This is interview #19 in JohnsonForAmerica.com’s “Important Voices” series, where we talk with key figures, such as elected officials, candidates, authors, commentators, and policy experts, about the issues of the day. A new interview is released every Monday and every Thursday, so check back often!
Our guest for today’s Important Voices interview is Anthony de Jasay. Mr. de Jasay is a Hungarian-born libertarian philosopher and economist known for his anti-statist writings. He was born at Aba, Hungary in 1925 and educated at Szekesfehervar and Budapest, taking a degree in Agriculture. In 1947-48 he worked as a free-lance journalist, his anti-communist activity forcing him to flee from the country in 1948. After two years in Austria, he emigrated to Australia in 1950 and took a part-time course in Economics at the University of Western Australia. Winning a Hackett Studentship, he went to Oxford in 1955 and was elected a research fellow of Nuffield College where he stayed till 1962, publishing papers in the Economic Journal, the Journal of Political Economy and other learned journals. In 1962 he moved to Paris and worked there as a banker, first in an executive capacity and then on his own account, till 1979, doing investment business in several European countries and the United States. In 1979, he retired to the Normandy coast where he still lives. He has published five books, several of which have been translated into a total of six languages, as well as numerous articles, mainly in English but also in French and German. He has a wife and three children.
Mr. de Jasay has, as a matter of common courtesy, agreed to answer our questions to the best of his ability. He wishes to state, though, that he has no views on the candidacy of Governor Gary Johnson for the Republican nomination.
Josiah Schmidt: It’s a privilege to speak with you, Mr. de Jasay. Could you please tell us about how you came to hold such a liberty-oriented philosophy?
Anthony de Jasay: From the war’s end to 1948 when I escaped to Austria, I lived under Soviet Russian occupation in my native Hungary. I witnessed the gradual installation of a “real-existing” socialist system (note well: “real-existing” is the term they use to express that their actual system is not yet the ideal one), the flooding of higher education and the media with Marxist gobbledygook, general moral degradation and the material misery caused in large part by the inherent stupidity of socialism. This experience must have added an emotional charge to my disposition to regard matters of justice, freedom, property and responsibility in a fairly disciplined logical manner. I may add that my father was a truly liberal, tolerant person and my mother a great teacher of logical thinking. Having lived in five different countries may have strengthened my liberal disposition, though I am not really sure of the effect. Let me add that I persist to use the word “liberal” in the European and not the American sense.
Josiah Schmidt: What is the fundamental reason why a system of private property is essential for any economy to function above subsistence levels?
Anthony de Jasay: One possible answer is that the alternative to private property, namely common or public property, is crippled by what economists call the principal-agent problem. The principal or owner is a hypothetical entity, the public, the state, or in the best of cases some smaller community that has diffuse ends which it cannot even unambiguously express and transmit to its agent(s) except maybe via politics (and the latter probably makes the principal-agent problem even worse). The agent, e.g. a government, is on a loose rein and pursues its own ends.
Unless property is private, it seems difficult to give the profit motive the role it must have to make the allocation of capital efficient. “Market socialism” is full of the most egregious absurdities in theory, and is a disaster in practice (e.g. the 1948-1989 Yugoslav worker ownership experiment).
Josiah Schmidt: Are high prices a form of exploitation?
Anthony de Jasay: “Exploitation” is emotionally charged and it is very difficult to give it an objective meaning. I may say that a price represents exploitation, you may say that it does not, and nobody is entitled to judge that my say-so is more valid than yours. The question is a little less elusive if we talk of “monopoly prices” instead of just high ones. A monopoly charges profit-maximising monopoly prices at its peril, because doing so invites entry by potential competitors as well as development of substitutes for its product. Monopolies nonetheless manage to survive and to the extent that they do, income distribution tilts against the consumer and in favour of the monopolists. As a consequence, resource allocation also tilts against consumption and in favour of capital accumulation. (Note that little of the monopolist’s astronomical income, or of any other very high income, is spent on Ferrari cars, trophy women and champagne. Most of it ends up as investment in real capital with its ownership vested in charitable endowments). The grudge against “high prices” may really be against “high profits”. One should always remember that “high profits” in turn mean faster capital accumulation, which ultimately leads to a faster increase in real wages than would be the case if prices and profits had been low to begin with.
Josiah Schmidt: Is there anything inherently wrong with income inequality?
Anthony de Jasay: Neither income nor any other inequality is inherently wrong. The notion that equality is intrinsically better than inequality is a subconsciously perpetrated bluff, dating from the second half of the 19th century–a bluff that nobody has had the courage to call since. The two statements “A distribution is to be equal unless there is a sufficient reason for it to be unequal” and “a distribution is to be unequal unless there is a sufficient reason for it to be equal” are ethically fully equivalent. Accepting one and discarding the other is a matter of the force of reasons speaking for each. Inequality is spoken for by talent, effort, past abstinence from consumption (hence inequalities in saving to accumulate capital) and others too numerous to list here. Equality is usually argued for by the affirmation that “all men are born equal,” but this is manifestly untrue as an empirical finding.
Josiah Schmidt: What is the number one reason why truly limited government is so difficult to achieve?
Anthony de Jasay: The main reason is not easy to sum up in one sentence, but let me try: in any government by the people for the people, there is majority rule that permits one part of the people to impose a “collective will” on the other part for various purposes involving the extraction of the resources required for it, but in order for a winning majority to be formed, resources have to be offered for key groups to persuade them to help form the majority rather than join a rival one that is making rival offers; there is a perpetual auction process by which an increasing share of GDP or other resources are extracted by the government and redistributed in the form of services, subventions, public works, etc. Democracy is biased to produce big government, and a truly minimal government must in some sense be non-democratic, secure in its tenure.
Josiah Schmidt: Are there any parting words of wisdom you’d like to leave our readers with?
Anthony de Jasay: In electing your representatives, pay more attention to their guts than to their brains, trust the ones who have more conviction than ambition, and promise less than their rival.
Josiah Schmidt: Thank you very much for taking the time out of your schedule to speak with us, Mr. de Jasay. It’s been an honor.