|
June 07, 2006
A quote from John Stuart Mill:
Laissez-faire, in short, should be the general practice: every departure from it, unless required by some great good, is a certain evil.
That captures laissez -faire doesn't it. Mill's dim view of government intervention leaves individual self-interest calling the shots, doesn't it. It presupposes the universally beneficent and harmonious operation of self-interest left alone. I guess this forms the core of what is neo-liberalism today. The critics of neo-liberalism, operating from a political perspective, have deemed to be irrational. So I will argue against laissez-faire from within economics.
Henry Sidgwick points out in his The Elements of Politics, even if one grants that individuals are the best judges of their own interests,
...it by no means follows that an aggregate of persons seeking each his private interest intelligently, with the least possible restraint, is therefore certain to realise the greatest attainable happiness for the aggregate ( pp. 144-45).
What this highlights is a divergence between private and social or public interests. Sidgwick highlights those cases where self-interest and laissez are not wealth maximising: Sidgwick cites in support of this
argument the use of natural resources, including the potential depletion of mines, fisheries, and plant species, and the diversion of water ways necessary for irrigation etc. Climate change and global warming would be a contemporary example of this divergence.
In his Principles of Political Economy Sidgwick uses the overuse of natural resources as an example:
Take, for instance, the case of certain fisheries, where it is clearly for the general interest that the fish should not be caught at certain times, or in certain places, or with certain instruments, because the increase of actual supply obtained by such captures is overbalanced by the detriment it causes to the prospective supply. Here---however clear the common interest might be---it would be palpably rash to trust to voluntary association for the observance of the required rules of abstinence; since the larger the number that voluntarily abstain, the stronger becomes the inducement offered to those who remain outside the association to pursue their fishing in the objectionable times, places, and ways, so long as they are not prevented by legal coercion ( p.410).
This example indicates that individual self-interest does not ordinarily take into account the interests of future generations (eg. with climate change) and that soem individuals can cheat,
Hence the divergence between private and social or public interests.
|
