The No-Demand Principle and Libertarianism

Start by asking whether someone suffering from poverty has the right to demand, at the point of a gun, a transfer of resources from those who are better off. Except under very unusual and extreme circumstances (such as preventing the sufferer’s imminent death from starvation), our ordinary moral intuition would reject such a right.

Second, consider a welfare state, which transfers resources from some members of society to other members of society. In effect, voters and politicians who advocate for a welfare state are demanding at the point of a gun that other citizens participate in this transfer system. But if it is morally wrong for the disadvantaged person to demand transfers at gunpoint, then it must also be morally wrong for political actors to demand transfers at gunpoint on behalf of the disadvantaged person.

I call this the no-demand principle. By stating that principle, Moller is not arguing for individualism or against concern for the disadvantaged.

• The question isn’t whether to view ourselves as lonely islands or amiable communities, but whether the state should create the relevant community by compulsory means… We would avoid a world of confusion… if only those arguments for the state promoting some value would add the rider, “… and I favor the use of threats and violence to promote this value if need be.” (page 6)

In appealing to our moral intuition against committing armed robbery, has Moller found a philosophical trump card that libertarians can play against their opponents? I am doubtful. In fact, in the game of intellectual bridge, I would suggest that moral intuition is the wrong suit for libertarians to bid.

Common-sense moral intuition is derived from participation in small-scale society, and it often needs to be corrected when we consider large-scale society. For example, common-sense moral intuition might say that it is best to “buy local” rather than import from another country. Economists work very hard to try to persuade people otherwise.

In the matter at hand, supporters of a welfare state could themselves invoke common-sense moral intuition. Someone could say that “My common-sense intuition tells me that if we are stuck playing a game in which the rules work to the advantage of some players and to the disadvantage of others, then we have the right to demand either compensation or a new set of rules.”

Moller himself writes, “And we might worry that there is no simple relationship between the interpersonal morality of individuals and the justice of macro-level institutions.” (p. 22) Exactly. That is a reason to be wary of relying on common-sense moral intuition when dealing with social and political philosophy.

In fact, Moller considers various objections to his claim that the no-demand rule militates against the welfare state, and much of Governing Least is devoted to answering them. In the process, Moller appears to fall back on what Jeffrey Friedman calls “the libertarian straddle,”2 introducing empirical, consequentialist arguments to supplement a priori reasoning.

For example, against the argument that the entire capitalist system is immoral, Moller cites the high rate of economic growth under capitalism as well as the widespread reduction in poverty that has taken place. Against an argument that we owe much more in foreign aid to desperately poor countries, he writes that:

• it may not seem like there is much that any group or organization can do to reliably foster economic growth from the outside. This is, in fact, another theme classical liberals are keen on, the difficulty of helping people externally, and the tendency for trying to do so to produce unintended consequences or simply to fail. As development economist William Easterly points out, Western nations have given over $2 trillion in aid the last few decades without much obvious success; the poorest countries have averaged about 0% growth over that time. (page 102)

Later, Moller writes, “It bears repeating that unplanned economic growth has done more to improve people’s lives than all of the intentional beneficence of the world combined.” (page 187)

Private property and moral intuition

Moller recognizes that, “arguments against redistribution don’t amount to much if we don’t take private property seriously in the first place.” (page7) Moller argues that we have a strong moral intuition against taking from others. This tells us that there is a moral foundation for private property.

Moller applies this intuition against a strong form of utilitarianism, which would say that we must always pursue the greatest good for the greatest number of people. Such a utilitarian dogma might require giving up one person’s happiness in order to improve the lot of others. He points out that a utilitarian philosopher who might feel comfortable advising followers to sacrifice their own well-being for that of others would nonetheless be reluctant to advise a follower to harm another person for the greater good. “But what is really hard about living with utilitarianism isn’t self-sacrifice but other-sacrifice… the prospect of exploiting others for the greater good terrifies us.” (page 18)

Moller says that as a citizen I understand that it would be wrong to rob another person in order to help someone who is worse off. This shows that I have a moral intuition about the sanctity of private property. We should be wary of any form of utilitarianism that violates this moral intuition.

The next objection is that an action that may be wrong for an ordinary citizen may be right when conducted under the auspices of the state. Moller writes:

• I may not rob you (as we say) to pay for someone’s surgery, but it doesn’t follow that the state may not tax you (as we say) to fund the procedure. Or so it is claimed. Essentially, the issue is whether there are emergent moral powers of the state—permissions that the state enjoys that mere individuals do not. (page 20)

He argues persuasively that the state has no emergent moral powers, but there remains the question of whether our moral intuition that people are entitled to private property, which holds in small-scale society, still applies in large-scale society.

Again, he falls back on empirical, consequentialist sorts of arguments.

• Generalized social cooperation will involve many costs borne by individuals that they can be expected to be compensated for at a better or worse rate in the market, but no emergent debt that must be separately taken care of in the form of taxation. (page 22)

But how much of the value of the meat that I buy can be attributed to the butcher and how much to the government meat inspection system? That strikes me as a difficult empirical question.

The morality of markets

Others might object that markets are immoral. Moller writes, “It is reasonable to suppose that there are virtues and vices of markets, but the pattern among intellectuals has been to ignore the former in the crush to emphasize the latter.” (page 121) I share his frustration, and I believe it applies even to mainstream economists. Nonetheless, many on the left would disagree with me, claiming that mainstream economics goes too far in emphasizing markets’ virtues relative to their vices.

I believe that what I call the distinction between “luck village” and “effort village” strongly affects how people assess the morality of markets.3 People who see economic outcomes as determined mostly by luck will find unequal market outcomes unjustified. Moller ends up arguing that luck is not a major factor in economic outcomes. As evidence, he notes that obtaining a high school diploma, working more than 35 hours a week for at least 40 weeks a year, and waiting to have children until one is at least 21 years old are sufficient to avoid poverty.

• Brookings Institution researchers Ron Haskins and Isabel Sawhill reported… that the odds of being poor even by the standards of a rich country like the United States are vanishing if these norms are met—only 2%. (page 151)

Again, this is arguing the important issue on consequentialist grounds. If it were the case that there were no norms that could allow people to escape poverty under a market system (and note that even with the data cited it might be that causality runs from poverty to destructive behavior rather than the other way around), the case for the morality of markets would be less compelling.

Public goods

Moller wants to give room for the state to provide public goods, in the economist’s sense of goods that would be under-provided based on voluntary behavior, due to free-rider problems. For example, if national defense relied on donations, I could free ride on others’ donations, making no donations myself and still enjoying protection. This would lead to under-funding of national defense in the absence of compulsion.

To allow for such goods, Moller writes that:

• it is permissible to compel payment for unrequested, unconsented services when:

• The providers cannot avoid providing the service without undue cost to themselves; cannot provide service in a way that excludes those who don’t pay; offer reasonable terms; and have grounds for taking themselves to be the appropriate people or organization to provide service; and
• The beneficiaries could otherwise free-ride, or be reasonably suspected of doing so; and are given an exit option at least as good as getting no service or fees, to the extent that doing so isn’t an unfair burden on others. (page 75)

In short, if it is costly to keep me from enjoying a good without paying for it, then it may be a public good. But Moller wants to be careful about what he allows in through the door of this anti-free-rider principle.

• A piece of public art like a statue that anyone can see is non-excludable and non-rival, but it isn’t obvious why that means everyone should be compelled to subsidize it. Many won’t care about art or about this statue in particular. (page 74)

Moller’s criteria for public goods are met by roads, because, “it would impose an enormous burden on most citizens to avoid deploying roads in a way accessible to all, except the occasional toll highway, or a future high-tech system.” (page 78) Again, note the empirical/consequentialist nature of the argument. In fact, Moller apparently can imagine a “future high-tech system” in which roads are not public goods, because it becomes feasible to charge people for using them.

Someone who supports Social Security or Medicare could argue that it is infeasible to allow people to opt out of those systems. The problem is that the people who opt out will be people with private information. In the case of Social Security, someone who knows, based on expectations for their longevity and earnings path, that they will not get out what they put into the system, may choose to opt out. In the case of Medicare, someone who knows that they are less likely than most people to experience an expensive illness after age 65 may choose to opt out. In theory, this could create free-rider problems with Social Security and Medicare. Assuming that most people want the insurance that these systems provide, the existence of free-rider problems would justify making them compulsory.

As another example, consider the problem of meat inspection. In theory, meat inspection could be undertaken by private firms. But which private meat inspector should you trust? If consumers would have a hard time solving that problem, then the only feasible outcome is government meat inspection or no meat inspection at all. Meat inspection would be a public good.

Finally, consider education. Economists understand that much of the benefit of education is private. That is, I benefit more from the education of my own children than from the education of yours. And yet, there is an argument that I get some benefit from the education of others’ children. It may not be feasible to avoid having a system that provides the public benefits without also subsidizing the private benefits. Hence, to avoid free-rider problems, one might argue for public provision of education.

I personally would take a much more expansive view of what the private sector can provide and a much more circumspect view of what government ought to provide. But my views are ultimately based on my observations of the consequences of having the government take over a function rather than leaving that function to the market. These are messy empirical claims that I have to raise and defend in order to try to persuade those who believe otherwise. I am afraid that Moller’s no-demand principle does not strike me as a useful addition to my persuasion arsenal.

Footnotes

[1] Dan Moller, Governing Least: A New England Libertarianism. Oxford University Press, 2019.

[2] See “The Libertarian Straddle: Rejoinder to Palmer and Sciabarra” by Jeffrey Friedman. TomPalmer.com, PDF file. Critical Review 12, no.3 (Summer1998).

[3] See my essay “Capitalism and Inequality”, by Arnold Kling. Library of Economics and Liberty, November 7, 2016.