Lexicographic orderings crumble in the face of scarcity.Rather esoteric, I admit, and it took me a long time to appreciate it. But the more I think about it, the more profound I think it is. Let me try to explain.
“Lexicographic” means “ordered in the manner of a dictionary.” If you want to order two words, the first letters are the only thing that matters, unless the first letters are the same. If you’re comparing ‘azzzzz’ and ‘baaaaa,” those following z’s and a’s have no impact whatsoever.
Other things are sometimes ordered lexicographically. For instance, some authorities rank nations’ performances in the Olympics based on the number of gold medals received, looking only to silver medals to break ties in gold (and looking to bronze only to break ties in both gold and silver). The odd result is that a nation with 10 gold and 1 silver beats out a nation with 9 gold and 20 silver.
The latter example demonstrates the problem with lexicographic orderings: they’re great for organizing a list, but they not so great for ranking preferences or values. Why? Because they imply a willingness to make any sacrifice in category B, however large, in return for any gain in category A, however small. Demsetz’s point is that lexicographic value or preference orderings may seem sensible in the face of small trade-offs, but they become highly implausible in the face of large ones. (To broaden its application, I would reword Demsetz’s quote to read, “Lexicographic orderings crumble in the face of steep trade-offs.”)
The lesson has implications for people of many different ideologies – for instance, environmentalists who insist on preserving nature “whatever the economic cost.” But since I know many libertarians read this blog, I’ll give three applications that pose challenges to libertarians – in particular, those libertarians who base their beliefs on a dogged attachment to deontology or inviolable natural rights.
The first application is from philosophy. There is a famous thought experiment (I’m sure some commenter will tell me the original source) in which you and ten other people have been captured by a military junto in the South American jungle. The general gives you a choice: you can either execute one of the other prisoners yourself, or you can refuse, in which case he will execute all ten. This thought experiment is supposed to provide a kind of “utilitarian test case” (are you really willing to act on utilitarian precepts?). I’ve never found the test very demanding, because the answer is bloody obvious: taking the hypothetical’s conditions at face value, of course you should execute a prisoner. But say you disagree with me on this; how far are you willing to take your moral stance? If your refusal would lead to the execution of a hundred prisoners, would that change your mind? How about a thousand? A million? The insistence that you should never kill an innocent, regardless of the consequences, amounts to a lexicographic preference that places first priority on the number of people you kill, and only second priority on the number of people who get killed by others.
The second application comes from law. Suppose you fall out the window of your 20th story condo. On the way down, you catch hold of horizontal flagpole on the 19th floor. You could swing over and break through a window of someone else’s condo, or you could let go and plummet to your death. Which do you choose? And more importantly, how should the law treat your action? I think the answers are clear: you should break into the condo, and the law should require you to pay compensation for the broken window (and any other damage that results). But I’ve actually heard deontological libertarians argue that you should respect the 19th floor condo owner’s property rights come what may. Fortunately, the actual law is on my side: cases like these are called “necessity cases,” and they are indeed treated with a liability rule (which requires compensation for damage) instead of a property rule (which punishes with the intent of preventing violations in the first place). Those who insist on the property rule in this case are clinging to a lexicographic preference that places first priority on respecting material property rights, and second priority on… well, everything else.
The third application comes from political economy. Should libertarians favor a minimal state or anarchy? Some deontological anarchists (I exempt consequentialist anarchists like David Friedman from my criticism) oppose the minimal state because any taxation is theft, any exclusion of competing protection services is coercion, etc. This position commits them to supporting anarchy regardless of what consequences may occur, including consequences that impinge severely on individual rights the anarchists themselves hold dear. For instance, what if anarchy resulted not in the nicely balanced and competing protection agencies that anarchist libertarians imagine, but instead in a Hobbesian state of war? (Some anarchists dispute that prediction. That’s a perfectly good consequentialist argument, but not the issue here. My argument is directed at the deontological position.) Even if it is shown that anarchy leads to a much larger overall amount and severity of rights violations than a government, deontological anarchists must oppose the creation of a government because it legitimizes some of those violations. In essence, they adopt a lexicographic ordering that places first priority on minimizing legitimized rights violations, while placing second priority on all other rights violations.
I don’t wish to imply that treating rights as side constraints on human action is a silly idea. Most of the time, rights are an eminently practical and just way to characterize our obligations to each other. Performing a quick cost-benefit analysis in every moral, legal, or political situation would be a prescription for disaster (in cost-benefit terms!). Nonetheless, rights are not ideal for dealing with lifeboat situations. Our choices in tough situations should not be invariant to the trade-offs involved, especially when the trade-offs are steep.
1 “Ethics and Efficiency in Property Rights Systems,” in Mario Rizzo, ed., Time, Uncertainty, and Disequilibrium, Lexington Books (1979), 97-116.