Oliver begins by turning his guns on the natural-rights defense of laissez faire—on the system of natural liberty.32 He is worried because Americans still seem to cling to this doctrine in underlying theory, if not in actual practice. First, he sets forth various versions of the libertarian position, including the “extreme” version, “A man has a right to do what he will with his own,” as well as Spencer’s Law of Equal Freedom and the “semi-utilitarian” position that “a man is free to do as he pleases as long as he does not harm someone.” The “semiutilitarian” position is easiest to attack, and Oliver has no difficulty in showing its vagueness. “Harm” can be interpreted to cover practically all actions, e.g., a hater of the color red can argue that someone else inflicts “aesthetic harm” upon him by wearing a red coat.

Characteristically, Oliver has least patience with the “extreme” version, which, he contends, is “not meant to be interpreted literally,” not a seriously reasoned statement, etc. This enables him to shift quickly to attacks on the modified and weaker versions of libertarianism. Yet it is a serious statement and must be coped with seriously, especially if “A” is replaced by “Every” in the sentence. To o often political debate has been short-circuited by someone’s blithe comment that “you can’t really be serious!” We have seen above that Spencer’s Law of Equal Freedom is really a redundant version of the “extreme” statement and that the first part implies the proviso clause. The “extreme” statement permits a more clear-cut presentation, avoiding many of the interpretative pitfalls of the watered-down version.

Let us now turn to Oliver’s general criticisms of the libertarian position. Conceding that it has “great superficial attractiveness,” Oliver levels a series of criticisms that are supposed to demonstrate its illogic:

(1) Any demarcation of property “restricts liberty,” i.e., the liberty of others to use these resources. This criticism misuses the term “liberty.” Obviously, any property right infringes on others’ “freedom to steal.” But we do not even need property rights to establish this “limitation”; the existence of another person, under a regime of liberty, restricts the “liberty” of others to assault him. Yet, by definition, liberty cannot be restricted thereby, because liberty is defined as freedom to control what one owns without molestation by others. “Freedom to steal or assault” would permit someone—the victim of stealth or assault—to be forcibly or fraudulently deprived of his person or property and would therefore violate the clause of total liberty: that every man be free to do what he wills with his own. Doing what one wills with someone else’s own impairs the other person’s liberty.

(2) A more important criticism in Oliver’s eyes is that natural rights connote a concept of property as consisting in “things” and that such a concept eliminates property in intangible “rights.” Oliver holds that if property is defined as a bundle of things, then all property in rights, such as stocks and bonds, would have to be eliminated; whereas if property is defined as “rights,” insoluble problems arise of defining rights apart from current legal custom. Furthermore, property in “rights” divorced from “things” allows non-laissez-faire rights to crop up, such as “rights in jobs,” etc. This is Oliver’s primary criticism.

This point is a completely fallacious one. Although property is certainly a bundle of physical things, there is no dichotomy between things and rights; in fact, “rights” are simply rights to things. A share in an oil company is not an intangible floating “right”; it is a certificate of aliquot ownership in the physical property of the oil company. Similarly, a bond is directly a claim to ownership of a certain amount of money and, in the final analysis, is an aliquot ownership in the company’s physical property. “Rights” (except for grants of monopolistic privilege, which would be eliminated in the free society) are simply divisible reflections of physical property.

(3) Oliver tries to demonstrate that the libertarian position, however phrased, does not necessarily lead to laissez faire. As we have indicated, he does this by skipping quickly over the “extreme” position and concentrating his attack on the unquestionable weaknesses of some of the more qualified formulations. The “harm” clause of the semiutilitarians is justly criticized. Spencer’s Law of Equal Freedom is attacked for its proviso clause and for the alleged vagueness of the phrase “infringes on the equal freedom of others.” Actually, as we have seen, this proviso is unnecessary and could well be eliminated. Even so, Oliver does considerably less than justice to the Spencerian position. He sets up alternative straw-man definitions of “infringement” and shows that none of these alternatives leads to strict laissez faire. A more thorough search would easily have yielded Oliver the proper definition. Of the five alternative definitions he offers, the first simply defines infringement as “violation of the customary legal code”—a question-begging definition that no rational libertarian would employ. Basing his argument necessarily on principle, the libertarian must fashion his standard by means of reason and cannot simply adopt existing legal custom.

Oliver’s fourth and fifth definitions—”exercise of control in any form over another person’s satisfaction or deeds”—are so vague and so question-begging in the use of the word “control” that no libertarian would ever use them. This leaves the second and third definitions of “infringement,” in which Oliver manages to skirt any reasonable solution to the problem. The former defines “infringement” as “direct physical interference with another man’s control of his person and owned things”; and the latter, as “direct physical interference plus interference in the form of threat of injury.” But the former apparently excludes fraud, while the latter not only excludes fraud, but also includes threats to compete with someone else, etc. Since neither definition implies a laissez-faire system, Oliver quickly gives up the task and concludes that the term “infringement” is hopelessly vague and cannot be used to deduce the laissez-faire concept of freedom, and therefore that laissez faire needs a special, additional ethical assumption aside from the basic libertarian postulate.

Yet a proper definition of “infringement” can be found in order to arrive at a laissez-faire conclusion. The vague, question-begging term “injury” must not be used. Instead, infringement can be defined as “direct physical interference with another man’s person or property, or the threat of such physical interference.” Contrary to Oliver’s assumption, fraud is included in the category of “direct physical interference,” for such interference means not only the direct use of armed violence, but also such acts as trespass and burglary without use of a weapon. In both cases, “violence” has been done to someone else’s property by physically molesting it. Fraud is implicit theft, because fraud entails the physical appropriation of someone else’s property under false pretenses, i.e., in exchange for something that is never delivered. In both cases, someone’s property is taken from him without his consent.

Where there’s a will there’s a way, and thus we see that it is quite easy to define the Spencerian formula clearly enough so that laissez faire and only laissez faire follows from it. The important point to remember is never to use such vague expressions as “injury,” “harm,” or “control,” but specific terms, such as “physical interference” or “threats of physical violence.”

• 32Oliver, Critique of Socioeconomic Goals, pp. 1–12.

After disposing to his own satisfaction of the basic natural-rights postulates, Oliver goes on to attack a specific class of these rights: freedom of contract.33 Oliver delineates three possible freedom-of-contract clauses: (1) “A man has a right to freedom of contract”; (2) “A man has a right to freedom of contract unless the terms of the contract harm someone”; and (3) “A man has a right to freedom of contract unless the terms of the contract infringe upon someone’s rights.” The second clause can be disposed of immediately; once again, the vague notion of “harm” can provide an excuse for unlimited State intervention, as Oliver quickly notes. No libertarian would adopt such a phrasing. The first formulation is, of course, the most uncompromising and leaves no room whatever for State intervention. Here Oliver again scoffs and says that “very few persons would push the freedom-of-contract doctrine so far.” Perhaps, but since when is truth established by majority vote? In fact, the third clause, with its Spencerian proviso, is again unnecessary. Suppose, for example, that A and B freely contract to shoot C. The third version may say that this is an illegal contract. But, actually, it should not be! For the contract itself does not and cannot violate C’s rights. It is only a possible subsequent action against C that will violate his rights. But, in that case, it is that action which must be declared illegal and punished, not the preceding contract. The first clause, which provides for absolute freedom of contract, is the clearest and evidently the preferable formulation.34

Oliver sees the principle of freedom of contract, because of the necessity that there be mutual agreement between two people, open to even stronger objection than the basic natural-rights postulate. For how, asks Oliver, can we distinguish between a free and voluntary contract, on the one hand, and “fraud” and “coercion”—which void contracts—on the other?

First, how can fraud be clearly defined? Oliver’s critique here is in two parts:

(1) He says that “common law holds that certain types of omissions as well as certain types of false statements and misleading sections void contracts. Where is this rule of omission to stop?” Oliver sees, quite correctly, that if no omission at all were allowed, the degree of statism would be enormous. Yet this problem is solved very simply: change the common law so as to eliminate all rules of omission whatever! It is curious that Oliver is so reluctant even to consider changes in ancient legal customs where these changes seem called for by principle, or to realize that libertarians would advocate such changes. Since libertarians advocate sweeping changes elsewhere in the political structure, there is no reason why they should balk at changing a few clauses of the common law.

(2) He states that even rules against false statements seem statist to some people and could be pushed beyond their present limits, and he cites SEC regulations as an example. Yet the whole problem is that a libertarian system could countenance no administrative boards or regulations whatever. No advance regulations could be handed down. On the purely free market, anyone damaged by false statements would take his opponent to court and win redress there. But any false statements, any fraud, would then be punished by the court severely, in the same manner as theft.

Secondly, Oliver wants to know how “coercion” can be defined. Here, the reader is referred to the section on “Other Forms of Coercion” above. Oliver is confused in contradictorily jumbling the definitions of coercion as physical violence and as refusal to exchange. As we have seen, coercion can rationally be defined only as one or the other; not as both, for then the definition is self-contradictory. Further, he confuses physical interpersonal violence with the scarcity imposed by the facts of nature—lumping them both together as “coercion.” He concludes in the hopelessly muddled assertion that the freedom-of-contract theory assumes a meaningless “equality of coercion” among contracting parties. In fact, libertarians assert that there is no coercion at all in the free market. The equality-of-coercion absurdity permits Oliver to state that true freedom of contract at least requires State-enforced “pure competition.”

The freedom-of-contract argument, therefore, implies laissez faire and is also strictly derivable from the postulate of freedom. Contrary to Oliver, no other ethical postulates are necessary to imply laissez faire from this argument. The coercion problem is completely solved when “violence” is substituted for the rather misleading term “coercion.” Then, any contract is free and therefore valid when there has been an absence of violence or threat of violence by either party. Oliver makes a few other attacks on “legal liberty”; e.g., he raises the old slogan that “legal liberty does not correspond to ‘actual’ liberty (or effective opportunity)”—once again falling into the age-old confusion of freedom with power or abundance. In one of his most provocative statements, he asserts that “all men could enjoy complete legal liberty only under a system of anarchy” (p. 21). It is rare for someone to identify a system under law as being “anarchy.” If this be anarchism, then many libertarians will embrace the term!

• 33Oliver, Critique of Socioeconomic Goals, pp. 12–19.
• 34In objection to this clause, Oliver states that “Anglo-American law traditionally has voided certain types of contract because of the belief that they are against the public interest.” Ibid., p. 13. It is precisely for this reason that libertarians suggest changing traditional Anglo-American law to conform to their precepts. Furthermore, “public interest” is a meaningless term (an example of the fallacy of conceptual realism) and is therefore discarded by libertarians.

On the free market every man obtains money income insofar as he can sell his goods or services for money. Everyone’s income will vary in accordance with freely chosen market valuations of his productivity in fulfilling consumer desires. In his comprehensive attack on laissez faire, Professor Oliver, in addition to criticizing the doctrines of natural liberty and freedom of contract, also condemns this principle, or what he calls the “earned-income doctrine.”35

Oliver contends that since workers must use capital and land, the right to property cannot rest on what human labor creates. But both capital goods and land are ultimately reducible to labor (and time): capital goods were all built by the original factors, land and labor; and land had to be found by human labor and brought into production by labor. Therefore, not only current labor, but also “stored-up” labor (or rather, stored-up labor-and-time), earn money in current production, and so there is as much reason why the owners of these resources should obtain money now as there is that current laborers earn money now. The right of past labor to earn is established by the right of bequest, which stems immediately from the right of property. The right of inheritance rests not so much on the right of later generations to receive as on the right of earlier generations to bestow.

With these general considerations in mind, we may turn to some of Oliver’s detailed criticisms. First, he states the basic “earned-income” principle incorrectly, and this is a standing source of confusion. He phrases it thus: “A man acquires a right to income which he himself creates.” Incorrect. He acquires the right, not to “income,” but to the property that he himself creates. The importance of this distinction will become clear presently. A man has the right to his own product, to the product of his energy, which immediately becomes his property. He derives his money income by exchanging this property, this product of his or his ancestors’ energy, for money. His goods or services are freely exchanged on the market for money. His income is therefore completely determined by the monetary valuation that the market places on his goods or services.

Much of Oliver’s subsequent criticism stems from ignoring the fact that all complementary resources are founded on the labor of individuals. He also decries the idea that “if a man makes something, it is his” as “very simple.” Simple it may be, but that should not be a pejorative term in science. On the contrary, the principle of Occam’s Razor tells us that the simpler a truth is, the better. The criterion of a statement, therefore, is its truth, and simplicity is, ceteris paribus, a virtue. The point is that when a man makes something, it belongs either to him or to someone else. To whom, then, shall it belong: to the producer, or to someone who has stolen it from the producer? Perhaps this is a simple choice, but a necessary one nevertheless.

Yet how can we tell when a person has “made” something or not? Oliver worries considerably about this question and criticizes the marginal productivity theory at length. Aside from the fallacies of his objections, the marginal productivity theory is not at all necessary (although it is helpful) to this ethical discussion. For the criterion to be used in determining who has made the product on the market and who should therefore earn the money, is really very simple. The criterion is: Who owns the product? A spends his labor energy working in a factory; this contribution of labor energy to further production is bought and paid for by factory owner, B. A owns labor energy, which is hired by B. In this case, the product made by A is his energy, and its use is paid for, or hired, by B. B hires various factors to work on his capital, and the capital is finally transformed into another product and sold to C. The product belongs to B, and B exchanges it for money. The money that B obtains, over and above the amount that he had to pay for other factors of production, represents B’s contribution to the product. The amount that his capital received goes to B, its owner, etc.

Oliver also believes it a criticism when he states that men do not really “make goods” but add value to them by applying labor. But no one denies this. Man does not create matter, just as he does not create land. Rather, he takes this natural matter and transforms it in a series of processes to arrive at more useful goods. He hopes to add value by transforming matter. To say this is to strengthen rather than weaken the earnings theory, since it should be clear that how much value is added in producing goods for exchange can be determined only by the purchases of customers, ultimately the consumers. Oliver betrays his confusion by asserting that the earning theory assumes that “the values which we receive in exchange are equal in worth to those which we create in the production process.” Certainly not! There are no actual values created in the production process; these “values” take on meaning only from the values we receive in exchange. We cannot “compare received and created values” because created property becomes valuable only to the extent that it is purchased in exchange. Here we see some of the fruits of Oliver’s fundamental confusion between “creating income” and “creating a product.” People do not create income; they create a product, which they hope can be exchanged for income by being useful to consumers.

Oliver compounds his confusion by next taking up the laissez-faire theorem that everyone has the right to his own value scale and to act on that value scale. Instead of stating this principle in these terms, Oliver introduces confusion by calling it “placing values on an equal footing” for each man. Consequently, he can then criticize this approach by asking how people’s values can have an “equal footing” when one person’s purchasing power is more than another’s, etc. The reader will have no difficulty in seeing the confusion here between equality of liberty and equality of abundance.

Another of Oliver’s critical objections to the earned-income theory is that it assumes that “all values are gained through purchase and sale, that all goods are those of the market place.” This is nonsense, and no responsible economist ever assumed it. In fact, no one denies that there are nonmarketable, nonexchangeable goods (such as friendship, love, and religion) and that many men value these goods very highly. They must constantly choose how to allocate their resources between exchangeable and nonexchangeable goods. This causes not the slightest difficulty for the free market or for the “earned-income” doctrine. In fact, a man earns money in exchange for his exchangeable goods. What could be more reasonable? A man acquires his income by selling exchangeable goods at market; so naturally the money he acquires will be determined by the buyers’ evaluations of these goods. How, indeed, can he ever acquire exchangeable goods in return for his pursuit (or offer?) of nonexchangeables? And why should he? Why and how will others be forced to pay money for nothing in return? And how will the government determine who has produced what nonexchangeable goods and what the reward or penalty shall be? When Oliver states that market earnings are unsatisfactory because they do not cover nonmarket production as well, he fails to indicate why nonmarketable goods should enter the picture at all. Why should not marketable goods pay for marketable goods? Oliver’s statement that “nonmarket receipts” are hardly distributed so as to “solve the nonmarket part of the problem” makes little sense. What in the world are “nonmarket receipts”? And if they are not inner satisfaction from inner pursuits by the individual, what in the world are they? If Oliver suggests taking money from A to pay B, then he is suggesting the seizure of a marketable good, and the receipts are then quite marketable. But if he is not suggesting this, then his remarks are quite irrelevant, and he can say nothing against the earned-income principle.

Also, it should not be overlooked that all those on the market who wish to reward nonmarketable contributions with money are free to do so. In fact, in the free society such rewards will be effected to the maximum degree freely desired in it.

We have seen that the marginal productivity theory is not necessary to an ethical solution. A man’s property is his product, and this will be sold at its estimated worth to consumers on the market. The market solves the problem of estimating worth, and better than any coercive agency or economist could. If Oliver disagrees with market verdicts on the marginal value productivity of any factor, he is hereby invited to become an entrepreneur and to earn the profits that come from exposing such maladjustments. Oliver’s problems are pseudo-problems. Thus, he asks, “When White’s cotton is exchanged for Brown’s wheat, what is the ethically correct ratio of exchange?” Simple, answers the free-market doctrine: Whatever the two freely decide. “When Jones and Smith together produce a good, what part of that good is attributable to Jones’ actions and what part to Smith’s?” The answer: Whatever they have mutually contracted.

Oliver gives several fallacious reasons for rejecting the marginal productivity theory. One is that income imputation does not imply income creation, because a laborer’s marginal product can be altered merely by a change in the quantity or quality of a complementary factor, or by a variation in the number of competing laborers. Once again, Oliver’s confusion stems from talking about “income creation” instead of “product creation.” The laborer creates his labor service. This is his property, his to sell at whatever market he wishes, or not to sell if he so desires. The appraised worth of this service depends on his marginal value product, which, of course, depends partly on competition and the number or quality of complementary factors. This, in fact, does not confound, but rather is an integral part of, marginal productivity theory. If the supply of co-operating capital increases, a laborer’s energy service becomes scarcer in relation to the complementary factors (land, capital), and his marginal value product and income increase. Similarly, if there are more competing laborers, there may be a tendency for a laborer’s DMVP to decline, although it may increase because of the wider extent of the market. It is beside the point to say that all this is “not fair” because his service output remains the same. The point is that to the consumers his worth in production varies in accordance with these other factors, and he is paid accordingly.

Oliver also employs the popular but completely fallacious doctrine that any ethical sense to the marginal productivity theory must rely on the existence of “pure competition.” But why should the “marginal value product” of a freely competitive economy be any less ethical than the “value of the marginal product” of the Never-Never Land of pure competition? Oliver adopts Joan Robinson’s doctrine that entrepreneurs “exploit” the factors and reap a special exploitation gain. But on the contrary, as Professor Chamberlin has conceded, no one reaps any “exploitation” in the world of free competition.36

Oliver makes several other interesting criticisms:

(1) He maintains that marginal productivity cannot apply within corporations because no market for a firm’s capital exists after the initial establishment of the company. Hence, the directors can rule the stockholders. In rebuttal, we may ask how the directors can remain directors without representing the wishes of the majority of stockholders. The capital market is continuing because capital values are constantly shifting on the stock market. A sharp decline in stock values means grave losses for the owners of the company. Furthermore, it means that there will be no further capital expansion in that firm and that its capital may not even be maintained intact.

(2) He maintains that the marginal productivity theory cannot account for the “lumpy,” “fixed” contribution to all incomes of the services supplied by the State. In the first place, marginal productivity theory does not at all, in its proper form, assume (as Oliver believes) that factors are infinitely divisible. Any “lumps” can be taken care of. The problem of the State, therefore, has really nothing to do with lumpy factors. Indeed, all factors are more or less “lumpy.” Furthermore, Oliver concedes that the services of the State are divisible. In one of his rare flashes of insight, Oliver admits that there can be (and are!) “varying degrees of police, military, and monetary (e.g., mint) services.” But if that is the case, how do State services differ from any other?

The difference is indeed great, but it stems from a fact we have reiterated many times: that the State is a compulsory monopoly in which payment is separated from receipt of service. As long as this condition exists, there can indeed be no market “measure” of its marginal productivity. But how can this be an argument against the free market? Indeed, it is precisely the free market that would correct this condition. Oliver’s criticism here is not of the free market, but of the statist sphere of a mixed statist-market economy.

Oliver’s attribution of income creation to “organized society” is very vague. If by this he means “society,” he is using a meaningless phrase. It is precisely the process of the market by which the array of free individuals (constituting “society”) portions out income in accordance with productivity. It is double- counting to postulate a real entity “society” outside the array of individuals, and possessing or not possessing “its” own deserved share. If by “organized society” he means the State, then the State’s “contributions” were compulsory and hence hardly “deserved” any pay. Furthermore, since, as we have shown, total taxation is far greater than any alleged productive contribution of the State, the rulers owe the rest of society money rather than vice versa.

(3) Oliver makes the curious assertion (also made repeatedly by Frank Knight) that a man does not really deserve ethically to reap the earnings from his own unique ability. I must confess that I cannot make any sense of this position. What is more inherent in an individual, more uniquely his own, than his inherited ability? If he is not to reap the reward from this, conjoined with his own willed effort, what should he reap a reward from? And why, then, should someone else reap a reward from his unique ability? Why, in short, should the able be consistently penalized, and the unable consistently subsidized? Oliver’s attribution of such ability to some mystical “First Cause” will make sense only when someone is able to find the “first cause” and pay it its deserved share. Until then, any attempt to “redistribute” income from A to B would have to imply that B is the first cause.

(4) Oliver confuses private, voluntary charity and grants-in-aid with compulsory “charity” or grants. Thus, he misdefines the earned-income, free-market doctrine as saying that “a person should support himself and his legitimate dependents, without asking for special favors or calling upon outside parties for aid.” While many individualists would accept this formulation, the true free-market doctrine is that no person may coerce others into giving him aid. It makes all the difference in the world whether the aid is given voluntarily or is stolen by force.

As a corollary, Oliver confuses the meaning of “power” and asserts that employers have power over employees and therefore should be responsible for the latter’s welfare. Oliver is quite right when he says that the slave-master was responsible for his slave’s subsistence, but he doesn’t seem to realize that only the reestablishment of slavery would fit his program for labor relations.

To say that the feeble-minded or orphans are “wards,” as Oliver does, leads to his confusion between “wards of society” and “wards of the State.” The two are completely different, because the two institutions are not the same. The concept of “ward of society” reflects the libertarian principle that private individuals and voluntary groups may offer to care for those who desire such care. “Wards of the State,” on the contrary, are those (a) to whose care everyone is compelled by violence to contribute, and (b) who are subject to State dictation whether they like it or not.

Oliver’s conclusion that “Every normal adult should have a fair chance to support himself, and, in the absence of this opportunity, he should be supported by the State” is a melange of logical fallacies. What is a “fair chance,” and how can it be defined? Further, in contrast to Spencer’s Law of Equal Freedom (or to our suggested Law of Total Freedom), “every” cannot here be fulfilled, since there is no such real entity as the “State.” Anyone supported by the “State” must, ipso facto, be supported by someone else in the society. Therefore, not everyone can be supported—especially, of course, if we define “fair chance” as the absence of interference or coercive penalizing of a person’s ability.

(5) Oliver realizes that some earned-income theorists combine their doctrines with a “finders, keepers” theory. But he can find no underlying principle here and calls it merely an accepted rule of the business game. Yet “finders, keepers” is not only based on principle; it is just as much a corollary of the underlying postulates of a regime of liberty as is the earned-income theory. For an unowned resource should, according to basic property rights doctrine, become owned by whoever, through his efforts, brings this resource into productive use. This is the “finders, keepers” or “first-user, first-owner” principle. It is the only theory consistent with the abolition of theft (including government ownership), so that every useful resource is always owned by some nonthief.37

• 35Oliver, Critique of Socioeconomic Goals, pp. 26–57.
• 36Edward H. Chamberlin, The Theory of Monopolistic Competition, 7th ed. (Cambridge: Harvard University Press, 1956), pp. 182 ff. “Pure” competition is an unrealistic—and undesirable—model admired by many economists, in which all firms are so tiny that no one has any impact on its market. See, Man, Economy, and State, chapter 10.
• 37Oliver often cites in his support the essay of Frank H. Knight, “Freedom as Fact and Criterion” in Freedom and Reform (New York: Harper & Bros., 1947), pp. 2–3. There is no need to elaborate further on Knight’s essay, except to note his attack on Spencer for adopting both “psychological hedonism” and “ethical hedonism.” Without analyzing Spencer in detail, we can, by a proper interpretation, make very good sense of combining both positions. First, it is necessary to change “hedonism”—the pursuit of “pleasure”—to eudaemonism—the pursuit of happiness. Second, “psychological eudaemonism,” the view that “every individual universally and necessarily seeks his own maximum happiness,” follows from the praxeological axiom of human action. From the fact of purpose, this truth follows, but only when “happiness” is interpreted in a formal, categorial, and ex ante sense, i.e., “happiness” here means whatever the individual chooses to rank highest on his value scale. Ethical eudaemonism—that an individual should seek his maximum happiness—can also be held by the same theorist, when happiness is here interpreted in a substantive and ex post sense, i.e., that each individual should pursue that course which will, as a consequence, make him happier. To illustrate, a man may be an alcoholic. The eudaemonist may make these two pronouncements: (1) A is pursuing that course which he most prefers (“psychological eudaemonism”); and (2) A is injuring his happiness, this judgment being based on “happiness rules” derived from the study of the nature of man, and therefore should reduce his alcohol intake to the point that his happiness is no longer impaired (“ethical eudaemonism”). The two are perfectly compatible positions.