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It’s Freedom, Stupid!

For a long time it has been taken for granted that property rights are fundamental to maintaining freedom. The argument has always supposed a contrary tension between equality and liberty. To a Libertarian, property rights are sacrosanct, and any violation of property rights, even (especially) to promote equality, is de facto a violation of freedom. From this, a Libertarian like Robert Nozick infers that taxation is theft. In the more practical world of neoliberal politics the inference is that if anyone is to be stolen from they must be stolen from in a comparable manner, and so emerges the demand for similar tax rates for the wealthy as for the not-so-wealthy, but it is all regrettable. And taxation for the purposes of equalising redistribution is the most regrettable of all. Property rights, according to the account, are the most essential ingredient in freedom – almost magical in its ability to promote it. A notable Libertarian has even claimed that money is the greatest instrument of freedom ever invented. This property-equals-freedom equation is very black and white. But the reality is a deep shade of grey that deserves a much deeper exploration.

There most definitely is a relationship between property ownership and freedom, but it is far from simple. We can start with the obvious contradiction. Property is not freedom. If freedom is the absence of obstacles and the lack of coercion (or threat thereof) then property is, by definition, the opposite of freedom – a severe constraint on freedom. Every piece of property is a little dictatorship. By having ownership rights over something I and I alone can decide what may be done with it, who may or may not utilise it, how they may do so, and so forth. I can use the force of the law to enforce my will as regards said property against everyone else in society. Every owned thing creates a zone of freedom for a single person – the owner – and a zone of unfreedom for every other person. In a society where most things are privately owned (or in the Libertarian utopia where all things are privately owned), property creates unfreedom for most people over most things. (This is the simplest case: in practise we place social constraints on usage for a variety of reasons, but such limits are necessarily a weakening of property rights). In the extreme case, a person with no property suffers from total freedom deprivation (Jeremy Waldron gives an excellent discussion of the plight of homeless people in property-based societies).

If property rights are little tyrannies, should we not reject them outright? Not at all. Such little tyrannies provide a defensive route to valuable freedoms. Property ownership, while not being freedom itself, can be instrumental to promoting important active freedoms.

We can define two categories of property:

1) The first category is direct control over the material goods we need to pursue our goals and allows us to directly pursue those goals without interference. The characteristic of this category is that it provides independence. In this domain we are free from others by virtue of them not being free to control such property.

2) The second category is control over material goods that do not relate directly to our goals. This second class has the characteristic of allowing us to deal with those who do hold the goods that we need. It is a means to manage interdependence and cooperation. It affords us a degree of leverage over others. We can exchange our goods in order to obtain the things we need to pursue our goals from others. Property acquired in this way is then transformed into the first category.

Private property rights can be a useful institution for managing the fact that we live in a world that we physically share with many others. They provide protection for our private domains and facilitate our relationships with others.

So we shouldn’t worry about the little tyrannies of property then? That is, broadly, the Libertarian conclusion, but, alas, it cannot be ours. Libertarians will eagerly recognise tyranny in the State (even when there may be none) but consistently fail to recognise comparable tyrannies in individuals or groups that flow from the property system. In previous posts I’ve talked about the importance of bargaining positions and of the characteristics of transient and durable benefits that result from bargains. The durability of benefits from one bargaining situation carry to the next and can affect the character of subsequent bargains reached. The property system is not the only ingredient in bargaining (a person’s genetic vulnerability to physical disorders is another, for example). But, because of its central role in our market societies, property is one of the major determinants of bargaining relationships. Those who have significant first-category property are likely to have a strong bargaining position as they can simply reject offers out of hand. But in modern society the second category is by far the dominant one. Almost all paid work is towards this end – we make things that we don’t personally need in order to receive an income by which we can pursue our needs. Much hinges on the dispersal of second-category property and the bargaining relationships that it gives rise to. Some, like Hayek, argue that part of the beauty of private property is that we can use other people’s property to achieve our own goals. But this claims too much: such usage is to freedom as monarchy is to democracy – we do so only at the owner’s pleasure which will most likely involve strengthening the owner’s relative bargaining position.

In “nature” (and in the animal kingdom), the ability to accumulate property is limited to the ability of an individual to protect that property. This provides a natural limitation to how much one can hold goods that others need or want – a parallel to our notion from last time that animals reach a mature size and grow no more. We clever humans have invented institutions that counteract this and allow almost unlimited accumulation – not least, that great instrument of freedom, money. Such institutions create many advantages. But if codified in law and its enforcement, unlimited property rights can readily lead to abuse. If, for example, one person owned all the food in a society then property, in this instance, is clearly an instrument not of freedom but of tyranny. It is hardly better if ownership of most property is split between a few people: the bargains that all the remaining people can make will hardly be the better for it. Libertarians occasionally recognise the danger of “monopoly” but only treat it as a problem once it has occurred (and myopia leads them to see it in the State far more readily than in individuals). For them, monopoly is a true/false situation. This is a hack, at best, and is nothing more than the failure to recognise a fundamental problem in their property model. It is better by far to treat monopoly as a graduated scale, a matter of balance, than an exceptional extreme – more concentration increases the likelihood of unfree relationships. When a small number of individuals own much second-category property, they have enormous leverage over their society. We must ask whether they need that amount of leverage over others to achieve their goals, and the question must arise as to whether their personal goals are compatible with the overall freedom of society. Monopoly is not an exception in capitalism. It is the norm. The tendency, in a free market society, is always towards monopoly or oligopoly: property gravitates to property, advantage to advantage. Compounding formulas rule above all. Inequality is the result, and with it, domination.

Oh, they will tell you about how trade is not a zero-sum game – that everyone is a winner. Our model of asymmetrical benefits should cast some doubt on that. The evidence on the social effects of inequality should also tell us that direct effects are not the whole story. The “trickle-down” effect has been debunked: what has been uncovered is a “pouring up” effect with disastrous consequences for bargaining – and hence free – relationships. In any case, some form of zero-sum equation is a necessity if we are to achieve the stable “mature economy” that featured in my previous post, with equality being the dominant measure. One thing that I have not mentioned to date is that the kind of property also matters – we forbid the ownership of slaves where once they were considered as legitimate property, for example. A task for future discussion is whether the ownership of the productivity of others (as manifest in the dominant productive property model – the stock or share) is morally permissible, especially given the role that it has in creating unequal societies. But that is a big topic for another day.

Our two categories of property tell us something important. The ability of property ownership to promote freedom is very much dependent on the balance of ownership. If the balance is right then we have a sound basis for a free society built on cooperation. People will have the things they need to freely pursue their lives, and will have the basic structure to cooperate with others in a fair way. However, if that balance is wrong then freedom suffers. The dynamic of asymmetric bargaining positions will habitually take us away from such balance. The Libertarian conception of property rights – the right to keep all acquired property – simply will not do. If freedom is our genuine goal, and if we desire the greatest amount of freedom that is compatible with the same for everyone, then the emphasis must first be on the right to have property. This must take precedence as it is this that defines the balanced relationships within which freedom can exist.

Equality and freedom are far more closely related goals than is usually argued. The tension is not, as is claimed, between these two. The true tension is to be found between freedom and property. By no means does this mean that we should abandon the private property system. It is very effective when balanced, but it is to that balance that we must attend. Far from ruling out taxation and redistribution, full attention to the interplay between property and freedom may well demand it.

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Categories: Politics
  1. Reyhan Ricklefs
    October 11, 2011 at 2:49 am

    I think the core motivation for property can be summed up in one word: access. Access to food that has been gathered. Access to shelter that has been built or otherwise secured. Access to the tools that enable one’s productivity. Traditionally, property ownership has been a reliable way to ensure that access is readily available. But, along the lines, the goal and the means have become confused with one another. The “information age” has provided evidence of this and helped to distinguish two, as seen through the success of businesses such as Netflix, Spotify, and Rhapsody — services which provide subscriptions to content rather than selling discrete products.

    Granted, the one similarity that these particular examples have is that they provide access to intellectual property, which is unhindered by the limitations of supply — only the limitations of distribution media. However, this leads to a whole different discussion about the legitimacy of intellectual property, which is a completely different topic…

    • October 11, 2011 at 7:24 am

      Excellently put Reyhan. Access is indeed the issue. And it is, I think, pretty straightforward to understand why (unlimited) property rights are a real double-edged sword in that respect – they can assure access but they can also deny it (or attach unreasonable conditions to it).

      Intellectual property rights are a huge and important issue with massive moral implications. On the one hand there is the need to protect investment to encourage incentive. And, as with “regular” property rights there is the case where they are used coercively. E.g. what are the implications for freedom (and access) when Monsanto can start patenting crops? My gut feel is that we could do a lot more for the developing world by relinquishing int. prop. rights than we can by foreign “investment”. I’m reading a great book by the economist Ha-Joon Chang called “Bad Samaritans” where he talks about some of these things. Well worth a read.

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