There is a bias to over-emphasize short-run, visible benefits in politics, often to the exclusion of what Frederic Bastiat termed the unseen effects on others and in the long run, because a politicians’ primary success requirement is to get elected long before all the consequences of their policies become obvious.
That was Henry Hazlitt’s central theme in Economics in One Lesson: “…we are already suffering the long-run consequences of the policies of the remote or recent past. Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed. From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
One of the most essential aspects of these biases is government reliance on coercion, because the use of coercion is government’s only comparative advantage, and coercion is an inherently short-run strategy, with seriously harmful consequences that are even worse in the long-run than in the short-run. The reason is that the results of voluntary cooperation improve over time, while coercion’s results deteriorate.
The expansion of cooperation over time, as long as it is voluntary, is illustrated by a phrase, “Supply curves and demand curves are more elastic in the long run than in the short run,” some form of which is taught in virtually every principles of economics course. That phrase reminds students that the longer the time period sellers have to respond to an increase in demand by buyers, the more their improved incentives will lead them to discover new and better ways of accommodating them with additional output; similarly, the longer the time period buyers have to respond to an increase in supply by sellers, the more their improved incentives will lead them to discover added valuable uses for those goods or services.
Essentially, this summarized the fact that when you give me better incentives to voluntarily cooperate with you in the marketplace, I will discover and implement more effective ways to do so over time, expanding the degree of our cooperation. I will search for better ways to cooperate, whether I am the demander and you are the supplier or vice versa.
On the other hand, if you coerce me, you are making me do something that is against my self-interest-except for the threatened penalties to enforce the imposition. My underlying incentives are worsened. As a result, over time, I will find more ways to respond to those worsened incentives, just as for improved incentives. I will employ my skills and efforts to evade the burdens imposed by coercion, rather than to better satisfy the desires expressed through voluntary offers. Social cooperation will contract. This is why Friedrich Hayek stressed “The fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion”in The Road to Serfdom.
The deterioration in social cooperation due to coercion is illustrated with innumerable price ceilings (such as rent control) and price floors (such as the minimum wage). Over time, people find an increasing number of ways to do less of what they are being forced to do against their interests, and the search for ways to reduce the harm imposed by the coercion undermines cooperation. As Hayek noted, “Any attempt to control prices or quantities of particular commodities deprives competition of its power of bringing about effective co-ordination of individual efforts.”
When the government holds the price of rental dwellings below what others would be willing to pay for them by law, with rent control, they reduce the incentives of landlords to supply such dwellings. Over time, landlords find ways to withdraw from the market (via condo conversions, deterioration, etc.) reducing the supply of rental housing-i.e., they will reduce their degree of cooperation with renters progressively over time (an ironic solution to the problem usually cited to justify rent controls–that housing is too expensive because there is too little of it available).
When the government holds the price of low-skill labor above what they would willingly work for by law, with minimum (or living) wages, they reduce the incentives of employers to use those overpriced workers in their production processes. Over time, employers find additional ways to conserve on those artificially scarce inputs, reducing the number of workers hired progressively over time (via changing production processes and products, substituting capital for labor, reducing output, etc.)–i.e., they will reduce their degree of cooperation with otherwise willing low-skill workers (an ironic solution to the problem usually cited to justify minimum wages-that low income workers are unable to earn enough).
The same story plays out in other areas of coercion. When government taxes people more heavily on income earned by benefiting those who voluntarily dealt with them, over time they earn less–i.e., do less to benefit others–and spend more effort looking for ways to hide or shelter their income from taxation instead. When government forces people to provide free habitat to any endangered species that might choose to inhabit their property, they progressively find ways to make their property unattractive to them (sometimes even killing them secretly to avoid the massive property “tax” that would otherwise be imposed on them). When government makes employers provide “free” benefits to workers, they progressively reduce other parts of their compensation bundle that workers have revealed they value more (by accepting them in preference to the mandated benefits, when given the choice) to “pay” for them, or they find ways to make do with fewer workers.
Further, because coercion in any of these forms triggers entrepreneurial attempts at evasion, more and more resources have to be devoted to enforcing edicts, which both takes resources away from productive uses and violates principles of justice that are upheld only when arrangements are voluntary.
Since there are very few areas where coercion is necessary to achieve social cooperation, there are very few areas where government advances such cooperation; its intervention elsewhere necessarily undermines it, and violates justice (particularly “Thou shall not steal”) at the same time.
That is why Ludwig von Mises’ observation that “Those who ask for more and more government interference are asking ultimately for more compulsion and less freedom” is not just important, but an ominous portent for the direction America is now taking. Not only does each expansion of government power shrink freedom and further constrain the realm of otherwise expanding, voluntary cooperation, its effects worsen progressively over time.
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So what if I get a volunteer group together to coerce you instead of the government?
Or what if I use economic coercion?
On the other hand, if you coerce me, you are making me do something that is against my self-interest – except for the threatened penalties to enforce the imposition. My underlying incentives are worsened.
Another bit of confusion: do you mean by “self-interest” your short term desires or will, or something in the longer term since that is what the article is about. There are many things that give immediate pleasure (various addictions or things which give contentment or satisfaction) which are bad over the long term. Generally my reason or will has to arbitrate between short and long term gains (or even time value), and the inability to do so is considered a defect in character.
For someone severely addicted to cocaine or heroin, it might be in their short term self interest to get another fix, even if it requires killing you and even if they would overdose, but not in their longer term self-interest (even using identical definitions of self-interest) – but they would have to be coerced to choose the longer term over the shorter term.
As far as coercion, Lets say I sell a product that is not offered for sale very many places, and I simply don’t like you forcing you go without, substitute something inferior, or travel some distance or undergo some other inconvienience in order to obtain the item. I am forcing you to do something against your self-interest. All the evils of coercion still apply – whether it is a government taxing some item or a private person imposes some restriction on your transaction of that item.
You don’t need coercion to achieve cooperation (in fact it poisons it), but that is not the complete question. Do you need coercion to prevent people from destroying (other’s) cooperation?
Are you arguing merely the negative – that there is no legitimate reason for government to promote cooperation – which I agree with, or are you arguing a larger point about any or all coercion?
Going back to the voluntary organization above, consider a group of volunteer malefactors whose exclusive desire, self-interest, etc. is simply to destroy cooperation. Through gossip or by using whatever powers to interfere with communications or transactions. Ought they be free to do so? Should they be free to prevent or minimize cooperation?
Is there any higher authority that should promote cooperation over chaos, reason and rationality over insanity or irrationality, and respect for rights and dignity over barbarism, or are these to be treated equally as they have equal merit, i.e. if someone acts to create chaos, or irrationally, or barbaric, would you use coercion (in whatever form) to violate their interests?
If someone resorts to coercion they forfeit their right to live. So if a drug addict tries to steal money from me I can gun them down. If a group threatens to coerce me into doing something against my will I have every right to defend myself. The second amendment is a wonderful thing.
Self interest is an individual preference. This also includes time preference, which answers the question on short term versus long term well being.
Tz,
You’ve got to get the hang of what is and what is not coercion. Your comment below is way off the mark because it confuses the facts of scarcity with the initiation of force or fraud:
“As far as coercion, Lets say I sell a product that is not offered for sale very many places, and I simply don’t like you forcing you go without, substitute something inferior, or travel some distance or undergo some other inconvenience in order to obtain the item. I am forcing you to do something against your self-interest. All the evils of coercion still apply – whether it is a government taxing some item or a private person imposes some restriction on your transaction of that item.”
Here is how your paragraph must be modified in order for coercion to actually come into play:
“As far as coercion, Lets say you posses a product and I simply take it from you by force. I am initiating force against your property which is against your self-interest. All the evils of coercion now apply – whether it is a government taxing some item or a private person stealing it.”
You have to realize that if you choose not to do business with someone, or you don’t let them in your house, in your car or in your pockets or in your bed, you are not an initiator of violence. If you defend against an uninvited aggressor in any of the above situations, you may use violence to do so and yet you are not using coercion because you are not initiating the violence. In each situation you would be defending your property against an aggressor. It’s important to understand what constitutes coercion, the initiation of force: it is definitely not inconveniencing someone because you choose not to do business with them.
Joel — I’m afraid you’re misstating case for the death penalty…
When someone engages in coercion towards me he loses his rights to the same extent he causes (or intends to cause) loss of mine.
I.e. if someone steals $5 note from me, I cannot go and kill him on the spot – but I can use minimal sufficient force to extract my compensation from him. If he runs away, I doubt that shooting him in the back is justifiable, because there are other venues of seeking satisfaction, such as calling protection agency and having them to track the perpetrator down.
Sounds arbitrary, I prefer to deal in absolutes.
Joking aside is there any concrete methodology for dealing with this kind of situation? Is it like “an eye for an eye” type deal?
Yes; actually “two eyes for an eye” – if someone steals $5 from you, you’re entitled to your $5 back, plus taking $5 from the thief in punishment. See The Ethics of Liberty.
If you mean physical violence, why can’t you say violence instead of using the word coercion? All harms and pains are not physical?
If you mean “violence”, I am free to harm you or cause you pain using any technique that doesn’t actually cause a somatic injury or deprive you of actual physical property.
Coercion and force pertain to the will (generally indicating actual negative consequences for an act, as opposed to bribery which would be a reward). I am quite sure creative people can find ways to create enough nonphysical harms and pains to bend wills.
I’ve also mentioned I am not convinced that initiation of force gives you any right much less carte blanche to use any form of force or violence (even assuming omniscience to find the perpetrator and know the exact amount for justice).
If and when I choose to defend (as opposed to revenge) myself, I am not doing so because I am countering violence as much as I am countering the evil will and act of the “aggressor”, and that would lead to the forms of defense I am allowed. Violence and evil are also different things, though they often occur together.
Part of this is visible in the $5 note example. If the protection agency is sane, it will simply pay you the $5 back and raise your premium for the claim, or assess a claim fee since it will cost them far more than $5 to investigate the claim, much less extract the $5 and processing fees.
For some reason many assume thieves aren’t good entrepenuers, and won’t spend their 8+ hours of work and study time per day finding better ways of stealing, defrauding, and robbing while evading the protection services (i.e. making it uneconomic – for a real-world example, in 1936 a book called “The Professional Thief” was published, I think it is available from “Books on Tape” or one of the other audiobook publishers).
If Rothbard is right in the strict sense, I can freely steal $5 from you as long as I can make it cost more than $5 for you to get it back. When you start adding expenses, where do you stop? If you don’t, you compound the loss. (And to add to the defense difference – how much would you pay to prevent me from stealing $5?).
(The above book makes reference to another published in the 1920s about a texas millionaire that was conned and chased the thieves around the world, and it sounds like he spent more in the recovery effort than was taken).
Tz,
I have responded to the points you make that i understood.
“I’ve also mentioned I am not convinced that initiation of force gives you any right much less carte blanche to use any form of force or violence (even assuming omniscience to find the perpetrator and know the exact amount for justice).”
What is your position on retribution and restitution of a victim? Are such things justified?
“If and when I choose to defend (as opposed to revenge) myself, I am not doing so because I am countering violence as much as I am countering the evil will and act of the “aggressor”, and that would lead to the forms of defense I am allowed. Violence and evil are also different things, though they often occur together.”
The aggressor’s act is evil, as you put it, because he is initiating violence against your property. You are justified in using defensive violence (not evil) because the aggressor has given up any justification to object, since he is the one who has initiated the violence.
“For some reason many assume thieves aren’t good entrepenuers, and won’t spend their 8+ hours of work and study time per day finding better ways of stealing, defrauding, and robbing while evading the protection services (i.e. making it uneconomic – for a real-world example, in 1936 a book called “The Professional Thief” was published, I think it is available from “Books on Tape” or one of the other audiobook publishers).”
In a free market in protection and insurance, thieves would be fools. They would loose all legal protection, become outcasts and outlaws. They would become destitute because people wouldn’t insure, protect or trade with them. Being outlaws, they would be subject to actions of those who had the inclination to aggress against them or take disproportional restitution or retribution against them without fear of market reprisal.
“If Rothbard is right in the strict sense, I can freely steal $5 from you as long as I can make it cost more than $5 for you to get it back. When you start adding expenses, where do you stop? If you don’t, you compound the loss. (And to add to the defense difference – how much would you pay to prevent me from stealing $5?).”
It only makes sense that the cost of getting the money back be included in the restitution. In addition to that, it also makes sense that more than the return of the stolen $5 be the just penalty. I would be happy to leave it to the private competing courts to decide where you stop adding expenses.
“(The above book makes reference to another published in the 1920s about a texas millionaire that was conned and chased the thieves around the world, and it sounds like he spent more in the recovery effort than was taken).”
In a free market in protection, insurance and courts, if the perpetrators were caught, this millionaire would get his money, costs, and compensation for his troubles, provided this was truly fraud he was a victim of. If they couldn’t pay up, sounds like he’d have himself some slaves while they provided restitution.
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