Liberty Matters

Class Structures as Complex Systems


David Hart provides an excellent introduction to the concept of class in classical-liberal thought. I would like to begin by highlighting two related points from his synopsis. First, distinctions between groups or classes of people have historically been recognized as important within the classical-liberal tradition. Second, most of the attention has been directed towards the divide between the political haves—those who have disproportionate access to the use of the state’s monopoly on violence—and the political have-nots. As Hart puts it in describing the first of his three ideas common to different versions of classical-liberal class analysis: “societies can be divided into two antagonistic groups, most simply put as ‘the people’ vs. their “rulers.’”[34]
Classical-liberal scholars have historically focused on the difference between the political haves and the political have-nots for good reason. The idea that even democratic forms of government generate privileges for those in power is and has been a great contribution of classical-liberal scholarship. Rules can create privileges that give particular individuals or types of people power over others, and although rules emerge from many sources, the strongest and most stable of these privileges are no doubt those enforced through the state’s monopoly on violence. State power as such is a significant and often underappreciated source of inequality in authority and opportunity.
But what I would like to suggest in this brief essay is that, in many societies, people cannot easily be sorted into those who rule and those who are ruled.[35] Class structures are instead better conceived as complex systems in which power and privilege can vary across social groups in many different ways simultaneously. Considering class structure in this way puts the focus on rules and how they affect different groups of people rather than on particular external characteristics like race, gender, family membership, or economic status (though these could turn out to be quite important if rules do discriminate on those characteristics). Further, the classical-liberal tradition provides many valuable tools that can facilitate conceptualizing class in this way, including the focus on institutional analysis and emphasis on the significance of even effects which cannot be seen.
All rules in effect in a society—including laws, regulations, and consistently enforced social norms—have the potential to give authority to some that is denied to others. For example, a law requiring plumbers to procure a license from the state gives some individuals the authority to legally accept compensation in exchange for installing a shower while simultaneously denying others the right to do the same. Although the law will certainly have a greater impact on some individuals than others, it may or may not privilege a particular group.[36] To the extent the law applies equally to all, it is best considered a general law.[37]
Other rules are non-general, meaning that people acting in the same way are treated differently under the rule. For example, a law that prohibits women from driving means that the choice to drive is met with different consequences for them than for men. The possibility of punishment is an additional cost borne only by women that they must consider when deciding whether to pursue a course of action that involves driving. Consequently, in a society in which this rule exists and is enforced, it is likely that women will make systematically different choices from men, even with no difference in their interests or abilities.[38]
The system of rules in effect in a particular society can potentially include multiple non-general components. Class distinctions are most obvious when the same group is repeatedly singled out for differential treatment based on gender, religion, race, family name, place of birth, or some other identifiable characteristic. Think slave societies, caste-based societies, and other obviously discriminatory systems, such as those faced by women and racial and religious minorities in many different countries across the globe. These institutional systems are of great concern to most of the liberal tradition, and it would be a missed opportunity for the classical-liberal voice to be missing from that discussion.
It is also possible for the system of rules in effect in a particular society to include multiple non-general rules that do not always single out the same population. Political privileges and unequal power relationships could potentially be distributed quite widely through the population, possibly even in ways such that group membership is not static.[39] To the extent this is true, a single system of rules can contain many different hierarchical power structures.
In a system with multiple hierarchies simultaneously in effect, it is possible for the same two people to have a different relationship to each other depending upon where and how they are interacting.[40] Consider the position of a city councilwoman. Her position gives her a privileged authority with respect to a particular set of decisions—things like which roads will be plowed first after a storm, or perhaps whether or not to levy a property tax on vehicles garaged within city limits. But the councilwoman does not have privileged authority relative to the other residents of the town in all areas of life. The members of the school board will be privileged with respect to what curriculum her children will be required to study. The chief of the police department will be privileged with respect to how strictly she will be required to obey the posted speed limit. The IRS agent who lives in the city will have to pay the vehicle tax assessed by the councilwoman, but the councilwoman will be subject to the IRS agent’s authority when the accuracy of her income tax return is assessed. I leave it as a matter for further debate whether the head of the neighborhood association in which she lives, the pastor at the church she attends, and the supervisor at her day job might be considered to also have differential authority. The answer is likely a function of both one’s definition of power and the specific institutional context.
Particularly in a polycentric system in which rules are created by multiple types of organizations simultaneously,[41] possibly even with multiple organizations regulating the same types of decisions, teasing out the structure of class relationships in a particular society can be quite challenging.[42] This suggests an important direction in which classical-liberal class analysis could differentiate itself from other versions of class theory. Instead of beginning analysis with the assumption of a class relationship, classical liberals can take as their first task the identification of the many different rules in effect that shape the allocation of power throughout a class structure.
This leads directly to two reasons why I think scholars working in the classical-liberal tradition are particularly well suited to study class structures. First, institutions matter, and this has always been an important part of the tradition of classical-liberal scholarship.[43] If the way to understand power and class structures in society is by first identifying the rules in effect and the ways in which those rules might privilege particular groups, then class analysis is effectively a form of institutional analysis.
Second, in the words of Frédéric Bastiat:
[FEE trans.] [A]n act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause -- it is seen. The others unfold in succession -- they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference -- the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.[New LF trans.] In the sphere of economics an action, a habit, an institution or a law engenders not just one effect but a series of effects. Of these effects only the first is immediate; it is revealed simultaneously with its cause, it is seen. The others merely occur successively, they are not seen; we are lucky if we foresee them. The entire difference between a bad and a good Economist is apparent here. A bad one relies on the visible effect while the good one takes account both of the effect one can see and of those one must foresee. [44]
Bastiat’s message about the importance of unseen and second-order effects may be the most valuable insight classical-liberal scholars could bring to the study of class structures. The non-general rules that create differential powers and privileges don’t just have the immediate effect of systematically distorting the costs of action along group lines. The group divisions they create will continue to have consequences, potentially very far into the future. For instance, what are the long-term ramifications of historical non-general rules such as the Jim Crow laws, or the Progressive Era decisions by the Supreme Court that upheld the constitutionality of gender-specific legislation? What are the likely effects of new non-general policies being considered today, such as proposals to limit the international mobility of particular groups according to their nationality or religion?
Class analysis can be a way to bring important classical-liberal insights about society and the nature of power to discussions about the long-term impacts of discriminatory laws. This is not only important for understanding history, but also because of Bastiat’s admonition that it would be “well for us” if these long-term consequences could be foreseen. [45] We may not be able to rectify the damages of class divisions created in the past, but it may be possible to avoid causing further damage if we can avoid perpetuating systems that differentially advantage particular groups at the expense of others.
[34.] David Hart, “Classical Liberalism and the Problem of Class.”
[35.] With some important exceptions, the most extreme being slave societies. In a slave society it is very easy to see who has authority and who does not, and the power relationship is strongly unidirectional.
[36.] Whether or not a definable group receives a differential advantage is an empirical question that depends on a variety of other factors, including other related regulations in effect and the history of the occupation (e.g., has a particular group been encouraged or denied the ability to work or train as plumbers in the past?).
[37.] This is the same distinction as made by, e.g., F. A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960), and James M. Buchanan, “Three Amendments: Responsibility, Generality, and Natural Liberty,” Cato Unbound, December 4, 2005, <>.
[38.] The only reason we cannot say for sure that women will choose differently is that the cost difference may be small enough that it won’t result in observable changes in behavior, though that is not likely in this case. Or, there could theoretically be other discriminatory rules that either decreased the cost of driving for women or increased the cost of driving for men that would counterbalance the expected effect.
[39.] An interesting question open for analysis is to what extent privileges are likely to consolidate over time. This relates closely to Hart’s call to study “the circulation of elites.”
[40.] I further elaborate on this argument in Jayme S. Lemke, “An Austrian Approach to Class Structure,” in eds. Christopher J. Coyne and Virgil H. Storr, New Thinking in Austrian Political Economy, (Bingley, UK: Emerald Group Publishing Limited, 2015), pp. 167-92.
[41.] See Vincent Ostrom, Charles M. Tiebout, and Robert Warren, “The Organization of Government in Metropolitan Areas,” American Political Science Review, 55 (1961), pp. 831-42, for an introduction to polycentricity.
[42.] This complexity could contribute to why an individual’s interests might not always align with those of their perceived class, as discussed in James M. Buchanan and Gordon Tullock (The Calculus of Consent: Logical Foundations of Constitutional Democracy (Indianapolis, IN: Liberty Fund, 1999 [1962]), p. 26.
[43.] See, for example, Ronald Coase, “The New Institutional Economics,” The American Economic Review 88 (1998), pp. 72–74, which explains the connection between new institutional economics and ideas about the functioning of economic systems which extend at least as far back as Adam Smith.
[44.] FEE trans.: Frederic Bastiat, “That Which is Seen, and That Which is Not Seen,” (1850), </titles/956#lf0181_label_033>. New LF trans.: “What Is Seen and What Is Not Seen” </pages/wswns>.
[45.] Ibid.