Liberty Matters

Counter-Society: Shrink the State or Grow the Market?

In the discussion of the process by which ideas are articulated and developed, spread and made influential, and ultimately play a part in changing the world, the final stage is the one that Jim Powell discusses: mass movements that demand a change in some crucial aspect of the way things are. Often these are led by social or political entrepreneurs who seize on opportunities created by the conjuncture of new techniques, moments of endogenous change or crisis, and the articulation of persuasive arguments and narratives to put pressure on the status quo and its defenders. Often the crucial point is that the change aimed at has significant knock-on effects, or consequences, cascade effects if you will, and that the campaign itself, as well as the change, brings about long-lasting and significant change in the core beliefs and outlook of a population. The campaigns against slavery and for free trade were both examples of this.
An important point is that such campaigns, as Jim points out, are not narrowly political. One way of understanding them is to use a different idea from economics: public goods. Political activity and significant social and political change are public goods with significant free-rider problems. What campaigns of this kind do, inter alia, is to ‘bundle’ the public good of purposive collective activity with private goods such as entertainment or (important historically) religious observance. However, they are still political in the general sense that the aim in concrete terms is a change in the law, institutions, or public policy.
Why do this? Perhaps the most effective way of changing things in many cases is to change society through social action and have political change follow as a consequence. Classical liberals and libertarians of all kinds (including, in other words, libertarian conservatives and egalitarians) agonize over how to shrink the state and are ruefully aware of the obstacles. Instead of doing this, why not look at the problem from the other end and think about not how to shrink the state but how to grow the market and voluntary cooperation? The idea would be to grow institutions and practices to the point where, first of all, they start to actually crowd out government supply and, second, they start to change popular outlook and perceptions. This “counter-society” strategy was most fully spelt out by the late Samuel Konkin,[135] but has been tried in a small way in a number of places. One point to bear in mind is the one made by Tyler Cowen: while the state takes a much larger share of national income than it did in 1900, because of economic growth since then, the share taken by the private sector is in absolute terms much larger. Consequently the resources available are greater.
For example, if we were to list the issues that have the salience and significance that slavery or free trade had, one of the first would be education, which George Smith identified (correctly in my view) as one of the big failures for 19th-century classical liberals. A huge amount of energy has been spent on advocating and lobbying for things like school choice, vouchers, and the like. Why not rather simply get into the business of creating mass low-cost and efficient private education? Crucially I do not mean setting up private schools, which is the route many have tried. Rather look to create all kinds of new and innovative ways of delivering education that escape the model of schooling invented by the Prussians all those years ago. Doing this kind of thing not only changes society by changing the way people behave, it also changes the core ideas through both argument and experience, and it undermines, to the extent it succeeds, one of the core institutions of the modern state and its associated elites. Surely this is worth trying.
[135.] See, Samuel Edward Konkin III, New Libertarian Manifesto (Anarchosamisdat Press, 1980; Koman Publishing Co., 1983). Online <>.