Matt Zwolinski and John Tomasi have a thought-provoking piece entitled, “A Bleeding Heart History of Libertarianism,” in the latest Cato Unbound. They criticize postwar libertarians (specifically mentioning Mises, Rand, and Rothbard) for seeing property rights as absolute and, in their view, regarding the welfare of the working poor as irrelevant to moral justifications for capitalism:
In the remainder of this essay, we will discuss one particular way that neoclassical liberalism has a better grounding in the libertarian intellectual tradition than the libertarianism of Mises, Rand, and Rothbard. It is not the only contrast, but one of the clearest and most important differences between these two schools of libertarian thought has to do with the proper nature of concern for, and obligation to, the working poor. On this issue, the neoclassical liberal position is that the fate of the class who labor at the lowest end of the pay scale under capitalism is an essential element in the moral justification of that system. And this position, we will argue, has a far more solid grounding in the libertarian intellectual tradition than the justificatory indifference to which the postwar libertarians are committed.
They go on to cite John Locke, Adam Smith, and Herbert Spencer (yes, Spencer!) as classical liberals who would be more sympathetic to the neoclassical-liberal project of justifying markets partly on the basis of their consequences for the welfare of the least well off. However, they also argue, plausibly, that Rand and Rothbard in particular were not indifferent to the fate of the poor, simply that they viewed the coincidence of respect for individual property rights and a better life for all as a happy fortuity. (Mises was more of a consequentialist and perhaps after all a comfortable fit within neoclassical liberalism.)
I would stress that libertarianism and capitalism are two separate concepts. One may endorse libertarianism without endorsing capitalism and vice versa. Or one might hold, as I do, that the moral justification of libertarianism is largely independent of welfarist considerations, but that the moral justification of capitalism is largely dependent on welfarist considerations. Zwolinski and Tomasi never draw that distinction, but I think it is an important one for reasons discussed further below.
Zwolinski and Tomasi sum up some of the virtues they see in the older, more flexible, more “bleeding heart” approach to justifying markets:
The classical liberal tradition of Locke, Smith, and Spencer, for example, gave great weight to property rights in a way that checked governmental power. But none of the early liberal thinkers treated property rights as moral absolutes, and thus none of them was forced by axiom to deny that concern for the poor was a legitimate consideration in institutional design. We believe that classical liberalism, not axiomatic libertarianism, is the true heir of the liberal tradition.
Our impatience with axiomatic deductions does not require a rejection of principled argument, of course. It does not require that we discard the ideas of rights and duties and desert in favor of an anemic consequentialism.
We have had a debate here on Pileus about whether property rights are “absolute.” I myself made the claim that they are not, but I meant that in a specific sense: that some rights to external things may change as external circumstances change. In another sense, rights are by definition absolute (see Mark LeBar’s comment). Presumably Zwolinski and Tomasi mean what I meant by property rights’ not being absolute, but in that case, it is noteworthy who is missing from their list of postwar libertarians: Robert Nozick. Nozick clearly didn’t spring for “absolute” property rights in the sense that external circumstances could not change legitimate entitlements (he endorsed a form of Locke’s Proviso), but his theory laid down in Anarchy, State, and Utopia is equally clearly “libertarian” and does not use welfarist considerations to justify libertarianism.
Zwolinski and Tomasi go on to explain how neoclassical liberalism is in fact consistent with John Rawls’ Difference Principle:
[S]ocial justice is not a property of the particular distributions that emerge in a society but of social and economic institutions viewed as integrated wholes. Thus a commitment to social justice in no way commits one to advocating liberty-limiting “corrections” of emergent distributions on an ongoing basis.
We believe that Robert Nozick’s critique of “patterned” conceptions of justice obscured this point. But this is the feature of social justice that led Hayek, in our view correctly, to state that his differences with Rawls about social justice were “more verbal than substantive.”
It is certainly true that whether the Difference Principle justifies ongoing income redistribution is a matter of contingent fact. Nevertheless, it’s pretty implausible that a pure free market, even with abundant private charity and mutual aid, could satisfy the Difference Principle. Remember that Rawls’ theory holds that just institutions must maximize the position of the representative least advantaged person. That is, when analyzing institutions comparatively and normatively, we must select that order that best guarantees the welfare of the worst-off.
Compare a pure free market with abundant mutual aid and private charity to that same society with a 1% income tax on annual personal income above $5 million, combined with an earned income tax credit of, say, $500 per year (those numbers seem roughly right for balanced budgets). Which society best secures the welfare of the worst-off: the first or the second? The deadweight loss from the tax-and-transfer system of the second society would be minuscule, and it is wholly implausible that this loss would outweigh, even in the long run, the $500 benefit that the poorest would receive.
This is the reason I believe the distinction between libertarianism and capitalism is important. If the libertarianism, understood as a particular view of the fundamental structure of rights, depends on welfarist/social-justice considerations such as Rawls’, then it is likely false. After all, tinkering with the structure of rights in a non-libertarian fashion is very likely to be necessary to satisfy Rawls’ criterion (or a Benthamite utilitarian criterion or any other welfarist criterion). If the fundamental structure of rights is justified by non-welfarist considerations, but social institutions are justified by welfarist considerations, then we can still uphold libertarian property rights as valid side constraints while advocating social institutions that promote welfare (for the least well-off). Those social institutions could even be governments (that respect libertarian property rights as side constraints). Homeowners’ associations provide a real-world example of governments that (in theory at least) respect libertarian side constraints while being internally non-capitalist. We libertarians can care about social welfare and the condition of the poor, even to the point of supporting the establishment of contractual, coercive governments to promote them, without compromising our support for property rights.