Libertarians’ History Problem 3

Part 1
Part 2

The second argument that Caplan rolls out is what Breunig calls the “folk morality” argument. I read this as the idea that one should be entitled to the fruits of one’s own labor. For example, if I build a house with my own two hands, then I “own” the house. If I plant seeds and water and weed a given plot of land, then I “own” the resulting crop. If I build a piece of furniture, or paint a picture, then it’s mine. Seems pretty straightforward, and this was basically the reasoning that John Locke used: “The labour of his body and the work of his hands, we may say, are strictly his. So when he takes something from the state that nature has provided and left it in, he mixes his labour with it, thus joining to it something that is his own: and in that way he makes it his property.” (By the way, Locke also argued that money was a set quantity of precious metal).

Caplan invokes this “folk morality” to justify the initial acquisition of private property. This makes some sense—we know, for example, that primates are hardwired to reject what they perceive as unfairness, such a greater reward for similar work effort.

And no doubt this sort of folk morality about fairness did play some sort of role. After all, why shouldn’t I be able to keep what I produce? And if I produce more than the next guy or gal, then why shouldn’t I have more? For libertarians, this is the cornerstone behind the private property argument, and really behind all of their philosophy. One is wealthy because one’s marginal productivity is higher, or one has highly specialized skills and rare talents. People are unequal in their abilities and disposition, so of course wealth is unequal. Anything else would be unfair.

But does this accurately account for kinds of wealth the disparities we see all around us today? After all, intrinsic qualities are distributed in people along a bell curve, or Normal distribution. Thus, if work equals reward, we would expect to see a pattern of wealth distribution which aligns roughly to that of skill/talent among individuals. How much “harder” can the wealthy work than the rest of us? After all, there are only 24 hours in the day, and a portion of those are spent sleeping.

Instead of the normal variation we see between individuals with, say, intelligence, conscientiousness, or physical strength, we instead see wealth distributed according to a “Power Law” or Pareto distribution.

Many empirical quantities cluster around a typical value…their distributions place a negligible amount of probability far from the typical value, making the typical value representative of most observations. For instance, it is an entirely useful statement to say that an adult male American is about 170cm (about 5 feet 7 inches) tall because not one of the 200 million-odd members of this group deviate very far from this size. Even the largest deviations, which are exceptionally rare, are still only about a factor of two from the mean in either direction and hence the distribution can be well-characterized by quoting just its mean and standard deviation.

…consider a world where the heights of Americans were distributed as a power law, with approximately the same average as the true distribution (which is convincingly Normal when certain exogenous factors are controlled). In this case, we would expect nearly 60,000 individuals to be as tall as the tallest adult male on record, at 2.72 meters. Further, we would expect ridiculous facts such as 10,000 individuals being as tall as an adult male giraffe, one individual as tall as the Empire State Building (381 meters), and 180 million diminutive individuals standing a mere 17 cm tall.

In fact, this same analogy was used in 2006 to describe the counter-intuitive nature of the extreme inequality in the wealth distribution in the United States, whose upper tail is often said to follow a power law.

http://tuvalu.santafe.edu/~aaronc/courses/7000/csci7000-001_2011_L2.pdf

So how, then, could such a distribution of wealth be the result of innate qualities or differences in talent or “hard work?”

It can’t.

In addition, the ability to deprive the community of the necessary resources to survive is quite contrary to the “folk morality” that Caplan invokes above. Any leader or member of a complex foraging tribe or simple agrarian society hoarding or depriving the others of necessary resources would quickly lose their social standing at the very least, and, in many cases, their lives. Thus “folk morality” is hardly consistent with the “sanctity” of private property posited by libertarians as “pure and natural.” As Matt Breunig points out, the “folk morality” invoked by Caplan is decidedly non-libertarian in its outlook:

The problem with the method is that the general folk morality of people, when taken as a whole, is not libertarian. Any assessment of how people generally feel about things in the economic realm would not generate the conclusion that they generally feel like laissez-faire capitalism is correct. We know this because no society ever selects those institutions and because libertarians write books all the time about how democracy is bad precisely because people as a whole are not sympathetic to the libertarian worldview.

An honest assessment of where folk morality is on economics would probably be something like: people have somewhat contradictory ideas about economic morality that roughly sum to the worldview that there should be property rights but also that those rights should give way to fairness and welfare goals to some degree.

I am not saying I agree with that general view or even that you should build your normative views this way. But if you are going to say the proper normative method is folk morality, as Caplan does, then it seems like you should actually take a comprehensive account of what that folk morality is, not just opportunistically pick off one piece of it.

To emphasize that point, it’s notable that traditional societies, even those with considerable surpluses, took extensive steps to keep inequality in check. To keep anyone from lacking the means of subsistence, land was periodically redistributed, and large infrastructure projects (irrigation ditches, walls, etc.) were built communally, often with corvée labor. The product of the land was owned and shared in common by all. Ancient contract law determined rights and responsibilities between families, not individuals as Henry Sumner Maine noted in his book Ancient Law. There was no such thing as “economic” behavior  as we understand the term today as Karl Polanyi concluded from his extensive survey of the anthropological data:

The outstanding discovery of recent historical and anthropological research is that man’s economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual interest in the possession of material goods; he acts so as to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end. Neither the process of production nor that of distribution is linked to specific economic interests attached to the possession of goods; but every single step in that process is geared to a number of social interests which eventually ensure that the required step be taken.

These interests will be very different in a small hunting or fishing community from those in a vast despotic society, but in either case the economic system will be run on noneconomic motives.

The explanation, in terms of survival, is simple. Take the case of a tribal society. The individual’s economic interest is rarely paramount, for the community keeps all its members from starving unless it is itself borne down by catastrophe, in which case interests are again threatened collectively, not individually. The maintenance of social ties, on the other hand, is crucial.

First, because by disregarding the accepted code of honor, or generosity, the individual cuts himself off from the community and becomes an outcast; second, because, in the long run, all social obligations are reciprocal, and their fulfillment serves also the individual’s give-and-take interests best. Such a situation must exert a continuous pressure on the individual to eliminate economic self-interest from his consciousness to the point of making him unable, in many cases (but by no means in all), even to comprehend the implications of his own actions in terms of such an interest.

This attitude is reinforced by the frequency of communal activities such as partaking of food from the common catch or sharing in the results of some far-flung and dangerous tribal expedition. The premium set on generosity is so great when measured in terms of social prestige as to make any other behavior than that of utter self-forgetfulness simply not pay. Personal character has little to do with the matter. Man can be as good or evil, as social or asocial, jealous or generous, in respect to one set of values as in respect to another. Not to allow anybody reason for jealousy is, indeed, an accepted principle of ceremonial distribution, just as publicly bestowed praise is the due of the industrious, skillful, or otherwise successful gardener (unless he be too successful, in which case he may deservedly be allowed to wither away under the delusion of being the victim of black magic). The human passions, good or bad, are merely directed toward noneconomic ends. [Polanyi; The Great Transformation, pp. 48-49]

That’s what actually happened. Folk morality, as it has been studied by anthropologists and sociologists, is decidedly communitarian, contra the beliefs of modern-day economists.

In his book Primitive Property, Emile de Layeleye concluded that while movable items, or “chattels” were considered private property from an early period, land and buildings were communally owned and managed. Arable land was periodically redistributed (just as debts were periodically annulled). He noted that such systems still existed in his own time (the late Nineteenth century) in various parts of the world such as Eastern Europe, India and Java. Land rights were usufructuary, and only transferable ceremonially between families if agreed to by the whole community. For example, he notes of ancient Rome: “Agriculture commenced and was developed under the system of common ownership and periodic partition. In the provinces of the Roman empire the soil was only occupied by title of usufruct.” Ancient families were the stewards, not the owners, of the land.

In his historical study he noted a gradual process of transferring ownership from communities to families to individuals unfolding over very long stretches of time, with creeping normality used to justify it after the fact. Of this evolution he writes:

It is only after a series of progressive evolutions and at a comparatively recent period that individual ownership, as applied to land, is constituted.

So long as primitive man lived by the chase, by fishing or gathering wild fruits, he never thought of appropriating the soil; and considered nothing as his own but what he had taken or contrived with his own hands. Under the pastoral system, the notion of property in the soil begins to spring up. It is however always limited to the portion of land, which the herds of each tribe are accustomed to graze on, and frequent quarrels  break out with regard to the limits of these pastures. The idea that a single individual could claim a part of the soil as exclusively his own never yet occurs to any one; the conditions of the pastoral life are in direct opposition to it.

Gradually, a portion of the soil was put temporarily under cultivation, and the agricultural system was established; but the territory, which the clan or tribe occupies, remains its undivided property. The arable, the pasturage and the forest are farmed in common. Subsequently, the cultivated land is divided into parcels which are distributed by lot among the several families, a mere temporary right of occupation being thus allowed to the individual. The soil still remains the collective property of the clan, to whom it returns from time to time, that a new partition may be effected. This is the system still in force in the Russian commune; and was, in the time of Tacitus, that of the German tribe.

By a new step of individualization, the parcels remain in the hands of groups of patriarchal families dwelling in the same house and working together for the benefit of the association, as in Italy or France in the middle ages, and in Serbia at the present time.

Finally individual hereditary property appears. It is, however, still tied down by the thousand fetters of seignorial rights, fideicommissa, retraits-lignagers, hereditary leases, Flurzwang or compulsory system of rotation, etc. It is not till after a last evolution, sometimes very long in taking effect, that it is definitely constituted and becomes the absolute, sovereign, personal right, which is defined by the Civil Code, and which alone is familiar to us in the present day.

The method of cultivation is modified in proportion as property is evolved from community. From being extensive, cultivation becomes intensive, that is to say capital contributes to the production of what was formerly derived from the extent of the territory.

At first, the cultivation is temporary and intermittent. The natural vegetation is burned on the surface, and grain is sown in the ashes; after this the soil rests for eighteen or twenty years…This mode of cultivation is not incompatible with the pastoral system and a nomadic life. Later on, a small portion of the land is successively put into cultivation, according to the triennial rotation, the greater part remaining common pasturage for the herds of the village. This is the system of Russia and Ancient Germany. Afterwards the cattle are better tended, the manure is collected, and the fields are enclosed. Roads and ditches are marked out, and the land is permanently improved by labour. Then the fallow is curtailed, powerful manures are purchased in the towns or devised by industry ; capital is sunk in the soil and increases its productiveness. This is the modern agriculture, the system of Italy and Flanders since the middle ages; never coming into action until the individual ownership of the land is completely established…

These necessities, these ideas, these sentiments, have been very similar and have acted in the same manner in all societies, at a certain period in their development, directing the establishment of institutions everywhere the same. All races have not, however, advanced at the same pace. While some had already passed out of the primitive community at the commencement of their historical existence, others still continue to practise, in our day, a system which dates from the very beginning of civilization…[Laveleye; Primitive Property, pp. 3-5]

As for Caplan’s “folk morality” argument, Laveleye concludes:

A study of the primitive forms of property is essential in order to form a solid foundation for the theory of property. Without understanding the real facts, the majority of jurists and economists have based property on hypotheses which are contradicted by history, or on arguments which load to a conclusion quite opposite to what they wished to establish. They strove to show the justice of quiritary property, such as the Roman law has bequeathed to us; and they succeeded in proving quite another thing — that natural property, such as it was established among primitive nations, was alone in accordance with justice.

To show the necessity of absolute and perpetual property in land, jurists invoked universal custom, “quod ab omnibis, quod ubique, quod semper.” (‘Always everywhere and by everyone.’ Universally accepted, agreed upon, or practiced.) “Universal consent is an infallible sign of the necessity and consequently of the justice of an institution,” says M. Leon Faucher. If this is true, as the universal custom has been the collective ownership of land, we must conclude that such ownership is alone just, or alone conformable to natural law. [Laveleye; Primitive Property, p. 337]

Thus, there is no “natural right” to property, nor are price-fixing markets spontaneous outgrowths of mankind’s supposedly “natural” instincts to “truck, barter and exchange.”  Nor were governments formed by mutual agreement of solitary individuals, but evolved by degrees through basic social instincts such as kin selection and reciprocal altruism. Our theories are based on imaginary scenarios posited by British thinkers of the Enlightenment attempting to justify the extreme inequalities they witnessed in their own day. John Locke, Thomas Hobbes and Adam Smith wrote lengthy philosophical treatises to justify what had been achieved by top-down violence and control over thousands of years on the part of elites before they were born. They did not look at actual history, nor, it seems, did they care to. But isn’t time we set aside their deductivist theories in favor of better ones; ones more accurate and better in line with the actual historical record and the facts as we know them? Won’t that get us further in seeking answers to our social ills?

In contrast to Bryan Caplan’s libertarian fairy tale above, David Harvey tells quite a different story about how private property was initially acquired and the establishment of price-fixing global markets:

…These include the commodification and privatization of land and the forceful expulsion of peasant populations; conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights; suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes.

David Harvey’s A Brief History of Neoliberalism (Naked Capitalism)

As Emile de Laveleye concludes in his exhaustive study of Primitive Property:

…these juridical antiquities, which seemed as if they could only be of interest to a limited number of savants, are of real, practical interest. Not only do they throw new light on fundamental institutions and on the mode of life of primitive races; but…they raise us above the narrow ideas, which make us regard that which is carried on around us, as the only scheme of social existence. [p. 3]

No wonder libertarians don’t want to talk about it.

Libertarians’ History Problem 2

(breaking this into multiple posts because of trouble posting)
Part 1

How did private property begin?

Matt Breunig quotes the Libertarian economist Brian Caplan’s attempts to explain how private property first came to be:

“There are many clear-cut cases of righteous acquisition; once we understand them, we can use them to analyze fuzzier cases. What are some clear-cut cases? An individual living alone on an island grows some food, builds a house, carves a sculpture, or quarries some rock. If someone else shows up on the island, the new arrival seems morally obligated to respect that property [presumtively]. This isn’t just ‘seems to me’ or ‘seems to libertarians’; it’s “seems to almost everyone other than self-conscious socialist philosophers.” Other clear-cut cases: If two people mutually agree to pool their resources and effort, then split the rewards according to an explicit formula – whether 50/50, 90/10, or whatever. Or: I pay you ten pounds of food to build me a new hut.”

If you flatly insist that a person who builds a hut on a desert island isn’t morally entitled to exclude a new arrival from sharing it, there’s little left for me to say. Otherwise, we can build on these straightforward cases to credibly justify everything from real estate development to malls to multinational corporations. Doesn’t any big economic project in the modern world ultimately contain at least a small dose of theft? (i.e., doesn’t every skyscraper have at least one stolen brick in it?) Very likely, but in the real world, this rarely turns out to be a serious moral problem.

How Did Private Property Start? (Jacobin)

Let’s pull that apart bit by bit.

Reading it, I am immediately struck by the following: Caplan’s argument is ahistorical; it is simply a thought experiment. It does not make recourse to any actually documented historical facts or evidence that we know of. Given that property rights are at the very heart of libertarian thought, how can they be understood without recourse to actual history? How can it be justified? Perhaps this is the reason why “mainstream” economic thought has mostly abandoned historical inquiry and instead focused mainly on justifying currently existing conditions using sophisticated mathematical models and abstract formulas. Property rights, inequality and asymmetrical power relations are simply taken for granted as “natural” or “customary” and explained away or never seriously questioned (“…in the real world, this rarely turns out to be a serious moral problem.”).

There is a good analogy here with the libertarian explanation for the creation of money. That explanation is also a deductive thought experiment without recourse to any historical or anthropological data.

Libertarians posit an imaginary ahistorical society—again composed of isolated individuals pursuing specialized occupations—engaging in repeated barter transactions for everything they need which they cannot produce themselves. To reduce the transaction costs, they somehow—and without recourse to any centralized governing authority—come up with an item that has value not because it is intrinsically valuable, but because it can be used for exchanges, and they use this instead for trading in place of constantly bartering for things. Everyone agrees to accept this item in exchange. For various reasons such as scarcity, divisibility and durability, various metals became chosen as the standard, especially gold and silver. These metals became “real” money used by traders in markets. Later, as paper becomes more common, credit appears, representing gold and silver stored in a bank vault somewhere. Government then comes along and skims off (i.e. steals) a portion of this wealth from the producers peacefully engaging in mutually beneficial transactions in “free and open” markets which formed spontaneously without government aid or sanction. Or so the story goes.

The problem with this story is that it never actually happened! It, too, is ahistorical. This article in the Independent Australia summarizes the problems with this story, and then describes the evidence for how money was actually created based on the historical  and anthropological evidence:

According to the myth, money evolved naturally, without the intervention of power institutions of any kind. In this tale, which I won’t repeat here, governments enter the story of money rather late on, eventually messing up a naturally stable system of commodity money. The abandonment of the gold standard by the USA in August 1971 supposedly marked the final betrayal by modern governments of a naturally stable system which had no need for governmental institutions at all. Governments confiscate taxpayers’ money. Governments create inflation and instability. Governments are generally bad news. So goes the story.

The thing is that there is apparently no evidence that this is true. None at all.

The prominent anthropologist, Caroline Humphrey, is very clear:

‘No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there has never been such a thing.

The monetary historian and one-time adviser to the Secretary of State for Wales, Glyn Davies is equally clear:

‘On one thing the experts on primitive money all agree, and this vital agreement transcends their minor differences. Their common belief backed up by the overwhelming tangible evidence of actual types of primitive moneys from all over the ancient world and from the archaeological, literary and linguistic evidence of the ancient world, is that barter was not the main factor in the origins and earliest development of money.’

In the case of ancient Mesopotamia, in particular, there are good reasons for believing that what became the social institution of money developed in a different way entirely.

The development of farming allowed for the emergence of religious and governmental institutions. Soldiers, administrators and priests needed to be provisioned, and accounts had to be kept of how this was being done. Tributes and taxes had to be raised in order to make this possible. The earliest sense in which money existed was as a way of recording the value of such tributes and taxes. The earliest unit of money as a scoring system may have been weights (or shekels) of barley, in places like Uruk, at least 5,000 years ago and probably well before that.

Not that taxes had to be paid in barley. They were just valued in these units. You could pay your taxes or tributes in a wide variety of items that the temple community could find a use for, as anthropologist David Graeber explains in his Debt: The First 5,000 Years.

The invention of government, accounting, taxation and money appear to have created early markets, specialisation and trade, and even credit and finance. Money as a thing was whatever you needed to obtain to pay your taxes. Governments were then able to spend by issuing token money which could be used in the future to pay taxes back to the government. Perhaps clay tokens were the earliest form of token money and, in some ways, not all that much unlike a modern $50 note.

Running out of money, budget emergencies and other neoliberal myths (Independant Australia)

I’m seeing a consistent pattern here. Libertarian thought tends to not be based on any serious inquiry into historical contingencies, or on empirical data, but on hypothetical thought experiments. And these thought experiments tend to be highly sympathetic to the status quo. Thought experiments are not necessarily bad–after all, scientists use them all the time to help formulate hypotheses. But when they contradict everything we know about history, anthropology, archaeology, sociology and psychology, well then, maybe we should stop taking them seriously. For example, there’s this from Caplan:

“An individual living alone on an island grows some food, builds a house, carves a sculpture, or quarries some rock. If someone else shows up on the island, the new arrival seems morally obligated to respect that property.”

The thing is, the above scenario never happened either! The lone individual has never existed! A hypothetical society of one has never existed outside of novels and films about imaginary castaways (and libertarian thought experiments). How can you rely on an imaginary state of nature which never existed in history to justify your position? It’s similar to the absurd Hobbesian concept of solitary individuals “choosing” to unite and form a government ex nihilo based on shared interests. As Francis Fukuyama writes:

We might label this the Hobbesian fallacy: the idea that human beings were primordially individualistic and that they entered into society at a later stage in their development only as a result of a rational calculation that social cooperation was the best way for them to achieve their individual ends…But in fact it is individualism and not sociability that developed over the course of human history. That individualism seems today like a solid core of our economic and political behavior is only because we have developed institutions that override our more naturally communal instincts…

Everything that modern biology and anthropology tell us about the state of nature suggests the opposite: there was never a period in human evolution when human beings existed as isolated individuals; the primate precursors of the human species had already developed extensive social, and indeed political, skills; and the human brain is hardwired with faculties that facilitate many forms of social cooperation…Human beings do not enter into society and political life as a result of conscious, rational decision. Communal organization comes to them naturally, though the specific ways they cooperate are shaped by environment, ideas, and culture.
[Fukuyama; The Origins of Political Order, pp. 29-30]

Just like governments, property relations must have arisen in a social milieu, and speculating about hypothetical Robinson Crusoes is not credible scholarship. Why not at least make a serious attempt to understand what actually happened? Perhaps it’s because it would not reflect so kindly upon the thesis you’re trying to justify. It seems like backward reasoning to me: starting with the conclusion and coming up with ways to justify it.

Matt Breunig makes a similar point:

The problem with the case is that, by clearing out all other people from the island, it eliminates the liberty destruction that makes property acquisition so obviously problematic. What if instead of one individual washing up on an island, ten of them do? Then one of them asserts that certain resources and land areas are his and that those who do not respect that claim will be violently attacked? This is more analogous to a real-life case of property acquisition where there exists more than one human being. It also clearly presents the problem of property acquisition rather than trying to get around it by creating a hypothetical society of one.

Similarly, Caplan’s hypothetical agreement between more-or-less equal individuals to divvy up resources along some sort of predetermined and mutually-agreed-upon formula (“…whether 50/50, 90/10, or whatever…”) is inconsistent with what we observe. It is more characteristic of strangers bartering in modern-day market economies than any ancient or traditional societies that we know of:

“Other clear-cut cases: If two people mutually agree to pool their resources and effort, then split the rewards according to an explicit formula – whether 50/50, 90/10, or whatever. Or: I pay you ten pounds of food to build me a new hut.”

This scenario assumes a hypothetical closed transaction among relative strangers with no ongoing social interactions between them where each party expects to walk away roughly equal. We know that this, like the hypothetical Robinsonade society of one, is not what actually happened in the past. Instead, exchanges were embedded in a wider social fabric without explicit reckoning of who owed what to whom. The unspoken laws of reciprocity determined that every individual could be secure in the knowledge that their labor and goods would be reciprocated at some point in the future by others, with everything balancing out in long run.

What actually happens in practice is that when individuals knew each other, exchange was based on reciprocity; a gift would be given in the anticipation of it being reciprocated in the future (when they don’t know each other there is barter, but in such situations money cannot emerge because cowrie shells might be important in one society, and gold in another).

One of the most famous stories illustrating the role of reciprocal exchange has concerns an anthropologist who after spending some time with bushmen, gave one of them his knife. When visiting the group some years later, anthropologists discovered that the knife had been owned, at some point in time, by every member of the community. The knife had not been communally owned, its ownership had passed from one person to the next and its passage was evidence of a social network in the community, just as the motion of planets is evidence of an, otherwise invisible, gravitational field.

Lady Credit (Magic, Maths and Money)

Karl Polanyi makes the same point in The Great Transformation:

Ceremonial display serves to spur emulation to the utmost and the custom of communal labor tends to screw up both quantitative and qualitative standards to the highest pitch. The performance of acts of exchange byway of free gifts that are expected to be reciprocated though not necessarily by the same individuals a procedure minutely articulated and perfectly safeguarded by elaborate methods of publicity, by magic rites, and by the establishment of “dualities” in which groups are linked in mutual obligations—should in itself explain the absence of the notion of gain or even of wealth other than that consisting of objects traditionally enhancing social prestige.

…For it is on this one negative point that modern ethnographers agree: the absence of the motive of gain; the absence of the principle of laboring for remuneration; the absence of the principle of least effort; and, especially, the absence of any separate and distinct institution based on economic motives…[pp. 48-49]

Here’s anthropologist David Graeber describing the role that social relationships play in  reciprocity:

[Sociologist Marcel] Mauss didn’t really think of everything in terms of exchange; this becomes clear if you read his other writings besides ‘The Gift’. Mauss insisted there were lots of different principles at play besides reciprocity in any society – including our own. For example, take hierarchy. Gifts given to inferiors or superiors don’t have to be repaid at all. If another professor takes our economist out to dinner, sure, he’ll feel that he should reciprocate; but if an eager grad student does, he’ll probably figure just accepting the invitation is favor enough; and if George Soros buys him dinner, then great, he did get something for nothing after all. In explicitly unequal relations, if you give somebody something, far from doing you a favor back, they’re more likely to expect you to do it again.

Or take communistic relations – and I define this, following Mauss actually, as any ones where people interact on the basis of ‘from each according to their abilities to each according to their needs’. In these relations people do not rely on reciprocity, for example, when trying to solve a problem, even inside a capitalist firm. (As I always say, if somebody working for Exxon says, “hand me the screwdriver,” the other guy doesn’t say, “yeah and what do I get for it?”) Communism is in a way the basis of all social relations – in that if the need is great enough (I’m drowning) or the cost small enough (can I have a light?) everyone will be expected to act that way.

What is Debt? – An Interview with Economic Anthropologist David Graeber (Naked Capitalism)

I’m sensing a pattern here. What does it mean that libertarian arguments are dependent on hypothetical scenarios that fall apart under empirical scrutiny? Does it not mean that they should be discarded? It is possible that these views continue to be the economic and political orthodoxy only because there are a lot of special interests promoting them? Maybe this is behind the disturbing trend of claiming all of the humanities have been taken over by “Marxists.” It’s a good way to shut down the debate when the facts are not on your side.

Part 3

Libertarians’ History Problem 1

Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait.
“The secret of great fortunes without apparent cause is a crime forgotten, for it was properly done.”
Honoré de Balzac

One of the simplest economic questions of all turns out to be one of the most complicated: Where did private property come from?

After all, private property is a shared fiction. There is no “property” apart from the legal rights enforcing it. Property is not, nor can it be, “natural.” We know that, once open a time, there was no such thing as private property. Indeed, this was the default condition for the hundreds of thousands of years while man subsisted as nomadic foragers, following herds of wild animals across the savanna and exploiting the abundant natural resources available to all.

There is no concept of “property” in the animal kingdom apart from that which an animal can defend or conceal itself. As the introduction to Primitive Property ponders:

No mere psychological explanation of the origin of property is, I venture…admissible, though writers…have attempted to discover its germs by that process in the lower animals. A dog, it has been said, shews an elementary proprietary sentiment when he hides a bone, or keeps watch over his master’s goods. But property has not its root in the love of possession. All living beings like and desire certain things, and if nature has armed them with any weapons are prone to use them in order to get and keep what they want. What requires explanation is not the want or desire of certain things on the part of individuals, but the fact that other individuals, with similar wants and desires, should leave them in undisturbed possession, or allot to them a share, of such things. It is the conduct of the community, not the inclination of individuals, that needs investigation.

The mere desire for particular articles, so far from accounting for settled and peaceful ownership, tends in the opposite direction, namely, to conflict and the right of the strongest. No small amount of error in several departments of social philosophy, and especially in political economy, has arisen from reasoning from the desires of the individual, instead of from the history of the community. [p. xi]

So that raises the question: how did we go from a system where resources were owned in common by all, to one where resources were owned by specific individuals who could deprive others of its use at will? And how and why did everyone else come to accept this situation?

After all, that’s what private property is. Private property is property where an individual or group of individuals can de-prive other persons of its use, hence private (privation also comes from the same root). Control and management over the item in question “belongs” only to certain people, and they and they alone are free to determine it’s use and claim the fruits of whatever it produces. They can also pass it down to their heirs in (theoretically) perpetuity.

Which is fine as well as it goes, but how then can one claim that such a system is based entirely on freedom and liberty? After all it’s all about taking liberty away from other people, particularly those who don’t own property. And those who do own property have considerable power over those who don’t—the very antithesis of freedom. Those without property have very little recourse.

Matt Breunig over at Jacobin points out that this is a serious problem with libertarian thought:

Perhaps the most interesting thing about libertarian thought is that it has no way of coherently justifying the initial acquisition of property. How does something that was once unowned become owned without nonconsensually destroying others’ liberty? It is impossible. This means that libertarian systems of thought literally cannot get off the ground. They are stuck at time zero of hypothetical history with no way forward.

How Did Private Property Start? (Jacobin)

If we accept that the only role of government is to guarantee private property rights, as libertarians claim, then shouldn’t we care about how those property rights came to be in the first place?

A problem with the concept of private property is that once private property becomes established in any society it sets in motion a Monopoly-style winner-take-all tournament where it accrues to fewer and fewer people over time. Things like the Law of Cumulative Advantage (a.k.a. the Matthew Effect) and just pure dumb luck ensure that more and more wealth accumulates to those who already have a lot of wealth to begin with, while those with already very little lose what little they have. This is so universal as to be considered almost a natural law.

This creates a polarization which has undermined every society that we know of since the dawn of agrarian civilizations thousands of years ago. It also appears to have very few good solutions.

An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world’s wealth by 2030. Even taking the financial crash into account, and measuring their assets over a longer period, they would still hold more than half of all wealth.

Since 2008, the wealth of the richest 1% has been growing at an average of 6% a year – much faster than the 3% growth in wealth of the remaining 99% of the world’s population. Should that continue, the top 1% would hold wealth equating to $305tn (£216.5tn) – up from $140tn today.

Richest 1% on target to own two-thirds of all wealth by 2030 (The Guardian)

It also puts paid to the idea that libertarianism and market relations are–or can be–systems entirely free of violence or coercion, unlike “oppressive” central governments. After all, isn’t depriving other people of the resources they need to survive and making them pay for it a kind of violence? How could it not be? Here’s Breunig quoting Matt Zwolinsky making this same point:

If I put a fence around a piece of land that had previously been open to all to use, claim it as my own, and announce to all that I will use violence against any who walk upon it without my consent, it would certainly appear as though I am the one initiating force (or at least the threat of force) against others. I am restricting their liberty to move about as they were once free to do. I am doing so by threatening them with physical violence unless they comply with my demands. And I am doing so not in response to any provocation on their part but simply so that I might be better able to utilize the resource without their interference.

Again, what’s so funny about this insight is not just that it is a persuasive counterpoint to libertarianism, but rather that it seems to suggest that libertarian principles themselves forbid property ownership.

How Did Private Property Start? (Jacobin)

Similarly, any market-based system relies upon violence, direct or indirect, just as much as does any central government:

Can you imagine how capitalism could possibly function without coercion and the threat of violence? There would be nothing to stop theft and pillage of businesses, no claim to ownership over goods, no implementation of contracts, no enforcement of patents or protection against fraud. There would no incentive to innovate, to invest, to trade or to do any form of business. Without some degree of coercion we would truly be in a Hobbesian world where nothing was secure. There simply would be no such thing as capitalism without the security supplied by coercion.

But, an ancap would argue, we voluntarily enter into contracts, unlike any agreement we have with the state. It’s not coercion if we have agreed to it. But this is patently untrue of private property. No one (apart from the state and the previous owners) agreed to my parents ownership of their property. No contract was signed with their neighbours and no consent was given by anyone else in society. In fact no one ever agreed that property should be privately owned. Who ever said that land could belong to any one person? To many ancient civilisations (such as the Celts and Native Americans) this notion was as strange as any one person claiming they owned the air or the sky.

Both The State And The Market Are Based On Coercion (Whistling in the Wind)

Indeed, how can we have “pure and natural liberty” based on something as unnatural as private property? How can a system based on depriving others of their rightful share in the commons claim that it is really all about “freedom?” And how can a system which deprives others of the basic things they need to survive be associated with “liberty?” It doesn’t make sense. Furthermore, how can we assert that such a system is entirely free of violence and coercion? Isn’t it just a matter of who does the coercion and why?

Part 2