A libertarian argument

Assume that we can agree on a reasonably clear and morally compelling definition of property right, one with sufficient breadth to cover the primary ways in which persons need to have disposal over things.

Assume, for example, that we can find a way to define all property as unambiguously the property of particular individuals:² All things are owned by particular persons; no social or communal property exists other than the joint or shared property created by voluntary decisions of otherwise inde­pendent persons.³ In the words of Robert Nozick: “Things come into the world already attached to people having entitlements over them” (1974:160). Assume, further, that any subsequent change of ownership results from voluntary agreement between the original owners. Assume finally that prop­erty right bestows widespread power of disposal over things (limited only by respect for rights of others). Then, it follows that the problems of the own­ership and use of wealth are resolved by individuals (concerned, for example, with their self-interest).

Nozick divides this idea into two parts: justice in acquisition and justice in transfer (1974:151). Justice in transfer means acquisition from a previous owner by voluntary agreement (gift or exchange). Justice in (original) ac­quisition refers either to an original appropriation that does not impair the situation of others or to production:

A process normally giving rise to a permanent bequeathed property right in a pre­viously unowned thing will not do so if the position of others no longer at liberty to use the thing is thereby worsened, (p. 178)

And:

Whoever makes something, having bought or contracted for all other held resources used in the process (transferring some of his holdings for these competing factors), is entitled to it. (p. 160)

This view provides one of the strongest arguments for a state that restricts itself to the defense of property (and by extension defense of the nation) and to the administration of justice (as defined on the basis of individual rights). The presence or absence of laws of political economy makes no difference to the state. Markets will likely play the primary role in facilitating the production and circulation of wealth. But the ability of markets to secure efficient allocation and full utilization of capital (and labor) does not concern the state.

This may not be easily done (see Ackerman, 1977:27).

This evades some important issues concerning the natural environment (see Mack, 1983 and references therein).

The state does not concern itself with securing the “proper” functioning of markets for the following reason. It can do so only by violating property rights and bringing about a redistribution of property by illegitimate means. First, the state makes a judgment that the private decisions of individuals concerning disposal of their property must be corrected because they lead to a lower overall level of well-being. In order to correct these decisions the state takes on the responsibility of redetermining the use of existing property through taxation and spending, for example.

Adam Smith argues against any extensive state involvement in economic affairs on the grounds that the state can only bring about an outcome less desirable than that resulting from unregulated self-seeking. Smith’s argument can be evaluated by judging the logic of his assumptions (for example, full utilization of capital) and his deductions (for example, that private entrepre­neurs direct capital into the most profitable and the most desirable lines of industry). The libertarian argument depends on no such reasoning about economic relations. Economic outcomes brought about by the state are by definition less desirable.

While the state has no purpose with regard to economic regulation, this does not make it inactive. On the contrary, a libertarian state may be very active in ways that affect our economic lives profoundly. The state’s concern with the security of the property system requires it to assure that property is, in fact, in the hands of those who have acquired it by legitimate means. Otherwise, the state must rectify past and current violations of property right (Nozick, 1974:152). The principle of rectification allows for a kind of redis­tribution of property. Such a redistribution is not, however, in accordance with any principles of just distribution other than those outlined above. Thus, the state in rectifying past abuse of rights does not impose a political judgment concerning the distribution and use of wealth. The state seeks to achieve an outcome defined for it by the principle of private property. Nozick criticizes arguments in favor of redistribution aimed at achieving justice defined in any way other than repeated application of the principles of justice in acquisition, justice in transfer, and the rectification of past injustice.

What should we make of this method for resolving the problems of political economy? For one thing, we might organize our society along libertarian lines and it might not “work.” That is to say, however just in principle the institutional arrangements, those living within such institutions may find them less than satisfactory.

A just society must generate its own support. This means that it must be arranged so as to bring about in its members the corresponding sense of justice, an effective desire to act in accordance with its rules for reasons of justice. Thus the requirement of stability and the criterion of discouraging desires that conflict with the principles of justice put further constraints on institutions. They must be not only just but framed so as to encourage the virtue of justice in those who take part in them. (1971:261)

Clearly, if we believe in the intrinsic justness of a libertarian order such as outlined here, we ought to be able to communicate our conviction to others and thus help them to embrace the principles of justice centered on rights. But more is at stake than this. We must also establish the viability of a society so ordered, its capacity to maintain the virtue of its principles in the eyes of its citizens.

This might be a problem if, for example, a society ordered along libertarian lines led to so many and frequent violations of the demands of economic interdependence (as captured in the classical notion of a social division of labor) that justice could survive only where such interdependence is minimal. The less our dependence on the market for our basic needs, the less does a failure of the market undermine our commitment to it. The prospect of market failure may force us to choose between a just society and a society of significant economic interdependence. Whether we must make such a choice depends in part on the validity of the claims for the self-regulating market made especially by the classical economists (and, as we have seen, criticized by Marx and Keynes among others).

Mutual dependence poses serious problems for the libertarian argument. The idea of property right implies a limitation in the like rights of others.

If what we do does not infringe on others except when they choose to allow it to, the scope for applying libertarian reasoning can be broad enough to make it relevant in thinking about the appropriate relation of state to econ­omy. Otherwise, the presence of involuntary interdependence undermines the relevance of the libertarian approach. This tells us something important about the libertarian vision of the world. At a fundamental level, that vision incorporates a way of thinking about the separateness of and connection between persons. The libertarian understands the separateness of persons to mean a capacity to sustain and be themselves without the larger context provided by social institutions and the system of persons. Nothing about being a person necessarily or immediately entails any connections with others. This, then, means that the impinging of the actions and projects of one person on another is not implied in being a person. Put another way, no special effort, interconnection, or institutional context is demanded of us if we are to be and act as persons.

We can make the same point with reference to the notions of personhood and integrity introduced at the beginning of the chapter. For the libertarian, integrity is not socially determined and socially sustained.

This makes persons separate in a very strong sense. It defines autonomy in a way that links it to the absence of interdependence. Given this sense of the separateness of persons, we do not need others in the strong sense of the term, nor do our lives inherently involve or impinge on others.

If this is in fact the state of affairs, then we should find externalities the exception rather than the rule. Further, it should be possible to escape from whatever external effects we experience. If someone’s use of cigarettes or automobiles pollutes our air, we can remove ourselves from the kind of proximity to such persons that affects us in this way. Escape (exit) is not possible when our survival depends on others or when participation in a system of interdependence is necessary for us to be fully human. When escape is not possible, the libertarian vision is a poor guide for thinking about the relation of state to economy.

A libertarian might choose to give up mutual dependence rather than freedom. In so doing, the libertarian (naturally enough) places the integrity of the individual (which he equates with individual rights) above that of the society of individuals. The latter exists only to protect and advance the former. The former exists on its own, but in a vulnerable state.

The difficulty that we sometimes have with libertarianism is that it seems to demand that we give up much that we hold valuable and depend on: our sense of being in society and of the obligations that our dependence on society creates. What we get in return is independence and a kind of liberty that, however appealing in certain respects, seems lacking in richness of content and perhaps more than a little asocial.^[28] While the libertarian does not directly demand such a sacrifice in exchange for liberty, he does insist that we re­constitute our social dependence as the result of arrangements entered into voluntarily. A well-ordered or just society is one organized in this way. It is as rich or empty as we individually or jointly choose to make it.

If we wish to deploy the notion of justice in support of arguments that allow a greater role for interdependence, we must think about the constitution of social institutions in a way distinct from that favored by libertarians. How can we conceive a just society that both respects the inviolability of the person and assures that the needs of persons arising within society will be met? The contractarian theory outlined in the following section takes us a step in this direction.