Peter Boettke: Cosmopolitanism Is the Answer

My answers to our current challenges are simple ones. Let’s begin at the beginning—which for the liberal is basic human equality. We are one another’s equals. There should be no confusion on this point. And if you are an advocate of liberalism and you find yourself “standing” (metaphorically or literally) alongside anyone asserting the superiority of one group over another you should know you are in the wrong crowd and you need to move in opposition quickly to leave no doubt in their or other’s minds.  

Liberalism is liberal. It is an emancipation philosophy and a joyous celebration of the creative energy of diverse peoples near and far. The liberal order is about a framework of rules that cultivates that creativity, and encourages the mutually beneficial interaction with others of great social distance – overcoming such issues as language, ethnicity, race, religion, and geography.  

We are one another’s equals. There should be no confusion on this point. 

Bumping and Bargaining

At a foundation level, no one is privileged over any other in recognition of our basic humanity.

As the great practical philosophical teacher in my life—my Mom—Elinor Boettke, used to like to say “people are people” that is who we are, we just have to let each other live, and that is that.We are fallible but capable human choosers, and we exist and interact with each in a very imperfect world.  

No one of us, let alone any group of us, has access to the truth from the Almighty Above, yet we are entrusted to find rules that will enable us to live better together than we ever would in isolation. We bump into each other and we bargain with one another to try to ease the pain of bumping or avoid the bumping in the future. But, we must recognize that despite our basic human equality, we argue and we don’t naturally agree with one another about how we are live our lives.

So in our bumping and bargaining with one another, it is critical to keep in mind that we will soon face severe limits on what we can agree on.  In particular, we have little hope of coming to an agreement among dispersed and diverse individuals and groups over a scale of values, of ultimate ends that man should pursue.

As Hayek put it in The Road to Serfdom (1944, 101):

The essential point for us is that no such complete ethical code exists. The attempt to direct all economic activity according to a single plan would raise innumerable questions to which the answer could be provided only by a moral rule, but to which existing morals have no answer and where there exists no agreed view on what ought to be done.”

This is one of the reasons why the Progressive establishment’s idea of a benevolent and omniscient social planner with a stable social welfare function would easily direct public policy toward the “general welfare” is a nonsensical approach to political economy, as James Buchanan effectively argued throughout his career from his very first critique in 1949 of the “fiscal brain.”2

Yet, public economics in the tradition of Paul Samuelson and Richard Musgrave continued, and continues, as if this Hayek and Buchanan challenge was never made. And, I should add, as if Kenneth Arrow had never demonstrated the impossibility of a democratic procedure for the establishment of a stable social welfare function. “We can rely on voluntary agreement,” Hayek put it, “to guide the action of the state only so long as it is confined to spheres where agreement exists” (1944, 103).

So if we rule out as impossible an all-inclusive scale of values on which we can agree, rather than seeking agreement on the ends to be pursued, our discussion will be limited to a discussion of the means by which a diversity of ends can be pursued within society. We can, in essence, agree to disagree on ultimate ends, but agree about the way we can acceptably engage with one another in disagreement. We are, after all, one another’s equals, and each of us must be accorded the dignity and respect as capable architects of our own lives.

The liberal virtues of respect, honesty, openness, and toleration all entail a commitment to a way of relating to one another, not necessarily a commitment to agree with one another about sacred beliefs or lifestyle choices, or what commodities we desire, or what occupation we want to pursue.

Philosophy Matters

True liberal radicalism is about the framework within which we interact, and I want to suggest that the most critical aspect of a viable framework for liberal society is that it can balance contestation at all levels of governance with the necessity of organizing collective action so as to address troubling issues that cannot be adequately addressed through individual action.3

Let me unpack that sentence. The first task in thinking through the viable framework is to determine what problems demand collective action, and what problems can be addressed by alternative forms of decision making.  

One of the great insights of Buchanan’s theory of public finance was that any theory of public finance—whether classical liberal, progressive elite, or socialist planner— had to posit a basic political philosophy for no other reason that public finance is premised on some answer to the question of the appropriate scale and more importantly scope of governmental action.

In other words, a public finance theorist can either work explicitly with the political philosophy they work with, or they can work implicitly with it, but they cannot work without a political philosophy.  

It is political philosophy that tells them that government is responsible for a host of public goods in the interest of the general welfare.  

We don’t need the federal government to decide how to collect our garbage.

There is no purely technical answer to that question. Once the answer is given as to what government should do, then a positive political and economic analysis can ensue, but efforts to provide a technical economic answer to this should question is merely normative philosophy masquerading as positive political economy, and scientific economics will only advance when we stop the masquerading, and explicitly acknowledge this political philosophical point Buchanan raised.  

This point is as relevant for today’s discussion as it was at the time he first made this argument during the heyday of the development of so-called “scientific” welfare economics. That same Samuelson-Musgrave style public finance and welfare economics structure is still what one can see in most modern public finance, and discussions of such hot-button normative issues as income inequality and the Pigovian tax scheme to carbon emissions.

Scale and Scope

Questions of the scale of government are not invariant with respect to questions of scope. As Keynes once remarked, you cannot make a fat man skinny by tightening his belt. Scope is about the range of responsibilities of government, scale is about the size of the governmental unit. The growth of government discussed in the previous section is primarily targeted at scope, but that in turn is reflected in scale.4

Questions of scope are philosophical as well as practical. But though philosophical, there is an institutional component due to the very fact that even wishful thinking must be operationalized in practice, and that requires institutions and organizations. 

The delineated scope of authority for the different units of government should match the externality the collective action is intended to address. Again, putting this in the most common-sense way, we don’t need the federal government to decide how to collect our garbage, and we probably shouldn’t expect the local mayor to figure out how to design a defense system against a nuclear attack.

Assuming we have solved these two structural problems of government—general rules to which we agree on how we relate to one another in our interactions as neighbors, and the delineated scope of responsibility and authority between local, state, and federal governments—we still have the problem of learning how to match citizen demand, expressions of voter preferences, and governmental policies and services.

We have to postulate some mechanism for learning within the liberal order of politics that corresponds to the process that was identified within the marketplace. How do we get a sort of learning liberalism within this general structure?

In the marketplace, the learning is guided by prices and disciplined by profit and loss accounting, but it is fueled by the rivalrous competitive process where one can be sure that if A doesn’t adjust their behavior to learn from previous missed opportunity to realize the gains from trade or they realize the gains from innovation, then B will gladly step in to take their place. Can we get such contestation in the political process? 

The true radical liberal has always been frustrated.

It’s not just a matter of contested elections, but contestation throughout the governmental process of service production and distribution. We cannot answer these questions without addressing the supply and demand of public goods, and thus the political process within democratic society.

Obviously, the frustrations with the establishment elite are deep-seated for the true liberal radical just as they are for the populist on the left or the right. The status quo is neither desirable nor sustainable. The diagnosis of the reasons why the establishment elite has failed differ between the liberal and the populist, but the critique of expert rule is an area of overlap.

Territorial Monopolies

The liberal project has a history that stretches back centuries, and the true radical liberal has always been frustrated. Constitutional constraints bend when they are meant to pinch, especially in times of war.

Delineated authority and responsibility is violated all the time, and not always due to the unwarranted of the federal into the affairs of the local, but in response to the state elected official strategically interacting with duly elected officials from other states to form a political cartel to benefit local interest groups at the expense of the general population.

Hayek asked his audience in 1949 to allow themselves to be Utopian, and I think that is correct. We need to envision a liberal system that respects the general rules of engagement, but structures an intense and constant competition between governmental units.  

Bruno Frey (2001) presented a vision of government without territorial monopoly. His idea of overlapping competing jurisdictions may be one such idea of how to cultivate a learning liberalism. Work by Edward Stringham (2015) provides another vision, and Peter Leeson (2014) yet another.  

What is common among all of these is that they make no recourse to axiomatic deductions from some non-aggression axiom. They instead offer arguments and evidence related to the operation of institutions and in particular, the processes by which self-governance performs not only better than you think, but in many instances better than any reasonable approximation for how traditional government would perform in the circumstances described.

Just as Hayek throughout his career proposed a series of institutional suggestions to bind the monetary authority from engaging in the manipulation of money and credit, only to be met with frustration as his suggested method proved ineffective against the governmental habit.5 Perhaps then in the supply and demand of governmental goods and services, the governmental habit as well is a source of instability, inefficiency and injustice, and thus frustration.  

If so, the reconstruction of the liberal project in the 21st century may need to turn to utopian visions as laid out by writers I have mentioned.  

A humane liberalism, as well as a robust and resilient liberalism, may find its operationalizability in an institutional structure of overlapping competing jurisdictions, and in a public discourse that respects the limits of agreement on ultimate values, but insists on a general framework that exhibits neither discrimination nor dominion.

Footnotes

  1. These words were spoken from the time I was growing up in NJ right outside of Elizabeth and Newark, NJ and with grandparents not far from Asbury Park, NJ and in the context of riots that nearly destroyed those cities for generations, and as a teenager in the 1970s as sexual preference issues became hot-button topics among some extended family members, and later on in the 1990s and 2000s in discussing interracial and single-sex marriage and also reproductive freedom rights among women.  People are people, you have to let them live.  Pretty common sense.  Elinor Boettke (January 1, 1926-August 10, 2017).
  2. See Buchanan, “A Pure Theory of Government Finance” (1949); also see Richard Wagner’s James M. Buchanan and Liberal Political Economy: A Rational Reconstruction (2017) for a brilliant discussion of how this paper laid the groundwork for much of Buchanan’s subsequent contributions to the field of political economy.
  3. The troubling issues are the social ills that plague human interactions, such as poverty, ignorance, squalor.  But the trouble issue in designing the framework is the potential for the powerful to exert their influence over the powerless and establishing rules that provide them with a permanent advantage.  So both “within any system” and “about any system” of governance we face trade-offs of eliciting agreement and curbing political externalities.  If our liberal system of government is to institutionalize our basic human equality in our ways of relating, then it must be designed so that neither discrimination nor dominion is permitted.  Various classic works in the analytical tradition of political economy from a liberal perspective have tackled different aspects of these puzzles starting, of course, with Hayek’s The Constitution of Liberty (1960), Buchanan and Tullock’s The Calculus of Consent (1962), Ostrom’s The Meaning of Democracy and the Vulnerabilities of Democracies (1997), and Munger’s Choosing in Groups (2015).
  4. And central to the argument is that this expansion of scale and scope has pushed politics in the democratic west beyond the limits of agreement, and that this explains both the dysfunctions and the disillusionment.
  5. Adam Smith in The Wealth of Nations argued that governments ancient as well as modern all resorted to the “juggling trick” when faced with the prospect of fiscal discipline. The trick entails a cycle of deficits, debt and then debasement. Smith warned that a default would be more honorable and least harmful, but that instead governments all will turn to juggling.  So if we take Smith’s metaphor for the moment, if you want to stop juggling you might tie the jugglers hands, you might take the balls away from the juggler, or you might cut off his arms.  If you find the juggler can still juggle with his hands tied behind his back, you might take away the balls. But if you find out that even though you took aways the balls he is juggling, he finds away to get them back again, then you might advocate not just tying, or even taking the balls away, but cutting off his arms so that he can never juggle again.  This last step is the most drastic, but it also might be necessary if the goal is to eliminate the juggling trick.

Excerpt from a paper prepared for the special meeting of the Mont Pelerin Society in Stockholm, Sweden, November 3-5, 2017.

Peter J. Boettke


Peter J. Boettke

Peter Boettke is a Professor of Economics and Philosophy at George Mason University and director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center. He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

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33 Responses to Peter Boettke: Cosmopolitanism Is the Answer

  1. jupes

    The liberal order is about a framework of rules that cultivates that creativity, and encourages the mutually beneficial interaction with others of great social distance – overcoming such issues as language, ethnicity, race, religion, and geography.

    So another open-borders loon. How’s that diversity working out in Sweden at the minute? Grenade attacks anyone?

    We are one another’s equals. There should be no confusion on this point.

    Give me strength …

  2. Sentinel Man

    There must be a special gate marked Fuckwit that academics have to pass through in order to gain the title Professor. The title now absolves the holder from all consequences of their actions in their quest to demonstrate their nativity and stupidity.

  3. Sentinel Man

    Correction naivity (dammed spelling checker)

  4. struth

    There must be a special gate marked Fuckwit that academics have to pass through in order to gain the title Professor. The title now absolves the holder from all consequences of their actions in their quest to demonstrate their nativity and stupidity.

    There is.
    They take photos of them.

    If you see a post with a photo of the writer at the bottom, especially if he’s wearing a bow tie, ignore it.

    Didn’t read more than a couple of sentences to realise this was an insulated, institutionalised wanker’s thought bubble.

  5. Combine Dave

    The liberal order is about a framework of rules that cultivates that creativity, and encourages the mutually beneficial interaction with others of great social distance – overcoming such issues as language, ethnicity, race, religion, and geography.

    So another open-borders loon. How’s that diversity working out in Sweden at the minute? Grenade attacks anyone?

    We are one another’s equals. There should be no confusion on this point.

    Being an open and liberal society is one thing.

    Allowing in those who are seeking access only to the welfare state is another and far more vile thing.

    Let in all those who wish to work or have the money and skills to survive here.

    Let all others stay home and enrich their homelands.

    End the humanitarian intake already FFS

  6. Driftforge

    We are one another’s equals. There should be no confusion on this point.

    ‘Let us start with a blatant falsehood and see what we can develop from there.’

    Oh dear.

  7. Rabz

    We are one another’s equals.

    No, “we” are not. After five decades on this planet I will no longer tolerate that blatant falsehood without giving the wally uttering it a gobful.

    Idiots.

  8. Arnost

    We are one another’s equals. There should be no confusion on this point.

    Men demanding rights to go into girls toilets? Coz they’re equal?
    Dwarfs demanding same pay as 2m pro Basketballers? Coz they’re equal?
    Men demanding right to bear / gestate children? Coz they’re equal?

    Crap. [or maybe they’re just confused?]

  9. Combine Dave

    Note the slight head tilt.

  10. Tim Neilson

    We are one another’s equals. There should be no confusion on this point.

    This statement is a confusion factory. As George C Scott as General Patton said at the start of the eponymous film, “don’t ever let anyone feed you any of that “equality” bullshit. Men are not born equal – anyone who’s ever seen a race or a fight knows that”.
    Even to say people have equal rights is misleading – perhaps they ought to, but in reality they don’t.

    No one of us, let alone any group of us, has access to the truth from the Almighty Above

    One of the Universe’s inductively proved equations, as real as E=MC2, “dogmatic atheist = sub-cretinous shit-eating megalomaniac fuckwit”.

  11. Alexi the Conservative Russian

    I really wish the writers of long winded articles would provide a synopsis or precise including their conclusions so I can decide whether I want to read such a long item. How about Catallaxy provides a format?

  12. Shy Ted

    If you rearrange the letters of Fee Faculty Network you get Eek, fat flowery cnut. And you can buy those joke teeth on Ebay.

  13. Confused Old Misfit

    Angels & Ministers of Grace Defend Us from these over credentialed academic idiots! I am almost an octogenarian and, like Rabz, i KNOW that “We are one another’s equals.” is pure, unadulterated, pretensious twaddle!
    I have known 3 sets of identical twins. One of these pairings were close but not quite there and as they aged the inequality became more apparent. But through grade school and high school they were pretty damned close both intellectually and athletically.

  14. My answers to our current challenges are simple ones. Let’s begin at the beginning—which for the liberal is basic human equality. We are one another’s equals. There should be no confusion on this point.

    I didn’t read the rest. Did I miss anything?

  15. Senile Old Guy

    My answers to our current challenges are simple ones. Let’s begin at the beginning—which for the liberal is basic human equality. We are one another’s equals. There should be no confusion on this point.

    I didn’t read the rest. Did I miss anything?

    No. When you start with an idiotic premise, you are not going to get anywhere sensible.

    The actual presumption is that we are all equal before the law (but even that is arguable).

  16. Turtle of WA

    Starting with the same premise that sociology/anthropology is based on. No one sane in those fields.

  17. Suburban Boy

    If “cosmopolitanism” is the answer, then you’re asking the wrong question, sport.

  18. J.H.

    This guy advances the great Socialist lie that People are Equal. People are not “equal”, they are competitors and there are vast differences between people, cultures and religions.

    They may be compatriots, but they are competitive. Some people will always be better than someone else at doing something. So Humans are not “equal”. Human ambitions are not “equal”.

    A healthy society with an eye to allowing Freedom, harnesses that competitiveness and advances it in a constructive way, allowing free enterprise in a free marketplace. An ordered society of laws and meaningful political representation with a population engaged in their own ambitions, whatever level that may take. Laws are like borders. They designate the boundaries of what is acceptable and what is not.

    Borders and boundaries are healthy, whether they be physical barriers, legal boundaries, or constraints upon behavior.

    Human society also has roles for women and men. There is no “equality”, instead there are stark differences. Biological ones that stamp themselves upon Human society. A tolerant society will accept the percentage of people who become outliers to normal behavior…. But Tolerance is not “Equality”.

    The only equality is the assurance that All are Equal before the judgement of God….. and that Judeo-Christian belief is only translatable into the concept that, All are treated equally before the Law, be it Gods law or liberal Society’s laws. Commoner or Aristocrat will have the law applied equally. That is the guarantee of a liberalized society.

    ….. and that is as far as Equality extends. Anything else in the name of “Equality” is Socialist pap designed to deceive and enslave the population to the false God of the Communist State and the ambitions of a rapacious political class that, as irony would have it…. are vastly unequal when compared to the rest of the Socialist State.

    Anyway, that’s my two bobs worth.

  19. cynical1

    Harsh but fair.

    You’ve all done very well.

    You can all have a medal.

    Equal first…

  20. 2dogs

    Frey’s FOCJ is not Open Borders – the main principle here is jurisdictional competition. Territorialism is permitted where necessary, but is not preferred as higher transaction costs lessen jurisdictional competition. (If necessary, each territorial function is split into different classes of government bodies so citizens can mix & match – this prevents otherwise good governments forcing bad policies in specific areas.)

    Whether Open Borders is a good idea or not is, for the FOCJ supporters, a question that can only be resolved through testing; they would designate a class of FOCUS to handle this question, allowing Open Borders jurisdictions compete with closed borders jurisdictions.

  21. .

    Frey’s FOCJ is not Open Borders

    Finally. Someone who reads instead of spews on the incantation of trigger words.

  22. Pingback: Gladstonian liberalism is the answer | Catallaxy Files

  23. Driftforge

    Finally. Someone who reads instead of spews on the incantation of trigger words

    Ah yes. Because when you are that far of the path of sanity, one step to the left or right really matters.

  24. Gilas

    Alexi the Conservative Russian
    #2556414, posted on November 17, 2017 at 2:41 pm

    Sorry for the late response Alexi, all you needed to read was the first two lines.
    Then on to the next thread.
    Easy!

  25. Combine Dave

    And if you are an advocate of liberalism and you find yourself “standing” (metaphorically or literally) alongside anyone asserting the superiority of one group over another you should know you are in the wrong crowd and you need to move in opposition quickly to leave no doubt in their or other’s minds.

    If you are standing on the side that supports the unimpeded importation of Islamists into the West then you are on the wrong side.

  26. .

    Driftforge
    #2557030, posted on November 18, 2017 at 8:13 am
    Finally. Someone who reads instead of spews on the incantation of trigger words

    Ah yes. Because when you are that far of the path of sanity, one step to the left or right really matters.

    What are you talking about? Seriously, your response is just gibberish.

  27. Combine Dave

    Whether Open Borders is a good idea or not is, for the FOCJ supporters, a question that can only be resolved through testing; they would designate a class of FOCUS to handle this question, allowing Open Borders jurisdictions compete with closed borders jurisdictions

    Wouldnt open borders have a tendency to minimize differences between competing territories and reduce competition?

    As demographics change in the new territory due to immigration some of the worst policies from their territories of origin will then be implemented in their new territory.

    + Suppression of free speech (don’t criticise my religion)
    + Carbon taxes are cool (they work fine in my Euro cuck homeland)
    + Rise in police state powers to combat imported Islamist Terrorists
    + General high tolerance for official corruption and lack of individual political freedoms (ie one party states in Asia or democratic states with autocratic tendencies in Asia)

  28. .

    You’re intentionally only looking at the downside. Tell me how Australia is special or different to Europe or Asia, with or without immigration?

  29. Combine Dave

    You’re intentionally only looking at the downside. Tell me how Australia is special or different to Europe or Asia, with or without immigration?

    One has high immigration and is in rapid decline, the other is ascendant and has little to none.

    There’s no upside to continuing the immigration scam in Australia (unless you have a big property portfolio dependent on constant population growth)

  30. Paul Farmer

    Interesting article , but the idea one could make jurisdictions compete with no territorial monopoly , I find a bit loony and moreover unnecessary. Some commentary exactly how this could work in practice would have been appreciated.

    Secondly such ideas are extreme when simpler steps we could and should return to have been abandoned. How about territories simply keep their territorial monopolies but learn to compete properly in a federal system ? That statement applies both in the United States and here. To much federalism and redistribution of taxation royalties to non lifting states has undermined the idea of states duking it out to attract residents to settle their through better provision of services and lower taxes. In this country we are lost in some lunatic land of vertical fiscal equalisation that only a lifelong Canberra bureaucrat could dream up. No better eveidence of this then the gross injustice of gst funding currently going to wa and the intractable problem of fixing this issue.

    Much to be said for giving some taxing powers back to the states, in lieu of cutting federal taxes, but let the states compete to attract people and investors. nobody in this country has really properly explored this this idea yet. Turnbull had a one week thought bubble on it, but the idea deserves proper consideration particularly if you can bundle with it the wiping away a significant amount of the duplication that exists between the 3 layers of government. As for the United States, they need a constitutional reset and getting back to basics, and to that end a convention of the states as allowed for by their constitution is gaining traction in some quarters. With respect to this author their is more fertile ground in that then some of the nonsense he is advocating for.

  31. Fisky

    The liberal virtues of respect, honesty, openness, and toleration all entail a commitment to a way of relating to one another, not necessarily a commitment to agree with one another about sacred beliefs or lifestyle choices, or what commodities we desire, or what occupation we want to pursue.

    It’s a nice idea that is not on offer anywhere, certainly not in Australia.

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