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The Limits of Liberty: Between Anarchy and Leviathan

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" The Limits of Liberty is concerned mainly with two topics. One is an attempt to construct a new contractarian theory of the state, and the other deals with its legitimate limits. The latter is a matter of great practical importance and is of no small significance from the standpoint of political philosophy."—Scott Gordon, Journal of Political Economy

James Buchanan offers a strikingly innovative approach to a pervasive problem of social philosophy. The problem is one of the classic paradoxes concerning man's freedom in in order to protect individual freedom, the state must restrict each person's right to act. Employing the techniques of modern economic analysis, Professor Buchanan reveals the conceptual basis of an individual's social rights by examining the evolution and development of these rights out of presocial conditions.

217 pages, Paperback

First published January 1, 1975

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About the author

James M. Buchanan

111 books60 followers
American economist known for his work on public choice theory, for which in 1986 he received the Nobel Memorial Prize. Buchanan's work initiated research on how politicians' self-interest and non-economic forces affect government economic policy. He was a Member of the Board of Advisors of The Independent Institute, a Distinguished Senior Fellow of the Cato Institute, and professor at George Mason University.
Buchanan was the founder of a new Virginia school of political economy. He taught at the University of Virginia—where he founded the Thomas Jefferson Center for the Protection of Free Expression—UCLA, Florida State University, the University of Tennessee, and the Virginia Polytechnic Institute, where he founded the Center for the Study of Public Choice (CSPC). In 1983 a conflict with Economics Department head Daniel M. Orr came to a head and Buchanan took the CSPC to its new home at George Mason University. In 1988 Buchanan returned to Hawaii for the first time since the War and gave a series of lectures later published by the University Press. In 2001 Buchanan received an honorary doctoral degree from Universidad Francisco Marroquín, in Guatemala City, Guatemala, for his contribution to economics.

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Displaying 1 - 8 of 8 reviews
Profile Image for Otto Lehto.
440 reviews171 followers
February 28, 2014
A word of warning: one cannot get much drier than this book.

But there is elegance and clarity in the dryness. Buchanan cuts through logical fallacies and unfounded assumptions with razor-sharp wit. The analysis is as deadly as ivory-tower stuff ever gets.

The book baffles slightly by its unwillingness to commit to specific policy recommendations. The book is both conservative and extremely radical: it calls for anarchy - but "orderly" anarchy.

"The limits of liberty" are a way of saying the Hobbesian jungle is dangerous, but so is the threat of Leviathan. We should come up with a constitutional arrangement that sets limits to both a) individuals' actions in regards one another, and b) the state's actions in regards individuals.

By finding the optimum balance between efficiency and freedom, the best state can be constituted.

”The very purpose, in the larger ”social” meaning, of defining rights in constitutional contract is to facilitate orderly anarchy, to provide the basis upon which individuals can initiate and implement trades and exchanges both of simple and complex forms. Having defined and accepted a structure of rights, individuals can reduce their own investment in defense and predation and go about their business of increasing utility levels through freely negotiated dealings with each other."

The argument aims to persuade men to accept, through constitutional renegotiation (or political revolution), a ”constructive consensus on a new structure of checks and balances.” These checks and balances, marking the "limits of liberty" from the title, are meant to chain the Leviathan, i.e. the overgrown state, and bring it closer to alignment with perfect unanimity conditions and place politics within the boundaries of Pareto-optimization.

The author is sympathetic to laissez-faire liberalism, libertarianism and anarchism, but grants that a minimal state is the best option, because there are public goods and externalities to be legislated. Crucially, he warns against the assumption that making a law to solve every problem is the right way forward. Buchanan argues for giving people maximum freedom to make choices while at the same time being protected from intrusions by his fellow citizens, whether through private action (theft), or collective action (intrusive laws and regulations).

The personal parts of the book deal with the promise of utopia, a society of free men dealing with each other in freedom. He grants the utopians that the ”ideal society is anarchy, in which no one man or group of men coerce another.” But he also grants the framework of collective negotiation through which such a state will, if ever, be reached, whether constitutionally (through rewriting the framework of the legal order) or "post-constitutionally" (through rewriting positive laws).

Buchanan is a fantastic economist, and even the supreme dryness and difficulty of his jargon-heavy prose cannot hide the fact that here is a forward-looking exposition, in the framework of Hobbesian-Lockean social contract theory, combined with economics, of the non-doctrinaire libertarian position which promises so much for us today, in the post-ideological world.
Profile Image for Thomas Ray.
1,095 reviews350 followers
July 20, 2017
George Monbiot reviews Democracy in Chains: The Deep History of the Radical Right's Stealth Plan for America by Nancy MacLean: The Guardian, July 19, 2017: theguardian.com/commentisfree/2017/ju...

James M. Buchanan in The Limits of Liberty: Between Anarchy and Leviathan advocates totalitarianism in defense of the freedom of the rich to do what they will, at the expense of everyone else. "Sponsored throughout his working life by wealthy foundations, billionaires and corporations, he developed a theoretical account of what this constitutional revolution would look like, and a strategy for implementing it."

"In one respect, Buchanan was right: there is an inherent conflict between what he called “economic freedom” and political liberty. Complete freedom for billionaires means poverty, insecurity, pollution and collapsing public services for everyone else. Because we will not vote for this, it can be delivered only through deception and authoritarian control. The choice we face is between unfettered capitalism and democracy. You cannot have both.

"Buchanan’s programme is a prescription for totalitarian capitalism. And his disciples have only begun to implement it. But at least, thanks to MacLean’s discoveries, we can now apprehend the agenda. One of the first rules of politics is, know your enemy. We’re getting there."
Profile Image for Nick.
220 reviews28 followers
May 5, 2023
Buchanan takes as a starting point the individualist principle that each count for one and no more than one which may be found in utilitarian and Kantian ethics. Buchanan does not associate democracy with collectivism or radical egalitarianism but with the equality of individuals before the law in terms of legal rights and political participation.

From this starting point the ideal is anarchy where the individual is not constrained by any other, all decisions are voluntary and unanimous, and everybody respects the autonomy of others. It is the latter two conditions which in practice are not always achievable and which limit the first condition and justify some kind of government. Buchanan utilizes a state of anarchy (as opposed a state of nature which is more metaphysical, this is still a social state) because the normative question of government is meaningful only if there is an alternative to government.

In a state of anarchy everyone may claim a right to everything without a recognized arbiter and can lead to violating autonomy and rights claims of others which then will not be reciprocated. Unanimity works fine directly between two persons or a small group but faces a scaling problem. If a single individual holds out then certain collective decisions can’t be made due to the free rider problem of dispersed benefits and concentrated costs or the externality problem of concentrated benefit and dispersed costs. Two solutions are 1) to compensate hold outs and 2) to exclude dissenters. But not everything is excludable and exclusion would at some point have to rely on force if they are insistent enough while compensation still relies on their acquiescence and could invite extortion.

Buchanan proposes a two contract theory: a constitutional contract and post-constructional contracts. In the first case some sort of status quo has to be recognized so that an agreement between all parties can be made that is mutually acceptable. Even if all do not start the same there may be equal consideration of different interests by one another. From the agreed status quo rights and compensatory measures may be done to ensure loyalty so nobody is worse off than before. It is in this first contract that unanimity operates. Afterwards private and public property rules with allowed exclusion/compensation derived from or not contradicting the social contract. The role of the state in the first contract is protective and the second productive, by provision of public goods and legal rules.

This then becomes the justification for majority rule short of unanimity since the social contract ensures nobody will be worse off relative to an agreed baseline established from anarchy and the more individuals that approve of the decisions of the state then the closer to unanimity in practice and the lower the costs of enforcement/compensation. This first contract can be revised presumably either internally or due to a sort of return to anarchy by war revolution or coup etc. The only unanimity required is internal. Those born or naturalized thereafter would be subjects until recognized as full members. Those who do not accept these conditions are not included in the social contract and are aliens or enemies.

The arguments of the book are similar to Thomas Hobbes who is mentioned often though Buchanan is more concerned with preserving the freedom from anarchy which doesn’t all disappear and does not recognize in the state sovereignty above the individuals who comprise and recognize the mutually accepted rules. Buchanan is himself a minarchist more like Locke while the theories of Hobbes and Rousseau are more concerned with sovereignty in general and leave the anarchic state of nature behind and so may justify a more extensive state than envisioned by Buchanan. Further, Buchanan’s constitutionalism does not rely as much on institutional restraints which he regards as having failed to restrain the state as upon the rule of law itself. This constitutionalism is similar to Calhoun’s doctrine of the concurrent majority as opposed to a numerical majority. The leviathan state comes when political actors concentrate benefits to themselves and disperse costs to others by using the post-constitutional legal system which is what the constitutional protection of preexisting rights and tendency towards unanimity by supermajority or veto power aim to prevent. These norms become the proper basis for popular political participation.
Profile Image for Nick Klagge.
731 reviews56 followers
February 18, 2013
Another in my series of "economics books I had lying around that I decided to pick up because the author died." It was not a promising match because Buchanan is far to the right of me on the political spectrum, and this book is focused on the topic of political organization, particularly focusing on Buchanan's contractarian view of the (normative) state.

The word that floated to my mind to describe this book is "bloodless." People often criticize economics for being "dry," but one of the main reasons I like economics is the way it deals with the real, practical decisions that people make every day. Buchanan's book is almost entirely about (admittedly) hypothetical multiparty contracting, and therefore misses all of that richness. It's a sharp contrast with many of the best books of economic theory, for example, "The Wealth of Nations" or "Exit, Voice, and Loyalty," the latter of which is also in the series I mentioned at the beginning. Worse, I felt a kind of political cowardice in Buchanan's book. He frequently makes vague references to "the way things have come to be in the 1970s" (when the book was published), or "the problems man faces in the 1970s." Although certainly there were many things in the 1970s worth criticizing, regardless of your political views, this comes across as an expression of the inchoate disquiet felt by an upper-class white man (his grandfather was the governor of Tennessee) in a society where previously disenfranchised groups were making (at least somewhat successful) claims to some political power.

At the end of the day I also just have problems with the contractarian view of government. Buchanan often starts with a thought experiment in which a group of people make a constitutional contract to abide by unanimous decisions, and then elides it with something like, "...but due to the excessive transaction costs associated with unanimous decision-making, they agree to adopt a non-unanimity voting rule." I think a huge amount is lost in this elision; the difference between unanimity rule and even extreme-supermajority rule is a total difference in kind, and the "transaction costs" thereby eliminated are of deep interest, unlike the transaction costs associated with, say, having to drive to the store.

Ideas that I found useful in this book: the distinction between the "protective state" and the "productive state"; the proto-economic framework for thinking about economic effects in a situation prior to the definition of property rights (what Buchanan talks about as "external economies" and "external diseconomies").

I found it interesting to be reading this at the same time as the sci-fi novel "The Dispossessed," which portrays an anarchist society and a "propertarian" society--in particular the way that the latter book seems to shed much more light on the shared issues than the former!
March 18, 2023

the book is extraordinary for all kinds of ideologies because it brings a formula of reasoning that has perfected the formula of the classics as currently: anarchy, Leviathan and middle ground.

If everyone reads carefully, it is a gradation inspired by Kantian metaphysics:
Zero-state or non-existent, either in Smith's laisser-faire or in the contract of Hobbesian moral or immoral anarchy;

there is also the Maximum State of Leviathan - socialism and wellfare State, interventionist etc.

and finally, ordered anarchy, which presupposes a minimum or limited State

from then on there, follows a rich discussion in this work that I warn everyone deals not only with the Constitutional Political Economy invented by Buchanan, but is too a work of Criminology, that make a rereading in this sense and see everyone that is something surprising that no one has noticed so far

o livro é extraordinário para todos os tipos de ideologias porque traz uma fórmula de raciocínio que aperfeiçoou a fórmula dos clássicos da seguinte forma atualmente: anarquia, Leviatã e meio-termo.

Se todos lerem com atenção, trata-se de uma gradação inspirada na metafísica kantiana:
Estado-zero ou inexistente, seja no laisser-faire de Smith ou no contrato da anarquia moral ou imoral hobbesiana;

existe também o Estado-máximo do Leviatã - socialismo e wellfare State, intervencionista etc.

e finalmente, a anarquia ordenada, que pressupõe um Estado-mínimo ou limitado

daí pra frente segue uma rica discussão nessa obra que alerto a todos trata não só da Economia Política Constitucional inventada por Buchanan, mas a obra inteira é uma obra de Criminologia, faça uma releitura nesse sentido e verão todos que é algo surpreendente que ninguem notou até agora

contem comigo pra novos debates

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heraldo montarroyos
Profile Image for Hattas Martin.
232 reviews6 followers
June 26, 2019
Kladie dôležité otázky anarchistickej spoločnosti a snaží sa svoje tvrdenia podporiť konštitučnou zmluvou v prospech výhod z nej plynúcej. Zároveň vysvetľuje súčasný ochranársky štát, ktorý nás má dopredu chrániť, namiesto obchodného štátu, ktorý má iba zabezpečovať plnenie zmluvy medzi subjektami. Hopp sa o Buchananovi vyjadruje ako o ortodoxnom etatistovi, ani sa mu nedivím. Vo svojej knihe je presvedčený o význame novej konštitučnej zmluve s poistkami.

"Slobodné vzťahy medzi slobodnými ľuďmi, táto zásada usporiadanej anarchie sa môže stať princípom, keď úspešná nová sociálna zmluva začlení moje a tvoje do novodefinovaného štruktúrneho usporiadania a hrozivý Leviatan bude spútaný novými obmedzeniami."

"Socializmus je priamou cestou k Leviatanovi."
August 20, 2022
Even though I am, personally, an ''anarch'' (yes, that does sound pompous, and it probably is!), Buchanan makes a great case for the necessity for a certain constitutional structure upheld by, at the very least, the ''night watchmen'' type of government. It is very easy to misunderstand Buchanan, as he deals with extremely delicate notions and ideas, therefore, this book requires careful, perhaps, slow reading. An intellectual tour de force, although in the end, it did not change my mind.
Profile Image for Craig Bolton.
1,195 reviews71 followers
September 23, 2010
The Limits of Liberty: Between Anarchy and Leviathan by James M. Buchanan (1977)
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