the Hayekian Way
was having dinner the other night with a group of people that included
a professional economist. He criticized someone else at the table
for worrying about the threat to liberty in the wake of the terrorist
attacks of last year. "The most important thing after September
11th," he told us, "was not liberty, but making
sure we don't get attacked again."
dinner he delivered a talk on the benefits of the free market as
seen by F.A. Hayek. What struck me at the time was the gap between
the acknowledged benefits of liberty in providing most goods and
services and its failure, in his eyes, in providing adequate security.
He would never think of suggesting that we must trade liberty against
material well-being. Quite to the contrary, he would insist that
it is only because each of us acts so as to improve his own condition,
as he sees it, that we enjoy the material comfort we have now.
talk was good, but as I listened to it I couldn't help but applying
his arguments to the problem of providing security. What follows
is some of the major points of his talk, along with the thoughts
rational allocation of resources depends on prices.
prices depend on private property and contract the very essence
of liberty. Furthermore, supplying the "right" amount
of security is a matter of rationally allocating resources. So any
move away from liberty will lessen our ability to perform that rational
allocation. Consider, for example, the fact that airlines are not
allowed to individually decide what sort of security their customers
will prefer and at what cost. Instead, they must use the one-size-fits-all,
federally designed airport security that allowed the September 11th
hijackers to pull off their attack in the first place.
allow people to discover profitable uses of their time and resources.
market for security allows people to discover profitable ways to
make themselves and others more secure. On the other hand, when
security is nationalized, the profit incentive is absent, and many
potentially advantageous discoveries will never be made. Who knows
what screening technology or passenger-profiling capabilities we
would have today if airlines were free to set their own security
policies, and could advertise their superior security systems to
potential customers. (E.g., "Very Safe Air: No Hijackings or
Crashes in 25 Years of Flying.")
routines, and conventions evolve in a market setting but become
ossified in a bureaucracy.
a business finds that its current practices for securing its property
are seriously inadequate to the task, it will probably take it a
day or two to make initial changes, and a few weeks or months to
completely revamp its approach. The criterion by which to choose
is clear: the business must find a security practice that yields
more in benefits than it costs to implement.
the owner of a private firm can simply declare a new security policy
when he sees fit, bureaucracies must adhere to complex procedural
guidelines in their decision-making. As pointed out by Ludwig von
Mises, that is because, lacking market prices for its inputs and/or
outputs, "[bureaucratic] conduct of affairs is conduct bound to comply with
detailed rules and regulations fixed by the authority of a superior
body. It is the only alternative to profit management" (Human Action, XV.10).
must swim in the sea of special-interest-group politics when a change
in their guiding rules is needed, and the change ultimately will
be made based on its political popularity rather than it adequacy
to the task at hand.
- We can't
"economize" for the entire economy. Only entities pursuing
a unified goal, such as individuals, families, churches, businesses,
and so on, can economize relative to that goal.
economize means to pursue the least costly set of means that one
envisions as leading to a chosen end. But the market economy has
no single, chosen end. Instead, it is only a name for a network
of individuals freely interacting to achieve their own ends.
idea that "the people of the United States" have a single,
chosen security end in mind is only useful for ideologically inspired
soundbites. In reality, security, too, is only consumed by individuals,
each of whom will have his own view of how much of which type of
security he wishes to consume. Some people will prefer additional
guards at nuclear power plants. Some will want greater control of
crop-dusting flights. Some people want nothing to do with guns,
while others would like to arm themselves like Rambo. Some people
might want convenient, fast access to their plane, while others
don't mind a strip search if it makes the flight a little safer.
market participants can choose how much of their resources they
will commit to particular security projects, the result will be
a structure of security that roughly reflects how much people think
various security projects are worth to their own well-being. Cases
where an individual property owner is seen as imposing undue risk
on those around him, such as the owner of a nuclear-power plant
who allows anyone off the street to come in and try out the system
for a day, can be handled through tort law.
doubt, a free market security structure will have deadly failures
at times. It is pointless to compare what that free market result
might be with a world of "perfect security." Such a world
cannot exist. What markets provide is not a perfect allocation of
resources but a rational one. And that is precisely what collectivist
efforts to provide goods, such as "national security,"
cannot provide, as they lack market prices to guide them.
isn't to say that various interventions in the market can't increase
the satisfaction of some people, at least in the short run. Government
agents are very good at using our resources to protect themselves.
I, too, would feel safer if I had my own trained security detail
assigned to me, flew on private jets all of the time at someone
else's expense, had special "no-fly" zones put in over
my house and office, and was whisked off to a secured bunker at
the first sign of trouble.
and security are not goods competing for our scarce resources, so
that we must accept less of one to get more of the other. Liberty
is not a good at all, but rather the inalienable condition of every
actor and every action. It manifests itself as a web of relationships
in which each one of us pursues the goods he values in the best
way he can imagine. We cannot sell the responsibility for our own
choices to another. Therefore, attempts to trade one's liberty for
something else are acts of self-deception and rewards to the "buyer"
of liberty for employing threats of violence and aggression.
trying to sell what we cannot sell, we should not be surprised if
we haven't bought what we thought we were buying.
2002 Gene Callahan
Callahan/Stu Morgenstern Archives