thomas Jefferson (Notes on Virginia, 1784) warned:
Mankind soon learn to make interested uses of every right and power which they possess, or may assume. The public money and public liberty...will soon be discovered to be sources of wealth and dominion to those who hold them; distinguished, too, by this tempting circumstance, that they are the instrument, as well as the object of acquisition.
And, in his Autobiography:
It is not enough that honest men are appointed Judges. All know the influence of interest on the mind of man, and how unconsciously his judgment is warped by that influence.
The fear of these men was not first of all the damage that free men could do in private life, but the great damage, the tyranny, that could be done when fallible men are given too much power through the reins of government. This principle was stated most succinctly by Lord Acton (John Emerich Edward Dalberg Acton, 1834-1902):
Now, it is clear that John Olmsted is aware of this problem. The passage above ends with him saying, "When the corollary [might makes right] becomes ascendant, the First Law [people are no damn good] guarantees a bad outcome." This, however, only acknowledges that "absolute power corrupts absolutely" and brushes over the implications of "power tends to corrupt" in conjunction with the same "First Law." The error of this omission is then compounded by the manner in which John evidently confuses libertarian or "minimalist government" with the anarchy of Hobbes's "state of nature"--an "absence of a political/social fabric," where life becomes nasty, brutish, and short.
There are, indeed, libertarian anarchists, and it is even possible to argue that John Locke's own principles make it difficult to avoid anarchy. On the other hand, neither Locke, nor Smith, nor Washington, nor Jefferson, nor Mill, nor F.A. Hayek, nor even Ayn Rand were anarchists. To them "minimalist government" meant, indeed, government; and such a government needed to exercise maximal power but only for certain purposes, as never expressed better than by Jefferson himself, in his First Inaugural Address of 1801:
Still one thing more, fellow citizens -- a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.
"Which shall restrain men from injuring one another," seems to rule out the chaos of "Yugoslavia, or Lebanon, or Somalia." Locke himself saw the institution of government as necessary to protect rights, especially property rights, that no one would be well able to defend in the state of nature. If Classical Liberal principles are indeed about abolishing rather than preserving the disabilities of the state of nature, with a sharp eye to the dangers of trusting too much power into the fallible, interested, greedy human hands of those in government, then the objections of John and Kees, and perhaps of Gray and Nozick, are answered. The confusion of Hofstadter is also revealed; for, far from, "assumed the Hobbesian war of each against all," the Founders saw government as the negation of anything like the Hobbesian war (which they didn't believe in anyway, since they saw the state of nature in Lockean, not Hobbesian, terms). They saw that too powerful a government would actually create a "war of all against all," by which politicians and interest groups profit from the corruption of government power. Of course, this is all very different if any of these people do not really accuse libertarianism of advocating anarchy but simply of advocating capitalism.
"Greed," after all, is a trendy buzzword to refer to profit, corporations, and the rich. A façade of concerns about human nature, etc., may really conceal implied criticisms of the free market, capital accumulation, and private property. Admitting such criticisms, however, would move the argument over to very different kinds of considerations. Is there an "invisible hand" that produces public goods out of private interests under the conditions of voluntary exchange in the free market? Or does capital exploit labor? Trendy leftist opinion has nothing but contempt for the "invisible hand," and in the same context the principle that capital exploits labor virtually has the status of a self-evident truth. On the other hand, since the fall of Communism, the failure of economic development in command-economy Third World countries, and the stagnation and high unemployment of socialist European economies, overt attacks on capitalism now sound anachronistic and foolish: They are usually only found at the fringe of leftist politics, even though the mainstream politics even of the Democratic Party still relies heavily on implicit anti-capitalist principles. The result is a great deal of confusion and cross purposes in political debate.
That is just the problem when answering accusations that libertarianism is somehow naive about human nature. The real argument is not about human nature, as we have seen (with those who hope for the "best" in government to restrain the greed of all the rest of us coming off as the naive ones), but about the nature of a market economy. The answer, however, will necessarily be similar. If the wealthy are thought to be greedy and so morally unworthy, are thought to have illegitimately acquired their wealth (through theft or exploitation), are thought to put their wealth to selfish and socially useless purposes, then it is clear that this wealth must be "redistributed" to produce more social good and create less "inequality of income." The problem with this we already see in Adam Smith [The Wealth of Nations, p. 423]:
The statesman who should attempt to direct people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.
"Could safely be trusted," is the key phrase; for it reveals that Smith's concern is the same as that of any other classical thinker about the power of government. Government not only has a more secure monopoly than Standard Oil ever had, but it secures that monopoly by the force of arms. To be free of the government's monopoly, one must leave the country. You cannot simply refuse to deal with it, or start a competing business, without men with guns (the police) showing up to force you to deal or to physically destroy the competition you represent.
When government is entrusted with the "redistribution" of wealth, no one should be surprised that the wealth straightaway is used to buy votes, to reward interest groups, to bribe constituencies, and to pay off friends. In terms of the growth of wealth and improvement of human life, these are all wasted uses. The situation is even worse when the money is borrowed or printed rather than taxed: The borrowed money must be taxed or printed eventually, while the printed money is simply stolen, by creating an artificial price inflation, from those who hold monetary assets (less likely to be the rich, whose assets are varied, than the poor and middle classes). These are all the stigmata of the greed and irresponsibility that afflicts those in power who have been given too much power, and especially a degree of power over wealth and property that is a virtual blank check for corruption.
Some people accept this corruption because they are deceived by the moralistic rhetoric that accompanies it (that the "self-interest" of the rich is replaced by the "public spirit" of the politicians); but it is more likely that the rhetoric is waved through more because people are satisfied with their share of the loot. As long as I get my "benefits" (Social Security, Medicare, etc.), then government must be doing a good job. Or, if "programs" exist to end or alleviate poverty, then we can congratulate ourselves on our own benevolence and compassion, as expressed through the "collective" action of government.
That anyone running a private pension plan the same way that Social Security is run would get arrested for fraud hardly gets mentioned in public discourse. That "anti-poverty programs" usually promote habits that perpetuate people in poverty rather than "lift" them out of it is something that occasionally gets said in public, but then the poor soul who dares to say that is usually mercilessly attacked and ridiculed by people who have never had anything to do with the creation of wealth or of jobs--but who mostly think that ending poverty simply means handing out money (or of requiring someone else to do the hiring).
The defense of capitalism, therefore, even without appeal to purely economic truths, can proceed in the same manner as the defense of limited government before the forms of economic life even became an issue. Distrust of human nature but trust in government betrays an incoherence whose bitter fruit is necessarily corruption and tyranny, however lofty and deceptive the rhetoric by which power always masks and rationalizes itself.
Copyright (c) 1997, 1998 Kelley L. Ross, Ph.D. All Rights Reserved
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