A General Theory on the Hierarchy of Political and Economic Orders

1. A General Theory on the Hierarchy of Political and Economic Orders Cameron M. Weber New School for Social Research New York, USA

2. A General Theory on the Hierarchy of Political and Economic Orders Political science began as a branch of philosophy with The Republic of Plato (circa 390 B.C.). Economic science began as a branch of political science with Adam Smith and The Wealth of Nations (1776).

3. A General Theory on the Hierarchy of Political and Economic Orders Thesis argued in paper: Alignment of certain economic and social orders might best enable us to be on a path towards a decent human life. For decent human life see Allen Buchanan 2006, “Equality and Human Rights” in Politics, Philosophy and Economics.

4. A General Theory on the Hierarchy of Political and Economic Orders Additional purpose of paper is to advance political dialogue by deconstructing political order into classes of organization and aligning classes with proposed economic orders, allowing for more specific – less idealistic and absolutist - policy debates. Presents an attempt at moving beyond “us versus them”, “left versus right”, and “neo-liberalism versus social democracy” political debate.

6. A General Theory on the Hierarchy of Political and Economic Orders Methodological approach: Advances arguments supporting thesis by combining psychology, organizational behavior, political science and economics. Attempts post-modern approach through cultivation of self-organizing processes (see Burczak 2006, Socialism after Hayek, for discussion of this “new science.”)

7. A General Theory on the Hierarchy of Political and Economic Orders Marx (and others) said we want to see and own the fruits of our labor. Maslow described a “hierarchy of needs” from food and shelter at lowest level and self-actualization at the highest. Adam Smith described how classical liberal order would increase material well-being through specialization of labor. Organizational behavior “team-building” theory describes how a team is built over time with repeated interaction.

8. A General Theory on the Hierarchy of Political and Economic Orders Problem Statement (for USA): Federal government share of GDP increased from 15.6% in 1950 to 18.4% in 2000 (a 17% increase). Public Opinion data from 1950 to 2004 shows increase in people identifying themselves as “independent” and decrease in those aligning with either major party. Implies growth of government at national level has lead to political alienation.

9. A General Theory on the Hierarchy of Political and Economic Orders “In our political system we have an industry dominated by two firms. Republicans and Democrats hold 99% of the market share and have undertaken actions at the state and national level to make it practically impossible for any other party to enter….Because no individual can influence government, stripping away intermediary organizations of individuals [through the petition process for market entry and “soft-money” limitations to independent parties] makes the remaining organized groups more powerful” (Cato Institute 2006).

10. A General Theory on the Hierarchy of Political and Economic Orders David Hume (and other Enlightenment philosophers) wrote of economic calculation being less important when ‘sentiment’ is present. This implies that less-defined property rights (a more communistic economic order) is possible at the family and intimate levels of social and political organization.

11. A General Theory on the Hierarchy of Political and Economic Orders Personalized economic orders at the community level can lead to sentiment (extra-market relationships), viz. “team-building,” and lead to greater incentive for collective action than at depersonalized level of exchange. See Virgil Storr 2007, “Hayek and Lefebvre on Market Space and Extra-Catallactic Relationships,” The Review of Austrian Economics (upcoming).

12. A General Theory on the Hierarchy of Political and Economic Orders At lower levels of the hierarchy we realize that some government involvement in our lives is both necessary and beneficial. We see, on a day-to-day “team” level, the need for public works and services; for police, fire-fighting and emergency medical services, for roads, urban mass transportation and for sewer and water services. We understand the need to share these, in Marxist terms, “means of production”, to receive these services “according to our needs” and to pay for them “according to our abilities.”

13. A General Theory on the Hierarchy of Political and Economic Orders As we move further up the hierarchy our relationships are more depersonalized, and, social and political organization is less voluntary and less personally-organized. Government redistribution at depersonalized levels can remove the compassion of daily exchange and leave both the recipient and the ‘donor’ of redistribution with a sense of alienation. Social capital can be diminished as result of these depersonalized exchanges.

14. A General Theory on the Hierarchy of Political and Economic Orders At lower levels coercive political activity and collective action does not bring untoward alienation because we directly see, and use, the result of our tax dollars. We have created a sense of civic community. However at depersonalized level of exchange (e.g. trade over distances) a team is not built and strict negative rights (rule of law) may be best role for government. More government may decrease social capitaland bring political alienation.

15. A General Theory on the Hierarchy of Political and Economic Orders Trade is how wealth is created (Ricardo 1812) and classical liberalism describes how best to allow those who do not know each other to trade; by providing a clear system of property rights and a rule of law in which to bring redress when wronged and to remove impediments (uncertainty) to trading freely with those we don’t know. Wealth creation is how we move from material need to spiritual and emotional advancement.

16. A General Theory on the Hierarchy of Political and Economic Orders On government spending: “The members of the effective coalition will receive differentially larger shares of the benefits expected to result from collective action and/or they will bear differentially smaller shares of the costs of collective action providing general benefits for the whole group. This amounts to saying that redistributive elements must be part of any collective decision reached by less-than-unanimity rule,” (Buchanan and Tullock 1962, The Calculus of Consent).

17. A General Theory on the Hierarchy of Political and Economic Orders Summary: Through keeping a check on the tendency of the nation-state to grow due to the unequal distribution of costs and benefits of government growth, and acknowledging how this growth may be a fetter on self-organizing processes that lead towards a decent human life, we might improve our own individual and collective paths towards developing human potential.

18. A General Theory on the Hierarchy of Political and Economic Orders Summary (cont.) The political, philosophical and economic discussions we might be having can move beyond the establishment political practices at the nation-state level, and our focus can be at what level, and to what extent, in our lives does government belong.