Chickens, Eggs, and Scrambled Institutions

Chicken and Egg.jpg
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.

8 Responses to “Chickens, Eggs, and Scrambled Institutions”

  1. Okay, so the chicken comes first in an “important sense” speaking teleologically. But, of course, as you know, evolutionary science tells us that the egg comes first in an important sense scientifically: the mutations in reproduction that generate evolutionary change is what ultimately gave us the chicken.

    This leads me to a question: have you written, or are you planning on writing, anything on the effect of evolutionary science on Aristotelian teleological thinking? Are you familiar with Larry Arnhart’s DARWINIAN NATURAL RIGHT, and if so, what do you think of it? Do you think it’s possible to be an intellectually respectable believer in Aristotelian teleology and at the same time a believer in evolution, which suggests that essentialism must be entirely abandoned? Or do you think that Ayn Rand’s notion of essences in INTRODUCTION TO OBJECTIVIST EPISTEMOLOGY solves this problem? Or does anyone have any idea what I’m asking?

  2. Tom G. Palmer

    Well, I didn’t mean to suggest that I thought that teleological approaches were very fruitful in general. I certainly don’t think that they help us to understand the natural world. The artefactual world, however, may be different, because moral agents do act for ends, whereas I don’t think that the world in general has any purposes or ends at all. (I’m not acquainted with Arnhart’s work, so I can’t comment on it.)

    The Aristotelian approach to causation has some advantages, inasmuch as it differentiates between various types of causes (material, formal, efficient, etc.), whereas the modern way of using the term generally restricts it to simply the efficient cause, which leaves out many other preconditions for change. In this case, knowing the end for the sake of which one acts (as a cause) helps us to know where we want to be (which helps us a bit in knowing what roads to avoid), but it tells us rather little about how to get there.

    All I was suggesting is that knowing what our end is helps us to know why we do what we do, but it doesn’t tell us a lot about what to do to get there. Knowing that government should have only limited powers is important, but it offers limited insight into *how* to move from a more coercive state to a less coercive one, from less freedom to more.

  3. I’m not sure I understand the particular issues in Iraq, but I’m reminded of something occuring in Ukraine during the time I was there.

    Commercial law, busines licensing and inspection rules, etc. are set at the national level. There wasn’t much success in getting serious economic reform passed at this level, but it was noticed that cities had wide differences in economic performances that couldn’t be accounted for. A closer look showed that city administrations enforced the laws differently, and these differences in enforcement were an important factor.

    USAID then developed a road show, so to speak, that explained to mayors the benefits of enforcing the rules in a transparent and non-corrupt way; benefits including economic growth, happier citizens, and more funds for the city gov’t.

    Ideas included limiting who could make inpections of businesses for fire & safety codes and when (a major way of extracting bribes was finding “violations”), making fines, fees and taxes payable only at one central office (again to limit bribe-taking), etc. In short, the program showed a number of things mayors could do to make corrupt behavior more difficult, and also explained to them why it was in their interest to do so.

    In the places where mayors adopted some of these ideas, they worked well, as I understand it. Small businesses moved out of the shadow economy, incomes went up, etc.

    I suspect (but have no evidence, although my impression is that the Orange revolution appealed to the more prosperour areas) that where these things occured, civil society also began to take root. Remove barriers, give people a taste of freedom & success, and they’ll want more.

    These kinds of actions might not satisfy an armchair purist, but they work. I’d guess there’s some lesson for Iraq here, but certainly there is for libertarians. This approach focused on things that could actually be changed, showed the key players why it was in their interest to do, and hence reduced the harm of the bad laws and sowed seeds for future reform on a bigger scale, I think.

  4. Tom G. Palmer

    “Shi’ite death squads” do not operate throughout Iraq. Where my friend is from there aren’t any at all. Getting the government to be prompt in, say, replying to emergency requests for security helps to reduce bombings and death squad attacks (in the north, for example, the police are very quick to respond to emergency requests, which is one reason why there are fewer terrorist attacks and — unsurprisingly — more normal social and economic activity). Similarly, getting the courts to be more efficient, responding to legal filings regarding mistreatment by the police, for example, would be a step toward a more law-governed and free society. Moreover, remember that what Americans see on television is horrible, but it represents a very selective view of life in Iraq. We hear about or see every bombing and every assassination, but we never see or hear about weddings, harvests, openings of businesses, or any of the other things that make up daily life. If government offices were to be made more responsive to the demands of citiizens to deliver law and security, perhaps there would be more weddings, harvests, and openings of businesses and fewer terrorist bombings.

    Mr. Young seems to associate businesslike behavior and customer service only with getting his burger and fries quickly, but my friend is using the term in a much deeper sense, one that Mr. Young might appreciate more if he were to live in a society like Iraq.

  5. Tom G. Palmer

    If Mr. Young were to check a map, he would find that Kurdistan is not in the center or the south of Iraq. That is where my friend was travelling.

    All decent Iraqis are quite deeply worried about the infiltration of the security forces by terror squads and people intent on collective payback (e.g., punishing Sunni Arabs for the crimes of people associated with the Sunni Arab constituency). But that is not happening everywhere; more importantly, it does not undercut the need to put the agencies of government on a basis of greater accountability and responsibility. Indeed, it strengthens it, as anti-corruption offices, criminal prosecutors, and independent courts are among the very institutions that innocent citizens might very well want to call upon as defense against rogue payback squads and militias. If such organizations don’t respond to citizen complaints, or even answer their phones (a common problem in many areas of the world), they are unlikely to be able to tackle the problems to which Mr. Young alludes. What is Mr. Young’s point?