An Argument for Self-Governance

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All States do harm. The damage to human life being done by the American State, being a large and powerful State, is very great indeed. It is unmeasurably large. It is of all types: distress, unhappiness, pain and suffering of manifold kinds, death, and destruction.

The writings in LRC document and call attention to numerous examples of such harm. There are five general ways in which the State harms and destroys. None are measured by official statistics. There is direct harm caused to those individuals the State aggresses against. There is the harm the State causes when it prevents actions that might have brought happiness. There is the harm done when the State fails to do what it is supposed to do, and then the associated harm when people expend valuable resources obtaining the service privately. There is the harm induced when the State changes incentives that alter behavior, which in turn fosters more harm in the other categories. There is the harm the State causes when it employs the resources that it extracts.

The harm can become worse in the years ahead. A war or acts of war against Iran can weaken and bleed America further. Any such act will have untold negative repercussions upon this country and the entire world, driving other countries into actions and postures of defense that can only make America less secure, moving the world further from peace. Such a war grows likelier by the hour, despite the fact, pointed out by Jude Wanniski, of Iranian good will and concessions over the nuclear issue. In addition, the Iranian nuclear program has a long history in which the Unites States itself played a key role. The morale of the American people could eventually give way. The harm of heavy debt burdens will be felt in years to come. The huge current account deficits could give way to severe economic distress.

America is a country all too easily aroused to and supportive of militaristic confrontations. Carried too far or too often, such behavior leads inevitably to disgrace and downfall. Within the country, politics loom large, pitting one group against another in another form of warfare. There are no deep signs of any change of any permanent and long-lasting nature in these characteristics.

"The fault, dear Brutus, is not in our stars,
But in ourselves, that we are underlings."

Yes, ultimately the fault lies in us. We the people exhibit every defect that any human being has ever exhibited. We are weak, limited, ignorant, lax, irresolute, forgetful, lazy, ill-willed, aggressive, impatient, greedy, and idolatrous, to mention only a few. There are rapacious interest groups, rulers who overstep, and rulers who hear the people’s voice and overstep the bounds of conscience and decency, amplifying the faults of their subjects and creating more suffering. We have bent the fundamental rules of society and government out of shape. We have worshiped the God of the State and abandoned the Lord. We have adopted evil means for improper ends of a State. We have done all this, we have allowed it, we have inherited it, and we have wanted it.

Whatever our motives were, they will always be with us and in us. These human faults are basic. They are not easily corrected. They and human nature must realistically be taken as a given, despite all effort at human improvement.

If we cannot change ourselves, then let us change the rules by which we live. Yet how to make beneficial changes in a country this size and with so many interests is far from clear. Must we wait until the whole system grinds down into an intolerable mess? If so, will we know what then to do?

What are the basic correctable faults in our way of life that, if altered, might result in greater happiness? This question is a never-ending challenge for many minds. Aristotle addressed it in his Politics. We are still addressing it today.

Thomas Paine wrote "that the thirst for absolute power is the natural disease of monarchy." The thirst for absolute power is also the natural disease of the democracy we live under. Mankind will always wish for the power to banish want without effort. Therefore, there will always be those seeking to rule others, those wishing to place their faith in them, and those adroit ones who pull everyone’s strings including the rulers.

We the people, the masses, we cannot lead each other. We have neither the knowledge nor the inclination. When we rule, we amplify our emotions, ignorance and greed into a slew of trouble. Andrew Jackson, an early man of the people, may have curbed the American System and the Second Bank of the United States, but he mistreated the Cherokee Nation, strongly opposed South Carolina’s nullification and secession, and instituted a spoils system. Harry S. Truman, another man of the people, without compunction managed to drop two atomic bombs.

The political leaders, the rulers, who are not of the people, who rise above them by dint of birth, privilege, intelligence, or accomplishment rarely do much better. Some do not have the strength to resist the people. Some are equally weak, irresolute, and short-sighted. Most are corruptible by any power given them. If and when they are far-sighted, they battle against all sorts of opposing forces. All have their own character faults, their own hobby-horses, their own mistaken ideas and theories.

Then there are the behind-the-scenes leaders, the puppeteers who pull the strings. They may be rapacious. They may be merely self-assertive or accumulative, standing ready to take advantage wherever they can. Their leadership is deadly because their own interests come first. They never consider the so-called public interest. As a matter of fact, neither do the masses or the rulers. If there were such a thing as the public interest, which there is not, no one would know what it was much less consider it as foremost in their decision-making.

The history of how Medicare became law shows how the system works. The people do not generally lead; they follow. Rulers are political entrepreneurs, but that does not mean that they originate all the ideas. They just calculate when advantage can be gained from them. The rulers sometimes come up with proposals and push them. Sometimes, they tap into an inchoate demand from the masses. Other times, it takes years to create a coalition as the rulers are divided. Sometimes special interests push from below. The Medicare proposals emanated from the bureaucracy, from the Public Health Service and the Social Security Administration as early as 1937—1950 before being picked up by the Truman Administration.

"The AFL-CIO, the National Farmers’ Union, the Group Health Association of America, the American Nurses Association, the American Public Welfare Association, and the National Association of Social Workers, among other groups, supported the proposal. It was opposed by the AMA, the National Chamber of Commerce, the National Association of Manufacturers, the Health Insurance Association of America (a newly formed organization of some 260 health insurance companies), the Pharmaceutical Manufacturers’ Association, and the American Farm Bureau Federation, among others."

There is no public interest visible here; there are competing private interests. A subset of our rulers responded to the Medicare proponents. Years of politicking went by. Outcomes seemed to hinge on personalities, on accidents of death or vacancy, but really the prime forces for and against kept struggling until with enough logrolling, coalition building, etc., one side gained the upper hand. The proposal eventually passed. Those voting for it naturally expected gains of some sort.

Key to this process is that it can be done — there are constitutional justifications for the power to institute Medicare. The rules we live by allow it to come into being. At the same time, it can be sold to the general public. A few artful studies, news reports of old-age tragedies, a few influential newspaper stories, talk shows, and appearances by attractive spokespersons, and public opinion can be swayed. Judging from the recent statements of both Defense Secretary Rumsfeld and President Bush, this game is again being played out with respect to Iran and its nuclear program. It is a most dangerous game.

The game of rule is age-old. The anti-federalists recognized that the U.S. Constitution was at its inception and would become an instrument of despotism. Even if we were to begin de novo with a document that purported to make good the errors of the original, a feat that is practically speaking an impossibility, within short order it would be turned in a tyrannical direction. The power of the State is so great and attractive and human nature being what it is, people will attempt to recreate the State even if the original rules seem to make it impossible.

In this situation the best that can be hoped for is that each person as much as possible is responsible for his own acts. In other words, when a person makes an error or a mistake, he feels the effects of it himself. If a person is violent to another person, it is best that he be held responsible for it. Acts that are negative, whether violent or not, are more likely to be recognized, caught and stemmed the more that they are associated with their initiators.

States, complex chains of command, divided governments, balances of power — these obscure that which should be clear and simple. There is a decision, an act, and it has results. It is best that the consequences of ones acts fall upon oneself. The more quickly this happens, the faster that error is discovered, the faster it can be corrected and the less the damage done. In the main, the voter votes, years pass, and distant legislators pass on distant and complex matters. These affect the voter in untold ways that no one can decipher. Regulations and laws fill up law books that few understand. Cause and effect are disconnected, and no voter can know the many influences on his well-being. This system cannot work well.

There are instances, naturally, when connections can be made, when there is clarity, when the voter knows and can react. Surprisingly, in these cases, even when a President Bush starts a war that fails and harms, even when public opinion turns against the war, the process of connecting cause and effect is time-consuming, erratic, and unsure. Has the public learned a fundamental lesson? Does it possess basic misgivings about such foreign ventures? Does it understand why they occur? Can it affix blame and remedy fault? If any of these answers were "yes," the President would not today feel free to threaten Iran openly with military force. Or instead, is the reaction a gut reaction to American loss of life and a lack of patience, a feeling that it isn’t worth it, "but we know that the war on terror must go on for the rest of our lives." Does the voter still retain faith in the system if not the man, regarding the event as merely a misjudgment to be racked up to experience? The system is at fault, as well as the man.

When one person (B) bears the effects of another person’s (A’s) acts, the latter (A) does not take into full consideration those effects on B because he does not bear the full costs of any error that he makes.

At present, we the people bear nearly all the risk and costs of ruling policies that go bad. Hence, the rulers have a reduced incentive to consider these costs and risks. Their power, which stems from numerous imperfections of the political system, allows them not to be held fully responsible for their acts.

The problem was recognized a long time ago. It was said by the federalists that a Constitution with three branches of government, with frequent elections, and with enumerated powers would mitigate the separation of the rulers from the ruled. Paine noted:"…and that the ELECTED might never form to themselves an interest separate from the ELECTORS, prudence will point out the propriety of having elections often…" The antifederalists argued strenuously, among other things, that altogether too much power was being lodged in the federal government. They were right.

At present, major decisions are initiated by private interest groups, the State bureaucracy and rulers. The effects fall on the subjects, broadly or narrowly as the case may be; but they fall on others than the initiators. This has to be the case in any State. This is a major defect of all States.

The Executive implements the decisions. Both Congress and the Executive ratify and monitor the decisions that are made. With all the decision functions (initiation, ratification, implementation and monitoring) lodged in one place (an incestuous Congress and the Executive), but with all the risk and effects of the decisions borne elsewhere, the system is geared to produce more actions that deviate from what the people as a group want, even if that mass want could be identified, which, it bears repeating, it cannot be. Thomas Paine found "the will of the king…handed to the people under the formidable shape of an act of parliament…" In our system, substitute interest groups and rulers for king.

The only sure road to a better alternative is to know at the outset that the State is a deeply flawed and destructive institution. The Founding Fathers knew this, or at least some did. Their rhetoric bespeaks a profound distrust of power, yet a feeling that the State was necessary! Jim Davies reminds us of Paine’s errant view that "Government, even in its best state, is but a necessary evil…"

Aware of all the defects of past governments, but wanting one of their own for their own purposes, the Founding Fathers, over the objections and foresight of many, brought forth a Constitution engraved with its own peculiar defects. A succession of our ancestral rulers then set about the task of creating the intractably despotic system of our day, a work that has visibly continued over our lifetimes.

The basic model built into the Constitution or at least built into the rhetoric that was used to justify it is a model of contract and agency. The people contract with their rulers who are their agents or representatives. In such a situation, transparency and accountability play significant roles. This is why information and the media become critical. The nature of the organization of government becomes important. All the devices of divided government, elections, freedom of speech, militia instead of a standing army, etc. are attempts to mitigate the problems that arise when the agents, distant from control and observation, ply their trade, not on behalf of the voters, but on their own behalf and that of special interests.

However, the contract/agent model is inapplicable to the subject/ruler relationship. If there is a contract, it is very loose. If there is any enforcement of it or judgment of it, the power belongs one-sidedly to the State. Rather than a nexus of contracts, the State is a nexus of powers. And the whole model assumes a "collective interest" of the people that is impossible to identify.

The general rule of behavior of reduction and diffusion of power is the answer to these problems.

The solution is no State at all. The solution is self-government or anarchism.

Human behavior being what it is, the defects of human nature and the thirst for power will still be present. The incentives and temptations for one defense agency to rule another and yet another, to grow into a dominant State will be present even with self-government. Yet the patronage of customers is a control. Self-government, being economically based on free markets, is far more responsive to error and excessive cost than any political arrangements. The temptations to conquest can be recognized and felt more quickly. They can be taken down faster and at lower cost, even if they never go away. Yet another control against aggression is the self-defense initiative of the population.

Such a solution seems far off and with no obvious path to its realization.

Let us

  1. Recognize the defective rules we are playing by.
  2. Recognize that we are caught in a spiral downwards. Most will end up losing. A few may win.
  3. Recognize how we got here, by an interplay of defective rules, mass weakness, greed, looking for the easy way, ignorance, too much fear of insecurity, too much support of war, the loss of God and replacement with the State, the loss of values. Step by step we either spun the cords that bind us fast or tied the knots.
  4. Set a clear new goal: a society of peace represented by peaceful self-governance.
  5. Move step by step toward that governance.

Michael S. Rozeff [send him mail] is the Louis M. Jacobs Professor of Finance at University at Buffalo.

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