The State Is Not a Transcendental Being

By Donald J. Boudreaux

“Many of the activities that are, by common interpretation, acceptable within the range of modern politics would be classified as predatory if carried out in markets.” ~ James M. Buchanan, “Notes on Politics as Process” (1986)

In 1986 my late colleague Jim Buchanan was awarded the Nobel Prize in Economic Science for his pioneering work in using economics to gain a more realistic understanding of politics. By rejecting the common habit of assuming that people acting in political settings are propelled by motives nobler than those that propel people acting in commercial settings, Buchanan — with his long-time colleague Gordon Tullock — founded what is now the thriving subdiscipline of economics called “public choice.”

The realism that public-choice scholarship brings to policy analysis is important. Yet far too many professors and pundits continue to ignore it.

Removing from one’s own eyes the gauzy veil that masks the reality of the state isn’t difficult. But great difficulty obstructs attempts to persuade others to remove the veils that cover their eyes. Most people simply crave to believe that duly elected and appointed state officials are the embodiment of superhuman motivations, knowledge, wisdom, and abilities.

And so upon reading the above quotation from Buchanan, most people would dismiss as absurd its suggestion that government often acts predatorily. But they’d be mistaken.

Consider occupational-licensing requirements, which are popularly explained as being necessary to protect the public from incompetent barbers, manicurists, interior designers, and other service providers. Are these requirements predatory? Yes.

“Stop Competing for My Customers or I’ll Shoot!”

Suppose I offer my services as an interior designer in a jurisdiction that doesn’t require that interior designers be licensed. Further suppose that my interior-design business meets with great success. Seeing my success, my next-door neighbor offers her services as an interior designer. And to attract customers, she charges rates lower than the rates that I charge.

Unhappy with this new competitor, I confront my next-door neighbor. Holding my loaded Glock 45 to her temple, I inform her that if she continues to operate as an interior designer without my permission, I’ll confine her to a cage in my basement. And, I promise her, if she resists, I’ll blow out her brains.

My neighbor, fearful and befuddled, asks for my permission. I respond by inquiring if she has a bachelor’s degree from a program approved by the Council for Interior Design Accreditation.

When she admits to having no such degree, I command her not to work as an interior designer until and unless she spends the time and money to get that degree. As I walk away, I proclaim I seek only to protect unsuspecting homeowners from incompetent interior designers. “I’m actually a public servant,” I remark with a smirk.

Without question my actions are predatory. Everyone — including even my late parents — would agree that were I to act in this way it is I who deserves to be imprisoned.

Is Majoritarian Violence Justified?

But consider a slightly different scenario. Suppose that, instead, I convince many of my fellow townspeople to go to a polling place and vote on whether or not my next-door neighbor should be permitted to work as an interior designer without first earning a college degree. And suppose that a majority votes in favor of inflicting violence upon anyone who insists on working as an interior designer without my permission.

Am I in this second scenario any less violent or any more justified in my actions than I am in the first scenario?

I think not. In both scenarios I arranged for violence to be threatened upon a peaceful person who is guilty only of competing with me economically. And yet in this second scenario, far from being imprisoned, I’m lauded as a benefactor of the town for my efforts to allegedly protect it from incompetent interior designers.

Some people will insist that the second scenario does indeed differ categorically from the first. Unlike in the first scenario, in the second my efforts to shield myself from competition are approved by a majority of the town’s residents. Being a community decision, rather than an individual one, seems to make a real difference.

But this difference is apparent rather than real.

Even without any restrictions at all on who in town may offer their services as interior designers, no one is obliged to purchase my neighbor’s interior-design services. Each resident of the town may choose to do so or not to do so. If without any restrictions on entry into the occupation of interior designer enough residents of the town — let’s say, 12 households this year — chose to purchase my neighbor’s services, then a community decision has indeed been made: my neighbor’s interior-design services were wanted badly enough by 12 members of the community, each of whom spent his or her own money to back the decision.

Yet when a majority of voters is permitted to override the decisions of residents who wish to hire my neighbor, we might fairly ask: on what basis? What business is it of Jones if Smith wishes to purchase interior-design services offered by Jackson?

Answer: none. And so as Jones would correctly be regarded as acting unjustly if he threatened to shoot Smith if Smith purchases Jackson’s interior-design services, Jones and other members of the majority act unjustly when they vote to use force to stop Smith from hiring the interior designer of his choice.

I concede that in practice some cases are more difficult than is this one involving interior-design services. Should residents of the town arrange to drain a nearby swamp in order to reduce the infestation of mosquitoes — and if so, how to pay for this drainage? What should be done about the late-night noise emanating from the sawmill in town that operates 24/7/365? Decisions such as these do have a genuine collective element to them; therefore, it’s inadequate simply to intone, “Let the market handle it.” A different institutional response is necessary.

But a surprisingly large amount of government action — such as who is qualified to work as interior designers — has no plausible collective element to it. The costs and benefits of Smith’s choice of an interior designer are borne fully by Smith; these costs and benefits do not affect in any ethically relevant way Jones, Jackson, or anyone else.

Ditto for Smith’s choice of how many imports to buy, how much pot to smoke, how to school his children, at what hourly wage to work, whether or not to demand from his employer paid leave, whether or not to be in a same-sex marriage, at what rate water should flow from his faucets. These and many other choices are personal. Ethically, they are the business of no one other than each person who makes them.

Therefore, when the state interferes with such personal decisions, it acts just as unethically as I would act were I — private citizen Boudreaux — to use force to compel you not to work as an interior designer, to stop buying imported shoes, or to not work at any hourly wage below the one that I declare to be minimally acceptable.

In short, much of what the state does truly is predatory.

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Donald J. Boudreaux

Donald J. Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.