2
The Never-Ending Quest for Good Government
We do not say that the production of potatoes is economic activity and the production of philosophy is not. We say rather that, in so far as either kind of activity involves the relinquishment of other desired alternatives, it has its economic aspect. There are no limitations on the subject matter of Economic Science save this.
—Lionel Robbins, An Essay on the Nature and Significance of Economic Science (1932)
Imagine you are taking part in one of the great revolutions in history. Maybe it’s the American Revolution, and you’re helping Jefferson, Madison, Hamilton, and the others draft what will become the most enduring constitution in the world. Perhaps it’s 1789 in France, and you have joined the philosophes in crafting a new political order that will send tremors across Europe and beyond. Or perhaps it’s 1918, and you are taking part in the Bolshevik Revolution at Lenin’s side. On a cheerier note, imagine you are in Prague in 1989 during the revolution that peacefully split Czechoslovakia into two countries, one for the Czechs who call it the Velvet Revolution and one for the Slovaks who call it the Gentle Revolution.
In other words, imagine you are helping to shape the rules of politics. What you decide will have deep and lasting consequences. Future generations will be more likely to live in prosperity, or poverty, based on the kind of government you establish. The likelihood of war abroad or civil unrest at home will be greater, or lesser, based on the decisions made by you and your fellow revolutionaries. How will you decide what to do? As a leader in such a revolution, the ideas you hold—your beliefs and attitudes, preferences and prejudices—will matter. What is the best form of government? How should it be structured? Should it even be structured at all, or might the best rules simply emerge through the evolution of voluntary cooperation? In short, what should government do? What should it not do?
The way that you, as an individual, answer these questions depends on a lot of factors: your education, your sense of right and wrong, what you talk about with your friends, how you read history and literature, and whatever else you think is important. Your beliefs about the best form of government are a distilled version of the unique blend of influences in your life. Some of these influences are easy to identify: In the eighth grade, Mrs. Parsons inspired you to write a paper on Japan’s political system. Other influences are more subtle and intermingled: the combination of people and events that have personally influenced you, the authors you have read, the figures who have influenced them, the influences on their influences, and so on. Whether knowingly or implicitly, we all approach the big political questions in life carrying with us a rich history of influential figures—some say baggage. The point is, you are not the first person to grapple with these issues, and neither are we. These questions have occupied the core attention of political philosophers for over two thousand years. This chapter provides a brief tour through some of their thoughts. The sheer beauty of political philosophy is that these questions endure. Its horror is that, for all our trouble and sometimes violent political conflict, humanity has arrived at precious few political truths after all this time.
Truth is a big word when it comes to politics. For example, is it true that democracies generate policies that are unjust, as our first motivating question from Chapter 1 seems to assume? Is it true that good rules of the game—that is, good political institutions—can lead to better outcomes from government? To give satisfying answers, we need an ideal against which to compare the actual. And this standard comes from our philosopher friends who, over the millennia, have laid the foundations of the economist’s trade. In this light, there is no doing economics without also doing philosophy. Interestingly, if we take this chapter’s opening quotation seriously, nor is it possible to do philosophy in an economic vacuum. Economics and philosophy, it seems, are connected at the hip.
Writing a little more than a decade before Lionel Robbins’s 1932 book, Justice Oliver Wendell Holmes says the production of truth is like a competitive marketplace of ideas:
When men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas—that the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which their wishes safely can be carried out. (Abrams v. United States 250 US 616 [1919] at 630)
And like competition among college basketball teams, or competition among producers of potatoes, the outcome depends on the rules of the game. In philosophy, the most important rule is whether people have freedom of thought and expression. This is a very old argument. For example, in his Areopagitica (1644) John Milton pleads with his fellow Englishmen, ensnared in civil war, to practice tolerance. The Truth, he says, depends on it. “Let her and Falsehood grapple; whoever knew Truth to be put to the worse, in a free and open encounter?” You can find the same basic argument anywhere from Socrates, to John Stuart Mill, to Thomas Jefferson. Lionel Robbins says it’s foregone alternatives that make a philosopher’s trade an economic one. Channeling Danny Biasone’s shot clock, we add the important point that the economics of ideas is about the rules of the game, too.
Morality, Rules, and the Good
For many political philosophers, the quest for political truth starts with figuring out what behavior is moral. Think about this for a moment. The study of politics begins with the study of individuals—who are we, what is in our hearts, how do we use our minds, how do we make moral decisions, are we inherently sociable or violent? These are delicate questions, but we have to understand that individual morality is at the heart of the big political questions. What makes political philosophy political is that it considers what types of rules a society should adopt to achieve what its people, as moral individuals, think is good. Morality, rules, good: These are the three basic ingredients in play.
If you follow scandals among contemporary American politicians, you might not think moral behavior and government go together. People in government do a lot of very bad things; they always have, and they always will. Some of the worst evils governments have committed arose from attempts to legislate morality. Yet many important, desirable rules about behavior within a society are made and enforced by government. Murder and blackmail are illegal, and that’s a good thing. Perhaps government is simply people’s collective way to recognize and reinforce what they were already doing peacefully and cooperatively anyway. Murder and blackmail were wrongful acts before they became illegal. Government can codify and perhaps even promote the framework of rules within which people in a society cooperate, prosper, and flourish in any number of ways that they, as individuals, believe are good.
It sounds rather simple in that light, this whole political philosophy endeavor. Choose the good, eschew the bad. But the devil is in the details.
In this chapter, we ask you to follow a brief tour of the history of Western political thought, from the ancients all the way up to the twentieth century. To make it fun along the way, and to grasp the details of our philosopher friends much better, we also tour their historical context. The societies in which they lived and the events of their times influenced the ways in which their ideas were founded, nurtured, and either accepted or rejected, often with horrible violence. Ideas have consequences. Circumstances do, too.
To lay this foundation for the rest of the book, we begin where the philosophers begin.
The Greeks and the Idea of a Democracy
Every art and inquiry, and similarly every action and intentional choice, is held to aim at some good.
—Aristotle, Nicomachean Ethics
Some of the earliest and most influential philosophers thought a lot about the best form of government and how people should live within a society. These thinkers include Socrates, Plato, and Aristotle, otherwise known as the primary contributors to the School of Athens.
As is often the case with ideas that change the world, the historical, cultural, and physical settings matter. The physical setting was the land of Homer’s Odyssey, among the city-states of ancient Greece. The historical setting was Athens of 470–430 B.C.E., a brief period of peace and prosperity marked by war both before and after and one of the most celebrated societies in history. The war (490–470 B.C.E.) that preceded this era saw Athens and Sparta join forces to avoid becoming the latest addition to the Persian Empire. The peace that followed soon gave way to the Peloponnesian War (430–400 B.C.E.), in which the former allies Athens and Sparta fought each other.
The School of Athens flourished during this brief era of peace, as did the society itself. The city-state of Athens had a prosperous economy for the time, using its port and navy to trade with neighbors. But it was the type of government that was unique. Athens had one of the “purest” democracies in world history. This observation merits some clarification, however, as women, slaves, and foreigners did not participate in the political process. Athens was a pure or direct democracy in the sense that all free adult male citizens could participate in the general assembly, which voted on a variety of matters small and large. There were no representatives, as everyone simply represented himself. Nor was there a president, an executive branch, or any alphabet soup of executive-branch agencies. There was a type of judiciary, a supreme court made up of perhaps a thousand citizens who rotated on an alphabetical basis and which, not incidentally, was rather hard to bribe with so many members. Democracy, indeed. Many political philosophers and even more politicians have commended the virtues of Athenian democracy, before moving on to argue for representative or monarchical government. Yet no society in history has been as famous or as democratic as ancient Greece, even though it was a remarkably brief period.
Looking back on this experiment in “pure” democracy, we may be tempted to thank the most famous Greek philosophers for their ideas. They might well respond with an “I told you so.” Socrates, Plato, and Aristotle certainly have unkind words for democratic institutions, and some modern scholars attribute the disappearance of democracy and its sluggish emergence in the West to these criticisms. At the least, the ideas of the School of Athens had a major influence on decisions about the best form of government in the history of Europe. Yet even that is understating their influence. Listen closely in political debates today, and you can hear the whisper of these ancient Greeks.
What is wrong with democracy? We turn first to Plato (427–347 B.C.E.). According to Plato, democracy is seemingly perfect because it reflects the will of the people. But it too easily turns to disaster, like anarchy or the rule of the mob. Exhibit 1 in Plato’s attack on democracy is the execution of his mentor, Socrates, by the Athenian “majority” that ruled the day. “I only wish it were so,” says Socrates as he nears death, “that the many could do the greatest evil; for then they would also be able to do the greatest good—and what a fine thing this would be! But in reality they can do neither; for they cannot make a man either wise or foolish . . .”1
Democracy is not the best form of government, Plato argues, because its end is merely freedom, not virtue, that higher value taught by Socrates. If they are focused on freedom, people are less likely to do what is right, or virtuous. Plato claims that a just society could be achieved if the people were truly virtuous, but they are not. Few achieve virtue. Those few, according to Plato, should lead.
To Plato, then, the ideal government requires that a philosopher become the king, or that the king become a philosopher. Surprisingly to the modern reader, Plato says that it doesn’t matter which of these two approaches is taken. This is because the philosopher who is properly educated and subsequently made king would make decisions for the benefit of all citizens and, by the power of the crown, would be sufficiently powerful to execute these decisions. Similarly, a king already has such power and, if subsequently educated, would produce the same benefit.
The philosopher-king might be a single ruler or even a small group of rulers. What matters to Plato is that they be properly trained. That is, those persons who Plato reckons should lead society are made, not born. The leaders would be properly educated and thereby deserving of their privileged position. As rulers they would be philosophers, so they would act in the best interests of all the people. Education and merit aside, the exclusivity—some might say elitism—of such a government is almost entirely foreign to us. There would be no private property among the ruling class, and there would be no formal means by which the rest of society could express their approval or disapproval of the rulers. No rulers would be voted off the island like some game show contestant. And no feedback would be solicited.
But we would be hasty to dismiss Plato’s model of government simply for being undemocratic. In fact, Plato offers a thoughtful critique of democracy (perhaps best thought of as “democracy gone wild”), and it’s a critique that has remained relevant for centuries. It was on the mind of the founders of the U.S. system. In the modern era, Plato also can be claimed as an ally of autocratic leaders and quasi-dictators across the world. In less-developed countries with poorly developed democratic institutions—from Africa to Asia to Latin America—many have exploited Plato’s virtue-over-freedom concern to establish rules that maintain a strong executive against a legislature or judiciary trying to limit their control. Nor are less-developed countries with inadequate political institutions the only places where one can see a powerful executive express concern about constraints imposed by democracy. Just look at the United States.
Supporters of President George W. Bush argued that the Twenty-Second Amendment, which limits presidents to two terms in office, made it difficult for the president to protect the United States from terrorist attack. Only a few years earlier, supporters of President Bill Clinton argued that he could, with or without support from Congress, send U.S. troops to Kosovo in an effort to prevent genocide. And President Obama reasserted the president’s right to carry out extrajudicial killings, while continuing his predecessor’s policy of holding suspected terrorists indefinitely and without trial. Various interests have argued that the “War on Terror” should allow the U.S. president to engage in conduct outside the scope of court review in pursuing and interrogating individuals, including U.S. citizens, who are deemed to be a threat to national security. In this modern incarnation it is security rather than virtue that leaders have used to justify ever-greater degrees of political power.
The branches of Plato’s core argument go in many directions, neither starting nor ending in the United States. But the philosophical root is the same. A strong leader, educated and virtuous, should protect the people and should not be constrained by the democratic masses or other institutions. Thus, you might invoke Plato if you are, for example, a president with an interest in taking some action that is politically unpopular or legally questionable, but that you think is important for your citizens to flourish. Or perhaps you want to protect oppressed people in a faraway country, saving innocent lives. You might want to save your country from recession, or save the planet from extinction, or even save your job in the next election. Or you might simply think that decisions about the big questions of governance should be made by the “best and brightest” in society. In short, many of our modern arguments about limits on political institutions in general and democracy in particular have their roots in Plato.
The ideas of Plato’s most famous student, Aristotle (384–322 B.C.E.) have had a similarly grand impact on political philosophy. Like Plato, Aristotle also is concerned about the good and the conditions needed to achieve it. Their differences are notable, too. In terms of political philosophy, Plato emphasizes the need for education, especially for the rulers, while Aristotle stresses the need to overcome moral weakness.
Aristotle is famous for many insights, including his advice for how to live a virtuous life. He recommends making decisions in accordance with a “golden mean”—the avoidance of extremes in favor of a middle or moderate position. Aristotle also applies the “golden mean” concept to political philosophy. There is a “golden mean” between rule by the elite and rule by the mob, a type of constitutionally limited government that lies between aristocracy and pure democracy. But living in accordance with the “golden mean” does not, in the philosophy of Aristotle, lead one to advocate democracy. Rather, he prefers aristocracy and is greatly troubled by democracy.
To see why Aristotle prefers aristocracy, let us consider his approach. He places along a continuum those governments that are most likely to bring the good, or virtue, to the most people. These are good governments. Then he lists those that do not bring the good, which are the bad governments. As shown in Table 2.1, the bad governments include tyranny, oligarchy, and demagogy. The good governments include monarchy, aristocracy, and some form of limited democracy. All of the good forms of government are good only if the rulers are virtuous.
It is important to note that the number of rulers does not necessarily imply good or bad government. A monarch who does not act with virtue and abuses the people is a tyrant. An aristocracy that does the same is an oligarchy. A well-governed and limited democracy that wanders away from virtue heads toward demagogy. While some might call this latter condition a state of anarchy, the label is misplaced, as anarchy implies no government, while demagogy implies the presence of a government, only one that essentially is “led” by everyone and is, thus, without order.
Aristotle argues that, in a sense, the best form of good government is monarchy, but when it goes bad and becomes tyranny, it is the worst of the bad. The problem is that the temptations for a king to move in this direction are strong. Similarly, democracy gives way far too easily to anarchy.
One could argue that the modern’s penchant for democracy simply represents a millennia-long evolution along Aristotle’s continuum, from monarchy to aristocracy to democracy. But this would not be Aristotelian. Rather, Aristotle’s golden mean is in the middle, with aristocracy. If we focus on the choice among good governments and, at the same time, recognize the tremendous costs that accrue when these governments go bad, then the golden mean appears reasonable, as it does to Aristotle. The ideal is a small group of leaders, educated and virtuous. It’s a position somewhere between Plato and the modern political world.
Table 2.1. Forms of government in classical thought.
Today’s developed democracies don’t give much attention to monarchs versus aristocrats, tyranny versus virtue. But the tensions between Plato and Aristotle are still evident. Take, for example, the modern approach in the United States to blend expertise with power, as evidenced by the growing list of policy areas to which the White House has assigned top administration appointees (known ironically in the news media as “czars”).2 Between them, Presidents George W. Bush and Barack Obama have appointed a combined 113 people to posts that include the well-known drug czar, intelligence czar, and climate czar. There are also czars for weapons, war, terrorism, manufacturing, green jobs, AIDS, global AIDS, bird flu, mine safety, food safety, copyright, and autos. There are even czars for faith and reading, along with czars appointed for executive compensation, bank bailouts, and stimulus accountability. Not to be outdone, Congress has given experts the power to govern areas of life that include regulation of markets, disaster aid, retirement pensions, agriculture subsidies, tax credits for everything from child care to divorce, and far more.
The contribution to political theory made by the Greeks is dwarfed only by their contributions to philosophy in general. In the practice of politics, Athens provides one of history’s clearest examples of direct democracy. But it is the theory, the ideas, that have been most influential. Plato and Aristotle offer harsh criticism of the Athenian model, casting a skeptical eye on democratic institutions and influencing ideas about government for over 2,000 years. Their ideas still influence us today.
The Romans and the Idea of a Republic
Apart from ancient Greece, few other societies contributed more to early political thought than ancient Rome. While Rome was one of the first societies to be influenced by Greek thought, its early political organization in fact preceded the School of Athens and endured in one form or another for much longer, almost a millennium. The reign includes the Roman Republic (509 B.C.E.–49 B.C.E.), followed by a period of conflict and transition (49 B.C.E.–29 B.C.E.) and the Roman Empire (29 B.C.E.–476 C.E.). While the fall of Rome in 410 C.E. is often cited as the beginning of the end of the Roman Empire, it is worth noting that this was the first time in nearly 800 years the great city had been successfully invaded. There was something particularly enduring about this society.
The Roman Republic began with the fall of a monarch in 509 B.C.E. The Senate, which had existed in a weak form under a strong monarch, assumed control. A leader from the Senate would be named consul, later to be called praetor, and would assume executive responsibilities. The Senate itself carefully defined these responsibilities, and a Roman “executive” in this era had little in common with the executive branch of modern governments. But for many centuries, this arrangement allowed the Senate to provide a political counter to continuous rule by a single monarch. Members of the Senate were aristocrats of noble birth and significant land holdings. They were complemented by assemblies that granted representation to talented but nonaristocratic members of Roman society, called plebians, and other assemblies that had less-expansive authority but even broader representation of citizens.
It is this Roman experience—including its ideas about government and how this government worked in practice—that has influenced political thought across centuries. And it is one thinker in particular, Marcus Tullius Cicero (106 B.C.E.–43 B.C.E.), who did the most to communicate its ideals. Cicero lived at the tail end of the Roman Republic, and he died as the Republic was dying. It was in this era that Julius Caesar assumed powers of a dictator, with the ability to appoint additional members to the Senate and even veto its decisions. In the civil war that engulfed Rome following Caesar’s assassination, Cicero would be one of its most prominent victims.
Though he was a skilled politician, it is Cicero’s philosophy of politics that has endured. He wrote two books that specifically address political philosophy. Neither has survived fully intact, but excerpts from the writings show a mind grasping at the question of the best political order.
Given that this question of the best political order was addressed by the Greeks, it is not surprising that Cicero has a decidedly Greek approach, though one tailored to the Roman experience. He studied under schools that claimed to be descended from Plato. Like those of Plato and Aristotle, Cicero’s ideas reflect a strong dose of skepticism, as well as the sense that life should be based on reason, not pleasure. As a good skeptic, Cicero doubts the certainty of any particular philosophy. As a successful politician, he seeks to pick ideas that would work to create a better society.
Cicero starts by examining the proper nature of a commonwealth—an assembly of people who associate with respect to the administration of justice and the common good. Like his Greek forebears, he recognizes that a commonwealth may be a monarchy, aristocracy, or democracy and that when they go bad their respective counterparts are tyranny, oligarchy, and demagogy. He observes that, because of the risks associated with any one form of government, a successful regime includes a mix of all three. That is, the best government would combine a king (monarch), with some authority granted to nobles (aristocracy) and other matters left to the people (democracy). The title of Cicero’s first book, Republic, indicates where he is going, while the title of his second, Laws, reflects the importance of a set of rules that enforce and maintain that type of good government.
While the concept of a republic as presented by Cicero is not identical to what latter political theorists would envision—including James Madison’s conception of the American republic—some elements are clear. A republic is neither a monarchy, as most governments known to the Greeks and Romans had been, nor a direct democracy in the style of the Greek city-states. It is a democracy with some degree of representation. This observation surely would have been obvious to the Romans, who had been living with their republic for almost five centuries. But Cicero adds something more. He is clearly aware of a decline in the ideals of the Roman Republic, and it would be but a few years after his death that the Roman Republic became the Roman Empire.
It is in this criticism and concern that Cicero articulates one of the most important concepts in political philosophy, the balance of power. He is the first philosopher to very clearly do so. The idea of a balance of power was unique because it went beyond the mutually exclusive types of government—monarchy, aristocracy, or democracy—to a careful mix of these or similarly powerful and competing institutions. The challenge, then as now, was to ensure that no single person or institution of government had too much power. This balance of power within representative democracy would later be recognized as a key element to many successful political systems, to government based on a republic.
It should be noted that a republican form of government does not mean a government run by Republicans, as that label is understood in the present-day United States, any more than a democratic form of government means a government run by Democrats. In the United States, Republicans represent an evolving set of political principles held by politicians who have included Abraham Lincoln, Dwight Eisenhower, Ronald Reagan, George H. W. Bush, and George W. Bush, while Democrats likewise represent an evolving set of political principles held by politicians who have included Thomas Jefferson, Franklin Delano Roosevelt, Jimmy Carter, Bill Clinton, and Barack Obama. In contrast, democratic and republican forms of government are ideal types, against which real governments may be compared. Because they are run by imperfect and fallible human beings, real governments are never ideal governments. The Roman model was no exception.
It would be foolish, therefore, for Republicans in the United States to present themselves as modern-day Romans and just as foolish for Democrats in the United States to style themselves as modern-day Greeks. On the other hand, both Greek and Roman influences pervade Western political systems. For example, the American Founders designed a representative government with a strong emphasis on checks and balances among competing institutions. Within the legislative institution, the more exclusive branch, often called the most exclusive club in the world, is the U.S. Senate, named after its Roman counterpart. A tour of Congress reveals exhibits and materials that show a clear philosophical lineage back to Greece and Rome. One can even see the Greco-Roman influence in the architecture of capitol buildings in Washington, D.C., in the American state capitals, and in many parts of Western Europe as well.
Cicero tried to save the Roman Republic, but he was too late. While many scholars have sought to understand why Rome fell, an equally valuable question is why its republican form of government endured for half a millennium, followed by an empire for another 500 years. Put in modern terms, what did the Roman republic do particularly well? What mistakes were made that modern society would be wise to avoid?
Some of the wealthiest and most stable democracies in the world have answered the first question by applying key elements of the Roman system, with a republican form of government and, importantly, a careful balance of powers. With regard to its failures, plenty has been written, including Edward Gibbon’s classic, The History of the Decline and Fall of the Roman Empire, published in 1776. While Gibbon takes six volumes to provide a complete answer, suffice it to say that he casts a lot of blame on a loss of virtue among the citizenry—a critique one might expect from the Greek philosophers—along with the outsourcing of military services to mercenaries, a decreased interest in worldly affairs, and greater concern for the afterlife due to the rise of Christianity in the empire. In fact, religion would play a key role in political philosophy in the years to come.
The Middle Ages: Monarchs, Popes and Political Thought
After Rome fell, the rules of politics were set not by a strong central government but by small, unconnected societies scattered across the former empire. The Catholic Church would be perhaps the most powerful political force in the region for the more than 800 years known as the Middle Ages. In addition to substantial political power, the Church held a virtual monopoly on the training of intellectuals—almost all of them monks and priests—and thus largely controlled the development of new ideas, whether in theology, philosophy, or politics. Like most monopolies throughout history, it was not a source of great innovation.
Two of the most important Church philosophers of the Middle Ages also serve as bookends for the period. Writing near the beginning is St. Augustine of Hippo (354–430). Near the end is St. Thomas Aquinas (1225–1274). Both play key roles in shaping theological as well as political thought.
St. Augustine is one of the most prolific writers and deepest thinkers in the history of Christianity. His many contributions cover important issues of the day, such as the concept of original sin, free will, and the relationship between faith and reason. But Augustine’s insights on politics play a key role in Western thought as well. He views the Church and state as separate authorities, with the Church responsible for the Heavenly City and deriving its authority from God and the state responsible for the Earthly City. His ideas would strengthen the Church as compared to other institutions of the day, especially monarchies.
In one of his more famous works, The City of God, Augustine responds to the argument that Rome fell because of the rise of Christianity. In doing so, he shapes an argument about the proper role of the state, drawing on his broader worldview that situates the Church as the central human institution. That view was to hold sway for a thousand years.
Augustine’s argument encompasses the Church, the State, the Heavenly City, and the Earthly City. The Heavenly City is that which awaits those who live according to the Christian faith, while the Earthly City is for those who live only for this present life. The Church and State set rules for individuals to live their earthly lives, but only the Church extends its concern to earthly conduct that will get one to heaven as well. Augustine is skeptical of the State, considering it far too susceptible to human sinfulness, much as the Greeks worried about human selfishness as an impediment to a successful democracy. He pays less attention to human imperfections within the Church itself. As we’ll see in Chapter 3, the mainstream of economic theory in the twentieth century also would pay little attention to human imperfections within political institutions.
In effect, the European political system during the Middle Ages was comprised of two institutions that would maintain an uneasy balance. One was led by a pope, while the other was led by an emperor or monarch. For most of the period, few thinkers looked on the Church with open criticism, probably because they were affiliated with it. And few thinkers bothered to look critically at the role of government, apart from jealously guarding papal interests as against the emperor or monarch. With a monopoly stranglehold on the marketplace of ideas, change would come slowly.
As the most important philosopher at the end of the Middle Ages, St. Thomas Aquinas (1225–1274) is an early example of the Church scholars known as the Scholastics, who emphasize the integrity of the individual in social thought. His influence is so great that Aquinas remains today a significant force in Catholic theology, and his political thought plays the pivotal role, more than anyone else of his day, of rediscovering the philosophy of Aristotle for the Christian world. The Crusaders returned from Muslim lands with Arabic translations of Aristotle. In addition, monks in Toledo translated the Arabic versions of Greek philosophy that already had become part of the Islamic Golden Age. These works influenced Aquinas and other scholars of the era, who in turn would affect Christian thought for centuries.
If we examine the life and works of Aquinas through the economic lens of Lionel Robbins, it makes sense that his political philosophy is remarkably Aristotelian. As a Catholic at a time when the Church was splitting, Aquinas may see the theme of Aristotelian balance as an advantage to his arguments about the best political rules. He argues that, just as the Church has authority, so should some men rule over others, owing to their superior virtue and knowledge of the good. A monarchy is the best form of government in theory, but it degrades to the worst form when the king eschews virtue. Given human nature, the best form of government, therefore, balances monarchy, aristocracy, and some form of democracy. In short, it produces a type of political Aristotelian mean that is reminiscent of Cicero’s justification of the Roman forum.
It is of no small consequence that Aquinas and the rest of the Scholastics are sympathetic to interests of the pope over that of kings. But in framing their arguments, they also tend to advance the interests of people ruled over by both popes and kings. Given the papacy’s competition with monarchs for political control, this is good politics, as it helps place the crown in a more subordinate position relative to the papacy. This is a significant step because it implies that the king is not automatically good. Justice, in other words, may depend on countering the power of kings. With this relative weakening of the crown, however, over time democratic institutions that were more representative of the people emerge to challenge both kings and popes.
Aquinas goes so far as to argue that under certain circumstances it may be proper to overthrow a king who had abused his power and was, much as Aristotle might have said, not good. Of course, it was not the case that kings and queens were suddenly at risk of being deposed by unhappy subjects, and Aquinas clarifies that the Church and it alone was to pass judgment on an unjust monarch. Nonetheless, the idea that a monarch could be judged by any mortal, even the pope, is an important step toward checks and balances against the abuse of power.
The Middle Ages saw the rise of ecclesiastical authority over the authority of kings, which helped lay the moral groundwork for future political ideas that would limit and separate political power. These ideas were becoming institutionalized during Aquinas’s lifetime. Most significantly, in 1215, the Magna Carta limits the power of kings by granting certain rights to subjects. The Magna Carta is, of course, largely considered the foundation of constitutional law in the English-speaking countries of the world today. The English cherish it as the foundation of their democracy based on common law and fundamental rights. The U.S. Capitol displays a copy of the Magna Carta document for all visitors to see. Such is the reverence in the United Kingdom that, when this country was considering whether to lengthen the time a suspected terrorist could be held without charge, one prominent politician referred to it as “the day the Magna Carta died.” The originally specified rights have evolved to serve more as general principles than specific political rules, although certain rights like habeas corpus and limits on eminent domain are direct descendants with practical relevance to the balance of the individual rights against government (whether in the form of a king, prime minister, or president), even eight centuries later.3
The Renaissance: Romance and Realism in Politics
Many have imagined republics and principalities that never really existed at all. Yet the way men live is so far removed from the way they ought to live that anyone who abandons what is for what should be pursues his downfall rather than his preservation; for a man who strives after goodness in all his acts is sure to come to ruin, since there are so many who are not good.
—Niccoló Machiavelli, The Prince
The European Renaissance of the fourteenth through the sixteenth centuries is largely seen as a rebirth of thought in theology, philosophy, and politics (the word renaissance literally means “a new birth” in Italian). It shaped art, architecture, literature, science, and religion in enduring ways. It also influenced politics. Perhaps no political thinker is more identified with Renaissance thinking than is Niccoló Machiavelli (1469–1527). He is history’s greatest political realist. Francis Bacon (whom we’ll meet presently) certainly thinks so, describing the world as indebted to Machiavelli for writing about what people do, not what they ought to do, as Machiavelli’s most famous work, The Prince (written in 1513, published in 1532), bluntly renders matters in the quotation opening this section.
For almost two millennia before Machiavelli, Western political thought was heavy on romance, neglecting to question whether it is in the interests of rulers to pursue the good. By examining the ruler’s tradeoffs when considering different courses of action, Machiavelli may be the first philosopher of political economy—in the parlance of today’s social sciences, he uses “positive” theory (what is) rather than “normative” theory (what should be). And being the first philosopher to eschew the idealistic in favor of the practical, Machiavelli’s ideas changed the way the world looks at politics. The most authoritative translation of Machiavelli’s The Prince states that it is “the most famous book on politics when politics is thought to be carried on for its own sake, unlimited by anything above it.”4
Machiavelli’s fame endures more commonly in the expression “Machiavellian,” often used to refer to a win-at-all-costs politician, a scheming professor in a university academic department, a backstabbing co-worker, or even that meddling member of your homeowners’ association. But these pejoratives are mostly unfair because they fail to appreciate Machiavellian means versus ends. When Machiavelli writes of ends, they are generally of the sort that would be admired by the modern reader. But when he speaks of means, we are shocked, shocked! Perhaps this is because he is the first to do so in such a candid and direct way.
Machiavelli’s honesty is seen most clearly in The Prince, his most famous and most hastily written work. Here, he writes to the teenage Prince Lorenzo de Medici, newly installed as the Florentine leader and holder of Machiavelli’s fate as the latter writes from a prison cell. Gambling mightily, Machiavelli decides to tell his audience the brutal truth: that all of political philosophy is flawed because it offers no practical insight about how to act in the real world. Rather, classical political thought is too focused on theoretical models, on ideals.
A clear example of this excessive focus on ideals is Plato’s allegory of the cave. Plato’s lesson is that politics should be guided by a “reality” that is not seen except by those few who are able to escape from the cave. This is Plato’s model of the enlightened leader who is supposed to understand the world as it really is. But in the real world there are no leaders who are so thoroughly enlightened. Thus, what Plato offers is not realism; it is idealism of the first order.
Machiavelli is a radical departure from Plato. In understanding republics, or any form of government in which real, fallible human beings rule we should not abandon “what is for what should be.” The practical lesson is to recognize the limits of good intentions. This is especially true in politics, where good intentions and true friends are fleeting. As two former U.S. presidents, Harry Truman and Bill Clinton, were fond of saying, if you want a friend in Washington, get a dog.
A deeper lesson, perhaps, is that circumstances of time and place limit the ruler’s ability to pursue the good. Sometimes a little wastefulness and injustice is the least negative course of action. Conditions aren’t always favorable to rule as a philosopher-king would. One is not to make a profession of pure goodness but to make a profession of acting wisely in a world full of both good and bad people who are doing good and bad things. The point is to succeed in navigating such a world. Do the “right thing” by acting and speaking nobly and truthfully, but only when this makes it possible to achieve one’s ends. When necessary, you must know when, and how, to employ dark means and make a deal with the devil—or one of the many corrupt popes in those days, or even a foreign prince if he has enough armies.
In The Prince, then, Machiavelli provides one of the first and most famous primers on the means to political advantage. Then as now, however, the means we use to gain such advantage and promote our goals can be a force for good or evil, so we would do well to understand the process by which this change occurs. In this sense, Machiavelli provides a blueprint for entrepreneurship in social and political change, a theme we take up in Chapter 5.
But Machiavelli offers more than a means for negotiating one’s way in the world. He also offers a more general framework for good government. To see this, however, one has to read his less famous work, The Discourses. There, he sets out the basic elements of his ideal form of government. Unsurprisingly, it is heavily influenced by Greek and Roman thought, especially the latter. Democracy is good, but it can be unruly. Monarchs may be wise, but they are often tyrants. A better government does not give too much power to one group but instead balances monarchy (princes), aristocracy (nobility), and democracy (the people as a whole). In so doing, Machiavelli sets forth the idea of checks and balances, an idea that goes at least to Cicero and (as we’ll see presently) that Locke and Montesquieu would advocate more formally in coming centuries, all of which would influence the American Founders. Thus, while most people think the Machiavelli of The Prince explains the cutthroat politics in their nation’s capital, Machiavelli of The Discourses also says much about the best rules for the political game when looked at realistically instead of romantically.
The Spanish Scholastics: Early Interest in Individual Rights
We’ve already previewed the Scholastics’ intellectual tradition, initiated primarily by St. Thomas Aquinas. In the sixteenth century, this intellectual tradition was reinvigorated by the Spanish Scholastics, in what is sometimes called the School of Salamanca. They rose to prominence in the early to mid-1500s, as Spain grappled with questions related to its expanding empire. Francisco de Vitoria and the Jesuit scholars Juan de Mariana, Luis de Molina, and Francisco Suarez are counted among its most famous contributors.
Like Aquinas, the Spanish Scholastics advocate a doctrine of natural rights based on a mix of revelation and reason. What is most significant, however, is that these thinkers extend this concept of rights to individuals outside of their own society, with remarkable results. Specifically, Spain is the first empire in history to seriously question its conquest of other lands and other peoples.
Aiming their pens at the papacy and the Spanish Crown, the Spanish Scholastics argue that the natural rights of individuals are not to be taken from them by anyone, including the Church. They further argue that these rights are inherent to the individual and exist regardless of the individual’s sin or lack of grace. Among these fundamental rights is the right to one’s own person—such as the right to not be a slave—and the right to one’s land and possessions.
Prior to the Spanish Scholastics, it was unheard of to argue for such rights for the subjugated peoples of conquered lands. No less an authority than Aristotle presents two contrasting forms of human existence, master and slave. Ironically, it is that famous Scholastic, Aquinas, who helps reintroduce Aristotle to European thought. Yet Aristotle’s position would hold sway for another three centuries in many parts of Europe and the Americas. The Spanish Scholastics of the sixteenth century simply were ahead of their time, planting the seeds of future rules by engaging the philosophical and moral ideas of their day.
The impassioned and forceful arguments of Vitoria on behalf of people who were not his countrymen—but were subject to the rule of his countrymen—have led a number of observers to call this Spanish Scholastic the father of international law. Others in this school of thought argue for the rights of the individual within a country. In particular, Juan de Mariana is remembered today for arguing that a ruler who had become a tyrant could be deposed, including by force.
While less directly related to political economy, the Spanish Scholastics also make contributions to economic theory, especially in the area of money and inflation (and as gold flows in from the Americas, they have much to study). They also offer an early defense of usury. So valuable were these insights that some scholars argue that it is the Scholastics of Spain, rather than the Calvinists of England, who do the most to lay the intellectual foundations for capitalism. At the least, they are laying the groundwork for a deeper appreciation of individual rights in political philosophies to come.
The Enlightenment: Individual Rights Meet Social Contracts
The Age of Enlightenment is known for its seminal contributions to philosophy and subsequent influence on political discourse. A hundred years earlier, Machiavelli had broken new ground in turning political thought toward realism, though it cannot be said that he changed philosophy itself. That would be left to Francis Bacon (1561–1626) and René Descartes (1596–1650).
Bacon is seen by many scholars as the first to argue generally that ideas based on reason should replace ideas based on faith. Perhaps his most important contribution to philosophy is empiricism, which emphasizes rational thought and use of the scientific method (building on Galileo and the Renaissance scientists). Bacon’s ideas are not only a big step away from Church authority; they are a necessary step for the scientific and industrial revolutions to come.
Descartes is to France what Bacon is to England, a major philosopher who helps liberate inquiry from the limits of mysticism and idealism. Whereas Bacon introduces empiricism, Descartes opens the door to rationalism, based on Cartesian logic. His focus on the individual as a rational being is a philosophic concern more than a political one, but it affects political philosophers to come. From Descartes, the individual can recognize him- or herself as a rational, thinking being apart from the rest of the world. Ultimately, Descartes establishes the individual as the starting point of all modern philosophy and the end to which all political philosophy must lead. This is a leap of historic proportions, and, as we’ll see in the next chapter, starting in the 1870s all of economic theory begins with the analysis of the individual.
For political philosophy as well as science, Bacon’s empiricism and Descartes’ rationalism provide the foundation on which future thinkers will build. By replacing revelation based on scripture with reason based on observation, they change philosophy and science. They also open the door for political philosophers to argue that laws should be based on reason, not revelation, and help further the argument that rights should attribute to individuals. Some of the most important political philosophers in history will make their contributions in the wake of these changes.
The State-of-Nature Approach
One example is Thomas Hobbes (1588–1679). Here is a leading representative of a key branch of political philosophy, one who sees government as a necessary element to create order in civil society. Hobbes’s view of human nature is important because, unlike Aristotle, he does not see humans as essentially political beings. Rather, he sees them as fearful, with fear of a violent death especially relevant. For those in the state of nature, there is no protection from the aggression of others and thus no incentive to plant that which may be sown by others or to build anything that may be taken by others. Property cannot exist in such a state. Conditions would be bleak, a war of all against all, and hence Hobbes is most famously remembered for his commentary on the state of nature prior to civil society, in which life would surely be “solitary, poor, nasty, brutish, and short.”
Hobbes argues that to ensure protection and establish peace—goals that would later influence the American Founders—there must be a mutual but minimal laying down of rights. That is, each person must give up as much freedom as every other person, starting with the right to kill the other. This mutual agreement to ensure self-preservation is the basis of the social contract, which for state-of-nature theorists like Hobbes makes civil society possible.
In giving up rights, Hobbes explains, a certain amount of power is relinquished to a government or sovereign. The sovereign is to protect the rights of the citizens, and the citizens are to respect the legitimacy of the sovereign. In fact, the citizen is to submit entirely to the sovereign, limited only by the right of self-preservation. Hence, a subject cannot be made to kill him- or herself or testify against him- or herself. Hobbes recognizes the enormity of the power to be given to this governing entity, which he compares to Leviathan in the Book of Job. (The notion of Leviathan as a powerful, imposing government is another way Hobbes’s thought has worked its way into modern language.)
Like the Greek and Roman philosophers, Hobbes looks at different government types, including monarchy, aristocracy, and democracy. But unlike Aristotle or Cicero, he is not terribly worried about a monarch turning into a tyrant. To Hobbes, the monarch, especially one who can expect to be succeeded by his or her heirs, has private interests that align with the interests of the people. Leading a country to ruin would also ruin the monarchy, and hence a monarch will avoid such folly. One wonders if North Korea’s Kim Jong Il or Zimbabwe’s Robert Mugabe got the wrong message from Hobbes during their princely educations.
Hobbes is less sympathetic to democracy. He argues that a democracy involves multiple leaders and factions, with ever-changing interests and allegiances that seldom serve society as a whole and often degenerate into anarchy. Aristocracy falls somewhere between monarchy and democracy, with some of the strengths and weaknesses of each. In this sense, then, Hobbes has something in common with Aristotle.
In practice, however, Hobbes’s loyalties are clearly with the crown. He lived in the days leading up to the Glorious Revolution of 1688, when the English crown ceded significant power to parliament. He knew Charles I and spent time in exile in Paris with Charles II. Hobbes is skeptical of the balance of power across government, such as between a king and a parliament, exactly what the Glorious Revolution helped achieve. To Hobbes, the English Civil War is a classic struggle for power between the king, the lords, and the parliament. The inevitable result of such a struggle is anarchy, which makes shared powers no better than the pure democracy that ultimately begets anarchy. To illustrate the perils of democracy, Hobbes translates Thucydides, the Greek historian of the Peloponnesian War. Hobbes hopes the Athenian democracy’s loss to Sparta will encourage the English to favor monarchy over democracy. It didn’t.
If Hobbes is the philosopher most closely associated with a powerful government, John Locke (1632–1704) is the philosopher most closely associated with a limited one. He builds his theory of government in response to Hobbes, with whom he vehemently disagrees. But Locke’s is not a minor difference of opinion; it is a radically different worldview.
Perhaps surprisingly, Hobbes and Locke start with similar opinions on the origins of government. Like Hobbes, Locke views government as a product of a social contract. This is in contrast to the view of government as established by God, a favorite argument of monarchs and those who favored the divine right of kings. Hobbes and Locke offer the view of humanity emerging from a “state of nature” and establishing a social contract. Both the divine right of kings and the social contract give legitimacy to government as well as a reason to obey it, but for very different reasons.
Like Hobbes, Locke assumes an original “state of nature” that precedes the state itself. Everyone in this state of nature owns or has property in his or her person as well as his or her labor. All other property, such as that which an individual discovers or creates, derives from this fundamental notion of property. Similar to Hobbes, Locke sees that the challenge to the individual in the state of nature is to protect property in him- or herself and that which he or she has created. To some extent in Hobbes and even more in Locke, property rights also are seen as a means to address scarcity, an economic reality in all societies.
Locke sees all humans as being inherently equal, and in this he would greatly influence the American Founders. By equal, Locke means equal in rights, not ability, and he plants the seed for the notion of equality before the law. More importantly, Locke is distinguished from Hobbes on the allocation of power under the social contract. Hobbes sees individuals coming to an agreement in which they vest a king with sovereignty and, in return, the sovereign protects their rights. Locke sees individuals coming to an agreement in which the rights of the individual to live exactly as he or she pleases is subsumed into a larger whole in order to protect those rights, with this larger whole also recognizing the rights of all other members of the community. Hobbes’s sovereign is not party to the social contract but instead is the all-powerful recipient of authority to govern. Locke’s government, in contrast, is party to the social contract. By implication, a Lockean government may be legitimately overthrown for failing to abide by that social contract.
Hobbesian ideas have taken a backseat to some of Locke’s work, especially the ideas put forth in Locke’s Two Treatises of Government. The First Treatise provides a refutation of the argument for divine right of kings. Having sufficiently attacked the argument for monarchy, Locke proceeds in the Second Treatise to provide his own approach to government. Today, students of political philosophy often bypass the First Treatise and head straight into the Second Treatise of Government. It is here that one sees clearly the fundamental difference between Hobbes and Locke. Hobbes’s tradeoff between anarchy and order contrasts with Locke’s tradeoff between liberty and oppression. It is in this sense that Locke is sometimes referred to as the first political philosopher of liberty.
On the other hand, Hobbes has not exactly gone out of fashion. In fact, it is common for political leaders—usually those in the executive branch—to invoke a concern about a state of anarchy as they claim more power, reminiscent of Hobbes. The modern student of political philosophy again is likely to think of George W. Bush and the suspension of habeas corpus for suspected terrorists. This is a classic example of the emphasis on order at the expense of liberty. But, again, this is not a historical first for the United States. At the start of the Civil War, Abraham Lincoln suspended habeas corpus in Maryland in an attempt to limit insurrection and restrict those who were likely to encourage that state to secede. During World War II, Franklin Delano Roosevelt oversaw the forced detention without trial of tens of thousands of Japanese Americans. It is an old debate about anarchy versus order.
The Emergence of Political Economy
While seventeenth-century England witnessed a rich debate between Hobbes and Locke, more than just the English made important contributions to political philosophy. In particular, a Frenchman, Montesquieu (1689–1755), writes admiringly of the English political system and was soon admired by those who would establish the model of government adopted by the English colonies in America.
Like Locke and Hobbes, Montesquieu sees human development progressing from primitive relations among individual savages to association in groups, with government emerging to address conflicts within or between groups. He provides a critique of the different forms of government, including a monarchy and a republic, and emerges with a model that is somewhat similar to but more developed than that supplied by Locke. Like Machiavelli, he rejects the Aristotelian approach of evaluating a government based on the virtue of the rulers, as in a king versus a tyrant.
Montesquieu instead provides key details about how a republic may be structured. For a democratic as opposed to an aristocratic republic, the people delegate to their representatives the authority to make certain decisions, such as those related to foreign affairs. These representatives should be chosen from those with a minimum amount of wealth. However, participation in the judicial system, as in serving on juries, should be open to all citizens. The model has important democratic elements, but with limitations, and it is far from being a direct democracy.
Montesquieu also takes the division of power further than Locke and much further than Aristotle. In the Aristotelian model, there are executive, judicial, and deliberative (or legislative) roles, but these need not be distributed among different branches of government or even among individuals. Locke argues strongly for a division of powers, but the executive and judicial roles are to be combined. In contrast, Montesquieu stresses the value of clear separation of executive, judicial, and legislative functions. The U.S. experience flows directly from this insight.
Still another Enlightenment thinker who would influence the political rule-makers of his day is one of the most influential philosophers of all time, David Hume (1711–1776). In his lifetime, Hume was known for his six-volume History of England. Today, he is known more for his many contributions to philosophy, ethics, and political thought.
With regard to political economy, Hume is often remembered for his remark that reason must be a slave to passion. It is easy to take this comment out of context, as Hume does not make of it what later thinkers, especially Rousseau, would make of Romantic philosophy. Rather, Hume builds on the arguments of Hobbes and Locke, arguing that what is good or ethical must be consistent with the passions. As we have seen, Hobbes views self-preservation as the greatest passion, with law deriving from the use of reason to preserve life. Hume disagrees, arguing that ethics does not derive from reason applied to the passions, but is itself derived from passions, or what Adam Smith would call moral sentiments.
Hume also differs from Hobbes and Locke in how he views the “state of nature” and the emergence of society. He argues that the benefits of working together to protect rights to property and life, as well as the benefits of the division of labor, are not obvious to those living in a state of nature. Rather, people first form families, a consequence of sexual desire, and only then do the benefits of association begin to be obvious. With time, the benefits of reciprocity become clear, especially in a world of scarcity.
In the course of living in society, we of course are self-interested, but the position of Hobbes and Locke that there is a “selfish” system of morals is not quite correct, not in Hume’s view. Rather, we recognize injustice when others fail to reciprocate or honor contracts, and we sympathize with others who are treated this way. Over time, a sense of right and wrong develops among the majority of the people. This ethical system is, nonetheless, beneficial to those who participate in society and thus is in some sense derived from people’s rational self-interest. Government exists, Hume says, to enforce this emergent, organic concept of right and wrong; that is, to ensure justice.
The benefit of reciprocity and just conduct accrues to everyone in society and is in our self-interest. However, it also will be in one’s self-interest to take advantage of certain situations, often for short-term individual gain at the expense of the harmed party or parties. In other words, people can cheat instead of playing by the rules. This is Hume anticipating the free-rider problem (which, as we will see in Chapter 3, is a building block of market failure theory). In establishing a government, Hume believes that it is best to assume that all humans are self-interested, not public spirited. The law should not depend on benevolence instead of self-interest because the latter is likely to dominate. Unlike Locke, however, Hume does not construct a social-contract theory of government, in which government exists and is justified by the consent of the governed. He agrees that government probably first developed from the state of nature based on consent. But Hume points out that government as we know it today, and as it has been known in recorded history, is not based on such consent. Rather, one type of government replaces another within a society, or one society conquers another and imposes a new form of government. The individual members of the society were not asked, one by one, to consent and thus join the society.
While Hume does not adopt Locke’s “natural law” approach to government, he agrees with many of Locke’s conclusions, including the right of citizens to overthrow an oppressive government that does not meet its fundamental obligation to protect rights. As for how the government should be structured, Hume is not far removed from Hobbes and Locke. Power should be separated among a head of state (or monarch) and a legislature, which might include a smaller “aristocratic” upper body and a popular assembly. The separation of powers, with checks and balances, should help control the weaknesses of each power. If checks and balances are properly established, Hume thinks that even a society with a monarch at its head could advance the interests of all members. This led Thomas Jefferson to conclude that Hume had done more to advance the ideas of the Tories, with their traditional support of the English crown, than the Whigs, with their traditional support of the legislative branch having greater power relative to the executive branch. Hume nonetheless has more in common with the Whig philosopher John Locke, albeit without the social contract theory.
The Idealized State and the General Will
In contrast to the political philosophy of Hobbes, Locke, and Hume, but no less an influence on modern governments, is Jean-Jacques Rousseau (1712–1778). No other eighteenth-century philosopher stands more solidly against the Enlightenment. Rousseau argues that progress in the arts and sciences does not lead to a betterment of the human condition but instead to moral corruption. Nor was the moral, or the good, to be found in religious faith. In this regard, Rousseau accepts Hume’s skepticism. Unlike Hume, however, he does not seek to replace faith with reason, and in fact thinks reason inferior to the heart.
Rousseau starts with the state of nature, but unlike his peers he ends with an idealized state, one to act as a model for guiding efforts to reform the current conditions but not necessarily one intended to be achieved in practice. Whereas Hobbes sees life in the state of nature as brutish, Rousseau sees it as idyllic, sufficient to satisfy basic wants. Rousseau considers efforts to better meet human needs, such as through science and technology, to be futile, corrupting, and ultimately enslaving. His famous treatise, The Social Contract, thus begins with an even more famous phrase: “Man is born free, and everywhere he is in chains.”
The source of these chains, and thus the source of all evil, is property, which also is the starting point of society. With property, there can be no equality. Here one stumbles on the question of whether Rousseau means equality of result (indeed impossible when property exists) or equality before the law (possible, as described by Locke and others). Rousseau focuses on the latter, but ultimately produces a model that strives also for the former. In The Social Contract, he makes clear that the individual’s rights should be “alienated” to the whole community. The happy (if theoretical) result is equal conditions for all and thus no incentive for anyone to impose burdensome conditions on anyone else. Rousseau’s model contrasts vividly with the “inalienable” rights in the Declaration of Independence. It also differs dramatically from Locke’s or Montesquieu’s view of a government with a balance of powers emerging from the state of nature or even from Hobbes’s more tolerant view of a powerful government protecting against anarchy.
A closer parallel to Rousseau is found in Plato, especially in educating citizens to know and do the good, where the good is a means to freedom. Rousseau is fond of the democratic city-state as developed by the Greeks. He clearly prefers Sparta to Athens. In understanding Rousseau’s focus on the city-state, one sees why he considers democracy feasible. He recognizes the problems of monarchy, aristocracy, and democracy, and he views the best approach to achieve freedom partly to be determined by the size of the society. A larger population may need a more powerful government, such as a monarchy, but the risks to freedom would be greater. A city-state, with democratic government, is preferred. This democratic government does not, however, have the balance of powers addressed by Locke and Hume.
In Rousseau’s vision, the rights of individual citizens give way to the general will. This is not identical to the perfectly natural state of humanity, because there is more than one person in society and thus more than one will. Rather, the general will is only constrained by what all may want and thus is very natural or free. The state represents all members, which is what makes it legitimate. This perspective, which has profoundly influenced so many governments, does not tell the modern reader exactly what kind of government to support. Either an authoritarian system or a democratic one may be appropriate, as long as it represents the general will. That said, Rousseau argues passionately that democracy as practiced in most forms is illegitimate and too likely to be subject to self-interest. One can see why Rousseau prefers Sparta to Athens.
Rousseau is adamant that society must reflect the general will of the people, however difficult this is to define. While skeptical of monarchy, he nonetheless believes that a “great leader” may be needed to establish this ideal society. The leader will impose the rules necessary to advance the general will and establish a new, ideal regime. This is not an evolutionary process; it is a revolutionary one. Rousseau’s influence on the French Revolution is as clear as Locke’s influence on the American Revolution.
The tension between the philosophies of Locke and Rousseau continued through the end of the Enlightenment, and they continue today, as can be seen throughout the world and throughout this book. Should government attempt to promote the general will, or should it protect the rights of each individual to advance his or her specific will? To the extent there is a tradeoff between the two, how should it be balanced? If government limits itself only to the protection of individual rights, what about the benefits that could accrue to members of society through collective action, but that will not be supplied individually? On the other hand, how can political institutions know the general will, and how can they advance it without falling victim to the human failings seen elsewhere in society? Not only does much of modern political philosophy trace back to this debate, but an entirely new but related discipline, economics, emerged at this time, offering new tools to better understand these and other important questions.
Adam Smith and the Birth of Modern Economics
The founder of economics is generally considered to be Adam Smith (1723–1790), another Enlightenment philosopher best known for his two great works, The Theory of Moral Sentiments (1758) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). In addition to setting the agenda for economic thinking, these companion books also form part of the philosophical foundation for today’s classical liberalism. Smith does not set out to establish a separate discipline of economics. Rather, in his system of thought there is an inextricable link between questions about the best political order and questions about economic life. No matter what modern political philosophers think of Smith, this link between politics and economics is essentially taken for granted today.
From an early age, Smith was educated to think of the relationships between individual morality, social rules, and public welfare. Once he begins writing his two great books, he spends many pages discussing how customs, traditions, and other social norms make it easier for people of disparate backgrounds and motivation to cooperate peacefully and productively. His life’s work aims to build a system of philosophical and economic thought where a society’s formal and informal rules (its history, its culture, its government) determine whether people interact sociably or violently. The capacity to cooperate, in short, depends on the rules of the game.
Smith poses the classic question: What is good, or virtuous? He finds that virtue derives from that which individuals desired to approve—approbation is the key word here—and their ability to sympathize with situations in which others find themselves. Smith does not quite offer the utilitarian philosophy of his friend, Hume, though the similarities are remarkable.
Like Hobbes, Smith views individuals as fundamentally equal by nature, though like Locke he has a decidedly more optimistic view of individuals’ abilities to cooperate without the use of force. In this respect, he also differs dramatically from Rousseau. Indeed, it is Smith’s view of the benefits of social cooperation that so distinguishes his political philosophy. The concept of the “invisible hand”—familiar even to critics who have never read Smith—first appears in the Theory of Moral Sentiments. Smith argues that individuals produce value for others in the course of pursuing their own selfish ends, always within a set of rules that protects the rights of each member of the society. While it is in The Wealth of Nations that Smith describes how this value creation is enhanced through, for example, comparative advantage and the division of labor, it is clear that he views the concept of the invisible hand—an unintended consequence of individual self-interest—to be an important element of social cooperation. This message was entirely new to eighteenth-century readers, who viewed wealth in terms of gold and silver coins, not the ability to produce valuable goods and services. Linking this new concept of wealth to social cooperation meant ideas about how people interact were more important than ever.
Smith fuses political and economic thought in a way that had not been achieved before him. The Wealth of Nations shows again the link that Smith draws between the economic and political realms. The last section of this book addresses the “duty” of the sovereign, which Smith divides into three parts. First, the government should protect society from violence by foreign threats (for example, invasion). Second, the government should protect every member of society from violence or oppression by internal threats (such as crime by other members of society). Third, the government should erect and maintain those public institutions that are advantageous to society but that would not be maintained if the expense had to be borne by only one or a few members.
Smith’s view that government should remain limited flows directly as an implication of his philosophical-economic system of thought. The capacity to cooperate depends on the rules of the game. These three functions for government, supported by social conventions outside of government, come the closest to the ideal set of rules that would allow a people to cooperate voluntarily toward mutual and social gain. The invisible hand works best under these rules.
The American Framers
While Adam Smith was polishing the prose in Wealth, Thomas Jefferson and the American revolutionaries were writing the Declaration of Independence. Both great works were published in 1776, and both were steeped in Enlightenment ideas. While critical to establishing the core principles of the fledgling United States, the political structure of this newly independent nation was established by the U.S. Constitution, ratified in 1789. In the two-year period between a constitutional convention and the document’s ratification, a number of important essays, today know as The Federalist Papers, were published by Alexander Hamilton, James Madison, and John Jay. The American Framers were grappling with Cicero’s question about how to define a republic, not in theory but in real and often bloody practice.
The Federalist Papers are an attempt to convince the citizens of New York to adopt the new constitution that had been drafted in 1787. It is important to remember that the Constitution, revered (if not always respected) in the United States today, was not universally appreciated at first. On leaving the Constitutional Convention, Benjamin Franklin answered a woman who asked what had been created with the quip, “A republic, if you can keep it.” Opponents of the new Constitution genuinely worried that, rather than creating a republic, it would create a strong, perhaps tyrannical, central government. In this, the skeptics were simply favoring the Greek experience, as well as Montesquieu’s argument that republican government worked only with small countries. Large countries, the skeptics feared, risked becoming tyrannical due to the authority needed to control them.
The Federalist Papers respond to this concern with a model for a specific type of republic designed for a geographically large country made up of diverse interests. This model of government is not a direct democracy because the citizens do not individually vote to approve or disapprove specific laws. Rather, citizens elect representatives to make such decisions on their behalf. The concept of a republic as presented in The Federalist Papers is, therefore, one of representative democracy.
In this view of government, the influence of Locke and Montesquieu is clear, especially the concept of separation of powers. The authors of The Federalist Papers argue for executive, judicial, and legislative functions that are not carried out by the same people and with at least some protection against abuse of a minority group—the tyranny of the majority. The Constitution contains a clear separation of powers, as well as other limitations on a potentially overreaching central government. The Tenth Amendment of the Constitution, for example, clarifies that the “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” In an economic sense, these provisions raise the cost of converting the power of government into tyranny. The early political history of the United States, with limited government and a clear separation of powers, closely tracks this model. And while the modern United States has a central government that is expansive compared to its early history, it also is true that, relative to most any other country on the planet, the United States continues to enjoy one of the governments with the clearest separation of powers because its institutions enshrined the principle of property rights.
Marxism: Class Interest Meets the Social Contract
Karl Marx (1818–1883) is famously quoted for having observed early in his career that “philosophers have only interpreted the world in various ways; the point however is to change it.” He meant it. Few philosophers in history have changed the world so dramatically. The Soviet Union, the People’s Republic of China, Cuba, and countless wars and revolutions have been driven by his ideas and desire to change the world.
So pervasive is Marx’s influence that, in many countries across the world today, calling someone a Marxist has meaning, whether in a favorable connotation or not. But while a speaker may know whether the label is an insult or not, relatively few know what Marx really said.
Surprisingly to those who have never read him, Marx has great respect for the productive forces of a capitalist (he calls it bourgeois) society, to which he attributes the nineteenth century’s unprecedented advances in agriculture, manufacturing, transportation, communications, and more. Marx is as much an historian as an economist, and he sees history through a particular lens. That perspective borrows heavily from Hegel’s theory of the dialectic, in which social change occurs through a discontinuous rather than smooth process.
Per Hegel, social change involves periods of thesis (in which a key idea emerges), followed by antithesis (in which a contrary or opposing idea comes forth) and then synthesis (the resolution of the conflict between thesis and antithesis, which in turn forms a new thesis). But this battle of ideas is, to Marx, too far removed from the real world. It is too idealistic. Marx insists that ideas are the products of the real, material world around us, which influences those ideas. In so arguing, he thus introduces materialism to Hegel’s dialectic. This mix of the dialectic with materialism would be called dialectical materialism by later proponents, such as Frederick Engels and Vladimir Lenin, who played a rather pivotal role in the emergence of the Soviet Union.
Applying dialectical materialism to the study of history, and taking a good look at the plight of the workers around him, Marx concludes that “the history of all hitherto existing society is the history of class struggles.” Specifically, the struggle is that of the workers (proletariat) against the capitalists.
Marx’s critique of capitalism remains popular among “occupiers” and other revolutionaries today, as it has been for over a century. Yet even as few understand the extent to which he sees capitalism as a necessary step in history and an improvement over what came before it, Marx sees history as a natural progression from slavery in the Greek, Egyptian, and Roman societies, to feudalism in Medieval Europe, to capitalism in his own time. But while capitalism is an improvement, exploitation remains and in fact is a defining characteristic of this stage. Socialism comes after capitalism collapses. And why does capitalism collapse?
Marx argues that capitalism will collapse because it is a system in which capitalists exploit the workers. His understanding of this exploitation derives from a concept adhered to by classical economists called the labor theory of value. While economic theory would later completely discredit the labor theory of value (as we’ll see in Chapter 3), Marx has quite good company in his day because both Adam Smith and David Ricardo partly subscribe to this theory. According to the theory, the value of a good is determined directly by the amount of labor needed to produce it. The clever reader may ask how this is so when goods are produced by a combination of labor and capital. Simple, replies Marx. Capital goods such as machines and equipment have a value that reflects the amount of labor used to produce them. A car, for example, has a value exactly equal to the labor used to produce all of its intricate parts and their assembly. One counts the labor not only of the assemblers but also the labor of those who built the machines used to assemble the car, those who built the factory in which the car was assembled, and so on.
According to Marx, because the value of a good is exactly equal to the amount of labor used to produce it, if workers were paid the full value of what they produce, then they would receive 100 percent of the price paid for any good. Because workers do not receive the full value of what they produce, they are exploited. The capitalist receives a portion of this value created by the worker, what Marx calls the surplus value. Further, as technology advances, new capital makes it possible to pay workers a smaller amount of the value they create, which in turn further impoverishes the workers and sows the seeds of a future revolution.
Most modern economists dispense with the labor theory of value, recognizing several reasons that Marx, along with Smith and Ricardo, are wrong about it. First, labor is not a homogenous factor; some workers are highly productive and others less so. To appreciate this, flip over your iPhone and notice the words “Designed by Apple in California and assembled in China.” There is significant variation in human capital (which, as we’ll see in Chapter 5, is what economists today call skills, training, and education) among the assembler, designer, engineer, and many others involved in producing a good. Further, Marx ignores the role of less-obvious contributors to the production of a valuable good. Take the middleman, for example. Bankers provide financing, with a commercial loan that allows a company to build a plant and produce something now rather than wait until it has the funds to do so later, or with a mortgage that allows a family to buy a house now rather than wait until it has saved an amount equal to the entire value of the home. Similarly overlooked by Marx, advertisers provide information to potential customers, while good managers provide organization and thus help avoid wasted effort by workers.
Most notably, Marx ignores the role of the entrepreneur, who searches for and responds to unmet needs in the market. Workers do not magically know what to produce or where to send it. The entrepreneur, in trying to fulfill consumers’ needs as conveyed by prices in the market, directs labor and capital and all resources to where they are most needed. Communist economies would ignore this lesson to their peril in the twentieth century. In the approach we develop in this book, a form of entrepreneurship—what we call political entrepreneurship—is the key driver of political change.
In short, post-Marxist economics shows that the labor theory of value offers an incomplete account of the market value of a good or service, as well as its cost of production. Labor alone tells us nothing about value because supply is only one-half of the equation and thus insufficient to determine the value of anything. Like many economists and others prior to the late nineteenth century, Marx fails to understand that the value of a good or service is determined, as Alfred Marshall aptly demonstrates, by both supply and demand. Marshall’s contribution is part of what is known in economics as the Margin-alist Revolution. This intellectual “revolution” is a devastating critique of one of the key tenets of Marxism. But one can safely bet that few soldiers in the Bolshevik Revolution (led by Lenin) or on the side of the communists in the Chinese Civil War (led by Mao) were aware of the Marginalist Revolution. That battle of ideas had already been fought and won, and the communist revolutionaries were on the losing side; they just didn’t know it.
The American Progressives: From Individual Rights to Public Interest
While technical errors would shatter Marx’s economics, they hardly gave pause to reformers wanting to implement egalitarian ideas. These reformers, known as the American Progressives, changed the landscape of politics and economics at such fundamental levels that their influence can hardly be overstated.
Progressivism is not an entirely unified movement. There is significant dissent among Progressive thinkers, activists, and political figures, and significant variation in the degree to which important figures of the time can be called Progressives. There is no single philosopher who encapsulates the key arguments of the movement—no Karl Marx, no Adam Smith, no Aquinas or Aristotle. Rather, important contributors to Progressive thought include presidents, Supreme Court justices, economists, social reformers in a number of areas, novelists, teachers, and many more. There is also significant variation in the degree to which important figures of the time can be called Progressives.
The Progressives reached their pinnacle during the decades around the turn of the twentieth century, from about the 1880s to about the 1930s. Yet the intellectual roots of Progressivism trace backward through the history of ideas to the economics of Karl Marx, to the social experiment of the American founding, to Enlightenment coffee shops and debates about the relations between individuals and society, to Rousseau and Hobbes, and to the ideas of direct democracy in the School of Athens. From their peak in the early 1900s, the ideas of Progressives achieved institutional changes that continue to shape human affairs in profound ways.
We can say only a few words about this vast topic. Our focus will be to substantiate a simple claim. Progressive ideas have permeated several areas of life, and under favorable political conditions these ideas have become instilled in shared institutions, both formal and informal, so that their effects are still easily visible today.
Conditions leading up to the turn of the twentieth century were ripe for Progressive ideas. Darwin’s revolution of the biological sciences was being vigorously adapted to many areas of human life. And life, to the Progressives, was brimming with social ills that reforms could abate. The need was desperate. Widespread hardships had crept into Americans’ living standards as life became industrialized and urbanized. Mass migration separated families and intensified racial and ethnic tensions. Unsanitary slums and workplaces spread illness into epidemics, leaving widows and orphans unable to provide for themselves. With low labor productivity and the one-factory labor market, masses of people barely subsisted despite working long hours each day in miserable and unsafe conditions, a condition that was dramatized most famously in Upton Sinclair’s The Jungle (1906). Children of impoverished families were put to work instead of given proper schooling (as were many in the earlier agrarian period). And real or perceived increases in income inequality emerged, as portrayed most famously by Thorstein Veblen’s The Theory of the Leisure Class (1899). For Progressives, it was the worst of times.
The Progressives believe that the good society was not only conceivable in thought but achievable in practice, through the enlightened application of science and civic virtue to human institutions. Sinclair personally sent a copy of his book to President Theodore Roosevelt. Not coincidentally, the Pure Food and Drug Act was enacted that same year, requiring ingredient labels and setting the stage for the safety and efficacy requirements of today’s Food and Drug Administration.
The Progressives influenced a wide range of public life. New labor regulations included the eight-hour workday, the banning of child labor, workers’ compensation programs, minimum wage laws, and protections of labor unions’ activity and strikes. New business regulations would control manufacturing operations. Antitrust statutes were enacted to divest monopolies and punish business practices deemed to be anticompetitive. Prohibitions on alcohol and marijuana were promoted. Environmental conservation was sought through the designation of national parks and land reclamation programs. And governments were called on to provide services like health care (the first national health care plan appeared in Theodore Roosevelt’s 1912 presidential campaign platform).
A hallmark of Progressive thought was the priority on efficiency in social organizations including governments, businesses, schools, charities, and more. Frederick Winslow Taylor, for example, pioneered the field of scientific management, which revolutionized the organization of business and manufacturing. An engineer by training, Taylor won the first U.S. doubles tennis championship at the age of twenty-five using a racquet of his own design. He viewed the world as a series of mechanical relationships and saw enormous and needless waste in the industrial operations of his age. Taylor’s basic objective was to hone manufacturing to ensure that a given set of inputs could produce the greatest possible quantity of output. By analyzing manufacturing—that is, breaking the process into individual steps and measuring its progress—Taylor’s scientific management sought to maximize the productivity of labor. In Chapter 3 we will meet the great twentieth-century economist, Paul A. Samuelson, whose approach to economics strongly paralleled Taylor’s approach to management.
Taylor was not very political. However, his same scientific approach was carried into public life during the Progressive era. The power of scientific knowledge made it feasible for governments and private aid societies to implement policies with precision. They required measurement, standardization, municipal administration, and efficient use of resources in all public fields, from education to social services to government administration to disaster aid. They abhorred corruption in public life, preached temperance in private life, and strove for greater equality in political-economic life.
There were major obstacles, both constitutional and philosophical. But Progressive ideas eventually began to occupy our shared institutions, both formal and perhaps especially informal. The footprints of Progressive thinking are all around our modern day.
For example, several constitutional amendments have their origins in Progressive ideas, including progressive income taxation (Sixteenth Amendment), direct election of U.S. senators (Seventeenth Amendment), and alcohol prohibition (Eighteenth Amendment). Late in the nineteenth century, twenty-four states introduced direct democracy institutions, including referendum, recall, and citizen initiative.
In education, college entrance exams have their roots in the 1905 Binet-Simon scale, which became the Army’s Alpha Beta testing program. Researchers at Stanford University, led by Louis Terman, developed the Intelligence Quotient Test, which is the basis for modern standardized testing.
It’s also during this time that political language gets inverted in America. So a “liberal” in the United States is someone on the left, but in most of the world it’s someone who is on the right.
Before concluding, we do want to say a few words about yellow school busses. We mentioned the Progressive priority on standards. Early on, around 1839, Horace Mann began advocating and founding government schools after touring schools in Germany (Prussia) and being very impressed. Mann’s influence would expand in the late nineteenth century, under the lead of the education philosopher, John Dewey. Instituting Dewey’s ideas, government schooling was transformed into a professional industry in the late nineteenth century. In 1887, Columbia University founded Teachers College, to teach teachers how to implement standardized, measurable delivery of education for the betterment of the public good and democracy. In 1905 the Carnegie Foundation for the Advancement of Teaching was founded to study the way teachers were being taught. Frank W. Cyr was a graduate of Teachers College and an education reformer. In April 1939, Cyr received a grant from the Rockefeller Foundation to organize a weeklong conference on standardizing bus colors. Around the table were educators, state-level politicians, and manufacturers of busses and paints. The result was forty-four standards for school bus design, including the standard designated color “National School Bus Chrome,” more commonly known as School Bus Yellow.
And finally, the Progressive influence can be felt in the era also in the transformation of political and economic inquiry into separate professions. The American Economic Association was founded in 1886, and the American Political Science Association was founded in 1905. Both quickly took control over their respective graduate curricula. Interestingly, political “science” largely continued the path of philosophical inquiry that we’ve begun in this chapter, but economics became more scientific, more concerned with inputs and outputs in the style of Frederick Taylor. Taylor’s maximizing approach and input-output mode of thinking would become a natural fit for economic theory in the twentieth century. Already Taylor’s work implied a theory of wages by which workers should be compensated according to their productivity. “Pay the worker, not the job” was the mantra of scientific management. As we’ll see in the next chapter, this is barely a stone’s throw from the conclusions that economic models would soon support.
In sum, the Progressives took firm stances on the main questions we have posed in this chapter. The role and function of government are to promote the general welfare, not merely to protect the rights of individuals. Indeed, only by advancing the public interest is government truly able to keep individuals free from the inability to advance their own wills. Through the scientifically enlightened expertise of its leaders, combined with an electorate whose civic virtues are cultivated in public schools, political discourse will find the path of the public interest. By amending the federal constitution, government would be empowered to act accordingly. And by eliminating corruption in government, political leaders would resist temptations to use their new powers in self-serving ways. Finally, with the dawn of mathematical economics in the twentieth century, the Progressives would have on their side formal “proofs” of the need for government regulation in the name of the public interest.