The Miserly Cat

A Dialogue Imagining A More Market-Centric Future For The Betterment

of Man

1/2/2011
The room is unremarkable; the audience a salmagundi: bleeding-heart liberals bedecked in products of slave-labour
and climate-altering pollution, rebellious radicals bold beyond their means or understanding, staunch conservatives
arrogant beyond their experience, inquisitive intellectuals-to-be in horn-rimmed glasses, smartly dressed movers-and-
shakers of no particular distinction and mindless twenty-somethings come for the free drinks proffered as reward for
feigned attentions.

At the front, two middle-aged men and a slightly younger woman sit around a table, chatting idly among themselves.

The lights dim...

Ms Sonaj: Welcome to the final session of the Godot Conference sponsored by Molloy Industries. I am privileged to
welcome two esteemed thinkers to share their views of where we in the developed world stand in terms of the structural
elements of our society and where we might want to be headed.

Professor Hanavi is a chemist who was written widely on political theory and Mr. Lewis is the managing partner for
development law at Vliegwiel Hooratas & Setrvacnik.

Mr. Lewis, let’s start with you. Could you explain what sort of legal and economic concepts define our era?
Mr. Lewis: Those of us who by accident of birth, ambition or necessity live in the ‘developed’ 1 world know we live in an
era of human rights and capitalism. Believing, as we have been conditioned to accept, that law is the process by which
politics become reality, we attribute much of the material, scientific and cultural progress of our age thereto and rightly so.
Human rights are no longer, if they ever were, (adherents of natural law dispute this), limited to the developed world. For
example: the Indian Supreme Court frequently cited international human rights documents and doctrines as it extended
legal protections to disadvantaged groups, and held that torture, cruel, inhuman or degrading treatment, aberrations not
prohibited by the written Indian constitution could, by reference to the those international standards be imputed as being
contrary to a fundamental human right to life and therefore contrary to the law of the land.2
This phenomenon is sadly not limited to salutary examples. It must be conceded that there are many examples of human
rights legitimizing or obscuring expropriation, exploitation and extermination, effecting a sort of legal/moral imperialism, 3
while the laws underpinning capitalism, can perversely cause1the over-throwers of brutal dictators to bear the debts of their
oppressors and so pay for the weapons used to violate their human rights.4

But medications which save millions of lives are often the product of experimentation, some of it unethical or unsafe
which regularly costs or ruins lives, and yet no doctor would refuse to use, or a patient refuse to accept an efficacious
remedy because of this. So too should we not reject human rights or capitalism for the failures which contribute to their
continued development.
Legal positivism believes that in homogenous societies like our own, legal adjudication of political disputes is a scientific
process grounded in objectivity. Others like Dworkin seek to impart a necessarily moralistic approach, while Habermas
would have the decision maker engage the dispute within the limits of idealized discourse. Yet none of those concepts can
be properly applied to genuine cases of cultural conflict.5
Unless one moral or legal vision is regarded as the absolute norm, that is to say, without reference to universal human
rights, the legal process cannot settle disputes between two cultures. The cultural blindness of universal rights is the
metric for the adjudication of international disputes if violence is to be avoided. To paraphrase US Solicitor General
Griwswold6, an absolute doesn’t always mean an absolute: the concept of ‘margins of appreciation’ has come to be seen as
providing limited accommodation for local realities and traditions.7

Now it might at first seem odd, but capitalism and human rights, the foundations of modern success have rather dissimilar
philosophical origins. Human rights developed from the school of natural law 8, while capitalism is descended from

1
The past-tense, describes, most likely unintentionally, Western culture as having reached its socioeconomic apex and now residing in stagnation: P
Brown, The Commonwealth of Life: Economics for a Flourishing Earth (2nd ed Black Rose Books 2008)
2
H Stacy, Human Rights for the 21st Century (Stanford 2009) 130/1
3
G Teeple, The Riddle of Human Rights (Humanity Books 2005), Stacy supra (no 2) and E Meiksins Wood, Democracy Against Capitalism (CUP,
1995) passim
4
M Freeman, ‘Beyond capitalism and socialism’ in J Dine and A Fagan eds, Human Rights and Capitalism (Edward Elgar 2006) 6
5
Supra (4) 134
6
New York Times v US 403 US 713 (1971)
7
In Fette v France (2004) 38 EHRR 21 the margin is seen a ‘legal space’ where nations can apply HR norms in a manner not entirely equivalent to the
universal norm, but in a significantly comparable one.
nineteenth century political economy, namely mercantilism.9 More generally: rights are moralistic and utilitarian,
capitalism scientific and consequentialist. And yet both are ontologically grounded in concepts of freedom and the
individual.

With that in mind it becomes less puzzling that capitalism and free markets are associated with the attainment (and
sometimes the failure) of human rights. Milton Friedman famously observed that all empirical evidence shows that free
markets are a necessary, but not sufficient condition for the fulfilment of individual liberty in modern societies because the
greed of the market cannot suffer irrational discrimination, which would reduce the possible pool of suppliers and
consumers any more than human rights can suffer unfulfilled necessities 10

Capitalism is a system that requires diversity. Diversity of consumers and producers protects each from the vicissitudes of
the other; meaning that a freer market is in fact more likely to favour minority groups than majorities. 11

It is because of these complementary actions that for example Jews and Asian-Americans were been able to overcome
serious discrimination in a matter of two generations and achieve economic, political and social success and acceptance. 12
Economic success in free markets allowed them to leverage debt into civil rights and social privileges. 13

Sonaj: Professor Hanavi you don’t see the fact that we have gained so much from human rights to be indicative of their
correctness?

Mr. Hanavi: In a word: Yes. Just because something has produced good results does not mean it is the only means to
those ends or that different means might provided superior outcomes.

Sonaj: Given that socialism, communism and other forms of collectivism have failed, what alternative do we have to a
system of morality based human rights and pseudo-scientific capitalism?

Hanavi: Each New Year’s Eve in New York City, standing between greed’s gate and opportunity’s doorstep, the crowd
pauses and sings a quiet, thoughtful hymn asking them to imagine a world different from their own. Embrace that moment,
and imagine.  But ‘imagine’ does not mean ‘accept’. As much as I ask for your imagination I ask for your scepticism.
Recent global financial turmoil, (a ‘Klein schock’ perhaps? 1) the product of capitalism perverted into consumerism, a
triumph of rights over regulation14 surely begs the question: ‘can we do no better?’  I believe we can.
Imagine with me the Catallactic Democratic Syndicate, an 1evolution of the competitive-capitalist welfare state. Inspired
by the Austrian and Chicago School of economics 2, pragmatic jurisprudence3, moral relativism, the service-state model 4
and the insights of modern cultural psychology 5, concatenating their complementary tenets, discarding contradictions,
developing the inherent synergies to substantially satisfy such divergent political movements as neo-liberalism,
corporatism, individualist anarchism, libertarianism, democratic socialism, and nonliberal capitalism 6.   A Catallactic
Democratic Syndicate is based upon the following concomitant and mutually balancing rights, responsibilities, and
freedoms:
The right: to individually, and jointly, own acquire, create, use and dispose of property and to such information
necessary to decision-making in respect of the same 7; to exclusive control of private property save where required by
lawful necessity for the furtherance of a right or responsibility of the Syndicate; to adjudication of disputes incapable of
peaceful resolution by the parties alone; to access markets; to the benefit of public property/goods; to influence and control
the acquisition, use and disposal of the same; to be compensated for harm or unlawful interference with one’s rights by the
perpetrator; and to  collectively exclude  or remove (with fair compensation) from the Syndicate those who disrupt its
functioning and the rights of its members.

Freedom: of contract (i.e., to choose partners and terms), from misinformation, from violent dispossession of property
/capital and, from harm to property save in the properly decided public interest.

The responsibility: to refrain from exercising one’s rights and freedoms so as to conflict with, diminish or otherwise harm
the rights or freedoms of members of the Syndicate; to respect and guarantee the rights of others in one’s conduct,
ensuring the fullest and most equal enjoyment of rights for the members of the Syndicate by obeying the law and

8
Although theoretical basis is origin of rights is now out of favour [supra (no 4) 6] citing Rorty and Donnelly. Dershowitz for example argues that
human rights are nothing more than moral reactions designed to prevent recurrences of the large scale humanitarian disasters of the ‘right less’ past.
9
Freeman supra (no 4) 7
10
M Friedman, Capitalism and Freedom: Fortieth Anniversary Edition (Chicago 2002) 13
11
Friedman, supra (no 10 ) 14.
12
C R Sunstein, Free Markets and Social Justice (OUP 1997) 151
13
Friedman supra (no 10) 108 Boaz 100
14
R Posner, The Crisis of Capitalist Democracy (Harvard University Press 2010) 3-9
honouring agreements; to participate and acquire ownership in the Syndicate. The Syndicate itself is responsible for
ensuring rights and freedoms of its members and providing such institutions and mechanisms as required for those
purposes.

Each member would be a partial owner of the Syndicate and participate in the choosing of its officers much like the
selection of a corporate board. Being shareholders, they would also be entitled to any profits made by the service.
Members would have to purchase their entitlement or have it purchased for them by say a parent, who could exercise their
rights by proxy during their infancy. While membership would be fungible, it would not be inheritable. The estates of
those members who at the end of their lives had received a net fiscal benefit from their membership would have to repay a
portion of this added value to the Syndicate.

Monopolies on force, law, adjudication and natural real property 15 are entrusted to the Syndicate, which would function
largely like a joint-stock service and holding company. These monopolies, coupled with the fact that all members are also
owners, give the Syndicate the authority it would otherwise lack to, for example, enter the private property of a member or
to transfer wrongly received property from one member to another. Of necessity the Syndicate would also be required, but
only until all other nations had so evolved, to provide for the common defence territorial integrity, foreign relations and
currency. Because the environment is a public good, which is collectively owned, its regulation and maintenance would be
assured.

Sonaj: Professor Hanavi you are obviously very fond of markets why is that?

Hanavi: Because markets are means, not ends based. By nature markets lack agreed value rankings of ends. They cannot
have a singular end.16 You don’t have to agree on an end to cooperate for mutual benefit on a market. The very essence of
a free market is people competing to cooperate better, and in cooperating accomplish more than they could individually. 17
That is to say that even the self-interested person acting in his or her own self-interest, when they act on a free market,
necessarily act to the benefit of others.18

Sonaj: Why is information so important?

Hanavi: Because perfect competition requires perfect information. Friedman rightly said that perfect competition was like
a true Euclidean line in that everybody knows what it is, but nobody has ever seen one. 19 But, the more perfect our
information the more perfect our competition and therefore our
1 cooperation.
Lewis: Might you not have a problem similar to the one in America which is caused by the takings clause of their
constitution, where if an environmental regulation, results, as they invariably do, in a loss or diminution of private property
or legitimate interests or expectations that you would have to compensate the affected owners. 20 In the age of global
warming and multinational money markets wouldn’t that present a serious burden on the Syndicate where virtually all
property is private?

Hanavi: Well, first of all I think you will find that that is no longer an accurate statement of the law. 21 But yes,
compensation for the losses would have to be paid, but it would be offset by the collective benefit shared by the collective
ownership nature of the Syndicate.

Sonaj: How would you answer the claim often made by those on the left, that the flexibility of markets, has in practice
invariably led to a ‘race to the bottom’ for poor and unskilled labour, that is to say, that capital doesn’t necessarily flow to
the educated or the skilled but seeks out the vulnerable and exploitable?22

Hanavi: In many cases that is correct. Capital will always seek the greatest return on investment and profits are greatest
where the difference between demand and supply are greatest or between cost and marketable price are highest. The
process by which capital moves from rich nations to poor ones or wealthy capitalists to poor workers is a form of wealth
redistribution so one would think those on the left would actually embrace it! I don’t see how your question relates the
Syndicate though. I will venture to say that given the increase amount of information available to consumers in the
Syndicate, over traditional western consumers, they would be better placed to decide if they wished to partake in the
exploitation you speak of. If they choose to exploit that choice should be respected, although I would imagine that faced
with constant reminders of their complicity many would not.
15
ie. land and natural resources, but not built structures for example.
16
F A Hayek Law, Legislation and Liberty: The Mirage of Social Justice v. 2 (University Of Chicago Press 1976) 107/8
17
D Boaz, Libertarianism: A Primer (Simon & Schuster 1997) 149
18
Hayek supra (no 16) 109
19
Friedman supra (no 10) 120
20
Dolan v Tigard 512 US 374 (1994) and Lucas v South Carolina Coastal Council, 505 US 1003 (1992)
21
Kelo v City of New London, 545 US 469 (2005) and Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 US 302 (2002)
22
Meiksins Wood supra (no 3) 285/6
Sonaj: In light of your support of the market how would you respond to the connotation of Murray Rothbard and other
individualist anarchists, who argue, that if markets are the best way to supply most goods they must be the best to supply
them all and that by extension of this principle, that the state’s monopoly on force and law should be replaced by a market
for the same?23

Hanavi: Quite simply because the law is normative, it requires universal acceptance to be of maximum effect and that can
only be achieved through monopoly and compulsion. Violence is not a normal market good because it is dangerous. The
illogical logical conclusion of Rothbard’s line thinking is that we should sell nuclear bombs and other dangerous goods
freely, and that just goes against common sense. If all had access to violence the only result would be mob rule and
eventual extermination.

Lewis: If, markets are, as you’ve pointed out amoral, how can you deal with something like genetic engineering, which
necessarily involves a moral debate on the nature of life and so forth?

Hanavi: The Syndicate’s laws would necessarily regulate what could be introduced onto the market, (but not how the
market operated (i.e. product safety regulations) and so the membership could conceivably choose to allow or disallow
such things on moral grounds. One must concede that things like genetic patents would be more likely within the
Syndicate than in an HR dominated nation, but I lack the information to pass a value judgment on that. Genetic
engineering, taken to its logical conclusion is the end of humanity, and being human, I’m quite fond of humanity, and I
would assume others to share that view if they take the time for careful consideration.

Sonaj: Forgive me gentlemen, but we are out of time.

23
David Gordon, The Essential Rothbard (Ludwig von Mises Institute 2007) 14
 Bibliography
Cases
Dolan v City of Tigard 512 US 374 (1994)
Kelo v. City of New London 545 US 469 (2005)
Fette v France (2004) 38 EHRR 21
Lucas v. South Carolina Coastal Council 505 US 1003 (1992)
New York Times Co. v United States 403 US 713 (1971)
Tahoe-Sierra Preservation Council v Tahoe Regional Planning Agency 535 US 302 (2002)

Articles
Chait J, Dead Left The New Republic 30 July 2008 <http://www.tnr.com/article/books/dead-left> accessed 19 December 2010
Heine S J,
— —and Dar-Nimrod, I. ‘Genetic essentialism: On the deceptive determinism of DNA’ Psychological Bulletin. (forthcoming)
— —et al ‘For whom is parting with possessions most painful? Cultural differences in the endowment effect’ Psychological Science (forthcoming)
— —Boyd R and Richerson P J, ‘Rapid cultural adaptation can facilitate the evolution of large-scale cooperation’ Behav Ecol Sociobiol (forthcoming)
— —Boyd R and Richerson P J, ‘Gene-culture Coevolution in the Age of Genomics’ (2010) PNAS 107 8985
— —and Buchtel E E, ‘Personality: The universal and culturally specific’ 2010 Annual Review of Psychology 60 369
— —Hamamura T and Paulhus ‘Cultural differences in response styles: The role of dialectical thinking’ (2008) PERS INDIV DIFFER 44 932
— —and Proulx T, ‘Death and black diamonds. Meaning, mortality, and the meaning maintenance model’ (2006) Psychological Inquiry 17 309
— —and Norenzayan A, ‘Towards a psychological science for a cultural species’ (2006) Perspectives on Psychological Science 1 251
— —Proulx T, and Vohs K D, ‘Meaning maintenance model: On the coherence of human motivations’ (2006) PERS SOC PSYCHOL REV 10 88
— —and Norenzayan A, ‘Psychological universals: What are they and how can we know?’ (2005) PSYCHOL BULL 131 763
Henrich, J et al, ‘Evolution of Fairness (Reply)’.  (2010) Science 329, 388
— —‘Markets, Religion, Community Size, and the Evolution of Fairness and Punishment’ (2010) Science 327 1480
Norberg J, ‘The Klein Doctrine: The Rise of Disaster Polemics’ 14 May 2008 <http://www.cato.org/pubs/bp/bp102.pdf> accessed 18 Dec 2010
— —‘Three Days After Klein's Response, Another Attack’ 4 Sept 2008 <http://www.cato.org/pub_display.php?pub_id=9626> accessed 18 Dec 2010
Nozick R, ‘Why Do Intellectuals Oppose Capitalism?’ CATO Institute Policy Report January/February 1998 <http://www.cato.org/pubs/policy_report/cpr-20n1-1.html>
accessed 3 January 2010

Books
Boaz D, Libertarianism: A Primer (Simon & Schuster 1997)
Brown P, The Commonwealth of Life: Economics for a Flourishing Earth (2nd ed Black Rose Books 2008)
Buffet W and Gates W, ‘Bill Gates and Warren Buffet Discuss Creative Capitalism’ in Michael Kinsley (ed) Creative Capitalism: A Conversation with Bill Gates, Warren
Buffett, and Other Economic Leaders (Simon & Schuster 2008)
Dershowitz A, Rights From Wrongs: A Secular Theory of the Origins of Rights (Basic Books 2004)
Dworkin R, Taking Rights Seriously (Harvard University Press 1977)
1
Engel E, Lex Naturalis, Ius Naturalis: Law as Positive Reasoning & Natural Rationality (Elias Clarke 2010)
Freeman M, ‘Beyond capitalism and socialism’ in ‘ Janet Dine and Andrew Fagan eds, Human Rights and Capitalism: A Multidisciplinary Perspective on Globalisation
(Edward Elgar 2006)
— — Human Rights (Blackwell Publishing 2003)
Friedman M, Capitalism and Freedom: Fortieth Anniversary Edition (University Of Chicago Press 2002)
Fuller L, The Morality of Law (rev ed, Yale University Press 1977)
Gordon D, The Essential Rothbard (Ludwig von Mises Institute 2007)
Hayek F A, The Fatal Conceit: The Errors of Socialism (University of Chicago Press 1988)
— — Law, Legislation and Liberty: The Mirage of Social Justice v. 2 (University Of Chicago Press 1976)
Horton J, Political Obligation (Palgrave, 1994)
Klein N, The Shock Doctrine: The Rise of Disaster Capitalism (Metropolitan Books 2007)
Meiksins Wood E, Democracy Against Capitalism: Renewing Historical Materialism (Cambridge University Press, 1995)
Mestmäcker E J, A Legal Theory Without Law: Posner v. Hayek On Economic Analysis of Law (Mohr Siebeck 2007)
Nozick R, Anarchy, State, and Utopia (Basic Books 1974)
Posner R, The Crisis of Capitalist Democracy (Harvard University Press 2010)
— —A Failure of Capitalism: The Crisis of '08 and the Descent into Depression (Harvard University Press 2009)
— —Frontiers of Legal Theory (Harvard University Press 2003)
— —Law, Pragmatism, and Democracy (Harvard University Press 2003)
— —‘Why Creative Capitalism would Make Things Worse’ and ‘What’s So Bad About Poverty?’ in Creative Capitalism (Simon & Schuster 2008)
— —The Problematics of Moral and Legal Theory (Harvard University Press 1999)
Prince Hans-Adam of Liechtenstein, The State in the Third Millennium (IB Tauris 2009)
Rawls J, A Theory of Justice: Revised Edition (Harvard University Press 1999)
— —Justice as Fairness: A Restatement (Harvard University Press 2001)
Russell B, The Basic Writings of Bertrand Russell (Routledge 1961)
Stacy, H A, Human Rights for the 21st Century (Stanford University Press 2009)
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Press 2005)
Sunstein C R, Free Markets and Social Justice (OUP 1997)
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Endnotes

1
1
Klein’s argues that dictators and “Chicago School” educated/ influenced bureaucrats/ politicians; exploit “shocks” to implement ‘unpopular’ liberal market
reforms. This is because, according to Klein, liberalization is unpopular and can only succeed by deception or coercion during times of turmoil. While the
currently popular and accepted ‘meaning maintenance model’ asserts that because people have a need for meaning, to perceive events by reference to expected
relationships, when their sense of meaning is threatened by an external crisis, they tend to reaffirm alternatively proffered contra-expected representations might
support some of her thesis; her deliberate reordering of chronologies, empirical and statistical errors, and her loathing obsession with Friedman devalue or
invalidate many of her claims. See for example the methodical deconstructions offered by Chait and Norberg.

2
The libertarian Austrian and neo-liberal Chicago schools are both individualist schools which believe that maximum social benefit, optimal resource
distribution and liberty are advanced by free markets with low transaction costs and minimal regulation. They view altruists as sadists and socialism as flawed
as a lack of prices necessarily precludes accurate information about needs. See: Friedman, Hayek, Rothbard, Boaz and Posner

3
Posner and others have tried to advocate a pragmatic, economics based approach to the law which is purpose orientated towards allocative efficiency.

4
Prince Hans-Adam believes that the state should evolve into a service corporation with its government controlled by direct democracy. This model has
afforded Lichtenstein the highest non-oil based GDPs and one of the highest standards of living of any nation.

5
Heine and others have shown by experimental investigation that there is likely a very strong correlation between a society’s level of market integration and the
fairness (relative apportionments and punishment for cheating) demonstrated by its individuals. Henrich has shown that the sort of rapid cultural adaptation
markets entail can more easily lead to large scale productive cooperation than other forms of social organisation.

6
Nonliberal capitalism is a term used to describe the manufacturing based, midsized privately owned firm organized labour dominated economies of Germany
in Japan. They are the culmination of a series of reforms initiated in the nineteenth century whereby a lack of political rights was compensated by social ones,
and later for economic ones. See Streeck and Yamamura.

7
Freedom of information necessary to acquiring and using property can be summarized as follows:

1. Protection against fraud.

2. Legally enforceable product definitions.
3. Right to information regarding the working conditions of the individuals who produced the product or the primary raw materials of which it is made,
4.The provision of information on the environmental impact of its production, transportation and eventual disposal where applicable.
5.Displayed and advertised prices to include all taxes, fees and other ‘hidden’ costs (although taxes is something of a misnomer as there are no ‘taxes’ levied in
or by the Syndicate.)
6.Disclosure, where appropriate, of the expected lifetime costs of the item under normal usage conditions.
7.Disclosure, where appropriate of the nature and extent of the outsourcing involved in the delivery of a service.
8.Clear labeling of geographic origin of the product and its primary components.
9.Disclosure of the individual having the title to the property being sold/bought.
10. Disclosure as to the nature of the property (its boundaries, history of occupation, composition ect.)
11. The right to see the accounts and records of the Syndicate.