The Limits of Liberty


The Limits of Liberty: Between Anarchy and Leviathan, by James Buchanan, Chicago: University of Chicago Press, 1975, 210 pp., $12.50.

James M. Buchanan is University Professor of Economics at the Virginia Polytechnic Institute and director of the Center for Study of Public Choice. His contributions to journals are numerous, and his books include Cost and Choice, Demand and Supply of Public Goods, Public Finance in Democratic Process, and The Calculus of Consent (with Gordon Tullock). His primary concern is with providing economic analysis and explanation of political processes and structures, remaining himself a "methodological individualist." These concerns have led him in this, his latest book, to explore the problems of sustaining an individualistic social/political order.

To my mind, the main problem with the book is its title. The Limits of Liberty: Between Anarchy and Leviathan leads one to expect a book full of a conservative economist's advice not to fly too close to the sun, lest one get burned, and to make one's peace with Big Brother in order to secure the blessings of law and order. Perhaps Buchanan would indeed admonish libertarian radicals in such terms if the matter were put to him, but the present book is devoted to larger and more important issues which transcend factional distinctions within the libertarian camp.


An explanation of my dissatisfaction with Buchanan's title must begin with the terms "anarchy" and "Leviathan" which appear in it. For purposes of such an analysis, I find it useful to translate many passages dealing with the legal relations among individuals under alternative social orders into a language somewhat more precise than that which the author himself employs. Let us then, for the remainder of this review, adopt the following terminology: If individual A has a duty toward individual B to do (or not to do) some action X, we will say that B has a right that A do (or not do) X. If A has neither a duty toward B to do X, nor a duty toward B not to do X, we say that A has a privilege to do X or not do X, as far as B is concerned. If, within a given legal order, A is not permitted to revoke some right or privilege which B might enjoy, we say that B has an immunity against A with respect to that right or privilege. If it is the case that A is permitted to alter the structure of B's rights or privileges, we say that A has a power with respect to those rights or privileges.

Now, using this terminology, what are loosely called a person's "rights" or "property rights" by Buchanan can be seen as including that person's rights (in the narrow sense) together with his privileges, powers, and immunities. For example, as owner of my home, my "property rights" include (among other things) the privilege of entering it whenever I please, the right that others not enter without my permission, the immunity against unilateral revocation of these rights or privileges by any private individual, and the power to transfer my rights and privileges of ownership to another through sale.

Any particular legal or political system can be fully described in terms of the rights, privileges, powers, and immunities which it assigns to various individuals. In particular, the system which Buchanan calls anarchy is one in which all individuals have the privilege of doing anything whatsoever, and consequently, in which individuals have no rights at all. (Buchanan is not entirely consistent in his use of the term anarchy, and occasionally employs it in senses different from the one discussed here, which is the sense the word is given in the title.) This is anarchy in the sense of the Hobbesian state of nature. It is a system in which there is literally no distinction between "mine" and "thine," and in which life is presumed to be solitary, poor, mean, brutish, and short.

In understanding Buchanan's argument, it is important to bear in mind the distinction between this meaning of anarchy, and the meaning given it by modern radical libertarians. The latter use the term not to refer to any particular assignment of rights, privileges, powers and immunities, but rather to a system in which no single agency (the state) has a monopoly on the enforcement of the prevailing property assignment, whatever it might be. The distinction is a crucial one. As Buchanan himself says, "it is essential that the whole set of problems involving the assignment of rights among individuals and groups in society be separated from the set of problems involving the enforcement of the assignment that exists. Monumental but understandable confusion arises and persists from a failure to keep these two problem sets distinct."


If anarchy, to Buchanan, is a system in which individuals have no rights, what, then, is Leviathan? If I interpret Buchanan (and Hobbes) correctly, the distinctive feature of the legal system of Leviathan is that individuals have no immunities. Individuals may very well have rights and privileges in such a society, but their assigned rights and privileges are subject to change at the whim of the sovereign. It may be, as Hobbes himself hoped, that the sovereign's own self-interest will result in the maintenance of relatively stable property assignments, but individuals have no legal guarantee that this will be the case. The sovereign retains the power to manipulate individual rights and privileges at will, and backs this with a monopoly on the effective means of enforcement.

With these points established, we are in a position to resolve the riddle of Buchanan's title. To my mind, the problem is simply that he says between anarchy and Leviathan; what he really should have said is beyond anarchy and Leviathan. Anarchy is the primordial state of nature, the war of all against all. By making a social contract to establish Leviathan, a community of people take the first primitive step toward lawful society. In turning over all power to the sovereign, they at least hope to secure civil peace, and to obtain such rights, however insecure, as it should suit the sovereign to grant them. But for people, dreamers as they are, this is not enough. They want not only peace, and the assignment of some concrete rights, but they want also security in those rights, and immunity from sovereign interference, with which alone comes true freedom. They want, in short, to explore the limits to liberty and see just how far these limits can be pushed.


Buchanan's book addresses the question of whether we can succeed in establishing a social order out there beyond anarchy and Leviathan, and in making it work without backsliding to one or the other of the more primitive alternatives. His answer is a rather heavily qualified yes. The crucial characteristic of such a society, in his view, is that it places constitutional limitations on the power of the state. The limits must constrain the state both in its role as protector and enforcer of the assignment of private property, and in its role as producer of such public goods and services as the citizens, in their original contract, shall choose to produce collectively rather than individually. The trouble is, it is hard to make such limits stick. Much of the book is devoted to an analysis of why. Various chapters treat such problems as: the tendency of the judiciary to overstep its limited role as guardian of the existing assignment of rights and usurp the power to manipulate that assignment; the inability of majoritarian legislatures to confine themselves to promoting the limited category of collective projects which might secure conceptual unanimous consent; and the "punishment dilemma" which robs people of the will to maintain the legal order which they have created. All of this is good reading in applied economic analysis.

Of course, radical libertarians will find little novelty in the idea that attempts to limit the power of the state are likely to fail. Such readers may become impatient with Buchanan for not forthrightly concluding that the state must be not limited, but abolished, and everything—enforcement of property assignments included—put on a private contractual basis. Buchanan does not directly reject this radical program. (In fact, he avoids drawing any specific programmatic conclusions.) But he does caution radical libertarians that the program, so simply stated, may be logically incomplete.

Too often, the libertarian, like his socialist counterpart, discusses reforms under the "as if" assumption that he is simply advising some benevolent despot who will lay down the proposed changes, with little or no reference to the consent of participating parties. With this political presupposition, it becomes relatively easy for the market-oriented libertarian to neglect any analysis of the existing distribution of rights and claims among persons. But unless these rights and claims are first identified and agreed on, what do the terms used above mean?


If we are to think in terms of establishing a new order by consensual redefinition of individual rights and claims, rather than by fiat, we must face the issue of reconciling nominally expressed claims by individuals to private property, and the power of citizens as voters to appropriate nominally private property via the political process. Under our current system, as Murray Rothbard has often pointed out, society is divided into two great classes, "net tax payers" and "net tax consumers." Buchanan's point is that if the consent of both groups is to be secured for a laissez-faire constitutional revolution, the net tax consumers must be bought off by an initial reassignment of nominal claims in their favor. The libertarian who refuses to do this commits himself to a Leninist, rather than a contractarian, revolution.

In casual argument, I have sometimes baited opponents by saying that if they would accept a laissez-faire regime beginning next January 2, I would accept a once-and-for-all egalitarian redistribution on January 1. After reading Buchanan, I think that there may be something more than a mere debating point involved here.

Edwin Dolan is a professor of economics at Dartmouth College. He has published in Soviet Studies, J. of Political Economy, NYU Law Review, National Review, Libertarian Forum, and other journals and books. He is the author of TANSTAAFL: An Economic Strategy for Environmental Crisis and a microeconomics text, and co-author of a macroeconomics text.