Today’s post is by Jakub Wiśniewski a fellow Fellow at the Mises Institute, going back to the Summer of 2012. He’s brilliant. Check out his blog here.
I especially enjoy being his friend on Facebook, where I get to see his famous aphorisms on liberty, markets, property, politics, and more. Here are just two examples:
The message of politics is that scarcity can be legislated out of existence. The message of economics is that scarcity can be legislated into existence.
Social progress is the process of substituting commerce for conquest.
Below, Jakub uncovers some praxeological foundations of Public Choice, a field in economics that deals with the actions and incentives of supposed public servants. The standard approach uses mainstream methods to arrive at conclusions involving moral hazard, misaligned incentives, costs outweighing benefits, etc. Jakub goes back to square one and shows how these fundamental results may be deduced and derived without the dubious help of mathematical utility maximization problems or empirical verification.
According to the Ricardian Law of Association, specialization and division of labor increase productivity. From this it follows that any given field of professional activity will be dominated by specialists.
Franz Oppenheimer’s distinction between the economic means and the political means, combined with the insights provided by the Ricardian Law of Association and the Austrian theory of entrepreneurship, suggests that whereas the economic means will be utilized most successfully by those capable of combining heterogeneous capital goods so as to produce the final goods that will harmonize with the uncertain future wants of the consuming public, the political means will be utilized most successfully by those capable of creating and wielding institutionalized violence, aggression, and coercion.
Now, let us assume for the sake of the argument that there is nothing inherently contradictory in the notion that one’s liberty can be violated to one’s own prudential or moral advantage, and, thus, that there is nothing inherently contradictory in the concept of a benevolent despot.
However, in view of all of the observations made in the previous paragraphs, the concept in question, even if logically coherent, at the same time seems logically constrained to denote an empty set. After all, just as someone who can operate profitably both on the gold market and on the silver market should be thought of as a better precious metals specialist than someone who can operate profitably only on the gold market, someone who can wield coercion both for the supposed good of his subjects and for his own private advantage is more specialized in using the political means than someone who can use them only for the former purpose.
In addition, even in our scenario of relaxed moral assumptions, achieving good results does not require initiatory violence – persuasion and charity are equally effective in this context, if not more so. In order to achieve opportunistic gains, however, a politician needs to resort to some form of initiatory violence, be it naked coercion or fraud. In other words, the political means are particularly well suited to advancing opportunistic, not benevolent behaviour.
In sum, in view of the praxeological nature of the political means and the praxeologically necessary consequences of the Ricardian Law of Association, for every would-be politician who sincerely believes that he is well suited for the role of a benevolent despot, there will be a far more effective politician concerned exclusively with his private gain, and the latter will always outcompete the former in the realm of power-seeking. Thus we get a purely logical proof of the conclusions of the Public Choice literature.