William Irwin's effort to marry a market ethos to existentialism offers lessons about the necessity of grounding free exchange in a moral code.
Free choice or coercive government policy? Antony Davies and James R. Harrigan address this question in their new book, Cooperation and Coercion: How Busybodies Became Busybullies and What That Means for Economics and Politics. They bring a unique blend of philosophy and economic thinking to what might be the most pressing issues of our world today: debt, power, and a culture of bullies. This interdisciplinary lens, which is what they are known for, proves valuable as we consider the ramifications of a busybody society on economic, political, and social institutions.
Free Choice and Human Nature
Cooperation and Coercion will become a classic book based on the most fundamental principles of human behavior and the economic way of thinking, reminiscent of Hazlitt’s Economics in One Lesson. It succinctly takes on the issues of our day—issues that will prove timeless as the battle between the state and the market rages on.
Davies and Harrigan begin exactly where they should: with the truths of human nature and human behavior. Any exploration of economics must start here. We are finite human beings with inherent dignity. We are social and thus we need each other—this means that we must find ways to cooperate. As Davies and Harrigan suggest, there are only two ways to organize society, what they call “organizing principles”: voluntary cooperation or involuntary coercion.
When people are free to make their own choices, some may choose what you would not choose, and some may choose things that you do not even think they should be able to choose. Market economies operate on the rule of law and respect for the rights of others. Thus, they leave many such choices on the table. To some, this is unacceptable, so they use the state to compel compliance. The state, even in a democracy, must elevate some preferences over others to function. A desire for equality then necessarily requires that we take one person’s earned income and give it to another. This opens the door for opportunistic behavior by those with connections and power, who have the incentives to use the state as a means to obtain rents and special privileges.
Market economies, however, are the best mechanism for sustainable, peaceful cooperation. Other—often coercive—attempts to promote both equality and cooperation fail to attain either. Market economies don’t perfect human nature—no human institution can. But they provide egalitarian opportunities to maximize human agency and, while they do not ever promise strict egalitarian outcomes, they justly compel us to use our human creativity to serve others. In this way, we all flourish more than we otherwise would. When we use the state to impose our preferred standards—like a love of equality—it requires that someone define and compel those standards. This is the platform that empowers those the authors dub “busybullies.” Without any doubt, markets guarantee that some will engage in behavior that others will deplore. But this is merely a side effect of the voluntarism and free choice which delegitimizes the busybullies.
Despite the superiority of markets, the explosion in our society’s conception of what “we have a right to” has led to a growth in the size and scope of the state in hopes of enforcing a more equal society. But as we increase the menu of certain “rights,” we necessarily diminish other ones. An expansion in the positive conception of rights (healthcare, education, income, a job) necessarily requires the state to get bigger and more coercive. The reason for this is an economic one: we live in a world of scarcity. If we are to provide everyone with an education, a home, and a job, we must pay for it. Positive “rights” provided by the state necessarily grow the power complex, and your “right” becomes an intrusion into someone else’s right to their income and wealth. This is so because resources are scarce, and scarcity always implies tradeoffs and opportunity costs.
As the authors remind us, there is no magic. Economics identifies the constraints on our unlimited desires and wants. The government has no more power than any other societal institution to fix all of our problems. When the state does “fix” something, it comes with a cost, as every decision does. The difference is that the state operates as a bureaucracy, not through the system of profit and loss. There is no omnipotent social planner who always knows what to do. Markets, on the other hand, have what governments do not when it comes to problem-solving: adaptability and feedback mechanisms. Thus, they can be nimble where government bureaus cannot.
We are social creatures, and seeking sustainable economic and political systems that foster cooperation rather than plunder and exploitation has been the single most important quest of humankind. The great accomplishment of human history is that we have been able to live longer, freer, and wealthier. The past 250 years have perhaps been the most profound in human history. Everyone is better off than they were before, by a large margin. This is no small feat. Market economies are egalitarian in the consumption possibilities they offer ordinary people. Yet the battle for power and control of both market systems and political systems will always be with us.
Coercion requires power: it means someone or some group of people must be in charge. Voluntary cooperation is peaceful because it allows people to choose or, perhaps more importantly, refrain from choosing. Voluntary choices are regulated in a decentralized manner through profit and loss. The market economy thereby brings discipline to human behavior.
Coercive Policy: Rise of the Busybullies
What might be most essential in the book is the discussion of marginal thinking, risk analysis, and policymaking. The oft-used trope “if it saves just one life” is particularly important as we wade through the best policies for human safety and economic vibrancy during a pandemic. Davies and Harrigan rightly note that politicians use this phrase for emotional reasons, wanting you to believe that they are uniquely capable of using the power of the state to engineer the best solutions. But the authors return us to where they began: we are finite beings who have limited knowledge, and power is both coercive and corrupting. The economy is not an engineering project. We cannot know this, however, without understanding the economic principles that are so clearly articulated at the start of the book.
Economics provides the framework for the analysis of choice under uncertainty. It is about choices, constraints, and incentives. Davies and Harrigan, in this short book, take us to the essence of political economy: what is the proper role of the state and the proper role of the market? From there, we can talk about any relevant policy issue in a non-ideological way. That is the power of this book. It provides both a philosophical understanding of the human condition and a concise and articulate presentation of the economic way of thinking. That analytical framework allows us to adjudicate the costs and benefits, as well as the unintended consequences, of any policy without ideological blinders.
This book isn’t “conservative” or “progressive” but rather obliges us to cast those narrow, insufficient ideological paradigms aside and engage in effective analysis so that we can truly pursue the good life and create a society that allows others to do the same. Davies and Harrigan unabashedly tackle some of the most pressing and important policy issues of the day: gun rights, suicide, homicide, minimum wage, debt, tax rates, and the wars on poverty, drugs, and terrorism.
No one wants more homicide, but limiting the sale of guns has not reduced gun-related homicides. Minimum wages have not reduced unemployment or poverty. The war on drugs has not reduced drug use. In fact, street drugs are more potent and lethal than they would be if they were legal. The war on terrorism has not reduced terrorism. The arguments for these policies, as Davies and Harrigan point out, are flawed in that they assume government can benevolently use policy to engineer better social outcomes. They disregard the knowledge problem, unintended consequences, and incentives. In short, they ignore the essential assumptions of economics, which are grounded in a proper understanding of the human person. Moreover, they create incentives for opportunistic behavior: groups use the state to achieve their desired outcomes. These policies, along with others, have paved the way for busybullies and created a culture of elitism.
Busybullies are those who use their influence, which thrives on an inflated sense of moral superiority, to tell others what they can and cannot do. This clout is used to strong-arm the state into enshrining their preferences for certain types of behavior and restricting others. It necessarily creates winners and losers, which undercuts the rule of law. As the size and the scope of the state grows, busybullies will gain greater traction and will be able to restrict behavior, institutionalize certain “values,” and engineer specific outcomes. This is not the premise of a free and flourishing society nor what the founders desired.
F.A. Hayek, when reflecting on the work of Adam Smith, articulated the problem of social life: we must ascertain how we can induce people, in their ordinary conduct, to think about the needs of others. The best way to do this, we have learned over the past 250 years, is through a system of property rights, prices, profits, and losses. Human beings are capable of great creativity and discovery, but we are all prone to greed and selfishness. The social problem is to obtain sustainable systems in which people cooperate. There is no utopia.
To foster this cooperation that we so desperately need, we must roll back coercion and, with it, the platform of power for the busybodies who have become busybullies. Davies and Harrigan leave us with this idea: The social project is not to find the best and brightest to run government so that we can engineer prosperity—an impossible task. It is rather to allow human creativity to surge, to allow more peaceful cooperation, and to take the levers of power away from the bullies.