What is the default baseline for property rights?

Liberals, from Locke through Rawls, are united in their commitment to two normative principles:

A. The presumption in favor of liberty. Liberty is the norm, while state coercion requires special justification (the “consent of the people”). No coercion against persons is legitimate in the absence of sufficient justification.

B. The principle of public justification. A coercive policy is justified if and only if all citizens consent to it (by accepting the reasons offered on its behalf).

Many of the debates in the liberal tradition fall under the general question: What coercive policies can be justified to all? For libertarians and classical liberals, the state should be limited to providing public goods, goods that are under-provided by the market but which are in the interests of all (e.g. national defense and highways). For modern liberals and liberal socialists, the state should additionally guarantee a relatively equal distribution of resources to all. One of the core disagreements between the two camps is, “What is the default baseline for property rights?” In other words, in the absence of justification, what is the default situation with regard to property rights, economic liberty, and the distribution of wealth? How one answers this question has huge consequences.

So, libertarians and classical liberals assume that a welfare state committed to egalitarianism is unjustified, because undoubtedly some citizens object to redistributionist measures. This section of the population objects to the use of state coercion to tax some citizens in order to transfer wealth to others. Thus, it is claimed, policies of redistribution are defeated, and state-imposed egalitarianism is thus illegitimate. The default baseline for property rights is: the emergent patterns of inequality that arise through voluntary transactions (I’ll come back to this).

Modern liberals, like John Rawls, assume that severe economic inequality is unjustified because such a state of affairs would be rejected by all appropriately situated deliberators – namely, by those who are situated in the original position behind the veil of ignorance. That is, if people didn’t know their particular place in society (they didn’t know their place of birth, their IQ, their talents, etc), they would surely play it safe and opt for an egalitarian distribution of wealth (knowing that they may end up in the least-advantaged group). The default baseline for property rights is: a strictly equal distribution of wealth (I’ll come back to this).

Clearly, the libertarian and the modern liberal have different kinds of arguments going on. The libertarian assumes that actual citizens (with full knowledge of who they are) have a right to approve or disapprove of proposals regarding economic justice, while the modern liberal assumes that only hypothetical citizens (with no knowledge of their place in society) have a right to approve or disapprove of proposals regarding of economic justice. What lies at the heart of this difference in approach?

It seems to me that the difference has (at least partly) to do with a complicated debate about desert that takes place between the luck egalitarians and the self-ownership liberals. I will summarize both positions (through Rawls and Robert Nozick) before drawing out some implications.

THE LUCK EGALITARIAN THESIS

In “A Theory of Justice,” Rawls develops an argument for luck egalitarianism that has four components:

1. No one earns their “human capital” (let’s call it), which includes: the family into which they are born, their IQ, their looks, their natural talents, their character, their level of motivation, their work ethic, etc. One’s stock of human capital is a matter of luck.

2. No one deserves any of the advantages that derive from their human capital.

3. No one has a legitimate ownership claim to their human capital (and the wealth that flows from it).

4. One’s political community as a whole has an ownership claim to each member’s human capital (and the wealth that flows from it).

Claims (1) and (2) are relatively uncontroversial. No one goes out and earns the right to be born into a middle class family, or the right to have a high IQ. These are not earned, and not deserved.

Claims (3) and (4) are much more controversial. But there does seem to be some loose connection between (1)/(2) and (3)/(4). If I didn’t earn (and thus deserve) my human capital, then why should I have a special claim to it (and the advantages that flow from it)? If human capital is randomly distributed across a population through the lottery of birth, and thus my stock of human capital is merely a matter of luck, then perhaps we should view the total stock of human capital (and the wealth it produces) as a common asset.

Thus, (1)-(4) produces a powerful argument for egalitarianism. Much of our personal wealth flows from our human capital (as I’ve defined it). Human capital is what enables us to make money through interacting with others. In the absence of egalitarian redistribution, differences in human capital would correlate strongly with differences in economic success. Those who get lucky in the natural lottery (with a desirable bundle of human capital) will do much better economically than those who don’t. This outcome would be entirely unjust for the luck egalitarian. Those who are unlucky have a partial ownership claim on the wealth of those who are lucky. The totality of human capital in a society is something akin to “manna from heaven” – a gift from above, to all of us, to which no one in particular has a special claim.

Let’s take an example. A group of five friends is at a restaurant. The restaurant is closing, and an employee comes out and gives them with a full pizza that would have been thrown away. There are 5 slices of pizza and 5 friends. All of us would respond in the same way. Because no one of the friends has special ownership claim to the pizza (it was given to the whole group), the assumption is equal distribution. Each person gets one slice. Any deviation from equal distribution requires consent (e.g. perhaps someone doesn’t like the particular kind of pizza, so they offer to give it to someone else, perhaps for free, perhaps in exchange for something else, it doesn’t matter. All that matters is that the deviation from equality requires the consent of the relevant parties). In cases like this, equal distribution is seen to be the obvious default.

This assumption in favor of equal distribution (with deviation requiring justification) is embodied in Rawls’ famous “difference principle”: “The difference principle represents, in effect, an agreement to regard the distribution of natural talents as a common asset and to share in the benefits of this distribution whatever it turns out to be.”

Equality is the baseline. Inequality requires justification. If it’s possible to move from a state of equal shares to a state of unequal shares in which everyone has more shares (including the least well off), then the move is justified by the difference principle. But this inequality is only permitted because everyone benefits from it.

Remember the core liberal commitments: liberty is the baseline, coercion requires justification. But, given points (3) and (4), taking wealth from the lucky and giving it to the unlucky is not a form of coercion that stands in need of special justification since the lucky do not have legitimate ownership claims to the wealth the flows from their human capital in the first place. Policies to guarantee egalitarian distributions are not in need of special justification, because egalitarianism is assumed to be the baseline – deviation from which requires special justification.

With that summary of the luck egalitarian thesis, let’s turn to the self-ownership thesis.

THE SELF-OWNERSHIP THESIS

Remember the four points of Rawls’ argument for luck egalitarianism:

1. No one earns their “human capital.”

2. No one deserves any of the advantages that derive from their human capital.

3. No one has a legitimate ownership claim to their human capital (and the wealth that flows from it).

4. One’s political community as a whole has an ownership claim to each member’s human capital (and the wealth that flows from it).

In “Anarchy, State, and Utopia,” Nozick argues that points (3) and (4) do not follow from (1) and (2). Indeed, I do not earn my human capital, and thus, in some metaphysical sense, I don’t deserve it. It is mostly a matter of luck what particular stock of human capital that I am blessed (or cursed) with. However, how does this observation lead to the view that my human capital is a common asset owned by the entire political community? If I don’t have a special ownership claim to my human capital, on what basis is that ownership claim transferred to the political community? I may not have earned my human capital, but certainly the members of my community didn’t either. What gives them a claim to it?

Thus, Nozick draws a different conclusion than Rawls did. From points (1) and (2), Rawls posits a presumption in favor of collective ownership of human capital. For Nozick, while I didn’t earn my human capital, I also didn’t steal it from anyone. I didn’t do anything illegitimate in acquiring it. Thus, why not let human capital lie where it falls? So, while Nozick agrees with points (1) and (2), he posits a presumption in favor of individual ownership of human capital. He writes: “It is not true that a person earns Y (a right to keep a painting he’s made, praise for writing A Theory of Justice, and so on) only if he’s earned (or otherwise deserves) whatever he used (including natural assets) in the process of earning Y. Some of the things he uses he just may have, not illegitimately. It needn’t be that the foundations underlying desert are themselves deserved, all the way down.” I have my human capital, and I didn’t acquire it illegitimately; therefore I ought to have ownership claims over it. Indeed, I do stand in a relationship with my human capital that other members of my political do not: it resides in my person. This seems somehow significant.

For these reasons, Nozick rejects Rawls’ original position and veil of ignorance, since they require us to view the distribution of human capital as a common asset, not attached to particular people. Nozick: “Do the people in the original position ever wonder whether they have the right to decide how everything is to be divided up?”

So let’s take another example to contrast with the pizza example. Let’s suppose that a group of five friends is walking down the street and suddenly one of them spots a twenty-dollar bill, and picks it up. The friend did not earn the money, but just randomly came across it. Should the friend go into the nearest store, break up the twenty-dollar bill into 20 one-dollar bills, and give four dollars to each friend, thus dividing up the money evenly? Most of us would not do this. When someone finds a twenty, we recognize that even though the lucky friend didn’t earn the money, neither did the others, so we usually let the luck lie where it falls. The lucky friend keeps the whole $20.

That seems to be Nozick’s argument. Human capital is distributed randomly throughout a political community, and even though no one fully deserves what they get, they should nonetheless be presumptive self-owners of their human capital and the advantages that flow from it. If I own my human capital, I have a strong ownership claim over the wealth that I derive from it. If I own my labor, I own the fruits of my labor. Coercive egalitarian redistribution can be reasonably rejected. Thus, equality is not the baseline. The emergent inequalities that flow from the unequal distribution of human capital is the baseline.

LUCK EGALITARIANISM OR SELF-OWNERSHIP?

In “Liberalism and the Limits of Justice,” Michael Sandel distinguishes between three responses to this issue of ownership and human capital:

a. Guardianship model [Rawls]: I am the guardian of the human capital that I bear, which is owned by another subject on whose behalf I cultivate and exercise it. There is a presumption in favor of regarding the distribution of human capital as a common asset.

b. Ownership model [Nozick]: I have extensive (maybe exclusive) rights with respect to my human capital. There is a presumption in favor of letting human capital lie where it falls.

c. Repository model: I am a repository for my human capital that no one has an ownership claim over (neither myself nor anyone else).

Given the arbitrariness of the distribution of human capital, Rawls wants to assume social ownership while Nozick wants to assume private ownership. However, as Sandel points out, neither of these logically follows from points (1) and (2). If I didn’t earn and thus deserve my human capital, and neither did any members of my political community, then it’s unclear how anyone, myself or my political community, secures a legitimate ownership claim over it. Both options seem equally arbitrary. I didn’t earn my human capital, but neither did anyone else. Who owns it and the wealth that flows from it? It’s not clear that this question has a fully satisfying answer. (Is my relation to my human capital better captured by the pizza example, or the twenty-dollar bill example? I don’t know!). Instead, points (1) and (2) logically lead to the “Repository model” – no one has a natural ownership claim over anyone’s human capital.

CONCLUSION

Of course, though, we need to make decisions about economic issues. Remember, for liberals, when we deliberate about coercive policies, we must have a baseline to which we default in the absence of consent. But, as I have shown, this baseline is itself controversial and contested. We disagree about what counts as coercion-in-need-of-justification. We not only debate about economic policies, but we have meta debates about which state of affairs should be resorted to in the absence of agreement about the economic policy. Indeed, the deep disagreements that animate our concrete debates follow us up into our meta debates.

This line of reasoning brings me to a central theme of my dissertation: debates about justice, especially regarding issues of property rights and economic distributions, are often not amenable to rational adjudication. Our disagreements are deep, and they are not resolved by moving up to meta-level debates about how our disagreements can be defused. (See related posts here, here, here, and here.) While the liberal commitment to the presumption in favor of liberty and the principle of public justification are appealing in some contexts, they are useless in others. In our condition of deep pluralism, where the terms of debate are just as contested and contestable as the objects of debate themselves, sometimes we have to accept that politics must be more unhinged, more tumultuous, and more frustrating than any of us might prefer.

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About Alan R

I am a philosophy graduate student at the University of Oregon working on my dissertation. My research focuses on the nature of our disagreements about justice, notably economic justice.
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2 Responses to What is the default baseline for property rights?

  1. Alan R says:

    Reblogged this on Blogos.

  2. Pingback: Is decentralization an acceptable solution to deep pluralism? | Alan P Reynolds

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