Taxation in the Liberal Tradition

ROBERT A. LAWSON, J.R. CLARK

THE REVIEW OF AUSTRIAN ECONOMICS

Abstract: In this essay, we argue that liberal economists should take more seriously the problems of public goods and externalities as well as the capacity of taxation and state action to improve human welfare. While taking seriously the public choice concerns about how the political process works as well as Austrian concerns about the limits of our knowledge in the absence of market price signals, we should also acknowledge that public goods and externalities do exist and taxation can provide a means to improve human welfare.

Libertarianism and Basic-Income Guarantee: Friends or Foes?

JUAN RAMÓN RALLO

JOURNAL OF BUSINESS ETHICS

Abstract: The Basic-Income Guarantee is a governmental programme of income redistribution that enjoys an increasing predicament among academic and political circles. Traditionally, the philosophical defence for this programme has been articulated from the standpoint of social liberalism, republicanism, or communism. Recently, however, libertarian philosopher Matt Zwolinski also tried to reconcile the Basic-Income Guarantee scheme with libertarian ethics. To do so, he resorted to the Lockean proviso: to the extent that the institutionalization of private property impoverishes certain people by depriving their access to natural resources, these people deserve compensation and the most pragmatic way of providing this is through a Basic-Income Guarantee. This paper examines Zwolinski’s arguments and responds by demonstrating that the Basic-Income Guarantee is incompatible with libertarian ethics: the current levels of poverty are not caused by the institutionalization of private property and the Basic-Income Guarantee does not constitute a pragmatic approach to eradicate poverty.

Economic policy of a free society

PETER BOETTKE

THE REVIEW OF AUSTRIAN ECONOMICS

Abstract: Liberalism correctly understood is little more than the persistent and consistent applications of the principles of economics of the affairs of men be they domestic or international. These include mutually beneficial exchange, the absence of political privilege, and toleration. The institutional precondition of these principles is the rule of law, private property, and freedom of contract. Since the collapse of communism, however, the gains in human progress that have followed from economic and political liberalization are being increasingly questioned and critiqued. To counter these criticisms of liberalism, I contend, requires tireless and varied iterations of the basic principles. In order to prevent the invisible hand of the market process from being captured by the visible hand of political privilege, political economists must stress how the creative powers of a free civilization erode poverty, inequality, and monopoly privilege through the spontaneous order of market process.

Should There Be Freedom of Dissociation?

DAVID S. ODERBERG

ECONOMIC AFFAIRS, Volume 37, Issue 2

Abstract: Contemporary liberal societies are seeing increasing pressure on individuals to act against their consciences. Most of the pressure is directed at freedom of religion but it also affects ethical beliefs more generally, contrary to the recognition of freedom of religion and conscience as a basic human right. I propose that freedom of dissociation, as a corollary of freedom of association, could be a practical and ethically acceptable solution to the conscience problem. I examine freedom of association and explain how freedom of dissociation follows from it, showing how dissociation protects freedom of religion and conscience. Extreme cases, such as the problem of the Satanist nurse, can be handled within a dissociationist framework, so it is reasonable to think less extreme cases can also be dealt with. The serious objection that dissociationism entails unjust discrimination is answered primarily by appeal to the need for ‘full and fair access’ to goods and services by all groups. I then allay important concerns about what kind of liberal society we should want to live in. Next, I refute the charge that a dissociationist society violates liberalism’s ‘higher good’, arguing that liberalism strictly does not have a higher good. I conclude with some reflections on what a dissociationist society might look like.

Populism and Institutional Capture

NICHOLAS CHESTERLEY, PAOLO ROBERTI

EUROPEAN JOURNAL OF POLITICAL ECONOMY

Abstract: This paper analyzes the relationship between populism and institutional capture. Populist politicians provide voters with a utility boom followed by a subsequent bust. Non-populists provide a constant level of utility. Once elected, however, politicians of both types are able to seize control of institutions to ensure their re-election. We show that in equilibrium, populist politicians may capture institutions to avoid being voted out of power during the bust: non-populists do not. Voters rationally elect a populist if voters discount the future sufficiently or if it is too costly for the populist to seize control of institutions. Unfortunately, both types of politician may prefer not to strengthen institutions, either to allow their capture or to discourage the election of the populist.

Judaism and Liberalism: Israel’s Economic Problem with its Haredim

DAVID CONWAY

ECONOMIC AFFAIRS, Volume 37, Issue 2

Abstract: This article argues that, in the arrangements for the public provision of welfare for the poor and a basic education for all in both biblical and post-biblical times, Judaism is more closely in accord with classical liberalism than it is with those variants of liberalism which favour no more than the minimal night-watchman state as well as those which favour the extensive welfare states of contemporary Western social democracies. To the extent that Israel’s ultra-orthodox Jews (its Haredim) have been able to secure more by way of state subsidies (through exploiting the leverage their country’s national system of proportional representation has given them, which often leaves them holding the balance of power), not only are they endangering Israel’s viability as a vibrant, developed liberal democracy, they are also guilty of departing from the religious teachings and tradition of Jewish orthodoxy.

Culture, Politics, and Economic Development

PAUL COLLIER

ANNUAL REVIEW OF POLITICAL SCIENCE

Abstract: For a generation, political science has been dominated by the analysis of interests within the framework of rational choice. Although this has enabled major advances, it struggles to provide a plausible analysis of many instances of sociopolitical dysfunction. This article reviews recent innovations in economics, psychology, and economic history that are converging to rehabilitate culture as a legitimate element of analysis. Culture matters, and its evolution is amenable to formal scientific analysis. But these processes need not be benign: There is no equivalent to the invisible hand of the market, guiding a culture toward social optimality. An organizational culture can trap a vital public agency, such as a tax administration, into severe dysfunction. A societal culture can trap an entire country into autocracy or poverty.