An abridged version of “Free Markets, Property Rights, and the Environment,” presented to a conference on “Libertarianism and its Critics” at Chapman University, November 14, 2008. This essay includes portions of a published article, “With Liberty for Some” and several essays previously published in The Crisis Papers and The Online Gadfly as indicated by the links in the essay.
Over the past decade, I have written and published numerous essays critical of Libertarianism. In fact, much of the focus of my book in progress, Conscience of a Progressive, is a critique of the libertarian doctrines of market absolutism, social atomism, and negative rights.
And yet, I would describe myself as a “semi-libertarian,” in that I endorse the libertarian positions on personal liberty –” of association, of religion (or lack thereof), of sexual preference, of free expression, etc. Thus the libertarians and I agree with John Stuart Mill that “over himself, over his own mind body and mind, the individual is sovereign.”
In this regard, the libertarians are in agreement with most liberals. So much so that many libertarians voted, albeit reluctantly, for Barack Obama in the recent election (as I discovered in a conference on “Libertarianism and Its Critics,” in which I participated this past week).
However, regarding economic justice, property rights, and the protection and preservation of the natural environment, libertarians disagree profoundly with the liberals and are more in tune with the conservative Republicans.
Thus the libertarians are in the strange position of agreeing, in some essential respects, with both the Democrats and the Republicans. But their disagreements with both are so substantial that the libertarians are estranged from both parties.
With the libertarians, I cherish and defend the fundamental rights to life, liberty and property. Also, along with the libertarians, I affirm the “like liberty principle:” that, in the words of John Rawls, “each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all.”
However, with the liberals I insist that when we explore the implications of the basic triad of rights to life, liberty and property, and combine them with the like liberty principles, we find complications and conflicts which require the articulation and enforcement of rules by the only agency authorized to act disinterestedly on behalf of all citizens, namely a democratic government acting with “the consent of the governed.”
This is all very abstract, and I will attempt in the course of this essay to exemplify these principles with familiar examples.
A “Society” is More Than the Sum of its Parts
Perhaps the fundamental dispute between libertarians and liberals such as myself resides in the ontological status of “society” and “the public."
The social atomism of the libertarians was starkly expressed by Margaret Thatcher when she wrote: “”There is no such thing as society –” there are individuals and there are families.” And Ayn Rand: “There is no such entity as “the public” … the public is merely a number of individuals" Now admittedly, Baroness Thatcher is not a political philosopher, and Ayn Rand insisted that she was not a libertarian. So let’s look further.
Consider first, this passage from Frank Chodorov:
Society is a collective concept and nothing else; it is a convenience for designating a number of people… The concept of Society as a metaphysical concept falls flat when we observe that Society disappears when the component parts disperse… When the individuals disappear so does the whole. The whole has no separate existence. (Quoted by David Boaz, Libertarianism: A Primer, p. 96).
Next, David Boaz of The Cato Institute:
For libertarians, the basic unit of social analysis is the individual…. Individuals are, in all cases, the source and foundation of creativity, activity, and society. Only individuals can think, love, pursue projects, act. Groups don’t have plans or intentions. Only individuals are capable of choice…
[At] the conceptual level, we must understand that society is composed of individuals. It has no independent existence. (Ibid., p. 95).
Now consider the implications of this denial of the "independent existence" of "the public" and "society." If there is no "public," then there are no "public goods" and there is no "public interest." If there is no "society," then there is no "social harm," or "social injustice" or "social (and public) responsibility." It then follows that government has no role in mitigating "social injustice" or promoting "the public interest," since these terms are fundamentally meaningless. Poverty and racial discrimination, for example, are individual problems requiring individual solutions.
In contradistinction, the liberal affirms that “society” and “the public” are “emergent entities,” like chemical compounds, languages, and living organism, with qualities distinct from those of their components. Attempts to reduce societies and publics to their component individuals is what the Brits call “nothing buttery:” for example, “a Beethoven symphony is nothing but notes,” or “Hamlet is nothing but a string of words,” or “a human mind is nothing but cells and synapses.”
If we can cite cases in which advantages to each individual harms the interest of all individuals, and conversely that harm to each individual benefits all individuals, then, by distinguishing “each” and “all” we have demonstrated the existence of an “all-entity,” “society,” that is distinct from a summation of “each” individual. Elsewhere, I have attempted at some length to prove that society is more than the sum of its component members (“good for each, bad for all,” and “bad for each, good for all”).
Consider just two examples:
Antibiotics: The over-use of antibiotics "selects" resistant "super-bugs," decreasing the effectiveness of antibiotics for all. But just one more anti-biotic prescription for a trivial, "self-limiting" bronchial infection won’t make a significant difference "in general," while it will clearly benefit the individual patient. But multiply that individual doctor’s prescription by the millions, and we have a serious problem. "Good for each patient, bad for the general population." The solution: restrict the use of antibiotics to the seriously ill. Individuals with trivial and non-life-threatening ailments must “tough it out.” “Bad for each, good for all.”
Traffic laws: We all agree that traffic laws can be a nuisance. But if you believe that traffic lights constrain your freedom of movement, try to drive across Manhattan during a power outage! In the blackouts of 1965 and 1977 in the eastern United States and Canada, traffic began to move only after the police and a few citizen volunteers stood at the intersections and directed traffic. (I was in Manhattan during both events). The decision of each driver to accept constraints worked to the advantage of all. So too with the traffic lights and stop signs that we encounter daily. We are all freer to move about only because we have collectively agreed to restrict our individual freedom of movement. “Bad for each, good for all.”
A third example of individual self-serving behavior leading to ruin for all, “the tragedy of the commons,” follows shortly.
To sum up: “society” is not, as the libertarians would have us believe, simply a physical location where autonomous private individuals “do their own thing,” from which activity somehow, “as if by an invisible hand” (Adam Smith), benefits for all accrue without foresight or planning. On the contrary, the liberal insists, a society is more than the sum of its individual parts. A society is, as John Rawls puts it, “a cooperative venture for mutual advantage [which] makes possible a better life for all than any would have if each were to live solely by his own efforts.” As the anti-biotics and traffic examples illustrate, common goods are achieved through individual constraint and sacrifice. ” Bad for each, good for all.” Conversely, unconstrained self-serving behavior by each individual can harm society as a whole. “Good for Each, Bad for all.”
The liberal does not deny that self-serving individual behavior, for example by scientists, entrepreneurs and artists, often or even usually results in benefits for all. (“Good for each, good for all”). Instead, the liberal insists that this is not a universal rule. In innumerable instances, such as the two presented above, it can be clearly shown that social benefit requires individual constraint and sacrifice.
The libertarian insists that, apart from the protection of life, liberty and property, whatever government attempts, privatization and the free-market can do better. For example,
Jacob Halbrooks: “Adam Smith’s ‘invisible hand’ of the market guides all participants in society to promote the best wishes of everyone else by pursuing his own wants and desires.”
David Boaz: “[T]he free market allows more people to satisfy more of their desires, and ultimately to enjoy a higher standard of living than any other social system… We need simply to remember to let the market process work in its apparent magic and not let the government clumsily intervene in it so deeply that it grinds to a halt."
And Milton and Rose Friedman: "A free market [co-ordinates] the activity of millions of people, each seeking his own interest, in such a way as to make everyone better off… Economic order can emerge as the unintended consequence of the actions of many people, each seeking his own interest."
What these "market absolutists" fail to appreciate is that not all workings of "the invisible hand" of the marketplace are beneficial. Some unintended consequences of market activity are harmful — "the back of the invisible hand." Economists call these "market failures."
The source of market failure is hinted at in Milton Friedman’s notorious proclamation that "the social responsibility of business is to increase its profits.” This result is neatly accomplished by internalizing profits and externalizing costs on unconsenting third-parties, the so-called "stakeholders." If the stockholders of a corporation are dissatisfied with the profit-making of the corporation, they can fire the managers. But who, other than the government, speaks for the stakeholders: those who live downwind and downstream from a factory, or most recently the tax-paying public, present and future, that has been presented the bill for rescuing Wall Street? If not the regulatory agencies, then perhaps the courts. However, as I have explained elsewhere at some length, the courts fall short as a remedy for market failures.
Limits of privatization and property rights
The Tragedy of the Commons. Garrett Hardin’s landmark essay, “The Tragedy of the Commons,” vividly displays the principle, “good for each, bad for all.”
Imagine a village of sheep herders, surrounded by an open pasture, a “commons,” owned by none and utilized by all. The number of sheep in the pasture is at “carrying capacity,” which means that the addition of more sheep will degrade productivity and sustainability of the common resource. It is to the advantage of each villager to add to his personal wealth by putting another of his sheep in the commons. But by so doing, he decreases the wealth and well-being of all the others. “Good for each, bad for all.”
And now the “tragedy:” Absent collective constraints on the individual, the only rational thing for the autonomous “economic man” to do under these circumstances is to increase his wealth by adding sheep to the commons. Presumably, all the others will be likewise motivated. True, it will destroy the resource and bring ruin upon all, including himself. But he is helpless, by himself, to avoid this result. Might as well “get what he can while he can.”
If this scenario applied only to sheep herders and pastures, it would be of little interest. But the significance of the tragedy of the commons resides in its scope of application: to air pollution, to global population, to game management, to ocean fisheries, and to much, much, more.
Hardin’s solution is both obvious and compelling: “mutual coercion, mutually agreed upon.” But who or what is best suited to articulate and enforce the mutually agreed upon rules of mutual coercion? What else but a democratic government, acting in behalf of all, and answerable to all?
The libertarian replies that the tragedy of the commons can be addressed by privatizing the commons — for example, by closing the open range and dividing it into private parcels. This solution internalizes the cost of over-exploitation, thus motivating the owner to manage the property sustainably. Agreed. But this is only a partial solution, for some commons, by nature, can not be privatized. Among these are migrating wildlife, pollenizers, the atmosphere, rivers, aquifers, the ocean, the hydrological and nutrient cycles, the global climate. The economic value of these so-called "natural services" is calculated by Robert Costanza, et al at approximately double the gross national product of the United States.
Who or what is to protect and preserve these indispensable natural services? We arrive at the same answer: the government, or more correctly, a consortium of governments, for these services, like nature itself, are totally indifferent to both national boundaries and property lines.
“The Public Interest:” Randville, Rawlsburg, and New Orleans. Are there public goods? Ayn Rand, let us recall, believes that there are no public goods because, “there is no such entity as ‘the public’ — since the public is merely a number of individuals — any claimed or implied conflict of the ‘public interest’ with private interests means that the interests of some men must be sacrificed to the interests of and wishes of others."
The liberal, of course, vehemently disagrees. As evidence of the existence of “public goods,” consider a parable.
Two communities are situated on opposite banks of a great river: on the right bank (appropriately) is “Randville,” and on the left bank is “Rawlsburg.” Randville is populated entirely by libertarians –” rugged individualists all, who shun “collective” activity and who assume full responsibility for their personal safety, welfare and property. “Rawlsburg” is comprised of liberal individuals who are properly covetous of their personal rights, yet fully aware of the desirability of promoting public goods and of acting collectively in the face of common emergencies.
News arrives at both communities that a great flood is approaching from upstream. The citizens of Randville immediately get to work piling sandbags around each of their individual dwellings. Across the river in Rawlsburg, brigades of citizens are hard at work building a levee around the entire town.
Come the flood, the puny separate efforts of the rugged Randville individualists prove to be futile, while the substantial communal levee surrounding Rawlsburg holds firm and the community is spared.
“Now hold on!,” the libertarian retorts. “Surely, faced with this common emergency, the folks at Randville would volunteer to build a levee. That’s just common sense.”
Very well, but what about those Randvillians who say: “you guys go right ahead and build that levee. I’d rather stay at home –” I have other priorities.” Surely the good libertarians wouldn’t want to force anyone, in Ayn Rand’s words, to sacrifice their interests to the interests of others.
And so we have the well-known “free rider problem,” whereby an individual gains unearned and cost-free advantage from the labor of others. A profound injustice on the face of it. The solution? What else than to coerce a contribution to the common effort, either by labor or, failing that, cash assessments.
In other words, taxes.
So, it comes to this: The only way for the Randvillians to deal with “the free riders” is to coerce labor on the levees, or assess taxes in lieu of labor. They must do so in behalf (are you ready for this?) of the “common good” of the community-as-a-whole. Just as the Rawlsburgers are doing across the river.
The Randville and Rawlsburg example is a fictitious thought-experiment. If it seems far-fetched, then forget Randville and think New Orleans, August, 2005.
Here’s another case that is quite real, and even personal:
In April, 2003, California Governor Gray Davis requested $430 million in federal funds to reduce the fire hazard in the southern California forests. The request was ignored until, on October 24, George Bush formally rejected it. The very next day, “the Old Fire” broke out in the San Bernardino mountains, followed by several more fires, eventually consuming three quarter of a million acres and 3577 homes, and causing 22 fatalities.
This particular disaster struck close to home –” precisely 150 feet close to my home, where the fire was stopped at my property line. “The Old Fire” almost surrounded the cluster of houses in our neighborhood, and only the combined, coordinated and professional effort of the US forest Service and the state and local firefighters saved our homes. Several days earlier the county Sheriff ordered us off the mountain while these “big government bureaucracies” did their work –” magnificently.
Perhaps some libertarians would have preferred to de-fund the government fire-control agencies and then to leave it to each of us individual property owners to take a valiant stand by our individual homes, garden hoses in hand. Who can doubt that had we tried that, all our houses would have been reduced to ashes and many of us would have ended up as “crispy critters.”
In his 2000 debate with Al Gore, George Bush said "I think you can spend your money more wisely than the federal government can." In November, 2003, all of us San Bernardino mountaineers –” democrats, republican, independents –” were convinced, contrary to George Bush, that “the government” spent our tax money better than we could.
Libertarians routinely trot out horror stories about government waste, fraud, and abuse, and measure these troublesome anecdotes alongside an unrealizable ideal of a "perfectly functioning market." However, this argument commits the fallacy of disparate comparison by comparing what the perfect market would do in theory with what imperfect governmental agencies, at their worst, have done in fact. No thoughtful liberal defender of public regulation of the environment in liberal democracies will pretend that this approach is perfect. In fact, as everyone knows, regulatory agencies are under constant assault and their public service is constantly compromised, usually by the very free market forces and private interests that are celebrated by the libertarians. But if the libertarians have a better alternative, then it must be shown to be preferable in practice, rather than in ideal theory. However, history shows that the unconstrained free market, privatization and the absence of "government interference" has given us opium in cough medicine, spoiled meat, child labor, mine disasters, black lung disease, air and water pollution, depletion of natural resources, and now the collapse of the financial markets.
"The free market," that cornerstone of libertarian theory, cannot survive without a governmental referee, for the unconstrained and unregulated "free market" contains the seeds of its own destruction. Though free market theorists are reluctant to admit it, capitalists are not fond of free markets, since open and fair competition forces them to invest in product development while they cut their prices. Monopoly and the elimination of competition is the ideal condition for the entrepreneur, and he will strive to achieve it unless restrained not by conscience but by an outside agency enforcing "anti-trust" laws. That agency, necessary for the maintenance of the free market is, of course, the "government," so despised by the libertarians. Evidence? Look to history. Then it was John D. Rockefeller, now it is Bill Gates
When, during a football game, a referee makes a call against the home team, the fans are often heard to shout: "Kill the Ref!" — forgetting, for that moment, that without referees, the game could not continue.
Similarly, "abolish government" is another cry that issues from frustration. Without a doubt, governments can be damned nuisances. They require us to pay taxes, often for services that do not benefit us or for benefits which we take for granted. Governments tell us that we can’t build homes and factories on public lands, that we can’t throw junk into the air and rivers, that we can’t drive at any speed we wish, and that we can’t sell medicines without first testing their safety and efficacy. All this curtails the freedom and the wealth of some. But at the same time, such "government interference" promotes the welfare of the others: of consumers, travelers, ordinary citizens and, yes, property owners. Among the liberal democracies, the constraints of "big government" tend to burden the wealthy and powerful, while those same constraints protect the poor and the weak, all of whom, in a just polity, are equal citizens before the law.
In short, libertarianism fails, not because it is wrong, but because it is insufficiently and over-simplistically right. It correctly celebrates the rights of life, liberty and property, and then fails to deal with the conflicts and paradoxes that issue from the exercise of these rights. Moreover, the libertarian fails to appreciate that a just system of adjudication of these rights and claims of presumably equal citizens would necessarily restore much of the very governmental structure that the libertarians would abolish and that the liberals defend.
If the libertarian scheme of free markets, absolute property rights and torts will not suffice to protect the rights of all citizens and the integrity of the natural environment, then what will?
Here’s a modest, if familiar, proposal. Let the public in general establish an agent to act in its behalf, and as the guarantor of the commonly held values and aspirations of the polity. And then let that agent first determine and then enforce rules for the optimum sustainable use of the necessarily "common resources" (e.g. the atmosphere, the hydrological cycle, migrating wildlife, etc.). And if the public is not satisfied with how that agent is acting in its behalf, it then has the right to replace that agent with another.
Such a system is in fact in place: the "agent" is called "government," the rules are called "environmental law and regulation," and the system of checks against the abuse of power is called "democracy." In the United States Constitution, as well as the supreme law of numerous other liberal democracies, the freedom and integrity of the individual (i.e., one’s rights to life, liberty and property) are protected, even from "the tyranny of the majority."
Admittedly, the liberal democracy and regulated capitalism that I would recommend is not perfect — nor is any human institution under the sun. But an anecdotal inventory of the shortcomings of public regulation of the environment does not, by itself, constitute a repudiation of the existing system.. What is required is a clear and persuasive presentation of a better workable alternative. This the libertarians have not offered us. Nor can they, as long as anyone pays more than casual attention to human psychology, ecological necessities, and the lessons of history.