The book is obviously geared to college PPE (Philosophy, Politics, and Economics) programs, which use the three disciplines to analyze social life and political power. In their introduction, the editors explain that, in their view, such programs must provide a learning experience that is both integrated and yet respects the different approaches of the three disciplines. The basic questions are: How can individuals live peacefully and productively in society? How should we organize political authority (if any is necessary)?
Philosophical adventures / It is not easy to review an anthology containing 66 articles and nearly as many different authors who often defend contradictory theories. The readings—typically academic articles or book excerpts—cover a wide range of theories, from Plato, through modern political thought (notably Thomas Hobbes and John Locke), up to Friedrich Hayek, Gary Becker, and James Buchanan. Libertarianism, which occupies a strategic place in the selections, is also challenged by intelligent thinkers. The anthology is not for the faint of heart who believe they have already found the eternal truth.
The oldest text in the book is Plato’s Crito, written around 360 BCE. It is considered one of the first philosophical defenses of absolute political authority. In the dialogue, Socrates has been condemned to death and his friend Crito is trying to persuade him to flee Athens. Socrates refuses, explaining that “your country is to be honored more than your mother, your father, and all your ancestors. … You must either persuade it or obey its orders, and endure in silence whatever it instructs you to endure.”
Although not far from Socrates on this particular point, Hobbes (also part of the anthology) adhered to an individualist methodology, which was unknown to the Ancients and would soon support the modern conception of liberty.
Methodological individualism is the backbone of modern social, political, and economic analysis. In their 1982 article “An Economic Theory of Military Tactics: Methodological Individualism at War,” Geoffrey Brennan and Gordon Tullock explained that the study of military tactics has to start with the fact that “the ultimate unit of analysis is always the individual” (emphasis in original)—as good a short definition of methodological individualism as one can find. “Armies,” the two authors continue, “must be analyzed as collections of independent individuals who are, in some sense, as much at war with one another and their own leaders as they are with enemy forces.” Looking at individual incentives is the only way to understand how, for example, decorations and rewards are crucial for motivating soldiers to risk their life and body integrity. This is why heroic soldiers are eventually removed from the direct line of battle and put into safer jobs.
Market failures / Several selections of the anthology deal with “market failures”—mainly externalities and public goods—using both standard economic analysis and game theory. Contributors such as Tyler Cowen, Jonathan Anomaly, David Friedman, John Hampton, Elinor Ostrom, and Samuel Bowles and Herbert Gentis show that many of these problems can be solved by voluntary cooperation, although some areas such as national defense remain problematic.
Philosopher David Gauthier explains how rational individuals are able to adopt strategies and dispositions (such as honesty and justice) that allow them to solve so-called “prisoner dilemmas” and thereby obtain the benefits of cooperation. But fellow philosopher Gregory Kavka then argues that one cannot will an intention, as opposed to willing the object of the intention, if the reasons for the intention don’t match the reasons for its object. A person cannot form the honest intention to cooperate if he knows that he will want to defect when it becomes profitable to do so. Gauthier replies that rationality (in his sense) implies commitment; a person who respects his commitments can commit to drink a toxin (borrowing from an elaborate thought experiment proposed by Kavka) and he knows he will do it when time comes.
The anthology contains excerpts from John Rawls and Robert Nozick. Rawls argues that rational parties to a social contract would adopt principles of justice affirming equal individual rights and, subordinately, limitations of inequalities so that they will benefit the least advantaged. Nozick counters that a Lockean entitlement theory of justice is inconsistent with the distribution pattern that a Rawlsian state must continuously reestablish—because, for example, baseball or rock-music lovers voluntarily pay to enrich their idols. People, argues Nozick, are entitled to what they appropriate without coercion.
These are complex topics. For example, Nozick argues that the restitution principle (to correct past offenses against just entitlements) can justify redistribution. “One cannot use the analysis and theory presented here to condemn any particular scheme of transfer payments,” he writes (emphasis in original); “past injustices might be so great as to make necessary in the short run a more extensive state in order to rectify them.” Even in the sort of minimal state advocated by Nozick, some redistribution may be required, which of course opens a Pandora’s box. Life is full of Pandora’s boxes, which man cannot resist opening.
As soon as issues of morality and justice are raised, one cannot avoid the question of whether laws should always be obeyed as Socrates argues in the Crito. Many articles in the anthology have a bearing on this issue, but the only other one that directly addresses it is Harrison Bergeron, a delicious short story by Kurt Vonnegut. In it, a “U.S. Handicapper General” is tasked with imposing handicaps on anybody who could otherwise tilt the equal playing field. Bags of birdshot are attached to the bodies of the strong. Regular noises from a compulsory earpiece interrupt the thoughts of the too-intelligent. George Bergeron, the hero’s father, rhetorically asks his wife as they watch TV, “The minute people start cheating on laws, what do you think happens to society?”
Government failures / Public choice theory, the great discovery of the mid-20th century, is well represented in the anthology. Markets are not perfect of course, but neither is the state—that is, political and bureaucratic processes. In other words, government failures are at least as prevalent as market failures. Although this idea now looks obvious (at least to many people), it did not become so until public choice economists formulated it. It is based on the rather simple assumption that politicians and bureaucrats are, like the rest of us, guided mainly by their self-interests. As Buchanan said, it amounts to viewing “politics without romance.”
This analysis of politics with the tool of economics owes much to Anthony Downs’s classic 1957 article (reproduced in the anthology) “An Economic Theory of Political Action in a Democracy,” as well as his book on the same topic. Many of Downs’s analytical results anticipate their further development by public choice theorists: “Some men are more important than others politically, because they can influence more votes than they themselves cast”; the ordinary citizen’s “incentive to become well informed is practically nonexistent”; “it is rational for every individual to minimize his investment in political information.” Therefore, the typical voter remains rationally ignorant of politics; he votes blind. “Ignorance of politics,” Downs explains, “is not the result of unpatriotic apathy; rather, it is a highly rational response to the facts of political life in a large democracy.”
The anthology presents fascinating discussions by Michael Huemer, Geoffrey Brennan, Loren Lomasky, Jason Brennan, and Sayre-McCord suggesting that there is no moral duty to vote, although there may be a duty for the ignorant not to vote.
Downs observed that
men are much more likely to exert direct influence on government policy formation in their roles as producers than in their roles as consumers. In consequence, a democratic government is usually biased in favor of producer interests and against consumer interests.
He cites protectionist measures as an example—a very current problem, indeed.
A whole chapter of the anthology is devoted to the technique of cost-benefit analysis. Steve Kelman of Harvard University provides an “ethical critique” of cost-benefit analysis. It is, in my opinion, one of the few weak articles in the book: the author does not seem to really understand what he criticizes. A more credible critique comes from Elizabeth Anderson, a philosopher at the University of Michigan, who argues that the technique cannot be used for higher goods of intrinsic value, which can only be evaluated by democratic deliberation. The question that a student of public choice theory would ask is, who decides what are the higher goods with intrinsic value, Trump voters or a general assembly of politically correct snowflakes? David Schmidtz, a philosopher at the University of Arizona, provides a more enlightened and instructive critique.
Many problems remain, besides the well-acknowledged fact that the individuals who pay the costs are typically not the ones who reap the benefits. Environmental fetishes often intrude in discussions about cost-benefit analysis. The actual calculations of costs and benefits, based on a forest of assumptions, provide only fragile estimates that offer multiple opportunities for biases, especially for government bureaucracies with lots of resources. Have you ever heard a government announce that one of its pet projects will be abandoned because cost-benefit analysis has shown no net social benefit? On the contrary, its bureaucrats or outside consultants seem to always come up with an analysis justifying the projects. (See “The War on Consumer Surplus,” Spring 2017.) It is true, though, that the theoretical precision of the method puts some constraints on governments.
The calculations of costs and benefits provide only fragile estimates that offer multiple opportunities for biases, especially for government bureaucracies.
Price gouging / The last chapter of the anthology deals with a host of practical applications: prostitution, sex and the family, drugs, organ rationing, sweatshops, and price gouging—again with a good balance of libertarian and non-libertarian arguments. In general, and despite the level playing field, I believe libertarian arguments win the debates. The only selection I didn’t find useful is an economically confused plea for sweatshop regulation by Mathew Coakley (Warwick University) and Michael Kates (Georgetown University).
The case of price gouging is neat and interesting. Munger reports on the disturbing case of a 1996 hurricane in North Carolina. Enterprising ice sellers were arrested as they sold at higher prices something that hurricane victims could not otherwise obtain and for which they were obviously happy to pay more. These same customers applauded when their suppliers were led away by police before their eyes! “They clapped,” Munger writes in disbelief.
As Munger explains, after a disaster has hit, “the only way to ensure low prices, and large supply, to buyers is to allow sellers to charge high prices, the highest they can get” (emphasis in original). Otherwise, prices will stay up for longer. The only other option is for government to effectively control prices, which would result in real shortages and generate arbitrary waiting lines to allocate the scarce goods.
Philosopher Jeremy Snyder argues against this sort of price gouging in times of disaster. In his opinion, it shows a lack of respect for others, namely the poor. For that reason, price gouging is immoral and should be prohibited or, at least, merchants should voluntarily eschew it.
University of San Diego philosopher Matt Zwolinski provides a master counterargument. It cannot be immoral for entrepreneurs to sell at higher prices things that people could not otherwise obtain (at the same time and place); these price gougers do not in any way worsen the situation of their customers compared to the latter’s alternatives if the former were not there. If there is no attempt at price gouging, Zwolinski points out, the consequence will not be “equitable access”; supply will be even tighter and it is doubtful that the poor will get more.
Bottom line / Before I conclude, I hope the reader will forgive me an unspeakable grumble. Anyone should be at liberty to write as one wishes, with the benediction of his godly editor. And it is normal that language adapts to change and fads. I also believe that formal equality of individuals, whatever their color, sex, or forehead shape, is more than a fad. Yet English is now written in a way that may soon render barely readable any writer published more than 20 years ago. Talking about a given voter A (“Consider for example citizen A”), one of the anthology selections uses both pronouns “she” and “he,” a disconcerting sex change that occurs within a single paragraph.
Regarding the contents of the anthology, the bottom line is the book is a well-conceived crash course in philosophy, politics, and economics. It is a must for PPE students. After reading it, they will be very street-wise about the world in which they live.
