Review of Austrian Economics, 13: 97–100 (2000)
2000 Kluwer Academic Publishers
(1998) Social Welfare and Individual
Responsibility: For and Against. Cambridge: Cambridge University Press,
222 + xviii pp., $49.95 cloth; $14.95 paper.
This volume is the ﬁrst of an announced series of essays in a “for and against” format,
where philosophers will articulate strongly contrasting positions on some common topic. In
the book under review, the topic is whether responsibility for personal welfare should rest
with the individual as mediated through various market-generated institutions and organi-
zations, or with the state. David Schmidtz argues for reliance upon markets and voluntary
association. Robert Goodin argues for the state as the guarantor of material welfare.
The reader won’t ﬁnd anything new here. The two essays are fairly well articulated
expressions of the respective positions. Schmidtz argues against casting the dichotomy as
one between individual and collective responsibility, in favor of casting it as one between
internalized and externalized responsibility. He is right in doing this. Collectivists are all
too ready to portray the alternative to state-controlled welfare as some reversion to rugged
individualism where people have no resources save what they can muster on their own. This
favorite leftist caricature of a liberal order ﬁnds no counterpart in history. Liberal orders
were characteristically populated by a dense network of institutions and organizations that
supported individuals in their pursuits of happiness.
Such mutual aid does not ﬁt within the common dichotomy between individual and
collective responsibility that so commonly appears in leftist-inspired writing. It is plain
enough why leftists invoke this dichotomy. If this were the relevant dichotomy, nearly
everyone, I am quite sure, would choose collective responsibility. In our time, leftists have
done far better than liberals in recognizing the power of language to frame issues and set
agendas. Schmidtz recognizes that to accept an individual-collective dichotomy is to grant
the moral high ground to the leftists. It is also to paint a false portrayal of what the relevant
alternative really is.
The relevant alternative is between internal and external loci of responsibility. When the
signers of the American Declaration of Independence pledged to each other their lives, their
fortunes, and their sacred honors, they were internalizing responsibility for their welfare.
When Franklin D. Roosevelt offered a chicken in every pot, he was articulating a program
of externalized responsibility. A solitary individual with a fat bank account illustrates one
internal form of responsibility. An individual with a thin bank account who participates in
a friendly society illustrates a different form of internal responsibility. Although Schmidtz
doesn’t say this, it is clear that internal responsibility emerges out of free association.
Schmidtz has a nice discussion of friendly societies that illustrates his distinction between
internal and external responsibility. Into the ﬁrst third of this century, friendly societies
organized mutual aid of various forms. For instance, medical care for rich and poor alike
was commonly organized within friendly societies. The demise of friendly societies was