We spend more on Health care because we rely on a Free Market System, rather than a centralized single payer system. Switzerland is right behind us in expenses because they also use Private Insurers.
Free Market systems cannot keep prices down when there is no elasticity in the demand for a product. If you raise the price of beef enough, people will switch to pork or chicken. But no sane person will do the Jack Benny trick of considering the options when the question is "Your money or your life?". Although people will economize somewhat on some healthcare decisions ( often resulting in expensive emergency room visits) there is no elasticity in the demand for health itself. Consequently, when the market decides the price, it goes up indefinitely. A single payer system is the only way of reversing this trend.
One Poster on a NYtimes comment page claimed that she had solved the health insurance problem by simply paying for a few checkups, and not getting health insurance at all. I replied to her thusly:
"Someday you will probably have a huge major medical expense, which will completely bankrupt you, and still leave thousands of dollars in extra debt that the rest of us will have to pay. You might escape being a free rider if you are "lucky" enough to die young from a quick violent death. But most people who follow your strategy will end up in the emergency room and stick the rest of us with the tab. Your strategy works for you only because you are free riding on those of us who have health insurance. It would not work if everybody else did it."
Tuesday, November 1, 2011
Sunday, October 30, 2011
A response to Obama's plan to refinance College loans (NYtimes comment)
Most of the people who are complaining about having their taxes pay for student loans went to school when college cost literally a tenth of what it cost now. That was because taxes once paid 80% of the expenses for state colleges, and now they pay only 20%. This also provided the competition that kept private schools affordable. You complainers are the real freeloaders, living off the Republican tax cuts, so that you didn't have to pay the kind of taxes the previous generation paid to make your education affordable. It's about time you coughed up your fair share to pay for the education of the next generation. This plan isn't the best way to deal the problem. What should be done is to restore the old state subsidies, so that the banks don't get a cut in the middle. But it's probably the only viable alternative at this stage in the game.
Those who claim that education loans can be paid off in a few years are being misleadingly vague. A Bachelors degree at the lowest cost institutions can be paid off in a few years. But any graduate degree requires a life time of payments, especially if the person with the degree is a teaching adjunct at a University. Renegotiating those loans would be a powerful economic stimulus that takes money out of the banks and puts it into the hands of people who will spend it, creating a powerful "trickle-up" effect to restore demand for goods.
Most importantly, It's absurd to think of refinancing loans as some unprecedented government intervention into the capitalist process. Practically everyone I know has refinanced their home loan, usually in response to a dropping of interest rates. It's also extremely common for people to renegotiate loans simply because the interest rates make it impossible for the borrower to avoid bankruptcy. The threat of bankruptcy has been eliminated by law for college loans. Obama's program simply partially restores some aspects of the renegotiating power for borrowers that exist in every other loan in this society.
Those who claim that education loans can be paid off in a few years are being misleadingly vague. A Bachelors degree at the lowest cost institutions can be paid off in a few years. But any graduate degree requires a life time of payments, especially if the person with the degree is a teaching adjunct at a University. Renegotiating those loans would be a powerful economic stimulus that takes money out of the banks and puts it into the hands of people who will spend it, creating a powerful "trickle-up" effect to restore demand for goods.
Most importantly, It's absurd to think of refinancing loans as some unprecedented government intervention into the capitalist process. Practically everyone I know has refinanced their home loan, usually in response to a dropping of interest rates. It's also extremely common for people to renegotiate loans simply because the interest rates make it impossible for the borrower to avoid bankruptcy. The threat of bankruptcy has been eliminated by law for college loans. Obama's program simply partially restores some aspects of the renegotiating power for borrowers that exist in every other loan in this society.
Saturday, October 22, 2011
Stakeholding and Safety Nets
Abstract: Nozick’s version of libertarianism is incoherent, even if one accepts the doubtful assumption that all ethical issues can be reduced to property rights. Nozickian libertarianism requires 1) Unconditional property rights, established by 2) a lineage of just transfers traceable to 3) a just original acquisition. The purpose of this paper is to discredit all three of those criteria for determining property rights. No government, not even a night watchman libertarian state, can function if it makes property rights unconditional. No one in the real world can justify their property rights by citing a lineage of just acquisitions. Finally, the concept of a unilaterally declared original acquisition, which supposedly supplies the foundation for all other property rights, is incoherent and unjust. A more moderate form of libertarianism would require institutions that strive to create approximate equality of opportunity. Those who took advantage of those opportunities would have a right to keep most of the wealth they created, and an obligation to create similar opportunities for others.
This paper defends the position that government ought to be actively involved in both what Ackerman and Alstott (hereinafter A&A) call stakeholding ( Wright 2006 pp. 43-61 ) and the creation of what Ronald Reagan called “the safety net”. “Stakeholding” I define as government programs which are designed to create opportunities for citizens to create their own wealth. “ Safety net” I define as any government programs designed to protect people from the worst consequences of bad luck.
Stakeholding recognizes that the free market does not always accurately reward productivity. Even if it did, using productivity and voluntary exchange as the only legitimator of wealth possession is justified only if everyone is given a fair opportunity to be equally productive. An unregulated free market is accurately described this way by A&A.
Born to poor parents? “Too bad”, says the libertarian. “Do the best you can”. Competing in the marketplace with the sons and daughters of privilege? “Be content with your lot” she advises. “It would be wrong for government to interfere”. (A&A 2006, p. 44)
Government stakeholding programs are justified by the claim that it would be wrong for government not to interfere in the situation described in the above quote. This kind of inequality is often partially alleviated by charitable organizations, such as Kiva (www.kiva.org) which gives interest free loans to help poor people start their own businesses. These privately run stakeholding programs are a good thing, and the more of them that exist, the less government needs to provide them. However, those of us who support government stakeholding programs argue that the amount of money made available to such programs should not be dependent on the market for the warm fuzzy feelings of benevolence that are produced by contributions. A fair stake is a right, and should not be seen as a gift dependent on the generosity of the wealthy.
Nevertheless, stakeholding programs are significantly different, not only from socialist views of government, but also from the liberal distributive justice principles defended by Rawls. Stakeholding programs do not attempt to equally distribute wealth, in fact they assume that an equal distribution of wealth would be morally justifiable only in the very unlikely event that every citizen is equally productive. Nor do they require that all unequal distributions of wealth benefit the least favored members of society. Stakeholding is designed to create a situation that is essentially the same as Nozick’s Wilt Chamberlain example.
. . . suppose a {just} distribution is realized. . . let us call this distribution D1. . . Now suppose that Wilt Chamberlain is greatly in demand by basketball teams, being a great gate attraction. . . He signs the following sort of contract with a team. In each home game, twenty-five cents from the price of each ticket of admission goes to him. . . Let us suppose that in one season one million persons attend his home games, and Wilt Chamberlin winds up with $250,000, a much larger sum than the average income and larger even than anyone else has. .. is this new distribution D2 unjust? … each person already has his legitmate share under D1. Under D1, there is nothing that anyone has that anyone else has a claim of justice against. (Nozick 1974 p. 161)
This example is usually seen as a defense for an unregulated free market. However, it derives most of its moral force from an often ignored fact: This market redistribution of wealth to Chamberlain is intuitively fair only if we begin with a just distribution, such as when “everyone has an equal share” (Nozick 1974, pp.160). Nozick’s use of this starting point is legitimate. He wants to show that even in a society that begins with an equal distribution of wealth, there will eventually be unequal distributions of wealth which are intuitively fair, and this is a telling criticism of Rawls. Nevertheless, the usual interpretation of this example obscures the fact that this intuition is so clear-cut only when everyone starts out with an equal stake. Suppose Wilt Chamberlain had been a landowner who had inherited thousands of acres from a distant ancestor, and was consequently able to spent all of his time partying and drinking mint juleps while the local tenant farmers gave him most of their earnings because that was their only alternative to starvation. Most of us would agree that such a society would not be as fair as Nozick’s original example. Stakeholding is justified because it creates a situation which is more like Nozick’s original example and less like my mint julep variation.
A government-supported safety net is justified because even with equal starting points, there is such a thing as bad luck which is nobody’s fault, and it’s right to try to protect people from that sort of bad luck. A paradigm case of such bad luck is medical problems. Some medical problems are caused by unhealthy lifestyles or other forms of carelessness, but many others are unavoidable. Suppose two people work equally hard and skillfully all their lives to create essentially identical successful businesses. One loses her business because the best health insurance she could afford was unable to cover her medical expenses, the other has the exact same health insurance plan, doesn’t get sick, and keeps her business. This seems unfair to us. This is why people rush to send money after an earthquake, because they know that the earthquake victims did not deserve what happened to them. This is equally true of any disease that hits a single person alone in her room. Even in situations where people are somewhat culpable for what happened to them, most of us feel there should be limits on the consequences of most bad decisions. If someone gets drunk, drives down the wrong side of the street, and crashes into a tree, we feel that they got what was coming to them. However, in the complexities of a capitalist market, it is always possible for someone to make a wrong decision even when correctly reasoning from the best available information. In a capitalist society, anyone could be vulnerable to a loss of finances and health, and although we’re willing to have substantial inequality in income, we also want to have a safety net so that if we hit the bottom it won’t be as bad as the bottom in India or Africa.
Utilitarian Arguments for Stake Holding and Safety Nets
Imagine a world in which one man with five billion dollars pays a billion dollars in taxes which are used to create stakeholding and safety nets (hereinafter SHSN) for millions of people. The rich man’s lifestyle is completely unaffected by this loss, because his wealth still exceeds the amount of money that a single person can spend on consumer goods. He does, however, have 20 percent less money than he otherwise would have had, which somewhat inhibits his opportunities to engage in the capitalist activities he enjoys. (He may only be able to buy one railroad this year instead of two). The millions of people who have received SHSN now have their own businesses and/or jobs skills which dramatically raise their standards of living: Houses with electricity and running water instead of mud huts, more and better tasting food which makes them happier and protects them from malnutrition, free or affordable subsidized health care to protect them from the ravages of disease etc. It is obvious that there will be more overall happiness in this world than in an alternative world in which the billionaire gets to buy his second railroad, and the millions of other people continue to live in subhuman squalor. SHSN are clearly justified by the utilitarian principle of the greatest good for the greatest number.
There are also egoistic utilitarian arguments which support the claim that even the rich benefit from SHSN. These arguments turn Rawls’ difference principle on its head by saying that SHSN are justified because they benefit the most favored as much as they benefit the least favored. Because SHSN creates and preserves opportunities for productive work, they create more overall wealth, which the rich can acquire for themselves by selling products to this newly prosperous middle class. Henry Ford believed in something like this principle. He raised the wages of his workers to increase the average national wage, which enabled more Americans to buy his cars. We might call this the trickle up effect.
There are utilitarian arguments that can be made in response to these. Some tax increases hurt the economy, thus creating less wealth and happiness for rich and poor alike. Most taxes do not fall on only billionaires, but also the moderately rich and the middle class, whose life style will be affected by the taxes. This paper, however, will devote little time to utilitarian arguments either for or against SHSN, other than to acknowledge their existence. Utilitarian arguments require large amounts of empirical data to determine exactly what produces the greatest good for the greatest number, and thus are not really philosophical in nature. (Unlike arguments for or against utilitarianism as a philosophical principle, which primarily involve the examination and analysis of ethical intuitions.).
Furthermore, most contemporary arguments about the ethics of wealth distribution reject utilitarianism. The fact that there would be more overall happiness in a society with SHSN cuts no ice with Rawls, because “An injustice is tolerable only when it is necessary to avoid an even greater injustice” and “justice denies that the loss of freedom for some is made right by a greater good shared by others”. (Rawls 1971 pp. 3-4). Rawls thus must justify taxing the rich to pay for distributive programs like SHSN by saying that loss of freedom for the billionaire is justified only by evidence that it would be an even greater injustice for those people to be denied the benefits of SHSN. Such programs cannot be justified by the happiness of the people who benefit from SHSN. Because Rawls’ theory of justice requires a social structure that everyone would approve if viewing the system through his posited “veil of ignorance”, it appears to offer little danger of creating a society which has justice but no joy (assuming it fulfills its ideals). No one in that hypothetical situation is going to vote for a society in which they have a good chance of being miserable.
In contrast, Nozick’s libertarian theory of justice, which is based entirely on property entitlement, rejects any attempt of lawmakers to even consider who is happy and who isn’t because “liberty upsets patterns”( Nozick 1974 p. 160), and the government’s sole job is to protect liberty. This means that the government has no right to consider what he calls “end-result principles” ( Nozick 1974 p. 170). As long as there are no unjust acquisitions or transfers of property, the consistent libertarian cannot disapprove of any end results that emerge from these transactions. This means that no elected government official is ever allowed to ask her constituents or herself, “what should I do to help create the sort of country we want to live in?” All effects of uncoerced property exchanges must be seen as morally acceptable: The collapse of the banking system, the poisoning of all breathable air, the extinction of the entire human race. If Nozick is consistent, he has to assert that none of these consequences, or any other consequences, can ever be considered as reasons for making a voluntary exchange illegal. Some critics of SHSN can argue that my original thought experiment about the billionaire misrepresents the actual effects of taxation, but this objection is not open to Nozick. He must argue that even in that hypothetical situation, the amount of happiness produced by SHSN has no relevance.
I believe that this kind of orthodox libertarianism can be refuted even if one ignores utilitarian arguments, and temporarily accepts its limited ideas about justice and property. However, such temporary acceptance should not be taken as rejection of the significance of these utilitarian arguments. I believe that the world under a libertarian government would be a bleak place, in which the government would be forbidden from eliminating terrible human suffering, even if the majority of citizens wished it. Nevertheless, one can accept the libertarian’s narrow ideas of right and wrong where property rights always trump happiness, and still discredit libertarianism on its own terms, because of certain incoherencies in its concept of justice. That is what I will be doing in the rest of the paper.
Some Problems with Nozick’s Rejection of End-Result Justice
Nozick asks “Must the look of justice reside in a resulting pattern rather than in the underlying principles?” and replies in the negative. “The system of entitlements is defensible when constituted by the individual aims of individual transactions. No overarching aim is needed, no distributional pattern is required. ” (Nozick 1974 p. 158) According to Nozick, if all transactions and acquisitions of property are voluntary, then justice is done, end of story. He does, however, consider a possible kind of counterexample to this claim, then dismisses it too hastily. He admits that it is possible that a conjunction of several different transactions might possess properties that the individual transactions do not have. After all, a conjunction of wood, cloth, and feathers can possess the property of chairness if arranged in an overarching pattern, even though no one of those items is itself a chair. Isn’t it possible that two actions which were themselves just could produce a higher level pattern which was not just? Nozick concedes that if this were the case, “some patterned principles of distribution would appear to be necessary . . .to legitimate any non-unit set of holdings” (Nozick 1974 p. 220). Nozick’s response is that these higher level patterns do not necessarily exist in all cases, which is true. Some conjunctions are merely conjunctions. However, this doesn’t prove that these higher patterns never emerge in social interactions. Perhaps he was laying the burden of proof on anyone who claims that two or more honest and voluntary exchanges can have an unjust result. If so, I take up that burden, and argue that the following examples show that Nozick’s theory of justice cannot adequately account for many obvious examples of injustice.
Many voluntary exchanges have impacts on third parties who are not participating in that exchange. One person can build a candy factory, another can buy candy from that person, and the free market provides a powerful incentive for the candy maker to continue to make better and cheaper candy. However, the free market provides no incentive for the candy maker to avoid polluting the nearby river, if the people who live near the river do not buy candy, and have no way of stopping other people from buying candy. That is why the pollution is called a negative externality by economists: because the market exchange has a negative impact on people who are external to the economic exchange, and thus cannot use their buying power to influence it. Nozick’s theory of justice requires him to deny the existence of negative externalities in economics. As introductory economics class almost always discuss negative externalities, and many studies on this topic have been published in economics journals, this is rather like denying the existence of pigeons in New York.
Nozick’s claims that the state should do nothing but insure that all property exchanges are honest and voluntary, and that “any state more extensive violates people’s rights”. Unfortunately, the negative externalities of honest voluntary exchanges frequently violate people’s rights and Nozick’s minimal state has no way of coping with this fact. This fact is acknowledged by introductory economics classes (Taylor 2005, Whaples 2006) as something that no modern economist denies. Whaples frequently refers to these negative externalities as “market failures”. Pollution is the most commonly discussed negative externality, but there are others. Stakeholding is designed to decrease another such negative externality: the gradual destruction of the equality of opportunities that existed in the days when there were unowned resources that were equally available to all. No theft or fraud needs to be posited to acknowledge that the gradual growth of networks of privilege and wealth have created an unlevel playing field which greatly decreased the availability of such opportunities. Stakeholding helps rectify this injustice by giving everyone new opportunities to develop their talents and resources.
Nozick’s Defense of Rectifying Redistribution
Nozick's rectifying argument for wealth distribution appears as an afterthought at the end of his chapter on Rawls, and contradicts almost everything else he says about the minimal state. Nozick acknowledges that when the rules for just acquisitions and transfers are not followed “the principle of rectification comes into play.” (Nozick1974 p.231). He then concedes that because “those from the least well-off group in the society have the highest probabilities of being (the descendants of) victims of the most serious social injustice. . . a rough rule of thumb might seem to be the following: organize society so as to maximize the position of whatever group ends up least well off in society.” (ibid. italics in the original.) We thus end with a social structure that is essentially the same as Rawls’, but justified by a principle of rectification rather than equality. Orthodox libertarians may resist this conclusion, as does Nozick himself (he concludes the chapter by saying that such rectification might be necessary “in the short run”.) There is, I believe, no way of escaping this conclusion, given Nozick’s premises, and SHSN seem to be the most effective way of accomplishing this rectification.
Some might say that it is impossible to prove that any particular person’s wealth was tainted by an unjust transfer and that “you can’t tax someone on a maybe” (Kent Partridge, personal communication.) The government can, however, impose legal judgments when there is no reasonable doubt that something occurred. There is no reasonable doubt that in the hundreds of thousands of years since the Cavepersons, there is at least one illegitimate acquisition in anyone's ancestral acquisition of property, even though we obviously don’t know what it was in each case. History reveals that many if not most property acquisitions occurred by force, not by voluntary exchange. All military and political history is basically the story of people murdering each other to get real estate. The government is not allowed to penalize someone for a crime that maybe happened, but it must enact a penalty if there is no reasonable doubt that the crime occurred. In this case, we are not even talking about a penalty but a simple returning of the stolen property. The situation is similar to what happened to friend of mine who unknowingly bought stolen property. He was not fined or jailed for doing this, because he made the purchase in good faith. But he was required to return the stolen property to the rightful owners.
In situations where information is inexact, we have no choice but to render justice inexactly. We start with the assumption that most of one's property was built up by productive labor, and is therefore rightfully acquired. It is undeniable, however, that the productivity of anyone's labor is heavily influenced by the opportunities one inherits. Because the distribution of those opportunities is at least partly stained with blood and theft if you go back far enough, no one can claim that they have an unconditional right to every single dollar that results from their labor. Consequently, it is more just to distribute some of that wealth to others who did not get the same opportunities as the wealthy. It's not as accurate as using a time machine to find exactly who stole what from whom, but it's clearly more accurate than accepting the obviously false statement that the current distribution of property was created by nothing but just acquisitions.
Many people are unwilling to accept all the implications of Nozick’s theory of rectification, including Nozick himself. Unless you vastly underestimate the amount of unjust acquisitions in human history, this theory seems to put all property at moral risk, and leave everyone’s property vulnerable in principle to indefinite amounts of seizure and redistribution. Even, or perhaps especially, if one cannot find any answers to these arguments, it is very tempting to say “let’s just not go there”, and cling tightly to whatever property one might be lucky enough to have. Many people are thus often willing to agree with Hume that “it will be for my interest to leave another in the possession of his goods, provided he will act in the same manner with regard to me”, (Hume 1739) and forget about questions of justice altogether. For example, any US citizen of European ancestry might fear that accepting the rectification principle would give any Native American the right to claim his split level bungalow. However, these kinds of fears arise from not following the rectification principle consistently enough. Warring tribes of Native Americans seized territory from each other by force well before the first Europeans arrived, so their ownership of the land is every bit as vulnerable to the rectification principle as that of the Europeans who seized it from them. What this really proves is that the idea of using a chain of just acquisitions to justify either possession or redistribution of property is a hopeless endeavor. Despite the temptingly plausible dialectical steps that appear to justify rectification at first, we must eventually admit that, if followed consistently, it is equally ineffective as a support for either the status quo or for any sort of distributive principle.
Waldron’s Critique of Nozick
Waldron argues that what Nozick and Locke call the original acquisition of natural resources cannot be seen as legitimate even if all of the transfers that followed it are legitimate. Waldron says that the idea of a person sticking a flag in a wilderness region and claiming it for herself is absurd, because it enables that person to unilaterally impose an obligation on people who were never consulted.
. . .by performing the acquisitive act A, an individual can put not himself but everybody else under an obligation. By his act, he acquires not duties but rights, and thousands of other people, including people he has never spoken with, people he has never met, people who have never even heard of him, suddenly find themselves laboring under obligations they did not have before. (Waldron 1988 p. 267)
Waldron argues that once we accept this fact about these original acts of acquisition, we must acknowledge that “property relationships do not exist between persons and objects, they exist between persons and other persons” (ibid.) Because the concept of property requires an agreement from the entire society to renounce possession of certain things, that agreement must be one that everyone in society would reasonably agree to. Waldron suggests that “The ‘strong’ proviso traditionally attributed to Locke (the proviso which Nozick rejects) will satisfy this test”. This proviso requires those who appropriate opportunities from nature make sure that the rest of the community still have the freedom “to take the resources that one needs from the common stock that has been left by the last appropriator”. (Waldron 1988 p. 281-282) The SHSN is in effect the state providing the modern industrial equivalent of a ration from the common stock that was earlier made by the Homestead Act. Thomas Paine also gives a plausible example of such a contract: We will let certain people use unclaimed resources, provided they compensate us from the wealth that their labor can generate (and ours cannot) because they alone have access to those resources.
… And as it is impossible to separate the improvement made by cultivation from the earth itself, upon which that improvement is made, the idea of landed property arose from that parable connection; but it is nevertheless true, that it is the value of the improvement, only, and not the earth itself, that is individual property. Every proprietor, therefore, of cultivated lands, owes to the community ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund produced in this plan is to issue. (Paine 1796)
The original acquirers of property, and their financial descendants, get to keep most of the wealth, because it is a product of their labor, but they also need to use some of their wealth to recreate the opportunities that were lost to the rest of us when they took control of the wealth-generating resources. Paine’s ground-rent is essentially indistinguishable from the stakeholder proposals of Ackermann and Alstott.
Bird and Violable Rights
Colin Bird takes a different tack, by pleading nolo contendere to the problems with acquisition. He says that even if we grant that everyone has a right to every cent they possess, it is impossible to create a just society if everyone's rights are considered to be inviolable. Nozick says "Liberty upsets patterns", and we must consider liberty as an inviolable right, regardless of the consequences. Bird points out, however, that even the Libertarian "Night watchman state" has to treat rights as violable.
Suppose a wealthy self-owner wants to donate. . . to the Lutheran Church. . . but now suppose that the public agent taxes the wealthy self-owner in order to . . . prevent a greater number of more serious violations of self-ownership in the future. . .in this case, then, the public agent violates this self-owner’s right to make the donation. . .Local violations are then justified when they would make it easier for everyone to live by the lights of their own consciences. (Bird 1999 p. 154-155)
If person X wants to give a portion of his money to the Lutheran Church, and the state needs that money to protect the property of person Y who lives a hundred miles away, the night watchman state has to take that money away by force to provide police protection for person Y. If Person X says, "Hey, I'm not going to travel that far, I don't need police protection over there", that's tough, the state takes the money anyway. This does not imply that Person X has no right to the money, or that there is something wrong with giving money to the Lutheran Church. It does mean, however, that even though Person X has a right to that money, that right must be overridden to protect the rights of Person Y.
This has two implications, among many others. First of all, it shows that we have to recognize that the Night Watchman state is not a worthwhile goal in its own right, but rather a means to an end: the creation of a just society. Nozick was wrong in saying that the night watchman state ignores the larger pattern of society, and only protects inviolable rights. It presupposes a particular goal, and if another kind of state produces that goal more effectively, the libertarian must concede that the night watchman state should be replaced with a more extensive state. Suppose we accept the idea that the only criterion for justice is that everybody gets to keep their property. Suppose further that the primary cause of crimes against property in a particular society is a large uneducated lumpenproletariat, which steals because it has no opportunities for gainful legal employment. The consistent libertarian would have to acknowledge that such a society would require extensive free public education, and the establishment of new businesses that could hire the poor once they have been appropriately trained. If it turns out that no private business thinks that training these people is worth its time, the state would have to get involved in providing incentives to get those businesses going, or run the businesses themselves. If these kinds of social programs produce a lower crime rate than limiting government activity to arresting and locking up criminals, the consistent libertarian would have to concede that this kind of welfare state is superior to the Night watchman state.
Furthermore, once we acknowledge that the government cannot be value-free, we have the right to ask whether protection of property is the only legitimate value for the state to be guided by. Protection of property could be seen as an end in itself, but it is more plausibly seen as a means to protecting people’s right to self-determination and self actualization. When people don’t have opportunities such as education they can’t be genuinely free to shape their own lives. Bird argues that this is a terrible violation of their rights. Taking some money away from multi-millionaires does violates their rights, but this is a smaller violation of rights than keeping the poor permanently locked in the underclass by not providing them with opportunities. Consequently, it is fair and just to make the the rich pay for SRSH, just as it is fair to deny someone the right to contribute to the Lutheran Church so that other people can have police protection.
Conclusion
Libertarianism’s surface simplicity is misleading, for it relies on several unstated presuppositions about the nature of ethics and justice, many of which are highly questionable. Nozick’s version of libertarianism requires 1) Unconditional property rights, established by 2) a lineage of just transfers traceable to 3) a just original acquisition. The purpose of this paper has been to discredit all three of those criteria for determining property rights. No government, not even a night watchman libertarian state, can function if it makes property rights unconditional. No one in the real world can justify their property rights by citing a lineage of just acquisitions. Finally, the concept of a unilaterally declared original acquisition, which supposedly supplies the foundation for all other property rights, is incoherent and unjust. Rejecting any one of these assumptions is sufficient to discredit Nozick’s libertarianism, even if the others are left in place. A more moderate form of libertarianism, which requires the existence of something like SHSN is more consistent with the fundamental tenets of libertarianism, and with the common sense principles of justice, decency, and compassion that are traditionally thought of as being essential to good government.
Bibliography
Ackermann, Bruce and Alstott, Anne (2006) “Why Stakeholding” in Wright, Erick P. (ed.) (2006) Redesigning Distribution. London, UK, Verso.
Bird, Colin (1999) The Myth of Liberal Individualism Cambridge, UK, Cambridge University Press.
Fishkin, James(1983) Justice, Equal Opportunity, and the Family. New Haven, Conn. Yale University Press.
Hume, David (1739) Treatise of Human Nature Book 3 part 2, Sections 2-4. (on Justice and Property) www.gutenberg.org/cache/epub/4705/pg4705.html.utf8
Nozick, Robert (1974) Anarchy, State and Utopia. New York, NY, Basic Books.
Paine, Thomas (1796) Agrarian Justice http://www.thomaspaine.org/Archives/agjst.html
Rawls, John (1971) A Theory of Justice. Cambridge MA, Harvard University Press.
Taylor, Timothy (2005) Economics, 3rd Edition. The Teaching Company, Chantilly Va.
Waldron Jeremy (1988) The Right to Private Property Oxford, UK, Clarendon Press.
pp. 253-283
Whaples, Robert (2006) Modern Economic Issues. The Teaching Company, Chantilly Va.
This paper defends the position that government ought to be actively involved in both what Ackerman and Alstott (hereinafter A&A) call stakeholding ( Wright 2006 pp. 43-61 ) and the creation of what Ronald Reagan called “the safety net”. “Stakeholding” I define as government programs which are designed to create opportunities for citizens to create their own wealth. “ Safety net” I define as any government programs designed to protect people from the worst consequences of bad luck.
Stakeholding recognizes that the free market does not always accurately reward productivity. Even if it did, using productivity and voluntary exchange as the only legitimator of wealth possession is justified only if everyone is given a fair opportunity to be equally productive. An unregulated free market is accurately described this way by A&A.
Born to poor parents? “Too bad”, says the libertarian. “Do the best you can”. Competing in the marketplace with the sons and daughters of privilege? “Be content with your lot” she advises. “It would be wrong for government to interfere”. (A&A 2006, p. 44)
Government stakeholding programs are justified by the claim that it would be wrong for government not to interfere in the situation described in the above quote. This kind of inequality is often partially alleviated by charitable organizations, such as Kiva (www.kiva.org) which gives interest free loans to help poor people start their own businesses. These privately run stakeholding programs are a good thing, and the more of them that exist, the less government needs to provide them. However, those of us who support government stakeholding programs argue that the amount of money made available to such programs should not be dependent on the market for the warm fuzzy feelings of benevolence that are produced by contributions. A fair stake is a right, and should not be seen as a gift dependent on the generosity of the wealthy.
Nevertheless, stakeholding programs are significantly different, not only from socialist views of government, but also from the liberal distributive justice principles defended by Rawls. Stakeholding programs do not attempt to equally distribute wealth, in fact they assume that an equal distribution of wealth would be morally justifiable only in the very unlikely event that every citizen is equally productive. Nor do they require that all unequal distributions of wealth benefit the least favored members of society. Stakeholding is designed to create a situation that is essentially the same as Nozick’s Wilt Chamberlain example.
. . . suppose a {just} distribution is realized. . . let us call this distribution D1. . . Now suppose that Wilt Chamberlain is greatly in demand by basketball teams, being a great gate attraction. . . He signs the following sort of contract with a team. In each home game, twenty-five cents from the price of each ticket of admission goes to him. . . Let us suppose that in one season one million persons attend his home games, and Wilt Chamberlin winds up with $250,000, a much larger sum than the average income and larger even than anyone else has. .. is this new distribution D2 unjust? … each person already has his legitmate share under D1. Under D1, there is nothing that anyone has that anyone else has a claim of justice against. (Nozick 1974 p. 161)
This example is usually seen as a defense for an unregulated free market. However, it derives most of its moral force from an often ignored fact: This market redistribution of wealth to Chamberlain is intuitively fair only if we begin with a just distribution, such as when “everyone has an equal share” (Nozick 1974, pp.160). Nozick’s use of this starting point is legitimate. He wants to show that even in a society that begins with an equal distribution of wealth, there will eventually be unequal distributions of wealth which are intuitively fair, and this is a telling criticism of Rawls. Nevertheless, the usual interpretation of this example obscures the fact that this intuition is so clear-cut only when everyone starts out with an equal stake. Suppose Wilt Chamberlain had been a landowner who had inherited thousands of acres from a distant ancestor, and was consequently able to spent all of his time partying and drinking mint juleps while the local tenant farmers gave him most of their earnings because that was their only alternative to starvation. Most of us would agree that such a society would not be as fair as Nozick’s original example. Stakeholding is justified because it creates a situation which is more like Nozick’s original example and less like my mint julep variation.
A government-supported safety net is justified because even with equal starting points, there is such a thing as bad luck which is nobody’s fault, and it’s right to try to protect people from that sort of bad luck. A paradigm case of such bad luck is medical problems. Some medical problems are caused by unhealthy lifestyles or other forms of carelessness, but many others are unavoidable. Suppose two people work equally hard and skillfully all their lives to create essentially identical successful businesses. One loses her business because the best health insurance she could afford was unable to cover her medical expenses, the other has the exact same health insurance plan, doesn’t get sick, and keeps her business. This seems unfair to us. This is why people rush to send money after an earthquake, because they know that the earthquake victims did not deserve what happened to them. This is equally true of any disease that hits a single person alone in her room. Even in situations where people are somewhat culpable for what happened to them, most of us feel there should be limits on the consequences of most bad decisions. If someone gets drunk, drives down the wrong side of the street, and crashes into a tree, we feel that they got what was coming to them. However, in the complexities of a capitalist market, it is always possible for someone to make a wrong decision even when correctly reasoning from the best available information. In a capitalist society, anyone could be vulnerable to a loss of finances and health, and although we’re willing to have substantial inequality in income, we also want to have a safety net so that if we hit the bottom it won’t be as bad as the bottom in India or Africa.
Utilitarian Arguments for Stake Holding and Safety Nets
Imagine a world in which one man with five billion dollars pays a billion dollars in taxes which are used to create stakeholding and safety nets (hereinafter SHSN) for millions of people. The rich man’s lifestyle is completely unaffected by this loss, because his wealth still exceeds the amount of money that a single person can spend on consumer goods. He does, however, have 20 percent less money than he otherwise would have had, which somewhat inhibits his opportunities to engage in the capitalist activities he enjoys. (He may only be able to buy one railroad this year instead of two). The millions of people who have received SHSN now have their own businesses and/or jobs skills which dramatically raise their standards of living: Houses with electricity and running water instead of mud huts, more and better tasting food which makes them happier and protects them from malnutrition, free or affordable subsidized health care to protect them from the ravages of disease etc. It is obvious that there will be more overall happiness in this world than in an alternative world in which the billionaire gets to buy his second railroad, and the millions of other people continue to live in subhuman squalor. SHSN are clearly justified by the utilitarian principle of the greatest good for the greatest number.
There are also egoistic utilitarian arguments which support the claim that even the rich benefit from SHSN. These arguments turn Rawls’ difference principle on its head by saying that SHSN are justified because they benefit the most favored as much as they benefit the least favored. Because SHSN creates and preserves opportunities for productive work, they create more overall wealth, which the rich can acquire for themselves by selling products to this newly prosperous middle class. Henry Ford believed in something like this principle. He raised the wages of his workers to increase the average national wage, which enabled more Americans to buy his cars. We might call this the trickle up effect.
There are utilitarian arguments that can be made in response to these. Some tax increases hurt the economy, thus creating less wealth and happiness for rich and poor alike. Most taxes do not fall on only billionaires, but also the moderately rich and the middle class, whose life style will be affected by the taxes. This paper, however, will devote little time to utilitarian arguments either for or against SHSN, other than to acknowledge their existence. Utilitarian arguments require large amounts of empirical data to determine exactly what produces the greatest good for the greatest number, and thus are not really philosophical in nature. (Unlike arguments for or against utilitarianism as a philosophical principle, which primarily involve the examination and analysis of ethical intuitions.).
Furthermore, most contemporary arguments about the ethics of wealth distribution reject utilitarianism. The fact that there would be more overall happiness in a society with SHSN cuts no ice with Rawls, because “An injustice is tolerable only when it is necessary to avoid an even greater injustice” and “justice denies that the loss of freedom for some is made right by a greater good shared by others”. (Rawls 1971 pp. 3-4). Rawls thus must justify taxing the rich to pay for distributive programs like SHSN by saying that loss of freedom for the billionaire is justified only by evidence that it would be an even greater injustice for those people to be denied the benefits of SHSN. Such programs cannot be justified by the happiness of the people who benefit from SHSN. Because Rawls’ theory of justice requires a social structure that everyone would approve if viewing the system through his posited “veil of ignorance”, it appears to offer little danger of creating a society which has justice but no joy (assuming it fulfills its ideals). No one in that hypothetical situation is going to vote for a society in which they have a good chance of being miserable.
In contrast, Nozick’s libertarian theory of justice, which is based entirely on property entitlement, rejects any attempt of lawmakers to even consider who is happy and who isn’t because “liberty upsets patterns”( Nozick 1974 p. 160), and the government’s sole job is to protect liberty. This means that the government has no right to consider what he calls “end-result principles” ( Nozick 1974 p. 170). As long as there are no unjust acquisitions or transfers of property, the consistent libertarian cannot disapprove of any end results that emerge from these transactions. This means that no elected government official is ever allowed to ask her constituents or herself, “what should I do to help create the sort of country we want to live in?” All effects of uncoerced property exchanges must be seen as morally acceptable: The collapse of the banking system, the poisoning of all breathable air, the extinction of the entire human race. If Nozick is consistent, he has to assert that none of these consequences, or any other consequences, can ever be considered as reasons for making a voluntary exchange illegal. Some critics of SHSN can argue that my original thought experiment about the billionaire misrepresents the actual effects of taxation, but this objection is not open to Nozick. He must argue that even in that hypothetical situation, the amount of happiness produced by SHSN has no relevance.
I believe that this kind of orthodox libertarianism can be refuted even if one ignores utilitarian arguments, and temporarily accepts its limited ideas about justice and property. However, such temporary acceptance should not be taken as rejection of the significance of these utilitarian arguments. I believe that the world under a libertarian government would be a bleak place, in which the government would be forbidden from eliminating terrible human suffering, even if the majority of citizens wished it. Nevertheless, one can accept the libertarian’s narrow ideas of right and wrong where property rights always trump happiness, and still discredit libertarianism on its own terms, because of certain incoherencies in its concept of justice. That is what I will be doing in the rest of the paper.
Some Problems with Nozick’s Rejection of End-Result Justice
Nozick asks “Must the look of justice reside in a resulting pattern rather than in the underlying principles?” and replies in the negative. “The system of entitlements is defensible when constituted by the individual aims of individual transactions. No overarching aim is needed, no distributional pattern is required. ” (Nozick 1974 p. 158) According to Nozick, if all transactions and acquisitions of property are voluntary, then justice is done, end of story. He does, however, consider a possible kind of counterexample to this claim, then dismisses it too hastily. He admits that it is possible that a conjunction of several different transactions might possess properties that the individual transactions do not have. After all, a conjunction of wood, cloth, and feathers can possess the property of chairness if arranged in an overarching pattern, even though no one of those items is itself a chair. Isn’t it possible that two actions which were themselves just could produce a higher level pattern which was not just? Nozick concedes that if this were the case, “some patterned principles of distribution would appear to be necessary . . .to legitimate any non-unit set of holdings” (Nozick 1974 p. 220). Nozick’s response is that these higher level patterns do not necessarily exist in all cases, which is true. Some conjunctions are merely conjunctions. However, this doesn’t prove that these higher patterns never emerge in social interactions. Perhaps he was laying the burden of proof on anyone who claims that two or more honest and voluntary exchanges can have an unjust result. If so, I take up that burden, and argue that the following examples show that Nozick’s theory of justice cannot adequately account for many obvious examples of injustice.
Many voluntary exchanges have impacts on third parties who are not participating in that exchange. One person can build a candy factory, another can buy candy from that person, and the free market provides a powerful incentive for the candy maker to continue to make better and cheaper candy. However, the free market provides no incentive for the candy maker to avoid polluting the nearby river, if the people who live near the river do not buy candy, and have no way of stopping other people from buying candy. That is why the pollution is called a negative externality by economists: because the market exchange has a negative impact on people who are external to the economic exchange, and thus cannot use their buying power to influence it. Nozick’s theory of justice requires him to deny the existence of negative externalities in economics. As introductory economics class almost always discuss negative externalities, and many studies on this topic have been published in economics journals, this is rather like denying the existence of pigeons in New York.
Nozick’s claims that the state should do nothing but insure that all property exchanges are honest and voluntary, and that “any state more extensive violates people’s rights”. Unfortunately, the negative externalities of honest voluntary exchanges frequently violate people’s rights and Nozick’s minimal state has no way of coping with this fact. This fact is acknowledged by introductory economics classes (Taylor 2005, Whaples 2006) as something that no modern economist denies. Whaples frequently refers to these negative externalities as “market failures”. Pollution is the most commonly discussed negative externality, but there are others. Stakeholding is designed to decrease another such negative externality: the gradual destruction of the equality of opportunities that existed in the days when there were unowned resources that were equally available to all. No theft or fraud needs to be posited to acknowledge that the gradual growth of networks of privilege and wealth have created an unlevel playing field which greatly decreased the availability of such opportunities. Stakeholding helps rectify this injustice by giving everyone new opportunities to develop their talents and resources.
Nozick’s Defense of Rectifying Redistribution
Nozick's rectifying argument for wealth distribution appears as an afterthought at the end of his chapter on Rawls, and contradicts almost everything else he says about the minimal state. Nozick acknowledges that when the rules for just acquisitions and transfers are not followed “the principle of rectification comes into play.” (Nozick1974 p.231). He then concedes that because “those from the least well-off group in the society have the highest probabilities of being (the descendants of) victims of the most serious social injustice. . . a rough rule of thumb might seem to be the following: organize society so as to maximize the position of whatever group ends up least well off in society.” (ibid. italics in the original.) We thus end with a social structure that is essentially the same as Rawls’, but justified by a principle of rectification rather than equality. Orthodox libertarians may resist this conclusion, as does Nozick himself (he concludes the chapter by saying that such rectification might be necessary “in the short run”.) There is, I believe, no way of escaping this conclusion, given Nozick’s premises, and SHSN seem to be the most effective way of accomplishing this rectification.
Some might say that it is impossible to prove that any particular person’s wealth was tainted by an unjust transfer and that “you can’t tax someone on a maybe” (Kent Partridge, personal communication.) The government can, however, impose legal judgments when there is no reasonable doubt that something occurred. There is no reasonable doubt that in the hundreds of thousands of years since the Cavepersons, there is at least one illegitimate acquisition in anyone's ancestral acquisition of property, even though we obviously don’t know what it was in each case. History reveals that many if not most property acquisitions occurred by force, not by voluntary exchange. All military and political history is basically the story of people murdering each other to get real estate. The government is not allowed to penalize someone for a crime that maybe happened, but it must enact a penalty if there is no reasonable doubt that the crime occurred. In this case, we are not even talking about a penalty but a simple returning of the stolen property. The situation is similar to what happened to friend of mine who unknowingly bought stolen property. He was not fined or jailed for doing this, because he made the purchase in good faith. But he was required to return the stolen property to the rightful owners.
In situations where information is inexact, we have no choice but to render justice inexactly. We start with the assumption that most of one's property was built up by productive labor, and is therefore rightfully acquired. It is undeniable, however, that the productivity of anyone's labor is heavily influenced by the opportunities one inherits. Because the distribution of those opportunities is at least partly stained with blood and theft if you go back far enough, no one can claim that they have an unconditional right to every single dollar that results from their labor. Consequently, it is more just to distribute some of that wealth to others who did not get the same opportunities as the wealthy. It's not as accurate as using a time machine to find exactly who stole what from whom, but it's clearly more accurate than accepting the obviously false statement that the current distribution of property was created by nothing but just acquisitions.
Many people are unwilling to accept all the implications of Nozick’s theory of rectification, including Nozick himself. Unless you vastly underestimate the amount of unjust acquisitions in human history, this theory seems to put all property at moral risk, and leave everyone’s property vulnerable in principle to indefinite amounts of seizure and redistribution. Even, or perhaps especially, if one cannot find any answers to these arguments, it is very tempting to say “let’s just not go there”, and cling tightly to whatever property one might be lucky enough to have. Many people are thus often willing to agree with Hume that “it will be for my interest to leave another in the possession of his goods, provided he will act in the same manner with regard to me”, (Hume 1739) and forget about questions of justice altogether. For example, any US citizen of European ancestry might fear that accepting the rectification principle would give any Native American the right to claim his split level bungalow. However, these kinds of fears arise from not following the rectification principle consistently enough. Warring tribes of Native Americans seized territory from each other by force well before the first Europeans arrived, so their ownership of the land is every bit as vulnerable to the rectification principle as that of the Europeans who seized it from them. What this really proves is that the idea of using a chain of just acquisitions to justify either possession or redistribution of property is a hopeless endeavor. Despite the temptingly plausible dialectical steps that appear to justify rectification at first, we must eventually admit that, if followed consistently, it is equally ineffective as a support for either the status quo or for any sort of distributive principle.
Waldron’s Critique of Nozick
Waldron argues that what Nozick and Locke call the original acquisition of natural resources cannot be seen as legitimate even if all of the transfers that followed it are legitimate. Waldron says that the idea of a person sticking a flag in a wilderness region and claiming it for herself is absurd, because it enables that person to unilaterally impose an obligation on people who were never consulted.
. . .by performing the acquisitive act A, an individual can put not himself but everybody else under an obligation. By his act, he acquires not duties but rights, and thousands of other people, including people he has never spoken with, people he has never met, people who have never even heard of him, suddenly find themselves laboring under obligations they did not have before. (Waldron 1988 p. 267)
Waldron argues that once we accept this fact about these original acts of acquisition, we must acknowledge that “property relationships do not exist between persons and objects, they exist between persons and other persons” (ibid.) Because the concept of property requires an agreement from the entire society to renounce possession of certain things, that agreement must be one that everyone in society would reasonably agree to. Waldron suggests that “The ‘strong’ proviso traditionally attributed to Locke (the proviso which Nozick rejects) will satisfy this test”. This proviso requires those who appropriate opportunities from nature make sure that the rest of the community still have the freedom “to take the resources that one needs from the common stock that has been left by the last appropriator”. (Waldron 1988 p. 281-282) The SHSN is in effect the state providing the modern industrial equivalent of a ration from the common stock that was earlier made by the Homestead Act. Thomas Paine also gives a plausible example of such a contract: We will let certain people use unclaimed resources, provided they compensate us from the wealth that their labor can generate (and ours cannot) because they alone have access to those resources.
… And as it is impossible to separate the improvement made by cultivation from the earth itself, upon which that improvement is made, the idea of landed property arose from that parable connection; but it is nevertheless true, that it is the value of the improvement, only, and not the earth itself, that is individual property. Every proprietor, therefore, of cultivated lands, owes to the community ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund produced in this plan is to issue. (Paine 1796)
The original acquirers of property, and their financial descendants, get to keep most of the wealth, because it is a product of their labor, but they also need to use some of their wealth to recreate the opportunities that were lost to the rest of us when they took control of the wealth-generating resources. Paine’s ground-rent is essentially indistinguishable from the stakeholder proposals of Ackermann and Alstott.
Bird and Violable Rights
Colin Bird takes a different tack, by pleading nolo contendere to the problems with acquisition. He says that even if we grant that everyone has a right to every cent they possess, it is impossible to create a just society if everyone's rights are considered to be inviolable. Nozick says "Liberty upsets patterns", and we must consider liberty as an inviolable right, regardless of the consequences. Bird points out, however, that even the Libertarian "Night watchman state" has to treat rights as violable.
Suppose a wealthy self-owner wants to donate. . . to the Lutheran Church. . . but now suppose that the public agent taxes the wealthy self-owner in order to . . . prevent a greater number of more serious violations of self-ownership in the future. . .in this case, then, the public agent violates this self-owner’s right to make the donation. . .Local violations are then justified when they would make it easier for everyone to live by the lights of their own consciences. (Bird 1999 p. 154-155)
If person X wants to give a portion of his money to the Lutheran Church, and the state needs that money to protect the property of person Y who lives a hundred miles away, the night watchman state has to take that money away by force to provide police protection for person Y. If Person X says, "Hey, I'm not going to travel that far, I don't need police protection over there", that's tough, the state takes the money anyway. This does not imply that Person X has no right to the money, or that there is something wrong with giving money to the Lutheran Church. It does mean, however, that even though Person X has a right to that money, that right must be overridden to protect the rights of Person Y.
This has two implications, among many others. First of all, it shows that we have to recognize that the Night Watchman state is not a worthwhile goal in its own right, but rather a means to an end: the creation of a just society. Nozick was wrong in saying that the night watchman state ignores the larger pattern of society, and only protects inviolable rights. It presupposes a particular goal, and if another kind of state produces that goal more effectively, the libertarian must concede that the night watchman state should be replaced with a more extensive state. Suppose we accept the idea that the only criterion for justice is that everybody gets to keep their property. Suppose further that the primary cause of crimes against property in a particular society is a large uneducated lumpenproletariat, which steals because it has no opportunities for gainful legal employment. The consistent libertarian would have to acknowledge that such a society would require extensive free public education, and the establishment of new businesses that could hire the poor once they have been appropriately trained. If it turns out that no private business thinks that training these people is worth its time, the state would have to get involved in providing incentives to get those businesses going, or run the businesses themselves. If these kinds of social programs produce a lower crime rate than limiting government activity to arresting and locking up criminals, the consistent libertarian would have to concede that this kind of welfare state is superior to the Night watchman state.
Furthermore, once we acknowledge that the government cannot be value-free, we have the right to ask whether protection of property is the only legitimate value for the state to be guided by. Protection of property could be seen as an end in itself, but it is more plausibly seen as a means to protecting people’s right to self-determination and self actualization. When people don’t have opportunities such as education they can’t be genuinely free to shape their own lives. Bird argues that this is a terrible violation of their rights. Taking some money away from multi-millionaires does violates their rights, but this is a smaller violation of rights than keeping the poor permanently locked in the underclass by not providing them with opportunities. Consequently, it is fair and just to make the the rich pay for SRSH, just as it is fair to deny someone the right to contribute to the Lutheran Church so that other people can have police protection.
Conclusion
Libertarianism’s surface simplicity is misleading, for it relies on several unstated presuppositions about the nature of ethics and justice, many of which are highly questionable. Nozick’s version of libertarianism requires 1) Unconditional property rights, established by 2) a lineage of just transfers traceable to 3) a just original acquisition. The purpose of this paper has been to discredit all three of those criteria for determining property rights. No government, not even a night watchman libertarian state, can function if it makes property rights unconditional. No one in the real world can justify their property rights by citing a lineage of just acquisitions. Finally, the concept of a unilaterally declared original acquisition, which supposedly supplies the foundation for all other property rights, is incoherent and unjust. Rejecting any one of these assumptions is sufficient to discredit Nozick’s libertarianism, even if the others are left in place. A more moderate form of libertarianism, which requires the existence of something like SHSN is more consistent with the fundamental tenets of libertarianism, and with the common sense principles of justice, decency, and compassion that are traditionally thought of as being essential to good government.
Bibliography
Ackermann, Bruce and Alstott, Anne (2006) “Why Stakeholding” in Wright, Erick P. (ed.) (2006) Redesigning Distribution. London, UK, Verso.
Bird, Colin (1999) The Myth of Liberal Individualism Cambridge, UK, Cambridge University Press.
Fishkin, James(1983) Justice, Equal Opportunity, and the Family. New Haven, Conn. Yale University Press.
Hume, David (1739) Treatise of Human Nature Book 3 part 2, Sections 2-4. (on Justice and Property) www.gutenberg.org/cache/epub/4705/pg4705.html.utf8
Nozick, Robert (1974) Anarchy, State and Utopia. New York, NY, Basic Books.
Paine, Thomas (1796) Agrarian Justice http://www.thomaspaine.org/Archives/agjst.html
Rawls, John (1971) A Theory of Justice. Cambridge MA, Harvard University Press.
Taylor, Timothy (2005) Economics, 3rd Edition. The Teaching Company, Chantilly Va.
Waldron Jeremy (1988) The Right to Private Property Oxford, UK, Clarendon Press.
pp. 253-283
Whaples, Robert (2006) Modern Economic Issues. The Teaching Company, Chantilly Va.
Thursday, January 13, 2011
A New Progressive Strategy for California
Jerry Brown says that his new budget is designed to insure that there is “shared sacrifice” throughout the state, but this is false. California has twice as many millionaires as any other state in the union, and they are not being asked to make any sacrifices whatsoever. Their taxes will remain the same, even though the “sacrifice” required of them would only affect a few numbers in their bank account, and have no significant effect on their lifestyle. Furthermore, the sales taxes that Brown is fighting to keep (which the Republicans are calling “tax increases”, even though they are already in place) are proportionally the same for all income levels. Because 65% of all income growth between 2002 and 2007 went to the top 1 percent, (Atlantic Magazine Jan 2011) and the rich have benefited disproportionately from the post 2008 “recovery”, this is not an efficient way of getting where the money is.
Brown is assuming that there is no way to make these people take on their fair share of the burden. The Republicans have made the “No New Taxes” mantra an article of faith, and they can supposedly impose their will on the Democratic majority because of the 2/3 rule for revenue increases. There is, however, a secret weapon that is now available to the majority, if they decide to use it. The last election has now made it possible for a simple majority to pass a budget, even though two thirds are still required to approve revenue increases. In other words, the taxophobic minority can decide how big the pie is, but now the majority gets to decide how the pie is divided. This mean the majority can say to the minority “You don’t want to pay for Government? Then no government for you”. In other words, not a dime from Sacramento goes to any district whose representative refuses to vote for revenue increases. No public funded building projects, no libraries, no convention centers. Jerry Brown has plans which will increase his power to use Sacramento money as carrots. He wants to transfer more responsibilities to the states, and then send revenue to the individual cities and counties to perform what were formerly state government duties. There is however, an opportunity for using sticks as well as carrots. Transfer the responsibilities to every county and/or city, but only send money to areas whose representatives are willing to vote for revenue increases. Let the Republican districts pay for these responsibilities with local tax increases, or do without.
There are two possible outcomes that can arise from this action.
1) The Republican Districts stoically tighten their belts and deteriorate into little western approximations of Somalia, with little or no functioning government. I don’t think this is very likely, but even if this happens the rest of us will still be able to use the extra revenue to keep our parks and schools open.
2) The people in those districts will protest that they are being unfairly treated, and demand their services back. The rest of us then say “Write to your representative and state senator and tell him or her to vote for revenue increases. If they refuse, replace them next term with someone who will take a realistic approach to revenue issues. Until you do this, the fairest place to make government service cuts is to those who think that government is unnecessary.”
I can regretfully understand why President Obama has been forced to compromise with the new Republican majority in congress. Governor Brown, however, is under no such pressure. California withstood the nation-wide Republican onslaught by electing no Republicans to statewide office, and electing fewer Republicans to the statehouse. It is absurd and unjust that a minority perspective that has been decisively defeated at the polls should continue to maintain a stranglehold because of the two-thirds rule. In a recent poll, California voters were asked if we should “increase state funding for California’s community colleges and public universities.” 82% said yes. To call this approval “overwhelming” is an understatement. Those extremists who have repeatedly cut state funding for public colleges are clearly out of sync with the rest of the public. They have forced their will on us for decades because of the old budget rules. Now that the majority controls the budget, we can take back the power of self-government. They have never compromised with us, and now there is no need to compromise with them. It is time to play hardball.
Brown is assuming that there is no way to make these people take on their fair share of the burden. The Republicans have made the “No New Taxes” mantra an article of faith, and they can supposedly impose their will on the Democratic majority because of the 2/3 rule for revenue increases. There is, however, a secret weapon that is now available to the majority, if they decide to use it. The last election has now made it possible for a simple majority to pass a budget, even though two thirds are still required to approve revenue increases. In other words, the taxophobic minority can decide how big the pie is, but now the majority gets to decide how the pie is divided. This mean the majority can say to the minority “You don’t want to pay for Government? Then no government for you”. In other words, not a dime from Sacramento goes to any district whose representative refuses to vote for revenue increases. No public funded building projects, no libraries, no convention centers. Jerry Brown has plans which will increase his power to use Sacramento money as carrots. He wants to transfer more responsibilities to the states, and then send revenue to the individual cities and counties to perform what were formerly state government duties. There is however, an opportunity for using sticks as well as carrots. Transfer the responsibilities to every county and/or city, but only send money to areas whose representatives are willing to vote for revenue increases. Let the Republican districts pay for these responsibilities with local tax increases, or do without.
There are two possible outcomes that can arise from this action.
1) The Republican Districts stoically tighten their belts and deteriorate into little western approximations of Somalia, with little or no functioning government. I don’t think this is very likely, but even if this happens the rest of us will still be able to use the extra revenue to keep our parks and schools open.
2) The people in those districts will protest that they are being unfairly treated, and demand their services back. The rest of us then say “Write to your representative and state senator and tell him or her to vote for revenue increases. If they refuse, replace them next term with someone who will take a realistic approach to revenue issues. Until you do this, the fairest place to make government service cuts is to those who think that government is unnecessary.”
I can regretfully understand why President Obama has been forced to compromise with the new Republican majority in congress. Governor Brown, however, is under no such pressure. California withstood the nation-wide Republican onslaught by electing no Republicans to statewide office, and electing fewer Republicans to the statehouse. It is absurd and unjust that a minority perspective that has been decisively defeated at the polls should continue to maintain a stranglehold because of the two-thirds rule. In a recent poll, California voters were asked if we should “increase state funding for California’s community colleges and public universities.” 82% said yes. To call this approval “overwhelming” is an understatement. Those extremists who have repeatedly cut state funding for public colleges are clearly out of sync with the rest of the public. They have forced their will on us for decades because of the old budget rules. Now that the majority controls the budget, we can take back the power of self-government. They have never compromised with us, and now there is no need to compromise with them. It is time to play hardball.
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