An Anthropological Case for Limited Constitutional Government: Part One

People hold a wide range of beliefs concerning human nature, and these different beliefs impact how they view the role of government and the proper prerequisites for society. These beliefs are often left as an unspoken assumption that leads groups to differ in their political beliefs. This article will be an examination of how a free market versus a socialist system would fare if two extremely different assumptions about human nature were true. This analysis will primarily be done through assessing the performance of a private property-based limited government system against a socialized system in societies where most people are strictly self-interested, or strictly altruistic.

In a world where most people can be assumed to be extremely self-interested and untrustworthy, a system of rigid protection of private property and rights holds the edge over a socialist system. In this simplified hypothetical, individuals will only act to increase their own financial gain, and government officials will only act to increase their financial gain. Individuals have two ways to increase their financial welfare: expending energy in the political sphere to increase money from the government or expending energy in “the market” to increase money from “the market.” Government officials seek to increase their financial gain by balancing the positive financial gain of government spending (this spending increases their financial gain by increasing popularity and thus opportunities for gain, along with a salary increase tied to government spending) with the negative financial gain of taking money from the people (this results from their decreased chance of reelection if they tax higher). Each official tries to maximize government spending while minimizing taxation. 

The Libertarian government restrictions in this model are unchangeable laws that prohibit:

1. Taxation over a certain threshold
2. Government debt
3. Alteration of private property laws
4. Violation of individual rights or property ownership unless someone has infringed on the rights of others

The Socialist government has a different set of principles:

1. A supermajority is required for distributive changes
2. The people have a right to politically determine ownership and economic structure
3. The state has the power to centrally plan and own industries

The libertarian set of principles restricts politicians to maximizing their financial gain in an extremely restricted environment, and the core limitations to government power and spending reduce the private benefit to rent-seeking. This pushes individuals to primarily seek gain through the market, which maximally pushes aggregate financial gain but also some income disparity(far less than that created in our current environment of government-enforced monopolies). If the society truly had no empathy, some constitutional anti-starvation blanket would be necessary to fill in the gaps for those with inability that would emerge if there were no private charity. However, even if everyone within the society cared only for themselves, each citizen would still have a path to the life that would most satisfy their selfishness. 

However, in a self-interested society, the socialist system would allow far graver tramplings of rights and abuses of well-being. Through debt, redistribution, and annexation of industries, politicians have an almost unbounded ability to increase spending while minimizing impact to a majority of the population. The slimmer the vote margin required for changes, the less limited the officials will be in their selfish spending and reelection efforts. The huge potential for gain in the political sphere means that rent-seeking will become an appealing choice for a far larger segment of the population than before, and those who will not or can not effectively influence the political system will be trodden upon by those who can. Rather than the removal of a competitive market, socialism creates a market with far less rules than the most laissez-faire society.

However, in the situation with primarily altruistic people, the socialist system becomes much more appealing. The model still describes people’s utility as strictly financial, but now they will vote based upon a personal weighting of aggregate and other people’s individual financial gain. This utility function would vary from person to person, but it would rule out scenarios like killing a random person to increase aggregate financial gain, or avoiding slight inconvenience to one small group of people even if it had huge positive effects for the rest of society. This is being quite generous to socialism, as many socialists do actively wish severe harm to the wealthy so they can increase the financial gain of the middle-class and poor majority group. However, in the model, each individual only seeks their own financial gain in so far as it allows them to maximize their unique combination of aggregate and individual utilities for their country. A personal example would be if someone were to vote based on the principle that the optimal societal outcome results in them with $70,000, the poorest person in society with $60,000, and the average income per person at around $100,000. Political office holders have a similar maximization situation, as they would be trying to maximize welfare for society and individuals within that society, then set a minimum for their own financial gain needed to survive. The government and people’s ability to alter private property laws to best satisfy the welfare of the people would mean that only industries where some benefit could be gained through nationalization would be nationalized. Industries that were benefiting the nation through private operation could continue. 

The socialist approach faces two difficulties, even in an entirely altruistic society. Even with utility simplified to money, it is impossible for every citizen to know the assumed subsistence levels of other citizens. The wide range in utility seen as a minimum would vary greatly, and it would be unfair to expect every citizen to understand what the others wanted. This informational problem becomes vastly more complex as real utility is made up of the ability to act meaningfully in a wide range of unquantifiable spheres of life. The second difficulty would be determining which industries to nationalize, as the inherent uncertainty in business requires constant risk taking and experimentation to lead to new discoveries. It would be very difficult for a nationally controlled industry to properly understand the distorted price signals it would receive from a socialist economy, and even more difficult for a government to know whether a privatized industry was in a pre-growth stage or truly “needed” government help. 

In a more libertarian government situation with a fully altruistic populace, people’s altruistic senses could operate with a level of situational knowledge that would not be possible in socialism. They could directly donate to individuals and causes that would bring the world closer to their ideal state. There is a risk of some people falling through the cracks, that would have been served in a socialist environment, but for the most part people’s specific needs would be met by private patrons with far more understanding than in a governmental welfare system. However, even within a libertarian environment, government officials seeking to maximize the aggregate and individual welfare of society would still have space to create limited welfare to prevent cases of true poverty or starvation. The far more limited level of government spending would mean that welfare would be utilized primarily in the most dire situations, and the great majority of the budget would constitutionally have to go towards protection of rights and property ownership. The aggregate welfare would be far higher in the Libertarian structure, as a result of the greater accessibility of information to both entrepreneurs and philanthropists as they acted. The individual welfare would be higher in almost all cases, as every need that was known of by private citizens would be taken care of in a deeply relational and individual way. If that failed, the inclusion of space for limited government welfare would mean that on the aggregate and individual level, the socialist system underperforms the constitutional free market system, even in a society of perfect people.