Running Head: Origin and nature of state and law

Origin and nature of state and law according to De Jasay The capitalist state

Submitted to Prof. Dr. Hardy Bouillon By Ergis Sefa, MPM

In partial fulfillment of the requirement for the course

Law and State

Swiss Management Center AG

July 26, 2012

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1. Title and Contract in the capitalist state Fundamentals The starting idea that the origin of capitalist ownership is that finders are keepers, reflects the belief that rule was born out of chaos. The statement that a capitalist state does not demand ownership to be justified reinforces it (De Jasay, 1998, p. 4). From these statements stems the neo-liberal idea that access to goods should be regulated by price and substitution and not by state authority. Thus, ownership is not connected with the public, the community, and its distribution is not a concern of the public sphere in an egalitarian sense. The same can be derived for wealth; that it can be disproportionally distributed among the society. Necessary conditions The freedom of contract is the fundamental element for a state to be capitalistic. This concept is defined as the right and freedom of the finder of property to keep it as long as s/he wishes, and to transfer its rights (all or partially) to a third party on whatever terms they agree. Implicitly, this concept prevails over all other rivals as the top of the pyramid stone. In a capitalistic state, the notion of freedom of contract prevails over notions of status, fairness or justice. The contract agreed upon in freedom is the cornerstone for the social fabric of a capitalistic state, be it a just/fair contract or not. The state has no authority to enforce any justice or status related rules upon this freedom of contract (De Jasay, 1998). Reshuffling However, the thin line between the freedom of contract and violation of rights of a third party makes state intervention/regulation desirable, at least, in practical needs. The burden of proof, the condition, remains on those who want to demonstrate that the contract violates some kind of

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right of a third party. Nevertheless, this is neither easy nor straightforward. Norms of judgment and values of righteousness/wrongfulness are not distinct from culture, tradition and/or ideology. State interventionism Nevertheless, there are certain cases of denial of the freedom of contract without involving third party rights. Forcible amendment of contract is one of them. This is valid even when one does it against his own interest. The state has the duty to intervene and not allow him from forcing the other party to comply with his terms or even protect him from mistaking his own preferences (the weakness of will argument). Many elaborate on this concept to argue the need for social welfare and healthcare provision, for example. Another view is that the state should only enforce upon the parties of a contract the external objective observer view for the benefit of both parties. As conception of good should be imposed on Bs contractual agreement for Bs own good. Whereas, A can be the majority of voters, a research institute, etc.

2. Inventing the State The birth of the state Two dominant views attempt to explain the birth of the state as an organized entity. Both emerge from two opposite axioms. Hobbes believed that every man has reason to fear his fellow man if they are alike (De Jasay, 1998, p. 15). Rousseaus thesis is that people in the state of nature are unable to organize the social cooperation necessary for the realization of their common good (De Jasay, 1998, p. 18). The prisoners dilemma is what Hobbes produced whereas from Rousseaus hunting party stemmed the idea of the social contract for the common good. De Jasay analyses both versions and inherently comes with his idea that truth may lay somewhat in between.

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The Prisoners Dilemma Since you fear your neighbor might harm you, then you have to be prudent and ready. Pursuing strength capacity building and strategizing to win the game over the other(s) is the highest priority of each individual. Since everybody is doing it, the result is armed peace. Hobbes concludes that the only reasonable result is to make a covenant of mutual trust and designate a sovereign (the state), invest it with powers and the duty to enforce and peace. Coercion is what gets people to a social contract, not free will, and they admit to submit to the coercive authority of the state for the alternative is consistent peril of conflict. De Jasay makes an interesting point that states do not behave like individuals when it comes to such situation. They are reluctant to give up sovereignty to a supra-national entity. They like to have their own voice in the UN. We have certainly seen this happen during the past 60 years. However, the birth of super-structures, like the EU, may serve as counterargument.

The Hunting Party Rousseau claims that individuals (person in the state of nature) are unable to organize in a social cooperation for their own good in free will. The two hunters hunting for prey not always collaborate in their natural status. If one sees the opportunity for something else, he will pursue his self-interest and forget about the other and their common hunt. Thus, we do not have a dilemma in the Hobbesian sense, because this is their nature. Thus, social cooperation does not require coercion. It is the myopia on one of the hunters, who cannot wait for the collective hunt to deliver, that cause a problem. Rousseaus solution is to get him voluntarily to submit to the coercion of a supra-party authority for his own benefit. The other party can demonstrate him the gathering from the previous collective hunt making him understand the payoff of this solution.

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However, this cooperation-by-incentive solution does not explain why he should accept all other organizing aspects in society prescribed in the contract, apart from the hunting.

3. Epilogue Furthermore, both views fail to fully explain the world we live today where states, being in a state of nature, do not tale practical steps to deliver their sovereignty to a supra state. They also fail to explain the situation of individuals in the modern world. Al of us have been born and raised inside state structures and never proved the taste of a state of nature. How can we than prove their basic premises?

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References De Jasay, A. (1998). The State, Indianapolis, IN: Liberty Fund.