A General Theory on the Hierarchy of Political and Economic Orders

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A General Theory on the Hierarchy of Political
and Economic Orders

• Cameron M. Weber
• New School for Social Research
• New York, USA

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A General Theory on the Hierarchy of Political
and Economic Orders

• Political science began as a branch of philosophy
  with The Republic of Plato (circa 390 B.C.).
• Economic science began as a branch of political
  science with Adam Smith and The Wealth of Nations
  (1776).

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A General Theory on the Hierarchy of Political
and Economic Orders

• Thesis argued in paper
• Alignment of certain economic and social orders
  might best enable us to be on a path towards a
  decent human life.
• For decent human life see Allen Buchanan 2006,
  Equality and Human Rights in Politics,
  Philosophy and Economics.

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A General Theory on the Hierarchy of Political
and Economic Orders

• Additional purpose of paper is to advance
  political dialogue by deconstructing political
  order into classes of organization and aligning
  classes with proposed economic orders, allowing
  for more specific less idealistic and
  absolutist - policy debates.
• Presents an attempt at moving beyond us versus
  them, left versus right, and neo-liberalism
  versus social democracy political debate.

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A General Theory on the Hierarchy of Political
and Economic Orders

• Methodological approach
• Advances arguments supporting thesis by combining
  psychology, organizational behavior, political
  science and economics.
• Attempts post-modern approach through cultivation
  of self-organizing processes (see Burczak 2006,
  Socialism after Hayek, for discussion of this
  new science.)

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A General Theory on the Hierarchy of Political
and Economic Orders

• Marx (and others) said we want to see and own the
  fruits of our labor.
• Maslow described a hierarchy of needs from food
  and shelter at lowest level and
  self-actualization at the highest.
• Adam Smith described how classical liberal order
  would increase material well-being through
  specialization of labor.
• Organizational behavior team-building theory
  describes how a team is built over time with
  repeated interaction.

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A General Theory on the Hierarchy of Political
and Economic Orders

• Problem Statement (for USA)
• Federal government share of GDP increased from
  15.6 in 1950 to 18.4 in 2000 (a 17 increase).
• Public Opinion data from 1950 to 2004 shows
  increase in people identifying themselves as
  independent and decrease in those aligning with
  either major party.
• Implies growth of government at national level
  has lead to political alienation.

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A General Theory on the Hierarchy of Political
and Economic Orders
In our political system we have an industry
dominated by two firms. Republicans and
Democrats hold 99 of the market share and have
undertaken actions at the state and national
level to make it practically impossible for any
other party to enter.Because no individual can
influence government, stripping away intermediary
organizations of individuals through the
petition process for market entry and
soft-money limitations to independent parties
makes the remaining organized groups more
powerful (Cato Institute 2006).
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A General Theory on the Hierarchy of Political
and Economic Orders

• David Hume (and other Enlightenment philosophers)
  wrote of economic calculation being less
  important when sentiment is present. This
  implies that less-defined property rights (a more
  communistic economic order) is possible at the
  family and intimate levels of social and
  political organization.

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A General Theory on the Hierarchy of Political
and Economic Orders

• Personalized economic orders at the community
  level can lead to sentiment (extra-market
  relationships), viz. team-building, and lead to
  greater incentive for collective action than at
  depersonalized level of exchange.
• See Virgil Storr 2007, Hayek and Lefebvre on
  Market Space and Extra-Catallactic
  Relationships, The Review of Austrian Economics
  (upcoming).

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A General Theory on the Hierarchy of Political
and Economic Orders

• At lower levels of the hierarchy we realize that
  some government involvement in our lives is both
  necessary and beneficial. We see, on a
  day-to-day team level, the need for public
  works and services for police, fire-fighting and
  emergency medical services, for roads, urban mass
  transportation and for sewer and water services.
• We understand the need to share these, in Marxist
  terms, means of production, to receive these
  services according to our needs and to pay for
  them according to our abilities.

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A General Theory on the Hierarchy of Political
and Economic Orders

• As we move further up the hierarchy our
  relationships are more depersonalized, and,
  social and political organization is less
  voluntary and less personally-organized.
• Government redistribution at depersonalized
  levels can remove the compassion of daily
  exchange and leave both the recipient and the
  donor of redistribution with a sense of
  alienation. Social capital can be diminished as
  result of these depersonalized exchanges.

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A General Theory on the Hierarchy of Political
and Economic Orders

• At lower levels coercive political activity and
  collective action does not bring untoward
  alienation because we directly see, and use, the
  result of our tax dollars. We have created a
  sense of civic community.
• However at depersonalized level of exchange (e.g.
  trade over distances) a team is not built and
  strict negative rights (rule of law) may be best
  role for government. More government may decrease
  social capital and bring political alienation.

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A General Theory on the Hierarchy of Political
and Economic Orders

• Trade is how wealth is created (Ricardo 1812) and
  classical liberalism describes how best to allow
  those who do not know each other to trade by
  providing a clear system of property rights and a
  rule of law in which to bring redress when
  wronged and to remove impediments (uncertainty)
  to trading freely with those we dont know.
• Wealth creation is how we move from material need
  to spiritual and emotional advancement.

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A General Theory on the Hierarchy of Political
and Economic Orders

• On government spending
• The members of the effective coalition will
  receive differentially larger shares of the
  benefits expected to result from collective
  action and/or they will bear differentially
  smaller shares of the costs of collective action
  providing general benefits for the whole group.
  This amounts to saying that redistributive
  elements must be part of any collective decision
  reached by less-than-unanimity rule, (Buchanan
  and Tullock 1962, The Calculus of Consent).

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A General Theory on the Hierarchy of Political
and Economic Orders

• Summary
• Through keeping a check on the tendency of the
  nation-state to grow due to the unequal
  distribution of costs and benefits of government
  growth, and acknowledging how this growth may be
  a fetter on self-organizing processes that lead
  towards a decent human life, we might improve our
  own individual and collective paths towards
  developing human potential.

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A General Theory on the Hierarchy of Political
and Economic Orders

• Summary (cont.)
• The political, philosophical and economic
  discussions we might be having can move beyond
  the establishment political practices at the
  nation-state level, and our focus can be at what
  level, and to what extent, in our lives does
  government belong.