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Universalism and Particularism
of Social Order in a Free Society
Remigijus Simasius, PhD
Lithuanian Free Market Institute
(text of Vilnius speech)
First of all I would like you to take a look at these libertarian symbols.
[slide]
What do all these symbols have in common?
- All of them show a man;
- A man is abstract. No concrete face race or sex can be identified (perhaps Adam Smith Institute is the only exception if
we look through well known libertarian or classical liberal logos).
- A man looks free;
- A man looks peaceful (body language tells a lot — just look at how he exposes himself);
- A man looks open to a world;
- A man is clearly cosmopolitan.
That looks nice, that is our strength, but a man is alone! That also gives an impression that we
ignore society.
I am afraid that the problem might be that we do not even know how to show two people side by side.
Looking at one another? Staying side by side? A crowd? All this does not seem acceptable to libertarians.
DILEMMA
Here we may start to talk about Libertarian Dilemma. Every libertarian accepts diversity, but also
understands common nature of all human beings and the need for the respect of common principles, which are based on individualism
and private property. However, drawing a dividing line between individual (or group) values and universal principles is quite a
complicated question.
[slide]
On one hand, principles of liberty are common to all human beings, on the other — every group of
people has a right to live their own way of life according to the principles of their own which can be neither compatible to
principles of other groups nor libertarian. The problem here is that a group of individuals may choose to renounce freedom. The
libertarian principle — let everyone to decide for him — is not so helpful in many cases because it is not so easy to decide,
whether you just use you right or pretend to do unlawful harm to others.
We may even say that society without contradictions between universal principles or values and group
principles or values would be a "libertarian paradise":
- Everyone is free to choose,
- Nobody chooses to be a slave,
- Nobody chooses to be a master.
This kind of romantic approach is very positive, but not sufficient enough.
Realities are different:
- Views of libertarians are not as similar as they look at first glance;
- People tend to impose power on others;
- People do not understand the importance of liberty and tend to betray it.
So the conclusion may be made that libertarians face a problem of making universal libertarian
principles compatible to group values. The question remains open, whether principles of liberty can be neglected in one or
another social group. (I will return to this later)
ALTERNATIVE SOLUTIONS
Solution 1: Everyone has a right to be free and it does not depend on society you live in.
This means that on one hand, you may disobey your local social norms if they contradict universal principles. On the other hand,
you must accept that some universal principles do exist or even have to be imposed on others.
But problems also arise:
- Do we know what freedom means to another person?
- Isn't this just another form of planned society?
- Can't we just leave it to spontaneous order?
Solution 2: People lead different ways of life in every society, so just leave these societies
alone. This means that we accept a huge diversity of social institutions, but, on the other hand, we have to accept that there
are no universal principles and values.
This approach has also certain problems:
- Does it mean that people are different just because they are born in different societies?
- How to escape this "social destiny"?
Here we may add that discussions on the war in Iraq are based on the same different principles.
The situation is paradoxical — we have often to choose between individual freedom and diversity.
Solution 3:"Natural order" (Professor Hoppe will speak about this.) I would only add that this
solution implies two levels of principles: metaprinciples and principles (or principles and values).
But a problem also exists — do we know what principles are universal and what are local?
HOW TO DEAL WITH THE DILEMMA
(methodological background)
What methods have to be employed to find the right solution? First of all we must clarify what our
task is. Briefly: the task is to solve a problem of conflicts in society. Of course, any society lives in scarcity, and
scarcity necessarily causes conflicts. But anyway, the task of any social order is to minimize those conflicts, to help to
avoid them and to help to solve them.
This task has to be stressed and well understood. If we accept this task, it means that
any social order and its elements can be only a means, but not an aim in itself: this applies even to such principles as respect
of private property, human rights, individualism and other values and principles, which are so important for us as libertarians or
for others. Here I have to make a comment: certainly respect for a human being and property rights are values that work and these
values are our values. But this is not just because it is so. It is because these values and principles have been proved.
Here we may say that we have to accept and follow an approach which is utilitarian in its essence.
[slide] In other words, I want to defend once more Hayek's standpoint, saying that the task is to show that ideology is to be
examined by the means of science (Law, Legislation and Liberty) and that of Mises who maybe was most successful of all advocates
of free market and freedom in general to prove those "ideological" ideas using scientific methods.
When we talk about social institutions, especially when we evaluate them, it is
difficult not to slip into "naive constructivism" as Hayek calls it, as well as in to fatalism. (Trying to stay on this slippery
line, first of all, we have to make descriptive conclusions and only then go to normative statements.)
[slide] There is also a problem that when we speak about social order, there are at least two
different aspects of it that have to be interesting to a social scientist. The first one is economics. Here libertarians are
for sure very strong (intellectually, but not necessarily in public debates, unfortunately). But a problem exists that most great
libertarian economists declare (without bothering to prove it) that economic freedom requires some kind of social environment:
property rights (in a broad sense) have to be respected. Here we begin to speak about a legal and moral environment, legal and
moral norms in society. A simple question has to be raised: if market is the most effective system, then why does the existence
of rules have to be implied (or left to government)? If we accept theoretical economic arguments that defend free market, we must
leave the law entirely to the market as well. This may be called chicken and egg problem — which one comes first? Or, how to
combine law with economics (nowadays even law and economics does not try to solve this problem seriously). Social institutions,
including law, can survive only if they are beneficial to individuals. Individuals support social institutions only if these
institutions help them to achieve their goals. This means that economic analysis of social institutions is essential.
Unfortunately, libertarians were not very strong at this for a very long time. What I want to
stress is that there are no arguments for not applying economic justification of a free market to social norms. Social norms in
this sense are similar to any other goods.
We have some works dedicated to law (e.g. Bastiat's "The Law"), but only in the middle of XX century
the problem was formulated (here we can name Bruno Leoni and his famous "Freedom and the Law", Public Choice theory, authors
of Law and Economics, Hayek and his "LLL"). But the problem is really deep enough. I must accept that there are several authors
who offer reasonable solutions: Bruce Benson, Hans Hermann Hoppe, David Friedman, Bryan Caplan. These ideas are starting to
spread wider and wider. Two years ago in Dax, for example, I bought a T-shirt with famous words: "The Congress has to make
No Law". On the other hand, people react to these words differently than to the words "The Government has to keep out of
Business". Solutions concerning rules in society are still not formulated in a manner, which can be accepted by most advocates
of freedom (as, for example, economic solutions are formulated). Here I can mention one of today's most famous advocates of
freedom — Hernando DeSoto who openly states that the state has to create the law and that there has to be no market for law.
We, of course, also have all kinds of libertarian ethics which pretend to offer universal principles
and to draw an outline of libertarian social order. But before going further to the analysis of what kind of order, what kind
of norms are necessary for a free society, we have to decide whether this has to be moral or legal norms, and whether we have to
use moral or legal argumentation. A moral approach offers standards which have to be applicable regardless of circumstances. A
legal approach, contrary, may be applicable just to draw dividing lines regardless of what they separate. As I stated before
(remember the task — to minimize conflicts), the problem is how to separate one from another, but not how to apply the same
rules.
Here we can give a classical example [slide]: two neighbors, one wants to have a silent rest,
another wants to learn to play violin. The problem here is not to decide, whether the violin player or his neighbor is right.
The problem is how to achieve that both of them are happy while doing whatever they want. Ronald Coase offered and proved a
wonderful solution: we have to have private property and clear dividing lines between them in all matters of our social life.
Here I have to return to a question "morality or law", and answer clearly that we have to bother about dividing lines, i.e. law.
Of course, here I have to clarify that there is no need to imply that law has to be created by government (and also to accept
possible critics that there is no such clear dividing line between law and morality as I implied in my presentation).
THE EMERGENCE AND SURVIVAL
OF SOCIAL ORDER
Here I come to the essence of my presentation. How is or can law (social norms) be created without
government, does it have to be universal, does it necessarily end in monopoly (as Benson stated)?
The analysis has to start from a very abstract model of state of nature where social
regulation is introduced by individuals with no previous social background. I will use four steps of argumentation. [slide ...]
First step. The analysis of social relations of two individuals concerning the distribution of a good in the state
of nature shows the benefits of introducing mutual agreement instead of violence: in case of conflict at least one individual
looses, while in case of agreement individuals create welfare for both of them. Rational individuals will come to agreement,
because this is the only way to maximize profits. That is the reason why "prisoner's dilemma" solutions normally do not work in
real life with real suspects and real investigators.
But a problem still exists that in some circumstances it would be more beneficial for an
individual to use violence when deciding on the distribution of a good and to distribute a good in a way which is not acceptable
for another individual.
Before going to a second step of argumentation, I have to stress that breaches of these norms
are not necessarily harmful. Life changes and there is also a need to create new norms, which means which means destroying old
ones (Schumpeterian "creative destruction" is no less applicable to law than to all other goods and institutions).
Second step. Use of violence increases incentives for another individual to use violence or to restrain from participating
in mutually beneficial relations. Such possibility creates incentives for an individual not to use force and to cooperate in
mutually beneficial manner.
Here we may also add that it is also very beneficial for both individuals to agree
beforehand on multiple cases, that is, to create social regulation for them, because any agreement also has costs.
However, an argument can be made that in some cases for some individuals it would be
beneficial not to cooperate or obey the rules which were agreed before.
Third step. The argument is not valid in the majority of cases; because individuals take into account not only immediate
benefits, but also long term benefits. To be able to be in beneficial social relations in the future, an individual has to have
a positive reputation, otherwise other individuals will avoid beneficial, but risky relations with him. The only possible way to
earn a positive reputation is to show permanent compliance to social rules which are important to other individuals, even if these
rules are not beneficial for an individual in one or another case. Positive reputation may also be earned by belonging to a group
in which there are good mechanisms to make members obey these rules (and a group, of course, tries to ensure the application of
certain norms, which make the group so reliable).
But, as Benson shows, a negative reputation may also be a value. If everyone knows that
you are a bandit, always cruel and fighting until the end, most people will tend to surrender to you some of their property,
treating this as a purchase of "safety" (everyone will try to avoid a direct violent conflict and will tend to give a conflicting
individual a rent which will be smaller than costs of direct conflict). This is how racketeers build their "business".
Fourth step. The mechanism of group selection in the process of social evolution is also very important in social
regulation. Social institutions and especially regulation has a decisive role in group selection, during which only effective
groups and societies remain. Even if it is beneficial for some individuals to create a negative reputation, group selection is a
mechanism which ensures that a critical majority of individuals in any existing social environment will behave according to
beneficial rules even if these individuals do not see a direct personal benefit of such behaviour.
As always, I have two news here: good and bad. Good news: as you see, this process of formation
of rules is completely decentralised.
On the other hand, Benson makes a conclusion that the process ends with the formation of
government. History also witnesses the same. It is not very pleasant news for libertarians. We may also observe and maybe even
state that centralised government is more effective for a group of people if this group is in a conflict with another group.
So, is there some hope or positive program for libertarians here? Yes, for several reasons.
First (and most abstract one), the theory of government-made monopolistic law is completely false Attempts to find a universal
concept of law leads to invalid concepts. The concept of law, based on the theory of sovereignty, is invalid. If you examine
theories of apologets of statist concepts of law, you will notice that most of them simply presume the necessity of government.
Others, those who are fair scientists, try to prove it but fail: even Kelsen and Hart recognize that in the end there is no such
thing as sovereign.
Second, both a difference in individuals and a difference in social and natural circumstances are huge and require
different rules to deal with them. As the law is based on the support of individuals, based on effectiveness of rules, legal
pluralism is a fact ant it is inevitable, especially in big societies with complicated relations. An absolute legal monopoly is
impossible, even having in mind that it may be beneficial for some individuals to create it. Looking very practically, non state
legal mechanisms, including Canon law, customary law, traditional law, self-regulation, law of organizations, even rules of ethics
and sports rules have a big impact on legal disputes. International law and semi-state (e.g. EU, even though I am not a fan of it)
law is also the source of legal pluralism. Non state law very often contradicts state law and individuals very often behave
according to non state legal rules even if they do this unintentionally. Furthermore, the state law, especially the law which
is obeyed by individuals, usually springs out of spontaneous non state legal rules. In cases where there is no contradiction
solutions are simply taken from non state systems into government created laws (in competitive societies, of course). Here we may
use DeSoto analysis very well.
And here one practical implication has to be stressed — avoid wars. This makes governments stronger.
CONCLUSIONS
Analysis aiming to answer what kind of social order and what kind of norms are features of a free
society and are necessary for a free society shall focus not on differences of legal institutes. It has to focus on procedural
mechanisms, which allows choosing effectively among different institutes. This means that we have to choose not between
particularism and universalism, but between legal monopoly and competition in law. In other words this is the same problem of
free market vs. central planning (I hope we know answers to it).
Only competition in law allows reaching a balance between universalism and particularism of rules.
Libertarians must take seriously words that government shall make no law!
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