EKIP– Expert Club for Economics and Politics A Different Opinion
The raging discussion in the media space about the role of the market and the state is undoubtedly an interesting topic. The total ignoring of basic concepts and facts in it is definitely disturbing. This article is also aimed at explaining them. Who comes first? The person or the society.
A person is born, lives and dies in society. This is an established situation and only in this sense does the individual come second. At the same time, we know that society is not “alive” in itself. On the contrary, it is collective human action and does not exist outside of it. Human action is an expression of reason, which is the only given thing we have at our disposal to explain the world around us. It is a purposeful use of means to achieve a given goal. Goals are our needs. They are subjective, which means that everyone rates them differently. For example, some prefer the songs of Lili Ivanova, others the theses of Azis. There is action and inaction, there is no other category that our reason can recognize. With his action, a person seeks to replace one state with another, more favorable one, i.e. to overcome some burden. For this purpose, the individual chooses different means.
Society is the greatest tool that man has invented to achieve his goals. Which does not mean that one day our ancestors got together and planned the creation of society. It arose at that moment when the individual understood that with the help of his fellow man he could satisfy more needs, in an easier way. It is obvious that most of the achievements of civilization are the result of collective actions (i.e., of society), there are things that are beyond the power of the individual. However, such a fact does not make society less subordinate to the individual, on the contrary, it is his strongest weapon in the fight against the burdens of life, his most faithful tool. The division of labor, as a basic social characteristic, is the result of social actions. The greater it is, the more people's productivity increases.
About the laws
A person levels his needs. The benefits of the division of labor and therefore of society are not without their price. In order to benefit from them, an individual must give up other desires of his, such as suppressing his sexual drive or not taking the life of an opponent who stands in his way. The individual gives up these goals because he understands that voluntary exchange and united forces will lead to more benefits (satisfaction of more important needs) than confrontation and destruction. This is how laws arise - voluntarily, because both parties understand the benefits of cooperative actions. It does not matter here whether the laws are written, unwritten, whether we will call them norms, morality, social framework, etc. The important thing is that they are accepted by both parties voluntarily, in the name of better, individual well-being for everyone.
Therefore, laws are intended to guarantee free exchange between people. In this way, they preserve the fundamental building block of society. As has been pointed out, it is a choice. The individual must choose between society and violence, i.e., disregard for free exchange. A quite natural extension of such an indisputable fact is the need for private property, or more specifically, for its protection. Without this protection, freedom of exchange is violated, i.e., society and all its fruits are doomed to genocide.
About the market
Every action is a choice and an act of exchange - an effort to replace one state with another, better one. There are two types of actions - individual and those in which another party participates. Seemingly, an action can be of both the first and the second type. For example, there is a difference whether we make a gift selflessly or expect some future reward in return. Of course, although it is difficult to distinguish them with observation, logically the boundary is clear. The second type of actions are public.
It is typical for people to divide social actions into economics and non-economics. Two separate spheres in which different laws operate, often contradicting each other. For example, laymen say, in economics egoism is the leading factor, in social life, the opposite is altruism. This is not true. "The Strange Case of Dr. Jekyll and Mr. Hyde" is a mystery only to those who do not understand that human action is fundamental, i.e. the laws described above are valid without exception. There is no such thing as mass schizophrenia, in which the same people act now this way, now that way. Economics is a part of the science of human action that tries to explain market prices.
The market is a process of free exchange between individuals, therefore a necessary phenomenon for the existence of society. Therefore, any polemic on the topic of market versus society is doomed to fruitless results and old wives' tales. Prices are the result of this process.
For an exchange to take place, both parties must value more highly what the other party possesses, otherwise there is no point in exchanging property. Those who are against the market are against peaceful exchange, and therefore against society and all its achievements. This misunderstanding is due to the fact that some individuals make the wrong logical conclusions that they can take a larger share of the achievements of society, not by voluntary exchange, but on the contrary - by force. In this way, they put the means - violence, before the means - society, in order to satisfy their needs.
Of course, there is also a variant in which the exchange is not voluntary - a person often chooses to give the right to choose to another party. An asymmetric relationship arises, i.e. power. It does not matter what the ruling body is - a good or bad dictator, one or another party with a certain ideology. The important thing here is that a person always has a choice, i.e. he can act - he can obey or not obey, this action is first. Therefore, power does not exist without a choice. Of course, the choice is not always easy, a person weighs his needs subjectively. For one, it is more important to become a great journalist, even if it is an associate of the State Security Service. For another, the life of a simple electrician is preferable to being trampled all his life. There is always a choice.
For the state
The state is the form, not the content of society. Equating them leads to fruitless disputes and false logical conclusions. Conflict arises when the form does not correspond to the content. The rulers of the state act by force, and when this action is in conflict with free exchange, the market, the division of labor, and the laws that protect them, it is against society, i.e. the best means of satisfying our most important needs is destroyed. No ruler, whether individual or collective, can act against the interests of society forever. The moment individuals realize that society is falling apart, they will overthrow the ruler. This is, of course, a process; the slower it is, the more severe the consequences of the destruction of society and the division of labor.
The absolutization of the state is an unforgivable mistake, contrary to common sense. This is the place to explain that logically no one can conclude that the state is evil. On the contrary, the only correct logical conclusion is that if the form does not correspond to the content, we have a problem and we can expect, first, the collapse of society, second, a backlash from individuals and delegitimization of rulers.
Anarchists claim that voluntary exchange and therefore the observance of laws can occur without a state, they deny it. Of course, it is possible, but the opposite is also possible. Voluntary exchange does not imply the denial of the state as an instrument for the application of laws. Human action has proven that over the years it creates the state as an effective mechanism for the observance of laws. Whether it will continue to do so, whether it will create smaller structures or a world structure, we cannot know. Human action is a continuous speculation about the future, it is uncertain. The only safe and reasonable conclusion is that when the means are not suitable for our purposes, they are replaced by others.
How does it happen that the state works against society is a logical question. People make mistakes. There is nothing wrong with that, the result of any action can be both profit and loss. There are many examples in which the majority of individuals choose the wrong means to achieve their goals. There are no absolute truths, no ready-made formulas, the world is dynamic. The task of reason is to make a constant assessment of human choice. Neither the confidence of the masses nor blind faith can overcome the uncompromising arguments that reason raises. Seen through the prism of the state, man invented democracy, considered as a decision-making process. This is the best we have at this stage. However, the denial of its imperfections inevitably leads to the loss of free choice and the destruction of society.
About ideologies.
Ideology is a system of views about man and society (collective human action). Although they are numerous, they rarely differ in their ultimate goal. There is no political orator who preaches slavery and ruin, because the propaganda of such doctrines is doomed to failure - they do not meet subjective human needs. Each promises freedom, happiness and abundance. Despite the common goal, they differ in the subjective assessment of the means by which the goal can be achieved.
Therefore, this is a dispute about the means, not the ends of human action. Here reason has the task of weeding out the rotten apples. Ideologies that contradict the division of labor and the market are doomed to failure. Their typical feature is that they are logically inconsistent and create conflicts between individuals. There are many examples, rich and poor, black and white, Christians and Muslims, old and young, one nation against another. Therefore, every nationalist, leftist, anti-market ideology is against society. Against the peaceful unification of people with common goals. They often try to deny reason, a human given, which is our only means of understanding the world around us. They raise into a cult some supernatural power with which to justify their ideas - of course, subjectively chosen. Ruin is inevitable, because where reason is denied, the battle between subjective doctrines is certain. In every battle there is violence, precisely what society denies.
Many writers, no matter how much or what they have read, make an unforgivable mistake related to liberalism. They believe that its ultimate goal is monetary profit, that individuals are driven solely by this need, that they act according to a predetermined monetary model in which everyone maximizes their monetary well-being. No conclusion could be further from the truth.
Every action implies the hope of profit, it aims at removing some difficulty and replacing it with something better. Of course, this is not about money, but about a subjective state that we value more highly after our action. It is an indisputable fact that monetary profits are a special case of human action, that prices are the logical consequence of human choice (as mentioned), but they do not encompass it completely. Not seeing this fact certainly leads to unhealthy conclusions.
Liberalism defends society, the division of labor, and free exchange as the best means of satisfying our individual needs. No more, no less. It is no coincidence that in another time, Bulgarians abandoned their guilds and rich farms and went to the forests, because the need for a free society and equality before the law was stronger than having three bags of gold hidden in some basement. There is nothing more liberal than that.
The world has changed a lot since John Locke. His theories were based on a time when socio-economic relations were quite simple and based on land ownership. When a limited number of owners had the right to vote and were of similar intellectual and economic characteristics. After the Industrial Revolution, things changed a lot. Opposition as a political action based on different groups is a fact. Therefore, liberalism in its classically beautiful form will never be. The state and the "state" ideology swept away everything. Ever since the times when the fight against monopolies or the reduction of social contradictions were and are the goals.
What kind of liberalism can we talk about now, or that the state is imposed by society? The state at the moment, I think, is based precisely on two denied characteristics - expropriation and violence.
Let's see what the "liberal countries" of the G20 are doing. What the EU did with the "coordination" of VAT years ago. In order to avoid the creation of tax havens. Just as regional integration saved the nation state (Milward), so now the international one will save it.
Ideologies and elections in which informed people, participants in an informed market, can participate are just a fond memory of the past.