The liberal ideal and the planned society

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A b str a c t o f T h e s i s .

TII5,

ANL THJI PLANTW; 3()C'IETY.

The o j j e c t o f t a l s t h e s e s i s t o exam i ne t h e be-r-'.ng o f U b e r r ^ l i s m , oon sh i^ i'ftn ac> a p o l i t i c a l v:ieal> on q u e s t i o n s o f e c o n o m i c o r g a n i c t i o n a n d , in p a r t i c u l a r , t o c o n s i d e r . / h e t h e r a c e n l r ^ l l y p l a n n e d o r a f r e e c - n t e r p r i a % aconoui :.c s y s t e a w i l l provi("'A tuf! m o s t r a v o u r a o l e o a s i s f o r a l l o t r a l s o c i e t y . P a r t I o f t h e t h e s i s c o n s i s t s '*n 3 s t a t e m e n t o f t h e L l o e r n l T d a o l . The n o t i o n s o f f r a a d o m and o f l l s t i I b u t i v e j u s t i c e are a n e iy s s d . I t I s tu'gued t h a t e> l l b t r & l s o c i e t y i s o n ly p o s s i b l e in so f a r as th e re i s agreement tet.veen i n d 1 V1 d u a I s on a. morr 1 c o d e by w h ic h t h e i r c o n f l i c t i h g c l a i m s t o f r e e d o m c a n be r e c e i v e d .

Part II o f t h e t h e s i s i s concerned with the a p p l i c a t i o n o f t h e L i u e r s l I d e a l t o economic q u e s t i o n s . I t i s shown t h a t certrn’n economic m a t t e r s are u n a v o id e b ly s u b j e c t t o c o l l e c t i v e p o licies, f i n s r a l i s m seems t o r e q u i r e t h a t such p o l i c i e s ^houlvi be evu ive d uj e o n s c t ; u a s o c i a l s l e c i o f o n s und 1^:p i w a n t e d by contr^.l economic p l a n n i n g . I n d i v i d u a l frsedoui, "if i s urge^j ought t o p r e v a i l In m a t t e r s o f consumers' c h o ' c a nnd c h o i c e o f employment. A mai'ket system I s found t o oe e s s e n t i a l t o t h e p r e s e r v a t i o n o f t h e s e f r e e d o m s 5 but t h i s system c a n , i t Is argu^cj, be combined w ith c e n t r a l economic p l a n n i n g and a l s o w it h p u b l i c ow nership o f i n d u s t r y . The c o n c l u s i o n hon e a sy t o t r e a t th e ta o o la s a a s more l a aooordanoe altk^ t h e i r d e a e r ta , but In th e oaae o f p u b llo exa m ln a tio n a . I t aeems Im p ra ctica b le not t o have an a l l - o r - n o t h i n g atandard.

J?art o f e h a t l e

Involved In th e d i f f e r e n c e between th e t e o cawee eeem st-tp'be t h a t th e treatm ent u iven by th e world t o th o se who p ass or f a l l a p u b lic exam ination are I n d ir e c t r e s u l t s o f t h e i r p a ssin g or f a l l i n g , which are I n c a l c u l a b l e , whereas In th e c a se o f th e c h il d r e n , th e treatm ent was a d i r e c t r e s u l t , which could bn determined by th e people i n charge o f th e c h ild r e n . P in a l P o s i t i o n . The f i n a l p o s it i o n seems to me t o be one o f dilemma, i t I s A r i s t o t l e ' s a n a l y s i s , which r e l a t e s th e treatm en t o f one o l a s s o f e q u a ls t o t h a t o f an oth er o l a s s o f e q u a ls , which seems to me to carry most o o n v lo t lo n .

On th e o th er hand,

1 cunnot a c c e p t an a n a l y s i s o f d i s t r i b u t i v e j u s t i c e which I s I n a p p lic a b le t o o a se s In which we f ir m ly b e l i e v e a q u e stio n o f d i s t r i b u t i v e j u s t i c e to a r i s e . ' u ; The Determinate standard o f J u s t i c e which ought t o be a p p lie d depends upon th e B e n s f i t or Burden to be A l l o t t e d . ho f a r we have been d is c u s s in g th e a b s t r a c t n o tio n o f d istr ib u tiv e j u s tic e .

I f we now turn to th e c o n s id e r a t io n o f

th e d eterm in ate sta n d a r d s , one p o in t seems c l e a r . I t I s th a t th e answer t o th e q u e s tio n "what d eterm in ate standard or

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C r it e r io n ought to be applied?" oan on ly be answered w ith r e fe r e n c e t o the determ in ate th in g which i s b ein g d i s ­ tr ib u te d and th e oiroumetancee in which i t i s being d istr ib u te d .

There oan be no g en er a l answer.

The a b s t r a c t

n otion of j u s t i c e i s the n o tio n of th e d i s t r i b u t i o n of a b e n e f i t or burden acco rd in g t o a d eterm inate standard or r u le .

Rules or standards which are a p p lic a b le in some c a s e s

w i l l be in a p p lic a b le in o t h e r s .

Of th e p o s s ib l e r u l e s or

standards in any g iv en s i t u a t i o n , i t w i l l be true th a t ^assuming th e o b l ig a t io n to d i s t r i b u t i v e j u s t i c e i s not

-

overrid en by oth er moral o b l i g a t i o n s ) , th a t one of them (which may be complex embodying two or more d i f f e r e n t c r i t e r i a ) w i l l be th e r ig h t one, which ought t o be a p p lied in th a t s i t u a t i o n .

Just what c r i t e r i a ought to be a p p lie d

in th e ca se o f the d i s t r i b u t i o n of economic b e n e f i t s and economic burdens i s d isc u sse d l a t e r .

i-

Ô4 CHAJMüüt I T .

L ib e r ty

ana

J u o tlo e.

f e (say now retu rn t o our o o n u id er a tio n o f how th e o o n flitjtin ti oluiœ» o f d i f f e r e n t in d ir id u a le t o l i v e t h e i r own l i f e tin t h e i r own way may be r e e o lv e d . The r e e o l u t io n , i t ib o fte n u rged , ought t o be based on a P r in c i p le o f Q u a l i t y .

The p o in t i s o f t e n p u t, by

s a y in g th a t in Bontban’o words "Everyone should count f o r on ; and nobody f o r more than one".

This seems to be a sta te m en t

o f th e f i r s t o f th e d eterm in ate c o n c e p tio n s o f d i s t r i b u t i v e J u s t i c e , which affirm ed a fundam ental e q u a l it y between a l l human b e in g s on th e b a s is o f t h e i r common humanity, end gave th e r u le "To each th e same".

How f a r , we have to a s k , i s a

p r in c i p l e o f e q u a l i t y in v o lv ed I n ^ e e o l u t i o n o f c o n f l i c t i n g oloim s and, i f i t i s i n v o lv e d , what i s th e p r e c is e mode o f i t s a p p lic a t io n ? An Iq u a l D i s t r i b u t i o n o f L ib e r t y . Does i t perhaps mean t h a t each in d iv id u a l should have equal lib e r t y ?

I f we take "equal" in i t s prima f a c i e s e n s e

o f th e same or a s i m i l a r amaunt, th en we can s e e t h a t th e I p r i n c i p l e o f eq u al l i b e r t y f o r a l l i n d i v id u a l s would lea d to a r a th e r unusual typ e o f s o c i e t y , v e r y d i f f e r e n t from t h a t which a d v o c a te s o f t h i s p r i n c i p l e seem t o have in mind. L ib e rty r e f e r s to th e r e l a t i o n between what a c»n wants

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t o do and th e c o e r c iv e impediments i n the way o f h i s doing it.

Ah eq u al d i s t r i b u t i o n of l i b e r t y would mean eaoh person

b ein g e q u a lly c o n s t r a in e d , i . e * having th e same amount of c o n s tr a in t put upon him in r e l a t i o n t o what he wanted to do, as o th er s had put upon them in r e l a t i o n t o what th e y wanted t o do.

I f you wanted freedom of e x p r e s sio n and I the r i g h t

of s u p p r e s s io n , and you had your way on Mondays and I mine on Tuesdays, th e r e would be e q u a l i t y of c o n s t r a in t between u s . Men have w id ely d i f f e r e n t d e s i r e s .

An eq u al d i s t r i b u t i o n

of l i b e r t y in t h i s sen se would mean then th e law , ( t h e c o n s t r a in t put upon the i n d i v i d u a l by th e s t a t e ) would have to vary w ith each p erson , so as to a c h ie v e a s t a t e o f a f f a i r s in which each in d iv id u a l was e q u a lly c o n stra in ed in r e l a t i o n to what he wanted t o do.

Such procedure would be in co m p a tib le

w ith the Rule o f law , u s u a lly regarded as a guarantee of in d iv id u a l l i b e r t y and r e q u ir in g t h a t i f Mr.A. i s proh iblteid from doing a c t io n x , so are a l l th e oth er members of the s o c i e t y in which Mr. A l i v e s .

Under th e Rule of Law,there

i s no e q u a l it y of c o n s t r a i n t , f o r th e law p r o h ib it in g a c t io n X which c o n s tr a in s A , who wants t o do a c t io n x^ does not c o n s tr a in Mr.B. who does not want t o do i t .

Hence, s i n c e

l i b e r t y means c o n s t r a in t in r e l a t i o n t o what a man wants t o do, the Rule o f Law does not p rovid e f o r e q u a l it y of l i b e r t y in th e se n s e of e q u a l it y of n o n - c o n s t r a i n t . R q u a lity of l i b e r t y i n th e se n se o f e q u a l i t y of non-

56

o o n e tr a in t i s n e ith e r p r a o t io a b le , ( s i n o e i t would be im p o ssib le t o f in d out what men wanted t o do and to have d i f f e r e n t laws fo r eaoh man, ohanging them as h i s d e s i r e s c h a n g ed ), n or, I t h in k , i t w i l l a t onoe be a g r e e d , d e s ir a b le The P r in c ip le of E q u a lity then does not mean t h a t a l l men fiLre to have equal l i b e r t y . E q u a lity of Opinions and of C o n s id e r a tio n • Does th e P r in c ip le o f E q u a lity mean perhaps th a t eq u al w eigh t should be g iv en t o eaoh man's view s about how oonf n o t i n g cla im s ought to be r e s o lv e d ?

I f t h i s i s th e c a s e ,

then i t w i l l be th e view o f th e m a jo rity which w i l l p r e v a i l , f o r i f eaoh man's view s are g iv e n eq u al w e ig h t, then th e s c a l e s w i l l t e l l in favou r o f th e m a jo r ity .

But l i b e r a l i s m

hmlds th a t th e moral op in ion of any in d i v i d u a l i s not so much equal w ith t h a t o f any oth er as i n v i o l a b l e in i t s e l f and t h a t s o c i e t y i s not j u s t i f i e d in im posing on an in d i v i d u a l a l i n e of n o tio n which oon traven es th e d i c t a t e s of h i s c o n s c ie n c e , not j u s t i f i e d , f o r i n s t a n c e , in eo m p ellin g a c o n s c ie n t io u s o b je c to r t o take up arms or p un ish in g him f o r not doing s o . S o c ie t y then oannot be based upon e q u a l it y of l i b e r t y , s in o e t h i s i s im p r a c tic a b le and seen t o be u n d e s ir a b le , and i t cannot be based on eq u al w eight b ein g g iv e n t o each man's view s s in o e t h i s would contravene th e l i b e r a l b e l i e f in th e

57

s a n c t i t y of the i n d iv id u a l oonsoienoe* I s th e r e any s e n s e of e q u a lit y o th er than t h a t a lr e a d y d isc u ss e d which i s

in v o lv e d in the drawing up o f th e

of behaviour on which s o c i e t y i s to be based?

code

Theclaim s of

eaoh in d iv id u a l to

l i v e h i s own l i f e in h is own

way, ought, -

i t may be s a i d , t o

be g iv en eq u al c o n s id e r a tio n

w ith th a t of

any other?

What does t h i s raean7

I t does not mean th a t we

th in k th e claim of the man who wants to su pp ress freedom of sp eech i s in any sen se eq u al t o the man|who wants i t t o be uph eld .

%yhat i t does mean i s sim p ly t h a t the r e s o l u t i o n

of claim s must be made on a moral b a s i s , i # e . t h a t in d e c id in g between claim s th e r e must be no p a r t i a l i t y .

I must

not say th a t my cla im s overrid e yours because th e y are mine. But t h i s i s ambiguous.

In a s e n s e , my cla im s may come

f i r s t , i f my ch a ra c ter and circu m stan ces are such as to make them o v er rid e o th er c o n f l i c t i n g cla im s o f y o u r s .

But th e y

must not be put f i r s t because of m orally i r r e le v a n t circum ­ s t a n c e s ,s u c h as my d e s ir e th a t my claim should be put f i r s t , what i s in v o lv e d then in g i v i n g eq u a l c o n s id e r a tio n t o a l l in d iv id u a ls * claim s i s i m p a r t i a l i t y or th e c o n s id e r a tio n of on ly m orally r e v a la n t c ir c u m sta n c e s.

I f a d ecisio n i s

b ein g made between the man who wants to su pp ress freedom of sp eech and th e man who wants to uphold i t , equal c o n s id e r a ­ t i o n t&e* means c o n s id e r a t io n on a moral b a s is and t h i s i n v o lv e s i m p a r t i a l i t y between c la im a n ts .

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I t 'Will be remembered t h a t we s t a r t e d w ith the b e l i e f t h a t th e P r in c ip le of E q u a lity was a determ inate c o n ce p tio n of d is tr ib u tiv e j u s t ic e ,

may then ask does i m p a r t i a l i t y

between cla im a n ts in v o lv e a p r i n c ip l e o f d i s t r i b u t i v e j u s t i c e ? We may n o tic e th a t an im p a r tia l c o n s id e r a tio n o f th e whole s i t u a t i o n i s neoosaary f o r any moral judgment o f any k ind . I t seems to me th a t i t i s on ly i m p a r t i a l i t y in regard t o one person in r e l a t i o n t o another in th e d i s t r i b u t i o n of some d isp e n sa b le th in g which in v o lv e s d i s t r i b u t i v e j u s t i c e .

The

i m p a r t i a l i t y in v o lv e d in th e c o n s id e r a tio n of c o n f l i c t i n g claim s of d i f f e r e n t in d iv id u a ls w ith a view to drawing up a g e n e r a l code of behaviour on which s o c i e t y may be basedj does n o t, i t seems to me, in v o lv e th e n o tio n of d i s t r i b u t i v e ju stic e .

Equal c o n s id e r a tio n f o r each in d i v i d u a l in t h i s

co n te x t seems to mean sim ply th e r e s o l u t i o n of c o n f l i c t i n g cla im s on a moral as d i s t i n c t from a non-moral b a s i s ,

i'

I f we look a t th e p r a c t i c a l s o l u t i o n in our s o c i e t y , to the problem o f c o n f l i c t i n g c la im s , we see th a t c e r t a i n l i b e r t i e s are p ro h ib ite d a l t o g e t h e r , i . e . a c e r t a i n g e n e r a l code of behaviour i s e n fo r c e d .

In a d d it io n t o t h i s , in

regard to th in g s agreed t o be good, t o which many c i t i z e n s la y c la im , a d i s t r i b u t i v e i d e a l of some s o r t i s m ain tain ed . I m p a r t i a l i t y in th e drawing up of th e g e n e r a l code o f behaviour seems to in v o lv e sim p ly th e c o n s id e r a tio n of o n ly moral r e le v a n t circu m sta n ces and no p r i n c i p l e of e q u a l i t y or

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d i s t r i b u t i v e j j u s t i c e i s in v o lv e d ,

where however a dispensa^

b le th in g such as w ea lth i s to be d iv id ed up, i m p a r t i a l i t y seems to meanthat th e shares

or treatm ent g iv e n t o d i f f e r e n t

o i t i z o n s should be the same or equal in th e absence of th e production of evid en ce t o support an oth er d i v i s i o n .

In

regard to th e d i v i s i o n of th in g s t o which many c i t i z e n s la y claim as d i s t i n c t from th e g e n e r a l code of behaviour^ i m p a r t i a l i t y does in v o lv e a p r i n c i p l e of d i s t r i b u t i v e j u s t i c e , i # 8 . th a t the f i r s t o f the determ in ate c o n c e p tio n s s e t out on p.

th e p r in c ip le , IJo eaoh the same) i s always v a lid

in the absence o f evid en ce t o the c o n tr a r y . The C o n d ition s o f L ib e ra lism . For th e p r e s e n t, we can summarise oui* c o n c lu s io n s as fo llo w s: a)

L ib era lism a s s e r t s t h a t c o n f l i c t i n g cla im s ought t o

be r e s o lv e d on a moral b a s i s and r e s i s t s t h e i r r e s o l u t i o n on a power b a s i s .

T his p oin t i s put in popular language by th e

a s s e r t i o n of a P r in c ip le of E q u a lit y , but t h i s p r in c i p l e tu rn s out on a n a l y s i s to mean sim ply eq u al c o n s id e r a tio n and equal c o n s id e r a tio n to mean moral c o n s i d e r a t io n . b)

L ib e ra lism h old s th a t each man's moral view s are in v io la b le ^

c)

I f s o c i e t y i s to be p o s s i b l e , g e n e r a l r u l e s of conduct must be m a in ta in ed .

I f th ere i s to be a l i b e r a l s o c i e t y a l l th e s e c o n d it io n s

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must be s a t i s f i e d a t onoe.

I t i s c le a r th a t t h i s oan only

be th e case where th ere i s agreement on a code o f s o c i a l m o r a lity . A l i b e r a l s o c i e t y then i s on ly p o s s ib l e in so f a r as th ere i s agreement on a moral code and where t h i s a g r e e ­ ment does not e x i s t th e r e cannot be a l i b e r a l s o c i e t y . In a l i b e r a l s o c i e t y , t h e n , l i b e r t y i s lim ite d by an agreed code of j u s t i c e in i t s g e n e r a l as d i s t i n c t from i t s p a r t ic u la r sense. The Rule o f Law. AS s t a t e d ab ove,a l i b e r a l s o c i e t y i s s a id to be one re g u la te d by g e n e r a l r u l e s o f conduct. The next q u e stio n to co n sid e r i s whether th e moral c o n s id e r a tio n of d i f f e r e n t i n d i v i d u a l s ' c o n f l i c t i n g claim s i s l i k e l y to r e s u l t in g e n e r a l r u le s o f behaviour or whether i t may not su g g e s t p a r t ic u la r r u le s fo r p a r t ic u la r people i . e . p a t t i c u l a r moral r u l e s , n o t p a r tic u la r r u le s based on p a r t i a l i t y . This i s a q u e s tio n of whether m o r a lity oan be form ulated in terms of g e n e r a l p r i n c i p l e s or r u l e s which are always a p p lic a b le to a l l people in a l l c ir c u m sta n c e s.

I do not m yself th in k t h i s to

be p o s s i b l e , but th e problem i s a d i f f i c u l t one of moral p h ilosop h y which oannot be donsidered h e r e . There i s , however, I t h in k ,g e n e r a l agreement on th e f a c t th a t f o r p o l i t i c a l purposes the Rule o f Law i s th e b e s t 1. guarantee a g a in s t p a r t i a l i t y . I t i s b e t t e r t o have a l a w__ I 1. This seems to be A r i s t o t l e ' s view when he s a y s p a s s io n i n f l u e n c e s th o se who are in power,even the v ery b e s t o f men:for which reason law i s reason w ith ou t d e s i r e ” . P o l i t i e s ^ -16 . 1287a.

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whieh e n fo r o es g e n e r a lly th e keeping of o o n t r a c t s , even though th ere may be o a s e s in whioh a p a r t ic u la r g o n tra o t ought not to be kept than to have a law which makes th e d e c i s io n about whether the c o n tr a c t ought to be kept or not l i a b l e to d e c is io n by p a r t ic u la r in d i v i d u a l s ju d gin g a p a r t ic u la r c a s e . J^or th e l a t t e r p r a c t i c e , opens th e door to P a r t i a l i t y ana d e c i s i o n s of b i a s . The law then i s enforced g e n e r a l l y .

But in th e a c t of

%

a d m in iste r in g i t ,

judges take note o f p a r t ic u la r c ir c u m s ta n c e s ,

t o which i t s a p p l i c a b i l i t y may be d o u b tf u l.

T his i s done by

meting out punishments on th e b a s is of moral d e s e r t in s t e a d of th e b a s is of th e a c t u a l deed performed.

T his means th a t

th e punishment ta k e s in t o account not o n ly the law, but th e a p p l i c a b i l i t y o f the law t o th e p a r t ic u la r circu m stan ces under c o n s id e r a t io n .

Vie a l l know th e ea se in which a p l a i n ­

t i f f wins h i s c a s e , but i s awarded o n ly a -^d in damages. The im p lic a t io n of such an award i s t h a t , alth o u g h th e p l a i n t i f f i s r i g h t s o f a r as th e law i s concerned, th e r e i s something f a u l t y in th e law in i t s a p p l i c a t i o n t o th e p a r t ic u la r circu m stan ces under c o n s id e r a t io n . The Area over Which Agreement on a Moral Code i s N e c e s s a r y . M ill h old s th a t over th e whole area in which one man's claim t o i n d i v i d u a l i t y c o n f l i c t s w ith a n o th er, th e r e i s ground f o r th e maintenance of a code of s o c i a l m o r a lity . L ib e r ty f o r th e i n d i v i d u a l i s o n ly above q u e stio n in regard

62

t o (sao’ s a o tio n s 'vthioh do not d i r e c t l y bear upon oth ers* But the s t a t e may or may not m aintain a moral code over t h i s whole a r e a .

S o o ie t y w i l l be p o s s ib le i f th e s t a t e

m aintains on ly order and s e c u r i t y .

In (is ottanç; i»A(j,rm(jiusu1r"on

m rnnïïa l i e e &#nWwk#k="e#n form tho b a s ir of a i n g e t t i n g agreement on a moral code which can form th e b a s i s of a l i b e r a l s o c i e t y , th e f i r s t q u e s tio n i s , how f a r f lu n g th e law i s t o b e , i# e # what area o f conduct ia i t t o cover?

Ought th e s t a t e to a c t as a r b i t e r over th e whole area

where i n d i v i d u a l s ' cla im s o v er la p or ought i t t o a llo w some t o be s e t t l e d a s may be by th e i n d i v i c u a l s con cern ed , th e s t a t e i n s i s t i n g only th a t th e y r e f r a i n from c o e r c io n and c o e r c iv e i n t e r f e r e n c e w ith one another* T r a d it io n a l l y l i b e r a l i s m has been a s s o c ia t e d w ith th e view th a t th e area covered by the la w , ( i *e . th e area over which s t a t e c o e r c iv e power i s used) should be a s lim it e d a s p o s s ib le * Grounds in favour of t h i s view a r e : a) th e d i f f i c u l t y o f rea ch in g agreement on th e moral code to be enforced taken t o g e th e r w ith th e f a c t t h a t on l i b e r a l p rem ises th er e i s no j u s t i f i c a t i o n f o r im posing a moral code on people who hold another* b) th a t in order to e n fo r ce a system of s o c i a l m o r a lity , i t may be n e c e ssa r y t o c u r t a i l in d i v i d u a l l i b e r t y not o n ly in regard to th e matter a t i s s u e but in regard t o many o th er

63

m atters as w ell*

For example, in order t o en foroe a ju s t

d i s t r i b u t i o n of e*^* b a e o n ,it i s n e c e ssa r y t o c u r t a i l l i b e r t y in regard to th e time and p la c e people k i l l p ig s and th e shops a t which p eople buy bacon* The reason s a g a in s t th e m inim ising o f th e area of law i s th a t in th e very a c t of m ain tain in g ord er, the s t a t e i n f lu e n c e s th e s o r t of s e t t le m e n t which w i l l i n f a c t be made* I f i t i s go in g to put th e stamp o f s t a t e s e c u r i t y on a s e t t l e m e n t , then i t may be h e l d , i t ought t o do t h i s i n regard to a s e t t le m e n t which i s s o c i a l l y a c c e p ta b le as a j u s t one* Let us now go in t o the q u e stio n o f th e area over which th e s t a t e should maintain a code of s o c i a l m o r a lity in a l i t t l e more d e t a i l by c o n s id e r in g th e view put forward on t h i s p oin t by P r o fe s so r F*H* K n igh t, Prof* Knight ' s view th a t th e o n ly i d e a l l y r i g h t f u n c tio n o f a l i b e r a l s t a t e i s to suppreas c o e r c io n among i t s members* In h is paper on th e "E th ic s of L ib e r a lism "

I. tn Ecoaomica 1939,

P r o fe s s o r P*H* Knight ta k e s th e view th a t th e l i b e r a l p r i n c ip l e th a t th e i n d i v i d u a l i s an end in h im s I lf need be supplemented by on ly one f u r th e r normative judgment, th e judgment t h a t co e r c io n of i n d i v i d u a ls or groups in s o c i e t y by other in d iv id u a ls or groups i s wrong. I f t h i s were the c a s e , th e area over which agreement would îiave to be reached t o provide f o r a t r u l y l i b e r a l s o c i e t y would be lim it e d to a) th e

64

p r i n c i p le th a t each in d iv id u a l should determ ine h i s own way of l i f e and b) t o t h i s fu r th e r p r i n c i p le th a t c o e r c io n of i n d i v i d u a l s or groups by o th er i n d iv id u a l s or groups i s wrong.

P r o fe ss o r Knight s a y s , 1) "The e s s e n t i a l s o c i a l

e t h i c a l p r in c ip le of l i b e r a lis m i s th a t a l l r e l a t i o n s between men ought i d e a l l y t o r e s t upon mutual consent and not on co e r c io n e i t h e r on the part of oth er in d iv id u a ls or on th e part of s o c i e t y as p o l i t i c a l l y organ ised in th e s t a t e

...

and 2) "The f u n c tio n and th e only i d e a l l y r i g h t f u n c t io n of th e s t a t e a ccord in g to t h i s e t h i c i s use c o e r c io n n e g a t i v e ly to prevent th e use o f c o e r c io n by i n a iv id u a ls or groups ( 1)

a g a in s t other in d iv id u a ls o f groups, and f u r t h e r , "We must maintain a c l e a r d i s t i n c t i o n between th e p o l i t i c a l and p erso n a l a s p e c t s of e t h i c a l d o c t r in e .

The p r i n c i p l e as s ta te d ( i . e . 2

above) i s a th eo ry of the r i g h t sphere of p o l i t i c a l c o e r c io n , not o f vJhat i s r i g h t and wrong in i n d iv id u a l or in s o c i a l con d u ct, o u tsid e th e s i n g l e matter of the i n d i v i d u a l ' s r o l e in determ ining the answer to t h i s one q u e stio n ."

He goes on

"What th e le a d in g proponents o f l i b e r a l i s m have thought about other e t h i c a l problems, such as th e nature of the good l i f e , th e meaning and co n ten t of moral o b l i g a t i o n , e t c . , i s a se p a r a te q u e s tio n .w I t i s f i r s t n e c e ssa r y to ask what i s meant by c o e r c io n in 1. The K th ics of L ib e r a lism . F .H . K night, ^ Econoraica 1939. p. 6 - 6

2,

:bid.

6Ç

th is o o n tsx t.

i’r o f e s s o r icniyht does not a n a ly se I t , but

th e g én ér a l au ggeation ia th a t he aoanu by ooeroion th e use o f or th r e a t o f f o r o o . At one p o in t in th e paper, however, he says th a t th e s t a t e i s J u s t i f i e d in u sin g c o e r c io n not only to put down p erson al v i o le n c e or th e th r e a t of I t , but a l s o 1

to suppreea fraud*

*

A3 wo saw in the ohaptear on freedom above,

freud may be in clud ed w ith tho use and th r e a t of f o r c e under the heading of d i r e c t c o e r c io n , s in c e th e s e ere a l l ways in which men may work d i r e c t l y upon one another t o impede each o th er’s a c t i v i t i e s ,

we may say then th a t on P r o fe s s o r

K n ig h t’s view the c o e r c iv e power o f the e t e t e i s t o be used on ly to su p p ress d i r e c t ooeroion e x e r o ls e a a g a in s t in d iv id u a l s or groups by oth er in d i v i d u a l s or g rou p s. That t h i s would not provide a a u f f i c i e n t b a s i s fo r s o c i e t y as we know i t oan be seen by im agining what a s o o i e t y would be l i k e in which tho s t a t e suppressed only d i r e c t c o e r c io n .

T heft and a r so n , provided th ey were not p erp etrated

w ith v i o l e n c e or in tic e id a tio n would go unpunished; th e one crime in suoh a s o c i e t y would be the use of f o r c e or in t im id a ­ t i o n by tho th r e a t o f f o r c e or o th er p s y c h o lo g ic a l p ressu re and i t would be a crime i r r e s p e c t i v e of the purpose f o r which th e fo r c e or prossure was used; in t im id a t io n to prevent t h e f t would be as much a crime as in tim id a t io n to fu r th e r t h e f t . may be sa id th a t t h e f t , a y s o n . e t o . , would in v o lv e v i o l e n c e as soon as anyone t r i e d to s to p i t and t h i s i s o f cou rse th e 1.

Ch.II.p.lü.

It

66

oase.

But th e p o in t i s th a t th e v io le n c e used by a man

tr y in g t o s to p t h e f t would be on e x a c t l y th e same l e v e l as a man u sin g v io le n o e to s t e a l something*

I f one wanted

to be c e r t a in th a t o n e 's p o s s e s s io n s were not s t o l e n then the only th in g to do would be e i t h e r t o guard them o n e s e l f th e whole tim e or to employ some tr u stw o rth y person to guard* While on guard, one could be sure that; th e s t a t e would suppress v io le n o e e x e r c is e d by anyone who was t r y in g to take th ese p o sse ssio n s.

But one could have no s e c u r it y in regard to any

of o n e 's p o s s e s s io n s which were l e f t unguarded and i f th e y were taken w h ile th ey were l e f t unguarded, th e r e would be no leg a l red ress.

For i t would not have been a g a in s t th e law

f o r a man t o take them, only f o r him t o use v io le n o e or fraud in so d oin g.

Hence th e r u le r s o f such a s o o i e t y would be

th o se who could most e f f e c t i v e l y gain power by s e i z i n g prop erty and other w ea lth w ith ou t a c t u a l r e s o r t to v i o l e n c e or fraud or th e th r e a t of th e s e t h i n g s .

As s t a t e d s e iz u r e

obtained oth er than by v io le n o e or fraud would be upheld by th e s t a t e »

There would be no l e g a l r e d r e s s and th e s t a t e

would suppress any r i g h t f u l owner who t r ie d by d i r e c t ooeroion to g e t back h is s t o l e n p ro p erty . I t appears then t h a t th e L ib e r a l p r in c ip le cannot be a d eq u a tely supplemented by the one f u r t h e r p r i n c i p l e th a t c o e r c io n i s wrong,

^^hat i s requ ired i d e a l l y i s a moral code

which extends over th e whole f i e l d in which i n d i v i d u a l ' s

67

olaitas c o n f l l o t *

ü?he s t a t e , i f i t m ain tain s ord er, oannot

remain n e u tr a l in t h i s f i e l d , f o r in th e v ery a c t of m ain ta in ­ ing o rd er, i t w i l l support some elaitasand su p p ress oth ers# For exam ple, i f s t a t e o o e r o iv e power i s used t o support a p a r t ic u la r property system , one f o r in s t a n c e in which th e r e i s p r iv a te p rop erty in th e means o f p ro d u c tio n , then the im p lic a ­ t i o n i s not on ly th a t c o e r c io n i s wrong, but th a t t h i s p a r t io u la r p roperty system i s r i g h t , th a t t h i s i s th e vfiy in which i n d i v ­ id u a ls* c o n f l i c t i n g claim s ought t o be r e s o lv e d .

I t i s im poss­

i b l e f o r th e s t a t e to m aintain order and y e t remain n e u tr a l as between d i f f e r e n t in d iv id u a ls* cla im s in th e way th a t P r o fe s s o r Knight seems t o s u g g e s t . And, i f i t cannot remain n eu tra l^ th en the b e s t s o l u t i o n i s fo r an agreed code o f s o c i a l m o r a lity t o be e n fo r c e d .

Where such agreement i s not fo r th c o m in g , and no

l e g i s l a t i o n i s passed on the matter a t i s s u e , th e p o s i t i o n i s th a t th e s t a t e i s not n e u tr a l but in the v ery a c t of m ain tain ­ in g order i s gu aran teein g th e s t a t u s qup. That in regard to S o c ia l and Pol i t i c a l Conduct , a N eg a tiv e Code i s a l l th a t i s req u i r e d . l e t us now r e c o n s id e r p r o fe s s o r K night*s p r i n c i p l e ta k in g ooeroion to mean not on ly d i r e c t c o e r c io n but a l s o compulsion and i n t e r f e r e n c e of th e s o r t s d escrib ed under (3) in th e 1.

chapter) on freedom.

Then th e p r i n c i p l e th a t th e s t a t e should

on ly use i t s power n e g a t i v e ly t o suppress c o e r c io n a r i s i n g between in d i v i d u a l s and groups seems more p l a u s i b l e , f o r , on Gh.II.

p.^7.

68 t h i s b a s i s , the c o e r c iv e power of th e s t a t e w i l l be used to put down t h e f t ; arson and b la c k m lil as w e l l as fr a u d , l i b e l and v io le n c e *

So f a r then as s o c i a l and c i v i l con d u ct, but not

economic con d uct, i s concerned^ t h i s p r i n c i p l e in i t s wide in t e r p r e t a t i o n seems f a i r l y ad eq u ate, and corresponds ro u g h ly t o th e f i e l d of common law in t h i s country to -d a y . I f , however, th e meaning of "coercion" i s in te r p r e te d in t h i s wide sen se as in c lu d in g a l l th e s e t h i n g s , i . e # s u p p r e ssio n of t h e f t , a r so n , b l a c k m a i l ,e t c . , then th ere i s wrapped up in th e word a number of moral judgments.

Hence i t seems m isle a d ­

in g to sa y , i f c o e rcio n i s understood in t h i s s e n s e , th a t th e one p r in c ip le needed to supplement th e p r i n c ip l e o f l i b e r a l i s m i s the p r i n c i p l e th a t co e rcio n i s wrong, f o r t h i s , th e l a t t e r p r i n c i p l e , tu rn s out on a n a l y s i s t o c o n s i s t of not on e, but a number of p r i n c i p l e s . N e v e r t h e le s s , we have I th in k here h i t upon th e d i s t i n c t i v e c o n tr ib u tio n of th e t r a d i t i o n a l l i b e r a l s t o th e problem of s o c i a l o r g a n is a tio n .

This i s th a t in th e s o c i a l , and p o l i t i c a l

area of con d uct, a minimum n e g a tiv e moral code w i l l form an adequate b a s is fo r s o c i e t y .

John 8 tu a r t M i l l , in h i s B ssay

on L ib e r ty , showed th a t in t h i s area of conduct th e r e i s a sphere f a i r l y wide ^pherover which i n d i v i d u a l s ’ claim s do not c o n f l i c t , i . e . the sphere of a c t io n which i s s e l f - r e g a r d i n g i s th e sen se t h a t th e d ir e c t consequences of th e a c t io n f a l l mainly and s i g n i f i c a n t l y upon the a g e n t.

In th e s o c i a l and p o l i t i c a l

69

sp h e r e , where in d lT ld u a ls ' c la im s do c o n f l i c t th e e a l l t h a t i s required f o r t h e i r r e s o l u t i o n i s agreement th a t c e r t a i n kinds of a c t io n s h a l l be p r o h ib it e d .

We do not have

t o rea ch agreement on whether t o have Mozart and Beethoven or j a z z , because each i n d i v i d u a l can have what he c h o o s e s . A corp orate way of l i f e i s then u n n ecessary so f a r as s o c i a l and c u l t u r a l m atters are oonoerned.

A l l t h a t i s re q u ired

t o supplement th e l i b e r a l p r i n c i p l e i s s o c i a l agreement on a minimum, n e g a tiv e moral co d e. Summary. Summing up th e n , we may sa y th a t th e L ib e r a l I d e a l i s one which a c c e p ts th e development of i n d i v i d u a l i t y as th e end of government.

S tated in t h i s form th e I d e a l i s in c o m p le te ,

in th a t i t r e q u ir e s t o be supplemented by a code f o r the r e s o l u t i o n of d i f f e r e n t i n d i v i d u a l s ' c o n f l i c t i n g c la im s , b efo r e s o c i a l o r g a n is a tio n i s p o s s i b l e .

T r a d itio n a lly , i t

has been held th a t t h i s r e s o l u t i o n should be based upon a p r in c ip le of S q u a lity .

T his p r i n c i p l e means not t h a t a l l

i n d iv id u a ls ought t o have eq u al l i b e r t y , but t h a t t h e i r o o n f l i s t i n g claim s ought t o r e c e i v e eq u al c o n s id e r a t io n . But " c o n sid eration " im p lie s a sta n d p o in t from which one can c o n s id e r and i f we ask what i s th e r e le v a n t sta n d p o in t in t h i s c a s e , th e answer i s , t h e moral s t a n d p o in t .

Hence th e

p r i n c i p l e of E q u a lity tu r n s out on a n a l y s i s t o be sim p ly an a s s e r t i o n th a t th e r e s o l u t i o n of c o n f l i c t i n g cla im s should

70

be on a moral b a s is •

I t i s th u s th e p r in o ip le of

l i b e r a lis m whioh r e s i s t s the r e s o l u t i o n of c o n f l i c t i n g claim s on a power b a s i s . Sinoe a o o ie ty i s on ly p o s s ib l e on th e b a s i s of g e n e r a lly en forced r u le s of conduct and l i b e r a l i s m h o ld s b oth th a t th e r u l e s must be based on m o r a lity and th a t th e in d iv id u a l c o n sc ie n c e i s i n v i o l a b l e , i t i s c l e a r th a t l i b e r a l i s m i s on ly p o s s ib le where th ere i s s o c i a l agreement or a code of s o c i a l m o r a lity . In th e c i v i l , s o c i a l and c u l t u r a l s p h e r e s , t h i s code may be a n e g a tiv e one.

N e v e r th e le s s i t cannot be lim it e d

s o l e l y t o th e su p p r e ssio n of " d ir e c t c o e r c io n " .

71

PARI I I .

IIDIYIDXIALISM A3SD ECONOMIC ORGABISAIIOIf. CHAPTER V. The L lh e r a l Dilemma.

We now tu rn to the a p p l i c a t i o n o f th e L ib e r a l I d e a l t o economic o r g a n is a tio n .

We have f i r s t t o c o n s id e r th e area

over which law ought to he a p p lie d and th en to c o n s id e r what w it h in t h a t area th e law ought t o h e. D i f f i c u l t y o f D e fin in g th e Sphere o f L ib e r ty . M i l l h eld t h a t i n d i v i d u a l s should enjoy l i b e r t y in regard to th o se a c t io n s which are s e l f - r e g a r d i n g i n th e sen se t h a t t h e i r d i r e c t conseq.uences f a l l m ainly and s i g n i f i c a n t l y upon the a g en t.

But under a developed economic system , n e a r ly

a l l economic a c t i v i t i e s are o th e r -r e g a r d in g i n t h a t th e y have d i r e c t e f f e c t s and important e f f e c t s on i n d i v i d u a l s o th e r than th e a gen t; hence th e d e f i n i t i o n o f th e sphere o f i n d i v i ­ d u al l i b e r t y by r e fe r e n c e to M i l l ’ s d i s t i n c t i o n between s e l f regard in g and o th e r -r e g a r d in g a c t io n becomes w e l l - n i g h im p o s s ib le . M i l l ’ s d i s t i n c t i o n was n o t , o f c o u r s e , ever in ten d ed t o be a hard and f a s t one; a l l our a c t io n s o f whatever k in d , have some consequences upon o th e r s; th e d i s t i n c t i o n M i l l ma&e was between th o s e a c t io n s which have "important!* and " d irect" consequences on o th er s and th o s e which do n o t. JBut j u s t

7g

because economic a c t i v i t i e s are more c l o s e l y lin k e d th an o th e r s o r t s o f a c t i v i t y , t h i s d i s t i n c t i o n i s v e r y d i f f i c u l t t o make i n regard t o economic conduct. l e t us c o n s id e r an example o f th e way i n which M i l l worked i

out h i s p r i n c i p l e i n th e c a se o f s o c i a l conduct and th en t r y t o apply i t t o economic con d u ct.

Drunkenness was i n i t s e l f .

K i l l h e ld , o u ts id e th e sphere o f s o c i a l m o r a lity ; i t was o n ly th e consequences o f drunkenness, such as th e use o f v i o l e n c e a g a in s t o th e r s or f a i l i n g t o support d ep en d en ts, which came w i t h in th e scope o f th e law; any e f f e c t s on th e drunkard h i m s e l f , such a s i l l - h e a l t h and l o s s o f work were h i s concern a lo n e .

In t h i s way. M ill argued, i t was p o s s i b l e t o 'fe n c e

round’ an area o f a c t io n i n which th e in d i v i d u a l was supreme, i n the se n se t h a t he was o u ts id e th e j u r i s d i c t i o n o f th e s t a t e , o u t s i d e , t h e r e f o r e , th e sphere o f s o c i a l m o r a lity . Consider now th e ca se o f men, working i n an e s s e n t i a l in d u s tr y , d e c id in g t o str ik e ,. w orkers.

L et 4 s suppose i t i s th e r a ilw a y

The d i r e c t consequences o f s t r i k i n g such a s l o s s o f

money, i d l e n e s s a r e , we s h a l l sa y, nobody’ s concern but th o s e o f the men on s t r i k e .

But th e consequences o f th e s t r i k e on

th e community i n g e n e r a l may be t o p a r a ly s e th e g r e a t e r p a rt o f in d u str y b ecau se p eop le cannot g e t t o work and, i f th e strU ce c o n tin u e s lon g enough, may cause a c t u a l la c k o f food and c o a l .

The p o in t i s t h a t a man who g e t s drunk may n o t make

h im s e lf a p u b lic n u isa n c e , or f a i l t o support h i s d ep en d en ts, 1 . Essay on L ib e r ty , p 153

73.

Hia a c t io n th a t ie to—ouy does not i n e v i t a b l y bear upon others and i t i s only i f i t does so th a t he becomes s u b j e c t to s o c i a l j u r i s d i c t i o n , but i t i s in th e very nature of a s t r i k e th a t i t should a f f e c t th e economic l i f e o f th e community and thus have consequences^ and important and d i r e c t consequences^ on people oth er than th e s t r i k e r s . But although we may agree w ith M ill th a t the drunkard or i d l e r may j u s t i f i a b l y be summoned f o r not su p p o rtin g h is c h ild r e n , we do not th in k th a t s t r i k e r s should be summoned f o r not g oin g to work, though we should agree th a t in a s t a t e of emergency, th e r e was nothing t o prevent v o lu n te e r s running 'bus s e r v i c e s , e t c .

The l i b e r t y to s t r i k e ought, we

should h o ld , be u ph eld , d e s p it e i t s consequences on o t h e r s . Most economic con d uct, owning p r o p erty , changing o n e 's jo b , buying more of t h i s and l e s s of t h a t , seems to be o f t h i s kind in t h a t i t has important consequences on o t h e r s , and economic l i b e r t i e s are l i b e r t i e s upheld d e s p it e con­ sequences r a th e r than because no s i g n i f i c a n t consequences e x ist.

This does not mean th a t we cannot d e f in e an area of

in d iv id u a l l i b e r t y in th e economic f i e l d

Indeed an attem pt

i s made to do so in th e f o llo w in g c h a p te r s .

But I do not

th in k th a t i t can be done on th e b a s is o f M i l l ' s d i s t i n c t i o n , f o r t h i s breaks down when a p p lie d to economic a c t i v i t y . P r o v isio n can be made W ithin One Economic System f o r o n ly a Lim ited V ariety o f d i f f e r e n t Codes and Ways of L i f e . The f a c t th a t th e economic a c t i v i t i e s of d i f f e r e n t in d i v i d u a ls are so c l o s e l y bound up w ith one another means

74 t h

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of d i s t r i b u t i v e j u s t i o e roust p r e v a i l , and th e s t a t e in m aintaining p u b lic order and e x e c u tin g th e law , imposes th a t i d e a l on a l l c i t i z e n s , in c lu d in g th ose who do not con sen t to i t . Take another example of the n e c e s s i t y f o r corp ora te d e c is io n s on economic m a tte r s.

One man may want to l i v e

in a n o n - in d u s t r i a l i s e d , a g r i c u l t u r a l community w ith a sm all p o p u la tio n , a r e l a t i v e l y low standard of m a te r ia l comfort and a r e l a t i v e l y high standard of l e i s u r e .

Another

may w ish to l i v e in a h ig h ly i n d u s t r i a l i s e d community w ith a r e l a t i v e l y high standard of m a te r ia l l i v i n g and a r e l a t i v e l y low p r o v is io n f o r l e i s u r e .

Up to a p o in t , both

can be s a t i s f i e d , but the i n d u s t r i a l i s t may want to upon th e c o u n tr y s id e , p u ttin g up f a c t o r i e s in the most economic p o s i t i o n and the countryman w i l l h ate th e smoke and n o ise and nearness of the town.

I f each a g r e e s to l i m i t

h is a r e a , then th e c o n d itio n s of l i b e r a l is m may be s a t i s f i e d , but th ere may be d if f e r e n c e s of view on the boundary.

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over each w i l l have to bear w ith the consequences of the o t h e r 's p o lic y ;

f o r exam ple,the countryman may l o s e h is

market fo r c e r t a in a g r i c u l t u r a l products because imports - paid f o r by manufactures - appear a t a cheaper p r ic e than th a t a t which he can produce them and th e manufacturer may have a poorer home market fo r h is goods, i f th e r e s t o f the p op u la tio n are p a s to r a l and a l s o p la ce a high v alu e on leisure^ than he would i f t h e i r t a s t e s ; were more in

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More*» U topia 1 5 1 6 . S aint-Sim on , F o u rier and Owen were i-eUuked as Utopian s o c i a l i s t s cy liSarx and E ngels (The Coaiiisunlst M an ifesto - S o c ia lis m Utopian and, S c i e n t i f i c ) on th e ground t h a t th e o a l l e f t h a t men could be brought t o c a n y through a re-orgc.n1 s a t ion o f s o c i e t y them c e r t a i n a b s tr a c t I d e a ls was

1 .

U

t o p i a n ,

78

d i s a g r e e m e n t i n a s o c i e t y “b e t w e e n p e o p l e on e c o n o m i c i s s u e s , such as the n a tu re of d i s t r i b u t i v e

ju stice

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e s a s t o t h e s o r t o f econom ic b a c k g ro u n d w h ic h th e y c o n s i d e r d esira b le,

t h a t s o c i e t y m u st becom e i l l i b e r a l .

L ib eralism

p r e s u p p o s e s a m e a s u r e o f a g r e e m e n t on e c o n o m i c q u e s t i o n s and i f t h a t agreem ent does not e x i s t , order,

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im posed upon o t h e r s , b u t ,

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d isap p ears. P r o b l e m A v e r t e d I n So F a r a s E conom ic C o n d i t i o n s a r e ,

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p e o p l e b e l i e v e They A r e . U n c o n t r o l l a b l e . I t i s only i n th e l a s t tw e n t y - f iv e y e a r s t h a t th e id e a t h a t we caji c o n t r o l e c o n o m ic c o n d i t i o n s a n d c a n e x e r c i s e c h o i c e a s b e t w e e n one e c o n o m ic s y s t e m and a n o t h e r h a s g a i n e d

cen tu ry

I n t h e earl^ p a r t o f 1 9 t h / t h e

acceptance.

e c o n o m ic c o n d i t i o n s

t h a t had a r i s e n o u t o f t h e I n d u s t r i a l R e v o l u t i o n were a c c e p t e d as in e v ita b le

a n d many s o c i a l r e f o r m s w e r e o p p o s e d on t h e

ground t h a t th e y c o n s t i t u t e d i n t e r f e r e n c e w ith a n a t u r a l o r d e r w h i c h man c o u l d n o t maJce b e t t e r t h a n i t w a s . econom ic c o n d i t i o n s a r e u n a l t e r a b l e ,

th en c le a r ly d iffe re n c e s

o f o pin io n about p u ta tiv e a l t e r a t i o n s are o f l i t t l e quences.

It

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we c a n c o n t r o l e c o n o m i c c o n d i t i o n s t h a t d i f f e r e n c e s a b o u t t h e à ends t o w hich t h a t c o n t r o l s h o u ld be d i r e c t e d a r e i m p o r ta n t. There i s

still

a g re a t d e a l of sc e p tic ism about the p o s s i b i l i t y

79

o f c o n t r o l and t h i s c o n tin u e s t o promote a cc ep ta n ce o f e x i s t i n g c o n d it io n s .

C le a r ly th e r e w i l l always he c e r t a i n

economic f a c t o r s heyond human c o n t r o l , such as c l i m a t e , and i t s h e a r in g on in d u s tr y and a g r i c u l t u r e , f e r t i l i t y o f la n d , e x i s t e n c e o f n a tu r a l r e s o u r c e s , e t c . , and t h e s e f a c t o r s w i l l determ ine th e s o r t o f a g r ic u l t u r e and in d u s tr y w hich w i l l t h r i v e i n any g iv e n su rro u n d in g s.

The s o r t o f economy

which w i l l t h r i v e and w i l l t h e r e f o r e y i e l d a r e l a t i v e l y h ig h standard o f l i v i n g a t th e m a t e r ia l l e v e l te n d s t o he r e a d i l y a c c e p te d .

Hence, permanent economic f a c t o r s and g e n e r a l

s c e p t i c i s m ahout c o n t r o l tend t o promote a cc ep ta n ce o f th e s t a t u s quo. There i s , however, no douht t h a t t o - d a y , we can c o n t r o l our economy s u f f i c i e n t l y to s u b s t i t u t e one system f o r a n o th er, p r i v a t e e n t e r p r is e f o r p u b lic ow nership, d i s t r i b u t i o n o f w e a lth on th e b a s i s o f rank f o r d i s t r i b u t i o n on th e b a s i s o f la b o u t, and t h a t we can d e c id e w it h i n l i m i t s what l e v e l o f n e w

employment th e r e i s to be and, i n th e p la n n in g o f th e /to w n s , can i n f l u e n c e where i t i s t o be and o f what s o r t .

I n so f a r

a s th e r e are r e a l and i r r é c o n c i l i a b l e d i f f e r e n c e s i n s o c i e t y about th e p o s s i b i l i t y and th e d e s i r a b i l i t y o f changing or t r y in g t o change th e economic s t r u c t u r e and about what changes should be made, th e s o c i e t y cannot be a l i b e r a l one, s in c e th e economic system w i l l n o t be based upon g e n e r a l c o n s e n t, but upon th e w is h e s o f one p a r ty whose v ie w s w i l l tak e p reced en ce over th e rem aining members o f s o c i e t y .

Free E n te r p r ise a s a S o l a t i o n t o th e Dilemma. That th e r e i s t h i s n e c e s s i t y f o r th e v ie w s o f some t o tak e p re c e d e n c e , i n order t o make an economic system w ork ab le, i n a s o c i e t y i n which th e r e i s no g e n e r a l agreement on econ­ omic m a tte r s , i s d en ied by th e t r a d i t i o n a l l a i s s e r f a i r e e c o n o m ists, whose v ie w s are r e s u s c i t a t e d and g iv e n modem e x p r e s s io n i n th e w r i t i n g s o f P r o f e s s o r K night (Chicago U n i v e r s i t y ) and P r o f e s s o r Hayek (London S ch ool o f E conom ics). These w r i t e r s urge t h a t th e f r e e e n t e r p r is e economy p r e s e n t s a way o f r e c o n c i l i n g l i b e r a l p rem ise s w ith th e n e c e s s i t i e s o f economic o r g a n is a t io n .

In th e Road t o Serfdom, P r o f e s s o r

Hayek r e f e r s t o "the im p erson al c h a r a c te r o f th e p r o c e s s ( i . e . th e f r e e e n t e r p r i s e eeononiy p r o c e s s ) , by w hich e v e r y ­ body has t o tak e h i s chance and no p e r s o n ’ s v iew about

.

1

what i s r i g h t and d e s i r a b l e o v e r r u le s t h a t o f o t h e r s ".

That t h i s i s a s o l u t i o n t o th e dilemma seems t o me f a l s e . S t a t e c o e r c io n i s used i n th e economic f i e l d as i n o th e r f i e l d s t o put down v i o l e n c e , e n fo r c e c o n t r a c t s and su p p re ss t h e f t and fraud ; and i n doing t h i s , th e s t a t e i s n o t o n ly m a in ta in in g a minimum e t h i c a l cod e, but i s a l s o m a in ta in in g th e e x i s t i n g economic system ; i n th e c a se under c o n s i d e r a t i o n , th e f r e e e n t e r p r is e economy.

S t a t e c o e i'c iv e power i s u sed ,

f o r in s t a n c e , t o m a in ta in ownership i n p r i v a t e p r o p e r ty and t o q u e l l th e r i o t s o f th e unemployed who mav w ish t o 1.

P. 76

81 s a b s t i t a t e a new system f o r th e e x i s t i n g one. Thus, i n main­ t a i n i n g o rd er, s t a t e c o e r c iT e power i s p u t t i n g i t s stamp on th e economic system .

I t i s tr u e t h a t th e f r e e e n t e r p r i s e

economy does away w ith th e need f o r e x p l i c i t and c o n s c io u s accep ta n ce o f economic stan d ard s i n regard t o j u s t i c e , owner­ sh ip o f p ro p erty e t c . , and f o r d i r e c t c o e r c io n hy th e s t a t e t o e n fo r c e t h e s e stan d ard s upon th o s e who do n ot co n sen t to them.

But i t d o es n o t do away w ith th e f a c t t h a t some

d eterm in a te system o f d i s t r i h u t i r e j u s t i c e and some d e t e r ­ minate system o f p r o d u c tio n i s n e c e s s a r y as th e b a s i s o f th e system and t h a t , i n th e f r e e e n t e r p r i s e economy, s t a t e c o e r c io n i s u sed, i n support o f th e v ie w s o f th o s e who th in k t h i s system i s r i g h t and d e s i r a b l e to o v e r r u le th o se who t h in k to th e c o n tr a r y .

Although i t i s tr u e t h a t under t h i s system

p eo p le viho are o v e r r u le d , are o v e r r u le d i n d i r e c t l y and by a round-about and im p erson al p r o c e s s ,

I t i s not th e c a s e th a t

i n a f r e e e n t e r p r is e economy, "no p e r s o n ’ s view about what i s r i g h t and d e s i r a b l e o v e r r u le s t h a t o f o th e r s" . I t i s worth w h ile n o tin g t h a t th e t r a d i t i o n a l e c o n o m is ts ’ th eo r y o f n a t u r a l harmony, w h ile i t h a s some p l a u s i b i l i t y i n regard to p r o d u c tio n h as none i n regard t o d i s t r i b u t i o n . The t r a d i t i o n a l ec o n o m ists

make no c la im t h a t th e system

harm onises c o n f l i c t i n g c la im s t o w e a lt h . 1 . S a b in e.

.

1

I n s t e a d , th e y put

H is to r y o f P o l i t i c a l Theory, p . 657

82

forward,

a th e o r y o f r e n t s , p r o f i t s and w ages, a cc o rd in g

t o which rewards accrae t o an i n d i v i d a a l , a cc o rd in g t o th e f o n c t i o n i n s o c i e t y which he p e r fo r m s^ c e r ta in rewards b e in g doe on th e th e o r y t o c a p i t a l and c e r t a i n rewards t o la h o o r . I n f a c t , th e n , th e f r e e e n t e r p r i s e system d o e s not p ro v id e a t one and th e same time f o r b a s i c a l l y d i f f e r e n t c o n c e p tio n s o f d is tr ib o tiv e J o stice ;

i m p l i c i t i n i t i s one p a r t i e o l a r

i d e a l which most o v r e r id e o th e r s i f f r e e e n t e r p r is e i s to e x ist. Economic P le n t y as a R e so lv e r o f D i f f e r e n c e s . So moch f o r f r e e e n t e r p r is e as a s o l a t i o n t o th e dilemma w ith which we are fa c e d . prop osed .

There are no o th e r g e n e r a l s o l o t i o n s

Bot i n a good d e a l o f s o c i a l i s t w r i t i n g , th e r e i s

th e p résom ption t h a t th e n e c e s s i t y f o r a s o c i a l l y a c c e p te d i d e a l o f d i s t r i b o t i v e j o s t i c e w i l l d isa p p ea r i n th e l i g h t o f economic p l e n t y .

D i s t r i b o t i v e j o s t i c e i s one o f th e most

fondam ental economic q^oestions on which s o c i a l agreement i s n e c e s s a r y and, i f p eo p le agree aboot t h i s , th e y tend t o agree on th e broad o o t l i n e s o f an economic system ; on th e o th e r hand, i f th ey d i f f e r on t h i s h ead , th e y te n d t o d i f f e r aboot how p r o d o c tio n i s t o be o rg a n ised and aboot th e s o r t o f p r o d o c tio n i t i s to be; th e whole o f M arxist and s o c i a l i s t d o c t r in e , f o r i n s t a n c e , i s d i r e c t e d towards th e s o b s t i t o t i o n o f th e c a p i t ­ a l i s t or f r e e e n t e r p r i s e methods o f d i s t r i b o t i o n f o r one which i s more j o s t .

I f th e n , th e n e c e s s i t y f o r agreement on

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84 i s gloomy i n t h a t a t p r e s e n t , taSrlng th e world a s a w h ole, p o p u la tio n I s in c r e a s i n g f a s t e r th an th e s u p p l i e s o f fo o d req[Uired t o m ain tain i t and, even i f a l l p o s s i b l e m easures t o i n c r e a s e food s u p p l i e s were ta k en , th e p r o v i s i o n o f what s c i e n t i s t s regard as an adequate d i e t f o r each p erso n i s , t o say th e l e a s t o f i t , d o u b t f u l. P r o d u c tio n i s l i m i t e d n o t o n ly by th e r e s o u r c e s a v a ila b le but a l s o by th e amount o f work p eo p le are prepared t o do. Even w ith machines a thousand tim e s more p ow erful th a n th o s e t h a t e x i s t to -d a y , human la b o u r t o make and mind th e machines would be n e c e s s a r y .

F u r th e r , th e r e i s a c e r t a i n s o r t o f

s e r v i c e , i . e . p e r so n a l s e r v i c e which i s v ery much i n demand and which no machine can su p p ly .

Eo one but a f i r s t - r a t e

cook can make a f i r s t - r a t e soup, no machine can lo o k a f t e r c h i l d r e n or make a b u s in e s s d e c i s i o n .

There i s no end t o

th e p e r s o n a l s e r v i c e s a man or woman may d e s i r e , a l l d e sig n e d t o "lay t h i n g s on" f o r him or h e r , so t h a t each can a c h ie v e t h e i r own ends more f u l l y th an would o th e r w ise be p o s s i b l e . There i s , i t i s t r u e , a brake on th e d e s i r e f o r l e i s u r e . Few p eo p le d e s i r e l e i s u r e i n th e sen se o f com plete i n a c t i v i t y . Work and l e i s u r e are both forms o f a c t i v i t y and th e words are ambiiguoua.

In our s o c i e t y , work i s c o n c e iv e d as some­

t h in g one d o e sn ’ t want t o do, but d o es g e t p a id f o r , w h ile l e i s u r e i s som ething one d oes want t o do, but d o e s n 't g e t paid f o r .

Where, as i n th e c a s e o f d o c t o r s , n u r s e s , t e a c h e r s

8b

and oth er p r o f e s a i o n s , p eo p le g e t paid f o r doing what th e y want to do, th e d i s t i n c t i o n ten d s to break: down. And t h i s happens not on ly in regard to p r o f e s s i o n a l work, p eople l i k e some r o u tin e work.

J3any

But even assuming th a t work 1

.

iB made as a t t r a c t i v e as p o s s i b l e and, g i v in g th e f u l l e s t w eigh t to p e o p le ’ s w i l l i n g n e s s t o work, i t i s d i f f i c u l t to b e l i e v e th a t th e amount o f goods and s e r v i c e s , in c lu d in g p erso n a l s e r v i c e s , d e sir e d by a l l p eop le would not f a r outrun th e Amount th a t could ever be produced by v o lu n ta r y la b o u r . A s t a t e o f a f f a i r s in which th e r e are enough p eop le who want t o produce what the sum t o t a l o f people would l i k e to consume would be a f a ir y la n d economy, but u n f o r t u n a t e l y , th e r e i s no magic want to g e t us t h e r e . We now have to c o n s id e r not the su p p ly but th e demand s i d e of the problem.

Mhen we look c l o s e l y a t th e a cc o u n ts

o f th e p o s s i b i l i t y of economic p l e n t y , we f in d q u ite o fte n th a t i t i s based upon th e l i m i t a t i o n of needs or w a n ts. For i n s t a n c e , Lewis îifumford in I’e o h n lcs and C i v i l i s a t i o n , makes a d i s t i n c t i o n between ’’v i t a l ” or n e c e ssa r y wants ( e . g . th e ”v i t a l " want f o r food i s th e number o f c a l o r i e s per day req u ired to s u s t a i n l i f e }

and what we may c a l l "luxury” w a n ts,

L. fhe problem of rmking work a t t r a c t i v e crops up c o n s t a n t l y in s o c i a l i s t l i t e r a l ; u r e . One may c o n s i d e r , f o r exam ple, F o u r i e r ’ s p ro p o sa l t h a t a man should j o i n 30 - 50 team s, a l l working a t d i f f e r e n t job s and should work w ith th e team o f h ia c h o i c e , never s t i c k i n g t o any p a r t i c u l a r o cc u p a tio n f o r more tnan Ig^ or ü hours a t a tim e .

8C and no are ^ a d u u H y made anare th a t th e a tta in m e n t o i eounomio p le n ty tieuaa tn e B a t i a i a u t io n o f " v it a l" nuuta o n ly . Thorn in t o t« a retu rn to the «im pie l i f e in which man w i l l not aoflk to a n t i a f y co re than t h e i r " v it a l" w ante. I f wo take waata in t h in asn ee th ey are s a t i a b l e .

C le a r ly But th e

e o t i s f a o t l o n o f " v ita l" needs which amounts t o th e p r o v is io n o f a cjinlouo standard of l i v i n g f o r ev e ry o n e, does not c o n s t i t u t e economic, p l e n t y .

^conoeiio p le n t y means th e e a t l e -

f a c t i a n o f a l l m a n to 'v lta l'a n d o o n - v i t a l and i t s a o h le v e a e o t ceama itspotjnibla because th e r e l e no n a tu r a l l i m i t t o human d ea iro a and wants in the se n se t h a t a t some g iv e n l e v e l s a t u r a t i o n i s ach ieved ana th e d e s i r e f o r f u r t h e r goods and s e r v i c e s d is a p p e a r s . J lcsires and wants c o n t i n u a l l y expand; th e y l i v e , as we m ifh t s a y , on what th e y fe e d on.

Marx h im s e lf

t a Iks o f "the c r e a t i o n o f new needs" as e x i s t i n g ones become sn tisfie d .

wo nee t h i s heopening in our s o c i e t y when f o r e x ­

ample , a l g a r e t t s s , which were fo r m e r ly a luxury are o la a se d OH n ecn ftK ities,

Thus so f a r oe human d e s i r e s a re concerned

th e r e seems to b« no n a tu r a l l i m i t . i t I s tr u e t h a t a f t e r a c e r t a i n p o in t , goods and s e r v i c e s e r e d e s ir e d not f o r use but f o r th e p r e s t i g e or power th e y b rin g w ith thets. are d e s ir e d .

But t h i s does not a l t e r th e f a c t th a t th e y

™he d e s i r e f o r w e a lth as a means t o p r e s t i g e

and power ?ao a means Veblen would nay t o co n sp icu o u s w aste) w i l l v a ry w ith th e c u ltu r e and c i v i l i s a t i o n o f a s o c i e t y th ere l o , f o r in s t a u o e , a much g r e a t e r demand f o r m a te r ia l

. . g Y. tr w e a lth in Araerioa to -d a y than in Western Europe i n th e Middle Agee, when p eop le c o n c e ir e d powwr as s p i r i t u a l and were preoocapied w ith the a f t e r - l i f e .

B u t, even in th e

M iddle-A ges, th e demand f o r m a te r ia l w ea lth and th e power and p r e s t i g e th a t a tta c h e d to i t , were such t h a t the demand f a r outran th e su p p ly .

i t i s tru e t h a t sometimes ed u ca tio n

and th e achievem ent of a h igh l e v e l o f c u ltu r e makes f o r th e cu r ta ilm e n t of d e s ir e f o r m a te r ia l w e a lth heyond a c e r t a i n p o in t.

But t h i s i s th e e x c e p tio n r a th e r than the r u l e , and

th e r e i s in any case no reason t o suppose th a t th e standard o f l i v i n g req u ired by a s o c i e t y o f c u ltu r e d p erson s could be provided by v o lu n ta r y la b o u r . I t s e e a s th en t h a t th e d e s ir e f o r w e a lth w i l l always outrun what i s a v a i l a b l e , so th a t th e r e w i l l always be th e n e c e s s i t y to d ecid e between the d i f f e r e n t c o n f l i c t i n g ends t o which economic r e s o u r c e s can be devoted and d i f f e r e n t peop le^ s c o n f l i c t i n g c la im s to th o s e r e s o u r c e s . Thus i t i s th e view which em phasises the p r o g r e s s iv e in c r e a s e of needs on th e one hand and the l i m i t a t i o n s on p rod uction on th e oth er

u

as

a g a in s t th e view th a t a b s o lu te economic p le n ty

i s p o s s ib l e th a t seems to me th e c o r r e c t one.

Only i f we

could a l l be provided by some s u p e r n a tu r a l agency w ith a l l p o s s i b l e o b j e c t s of d e s ir e e o m p le te and ready f o r use a t th e moment we d e sir e d them, w ith o u t any in v o lu n ta r y human labour b ein g n e c e ssa r y to produce them would th e q u e s tio n o f th e

88 d i v i s i o n between i n d i v i d u a l s o f what was or oould be made a v a i l a b l e d isa p p e a r .

A b solu te p le n t y th en i s u n a c h ie v a b le

and r e l a t i v e p le n ty I s o n ly a n oth er name f o r p r o s p e r i t y , which a lth o u g h I t may tak e th e edge o f f p e o p l e ' s d i f f e r e n c e s about the d i s t r i b u t i o n of w e a lth and of labour does n oth in g In I t s e l f t o r e s o lv e th o s e d i f f e r e n c e s . j i a j o r l t y R u le . I t may be s a id t h a t th e answer to th e problem I s m a jo r ity r u le and t h a t democracy, I f not l i b e r a l i s m , I s upheld In so f a r a s th e view s o f th e m a jo r ity take p reced en ce. P rofessor

p o in ts out th a t In regard to p o l i t i c a l

and economic q u e s t io n s , th e p o s s i b l e c o u r se s t h a t can be adopted or th e number of v iew s t h a t can be taken are r a r e l y lim it e d t o two; th ey are u s u a l l y numerous; th e r e a r e f o r In s ta n c e any number o f c o n c e p tio n s o f d i s t r i b u t i v e j u s t i c e , d i s t r i b u t i o n on need a s s e s s e d In numerous d i f f e r e n t ways, d i s t r i b u t i o n a cco rd in g to rank determined by any o f a number o f d i f f e r e n t methods, d i s t r i b u t i o n on th e b a s i s o f la b o u t w ith v a r io u s s u g g e s t io n s f o r measurement.

You may then have

a group o f p eo p le In fa vou r o f each d i f f e r e n t c o n c e p tio n In t h i s c a s e ,

and,

a lth o u g h I t w i l l be e a s y to g e t ' n e g a t i v e '

m a j o r i t i e s . I . e . a m a jo r ity a g a i n s t t h i s or a m a jo r ity a g a in s t t h a t ,

s i n c e a l l th e o th e r groups w i l l combine a g a i n s t

th e one group p u t tin g forward I t s v i e w s . I t w i l l o n ly be p o s s ib l e to g e t a p o s i t i v e m a jo r ity , In favou r o f t h i s co u rse

89 or in favour o f th a t on th e h a s i s of a c o a l i t i o n between two or more d i f f e r e n t gro u p s. The p o in t i s o fte n e x e m p lifie d in French p o l i t i c s . The French, u n lik e o u r s e l v e s , s e e c l e a r l y t h a t in regard t o some g iv en i s s u e a number o f d i f f e r e n t view s are p o s s i b l e and proceed t o form th em se lv es i n t o g rou p s, some

o p tin g f o r one

view and some an oth er; in t h e s e c irc u m sta n ces a lth o u g h n e g a tiv e m a j o r i t i e s w i l l be e a s i l y o b t a in a b le , th er e w i l l be no p o s i t i v e m a jo r ity f o r any one v iew . In t h e s e circum ­ s t a n c e s in which th e r e i s no p o s i t i v e m a jo r ity v i e w , th e view t h a t ten d s to take p recedence i s th e view o f th e l a r g e s t agreed number.

But in t h i s c a se i t i s a m in o r ity who

impose t h e i r view s on the r e s t . S eco n d ly , i n so f a r a s th e r e can be any j u s t i f i c a t i o n f o r im posing a code o f v a lu e s on p eop le who do not a g r e t w ith them, i t d e r iv e s from th e c e r t a i n t y w ith which th e code i s h e ld .

But whereas we f e e l a v er y h ig h degree o f c e r t a i n t y

about our minimum e t h i c a l c o d e , we f e e l no such c e r t a i n t y about th e v a lu e judgments in v o lv e d i n ch o o sin g one economic system r a th e r than an oth er; we f e e l g r e a t c e r t a i n t y , t h a t i s , t h a t t h e f t and murder are wrong, but no such c e r t a i n t y t h a t any p a r t i c u la r p ro p erty system i s r i g h t .

I t seems th en

th a t th e g r e a t e r th e need f o r th e im p o s itio n o f v a lu e s t o m aintain s o c i e t y , th e l e s s j u s t i f i c a t i o n th e r e i s f o r t h a t im p o s it io n .

Moreover, i n so f a r a s th e judgments in v o lv e d

m are oonoerned not o n ly w ith moral good ness hut w ith a g e n e r a l way o f l i f e , we cannot sa y t h a t any one view i s wrong in th e se n se t h a t murder i s wrong.

In o th e r w ords,

e v i l may be uniform but human e x c e l le n c e and a e s t h e t i c v a l u e , and p a r t i c u l a r l y th e l a t t e r , d i v e r s e . But i f t h i s is

80)

th e arguments a g a i n s t th e im p o s itio n of one s e t o f

p o s i t i v e v a lu e s on p eop le who do not a g re e w ith them are r e d o u b le d . How f a r i s i t p o s s ib l e t o have an economic system w ith ou t such im p o sitio n ?

what i s r e q u ir e d i s t o d i s t i n g u i s h

between th o se m atters on which co r p o r a te d e c i s i o n s are una[v o id a b le and th o se in regard to which p r o v is io n can be made fo r in d iv id u a l d iffe r e n c e s . n ext c h a p te r .

T his w i l l be th e ta s k o f th e

91

CHAFPKR

VI .

COLLWTITO DECISIONS AHD THE SUPREmCY OF IKHIVIDCAL TASTE In th e l a s t c h a p te r , th e d i f f i c u l t i e s o f a p p ly in g th e L ib e r a l I d e a l to economic o r g a n is a t io n were em phasised. I t was p o in ted out th a t on many economic m a tte r s , a l l - o r - n o t h i n g d e c i s i o n s had t o be made, and t h a t , even where t h i s was not th e c a s e , i t was d i f f i c u l t to make th e d i s t i n c t i o n between th e f i e l d of s o c i a l j u r i s d i c t i o n and th a t o f i n d iv i d u a l l i b e r t y , because th e g r e a t ’’in t e r t w in e d n e s s ” o f economic a c t i v i t i e s made M i l l ’s p r i n c i p l e i n a p p l i c a b l e .

I t is ,h o w e v e r ,

j u s t t h i s d i s t i n c t i o n between th e a p p r o p r ia te f i e l d j u r i s d i c t i o n and th e f i e l d

of s o c i a l

in which th e in d iv id u a l can and

ought t o be supreme th a t must now be made. I n d iv id u a l L ib e r ty and th e Supremacy of I n d iv id u a l Tas t e . I t i s c le a r from the fo r e g o in g a n a l y s i s o f th e meaning of freedom th a t in d iv id u a l l i b e r t y i s a c o n d itio n and not a guarantee o f i n d i v i d u a lis m *3 ^^^^The f a c t t h a t a man e n jo y s l i b e r t y does not mean automa­ t i c a l l y th a t he can do what he wants because th e r e are many however impediments to d e sir e d a c t i v i t y o th e r than c o e r c io n . I f / a n in d iv id u a l has no l i b e r t y , i . e . i f he i s coerced by th e s t a t e or o th er i n d i v i d u a l s , th en a lth o u g h he can e x e r c i s e moral c h o i c e ( i . e . he can do what he th in k s i s r i g h t i n th e circum ­ s ta n c e s } , he cannot e x c e p t w ith in narrow l i m i t s d ev elo p h i s

^98 in d iv id u a lity , d is c u s s e d l a t e r .

o th er c o n d it io n s of in d iv id u a lis m are For the moment

twq

may c o n o e n tr a te on

l i b e r t y and c o n sid e r th e j u s t i f i a b l e r e s t r i c t i o n s of i t in whe eeonomio f i e l d . The U n a v o id a b ility of C o l l e o t i v e D e c is io n s . As in d ic a te d in th e l a s t c h a p te r , some eeonomio matters^ are s u b j e c t to a l l - o r - n o t h i n g d e c i s i o n s , or to put th e p o in t in an oth er ’way, are s u b j e c t to o o l l e o t i v e p o l i c y , c o l l e c t i v e in the sense th a t whatever p o l i c y i s pursued, a g e n e r a l e f f e c t w i l l be produced which w i l l have r e p e r e u s s io n s on a l l members of s o c i e t y .

P o l i c i e s which are c o l l e o t i v e in

t h i s se n s e need not of cou rse be c o l l e c t i v e in th e s e n se th a t th ey are d ecided c o l l e c t i v e l y through p o l i t i c a l machin­ ery ; such p o l i c i e s m y be made by c o n s c io u s s o c i a l d e c i s i o n , but th ey may e q u a lly w e ll be in

6he

hands of a p a r t i c u l a r

c l a s s in s o c i e t y (a s was th e ca se in t h i s country ^prior t o 1^09 in regard to th e d e c is i o n about th e l e v e l of r e a l in v e s tm e n t); th e y may be s u b j e c t to d e c i s i o n s by i n d i v i d u a l s , a s has been the case u n t i l r e c e n t l y in m atters of town and country b u ild in g or th ey may be m a t t e r s , such a s d i s t r i b u t i v e j u s t i c e , which do not over lon g p erio d s come up a t a l l f o r c o n sc io u s d e c i s i o n by anyone,

v^e must n o t i c e t h a t i f t h e s e

m atters are decided by c o n s c io u s s o c i a l d e c i s i o n through p o l i t i c a l machinery, t h i s would norm ally be s a id to c o n s t i t u t e economic p lanning i # e . th e c o n s c io u s e x e r c i s e o f c o n t r o l

93

over th e eoonomio system as a w h o le. We must now attem pt t o d e fin e th e m atters which are s u b j e c t to a c o l l e c t i v e p o l i c y in th e s e n s e th a t w hatever p o l ic y i s pursued, i t w i l l have g e n e r a l e f f e c t s on th e community as a w h ole.

Such m atters i t i s c le a r w i l l form

, th e a p p r o p r ia te sphere o f s o c i a l j u r i s d i c t i o n .

They seem t o

me to be as f o l l o w s : Dis t r i b u t i o n of Property and Incom e• 1)

The v e r y e x i s t e n c e of an economic system presu p poses a

measure o f agreement on a d i s t r i b u t i v e i d e a l in regard to p rop erty and income and th e r e l a t i o n between them. I s s u e s r a is e d under t h i s head in c lu d e th e q u e s tio n o f p u b lic or p r iv a te ownership of th e means of p ro d u ction i n th e se n s e o f n a t i o n a l i s a t i o n , th e q u e s tio n of payment f o r labour performed on a s o c i a l b asis^ avnd the q u e s tio n of th e a l l o c a ­ t i o n o f consumable w ea lth between i n d i v i d u a l and communal With regard to th e la st-n a m ed , consumption, / i t i s unavoid ab le th a t th e c o s t o f governm ent, a d m in is tr a tio n and d efen ce should be a charge on th e g e n e r a l r e s o u r c e s o f the community.

The s t a t e may however d ecid e

in a d d it io n t o provide communally s e r v i c e s and com modities which u n lik e th e item s mentioned ab ove, coüld be purchased by i n d i v i d u a ls as and when th e y want them and su p p lie d by o th er i n d i v id u a l s w ith o u t th e agency o f th e s t a t e .

S o c ia l

s e r v i c e s in the form o f a n a t io n a l h e a lt h s e r v i c e and a N a tio n a l in su ran ce scheme are ob v io u s c a s e s in p o i n t . So to o

-94 l

8

s t a t e education» Under p rese n t c o n d it io n s of s p e c i a l i s e d i n d u s t r i a l

p r o d u c tio n , rapid communications and p r essu re o f p o p u la tio n on a v a i l a b l e la n d , th e f o l l o w i n g i s s u e s a l s o i t seems to me become s u b j e c t t o a c o l l e c t i v e p o l i c y . B u ild in g and Layout in Town and Country.

In th e l a s t

tw enty y e a r s or s o , i t has become apparent t h a t a c o l l e c t i v e p o l i c y on town and cou n try la y o u t i s unavoid ab le# There may be s t a t e p lann ing or l i b e r t y f o r i n d i v i d u a l s in t h i s m a tter. Both are e q u a lly p o s s i b l e , but what i s not p o s s i b l e i s t o avoid the f a c t th a t w h atever p o l i c y i s pursued, whether o f s t a t e planning or in d iv id u a l l i b e r t y , w i l l be a c o l l e c t i v e p o l i c y in the sen se th a t i t a f f e c t s i n d i v i d u a l s g e n e r a ll y and d eterm ines th e s o r t o f environment in which th e y w i l l liv e .

I f I , as a p r iv a te c o n t r a c t o r , put up a row o f modern

houses on th e edge o f a m edieval town, I am d e s tr o y in g g e n e r a l am en ity.

I f I as an i n d i v i d u a l put up a bungalow

in a p le a s a n t country sp ot f o r s e c l u s i o n , I may w e l l fin d th a t a f t e r s e v e r à l y ea r s have p a s se d , during which oth er i n d i v i d u a l s have had and ex ecu ted a s i m i l a r i d e a , a s ta g e has a r r iv e d a t which th e sp o t has ceased t o be cou n try and ceased t o be p l e a s a n t .

As a r e s u l t o f a number of i n d i v i d u a l

a c t i o n s , a r e s u l t w i l l have accrued which nobody d e s ir e d and nobody w i l l e d .

The p o in t I s th a t in m atters o f b u ild in g and th e u se o f la n d , each i n d i v i d u a l ' s a c t i o n s have con seq u en ces and im portant consequences on o t h e r s .

I f th e r e a r e th r e e

men, A.B. and c and each buys a d ja c e n t p l o t s o f la n d , then th e a c t i o n s o f each i n doing what he wants w ith o u t r e s t r i c t i o n w ith h i s la n d , .may have consequences on th e oth ers.

A may Tee

b lo c k B*s

v ie w , C may render A*s

garden weedy by f a i l i n g to weed h i s own, B may b u ild h i s house i n a s t y l e the o th e r s abominate and which c l a s h e s w ith th e s t y l e of t h e i r h o u s e s .

Baoh w i l l o f c o u rse have

t o put up w it h th e consequences o f th e o th er two owners' a c t i o n s but as in th e ca se o f A'a a c t i o n OB B. e t c . , t h e s e oonsequences may c o n s t i t u t e impediments t o h i s freedom . Each w i l l have l i b e r t y in regard t o h i s p l o t o f la n d , but he may not have freedom in th e wide s e n s e , s i n c e environment a l Impediments a r i s i n g out o f th e o t h e r s ' a c t i o n s w i l l r e s t r i c t h i s a c t i v i t i e s and enjoym ent. I t may be h eld t h a t i n d i v i d u a l s ought t o have l i b e r t y In th e m atter o f b u ild in g and u se o f land d e s p i t e th e f a c t t h a t t h i s l i b e r t y w i l l not n e c e s s a r i l y mean t h a t th e y have e f f e c t i v e freedom b ecau se o f impediments t o t h e i r a c t i v i t i e s cr ea ted by o th e r p eop le in th e enjoyment o f a l i k e l i b e r t y . The degree t o which i n d i v i d u a l s ' a c t i o n s c l a s h and bear upon one another v a r i e s , o f c o u r s e , w ith d i f f e r e n t a c tiv itie s.

I t seems t o me t h a t th e h ig h e r th e degree o f

96

" in tertw in ed n ess**, th e g r e a t e r th e ca se f o r a d e l i b e r a t e e o o i a l d e o is io n on th e m atter in q u e s t io n .

I f I ohose a

v e g e ta r ia n d i e t o f o a t s , n u ts and f r u i t in s t e a d o f meat, f a t s and v e g e t a b le s , th a t i s e n t i r e l y my a f f a i r and th e e o n sequenoes on o th e r s are i n d i r e c t and, i t seems to me should be d isr e g a r d e d .

In th e m atter o f d i e t , we have an example

of an a c t io n in th e economic f i e l d which i s s e l f - r e g a r d i n g in M i l l ' s s e n s e .

But in m atters of town and co u n try b u i l d ­

i n g , th e degree and kind o f oonsequences which accru e to in d i v i d u a l s as a r e s u l t o f o t h e r s ' a c t i o n s seem t o me t o be such t h a t th e whole q u e stio n f a l l s a p p r o p r ia t e ly i n t o the fie ld g)

of s o c ia l ju r isd ic tio n .

P o li c y on D i v i s i o n between P re sen t and Future Consumption Under any economic sy ste m , e x c lu d in g o n ly th a t o f a

nomadic t r i b e , a d e c i s io n has t o be made about the p rop ort i o n s o f r e s o u r c e s which are t o be devoted to producing commodities f o r immediate enjoyment and th e p ro p o rtio n of r e s o u r c e s which are to be deboted to making m achinery, b u i l d i n g s , s h i p s , e t c . , which w i l l in c r e a s e and make more e f f i c i e n t p rod u ction of th e former typ e o f com m odities a t a l a t e r d a te .

T h is d e o is io n i s a c o l l e c t i v e on e, b e c a u s e , a s

r e c e n t economic th e o r y has show n,the l e v e l o f r e a l i n v e s t ­ ment

ùlB

c r u c i a l in th e d e te r m in a tio n of th e g e n e r a l l e v e l

o f economic a c t i v i t y . The d e c is io n about r e a l in v estm en t may o f course be

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j on t h i s head.

F i r s t , p e o p le making i n d i v i d u a l money

s a v in g s make them f o r s p e c i f i c purposes and th e l e v e l o f t h e i r s a v in g s are by no means a c e r t a i n i n d i c a t i o n o f t h e i r c h o ic e on th e q u e s tio n of communal sa v in g and in v e s tm e n t. F o r'ex am p le, a man sa v in g to pay f o r h i s c h i l d r e n ’ s ed u ca tio n may not be prepared f o r th e h ig h l e v e l of r e a l in v estm en t f o r th e community as a w h ole, which th e high l e v e l o f h i s p e r so n a l s a v in g s would seem t o i n d i c a t e . Peop le h a v e, then an i n d i v i d u a l and a communal a t t t t u d e towards s a v i n g s , and i n d i v i d u a l s a v in g s cannot be taken as an yth in g l i k e an i n f a l l i b l e gu id e to th e e x t e n t to which peop le are prepared to fin a n c e r e a l communal in v e s tm e n t. S eco n d ly , r e c e n t economic th e o r y has shown th a t under a system o f p r iv a te e n t e r p r i s e , i t i s th e t o t a l of r e a l in v estm en t whioh d eterm ines th e t o t a l o f i n d i v i d u a l s a v in g s and not v i c e v e r s a .

Thus in her I n t r o d u ctio n to th e Theory

o f Employment, Joan Robinson s a y s th a t under th e system o f p r iv a t e e n t e r p r i s e , "Everyone i s f r e e t o save as much as he l i k e s , but how much he l i k e s to save i s in flu e n c e d by h i s income and h i s income i s in flu e n c e d

by th e d e c i s i o n s

o f en trep ren eu rs as t o how much i t i s worth t h e i r w h ile

.

1

to in v e s t." 4)

The D e c is io n Between Work and L e is u r e . Where a man i s working on h i s own a c c o u n t, he can make

1 . I n tr o d u c tio n to th e Theory o f Employment, p. 12

99

h i s own d e o is io n on th e r e l a t i v e m erits o f work and l e i s u r e . But in a modern h ig h ly orga n ised économie s y ste m , where labou# i s s p e c i a l i s e d , ^’th e g r e a t makority o f workers m u s t,” as h*B* D ick in son p o in ts o u t , ”adapt th e m se lv e s t o th e d i s c i ­ p l in e o f the s o c i a l labour p r o c e s s .

They must c lo c k in

and c lo c k out of f a c t o r y , m ine, s c h o o l and o f f i c e .

The same

d i v i s i o n o f time between work and l e i s u r e h o ld s good f o r

.

1

ev ery member o f th e s o c i a l labour f o r c e doing th e same j o b . ”

And we may add, th a t th e r e has t o be c o - o r d in a t io n between th e hours worked between p eop le doing d i f f e r e n t jo b s in th e same in d u s tr y ( a s f o r in s t a n c e in mining) and between -

d i f f e r e n t i n d u s t r i e s (tr a n s p o r t must be a v a i l a b l e t o ta k e p eop le t o work).

I

H.D. D ick in son g o es on, (under f r e e e n t e r ­

p r i s e ) , "the d i v i s i o n o f time between work and l e i s u r e i s made over th e workers* heads by th e d e c i s i o n s o f p eop le who are not w orkers.

-I

Under s o c i a l i s m , t h i s d e c i s i o n cou ld

be made by th e workers t h e m s e lv e s , through a p p r o p r ia te d em ocratic i n s t i t u t i o n s , e i t h e r r e g i o n a l and o cc u p a tio n a l* I t must be noted however, t h a t t h e d e c i s i o n would have to be in th e m a jo r ity o f c a s e s not an i n d i v i d u a l and p a r t i c u l a r 2

d e o i s i o n , but a c o l l e c t i v e and g e n e r a l one.

.

I th in k t h a t what H.D. D ick in so n i s s a y in g i s sim p ly th a t th ere

to be one d e c i s i o n Inapplicable more T

1. 2.

—

-

-

-

H.D. D ick in son Boonomios of S o c ia lis m P. 209. do. do. ■ do. p . 2l 0 *

] j

: ]. 100 or l e 88 throughout th e whole eoonooy 8o t h a t in most o a ses in d i v i d u a l p eop le

.o a a n o t/

ch oose f o r th e m s e lv e s .

Some p r o v is io n can be made f o r in d i v i d u a l t a s t e by freedom of c h o ic e of o cc u p a tio n and employment whioh w i l l en ab le peop le to take i n t o account th e hours t o be worked when ta k in g up any employment.

But the d e c i s i o n s w ith in

i n d u s t r i e s on the d i v i s i o n between work and l e i s u r e and th e c o l l e c t i v e d e c i s i o n which r e s u l t s w i l l have r e p e r c u s s io n s r i g h t through th e economy.

A high degree o f l e i s u r e fo r

th e community as a whole means a lower standard o f m a te r ia l l i v i n g than would o th er w ise be p o s s i b l e , i . e . few er and dearer goods i n th e s h o p s .

T h is w i l l a f f e c t even th e man

who does n o t d e s i r e l e i s u r e and works heavy overtim e; h i s overtim e ea r n in g s w i l l be n e g l i g i b l e as com pensation a g a i n s t th e r e l a t i v e l y h igh p r i c e s o f goods in th e sh o p s, r e s u l t i n g from th e g e n e r a l communal a t t i t u d e t o work and le isu r e . 5)

The Choice between Iia rg e-a ca le S tan d ard ised P rod u ction and S m a ll- s c a le Q u a lity P ro d u ctio n . An economic system in which p rod uction i s l a r g e - s c a l e ,

sta n d a rd ise d and cheap i s a v er y d i f f e r e n t one from one in which ^production i s by craftsm en working in a sm a ll way. There i s a l l th e d i f f e r e n c e between p r o d u c t io n .in a n c ie n t Greece or in th e ML d d le Ages under th e g u ild system and p ro d u ction in th e t w e n t ie t h c e n tu r y .

iO l

The f a o t th a t ne oannot go hack t o th e economic c o n d itio n s and th u s to th e system of p rod u ctio n of th e Middle A ges, does not mean th e q u e s tio n of la r g e s c a l e v i a sm all s c a l e p rod u ction has no p r a c t i c a l im portance t o - d a y , f o r d e c i s i o n s have c o n t i n u a l l y t o he made ahout th e degree of

s t a n d a r d is a t io n whioh i s t o he ad opted .

The d e o is io n i s

at

p r e se n t made in th e main hy h u s in e s s men, as f o r in s t a n c e

in th e c a se o f th e E n g lis h Car f# n u fa o tu r e r s * d e o is io n t o s ta n d a r d iz e ty p e s of oars in order t o reduce c o s t . Many f a c t o r s , such as a c o u n tr y 's dependence upon o v e r se a s trad e and need to compete in oth er markets than th e home market hear upon th e d e c i s i o n ahout th e s c a l e and s t a n d a r d is a t io n of p r o d u c tio n .

F u rth er s o c i a l d e c i s i o n s

ahout th e type and kind o f p ro d u c tio n would alm ost i n e v i t a b l y in v o lv e p u b lic ownership of i n d u s t r y , th e d e s i r a b i l i t y o f whioh has to he c o n s id e r e d , What we have to n o t ic e

on oth er grounds. a t p r e se n t i s t h a t th e d e o is io n

about s t a n d a r d is a t io n w i l l e f f e c t th e g e n e r a l economic environm ent.

I t i s probably tr u e th a t th e man who d e s i r e s

h i g h - q u a l it y n on -sta n d a rd ised goods w i l l have to pay a r e l a t i v e l y h ig h e r p r ic e f o r them, i f indeed he can g e t them a t a l l , in a s o c i e t y in whioh p rod u ctio n i s l a r g e - s c a l e and sta n d a rd ised than he would i f p rod u ction g e n e r a ll y were organ ised to s a t i s f y h i s t a s t e s .

102

That C o l l e o t i v e P o l i o i e e ahould be Deolded through Betflooratio i&iohinery# Once i t i e accep ted th a t c e r t a in m atters are u n avo id ­ a b ly eu b ja ot to c o l l e c t i v e d e c i s i o n s , then th e b e s t method, i t seems to me, of g i v i n g e f f e c t to the l i b e r a l p r i n c i p l e t h a t each man should have a v o ic e in d e c id in g th e c o n d it io n s under which he i s to l i v e i s through dem ocratic machinery* Only in th e sm a ll c i t y s t a t e s of A n cien t Greece could each c i t i z e n v o te p e r s o n a lly on c o l l e c t i v e i s s u e s .

Under modern

c o n d i t i o n s , r e p r e s e n t a t i v e democracy i s th e b e s t th a t can be d e v is e d .

The l i m i t a t i o n s of democracy taken as m a jo r ity

r u le have a lr e a d y been d isc u s se d and th e l i m i t a t i o n s of r e p r e s e n t a t io n are f a i r l y o b v io u s .

N e v e r t h e l e s s , i t seems

to me th a t l i b e r a l i s m can be more f u l l y s a t i s f i e d in regard t o th e making of c o l l e c t i v e p o l i c i e s by t h i s method than by e i t h e r unoijfrdinated i n d i v i d u a l d e c i s i o n s or by the d e le g a tio n o f th e d e o is io n t o a p a r t ic u l a r group of i n d i v i d u a l s or a p a r t i c u l a r c l a s s i n s o c ie t y *

I f th e r e

i s agreement t o d e le g a te the d e c i s i o n s t o a p a r t i c u l a r group or c l a s s , th e n , i t seems to me, th e s o c i e t y i s v o t in g a g a in s t th e t e n e t s of l i b e r a l i s m , i # e . a g a i n s t th e p r i n c i p l e th a t each i n d i v i d u a l i s an end in h im s e lf and should take part in d eterm in in g th e c o n d it io n s under whioh he i s t o l i v e .

r h i l o l i b e r a l i s m i n t h i s sen se i s an

i d e a l which i s probably u n a t t a in a b l e , y e t r e p r e s e n t a t i v e

■

TT

1 0 3

âetnooraoy makes a r e a l attem pt t o g iv e i t c o n te n t and meaning»

Let ua oon eid er f o r exam ple, th e d e o i s i o n in

regard t o work and l e i s u r e . I n th e time o f th e i n d u s t r i a l r e v o lu t i o n t h i s d e c i s i o n was in the hands o f a group, th e e n tr e p r e n e u r s who worked people lo n g er hours than was in a n y o n e e c o n o m i c se lf-in te r e st.

Gradually th e q u e s tio n became a s u b j e c t

f o r c o n s c io u s s o c i a l d e c i s i o n through P a r lia m e n t.

In t h i s

s t a t e o f a f f a i r s , th e mass o f th e working c l a s s who b e fo r e had had no means of e n fo r c in g t h e i r c o n d it io n s of work could a t l e a s t now t o some e x t e n t make t h e i r view s f e l t through p o l i t i c a l machinery.

I f th e r e should now be any agreement

by v o t in g t o r e v e r t to th e old p r a c t ic e o f l e t t i n g a p a r t i c ­ u la r group in s o c i e t y d ecid e q u e s tio n s o f maximum h o u rs, t h i s would c l e a r l y be a v o te a g a in s t th e t e n e t s o f l i b e r a l i s m because i t would l e s s e n th e t e x t e n t t o which th e g r e a t m a jo rity of in d i v i d u a ls could through r e p r e s e n t a t io n tak e part in d eterm in in g th e economic environment w ith in which th ey have t o l i v e . I f economic c o l l e c t i v e p o l i c i e s are to be s u b j e c t to c o n sc io u s s o c i a l d e c i s i o n s hammered out through dem ocratic machinery th en what i s in v o lv e d i s c e n t r a l economic p la n ­ n in g .

Hence we come to th e see m in g ly p a r a d o x ic a l c o n c l u s io

t h a t in m atters whioh are s u b j e c t to a c o l l e o t i v e p o l i c y , e . g . d i s t r i b u t i v e j u s t i c e ,t o w n and cou n try p la n n in g , th e l e v e l of r e a l in v e s tm e n t, th e d i v i s i o n between work and

‘ 104

t e i e o r e , i t i a c e n t r a l economic p la n n in g In th e aenae o f oonaolous s o c i a l d e o la lo n a on t h e s e m atters which appear t o , be In accordance w ith th e l i b e r a l I d e a l , r a t h e r than a s we might ex p ec t from th e p o in t o f view of t r a d i t i o n a l l i b e r a l i s m , l i b e r t y of a c t io n and d e c i s i o n f o r th e I n d iv i d u a l . The Koonomlo F i e l d M'lthln a h lch I n d iv id u a l T a s te s and R lsh e# Pan

and Ought t o Be aupreme. In th e Road t o Serfdom , P r o f e s s o r Hayek d e f i n e s

in d iv id u a lis m a s " r esp ect f o r th e I n d iv id u a l man qua ual

In d iv id ­

man, t h a t I s r e c o g n it io n t h a t a man's t a s t e s and v iew s

are supreme In h i s own f i e l d however narrowly t h i s may be circu m scrib ed and the b e l i e f t h a t I t i s d e s i r a b l e th a t men should d e v e lo p t h e i r own I n d iv id u a l g i f t s and b e n t s " .

we

have d e fin e d b ro a d ly th e area In th e economic f i e l d In which supremacy f o r in d iv id u a l t a s t e s and w is h e s I s not In th e n atu re of t h in g s p o s s ib l e and In which c o n s c io u s s o c i a l d e c i s i o n s seem most In accord w ith th e L ib e r a l I d e a l . We must now attem pt t o d e fin e th e economic sphere In which I n d iv id u a l t a s t e s and v iew s b oth can and ought t o be supreme. AS

a lr e a d y p oin ted o u t , t h i s I s p a r t l y , but not w h o lly , a

q u e s tio n o f d e f in in g th o s e economic m atters In regard t o which th e r e can and should be I n d iv id u a l l i b e r t y ,

as

we

have s e e n , l i b e r t y i s a n e c e s s a r y , but not alw ays a s u f f i c ­ i e n t c o n d itio n f o r e n su r in g th e supremacy o f I n d iv id u a l P

r o f .

Hayek.

Road

t o

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.

1*.

1 1 .

10 5 ta .s t« .

W id le t h e n t h e s p h e r e i n w h io h i n d i r i d u a l t a e t e a

a n d v ie w s a r e s u p r e m e w i l l b e a s p h e r e i n w h i o h t h e i n d i v i d u a l h a s l i b e r t y o f a c t i o n , h e may h a v e l i b e r t y

of

-

a c t i o n w i t h o u t b e i n g a b l e t o m ake h i s t a s t e s a n d w i s h e s

'

e ffe c tiv e .

'if

The s p h e r e i n w h ic h p r o v i s i o n c a n a n d o u g h t t o b e

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|

m ade f o r i n d i v i d u a l t a s t e s a r e I t h i n k , t w o ; f i r s t i n r e g a r d to

>

t h e g o o d s a n d s e r v i o e s w h io h t h e i n d i v i d a l w i s h e s fto

h a v e i n , r e s p e c t o f h i s s h a r e o f t h e n a t i o n a l In co m e a n d se c o n d ly ,

i n m a t t e r s o f o h o i o e o f o c c u p a t i o n a n d e m p lo y m e n t.

We m u stI new c o n s i d e r e a c h o f t h e s e i n d e t a i l . y

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106' CHAriKR V I I PRTÎTÎDOM OP

COHSÜAPSRa’ CHOICTÎ

.

In our a n a l y s i s o f th e term ''freedom",we found i t r e f e r r e d t o th e f u l f i l m e n t of c o n d it io n s f o r engaging i n a d e s ir e d a o tiT ity .

There seem t o he th r e e c o n d it io n s f o r consumers'

c h o i c e , th e ahsenoe o f any o f whioh w i l l c o n s t i t u t e an im p ed i­ ment t o i t s o p e r a tio n .

The f i r s t c o n d it io n i s payment in terms

o f income as d i s t i n c t from payment in k in d , th e second i s the absence o f c o e r c io n by

the s t a t e or o th e r s in regard to

th e use to whioh t h a t income i s put and th e tim e a t which i t i s sp en t and the th ird i s machinery by which p ro d u ction i s geared to th e sum t o t a l of i n d i v i d u a l p r e f e r e n c e . In Freedom Under P la n n in g ^ M ir s. wootton p u ttin g the f i r s t two c o n d i t i o n s t o g e th e r d is t in g u is h e d between two d i f f e r e n t s e n s e s of Freedom of Consumers' C h o ice, th e f i r s t one in which p eop le are a b le to d iv id e up t h e i r money income in any way th e y l i k e between the goods th a t are a v a i l a b l e in th e s h o p s , th e second in which th e p a tte r n of p rod u ction i s based on what p eo p le want to have.

1.

Let us examine each o f th e c o n d it io n s o f co n su m ers'c h o ice i n tu r n .

F i r s t , th e n e c e s s i t y f o r payment in money as

d i s t i n c t from payment in k ind.

"Money", sa y s H .D .D ick in so n ,

i s an extrem ely im portant d e v ic e . . . . f o r g i v i n g e f f e c t to 1.

P .42

•

1. oootmasrtj* freuüom.

l a o le a r t h a t people caan ot y e t what

th e y want a o at w ith t h e i r ohore o f th e n a t io n a l w e a lth u n t i l th e y oan he paid in autie winner which lioeS not praeuppose th e use th ey w i l l csako o f i t . of v a lu e ,

80

itoney i s n eoesaary aa a measure

t h a t people oan reckon th e v a lu e o f one oommodlty

In t e r n s o f o t h e r » , a« a medium o f eaoh an ge, ao th a t th e y can purohaie from any vendor and not o n ly from one who wants th e p a r t i c u l a r commodity th ey may have t o o f f e r and o s a s t o r e o f v a lu e ,

80

t h a t th ey can make t h e i r p urch ases when th e y w is h ,

t i . i i . a r e "free" t o s a v e ) .

when money has been in v e n te d , th e

f u l f i l m e n t o f t h i s f i r s t c o n d it io n r e q u ir e s t h a t d eb to rs do not use e i t h e r d i r e c t c o e r c io n or th e lo v e r o f n a tu r a l n e c e s s i t y to make people aooep t payment in kind in s t e a d o f payment i n money. view ing the working o f an

economy, i n which th e r e was a h igh d egree of i n e q u a l i t y of w ealth and a high degree of monopoly and im p erfect co m p e titio n and in which, a c c o r d i n g l y , c h o i c e on the part of most consumers was ver y r e s t r i c t e d , made n o te s of t h e cr y in g n e c e s s i t i e s of many ordinary f a m i l i e s f o r f o o d , c lo t h e s , fu r n itu r e , houses, e t c .

"Before th ey had g o t

v er y f a r " , s a y s Mr. B trachey, "they, ( t h e N .S . P .P . C • , ) found th em s e lv es working out a comprehensive budget o f the needs of an American f a m i l y . They then worked back through th e p rod uctive system and enquired whether or n o t th er e e x i s t e d r e s o u r c e s of production which could be used to supply the goods and s e r v i c e s n e c e s s a r y t o meet t h e s e n eed s.

They came t o th e c o n c l u s i o n t h a t t h e s e r e s o u r c e s

did e x i s t .

But some o f t h e s e r e s o u r c e s would have to be

r e a l l o t t e d from t h e i r e x i s t i n g u s e s and used a c c o r d in g to a p la n .

They would have to be used a cc o r d in g to a

plan which provided t h a t th e a v a i l a b l e raw m a t e r i a l and

^180

aecBi-fiabrioated produotü should be f i n a l l y f a b r i c a t e d i n t o the p a r t i c u l a r ^uoUw and no o t h e r s , which th ey had l a i d down in advance when they raado out t h e i r f a m i l y budget . .

. . i n doin&,

t h i a , the authors of the re p o r t took upon th em s e lv es no l e s s a t a s k than t o decide upon t he r e l a t i v e urgency o f humn n e e d s , in M -i.rjir,

»n.j,

p l a i n language to de c id e what people r e a l l y wanted to have . ^ What the authors of the H . ü . f . p . C . , r e p o r t proposed, the planning body, says Mr# b tr a o h e y , would oarry i n t o e f f e c t . But o n ly the plan f o r the f i r s t period would have to be p r e parea in t h i s way.

”A l l subsequent bud gets w i l l be merely

co rrection ® of t h e m i s o a l o u la t io n o d isc o v e r e d i n the f i r s t . * ’ on t h i s system , goods are s o l d at f i x e d p r i c e s , (baaed on c o s t s , t?e are t o l d , but we are not t o l d how c o s t s can be c a l c u l a t e d in the absence of a f r e e roarket f o r goods - t h i s i a a p o in t t o which we s h a l l return l a t e r ) and e r r o r s in a s s e s s i n g consumers * c h o i c e show th em selv es i n th a t a t th e end of the y e a r , or whatever th e planning period imy be - some t y p e s of goods are l e f t o v e r ,w h i l e o th e r s have bef?n exhausted b e f o r e th e end of the p e r io d .

Changes of t a s t e a l s o appear in t h i s

way and are taken i n t o account in the drawing up of th e plan f o r the new period* ^"hile t h i s type of planning may w e l l be p r e f e r a b l e t o th e monopoly c o n d i t i o n s i t i a intended to r e p l a c e , i t i s s u b j e c t t o s e v e re l i m i t a t i o n s as a method f o r p rov id in g f o r consume r s ' 1.

Theory and p r a c t i c e of B o u ia lis m .

P. 3 5 - 4 .

oholoQ. Neede and Wants . B efore o r i t i o i s i n g i t hov/ever, we must d i s t i n g u i s h between needs and w a n ts .

"What people r e a l l y wanted to have" i s not

i n f a o t the p l a in language whioh i t i s s t a t e d t o be*

I t may

mean th e M in istry of Pood planning the production of mousetrap ch ee se because the M in istry t h i n k s 1 need i t s n u t r i t i v e v a lu e or i t may mean t h e i r f i n d i n g out t h a t I want Camembert and p lanning to import i t f o r me. F u r t h e r , i n regard t o needs and w a n t s , we have t o d i s ­ t i n g u i s h not only between ray wants or d e s i r e s as e s tim a te d by me and ray needs as estim a ted by someone e l s e , the p l a n n e r s . I t i s a common b e l i e f t o - d a y t h a t every i n d i v i d u a l needs a decent house to l i v e in*

But t h e t h i n g s whioh people are

prepared to vote f o r as s o c i a l l y d e s i r a b l e and n e c e s s a r y and are not always the t h i n g s th ey are prepared t o spend t h e i r money on.

Where t h i s i s th e c a s e , t h e s e s o c i a l l y n e c e s sa r y

t h i n g s can only be provided by th e s t a t e ' s spending p e o p l e ' s money f o r th e m ,in s te a d of t h e i r spending i t as i n d i v i d u a l s . S u b s i d ie s on housing are a ca se in p o i n t . In t he P r i n c i p l e s of Koonoraio P l a n n i n g ,

P r o f e s s o r Lewis largues t h a t housing

s u b s i d i e s should be removed and w o r k i n g - c l a s s t a x a t i o n reduced by an amount equal to the s u b s i d i e s . p o lic y

"The argument f o r t h i s

he s a y s , '^is t h a t i t does away w it h th e expense of

c o l l e c t i n g w o r k in g -c la s s t a x a t i o n and, a t th e same time g i v e s the

/ worker!

g r e a te r c h o ic e and t h e r i g h t to take h i s b e n e f i t s as

123 1.

he p l e a s e s . ”

P r o f e s s o r Lewis p o i n t s out t h a t i f t h i s were

done, th e r e mould probably not be so many new b o usin g e s t a t e s . But he s a y s "The only v a l i d o b j e c t i o n t o t h i s ( i . e . h i s p ro p o s a i f o r the a b o l i t i o n o f s u b s i d i e s and corresp o n din g redu c­ t i o n of t a x a t i o n ) i s the b e l i e f t h a t th e government knows b e t t e r than th e w o r k i n g - c l a s s e s how th ey should spend t h e i r money. There may of course be widespread agreement w i t h i n a s o c i e t y t h a t many commodities e . g . h o u s e s , which could be used or purchased i n d i v i d u a l l y , s h a l l be provided communally.

But

where t h i s i s s o , the s o c i e t y i s , i t seems t o me v o t i n g f o r illib era lism .

The l i b e r a l way t o combat s o c i a l e v i l s i s not

so much d o lin g t h i n g s out t o p e o p l e , t h i n g s which are paid f o r by t a x e s as t o i n c r e a s e t h e i r incomes so t h a t th e y ca n buy the d e s i r a b l e t h i n g s f o r t h e m s e l v e s .

In o th er words,

l i b e r a l i s m h olds t h a t i t i s on my needs as I s e e them and am prepared or helped to pay f o r t h e i r s a t i s f a c t i o n , t h a t production should be based . C r i t i c i s m o f Mr. 3 traohey*s p r o p o s a l s . We now turn to the c r i t i c i s m of iÆr. S t r a o h e y ’ s p r o p o s a l s . F i r s t , I th in k th e p ro p o sa ls presupposes a g r e a t e r degree of u n ifo r m ity among people^s t a s t e s than e x i s t s .

Planners on

the b a s i s of Mr. b trachey*s p r o p o s a ls plan f o r th e t y p i c a l f a m i l y or f o r the average man. f a m i l y or average 1.

princip les

of

man e x i s t ? Planning

p .31.

But does such an average The degree o f u n i f o r m i t y o f

13 3

ta e te a in a so ciety v a rie s with i t s prevalent re lig io u s b e lie f s , i t s systems of education, i t s general eoonomio o o n c ltio n s, d is trib u tio n of w ealth, the s ta t e of s o ie n t i f i o development, in fa o t everything whioh goes to make up the d is tin c tiv e « iv ilis a tio n of th a t so c ie ty . Can we say th a t there are lim its w ithin whioh a l l in d iv id u a ls ' scales of preference fo r commodities are lik e ly to be f a i r l y uniform?

®e can, I th in k , make a d is tin c tio n

between necessary goods and luxury goods, between s h e lt e r , s u f f ic ie n t food to prevent hunger and s u f f ic ie n t clothing to prevent cold on the one hand, end books and s t y l i s h clothes and entertainm ent on the o th e r. course, a hard and f a s t one.

The d is tin c tio n i s not, of

There are people who p refer

luxuries f o r the mind to the n e c e s s itie s f o r the body, but they are few.

provided we can have a l l

our pressing

n e c e s s itie s s a t i s f i e d , nearly everybody would p refer to have them s a tis f ie d before having any lu x u rie s , th a t i s to say, would prefer a minimum of food and s h e lte r to any number of c ig a re tte s and cinema shows.

But, snoe ste p over the bounds

of n ecessity , o r, l e t i t be the case th a t a l l n e c e s s itie s cannot be s a tis f ie d and people's choices may diverge widely. Does everyone want food before a l l other n e c e ssitie s?

This

i s a question to. whioh i t i s d i f f i c u l t to give an accurate answer, but i t is in any case purely academic, since i f the v ast m ajority of people are not provided with a l l n e c e s s itie s ,

i&g; th e r e i s s o c i a l r e v o l u t i o n , i n whioh a l l q u e s t i o n s of consumers' ohoioe becomes i r r e l e v a n t . I t i s im portant, however, t h a t onoe th e bare n e c e s s i t i e s o f l i f e are s a t i s f i e d , p e o p l e ' s t a s t e s do d i f f e r w id e ly ; f o r in s t a n d e X would opt f o r a packet of c i g a r e t t e s and a p in t of b eer in a d d i t i o n t o h i s minimum d i e t w h ile Y would opt f o r a cinema show i n a d d i t i o n t o h i s minimum d i e t and Z would fo r e g o c i g a r e t t e s , beer and cinema f o r a p p e t i s i n g m eals. I t might be argued t h a t the plann ers can provide f o r v a r i e t y of t a s t e , by v a r y in g the p r o p o r tio n s of d i f f e r e n t ty p e s of goods they produce i . e . i n s t e a d o f b a s in g th e plan on one average f a m i l y , they might c a t e r f o r 10^ highbrow and 90^ lowbrow t a s t e s or something of the kind. But whatever the c l a s s e s on the b a s i s of which th e y plan th e y must presume u n ifo r m ity w i t h i n the c l a s s , a s u p p o s i t i o n which I submit i s u n l i k e l y t o do j u s t i c e t o the v a r i e t y of i n d i v i d u a l t a s t e . Moreover the planners can only determine th e s i z e o f each of th e c l a s s e s by r e f e r e n c e a) e i t h e r t o f i g u r e s of consumption under a f r e e market, i f and when i t was i n o p e r a t io n or b) th e a ssessm ent of t a s t e by o b s e r v a tio n of r a t e s o f consumption or c o) th e use of s o c i a l s u r v e y s . Method a) presupposes a f r e e market^ method (b) i s t h a t by whioh Mr. btrachey s u g g e s t s p lann ers would i n any event t o c o r r e c t t h e i r g u e s s e s and method (o) i s a f u r t h e r p o s s i b l e method of c o r r e c t i o n , which M r . S t r a c h e y would almost

125

c e r t a i n l y have su gg ested had he been nvriting t o - d a y .

Let

us s e e then how f a r by methods (b) and fo) e r r o r s i n the p l a n n e r s ' g u e s s e s might be c o r r e c t e d . b)

I t does not seem to me t h a t consumers' c h o i c e s can

be a c c u r a t e l y a s s e s s e d by o b serv in g r a t e s o f consumption. Queues f o r commodity

c l e a r l y i n d i c a t e a sh o r ta g e o f X, but

t h e y do not t e l l us how g r e a t t h a t sh o rta g e i s , i# e# how much i n terras of o th er goods people would be prepared t o s a c r i f i c e t o g e t more of x*

Who can say how much i n terms o f oth er

goods people would to -d a y be prepared t o s a c r i f i c e t o g e t permanently l a r g e r s u p p l i e s o f meat?

Would th e y be prepared

t o g i v e up a weekly v i s i t t o th e cinema or would t h e y not? The government has had t o s a c r i f i c e th e f r e e market in the i n t e r e s t s of a j u s t d i s t r i b u t i o n of what i s a v a i l a b l e , but i t cannot, I t h i n k , in the absence of th e market a s s e s s the importance people a t t a c h t o meat i n terms o f o th e r g o od s. F u r t h e r , th e f a o t t h a t too l a r g e a q u a n t i t y of a good has been produced w i l l not always be i n d i c a t e d by t h a t good b ein g l e f t over i n the s h o p s , f o r p eo p le w i l l consume what i s a v a i l a b l e even i f i t i s not what th e y would have most p r e f e r r e d g iv e n e x i s t i n g r e s o u r c e s .

I f th e r e i s too l i t t l e

poultry

and too many eggs t o meet consumers' t a s t e s i t does not f o l l o w t h a t both w i l l not disappear from th e s h o p s , f o r people unable to g e t p o u ltr y w i l l take eggs i n s t e a d as people unable to g e t

136

i n t o a t h e a t r e w i l l go t o a cinema»

Of c o u r s e , oonauoera*

tawtea cannot always be met, a l n o e e i t h e r m a t e r i a l reeouroea or labour may not be a v a i l a b l e .

But a planned ayatem i n

wtiioh th er e i a not a f r e e market does not p rovid e any means by which th e oonuumer oon i n d i c a t e what importance he a t t a c h e s to one oommouity in terms o f a n o t h e r . Within the framework o f economic p l e n t y whioh ijr. Btrachey prenuppoaea, auoh i n d i c a t i o n i a u nneoesaary. ^ e r y body /ihkmg can have enough o f a l l th e goods th ey d e s i r e , ao people r e a l l y do l e a v e goode unoonaumed when th ey a re not what th ey w ant.

In t h i s framework, t h e q u e s t i o n o f what p eop le

want most dues not a r i s e .

But i t has a l r e a d y been argued

t h a t a b s o l u t e eoonomio p l e n t y i s u n a t t a i n a b l e ( p . 8 S ) . (o)

*

B o o ia l su rvey s and q u e s t i o n n a i r e s t o f i n d out

consumers' p r e fe r e n o e s have become popular r e c e n t l y .

The

r e a l d i f f i c u l t y about t h i s method of aaeeesment i s t h a t a man or woman cannot sa y how much o f any good he or she would l i k e u n t i l he knows i t s c o s t i n terms o f o th e r goods; t h e h o usew ife pan g i v e some id e a of how much soap she needs and what ÿypesjsha p r e f e r s , but when th e q u e s t i o n a r i s e s , would she r a t h e r have more soap and l e s s sugar or l e s s . V

sugar and more soap , she cannot g i v e an answer u n l e s s she knows how many u n i t s of soap ahe would g e t f o r th e s a c r i f i c e o f one u n i t of sugar and v i c e v e r s a . i

But how , ’j?«ssA.v

over/

many u n i t s of soap she would have to s a c r i f i c e depends upon oth er p e o p l e ' s s c a l e o f p r e f e r e n c e s f o r consumption and a l s o on the work th e y are prepared to do.

But the work

people are. prepared to do depends upon the p r i c e th e y can get fo r i t .

Uonoe i t does not seem p o s s i b l e to e l i c i t

p e o p l e ' s p r e f e r e n c e s f o r one good in terms of another by s o c i a l s u r v e y s , where th e r e i s not a p r i c e s y stem .

And i f

th e r e i s a p r ic e system then i t becomes u n n e c e s s a r y . F u rth er the system of s o c i a l su rvey in g i s g r o s s l y i m p r a c t i ­ c a l as a g e n e r a l as d i s t i n c t from a supplementary method of f i n d i n g out what people want most, because many people would not bother to f i l l i n the q u e s t i o n n a i r e s or submit to i n t e r v i e w s by s o c i a l s u r v e y o r s .

Again, th e te ch n iq u e

of s o c i a l su rveyors i s to take a sample r e p r e s e n t a t i v e i n s e x , a g e s , o ccup a tio n s and economic c l a s s e s of the t o t a l p o p u la tio n .

The assumption i s a g a in t h a t t a s t e s tend t o

be uniform w i t h i n a g iv en age group, s e x , o c c u p a t i o n , e t c . , t h i s i s v er y l a r g e l y tr u e a t p r e s e n t as th e s u c c e s s of s o c i a l su rv eys have shown, but i n so f a r as i n d i v i d u a l i t y i a developed people tend to have t a s t e s independent o f t h e i r c l a s s and s o c i a l background and a l i b e r a l system should provide f o r th e e l i c i t a t i o n o f d i f f e r e n c e s and should not by presuming a uniformity,^ tend to f o s t e r i t s growth.

These

c r i t i c i s m s do not mean t h a t s o c i a l su rv eys cannot be u se# f u l l y used by governmental and o th er b o d ie s f o r s p e c i f i c

1881

p u r p o s e s , but o n ly t h a t th ey are u n s u i t a b l e a s the main g e n e r a l method of f i n d i n g out what p eople want most g iv e n e x i s t i n g reaouroes. It

■i-;

aornetiaeB s u gg ested by a d v o ca te s of p lann ing o f

th e type under c o n s i d e r a t i o n t h a t i n d i v i d u a l p r e f e r e n c e s could be e l i c i t e d through p o l i t i c a l machinery.

But i t i s

q u i t e im p o s s ib le f o r one M.P. to r e p r e s e n t the d i f f e r e n t t a s t e s of a l l h i s d i f f e r e n t c o n s t i t u e n t s .

In any e v e n t he iwoul

would not know them without r e s o r t t o one o f t h e methods a lr e a d y d i s c u s s e d .

P o l i t i c a l machinery w h ile u s e f u l t o

c o r r e c t g r o s s e r r o r s in regard to r a t io n e d goods i s q u i t e inadequate âa a means of e l i c i t i n g consumers' g e n e r a l s c a l e of p r e f e r e n c e s . N e c e s s i t y f o r a Free Market. We may conclude then t h a t a f r e e market i n goods i s e s s e n t i a l t o e l i c i t consumers* p r e f e r e n c e s and th a t i t i s not ■\ in accordance w ith the L ib e ral I d e a l t h a t p lans of production should be decided by a planning body w ith ou t th e a id of the p r i c e system .

Once t h e s e p r e f e r e n c e s have been e l i c i t e d ,

however, th ey may be t r a n s l a t e d i n t o production e i t h e r under a system o f p r i v a t e e n t e r p r i s e i n so f a r as i t i s i n a s t a t e of p e r f e c t c o m p e titio n or under a system of s t a t e ownership of in d u s tr y by th e drawing up of

k

p roduction p lah s in

accordance with p r e f e r e n c e s e l i c i t e d .

In a fr e e e n te r p rise

economic system , th e r e must be measures a g a i n s t monopoly

. -J,:y -