The states under which we live in the West are not nasty on the model of George Orwell’s 1984, but nice like in George Lucas’s THX 1138. In Lucas’s early and extraordinary science-fiction movie, Big Brother speaks softly to his wards: “Blessings of the state, blessings of the masses. . . . Work hard, increase production, prevent accidents, and be happy.” Had the script been written today instead of 30 years ago, the voice might have added: “Don’t smoke, bring your guns to the police, and say nice things about people.”
Our Nice State is characterized by a deep concern for people’s welfare and a network of a priori controls meant to maximize welfare and to minimize the occurrence of violence and punishment. How did the state come to be nice? Answering this question provides one of the main keys to the world in which we live. But to answer the question, we have first to review some economic analysis of the state.
States of the State
The most basic state is the Protective State, which produces peace through public protection. Like everything that the state produces, protection uses two inputs: punishments or threats thereof, and a priori (administrative) controls. An extreme example of a priori control would see the state confining every individual to a locked room from the cradle to the grave. At the other extreme, the state would exert no a priori control but punish every breach of peace by years, perhaps decades, of excruciating torture. In both cases, total or (in the second case, perhaps) near total peace will be achieved. In realistic settings, there are substitution possibilities between a priori controls and dissuasive punishments, and the state will use a combination of both. Dissuasive punishments being less expensive than a priori controls, they will constitute the main input for the Protective State.
Input intensity starts changing with the Redistributive State. The more redistribution the state does, the more individuals will try to increase their shares. Redistribution requires more a priori controls, if only because recipients of state goodies must fill in forms, and the state must make sure that its subsidies are used according to the rules. The more redistribution, the higher the taxes. The higher the taxes, the larger must be the tax base, hence wide-based taxes like income taxes. These taxes require, and facilitate, a priori controls and state surveillance in order to prevent tax evasion. The Redistributive State naturally becomes a Tax Leviathan.
There are two main reasons why the state starts redistributing to the people money taken from them. First, competition among would-be rulers leads them to bid up redistributive spoils for their supporters. Second, when the people realize that the rulers take too large cuts, resistance appears, eventually leading to democratic revolutions, limiting what the political and bureaucratic classes can keep.
One perverse consequence of democracy is that the population will become more trustful of the rulers. After all, “we” are the state. Individuals will willingly provide more information, and grant surveillance capacities, to the state. The bureaucrat is my “civil servant.” I am filling out forms for myself. Our customs cop is searching our collective luggage.
In economic terms, a priori controls and surveillance become less costly because the cost of information goes down. In fact, individuals often provide it for free in the process of requesting favors. They exert “self-surveillance” to quote a term coined by French socialist Jacques Attali. (Unfortunately, Attali had the whole story wrong: he believed that pocket calculators were the precursors of capitalist self-surveillance. He later became president of the European Central Bank, and was eventually kicked out for sumptuary expenses.) If administrative controls cost less to the state, they will be used more.
These same factors (demand and competition in the political market, democracy, and the lower cost of information and surveillance) explain why the Redistributive State naturally metamorphoses into the Social State. In the 19th century, explains James Scott, a new conception of the role of the state appeared, “[t]he idea that one of the central purposes of the state was the improvement of all the members of society their health, skills, and education, longevity, productivity, morals, and family life.”  In the 20th century, the theory of Welfare Economics was built to explain how the state could maximize social welfare. This new mission obviously requires more a priori controls and state surveillance. Responsibility for the welfare of individuals requires knowing their personal circumstances and controlling their actions for their own good. In the process, more information is produced which, in turn, makes control less costly.
Under the Social State, criminal dissuasion is still required if only to prevent individuals to escape controls but actual punishments will be less frequent. For example, fewer tax evaders will be condemned, simply because reporting requirements and administrative make the “crime” more difficult to commit. The Social State is faint-hearted anyway, it does not like to punish, it prefers to prevent, and to cure when prevention has not worked. The Sanitary State, THX 1138-style, is the ultimate stage of the Social State.
The Sanitary State cares for the total health and welfare of its citizens. The paradigm is illustrated by the World Health Organization’s objective of “the highest possible level of health,” where health is defined as “a state of complete physical, mental and social well-being.”  Alexis de Tocqueville’s brilliant premonition of 150 years ago is very actual: “Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications, and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent, if, like that authority, its object was to prepare men for manhood; but it seeks on the contrary to keep them in perpetual childhood For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness: it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry what remains, but to spare them all the care of thinking and all the trouble of living?” 
Happiness with a Praetorian Guard
Another type of reason concurs to the emergence of the Sanitary State. Democracy prevents the rulers from redistributing to themselves a large portion of the state’s revenues. George Bush, Tony Blair, or Jean Chétien put in their pockets (or, should we say, in their pick-pockets’ pockets) a much, much lower share of taxes than Louis XIV or Mobutu. As we went from more or less autocratic regimes to more or less democratic ones, the revenues of the state did not diminished; in fact, they increased in both absolute and (often) relative terms. What do you do if you are a state official sitting on a mountain of money that you can’t put in your own pockets? You become a philanthropist, for the same reasons that men with private wealth become philanthropists: to do good, or to feel good when you look into the mirror or confident when you arrive at Saint Peter’s gate. You spend the money for the good of your people. “My people!”
In fact, the state ruler becomes philanthropic with a vengeance, for he has not only money, but also a praetorian guard to force people to be happy (to paraphrase Jean-Jacques Rousseau).
The goals of the Sanitary State require the abandonment of the traditional rule of law, based on punishment after the fact, and its replacement by wide-ranging, benevolent, a priori controls. The Sanitary State is the ultimate Nice State, which controls individuals for their own good. The Nice State hates open violence, resorts to it only in last resort, and tries to make individuals as peaceful and quiet as possible. The Nice State is quiet tyranny, soft fascism, oppression with a smile.
We have an interesting paradox here. On the one hand, a strand of economic theory claims that nasty, selfish people governing the state are led, as by an invisible hand, to act in the interest of their subjects, if only by providing them with protection. On the other hand, philanthropists manning the State are led, by a similar indivisible hand, i.e., by their own interests, to turn it into an instrument of control and sanitary oppression. Nasty men run a useful state; nice people change it into a nasty monster.
“What has always made the state a hell on earth,” wrote German poet Friedrich Hoëlderlin, “has been precisely that man has tried to make it his heaven.” A good antidote is offered by Patrick Henry’s famous 1775 speech: “Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!”  All school children should learn this by heart. We must reclaim the right to wrath. Otherwise, all heaven will soon be breaking loose.
 Jacques Attali, La nouvelle économie française (Paris: Flammarion, 1978).
 James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (Yale University Press, 1998), p. 91.
 See my “WHO’s Whiteshirts,” Laissez-Faire City Times, June 4, 2001, at http://www.zolatimes.com/V5.23/who_whiteshirts.html.
 Alexis de Tocqueville, Democracy in America, Vol. II (1840), Part IV, Chap. 6, available at http://digital.library.upenn.edu/webbin/gutbook/lookup?num=816.
 See my “Democracy Revisited,” Laissez-Faire City Times, June 25, 2001, at http://www.zolatimes.com/V5.26/democracy_revisited.html.
 Available at http://libertyonline.hypermall.com/henry-liberty.html.