Depressed Metabolism

In a recent opinion piece for Forbes, legal scholar Richard A. Epstein draws attention to the political philosophical aspects of the financial meltdown:

Fannie and Freddie didn’t design their horrific lending policies by chance. No, behind this lending fiasco lay the strong collective preference for the “patterned principles” of justice that Robert Nozick attacked so powerfully in his 1974 masterpiece, Anarchy, State, and Utopia.

Public policy makers attribute goals to society and look at its institutions, and ultimately people, as means to produce them. Such a teleological mindset stands in strong contrast to “historical principles of justice, which are content to establish the rules of the game and then let the legal moves by individual players determine the social outcomes.”

Whether “fairness” in the mortgage market or the creation of an “ownership society” is the goal, the underlying premise of society as collective enterprise towards “shared” goals is bound to create winners and losers and unintended consequences (which require additional interventions and so forth).

Epstein’s characterization of Congress as a  “pattern junkie” is very much to the point because, as a general rule, politicians cannot resist the siren song of using the coercive power of the state to overturn contract and spontaneous cooperation. As Anthony de Jasay points out in his treatise on political power The State, not intervening would require that the state has ends that lie beyond politics:

It seems anomalous if not self-contradictory for the state both to have a will and to want to minimize itself. For this to be rational, its ends must lie beyond politics, and be unattainable through governing.