The limits of liberalism: Good boundaries must be discovered

Abstract

Determining good boundaries for governance jurisdictions is among the most difficult problems in political theory and political philosophy. But to whom the rules of a given jurisdiction applies is a problem that afflicts private as well as public governance. Clubs have boundaries no less than cities, states, or nations. This essay applies Hayek’s conception of competition as a discovery procedure to boundary problems, arguing that good jurisdictional boundaries are subject to a great deal of contingent variation according to particular the conditions of time and place. Philosophical speculation, therefore, cannot fully replace a trial and error process that facilitates social learning about where good boundaries fall. I outline the features of good boundaries that make them subject to such variation, then evaluate two criteria for evaluating whether existing jurisdictional boundaries are good: one that emphasizes ex ante consent to boundaries, and one that focuses on the ability of individuals to exit from jurisdictions ex post, arguing that the exit-focused approach is underappreciated.

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Notes

  1. 1.

    Note that these two perspectives do not apply only to boundaries. They are evaluative criteria for judging all sorts of qualities of institutions.

  2. 2.

    The reason I say they are similar is that an exit tilt implies, like Levy’s pluralism, some minimal commitment to polycentricity, a commitment that is at best accidental in both rationalist and consent tilt liberalism. But there are several differences between our divisions. My distinction concerns the formation and dissolution of jurisdictions and movement between them, not how local they are, and so applies to centralized states and more local groups equally. Moreover, centralized states may work to empower individual exit rather than merely constrain it. Finally, the problems that Levy (2015) identifies with calcification of associations (p. 47) are actually problems of too much ex ante consent, not problems of too much exit, so the tough cases at the extremes will be different for our taxonomies.

  3. 3.

    Though as Benson’s (1990) work demonstrates, polycentric legal systems tend to converge on certain universal norms that take diverse local forms.

  4. 4.

    This feature of exit is wholly complementary with ex ante consent, in that allowing individuals to sort into jurisdictions with rules they prefer makes widespread consent more likely.

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Correspondence to Adam Martin.

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Martin, A. The limits of liberalism: Good boundaries must be discovered. Rev Austrian Econ 31, 265–276 (2018). https://doi.org/10.1007/s11138-017-0381-4

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Keywords

  • Clubs
  • Competition
  • Governance
  • Jurisdictions

JEL classifications

  • B53
  • D02
  • D71
  • H1
  • P16