Which Comes First?*
I had a meeting today with a colleague and an Iraqi friend who is going back soon to run her business in Iraq. Among the topics of conversation (in addition to the books she’s taking back for translation) were how to introduce businesslike behavior and customer service into a society characterized for a long time by very little of either. She was hoping to institute customer-friendly standards of behavior (such as answering letters, processing material efficiently, reducing or eliminating occasions for demands for bribes, and so on) in government ministries. My colleague and I suggested that perhaps a better approach would be to promote civil society and let good businesslike behavior go from the private sector into the public sector, rather than expecting it to go the other direction. The problem she raised is that without getting such things as registration forms processed and certified, a private association or business has little legal security (see The Mystery of Capital by Hernando de Soto for evidence of that), so in order to let the private sector grow, you need to get the government associations to process their documents. What about getting the parliament to cut down on the powers of the ministries to require such forms and procedures before private businesses can be started? “Oh, that’s the hardest of all,” she responded. The reason is that the civil society is quite underdeveloped, whereas the ministries are enormous and have large patronage networks to support their expansive powers. So in order to create public pressure for limiting state powers, you have to build up a large private sector, and do to that, the state has to be at least more efficient and prompt in processing the papers that create legal security so that a private sector can flourish. But the last thing you want is more “efficiency” in the exercise of unlimited and unjustified state powers. Efficiency improvements should be limited to those things that will generate more freedom and legal security, not less. It’s not an easy problem to address. Government has to do less of what it shouldn’t be doing (either because those actions are unjust in themselves or because they can be done voluntarily) and more of what ought to be done (like defining and protecting property rights and enforcing contracts), but the problem is how to get the wheel rolling so that more freedom and enforcement of rules of just conduct can generate the rich associational life of civil society that can then exercise a restraining force on the state. What’s the best place to grasp the wheel to start it rolling?
That’s not the same problem as what “ought to be done” if one had the power to wave a magic wand and cause “what ought to be done” to be done; if we could do that, we in the USA and in the European Union would have eliminated the unjust and extremely inefficient — and, from a social point of view, irrational — policies of farm subsidies. The problem in less law-governed and free parts of the world is much harder than the problem we have not succeeded in addressing in the wealthy countries. The problem is to apply the pressure one has at one’s disposal to start a process that has a chance to be reinforcing. Where should such pressure be applied? Lobbying the state to limit its own powers, or creating voluntary associations within the parameters set by an already interventionist state, or trying to introduce into the organization of the state greater efficienty and responsibility to the social order, so that it ceases to be such an impediment and facilitates (or at least allows) more voluntary association?
A part of the solution is to understand that the end of the process is to secure justice and freedom, which means getting the state to protect rights and create a legal order and to limit the state to those functions. More efficient governmental organization is hardly a worthy ideal by itself, but it may be a part of the process of realizing the ideal, which in this case is limiting the coercive powers of the state and expanding the areas of human interaction that are governed by voluntary agreement, rather than by power. But determining where you start the process of institutional change to get to that ideal is not an easy problem to solve.
*An Aristotelian/teleological approach would posit that the chicken comes first in at least one important sense, because a chicken is that for the sake of which an egg is laid, whereas an egg is not that for the sake for which an egg matures into a chicken. (Let’s set aside the questionable value of such a teleological approach to understanding the physical world and just apply the metaphor to the world of human actions, which are oriented toward ends.) Similarly, the end (telos) of political action is the securing of one’s rights to one’s life, liberty, and estate, so what comes first in the sense of ends is the limitation of state power and the securing of freedom; understanding the end of law is the key to knowing how to reform and thus limit the state, but being causally first in the sense of the end for the sake of which something is done is not the same as being first in the order of temporal succession. That’s a different problem.