David Gordon — Liberalism and "Classical Liberalism" — An Unfortunate Evolution

Backgrounder in the history of the development of liberalism. While it written from a Libertarian point of view, it is useful in understanding the historical background.

For a more thorough treatment although still a summary backgrounder, see the entry on liberalism at the Stanford Encyclopedia of Philosophy.

Where it falls short is assuming the John Locke somehow discovered the foundations of genuine liberalism, when the fundamentals emerged in ancient Greece and where treated throughout the history of Western thought and manifested differently in Britain, the Continent, and America.

Both the Gordon and Stanford Encyclopedia summaries focus on liberalism as an Anglo-American phenomenon and neither mentions either the history or Continental approach to liberalism, or the antecedents. "Laissez-faire" is, of course, a French term, and the early French writers on economics and political theory were highly influential in the development of economic and political liberalism. Gordon mentions only Frédéric Bastiat.

Gordon and Stanford Encyclopedia also ignore the German contribution to the development of liberalism is ignored, which is understandable given the scope of their summary. But it is a major omission in that many consider Kant rather than Locke to be the father of modern liberalism. Prussian philosopher and educationist Wilhelm von Humboldt, who today is not adequately recognized for his contributions to the Western intellectual tradition, was also a major influence. The Stanford Encyclopedia article on liberalism does make mention of him but only in a brief sentence about his influence on J. S. Mill and it cites Humboldt's The Limits of State Action in the bibliography.

Of course, Anarchists were the the arch-liberals in the sense of advocating for complete freedom from government intrusion in the lives of individuals. While Marx and Engels disagreed with the anarchists of the time over means, they were in agreement over the principle of freedom from state control of individuals and proposed what they concluded from their analysis to be an optimal means for means of achieving this goal. 

After witnessing the French Revolution, Marx and Engels did not simply assume that getting rid of the state through overthrowing the state would lead to utopia immediately. That would take a gradual process of development that would need an interim arrangement to manage the transition as peacefully as possible under the circumstances. They also recognized that the elites in power and their regimes would not just roll over.

Another point that is interesting is that Mises, Hayek and Rothbard all wrote books specifically on liberalism from the classical liberal point of view updated in terms of modern Libertarianism.

A work I like in the tradition of welfare liberalism is John Kenneth Galbraith's The Good Society: The Humane Agenda.

In order to really understand your position, you have to think a thing through carefully using creative and critical thinking. This is best accomplished by writing. At the end of the process, there is something to share with others that may be of value — and could even change the world.

Mises Wire
Liberalism and "Classical Liberalism" — An Unfortunate Evolution

David Gordon |  Senior Fellow at the Mises Institute, and editor of The Mises Review

Kenneth L. Pearce — George Berkeley and the power of words

John Locke's epistemological realism versus George Berkeley's linguistic constructivism. Subsequent findings favor Berkeley's view. Human's participate in the construct of their reality through the way they express themselves about it and their relationship to it.

Short and worth a read.

OUPblog — Oxford University Press's Academic Insights for the Thinking World
George Berkeley and the power of words

Kenneth L. Pearce | Ussher Assistant Professor in Berkeley Studies (Early Modern Philosophy) in Trinity College Dublin

John Quiggin on John Locke's Classical Liberalism

Weekend reading on liberalism. These are short posts and they provide a good background in many political issues now to the fore in US politics.

John Locke was a proponent of bourgeois liberalism aka propertarianism. In this view the sole purpose of civil government is the protection of private property. John Quiggin exposes this idol of liberalism as having feet of clay. It also explains how many of the American founding fathers from the slave owing states saw no conflict between liberalism and slavery, which otherwise might seem a puzzling oversight or rank hypocrisy. Locke justified it for them because he was one of them, albeit in absentia.

Short Summary: John Locke, an enemy of freedom – John Quiggin

John Locke Against Freedom | John Quiggin - Jacobin

John Locke’s Road to Serfdom | John Quiggin - Jacobin

Locke’s Folly | John Quiggin - Jacobin

John Quiggin — Locke’s Folly

Jeffersonian Democrats made a serious attempt to implement Locke’s theories. Colonization and expropriation followed.

John Locke was an Enlightenment philosopher with an agenda — bourgeois liberalism based on freedom, to exploit land and workers that is.

Jacobin
Locke’s Folly
John Quiggin | Professor of Economics and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government

Sandwichman — Ownership,Trade and Equilibrium: Locke, Graunt and Gracian

"It is impossible that the primary law of nature is such that its violation is unavoidable. Yet, if the private interest of each person is the basis of that law, the law will inevitably be broken..." — John Locke, Essays on the Law of Nature

Baltasar Gracian's Oráculo manual y arte de prudencia (1647), John Graunt's Natural and Political Observations made upon the Bills of Mortality (1662) and John Locke's Essays on the Law of Nature (1664) all appeared within the span of 17 years in the middle of the 17th century. Gracian bequeathed to economic discourse the philosophical concept of laissez faire, Graunt laid the foundations for quantitative social science, Locke unambiguously defined the natural law constraint that he later alluded to in the famous fifth chapter of his Second Treatise on Government, "Of Property."…

Philosophy and economics. We are still struggling with these issues.

Ownership is thus opposed to abundance that escapes its grasp. Perhaps Locke was on to something after all when he observed that "it is impossible for anyone to grow rich except at the expense of someone else." But it is not a physical amount that the grasping individual steals "from another man's heap." It is instead a capability and productive potential that the wealthy monopolize and hoard. One of the ways the owners impose on everyone else is by propagating myths about the sanctity of private property, the self-adjusting character of the price system and the fallacy and futility of any attempt by anyone other than owners to regulate or restrict production on behalf of the wider community of non-owners. 

Econospeak
Ownership,Trade and Equilibrium: Locke, Graunt and Gracian
Sandwichman

John Quiggin — John Locke’s Road to Serfdom

John Locke advocated for a world based on expropriation, enslavement, and serfdom.

Jacobin
John Locke’s Road to Serfdom
John Quiggin

John Quiggin — John Locke, an enemy of freedom

A proper treatment of Locke would have to explain how

• His theory of natural rights in property was designed to justify the expropriation of indigenous populations
• His advocacy of freedom included support for slavery
• His theory of religious toleration excluded atheists and Catholics
• His theory of political freedom did not extend to freedom of speech.

How then did Locke get such a high reputation? The answer isn’t all that mysterious. Locke was closely involved in the British colonisation of North America, both as an investor and as a participant in political activity such as the drafting of the Constitution of the Carolinas, which ratified the expropriation of the indigenous population and enshrined the absolute power of slave-owners....

John Quiggin

John Locke, an enemy of freedom

Edward Martin And Mateo Pimentel — The Inadequacies of Liberalism: The Centrality of Socio-Economic rights for Marxism and the Catholic Social Justice Tradition

Weekend reading.

Counterpunch
The Inadequacies of Liberalism – The Centrality of Socio-Economic rights for Marxism and the Catholic Social Justice Tradition
Edward Martin And Mateo Pimentel

Edward Martin is Professor of Public Policy and Administration, Graduate Center for Public Policy and Administration at California State University, Long Beach, and co-author of Savage State: Welfare Capitalism and Inequality.

Mateo Pimentel lives on the Mexican-US border. You can follow him on Twitter @mateo_pimentel, or read more at www.guerrillaprose.info.

Matt Bruenig — Should the State Steal from the Poor?

Ya gotta love Matt.

There is a funny group of people out there who became laissez-faire propertarians for secular reasons but then later had to backfill ways to reconcile it with their Catholic religion. One of the things these people often do is concede that, as Locke famously wrote, the poor have a right to the surplus of the rich, but then insist that the state has no role in actualizing that right. 

People who say this seem to imagine that the state can somehow stay out of the matter: the rich will either give it over to the people it belongs to (the poor) or they won’t, and the state will keep out of it. But this can never be the case. 

On this view, the surplus of the rich literally belongs to the poor. It is theirs. Yet, under laissez-faire propertarianism, when the poor go to collect what is theirs (e.g. grab up food and supplies and whatever from the houses of local rich people), the state does not stay out of it. Instead, the state comes out and violently attacks the poor, throwing them in jail even. 

If you believe, as these conservative Catholics claim to, that the surplus truly does belong to the poor, then state enforcement of property law in scenarios like this is literally stealing from the poor. The state is using its force to keep the poor away fromtheir own belongings. Should the state’s force be mobilized in this way? To steal from the poor and give to the rich?

Matt Bruenig
Should the State Steal from the Poor?

My comment there:

Where does the surplus come from? Gains that don't come from work, which is why the workers have a right to it. The surplus is extracted from their productive contribution. 

In economic terms, the surplus is the result of economic rent and rent-seeking behavior.
According to economist Michael Hudson, for example, economic needs to be taxed away both to restore distributive balance after imbalance created by imperfect markets and also to create a disincentive for rent-seeking. 

The surplus that is taxed away should then returned to the economy productively through spending on public purpose, or reducing taxation on workers. 

The formula is don't tax work, tax economic rents — land rent (different from rent on real estate), monopoly rent, and financial rent.

Matt Bruenig — John Locke Says Everything Belongs to Everyone

As I’ve pointed out before, people misread Locke as if he is some kind of hardcore absolute propertarian, but he simply isn’t.

In the very first sentence of his treatment of property, Locke cites to Psalm 115:16 and remarks that “it is very clear, that God … has given the earth to the children of men; given it to mankind in common.” Locke reaffirms that the earth belongs to everyone in common over and over again in the ensuing paragraphs: “God, who hath given the world to men in common”, “the fruits it naturally produces, and beasts it feeds, belong to mankind in common”, “the earth, and all inferior creatures, be common to all men,” etc.

That Locke says everything belongs to everyone is not surprising, as it would have been a massive break with Christian tradition to say otherwise.

From the starting point that the entire world is owned in common, Locke then argues for creating and respecting property institutions as being instrumentally valuable for administrating the use of the collectively-owned earth. He notes that, although the world belongs to everyone, it is intended that people “make use of it to the best advantage of life, and convenience” and “for the support and comfort” of human beings. Accordingly, “there must of necessity be a means to appropriate” the earth to mobilize its resources towards these ends.

So, on the abstract normative framework level, Locke’s view is that the world belongs to human beings in common, that we need some mechanism to allow for the utilization of its resources, and that a propertarian system “might” serve that instrumental end. If this seems familiar to you, it’s because that’s the Thomist view, which, again, was fairly prevalent at the time.

Demos Policy Shop
John Locke Says Everything Belongs to Everyone
Matt Bruenig

Locke’s other writings on resource rights make this all very clear. In addition to the famous Lockean Proviso (which requires that property cannot be appropriated unless there is enough left in common for others), Locke straightforwardly claims that the poor have a right to the “property” of the rich:

God, the lord and father of all has given no one of his children such a property in his peculiar portion of the things of this world, but that he has given his needy brother a right to the surplusage of his goods, so that it cannot justly be denied him when his pressing wants call for it, and therefore, no man could ever have a just power over the life of another by right of property in land or possessions, since it would always be a sin in any man of estate to let his brother perish for want of affording him relief out of his plenty.

If ever there was a clearer call for the right of redistribution, I haven't seen it. And, of course, this too was the prevailing Christian thought on this matter at the time. Locke's musings on property have acquired a radical character more so from anachronistic misreads and half-reads than what Locke actually wrote.

Seem that John Locke was more of a socialist than Pope Francis. Who knew?

Matt Bruenig — Locke and Hobhouse on coercion

L. T. Hobhouse and John Locke are two great British liberals separated by two centuries. But they both saw the coercion inherent in economic inequality. They both saw the way in which the person who has much can dominate and subordinate the person who has little. And they both found it reprehensible, something that must be protected against, for liberty.

Wealth = power.

Matt Bruenig
Locke and Hobhouse on coercion

Barkley Rosser — More On Owning Unowned Land

Economics, law, and the origin of property rights.

Merrill cites John Locke on this who wrote, amazingly enough, that we should think of the world as originally "being America," that is a giant commons. For Locke it was mixing one's labor with the land that established ownership, a labor theory of ownership as it were. The matter of "accession" is posed as an alternative, but this simply involves a modification of this labor mixing principle, altering it to the first owner is the one who establishes effective control over the land. Once that is recognized, then a chain is established that simply continues, which is why we have this matter of the code holding when land first becomes clearly owned being the relevant one for later property transfers, particularly real estate ones.

Now in fact this does not really answer our question, although it does highlight important details to some extent, particularly when we consider Locke's view of "America." Why is it that the Indians did not "own" the land, or were not considered to be the owners by the British (and Spanish and French)? Needless to say, certain areas were used regularly by certain tribes, arguably enough that Locke should have granted them property rights, unless he wanted to argue that they could not due to being subhuman or something like that (am not aware of Locke ever making such arguments).

No, obviously what is involved is recognizing that behind property rights, certainly in land, there is assumed to be some sort of government or state with an organized legal code and system of courts to enforce it, even if it is one that has evolved "spontaneously" a la the common law of Britain, in contrast to the continental codes derived from Roman law, although the argument of Shleifer and his allies about the differences between these has been way overblown and often full of errors, the famous "Legal Origins" QJE paper by Glaeser and him being notorious for its myriad mistakes, even as it is one of the most heavily cited economics papers of all time.

So, private property comes into play when a government with a legal system recognizes that somebody has "mixed their labor" or otherwise assumed some recognized degree of control over some land with, very importantly, that person recognized as someone with legal rights to do so within the law code of the state involved, with that state itself ultimately having some degree of control or claim to control the land in question.

Econospeak

More On Owning Unowned Land

J. Barkley Rosser | Professor of Economics at James Madison University in Harrisonburg, Virginia

Sandwichman — The Poverty of Marginal Utility

If labour does not possess a "real and fixed value," how is it that one can conclude that introducing labour-saving machinery will diminish the value of the commodities produced? My explanation for this uncanny convergence is no doubt too "simple" and too "obvious" to be believed. A proper exposition would lead the reader on a suspenseful and convoluted excursion to interrogate all the historical opinions, detours, evasions and possible objections.

But why bother? It is this simple: marginal utility theory of value is an embodied-labour theory of value in disguise. The disguise consists of not stating the obvious assumption and getting away with it because the assumption is so obvious as to be taken for granted.

The assumption is that the two parties to an exchange have a legitimate right to conduct that transaction....

Enter John Locke.

EconoSpeak

The Poverty of Marginal Utility

Sandwichman

Frances Coppola and Daniel P. Ellsberg on Property Rights

People of libertarian persuasion are often very keen on the idea that Government should "defend property rights". Their view is that the assets they own are theirs by natural right, and it is the Government's job to defend that right....

But Government doesn't "defend" property rights, anyway. It creates them. The natural law is "I'm bigger and stronger than you are, so I'm having that". Government, pressured by people who believe that things they have are theirs by right even if they can't defend them, creates laws that say that what you have, you own, and no-one else can have it however big and strong they are. And it creates the legal infrastructure to enable those laws to be enforced. Well, more or less. Too often those laws are not enforceable in practice, not just because people don't have enough money to enforce them, but because it isn't easy to define what we mean by "ownership" or "property".

The legal infrastructure created by Government to protect individual "rights" incorporates within itself the right for Government to take some of the property of its citizens in order to fund itself. But our libertarian friends are horrified by the idea of taxes, especially capital taxes. Government taking your property from you by force is a betrayal of what they regard as the primary function of Government, namely to "defend property rights". This is illogical. Without taxes, Government could not function and the laws created by Government could not be enforced - including the "property rights" beloved of libertarians. Confiscation of property by Government is necessary if it is to "defend" the right to own property.

I find this view bizarre. As I've noted before, there are no "natural" property rights. The law of the jungle, which is the law that holds when all other laws are unenforceable, says that the only property you "own" is what you can defend....

What our libertarian friends really want is for Government to "defend" the property rights that they would LIKE to have - namely that what they have, they own, and no-one - not even Government - can take it from them. I don't have any problem at all with the idea of Government defining and enforcing an alternative set of property rights that are more "just" than the law of the jungle, if that can be done. But to claim that these are "natural" property rights and Government is merely "defending" them is simply wrong. If property laws are more "just" than the law of the jungle, it is ONLY because Government makes them so. And if Government can impose "just" laws regarding property ownership, why should it not impose "just" laws in other areas too? The problem is, of course, that the "just" property rights beloved of the libertarian right conflict with other "just" laws, such as the right of workers to a living wage, and the right of those who cannot work to the means to live. But why should laws that primarily benefit the rich override laws that primarily benefit the poor?

Coppola Comment
A question of justice
Frances Coppola


Daniel Ellerman has a book entitled Property and Contract in Economics: The Case For Economic Democracy. It is a free download here.

This book presents a modern version of the old Labor (or Natural Rights) Theory of Property and of an Inalienable Rights Theory that descends from the Reformation and Enlightenment. Together these theories re-solve the basic problem of distribution in the sense of giving a basis for the just appropriation of property and a basis for answering the question of who is to be the firm, e.g., the suppliers of share capital as in conventional capital, the government as in socialism, or the people who work in the firm as in the system of economic democracy (or labor-managed market economies). While these theories address old questions in economics, they do so in an entirely different manner than conventional economics which renders the questions as being about value or price theory (instead of about property rights and contracts). This book is now out of print and the rights have reverted to the author.

See also Daniel Ellerman's paper, Rethinking Common vs. Private Property

The purpose of this paper is to suggest a rethinking of the common-versus-private framing of the property rights issue in the Commons Movement. The underlying normative principle we will use is simply the basic juridical principle that people should be legally responsible for the (positive and negative) results of their actions, i.e., that legal or de jure responsibility should be imputed in accordance with de facto responsibility. In the context of property rights, the responsibility principle is the old idea that property should be founded on people getting the (positive or negative) fruits of their labor, which is variously called the labor or natural rights theory of property[Schlatter 1951].[1]

For instance, the responsibility principle is behind the Green Movement’s criticism of the massive pollution and spoliation by corporations that don’t bear the costs or legal responsibility for their activities. Ordinary economics shows that markets do not function efficiently in the presence of these “negative externalities” but the responsibility principle shows that there is injustice (i.e., the misimputation of responsibility) involved as well, not just inefficiency, and that aspect is overlooked by conventional economics.

The current economic system institutionalizes forms of social irresponsibility that go far beyond the topic of negative externalities. Indeed, the forms of socialized irresponsibility embodied in Wall Street capitalism are behind the current economic crisis, although the roots are much older. In recent decades, the American model of Wall Street capitalism has been promoted as an “advanced” model of a market economy to be emulated not only in the industrialized countries but also in the post-socialist and developing worlds. Hence the current crisis provides the opportunity to finally discredit the idea that this “advanced” form of socialized irresponsibility should be emulated by anyone. That is the topic of the next section.

But our main point goes much deeper than just a tamed or reformed version of capitalism; it goes to the form of private property behind the system. The ideology of the current system seems to have convinced those on both the Left and Right that the current system is based on the principles of private property so that anyone who opposes the current system is an “enemy of private property” itself, as the Commons and Green Movements are often portrayed (and as some members of those movements may portray themselves). We will see that practically the opposite is true.

Like the old system of chattel slavery, the current property system is “a” private property system but it is grounded on violating the very responsibility principle upon which property appropriation and other juridical imputations are supposed to rest. And when private property is refounded on the responsibility principle (or the labor theory of property) then a very different system emerges where firms are worker cooperatives (or similar workplace democracies) where people will appropriate the positive and negative fruits of their labor. Moreover this refounding of property on the responsibility principle provides no basis to treat the products of nature as if they were ordinary private property.

The rethinking of private property will take place in two steps: (1) the undoing the “brain-washing” ideology that the usual form of enterprise is based on “private ownership of the means of production” and (2) the application of the responsibility principle to the human activities of the people working in any enterprise where they are inalienablyde facto responsible for both the positive and negative results of their activities. After two sections on those two steps and a section on the notion of inalienability, we show how the corporation can be re-constituted from these first principles. Then we conclude with the negative application of the labor theory of property to the products of nature (natural resources) where some common ownership arrangement is required (rather than ordinary private ownership) so that the equal claims of future generations can be respected.

Mike Konczal — How Ronald Coase Demolished Current Libertarian Ideas About Property

Property isn’t a vertical relationship between a person and an object, but instead is a horizontal, reciprocal relationship of exclusions between people. Since the benefit of one person in regard to property comes at the expense of someone else, there’s no logical or coherent way to invoke liberty or classical liberal principles of “do no harm” when it comes to how the law determines the shape of property. All we can do is pick among competing systems that try to achieve shared social goals.

That’s not an idea normally associated with the economist Ronald Coase, who died yesterday at 102. But it’s a very important part of his landmark paper, ”The Problem of Social Cost” (1960), that goes missing when the right-wing celebrates his legacy. Let’s unpack it.

Next New Deal | Rortybomb
How Ronald Coase Demolished Current Libertarian Ideas About Property
Mike Konczal

Konczal bases much of his post on the Coase Theorem, which was a product of George Stigler, based on the work of Coase. Coase, however, rejected it as his. "Coase himself has stated that the theorem was based on perhaps four pages of his 1960 paper The Problem of Social Cost and that the "Coase theorem" is not about his work at all." (source)

I have always wondered how Libertarian Austrian economics could think that the system of enforceable property rights that Rothbard proposes could possibly work given transaction costs involved in litigating disputes over externalities. It would be litigation nation, and a lot of the judicial decisions would be based on the way judges approached issues. How lawmakers and judges would be selected would be extremely important since where there is power there is politics and class structure.

Randy Wray — Back To The Future: Modern Money Conference In 1999

MMT history lesson.

New Economic Perspectives


Back To The Future: Modern Money Conference In 1999
L. Randall Wray | Professor of Economics, UMKC