Leviathan

Bigger on the inside than the outside

The libertarian economist Arnold Kling calls the US government The Oversized Conglomerate. His thesis is: “We should prefer a government that does a few things well to a government that does many things poorly”.

While I agree that there are many areas that governments should not be involved in, I also think Kling is making a category error in trying to apply corporate managerialist principles to a State. States are not Corporations.

A compulsory political organization with continuous operations will be called a 'state' [if and] insofar as its administrative staff successfully upholds a claim to the monopoly of the legitimate use of physical force in the enforcement of its order.

The above quote comes from early 20th century political thinker and pandemic victim Max Weber. Notice that it does not reference profit or shareholders. The State is fundamentally about the maintenance of order and the management of violence. That is not what Corporations are about. And it is terrifying when they are.

For by Art is created that great LEVIATHAN called a COMMON-WEALTH, or STATE, (in latine CIVITAS) which is but an Artificiall Man; though of greater stature and strength than the Naturall, for whose protection and defence it was intended”

Nearly all publicly-listed companies have a legal mandate to deliver returns of their shareholders. Now what this means in practice can get complicated but in theory it is simple. Give shareholders money (through either dividends or a higher share price) or they will sell you. States do not have shareholders and they have no mandate to provide them a return. Instead modern democracies have citizens and the State’s role is to keep those citizens alive.

Seventeenth century weirdo Thomas Hobbes called this state the Leviathan (after the monster in the Bible’s most schadenfreude-ish book: Job). Hobbes’ concerns were shaped by his experience of the English Civil War. Around 5% of the population died (compared to 3% of the population in the US Civil War as a benchmark for our American readers*). For a war-scarred Hobbes, order was more important than freedom. Although a strong Leviathan did free people from having to think about politics (which is simply war by other means) constantly. To start profitable businesses, for example. Order and freedom are not antithetical.

“The finall Cause, End, or Designe of men, (who naturally love Liberty, and Dominion over others,) in the introduction of that restraint upon themselves, (in which wee see them live in Common-wealths,) is the foresight of their own preservation, and of a more contented life thereby; that is to say, of getting themselves out from that miserable condition of Warre, which is necessarily consequent (as hath been shewn) to the naturall Passions of men, when there is no visible Power to keep them in awe, and tye them by feare of punishment to the performance of their Covenants”

Historically Corporations have used physical force but the modern Leviathan is jealous. You can’t even flirt with violence.

States are apex predators in their particular ecosystems of power. For both Hobbes and Weber, the State exists provide order, not returns. But that order can take many forms.

The economy of 17th century England was largely agrarian and during the time of Hobbes around half the population worked in agriculture. The Leviathan was an Artificiall Man made of grass, corn, and wicker. Currently around 1% of the UK population work in agriculture. The modern economic and social order has changed completely. This complexity requires a complex government.

Additionally, our expectations of government have increased. “Maintaining order” does not mean simply stopping other countries from invading. Citizens want more than bare life. They want health and education and roads and, above all, better opportunities for their children.

To leave all this to Corporations is to leave it to entities that have no duty of care to citizens, only to shareholders. Therefore I would rewrite Kling’s dictum as:

“We should prefer a government that does the things that no one else can do better.”

And if you have ever worked in the private sector, you will know that gives the public sector a lot of scope.

I should lay my cards on the table. It is due to the interventions of the post-WW2 British welfare state that my parents were able to get middle class jobs and I was able to go to university. In some alternate reality, another me works in a fast food restaurant on the outskirts of Birmingham. The mental health issues of family members have greatly benefited from (patchy but present) state support. I am not a disinterested observer.

This does mean that I have no problems paying tax. In fact, I view it as a patriotic act. You don’t get to wrap yourself in the flag if you can put coin the collection plate but you keep it to yourself. And as I have been somewhat successful in life, I pay that tax with pride.

Whether libertarian objectors are high-minded defenders of liberty or lovers of efficiency or simply greedy is hard to tell. Someone like Ayn Rand was very skilled at hiding her naked desires in a dressing gown of philosophy.

But whatever our priors, it behoves us to understand that things that we describe properly.

*Australia has never had an official civil war although the first nations vs colonizer conflicts probably count as wars and the AFL-NRL division also comes close.