Concept of property
Your libertarian argument based on property
rights is utterly conclusive, because it is purely logical, being based on the
definition of the term “property”.
However I reject your definition of the
term “property”. Property is a social institution. Its definition must be
adapted so as to maximise the welfare of society as a whole – without however
despoiling the proprietor, which would discourage productive efforts.
Private property exists only thanks to the
vigilance of the state. Private property can be enjoyed only thanks to the
provision of infrastructure, which in practically all historical instances has
been provided by the state. The very concept of private property is defined by
the state in its laws.
You attempt to define property
ahistorically on the basis of an abstract morality that fraudulently claims to
have no social or historical roots. Such a claim cannot be taken
seriously.
Defining property
You call the state a parasite because the
state doesn't respect private property. However private property was created
and defined by the state and is protected and maintained by the state. Without
the state, private property does not exist. How can you oppose private property
on the one hand to the state on the other as if private property were an
independent entity unrelated to and prior to the state?
Moreover, you call the state a parasite
because it encroaches on the private property that it created. However
parasitism clearly implies harmful activity, activity that is pernicious to
others, in this case to property owners.
To make this epithet stick, you must prove
that the net effect of taxes and other state encroachments on private property
is to reduce property owners’ wealth (or society’s wealth, or both).
But taxes are used among other things to
pay policemen’s wages. If there were no police, property owners would be wiped
out in 24 hours by bands of roving looters. So you cannot be demanding the
abolition of the police. Therefore you must be implying that the state continue
to maintain and defend private property for free, without charging any of its
expenses to property owners. In that case, who shall pay the expense of defending
property owners’ wealth?
Your theory seems to demand the existence
of a class of persons who own no property, from whom the state should extract
the revenue required to pay the costs of defending property.
Thus your theory of property seems to require
a slave class without property rights.
The next logical step is to say, with
Proudhon “Property is theft.”
Different kinds of property
Stating the issue of property as a moral
question, i.e. right or wrong, is unacceptable.
There are many different sorts of property
with different economic characteristics. Some assets are fixed in amount, like
land, while others are easily multiplied, like human capital.
To apply a one-size-fits-all standard to
these different forms of wealth would mean to restrict the state’s ability to
tax them differently depending on the different effects that taxation has on
them.
Many sorts of wealth are unearned. Their
possessor has done nothing to earn his assets except being at the right place
at the right time to collect a windfall, or has obtained his wealth through
monopoly practices or by inheritance. Taxing these assets at high rates does
not discourage productive efforts. Consequently they should be taxed at high
rates.
The value of land is composed of the
improvements that the landowner has made plus the innate value of the land that
depends on extraneous factors that the owner cannot influence. This latter part
should be taxed at a 100% rate.
Free-market ideology
Free-market ideology carefully avoids
discussing the conditions necessary for markets to be efficient transmitters of
information in the Hayekian sense.
Moreover it ignores the socio-political
framework necessary for markets to exist and operate properly. Consequently
free-market ideology simply fails to address fundamental issues and its
conclusions are therefore irrelevant.
All the works you cite suffer from a
fundamental flaw, namely that they fail to take into account numerous defects
of the market, some of which are preventable and other are not.
1. Preventable market defects are monopoly,
fraud, coercion and perhaps others. Any of these phenomena makes the price
diverge from the competitive market price and renders the benefits of markets
illusory to a greater or lesser extent.
I admit, however, that monopolies can have
advantages.
The only way to prevent these defects is
through government action. Government is conceived of, in this context, as a
referee that sets and enforces rules and is itself not motivated by the desire
for commercial gain.
2. Market defects that are not preventable
are public goods and externalities. Here again the government must step in to
assure the common good.
The concept of public goods is based on the
concept of exclusive enjoyment, i.e. the owner’s ability to prevent others from
enjoying use of his property. Goods that enable exclusive enjoyment are called
private goods. Those that do not are called public goods.
Markets work well only for private goods.
Public goods must be provided through non-commercial mechanisms, i.e.
non-profit associations, charities or government. Free-market ideology does not
address the issue of public goods. Consequently its conclusions are irrelevant.
Theoretical discussion has limitations. A
more conclusive method of ascertaining the issue of whether and to what extent
government intervention in the economic sphere is beneficial or otherwise is
empirical research of historical cases of government action. The fact that no
free-market enthusiast has ever bothered to research empirically the many cases
of government action is itself an indictment of free-market ideology. I, by
contrast, have researched the development of the welfare state in a number of
European countries and concluded that the welfare state – if well run -- is a
thoroughly beneficial institution in advanced industrial societies, which
greatly increases the standard of living and assures social and political
stability.
An example: the health care system in
the US and in other industrial countries
In the US the health care system is highly
regulated. However, this regulation cannot be considered a restriction on the
freedom of action of the profit-making firms involved in the health-care
industry, for the simple reason that all regulation in the industry is drafted
by those profit-making firms by means of their puppets in the legislatures.
Consequently the inefficiency of the US health care system cannot be attributed
to government regulation as such. On the contrary, the US health care system is
designed to facilitate profit-making by the firms involved.
The US health care system is a scandal, a
hazard to public health. Although the US spends a huge share of its national
income on health care, Americans’ health is far worse than that of comparable
industrial countries. The reason is obvious: those countries have a national
health care system run by public bodies and the US does not. The public bodies
are not motivated by profit, but by the goal of improving public health.
The data are available in many places.
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