Sunday, January 02, 2011

Garden variety discussions of what the state ought to do are inevitably frustrating and pointless. People assert, often with great passion, that the state is obligated to do such-and-such or that it has no right to do such-and-such. But these claims typically lack any content beyond a declaration of personal preference.

Don’t get me wrong. I’m prepared to defend the view that people do have moral intuitions and that these intuitions are no less real than other forms of cognition. So I’m not afraid of normative claims. But moral intuitions are adequate only within the context of a particular moral tradition. Given a substantive body of moral traditions, our intuitions can help guide us along at forks in the road. But normative discussions regarding the roles of states generally take place across moral communities that lack sufficient common ground. Making normative assertions in such a context are like shouting directions on the basis of compass readings without benefit of a map.

Now this hasn’t prevented libraries from filling up with tracts on political philosophy. In my next post, I hope to deal with some of the main ideas for regulating discourse across moral communities. But for now I want to discuss some ideas proposed by economists that actually have some analytic and empirical content. Economists ask which economic functions can be carried out more efficiently by the state than by free markets. (Of course, the word “efficiently” might very well be hiding some moral questions about which people might be disagree, but let’s elide that for the moment.) For this reason, I propose to begin this discussion from the economic point of view with an eye towards expanding out from there to broader moral questions.

There are a number of economic roles that even the most determined free-marketeers are prepared to concede to the state. (The second chapter of Milton Friedman’s Capitalism and Freedom is as good a starting point as any for such a discussion.)

First of all, for the market to work at all, property rights need to be protected. A police force, an army and a justice system are needed to ensure that property isn’t stolen or conquered and that contracts are honored.

Second, there are certain kinds of goods and transactions for which the market is likely to fail. For example, some goods like roads or streetlamps are non-excludable; once someone supplies them everyone can use them and there is no mechanism for collecting compensation for that use. In such cases, nobody will be willing to provide the goods. (Of course, nowadays there are technologies for efficiently collecting tolls on roads with restricted entry and exit and indeed such roads are increasingly being privatized.) Similarly, there are actions that impose costs on others (negative externalities) but for which it is impossible to compensate them. For example, my car pollutes the air you breathe, an imposition for which you and I could probably agree on some compensation. But, there is no practical mechanism through which I could execute that transaction with you and the indeterminate group of others similarly affected. The government, acting as a proxy for you, can at least charge me for my free ride by, for example, taxing gasoline.

Third, once we have conceded that the state needs to fulfill these roles, it must necessarily also establish the means and the mechanisms to do so. Broadly speaking, it needs to carry out some fiscal policy (setting taxation levels and spending levels and priorities), as well as some monetary policy (controlling money supply and setting interest rates).

So much for the roles of the state that are generally agreed upon. Now let’s consider two broad areas about which there has been endless debate with regard to the right level of state involvement.

The first concerns the extent to which the state should engage in benign paternalism. Should the state tax wealthier citizens for the purpose of supplementing the income of poorer citizens? Should the state use tax revenues to provide citizens with goods and services that the state regards as essential but that individual citizens may not wish to pay market prices for? Should the state regulate voluntary transactions among citizens for the protection of one or both of them?

The second concerns the extent to which the state should encourage or even enforce moral virtue. Should the state outlaw behavior which many people find morally offensive? Should the state sponsor religious institutions or services? Should the state regulate the education system to ensure inculcation of patriotic values or other virtues it regards as necessary for citizenship?

We’re going to spend plenty of time discussing these questions. For now, a few teasers.

First, if you’ve already conceded above that the state should compensate (partially) for negative externalities by, for example, penalizing air pollution, can you argue that the state should not similarly penalize offensive public acts? What’s the difference? (The question isn’t rhetorical; there are differences.)

Second, the first set of questions deal with state enforcement of fairness. The second set deals with state enforcement of community-based morality. So it’s probably not a coincidence that there is non-negligible negative correlation between support for the first type of state intervention and the second type of state intervention and that the best way to guess if someone supports only the former or only the latter is to know his degree of affiliation to some moral community.

Third, as I already suggested above, we can attack these questions from two different perspectives. One is the normative approach favored by many political philosophers that asserts that some interventions are right and others are wrong. The other is the prudential approach that asserts that some interventions lead to results that most people don’t want and others lead to results that most people do want.

In the next few posts, I’ll make two main points. First, normative arguments (typically supporting the first type of intervention and opposing the latter type) are generally not much more than political preferences disguised as high principle. Second, that many people in Israel, especially those who strongly identify as part of a Jewish community, unwittingly support the kinds of state intervention that lead to results that they do not want.


Anonymous Bob Miller said...

I'm eager to see how this analysis, as it progresses, takes our people's unique relationship to G-d into account. Principles that are useful or necessary to set up and operate a state in general may or may not be appropriate for our particular state.

6:18 PM  
Anonymous Anonymous said...

Is the bottom line of all this going to be that people like R. Avraham Gisser who go and work for the IDC are naive and are having the wool pulled over their eyes?

I'm not sure how naive they are, and I wouldn't use the word "unwittingly". I think that there is a strong stream of thought that views the "elites" as having been "successful" in creating the institutions for the establishment of a State, and then running it, which the "Jewish community" couldn't (or wouldn't) do, and therefore they view these "unaffliateds" as the natural elite of the State and thus support them - even if it goes against other interests of the Jewish community.

12:16 PM  

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