Some Thoughts on Libertarianism

Some Thoughts on Libertarianism June 21, 2006

The Politics of Atheism posts back in April inspired a healthy debate with several regular commenters who advocate a libertarian political philosophy. One of the major claims of this philosophy, defended both on this blog and by prominent libertarians such as Timothy Sandefur, is that “taxation is theft” and that any taking of property from any individual, by the government or by anyone else, without that individual’s consent is an immoral act even if done with the best of intentions.

I disagree with this claim, and to see why, let us craft a thought experiment in which we grant the libertarians exactly what they wish. Let us assume that all rules that infringe on people’s ability to contract freely or to do as they wish with their own property were abolished, and we started over again in a brave new libertarian world. In this world, the right to own property is absolute, and people who own property can set whatever rules they desire as a condition of allowing others to use it; those others can, in turn, either freely accept and abide by those rules or seek an alternative elsewhere.

It is a key tenet of libertarianism that economic inequality, arising from fair competition in a free market and premised on people’s differing levels of natural talent and willingness to work to achieve their goals, is a normal and desirable state of affairs. So be it. Once the initial conditions have been set, we will step back and let the market work. Over time, because of their differing levels of business acumen, foresight and dedication, some people will naturally be more successful than others, and will become wealthy.

Let us now suppose that those who are most successful in this market move toward expanding their property, a natural and necessary step if they want to further boost their wealth by increasing their ability to produce whatever product or service they have been providing. They achieve this by purchasing neighboring tracts of property from their owners who freely agree to sell them. Over time, as this process continues (because free competition inevitably results in a power law distribution), there will be a few individuals who are very wealthy and possess large quantities of land and other resources, and a comparatively large number of individuals who possess little or none.

Next, let us suppose that the largest landholders choose to diversify. Instead of devoting their entire property to uses of their personal choosing, they choose to allow others to move onto and live on their property, and use the resources of that property to make a living – by farming, say, or by mining, or simply by using the space to run a business of their own. In exchange for this privilege, the landholders charge their new tenants a fee. This is a perfectly fair libertarian transaction, since it is free and uncoerced and entails a mutually agreeable trade of value for value.

However, note that if these landholders charged their tenants only a fixed, one-time fee for the right of occupancy, they would be losing out, since a successful tenant might use the landholder’s property to derive a potentially unlimited profit. Therefore, instead of charging a fixed amount, let us suppose that the landholders would understandably set the fee as a percentage of what the tenants produce. This seems only fair in a free-market world: as long as you are going to keep using my resources to make a profit, you should keep paying me for that privilege.

Finally, let us suppose one more step: the large landholders, now profiting handsomely from the labors of their tenants, choose to improve their competitive position by using a portion of that profit to offer beneficial services to those tenants: services such as police protection, medical care, education, utilities and infrastructure. A landholder’s doing so would make the offer to dwell on their land more attractive to potential tenants, thus increasing their population of tenants, increasing their profit, and allowing them to expand still further.

My question to libertarians is this: How does this world differ from the one we actually live in? By beginning with a strictly libertarian worldview and following it all the way through to its logical conclusion, we end up with a situation identical to the one that actually exists now: independent states which collect taxes from their citizens as a way to fund social programs for the common good. There is not a single step in this process that is inconsistent with the strictest possible interpretation of a libertarian political philosophy. The only differences between the actual world and this scenario are terminological – instead of large landholders, we have states and governments; instead of tenants, citizens; instead of occupancy fees, taxes; instead of beneficial services, social programs. It would seem that we do live in a libertarian world after all. Libertarians should rejoice to hear this. They need not struggle to put their preferred view of politics into effect, because it has already happened.

Why is taxation not theft in this thought experiment? Because, obviously, the tenants/citizens are not being forced to pay anything. They agreed to accept a landholder’s terms in exchange for the privilege of living on their property. If they dislike the terms of the social contract of that landholder, they are free to leave and seek another whose politics are more congenial to their own. And this principle holds true in exactly the same way in the real world: if a libertarian dislikes paying taxes, they can leave the state they live in and take up residence in another. (Given this, I concede that taxation imposed by a state that prevented its citizens from leaving would be theft.) Arguing that an individual has the right to refuse paying taxes while still living in that state and taking advantage of the social benefits it provides is analogous to arguing that an individual has the right to violate the terms of a contract they freely agreed to, something which any libertarian should find abhorrent.

There is one difference between this thought experiment and the real world that I have not touched upon, however. The scenario I have described in this post is actually a world of dictatorships, where single individuals or small groups of individuals control all the land available for dwelling and are not accountable to anyone. Large property owners can set absolutely any rules they like for the use of their property, and this may lead to work-or-starve scenarios where people are coerced, not by force but by bad luck and circumstance, into grueling, dangerous, low-paying jobs that leave them little or no practical freedom. This is undesirable. It seems to me that a libertarian should actually prefer our current democratic society to the world of this thought experiment, because it affords us more control over the laws of the land – more freedom – via participation in the democratic process.

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