Governance and the State within a Libertarian/Objectivist Society By Bert Ely Presented as a Participant-Sponsored Session at The Objectivist Center’s

Governance and the State within a

Libertarian/Objectivist Society

By

Bert Ely

Presented as a Participant-Sponsored Session at The Objectivist Center’s

2001 Summer Seminar

An overview of this two-partParticipant-Sponsored Session

• A libertarian/Objectivist (L/O) perspective on the human condition focuses on individuals and the rights that they inherently possess. This can be seen as a “bottom up” view of the world

• However, in higher income, urbanized societies, such as the United States, nearly every individual is constantly engaged in numerous social interactions of many types. These interactions create a need for societal governance mechanisms that should exist independently of the “state” This can seen as a “top down” view of the world

Rights of individuals, based on libertarian/Objectivist principles

Bottom upperspective

Libertarians and Objectivists Traditionallyhave a “Bottom Up” view of individual rights

Individualsincreasingly function in large, complex societies

Top downperspective

A “Top Down” view focuses on interactions

between individuals within society

Rights of individuals, based on libertarian/Objectivist principles

Individuals increasingly function in large, complex societies

Top downperspective

Bottom upperspective

The challenge: reconciling the inherent rights of individuals with the reality of today’s large, complex societies

Basic premises in addressing this challenge

• The rights of individuals are paramount, yet almost all individuals live within increasingly complex societies characterized by many types of organizations

• Human beings are incapable of perfection• Institutions must exist within society which set the rules governing

individual and organizational interactions and referee those interactions when conflicts arise

• Societal rule-setting and refereeing constitute societal governance, which is distinct from and above the “state”

• A society’s written constitution must not only declare the inalienable rights of individuals within society, but also create a society’s governing institutions as well as the “state”

Individuals/Citizens/Voters

Governance and the State in a Libertarian/Objectivist Society

Written Constitution

Institutions ofSocietal Governance

The “State”

Some important definitions

• Written constitution -- Specifies inalienable individual rights as well as creating institutions of societal governance and the “state”

• Institutions of societal governance -- A legislature and a judiciary that, respectively, set the rules for and referee disputes among individuals and private organizations within the society the constitution encompasses

• The “state” -- A set of institutions subordinate to the institutions of societal governance that performs certain carefully prescribed functions

A Two-Part Presentation

•Today -- The Governing Challenge

•Tomorrow -- Meeting the Governing Challenge

Today --The Governing Challenge

• Why explore the question of governance and the role of the state within an L/O society?

• Key assumptions about an L/O society

• Types of organizations and informal groupings within an L/O society

• Conflicts which arise from various types of human interactions create governance issues

• Governing human and organizational interactions within an advanced society

Why explore the question of governance and the role of the state within an L/O society

• Societal governance is a fundamental issue that must be addressed in conceptualizing any society other than an pure anarchy

• Why it is important to distinguish the governing institutions of society from that entity called the “state” Hayek, among others, has drawn this distinction

• Questions about the role of governance within society also must be addressed forthrightly in order to broaden the appeal of the L/O philosophy The L/O philosophy forms the foundation for addressing

these governance issues

Why it is important to distinguish governing institutions from the “state”• Governance issues exist and therefore must be addressed

in any society other than a pure anarchy• It is in the best interest of an L/O society, viewed in its

entirety, to have efficient, effective, and timely mechanisms for resolving disputes in a manner which best serves society, viewed as a whole David Kelley has noted that people crave certainty,

which is one reason why fair, effective governance within society is important

• Differentiating governance from the state makes it easier to minimize the state, if not abolish it, by clearly defining societal governance issues which exist independently of and above the state

Key assumptions about an L/O society, specifically occupying the U.S. territory

• Large, ethnically diverse, and primarily containing a urban/suburban/non-rural population

• The economy within this territory High level of economic output reflecting a significant

division of labor Substantial trade and financial integration with the rest of

the world.

• Individuals living within the society hold a wide range of views regarding personal conduct What constitutes rational conduct? What constitutes moral conduct? What constitutes unhealthy dependency

Types of organizations and informal groupings within an L/O society

• Families, tribes, clans

• Businesses

• Voluntary associations

• Involuntary associations

Types of business organizations

• Natural forms Sole proprietorships Partnerships

• Artificial forms that require substantial legal architecture, in part because of limited personal liability of the owners of the business Corporations Cooperatives

Types of voluntary organizations

• Religious/spiritual• Open-shop labor unions• Private schools, colleges, universities• Political parties• Civic associations (e.g., Coalition for a Sensible Bridge)• Social welfare (e.g., charities, Boy Scouts, museums)• Trade associations• Private clubs• Think tanks (e.g., The Objectivist Center, Cato Institute)• Groups with common interests (e.g., dog clubs, Objectivist

discussion groups)

Involuntary associations

• Membership required as a condition of employment -- union/closed union shops

• Membership is required as a condition of property ownership Home owner associations Condominium associations

Conflicts which arise from various types of human interactions create governance issues

• Civil interactions

• Tortious actions

• Criminal interactions

• A reprise: In none of these types of interactions is the “state” a direct party

Types of civil interactions• Property ownership

Real estate Personal property (movable things) Intellectual property (i.e., patents, copyrights)

• Contractual relationships

• Control of organizations

• Fiduciary obligations

• Privacy matters

• Bankruptcy

• Family relationships

• Mental incompetency

• Public health (e. g., building safety, contagious diseases)

• Acceptance into society -- citizenship

Types of tortious actions

• Bodily harm Unintended harms Reasonably preventable harms Difficult-to-prevent harms Long-term harms (e.g., asbestosis)

• Reputational/psychological harms (e.g., slander, libel, mental harassment)

• The breadth of harms which arise from motor vehicle usage

• Damages – actual, compensatory, punitive

Types of criminal interactions

• Defining crime to exclude crimes against the state and victimless crimes

• Types of crimes within society against persons and private organizations Property crimes/fraud Crimes against the person

• Crimes against children Crimes against animals

• Crimes committed by children

• Crimes against society and the state

• Punishment upon a criminal conviction

A reprise:

In none of the interactions discussed so far is the “state” a direct party. That is,

these are issues that would arise

even in the absence of the “state”

Governing human and organizational interactions within an advanced society

• Basic assumptions about people and human nature

• Key question: Within a given area, can different legal systems peacefully exist?

• In contemplating an L/O society, how far can we justifiably go in altering assumptions about human behavior?

• The tremendous impact of technological on human and organizational interactions The growing privacy debate

Basic assumptions about people, human nature

• Not everyone will play at all times under previously agreed upon rules There can be honest differences of opinion among the

affected parties as to what constitutes compliance with previously agreed upon rules

• Not all human interactions take place under previously agreed upon rules, such as torts

• Mistakes and bad things happen that are viewed as torts or even crimes (e.g., involuntary manslaughter)

• Some people unfortunately respond only to societally sanctioned violence or threats of violence

Key question: Within a given area, can different legal systems peacefully exist?

• What has been the real-world experience (e.g., Bosnia and Kosovo)?

• A basic premise: Within a given geographical area, there ultimately must be one set of enforceable rules applicable to all who live, own property in, work, or do business within that territory

• Related geographical issues arise from the existence of local, through streets and roads.

Tomorrow -- Meetingthe Governing Challenge

• Governing societal interactions

• Recapping the discussion to this point

• Central question: How best to conceptualize the role of the state in an L/O society, given the discussion to this point

• Structuring the subordinate state within an L/O society

• A summing up

Governance and the State within a

Libertarian/Objectivist Society

Part II

By

Bert Ely

Recapping yesterday’s discussion --The Governing Challenge

• Why explore the question of governance and the role of the state within an L/O society?

• Key assumptions about an L/O society

• Types of organizations and informal groupings within an L/O society

• Conflicts which arise from various types of human interactions create governance issues

• Governing human and organizational interactions within an advanced society

Today -- Meeting TheGoverning Challenge

• Governing societal interactions

• Recapping the discussion to this point

• Central question: How to best conceptualize the role of the state in an L/O society, given the discussion to this point?

• Structuring the subordinate state within an L/O society

• A summing up




Institutions ofSocietal Governance

The “State”

Governing societal interactions

• The starting point -- people The notion of residency within a given

geographical area The notion of citizenship or membership

within society, at least with regard to their inalienable constitutional rights• This question extends to the rights of lawful

immigrants and illegal immigrants Citizens who can vote on governance issues

and issues affecting the state



Citizens


• The starting point -- people

• The basic governing document -- a written constitution directly controlled by the citizenry




Soci etal

Institutions

Initial adoption of constitution Subsequent amendments

Citizens

Basic Governing Document

What a constitution should address

• Subdivisions of the constitution A Bill of Rights -- a clear listing of the inalienable rights of

the individuals affected by the constitution

• Reflects the “bottom up” view of L/Os The structure of the society’s governing institutions

• Reflects a “top down” view of society The structure of the state The process for amending the constitution

• Differentiating governance from the state suggests that the constitution separately create the primary governance institutions and the institution of the state




• The governing institutions of society The primary institutions -- legislative and

judicial




SocietalLegislature

IndependentJudiciary

Soci etal

Institutions

Select

Create Create


Citizens


Primary Governing Institutions

Elect

Functions of the societal legislature• Transform common law principles into statutory law

when warranted

• Create statutory law where there is insufficient case law and the law needs to be prospective

• Establish uniform laws across multiple political jurisdictions within a federal system (e.g., the United States)

• Delegate supporting functions of the societal institutions to the state

• Approve treaties negotiated by the state

• Ensure a fair, transparent operation of the political marketplace -- societal institutions and the state

Functions of theindependent judiciary

• Adjudicate criminal and civil cases

• Adjudicate appeals from the trial courts An automatic right of appeal is essential

to ensuring judicial fairness In a large society, case law is formed

increasingly at the appellate level

• Judges would be selected by the societal legislature for a lengthy term or for life

Checks and balances between thelegislative and judicial branches

• Checks of the legislature on the judiciary Select judges Sets the rules under which the courts operate Set rules governing judges’ conflicts of

interest Remove judges for cause

• Checks of the judiciary on the legislature Rule a particular law unconstitutional




• The governing institutions of society The primary institutions -- legislative and

judicial Supporting institutions




SocietalLegislature


CriminalProsecutions

Soci etal

Institutions

Select

Enforcement ofJudicial Orders

Select Select

Create Create


Supporting GoverningInstitutions

Direct throughjudicial orders

Elect

Citizens






SocietalLegislature



Soci etal

Institutions

Select


Select Select

Create Create



Elect

Patent/Trademark

Office

Property/Lien

Records

Prisons/Probationand Parole

DeterminingCitizenship

RunningElections

Taking aPeriodicCensus

PublicHealth


Citizens



Recapping the discussionto this point

• The discussion so far has focused only on individuals, private organizations, and their many types of interactions

• The functions discussed so far represent the governing apparatus within society that exists above the apparatus of the state itself

• There purposely has been no discussion of many types of functions widely attributed to the state

Central question: How to best conceptualize the role of the state in an L/O society, given the discussion to this point?

• View the state as an organization, even a corporation, with unique powers granted to and exercised by it by the constitution and the societal legislature

• However, view the state as a subordinate institution, specifically subordinate to society’s primary governing institutions Subordination effectively removes the organs of

governance from the reach of the state Subordination destroys the concept of sovereign

immunity

Structuring the subordinate state within an L/O society

• Oversight of the state -- state legislature and state executive




SocietalLegislature



Soci etal

Institutions


Select Select

Create Create



Elect

Patent/Trademark

Office

Property/Lien

Records


Other functions:• Citizenship • Elections • Census • Public health

StateExecutive

Legislatureof the State

ElectSelectOversight of the State

Select

Create CreateInstItIons

of

the

state


Citizens



Functions of the state legislatureand the state executive

• State legislature Effectively operates as the popularly elected board of

directors for the state Establishes the operating rules (i.e., administrative

law) for the state’s agencies and departments Selects the head of the state’s executive branch

• State executive Oversees the day-to-day activities delegated to the

state by the societal legislature or authorized for the state under the constitution



• Supporting activities of the primary societal institutions delegated to the state




SocietalLegislature



StateExecutive


Soci etal

Institutions

Institutions

of

the

State

Elect

Select

Select

Patent/Trademark

Office

Property/Lien

Records




Select Select

Create Create

Create Create

Delegation of certain governanceactivities to the State


Administeragencies

Set operating rules for subordinate agencies


Elect

Oversight of the State


Citizens



Delegated Governing Activities



• Supporting activities of the primary societal institutions delegated to the state

• Activities authorized by the constitution




SocietalLegislature



StateExecutive


Soci etal

Institutions

Institutions

of

the

State

Elect

Select

Select

NationalDefense

Patent/Trademark

Office

Property/Lien

Records

Police


Finance/Tax

Collection



Select Select

Create Create

Create Create

Delegation of certain governanceactivities to the State


OtherActivities

of the State

Administeragencies

Set operating rules for subordinate agencies


Elect

Oversight of the State


Citizens


Delegated Governing Activities


Institutions of the State

S

= Individuals/families

= Private organizations: corporations, partnerships, churches, unions, schools, hospitals, foundations, social clubs, etc.

= The state, granted by the society's constitution the unique power to use

= Legislative and judicial system for the society. The legislative branch ofsociety's constitution to grant the government specific powers to compel,

force to compel the citizens of the societyto pay taxes and obey laws and judicial orders.

subject to judicial review.

L/J

S

The boundaries of society

L/J

= Individuals/families

= Private organizations: corporations, partnerships, churches, unions, schools,

=

= Legislative and judicial system for the society. The legislative branch ofsociety's constitution to grant the government specific powers to compel,

Another perspective on the relationship of governance and the state to an L/O society

S

L/J

S

L/J

A summing up

• Humans are far from perfect, which leads to numerous types of conflicts

• Human conflicts create the need for governance processes backstopped with enforcement mechanisms

• The need for governance processes and enforcement mechanisms exists independently of the “state”

• It is in the self-interest of libertarians and Objectivists to desire efficient, effective governance even as they seek to minimize the state

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Documents

Governance and the State within a Libertarian/Objectivist Society By Bert Ely Presented as a Participant-Sponsored Session at The Objectivist Center’s