Capitalism

A recent video I saw on YouTube presented some arguments against libertarianism. Two points that stick out in my mind are that the institution of property somehow constitutes a form of theft and that libertarians have entered a social contract along with everyone else. This is what supposedly justifies our government and all or at least a great deal of the things that it does including the violent enforcement of tax codes.




On the first point this will require some work, regardless of which position you take on property. No matter how you decide how the non-human parts of the material world are to be organized, we need rules to govern their use. If anyone could use scarce resources in any way they saw fit, then they would tend to use them even in situations where the cost would outweigh the benefits. Every society understands this on an intuitive level.



However there are some who would argue that establishing property rights is an initiation of force or coercion. This is not strictly true, but I see their point. Property rights are part of a moral philosophy. There are ideas about how the control over the use of resources can and cannot take place. As part of a system of moral and ethical values, these rules need not involve any use of force at all. They might only be enforced socially, which is the way that property rights are typically enforced for items that aren’t very valuable. Few people will call the police or pull out a gun if you steal their toothbrush.



Just about every society has personal property. In just about any society that has toothbrushes, these are likely to be owned by individuals in most cases. Even socialist societies have personal property. I have talked with people from the former Soviet Union and found out that they had laws against stealing personal property as well as state property.



The institution of private property is one of a few ways of dealing with the tragedy of the commons. Suppose we have a common well from which each of a certain number of people can draw water. In this case any of the members of this society will want to draw water from the well as long as the benefits exceed the costs. However, since they only partially own water in the well, they will be motivated to draw out water until the cost of doing so is several times the benefit. Hence they will remove too much water.



Now there are other ways of dealing with the problem. Generally the society will have to establish some rules regarding the use of resources. For example, everyone can walk in the park, but no one can start chopping down its trees to build a house. However, we cannot come up with enough rules to govern the use of everything in this manner. Further, in many cases the use of rules will not work as well as placing control over the resource in the hands of a single individual. That individual will then enjoy the benefits and suffer the costs of any use of that resource. The use of rules is unlikely to align the costs and benefits quite as well.



It is not property rights that are inherently violent, but violent enforcement of those rights. However, it is the same with any other method of controlling scarce resources. The state isn’t likely to rely on moral persuasion if you start chopping down trees in the local park. In either case society is likely to have rules regarding whether or not violent enforcement is permissible based on the severity of the offense.



One area of controversy is whether capital goods should be private property. On this point, I must side with capitalism. State ownership of capital goods has been shown to be unworkable in theory and practice. Unless capital goods can be bought and sold, we will have no way of determining their value so that we can make rational economic decisions.



Now I will turn to the social contract. Some argue that by being born in a certain place, you have effectively signed a contract. I wonder if this is supposed to apply to dictatorship. The argument that if people don’t like the way the government operates, they can always move applies just as well to this case. However, people will view the case differently if the government is democratic.



One problem with this is that no government is fully democratic. For example there is no point in time when the people of the United States wrote a constitution. Our constitution was the result of an agreement between legislators, who were elected by adult men who didn’t happen to be slaves. Granted many of the deficiencies have been corrected since then. Slavery has been made illegal, and women have been granted the right to vote. However, there are many features that remain that favor the class of men who wrote the constitution, the legislators. Who is allowed to make changes? The legislators. That is an obvious conflict of interest.



Another problem with this argument is that it fails to take into consideration the necessity of granting certain individual rights. For example, we don’t allow a majority of people to determine what sort of speech should be legal. There is a widely perceived need to protect unpopular speech. But if we are to enjoy the benefits of individual property rights, then we will need to protect certain unpopular uses of property. If individuals are to control resources rather than majority opinion, we will need some way of restraining the majority in this regard.



In this sense capitalism can be said to be undemocratic. However, this is no more so than in the case of free speech or freedom of the press. In both cases where there is political control, it is exercised democratically, and both cases rely on widespread public acceptance of the restrictions on that political control. Democracy is an idea about who should have political power. Libertarianism is an idea about how that power should be exercised. As with liberalism, they will only be compatible in the presence of that popular opinion.



In our society there is widespread public acceptance of the idea that it is immoral to kill people because of their religion. This is not the case in every society. A free society depends on widespread popular support for certain ideas about how people should be governed. When the government imposes taxes, they are engaging in activity that would be considered immoral and in fact illegal if performed by an individual.



But how can we be certain that if taxes were not collected that we wouldn’t experience worse problems? We cannot rule out the possibility that taxes are necessary in order for us to maintain the sort of government that would be able to provide sufficient protection of property rights from other forms of encroachment. However, this is another matter from saying that any sort of tax is acceptable so long as a majority approve. In this case taxes must be seen as a necessary evil. At the very least the state would have to show some sort of effort to find alternate forms of funding government activity as well as efforts to avoid expenditure that isn’t necessary to maintain government. Our government has done neither.