"Private control of large resources only exists by accident - as a result of certain past conditions and of public inertia - and is upheld solely by the physical force of the majority. Were this physical force to be withdrawn, the natural resources would again - as in feudal times - be in a state of constant transfer, through force of arms, among groups of the physically strong and shrewdly organised. Capone and his racketeers gave us an idea of the general trend of an unpoliced modern world. Well - the majority have hitherto lent their physical support to existing capitalism because they believed it gave them a better deal than feudalism did. Probably they were right up to about 70 years ago - for the worst pressure of capitalism is its recent pressure, whilst the techniques of industry and economics did not make practical socialism possible till the last two generations. Today, however, the masses do not get as much from the capitalistic order as they would get from feudalism... Sooner or later, the beneficiaries of capitalism are going to lose the physical support of those who have hitherto kept the system in existence. - the physical support of the masses they have neglected, ignored, and evicted from the hope of a livelihood."- H.P. Lovecraft, October, 1936
*****
Let's forget the concerns about capitalism or claims about socialism for the time being. What I'm intrigued by is this idea of private property as an institution that is maintained by force. It's traditional to think that anybody who tries to take my property is initiating force against me. But the only reason why I can assert this privelege to my property is because I have a gang of hundreds of millions of people putting others on notice that they'll get the crap beat out of them if they try anything. What is the difference between private property and a gang claiming urban territory other than strength of numbers? They assert a monopoly on territory and back it up with force. I assert a monopoly on the goods that I "own" and I back it up with force. There is no difference, really. Maybe that's efficient, but that's not the point. From an ethical stand-point, it's something to grapple with for anyone that sees the violation of property rights as an initiation of force.
The picture becomes more complicated when, like Jefferson and Paine, you introduce the dimension of time. Inheritance allows the appropriation and accumulation of property with no legitimate claim at all. The inheritor didn't work for the property. It's solely his by virtue of the pact of violence between him and society to bash the skulls of anyone else who would claim it. What is the difference between the heir and the non-heir that warrants the award of property to the heir? Sheer luck of birth, and nothing more. Add on top of that the fact that over time, property rights offers a perfect money laundering scheme. At least one branch of my family owned slaves - they owned human beings like livestock - and they derived advantages from that, and I enjoy advantages from that. If I held slaves today against the law and derived benefits from that, the state could take those benefits back from me (and then some). But because of the property pact, no one will ever challenge my right to the benefits won for me by my slave-driving forefathers. It is mine.
I'm not advocating the overthrow of capitalism, but when you really think about it, it all gets awfully hazy. It would be like asserting the overthrow of Mubarak is unethical because they challenged his right to rule, when the right itself was only ever enjoyed because he had powerful friends willing to be violent on his behalf. The very nature of society is to coerce. What we know as social institutions are the frameworks that other human beings that I've never met would use violence, shunning, ostracism, and the withholding of favor to enforce. When I say "I own this", what I mean is "I would normally have to defend this with force if I wanted to use it but I have three hundred million people who will defend it for me, so I can just assert my possession without putting anything on the line". All social life is about power and coercion. The exercise of the fruits of that coercion - the exercise of rights - can't be thought of as the opposite of coercion. Liberty is not the opposite of coercion, so what is it? Liberty is the arrangement of these coercions in a way that is consistent with human dignity and human potentiality.
The myth of natural rights is a convenient myth, and a nice mental device, but it introduces the very problematic idea that rights are things-in-themselves which human conduct is measured against. If you believe in natural rights, a violation of liberty is twisted into that which alters or departs from rights. Liberty is conceived of as the state of life which follows from adherence to rights. The reality is just the opposite. Rights must be arranged to promote, approximate, or approach liberty, and not the other way around.
And an arrangement that is quite successful - the best we have so far - is a system of private property, with adequate social organization to support those who suffer in that arrangement through no fault of their own. That is a system that maximizes dignity and our potentiality (socialism would not do this for the obvious reaons). This was the Jeffersonian vision of liberty:
"That the earth belongs in usufruct to the living; that the dead have neither powers nor rights over it. The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society. If the society has formed no rules for the appropriation of its lands in severalty, it will be taken by the first occupants. These will generally be the wife and children of the decedent... But the child, the legatee or creditor takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject. Then no man can by natural right oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be reverse of our principle."
- Thomas Jefferson, 1789
"Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right"
The picture becomes more complicated when, like Jefferson and Paine, you introduce the dimension of time. Inheritance allows the appropriation and accumulation of property with no legitimate claim at all. The inheritor didn't work for the property. It's solely his by virtue of the pact of violence between him and society to bash the skulls of anyone else who would claim it. What is the difference between the heir and the non-heir that warrants the award of property to the heir? Sheer luck of birth, and nothing more. Add on top of that the fact that over time, property rights offers a perfect money laundering scheme. At least one branch of my family owned slaves - they owned human beings like livestock - and they derived advantages from that, and I enjoy advantages from that. If I held slaves today against the law and derived benefits from that, the state could take those benefits back from me (and then some). But because of the property pact, no one will ever challenge my right to the benefits won for me by my slave-driving forefathers. It is mine.
I'm not advocating the overthrow of capitalism, but when you really think about it, it all gets awfully hazy. It would be like asserting the overthrow of Mubarak is unethical because they challenged his right to rule, when the right itself was only ever enjoyed because he had powerful friends willing to be violent on his behalf. The very nature of society is to coerce. What we know as social institutions are the frameworks that other human beings that I've never met would use violence, shunning, ostracism, and the withholding of favor to enforce. When I say "I own this", what I mean is "I would normally have to defend this with force if I wanted to use it but I have three hundred million people who will defend it for me, so I can just assert my possession without putting anything on the line". All social life is about power and coercion. The exercise of the fruits of that coercion - the exercise of rights - can't be thought of as the opposite of coercion. Liberty is not the opposite of coercion, so what is it? Liberty is the arrangement of these coercions in a way that is consistent with human dignity and human potentiality.
The myth of natural rights is a convenient myth, and a nice mental device, but it introduces the very problematic idea that rights are things-in-themselves which human conduct is measured against. If you believe in natural rights, a violation of liberty is twisted into that which alters or departs from rights. Liberty is conceived of as the state of life which follows from adherence to rights. The reality is just the opposite. Rights must be arranged to promote, approximate, or approach liberty, and not the other way around.
And an arrangement that is quite successful - the best we have so far - is a system of private property, with adequate social organization to support those who suffer in that arrangement through no fault of their own. That is a system that maximizes dignity and our potentiality (socialism would not do this for the obvious reaons). This was the Jeffersonian vision of liberty:
"That the earth belongs in usufruct to the living; that the dead have neither powers nor rights over it. The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society. If the society has formed no rules for the appropriation of its lands in severalty, it will be taken by the first occupants. These will generally be the wife and children of the decedent... But the child, the legatee or creditor takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject. Then no man can by natural right oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be reverse of our principle." - Thomas Jefferson, 1789
"Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right"
-Thomas Jefferson (proto-Keynesian), 1785
Posts
Greg Mankiw had an interesting statement on inherited privilege.
ReplyDeleteSome research had shown a 50% correlation between father's income and son's income.
So coefficient of correlation, r = 0.5
But, significance of correlation, r^2 = 0.25
Meaning that only in 25% of people surveyed do we at all see any meaningful connection between father and son's wealth. That is...pretty low, no?
Me - I am descended from the Oraon tribals, an aboriginal Indian group. They are not Hindus; we used to be hunted and forced by invading Hindus into the jungles. Lived in the mountaineous forests, in extreme poverty for at least a millenia. Such was the case all the way till my grandparent's days. Some way, some how, my grandfather saved and earned enough as a teacher, and my father did well enough in school and college to get a good job in insurance and later go to a business school in France. And today we are...somewhat well established. Interestingly, tribal groups like the Oraon do get affirmative action, but it was somehow never used by my father or grandfather (because perhaps it was not fully implemented then). It also simply never registered in them that they were poor, despite having Hindu neighbours earning 10 times as them. The spoilt young landlord in Hazaribagh had an old feudal line that entrusted him with a large property, but it was a rather a matter of gratitude that my grandfather got a place to live under him, and not a matter of anger that the landlord had more than him.
Our social mobility did not happen suddenly or rapidly, but here we are. And so too in one of the least socially mobile countries in the world. Socio-economic status is all just a matter of time, I guess.
PS: After all, how else did Jewish Americans, who once lived in poverty and squalor in New York, now manage and run businesses like Disney, Dell,.etc?
Right, we are certainly not frozen in time.
ReplyDeleteOn a related subject, I was having an email conversation with a friend of mine (who happens to be a staunch Austrian) not too long ago. He was going on and on and on about state coercion, theft, etc. Here's a section of my reply:
ReplyDeleteRegarding the evils of state coercion... I've been mulling over this issue a little and, while I certainly sympathise with numerous elements, I think that a - let's call it - "coercion fixation" rather misses the point. For one thing, our entire legal system is predicated on the state's ability to use some, justifiable level of force or coercion. Doing away with the latter - the possibility of throwing criminals in jail, etc - simply renders the system ineffective. Imagine if, say, a murderer could simply initiate his defence on the basis that he had never agreed to any relevant laws. Reading your email, I also sometimes wonder whatever happened to Government "by the people, for the people, of the people"? If a government enacts legislation that you do not agree with, then it is your job to help vote them out. The same as would be for any shareholder in any company.
Okay, maybe not my most coherent paragraph, but I'm sure enough to invoke opposition from some of your other readers. :)
As an aside, I had a class earlier this week where we were discussing pretty much this very issue. An interesting point to come up was that, in modern societies, we have ceded the right to violence to the state... The state carries monopoly power in this area.
Oh, also... Your use of Mubarak reminded me of how vacuous the Pareto criterion for optimality is when you really get down to it.
ReplyDeleteYou cannot make a Pareto improvement by removing Mubarak from office since it obviously upsets him, despite the fact that it (clearly?) stands as the best course of action for the masses.
It's like that old example of a Christian that is about to be fed to the lions. Within the strict bounds of this thought experiment, you cannot implement a course of action (either feed 'em or free him) that is Pareto improving, since someone will stand to lose utility... Whether that be the Christian, the Roman crowds or the lions.