Quality arguments

by Henry on August 11, 2006

Tyler Cowen at Marginal Revolution today.

The libertarian vice is to assume that the quality of government is fixed. … If the quality of government is fixed, the battle is then “government vs. market.” Not everyone will agree with libertarian views, but libertarians are comfortable on this terrain. … But sometimes governments do a pretty good job, even if you like me are generally skeptical of government. The Finnish government has supported superb architecture. The Swedes have made a good go at a welfare state. The Interstate Highway System in the U.S. was a high-return investment. … The libertarian approach treats government vs. market as the central question. Another approach, promoted by many liberals, tries to improve the quality of government. This endeavor does not seem more utopian than most libertarian proposals. The libertarian cannot reject it on the grounds of excess utopianism, even though much government will remain wasteful, stupid, and venal. More parts of government could in fact be much better, and to significant human benefit and yes that includes more human liberty in the libertarian sense of the word. Libertarians will admit this. But it does not play a significant role in their emotional framing of the world or in their allocation of emotional energies. They will insist, correctly, that we do not always wish to make government more efficient. Then they retreat to a mental model where the quality of government is fixed and we compare government to market.

When reading this post, it’s hard not to think of Albert Hirschman’s brilliant little book, Exit, Voice and Loyalty. Hirschman’s theoretical innovation is precisely to assume that quality (of organizations, of products etc) isn’t fixed, and that there are different mechanisms through which we might imagine that quality would be improved. “Exit” – the threat of switching to a competing organization – is one such mechanism, and it’s one that libertarians will be very comfortable with, as it’s greatly enhanced by free markets or market-like competition under many circumstances. The other is voice – which refers to more directly political actions, of argument, protest, criticism etc, and which doesn’t seem to me nearly as congenial to libertarians, because it suggests that faulty organizations and governments can be made better without recourse to market mechanisms. Indeed, under some circumstances, increased opportunities for exit may reduce the ability of voice to bring through change. Authoritarian regimes frequently allow some critics to go into exile, for fear that they’d become rabble-rousers at home.

Which makes me curious. What do libertarians think about Hirschman’s arguments? Do they read him? Do they have a sophisticated response?

Update: Alex Tabarrok points me to an old post of his, which rightly points out that under some circumstances exit and voice can be complements.

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{ 38 comments }

1

djw 08.11.06 at 9:31 am

If the argument is reduced to “government vs. market” and pro-marketers are in control of government, is corruption of government an inevitable result?

2

David Kane 08.11.06 at 9:51 am

Why not invite a libertarian to guest blog at CT and engage questions like this? You would be amazed at what a little intellectual diversity can do for the quality of the conversation.

3

C. L. Ball 08.11.06 at 10:11 am

Hirschman discussed some of these issues in “Exit, Voice, and the State” World Politics 31:1 (Oct. 1978). Here he argues that Exit, Voice, and Loyalty focused more on economists’ neglect of voice compared to political scientists’ neglect of exit. Contra the idea that exit via exile removes voice via dissent and therefore strengthens authoritarian regimes, on p.103, he conjectures that 19th centuy emigration from Europe (exit) enabled democratization there by removing many anarchists, socialists, and revolutionaries and therefore reducing the fear of radicalism that would otherwise have accompanied the expansion of suffrage. He acknowledges that this is conjecture, not history.

While libertarians indeed stress exit from government over voice within government, this should be seen in the context of how many others use voice versus remain loyal. State authority, even in democracies, will not be responsive to voice if most of the citizenry remains loyal. The opportunity for exit if voices are ignored may be necessary to make voice effective.

The greater problem is that it is hard to exit the state in the truest sense. When Hirschman discusses exit above, he means emigration or secesssion — not merely reduced regulatory scope or exemption from regulation.

4

mkl 08.11.06 at 10:41 am

The unsophisticated responses are pretty straightforward:

(a) Exit works more reliably than Voice. One may be better off putting the kids in a private school or moving to a community with better schools, vs. attempting to reform local public schools, as you have one limited time shot at educating your children.

(b) The threat of Exit may improve the effectiveness of Voice.

In addition to Hirshman’s comments on exile noted in (3), there are strong counterexamples, such as Khomeini’s exile to France, to the argument that Exit weakens Voice.

5

Sebastian Holsclaw 08.11.06 at 10:48 am

“The other is voice – which refers to more directly political actions, of argument, protest, criticism etc, and which doesn’t seem to me nearly as congenial to libertarians, because it suggests that faulty organizations and governments can be made better without recourse to market mechanisms.”

If that is all you mean by voice–the permission to criticize, I’m not impressed. The ability to complain doesn’t really cause an incentive to improve the efficiency of an organization at most realistic levels of complaint. One of the problems with government without competition is that complaints can be safely ignored until people get to the point where they are willing to vote you out of office over it. This is a fairly high bar, so even obvious improvements can languish unaddressed until the problem becomes very bad. (See for example HUD in the 1970s).

6

Daniel Nexon 08.11.06 at 11:14 am

Sebastian: I think you underestimate the efficiency by which representatives provide constituent services. Voice, even without a realistic threat of removing someone from office, works quite well in my experience.

7

Sebastian Holsclaw 08.11.06 at 11:29 am

“Voice, even without a realistic threat of removing someone from office, works quite well in my experience.”

What experience is that? (I’m not being snarky, it just would be helpful to find out where it works). In my experience such ‘voice’ is looked at with smiles and then ignored.

Works at what? Having the concern raised or having it dealt with?

8

Daniel Nexon 08.11.06 at 11:48 am

Do you want some examples? Here’s one from the list: The tree that came down in our power lines and on our house. The two power company and the county refused to do anything about it, claiming the other was responsible, until we called our county delegate.

Read up on Tip O’Neil’s tenure in Congress if you want mind-blowing examples.

9

Ben A 08.11.06 at 11:52 am

The presence of Voice does not distinguish non-market from market interactions. Many market interactions are characterized by Voice (defined as an attempt to improve the relationship through communication).

So I think it’s a false step to say that libertarians are suspicious of Voice because it is uncharacteristic of market transactions. Perhaps instead libertarians appreciate how, in market interactions, the possibility of Exit usually enhances Voice. E.g., a laborer has much more influence on work conditions if his threat of exit is plausible. The classic libertarian concern, I would think, is the sustainability and strength of Voice absent the ability to Exit.

10

pedro 08.11.06 at 11:56 am

Hilzoy, at Obsidian Wings, has made an eloquent case that libertarians should, under the current circumstances, vote Democrat. The Republican party has no incentives whatsoever to make government work better or more efficiently, and in fact, given that part of its constituency is highly sceptical of the government, it can be said that it has incentives to make government look bad. On the other hand, the Republican party has shown itself incapable of delivering on its promise to move towards smaller government. For a party that has squandered millions of dollars in a dubious war that have little foreseeable good effects and committed itself to the economic and political reengineering of a troubled foreign nation, the Republican party certainly has not been financially austere at home. Libertarians like Tyler Cowen ought to give some consideration to the rather obvious point that it is the party whose electoral chances depend on the perception of government as a somewhat efficient tool that can indeed govern more efficiently, however sceptical one may be about the government’s ability to do well what markets do better in one’s view.

11

abb1 08.11.06 at 12:29 pm

I’m skeptical about this idea of improvement by ‘exit’, I think the result will probably be the opposite of what’s suggested here.

I’m also skeptical about the ‘voice’ mechanism, for the reasons Sebastian described above.

Guillotine is a good mechanism; they have to be afraid to to fail, to screw up, to be caught – as opposed to looking forward to a million dollar a year lobbying career in the worst case scenario.

12

Steve LaBonne 08.11.06 at 12:45 pm

Screw government- give me those competent, honest private organizations, like Enron and BP.

13

Cranky Observer 08.11.06 at 1:08 pm

> I’m skeptical about this idea of improvement
> by ‘exit’, I think the result will probably
> be the opposite of what’s suggested here.

The problem with depending on exit to control social entities is that they tend to follow you whether you like it or not. That is, many have argued that on a certain [very controversial topic] we should adopt a pure libertarian solution. California permits [vct]; Utah prohibits it. So everyone who doesn’t like the outcome where they are should just move to one or the other.

The problem, as we have seen in relation to [vct], is that the extremists on one side or the other will gain the upper hand and then force their preferred solution on everyone regardless of location. So if you don’t have political voice you stand a good chance of losing your choice later, and no amount of exit will help you.

Cranky

14

Cranky Observer 08.11.06 at 1:11 pm

I would be very curious to hear a libertarian defense of Senator Santorum’s plan to “privitize” the National Weather Service. To me the collection of weather data and the distribution of reliable forecasts and information is a perfect example of a function that can and should be performed by a central government. And the US NWS does a fantastic job of it, delivering more value for the money than any other organization of its type that I am aware of. Yet as we have seen there is an underlying belief that this function “must” be privitized. The only value I can see from that is the extra money that will be squeezed out of my pocket and placed in the hands of private investors.

Cranky

15

Sebastian Holsclaw 08.11.06 at 1:34 pm

“I’m skeptical about this idea of improvement by ‘exit’, I think the result will probably be the opposite of what’s suggested here.”

The opposite for what? If the exited organization does not improve it will tend to have problems surviving or doing well. True. But the people are going and getting their needs served somewhere else. The place they are exiting to is improving their lives in some way.

The goal isn’t to have some particular program or some particular agency survive. The goal is to have the needs met. Sometimes the agency is not as effective as other solutions at getting a particular need met. If that is true for a long period of time, and exit it available, it is true that the agency in question will have problems. But that isn’t proof that things are getting worse for the people’s needs.

16

Stuart 08.11.06 at 1:35 pm

I’m quite sure that in theory the quality of government could be improved. I think it’s harder to improve than most private entities are, though, primarily because (i) government is by its nature a monopoly, and (ii) the incentives for governmental actors aren’t necessarily gear (or gearable) to high quality.

There’s also the question of whether we do or should want better quality government, at least outside a fairly narrow set of tasks (like public order, national defense, courts and things like that). Government means compulsion, so higher quality government means (or at least could mean, or implies) less freedom, and less diversity (because the government’s will gets imposed on everyone).

17

abb1 08.11.06 at 1:52 pm

I was thinking more in terms of places rather than agencies.

It’s like with excessive liquidity of capital, when investors suddenly rush into some lucky third world country building factories, infrastructure, creating economic boom there. And then something happens – some marxist guerrillas found in the jungle, el presidente catches cold, whatever – and immediately the capital flees, leaving nothing but ruins – to the next eldorado. No one wins except for a few speculators.

No, you probably should stick around and try to make the place (or agency for that matter) better. Unless it’s completely outta whack, of course.

18

Cranky Observer 08.11.06 at 2:16 pm

=== I’m quite sure that in theory the quality of government could be improved. I think it’s harder to improve than most private entities are, though, primarily because (i) government is by its nature a monopoly, and (ii) the incentives for governmental actors aren’t necessarily gear (or gearable) to high quality. ===

You don’t know private enterprise very well, do you? ;-)Pretty much everyone who deals with the Federal Aviation Administration, for example, agrees that the services the FAA provides that have been outsourced over the last 10 years have gone drastically downhill, in many cases to the point where they are directly affecting aviation safety and the future of the aviation industry (not the airlines directly, but the little guys who are the seed corn for the big commerical providers). And naturally “user fees” have been instituted and have been going nowhere but up. Meanwhile the Beltway Bandits who scooped up the FAA contracts (oddly enough, big Repub campaign contributors too) are booking record profits.Outsourcers have just about zero incentive to provide high quality service, as anyone who has dealt with a large outsourced service provider can tell you. And this isn’t limited to governments; a very large PC manufacturers outsourced its A/R functions to a very large bank two years ago; the results for the customer were so bad we ended up dropping them as a supplier.Cranky

19

Bill McNeill 08.11.06 at 2:20 pm

Do libertarians read Hirschman? Do they have a sophisticated response? And have they finally stopped beating their wives?

Because you don’t say what you mean by libertarian you run the risk of straying into straw man territory. If by libertarian you mean a gun-loving crank who drives themselves into fits of apolexy over zoning laws, I doubt that sort person is going to have a sophisticated response to much of anything. (Certainly not my stereotypical idea of that sort of person anyway…) But my sense for the U.S. at least is that a “libertarian” has come to mean a John Stuart Mill fan with a distrust of powerful hirearchical institutions (primarily but not exclusively governments) and a strong inclination towards the “market” end of the market vs. publicly-managed spectrum of economic philosphies. Basically what the word “liberal” has meant at other times and in other countries. Some of this is just fancy nomenclatural footwork–since “liberal” has strong new left connotations in the U.S. these days, which people either for strategic or heartfelt reasons may wish to disavow. Some of it is more substantive. Whatever you want to call it, this political attitude doesn’t automatically entail a blind love of Enron or unqualified hostility towards the U.S. Postal Service, which, all told, does a pretty good job.

Even though they frequently contradict each other, you can read both the The Nation and Reason without your head exploding. And you’re not automatically a corporate lackey if you’re pleased when the Cato Institute gets something right.

20

Walt 08.11.06 at 3:17 pm

Bill: Henry sounded to me like he was genuinely asking if libertarians had read Hirschman, and if so, what they thought.

21

MattXIV 08.11.06 at 3:56 pm

I haven’t read Hirshmann before, but my impression is that “voice” (changing the government via elections and protest) seems to have four major limitations compared to “exit” (denying the government powers or making participation voluntary) that for me make it an inadequete check on bad governance on its own, with the context of a representative democracy.

First, the cost of voicing objections is typically higher that the cost of exiting. “Voice” is always an active process, and often requires extensive effort, while exiting is often passive, and even when not, it is fairly simple and straightforward. “Voice” also often requires sustained and coordinated efforts by a large group of individuals and may need to be continued even after the improvement is made to maintain it, while “exit” is typically a one-time action that can be taken by each individual at their leasure and may provide some immediate improvement if the situation being exited made the individual worse off in absolute terms even if a substitute isn’t immediately available.

Second, “voice”, because of the cost element, does not necessarily correspond to the “true” preferences of a population. A small group that stands to heavily benefit from a policy will be willing to put forth much more effort that the rest of the population that it only costs slightly. The “voice” also constrained by social norms – for example, the voicing of criticism of military leaders during wartime is curbed by patriotic social norms, even though such criticism could lead to a more effective war effort.

Finally, “voice” lends itself to action around a single modality – this isn’t intrinsic so much as a consequence of representative democracy. Take the case of a universal health insurance proposal where the redistributive factor is separated out (everybody presumably would recieve a uniform cash grant in its absence). Say that 20% of the population doesn’t want to buy health insurance, but would prefer high deductible to low, 35% wants high-deductible, low-premium insurance, and split evenly with regards to whether they’d prefer none or low-deductible insurance, and 45% wants low-deductible, high-premium insurnace and would prefer high-deductible insurance to none and everybody is equally interested in voicing their preference. The most likely outcome of the political solution in this case would be a single government plan which 55% of people wouldn’t prefer, but would be the plan with the most “voice” behind it. The market outcome, on the other hand, would be that each person would find a plan of their liking. Even if the market and the government were equally efficient at delivering health care, the market would deliver a more satisfactory outcome for 55% of the population.

To exit via emmigration means giving up the entire bundle of benefits provided by that government, whereas the granularity of benefits purchased on the market tends to be much smaller (you can change your health insurance without changing your ISP, but you can’t change your police dept without changing your school district). This means that there are more individual opt-out decisions to make when the services are unbundled, thus the quantity of information available to decision makers is better. Since both governments and the private sector solicit “voice”-style feedback, the government will typically have less information to work from and thus will be less effective at moving towards the optimal policy, independent of the efficiency of the policy’s implementation. This assumes that the different under regimes where the government is ran for the benefit of a small group rather than its citizens in general.

As for exile as a form of “exit”, I’m guessing that in the majority of cases the government isn’t giving the dissident the option of leaving or continuing to agitate as they please, but instead is making an implied threat of harassment, imprisonment, or death if they stay.

22

Bill McNeill 08.11.06 at 4:18 pm

You’re right, Walt. My warnings about straw men is better directed at some of the follow on comments than the original post, which asked a specific question that could be answered in a specific way. Henry didn’t bash any straw men, though his closing line’s resemblance to a rhetorical question may have caused a little straw to spontaneously appear on the ground.

In the absence of any specific sources to inquire, I’ll nominate the guys from Reason that I cited in (21) as spokespeople for all things libertarian. The answer to Henry’s questions based on my admittedly tiny Googled sample is yes and yes. There is an unsurprising emphasis on the Exit side of the equation, but to me this is a position in the argument, not a disengagement from it.

A specific libertarian (Libertarian? “libertarian”?) application of this notion can be found in “All Culture, All the Time”, which praises crass commercialized pop culture, in part by characterizing it as offering multiple avenues of “exit” from some received set of authentic, correct, and edifying cultural norms. I haven’t read Hirschman, so I don’t know if this is a novel application of his ideas, but I thought it was a good tool for examining the issue.

23

James Killus 08.11.06 at 4:45 pm

To “assume that the quality of government is fixed” seems like an awfully esoteric vice compared to, for example, attributing to organizations like corporations the same rights as individuals or assuming that markets are inherently moral. I’ve seen libertarians make both of those assumptions over and over again, and they seem pretty pernicious to me.

24

Dan Karreman 08.11.06 at 6:41 pm

I don’t think libertarians would accept Hirschman’s premise: that quality variations provide arbitrage opportunities. For a libertarian, this means that you have a market failure and the price mechanism does not operate correctly. This is, of course, Hirschmans point (and co-incidentally Tyler’s). One person’s feature, another person’s bug.

When I read Tyler’s post, I didn’t think Hirschman – but good thinking, Henry – but rather Mills .

25

Robert Vienneau 08.11.06 at 6:46 pm

If a “libertarian” reads Hirschman, he might read “The Rhetoric of Reaction”. (To me, “libertarian” should mean “anarchist”, and an anarchist is a kind of socialist.) And then he will find that all of his arguments can be categorized into three buckets. Either he typically argues that the unintended and bad consequences of government action will overwhelm the good. Or that social roots are so deep that government actions are just so much wasted effort. Or, finally, that government actions, even when they work, jeopardize something good that we rely on. As Hirschman recognizes, classifying reactionary arguments into these buckets – which seems to work – doesn’t demonstrate any argument is wrong in any particular case. But recognizing how stylized the arguments are cannot but help encourage a certain amount of skepticism.

26

Seth Edenbaum 08.11.06 at 9:02 pm

“Hirschman’s theoretical innovation is precisely to assume that quality (of organizations, of products etc) isn’t fixed,”

This is an innovation?

Add this to your comments that Hitchens writing is “grounded more in a sensibility than in a coherent view of politics” and I’d say you’re one step away from Donald Rumsfeld’s metaphysic of conceptual idealism.
Maybe I should have gone to grad school after all and gotten a degree in Air Castle engineering.

27

Sebastian Holsclaw 08.11.06 at 9:07 pm

The more I think about it the less impressed I am. It doesn’t seem a revelation to libertarian thought that the quality of organizations isn’t fixed. Their whole method is based on the idea that the most efficient way to improve the quality of organizations is to subject them to serious competition. Monopolies aren’t as attentive they could be because they don’t have to be.

28

aaron 08.11.06 at 11:21 pm

Now, if only government could focus on what it does well instead of what it does poorly.

29

no one 08.12.06 at 6:13 am

David Marquand once pointed out that discussions of Hirschman’s “exit voice and loyalty” rarely talked about loyalty as an independent variable. I’d be curious to see what libertarians–and liberals, while we’re on the subject–make of loyalty. It’s surely interesting too in light of the apparent dilemma in Britain of native-born bombers.

30

Steve LaBonne 08.12.06 at 9:57 am

Monopolies aren’t as attentive they could be because they don’t have to be.

When libertarians get serious about acknowledging the very high prevalence in the “free” market of predatory oligopolies and politically connected crony capitalists (and the fact that the latter, oddly, seem to flourish especially under privatization-happy “conservative” administrations- which also, just as oddly, seem quite unenthusastic about antitrust enforcement), maybe I’ll pay more attention to them. Comparisons of real government to a largely imaginary picture of the private sector just don’t cut it.

31

Nell 08.12.06 at 9:57 am

ben a: E.g., a laborer has much more influence on work conditions if his threat of exit is plausible.

Wait: does this mean libertarians are in favor of unions? Or only of there being plenty of other plausible work opportunities?

32

Nell 08.12.06 at 10:00 am

pedro: Hilzoy, at Obsidian Wings, has made an eloquent case that libertarians should, under the current circumstances, vote Democrat.

Her case was that they should vote Democratic (i.e., vote for Democrats).

33

Brendan 08.12.06 at 11:31 am

‘Their whole method is based on the idea that the most efficient way to improve the quality of organizations is to subject them to serious competition’.

I may regret this (I’ve always thought that libertarians differed only from doctrinaire Marxists in the degree of their self-delusion) but what do you actually mean by ‘serious competition’. And please an answer I can understand: preferably with examples. (What I am getting at here is the use of hte word ‘serious’: there is at least a realisation that not all competition is good; so how do we decide between the good and the bad?).

34

Leonard 08.13.06 at 12:47 am

This whole argument is interesting its way, but it rather misses what libertarianism is about. The discussion here is all about what sort of relationship between an individual and an organization allows that individual to most effectively control that organization. That is, it’s a discussion about the utility of two kinds of power. But liberty is emphatically not about utility. To view libertarianism via a ideological mindset of utilitarianism is a mistake.

Rather, liberty is the state of being uncoerced by others. Libertarians seek to maximize liberty. Thus we talk about “exit” because no person (or group thereof, include corporations and the state) has the right to impose a relationship on any other. Justice demands that every peaceful human be able to “exit” every relationship except those he or she chose his or herself.

The consequences of exit are interesting to argue about, and perhaps even useful, but they are not the heart of the matter. The heart of it is the right to free association.

On a more personal level, let me make two observations about voice and exit that may also explain our tendancy to emphasize just exit. First, voice has not done diddly for us. We’ve protested your usurpations of our freedom bitterly for years, and we are irrelevant and marginalized as much now as ever. What has voice done for us? Pretty near zero, by appearances. By comparison, both the mainstream left and right have numerous successes in terms of getting the state to do what they want. (Much of which involves stealing my money and spending it in ways which I disapprove of, occasionally bitterly, without effect.)

Second: libertarianism appeals to men more than women, white people than minorities, and introverted systemic thinkers (aka geeks), more than extroverted people-loving touchy-feely types. That is, we’re a bunch of white male geeks. This is the demographic probably least likely to complain (use “voice”) about anything. Because (a) confronting people makes introverts uncomfortable, and (b) for white guys whining is social death.

35

abb1 08.13.06 at 4:53 am

Thus we talk about “exit” because no person (or group thereof, include corporations and the state) has the right to impose a relationship on any other.

But I thought the libertarians do enthusiastically accept the idea of contractual obligations. And any time you enter (implicitly or explicitly) into a contract with a state or any social institution within the state, the terms may or may not include the right to exit or you may have the right but it’s difficult to exercise.

And the state may have a good reason to make exit difficult or impossible, because of the natural inclination of self-sufficient individuals to bail out – which destroys the system.

So, if you’re young, healthy and with a well-paying job (which is what ‘white male geek’ probably means), you just need to take it easy, graciously accept the limitations on your freedom and be glad that you are not old, sick and unemployed.

36

Steve LaBonne 08.13.06 at 9:25 am

As a matter of practical politics, libertarians have screwed the pooch by being so fixated on economic “rights” that they haven’t been able to form an effective coalition with left-liberals on the many facets of civil liberties on which the two agree. Instead, in the US they have tended at least until very recently to throw their support behind the Republican party, which is the declared enemy of those liberties. Bad, bad move. And typical of doctrinaires who can’t see any farther than the copies of The Road to Serfdom (or in the nuttier cases, Atlas Shrugged) that are wedged under their noses.

37

Ben A 08.13.06 at 10:13 am

Nell,

I’m not a libertarian myself, but I don’t really see the basis for am a priori libertarian critique of collective bargaining or of unions. No doubt a particular union could act badly, but that’s par for the course (a particular person or corporation can act badly too). The point is, it does seem like there are many, many cases where Exit enhances Voice, and that market relationships often display this dynamic. I just picked up the Hirschman today, so I’ll see what he says soon.

38

Farrold 08.13.06 at 11:57 am

A contributor to libertarian blindness regarding voice, exit, and the extent of government control is a tendency to lump all government together into one abstract entity: The State. A county or village, however, is not The State, and may be granted un-libertarian powers with less damage to liberty.

Voice is more effective in smaller political entities because a person or small group contributes a larger fraction of the total political pressure. This increases effectiveness per unit cost, and reduces the need for the costly and slow development of pressure groups.

Exit (of the literal, jurisdiction-shifting sort) is more effective within a set of smaller political entities because the various costs of moving are when moves are more local. Accordingly, the support that exit gives to voice is strengthened.

Liberty is less impaired when coercion is less effective from a person’s point of view. Lower cost of exit (and, to a lesser extent greater effectiveness of voice) accomplish this. Slightly paradoxically, lower cost of exit increases the effectiveness of coercion from a community’s point of view because it offer individuals a highly effective alternative to disobedience.

One could even argue that granting seemingly un-libertarian powers to small political entities can increase, if not liberty in a technical sense, then at least the related value of broadening the range of options for an individual (family, etc.) to control the conditions of life. Expanded their powers can increase the diversity of communities, making possible social orders that could (but in practice would not) arise through contractual covenants. If I wish to raise children in an environment free of pornographic magazines, granting to small jurisdictions the power to control the contents of magazine racks would provide such environments, offering an option (by entrance, the converse of exit) that would not otherwise be available. And, of course, it would make this possible at a smaller cost to effective liberty than would a grant of the same power to The State (here presumed to be a much larger entity).

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