Robert Bass
Department of Philosophy
University of North Florida
Jacksonville, FL 32224
Utilitarianism burst upon the world of nineteenth-century England both as a philosophic theory of morals and as a political reform movement. Launched by David Hume’s explorations in ethics, elaborated by Jeremy Bentham and James Mill, refined, sophisticated and applied by John Stuart Mill, it sought to replace the fading sanction of religion and the rigidities of custom and tradition with a new test: the Greatest Happiness Principle.
The central idea was that the worth of an act – whether private or political – was not to be determined by its conformity to some rule of duty or sacred principle; rather, rules of duty and sacred principles were to be determined by the worth of actions undertaken in accordance with them. And the worth of an act was to be judged in terms of its consequences – its impact on human happiness. Any act which increased that sum (or diminished suffering) was esteemed right and meritorious; any which subtracted from it was wrong and vicious.[1]
In the context of the early nineteenth century, this was distinctly salutary for liberty, offering a standing challenge to established authority, customary practice and legal privilege. Bentham’s writings, in large part, were devoted to the discussion and advocacy of legal and penal reform, and John Stuart Mill’s On Libertyis the classic presentation of the utilitarian case for maximum freedom for each individual.
The record since has been more equivocal. It has been easy to argue fom the standard formulation, “the greatest happiness for the greatest number,”[2] that restrictions on liberty best served the general happiness. For example, it could plausibly be maintained that a wealthy man would never miss a hundred dollars as much as a poor man would appreciate it, or, more generally, that it was more important to provide necessities of life to those in need than luxuries to the well-to-do.
A friendly critic might say that it has been tooeasy to argue thus and suggest revisions or limitations within the scope of utilitarianism, while an unfriendly critic might maintain that the ease with which utilitarians switched sides on political issues shows only that their doctrine has no distinctive impulses except destructive: Having run out of bad laws and institutions to oppose, they proceeded to opposing good ones.
Contemporary libertarians have, for the most part, been unfriendly critics, holding that any doctrine which subordinates liberty – whether it be to the general welfare, the will of the Aryan people, or anything else – will eventually end up sacrificing liberty tout á fait.
Contemporary utilitarians, on the other hand, have been, for the most part, unfriendly critics of libertarianism, maintaining that it involves an arbitrary adherence to a set of rules which have nothing to recommend them save their traditional source. It is, they would say, morally indefensible to give the property rights of the well-heeled greater weight than the hunger of people who are starving.[3]
Yet, “for the most part” does not mean “all.” Eminent figures have comfortably embraced both positions. John Stuart Mill, who was primarily a utilitarian embraced thoroughgoing liberty as a conclusion;[4] Ludwig von Mises, a market-oriented economist and a classical liberal, adopted utilitarianism as a foundation.[5]
Here, as elsewhere in philosophy, disagreements are not to be settled by head-counts or appeals to authority. What is needed is a fresh look.
Suppose we want to achieve the best consequences overall. One approach is the God’s eye view: We survey the world, all its people and all its resources, see what needs to be done and arrange that those best able to perform the various functions have the resources needed to do them well.
Bluntly, this is preposterous. It presumes that we have complete knowledge of all the people in the world, that we know every detail of their abilities, aptitudes, and proclivities – including those they don’t have but could be taught or trained to acquire. It presumes as well that we know every detail about the material resources available for executing our plan. Even supposing we had all the relevant knowledge, this program would generate a calculational nightmare. The only way we can begin to calculate “best consequences” is to assume that a great many factors are not in our control – that they are “givens” with which we must work but which we can’t easily or directly change. In order even to think in terms of achieving the best consequences, we needconstraints on who may do what to whom or with whom and also on what resources can or cannot be used in a given project. This is – very nearly – a truth of mathematics: You can’t solve an equation that consists of nothing but variables.
In fact, of course, we fall far short of omniscience, so the uncertainty of the calculation is only compounded by the uncertainty of the data with which to calculate. This, however, is a grotesque caricature of anything advocated by utilitarians. A few dictators may have imagined their task thus; no sane utilitarian has.
Let’s try another tack: Each action should be directed at the production of the best consequences overall. The actor need not be supposed to be stupid. She may be well aware that actions and outcomes are not the same and that while actions are chosen, outcomes are only more or less probable. She can be fully sensitive to the fact that the desirability of an outcome has to be balanced against its likelihood. She can also take into account the fact that in some cases, sheer ignorance of some factor may make it difficult or impossible to accurately assign probabilities. Still – she might say – that is no reason for not doing the best we can. After all, how could we ever justify doing something to deliberately promote worse consequences?
This is called act-utilitarianism. It is also quite untenable. There are at least three reasons:
First, as J.L. Mackie has observed, it is “the ethics of fantasy.”[6] There is simply no prospect – either now or in the near future or in the remote future – that people in general will devote themselves to impartial pursuit of the general happiness.
Second, even if people could or would impartially devote themselves to the general welfare, the results would be anti-utilitarian. This is because most happiness depends on the satisfaction of strong personal desires related to such matters as sex, friendship, family, wealth, luxury, etc. If all people were to give up or subordinate these desires for the sake of “the general happiness,” there would simply be a lot less happiness.
Third, act-utilitarianism undermines the possibility of long-term cooperation and therefore, if generally accepted, would deprive us of all the benefits that depend on such cooperation. The reason is simple: An act-utilitarian can’t make binding promises or contracts. An act-utilitarian’s promise can only mean: “I will do such-and-such only ifI don’t think of anything better in the meantime.”
Suppose, for example, that the day after tomorrow we all became act-utilitarians. No doubt, we would, at first, go on making and keeping promises, signing and observing contracts. We would do these things because we’d think that those actions would have the best consequences. Pretty shortly, though, it is safe to bet that someone would find a plausible reason for breaking a promise or violating the terms of a contract.[7] This need not be, in any pejorative sense, an “excuse.” The motive may be noble: a payment on an auto loan may seem insignificant when contrasted with starvation and cholera in Bangladesh. In fact, given the world as it is, it is more than a safe bet that lots of people will find good reasons for breaking promises and violating contracts – which, in turn, engenders reluctance to enter into such arrangements. That reluctance makes it more difficult for anyone to develop or execute long-term plans that depend on other people’s cooperation. In short order, the double erosion of reliability and of willingness to engage in cooperative undertakings would meet at zero. Beyond that point, it’s anyone’s guess how many of us could scratch out a living as self-sufficient farmers.[8]
There are two diffferent ways of looking at this result. It could be viewed either as proof that utilitarianism is unacceptable or else as a challenge to modify it[9] so utilitarian premises don’t lead to anti-utilitarian conclusions.[10] How might utilitarianism be repaired? The most obvious suggestion is that the Greatest Happiness Principle should be applied to rules instead of individual actions. We should abide by that set of rules whose general observance would maximize happiness or produce the best consequences. This is called rule-utilitarianism.
It may well be that if each action were directed at maximizing happiness, no one would be able to rely on contractual guarantees; the rule, however, to respect and abide by terms of contract would be justified rather than undermined by consideration of the consequences of its general observance. The same pattern of analysis can naturally be applied to a great many other commonly accepted moral rules. Thus, though it would surely be unwise – on utilitarian grounds – to let each person decide whether or not it would be best to kill some acquaintance of theirs, the rule, “Do not murder,” while insuring some error on those rare occasions when it really would be best to kill someone, has far better consequences on the whole. This approach can be very plausible when applied to specific widely-accepted moral rules. It apparently justifies some and may undermine others.[11]
A question arises, however, as to what to include in the set of accepted or endorsed rules. This generates problems in two ways. First, it is entirely possible that two or more independent rules that are justified in terms of their consequences are jointly unjustified. Though they may be formally consistent, conformity with both (or all) may produce interactions that undermine the gains from independent observance. This suggests that the rules need some unifying rationale. (The “general happiness,” since it includes the satisfactions derived from successful pursuit of a multitude of different goals, is too abstract to do the job.)
The second and deeper problem is that no rule can contain within itself a complete specification of the range of its application. If killing is forbidden, does the prohibition include non-humans or unborn humans or judicial executions or euthanasia or actions in self-defense or in war? Does a rule apply to all cases or only to normal, non-emergency situations? Is the non-supply of goods needed to sustain life equivalent to killing? The point of asking these questions is not to suggest that they are unanswerable but rather to illustrate the fact that neither this nor any conceivable rule short of infinite complexity can settle all possible issues about its meaning and application. As a result, a rule-utilitarian can always, in good conscience, question whether the rule, as it stands, applies to the present situation. The rule, “Never do x,” can always be replaced by “Never do x – except in cases like this.” As this is an abstract possibility that applies to every rule and every situation, rule-utilitarianism collapses into act-utilitarianism. Instead of focusing on the consequences of each individual action, the utilitarian focuses on rules which are, in the end, so qualified that they apply only to individual actions. The “rules” are demoted to “rules of thumb.”
If utilitarianism is to be defensible, it appears that simple rule-utilitarianism won’t do: The rules must somehow be protected from constant utilitarian erosion. This is the motivation behind what may be called indirect utilitarianism.[12] The animating idea of indirect utilitarianism is first to give some sort of rationale to unify the rules it recommends and second to insulate the rules recommended from the erosion that converts rule- into act-utilitarianism.
In order for this project to succeed, a strong (but not completely impermeable) barrier must be erected between moral rules as they are embodied in practice and as they are subject to utilitarian assessment. In general, a moral rule is one which is functioning in the judgments and behavior of the vast majority in a given society. As a functioning rule, it is general and (nearly) absolute.[13]
By contrast, utilitarian assessment occurs on a reflective or critical level. From this standpoint, the utilitarian can advocate minor or major changes in or adjustments among the moral rules. It must be understood, however, that what is being advocated is a change in rules which, both before and after the change, are to be generally and inflexibly observed in practice; the indirect utilitarian is not in any sense urging that the rules as they function in practice be subjected to constant judgment in terms of consequences.[14]
Before trying to develop this position in more detail, can anything be said about the form moral rules will take if they are to pass muster by indirect utilitarian standards? There seem to be several constraints.
First, as rules embodied in practice, they must be of a sort that can actually be observed by virtually everyone. This means that if a change in an already accepted rule is to be considered, the costs of making the change – that is, of getting everyone to accept and act on the new or revised rule – must be balanced against the benefits to be obtained once the new rule is a functioning part of virtually everyone’s behavioral repertoire. These costs include both education and formal or informal enforcement.[15] In addition, they include whatever losses may be incurred by unsettling (an admittedly imperfect) existing consensus. There may well be times when it is better to have some definite (though flawed) rule than to lose the advantages of certainty and predictability that derive from there being somesettled rule for the sake of substituting something better (especially since there is no certainty that consensus will coalesce around the substitute).
Second, if they are to command widespread support, they should be simple. This minimizes both educational problems and costs of (formal or informal) adjudication and enforcement.
Third, it is a great advantage if a proposed rule has some sort of “natural appeal” – that is, if it can be seen as safeguarding or protecting or harmonizing something in which we already have an interest.
What is suggested by these considerations is first, that one should be very careful about attempts to alter the existing moral consensus,[16] and second, that the most general moral rules should be negative in form.[17] Rules framed as prohibitions are almost invariably simpler than their positively-phrased counterparts.[18] For example, the positive counterpart to “Do not commit murder” would have to be a horribly complex and indefinitely lengthy list of actions among which one may choose. In addition, negative rules are far more likely to have the sort of rationale that amounts to “natural appeal” and is important to the indirect utilitarian to unify the system of moral rules.
It is at this point, if not before, that the libertarian should take notice. For it appears that the form of the most general moral rules for indirect utilitarianism is the same as the form of the rules defining libertarian rights. Libertarian rights are simple and, on a fundamental level, negative in form. (With only a little explanation, the entire moral content of libertarianism could be summed up in the injunction, “No Trespassing.”[19]) They have also a rationale that appeals to something people already want – namely, a protected sphere in which to pursue their goals and projects without interference. So far, this is no more than an intriguing parallel; whether these parallels meet can only be determined by further investigation.
If we are exploring the connection between utilitarianism and liberty, it must be understood that there are, for the utilitarian, no further limitations on how we – separately and together – find happiness or well-being than how we in fact find it. Constraints in human nature and psychology, in our relations to our fellows and to the objective conditions of our world, there are in plenty. These being taken into account, however, there are no further “moral” considerations to be invoked.
Given, then, that what each of us finds most satisfying or most worthwhile may vary widely, is there any interest that we have in common, any state or condition that must be supplied to each of us if we are to realize our separate purposes and satisfactions? The answer has rarely been better put than by John Stuart Mill:
The interest involved is that of security . . . the most vital of all interests. All other earthly benefits are needed by one person, not needed by another; and many of them can, if necessary, be cheerfully foregone or replaced by something else; but security no human being can possibly do without; on it we depend for all our immunity from evil and for the whole value of all and every good, beyond the passing moment, since nothing but the gratification of the instant could be of any worth to us if we could be deprived of everything the next instant by whoever was momentarily stronger than ourselves.[20]
There are two points that deserve further emphasis in this argument. The first is that security – not being harmed by others – is a distinctive good with regard to its centrality: it is a necessary condition for virtually anything we may wish to pursue. It is further distinctive in the mode of its provision. Other goods (of the sort which could conceivably be made available through a legal apparatus) can be self-provided or, often enough, done without. Security is a good which can only be supplied to us by others. The second is that there is no way to make sense of the demand for security (or of a reciprocal willingness to refrain from harm to others) without reference to people’s rights, more specifically, without reference to the boundaries of the self and of that which “belongs” to it. Moreover, Mill was well aware of this. The passage is embedded in his discussion of what it is to have a right. Rights, for Mill or other indirect utilitarians, do not descend from heaven but neither are they light or transient or “merely conventional.” Being based on an interest which is pivotal with relation to our other goals and inescapable for each of us, rights are as important, as binding and as absolute as anything can be.
The same points can be illuminatingly re-expressed with a more positive focus. The interest in security has a complement which has equally a claim to be regarded as a central and inescapable human interest. If we consider again what we want from others, it is clear that we want more – even on the same level of generality – than that they do us no harm. We want the benefits that can be obtained, and can only be obtained, through social cooperation.
As hermits, far from the company or civilization of others, we might secure that we not be harmed.[21] Yet, most of us, even given substantial risks that our association with others will result in greater or lesser harm to ourselves, are unwilling to follow the hermit’s prescription for a good life. The reason is simple and clear: Virtually everything that we want depends, directly or indirectly, not only upon our not being harmed by others, but also upon the benefits that can be acquired through association and active cooperation with others. Whether we consider such elementary acquisitions as food, shelter and clothing or more “refined” satisfactions such as those provided by literature and music or the simple pleasures of human company or any of innumerably many other goods – we can achieve almost none of these without the assistance and cooperation of others. Since these are things that we care about – in fact, almost all that we care about – the argument for basic moral rights outlined above can be transposed and regarded as a demand that the most general moral rules be so framed as both to make possible and to promote social cooperation.
Thus the indirect utilitarian can point out that taking social cooperation to be the proximate goal to be promoted by our most general moral rules leads to exactly the same conclusions as the negative focus on our interest in security. If cooperation is to be possible there must be independent agents to cooperate. If they are (if we are!) to cooperate, then they must have delimited endowments of resources with which to act. And if it is cooperation that is to be achieved, there must be freedom to engage in or decline to engage in cooperative undertakings. In short, spelling out what it means to promote social cooperation requires the recognition of the familiar libertarian canon of rights to one’s own person, to one’s own property, and to the freedom to employ them as one sees fit.
The indirect utilitarian’s argument that the basic moral rights are libertarian in form may be developed abstractly. That their content is libertarian as well is a case that lives (or dies) in the details. Though the boundaries of the person may be taken, for most purposes, to be uncontroversial – given that the incidence of involuntary interpenetration of bodies is negligible[22] – and the range of freedom is specified by the boundaries of the property of the person whose freedom is in question, the argument does not settle issues as to precisely how property rights are to be contoured.
On the level of theory, libertarians should not be distressed by the suggestion that they may have an inadequate conception of the contours of property. For the boundaries of property are not drawn in nature and on almost any credible theory include conventional elements. If a persuasive case can be made that some different delineation is superior, there should be no hesitation to adopt it merely on the score that it differs from that to which they are accustomed.
Nor should utilitarians be troubled provided they remember their own commitment to the position that moral questions are not to be decided a priori. They should be willing to attend to both empirical evidence and to the theoretical sophistication that can be placed at their disposal by those specialists in law and economics who have intensively studied various possible property institutions. It should also not be presumed in advance that libertarians are mistaken in the way that they delineate property’s contours – the subject has, after all, been a matter of special concern, study and investigation for them.
Yet, the issue is not to be burked. Its examination in the present context, however, can hardly be exhaustive. Such considerations as can be offered here are only sketchy, programmatic, and illustrative.[23]
To begin, the libertarian conceives property rights to include four dimensions: acquisition, possession, use and disposition. A person may acquire property either through voluntary transfer from a prior owner or through appropriation of something unowned.[24] The right of possession means that she may exclude others. The right of use means that the property may be employed as she sees fit. The right of disposition means that it may be disposed of as she sees fit by transferring it to another on terms acceptable to herself (and to the other party).[25] Once something is owned, the rights regarding it may be divided and re-apportioned in many ways. A common example is rent, in which, for specified terms, an owner grants another party limited rights of use. Another is the sale or transfer of parts or aspects of a property as may occur with mineral rights.[26]
Since the libertarian sees all possible liberties with respect to a given property (save for its employment to violate the boundaries constituted by the rights of others) as properly vested in the owner, this conception will be called “full ownership.” No “fuller” ownership is possible as an owner could only be accorded additional liberties if they were non-consensually transferred to her from other owners. Therefore, any argument that better arrangements than full ownership are possible will have to claim either that ownership should be restricted in some way or that, in some area or with respect to some good(s), ownership should not be instituted.[27]
In the following, I shall take it for granted that the desirability of the preservation and extension of a complex, worldwide, division-of-labor economy is not in question.[28] Given this, it is not open to the utilitarian to advocate any sort of comprehensive economic planning over-riding the decisions and plans of individual owners. The central problem, first grasped by the Austrian economist, Ludwig von Mises, is that the information needed to formulate rational, comprehensive plans is only available through the interactions and choices expressed in the market which planning seeks to over-ride.
The crucial Misesian insight was that rational planning of long-term productive processes requires that alternatives in production processes be ranked as to preferability and that subjective ordinal preferences are not sufficient. What is needed is some way of assigning cardinal values to the benefits and costs of proposed courses of action which – even given full information about technological possibilities and people’s preferences – can only be available to planners insofar as there is a price system generated by competitive bidding for the use of resources.
Mises’ student, Friedrich Hayek, expanded and supplemented the argument by emphasizing that much of the knowledge upon which action and planning is based is not explicitly formulated or articulated. It includes preferences which may be unknown even to the person who acts until decision is required and response and adjustment to conditions of which no one need be explicitly aware. In addition, decisions are based not only upon “data” but upon expectations with regard to the future and upon personal risk assessment and acceptance. The information upon which decisions are based is encoded in terms of sale or transfer – in the prices people are willing to accept and to offer for different goods or services. The information necessary to make intelligent decisions among the various public policy options is not only not currently available; it is, in principle, unobtainable.[29]
An additional difficulty with “the planning ideal” is that it presumes that either the present or some foreseeable and achievable future state of affairs is normative. Planning as an ideal is geared to a static economy and a static society. Major innovations, whether political, scientific, technological, social or cultural, are necessarily left out of account in the construction of the plan. To the extent that planning is comprehensive, it must actively discourage and prevent improvements in any department of life. (Businesses face the same difficulties with the crucial difference that they have, in the absence of political intervention on their behalf, no means – other than persuasion – for imposing their plan on other businesses or upon society at large. What is socially dangerous is not intelligence or foresight or planning per se but the breathtaking arrogance of those who would, by imposing their agenda, rule out the very possibility of improvements unforeseen therein.)
Moreover, these arguments undermine as well the feasibility of non-comprehensive economic planning (which attempts, for example, to identify aggregate “targets” to be promoted in areas such as GNP and employment or to pick out industries to be directly or indirectly subsidized). The difficulty with non-comprehensive planning is simply that it is non-comprehensive and therefore constantly liable to upset from the “unplanned” sectors of the economy. There is a constant tension between the need to make the plan more comprehensive if it is to be effective and the temptation (which should be succumbed to) to abandon it.[30]
If both comprehensive and non-comprehensive economic planning are ruled out, there appear to be only three ways in which a utilitarian can criticize or propose to improve upon a regime of full ownership. (1) It could be held that though planning must be abandoned, ad hoc adjustments or interventions need not. (2) It could be claimed that initial distributions of property are in some way defective or sub-optimal, i. e., that full ownership would be appropriate if some prior condition were met. Or (3) it could be maintained that there are public goods (in the economists’ sense) which would go unproduced or be chronically under-produced under full ownership.
(1) The first of these is least deserving of our attention. To suggest that there should be a policy of intervening in the decisions and transactions of individuals and over-ruling their choices when it is thought appropriate (by whom?) and that there is to be no further principle or policy to provide guidelines for the exercise of this function is to propose an institution so obviously liable to abuse as to be ludicrous.
Yet it can hardly be denied that bad things, sometimes very bad things, can befall participants in thoroughly voluntary relationships.[31] It would be absurd to say that nothing can be done in such cases. And the libertarian does not say it. Reflection shows, I think, not that such situations require ad hoc intervention that involves over-riding the rights of other parties[32] but rather that what is called for is a departure from the way things otherwise would have gone – that is, from economic interaction characterized by mutual unconcern.[33] Ad hoc intervention may well be appropriate in some cases, but it should be genuinely ad hoc – conducted by those close to and knowledgeable about the specific circumstances who are willing to risk their own time, effort and resources to resolve the situation.[34]
(2) Is full ownership open to the criticism that initial distributions of property are in some way defective? The question is unclear. Full ownership admits that actual property distributions may be improper if they have arisen in some other way than through initial appropriations or voluntary transfers. Where this is the case, it is an epistemic question whether it is possible to identify the maldistribution and a practical question whether it can be rectified. If this is what is being asked, it is not a criticism of full ownership because the principles identifying the maldistribution and the appropriate rectification (where that is possible) are implicit in full ownership.
If, on the other hand, it is being asked whether – regardless of the way in which current property distributions came about – there might have been some other distribution at some time in the past which would have been productive of better consequences, the answer must be that we don’t know. It is certainly possible that some other distribution would have been optimal had it obtained, but there is no way of knowing what that other distribution was or would have been. As a mere logical possibility, it is devoid of implications for policy. To suppose otherwise would be to retreat to the absurd God’s-eye-view version of utilitarianism.
(3) By far the most interesting suggestion for justifying limitations on full ownership is provided by what economists term the public goods argument. A public good is characterized by non-excludable provision and non-rivalrous consumption. Non-excludable provision means that if the good in question is provided, it cannot be provided solely to those who have paid for it. Non-rivalrous consumption means that if the good is provided, it is not diminished or degraded in quality by the presence of additional consumers.[35] A common example is the lighthhouse whose signal warns off any number of ships (within limits) from treacherous waters regardless of whether their owners have contributed to its financing and upkeep. Another common example is national defense which can’t be provided to my neighbors without being provided to me – whether or not I have helped to pay for it.
This set of conditions suggests the interesting possibility that there may be some goods which (a) benefit everyone,[36] (b) benefit each person more than her quotal share of the cost, but (c) would yet go unproduced or underproduced if their production had to be organized voluntarily.
The argument for this is straightforward. There is, first, some threshold or minimum of cost that must be incurred if the good is to be provided at all.[37] (A fifty dollar contribution – if that were all there were – would be no contribution at all to national defense.) Providing the good, therefore, requires that a great many people contribute. But even though each person would be benefitted by enjoying the good and contributing their quotal share to its production, each would be even better off if she could enjoy the good without helping to finance its production. And since public goods are non-excludably provided and non-rivalrously consumed, this is a real possibility. Each person faces the temptation to be a free-rider – to enjoy the benefits of the good (if it gets produced) without paying for it. Since this set of incentives applies to everyone, it becomes very difficult to voluntarily organize the production of a public good and more difficult the larger the numbers involved. People who, given the applicable cost-benefit ratio, would willingly contribute, become hold-outs because (a) they fear that the threshold will not be reached and are unwilling to waste their contribution, (b) dislike the prospect of being taken advantage of by free-riders, or (c) may hope to become free-riders themselves.
Therefore, runs the public goods argument, each person has a reason to want the public good produced and each has a reason to withhold contribution. So the conclusion is drawn that everyone has a reason to want everyone (themselves included) to contribute. And it is this reason, which everyone has, which justifies the use of compulsion to insure that everyone does contribute. Put otherwise, it is because everyone is willing, in one sense, to contribute to the production of a public good (and because it will in fact benefit each of us) that compulsory means are justified to overcome our unwillingness, in another sense, to contribute to its production.
If we are to assess this, certain qualifications should be noted:
First, it does not follow from the fact that something meets the formal criteria of non-excludable provision and non-rivalrous consumption that it is really a public good. It may differentially benefit some subset of the population so that either (a) total costs exceed total benefits or (b) costs for some subset of the population exceed benefits enjoyed by that subset.[38]
Second, it does not follow that something once identified as a public good remains so. It is, for example, now technologically feasible to subject the services of a lighthouse to excludable provision by using coded radio signals and selling or leasing decoding devices.[39]
Third, the financing of public goods can sometimes be made to piggyback on the financing of private goods. Lighthouses might be paid for by (a portion of) insurance premiums on policies against shipwreck.[40]
Fourth, public goods compete with private goods for the use of limited resources. Like other goods, increasing production can yield diminishing and ultimately negative returns. It is therefore possible, if financing is coercively organized, to over-produce public goods and thereby transform them into public bads. An economy, for instance, can be bankrupted by military expenditures.
Fifth, virtually everything which has ever been identified as a public good has been produced privately if, arguably, not optimally, at least, non-disastrously.
Sixth, it is not clear to what extent the public goods argument actually captures the salient features of human motivation. An interesting historical case in point, though the arguments antedate the development of the “public goods” terminology, is the debate over disestablishment of national (tax-supported) churches. Both sides in the debate – those who favored disestablishment and the antidisestablishmentarians – employed what is now recognizable as a public goods argument. Those who defended tax-supported churches feared that disestablishment and the necessity to organize financing voluntarily would mean an end to the public good of religion. Many who attacked tax-supported churches expected (and hoped for) exactly the same thing. Since neither hopes nor fears have been vindicated by subsequent events, it may be well to be cautious about the justificatory weight to be placed on the public goods argument.[41]
What do these considerations amount to?[42] I think they may be summed up as saying (a) that there is no easy or automatic way to identify a public good, (b) that, contrary to initial appearances, the production of public goods can often be organized on a voluntary basis, and (c) that coercively organized financing of a public good is dangerous in the sense that it is insensitive to diminishing returns.
These amount to restrictions on the scope and application of the public goods argument but do not reduce that scope or application to zero.[43] In particular, if we can be certain that we are dealing with a genuine public goods problem, and if, since explicit unanimous support is not to be expected,[44] there is a way of identfying an interest that everyone has that doesn’t rely upon their preference-expression, and if the stakes are sufficiently high,[45] then there may be a case for financing organized through taxation.
What might qualify? The number of candidates for consideration as such public goods is notably sparse. Most are not even remotely plausible. If coercion is to be employed to secure financing, there is a weighty burden of proof to be discharged. Prima facie, the only candidates are those essential to the survival of a given society, viz., national defense and a system of law and contract enforcement and adjudication.[46]
Here, there is a straightforward way of imputing an interest without appealing to expressed preference. We have stressed already the general interests in security and social cooperation to which the proper response is the construction of a system of rights. Because these interests are real and because the system of rights is their appropriate safeguard, there is likewise a general interest in the preservation of the system. The interest in security is backward-looking, focusing on the protection of what has been achieved. The interest in cooperation is progressive, focussing on what may yet be achieved. Tying past and future together is the interest in preserving and granting stability to the system of rights.
In a case such as this, it appears that public goods are not only goods but necessities. It is for this reason – but only for this reason – that the indirect utilitarian may here countenance some modest restriction on full ownership.[47] But the reason for such restriction must be emphasized. Full ownership is not being restricted in favor of some alternative ideal. It is not being restricted because it is undesirable. It is being restricted only to the minimal extent necessary to preserve it and only because it is desirable.[48]
Berger, Peter. 1986. The Capitalist Revolution: Fifty Propositions About Prosperity, Equality. and Liberty. New York: Basic Books.
Block, Walter. 1982. A Free Market in Roads. In The Libertarian Reader, edited by Tibor R. Machan. Totowa, New Jersey: Rowman & Allanheld.
Epstein, Richard. 1985. Takings: Private Property and the Power of Eminent Domain. Cambridge, Massachusetts: Harvard University Press.
Friedman, David. 1989. The Machinery of Freedom. 2nd edition. La Salle, Illinois: Open Court.
Gauthier, David. 1986. Morals by Agreement. Oxford: Clarendon Press.
Gray, John. 1989. Liberalisms: Essays in Political Philosophy. London: Routledge.
Hayek, F.A. 1948. Individualism and Economic Order. Chicago: Henry Regnery.
_____. 1960. The Constitution of Liberty. Chicago: University of Chicago Press.
Hazlitt, Henry. 1972. The Foundations of Morality. Los Angeles: Nash Publishing.
Hoppe, Hans-Hermann. 1989. A Theory of Socialism and Capitalism. Boston: Kluwer Academic Publishers.
Lavoie, Don. 1985. National Economic Planning: What is Left?Cambridge, Massachusetts: Ballinger Publishing.
Lepage, Henri. 1982. Tomorrow, Capitalism. Trans. Sheilagh C. Ogilvie. La Salle, Illinois: Open Court.
Lippmann, Walter. 1943 [1st ed., 1936]. The Good Society. New York: Grosset & Dunlap.
Machan, Tibor R. 1982. The Libertarian Reader. Edited by Tibor R. Machan. Totowa, New Jersey: Rowman & Allanheld.
Mackie, J. L. 1977. Ethics: Inventing Right and Wrong. Harmondsworth, Middlesex, England: Penguin Books.
Mises, Ludwig von. 1990 [1920]. Economic Calculation in the Socialist Commonwealth. Trans. S. Adler. Auburn, Alabama: Ludwig von Mises Institute.
_____. 1969. Theory and History. New Rochelle, New York: Arlington House.
Parfit, Derek. 1986. Reasons and Persons. Oxford: Oxford University Press.
Schmidtz, David. 1991. The Limits of Government: An Essay on the Public Goods Argument. Boulder, Colorado: Westview Press.
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[1] For the sake of precision, it might be added that actions which increase human happiness are to be performed only if no better options (i.e., greater increases) are available, and those which subtract from the sum of happiness are permissible if they constitute the lesser (or least) of a choice among evils.
Also for the sake of precision, it should be noted that utilitarians differ as to whether “actions” refers to specific actions or to classes of actions united by some common characteristic. (This will receive more attention later.) In addition, it is worth mentioning – but just mentioning – the distinction between utilitarianism and consequentialism. Utilitarianism holds that moral judgments are based on consequences and that the consequences that count are consequences for human happiness (or satisfaction or preference-fulfillment). Consequentialism says exactly the same thing except that it doesn’t commit itself to saying that the desirable consequences must be or must be measured in terms of some sort of subjective state. Utilitarianism, in short, is a variety of consequentialism with specific commitments as to what good consequences are. It is possible, however, to be a consequentialist and count other sorts of goods – for example, knowledge or prosperity – without trying to or feeling obliged to justify these, in turn, in terms of happiness.
[2] The formulation of utilitarianism quoted here is not otherwise employed in the current discussion for the related reasons that it is either superfluous or subversive. The distributive concern expressed – that happiness (or more vaguely, good consequences) should be “for the greatest number” – either flows from straightforward maximization and is therefore superfluous, or it does not and is therefore subversive. To the extent that a utilitarian needsan independent principle to say how happiness should be distributed, she has given up utilitarianism.
[3] This involves a slight misrepresentation of the libertarian’s position. She may hold that property rights are more important than even dire need, but says that only in the sense that it must not be the business of legal or compulsory processes to minister to such need. It breeds only confusion to take that statement to mean that those who have property should withhold it from efforts to relieve pressing need.
[4] Whether this was Mill’s consistent position throughout his other work has been widely disputed by scholars. As extensive investigation and substantial exegetical work would be required to resolve the matter, I will take it to suffice that Mill was famous as an advocate of thoroughgoing liberty and leave to others questions of the extent to which that represented his own fully-formed position.
[5] See Mises 1969, 19-68, for an outline of his position in his own words. A book-length development of a very similar position may be found in Hazlitt 1972.
Another very interesting treatment from a (mainly) utilitarian perspective is David Friedman’s The Machinery of Freedom (1989). Economically sophisticated and delightfully readable, it focuses not on an abstract case for libertarian rights but on the concrete benefits that can be expected in particular cases if libertarian prescriptions are somehow implemented. An especially attractive feature is the honesty and good humor with which he tackles the “hard questions” (see, e. g., pp. 168- 200).
[6] Mackie 129-134. Cf. also Derek Parfit’s discussion (1986, 27-29).
[7] Actually, of course, people frequently find plausible and not-so-plausible reasons for breaking promises and violating contracts. Thankfully, these institutions don’t depend on 100% compliance. They do depend on widespread and substantial compliance.
[8] Even the prospect of small numbers of people surviving through subsistence farming is probably too optimistic. Farming is an occupation that requires long-term planning and the cooperation of others at least to the extent of refraining from damaging crops before they mature and from harvesting them without the farmer’s consent.
[9] Of course, if utilitarianism can be modified without being abandoned, that undermines the first option: The preceding argument would not then show utilitarianism to be untenable.
[10] There is a third alternative: The attempt could be made to show that there is some mistake in the argument and that act-utilitarianism doesn’t lead to the destruction of long-term cooperation (or that long-term cooperation isn’t really very important). I don’t think there’s much chance that such an objection can be made plausible or persuasive.
[11] A rule may also be justified at one time but not at another. Rules against extra-marital sex (which may result in children who cannot be supported) may be appropriate if reliable contraception is unavailable but inappropriate if it is (and is employed).
[12] I owe the term to John Gray’s “Indirect utility and fundamental rights,” in Gray 1989. He defines indirect utilitarianism as
. . . that species of utilitarian theory in which a strong distinction is marked between the critical and the practical levels of moral thought, and in which the principle of utility is invoked, solely or primarily, at the critical level. Utilitarian appraisals apply, not directly to conduct, but to all the considerations that govern conduct – not only social rules, but the whole body of sentiments, attitudes and dispositions which lead us to do one thing rather than another . . . . [I]n its application to the human realm, it will apply especially to the codes of conduct to which we subscribe. (p. 122)
[13] It is not entirely absolute even if no exceptions are embodied in the practices or judgments which constitute it: There is still the possibility that an unforeseen set of circumstances may qualify as an excuse.
[14] An objection requires response here. How, it is often asked, can rules which are based only upon empirical probabilities, be regarded as general or inflexible? If we are not certain of the outcomes of following the rules, must they not be infected with the uncertainty of the data upon which they are based?
In fact, there is nothing mysterious about the type of reasoning involved in adopting such a rule. Dieters, for example, do it every day in deciding to refrain from a piece of candy when the calories it contains would not, by themselves, ruin the diet. More broadly, a general rule can be justified by consideration of empirical probabilities ifwe know that the consequences of one course of action are more often than not better than another and if we are not in a position to discriminate the favorable from the unfavorable instances in advance of acting. (It is not even strictly necessary that a given rule have favorable consequences in the majority of cases. It need only have better consequences than available alternatives. A gambling system which enabled its user to win forty percent of the hands in a five-person poker game would be very good indeed.)
Only if our discrimination improves (or if the situation changes) is there a case for revising or replacing the rule. It is true that moral rules based on empirical probabilities are provisional, but they are not “merely provisional” – as though there were something else they could be.
[15] It should be noted that costs of education are not solely transitional. Even if we had an ideal moral rule, it is entirely conceivable that the marginal benefits derivable from its implementation would not outweigh the immediate and ongoing costs of educating ourselves and generations to come in the nuances of the principle itself and/or of training ourselves to acquire the disposition of compliance.
[16] This is not to say that an indirect utilitarian can’t advocate massive or radical changes in the status quo, only that the case for doing so needs to be correspondingly stronger. The abolition of slavery might well have constituted a plausible case for such radical advocacy. In general, radical advocacy is in order when an existing social practice or set of institutions is productive of major losses in human well-being and when piecemeal change is likely to be ineffective or to be swamped by the inertia of established institutions or fails to be responsive to the seriousness of the wrongs which proposed change seeks to rectify. If there is a non-empty intersection of the sets of libertarians and indirect utilitarians, then, in all likelihood, such libertarians will have to attempt to make the case for radical change.
[17] The attentive reader will note that here and in the arguments to follow a transition has occurred between discussion of the entire system of moral rules and discussion of the most general moral rules. This is because the most general moral rules are those which are directly relevant to political and legal institutions. Less general rules which appeal to interests or goals not shared by all should not, on the current view, be subject to the procedures of legal enforcement for the two reasons that there seems to be no way to implement such enforcement without over-riding the interests protected by the more general rules and that it is disrespectful of those who do not share the less general interests to require their acquiescence in and compliance with something in which they have no stake. (This may not be quite so restrictive as it at first appears since the indirect utilitarian need not be committed to the view that interests are identical to wants. A person may be shown to have an interest in something without it either being shown or being true that he wants it.)
It must be remembered as well that the indirect utilitarian does not lose concern with a moral rule or with the other dispositions, sentiments, and habits that guide behavior and interaction among people simply because she has concluded that these are not appropriately matters for legal enforcement. It may be all the more important to spread and inculcate them through admonition, education, argument, and example.
[18] This is not always true, of course. An injunction which specifies a definite action to be performed – “Go to church every Sunday,” for example – may be simpler than its negative counterpart. The negative counterpart could employ a double negative to say the same thing cumbersomely or could, in parallel with the positive counterpart to “Do not murder,” attempt to rule out everything that doesn’t include Sunday church-going.
[19] More precisely, the primary moral content of libertarianism can be summed up as “No Trespassing.” What is to be done in the way of rectification aftertrespass has occurred is a different matter.
[20] John Stuart Mill’s Utilitarianismis available in many editions. I have quoted from Mill’s Utilitarianism: Text and Criticism ed. James M. Smith and Ernest Sosa (Belmont, California: Wadsworth Publishing, 1969), p. 78. In addition to the argument from security, Mill also employed, in On Liberty, an argument from our interest in what he called “individuality.” That is not discussed because it depends on Mill’s analysis of human nature – the exposition of which would take us far afield.
[21] Even in an extreme case of this sort, it is next to impossible to entirely escape the risk that one will be harmed at the hands of others. The hermit, though unknown to his fellows, may still be anonymously assaulted through polluted water, radioactive fallout, etc.
[22] Abortion constitutes a troubled issue here. Decisions on that subject probably turn on questions regarding the conditions necessary for ascription of personhood and, if the unborn do not meet those conditions, upon issues regarding the proper treatment of non-persons.
[23] Two excellent sources for detailed theoretical and empirical consideration of these issues are Hayek 1960 and Sowell 1980. Both employ what may broadly be characterized as an indirect utilitarian approach, Hayek more explicitly than Sowell. Additional sources summarizing important evidence though uncommitted to a utilitarian position are Lepage 1982, Berger 1986, and Seldon 1990.
[24] Something unowned need not be something that has never been owned. It may actively have been disowned or the owner may have, through some misfortune, ceased to own it without leaving identifiable heirs or assigns. Sunken treasure could serve as an example.
[25] The right of disposition would also include the right to destroy the property in question – which is not to deny that there may be very weighty prudential and/or moral reasons for doing otherwise.
[26] It is important to keep in mind, with Don Lavoie, that “it is by no means necessary that the ownership be of any particular historically familiar form. It is only necessary that ownership be polycentric as opposed to centrally planned – that is, that it be divided among . . . different agents. Owners could be workers’ councils, stockholders, wealthy capitalists, maverick entrepreneurs, or any combination of these or other as yet unimagined arrangements so long as their plans are separately devised, their person and property legally protected, and their projects permitted to strive in open competition for scarce resources.” (1985, p. 48)
[27] There is one area in which it is essential to the libertarian’s position to deny the appropriateness of ownership – over other persons.
The structure of the argument to follow, it may be noted, is that since comprehensive and non-comprehensive economic planning are ruled out, the only possible criticisms of full ownership to be answered are in terms of (a) the desirability of ad hoc intervention, (b) the possible defectiveness of either initial or some prior distributions, or (c) the existence of some interest on a par with those in security or in social cooperation which would require some modification or limitation of full ownership.
[28] It seems as certain as anything can be that the survival, not to mention the prosperity, of the bulk of the world’s population is dependent on the world-wide economy. Romantic daydreams of agriculturalists in self-sufficient villages are, in the context of today’s world, just that – romantic daydreams. In practice, dissolution of the links of the world economy would mean starvation for well over half the world’s population. This is, moreover, an extremely optimistic scenario which leaves out of account the fact that many nations, including the poorest, are in possession of dangerous military hardware which, in time of crisis, would likely be turned against their neighbors.
[29] An example may clarify the issue. A plumbing manufacturer need not know the cause of an increase of a few cents per pound in the price of copper. It may be explained by a South American miners’ strike, the depletion of the mines of a major supplier, or an increase in fuel costs for the shipper. Not only does he not need to know these things; he could hardly be expected to spend time finding out. Yet, the price provides all that is needed to induce him to adjust his actions appropriately. He is motivated to search out alternative suppliers of copper and alternatives to copper. He considers whether the price change is transient or enduring, whether to raise his own prices, absorb short-term losses, or alter his production mix. The price change tells the manufacturer both that copper has become more difficult to get and also how much more difficult compared to its feasible substitutes. It carries this information, however, only because it has been free to move in response to the pressures of competitive bidding for resources (and services). A comprehensive plan which could over-ride the decisions of owners would, at the same time, strip prices of their function as signals carrying information about the circumstances of a changing world.
[30] Ludwig von Mises pioneered this argument in his 1920 article, “Economic Calculation in the Socialist Commonwealth” (1990) and incorporated it in several later works. His student and later Nobel laureate in economics, F. A. Hayek, summarized the argument in a 1945 article which is a model of brevity, elegance and persuasion, “The Use of Knowledge in Society,” reprinted in Hayek 1948. One of the first popular writers outside of academia to understand and appreciate its force was Walter Lippmann in The Good Society (1st ed.,1936). Better than a third of the book is a development of this theme (and the related “totalitarian problem” – how, if comprehensive planning is instituted, to secure any liberties to the citizenry). Lippmann’s central conclusion is that comprehensive economic planning is only feasible in time of war and that its employment in peacetime can only create wars. This, clearly, deserves extremely serious attention from anyone tempted to advocate such planning. An excellent recent treatment may be found in Lavoie (op. cit.) which includes discussion of contemporary proposals for comprehensive and non-comprehensive economic planning and integrates its discussion of what the author terms “the knowledge problem” with a sophisticated understanding of the philosophy of science.
[31] Libertarians sometimes make the mistake of holding that the initiation of force is morally the worst thing possible. This is supposed to be what justifies the limitation of legal or compulsory processes to issues in which force has been initiated or to redress damage produced by such initiation. Yet the premise is vastly implausible and thus constitutes a serious weakening of the libertarian’s position. All that need be claimed is that bad things that involve initiated force may be responded to by force while those that do not involve initiated force require different treatment.
[32] I do not mean to ignore the question raised by those situations in which it appears that some violation of rights is necessary to prevent a greater or weightier rights-violation. That, however, is not the issue in the current discussion.
In the spirit of indirect utilitarianism, an interesting suggestion with regard to this possibility is that there should not – for utilitarian reasons – be a straightforward maximization procedure applied across rights-observance (or minimization across rights-violation). Instead, there would be some threshold of seriousness that would have to be crossed before it could be appropriate to infringe rights in order to limit the damages caused by rights-violation. (We might, for example, think it ill-advised to torture the children of a captured terrorist in order to get him to reveal the plans in which he was participating.)
There would, in effect, be first-order rights which function (in part) as constraints on maximizing policies (justified by the contribution of rights-respecting institutions to the production of greater maxima), and second-order rights which function as constraints on maximization over rights-observance (justified by the contributions of second-order rights-observance to the general maximization of rights-observance). Moreover, we might conceivably need to appeal to third- and higher-order rights to adjudicate issues regarding maximization over observance of second-order rights, etc.
Thankfully, such rarefied considerations are seldom necessary. The important point is that there is no level at which rights are absolutely indefeasible or utterly severed from considerations of utility, but neither is there any level at which they lapse as morally weighty considerations.
[33] This characterization of economic relations is credited to P. H. Wicksteed by David Gauthier (1986, 87). The claim is not that people have no interest in other people’s interests but that, insofar as a relation is economic, transactors take no account of each other’s interests. Quoting Wicksteed, “The specific character of an economic relation is not its ‘egoism’ but its ‘non-tuism.’”
[34] In addition to the fact that having a policy of intervening in some specified circumstances would be a form of non-comprehensive planning and therefore subject to the strictures above, the category of moral hazard, identified by insurance companies, is relevant. Moral hazard is the danger that insuring against something will increase the incidence of what is being insured against. This is why insurance policies are written to include a deductible or else a disproportionately larger premium is charged for a policy without the deductible. Since a policy of intervening in a certain sort of case amounts to “insurance” that the “victims” will not suffer (or that suffering will be limited) from that sort of case, it is important to ask whether “moral hazard” applies here also – whether, that is, the policy of intervention may not be creating exactly the sort of harm it is designed to remedy.
[35] It should be understood that both of these criteria are matters of degree and may, to a certain extent, diverge from one another. The showing of a movie, for example, may be subject to excludable provision. (You don’t get to see it unless you buy a ticket.) But it is non-rivalrous in consumption. (Up to the capacity of the theatre, any number may view it.) On the other hand, a good may be non-excludable in provision but rivalrous in consumption. (As public roads are currently managed, any number may have access to them, but rivalrous consumption is called a traffic-jam. In this case, though, it seems that some sort of toll or fee system could subject access to excludable provision. See Walter Block’s “A Free Market in Roads” in Machan 1982.
[36] “Everyone” sometimes needs to be relativized to the context. With regard to lighthouses, for example, “everyone” covers only owners of ocean-going vessels.
[37] If there were no threshold or one sufficiently low that it could reasonably be met by a single individual (or firm, family, investment syndicate, etc.) and if, at that level of investment. there were sufficient returns to the investor(s) to exceed their costs, there would be no public goods problem with respect to that good. Note, for example, that shopping malls meet the formal conditions necessary to qualify as public goods.
[38] In case (b), provided that the positive differential (benefits minus costs) exceeds transaction costs, the net beneficiaries would be able to “buy off” the opposition of the net losers.
[39] Under-production of public goods may provide incentives for the creation of private-good substitutes. Difficulties in financing lighthouses may be part of the reason we have sophisticated and reliable navigational and radar equipment on board ocean-going vessels.
[40] It might be said that this suggestion merely displaces rather than resolves the public goods problem: The problem is transferred to insurers who must cooperate to keep one or more of their number from free-riding by refusing to contribute to lighthouse provision and thereby being able to offer lower rates. The objection fails because shippers do not live by taking in one another’s cargo, but insurers do live by taking in each other’s risks. There is a far smaller number of insurers (than shippers) to mold into a coalition and far more effective enforcement (through business ostracism) is possible.
[41] The interest and relevance of this instance was brought to my attention by Roderick Long.
[42] Libertarians have assessed the public goods argument in different ways. An extremely skeptical treatment is provided by Hans-Hermann Hoppe (1989, 187-99). By contrast, Richard Epstein takes the public goods problem to be genuine and fundamental to specifying the proper scope and limits of government in Epstein 1985. An excellent extended discussion may be found in Schmidtz 1991.
[43] One of the difficulties with the public goods argument, otherwise unadressed here, is the question as to how you get the institution that is to use compulsory means to resolve public goods problems. This, it seems, would be another public goods problem and would therefore either generate an infinite regress or show that public goods problems can be solved without resort to such institutions.
[44] If such support were available, of course, the good in question could be financed without the use of coercion.
[45] The gains from the production of a public good need to be substantial in order to overcome the presumption against coercion derived from the fallibilistic point that coercive financing removes any straight-forward tests of whether the good is being over-produced – and therefore, of whether it is a good or not.
[46] I would neither be averse to considering nor especially surprised to see persuasively developed a utilitarian argument that even in these areas, the public goods in question can be provided (as well as can be expected under any system) without recourse to compulsory institutions.
Whether or not this can be done, the position taken in the text, I think, represents an important aspect of utilitarianism in that nothing could be more foreign to the utilitarian temperament than the maxim Fiat iustitia, ruat caelum (“Let justice be done though the heavens fall”). The utilitarian, in short, does not advocate rigid adherence to a principle in the face of imminent disaster; rather, she takes the imminence of disaster as proof that the (unqualified) formulation of the principle is somehow defective.
[47] An interesting alternative treatment is offered in Tibor Machan’s “Dissolving the Problem of Public Goods: Financing Government Without Coercive Measures” in Machan, pp. 201-208. Machan’s suggestion is that the financing of national defense and the legal system can piggyback on fees charged for the private good of contract adjudication and enforcement.
Another possibility which may merit more extended consideration is that the public goods argument might be construed as having a place in the structure of defeasible rights suggested in note 33.
[48] An analogy: Traffic laws place limits on driving behavior because freedom of travel is desirable.