Politics (7) - Rational Demands on the State and the Political Foundations of Markets - (7) Literature Review of My Work on Politics and Freedom

Image credit. Home to me is a permanent search for and a march-past of parting convictions. I seem unable to settle for an enduring creed. This is a view from my home area over to the French border.

Continued from here.

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In

P009 Liberty - Always a Political Attempt from 01/02/2013

we witness a quick turnaround in my outlook since late September 2012. Within hardly more than 3 months I was able to shed tons of libertarian baggage. The lever most instrumental in distancing myself so quickly from years of unquestioned faith was being provided by my answers to the questions I had felt provoked to answer when moving for a week among the von Mises crowd in Bodrum, Turkey: Why am I not an anarchist? This quickly led me to consider the positive use of the state, and to pondering the raison d'être of politics which is what we do to utilise the enormous power of the modern state.

What worries me is a pronounced tendency within the libertarian movement whereby increasingly vigilance vis-à-vis the state is turning into unconditional verbal opposition, a habit of lamentation and a dogmatic moral posture that condemns anyone who takes the original view of classical liberalism (according to which there is a need to work through the political process and with the state) or indeed anyone who does not endorse (an often only implied) anarchism. [...]

If there can be so much disagreement between people who support liberty (let alone the larger community), I cannot see how these rival views are ever to be dealt with other than through the means and channels of political competition. Analogously, there is the untenable presumption that ideas on what a market is, how it works, and what action will further or damage the market represent an uncontroverted, pristine standard known to the believer in liberty, if only he is of the true kind. Add to all this, that even tiny differences, once thrown into the pond of human rivalry can quickly expand to vast concentric circles. In a word: no one can escape from politics. Liberty will always be a political attempt. [...]

Can markets handle the task of protecting themselves against adverse political influence on them? By which mechanism do markets achieve this feat? If markets are incapable of achieving this aim, may politics and the state play a certain role in protecting markets?

Rather than being a mystical power onto itself, the state consists of and is influenced by interested parties whose competition for the power to have the state enforce their ambitions tends to form and sharpen rational demands on the state, and the need and the capacity for the state to perform to the advantage of growing numbers of people and a widening franchise of stakeholders:

Also, there are good reasons to assume that "the State" pursues the duplex aim of wealth and power maximisation. There is ample evidence that some states are considerably more successful at balancing these two needs: enforcing property rights etc that make for a powerful economy (creating a rich resource basis for the state) AND marshalling political support to cement its power base. My own native Germany and the USA are a lot better at this than Somalia, say, or North Korea, and the reason why is that we have hugely better governments/states, i.e. governments that are far more protective and supportive of the institutions of liberty than other countries. And this is largely because there are people who are prepared to fight with the requisite and indispensable political means for a state that respects liberty.

In the meantime, I am more doubtful as to whether it is "people who are prepared to fight" for her that are responsible for the overall outcome of a society of considerable freedom. May be it is their being caught up in a fiercely competitive political system that produces freedom, more than any self-conscious heroism.

At any rate, the text shows, at the time, I am not yet fully disengaged from my libertarian autopilot, but the genie is out of the bottle - that is: I am permanently perpetrating the sacrilege of actively defending the virtues and welcome capacities of the state, government, and the political processes that shape and constrain the forces embodied in and acting through these institutions. Thus, I respond to a commenter:

You write: "People too often suppose that large social problems can be solved only by deciding ahead of time which particular group of people and procedures hold the key to the solution." This is certainly a big, chronic problem, masterfully explained by Hayek. However, the insertion "too often" in your proposition is important. For some large social problems can be solved only by deciding ahead of time which particular group of people (those of our libertarian convictions and knowledge) and procedures (those favoured by us, the rule of law and other norms conducive to free markets) hold the key to the solution. Unless libertarians succeed in the political process thereby managing to play a leading role in forming the nature of the state, the requirements of markets and liberty are in danger to be violated by other participants in the political process. Unless it can be shown that markets qua markets can handle the task of protecting themselves against adverse political influence. Like Armen Alchian, however, I have never found evidence to support the assumption that markets can take care of their own preconditions.

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 Continued here.