November 2006: Skepticism and Freedom
The theme for this year’s Heartland anniversary benefit dinner, held on October 5, was “Skepticism, Faith, and Freedom.” The audience was treated to outstanding presentations delivered by two remarkable individuals. For this month’s Heartlander, I summarize and comment on Richard Epstein’s presentation on skepticism, and next month I will comment on Fr. Robert Sirico’s presentation on faith and freedom.
Drinking from a Fire Hose
Richard Epstein, one of the world’s most brilliant legal minds, is the Distinguished Service Professor of Law at the University of Chicago Law School and a senior fellow at the Hoover Institution. His books include such libertarian classics as Principles for a Free Society: Reconciling Individual Liberty with the Common Good (Perseus Books, 1998); Simple Rules for a Complex World (Harvard, 1995); Takings: Private Property and the Power of Eminent Domain (Harvard, 1985); and the book that inspired the theme for our dinner, Skepticism and Freedom: A Modern Case for Classical Liberalism (University of Chicago, 2003).
Listening to Epstein, it has been said, is like trying to drink from a fire hose. His delivery is rapid and flawless, with nary a single wasted word, unrelated thought, or vocalized pause. His listeners often sit in amazement, realizing every sentence and word is important and conveys an important meaning. Listening to Epstein is hard work, because he compacts into seconds what others require minutes to express, and into 30 minutes what others might take hours to describe.
When I invited Epstein to speak, I expressed concern he would talk over the head of the audience, as I recalled him doing when he last addressed a Heartland audience a decade ago. “I speak slower now,” he assured me. If that is true, I didn’t notice it on October 5. Luckily, we recorded his presentation and I was able to replay it while writing this summary.
Epstein and Fr. Robert Sirico agreed to deliver four alternating 15-minute talks, rather than two 30-minute speeches. Breaking up Epstein’s remarks seemed to work. Everyone I talked to that night said they found Epstein utterly fascinating. One guest wrote to me after the dinner, “I honestly felt smarter at the evening’s end.”
Epstein began his presentation by saying people with a limited government perspective generally approach questions of law and political economy in one of two ways. The first is by deductive reasoning applied to natural laws that have either divine origins or can be discerned from patterns in nature that are so regular as to amount to immutable or inescapable truths. The second is to start with appreciation of what people are like, and then ask in an instrumental fashion what needs to be done to create a world in which (a) they do not kill each other and (b) they can cooperate to create wealth.
Epstein finds himself in the second camp, admitting “I’m not so good in the faith department.” In his book, Skepticism and Freedom, he also comments on how the rise of moral skepticism in America and around the world makes appeals to tradition, natural law, or shared values less persuasive than they would have been, say, 230 years ago when these concepts were evoked by the Founding Fathers in the Declaration of Independence.
As we examine “what people are like,” the first thing we discover is how little we know about other people’s values and preferences. This ought to give us pause before imposing our preferences on others or assuming they share our values, and makes us naturally fearful of allowing others to impose their preferences on us.
The second thing we discover is that people put their self-interest and the interests of friends and family members ahead of the welfare of others. This is a function of having to survive in a world of scarcity, which rewards personalities with large strands of self-interest and smaller strands of altruism.
Given what we know about people, how do we go about ordering society? We begin with property rules, which keep people apart by enabling people with property to prevent others from invading their physical space or benefitting from the wealth they create. Property rights keep rationally selfish people with differing and unknown preferences from killing each other by fostering a sort of universal forbearance.
The design of a property rights system is constrained by the requirement that institutions and rules continue to work as population increases. Prices and titles to property meet the test if they are the same for all potential buyers. Equality is important because once you start making special accommodations for some, you need to accommodate others, and it would be impossible to keep track of, calculate, and enforce different rules for millions or billions of different people.
Private property creates the ability to exclude people from locations and activities, but also the ability to include people. Property becomes the platform on which consensual activity takes place. Because property ownership can be widely dispersed, so too is social and economic power, an important check on the growth and concentration of political power.
A system of property may guarantee survival, but it does not guarantee prosperity. For prosperity to occur, people must be free to decide who to cooperate with in social and economic endeavors. Contracts allow this to happen. Two people working together can often accomplish what one person cannot, but more importantly, cooperation creates opportunities for the division of labor, which can increase productivity by much more than the simple sum of the participants’ efforts.
Contracts are not just bilateral transactions. They can create enduring relationships among groups, each with governing institutions of their own. Contracts enable all kinds of organizations to flourish, building the freedom-protecting institutions of civil society on the platforms provided by private property.
The alternative to voluntary contracts, where each party by definition expects to benefit, is to use force to compel one or more parties to cooperate. Force is always less likely to work than voluntary cooperation through contracts because force brings together people with fundamentally different beliefs and expects them to be as productive, happy, or peaceful as groups that share values and preferences. As society grows larger and more diverse, private forms of cooperation to solve problems become more, not less, important.
Limits of Liberty
Epstein identified problems--some real and persistent, some easily addressed--that confront the classical liberal model. A real difficulty is defining “force” narrowly enough to avoid it morphing into a “harm principle,” that any time someone is harmed he is entitled to some kind of redress. The harm principle is a dangerous trap because harms can be direct, indirect, perceived, subjective, and even imagined, enabling people who are most easily offended or most likely to claim offense to set the rules for everyone else.
A second problem occurs when monopolies, caused either by nature or by law, create a single supplier in a market. The ability to refuse to deal with a producer is what makes prices go up or down and creates supply and demand. Where a producer is a monopolist, government may need to step in to protect other parties.
A third problem is how to finance this system of rights and contracts. According to Epstein, the state must have the power to impose compulsory taxation in order to maintain a monopoly over the use of force, which it needs to enforce property rights and contracts. While libertarian theory does not justify compulsory taxation, Epstein finds a justification in classical liberalism. A limited government can use user fees to pay for services performed for the benefit of particular people, and broad-based flat taxes to finance services that benefit the general public.
This is not a short essay, and it has covered a wide range of questions. It is incredible, looking back on it, that Epstein said all of this in a mere 30 minutes. And he said much more that I haven’t reported here!
Epstein summarized the classical liberal model as requiring strong property rights to keep people apart, voluntary associations and contracts to bring people together, some regulation of monopoly and essential facilities, and a system of general taxation to fund general government functions. Such a system allows societies to survive and flourish both economically and culturally.
Now, do you feel smarter than you were before you read this essay?
Joseph Bast (firstname.lastname@example.org) is president of The Heartland Institute.