Library of Economics & Liberty
October 3, 2011
In the type of society we live in, two kinds of order are intertwined. One is driven by agreements, contracts and custom resulting in exchanges between individuals exercising the freedom of choice that the circumstances of each permit. Their circumstances are partly a result of the past, partly of their own doing. The other kind of order is driven by command. Command in the form of laws and ad hoc regulations and orders determining what society or its various groups and categories must and must not do. It thus produces collective choices to which individuals are forced to conform by the principle of submission leading to political obedience. Political obedience is considered legitimate because the collective choice rule on which it rests, for example majority rule, is claimed to be of people's own choosing.
Collective choice where some, perhaps a majority but perhaps just a small and assertive group, decides for society as a whole, has the power to pre-empt or otherwise override the order based on freedom of exchange. They have obvious, identifiable incentives to do so. The response to incentives takes two major forms. One is redistribution; by collective choice, taxation on the revenue side and the provision of public goods and services on the expenditure side transfer resources from those who produce them to those who will consume them. The welfare state is the typical result, but a warlike state armed to the teeth could also be created in this way by collective choice.
More
No comments:
Post a Comment