Marketing Plan for Chick-fil-A Essay

IntroductionEstablishing a marketing plan to bring in a naked as a jaybird serving to an cheek requires extensive analysis and reviews of its competitors. An organization affects to review the pros and the cons of any new attend to, especi eachy when the organization is before long growing nationally. In this paper, Team A exit provide a basic overview of Chick-Fil-A. Team A result bring in a sales pitch service for Chick-fil-A, including a SWOTT analysis, the importance of Marketing, and the marketing approach it should take to run service.Chick-fil-A OverviewChick-fil-A is a company that was founded by S. Truett Cathy in 1946, which is privately held and family owned. The company work 39 states, 1,500 locations, including their headquarters stationed in Atlanta, GA (Chick-fil-A, 2012). Chick-fil-A mission teaching is guileless but strong To be Americas best swift-service food for thought establishment at captivating and maintaining helps (Chick-fil-A, 2012). Chick- fil-A has a huge variety of specialty chicken ground products such as, a variety of chicken sandwiches, wraps, nuggets, salads, desserts, and now breakfast. Chick-fil-A has a few signature products that include their famous chicken sandwich, signature lemonade, as rise up as products with their different logos and characters for personal use such as clothing, cold and hot beverage mugs, books, and home and office supplies.Description of crude ProductChick-fil-A is more than a restaurant, it has become a cultural next similar to the Starbucks and Chipotle franchises, which focuses on a healthy fast food options and boasts family congenial environments, it would be beneficial to run a pitch shot service that focuses on families and organizations. Chick-fil-As new product offering should be a family surface meal which can include various selections of our current options. This new family meal approach opens up the types of services provided and come forwards the company in another course of instruction when it comes to be fast food restaurant competitor. Not only would Chick-fil-A report to show the importance of family but it represents a strong tie to the organizations value and opens up the competitive market for the culture based following that has been established.SWOTT synopsisStrengthsChick-fil-A size and strengths gave the company an opportunity to offer customers a expedited option to brook the vocation in the workplace and busy sites. Chick-fil-A is family orientated and kid friendly restaurant. For fast service and pitching, Chick-fil-A offers online order and catering delivery service to their customers. In 2010, Chick-fil-A system sales reached a $3.5 billion. The companys product statement offers a variety of delicious products that can fit a match and healthy diet.WeaknessesChick-fil-A Incorporation had to voluntary removal 1.5 million of the Planet denudation electric shavers Meal premium from its restaurants in 2011. The kid s meal had the planet toy attached to bottom of the suction form which a small child could easily remove the toy and go under it their mouths and swollen casing injury, (Chick-fil-A Recalls Kids Meal Premium, 2012). The cause of the reminiscence caused the corporation money, however, it earned consumers respect because it the safety of their family was put first. Chick-fil-A redesigned the product to be kid friendly by making the pieces larger and keeping at bottom the same theme.OpportunitiesThe opportunity for other restaurants to capitalize on the food assiduity is with introducing new products, inter replaceable McDonalds with the McRib and Wendys with the Spicy Chicken Salad. However, Chick-fil-A has stayed a head of the game with launching new products such as the new spicy Chick-fil- A sandwich and introducing the healthiest kids meal, the Grilled Chicken Nuggets.ThreatsThe fast food chains such as McDonalds, Burger King, or Wendys argon a major threat to Chick-fil-A. Ma ny of these chains are currently introducing healthier menu options which can potentially cause Chick-fil-A the inability to grow in certain areas. Although, in that respect are differences between Chick-fil-A and these fast food chains, there are other restaurants service consumers healthy meal options such as Veggie Grill.Even if TrendsAmericas current curve of a healthy eating lifestyle will allow introduce a fast-food franchise that offers delivery service for consumers with minimal time. Chick-Fil-A will cave in more ways to position assets to improve the majority of their restaurants with the intentions to improve patrons satisfaction and present a complete service that evermore will produce an abundance of r notwithstandingue.The Importance of MarketingMarketing plays an central role in Chick-fil-A overall success as it affects the positioning of business strategy of the products to the consumers. While managers may have an eye on the subsisting products and sales, prof its, and market share and how well Chick-fil-A growth it continues to meet the companys goal and expectation by developing the products that customers want, making products readily purchasable to the consumers, and promoting products and service that will outlast its competitors.Marketing Research ApproachChick-fil-A already counts with a great number of customers nationwide. The purpose of the new service that will be offer by the company is to retain and attract even more customers to our restaurants. The positive results of the project will help the company to stretch out to more cities inwardly the U.S. to reach more customers. Considering the already existing customers, that already like the food and service that is offered at Chic-fil-A, they eventually would want to wait on a change that takes that food and that service to a different aim of quality. Those changes in product and operations make things more convenient and favorable for consumers. At Chick-fil-A, we want to let the public know the new delivery service that will facilitate customers to eat food from Chick-fil-A without having to go to the restaurant.The separate of consumers that the organization will target is those that usually are in need of fast food or that their busy schedules do not authentically have the time to go pick their lunch. Most working professionals are groups that are likely to have their food deliver to their work place or office, especially in places like Los Angeles and other big cities where obese traffic, busy streets, and congested freeways is an issue. Also, for those who do not have the time to cook, like walking, or driving at night, a delivery service is a solution to their problem.In smaller cities delivery service is an attractive service for customers, specially, if shopping centers or restaurants are far away from the populated areas. In comparison to most fast food restaurants, which do not offer a delivery service, Chick-fil-A will be taking a t rample forward from its direct competitors. Finally, we will complete a competitor analysis. We will research the kinds of services our competitor offer and whether or not they focussing for their delivery services. We will explore their online ordering and time frames between the orders being placed and delivered and will the order be free if it is not delivered within a specified time frame.ConclusionAs a secure in the fast food industry for years now, we strongly recall in the marketing techniques and branding that Chick-fil-A has been known for however, the company is not against change and recognize room for growth. The choice, as outlined above, to establish a delivery service should prove to be profitable and increase customers in all our markets. Our marketing plan provides complete coverage on how we plan to escape and introduce the change to all of our stores. We are confident that the delivery service will yield the expected results for Chick-fil-A for years to come.R eferenceChick-fil-A. (2012). Retrieved from http//www.chick-fil-a.com/Company/Highlights-Fact-Sheets Chick-fil-A Recalls Kids Meal Premium. (2012, February). QSR Magazine . Retrieved from http//www.qsrmagazine.com/news/chick-fil-recalls-kids-meal-premium

Purchasing and inventory system Essay

INTRODUCTION1.1 Background of the resumeBatang Convenience Store is a retail teleph genius circuit selling modify goods, LPGs, soft drinks and food that located in Silang, Cavite. It is founded by Yolanda and Eduardo Atienza who started its first feat on 1999. Since its venture to this kind of business, Batang Convenience Store never utilise any type of inscribe books or computerized placement of ruless. The owner arranges the purchasing ofsupplies by evaluating documents like delivery receipts and purchasing orders, which is time-consuming, muted, and inconvenient. The owner is non advised if product is no longer available or the item is turn prohibited of stock. If the owner wants to purchase items from the supplier, it must be done in form of written material. Sometimes the owner encounters loss of data due to cargonlessness. With the caller-outs manual means of evaluating the line of descent and managing the purchasing trading works, in faithful entries are som etimes made.The Purpose of the Computerized store and acquire System is to help a club in managing, supervise and maintaining their scrutinize as well as generating necessary reports and keeping important data safe. The researchers of this study forget fail a new purchasing and inventory system for the business utilise Visual Basic.Net and Microsoft SQL Server software. With this system, the evaluation of inventory and management of purchasing operations lead become more organized, and thus easier. In this manner, wrong commentarys get out be avoided, and the checking and organizing of items pull up stakes be more accurate.1.2 Statement of Problem1.2.1 full general ProblemBatang Convenience Store encounters problems such as in and out of product from the stock room are not proper(ip)ly monitored by the purchasing work.Availability of their products is less supervised by the owner that consumes a pot of time by checking all(prenominal) item manually. Human errors i n writing reports, miscount of products and tallying of inventory is time-consuming and tiresome due to the nonexistence of record books or computerized system.buying declares and Documents are as well as unavailable, hence purchasing deales takes similarly long and it may affect the overall productivity of the business. Manual process of evaluating, inventory, and managing the purchasing operations by the owner leads to inaccurate entries of data. The lack of proper record keeping also causes the lost of relevant data.1.2.2 Specific ProblemsThe proposed system intends to answer these succeeding(a) problems In and out of product is less supervised,Time-consume and tiresome tallying of inventory records, acquire processes takes too long, by manually writing each item,Inaccurate entries of data due to manual process of evaluating, inventory, and managing the purchasing operation and Loss of relevant data due to the nonexistence of record books or computerized system.1.3 Objective s of the Study1.3.1 General ObjectiveThis study aims to take aim a computerized line of descent and Purchasing System for Batang Convenience Store. The system leave behind help the business in producing accurate reports, improve doings and provide a more convenient process for the owners / autobus and staff. They rat also serve their customer in a fastest way and accurate w/out any problem occurs.1.3.2 Specific ObjectivesThe following peculiar(prenominal) objectives must be attained to meet the General objective of the proposed system To resurrect a system that will help the purchasing clerk to monitor the products in the stock room, To generate a system that will helpto lessen the burden of the store owner in tallying inventory items, To draw a system that tidy sum help the owner to have straightaway way of ordering products, To create a computerized system that will help the owner to create evaluation inventory and manage purchasing operation. To develop a system that w ill automatically keep all the exertion record by updating and putting security measure such as password and backing up of files.1.4Significance of the StudyThe Purchasing and stocktaking System is one of the key factors to have a successful and gainful business. If the system is not well organized and stable, the business may not be able to meet the target profit in a given period of time. This study will be beneficial to the followingThe company, interviewed by the researchers, will be able to monitor the status of materials necessary to be purchase on a given period of time. information inputs will produce an efficient output to be used as butt for making decisions. The owner can easily generate an machine-controlled approval report and can monitor the stock with ease and efficiency. Purchasing Clerk can do the processing of order, preparing the purchase order (PO) and monitoring of order status, the Stockman can do the inventory of items easily, and theSupplier will have a lesser travel time to get the procure Order (PO) from the company. Future Researchers can utilize the results of the study as basis or reference when conducting their own research about Inventory and Purchasing System.1.5Scope and LimitationsThe researchers of this study will use Visual Basic.Net together with Microsoft SQL Server to develop the system. The proposed system will have troika (3) level accesses, one for the owner, one for the manager, and for the Stockman. The owner/manager will have the access to the following modules The Purchasing Module This is where the owner/manager approves the Purchase Order (PO), Purchase point (PR) and in this module the owner/manager can cancel the transaction processing. The Inventory Module The owner can view the status and heading of the stocks in this module. The owner can also add, edit or demobilise items using this module. The Reports Module In this module the manager can deliberate the Purchase Order (PO), Purchase Request (PR ) and Inventory Reports.The User news report Module In this module you can add, edit, search and read data that is recorded The Administrative Module This is for the users account universe and editing. The Supplier Module This is for owner/manager can view the companys current suppliers, add and deactivate suppliers and in this module the manager can also edit the details of the supplier. The Purchasing Clerk will have the access on the following modules Purchasing Module where the input of ordered items, purchase order, purchases Request is being made. Inventory module where stocks can be viewed.Report module in this module the purchasing clerk can see the Purchase Order (PO) Reports, Purchase Request (PR) Report and inventory Reports. The Stockman can only access the following modulesInventory module where the stockman can report the new products in the inventory and the status of the stocks. Report Module In this module the stockman can only see the Inventory reports. There wil l be three (3) workstations in the proposed system for the Purchasing Clerk, the Owner and the stock room. The workstations will be networked through UTP cables and a switch. We also added a Network Printer which is attached to theManagers Computer for printing Reports and Documents.LimitationThe proposed system will concentrate mainly in solving the problems that the company experiences concerning their Purchasing and Inventory System. Some limitations that the proposed system might encounter are the following top executive interruption due to power failure,Exclusion of auditing and transaction of sales, andThe network is not connected to the Internet.Our Proposed System will not run in early(a) Operating system environment besides Windows.HIPO

Compare Glory Glory Be to Chocolate

Comp be and analyse halo Glory Be to Chocolate and The bungles Shop and how they represent the ideas/attitudes/feelings about food. In Glory Glory Be to Chocolate, John Agard emphasises the marvellous and remarkable feelings the author has towards coffee bean. He exaggerates his attitudes on how he feels food should be spoken about, as he constantly repeats religious references such as manifestations. Using the lexis from the semantic scene of action of religion is useful for the author to strain his response on how drinking chocolate tastes so swell.The lexis manifestations is a metaphor in the text that exhibits that the chocolate has embody god, showing the Agards feelings that chocolate is that powerful to him. Also he postulates to packet it with the audience by using influential words to hypnotise the ref by appealing to their senses. For example in the recognition express-watering nix that ring the tastebud bells, Agard lures human senses into fashioning them c reate an image of the butterscotch and yellowish brown chocolate that seems so pleasurable, which is one of the aims of John Agards to make multitude want to appreciate food like he does.However, The Butchers Shop gives a very negative perspective towards food as Angela transcend uses negative connotations to reveal her ideas and attitudes towards food. Topping explains the darkness in the slay denounce, making the reader imagine them being in the butcher shop witnessing the killing of the innocent animals. The events of the butcher shop illustrate the horrifying impartiality of what happens to animals instead of the fake stories that children are told in books.Throughout the poetry, the author constantly uses a political under tones to give her opinion on the political caller which she disagrees with, such as their porky heads voting Tory all their lives their blue rosettes discarded now. Topping uses the lexis Tory in a negative fashion, as she tries to give her own opin ion on the party, as she is anti tory and is saying the butcher is Tory and doesnt want change. The butcher doesnt want change as he likes the way things are going and that animals are killed for slaughter, which makes the readers put the Tory party in a scandalous light.Furthermore, the blue rosettes symbolise the Tory party which mainly consist of amphetamine class the great unwashed but also are the colour rosettes that are given to the best animals at competitions, which is ironic as the animals that get slay are not actually winners in the end, and their rosettes mean nothing now. At the end of the poem Glory Glory Be to Chocolate, the move line is on its own stanza, to emphasise the importance of the sentence. By making it significant, Agard asks the audience a simple rhetorical question the makes every babble out a god? She uses the straightforward lexis to question their views on if they think chocolate is god-like which can create highly debatable conversations between p eople indication the poem. The use of the grammar also sums up the poem and gives the reader a sack up choice as to whether they agree with his opinions of chocolate or disagree. By having mouth a god in the sentence is a very sozzled term to have as it can create religious disagreements as some religions have more than one god and could create tautness between some readers.In The Butchers Shop, the poem doesnt flow like Glory Glory Be to Chocolate as it has abrupt feel to it throughout the novel with many sentences stopping midway through and carrying on the next line. Topping uses enjambment through the poem to portray the continuous killings of the animals, and that meat is never ending no look how much people protest against the butchery and consumption of meat. This is shown in the citation open-mouthed dignified in martyrs death.They hang stiff as Sunday manners. In the poem, the stanzas are presented in different lengths, which could represent the different pigs hanging in the butchers shop. Plus, using the adjective dignified is described in a critical manner as the poet is saying the pigs are being killed for the greater good and using the term Sunday manners exposes that its normal for people to have meat when having the traditional British Sunday dinner and thats what the animals are killed for.In conclusion, Glory Glory Be to Chocolate uses religious references to portray Agards true passion towards chocolate and uses language devices to underline the prominence verifying attitude food gives. While The Butchers Shop gives a cruel feeling towards food, as Topping uses child imagery to leaven that there is no innocence in the butchery and that childrens stories are merely lies as to what happens to animals.

Quantitative Easing

Evan Schrager 11/14/2011 denary stand-in look Paper The landmark numeric locomote(QE) describes a process in which the provideeral tolerate expands its proportionality sheet through purchase game judicature marrys from monetary institutions with electroni chattery created funds. The brass purchases, by personal manner of depend deposits, give brims the excess reserves indispensable for them to create new specie by the process ofdeposit multiplicationfrom change magnitude bulge out(p)doow in the fractional reserve banking system. As the supply of medium and dour- bourne brass bonds decreases, their impairments increase.This leads to a decrease in their yield yields atomic material body 18 often a de destinationinant of retentive-term busy rate, mortgages and most business lending. Since it is easier for individuals to borrow bullion, consumer riches increases, which leads to investment funds and spending increases as soundly. Risks include the form _or_ system of government being to a great extent efficacious than intended, spurringhyper inflation, or the risk of non being centreive enough, if banks opt exactly to pocket the redundant cash in recount to increase their capital reserves in a climate of change magnitude defaults in their present loan portfolio.In the quantitative stand-in process, the feed goes to a network of dealers, in pursuit of Treasury bonds. The ply demoralizes the bonds in a competitive bidding process between the approved bond dealers. The cater takes a bond certificate and gives the dealers freshly gulled US vaulting horses. The proceeding be done electronic totallyy, precisely it is still referred to as printed capital. The USfederal official fill-inheld between $700 billion and $800 billion of Treasury notes on its sense of balance sheet before the current recession. In late November 2008, the provide started purchase $600 billion inMortgage-backed securities.By March 2009, it held $1. 75 trillion of bank debt, MBS, and Treasury notes, and reached a peak of $2. 1 trillion in June 2010. The base dealers tidy sum offer to sell the Fed bonds held by their clients. The newly printed money moves from the Fed, to the dealer, to the clients brokerage account. Cash is moving directly into the literal deliverance. The customer ordure buy another bond, buy stocks, use it at the grocery store, or simply keep the cash. Right now, however, cash is earning conterminous to no occasion, so investors atomic number 18 prompt to find alternative stores of value. They be motivated to spend or invest their cash.With an ongoing battle taking set out between inflationary and deflationary forces in the economy and financial merchandises, it is exceedingly important for investors to get word how quantitave easing programs pass on impact their investments and their long term purchasing power. Since quantitative easing represents a threat to our wealthiness establi sh on its potential adverse impact, this topic warrants serious attention preceding(prenominal) and beyond a boilerplate analysis. Common references to cash sitting at banks offer alone give investors a poor read on what quantitative easing is and the practicable ramifications for our portfolios and the economy.In swan to put QE in context, I leave discuss the lacquerese deflationary spiral of the 90s. Japan suffered from stagflation throughout the 1990s, so the Bank of Japan instituted a quantitative easing program of its own, referred to as QEP. The QEP consisted of three key elements (1) The BOJ changed its main operating target from the uncollateralized overnight call rate to the outstanding current account balances (CABs) held by financial institutions at the BOJ (i. e. , bank reserves), and ultimately boosted the CAB well in excess of required reserves. 2) The BOJ boosted its purchases of government bonds, including long-term JGBs, and some other summations, in order t o suffice achieve the targeted increases in CABs. (3) The BOJ committed to maintain the QEP until the core CPI (which in Japan is defined to exclude perishables but not energy) stopped declining. The gist of the Bank of Japans liquidity injections on bank lending was muted by the substitution of central bank liquidity for interbank liquidity. Second, in spite of the dampening of the stimulus from the liquidity injections due to this substitution, on that point was a collateral and significant loading of liquidity on bank lending.This implies that quantitative easing can affect the supply of credit, particularly during uttermosts of financial stress. However, the overall effect was fairly small, so that huge amounts of liquidity would have been needed to achieve noticeable do. Third, weak banks benefited to a greater extent from QEP than stronger banks. However, the rapid unwinding of liquidity infusions observed at the conclusion of QEP had little impact on lending growth erst piece bank health and confidence in the banking system had been restored. It is possible that QEP exerted ositive effects, but that these were simply overwhelmed by the drag on total outlay sexual climax from weakness in the banking sector and balance sheet problems among house accords and firms. Since there are a number of dashs that QEP may have stimulated spending, we can infer that the QE programs in the unify States testament stimulate some spending as well, but perhaps we impart overestimate the effects fair like Japan did years ago. When you consider some of the earthly concerns largest sovereign wealth funds may participate in QE, you can chthonianstand the potentially wide-eyed impact of the Feds actions. The largest ones look into billions of dollars.With the currency risk involved when immaterialers hold treasury bonds, it is not a stretch to retrieve that some sovereign wealth funds relinquish be interested in selling some of their treasuries to the Fed in rallying for newly printed US dollars. They may too quickly exchange the cash for gold, silver, copper, oil or stocks to reduce their currency risk. Fears of afterlife inflation can make cash unattractive in the eyes of investors and consumers. A big part of the Feds approach is to increase the expectations of future inflation since it can change the investing and buying habits of businesses and consumers. Since there are m whatsoever un have a go at itns, and many moving parts, listen with skepticism to anyone who claims to know the long term impacts of QE programs on both the financial markets and the economy. We need to better understand the QE process, and monitor and assess the markets reaction to details as they are released by the Fed. We must be go outing to make inflationary and deflationary adjustments base on market internals and economic data. Adopting a QE go away work or wont work approach in advance would be exaltedly speculative. Flexibility is always important in the markets, but maybe more so when it comes to the possible long term impacts of QE.This newly printed money pass on find its way a labialise the globe, impacting currencies, commodities, and foreign stock markets. According to Brian P. Sack of the NYFRB, The effect of summation purchases on the economy remains a point of ongoing debate, with some uncertainty well-nigh the channels through which such purchases operate and the magnitude of those effects In particular, by purchasing monthlong term securities, the national Reserve removes eon risk form the market, which should help reduce the term premium that investors pack for holding yearlong term securities. That effect should, in turn, oost other asset prices, as those investors displaced by the Feds purchases would likely seek to hold alternative types of securities. Nevertheless, balance sheet insurance can still dismount longer-term borrowing costs for many households and businesses, and it adds to hou sehold wealth by safekeeping asset prices high(prenominal) than they otherwise would be. It seems highly unlikely that the economy is entirely insensitive to borrowing costs and wealth, or to other changes in broad financial conditions. Notice the references to boosting asset prices, and lowering borrowing costs, and adding to household wealth by keeping asset prices high(prenominal). From Mr. Sacks perspective, the Fed buys middling term treasuries, which drives down the yield for new investors. Mr. Sack hypothesizes that those new investors will decide to purchase other bonds, perhaps with longer maturities as they search for higher yields. As the Fed laboures demand to other areas of the bond market, longer term interest rate would fall. As new investors look at their options, they may decide to purchase other high yielding assets since the Feds actions have made yields on more conservative investments unattractive.Since the Fed promises to remain in the market with QE for an extended period, the risk associated with holding stocks, higher yielding bonds, commodities, precious metals and real estate are reduced. If you think in extremes, if the Fed stated that all treasuries would pay no interest for the conterminous 5 years, investors would move into investments with more risk in search of higher yields. A good way to summarize QE is as follows QE onrushs to lower long term interest rates, keep them low for a pre-defined period of time, era pouring cash into the economy in an effort to boost consumption and investment.Like gold, US dollars have value only to the extent that they are strictly limited in supply. The government has technology that allows it to produce as many US dollars as it wishes at essentially no cost. By increasing the number of US dollars in circulation, or by heavy(a) to do so, the US government can reduce the value of a dollar in name of goods and services, which is the same as raising the price in dollars of those goods an d services. Thus, we can conclude that, under a paper money system, a determined government can always generate higher spending and hence, positive inflation.The important takeaway is the concept, which is to print money, and devalue the purchasing power of US dollars in your wallet/bank account. Based on the government and Feds extreme actions during the financial crisis, it is safe to declare that we have a determined government. Investors cannot underestimate how determined our government will be, in terms of how much money are they willing to print? and what assets are they willing to buy? For example, if buying T-bonds doesnt work, what pr reddents them from moving to corporate bonds, stocks, residential trapping, or commercial real estate?That sounds extreme, but tailfin or six years ago, having the Fed buy treasury bonds or having the government take over AIG seemed extreme. But that happened right before our eyes. A problem around the globe is weak balance sheets from consumers to corporations to municipalities all the way up to the get together States assets and liabilities ledger. in that respect are two ways to wield weak balance sheets. You can attack the asset side or the liability side. During recessions, bad debt is removed from the system when entities go out of business, defaulting on their debts.This is a painful part of a recession, but is necessary to allow capital to reform, which eventually leads to new investment and sustainable economic growth. The threatening way to address our problems with balance sheets is to let those who deserve to fail go out of business. Unfortunately for the lands long term outlook, the intemperately way, or fiddling term pain, does not sit well with those in positions of powerespecially politicians, who are always concerned about the conterminous election. This is a huge flaw we need to think in terms of what is best for the future of our country instead of thinking in the short term.If we need t o reduce our standard of living in order to storm the national famine, then so be it. the Statesns need to stop quetch about the recessionary conditions and must make sacrifices now in order to guarantee future standards of living. In order to understand all of the bailouts, government takeovers, and money printing, you basically need to think about powerful mountain in business and government who are simply trying to cheque in power, regardless of whether or not their actions are in the best long term interest of shareholders, taxpayers, and ordinary hard working citizens.These comments do not apply to the select few in positions of power who still make decisions based upon sound principles and integrity, but most politicians do not. Ill stay away from this topic because it is a political issue, but preferably applicable so I felt it was worth mentioning. In a healthy credit market, banks lend while consumers and businesses borrow to invest and consume. Demand, based upon av ailable credit, boosts asset prices and profits. As asset prices rise, balance sheets strengthen. With healthy balance sheets, businesses and consumers feel wealthy, and borrow more, invest more, and consume more.This is known as the wealth effect. As asset prices rise, the collateral backing the loans remains sound, allowing the banks to lend even more, and around and around we go, until credit causes the creation of too much supply. A good example is the recent overbuilding in the caparison market. Then asset prices begin to fall. Now the wealth effect becomes the reverse wealth effect, as consumers, businesses, and banks begin to see their net worth deteriorate. When the Fed lowers interest rates, they attempt to spur borrowing and lending.This, in turn, can get the wealth effect back into gear, as borrowed money creates demand for goods, services, and assets. In the present day, traditionalistic banks are reluctant to lend, and many consumers either dont bound offe a loan, o r cannot get a loan. In this environment, the Fed, via QE, is trying to fizz the wealth effect by attempting to re-inflate asset prices. QE II refers to the decision in November 2010 in which the FOMC announced the purchases of 600 billion longer-term treasury debt. A fair enquire to ask is, Why did we pursue QEII? There are several reasons the government went through with another round of QE. Firstly, the Japanese experience with mild deflation and a near-zero nominal interest rate has been poor. Second, inflation in the US was last to the implicit FOMC inflation target during the first part of 2010. However, during 2010, a renew disinflation trend developed and the recovery slowed down in the summer of 10. These developments leave the US at risk of a Japanese-style outcome. Was QEII effective? The financial markets effects of QEII looked the same as if the FOMC had reduced the policy rate substantially.Specifically, real interest rates declined, the dollar depreciated, and eq uity prices rose. These are the classic financial market effects one might observe when the Fed eases monetary policy in ordinary times (in an interest rate targeting environment). The QEII experience shows that monetary policy can be eased aggressively even when the policy rate is near zero. However, it is difficult to observe the overall effects of QE and QEII because of the lags involved. make on the real economy would be expected to lag by six to twelve months.Real effects are difficult to crystalize because other shocks hit the economy in the meantime. This happened, apparently, during the first half of 2011, and is a standard problem in evaluating monetary policy. Overall, QE2 has shown that the Fed can transmit an effective monetary stabilization policy even when policy rates are near zero. Now I will discuss investment strategies for inflationary and deflationary outcomes of quantitative easing. Inflationary and deflationary forces coupled with possible Fed intervention require a flexible approach to financial markets.Common sense tells us that money printing is probably not the path to long term prosperity, but I do conceive QE can impact asset prices in a manner not fully understood by many individual investors as well as many financial advisors. If the Fed is successful for a period of time, I would invest in inflation friendly and weak-dollar assets such as gold, silver, copper, oil, and emerging market stocks. If the Fed fails in the long run, then a deflationary spiral may be the outcome, making cash, gold, dividend payers, conservative bonds, and CDs attractive. warmness of the road choices include utilities, consumer staples stocks, and other dividend payers. Financial markets tend to anticipate Fed announcements. We always have to be on our toes for information/news relevant to QE. If you read the writings of Ben Bernanke and more recently writings by pile Bullard, you know the Federal Reserve is willing to use every quill and printing press in their arsenal in attempt to re-inflate asset prices and restore some semblance of the wealth effect. However, we must understand that the Fed faces high hurdles, in the form of mountains of global debt and fragile asset prices.So far, the U. S. has been able to get away with massive debts and unsustainable deficits for one simple reason. The U. S. dollar is still the cosmeas reserve currency, as it has been effectively since valet de chambre War II and literally since the early 1970? s. Because all governments and banks in the world accept and hold U. S. dollars as the majority of their reserves, the United States is able to simply print more money whenever it cannot afford to pay for things that it needs. Besides this, the country can borrow money in its own currency at incredibly low interest rates that we have seen approach close to zero.US citizens personally benefit in another critical way every time that they stop to get gas. With the U. S. dollar as the internati onalist reserve currency, oil and almost allcommoditiesare all priced in dollars. As a prove, you see an enormous amount of inexpensive goods available. provender items and other items that use oil/gas as inputs are extremely cheap. This makes restaurants and other attractions affordable in America. The level of wealth seen in the United States is simply unprecedented, and most of this results from the benefits of the dollar as universal reserve currency.There will be dramatic consequences difficult to imagine if the dollar eventually ceases to be the reserve currency of the world. Should this happen, then the value of the dollar will plummet. The immediate painful effects will be that commodities prices skyrocket. These would no longer be priced in U. S. dollars, and you would see the falling value of the dollar buy fewer and fewer commodities. Gasoline at five to ten dollars a gallon is not only possible, but highly likely. Along with higher gas prices, we could see higher pric es for anything that uses oil to ship goods around the world.This heart practically everything that you buy would all cost dramatically more. As prices skyrocket, your life-style would sustain a punishing drop overnight. This is a very scarey succession of possible events. Unfortunately, this is not the only consequence that you would see of a dollar that is no longer the reserve currency of the world. Interest rates would rise dramatically. They could easily reach ten to fifteen percent. This would wreck the housing market far worse than it is today. It would also cause the stock market to crash by almost half in a number of weeks.As the costs of supplies and materials go up with the falling currency value, businesses would be forced to cut back onemployeesbecause of their falling sales. Un duty could reach twenty to thirty percent or more as a result of this. As if this is not bad enough,inflationwould be sky high along with the rising prices and disappearing jobs. It is impo rtant to remember that the only thing that has to occur for all of these terrible things to happen is for other countries to prefer to be paid in anything besides U. S. dollars.In the event that non-United States holders of dollar-denominated assets decided to parapraxis holdings to assets denominated in other currencies, there could be serious consequences for the US economy. The gap of QE3 has some serious implications, although Bernanke has denied that there will be another round easing. The dollar has plunged nearly 20% against the euro over the last year and a half, a period that includes the run-up to and aftermath of the last round of quantitative easing, the Feds $600 billion bond-buying program known as QE2. But a QE3 may not pack the same dollar-slamming punch.If there is a QE3, the dollars fall could easily approach 10% on a trade-weighted basis against rival currencies, say David Woo, head of G-10 global rates and currencies research at Bank of America Merrill Lynch in rude(a) York. But the market is now more skeptical of the benefits of QE for the economy, Mr. Woo said. It is possible that by extension this means any short-term dollar decline on the back of QE3 will be also more limited. Instead of QE3, Bernanke and the Fed decided to implement Operation Twist, a widely expected stimulus move reviving a policy from the 1960s.The policy involves selling $400 billion in short-term Treasuries in exchange for the same amount of longer-term bonds, starting in October and ending in June 2012. While the move does not mean the Fed will eye additional money into the economy, it is designed to lower yields on long-term bonds, while keeping short-term rates little changed. The intent is to thereby push down interest rates on everything from mortgages to business loans, giving consumers and companies an additional incentive to borrow and spend money. Some reputable names deal the dollar is going to depreciate in value over the neighboring decade or t wo.Bestselling authors Robert Wiedemer of Aftershock and David Skarica of The Great Super Cycle both forecasted the housing collapse, financial crisis, and stock market collapse years ahead of them happening. They are calling for a collapse of the dollar. This could lead to many unsophisticated investors to hop on the train, causing a swing in practiced expectations. QE attempts to lower long term interest rates, keep them low for a fairly well-understood period of time, while flooding the economy with cash in an effort to boost consumption and investment.In my opinion, quantitative easing in the US was a mild success. The markets were in a state of fuse and we needed to do something. QE2 was necessary because we needed to increase the plateful to which the LSAPs (large scale asset purchases) affected the economy. As for QE3, I dont believe it is in our countrys best interest, because it would show even greater weakness, leading many foreign investors to flee from the dollar. Som ewhere down the line, I predict that the IMF will attempt to overtake the dollar as the world reserve currency, but it certainly wont happen overnight.If this happens, Americans will have to downgrade their wealthy standard of living due to increased commodity prices. However, I dont believe the US Dollar will lose its currency reserve status anytime soon, nor do I believe that QE3 will happen. My recommendation is to continue QE in small amounts, unwinding it under Bernankes plan from his September speech in Minneapolis. Bernanke has stated that there will be no more easing, but you never know with the Bernanke, Obama, Geithner brain trust. Thus, our best option is to remain flexible in our policy schemes and monitor and react to relevant news as best as we can.Ben Bernanke concludes his Minneapolis speech in an attempt to reassure us that our country will be okay. The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a contex t of price stability. Let us confide they act with rationality and in the best interest of the long term growth and stability of our economy. If America is ever going to dig itself out of the enormous debts it has taken, we must not devalue the dollar to the point that it is phased out as the world reserve currency.Perhaps a downgrade in Americans standard of living is necessary to reduce the deficit by a significant enough margin. There is some swear for a return to prosperity and consistent growth, but Americans need to be aware of the implications of QE on their portfolios and their long term purchasing power. Works Cited 1. United States. capital of Virginia Federal Reserve. By Thomas M. Humphrey. The Theory of Multiple amplification of Deposits What It Is and wherefore It Came. Mar. -Apr. 1987. Web. 14 Nov. 2011. . 2. A QE1 Timeline. Calculated Risk, 03 Oct. 2010. Web. 13 Nov. 2011. . 3. Ciovacco, Chris. Video serial publication valued Easing. Ciovacco Capital Managemen t. Web. 14 Nov. 2011. . 4. Sack, Brian P. Managing the Federal Reserves Balance Sheet Federal Reserve Bank of New York. Federal Reserve Bank of New York, 04 Oct. 2010. Web. 13 Nov. 2011. . 5. Bowman, David, Fang Cai, Sally Davies, and Steven Kamin. Quantitative Easing and Bank Lending turn out from Japan. Www. federalreserve. gov. Board of Governors of the Federal Reserve, June 2011. Web. 13 Nov. 2011. http//www. federalreserve. gov/pubs/ifdp/2011/1018/ifdp1018. pdf. 6. Eichengreen, Barry. Dollars Reign as Worlds Main Reserve Currency Is Near an End. Foreign Exchange Report. The Wall Street Journal, 02 Mar. 2011. Web. 13 Nov. 2011. 7. Herold, Thomas. What If The U. S. Dollar lacks Reserve Currency circumstance? Wealth Building Course, 14 Jan. 2011. Web. 13 Nov. 2011. http//www. wealthbuildingcourse. om/dollar-loses-reserve-currency-status. html. 8. Bullard, James. QE2 An Assessment. Federal Reserve Bank of St. Louis, 30 June 2011. Web. 13 Nov. 2011. http//research. stlouisfed. org/econ/bullard/pdf/Bullard_QE_Conference_June_30_2011_Final. pdf. 9. Wieland, Volker. Quantitative Easing A Rationale and Some indorse from Japan, inNBER International Seminar on Macroeconomics 2009(2010), University of Chicago Press http//www. nber. org/papers/w15565 10. Cronin, Brenda. Slow-Paced recuperation Feels Like a Recession. The Wall Street Journal, 10 Oct. 2011. Web. 13 Nov. 011. http//online. wsj. com/ bind/SB10001424052970203499704576623053674426690. html. 11. Fontevecchia, Agustino. Central Banks underprice Treasuries As Dollars Reserve Currency Status Fades. Forbes, 03 Mar. 2011. Web. 13 Nov. 2011. http//www. forbes. com/sites/afontevecchia/2011/03/16/central-banks-dump-treasuries-as-dollars-reserve-currency-status-fades/. 12. Case, Karl E. , John M. Quigley, and Robert J. Shiller. Wealth effectuate Revisited. Yale University, Feb. 2011. Web. 14 Nov. 2011. http//cowles. econ. yale. edu/P/cd/d17b/d1784. pdf. 13. Rooney, Ben. IMF Discusses Plan to Replace Dol lar as Reserve Currency. CNNMoney, 10 Feb. 2011. Web. 13 Nov. 2011. . 14. Weisenthal, Joe. This Is How The Dollar Could Lose Its Reserve Currency Status. Business Insider, 15 Nov. 2010. Web. 13 Nov. 2011. . 15. Bernanke, Ben. The U. S. Economic OutlookSeptember 8, 2011. Board of Governors of the Federal Reserve System, 08 Sept. 2011. Web. 13 Nov. 2011. . 16. Hamilton, James. 5 Key Arguments Against Quantitative Easing. Business Insider, 20 Oct. 2010. Web. 14 Nov. 2011. . 17. Johnson, Andrew J. Sizing Up Dollars Pain From a QE3. The Wall Street Journal, 05 Sept. 2011. Web. 14 Nov. 2011. . 18. Censky, Annalyn. Federal Reserve Launches Operation Twist. CNNMoney, 21 Sept. 2011. Web. 14 Nov. 011. . 1 . Richmond Federal Reserve. By Thomas M. Humphrey. The Theory of Multiple Expansion of Deposits What It Is and Whence It Came. 2 . Wieland, Volker. Quantitative Easing A Rationale and Some severalise from Japan 3 . Calculated Risk. A QE1 Timeline. 4 . Videos Quantitative Easing, Chris Ciovacco 5 . Videos Quantitative Easing. Chris Ciovacco 6 . Bowman, Quantitative Easing and Bank Lending Evidence from Japan. 7 . Bowman, Quantitative Easing and Bank Lending Evidence from Japan. 8 . Hamilton, James. 5 Key Arguments Against Quantitative Easing. 9 . Hamilton, James. 5 Key Arguments Against Quantitative Easing. 10 . Sack, Brian P. Managing the Federal Reserves Balance Sheet 11 . Wieland, Volker. Quantitative Easing A Rationale and Some Evidence from Japan 12 . Wieland, Volker. Quantitative Easing A Rationale and Some Evidence from Japan 13 . Cronin, Brenda. Slow-Paced Recovery Feels Like a Recession. 14 . Case, Karl E. , John M. Quigley, and Robert J.Shiller. Wealth Effects Revisited. 15 . Bullard, James. QE2 An Assessment. 16 . Bullard, James. QE2 An Assessment. 17 . Videos Quantitative Easing, Chris Ciovacco 18 . Eichengreen, Barry. Dollars Reign as Worlds Main Reserve Currency Is Near an End. 19 . Fontevecchia, Agustino. Central Banks D ump Treasuries As Dollars Reserve Currency Status Fades. 20 . Eichengreen, Barry. Dollars Reign as Worlds Main Reserve Currency Is Near an End. 21 . Weisenthal, Joe. This Is How The Dollar Could Lose Its Reserve Currency Status. 22 . Rooney, Ben. IMF

The Vampire Diaries: The Struggle Chapter One

DamonIcy sprain whipped Elenas blur around her face, tearing at her light sweater. Oak leaves swirled among the rows of granite headstones, and the trees lashed their branches together in frenzy. Elenas hands were cold, her lips and cheeks were numb, but she stood facing the screaming lead-in directly, shouting into it.DamonThis prevail was a show of his berth, meant to frighten her away. It wouldnt work. The thought of that same Power macrocosm saturnine against Stefan woke a hot fury inside her that burned against the wind. If Damon had reserve anything to Stefan, if Damon had hurt himDamn you, answer me she shouted at the oak trees that border the graveyard.A dead oak leaf similar a wizen brown hand skittered up to her foot, but there was no answer. Above, She dark and gasped.He was conscionable behind her, so close that her clothes napped his as she turned. At that distance, she should have sensed another human cosmos standing there, should have felt up his lugga ge compartment warmth or comprehend him. nevertheless Damon, of course, wasnt human.She reeled back a couple of steps before she could get out herself. E precise instinct that had lain quiet while she shouted into the violence of the wind was nowadays begging her to run.She clenched her fists. Wheres Stefan?A line appeared between Damons tenebrific eyebrows. Stefan who?Elena stepped forward and slapped him.She had no thought of doing it before she did it, and afterward she could scarcely regard what she had done. precisely it was a good hard slap, with the dependable force of her form behind it, and it snapped Damons head to one side. Her hand stung. She stood, discovering to calm her breath, and watched him.He was dressed as she had first seen him, in cruddy. Soft black boots, black jeans, black sweater, and leather jacket. And he presented like Stefan. She didnt know how she could have befuddled that before. He had the same dark h waycloth, the same pale skin, the sa me worrisome good looks. But his hair was straight, not wavy, and his eyes were black as midnight, and his mouth was cruel.He turned his head slowly back to look at her, and she saw blood rising in the cheek shed slapped.Dont fraud to me, she express, her voice shaking. I know who you are. I knowwhat you are. You killed Mr. Tanner last night. And now Stefans disappeared.Has he?You know he hasDamon smiled and then turned it off instantly.Im inform you if youve hurt him Then, what? he said. What will you do, Elena? What john you do, against me?Elena fell silent. For the first time, she completed that the wind had died away. The day had gone deadly quiet around them, as if they stood passive at the center of some great circle of power. It seemed as if everything, the weighted sky, the oaks and purple beeches, the ground itself, was connected to him, as if he drew Power from all of it. He stood with his head tilted back slightly, his eyes fathomless and teeming of strange light s.I dont know, she whispered, but Ill find something. Believe me.I do believe you, he said, relaxing, looking for around the graveyard. Then he turned back and held out a hand to her. Youre too good for my brother, he said casually.Elena thought of slapping the hand away, but she didnt want to touch him again. key out me where he is. Later, possibly for a price. He withdrew his hand, just as Elena realized that on it he wore a ring like Stefans silver and lapis lazuli. call in that, she thought fiercely. Its important.My brother, he went on, is a fool. He thinks that because you look like Katherine youre weak and easily led like her. But hes wrong. I could feel your angriness from the other side of town. I can feel it now, a face cloth light like the desert sun. You have strength, Elena, even as you are. But you could be so much strongerShe stared at him, not understanding, not appetency the change of subject. I dont know what youre talking astir(predicate). And what has it got to do with Stefan?Im talking about Power, Elena. Suddenly, he stepped close to her, his eyes fixed on hers, his voice leisurely and urgent. Youve tried everything else, and nothing has satisfied you. Youre the girl who has everything, but theres always been something just out of your reach, something you need desperately and cant have. Thats what Im offering you. Power. Eternal life. And feelings youve never felt before.Shedid understand then, and bile rose in her throat. She choked on abuse and repudiation. No.Why not? he whispered. Why not try it, Elena? Be honest. Isnt there a part of you that wants to? His dark eyes were full of a heat and intensity that held her transfixed, unable to look away. I can waken things inside you that have been sleeping all your life. Youre strong generous to live in the dark, to glory in it. You can become a queen of the shadows. Why not consent that Power, Elena? Let me help you take it.No, she said, wrenching her eyes away from his. She w ouldnt look at him, wouldnt let him do this to her. She wouldnt let him make her forget make her forgetIts the ultimate secret, Elena, he said. His voice was as caressing as the fingertips that touched her throat. Youll be intelligent as never before.There was something terribly important she must remember. He was using Power to make her forget it, but she wouldnt let him make her forgetAnd well be together, you and I. The cool fingertips stroked the side of her neck, slipping under the call for of her sweater. Just the two of us, forever.There was a sudden twinge of distract as his fingers brushed two tiny wounds in the flesh of her neck, and her spirit cleared.Make her forgetStefan.That was what he wanted to drive out of her mind. The recollection of Stefan, of his green eyes and his smile that always had sadness lurking behind it. But nothing could force Stefan out of her thoughts now, Ive already found what I want, she said brutally. And who I want to be with forever.Black ness welled up in his eyes, a cold rage that swept through the air between them. sounding into those eyes, Elena thought of a cobra about to strike.Dont you be as stupid as my brother is, he said. Or I might have to diplomacy you the same way.She was frightened now. She couldnt help it, not with cold pouring into her, dismay her bones. The wind was picking up again, the branches tossing. Tell me where he is, Damon.At this heartbeat? I dont know. Cant you stop thinking about him for an instant?No She shuddered, hair lashing about her face again.And thats your final answer, today? Be very sure you want to play this game with me, Elena. The consequences are nothing to prank about.Iam sure. She had to stop him before he got to her again. And you cant intimidate me, Damon, or havent you noticed? The s Stefan told me what you were, what youd done, you lost any power you might have had over me. Ihate you. You abuse me. And theres nothing you can do to me, not any more.His face alter ed, the sensuousness tress and freezing, becoming cruel and bitterly hard. He laughed, but this laugh went on and on. Nothing? he said. I can doanything to you, and to the ones you love. You have no idea, Elena, of what I can do. But youll learn.He stepped back, and the wind cut through Elena like a knife. Her vision seemed to be blurring it was as if flecks of brightness filled the air in front of her eyes.Winter is coming, Elena, he said, and his voice was clear and chill even over the howl of the wind. An unforgiving season. Before it comes, youll have wise(p) what I can and cant do. Before winter is here, youll have joined me. Youll be mine.The swirling whiteness was blinding her, and she could no longer see the dark bulge of his figure. Now even his voice was fading. She hugged herself with her arms, head bent down, her whole body shaking. She whispered, Stefan Oh, and one more thing, Damons voice came back. You asked earlier about my brother. Dont bother looking for him, Elena. I killed him last night.Her head jerked up, but there was nothing to see, merely the dizzying whiteness, which burned her nose and cheeks and clogged her eyelashes. It was only then, as the fine grains settled on her skin, that she realized what they were snowflakes.It was snowing on the first of November. Overhead, the sun was gone.

Friedrich Von Hayek – Law, Legislation and Liberty

t of e ofj cc L AW, LEGISLATION AND LIBERTY This is Hayeks study line of reasoning of political philosophy. Rejecting Marx, Freud, logical positivism and political egalitarianism, Hayek acquaints that the naive c e very(prenominal)placeing of scientific methods to culture and education has been painful and misleading, creating superstition and error rather than an age of reason and culture. Law, Legislation and Liberty combines on the whole ternion masss of Hayeks door-to-door study on the staple fibre principles of the political state of a supernumerary monastic orderliness.Rules and Order lie withs with the basic universes necessary for a vituperative analysis of world(a) theories of preciselyice and of conditions which a constitution securing personal impropriety would pass to satisfy. The Mirage of mixer rightness kick inlya daytimess a critical analysis of the theories of utilitarianism, pro comprise positivism and fond vindicatoryice. The Pol itical Order of a Free People ease ups that the democratic grand is in peril of miscarrying repayable to confusions of egalitarianism and state, err matchlessous assumptions that there mountain be moral standards with bug out moral discipline, and that customs cig atomic number 18tte be snub in proposals for respiteructuring partnership.F. A. Hayek became both a suffer-to doe with of Law and a Doctor of Political Science at the University of Vienna. He was made the unbendingoff theater postor of the Austrian Institute of Economic Research and in 1931 was appointed to a chair at the London School of stinting acquisition. In 1950 he went to the University of wampum as Professor of Social and Moral Sciences and then became Professor of Economics at the Albert-Ludwigs-Universitat of Frieburg and Professor Emeritus in 1967. He was in both case a Fellow of the British Academy and was awarded a Nobel Memorial Prize in Economics in 1974. Hayek died in 1992. L AW, LEGI SLATION AND LIBERTYA novel recital of the unspecific principles of evaluator and political economy Volume 1 RULES AND parliawork forcetary truth Volume 2 THE MIRAGE OF SOCIAL JUSTICE Volume 3 THE political ORDER OF A FREE populate F. A. Hayek Vol. 1 Rules and Order premier-year createed 1973 Vol. 2 The Mirage of Social Justice first conduct oned 1976 Vol. 3 The Political Order of a Free People first published 1979 First published in one raft with corrections and revise innovate in 1982 by Routledge & Kegan Paul Ltd. Reprinted 1993, 1998 by Routledge 11 brand- crude Fetter Lane, London EC4P 4EE F. A. Hayek 1973, 1976, 1979, 1982 Printed and bound in prominent Britain by T. l.International Ltd, Padstow, Cornw wholly on the safe and sound rights re administerd. No part of this take for may be reprinted or reproduced or utilised in whatever excogitate or by for each one electronic, mechanical, or other c only(prenominal) backs, instanter lie withn or here af terwards invented, including photocopying and recording, or in both study storage or retrieval system, without licence in writing from the publishers. British subroutine library Cataloguing in Publication in bodyation A catalogue record for this book is available from the British Library ISBN 0-415-09868-8 C ONTENTS Volume 1 RULES AND ORDER xv CONSOLIDATED precede INTRODUCTION 8 REASON AND organic evolution Construction and ontogenesisThe tenets of Cartesian loosen thinking The permanent limitations of our bearual intimacy Factual k immediatelyledge and science The synchronal ontogenesis of mind and familiarity the role of rules The treasonably dichotomy of natural and artificial The localize on of the evolutionary approach The persistence of constructivism in current thought Our anthropomorphous language Reason and twitchion Why the extreme founds of constructivist rationalism regularly lead to a revolt against reason 2 8 9 11 15 17 20 22 24 26 29 31 COSMOS AND TAXIS 35 The c at at one timept of battle array The dickens sources of order The distinguishing properties of natural orders Spontaneous orders in reputationIn alliance, reliance on spontaneous order both ext peculiaritys and limits our creators of control Spontaneous orders sequel from their elements obeying certain rules of beam The spontaneous order of society is made up of undivideds and practiceups 35 36 38 39 v 41 43 46 C ONTENTS The rules of spon taneous orders and the rules of organization The conditions organism and organization 5 55 55 67 THE changing CONCEPT OF righteousness 72 Law is older than edict The less(prenominal)ons of ethology and pagan anthropology The process 0. articulation of practices Factual and normative rules Early righteousness The genuine and the medieval traditionThe distinctive specifys of law a uprising from custom and precedent Why self-aggrandizing law requires correction by legislation The origin of legislative bodies homag e and reign 4 PRINCIPLES AND EXPEDIENCY Individual aims and collective benefits Freedom backside be preserved sole(prenominal) by following principles and is destroyed by following expediency The necessities of policy argon globally the consequences of before longer measures The danger ofattaching wideer importance to the predictable rather than to the solely mathematicalconsequences ofour achievements Spurious realisln and the necessitate courage to consider utopia The role of the lawyer in political evolutionThe modernistic development of law has been control or soly by ridiculous stinting science 3 48 52 72 74 76 78 81 82 85 88 89 91 NOMOS THE LAW OF LIBERTY 94 The functions of the judge How the task of the judge differs fro In that of the send of an organization The aiJn of jurisdiction is the Inaintenance of an ongoing order of actions Actions towards others and the protection ofexpectations 94 vi 56 59 61 62 65 97 98 101 C ONTENTS In a dynamic order of action s however whatever expectations rotter be protected The maximal coincidence of expectations is achieved by the deli/nitation of protected domains The frequent problem of the consummations of wane on pointsThe role of law The articulations of the law and the predictability of judicial decisions Thefunction ofthejudge is confined to a spontaneous order Conclusions 6 THESIS THE LAW OF LEGISLATION Legislation originates from the want of establishing rules of organization Law and statute-the enforcement of law and the execution of biddings Legislation and the theory of the separation of powers The governmental functions of instance asselnblies Private law and common law institutional law Financial legislation Administrative law and the police power The In easures , of policyThe conversion of private law into public law by sociallegislation The Inental bend ofa legislature preoccupied with governlnent 102 106 110 112 115 118 122 124 124 126 128 129 131 134 136 137 139 141 143 cxlv NOTES vii C ONTENTS Volume 2 THE MIRAGE OF SOCIAL JUSTICE 7 GENERAL upbeat AND PARTICULAR PURPOSES In a lighten society the ecumenic dear(p) consists principally in the facilities for the pursuit of unk at a timen purposes The general interest and collective goods Rules and ignorance The signifi so-and-soce of abstract rules in a world in which approximately of the busys ar unk at a timen Will and opinion, ends and mensurates, commands and rules, nd other terminological issues gazump rules operate as ultimate values be cook they serve un populate crabby ends The constructivist fallacy of utilitarianism All valid criticism or improvement of rules of study essential proceed within a presumption system of rules Generalization and the evidence of ecumenicalizabiiity To per mannikin their functions rules must be utilise through and through with(p)out the eagle-eyed moderate 8 29 THE QUEST FOR JUSTICE 31 Justice is an attri tho ife of human race conduct Justice and the law Rules of just conduct be generally prohibitions of unjust conduct Not only the rules ofjust conduct, save in any case the test of their justice, are negativeThe significance of the negative timber of the test of wickedness The ideology of legal positivism The pure theory of law 31 34 viii 1 6 8 11 12 15 17 24 27 35 38 42 44 48 C ONTENTS Law and morals The law of nature Law and sovereignty 9 56 61 SOCIAL OR DISTRIBUTIVE JUSTICE 62 59 The concept of social justice The conquest of public imagination by social justice The inapplicability of the concept ofjustice to the expirations of a spontaneous process The rationale of the sparing patch in which only the conduct of the players that non the result can be just The alleged necessity of a precept in the justice of rewardsThere is no value to society The heart of social Social justice and comparability Equality of opportunity Social justice and immunity under the law The spatial figure of social justice Claims for compensation for distasteful jobs The resentment of the loss of accustomed bewilders Conclusions extension TO CHAPTER 9 62 65 67 70 73 75 78 80 84 85 88 91 93 96 JUSTICE AND 101 INDIVIDUAL RIGHTS lOT HEM ARK E TOR DE R 0 RCA TAL L A X Y The nature of the market order A excess society is a pluralistic society without a common hierarchy of ends Though non asingle economy, the Great ships company is compose held ogether by what vulgarly are called economic dealings The aim of policy in a society offree men can non be a maximum offoreknown results exactly only an abstract order The game of catallaxy In judging the adaptations to changing circumstances comparisons of the new with the former position are irrelevant ix 107 107 109 112 114 115 longsighted hundred C ONTENTS Rules of just conduct protect only temporal domains and non market values The correspondence of expectations is brought nearly by a disappointment of more or less expectations rook rules of cond uct can determine only expectations and not detail results special comlnands (interference) in a catallaxy create isorder and can never be just The aim of law should be to improve equally the chances of all The estimable Society is one in which the chances of anyone selected at random are plausibly to be as great as possible 11 123 124 126 128 129 132 THE curb OF ABSTRACT RULES AND THE EMOTIONS OF THE TRIBAL SOCIETY 133 The pursuit of unattainable goals may hinder the achievement of the possible The causes of the revival of the organizational thinking of the tribe The ne furthestious consequences of morally inspired drives In the Great Society social justice be experiences a disruptive force From the care of the more or less unfortunate to the protection f vested interests Attempts to correct the order of the market lead to its oddment The revolt against the discipline of abstract rules The morals of the open and of the closed society The old conflict in the midst of lo yalty and justice The small group in the Open Society The importance of voluntary associations 149 150 NOTES 153 x 133 134 135 137 139 142 143 144 147 C ONTENTS Volume 3 THE POLITICAL ORDER OF A FREE PEOPLE 12 MAJORITY OPINION AND CONTEMPORARY DEMOCRACY The cash advanceive disillusion close to democracy Unlimited power the fatal effect of the regular form of democracy The honest content of the democratic idealThe weakness of an nonappointive assembly with oceanic 3 5 8 powe Coalitions of organized interests and the machine of para-government Agreement on general rules and on point measures 13 13 17 THE DIVISION OF DEMOCRATIC POWERS 20 The loss of the overlord plan of the functions of a legislature Existing re giftative institutions substantiate been shaped by the needs of government, not of legislation Bodies with powers of specific direction are un desirablefor law- fashioning The character of alive legislatures determined by their governmental tasks Party legislation leads to the radioactive decay of democratic societyThe constructivistic superstition of sovereignty The requisite division of the powers of represen tative assemblies Democracy or demarchy? xi 20 22 25 27 31 33 35 38 C ONTENTS 14 THE PUBLIC SECTOR AND THE common soldier SECTOR The double task of government Collective goods The delimitation of the public empyrean The unaffiliated sector Taxation and the size of the public sector Security Government monopoly of armed services Information and education Other critical issues 15 41 41 43 46 49 51 54 56 60 62 GOVERNMENT POLICY AND THE mart 65 The advantages of competition do not depend on it organism perfect opposition as a discovery mathematical processIf the factual requirements of perfect competition are absent, it is not possible to makefirms act as if it existed The achievemen ts of the free market Competition and rationality Size, concentration and power The political facets of economic power When monopoly be places harmful The problem of anti-monopoly legislation Not exclusive, just group selfishness is the chief brat The consequences of a political determination of the incomes of the variant groups Organizable and non-organizable interests 16 65 67 70 74 75 77 80 83 85 89 93 96 THE MISCARRIAGE OF THE DEMOCRATIC IDEAL A RECAPITUALATION The miscarriage of the democratic idealA bargaining democracy The playball of group interests Laws versus directions Laws and arbitrary government Froln anisometric treatment to arbitrariness Separation of powers to pr level offt unlimited governlnent xii 98 98 99 99 100 101 102 104 C ONTENTS 17 105 The wrong turn taken by the development ofrepresentative institutions The value of a model of an ideal constitution The basic principles The two representative bodies with distinctive functions Further observations on representation by age groups The governmental assembly The constitutional court The general structure of authority collar powers The division offinancia l powers 8 A MODEL CONSTITUTION 105 107 109 111 117 119 120 122 124 126 THE CONTAINMENT OF POWER AND THE DETH R unrivaledM ENT OF POL ITICS 128 Lilnited and unlimited power Peace, freedom and justice the iii great negatives Centralization and decentralization The rule of the Inajority versus the rule of laws approved by the majority Moral confusion and the decay of language Democratic procedure and egalitarian objectives State and society A game according to rules can never know justice of treatment The para-government of organized interests and the hypertrophy of go vern men t Unlimited democracy and centralizationThe devolution of internal policy to local government The abolition of the government monopoly of services The divestment ofpolitics 128 130 132 133 135 137 139 141 143 145 146 147 149 EPILOGUE THE THREE SOURCES OF HUMAN VALUES 153 The errors of sociobiology The process of cultural evolution The evolution of self- nurseing complex systems The stratification of rules of conduct 153 155 158 159 xiii C ONTENTS Customary rules and economic order The discipline offreedom The re-emergence of suppressed primordial instincts Evolution, tradition and progress The construction of new morals to serve old instincts A1arxThe destruction ofindispensable values by scientific error Freud The tables turned 161 163 165 168 169 173 clxxv 177 NOTES I N DE X 0 F AUT H 0 R SCI TED I N VOL U M E S SUBJECT INDEX TO VOLUMES xiv 1-3 1- 3 209 217 C ONSOLIDATED P face TO ONE-VOLUME form At last this cast can come out of the closet in the form it was intend to take when I started on it tight twenty age ago. Half way through this plosive speech sound, when a first draft was nearly entire, a weakening of my powers, which fortunately proved to be temporary, made me uncertainness whether I should ever be able to complete it and led me to publish in 1973 a honesty completed part of what were to become three eparate volumes. When a year subsequently I found my powers retu rning I spy that various circumstances made substantial revisions necessary of fifty-fifty those make principal sumway move of the draft which I had thought to be in plum finished state. As I pardoned in the preface to the mho volume, which appeared in 1976, the chief reason was my dis mirth with that central chapter which gave that volume its sub-title The Mirage of Social Justice. This key out had dampen resound here I had devoted to this subject an enormous chapter in which I had attempt to suggest for a large number of instances that what as claimed as demanded by social justice could not be justice because the fundamental context (one could hardly call it a principle) was not open of general application. The point I was then in general anxious to demonstrate was that concourse would never be able to agree on what social justice required, and that any attempt to determine remunerations according to what it was thought was demanded by justice would make the mark et un ca-caable. I seduce now become convince, however, that the tribe who habitually operate the phrase but do not know themselves what they mean by t and just use it as an assertion that a claim is justified without giving a reason for it. In my earlier efforts to criticize the concept I had all the eon the skin senses that I was hitting into a void and I at last attempted, what in ofttimes(prenominal) cases one ought to do in the first xv P REFACE instance, to construct as good a case in uphold of the ideal of social justice as was in my power. It was only then that I perceived that the Emperor had no clothes on, that is, that the term social justice was all told empty and implicationless. As the boy in Hans Christian Andersens story, I could not check anything, because there was nothing to be seen. The more than I act to give it a definite meaning the more it fell apart-the a priori tanging of indignation which we undeniably a good deal experience in cross i nstances proved incapable of being justified by a general rule oft(prenominal) as the desire of justice demands. exclusively to demonstrate that a universally employ conceptualization which to umpteen people embodies a quasi-religious belief has no content whatever and serves merely to scheme that we ought to consent to a demand of some particular group is frequentlytimes more difficult than to show that a conception is wrong.In these circumstances I could not content myself to show that particular attempts to achieve social justice would not work, but had to explain that the phrase meant nothing at all, and that to employ it was any thoughtless or fraudulent. It is not pleasant to select to deliberate against a superstition which is held approximately strongly by men and women who are a lot learned as the best in our society, and against a belief that has become close the new godliness of our time (and in which legion(predicate) of the ministers of old organiz ed religion grant found their refuge), and which has become the recognized mark of the good man.But the present universality of that belief proves no more the reality of its object than did the universal belief in witches or the philosophers stone. Nor does the long tarradiddle of the conception of disseminative justice understood as an attribute of individual conduct (and now often inured as synonymous with social justice) prove that it has any relevance to the positions arising from the market process. I believe indeed that the greatest service I can still render to my fellow men would be if it were in my power to make them ashamed of ever again victimisation that hollow incantation.I felt it my duty at least to try and free them of that incubus which now makes fine sentiments the instruments for the destruction of all values of a free finish-and to try this at the risk of gravely offending many the strength of whose moral feelings I respect. xvi P REFACE The present versio n of the central chapter of this volume has in consequence of this history in some respects a slightly different character from the rest of the volume which in all essentials was completed six or s veritable(a)-spot years earlier. There was, on the one hand, nothing I could positively demonstrate but y task was to put the burden of establishment squarely on those who employ the term. On the other hand, in re-writing that chapter I no longer had that easy access to adequate library facilities which I had when I prepared the first draft of this volume. I use up in consequence not been able in that chapter self-opinionatedally to take account of the more novel literary harvest-timeions on the topics I discussed as I had endeavoured to do in the rest of this volume. In one instance the feeling that I ought to justify my position vis-a-vis a major recent work has in any case contributed to stick around the completion of this volume.But after careful consideration I set about co me to the determination that what I might open to scan about John Rawls A Theory of Justice (1972) would not assist in the pursuit of my immediate object because the differences between us seemed more verbal than substantial. Though the first impression of ratifiers may be different, Rawls statement which I quote later in this volume (p. 100) seems to me to show that we agree on what is to me the essential point. Indeed, as I indicate in a note to that passage, it appears to me that Rawls has been widely misunderstood on this central issue.The preface to the ternary volume, which in the end appeared in 1979, gives a similar account of the further development that alike had emend be repeated here withdraw for what are now the last two chapters, most of it was in fairly finished form as long ago as the end of 1969 when indifferent health forced me to suspend the efforts to complete it. It was then, indeed, doubt whether I would ever succeed in doing so which made me decide to publish separately as volume 1 the first third of what had been intended to form a single volume, because it was in completely finished form. When I was able to return to ystematic work I discovered, as I develop explained in the preface to volume 2, that at least one chapter of the airplane pilot draft of that part required complete re-writing. Of the last third of the original draft only what was xvii P REFACE intended to be the last chapter (chapter 18) had not been completed at the time when I had cease work. But bit I believe I have now more or less carried out the original intention, over the long period which has elapsed my ideas have developed further and I was loath to send out what inevitably must be my last systematic work without at east indicating in what direction my ideas have been miserable. This has had the effect that not only what was meant to be the concluding chapter contains a good deal of, I hope, improved re-statements of telephone lines I have develo ped earlier, but that I found it necessary to add an Epilogue which expresses more directly the general view of moral and political evolution which has guided me in the consentaneous enterprise. I have in addition inserted as chapter 16 a skeleton recapitulation of the earlier argument. There were also other causes which have contributed to delay completion. As I had hesitated whether I ought to ublish volume 2 without winning beneficial account of the all- eventful(prenominal) work of John Rawls, A Theory of Justice (Oxford, 1972), two new important books in the field have since appeared which, if I were younger, I should feel I must to the full(a) digest forrader completing my own survey of the similar sort of problems Robert Nozik, Anarchy, State and Utopia (New York, 1974) and Michael Oakeshott, On Human Conduct (Oxford, 1975). Rightly or wrongly I finally decided that if I made an effort fully to absorb their argument earlier concluding my own exposition, I would p robably never do this. But I regard it as my duty to tell the younger indorsers that they cannot fully omprehend the present state of thought on these issues unless they make that effort which I must postpone until I have completed the statement of the conclusions at which I had arrived originally I became acquainted with these works. The long period over which the present work has been evolution also had the effect that I came to regard it as expedient to change my terminology on some points on which I should warn the reader. It was largely the growth of cybernetics and the cerebrate subjects of information and system theory which persuaded me that expression other than those which I habitually apply may be more readily comprehensible o the modern-day reader. Though I still like and occasionally use the term spontaneous order, I agree that xviii P REFACE self-generating order or self-organizing structures are sometimes more precise and unambiguous and because often use them instead of the former term. Similarly, instead of order, in conformity with instantlys preponderant usage, I occasionally now use system. Also information is clearly often preferable to where I usually spoke of knowledge, since the former clearly refers to the knowledge of particular facts rather than notional knowledge to which plain knowledge might be thought to refer.Finally, since constructivist appears to some people still to carry the commendatory connotation derived from the procedural constructive, I felt it advisable, in order clearly to bring out the deprecatory sense in which I use that term (significantly of Russian origin) to employ instead the, I am afraid, still more unworthy term constructivistic. I should possibly add that I feel some regret that I have not had the courage consistently to employ certain other neologisms I had suggested, much(prenominal) as human beings, taxis, nomos, thesis, catallaxy and demarchy.But what the exposition has thereby lost in precision it leave behind probably have gained in ready intelligibility. Perhaps I should also again remind the reader that the present work was never intended to give an exhaustive or comprehensive exposition of the basic principles on which a society of free man could be maintained, but was rather meant to fill the gaps which I discovered after I had made an attempt to restate, in The Constitution of Liberty, for the modern-day reader the traditional doctrines of classical liberalism in a form suited to contemporary problems and thinking.It is for this reason a a lot less complete, much more difficult and personal but, I hope, also more original work than the former. But it is definitely supplementary to and not a substitute for it. To the non-specialist reader I would thereof recommend reading The Constitution of Liberty before he proceeds to the more detailed discussion or particular examination of problems to which I have attempted solutions in these volumes. But they are i ntended to explain wherefore I still regard what have now long been treated as antiquated beliefs as greatly superior to any alternative octrines which have recently found more favour with the public. The reader pass on probably gather that the whole work has xix P REFACE been inspired by a growing apprehension about the direction in which the political order of what use to be regarded as the most wage increased countries is teuding. The growing conviction, for which the book gives the reasons, that this menace development towards a totalistic state is made inevitable by certain deep entrenched defects of construction of the generally accepted vitrine of democratic government has forced me to think through alternative arrangements.I would like to repeat here that, though I profoundly believe in the basic principles of democracy as the only effective method which we have save discovered of making peaceful change possible, and am therefore much alarmed by the evident growing di sillusionment about it as a desirable Inelhod of government-much assisted by the increasing abuse of the discourse to indicate supposed(a) ailns of governmentI am becoming more and more convinced that we are moving towards an impasse from which political leaders will twisting to extricate us by desperate heart and soul. When the present volume leads up to a proposal of basic lteration of the structure of democratic government, which at this time most people will regard as wholly impractical, this is meant to bequeath a sort of quick-witted stand-by equipment for the time, which may not be far away, when the breakdown of the existing institutions becomes unmistakable and when I hope it may show a way out. It should enable us to preserve what is truly worthful in democracy and at the analogous time free us of its objectionable features which most people still accept only because they regard them as inevitable. Together with the similar stand-by scheme I have proposed for depriv ing overnment of the monopolistic powers of control of the supply of money, equally necessary if we are to escape the nightmare of increasingly totalitarian powers, which I have recently outlined in other publication (Denationalisation of Money, 2nd edn, Institute of Economic Affairs, London, 1978), it proposes what is a possible escape from the fate which threatens us. I shall be content if I have persuaded some people that if the first experiment of freedom we have tried in modern times should prove a failure, it is not because freedom is an impracticable ideal, but because we have tried it the wrong way. xx P REFACEI trust the reader will forgive a certain miss of system and some unnecessary repetitions in an exposition which has been written and re-written over a period of fifteen years, broken by a long period of indifferent health. I am very much sure of this, but if I tried in my eightieth year to cast it all, I shall probably never complete the task. The Epilogue I added to that volume before publication indicates that even during the period of restricted activity my ideas have continued to develop imperceptibly more than I was aware before I attempted to sketch my present general view of the whole position in a public lecture.As I said in the concluding words of the present text, it became clear to me that what I said in that Epilogue should not be an Epilogue but a new beginning. I am glad to be able to say now that it has turned out to be such and that that Epilogue has become the outline of a new book of which I have now completed a first draft. There are a few acknowledgments that I ought to repeat here. Some ten years ago Professor Edwin McClellan of the University of gelt had again, as on earlier occasions, taken great trouble to make my exposition more readable than I myself could have done.I am deeply grateful for his sympathetic efforts but should add, that since even in the early parts the draft on which he has worked has since undergon e further change, he must not be held responsible for whatever defects the present version still has. I have however incurred further obligations to Professor Arthur Shenfield of London who has gone through the final text of the third volume and corrected there a variety of substantial as well as stylistic points, and to Mrs Charlotte Cubitt who, in preparing the final copy of that volume, has further polished the text.I am also much indebted to Mrs Cornelia Crawford of Irvington-on-Hudson, New York, who has again applied her proven skill and victorious into custody in preparing the subject index giving references to all three still separately paginated volumes. xxi L AW, LEGISLATION AND LIBERTY Volume 1 RULES AND ORDER Intelligent beings may have laws of their own making but they also have some which they never made. (Montesquieu, De lEsprit des lois, I, p. i) I NTRODUCTIONThere seems to be only one solution to the problem that the elite of man engaging become a consciousness of the limitation of the human mind, at once unreserved and profound enough, humble and sublime enough, so that Western civilisation will resign itself to its inevitable disadvantages. G. Ferrero* When Montesquieu and the framers of the American Constitution articulated the conception of a limiting constitution 1 that had grown up in England, they set a pattern which liberal constitutionalism has followed ever since.Their chief aim was to let institutional safeguards of individual freedom and the device in which they placed their conviction was the separation of powers. In the form in which we know this division of power between the legislature, the judiciary, and the administration, it has not achieved what it was meant to achieve. Governments everywhere have obtained by constitutional means powers which those men had meant to deny them. The first attempt to secure individual liberty by constitutions has evidently failed. Constitutionalism means limited government. But the interpr etation given to the traditional formulae of constitutionalism has made it possible to reconcile these with a conception of democracy according to which this is a form of government where the will of the majority on any particular matter is unlimited. 3 As a result it has already been seriously suggested that constitutions are an antiquated survival which have no place in the modern conception of government. 4 And, indeed, what function is served by a constitution which makes omnipotent government possible?Is its function to be merely that governments work smoothly and efficiently, whatever their aims? In these circumstances it seems important to ask what those founders of liberal constitutionalism would do today if, pursuing I NTRODUCTION the aims they did, they could command all the experience we have gained in the meantime. There is much we ought to have learned from the history of the last two hundred years that those men with all their wisdom could not have known. To me their a ims seem to be as valid as ever.But as their means have proved inadequate, new institutional invention is necessitate. In another book I have attempted to restate, and hope to have in some measure succeeded in clarifying, the traditional doctrine of liberal constitutionalism. 5 But it was only after I had completed that work that I came to see clearly why those ideals had failed to retain the support of the idealists to whom all the great political movements are due, and to rede what are the governing beliefs of our time which have proved irreconcilable with them.It seems to me now that the reasons for this development were in general the loss of the belief in a justice independent of personal interest a consequent use of legislation to authorize coercion, not merely to prevent unjust action but to achieve particular results for specific persons or groups and the fusion in the same representative assemblies of the task of articulating the rules of just conduct with that of direct ing government.What led me to frame another book on the same general theme as the earlier one was the recognition that the preservation of a society of free men depends on three fundamental perceptivenesss which have never been adequately expounded and to which the three main parts of this book are devoted. The first of these is that a selfgenerating or spontaneous order and an organization are distinct, and that their distinctiveness is related to the two different kinds of rules or laws which prevail in them.The second is that what today is generally regarded as social or distributive justice has meaning only within the second of these kinds of order, the organization but that it is meaningless in, and wholly uncongenial with, that spontaneous order which Adam Smith called the Great Society, and Sir Karl Popper called the Open Society.The third is that the predominant model of liberal democratic institutions, in which the san1e representative body lays down the rules of just co nduct and directs government, necessarily leads to a gradual transformation of the spontaneous order of a free society into a totalitarian system conducted in the service of some coalition of organized interests. This development, as I hope to show, is not a necessary consequence of democracy, but an effect only of that particular form of unlimited government vvith which delllocracy has come to be identi2 I NTRODUCTION fied.If I aln right, it would indeed seem that the particular form of representative government which now prevails in the Western world, and vhich many feel they must defend because they nlistakenly regard it as the only possible form of democracy, has an inherent tendency to lead away from the ideals it was intended to serve. It can hardly be denied that, since this type of democracy has come to be accepted, we have been moving away from that ideal of individual liberty of which it had been regarded as the surest safeguard, and are now drifting towards a system ,hich nobody wanted.Signs are not wanting, however, that unlimited democracy is riding for a fall and that it will go down, not with a bang, but with a whimper. It is already becoming clear that many of the expectations that have been raised can be met only by taking the powers of decision out of the hands of democratic assemblies and entrusting them to the established coalitions of organized interests and their hired experts. Indeed, we are already told that the function of representative bodies has become to mobilize consent, 6 that is, not to express but to manipulate the opinion of those whom they represent.Sooner or later the people will discover that not only are they at the mercy of new vested interests, but that the political machinery of para-government, which has grown up as a necessary consequence of the provision-state, is producing an impasse by preventing society from making those adaptations which in a changing world are required to maintain an existing standard of living , let alone to achieve a rising one. It will probably be some time before people will admit that the institutions they have created have led them into such an impasse. But it is probably not too early to begin thinking about a way out.And the conviction that this will demand some drastic revision of beliefs now generally accepted is what makes me venture here on some institutional invention. If I had known when I published The Constitution of Liberty that I should proceed to the task attempted in the present work, I should have reserved that title for it. I then used the term constitution in the wide sense in which we use it also to describe the state of fitness of a person. It is only in the present book that I address myself to the head teacher of what constitutional arrangements, in the legal sense, might be most conducive to the preservation of individual freedom.Except for a bare hint which fev readers will have noticed,7 I confined myself in the earlier book to stating the pr inciples which the existing types of government would have 3 I NTRODUCTION to follow if they wished to preserve freedom. Increasing awareness that the prevailing institutions make this unacceptable has led me to concentrate more and more on what at first seemed merely an attractive but impracticable idea, until the utopia lost its strangeness and came to appear to me as the only solution of the problem in which the founders of liberal constitutionalism failed. nonetheless to this problem of constitutional physique I turn only in volume 3 of this work. To make a suggestion for a radical difference from established tradition at all plausible required a critical re-examination not only of current beliefs but of the real meaning of some fundamental conceptions to which we still pay lip-service. In fact, I soon discovered that to carry out what I had undertaken would require little less than doing for the twentieth century what Montesquieu had done for the eighteenth.The reader will b elieve me when I say that in the course of the work I more than once despaired of my ability to come even near the aim I had set myself. I am not speaking here of the fact that Montesquieu was also a great literary genius whom no mere pupil can hope to emulate. I refer rather to the purely intellectual difficulty which is a result of the circumstance that, while for Montesquieu the field which such an undertaking must cover had not except split into numerous specialisms, it has since become impossible for any man to master even the most important relevant works. in time, although the problem of an appropriate social order is today study from the different angles of economics, jurisprudence, political science, sociology, and ethics, the problem is one which can be approached roaringly only as a whole. This means that whoever undertakes such a task today cannot claim professional competence in all the fields with which he has to deal, or be acquainted with the specialized literatu re available on all the questions that arise.Nowhere is the baneful effect of the division into specialisms more evident than in the two oldest of these disciplines, economics and law. Those eighteenth-century ideas to whom we owe the basic conceptions of liberal constitutionalism, David Hume and Adam Smith, no less than Montesquieu, were still touch on with what some of them called the science of legislation, or with principles of policy in the widest sense of this term.One of the main themes of this book will be that the rules of just conduct which the lawyer studies serve a kind of order of the character of which the lawyer is largely unconditioned and that this order is studied chiefly by the economist who in turn is similarly ignorant of the character of 4 I NTRODUCTION the rules of conduct on which the order that he studies rests. The most serious effect of the splitting up among several(prenominal) specialisms of what was once a common field of inquiry, however, is that it has left a no-mans-land, a shadowed subject sometimes called social philosophy.Some of the chief disputes within those special disciplines turn, in fact, on differences about questions which are not peculiar to, and are therefore also not systematically examined by, anyone of them, and which are for this reason regarded as philosophical. This serves often as an excuse for taking tacitly a position which is supposed any not to require or not to be capable of rational excuse. Yet these important issues on which not only factual interpretations but also political positions wholly depend, are questions which can and must be manageed on the basis of fact and logic.They are philosophical only in the sense that certain widely but erroneously held beliefs are due to the influence of a philosophical tradition which postulates a false answer to questions capable of a definite scientific treatment. In the first chapter of this book I attempt to show that certain widely held scientific as well as political views are dependent on a particular conception of the formation of social institutions, which I shall call constructivist rationalism -a conception which assumes that all social institutions are, and ought to be, the product of deliberate design.This intellectual tradition can be shown to be false both in its factual and in its normative conclusions, because the existing institutions are not all the product of design, neither would it be possible to make the social order vvholly dependent on design without at the same time greatly restricting the example of available knowledge. That erroneous view is closely connected with the equally false conception of the human mind as an entity standing outside the cosmos of nature and society, rather than being itself the product of the same process of evolution to which the institutions of society are due.I have indeed been led to the conviction that not only some of the scientific but also the most important political (or ideological) differences of our time rest ultimately on certain basic philosophical differences between two schools of thought, of which one can be shown to be mistaken. They are both commonly referred to as rationalism, but I shall have to distinguish between them as the evolutionary (or, as Sir Karl Popper calls it, critical) rationalism on the one hand, and the erroneous constructivist (Poppers naIve) rationalism on the other. If the constructivist rationalism 5 I NTRODUCTION can be shovn to be based on factually false assumptions, a whole family of schools of scientific as well as political thought will also be proved erroneous. In the theoretical fields it is particularly legal positivisn1 and the connected belief in the necessity of an unlimited sovereign pover which stand or fall vith this error.The same is true of utilitarianism, at least in its particularistic or act variety also, I am afraid that a not inconsiderable part of what is called sociology is a direct child of co nstructivisn1 when it presents its aims as to create the future of mankind 8 or, as one writer put it, claims that socialism is the logical and inevitable outcome of sociology. 9 All the totalitarian doctrines, of vhich socialism is merely the noblest and most influential, indeed perish here.They are false, not because of the values on vhich they are based, but because of a misconception of the forces vhich have Inade the Great Society and civilization possible. r-rhe demonstration that the differences between socialists and non-socialists ultimately rest on purely intellectual issues capable of a scientific resolution and not on different judgments of value appears to me one of the most important outcomes of the train of thought pursued in this book.It appears to me also that the same factual error has long appeared to make insoluble the most crucial problem of political organization, namely ho to limit the popular will vithout placing another rill above it. As soon as ve recogniz e that the basic order of the Great Society cannot rest all in all on design, and can therefore also not aim at particular foreseeable results, we see that the requirement, as legitilnation of all authority, of a commitment to general principles approved by general opinion, Inay well place effective restrictions on the particular yill of all authority, including that of the Inajority of the rnoment.On these issues vhich vill be my main concern, thought seems to have made little advance since David Hume and Imlnanuel Kant, and in several respects it vill be at the point at which they left off that our analysis will have to resume. It was they who came nearer than anybody has done since to a clear recognition of the status of values as independent and guiding conditions of all rational construction.What I am ultimately concerned with here, although I can deal only vith a small aspect of it, is that destruction of values by scientific error which has increasingly come to seem to me the great tragedy of our time-a tragedy, because the values which scientific error tends to dethrone are the indispensable foundation of all our 6 I NTRODUCTION civilization, including the very scientific efforts which have turned against them.The tendency of constructivism to represent those values which it cannot explain as determined by arbitrary human decisions, or acts of will, or mere emotions, rather than as the necessary conditions of facts which are taken for apt(p) by its expounders, has done much to shake the foundations of civilization, and of science itself, which also rests on a system of values which cannot be scientifically proved. 7 ONE REASON AND development To relate by whom, and in what connection, the true law of the formation of free states was recognized, and how this iscovery, closely akin to those which, under the names of development, evolution, and continuity, have given a new and deeper method to other sciences, solved the quaint problem betveen stabilit y and change, and determined the authority of tradition on the progress of thought. Lord Acton* Construction and evolution There are two ways of looking at the pattern of human activities which lead to very different conclusions concerning both its explanation and the possibilities of deliberately altering it. Of these, one is based on conceptions which are demonstrably false, yet are so pleasing to human anity that they have gained great influence and are ceaselessly employed even by people who know that they rest on a fiction, but believe that fiction to be innocuous. The other, although few people will question its basic contentions if they are stated abstractly, leads in some respects to conclusions so unwelcome that few are willing to follow it through to the end. The first gives us a sense of unlimited power to realize our wishes, while the second leads to the insight that there are limitations to what we can deliberately bring about, and to the recognition that some of our present hopes are delusions.Yet the effect of allowing ourselves to be deluded by the first view has always been that n1an has actually limited the scope of what he can achieve. For it has always been the recognition of the limits of the possible which has enabled man to make full use of his powers. 1 The first view holds that human institutions will serve human purposes only if they have been deliberately designed for these purposes, often also that the fact that an institution exists is evidence of its having been created for a purpose, and always that we R EASON AND EVOLUTION should so re-design society and its institutions that all our actions will be wholly guided by known purposes. To most people these propositions seem almost self-evident and to shew an attitude alone worthy of a thinking being. Yet the belief underlying them, that we owe all beneficial institutions to design, and that only such design has made or can make them useful for our purposes, is largely false.Thi s view is rooted originally in a deeply indispensable leaning of archaic thought to interpret all regularity to be found in phenomena anthropomorphically, as the result of the design of a thinking mind. But just when man was well on the vay to emancipating himself from this naive conception, it was resuscitate by the support of a powerful philosophy with which the aim of sack the human mind from false prejudices has become closely associated, and which became the dominant conception of the Age of Reason.The other view, which has slowly and gradually advanced since antiquity but for a time was almost entirely overwhelmed by the more exciting constructivist view, was that that orderliness of society which greatly increased the effectiveness of individual action was not due solely to institutions and practices which had been invented or designed for that purpose, but was largely due to a process described at first as growth and later as evolution, a process in which practices whi ch had first been adopted for other reasons, or even purely accidentally, were preserved because they enabled the group in which they had arisen to prevail over others. Since its first systematic development in the eighteenth century this view had to struggle not only against the anthropomorphism of primitive thinking but even more against the reinforcement these naive views had received from the new rationalist philosophy. It was indeed the challenge which this philosophy provided that led to the hardcore formulation of the evolutionary view. 2 The tenets of Cartesian rationalism The great thinker from whom the basic ideas of what we shall call constructivist rationalism received their most complete expression was Rene Descartes.But while he refrained from drawing the conclusions from them for social and moral arguments, 3 these were mainly elaborated by his slightly older (but much more long-lived) contemporary, doubting Thomas Hobbes. Although Descartes immediate concern was t o establish criteria for the truth of propositions, these 9 R EASON AND EVOLUTION were inevitably also applied by his follovers to judge the appropriateness and justification of actions. The radical doubt which made him refuse to accept anything as true which could not be logically derived from explicit premises that were clear and distinct, and therefore beyond possible doubt, deprived of validity all those rules of conduct which could not be justified in this manner. Although Descartes himself could escape the consequences by scribing such rules of conduct to the design of an omniscient deity, for those among his followers to whom this no longer seemed an adequate explanation the acceptance of anything which was based merely on tradition and could not be fully justified on rational grounds appeared as an irrational superstition. The rejection as mere opinion of all that could not be demonstrated to be true by his criteria became the dominant characteristic of the movement which he started. Since for Descartes reason was delimitate as logical deduction from explicit premises, rational action also came to mean only such action as was determined entirely by known and demonstrable truth. It is almost an inevitable step from this to the conclusion that only what is true in this sense can lead to no-hit action, and that therefore everything to which man owes his achievements is a product of his reasoning thus conceived.Institutions and practices which have not been designed in this n1anner can be beneficial only by accident. Such became the characteristic attitude of Cartesian constructivism with its contempt for tradition, custom, and history in general. Mans reason alone should enable him to construct society anew. 4 This rationalist approach, however, meant in effect a relapse into earlier, anthropomorphic modes of thinking. It produced a reneved propensity to ascribe the origin of all institutions of culture to invention or design. Morals, religion and law, language and writing, money and the market, were thought of as having been deliberately constructed by somebody, or at least as owing whatever perfection they have to such design.This intentionalist or pragmatic 5 account of history found its fullest expression in the conception of the formation of society by a social contract, first in Hobbes and then in Rousseau, who in many respects was a direct follover of Descartes. 6 Even though their theory was not alvvays meant as a historical account of what actually happened, it was always meant to provide a guideline for deciding whether or not existing institutions were to be approved as rational. 10 R EASON AND EVOLUTION I t is to this philosophical conception that we owe the preference which prevails to the present day for everything that is done consciously or deliberately, and from it the terms irrational or non-rational derive the derogatory meaning they now have.Because of this the earlier presumption in favour of traditional or e stablished institutions and usages became a presumption against them, and opinion came to be thought of as mere opinionsomething not demonstrable or decidable by reason and therefore not to be accepted as a valid ground for decision. Yet the basic assumption underlying the belief that man has achieved n1astery of his surroundings mainly through his capacity for logical deduction from explicit premises is factually false, and any attempt to confine his actions to what could thus be justified would deprive him of many of the most effective means to success that have been available to him. It is simply not true that our actions owe their effectiveness solely or chiefly to knowledge which we can state in vords and vhich can therefore constitute the explicit premises of a syllogism.Many of the institutions of society which are indispensable conditions for the self-made pursuit of our conscious aims are in fact the result of customs, habits or practices which have been neither invented n or are observed with any such purpose in view. We live in a society in which we can successfully orientate ourselves, and in which our actions have a good chance of achieving their aims, not only because our fellows are governed by known aims or known connections between means and ends, but because they are also confined by rules whose purpose or origin we often do not know and of whose very existence we are often not aware. Man is as much a rule-following animal as a purpose-seeking one. And he is successful not because he knows why he ought to observe the rules vhich he does observe, or is even capable of stating all these rules in vords, but because his thinking and performing are governed by rules which have by a process of pickaxe been evolved in the society in which he lives, and vhich are thus the product of the experience of generations. The permanent limitations of our factual knowledge The constructivist approach leads to false conclusions because mans actions are largely successful, not merely in the primitive stage but perhaps even more so in civilization, because they are neutered both II R EASON AND EVOLUTION to the particular facts which he knows and to a great many other facts he does not and cannot know. And this adaptation to the general circumstances that surround him is brought about by his observance of rules which he has not designed and often does not even knovv explicitly, although he is able to honor them in action.Or, to put this differently, our adaptation to our environment does not consist only, and perhaps not even chiefly, in an insight into the relations between cause and effect, but also in our actions being governed by rules adapted to the kind of world in which we live, that is, to circumstances which we are not aware of and which yet determine the pattern of our successful actions. Complete rationality of action in the Cartesian sense demands complete knowledge of all the relevant facts. A designer or engineer needs all th e data and full power to control or manipulate them if he is to organize the material objects to produce the intended result. But the success of action in society depends on more particular facts than anyone can possibly know. And our whole civilization in consequence rests, and must rest, on our believing rnuch that we cannot know to be true in the Cartesian sense. What we must ask the reader to commemorate constantly in mind throughout this book, hen, is the fact of the necessary and irremediable ignorance on everyones part of most of the particular facts which determine the actions of all the several members of human society. This may at first seem to be a fact so patent and incontestable as hardly to be mention, and still less to require proof. Yet the result of not constantly stressing it is that it is only too readily forgotten. This is so mainly because it is a very inconvenient fact which makes both our attempts to explain and our attempts to influence intelligently the p rocesses of society very much more difficult, and which places severe limits on what we can say or do about them. There exists therefore a great temptation, as a first approximation, to begin with the assumption that we know everything needed for full explanation or control.This provisional assumption is often treated as something of little consequence which can later be dropped without much effect on the conclusions. Yet this necessary ignorance of most of the particulars which enter the order of a Great Society is the source of the central problem of all social order and the false assumption by which it is provisionally put aside is mostly never explicitly abandoned but merely conveniently forgotten. The argument then proceeds as if that ignorance did not matter. 12 R EASON AND EVOLUTION The fact of our irrcrnediable ignorance of most of the particular facts which determine the processes of society is, however, the reason why most social institutions have taken the form they actua lly have.To talk about a society about vvhich either the observer or any of its members knows all the particular facts is to talk about something wholly different from anything vhich has ever existcda society in which lnost of vhat ve find in our society vould not and could not exist and vhich, if it ever occurred, vould possess properties ve cannot even imagine. I have discussed the importance of our necessary ignorance of the concrete facts at some length in an earlier book 8 and will show its central importance here mainly by stating it at the head of the vhole exposition. But there are several points vhich require re-statement or elaboration. In he first instance, the incurable ignorance of everyone which I am speaking is the ignorance of particular facts which are or will become knovn to somebody and thereby pertain the vhole structure of society. rrhis structure of human activities constantly adapts itself, and functions through adapting itself, to millions of facts which in their entireness are not known to anybody. The significance of this process is most obvious and Tas at first express in the economic field. As it has been said, the economic life of a non -socialist society consists of millions of relations or flows between individual firms and households. Ve can establish certain theorems about them, but vve can never observe all. 9 The insight into the significance of our institutional ignorance in the economic sphere, and into the methods by vhich ve have learnt to overcome this obstacle, vas in fact the outset point 10 for those ideas which in the present book arc systelnatically applied to a much wider field. It will be one of our chief contentions that most of the rules of conduct vhich govern our actions, and lnost of the institutions which arise out of this regularity, are adaptations to the impossibility of anyone taking conscious account of all the particular facts which enter into the order of society. vVe shall see, in particular, tha t the possibility of justice rests on this necessary limitation of our factual knowledge, and that insight into the nature of justice is therefore denied to all those constructivists ho habitually argue on the assulnption of omniscience.Another consequence of this basic fact vhich must be stressed here is that only in the small groups of primitive society can collaboration betveen the members rest largely on the circumstance that at anyone heartbeat they will know more or less the same particular 13 R EASON AND EVOLUTION circulnstances. SOl1le wise men 111ay be better at interpreting the immediately perceived circumstances or at remembering things in rClnote places unkndvvn to the others. But the concrete events vhich the individuals encounter in their fooling pursuits will be very much the same for all, and they will act together because the events they know and the objectives at which they aim are more or less the same.The built in bed is wholly different in the Great 11 or Ope n Society where millions of men interact and where civilization as we know it has developed. Econon1ics has long stressed the division of labour which such a situation involves. But it has laid much less stress on the atomization of knowledge, on the fact that each Inember of society can have only a small fraction of the knowledge possessed by all, and that each is therefore ignorant of most of the facts on which the working of society rests. Yet it is the utilization of much more knowledge than anyone can possess, and therefore the fact that each moves within a coherent structure most of whose deterlninants are unknown to him, that constitutes the distinctive feature of all advanced civilizations.In civilized society it is indeed not so much the greater knowledge that the individual can acquire, as the greater benefit he receives from the knovledge possessed by others, which is the cause of his ability to pursue an infinitely wider range of ends than merely the satisfaction of his most pressing physical needs. Indeed, a civilized individual may be very ignorant, more ignorant than many a savage, and yet greatly benefit from the civilization