Not All Power Is State Power: A Response to Matthijs

Matthias Matthijs writes:

On what planet has the author of this month’s lead essay of Cato Unbound been living these past thirty years? … Klein, like most libertarians, casually overlooks the fact that it is his own dogmatic libertarian thinking — centered on lower taxes, deregulation, absolute private property rights, and smaller government — that has led to the biggest economic disaster since the Great Depression; the very financial mess we are in right now.

If Matthijs believes that the trend over the past thirty years has been to smaller government, he is confusing rhetoric with reality. Thirty years ago, federal expenditures were 21.7% of GNP. In 2008, the latest year for which the Statistical Abstract provides actual rather than estimated figures, they were 21%; the estimates for 2009 and 2010 are considerably higher than that. During that same period, state and local expenditure rose from 11% to 14% of GNP. If he thinks that the trend has been towards absolute private property rights, he might want to read Kelo v City of New London.

He might also consider that what set off the “current financial mess” was the collapse of a market dominated by two firms, Fannie Mae and Freddie Mac, both created by the U.S. government.

Matthijs also writes:

[T]here is nothing “natural” either about laissez-faire capitalism or private property rights; they were both enforced by the state in the first place. … At a basic level, property rights originate from power …

The first statement is demonstrably false; private property rights predate the existence of the state. He is correct, however, that property rights originate from power. His mistake is the assumption that all power belongs to the state. Rights, to private property and much else, originate in a radically decentralized form of power, the power of each individual over his own body. For details, see my essay.

Also from This Issue

Lead Essay

  • Against Overlordship by Daniel B. Klein

    In his lead essay, Daniel B. Klein introduces us to the idea of overlordship – the premise, implicit in modern social democracy, that the state is the ultimate owner of all property rights in society. Under this theory, the state provisionally delegates any rights that individuals may have, and it is free to revoke them as well. The social contract, to which we have all allegedly subscribed, gives warrant for these acts, or so we are told.

    Though his formulation may seem quite harsh – “overlordship” is a term we more often associate with feudalism – Klein traces its development in the late nineteenth century, citing authors who were quite explicit about their intentions. He also cites recent figures, up to and including President Barack Obama, who subscribe to substantially the same views. Klein calls for a return to individualist modes of ownership, as championed by David Hume and Adam Smith, both of whom were also skeptical of the social contract in general, owing in part to the dangerous consequences implicit in that mode of thinking.

Response Essays

  • In Defense of Reason and a More Balanced Free Society by Matthias Matthijs

    Matthias Matthijs charges that libertarian thinking caused the biggest economic disaster since the Great Depression, and that our current political climate is nonetheless still dominated by an ideology highly congruent to Daniel Klein’s. Reasonable people, however, now doubt even market capitalism itself. Libertarians and social democrats disagree on three fundamentals: the empirical evaluation of government efficacy, the positive/negative liberty distinction, and the absolutism of private property rights. On each disagreement, Matthijs argues, the social democrats have the upper hand. In particular, property rights would not exist without the state to regulate them, and these rights are in no sense “natural.” A natural right, Matthijs argues, would never have any need of defense by the state.

  • A Positive Account of Rights by David D. Friedman

    David Friedman suggests a threefold classification of rights. In his scheme, normative rights are moral claims whose violation results in a moral judgment: I may think, with reason, that you are a bad person. A legal right is one that has been duly written into the law. Finally, a positive right is one for which violators face meaningful consequences, such that they will be substantially deterred. These definitions differ somewhat from those found in traditional legal theory, but Friedman defends the analytical power of his schema. In practice the three types overlap, but we may still analyze rights according to their normative, legal, and positive dimensions. Friedman offers historical and contemporary examples of the three types of rights and speculates on their origins using game theory.

  • Creation, Consent, and Government Power over Property Rights by Ilya Somin

    Ilya Somin examines three arguments for government control over property rights: the claims that property rights are created by the government, that residence and/or citizenship imply consent, and that government control can produce superior outcomes to private control, regardless of theoretical justification. He dismisses the former two and concedes that the latter, consequentialist argument for government control is the strongest of the three. Still, he argues that this approach has serious weaknesses, in that people across the political spectrum tend to overestimate the good that governments can do.

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