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. 

Are there no policies worth retaining to reduce greenhouse gas emissions in Australia?

 This is a guest post by Geoff Edwards.

Tasmania-raised, Geoff has held economist positions at the Productivity Commission, La Trobe and Melbourne Universities, the Australian Treasury and the Bureau of Agricultural Economics. His research has focused on public policy for energy, water, agriculture and industry. Geoff's research has been published in The Economic Record, The American Economic Review, The Australian Journal of Agricultural and Resource Economics, The American Journal of Agricultural Economics, Australian Quarterly and elsewhere, including “Freedom and Flourishing”. (Geoff has previously published here about gas price policies.) 

In this post, Geoff discusses one of the policies announced by Angus Taylor, leader of the Opposition, in his recent budget reply speech in the Australian parliament.

The Opposition leader's budget reply often serves as an opportunity for the Opposition to present the narrative that it proposes to take to the next election. Angus Taylor’s recent budget reply speech has special significance. Since this was his first budget reply speech, it provided an opportunity for Taylor to point out the shortcomings of the Government’s economic policies and to propose a radically different approach. The political context surrounding Angus Taylor's budget reply speech added urgency, as the Liberal-National Party coalition faces an existential crisis, with competition from Teal Independents, on its left flank, and more intense competition from One Nation, on its right flank.

The Government’s budget, the fifth delivered by Jim Chalmers, seeks to address chronically low productivity growth and perceived generational inequity with policies that are anticipated to result in a higher public debt burden to be serviced by future generations. Taylor outlined a platform centred on "generational tax reform" through indexing income tax brackets to inflation (the "tax back guarantee"), cutting net overseas migration, and restricting certain welfare services to Australian citizens only. As Geoff notes below, Taylor also foreshadowed a radical shift away from policies to reduce greenhouse gas emissions.

Geoff Edwards writes:

Opposition leader Angus Taylor said a government he led would stop targeting net zero greenhouse emissions. It would increase use of fossil fuels, running coal-fired power generators "as long and as hard as possible". Mr Taylor wants "cheap energy". He blamed  the renewables push and the energy bureaucracy for high energy prices. The reality is that the impact of high world prices for oil, gas and coal on electricity costs are also relevant. 

There is a certain irony in Mr Taylor's rejection of net zero 2050. It was he as Energy and Climate Minister with then  Prime Minister Scott Morrison who, in October 2021, first announced Australia's commitment to net zero. Subsequently, in opposition, the Liberal Party followed its smaller coalition partner, the Nationals, in walking away from net zero 2050.

Australia generates about one per cent of global greenhouse emissions. It cannot  influence climate perceptibly, domestically or globally. But a majority of Aussies according to surveys see it responsible for doing its bit to reduce carbon dioxide and other greenhouse emissions, so the atmosphere is more conducive to good living conditions for humans and other species. And I want my grandkids to grow up in an Australia that has policies and a culture that take seriously caring for the global commons that is the atmosphere.

Yes, remove subsidies on solar electricity, household batteries and EVs—-though I don't see that reducing electricity prices. And credit to Mr Taylor for the rational initiative of removing the ban on nuclear energy in Australia, so long as any investments in nuclear are made through unsubsidised, technology-neutral competitive processes.

But the Safeguard Mechanism, a de facto tax on carbon emissions, attacked by the Opposition leader, is the right way to go. It is a price directly on the pollution that harms the habitat of humans and other living things. 

Under the Safeguard Mechanism, the country's largest industrial firms have a baseline level of carbon dioxide equivalent emissions they can make without penalty. The baseline is reduced each year. Emissions in excess of the baseline need to be offset by purchasing approved carbon credit units; these are accredited emission reductions made in such ways as soil carbon sequestration, vegetation management and energy efficiency gains.

Yes, the Safeguard Mechanism increases prices a small amount; appropriate for efficient pricing when producers are made to pay a real cost. The Productivity Commission and others, focusing on efficiency in the energy sector and beyond, and on cost-effectiveness in reducing emissions, recommend extending the Safeguard Mechanism so disincentives to pollute the atmosphere are experienced by more of the polluters.  It is especially incongruous that individual electricity generating facilities are not subject to an emissions tax. 

 

Geoff Edwards

Kew, Vic.

Does Aristotle’s assertion that a viable political system requires a supportive culture still have relevance today?

 

Some readers may be wondering why anything written about culture and politics over 2000 years ago could possibly have contemporary relevance. Fred D. Miller J.R. makes a strong case that Aristotle’s views remain relevant in his recently published book, Aristotelian Statecraft. In particular, Miller demonstrates that we can still learn a lot from Aristotle about the relationships between moral character, culture and political systems.

In the first part of this essay I will draw upon Miller’s book, particularly Chapter 15, to explain the basis for Aristotle’s assertion that a viable political system requires a supportive culture. In the second part I will outline Miller’s observations about the contemporary relevance of the relationship between culture and political systems. In the third part I will reflect on implications of Miller’s work for the role political entrepreneurship in institutional change, drawing on my recent essays on that topic.

Aristotle’s thesis

At this point I should explain why I think Aristotle was intending to convey the idea that a viable political system requires a supportive culture in the sentence quoted in the epigraph (Pol. V.9.1310a). The quote appears in a context where Aristotle is writing about laws being democratic or oligarchic. Since he is also referring to a constitution as something that might be influenced by education of the young, it seems reasonable to infer that in this context he sees a constitution as being constituted mainly of mores (i.e. informal institutions).

Aristotle observes that the moral character of a polis reflects the moral character of its citizens. His thesis that a viable political system requires a supportive culture can be seen to stem from his moral psychology. The line of argument is summarized in the following points:

• Individuals develop character traits, including social virtues, through their voluntary habitual actions in social settings. Good character has two components: pursuit of virtuous ends; and practical wisdom to choose the best means to those ends.
• Justice and friendship are the most important social virtues. Justice aims at establishing some kind of equality among individuals whereby they all get what properly belongs to them and can cooperate for mutual advantage. Friendship goes beyond justice. Friends choose what is good for each other, and each believes their own good is chosen by the other. Friendship entails trust as well as respect.
• “When a number of individuals cooperate in an association over a period of time, their shared character traits and practical knowledge become an integral part of the culture of the association.” (p. 370)
• Political friendship – a situation where individuals regard fellow citizens as their friends - is closely related to consensus. It is typically found in a society where the rich and the poor (and others with divergent interests) agree about important issues and trust people in authority to act in the common interest.
• However, if people are not careful to treat each other justly, political friendship will be eroded, resulting in civil strife between parties with divergent interests. As the culture is corrupted “individuals will seek to aggrandize themselves at the public expense and the association will become unjust, unstable, and fragile”.

Miller concludes:

“The practical upshot of Aristotle’s thesis is that legislators and policy makers should be concerned about supporting and advancing culture by promoting education and the institutions and practices necessary for the formation of virtuous character traits.” (p. 371)

Miller’s observations about contemporary relevance

The point about emergence of civil strife among those with divergent interests seems to me to be relevant to explaining the link between interest group politics and growth of populism in Western democracies. I will return to that topic later.  

In discussing the contemporary relevance of Aristotle’s thesis, Miller focuses on the role of culture in the political transition of the countries that emerged following the collapse of the Soviet bloc in the early 1990s. Miller sets the scene for that discussion by noting that Alexis de Tocqueville advanced similar ideas to Aristotle in Democracy in America.

Tocqueville noted that democratic political institutions suited to common traits of Americans could not easily be transferred to Europe. He suggests that traits such as self-help, mutual beneficence, and active participation in voluntary associations made Americans more self-reliant and less dependent upon government support.

Miller also draws upon Douglas North’s views on the path-dependence of culture. He quotes a passage in which North cites examples of unsuccessful attempts to transplant to other countries the constitutions and laws of the United States and other successful Western countries. Those attempts failed because the formal institutions being transplanted were incompatible with the prevailing cultures of recipient countries.

Miller’s observations about the political transition following communist rule draw initially on the work of Svetozar Pejovich (“The Uneven Results of Institutional Change in Central and Eastern Europe: The Role of Culture”, Social Philosophy and Policy, 2006). Pejovich’s theoretical framework rests on the idea that the transactions costs of integrating new formal rules are higher when members of the community perceive the consequences of those rules to conflict with their prevailing culture. He applies that framework to discuss the great disparity in economic freedom among Central and Eastern European countries in 2004, advancing the hypothesis that countries with a stronger Western cultural influence have been more successful in making the transition than those with a tradition of Eastern Orthodox Christianity or Islam. Pejovich observes that culture in the less free and unfree groups has “a bias toward collectivism, egalitarianism, and shared values that predates communism”.

Miller expands Pejovich’s analysis to cover political and personal freedom and extends the period covered to 2002. Drawing upon a range of sources, he identifies three groups of countries in Eastern Europe and the former Soviet Union for 2020-2022: consolidated democracies; consolidated semi-democracies; and hybrid regimes. The consolidated democracies are Estonia, Latvia, Slovenia, Lithuania, Czech Republic and Slovakia. The consolidated semi-democracies are Poland, Bulgaria, Romania and Croatia. The19 hybrid regimes include Russia, Belarus, Ukraine, Serbia, and Hungary.

The author notes that most of the countries that got off to a good start after the fall of communism have continued their trajectories to consolidate democratic capitalism.  He adds: “A notable exception was Hungary, which was demoted to the hybrid zone after a conservative government adopted a new constitution.”

Miller notes that most countries in the hybrid group have made little progress to democratic capitalism. He then adds:

“On the other hand, it is noteworthy that none of these countries have reverted to outright authoritarianism. It is as if they have an inner tendency preventing them from rising above or falling below a certain level. Aristotle’s thesis suggests a plausible explanation of this phenomenon: the parameters of political change are determined to a significant extent by a country’s underlying culture.”

Implications for political entrepreneurship

Miller’s book contains a great deal of information about Aristotle’s view of statecraft which is highly relevant to consideration of political entrepreneurship. In this section of the essay, however, I want to focus on two of my essays discussing the roles of culture and political entrepreneurship as determinants of economic and personal freedom.

The first of these essays is entitled Part II: Can cultural values explain freedom levels? In that essay I observe the existence of a weak positive relationship between economic freedom and an index of facilitating values that I have developed and a strong positive relationship between Christian Welzel’s emancipative values index and personal freedom levels. This research is broadly supportive of the view that culture plays an important role as a determinant of formal institutional settings.

However, my main focus was on outlier countries, whose freedom levels could not be readily explained by culture. I suggested that outlier status can be attributed to the influence of political entrepreneurship. It is relatively easy to identify individual political entrepreneurs who have contributed to institutional outcomes in countries with economic and/or personal freedom ratings substantially lower than might be predicted by underlying cultural values. However, when governments have relatively high regard for individual liberty, political entrepreneurship tends to be more subtle, and less focused on individual national leaders.

Looking at the data base used in this analysis, 24 countries can be identified as belonging to the former Soviet bloc. Of those,10 have both economic and personal freedom levels within a range of plus or minus 1 unit of that predicted by underlying cultural values. Armenia is the only country in which both personal and economic freedom are greater the predicted level; Albania is the only other country where economic freedom is greater than the predicted level. Azerbaijan is the only country with both personal and economic freedom are less than the predicted level and is also the only country with economic freedom less than the predicted level. Apart from Armenia, the countries with personal freedom greater than the predicted level are Bosnia, Bulgaria, Estonia, Georgia, Latvia, Lithuania, North Macedonia and Romania. Apart from Azerbaijan, the countries with personal freedom levels lower than the predicted level are Belarus, Russia and Tajikistan.

This analysis provides some support for the Aristotle/Miller thesis even though it suggests that political entrepreneurship can also play an important role in determining economic and personal freedom levels.

The second of my essays relevant to the role of culture and political entrepreneurship is entitled Part VI: What are the consequences of path dependence? In that essay I argue that the culture of preferment-seeking and plunder currently associated with interest group politics in Western liberal democracies took a long time to reach its current state, but it is now entrenched and will be difficult to overcome. The problem arises from path dependence. Changing the rules of the game to reduce the adverse impact of interest group politics poses a large challenge for reform-minded political entrepreneurs.

The development of my line of argument has features in common with the Aristotle/ Miller thesis outlined above. The most obvious common element is reference to Douglas North’s views on the path dependence of culture.

My line of argument also relies heavily on the views of James M Buchanan about social virtues. Those views have an Aristotelian flavour. Buchanan argues that two norms underpin liberal democracy: that a sufficient proportion of the population can make their own choices and prefer to be autonomous rather than dependent on others; and that a sufficient proportion of the population enter relationships with others based on reciprocity, fair dealing, and mutual respect. My attempt to link Buchanan’s views to Aristotle has led me to John Passmore’s book, The Perfectibility of Man (1970). Buchanan claims that book “remains the definitive work on the history of ideas” related to its title. From the little I have read of Passmore’s book, it is clear that he is influenced by Aristotle (but more critical of Aristotle’s views than I am).

I began my path dependence essay with famous quotes from Frédéric Bastiat about the state being the great fiction by which everyone tries to live at the expense of everyone else; and the universal franchise as likely to result in universal plunder. It is now clear to me, however, that Bastiat’s comments should be viewed in the light of Tocqueville’s observation that democratic political institutions suited to common traits of Americans could not easily be transferred to Europe. In that light, at the time they were made Bastiat’s comments seem to have been more pertinent to continental Europe than to the Anglosphere. Over the last 150 years, democratic political institutions do seem to have had greater resilience in the Anglosphere than in other parts of the world.

However, in my view Aristotle’s warning that social trust will be eroded if people are not careful to treat each other justly has now also become highly pertinent to the Anglosphere. We are seeing increasing evidence that as the culture is corrupted “individuals will seek to aggrandize themselves at the public expense”. Our democratic political institutions now seem to be becoming increasingly “unjust, unstable, and fragile”.

Conclusion

 This essay was prompted by my reading of Chapter 15 of Fred Miller’s book, Aristotelian Statecraft. That chapter discusses how Aristotle’s observation that the moral character of a polis reflects the moral character of its citizens supports his view that a viable political system requires a supportive culture.

In that chapter, Miller also discusses the varied political transition of countries following the Soviet bloc in the early 1990s to illustrate that democratic capitalism is only viable if culture is supportive. He demonstrates that the countries that have been most successful in making the transition have had a history of relatively strong Western cultural influence. Cultural influences in many of the other countries seem to hold them back from either advancing strongly toward democratic capitalism or reverting to outright authoritarianism.

I also considered whether the Aristotle/Miller thesis is consistent with the conclusions of two essays in my series on political entrepreneurship. The findings of my essay on the extent to which cultural values explain freedom levels are broadly supportive of the role of cultural values, even though I emphasize that political entrepreneurship can also play an important role.

My essay on the consequences of path dependence offers strong support for the Aristotle/ Miller thesis in the context of considering the gradual erosion of social virtues in Western liberal democracies. I think we are now observing the consequences of failure to heed Aristotle’s warning that social trust will be eroded if people do not treat each other justly.

Can the rise of populism be explained as a reaction to the rule of experts?

 

In an essay written over 15 years ago I observed that we were beginning to see a populist reaction to the rule of experts in the United States and (to a lesser extent) in Australia. In more recent essays, however, I have tended to see populism as a manifestation of interest group politics. These explanations are not mutually exclusive, but it may be useful to consider how the rule of experts and populism are both entangled with interest group politics.

My 2010 essay

The essay was entitled: Does Australia also have a ruling class? It was prompted by an article by Angelo Codevilla which suggested that Democrat and Republican office-holders in recent governments in the United States had shown “a similar presumption to dominate and fewer differences in tastes, habits and opinions ... than between both and the rest of the community”. He claimed: “They think, look, and act like a class.”

Codevilla discussed several characteristics of this “ruling class”. For example, he suggested that they believe themselves to be “the best and brightest while the rest of Americans are retrograde, racist, and dysfunctional unless properly constrained”. They view the common people’s words as “like grunts, mere signs of pain, pleasure and frustration”.

I concluded that while Australia also had a self-appointed ruling class which could be identified with the public service and the political left, I didn’t think the conservative side of Australian politics was as closely identified with that ruling class as in the United States. That explains why populist politicians were not particularly popular in Australia at that time.

In retrospect, however, I think I also displayed some “ruling class” attitudes in my essay:

“In my view the words of non-experts on complex economic issues do have little more value than a grunt. Whether we are talking about economic policy, brain surgery or plumbing, I think it should be self-evident that the views of experts count for more than those of non-experts.”

I still think that the views of experts should count for more than those of non-experts, although these days I try to avoid being offensive. Apart from the tone of my comment, I should have made clear that there are reasons to doubt that some of those who claim economic expertise know what they are talking about. The claims that some economists make about the potential to regulate complex market systems to produce better outcomes deserve no more respect than the similar claims of non-experts.

In his book, Expert Failure, published in 2018, Roger Koppl brings an economic perspective to “the problem of experts”. I will briefly consider Koppl’s line of argument in the following section.

Expert Failure

Koppl acknowledges that we must rely on experts even though experts may not be completely reliable and trustworthy sources of the advice we require from them.

 He defines an “expert” as anyone paid to give an opinion. That definition leaves open the question of whether experts are reliable or unreliable.

 Koppl adopts the Hayekian view that knowledge is generally emergent from practice, often tacit, and embodied in our norms, habits, practices, and traditions. His comparative institutional approach leads to the conclusion that expert error and abuse are more likely when experts have monopoly power, and less likely in a “competitive” market for expert opinion.

I expect most economists would view that as commonsense, but it is far removed from standard practice in many fields which rely on expert knowledge. Based on his study of the use of expert witnesses in law, Koppl observes that it is common to encounter the view that it is scandalous for the opinions of men of science to be challenged, even by other scientists. It is often held that the knowledge of expert witnesses is or should be uniform, unambiguous and certain. Experts are often encouraged to come to a common understanding rather than to offer competing views.

Koppl observes that the division of knowledge makes it impossible for anyone to avoid a limited and partial perspective, which implies a parochial bias in our perceptions and judgments. That kind of bias cannot be eliminated by blinding protocols – such as the double-blind requirements used in testing of pharmaceuticals.  It can only be mitigated by multiplying the number of experts and putting them in positions of genuine rivalry.

The book contains an interesting discussion of epistemic systems design in an experimental economics laboratory. In that setting, the experimenter is in the god-like position of defining unambiguously what the truth is and examining how close experimental subjects come to it in different institutional settings. The knowledge gained of which institutional structures promote the discovery and elimination of error is relevant to the real world. Experimental systems design studies offer opportunities to test the role of network structure in producing reliable knowledge in scientific fields.

Koppl comments:

“Rather than attempting to instruct people in how to form true opinions, we might reform our social institutions in ways that tend to induce people to find and speak the truth.”

However, at the end of the next chapter, after considering the problems arising from the monopoly of expert opinion in government -  referred to as the rule of experts or the entangled deep state - the author suggests that the experimental approach of “piecemeal institutional reform (which is mostly borrowed from Vernon Smith) does not have an obvious application to the entangled deep state.”  He concludes:

“If my diagnosis of the deep state is at all correct, reform is urgently required. I freely confess, however, that I have no specific ideas on how we might attempt to roll back the deep state with a reasonable prospect of success.”

Nevertheless, Koppl offers useful insights into the nature of the problem arising from the rule of experts. His conclusion that the problem of experts “mostly boils down to the question of knowledge imposition” is highly relevant to consideration of institutional approaches to determination of public policies.

In the introductory chapter to his book Koppl explains that he values pluralistic democracy and is as much opposed to populism as to the rule of experts.  He argues for pluralism on the grounds that each of us has at best a partial view of the truth:

“In a pluralist democracy, competing partial perspectives on the truth have at least a chance to be heard and to influence political choices. Decisions in a political system – be it populist, elitist, or something else – that override or ignore plural perspectives will be based on knowledge that is at best limited, partial, biased.”

In the process of developing that view Koppl refers to an article by Christopher Bickerton and Carlo Accetti (“Populism and Technocracy: Opposites or Complements?” Critical Review of International Social and Political Philosophy, 20(2), 2015) which describes populism and technocracy as two organizing poles of politics which are both opposed to “party democracy”. I will now discuss that article because it raises the question in my mind of whether party democracy has more in common with interest group politics than with pluralism.

Party democracy, interest group politics and pluralism

 Bickerton and Accetti argue that whilst populism and technocracy are usually assumed to be opposed to each other, there is also an important element of complementarity between them. Both populism and technocracy are predicated on an implicit critique of party democracy. The authors suggest that “if we accept the idea that politics is increasingly structured in terms of this conflict between populism and technocracy, then we find that even the very possibility of articulating a defense of party democracy is excluded from the political spectrum”.

I have no difficulty agreeing with Bickerton and Accetti if they are just using different words to say that both populism and the rule of experts are opposed to pluralistic democracy. Technocracy seems to correspond closely with rule of experts, but “party democracy”, as the authors describe it, seems to me to corresponds more closely to interest group politics than to the role of encompassing political groups in a two-party pluralistic democracy.

The authors define party democracy as a political regime based on two key features: the mediation of political conflicts through the institution of political parties; and the idea that the specific conception of the common good that ought to prevail and therefore be translated into public policy is the one that is constructed through the democratic procedures of parliamentary deliberation and electoral competition. The role of political parties in “mediation of political conflicts” is the focus of my concern.

The authors suggest that an important function performed by political parties is that of “integrating a plurality of particular interests” and moulding them into “an overarching conception of the common good”. When political parties aim to do such things, it seems to me that they end up cobbling together coalitions of interest groups which seek to obtain benefits for themselves at the expense of others. That is essentially what interest group politics is about.

In my view, better outcomes are produced when political parties take on the role of encompassing political groups in two-party pluralistic democracies. In discussing the importance of encompassing political groups in a two-party system of government, Mancur Olson asserted that the leader of a party “whose clients comprise half or more of the society naturally is concerned about the efficiency and welfare of the society as a whole” because this affects the party’s electoral prospects.  (See further discussion and reference here.)

 As I have explained elsewhere (for example in a recent essay on the consequences of path dependence) the growth of interest group politics has tended to contract economic freedom, constrain economic growth and increase public debt levels. As a result, voters have tended to become increasingly disenchanted with conventional politics.

It seems to me that as party politics has increasingly focused on pandering to particular interest groups it has helped to bring about a situation where more people have become more willing to listen to populists who tell them that they are being disadvantaged by the policies of conventional political leaders. Unfortunately, most of those populist leaders advance policies that are likely to produce even worse economic and social outcomes.

The ubiquity of populism, rule of experts, and interest group politics

Looking at recent politics in the United Sates, it might seem appropriate to identify the Democratic Party with rule of experts and the Republican Party with populism. However, that assignment understates the extent of populism in the Democratic Party, which tends to seek popular support by attributing economic woes to the wealthy 1% of the population in much the same way as economic nationalists in the Republican Party attribute economic woes to import competition and immigration. It also understates the extent to which the current Administration relies on commercial expertise – dealmaking – in running the government. It seems that the rule of one group of experts has been replaced by rule of another group with different expertise. The problems arising from the monopoly of expert opinion have changed their character but have not disappeared.

Roger Koppl’s reference to the “entangled deep state” reflects his awareness that the rule of experts is not immune to interest group politics. He notes that participants in the American deep state “have a variety of competing and parochial interests”. More generally, interest group politics is strongly associated with the entanglement of entrepreneurs and interests in private and public sectors.

Interest group politics seems to have attended to the pleas of increasingly narrow groups in recent years. As well as seeking support of broad economic groups such as unions, industry groups, and groups with differing social and environmental attitudes, political parties have increasingly sought the support of narrow interest groups by engaging in identity politics. The progressive side of politics has favoured groups that have previously been disadvantaged by ethnicity, gender and sexual orientation. The conservative side of politics has pushed back against what they label as wokeness, while seeking support from some groups, e.g. young men, who perceive themselves to be disadvantage by it.

Another interesting development in interest group politics in the United States is the emergence of an alliance between conservative populists and the high-tech community. It is not easy to comprehend how populists who claim to be concerned about economic and social impacts of competition from imports and immigration could be complacent about the economic and social impacts of AI. Action by the U.S. government to facilitate rapid development of AI has been accompanied by a change in the economic nationalist narrative away from its populist roots to emphasize the importance of retaining technological leadership in AI in the face of increasing competition from China.

The warning of President Eisenhower, quoted in the epigraph, might now be relevant for reasons that he could not have foreseen. Public policy is not only at risk of becoming the captive of a scientific-technological elite supported by the administrative state, it is also at risk of becoming the captive of a scientific-technological elite controlling the development of powerful AI models.

However, I don’t think we should assume that a future in which AI models will have an increasing influence on social and economic outcomes will necessarily be worse than a future in which the entangled deep state retains its current influence.  It is possible that rivalry between different AI models will ensure that their social and economic impacts are relatively benign and consistent with pluralistic democracy. Even now, greater use of truth-seeking bots has potential to lessen the problem of rational ignorance, and thus to reduce the susceptibility of voters to populists peddling false narratives.

Conclusions

The rise of populism in the Western liberal democracies can be explained to some degree as a reaction to the “ruling class” attitudes of experts within governments.  I have recently tended to see populism as a manifestation of interest group politics, but it is worth considering how the rule of experts and populism are entangled with interest group politics.

The essay has outlined the views presented by Roger Koppl in his book, Expert Failure. Koppl offers the useful insight that the main problem arising from the rule of experts is knowledge imposition. Expert error and abuse are more likely when experts have monopoly power and are less likely when experts are placed in positions of genuine rivalry. Koppl argues that pluralist democracy is superior to both the rule of experts and populism because it enables competing partial perspectives on the truth to have a chance to be heard.

I have also considered the view of Christopher Bickerton and Carlo Accetti that both populism and technocracy are predicated on an implicit critique of party democracy. I suggested that party democracy, as the authors described it, seemed to have more in common with interest group politics than with pluralistic democracy. In my view, interest group politics is largely to blame for the poor economic and social outcomes that have encouraged the growth of populism.

My main conclusion is that the rule of experts, populism, and interest group politics are currently ubiquitous on both the progressive and conservative sides of politics. Populism is certainly not confined to one side of politics and populist governments don’t eliminate problems arising from the monopoly of expert opinion. In the U.S. a populist executive has continued to discourage rival views, while attempting to substitute expertise in commercial deal-making for expertise in statecraft.

The emergence of an alliance between the current U.S. Administration and the high-tech community poses a risk that public policy may become captive to a scientific-technological elite controlling the development of powerful AI models.  We should not assume, however, that a future in which AI models have an increasing influence on social and economic outcomes will necessarily be worse than one in which the entangled deep state retains its current influence. Rivalry between AI models may even have potential to produce better outcomes.

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.