On Self-Interest and Collective Interest

     

The Mill-Macaulay debate is fascinating stuff – and immensely entertaining knockabout stuff to boot – but I want to briefly revisit Sandra’s earlier point regarding a thorny matter: namely, how we might “move from here to there and, indeed, what ‘there’ is … a problem that is particularly vexing in the context of partiality (if we all were to gain it would be relatively straightforward to induce the change) … [and] factions that stand to lose through institutional reform.” As Sandra notes, there is much debate over how “we” might engineer the transition from “here” to “there,” and much debate and disagreement over whether “here” is really “bad” enough to warrant the potentially painful transition to “there” and whether “there” is really all it’s cracked up to be. As already noted, poor old Perronet Thompson “rebutted” Macaulay’s charge that the Greatest Happiness Principle was incentive-incompatible by asserting that the “greatest happiness of the individual … [is] in the long run to be obtained by pursuing the greatest happiness of the aggregate.”[111] As Ludwig von Mises similarly noted, “Liberal social philosophy … showed that by maintaining and developing the social bond each individual serves his highest interest.… [T]he sacrifices made in the fulfillment of social life are only temporary ones.… [D]uty and interest coincide. This is the meaning of the harmony of interests of which the liberal theory of society speaks.”[[112]

Indeed, Mises – explaining the classical-liberal theory regarding the “harmony of the rightly understood interests of all members of a market society” – explicitly states in a footnote that by “rightly understood” interests we “may as well say interests in the long run.”[113] Unsurprisingly, Mises (as with all too many thinkers) is implicitly invoking the far from robust assumption of a zero discount rate.[114] Nevertheless, the allure of the off-diagonal payoff (e.g, in a one-shot prisoner’s dilemma game) all too often assures that a person’s narrow self-interest trumps the collective interest. James Mill’s solution is, as we have seen, moral education. Accordingly, I wonder if the whole libertarian or classical liberal enterprise is just so much pious hope.[115] As the late Professor Buchanan candidly wondered, “To what extent … does classical liberalism depend on some presumption that man is perfectible?”[116] I leave the reader to enjoy the discovery of Professor Buchanan’s fascinating answer.

[111.] T. Perronet Thompson’s “‘Edinburgh Review and the ‘Greatest Happiness’ Principle,’” reprinted in Utilitarian Logic and Politics, edited by Jack Lively and John Rees (Oxford: Clarendon Press, 1978), p. 187.

[112.] Ludwig von Mises, Socialism (Indianapolis, Ind.: Liberty Fund, 1981), p. 363. Online: Ludwig von Mises, Socialism: An Economic and Sociological Analysis, trans. J. Kahane, Foreword by F.A. Hayek (Indianapolis: Liberty Fund, 1981). </titles/1060#Mises_0069_892>.

[113.] Ludwig von Mises, Human Action (Washington, D.C.: Henry Regnery, 1966), p. 674. Online: Ludwig von Mises, Human Action: A Treatise on Economics, in 4 vols., ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). Vol. 2. </titles/1894#lf3843-02_label_677>.

[114.] David M. Levy, The Economic Ideas of Ordinary People (London: Routledge, 1992) provides a brilliant and highly illuminating discussion of the way in which this fragile supposition rears its head in umpteen important debates.

[115.] Admittedly, the libertarian (or classical liberal) enterprise is a very broad-church: <https://www.theonion.com/articles/la-efficiency-chosen-as-site-of-2000-libertarian-c,1480/>

[116.] James M. Buchanan, Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism (Cheltenham: Edward Elgar, 2005), p. 11.