"Liberalism . . . is based on the conception of civil society as by and large self-regulating when its members are free to act within the very wide bounds of their individual rights. Among these, the right to private property, including freedom of contract and exchange and the free disposition of one's labor, is given a high priority. Historically, liberalism has manifested a hostility to state action, which, it insists, should be reduced to a minimum" (1).But how should we interpret "by and large self-regulating"? Does this mean that while society is largely a self-regulating unintended order, it does need some minimal regulation by government in deliberately designing a legal framework that defines the rights of property, contract, and exchange and protects individuals against force and fraud? Historically, liberals from Locke and Smith to Mises and Hayek have taken this position, in which the liberal "hostility to state action" has been expressed as a desire for a limited government that minimizes legal coercion and maximizes individual liberty.
And yet some people (including Raico) suggest that the logical fulfilment of liberalism is anarchism, in which government is not just limited but totally abolished. That's the argument of Murray Rothbard, Roderick Long, and David Friedman, who have defended "anarcho-capitalism."
A Darwinian view of the evolutionary history of society and government would support the classical liberal endorsement of limited government, while casting doubt on the liberal anarchist vision of abolishing government. Although the evolutionary history of stateless societies shows that social order does not require a Weberian state, social order does require government, even if this governmental rule is informal, episodic, and dispersed.
The Austrian school of economics began in 1871 with the publication of Carl Menger's Principles of Economics. Raico shows how Menger's emphasis on unintended or spontaneous order, which was originally developed by the philosophers of the Scottish Enlightenment, became a predominant element of the Austrian tradition leading to the liberalism of Mises and Hayek. If the social orders arising as the unintended outcome of the self-seeking actions of individuals can lead to beneficial institutions, even though they are not the products of any intelligent design, this supports liberalism's teaching that the best human orders are those that arise largely as self-regulating social orders free from intentionally designed governmental planning.
In his Investigations into the Method of the Social Sciences, Menger has a chapter on "The Theoretical Understanding of Those Social Phenomena Which Are Not a Product of Agreement or of Positive Legislation, But Are Unintended Results of Historical Development" (Book 3, Chapter 2). His question is "How can it be that institutions which serve the common welfare and are extremely significant for its development come into being without a common will [Gemeinwellen] directed toward establishing them?" He goes on to explain how "law, language, the state, money, markets, all these social structures in their various empirical forms and in their constant change are to no small extent the unintended result of social development" (146-47). As he indicates here by the phrase "to no small extent," Menger insisted that intentional design could and should be exercised to some degree in adjusting unintended orders to changing circumstances. For example, while he argued that legislators and judges should recognize the "unintended wisdom" often inherent in customary legal traditions, he also recognized that customary law often needed to be corrected by statutory stipulation to make the law more suitable for the common welfare (223-34).
Notice also that Menger thought the history of the state could be explained as a combination of unintended development and intentional design. Raico objects: "It should be noted that by including the state in the same category as such social formations as language and markets, Menger is obscuring the crucial liberal distinction between state and civil society, coercion and voluntarism" (24).
In explaining the origin of the state, Menger thought that the natural instincts for sexual mating, conjugal bonding, and parental care would have created a familial social order in which heads of families--typically, the older males--could develop customary rules for settling disputes between individuals, and this customary order could become "a state community and organization even if it was undeveloped at first" (156-57). Weaker individuals would seek the protection of stronger individuals. Customary rules would arise based on the general understanding of "the necessity of certain limits to despotism." This might arise first in the minds of those few wisest individuals who could see the need for this. Even the strong individuals might see the need for limiting violence, because they would have a personal interest in "the conservation of what their power has achieved" (225). In some cases, law originated through powerful conquerors who could impose their laws on the conquered. Thus, "law arose originally from the conviction of the members of the nation or by force" (230).
Raico recognizes that Menger and the other founders of the Austrian school of economics were not as clearly liberal in their political thought as Ludwig von Mises and Friedrich Hayek. And even Mises and Hayek disagreed in their interpretation of liberalism, because Mises was more strongly laissez-faire than was Hayek, who actually defended governmental welfare-state programs, including a guaranteed minimum income for everyone. Murray Rothbard followed the lead of Mises, but Rothbard went even farther than Mises in arguing for a radical form of liberalism that would abolish the state and thus allow for a self-regulating, stateless society.
Raico suggests that there are two ways of attacking liberalism (96). One way is to argue that liberalism overestimates the self-regulatory capacity of society, because the economy works well only when it is centrally planned by government, or because the culture cultivates good moral character only when it is centrally supervised by an established religious authority.
The second way of attacking liberalism, which Raico regards as more plausible, is to argue that the liberal program for establishing a limited state must fail, because any state has a natural tendency to expand its powers without limit. Raico thinks Hans-Hermann Hoppe is persuasive in this criticism, concluding: "Contrary to the original liberal intent of safeguarding liberty and property, every minimal government has the inherent tendency to become a maximal government" (96).
This leads Raico to embrace the anti-statist liberalism of Gustave de Molinari (1819-1912), a Belgian-born French economist who was identified by Rothbard as the first proponent of "anarcho-capitalism" or "free market anarchism."
There are some problems with this appeal to Molinari, however. As I will indicate in my next post, Molinari did not even identify himself as an anarchist, because he rightly saw that government was necessary for a free society.
Some of my previous posts on unintended orders, anarchism, and government can be found here, here, here, here, here, and here.