To the extent that the collective choice rule can define or by a rule-change amend the frontier, its zone may encroach on the zone of individual choices, while the reverse is of course not the case; individuals have no rule-making power enabling them to encroach on the collective zone. Much of the problem of limited government is summed up by this sentence...
From the conquering war band and its leader we have moved to a looser feudal structure, to absolute monarchy, to constitutional monarchy, representative government (either unelected or elected on a restricted franchise), and finally to simple majority rule and universal suffrage with constitutional limits or with absolute sovereignty. The latter may well be a rule-of-thumb approximation of some optimum compromise between the two contradictory objectives of maximum gain for the winning coalition and maximum security of its tenure. With a touch of good-natured irony, we might say that if this is the optimum combination, it is the “end of history.”
...rising taxes trigger two streams of exit: a “brain drain” typically composed of the most enterprising, ablest, and best-trained members of society, as well as a flight of capital in the form of money, and of going concerns that “de-localize” to low-tax jurisdictions.
...Unreasoning, even plainly unreasonable standards can effectively limit government if they are widely followed. For about a century and a half before Keynes’s General Theory became common currency for the literate and the semi-literate, it was widely believed that repeated deficits in the state household were mortally dangerous, liable to lead to the country’s ruin and to be countenanced only in desperate circumstances.
He is concerned with a deep problem. Those of us who are "minarchists," meaning that we favor government that is limited to adjudicating conflict, have no reliable mechanism for restraining government.
His point is that government can use its rule-making power to remake any rules that were used to create it. Certainly, we have seen this in the United States, where I would say that the original Constitution lies in shreds.
He concludes that only irrational standards or taboos can constrain the power of government. I tend to agree. If there is no taboo against government interference with activity X, then as long as it is in the interests of the governing coalition to interfere with activity X, that will happen.
I call these irrational standards and taboos folk beliefs. In my view, the real political contest in America is not between Republicans and Democrats but between a folk Locke-ism which restrains government and other folk beliefs, such as folk Marxism of college campuses or the collectivist religion that Daniel Klein calls the people's romance.
The mass of recent evidence from evolutionary biologists, cognitive psychologists, and sociologists is that human ordered anarchy is structured not simply by “conventional rules banning torts against life, limb and property, nuisances and incivilities” but by moral rules (or norms). Certainly moral rules include various prohibitions against harming others and some types of deception. Although there is dispute about this, I think there is also considerable evidence that these moral rules include some standards of fair distribution. The norms that enabled human groups to survive and thrive during most of our evolutionary history were not simply coordination rules, but also norms about the fair sharing of goods. As Cristina Bicchieri (2006: ch. 3) has shown, fairness norms are fundamental to social life and we now have a deep “taste for fairness.”
...We now see the deep problem for the classical liberal project of holding back the state. If the rules that are fundamental, according to classical liberals, are merely conventional, then citizens will see them revisable by authority. The legitimacy of democratic authority and its laws will override the authority of the conventional rules classical liberals so stress. We do not need an account of how the interests of the state cannot be constrained: it the weakness of conventional rules that is the real culprit. Of course, if the basic normative commitments of classical liberals were widely conceived of as moral rules, then there would be much deeper resistance to government-made rules that seek to cancel or override them...The welfare state reigns supreme not because the state and it allies have tricked the rest of us in a power grab; it reigns supreme because in the eyes of most citizens it conforms to the egalitarian fairness norms that have evolved with humans (Fong, Bowles, and Gintis, 2005). Classical liberals who convince themselves that the New Deal is best explained as a power grab by Roosevelt and his allies are manifestly deluded: it was (and still is) very widely seen as demanded by our sense of fairness.
...Some apparently obvious applications of our moral concepts — such a treating a far-flung economic order in which each must have an incentive to find his place as if it was a tribe in which the hunt must be fairly shared — are misguided and end up violating other moral notions about freedom and fairness to individuals. The debate is complex, concerning both empirical and moral issues. Few proponents of classical liberalism are willing to engage the debate on these complex grounds (my colleague David Schmidtz is a notable exception), preferring instead to ignore our complex pluralistic moral sentiments by building their case only on self-interest, or retreating to a narrow “natural rights theory” of morality shared by few. It is no wonder that classical liberals are losing the debate about the limits of the justified state. The state grows to a large extent because most citizens think that fair dealing, as well as the protection of everyone’s basic interests, requires it. Until they are willing to engage the moral sense of their fellows, classical liberals worried about the unbound state should look no further then their own failure to convince the vast majority of their fellow citizens that morality does not endorse it.
In other words, the irrational standards and taboos that undergird our political system are likely to reflect, for better or worse, our moral sense that evolved under tribal conditions. Hence, the "people's romance" comes from a (misguided) attempt to apply tribal morals to complex nation-states. So you get Senator McCain arguing that highly-paid individuals in the private sector are not doing their part to serve the tribe.