The reference to Sancho Panza is to suggest a less cavalier attitude toward the future of labor opportunities for less-productive workers. I’m just not clever enough to formulate a better title for this post.

Jordan wants us to think about what will happen in the labor market when the productivity of some people increases exponentially relative to others. His argument grates against my priors, so I had better reinvestigate those biases.

He provides “Four Theses about [American] Work:”

1/Average company could lose 30-40% of staff without unacceptable output quality decline.

2/Average company is just competent enough to not go out of business.

3/Most employment is a form of privatised welfare tolerated because society lacks a compelling counternarrative to finding meaning in work.

3.5a/Corollary: we are still only in the beginning stages of technological unemployment, and

3.5b/the pressure against it will be rooted in existential angst and the failures of a welfare system predicated on near-full employment

4a/Competitive pressure strips resources needed for antifragility.

4b/Then, when pressure abates, excess resources do not (necessarily) improve resilience.

4c/Resources that could be spent on a second lung or kidney go toward additional fingers instead.

Very good, and a challenge to the laissez-faire economist’s usual cavalier attitude toward laborers. The first simple result is to say that if some people can’t match others’ productivity they will starve and die off, society will be richer on average and so much the better. This echoes the approach adopted by eugenicists that preferred a negative check on population, like Darwin. Survival of the fittest among people just as among animals. Birth control is problematic to these folks because the fittest are actually more likely to cut out the fittest rather than the weakest, the fit having better access to contraceptives. The eugenicists that preferred a positive check on population also treated humans like animals, but domesticated animals, desiring active management of the herd. Contraceptives should be forced upon the unfit specimens, up to sterilization in many cases.

The progressive discussion over eugenics (that I think included Keynes’ optimism) was possibly a response to never-before-experienced increases in productivity and quality of life. The distribution of improvements in productivity was possibly more even in the progressive era than the increases in productivity Jordan is concerned about looking forward from today. I say possibly because we have a problem of survivor bias. The distribution may have been every bit as lumpy as what we may experience imminently. I don’t know how many people starved to death in the industrial era because they were left behind by progress. Was the Irish Potato famine an example? What about the Chicago slaughterhouses? Did many elderly farmers simply die of starvation? How would that have been reported and recorded? I don’t know. I think Progressives might have said, cavalierly: good riddance.

Of course the lesser classes also had a lesser voice in that era. They were not included in any deliberative form of democratic decision-making. The survivors of that era may all have been of “better stock” than those that experienced it. Our great-parents may have experienced an era of relatively evenly distributed levels of productivity because the previous generations’ under-productive members died off. Or maybe the improvements in technology were such that everyone’s productivity improved apace. Just last might I recounted to a friend how in my family only one person in my parent’s generation was above a blue-collar worker, and none of may grandparents were above blue-collar. Yet they all owned houses and cars. I don’t know, but it may be worth investigating.

Considering a general, ahistoric case of skewed distribution of productivity improvements what options are available to the low-productivity laborer, and how will the rest of society treat them?

I consider my barber for a moment. I can’t remember where the example was introduced to me, possibly Bastiat, but I pay my barber $12 for a haircut (plus a tip that operates as an efficiency wage such that I always get my preferred barber whenever I go to the shop). I remember paying $6 for a haircut in North Jersey as a kid. Has barbering technology improved greatly over time? Not really. But the opportunity cost to the average client of cutting his own hair has increased apace to his productivity. Hence, barbers’ wages increase along with my productivity.

This can be applied generally. As the ultra-productive increase in productivity their opportunity costs also rise. They become willing to pay more to have more menial tasks done for them. Witness the rise in the services sector.

But suppose a haircutting machine is developed such that I can stick my head into something resembling the odd domes our grandmothers used to stick their heads in at the salon (what were those things for?!?). I sit under the dome and the machine cuts my hair to perfection, every time. Capital supplants labor, and the owners and technicians of barber-domes see an increase in personal productivity while barbers are the newest victims of creative destruction.

Is there any shortage of new service-opportunities for former barbers? The cavalier economist typically shouts “no!” with little evidence to support him. There is an infinite supply of unmet-wants. New service industries—witness personal trainers, life coaches, dog walkers, etc.—will emerge, and those laborers will earn wages that reflect high productivity workers’ opportunity costs.

But we must consider the elasticity of labor supply. As ultra-productivity increases fewer workers are actually engaged in making stuff and more workers are engaged in pampering people. But if the supply of service workers increases to perfect elasticity the ultra productive will be able to capture greater shares of the surplus from hiring pamperers.

Inequality of quality of life follows, generating envy at least, at worst we are back to the eugenic negative check. Worse yet if the classes become further separated and sympathy fails to cross class lines.

I find at this point that many critics of inequality become concerned about the deliberative process. If the political sector can be captured by the ultra-productive we may observe a move toward an effectively positive-check sort of eugenics. That is, introduction of policies that cause the least productive to be removed from legal protections. The extent to which cronyism is an example of this should be considered.

Modern Progressives (I’m thinking of the Bruenigs, for example) might suggest radical redistributive schemes to prevent the capture of the political sector. Of course, that is not the typical appeal, rather they attempt to awaken our sympathies more generally. The political challenges attached to such an agenda frighten many, but particularly the ultra-productive, who stand to lose both wealth and status. Perhaps the loss of status is more important to some, witness Trump’s supporters. To what extent are Nozik’s arguments for Wilt Chamberlain’s income really just upper-class propaganda?

Another option for the under-productive is to abandon society and try to eek out a living in the wilderness, or the trash heaps, where we see some living today. In the extreme we experience the antifragile result that the peasants revolt, and the ultra-productive are either stripped of their lives, their work, or their marginal productivity. In any case society will have fewer resources in total to distribute by whatever criterion afterwards.

What is to be done? Mass public education has not overcome the problem of unequal distribution of talents, and has perhaps only exacerbate the problem, pushing lower-productivity workers into student debt, and effectively subsidizing their higher-productivity counterparts’ education, with no productivity gains to speak of.

We do observe lower levels of fertility among the wealthy, so maybe the long-run labor supply becomes more inelastic.

Or maybe new technologies will have a more even distribution of productivity gains.

I’m hesitant to make any prescription, because moving in any direction presumes knowledge we just can’t have. I hope I’m a little less cavalier than I used to be though.

Will Wilkinson’s criticism of Karl Hess’s dictum, as often attributed to Barry Goldwater, is clever and for the most part correct. But I’ll point out a few flaws, and a better way forward.

Wilkinson thinks that the first half of the statement “extremism in defense of liberty is no vice” in plainly a violation of the Aristotilian understanding of virtues. Quite right, if one takes Aristotle as an authority, as Wilkinson confesses. Hess made the mistake of framing the statement in terms of virtues and vices, so working within that system is defensible. But I will claim that virtue ethics are insufficient for and unnecessary to do-ing justice.

The porridge of virtue may always be just right, but that must be in reference to something, viz. the status quo. Moderation cannot get us out of a system of injustice or a transitional gains trap.

But Wilkinson is right that extremism leads typically to violence. He then identifies Malcom X as embodying the ethic of extremism. X was known to reject the aid of white sympathizers. Under extremism they only get in the way. X saw the Civil Rights movement as blacks stepping up to claim equality as “within their rights” and when rights talk gets started, “any means necessary” quickly follows.

That white supremacy required some sort of exogenous shock to be broken is granted. We shall see what sort of shock actually worked.

“Moderation in pursuit of justice is no virtue”

It is important to Wilkinson that “We’re talking about how to go about defending liberty and pursuing justice as a practical matter.” Me too. Do-ing justice is what we should be about, but whether it can be done by a “we” is doubtful. Wilkinson prefers persuasion, as do I, but he limits his mechanism of persuasion to rhetoric. He claims a “sound persuasive argument” is “obviously virtuous.”

Dr. Martin Luther King Jr. is Wilkinson’s second example, after Milton Friedman, both masters of rhetoric, or sound persuasive argument. Wilkinson then claims that “the virtue of the tactics” employed by King determined the success of the bus boycott and the civil rights movement. But that is not enough. King openly accepted, and I will claim relied upon, the help of whites, in contrast to X.

The vehicle for success was less the distinction between extremes and moderation than the composition of individuals that were involved. King succeeded because he captured the sympathy of a sufficient number of whites. Those whites got involved and supported his movement. White people marched with King, supported his movement, and openly advocated for it.

Sympathy works (roughly) like this: The class that I consider “other” is at a social distance far enough from me that I don’t sympathize with their suffering. I sympathize with people who are like myself. When someone whom I consider alike to myself, someone with whom I sympathize, demonstrates sympathy with those I consider “other” I am forced into making a decision. Either I also extend my sympathy toward the others, or I must push the one whom I considered alike into the other category. Extension of sympathy is very costly. It requires a kind of abdication from the privileges I enjoy under the status quo. The loss of sympathy with a member of my community is also potentially costly. I may lose a friendship, or choose not to do business with such a traitor, and thus lose some surplus from exchange.

The sympathizing of the traitor has forced me into a corner. I will lose something either way, especially in the short run. The question is whether I can see the potential long run gains from the extension of sympathy. Many cannot.

Again, Wilkinson frames his discussion in terms of compromise and rhetoric, “moderation in principle means hammering out workable compromises with people who hold to different principles. If that’s a vice, we’re all in big trouble.” Indeed. But compromises only work when there are mutual gains.

With patterns of injustice, there are not always Pareto opportunities such that all will benefit, especially given heterogeneity of discount rates. Many people were harmed materially and psychically by the outcome of the Civil Rights movement. If we include Johnson’s welfare programs as among the outcomes of the Civil Rights movement there are many who will claim that even blacks were harmed.

Wilkinson identifies two large parties, those that started thinking seriously about politics by reading Ayn Rand, and those that started by reading Karl Marx or Noam Chomsky. I belong to a minority that got started with Stanley Hauerwas and John Howard Yoder. The Hauerwasian mafia, as they are sometimes identified, similarly start from a position of non-violence.

An economist who gets started here will read Murray Rothbard at some point and find some purchase in the Non-Aggression Principle. So I did. Rand and Chomsky came later for me, and then Aristotle and finally Adam Smith. I am certain that I misunderstand all of these.

The one option that economists and political theorists tend not to consider is simple charity. The way out of a transitional gains trap must be compensated for, but by whom? I maintain that it must be paid for by those who sympathize.

Dr. King’s movement was not successful because of moderation, extremism, or complacency. That movement worked because sympathizers gave. White people abdicated privileges, and made willing sacrifices for the sake of blacks.

Oppressed minorities are incapable of rising up to positions of equality in any other way. There is nothing about a bus boycott or a sit in or a march on Washington DC that can succeed unless some whites sympathize.

The advent of television made much of this possible. Sympathy is aroused by spectatorship. Until northern whites saw for themselves blacks and whites being sprayed by fire hoses on TV they were free from ever thinking about the problems of Jim Crow. Wilkinson rightly says that “if you want to get anything done in politics, on any issue, you need allies. In order to win reliable allies, you need other groups, other factions, to trust your faction and feel that, at least, you don’t disrespect them.”

Libertarians are cavalier about transitional gains traps. They say Kaldor-Hicks improvements are the best we can hope for in the real world. Systemically this is true. Bryan Caplan will say it is true even about wristwatches. But abdication and charity, sacrificial altruism as I have called it, is the only approach that has effected praiseworthy reforms. My only complaint is that we typically don’t have the patience or the fortitude to follow an ethic of sacrificial altruism all the way through a reform.

I can’t expect the oppressed to wait. Birmingham jail proved that to us. But that only means that I need to get moving faster.

There were riots in Baltimore, responding to what to many seems to be systematic police abuse of force on blacks. Some have blessed the riots, claiming that at some point, violence is the only answer. Others have condemned the riots, claiming that destruction and violation of property rights is never a good long-term solution. Some say that the majority of rioters were simply opportunistic looters, taking advantage of the moment to steal from the very groups that had already been harmed by the prevailing injustices. Some say that destruction and violation of property is precisely what is necessary to demonstrate the illegitimacy of the systems responsible for the particular distribution of property that exists.

Perhaps it would have been better if the riots had taken place in Chevy Chase or Annapolis instead.

My question is: was this an organized riot or a wildcat riot?

James C. Scott in “Two Cheers for Anarchism” talks about the wildcat riot and how it is the most threatening form of protest to those in power. This is exactly right, from a public choice point of view, and perhaps right anyway.

When a protest is organized, we can count upon the organizers to act in their self interest. They will attempt to control the protest such that the marginal cost of the protest, in terms of the organizers’ loss of credibility with existing powers, is equal to the marginal benefit, in terms of the organizers’ capacity to gain influence over the existing powers. But it is really all about the organizers.

In a wildcat riot, the real point is that the entire system is broken. Community leaders are recognized to have no power to change the situation for the right. The bargaining and compromise necessary for marginal reforms is recognized to lead to insufficient reforms for those most urgently in need of change.

I hereby invoke the transitional gains trap. When the reform that is possible through the usual channels of politics is known to be insufficient, the only way to sufficient reform is an exogenous shock. We have to enter a prophetic stage, in which voices at the fringes, those who have no political capital and who do not stand to gain any political capital send the people scurrying about as independent agents to burn the system down. The riot will destroy. It will take lives. It primarily says to the system: you do not work for us, and we know it. The riot does great harm, and in my understanding is the only ultimate alternative to the sacrificial altruism that I preach. And those two options are polar opposites in terms of strategy, but of the same end.

The riot will go on, and will send the correct message, so long as it remains wildcat. But the moment demagogues arise within it, the moment some leaders start to gain some social capital, the moment it becomes apparent to some agent that they can get some goodies for the riot while quelling it and appeasing the establishment, and the moment that the riot yields to these demagogues, the wildcat nature is gone. It is politics as usual.

I’m afraid that the failure of the Burkian good folks to do the right thing led to the alternative of the wildcat riot, but that then the demagogues arose. The riots will be meaningless in the end. Some innocent bystanders will have been harmed. Some new demagogues will arise. Mostly the same old demagogues will take advantage of the situation.

When it all settles down, it will still be the same Baltimore. I am grieved.

We are allowed to rant here, right?

I said, “But the individual retains volition over the shaping of self in every respect. The individual can only exercise that volition selectively. And the individual should be careful about rejecting the formative structures without extensive deliberation, per Hayek.”

Those who subjectively value the increase in virtue should expect to have to shoulder that burden personally. The only true route to reform, whether of society or the individual, is through personal expense.

Adam: “One cannot conceive of virtue without language, the consensus that bravery, restraint, wisdom, charity, fairness, and similar qualities, are in fact worthy of praise.”

This is perhaps the point of departure between Adam and I, at least in our understanding thus far. I can demonstrate charity in a way that words cannot. Words are ultimately about exchange. This is something I hope to get at in my research on Richard Whately. There are some behaviors that demonstrate virtue above that which can be articulated. Those virtues are not open to debate or discussion. They are also not amenable to imposition. They truly must be caught, and voluntarily, rather than taught, didactically.

In other words, I am not really trying to persuade anyone to adopt my ethic. I try repeatedly to say that I don’t know why anyone would adopt my ethic. But I also don’t see a way to effect reforms that reach Pareto outcomes without direct personal sacrifices. The usual response is that my ethic is vulnerable to moral hazards. Precisely. The goal is not really the reform, but the transformation of the individual. So volition is central.

So there is an ought that is merely moral, that is, conjective, or socially praiseworthy. Then there is that peculiar ethic that I try to hold myself to, that goes beyond the conjective, beyond what I can hope to persuade you to do through words, beyond that which I can motivate you unto through appeals to your self-interest no matter how long your time horizon. I’m saying my ethic is impossible. But that is why it is true religion. It is not entwined in any way with self-interest. All religion that so compromises itself I count as less than.

And that lesser religion is usually sufficient for social progress. But it cannot motivate the redemption of sinners. No simply moral religion would allow Saul, murderer of Christians, to become Paul. It is offensive to most ears, and rightly so. It says that your morality is insufficient.

I illustrate this by showing that all reform is a fail. Inasmuch as reforms are justified by Kaldor/Hicks efficiency rather than Pareto efficiency they implicitly claim that the best morality we can hope for is one that sacrifices the losers for the sake of the whole. You see, the losers of such reforms are never accounted for when measuring the success of the reform. They are dead.

Pareto efficiency is not a possibility, unless people are willing to make personal sacrifices. Then it is not a political reform really, but an anarchic mob spite-ing the illegitimacy of the regime by accomplishing what the regime cannot.

In other words, I am saying that Christians should shoulder the full burden of the reforms they advocate personally and sacrificially, otherwise they are compromising their religion.

Can a Christian, can I, remain involved in politics, continue to vote, continue to participate in the conjective? I suppose so. But I must not bring any of my radical sacrificial altruism into that exchange.

This is how I manage to remain an economist, despite my ethic. I take the Misesian / Hayekian approach as demonstrated in the Socialist Calculation debate: Given the ends specified, will the selected means achieve those ends? There is no value judgment in this. It is purely conjective. Consequently, my primary function in political discussion is to say “no.” That is, with Hayek, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” This is why economists are unpopular.

I have no ideal outcome. I am not deluded into thinking that all individuals could possibly adopt this radical sacrificial individualist ethic. Again, I don’t know why anyone would want to adopt this ethic. I think the primary function of the ethic is prophetic, that is showing that the emperor has no clothes. Showing that the tidy reforms of the past have actually prejudiced some at the expense of others. Showing that the advocacy practiced on symbolic margins is not praiseworthy. Showing the Church that entanglement with the state is ultimately a harmful compromise. Showing the Kantian duty is insufficient for motivating people to do positive good. Showing that even virtue ethics leaves something undone. All of this can be done through the simple economist’s “no.” But then overcoming that “no” in any way requires my peculiar ethic. The ethic is altogether spiteful, and in spite of existing powers. It is throwing starfish back into the sea, one at a time.

The positive good is important because progressives believe that the state can be effective in accomplishing it. Progressives are right that morality and virtue are insufficient for caring for the very least of these, but then they presume that the state can accomplish those ends. The economist says, “no.” the sacrificial altruist says, “I must do it.” Virtue ethics might be the best we can possibly hope for with respect for civic morality. And it is very good! Particularly when it recognizes that exchange is ubiquitous and essential.

I was doing what David Levy’s students do at the Library of Congress this Tuesday (there were two other Levites nearby) when I came across this paragraph in which Frank Knight invokes the term ‘Bourgeois Virtues’.

I flipped through my copy of McCloskey’s first volume, searching for a link to this text or some other connection between Knight and the term. No hits.

Here’s the passage:

The evil has been that on one side the economists have taken for granted the virtues of the economy, management and thrift, while the ethicists have tended to ignore or even to disparage them. This latter attitude is no doubt in part a result of the way in which the economic side of life is treated in the Judeo-Christian religious tradition. In any event, the modern mind finds it self-evident that not merely progress but civilization itself depends upon the general recognition and the conscientious practice of these ‘bourgeois virtues’; yet they have not been made philosophically respectable and one of the crying needs of the hour and for the future is that this should be done.

Frank Knight, “Forward” to Alec L. Macfie (1943) Economic Efficiency and Social Welfare, page v.

Update: Because David Levy:

I don’t agree with Adam that individual responsibility emerged within a tradition, or only ever existed within a space framed by groups. Individual responsibility may be a relic of the state of nature, if one ever existed.

The Durkheim and Foucault schools seem to rightly identify that the individual is shaped by structures and institutions, wherever the individual does not practice volition. But the individual retains volition over the shaping of self in every respect. The individual can only exercise that volition selectively. And the individual should be careful about rejecting the formative structures without extensive deliberation, per Hayek.

The teleological consequence that Durkheim and Foucault aim at (and here I must beg the reader to contradict me if they understand better, because my familiarity with these writers is strictly third-hand) is that certain structures shape the individual badly, in particular “capitalism,” which I put into scare quotes because theirs is a stylized capitalism, but so is mine.

Adam’s thesis fizzled in the examples. But what I understand is that he would warn libertarians not to presume volitional action on the part of those agents that seldom act volitionally. I think a more robust model would first compare the marginal benefit to marginal cost to the individual of thinking volitionally about a particular habit.

How much instruction in virtue is needed? Most pedagogies of virtue guide the individual through a program of deliberation over habits. But we are short on instruction in virtue.

Perhaps the best lesson to learn about virtues is concentrated in the problem of faction, as rightly identified by Adam Smith and Richard Whately. Where deliberation over a habit is discouraged, or completely blocked, we should suspect that the habit is supportive of faction, rather than sympathy. Mill thus placed a great emphasis on liberty of conversation. Precisely those habits that structures discourage individuals from deliberating on are those habits that are most suspect of forming vice in the individual to the benefit of some in-group sympathy.

Finally, virtue is best exemplified and then caught, rather than taught. But who will take the initiative to demonstrate? Particularly when the students might be few, and might not absorb the lesson apart from repeated demonstrations? Those who subjectively value the increase in virtue should expect to have to shoulder that burden personally. The only true route to reform, whether of society or the individual, is through personal expense.

Adam alerted me to Vulgar Morality’s piece “Freedom and Community” last night.

My thoughts:

The Vulgar Moralist points out the theory of clubs, which is really just an extension of contractarian political philosophy. In order to get into a club I have to give up some liberties. I must pay dues, or demonstrate some credible commitment to the group. Perhaps I have to go through some rite of passage. Perhaps I have to be baptized, or get circumcised, or post a bond.

But community that exists for positive purposes must first protect itself against the collectivist’s problem of free riders, and the methodological individualist’s problem of collective decision making. Those problems are symmetric. Methodological individualism is mathematically tractable, so economists prefer that approach.

Collectivism works particularly well at destroying things, as VM points out through various examples. Apart from the formation of a club, groups are better at breaking than building.

James C. Scott illustrates this well in “Two Cheers For Anarchism.” Scott shows that wildcat strikes and unorganized protests are the most threatening to incumbent powers. Organized movements have particular decision makers whose self interest can be bought. Politics is exchange. A collectivist movement with no decision makers is not doing politics. It is destroying the existing order.

The Freiburg Circle in Germany during WWII, out of which the Ordoliberals emerged, consisted of individuals who had made a credible commitment. If discovered, each of them faced certain punishment, possibly death. They were working to circumvent an absolute surrender that would cripple Germany sufficiently to motivate a WWIII in the next generation. They were trying to build a shadow government to replace the Naziis when the time came. They succeeded in part.

That positive collective was sustained by an externally enforced credible commitment. One could say that the early Christians, who faced persecution at the hands of the state, also “enjoyed” that sort of external enforcement. But the identities of those committed were well known, or easy to monitor. Circumcision is easily detected. Baptism was designed as a public act.

The problem with collectivist movements that can only destroy is that they are anonymous. There is a desire for a changed world that begins by looking outward with blame. One absolves oneself by virtue of becoming part of such a commitment – free collective. The problem most certainly, says the collectivist, is the system.

So long as the movement remains unorganized, perhaps it can achieve some welfare – enhancing results, at least in the Kaldor / Hicks sense. Destructive movements can produce the equivalent of omnibus repeals of rent -seeker friendly programs, overcoming transitional gains traps. But unless those programs all bequeath the rents on the same concentrated set of interests, a mass destructive movement will be difficult to sustain. Witness the inability of the occupy movement to come to real agreement about positive action.

An organized movement will almost certainly compromise its most cherished ideologies. Witness political parties. The politics of exchange is relatively peaceful and constructive, compared to the mob. But it cannot bring itself to omnibus repeals. It privileges the status quo.

Gordon Tullock showed us that most rebellions result in the same middle management of the state, under a new executive. VM corroborates with the example of the Egyptian rebellion. The institutions that made America relatively successful were in place long before 1776, or 1789. Those institutions largely survived the American Revolution, with many of the same individuals in the decision-maker’s positions.

I’m an utter pessimist with respect to reform. I don’t like the destructive results of the riot. I’m not a fan of omnibus repeal. Many of those who receive benefits of existing programs are fully capitalized into those programs, and I don’t like the idea of not compensating them.

So I fall back into a position of sacrificial altruism as the only legitimate route for reform. If a group wants to reform a program, let them compensate the capitalized interests. Morality, misapplied, takes the mob’s attitude. Burn it with fire. It is outward facing with its blame and absolved of all responsibility. Anonymity is unaccountable. It cannot peacefully overcome the status quo, so it moves outside the exchange of politics, and demands something for nothing.

Morality, correctly applied, subverts politics. It uses exchange to take responsibility, even where it bears no guilt, and pays from its own resources, honestly earned, to effect reform. It is like the good Samaritan. It is like the Muslims protecting Christians from violence during the rebellions. It is like the volunteer visiting the elementary school to read with the kids who are behind.

It is quaint. It is mundane. It is constructive. It is what sustains us.

Property is theft, some say. And this could be true. Suppose there were an idyllic community sharing all things in common, peacefully. In a model akin to Olson’s roving bandit, a raving bully

within the community begins appropriating things unto himself, and property is born, through theft. Most often this is the story told about enclosure laws. Whoever had the ability to manipulate the institutions of law and power could capture rents. Once in place, a raving bully would be hard to displace, thanks to transitional gains traps.

All property is understood to have emerged from this process.

But suppose property emerged not from appropriation, but through allocation. Suppose a community has only one bow-and-arrow (or whatever specialized asset) among them. The community then allocates that bow-and-arrow to the person most talented in its use.

The archer no longer is understood to have taken the property unto herself, rather, she is understood to have been allocated the tools of her trade for the benefit of the community. She is a steward of the assets, not a tyrant or a miser. Should the archer abuse the use of the bow-and-arrow they would be taken from her and given to someone else. Should someone more talented in the use of the tool be discovered, then the tools would be re-allocated to that individual.

Now suppose that the comparative advantages of each individual in the community were discovered and that each individual were allocated the capital best suited to them to steward for the sake of the community. Each person would be a steward over some set of assets, and would be accountable to the whole community for the appropriate use of those assets. Suppose also that one individual were discovered to have an uncanny ability to correctly identify the comparative advantage of all other individuals. To this wise and (let us assume) benevolent one is allocated the responsibility of allocating all other community assets. The community prospers through the wisdom of the Allocator, who appoints stewardship over assets.

Students of economics will recognize Hayek’s Use of Knowledge in Society within this parable. It turns out that the invisible-hand mechanism of the market is the benevolent and wise Allocator. Property is only held, in the long run, by the person who stewards it best, that is, who operates as the least-cost producer of goods desired by others because the property holder has a comparative advantage in employing that asset.

Of course there are all sorts of qualifiers that involve the theory of the firm and whatnot, and economics has been working out these details off and on for quite some time now, though not much was done between the early political economists and the 1950s when Alchian, Buchanan, Coase, and Demsetz (ABCD, with a nod to Epstein and Fama, please feel free to add to the list, new Twitter game) began to work out the economics of property rights.

Bruenig argues that all income could be reallocated according to any from among an infinite set of possible institutionally based distributions, without unjustly taking from some a claim to future income. He is theoretically correct in this I believe. But he has started from the wrong premise, that property is theft, and that the current distribution of property is therefore the consequence of injustice. I’m trying to be charitable, but Bruenig it seems may be perilously close to assuming himself the wisdom and benevolence of the Allocator.

Step back, surely the present allocation of property does reflect some injustices. Agreed. There are a great many appropriators, raving bullies, that fleece the community and enjoy luxury at the cost of others’ poverty. Many of those bullies are in Congress, or in Town Hall, or on the School Board, or on the local HOA, I would argue. Why would Bruenig entrust these institutions with the responsibility of enacting his preferred policies?

I think he is too romantic about those institutions. I think he sees top-down as an efficient approach to changing the world for the good. I think he means quite well.

But I think there is a pattern of thought that at once assumes that property is the consequence of top-down appropriation by a raving bully and that finds the solution to problems through top-down channels. It is the worldview that takes anarchic cooperation as its starting point, that then can understand the invisible-hand mechanism’s function in allocating resources efficiently (and peacefully!), that also is very suspicious of the top-down approach.

It is the combination of the Virginia School’s robust political economy that combines Hayek’s insights of the Knowledge Problem, The Coasian insights about property, the Public Choice understanding of politics and rent seeking, and now also the Bloomington Workshop’s insights about concentric orders, all seen from the perspective of a positive research program in anarchy that leads me to most of my ethical conclusions. That and a hefty dose of pacifism, with a shot of grace.

Bruenig is wrong about property. Workers are not atomistically interchangeable. We have specific talents. The only way to get rich, apart from political abuse, is by making other people better off. The right way to deal with injustices is not by overturning the whole system. Rather, the right approach is to work under the system, to subvert it, to be an agent of grace and mercy. Be the exogenous shock you want to see in the world. Stop blaming other people. Yeah, they are wicked, but so am I, if I’m honest with myself.