Will AI Replace Human Labour? Revisiting a Question I First Asked in 2015

 

In 2015, I wrote an essay entitled, “Will robots replace human labour and reduce real wage levels?” That essay still seems to attract quite a lot of attention even though some of the thoughts in it are now out of date. I did not anticipate the impact of Large Language Models (LLMs).

One of the things I like about my previous essay is the use of down-to-earth examples to illustrate processes. So, I will try to continue in that vein.

Horses, tractors and robots

My previous essay included some paragraphs, quoted from Nick Rowe, illustrating how the replacement of human labour by non-human labour is an ongoing process rather than a new phenomenon:

“Horses were once like robots. Horses could do a lot of the same work that humans could do. Humans and horses can pull things, if you feed them. But then mechanical horses, called tractors, were invented, that could pull heavier things with cheaper food. Tractors pushed horses' wages below subsistence, so the horse population declined.

The robot horse displaced horses, just as horses displaced humans from all the jobs where humans pulled things. But humans, unlike horses, can do lots of other jobs beside pulling things. Humans are very versatile. Horses can't really do anything except pull things. So humans switched to doing other jobs, while horses couldn't. And the marginal product of labour, and hence wages in those other jobs, increased. Horses and tractors were complementary factors to human labour in those other jobs.

But that won't happen if robots are invented that really are just like humans, and can do all the jobs that humans can do. Robots that are just like humans would be just like slaves, rather than like tractors and horses.”

My comment in 2015:

What we are seeing now is robots that are displacing humans from a range of activities and freeing them to do things that robots can’t do - just as horses did. There are adjustment problems for people in the affected industries, but the impact on average real wages is likely to be positive. Over time, superior robots are likely to be invented that will replace the initial series of robots, just as tractors displaced horses. If robots can eventually reproduce like crazy, their capacity to live off “the smell of an oily rag” might mean that wages in many industries in which humans are currently employed will be driven below human subsistence levels.

However, it seems unlikely that robots will ever be viewed by humans as close substitutes for human labour with respect to all attributes relevant to all economic activities. My guess is that many humans will show a strong preference for some goods with a high human labour input e.g. home produced food, restaurant meals and beverages that are served by humans, live music by local musicians, handicrafts and works of art produced by humans, and some manufactured goods that individual humans have designed specifically for themselves or friends and relatives.

My bottom line is that over the next few decades the impact of robots in replacing human labour is likely to be a relatively small part of the total impact of technological change on the quality of life. Rather than worrying about robots replacing human labour perhaps we should be more concerned that the rate of technological progress may be slowing down.

Why do my thoughts of 2015 need revisiting?

In 2015 I was thinking mainly about robots as physical substitutes for human labour, and I posed the choice as one between two models: robots as something close to slave labour (a pure increase in labour supply, competing directly with humans) or robots as something more like horses and tractors (displacing humans from some tasks while freeing them, and raising their marginal productivity, in others). I concluded that robots were unlikely to be close substitutes for humans across all the attributes relevant to production, and that the wage effects of automation would therefore be a comparatively minor part of the overall story over the following few decades.

Large language models (LLMs) were not on my radar in 2015. They change the shape of the question, because they are far closer to general-purpose cognitive substitutes than any robot arm or self-driving vehicle. An LLM does not just replace one narrow task; it can draft, summarise, code, translate, analyse and advise across an enormous range of activities that previously required a trained human. In that sense, the "close substitute" horn of my original dilemma is more relevant to cognitive and creative work than I gave it credit for. I now think the economic impact of LLMs will be massive - considerably larger than the impact of robots in physical production that I was focused on a decade ago.

State plainly, LLMs are closer to general-purpose cognitive substitutes than anything I had in view a decade ago. The AI revolution is very much like an influx of low-cost labour that will replace human labour.

However, it is premature to jump to the conclusion that most of the human population is about to become unemployed and will need to find some source of income other than wages and salaries if they are to survive. In what follows I discuss a range of factors that impinge on the speed and unevenness of dispersion of the new technology before turning my attention to the profound issues associated with checking and validation of AI output.

Human interaction

As argued in my original essay, some activities that depend on human interaction may remain largely immune. People want to be served, taught, cared for, negotiated with and entertained by other people.

Yet, this point should not be overstated. A lot of "human interaction" jobs are information-transfer jobs with a human face on them - for example, customer service, a lot of teaching, first-line medical triage, even therapy. People are apparently willing to accept an AI substitute when it's cheaper, faster, or less judgmental. AI companions, tutoring bots, and mental-health chatbots are already being adopted.

Human advantages

Trades that depend on physical presence and situational judgement - builders, plumbers, electricians, nurses - are unlikely to face serious robotic competition over the next decade or two, whatever progress is made in software.

Diffusion lags

Use of AI in physical production processes is usually a costly and slow process. Diffusion into actual production processes can take many years. Restructuring enterprises – investing capital, redesigning workflows, retraining staff - is likely to take considerably longer than development of the knowhow and systems design which makes automation feasible.

By contrast, however, adoption of AI can occur rapidly in many service sector industries. Individual employees began using AI on their laptops last year, with no capital expenditure and no sign-off from anyone. That is arguably why uptake has already been faster than any prior general-purpose technology. In service sector industries, the labour-market effect may arrive informally and quietly, well ahead of any restructuring.

Costly inputs

The relevance of the "smell of an oily rag" idea in my original piece - the thought that machines might reproduce and operate so cheaply that they would drive human wages toward subsistence – depends on the time period we are considering. During the next few years, electric power and compute will be costly; the marginal cost of running systems at scale is real and substantial.

In the longer term, however, the situation will look different. Computational and financial expense of generating outputs from trained models is falling rapidly. Within a few decades, what looks now like an unusually capable but costly input is likely to look more like a flood of costless labour.

Potential for entrepreneurship

We should take account of the potential for enterprising individuals, rather than large incumbent firms, to exploit these tools quickly - using AI to launch new products and services. That will create new employment opportunities, but not necessarily for the same people who lost the old ones, at anything like the same wage, on anything like the same timescale.

The more important point is that the new technology may have potential to help large numbers of people to find hidden entrepreneurial capabilities. As I noted in a recent essay, entrepreneurs may market new products to satisfy needs that consumers previously didn’t know they had. For the most part, those innovations are likely to be relatively minor and only of local or regional significance, but they could add substantially to the incomes of the new entrepreneurs and, in aggregate, make a substantial contribution to national income.

Complementarity

The "horses and tractors" story is still relevant because humans are using AI as a tool to raise their personal productivity. Adding an LLM app to a personal computer is like adding a hydraulic arm to a tractor – the hydraulic arm enables the driver to become more productive because he can use the tractor to lift things rather than just pull things.

Nevertheless, general-purpose AI has potential to displace humans in a wide range of routine cognitive tasks over the next decade or so. And, over the longer term, the market adjustment mechanism can be expected to have progressively less scope to switch humans to other jobs.

Arguably, like most of the other points discussed above, the complementarity point seems more relevant to considering the impact of AI over the next few years than to considering what is likely to happen in the decades ahead.

It is now time to introduce a more profound consideration – verification.

Who will be responsible for checking what AI does?

Imagine that vast numbers of aliens suddenly arrive from outer space and are willing and able to do nearly all the cognitive and physical work that humans do at much lower cost than humans. However, even though these alien agents are friendly to humans, they cannot always be trusted to produce outcomes that meet appropriate quality standards and respect individual rights (of humans). Adverse outcomes will sometimes occur because the agents are fallible or because they may be willing to “cut corners” in pursuit of goals. (Those are traits they share with humans.) At other times, adverse outcomes will arise because some humans will instruct the agents to cut corners or infringe the rights of others. The use of agents does not remove the need for principals to check and validate outputs.

That scenario is similar to the one explored in a paper entitled, “Some Simple Economics of AGI” by Christian Catalini, Xiang Hui and Jane Wu, published by SSRN, February 24, 2026. The authors’ core thesis is that artificial general intelligence (AGI) makes output cheap and abundant; human verification becomes the scarce factor; and the economy’s bottleneck shifts from doing to checking.

Catalini et al describe a dynamic process leading to adverse outcomes because the availability of humans with necessary oversight skills doesn’t expand sufficiently as the cost to automate collapses:

“The current "human-in-the-loop" equilibrium is unstable. It is eroded from below as apprenticeship pathways collapse (the Missing Junior Loop), shrinking human expertise precisely when oversight becomes most valuable. It is eroded from within as experts codify their own obsolescence (the Codifier's Curse), converting experience into training data. As capabilities outpace oversight, deploying unverified systems becomes privately rational -introducing a "Trojan Horse" externality of misaligned output. Using AI to verify AI only manufactures false confidence as correlated blind spots propagate. Left unmanaged, these forces pull toward a Hollow Economy of explosive nominal output but decaying human agency.”

The authors also present a more optimistic scenario:

“Yet this outcome is not inevitable. The answer is not a retreat into obsolescence, but a radical elevation of human purpose. By scaling verification infrastructure alongside agentic capabilities, the forces that threaten collapse become the catalyst for unbounded discovery, experimentation, and execution - powering an Augmented Economy.”

Nevertheless, after I had finished reading the article, I was left with the impression that that authors think we are heading rapidly towards a Hollow Economy. In their Conclusion they write:

“Autonomy is fundamentally outpacing oversight. Open-source agent swarms are already operating autonomously at scale—integrated with payments, infrastructure provisioning, and live user data—producing the first visible instances of unverified agentic output in the wild. The same infrastructure that enables accidental harm presents the ultimate attack surface for deliberate abuse, granting malicious actors the leverage to scale catastrophic harm at the marginal cost of compute. Inside major software firms, AI produces a material share of new code, a share executives openly project rising toward a majority in the near future.” (The authors cite references that have been omitted from this quote.)

Catalini et al have provided an important warning about what might happen, but it seems to me that a more nuanced view might be appropriate, taking account of the potential for a diversity of responses by individual firms and the incentives of the legal framework.

Expect diverse responses

I don’t think Catalini et al have suggested explicitly that intense competition will cause firms to engage in “a race to the bottom”. However, that idea surfaces frequently in public discussion of competition and may underlie fears about the emergence of a Hollow Economy. A problem with race to the bottom theory is that it assumes that all firms will make the same assessments about the strategies most likely to enhance their profitability. The theory ignores the possibility that while some firms will see advantages in reducing standards, others will see reputational advantages in maintaining high standards.

It seems likely that while some firms will seek to profit by cutting corners on validation of output, others will focus on enhancing longer term profitability by seeking to build inhouse expertise in checking and validation of output. Interestingly, by drawing attention to the potential for a widespread validation problem to emerge, the paper by Catalini et al may encourage more firms to pursue an inhouse training strategy.

It should also be noted that even though AI is likely to evolve rapidly to become more efficient at verification, the existence of a technically perfect verifier does not solve the accountability problem. As one paper explains, high-stakes domains require a human who understands the content and accepts responsibility for its use, even if the AI's check is flawless.

Having introduced the concept of accountability, we now need to consider how the choices which firms make are likely to be influenced by the incentives provided by the legal and political environment in which they operate.

Legal liability

There is a good reason why I have chosen the Roman legal maxim, “He who acts through another does the act himself” as the epigraph for this essay. That maxim has modern legal application in laws which establish that principals are legally responsible for the authorized acts and contracts performed by their agents.

Existing tort and regulatory frameworks already hold humans responsible when AI-assisted outcomes go wrong. This complicates claims that unverified deployment of AI is likely to be highly profitable. In any context where firms currently adopt rigorous checking practices to reduce potential legal liability for damage to others, they will continue to have an incentive to maintain rigorous checking practices. Insurance companies offering cover for legal liability may refuse cover to firms which cut corners.

Regulation

Government regulation impinges on a wide range of activities in modern economies. Firms using AI will still incur penalties if they fail to meet regulatory requirements. For good or ill, that places an increased burden on firms to have checking mechanisms in place to ensure that compliance occurs.

In respect of some industries, e.g. medicine, law and education, government regulation typically determines who may supply services. For example, if an individual uses AI to diagnose the nature of an illness they suffer from, they are likely to be required to consult a human doctor to check that diagnosis before they can obtain pharmaceuticals to treat the illness.

In recent years, the concept of "meaningful human control" has entered legal-political discussion in response to worries that autonomous systems create a "responsibility gap" where lethal or harmful outcomes occur but no human can properly be held morally responsible for them. In a paper published in 2018, Filippo Santoni de Sio and Jeroen van den Hoven presented a philosophical account of conditions that need to apply for humans to remain ultimately in control of autonomous weapons and other autonomous systems. The authors suggest systems should be able to respond to a “tracking” condition (relating to relevant moral reasons of the humans designing and deploying the system and relevant facts in the environment in which the system operates) and a “tracing” condition (to enable the outcome of its operations to be traced back to at least one human along the chain of design and operation). The authors also suggest that meaningful human control requires training systems to improve users’ understandings of the risks and responsibilities associated with operating them.

For present purposes, the important point is that meaningful human control requires substantial human inputs.

It is unfortunately also necessary to note that advances in AI have added to the capability of predatory individuals and organizations (including authoritarian governments) to purposefully cause financial and physical harm. In that context, humans may need to focus more attention on protecting themselves from predation.

So, will AI replace humans?

After all that I have written above, perhaps the most appropriate conclusion would be that I am not a prophet, so I don’t claim to know whether AI will replace humans. That is certainly the case if we are talking about what might happen in the 22^nd century or beyond.

However, if we are talking about the next few decades, it is possible to make some relevant points:

• ·       The economic impact of LLMs is likely to be massive. This is a major step in the ongoing process of replacement of human labour by non-human labour.
• ·        The impact of LLMs will be uneven. In the services sector, there is likely to be substantial displacement of human labour engaged in routine cognitive activities; trades that depend on the physical presence of humans will be less affected, and some activities involving human interaction will be largely immune. Automation is likely to continue to proceed at a moderate pace in manufacturing and agriculture.
• ·        A major human input will still be required to verify AI output. Firms will need verification to protect their reputations.
• ·        Existing legal and regulatory frameworks hold humans responsible when AI assisted outcomes go wrong –  providing additional incentives for human verification.  

Even after taking account of the human labour required to verify output, we are obviously still talking about substantial displacement of human labour. However, that doesn’t necessarily translate into a situation where there will be growing numbers of intelligent humans either enjoying a life of leisure (or sitting in their homes twiddling their thumbs).

This brings me back to the bottom line of my 2015 essay - that the wage impact of automation would be a relatively small part of the total impact of technological change on the quality of life. For the next decade or two, I think that claim still holds, for the reasons set out above: uneven diffusion, the persistence of human-interaction and physical-presence work, and the ongoing need for human verification. Over a longer horizon, as compute costs continue to fall and verification itself becomes easier to scale, I am considerably less confident the claim will hold - which only means my 2015 self was answering a shorter-run question than he realised.

A massive growth of productivity offers potential for a massive expansion in human leisure, but that outcome isn’t inevitable. It is worth remembering in that amid the Great Depression of the 1930s John Maynard Keynes predicted (in an essay entitled “Economic Possibilities for Our Grandchildren”) that by now we would be able to satisfy our needs without having to work more than three hours a day. Average incomes rose more than Keynes predicted and working hours fell much more gradually. Keynes had no way to predict the emergence of new products to satisfy needs that consumers didn’t know they had.

It remains an open question of whether humans will use the growth of productivity resulting from AI for increased leisure, or whether they will continue to work long hours to earn the income required to satisfy needs that they don’t yet know they have.

Why Bother Considering Whether Government is Necessary?

 

Before my most recent trip to India I had to choose which of two recently purchased books I should take with me: Aeon Skoble’s Deleting the State, or Salvatore Babones’ Dharma Democracy. I chose Dharma Democracy (which I have since written about here) because I didn’t like the idea of trying to explain to an airport official that Deleting the State is a philosophical treatise rather than a manual for the violent overthrow of governments.

At that time, I would not have been able to point to pages 107-8 where Skoble argues explicitly against violent action to remove a government in any “nominally liberal democracy”. In the Afterword of the recently published second edition of his book, the author takes the opportunity to emphasize his opposition to violence by giving reasons for eschewing it and reiterating that deleting the state means “deleting the idea of the necessity of the state”.

The subtitle of the book is Requiem for an Illusion. The illusion Skoble refers to is the Hobbesian Fear that in the absence of a government “to keep them all in awe” people would find themselves at each others’ throats - in a war “of every man against every other man”.  I will discuss later the author’s reasons for considering the Hobbesian Fear an illusion.

Skoble regards the neo-Aristotelian conception of human flourishing provided by Douglas Rasmussen and Douglas Den Uyl as providing the best defense of a theory of individual liberty. He notes, however, that in Norms of Liberty the Dougs leave open the question of whether a political/legal order defending individual rights necessitates the existence of a state. Skoble points out that the difference between a state and a political/legal order is not trivial.

What is the point of philosophical anarchism? 

In the Afterword Skoble writes:

“If deleting the state means deleting the generally held notion that we need to have a state, and the only way to do it is to make philosophical arguments, we’re in a lot of trouble. Philosophers have a poor track record of being persuasive to large majorities. So what, one might ask, is the point of philosophical anarchism?”

The author goes on to answer that question cogently. However, before considering his response, I want to present a contrary argument.

Is the existence of government an issue that should occupy the minds of those who believe that liberty supports human flourishing? As far as I know, there is no country in the world in which citizens are currently faced with a choice between having a minimal state or no state at all. In liberal democracies – the countries that currently enjoy the greatest personal and economic freedom – liberty is being threatened by political movements with authoritarian tendencies. Authoritarianism is presented in the wrapping of different varieties of collectivist idealism which offer citizens the opportunity to attribute personal and social problems to immigration, foreign competition, the greed of the wealthy, systemic discrimination, environmental degradation or anything else that appears to justify a larger role for government. Shouldn’t libertarians be focusing their attention on supporting the political/legal order – democracy, or representative government - that has been most successful in promoting personal and economic freedom?

Readers who doubt that the countries with greatest economic and personal freedom are liberal democracies should take a look at the graphs shown in an essay I wrote last year. There may be serious errors in common measures of personal freedom for some countries - as noted in my recent essay on Indian politics – but the weight of evidence suggests that representative government has hitherto been more successful in defending individual rights than any other contemporary form of politico/legal order that currently exists in the real world.

So, how do I justify spending time thinking about utopian concepts such as philosophical anarchism instead of spending all my efforts opposing the advances of authoritarianism?

The first defence that comes to mind is that I find it interesting to think about the question of whether government is necessary. I think that is sufficient justification for a human to spend some time thinking about any topic.

However, I have reasons to be particularly interested in the potential for utopian thinking to play a useful role in considering public policy issues. I have claimed in the past:

“We are more likely to improve opportunities for human flourishing if we approach public policy issues with a view to both (a) upholding ideals that ought to apply and (b) the real-world constraints that should not be overlooked.”

I made that comment in a short essay considering Chris Sciabarra’s discussion of the anti-utopianism in the methodology of Marx and Hayek in Marx, Hayek and Utopia.

Skoble argues that anarchist arguments can help people to think about the limits of state power. He suggests that they can be used to clarify that getting a different group of office-holders into power will not resolve problems that are attributable to institutional structures. He cites mass incarceration and business regulation that stifles innovation as examples. He sums up:

“To make the case against the state is to undermine the idea that coercion is necessary for social order or that it is beneficial to human society. It is to point the way toward the continual need to scale back the scope of state power. It is to affirm the priorities of liberty and its necessary connection to human flourishing, and to keep us mindful of the ways in which the state, and our often-unthinking obedience to it, hinders that flourishing.”

Allaying the Hobbesian Fear

Those who argue that a government is necessary to maintain social cooperation often refer to the prisoner’s dilemma in game theory. Players can obtain a greater payoff if they both cooperate than if they both defect. However, each player has an incentive to defect in the hope of obtaining a greater payoff at the expense of the other player. On that basis, it is claimed that in the absence of a coercive intervention to enforce cooperation both players will end up defecting.

However, Skoble observes that defection is only the winning strategy in a one-shot game - social cooperation emerges spontaneously when the prisoner’s dilemma game is repeated over long periods. In support of this argument he refers to Robert Axelrod’s book The Evolution of Cooperation, which found that a tit-for-tat (reciprocation) strategy gave players higher payoffs than constant defection. The author notes that strategies that allow for the possibility that a defecting player may have made a mistake offer higher payoffs than tit-for-tat.

It may be worth adding that the utility maximizing assumptions of game theory tend to be less conducive to social cooperation than are real people engaged in trust games in a laboratory setting. As Vernon Smith and Bart Wilson noted in Humanomics, anonymously paired people are “predominantly caring other-regarding, independent actors in the personal social exchange context of trust games in the laboratory”.

Skoble makes the point that law ought to be construed as a natural consequence of attempts of people to live and work together rather than as something requiring a coercive monopoly power. Among other things, he notes that enforcement of property rights requires “a society that in fact recognizes the practicality of recognizing property rights” rather than a “monopolistic coercive authority”. In that context he discusses the history of spontaneous evolution of civil law conflict resolution drawing upon works by David Friedman and Murray Rothbard.

The author devotes a chapter to providing an extended example of the potential for disaster relief to be provided via voluntary cooperation rather than a centralized political authority.

In his final chapter, Skoble discusses the question of whether disagreements between libertarian anarchists and minimal-state libertarians are radically incommensurable, or capable of being resolved by dialogue. He argues that there are “no fundamental premises or values that separate anarchists from libertarian minimum-statists” that would prevent the differences between them being resolved by dialogue. There is even potential for dialogue between libertarians and welfarist liberals. Political philosophy can explore relevant questions such as the circumstances, if any, under which the will of the majority should override individual liberty.

Additional considerations

One argument that is sometimes advanced in opposition to philosophical anarchism is that a written constitution helps to protect liberty. Perhaps that is true of the United States, but it is not difficult to find examples of countries where constitutional provisions have failed to protect liberty. The former Soviet Union comes to mind. There are also notable examples of countries which have maintained a relatively high degree of liberty without written constitutional protections. Britain comes to mind.  

Roderick Long has suggested that those who believe government is necessary are being misled by a metaphysically illusive picture of what constitutional restraints are and how they work:

“The metaphysical illusion I referred to is the habit of thinking of constitutional restraints (checks and balances, separation of powers, etc.) as though these structures existed in their own right, as external limitations on society as a whole. But in fact those structures exist only insofar as they are continually maintained in existence by human agents acting in certain systematic ways. A constitution is not some impersonal, miraculously self-enforcing robot. It’s an ongoing pattern of behavior, and it persists only so long as human agents continue to conform to that pattern in their actions.” (Long, 2008)

I have previously discussed similar views of the nature of constitutions by Sheldon Richman (here) and Douglass North (here).

A more difficult argument to contend with is that the free rider problem would prevent adequate provision of national defense. I think John Hasnas has advanced an appropriate response to that argument. He suggests that an inability to raise sufficient capital to engage in foreign military adventures or pre-emptive warfare without resort to coercion proves nothing about the potential for defense against outside aggression to be funded voluntarily.

Hasnas acknowledges that he doesn’t know whether sufficient funds could be raised by voluntary means to fund protection against outside aggression. He suggests:

“No one believes that we can transition from a world of states to anarchy instantaneously. No reasonable anarchist advocates the total dissolution of government tomorrow. Once we turn our attention to the question of how to move incrementally from government to anarchy, it becomes apparent that national defense would be one of the last governmental functions to be de-politicized.”

That seems to me to be a sensible position to adopt. It does not preclude the possibility that a society that moves incrementally to reduce coercion of some by others will one day end up not requiring coercion to ensure appropriate provision of any goods currently provided by governments.

Conclusion

This essay has been prompted by my reading of the Second edition of Aeon Skoble’s book, Deleting the State.

Early in the essay, I posed the question of whether the existence of government is an issue that should currently occupy the minds of libertarians in the light of current threats to liberty by political movements with authoritarian tendencies. Skoble provides an appropriate response in his defense of philosophical consideration of the possibility of anarchy. In particular, he suggests that such philosophical endeavours help libertarians to make the point that getting a different group of office holders into power will not resolve problems that are attributable to the existence and scope of state power.

A central concern of the book is to allay the Hobbesian Fear that people will be unable to obtain the benefits of social cooperation in the absence of a government to maintain order. In my view, Skoble provides strong arguments to allay that fear.

I endorse Skoble’s view that law ought to be construed as a natural consequence of attempts of people to live and work together, rather than as something requiring a coercive monopoly power. Constitutional restraints are not self-enforcing. It cannot be assumed that they would continue to offer protection of the rights of citizens if enforcement of them did not have broad community support.

The question of how national defense could be provided without coercive taxation is probably the most challenging obstacle to attempts by philosophical anarchists to persuade minarchists that anarchy is a viable option. In my view, it makes sense to acknowledge the difficulties that would be encountered at present in ensuring adequate voluntary provision of defense resources. That doesn’t mean, however, that it makes sense to assume that coercive taxation will always be required to fund defense. Libertarians who have the objective of reducing coercion “as much as possible in society”, should leave open the possibility that at some stage elimination of the state could become a viable option.  

References

Axelrod, Robert, The Evolution of Cooperation (Basic Books, 1984).

Babones, Salvatore, Dharma Democracy: How India Built the Third World’s First Democracy (Connor Court Publishing, 2025).

Hasnas, John, Common Law Liberalism: A New Theory of the Libertarian Society (Oxford University Press, 2024).

Hayek, F. A. The Constitution of Liberty (University of Chicago Press, 1960).

Rasmussen, Douglas B. and Douglas J. Den Uyl Norms of Liberty: A Perfectionist Basis for Non-Perfectionist Politics (Pennsylvania State University Press, 2005). 

Long, R. T. “Market anarchism as constitutionalism”, in R. T. Long & T. R. Machan (Eds.), Anarchism/Minarchism: Is a government part of a free country? (Ashgate Publishing, 2008). pp. 133–154.

Sciabarra, Chris Matthew, Marx, Hayek and Utopia (State University of New York Press, 1995).

Skoble, Aeon J. Deleting the State: Requiem for an Illusion, Second edition (Independent Institute, 2026).

Smith, Vernon L., and Bart J. Wilson, Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century (Cambridge University Press, 2019).

Is Indian Democracy an Extraordinary Success Story?

Salvatore Babones puts the view that Indian democracy is an extraordinary success story in his book, Dharma Democracy: How India Built the Third World’s First Democracy, which was published last year.

Babones describes himself as “a skeptical quantitative and comparative sociologist who came to the subject with an interest in democracy not (initially at least) with any particular interest in India itself”

I read the book during my most recent visit to India. I came to it with a particular interest in India and a desire to understand whether that country is more appropriately viewed as the world's largest democracy, or as an elective autocracy in which personal freedom is severely restricted. Babones has persuaded me that the first view is closer to being correct.

The structure of this essay is as follows. In the next section I discuss the graph presented above. I then draw upon Dharma Democracy to explain why Babones implies that the freedom data depicted in the graph understates personal freedom in India. The following sections outline why Babones views Indian democracy as a success story, his explanation for that success, and the reception his book has received in India. I present some personal views before concluding.

A Visual Starting Point: Emancipative Values and Personal Freedom

To frame the discussion, I use the chart above showing data from the World Values Survey and the Human Freedom Index. The horizontal axis presents Christian Welzel’s emancipative values index, a measure of cultural support for autonomy and expressive freedoms. The vertical axis shows personal freedom as assessed by the Fraser/Cato Human Freedom Index. I have previously explained the chart more fully on this blog, when using it to explore global patterns of authoritarianism associated with political entrepreneurship.

I am using the chart here to highlight how India appears to be situated within the broader global landscape. India appears in the middle of the distribution: less free than Western democracies but significantly freer than many culturally comparable societies. The chart suggests that the degree of personal freedom in India is much as might be expected for a country with India’s level of economic development and cultural values.

However, historical data suggests that personal freedom was much higher in India during the first decade of this century. It declined to its current level (around 6/10) from a rating substantially higher than might be expected based on emancipative (around 7/10). 

Possible errors in the measurement of personal freedom

Babones implies that the Fraser/Cato index understates the personal freedom that Indians experience. He argues that there is bias in all democracy and freedom indexes that use of subjective data from the Varieties of Democracy Institute (V-Dem). Apparently, nearly all of V-Dem’s survey indicators are coded by country experts, most of whom are academics residing in the country being studied. In the case of India, that methodology may introduce bias in recent freedom indicators because Narendra Modi and his BJP party are “widely reviled among social scientists both within India and in the West”.

This raises several issues. First, the Fraser/Cato index’s reliance on V-Dem seems to be modest. As far as I can see, only one item tends to depress India’s freedom score: that is V-Dem’s score for Media and expression under the heading “Expression and information”. On that item, V-Dem’s score is not far below the scores of Freedom House, BTI and CLD, which are also used in the Fraser/Cato index. It is possible, however, that data from Freedom House, BTI and CLD are subject to similar methodological biases as the data from V-Dem.

Second, India’s academics have some good reasons to criticize Modi’s human rights record. Nevertheless, in my view Babones’ allegation of bias carries weight because V-Dem gives Indian democracy a lower rating at present than in 1976 - during Indira Gandhi’s “Emergency” rule - when civil rights were suspended.

Third, some other freedom indexes provide a rosier picture of civil liberties in India than Fraser/Cato. For example, the Civil liberties rating for India incorporated in the Democracy Index of the Economist Intelligence Unit (EIU) is higher than for Armenia and Georgia – a ranking which is inconsistent with that shown in the above chart.

On balance, it seems to me that Babones has made a plausible case that democracy and personal freedom are in better shape in India than is often claimed by critics of the Modi government.

 India as an Extraordinary Democratic Success

Babones argues that “India’s democracy is in better shape than that of just about any other developing country”. His central claim is that India’s democracy is historically exceptional.

He emphasizes that India is the only large, poor, post‑colonial society to maintain continuous electoral democracy for more than seven decades. Unlike Western democracies, which evolved gradually over centuries, India launched universal suffrage at independence despite widespread illiteracy and immense cultural diversity. For Babones, this makes India not a fragile democracy but an extraordinary one - a global outlier whose success cannot be understood through Western liberal frameworks.

He grounds this argument in several propositions:

·        India conducts elections involving hundreds of millions of voters with consistently high turnout. Babones sees this as evidence of a deeply internalized democratic ethos.

·        India’s democratic resilience is rooted in its dharmic heritage, which emphasizes pluralism, decentralisation, and negotiated social order.

·        Most post‑colonial states experienced military coups and/or authoritarian consolidation. India did not.

·        India has vast civil society networks which have tended to inculcate a sense of national unity.

·        India’s electoral system has enabled historically disadvantaged communities to gain political voice – it is helping these communities to overcome social disadvantages.

Babones has included a chapter discussing the status of Muslims in India. In that context he suggests that nationhood is a work in progress. One interesting statistic he cites is that 99% of Indian Muslims report being “proud” to be Indian. He also makes the point that in a country that is 80% Hindu, “Muslims will never experience full social inclusion unless Hindus actively invite them into the national mainstream.”

Reception of “Dharma Democracy”

I asked Grok and CoPilot to provide summaries of the reception that the book has received in India.

Grok notes that as a relatively recent book from a smaller publisher, it hasn’t yet garnered widespread mainstream academic or Western critical reviews. However, the book has been well-received in circles aligned with its thesis. Reviewers highlight its challenge to global democracy indices, defense of India’s success via “dharma” and Hindu civil society, and data-driven rebuttals to criticisms of Modi-era democracy. One highly critical reviewer argues the book is misguided because it fails to address the Indian Constitution’s alleged anti-Hindu biases.

CoPilot offered similar comments, noting specifically that some critics are concerned that support for the Hindu civilization thesis tends to downplay pluralism and legitimize majoritarian narratives. Extending its analysis beyond formal reviews, it notes that much Indian academic discourse pushes back against the core thesis of the book. Many Indian scholars continue to view recent developments in India’s democracy as problematic. CoPilot sums up: “The book has not been dismissed; it’s being taken seriously in India, but primarily as a provocative intervention in an ongoing debate rather than a settled or widely accepted interpretation.”

Personal Perspectives

I cannot claim to have spent much time discussing politics during my three visits to India. Readers who are interested in my motives for visiting India can find relevant information here, here, here, here and here.

However, when discussion has turned to politics, the people I met have tended to express views that either strongly oppose or strongly support prime minister Modi. There were exceptions, but the views seemed to be linked to education levels – those with a university degree tended to be critical of Modi’s human rights record, whereas those without a university education were highly supportive of his emphasis on nationalism and economic development.

One observation stands out: critics of Modi expressed their views to me openly and without hesitation. These were not whispered conversations but frank and confident exchanges, often in public settings. That willingness to criticise the government directly to a foreign visitor is not something one would expect in a society where personal freedom is severely restricted. This suggests that India’s public sphere retains a level of openness that complicates the more pessimistic narratives about democratic decline.

My own view of Modi has moderated over the years. When he was first elected, international reporting had me viewing him as a somewhat alarming Hindu nationalist, whose policies might cause disorder. Perhaps Modi has himself become more moderate as he has focused on achievement of Viksit Bharat, which translates as “Developed India”. The image he presents internationally is certainly that of an extraordinarily diplomatic leader who seeks mutually beneficial relations with nearly all other countries.

While reading Babones’ book I pondered whether a “dharma democracy” would differ substantially from one based on Western individualism. At a superficial level, a “dharma democracy” might be seen to place less emphasis on personal freedom because dharma is about “duty” or “right action” rather than individual rights. However, the Indian concept of dharma seems to me to be close to Aristotelian ideas of individual self-actualization in accordance with natural purpose (telos). Babones notes that the Indian philosopher, Sarvepalli Radhakrishnan (1888-1975), suggested “every form of life, every group of men has its dharma, which is the law of its being”.

It seems to me that when Indians speak of duty to the nation what they have in mind might generally have more to do with doing the right thing - for example, adherence to societal norms that make democracy possible – because such behaviour is honorable and integral to self-realization, rather than an obligation that necessarily entails self-sacrifice.

 I am left wondering whether there is much difference in practice in the way Indian democracy is conducted by comparison with Western democracies. It seems possible that Indian democracy may be conducted with a little more regard to the norms of reciprocity, fair-dealing and mutual respect that restrain citizens from seeking to use the political process to exploit their compatriots.  

Conclusions

Salvatore Babones argues in Dharma Democracy that India is an extraordinary democratic outlier among post‑colonial societies. I think that line of argument holds up surprisingly well once one examines both the historical record and the limitations of the freedom indices that dominate international commentary. The evidence suggests that India’s personal freedoms, while imperfect, are not in the state of collapse that some critics claim.

The dharmic framing of democracy that Babones highlights offers a useful reminder that democratic resilience can emerge from cultural resources that differ from those of the West. India’s traditions of pluralism, decentralization, and negotiated social order have helped sustain a vast and diverse electorate through seven decades of elections. Whether or not one embraces the full “dharma democracy” thesis, it is clear that India’s democratic foundations run deeper than many external observers assume.

The reception of Dharma Democracy inside India reflects this complexity. Supporters see it as a welcome challenge to Western academic pessimism; critics worry that it risks legitimizing majoritarian narratives. Yet the very fact that the book has sparked open, vigorous debate is itself evidence of a public sphere that remains lively and accessible.

My own conversations in India reinforce that impression. Critics of the government spoke freely and confidently, even in public settings - something inconsistent with the idea of a society sliding into authoritarian silence. At the same time, the polarization of views, often along educational lines, reflects the tensions of a rapidly modernizing nation.

In the end, distinctive characteristics of India’s society have shaped its experience of democracy. Distinctive cultural values help to explain why Indian democracy has been surprisingly resilient. If the norms of reciprocity, restraint, and mutual respect that underpin democratic life continue to hold, India’s democracy may remain not only durable but an extraordinary success story. 

Does human perfectibility pose a problem?

 

This essay was prompted by my reading of John Passmore’s book, The Perfectibility of Man, which was first published in 1969. 

I read the book mainly because of James M. Buchanan’s suggestion that “it remains the most definitive work on the history of ideas” relating to the extent to which classical liberalism depends on some presumption that man is perfectible. Buchanan made that suggestion at the beginning of a chapter entitled “Classical liberalism and the perfectibility of man”, in his book Why I, Too, Am Not a Conservative (2005). Buchanan argued that although classical liberalism does not depend on people being especially "good" in a conventional sense, there is nevertheless a presumption of human perfectibility in classical liberalism. He argued that classical liberalism requires that sufficient persons (i) prefer to govern themselves and not be dependent upon others; (ii) respect the person and property of others; (iii) eschew attempts to implement impractical visions of utopian perfectionism; and (iv) be willing to defend the political institutions of liberal society against its enemies.

I had another reason for reading The Perfectibility of Man. As an Australian interested in Aristotle’s view of human perfectibility, I felt that I should by now have read a book on this topic by a distinguished philosopher who was my compatriot.

The book was enjoyable to read and I learned a lot from it. However, I disagree with the author’s assessment of Aristotle’s application of teleology to individual flourishing. It seems to me that Passmore’s view that that “there is something more than a little strange” in “identifying perfection with the realization of potentialities” is not consistent with the view he expresses at the end of the book that humans “are capable of more than they have ever so far achieved”.

I will return to that point later in this essay. Meanwhile, I will briefly outline the scope and content of Passmore’s book.

Passmore’s history of ideas on perfectibility

Passmore discusses the long history of ideas about the perfectibility of humans from Ancient Greece and Rome to the 1960s. He discusses the differing views of Christians over the last 2000 years as well as views associated with the Renaissance, the Enlightenment, the influence of social action, scientific progress and natural evolution.

The following paragraph, referring to the views of Pierre Teilhard de Chardin (1881-1955), summarizes the themes of the book:

“To an extraordinary degree, then, Teilhard built into a single system almost all the main forms of perfectibilism which we have so far distinguished from one another. He was a mystic: perfection consists in union with God. He was a Christian: perfection depends on Christ’s working in man through evolution. He was a metaphysician: perfection consists in the development to its final form of that consciousness     which is present, according to Teilhard, even in elementary electrons. He believed in perfection through science: scientific research is, in his eyes, the prototype of “working with God.” He believed in perfection through social change: men are to be perfected through their participation in a society infused with love. He believed that Christianity shows us in what perfection consists: the New Testament, and especially Paul, reveal to us the nature of that final unity in which evolution must finally come to rest; the Incarnation, the sacrifice of the Mass, symbolize the unity of the material and the spiritual. He believed that science can demonstrate that humanity is moving towards such a perfection. He was Pelagian in his constant emphasis on human effort; he was anti-Pelagian in so far as he argued that God’s grace is essential if mankind is to achieve its final perfection. If Teilhard had not existed, it would almost have been necessary to invent him, in order to weave together our diverse themes.”

Towards the end of the book, it becomes obvious that Passmore is particularly concerned about the tyrannical outcomes of government attempts to implement utopian ideas relating to human perfectibility.

I will now turn to the point on which I disagree with Passmore.

Aristotle’s teleology

Passmore notes that, according to Aristotle, “potential is incomplete, formless, imperfect”. That implies “the actual is ‘perfect,’ then, in so far as it is the realization of, or the giving form to, a potentiality”. He then comments:

“But there is something more than a little strange in thus identifying perfection with the realization of potentialities. Suppose a man is potentially a liar. When he actualizes that potentiality, has he thereby perfected himself? At this point, it is important to recall that the general concept of perfection does not have written into it any suggestion of moral excellence. A man can be a perfect scoundrel or a perfect idiot just as he can be a perfect saint; he can commit a perfect crime, be a perfect forger, or have a “perfectly rotten time of it.” But, as we have already pointed out, when we speak of “perfectibility,” as distinct from perfection simpliciter, the situation is different; to assert that man is perfectible is to assert that he can become, in some sense taken to be absolute, a better person. To the extent to which an analysis of perfection is directed towards helping us to answer the question whether human beings are, or are not, perfectible, it must not allow the response: “they are perfectible all right: there are plenty of men who are potential villains and who actualize that potentiality perfectly.” (p.14)

It seems to me that Aristotle’s perception of individual human perfectibility does have a suggestion of moral excellence written into it. As Passmore acknowledges, Aristotle saw the good for man, as “an activity of soul in accordance with goodness”. In that context he notes that Aristotle argues that the human good consists in a life of contemplation.

However, Aristotle suggests in Book I of the Ethics that the good of man consists in our living in accordance with practical wisdom. In his book Rational Man - in which the passage quoted in the epigraph appears - Henry Veatch comes out strongly in support of the latter view.

Veatch explains that from an Aristotelian viewpoint, a person who is honest, courageous or temperate “will not be one who has merely been conditioned to follow unthinkingly certain approved patterns of behavior. He will be one who has learned to let his choices and preferences be determined by such knowledge and understanding as he may have, rather than to proceed simply from chance feelings and impulses of the moment or from long established but mechanical habits of response.” (p. 74-5)  

In his Preface to the 2003 edition of Rational Man, Douglas Rasmussen makes the point that “when Veatch spoke of how to “perfect” oneself, he did not mean that one should become Godlike, immune to degeneration, or incapable of harm. Rather it is to fulfil those potentialities and capacities that makes one fully human.”

Passmore’s bottom line

Passmore concludes that “perfectibilism is dehumanizing”:

“To achieve perfection in any of its classical senses, as so many perfectibilists have admitted, it would first be necessary to cease to be human, to become godlike, to rise above the human condition.”

However, the concept of perfectibility endorsed by Neo-Aristotelians such as Veatch and Rasmussen certainly doesn’t require humans to become godlike.

And Passmore’s final paragraph suggests to me that there is little difference between his views on perfectibility and those of the Neo-Aristotelians mentioned above:

“In spite of these reflections, which might lead us to reject perfectibilism in any of its forms, it is very hard to shake off the feeling that man is capable of becoming something much superior to what he now is. This feeling, if it is interpreted in the manner of the more commonsensical Enlighteners, is not in itself irrational. There is certainly no guarantee that men will ever be any better than they now are; their future is not, as it were, underwritten by Nature. Nor is there any device, whether skilful government, or education, which is certain to ensure the improvement of man’s condition. To that extent the hopes of the developmentalists or the governmentalists or the educators must certainly be abandoned. There is not the slightest ground for believing, either, with the anarchist, that if only the State could be destroyed and men could start afresh, all would be well. But we know from our own experience, as teachers or parents, that individual human beings can come to be better than they once were, given care, and that wholly to despair of a child or a pupil is to abdicate what is one’s proper responsibility. We know, too, that in the past men have made advances, in science, in art, in affection. Men, almost certainly, are capable of more than they have ever so far achieved. But what they achieve, or so I have suggested, will be a consequence of their remaining anxious, passionate, discontented human beings.” (p. 258)

Conclusion

This essay was prompted by my reading of John Passmore’s book, The Perfectibility of Man.

Passmore makes a strong case that government attempts to implement utopian ideas about human perfectibility result in tyrannical outcomes.

In my view, he also offers a persuasive argument that perfectibilism is dehumanizing when it is approached from the perspective of attempting to rise above the human condition - to become godlike.

However, I disagree with Passmore’s view of Aristotle’s application of teleology to individual flourishing. Passmore suggests that because the general concept of perfection does not have written into it any suggestion of moral excellence, it is possible for some people to actualize their potential perfectly by becoming villains. My response is that Aristotle’s understanding of human perfectibility does have a suggestion of moral excellence written into it. In support, I also refer to Henry Veatch’s view of the link between virtuous behaviour and the exercise of practical wisdom.

Nevertheless, after considering Passmore’s bottom line about the possibility for greater human achievement, I conclude that his view that perfectibilism is dehumanizing does not necessarily apply to Neo-Aristotelian perfectibilists. It certainly doesn’t apply to those of us who maintain that seeking to perfect oneself is about becoming “fully human”, rather than godlike.

What was wrong with the Washington Consensus?

 

Just as I was reading the final chapters of William Easterly’s book, Violent Saviours: The West, the Rest, and Capitalism Without Consent, the United States government abducted the president of Venezuela to stand trial on drug charges in New York. I was pleased to see Nicolás Maduro facing justice, even if for the wrong reasons, but at the time of writing it remains to be seen whether the U.S. actions will advance the economic and personal freedom of Venezuelans.

 In the light of recent developments, Easterly’s conclusion seem to me to be excessively optimistic. He states:

“Adam Smith’s prophesied movement of “nations into some sort of respect for the rights of one another” had been partially fulfilled. The relation of the West to the Rest, previously based on coercion, was now based mainly on consent.”

Under the presidency of Donald Trump, the U.S. seems to me to be behaving like a colonial power. President Trump makes no secret of the fact that he is more interested in control of additional territory, oil, and other resources than in promoting respect for human rights, free trade, and the liberal international order.

Apologists for President Trump can claim, with some justification, that big powers have always swung their weight around in their own interests despite their rhetoric supporting the liberal international order. Nevertheless, public support for international norms of behaviour has hitherto signaled a willingness to be held to account publicly for breach of those norms.

 Easterly qualifies his statement that the relation of the West and the Rest is now based mainly on consent:

“The trend toward freedom is neither inexorable nor irreversible. As of this writing, new threats to freedom have emerged with proposed increases in US tariffs and possible restrictions on foreign students. It’s a little premature to declare the attainment of a liberal paradise.”

With the benefit of observation of recent events, however, it is difficult to escape the conclusion that the world is currently moving rapidly away from the ideal of relations between nations being based on consent rather than coercion. It is possible, nevertheless, that oppressed people in some countries will manage to achieve more economic and personal freedom over the next few years. The best we can hope for is that before too long Washington will once again embrace the ideal that relations between nations should be based on consent rather than coercion.

Before I discuss Easterly’s view of the Washington Consensus, I will briefly outline what Violent Saviours is about.

The West’s conflicted view of the Rest

Violent Saviours offers a historical account of the conflict between the duelling visions that have influenced the conduct of Western nations toward the rest of the world since the 17^th and 18^th centuries. On the one hand, there are the liberal ideas of consent, self-determination, and equality that make possible positive-sum gains from commerce between groups and individuals. On the other hand, there are the opposing illiberal ideas of coercion, paternalism and racism that yielded a negative sum world of conquest.

Adam Smith was a leading advocate of liberal ideas and a critic of many aspects of colonialism. However, some well-intentioned Enlightenment philosophers (e.g. Condorcet) offered support for the “Development Right of Conquest”. Condorcet sought to justify conquest as offering the hope of eventually “civilizing” the locals.

Over the period from 1776 to 1865, the liberals were mainly on the losing side. They were unable to prevent the West’s adoption of illiberal policies such as colonial conquest and population removal (in countries such as the U.S, and Australia). However, liberals had some victories during that period; most notably, they were able to bring about abolition of the slave trade and of slavery in the United States.

Easterly suggests that over the period from 1865 to 1945 most economists abandoned liberal morality: “Commerce expands but without moral constraints on plunder”. The regression of freedom culminated in World War II, during which liberalism had to fight for its survival.

The period since 1945 has seen the partial victory of liberal ideas with the end of colonialism and a surge in commerce which has partially restored agency to people in the former colonies. Easterly notes that some economists – notably Milton Friedman, P. T. Bauer, and Amartya Sen – revived the idea of individual freedom as “an end in itself”.

It is possible to quibble with some aspects of that account, but I think the important point to focus on is the current state of the conflict between the duelling visions. Easterly writes:

“Yet the legacy of the past is still here. While obviously not equating modern development efforts with slavery, genocide, and colonialism, the question remains of what violations of consent today in the name of progress should be out of bounds.”

That provides the context in which I would like to consider the Washington Consensus.

 The Washington Consensus

The Washington Consensus was the term John Williamson, an economist, invented in 1989 to describe the set of policy reforms that the US Treasury, the World Bank and the IMF believed would be good for Latin American countries. The ten propositions of the Washington Consensus combined fiscal discipline with selective deregulation. They were broadly pro-market but did not entail a vastly diminished role for government. As an advocate of a greater measure of economic freedom than required by the ten points in the Washington Consensus, I recall being bemused to see opponents equate it with “neoliberalism” and “market fundamentalism”. John Williamson had a different reaction. As he discussed in the paper from which I obtained the epigraph, he was concerned that the term was often being used to refer to a more radical pro-market view than he had intended.

The policy ideas in the Washington Consensus were certainly applicable beyond Latin American countries and were not confined to economists in Washington DC. Those ideas were widely accepted by economists with expertise in economic policy in many different countries. I think they are still widely accepted by economists today.

As I was reading Easterly’s discussion of the Washington Consensus, the thought crossed my mind that the era in which it held sway was actually the high point in economic development policy as advocated by the World Bank. The Washington consensus seemed to show more recognition of the importance of economic freedom than subsequent policy approaches emerging from Washington.

One of the problems that Easterly mentions is that many observers thought that pro-market reforms were only desirable if they produced immediate economic gains. The reforms led to anti-globalization protests because they didn’t have an immediate positive impact on economic growth and were often associated with worsening of poverty. As time went on, however, “there was more evidence of growth turnarounds and poverty reduction correlated with movements away from extreme state control”.

As I was reading this, I tried to recollect what I had written in the 1990s about the adjustment process following an expansion of economic freedom. I wrote about some aspects of that question in an article entitled “The New Zealand Model of Economic Reform: A Review” (published in: Agenda: A Journal of Policy Analysis and Reform, Vol. 4, No. 3 (1997), ANU Press). My work suggested that the lack of clear evidence of economic benefits in some countries that had undertaken economic reforms in the 1980s could be attributed partly to the time required for new policy directions to become embedded and for adjustment to occur: 

“Profound changes in behaviour, including changes in the willingness of individuals to learn new skills and business practices, are required as people respond to the incentives that policy reforms provide.  It takes time even for the most innovative firms and individuals to accept that new market incentives are likely to be sustained and to develop and implement new strategies.  Widespread adoption requires sufficient time for these new strategies to become demonstrably successful.”

I am pleased that I wrote that even though I missed an important point that Easterly makes. He suggests that the emphasis “on material results alone – on both sides of the debate – neglected Sen’s and others’ arguments for freedom as an end in itself”.

I don’t see freedom as an “end in itself” – freedom is necessary because human flourishing is an individualized and self-directed process. What I think Easterly means is that institutional freedom would be no less desirable if individuals chose to use it ways that made no contribution to economic growth e.g. by increasing the amount of time they spent on leisure activities.

Easterly also suggests that the manner in which foreign governments were encouraged to adopt Washington Consensus polices was problematic:

“Low and middle-income countries could get badly needed loans from the World Bank and IMF only if they agreed to reforms decreed by Bank and Fund staff. The fatal combination of foreign advisors with some coercion would keep discrediting promarket recommendations made by the World Bank and International Monetary Fund in the 1990s, especially for Africa, Latin America, and Russia.”

A few pages on, however, the author notes that “the association of liberal reforms with a Washington-imposed Consensus did not turn out to be fatal”. He follows that observation with a long list of “homegrown reformers” who have pursued pro-market reforms. (I have reproduced the list here.)

Unfortunately, Easterly’s list of reformers does not include Javier Milei, president of Argentina. It was probably compiled too soon for that to be possible.

Now that I have mentioned Javier Milei it is worth noting that the U.S. government offered a $20 billion bailout for Argentina prior to the country’s recent legislative elections. The offer was apparently made with strings attached — namely, that the funds would be available only if Milei’s party won the election.

It seems to me that if the U.S. president were to promote a general policy of assisting those low-income countries whose political leaders enthusiastically expand economic and personal freedom, he might be worthy of the Nobel Peace Prize.   

Conclusion

William Easterly’s book, Violent Saviours, offers an insightful account of the conflict between liberal and coercive views of economic development since the 17^th and 18^th centuries. He suggests that the legacy of the past is still with us because development economists and policy makers are still confronted by the question of what violations of consent should be out of bounds.

That provided the context in which I considered Easterly’s views of what was wrong with the Washinton Consensus – the moderately pro-market economic policies advocated by the U.S. Treasury, the World Bank, and the IMF during the 1990s. Easterly is clearly sympathetic to espousal of pro-market policies. However, he makes a strong case that such policies should be advocated to promote economic freedom rather than to promote “material results alone”.

The view that Easterly presents is consistent with the idea that liberty is desirable because it provides opportunities for individuals to flourish in the manner they choose.