The Normative Vision of Classical Liberalism
Chapter 10: God, the State and the Market
10. God, the state and the market* I am not competent to discuss the particular failures and occasional successes in differing countries in central and eastern Europe as they march through the post-Communist transition. It is now acknowledged, I think, that the decade of the 1990s taught us what we should have known, namely, that the destruction of one set of institutions does not insure that an alternative set of institutions will arise as if from the ashes. It is now widely understood that the rule of law, embodying the protection of life and property and the enforcement of voluntary contracts, must, somehow, be put in place in order for market and marketlike institutions to emerge, at least those that carry positive evaluative significance. A genuine dilemma arises, however, when we acknowledge that the rule of law must originate from, and be implemented by, the agencies of the state. How can persons, in their ordinary capacities, come to trust the state, after the oppression suffered over the course of the century? A first, and essential, step is a dramatic shift in understanding of and attitudes toward the responsibility of the state for the welfare of the citizens. Many persons who fully acknowledge that socialism, as a grand experiment, failed to deliver on its promises now hold the view that ‘the market,’ as an alternative organizational structure, will simply do better. In economists’ terms here, the view is that socialism turned out to be grossly inefficient in delivering valued goods...
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