Friday, September 21, 2012

Jonathan Catalan on Property and the State

Jonathan has good thoughts on this very odd phenomenon of people thinking that you can't have property without the state.

The point he makes is that as a social construction all property rights really require is an enforcement mechanism. This could be anything. There's no reason it needs to be the state. Mutual benefit from recognition of property rights may even require very thin institutions. I think most people probably think some kind of institutional enforcement is required (otherwise we'd all be an-caps), but there's no reason to think it has to be a state.

I am particularly happy to see Jonathan adopting language around coercion that I've pushed for: "No, I’m not saying the free market is free of coercion (i.e. that property rights don’t need a protective, coercive institution). But, markets tend to minimize coercion (embodied in the general cooperative relationships aggregated as the division of labor)". I think it's wrong to talk about non-coercion as a goal. Everything in life is coercive. Property rights are coercive: property rights are just you being able to say "this is mine and if you try to make it yours 300 million other people have my back and will contribute resources to forcefully prevent you from doing that". The goal is to minimize how coercive human life is, and as Jonathan suggests markets tend to work very well at minimizing coercion because market action occurs precisely when action is mutually beneficial and voluntary.

I do have more problems with this paragraph on redistribution:

"The market, though, is characterized by a growing volume of voluntary exchanges. Certainly, incomes today — save those decided by government redistribution (to all income groups and institutions) — are voluntary. Government redistribution is characterized by the use of force. Suppose, for an instance, the existence of a completely unperturbed market. It’s true that institutions change over time, and so does income distribution, even in this setting. So, the idea of redistribution doesn’t presuppose a “default” distribution, rather it distinguishes a coercive stream of income from the voluntary one of the market. To make the point clearer, person A’s income is redistributed by the State to person B, because person A didn’t voluntarily surrender (usually in exchange for something else) her income."

Income distribution today is really not voluntary. It depends critically on the circumstances and the brain and body you were born into and the choices that were made for you when you were young. It's impossible to look at income distribution by something like gender and race and seriously conclude that the size of the pie that different groups get is something that is "voluntary". That's nonsense.

So we're at a bit of an impasse.

We know the market has important coercion-minimizing properties, but we also know that a lot of the resources that people bring to the market and that they live off of are anything but voluntary.

For me, that opens the door to egalitarian policy that constantly has an eye toward ensuring this slippery concept of "equality of opportunity" while trying to avoid this equally slippery concept of "equality of outcomes". It's not an easy distinction to make at all, because one child's "equality of opportunity" is some parent's "equality of outcome".

This is the trade-off of coercions that we as a society have to deal with.

States governed by the principles of liberalism seem to me to strike a decent and workable balance - and that's where the state comes in. But Jonathan is certainly right that there is no necessary connection between states and property rights.

10 comments:

  1. "Income distribution today is really not voluntary. It depends critically on the circumstances and the brain and body you were born into and the choices that were made for you when you were young. It's impossible to look at income distribution by something like gender and race and seriously conclude that the size of the pie that different groups get is something that is "voluntary". That's nonsense."

    So, what would your solution be? Do you seek to equalize this distribution? To, in some way, redistribute wealth?

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    1. Yes, redistribution - probably of income and opportunities rather than wealth. Not sure I have a good reason for that at the moment except that at the moment redistribution of wealth rubs me the wrong way.

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    2. It's a phrase, Daniel. You know what I am talking about (economically).

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  2. "Let us live like the gods, calling nothing our own." -- Buddhist saying

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  3. The following is based upon my lay impression of anthropology.

    It used to be thought that primitive peoples did not have a concept of property. However, they do have a concept of private property, which is respected with occasional disputes.

    Tribes may have territories, which are not privately owned.

    AFAIK, private ownership of land and the state arose out of the agricultural revolution, which enabled larger social organization. Perhaps the earliest form was like that of Hawai'i, where the royal family owned all the land.

    It seems to me that the history of the American West indicates that without the state, wars over land are likely to develop.

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  4. Daniel, I'm concerned that you might be conflating "being subject to an obligation" and "being coerced". When one acquires a right or has a right (such as a property right), then others are subject to a correlative obligation, and right holders are *justified* in coercing those who stand to violate the right. But if being subject to a correlative obligation is simply being subject to coercion, then it seems there is no possibility of "minimizing how coercive human life is". It seems that all moral rights would imply coercion, and the distribution of those rights would never change the total sum of coercion existent in the world. To me, it's counterintuitive to claim that being subject to a correlative obligation is the same as being subject to coercion. When I promise to do so-and-so, I obligate myself and create a promissory right in another. But I do not think of it as increasing the amount of coercion in my life. Any way, just a thought to be cognizant of.

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    1. I agree. Daniel's definition makes "coercion" fairly meaningless.

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  5. I don't agree.

    If you're going to create "equality of opportunity" for children, then that's just a way of letting adults off the hook for helping their children. Thereby weakening the incentive to work. Certainly that could improve "equality of opportunity" but just like the taxes that support it it has a deadweight effect.

    In the very long run economic growth can make everyone adequately well off. For that reason economic growth is the most important thing and putting it at risk via redistribution is stupid.

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  6. "If you're going to create "equality of opportunity" for children, then that's just a way of letting adults off the hook for helping their children."

    Completely unrealistic.

    "In the very long run economic growth can make everyone adequately well off. For that reason economic growth is the most important thing and putting it at risk via redistribution is stupid."

    Redistribution that creates equality of opportunity increases the chances of economic growth because it eliminates waste. Aristocratic, feudal, and caste societies are not known for their economic dynamism.

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    1. "Completely unrealistic."

      I don't know about where you live, but in the places I've lived many adults aren't overly enthusiastic about helping their children. Many don't encourage them to study at school let alone pay for it. That's understandable to a degree, since their children can live off welfare. But, apart from the section of the determined underclass who think that way there are plenty of people for who helping their children's futures beyond a certain stage doesn't meet the cost-benefit test.

      "Redistribution that creates equality of opportunity increases the chances of economic growth because it eliminates waste. Aristocratic, feudal, and caste societies are not known for their economic dynamism."

      Feudal societies performed redistribution of their own. The King made men who had helped him lord and awarded them lands, normally from land that had been conquered or land formerly owned by lords who had betrayed him. These were people good at winning battles, not good at commerce. Our modern society is very different, businesses employ whomever is able to do a job, there's no need to be a sole-trader. Entrepreneurs are not always capitalists since lending and borrowing is quite easy.

      Nevertheless, I agree with what you say to some extent. Two men of equal ability, one from a poor background and one from a richer background are unlikely to produce the same qualifications to an employer or the same business plan to an investor. But, how much of a problem is that? Is it really a big enough problem that redistribution is called for to tackle it? I don't think so, consider the downsides.... Most of the funds redistributed will be spent on consumption, not directly on the assisting the talented. And, of course, the more the state taxes to perform these services the more taxpayers are discouraged from working.

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