(Part 4 of 4) The Moral Case for Separating State and The Economy – What’s That About?


May 12, 2015 by Anders Ingemarson

This is the fourth and final installment in our series “The Moral Case for Separating State and The Economy – What’s That About?” A condensed version of the four installments is available here.

In part 1 of this series, we pointed out the similarities between a full, pure, uncontrolled, unregulated laissez-faire market for religious ideas and a full, pure, uncontrolled, unregulated laissez-faire market for products and services. We showed how both markets respect our individual rights to life, liberty, and the pursuit of happiness.

We observed that the vast majority of Americans support such a state of affairs when it comes to our faith—i.e. total separation of state and church—but not when it comes to our economic life—i.e. total separation of state and economy.

We lamented that when it comes to our economic lives, we have permitted the government to tax, regulate, fine, coerce and threaten us to such an extent that if it had happened in the market place for religious ideas it would be considered fundamentalism of the kind that is only practiced in Islamic countries.

In part 2, we explained that, paradoxically, faith is the main cause of the differing views on separation of state and faith and separation of state and the economy; most faiths teach selflessness and sacrifice as the standard of morality, which leaves people of faith defenseless against those who want to use government force to institutionalize such a moral code, as fundamentally they share the same moral ideas.

We clarified that only a morality of rational self-interest provides the foundation for defending individual rights—your unalienable rights to your life, your liberty, and your pursuit of your happiness—and for championing the moral case for separating state and the economy.

And in part 3 we showed that in the long run, faced with a contradiction between faith and facts, history demonstrates that most men and women resolve the contradiction by revisiting and realigning their religious beliefs with the facts, as exemplified by what happened in the aftermath of Galileo’s discovery of heliocentrism, William Smith’s discoveries in geology, and countless other scientific discoveries.

So far we have discussed a faith based morality of selflessness and sacrifice as a hurdle to widespread support for the moral case for separating state and the economy. But what about the large group of Americans who subscribe to a morality of selflessness and sacrifice on secular grounds? The altruists who subscribe to one form of collectivism or another in politics: socialism in all its incarnations, including the welfare statism of our current American “mixed” (unseparated) economy. Is there any hope for them?

The answer is “yes, of course.” Secular altruists possess the faculty of reason and free will to recognize the facts when they see them just like everybody else. However, in our estimate they are probably slightly less open to considering these facts than the average man and woman of faith.

Somewhat generalized, secular altruists are less morally/politically conflicted than people of faith on the issue of separating state and the economy, as a large government presence in the economy is part of their collectivist political philosophy. They don’t experience the same contradictions between their moral and political beliefs as many religious Americans do who tend to support some version of a free market.

Contradictions can serve as terrific intellectual stimuli and calls to action. Most of us feel uncomfortable living with unresolved contradictions. Imagine living in the time of Galileo, believing that the earth is the center of the universe because the church says so. Then imagine being exposed to the irrefutable facts of heliocentrism. Now you’re faced with a serious contradiction between your religiously based views and Galileo’s discovery. You may try to push the unresolved contradiction aside for a while, you may try to evade it or explain it away—the all too common “don’t wanna go there” tactics. But being of an independent mind, sooner or later you’d probably take the bull by the horn and resolve the contradiction, coming out in favor of Galileo and the facts and finding a way to reconcile them with your faith.

Fast forward to the idea we’re concerned with here at SEPARATE!, the moral case for separating state and the economy. The facts are that as humans we have individual rights, and that only a morality of rational self-interest provide the proper ethical foundation for respecting those rights. Politically this requires total separation of state and the economy or we’ll end up with a system where we endemically violate each other’s rights through taxation and regulation. Just look around you.

Let’s say you find this idea attractive but that you currently subscribe to some form of altruistic morality on religious grounds. Now you’re facing a contradiction between the morality of rational self-interest that is inseparable from championing total separation of state and the economy in politics, and altruism, which has some form of statism or another as its logical, political corollary (if it’s moral to sacrifice, then it makes sense for the state to help you along on the path to selfless moral perfection).

We’re quite optimistic that over time, you’ll find a way of reconciling with your faith the irrefutable moral facts underlying the moral case for separating state and the economy. Again, because living with unresolved contradictions is darn uncomfortable.

However, in the case of many secular altruists, the moral and political worldviews don’t clash. If no contradiction rears its ugly head, you are probably less likely to challenge your positions, however wrong and disconnected from the facts they may be.

There was a time when secular altruists preaching their collectivist political utopian ideas may have been excused for their mistaken beliefs. A time before the disastrous political experiments of the 20th century—Nazi Germany, Communist Soviet Union and China—and the current slow break down of Western Europe and the United States under the yoke of welfare statism. But today, the facts are undisputable: collectivism in all its forms not only does not work, but is immoral. (Ironically, holding on to collectivist beliefs in the face of the facts has developed into a religion; today you have to have faith in collectivism, because all the facts are against it, morally and politically.)

Our current assessment is that people subscribing to a religiously based form of altruism are somewhat more likely to embrace the morality of rational self-interest that is the foundation for separating state and the economy. But we obviously welcome converts from secular altruism and collectivism to a morality of rational self-interest with open arms.

In the end, championing the moral case for separating state and the economy is a fight of facts over faith. It is a battle for the minds of men and women who don’t like to live with contradictions between their moral and political worldviews. It’s a battle for the minds of men and women who have reverence for the facts, however uncomfortable those facts initially may be.

Does our assessment make sense? Are we too optimistic or pessimistic? Are we spot on or way out there? We’d love your feedback!

3 thoughts on “(Part 4 of 4) The Moral Case for Separating State and The Economy – What’s That About?

  1. Jay Davidson says:

    No mention anywhere in this article about an overbearing Federal government drunk on its own power using this information against the citizens of the United States to further crush individual rights.

    Perhaps the author (wrongly) believes that the actions of federal bureaucrats are immune to petty human failures. What can we expect from anyone who believes the government, and its minions, are always correct. With this attitude so pervasive in the current regime, citizens need to step up and demand an end.

    If our elected politicians don’t have the courage to eliminate federal incursions into private citizens inalienable rights to freedom, it is time for non-violent civil disobedience. Much better non-violent now, than later, when it is too late. It is long past time for each citizen to take back control from a federal bureaucracy gone mad with power. — Jay Davidson

    WSJ: Impeding the Fight Against Terror

    This has been our operational philosophy for seven long years. It is heartening to see others speaking to this issue:

    And so my modest proposal: Let’s withhold that compliance through systematic civil disobedience. Not for all regulations, but for the pointless, stupid and tyrannical ones.

    WSJ: Regulation Run Amok—And How to Fight Back


  2. For what it’s worth: I think there is cause for optimism in the long run – but it may be a very long run. Ideas do ultimately determine the course of history; but it takes a long time for a new idea to take hold and get widely accepted. (This, by the way, is something Mises discusses in “Theory and History”, and it is one of the good points of the book.)


  3. I had an interesting exchange with Dr. Eric Posmentier of Dartmouth College reprinted here with his permission.

    Mr. Ingmarson,

    I respectfully disagree with your arguments. The question you deal with is one which postulates a black-and-white, all-or-none, winner-take-all situation, frighteningly consistent with the view of fundamentalists who accept or even embrace terrorism (although I am sure that is not your intention). You are explicit in your denial of the possibility of compromise:

    [This] “requires total separation of state and the economy or we’ll end up with a system where we endemically violate each other’s rights through taxation and regulation.”

    I suggest that you consider replacing your basic question with its equivalent in a more realistic, shades-of-gray world? The new question would be “How much overlap of state and the economy is optimum?” When asked in this manner, the answers of 0% (your view) and 100% (Mao Tse Tung’s view) are both immediately seen as extremes that can’t possibly be optimum. When you look at the facts, as you repeatedly advise, you come across the facts that the highest quality of life on the planet is found in the mixed economies of Scandinavia, Israeli kubbutzim, and other societies which seek to maintain a balance between individual freedom and group interests.

    The reason that the mixed economy, in fact, leads to the greatest satisfaction for the greatest number, is that entrepreneurism and altruism are both great engines for driving societies and economies to maximum productivity, while they are also both threats to freedom and productivity if allowed to developed with no constraints. If either one is allowed to become dominant, we suffer the twin losses of sacrificing half of the driving force behind every thriving culture and simultaneously falling into the tyrannical control of a small gang of robbers.

    A corollary reason for the superiority of a mixed economy is the nature of people. We are a heterogeneous species. Some of us are far happier and far more productive in an altruistic, communal setting – that’s just the way they are – while others are at their best in a more competitive environment where they are free to reach for the gold ring. A one-size-fits-all system inevitably becomes oppressive to one of these halves of humanity, rendering them unproductive and miserable.

    Thank you for your attention,

    Eric S. Posmentier
    New Hampshire, USA

    2. SEPARATE!

    Mr. Posmentier,
    Thank you for taking the time to provide your thoughtful remarks.
    I’m afraid respecting and protecting individual rights on principle doesn’t allow for any gray-zones. Fundamentalism is lethal in the service of irrational principles that are against human nature (collectivism, religious fundamentalism, etc.), but necessary when championing rational principles based on human nature.
    In the historical perspective we’re dealing with (thousands of years, not hundreds of thousands or millions), human nature is what it is. Nature has equipped us with reason, that is, the capacity to think. Exercising this capacity is our fundamental tool of survival, and it is an exercise in which we are alone. Our free will gives us the option to exercise it rationally and independently, or by deferring to others, or by choosing not to think (evade). However, in each case, the decision is made by us individually. By nature, nobody can think for us.
    As a consequence, the products of our thinking, material and immaterial, have to be ours to keep by right. We benefit immensely from trading the products of our thinking with others, but others don’t have the right to take them from us by force. This would be a violation of our individual rights, which is an indirect violation of our nature.
    An application of trading the products of our thinking with others may be voluntarily choosing to live in a communal setting as you point out. However, we don’t have the right to impose this type of living on others by force as is systematically done today. No, not literally, but all the government programs that are currently forced upon us are effectively institutionalized communal practices on a giant scale.
    The transition to a system of total separation of state and the economy will obviously take time. We may compromise on aspects of the practical implementation, but to make any headway, we must not compromise on the fundamental (yes!) underlying principles. Any compromise on principle between 0% and 100% is equivalent to allowing a certain amount of poison into the equation. Only Mao Tse-Tung and his collectivist heirs has anything to gain from that. We don’t.
    As to qualify-of-life measurements, my experience is that such studies for the most part find what they are looking for. You may find the following piece of mine about my native Sweden of interest:
    All the best,

    PS. May I post this exchange in the comments section on the website?


    Mr. Ingmarson,

    Thank you for your carefully considered reply. I read it with interest.

    Yes, feel free to post our exchange.

    I would like to respond to your reply:

    I find myself in agreement with most of your comments, but I still don’t follow their connection with your idea of total separation of the state and the economy.

    To begin with, I agree that there should be no compromise on the concept of respecting and protecting human rights. However, in its implementation, one must make certain unavoidable gray zone decisions. For example, is your right to enjoy loud music through the night higher priority than my right to a good night’s sleep. In fact, almost all human rights issues are in this category of finding a balance among different rights. These issues are intrinsically in a gray zone, and require compromise. Only very few human rights questions deal with protecting all rights vs denying all rights, and I’m sure you and I would agree on the answers these questions. It is the far more common situation, however, when some rights contradict other rights, that absolutes and fundamentals do not provide helpful answers, and we have no alternative but to prioritize rights from black through the many shades of gray to right. This is certainly not easy, and can cause displeasure and controversy, but it is not avoidable.

    When these rights are related to the economy, the situation is no different. In reality, there is no such thing as a “free economy”; it exists only as a conceptual extreme, at the opposite end of the equally unrealistic Maoist economy. Allow me to explain why I make this assertion. Just like the example of loud music at night, your right to certain monopolistic practices would deny me of my right to compete. My right to sell toxic food denies your very right to life! Your right to unionize stands in opposition to my right to run my business as I wish. The logistics of protecting all these economic practices is impossible simply because many of them are mutually exclusive or in mutual opposition. Indeed, the very concept of protecting them all so illogical as to be meaningless. We are inevitably in a gray area again. The legality of various economic practices must be prioritized; choices must be made; balances must be found. There’s simply no way for Society to avoid it. Maoists solve the dilemna by having the state dictate every economic action, leaving zero freedom of action except for a few top bureaucrats; “free” economy advocates would have Society permit economic anarchy in which the less clever and the weak are totally at the mercy of the greed and aggression of the more crafty and the strong. Both of these extremes end up with the vast majority being denied the very economic opportunities you and I both would like to protect. If we want to maximize economic opportunity for all, Society has no choice but to apply some moderate measure of control. What controls, precisely? This question has no perfect answer, and it is far too difficult a question for a single person to answer, and far too value-laden to develop a broad concensus. As much as I would prefer to wrestle with questions with absolutely correct answers that are straightforward to apply, there is no way to avoid the effort of evolving towards the most nearly optimal answer we can find, somewhere in the vast gray zone.



    Eric S. Posmentier

    4. SEPARATE!

    Mr. Posmentier,
    Good comments and questions, indeed. A couple of points:
    We have to be careful with what we define as a “right”: A “right” is a moral principle defining and sanctioning a man’s/woman’s freedom of action in a social context. “In a social context” implies that we both have rights and that we have to respect that others have the same rights as we have. By this standard, any alleged right that violates the rights of others is not and cannot be a right.
    In your example, enjoying loud music at the expense of your neighbor’s sleep is not a right. It may be of tremendous interest to you, and if enjoying it is high enough on your hierarchy of values, you may exercise your rights to use your property to buy or build a home away from others, or to soundproof your home so you can enjoy loud music to your hearts desire. Obviously, not everybody is inclined to respect the rights of others. That’s why we delegate the protection of our rights to the government, which gives me the option to take you to court if your loud music is sufficiently annoying to me. The courts will then rule on the application of the particular case to each of our rights. (The courts system is one of the three valid functions of government. The military and the police are the others.)
    The same reasoning applies to selling toxic food and unionizing. If those alleged rights violate the individual rights of others (for example others being poisoned, and an employer being forced by law to accept unionization), they are not and cannot be rights.
    So the gray areas that you point out do not change the fundamental nature of individual rights because the examples are not rights. I agree that the front lines of applying particular cases to the concept of rights in a legal context may be considered a gray zone. However, that is in the nature of how the law evolves over time, and doesn’t change the fundamental definition of rights.
    Applying these principle to the economy as a whole is really no different. It is simply a matter of adding up the millions of particular examples of individuals interacting and trading with one another while respecting each others rights (and if thinking their rights have been violated, taking the other party to court).
    FInally, a free economy is the best protection for the less clever and weak, as they will benefit immensely from the inventions and progress created by the “more crafty and the strong” and from the charitable endeavors that they normally embark on when making money has seized to be their top priority.
    If you have the time, I’d be interested in what you think about the essays “Man’s Rights” and “Collectivized Rights” by Ayn Rand which I think address these issues much more clearly than I ever can. They’re available here:

    All the best,


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