Justice and Its Surroundings
by Anthony de Jasay,
Indianapolis, Liberty Fund
2002, 321 pp
ISBN 0-86597-977-4

‘It seems to me that by promoting clear thought, …one would be doing a greater service to the good society than by promoting good principles.’

A. de Jasay, in the book under review, p. vii.

Anthony de Jasay is possibly the most insightful and comprehensive among the new European radical liberals. They are arguing with passion against those opportunistic political pragmatists on the left and the right, who are replacing more and more of our individual liberties by expanding the ambit of coercive public choice. This school—if a school it is—is not widely known in Australia; names such as Hardy Bouillon, Anthony Flew, Angelo Petroni, Gerard Radnitzky, Arthur Seldon, and Manfred Streit are hardly household names here. These writers stand on the shoulders of classical philosophers of individualism, such as John Locke, David Hume and Ludwig von Mises. Like better-known leading American libertarians, such as Walter Block, Richard Epstein, David Friedman, Hans-Hermann Hoppe, and Gordon Tulloch, they are highly critical of democratic majority rule. Given the slow drift to political opportunism and collectivism in the Australian democracy, friends of private responsibility should take greater note of these authors.

On Jasay and his oeuvre

Anthony de Jasay might be described as an Austrian institutionalist, because his copious writings argue from a 'neo-Austrian' basis, i.e. for individual responsibility in a world of limited knowledge, strict subjectivism—namely that only individuals can act and choose —and minimal government. He has also thought about the right institutions, the rules that underpin a free and just society. He is relying primarily on the ethical norms, conventions and customs, i.e. the rules that evolve within society and are enforced spontaneously, rather than top-down legislation and administrative regulation.

As a young refugee, Jasay came to Perth and studied economics. As he once confessed to me, he, the Hungarian aristocrat, found post-war Australia rather inward-looking, mediocre and uninspiring. He was glad to leave for a teaching position at Nuffield College, Oxford. In 1962, he decided that an academic salary permitted only too modest a life style; so he became an investment banker, making and losing fortunes. From the net result, he has managed, since the late 1970s, to become an independent scholar in the service of liberty. He resides in rural Normandy.

Before we turn to his latest book, Justice and Its Surroundings, it seems worthwhile to undertake a quick tour d'horizon of Jasay's most influential earlier works.[1] His first major, and arguably most-cited, work is The State (1985), in which he developed a dynamic theory of why democratic government cannot remain limited. The state is seen much like economists treat the firm—an actor who maximises his discretionary power to pursue its own, self-chosen aims. The main game is redistribution, seeking and using monopoly positions, driving governments in the direction of totalitarianism. ­­In Social Contract, Free Ride (1989) he refutes the widely accepted public-goods argument for government activity, as well as allegations of 'market failure' to develop possible voluntary, competitive solutions for problems which are now ceded undisputed to government. His highly readable small volume for the Institute of Economics Affairs, the London sister organisation to the CIS, Choice, Contract, Consent (1991), restates liberalism to make it resistant to infiltration by its many false friends who claim to be liberals, but import collectivist neo-conservative, social-democratic and neoclassical concepts. ­­In Against Politics (1997), Jasay targets the alleged need to override individual choices by collective decisions. He casts doubt on the benign powers of constitutional constraints on the rulers, as well as the possibility of limited government. He demonstrates how deep-rooted conventions on torts, contracts and property can do the work of coercive laws and maintain what amounts to rule-constrained, ordered anarchy.

To his chagrin, Jasay appears to be quoted most frequently for the term 'the churning society' which he coined. Over the past fifteen years, he has produced a fresh and complete intellectual body of arguments in defence of liberty; and has done so in a most accessible style of writing. Is this why so many academics and so many adversaries of individual freedom have so far tried to ignore his oeuvre? However, recognition is coming, with many of his writings now being translated and someone like Nobel Prize winner James Buchanan acknowledging the 'flint-hard' qualities of Jasay's argument in the book under review.

What is justice?

Jasay's latest book is a collection of essays which should be seen in the context of his earlier writings. Indeed, the opening segment ('The Needless State') summarises his earlier arguments against the hard and soft collectivism, which is so widely and so uncritically accepted in democracies. Of course, the collectivist message is continually propagated by government bodies and their hangers-on—in public schools and universities, through daily, government-funded broadcasts, public speeches, spin-doctoring, government-supported research, government-dependent studies and inquiries, tax-funded advertising and media releases. We are told every day by politicians of all shades, and their administrative assistants and cronies, of the merits of submitting to the state under a supposedly voluntary social contract. In particular, we are told that redistribution enhances the 'common good'. Jasay uses all his considerable weapons of logic and empirical experience to caution the reader against accepting such statism and against falling into the trap of tolerating coercive redistribution of incomes and life opportunities because they promote justice.

Early in the book, Jasay attacks the explicit or implicit notion that 'every unfilled need, every blow of ill luck, every disparity of endowments, every case of conspicuous success or failure, and every curtailment of liberties, is a question of justice' (p. viii). He distinguishes between two meanings of 'justice': There is what he calls a 'no fault concept of injustice'. It is adduced wherever real conditions deviate from someone's ideal norm, whether the deviation is caused by nature or some other factor. He rejects this definition in favour of the more traditional meaning that relates injustice to actions which are, by convention, considered unjust. The first meaning relates to outcome equality and coercive redistribution by government, the latter to rules of conduct, or institutional economics.

The collectivists of all descriptions, who buy elections and thrive by promising well-organised groups redistribution in their favour, tend to claim justice as a noble motive for expropriating some by coercion and giving handouts to others. The socialists have vilified the exclusivity of private property and have used the claim of being just even more than other political operators, because claims of socialist policy being rationally designed and claims to 'iron laws of history' would never win the argument for socialism. But Jasay shows that the primary aim of the socialists is to hold power for an elite and control the masses. He shows that the consequences of much socialist policy are an unjust lack of respect for the human being and unjust acts of control and coercion. This is why the 'real, existing' socialism has tended to weaker enforcement, ever more futile commands, habits of neglect, waste and shirking, and ultimately to gross inefficiency (chapters 13 and 14, where he deals with 'market socialism', which he calls a square circle).

In Part Two of the book, Jasay dissects the concept of distributional justice, as well as the political game of redistribution. He convincingly rejects the public choice optimism, which I myself once shared, that the abuses of the redistributional welfare state in majoritarian democracies can be stopped simply by changing the rules. We have to realise that parliamentarians and other political entrepreneurs will almost inevitably expand the scope of redistributive legislation, whatever the perverse economic and social consequences. Like all others, they seek to use their powers to expand business. More welfare programs widen their influence.

Jasay starts from the position that all redistribution implies a violation of private property rights. He takes on those who consider taxation as compatible with property rights protection, those who claim that property rights should not be seen as 'absolute', that property rights are somehow conferred on individuals by society (two arguments used widely by the Green lobbies in Australia), that the starting position of uneven property ownership makes the whole system unacceptable, and that political tax-subsidy games will somehow make capitalism politically more acceptable. He concludes with von Mises that all social welfare is ill-disguised socialism. Jasay ends with the rather pessimistic conclusion that democracies will hardly be able to extricate themselves from the welfarist predicament, once welfare recipients see transfers as 'rights' and entitlements. Neither can he imagine how the present mature welfare states can sustain themselves for long. When social welfare programs become prohibitively expensive and counterproductive, reformers will try to roll it back (as did to some extent Thatcher and Reagan, or recent Australian governments). But adjustment problems soon give interest groups and welfare lobbies the political opportunities in electoral democracies to ensure that welfare cuts are overturned and new handout programs adopted with a vengeance.

My own, slightly more optimistic view is that globalisation and population ageing will inflict traumatic experiences, which will inspire an ongoing and durable retrenchment of socialised welfare. My relative optimism is probably inspired by the reform history in Anglo-Saxon countries, whereas Jasay's pessimism derives from the frustrations of Old Europe.

The path to trauma-driven political reform will be paved intellectually if more people absorb Jasay's clear thinking about justice. According to him, it is a weasel word with many contradictory meanings. The essays on justice (in Part III) constitute the core of Jasay's theory of justice. He defines justice as conduct based on three principles: (a) responsibility, which derives from freedom and voluntarily assumed obligations (contracts), (b) the presumption of innocence, and (c) accepted conventions (institutions) which indicate at what is considered unjust. Rejecting the much-quoted John Rawls and proliferating social justice theories, Jasay—like Oxford philosopher Anthony Flew—rejects the view that mere inequality of income or wealth is an injustice.[2]

What is just or unjust behaviour is determined by conventions, which are evolved institutions that are enforced informally, as well as the government's monopoly in bringing about certain outcomes. These belong to what Jasay calls 'the surroundings of justice'. He also makes clear that justice, as he defines it, inflicts 'the bitter medicine of freedom' (the title of the last in this essay collection).

A transaction-cost justification of liberty

Because it is, to my mind, such an important idea, and because it again surfaces in the book under review, allow me to dwell on Jasay's most interesting justification of liberty. We owe him what I would call the 'transaction-cost justification of liberty', based on Austrian economics reasoning. It makes a novel consequentialist case for liberty, whereas natural law proponents and other liberals have begun with a priori reasoning for the merits of liberty or pointed to broad beneficial consequences, such as higher economic growth or less conflict in relatively free societies, without explaining logically why this should be so.

The most important condition that facilitates human coexistence is the presumption of liberty, property and innocence: the presumption that all individuals are free to act as they see fit, as long as others do not meet with valid objections in a particular society. In response to proposals for a specific action, others may raise objections, for example claiming tort. Then, law makers and arbitrators have to decide who is to bear the burden of proof, the intending actor or the objector. This is often decisive because the transaction costs of proving the objection valid can be very high. Decisions about proposed actions and the cost of proof depend on whether the list of acceptable objections is explicit and finite. Rational objectors will have specific and concrete reasons in mind and should find it easy to prove their claim by pointing to the list of valid reasons. The intending actor may falsify the objector’s claim by showing that no relevant objection is listed. The transaction cost of this process depends on the length of the list. In real life, valid objections are rarely enumerated. Some are based on implicit conventions, and the list is often infinite. Intending actors will therefore find it logically impossible to falsify the objectors' claims, and initiatives are easily frustrated.

If legislators and judges place the burden of proof on intending actors, they request the impossible—violating the legal principle of reasonableness. The burden of proof, argues Jasay, must therefore always rest with those who object. People in a community where all is forbidden, except what it is explicitly allowed or who need a 'right' guaranteed by some bill of rights, are not free.

In this context, Jasay makes an important distinction between liberties and rights. Liberties place the burden of proof on nay-sayers and objectors to free actions, whereas rights place the burden of proof, and the often considerable transaction costs, on intending actors.

This kind of reasoning of course escapes those who assume 'perfect knowledge', the hallmark of neoclassical economics. When people are perfectly informed, proving a case is not burdensome and transaction costs can be assumed away. In the real world of a modern economy, with a complex division of labour and ceaseless innovation, the transaction costs of finding knowledge and contracting exchanges are estimates to account for about half of all costs.[3]

How much government?

In the essays under review, as in Jasay's entire life work, the question of whether a community needs public choice and government at all, is never far from the surface. The title of Part I says that the state is not needed, and one essay makes a very nice case for relying on evolved, internal institutions and spontaneous enforcement. But can we really imagine a sizeable community to be run exclusively as an ordered anarchy?

In this book, Jasay deals with government almost exclusively as a redistributor, indeed he says that no government action can be imagined that does not have redistributional consequences. However, the traditional, classical viewpoint was that the primary role of government is protective, against internal rule breakers and external enemies. Indeed, in the essay 'Is National Rational?', Jasay touches upon defence, conceding that size matters here and that collective action may be advantageous in defending a community's security. But he does not follow this justification for collective action up in other essays when he claims there is no need for the state. This makes for a more dramatic argument: government is bad and superfluous. But it avoids a number of arguments in favour of government, which classical liberals tend to accept and which I have discussed elsewhere.[4]

It is a fact that even small, nascent communities, such as the Bounty survivors, created a government structure to secure the internal peace (after much murder and mayhem nearly wiped them out). One cannot brush this factual argument aside, as Jasay does, with the clever remark that one cannot disprove the allegation that illness is a condition for life, but that this has not stopped medical researchers from searching for cures. The medical profession tries to reduce illness, just as all contemporary liberals try to reduce the ambit of the state. And Jasay's arguments, which make a powerful and convincing case against redistribution, seem overstretched when he seems to extend his case to abolishing all government.

This seems a pity, because the real intellectual battle has always been to live with inevitably burdensome government, but to keep the monopoly of the state within narrow bounds and control its abuses. Developing a government-free utopia satisfies the demand of many for a static, perfect end state. However, Austrian philosophers, who perceive the real issues as evolutionary processes that have no final end state, should forgo such a dream and realise instead that the real task is to hold back Leviathan's gargantuan appetite for expansion. And that means to stem the tide of redistributional interventionism. On that score, Jasay has an excellent message to share with readers.

Overall

Like all essay collections, this book is not always tightly woven together. But more than most such collections, it is held together by the author's basic, compelling philosophy and his clear, though demanding writing style. The quote at the head of this article points to Jasay's main intent, namely to call a spade a spade and to get rid of the facile associations and conceptual amalgams which philosophers (like John Rawls, Brian Barry or T.M. Scanlon) and political spin doctors have been producing. It is his great merit that he ensures that we understand the fundamental value of justice for what it is. Justice is not fairness or equality. Nor is it impartiality. Nor is justice a kind of society-wide insurance scheme. It has nothing to do with political convenience. Just conduct is something real, and not some imaginary ideal that we can never realise.

Acknowledgements
This review essay owes much to pointers from, and exchanges with, Gerard Radnitzky.