Classical liberalism is generally associated with welfarism, especially with utilitarianism, in large part because its major advocates were economists. Adam Smith and the Classical Economists, Hayek, Friedman, von Mises, and many others, were basically (indirect) utilitarians. Their arguments for robust economic freedoms and property rights were largely grounded in the efficiency of markets and their tendency to promote individual welfare. But before economists had captured classical liberalism, Kant, Humboldt, and other German idealists argued for a nascent classical liberal position that advocated private property rights and economic freedoms.
A great virtue of John Tomasi’s (JT) Free Market Fairness that it seeks to revive a Kantian classical “liberalism of freedom,” as an alternative to the classical “liberalisms of happiness.” He relies upon John Rawls’s Kantian constructivism. He argues that Rawls’s framework, suitably pruned and adapted, and even Rawls’s principles of justice, support a classical liberal/libertarian form of capitalism, and not the property owning democracy or liberal socialism Rawls advocates. For left-liberal Rawlsians like myself, JT makes many challenging arguments. I’ll focus on his argument that “thick economic rights” typical of laissez-faire capitalism should have the exceptional status of basic rights and liberties in Rawls’s sense.
Like Kant and classical liberals generally, JT assigns governments a duty to meet the basic needs of people who cannot care for themselves. Laissez faire capitalism in England maintained the “poor relief” that originated in the Elizabethan Poor Laws, the basic idea being that a decent society does not allow its destitute and disabled to starve or freeze to death. Welfare state capitalism goes beyond laissez-faire, and provides an array of public goods and social insurance for all society’s members, including old-age pensions, universal health care, unemployment insurance, income supplements or a minimum wage for lowest paid workers, public health measures, and publicly funded education through young adulthood.
JT’s position purportedly supports both laissez faire and a restricted welfare state capitalism. (pp.116-117) The latter–“democratic limited government”–he says resembles the views of Hayek and Friedman. There’s little indication that JT would endorse more extensive social welfare systems characteristic of Northern European capitalist social democracies.
JT says: “the central moral claim of market democracy [is] that thick economic liberties are among the basic rights of liberal citizens.” (p. 121) He understands basic rights in terms of Rawls’s first principle of justice, the principle of equal basic liberties. For Rawls the basic liberties include liberty of conscience and freedom of thought and expression; freedom of association and the rights and liberties that maintain freedom and integrity of the person (including freedom of occupation and a right to hold personal property); equal political liberties and the rights establishing the rule of law. Rawls explicitly rejects economic rights, including ownership of means of production, as among the basic liberties, saying that the scope of economic rights are to be defined and regulated by his second principle, including the difference principle.
A distinctive feature of Rawls’s first principle is that the basic liberties can only be restricted for the sake of maintaining the “most extensive scheme” of equal basic liberties (or “fully adequate scheme” Rawls later says). JT endorses transfers to the least advantaged to prevent them from destitution or similar threats to the basic security and integrity of their persons. He argues this is compatible with basic economic liberties. (Rawls also contends that among the basic rights protected by the first principle is that basic needs be met.) But it is hard to see how JT could justify other transfers needed to effectively exercise the basic liberties, or even justify many measures recognized by laissez faire capitalism to maintain the conditions of economic efficiency. For it is the nature of a basic liberty that it cannot be restricted for the sake of economic efficiency, the public good, or to provide greater opportunities or social benefits to others. Thus, once thick property rights are made basic, it seems a violation of them to tax everyone to pay for public services such as public education, health care, unemployment insurance, old-age pensions and other benefits endorsed even by classical liberals such as Hayek and Friedman. (The fact that these benefits might be needed to enable citizens to effectively exercise their basic liberties is irrelevant, since neither Rawls, and surely not JT, claims that a right to an education, health care, a social minimum, etc., are themselves basic rights protected by the first principle.) Also, it appears to violate basic economic liberties to legally forbid price collusion, agreements in restraint of trade, and other practices that undermine efficient markets. Most regulations to control monopolies and otherwise maintain market efficiency would seem violations of basic economic rights. Moreover, government’s powers of eminent domain, needed to establish transportation and communication infrastructure (highways, RR, airports, electricity and telephone easements, etc.) would not seem to be possible if economic liberties are basic. Nor can people be taxed to pay for these and most other public goods not essential to protecting the basic liberties.
None of these measures now taken for granted in a modern capitalist society would seem to be possible if, as John envisions, economic rights of property and freedom of contract could be limited only for the sake of protecting other basic rights and liberties. Economic liberties were never given such extraordinary priority, even during the laissez-faire era, that they could not be limited to maintain economic efficiency and other public goods. It appears then that, by making the economic liberties basic in Rawls’s sense, John, whether wittingly or not, argues for a kind of libertarianism that allows public transfers only if necessary to protect the basic security of persons and their basic liberties (thus to pay for police protection, prisons, national defense, the courts and administration of the legal system, and a few other essential public goods).
It is a truism to say that in order to achieve the benefits of an efficient market economy (increasing productivity, greater economic output, increasing productive capital, etc.), the basic rules of property, contract, and exchange must be structured to realize efficient market relations. This is a precondition of the benefits of Smith’s Invisible Hand and Hayek’s Spontaneous Order. It is the main reason that the great classical liberal utilitarians did not put economic liberties on a par with important personal liberties such as freedom of conscience, expression, and association. To design basic economic rights and liberties as JT proposes, so that they realize something quite distinct from economic efficiency—namely, our capacities for self-authorship—takes the Invisible Hand in the wrong direction. It unrealistically assumes that economically efficient market relations and outcomes fortuitously will transpire as a result of the exercise of economic liberties which not only are designed to promote something entirely different (individual self-authorship) but which cannot even be modified to achieve economic efficiency. Hayek’s spontaneous order, like Smith’s Invisible Hand, never countenanced such an extraordinary coincidence.
In light of this, it is especially puzzling how JT can argue that his account of free market fairness satisfies the difference principle, and that the least advantaged under his account fare better than they would in Rawls’s property owning democracy (pp.226-237), or presumably a social democratic capitalist welfare state. This puzzle is only aggravated by JT’s support for open borders (p.262), allowing workers freedom to migrate wherever they choose. The likely outcome is that wages for unskilled labor, the least advantaged for Rawls, would be bid down to subsistence levels.
My question for JT is: Given the stringent nature of basic liberties, how can he contend that a society in which laissez-faire capitalist economic rights are not simply constitutionally protected, but are regarded as basic rights and liberties in Rawls’s sense, can justify the institutions of a limited welfare state, or even the laissez-faire capitalism of the classical economists? If thick economic liberties are truly basic, and hence cannot be restricted for the sake of economic efficiency and the public good (not to mention economic reciprocity and fairness), how does JT avoid a position much like Nozick’s libertarianism (which he explicitly rejects)?
Note: After Theory, Rawls confined the priority of the basic liberties to the “central range of application” of a basic liberty in exercising one or the other moral powers. Thus, whereas political speech, and scientific, artistic, literary, and cultural expression are basic liberties with priority over other social values (since they are necessary to exercise one or the other moral powers), advertising and commercial speech are not basic and can be restricted for legitimate public reasons. I do not see how this qualification can help John’s argument for laissez-faire economic liberties. For if it is argued that thick economic liberties are within the central range of application, then the initial problem remains; they still cannot be restricted for reasons of economic efficiency or the public good. On the other hand, if it is argued that, not thick economic liberties, but more qualified rights of private ownership and freedom of economic contract are basic rights with a central range of application to the moral powers, then this strengthens the case for widespread private ownership of productive resources for all citizens—thus supporting property-owning democracy. Can it seriously be argued that thick economic liberties—including laissez-faire rights of contract and rights of unlimited accumulation of wealth and productive resources–are within the central range of application of economic liberties necessary to the development and exercise of the moral powers? I address this question next.
One Further Note Before I Do: John’s claim that limits on worker’s hours violate workers’ freedom (p. 77 and elsewhere) assumes that such restrictions prevent wage laborers from working more than an 8 hour day. But workers can always take on a second job, or alternatively agree to work overtime at their only job at overtime rates. The restriction on hours is not a restriction on workers but on employers from exercising duress over workers, requiring them to work, for example, 14 hours days at the same wage rate to preserve their jobs.
Now I’ll turn to John’s argument that thick economic liberties are justified by the moral powers of free and equal moral persons (defined as the capacities for self-authorship and respect for others’ rights of self-authorship). Rawls endorses the basic liberties of freedom of occupation and choice of workplace, so that’s not the issue here. The issue is whether thick rights of ownership and control of means of production and laissez-faire freedom of economic contract are conditions of the effective exercise and full development of the moral powers of citizens generally.
I am not sure what the argument for this could be. If John’s claim is that, to develop the moral powers and be an independent person, each person must actually exercise to some degree economic liberties and own and control productive capital, then this would be a justification of property-owning democracy, with widespread distribution of productive wealth and economic powers to all citizens. John clearly rejects property-owning democracy. In any case, a claim that all persons must exercise thick economic liberties for their self-authorship is false, since most people who effectively author their own lives do quite well without being entrepreneurs or owning and extensively controlling productive capital.
Perhaps John’s claim then is that having the opportunity to exercise thick economic liberties, including extensive ownership rights of productive capital, is a condition of the effective exercise of the moral powers. Why should the fact that some people, but not others, are laissez-faire capitalist entrepreneurs who own and control extensive productive capital be necessary to the exercise and development of everyone’s moral powers? The opportunity to exercise such thick economic liberties does not exist in Northern European social democracies, or even in the U.S., and most people (except the poor) can effectively exercise their powers of self-authorship.
Moreover, even if thick economic liberties were necessary for these purposes, I do not see why this should justify making economic liberties basic in Rawls’s sense, instead of, say, constitutionally guaranteed economic rights that can only be overridden for special public reasons (such as economic efficiency and important public goods). For Rawls, having an adequate share of income and wealth is a condition of maintaining the value of the basic liberties and the full development and effective exercise of the moral powers; but this does not lead him to argue for a basic right to a guaranteed income as part of his first principle. Instead Rawls leaves the determination of citizens’ entitlements to a social minimum up to the difference principle. The general point is that certain rights and institutions can be necessary for the effective exercise of the moral powers (e.g. education, health care, and a social minimum) but this does not imply they should be basic rights. Thus, thick economic rights and liberties can be seen as having great importance (as in Hayek and Friedman) without their being cemented into the exceptional position of basic rights and liberties.
I remain at a loss to understand why John thinks that thick capitalist economic rights (e.g. the right of unlimited accumulation of wealth) are necessary preconditions for everyone’s effectively exercising their moral powers; and (even if this is so) why such rights should be protected as basic rights and liberties that can be restricted only in order to protect others’ basic rights and liberties.
My suspicion is that John’s real reasons for making thick capitalist economic liberties basic in Rawls’s sense has little to do with the institutional conditions necessary for everyone to exercise and develop their moral powers. He says, “the exercise of thick private economic liberty is for many citizens a condition of responsible self-authorship.” (p. 183) This suggests that for many people in a capitalist economic system, essential to their particular occupations and conceptions of the good is that they be capitalist entrepreneurs and/or owners of productive resources with thick economic rights to use as they choose. Of course this may be true of many people. John’s example is Amy’s dog wash, “Pup-in-the-Tub” (which nonetheless would seem to do quite well without laissez-faire liberties in a property owning democracy or social democratic welfare state—but I’ll let that issue be.) But it is also true that many other people might rationally desire that other economic rights and powers be made basic since they are essential to pursue their very different occupations and life plans. For many workers in social democratic economies of Northern Europe it is essential to their occupations and life plans that they be guaranteed unemployment benefits, bargaining rights, a right to strike, and co-determination rights and other worker prerogatives within their firms. But this does not mean that such social democratic rights should be given the exceptional status of basic economic rights that can only be restricted to protect other basic rights and liberties.
My general point is that simply because certain rights and liberties are essential conditions for many people to pursue their particular choice of occupations and life plans is not a reason to make them basic rights and liberties. For rights and liberties to be basic in Rawls’s sense, they must at least be necessary to the exercise and development of the moral powers of all citizens.
Perhaps John can clarify these perplexing issues.