Last Updated on April 25, 2021

In a previous post, I stated that people have a variety of libertarian ownership rights. The post covered self-ownership rights, world-ownership rights, and some considerations related to the nature of those rights. In this post, I will consider the implications that I believe these ownership rights have on the permissible activities of a state. That is, I will consider the state activities that I believe are compatible with the libertarian ownership rights that I described earlier.

To start, I must note that libertarians are notorious for rejecting activities by the state that many non-libertarians might see as morally permissible or obligatory. For example, many libertarians reject forms of wealth redistribution, welfare, social safety nets, etc. because (they believe) the state violates our rights by forcing us to fund these services against our will. Some libertarians (anarchists) even claim that all mandatory taxation is unjust. Are these conclusions correct? As a libertarian who endorses self-ownership and private property, am I committed to the rejection of the mandatory taxation by the state? If not, am I committed to the rejection of wealth redistribution, safety nets, etc. provided by the state?

I believe that the formulation of libertarian ownership rights that I have previously described is not committed to any of these conclusions. However, I do believe we should be immediately suspicious of these state activities since they involve force against non-consenting persons, and force against non-consenting persons are often paradigmatic cases of rights violations. The challenge, then, is to give a justification for these activities by the state in a way that is compatible with the libertarian commitment to self-ownership and private property that I have formulated thus far.

In this post, I will outline and (briefly) justify a few kinds of activities that I believe the state is permitted to engage in. First, I will consider non-negotiable state activities, i.e. activities that the state is permitted/obligated to practice regardless of whether the activities serve the common interest or common will of its citizens. Second, I will consider negotiable state activities, i.e. activities that the state is permitted to practice only if, and because, the activities serve the common interest or common will of its citizens. These activities include many activities that are accepted by many non-libertarians, so one might wonder whether my formulation of libertarianism is meaningfully different from non-libertarianism. Therefore, to show that my views retain a libertarian flavor, I will conclude by listing some limitations on the state that I endorse which many non-libertarians oppose.

Non-negotiable state activities

Here, I will consider non-negotiable permissible forms of state activities. This includes activities that the state is permitted/obligated to practice regardless of whether the activities serve the common good or common will of its citizens. There are two kinds of activities that I have in mind here. The state is permitted to redistribute resources in order to guarantee (1) a certain egalitarian distribution of opportunity to acquire natural resources, and (2) a certain sufficientarian distribution of opportunity to acquire certain essential goods. I believe that the state is justified in imposing mandatory taxation to subsidize these activities and I believe the justification is perfectly compatible with the libertarian ownership rights that I have described before.

Egalitarianism

The state is permitted to redistribute resources in order to guarantee an egalitarian distribution of opportunity to acquire natural resources. In a previous post, I stated that everyone is entitled to the opportunity to acquire an equally valuable share of natural resources, where “valuable” is measured in terms of economic value. On this theory, if a person controls an excessive share (i.e. more than their fair share) of natural resources, he would control resources that he does not own. Moreover, he also violates the property rights of others insofar as his excessive control actively blocks others from acquiring their fair share of natural resources. Therefore, the state is permitted to forcibly transfer resources from those with excessive resources to those who where thereby blocked from acquiring their fair share of resources. It should be clear that the state is not initiating force in performing this activity. If a person controls an excess share of resources, that person has initiated force on the rest of society by depriving others of resources to which they are entitled. Therefore, when the state extracts and redistributes excess resources, they are retaliating to, rather than initiating, force.

There are a few ways this kind of taxation can be implemented. This can be implemented by directly confiscating any excessive natural resources that a person controls. However, this may not be a preferable system, even from the perspective of the worst-off members of society. Some individuals are particularly productive at generating societal value from a given amount of natural resources. So it might be in the best interest of society to allow productive individuals to control an excessive amount of natural resources but force them to compensate society for their excess share. This can be done by forcibly extracting resources (natural or otherwise) from such individuals to be redistributed to other members of society. In other words, all individuals who control excess shares of natural resources must be taxed so much that their disproportionate control does not make any person economically worse-off (relative to their hypothetical outcome if everyone had the opportunity to acquire an equally valuable share of natural resources).

When I say that resources should be “redistributed” to other members of society, one might interpret this as literally giving resources directly to their rightful owners, as in e.g., a universal basic income system. I’m not against such a system, but I must clarify that this is not the only permissible form form of redistribution, nor is it necessarily the most ideal. For example, children are also owed compensation whenever individuals appropriate more than their fair share of natural resources. However, the best method of compensation may not involve merely transferring income to them or their parents. Rather, it may be preferable to use a portion of their compensation to subsidize other useful services such as, e.g., public education.

Sufficientarianism

In a previous post, I said that “exception rights” permit us to intrude on someone’s body or their property so long as the following conditions are met :

1. The intrusion imposed is of a reasonable level.
2. The intrusion (or a similar level of intrusion) is necessary to bring a needy person out of peril.
3. The needy person is in peril through no fault of their own.
4. The perilous circumstances are of sufficiently large gravity.

I believe mandatory taxation by the state can be justified so long as these conditions are met. Condition 1 implies that the tax rate must be reasonably low. Condition 2 implies that the tax rate should be as low as is necessary to ensure everyone can escape peril. Condition 3 implies that taxation should be restricted to alleviating burdens for those who are not responsible for their circumstances. Finally, condition 4 implies that the taxation should be restricted to alleviating burdens of sufficiently large gravity. Keep in mind that these conditions are required only for justifications of state activity based on “exception rights.” I go into more detail on this particular justification of state activity in a separate post. In other words, the state is permitted to ensure the minimum interference necessary (so long as the intrusion is minor) to ensure that everyone has a reasonable opportunity to escape peril of sufficiently large gravity. This is the only circumstance where the state is permitted to initiate interference against a person’s body or property (hence why they are called “exception rights”).

What kinds of perils are of “sufficiently large gravity”? At a minimum, this includes being unable to defend one’s rights, e.g. the rights associated with self-ownership, the rights associated with property ownership, and the right to the opportunity to acquire a fair share of natural resources. Therefore, at a minimum, I believe the state is permitted to impose mandatory taxation to protect everyone’s rights. In order to protect these rights, the state may impose mandatory taxation to fund the activities of what Nozick calls the “minimal state“, i.e. the police, the courts, and the military.

Additionally, it may be reasonable to assume that “sufficiently large gravity” also includes lacking the reasonable opportunity to exercise one’s rights. To have a reasonable opportunity to exercise one’s rights, it is not sufficient that one is protected from rights violations by others. It is also necessary that one have the capacity to take exercise those rights. Therefore, the state may be permitted to subsidize access to goods/services (e.g. education, food, certain forms of health care, etc.) that are necessary to develop this capacity for people who would otherwise lack the reasonable opportunity to acquire those goods/services for themselves. Whether the state is permitted to subsidize these activities will require further argument and deliberation.

Negotiable state activities

Here, I will consider negotiable permissible forms of state activities. This includes activities that the state is permitted to practice only if, and because, they serve the common good or common will of its citizens. There are two kinds of activities that I have in mind here: (1) state enforcement of the rules regarding common property, and (2) the regulation of negative externalities, including what I call opportunity-constraining incentives. I believe that the state is justified in imposing mandatory taxation to subsidize these activities and I believe that the justification is perfectly compatible with the libertarian formulation that I have given thus far.

Common property

The first negotiable form of permissible state activity concerns common property. Recall that common property refers to resources where multiple people have the right to use the resource in specified ways. Let’s limit the discussion here to collective property (i.e. only a particular group of individuals are permitted to use the resource) because that is easier to reason about. If a certain resource is collectively owned by a group of people, then there must be rules on how the resource may be used. The owners of the resource should obviously be the ones who determine the content of the rules. Therefore, anyone who uses the property without respecting these rules would violate the rights of the property owners.

Because the state is permitted to enforce property rights, the state is also permitted to enforce the rules decided by the owners regarding the use of the property. This includes excluding non-members from using the property and ensuring that members who use the property obey the rules decided by the group. I called this a negotiable state activity because the state is only permitted to enforce rules which are decided by a certain group of people (namely, the owners of the collective property). For example, if a pond is collectively owned by a group of people in an area, then the state may enforce the rules that the owners decide regarding the use of the pond (such as e.g. rules to limit overcrowding or pollution).

Negative externalities

The second negotiable form of permissible state activity concerns negative externalities. Many libertarians agree that we are justified in interfering with economic transactions that impose negative externalities on others (e.g. left-libertarian Peter Vallentyne (2007) argues that the state may legitimately overcome market failures in general). For example, many endorse regulating factories to limit their production of pollution. I agree with these regulations because I believe that pollution constitutes a serious negative externality which interferes with the bodies and property of other persons. However, I deviate from many libertarians in that I support vastly more extensive regulations since I believe the set of negative externalities that constitute interference encompasses far more than what most libertarians would consider. Specifically, I believe the state is permitted to penalize economic transactions that produce opportunity-constraining incentives (this is my personal terminology). Opportunity-constraining incentives occur when the following conditions are met:

1. In a free market, fully informed and fully rational individuals are incentivized to participate in economic transactions of type X.
2. These incentives lead to widespread participation in economic transactions of type X, which in turn leads to the absence of certain opportunities (call these opportunities of type Y).
3. The individuals affected by these incentives, if fully informed and fully rational, would prefer to live in (a) a society with opportunities of type Y over (b) a society in which people can participate in economic transactions of type X without government penalty.

When these situations arise, the state is permitted to penalize such transactions to prevent the opportunity-constraining incentives. A more concrete example may be useful. Imagine a free market where no companies provided benefits such as time-off, safety regulations, work breaks, etc. to their employees. Some companies attempt to provide such benefits to employees, but this lowers their productivity. As a result, consumers are incentivized to support companies without these benefits (e.g. because such companies are able to sell goods at lower prices due to their superior productivity). This leads to companies without benefits being the only successful and reliable businesses, which means that companies without benefits are the only reliable opportunities for employment available. The result is that workers, for the most part, lack benefits such as time-off, safety regulations, etc. In actuality, consumers (if fully informed and fully rational) would prefer to live in a society in which companies did provide benefits to employees despite the overall decrease in economic productivity. In this situation, I believe the state is permitted to penalize companies that employ workers without providing essential benefits to them. The reason is that such transactions produce opportunity-constraining incentives because the 3 conditions from above are met: (1) in a free market, fully informed and fully rational consumers are incentivized to support companies that do not provide benefits to workers, (2) these incentives lead to the absence of employment opportunities providing worker benefits, and (3) the individuals affected by these incentives, if fully informed and fully rational, would prefer to live in (a) a society with employment opportunities providing worker benefits over (b) a more productive society in which companies can, without government penalty, employ workers without providing benefits to them.

In situations like this, the state may prevent opportunity-constraining incentives by either (a) outright banning the economic transactions that produce such incentives (e.g. forcing corporations to provide benefits to employees), or (b) taxing economic transactions that produce these incentives (e.g. taxing corporations that do not provide benefits to employees) so that such transactions are no more economically productive than alternatives. What justifies this kind of state interference? One might say that it improves societal well-being but I don’t believe considerations about well-being are sufficient to permit the initiation of interference. A true defense of this intervention is beyond the scope of this post, but I can give a rough sketch.

The basic idea is that this kind of state interference is permitted because it is not an initiation of interference. Economic transactions that produce opportunity-constraining incentives constitute initiations of interference. Why? Because harmful incentives can interfere with someone’s life just as much as a threat can. Consider what makes a threat to violence an unjust interference in someone’s life. The problem with a threat to violence is not that it directly commits violence on a person. The problem with a threat to violence is, if it is a legitimate threat, that it unjustifiably modifies the rational options available to a person. If I threaten to kill Adam if he doesn’t punch Bob, then, if the threat is legitimate, Adam no longer has the rational option to refuse to punch Bob, which means I have interfered with both Adam and Bob, and I have violated both of their rights. Likewise, incentives can also unjustifiably modify the rational options available to a person. For example, if I incentivize a group of people to steal your property (e.g. by offering them a reward), then I have interfered with your right to property by unjustifiably modifying the rational options of that group of people. So creating threats and creating incentives can be wrong for very similar reasons, i.e. they unjustifiably modify the rational options available to persons. In fact, threats can be considered a special type of incentive (specifically negative incentives). With that being said, I consider the participation in economic transactions that produce opportunity-constraining incentives as unjustifiable modifications on the rational options available to a group of people. Specifically, these incentives make it irrational for the group to support transactions that are necessary to produce certain important opportunities (e.g. in the example from above, they make it irrational to support companies that provide benefits to workers). Thus, the state is justified in penalizing transactions that produce these incentives; the state would be retaliating to, as opposed to initiating, interference. Much more obviously needs to be said but this, I believe, is a sufficient rough sketch.

The regulation of opportunity-constraining incentives can justify imposing penalties that many communitarians endorse. For example, this kind of reasoning can perhaps justify “imposing restrictions on large-scale discount outlets such as Wal-Mart that threaten to displace small, fragmented, and diverse family and locally owned stores” or “implementing laws regulating plant closures so as to protect local communities from the effects of rapid capital mobility and sudden industrial change.” I do not have a strong opinion on the degree to which the state is permitted to impose these kinds of penalties. It will be interesting to investigate this in a separate post.

In this subsection, I stated that whether the state is permitted to engage in negotiable activities depends on the common will (or common interest) of its citizens. I have not specified the procedure that ought to be used to determine the common will (or common interest) of the citizens. That is because the procedure does not inherently matter. We ought to use whatever procedure best approximates the common will/interest of the citizens in the actual world, whether that is a democracy, epistocracy, monarchy, noocracy, etc. My post here is completely agnostic with respect to which procedure best approximates the common will/interest of the citizens. That’s a descriptive question, not a normative question. However, answering this descriptive question will obviously have normative implications on which state activities are permissible. For example, if democracies are the best procedure to approximate the common will/interest of the citizens, then the state would have a non-negotiable duty to provide the institutions necessary to properly facilitate democratic decision making.

Differences with non-libertarians

I have endorsed here many permissible state activities that many non-libertarians agree with. For example, I claimed that the state is permitted to guarantee a certain egalitarian distribution of opportunity to acquire natural resources and a certain sufficientarian distribution of opportunity to acquire certain essential goods. I also claimed that the state is permitted to intervene in the market to prevent certain negative incentives produced by a free market. So it might seem that my views are not meaningfully different from the views of other non-libertarians or the views of other non-libertarian theories (such as e.g. Rawlsianism, egalitarianism, welfarism, etc.). Therefore, to show that my views retain a deeply libertarian flavor, I will conclude by listing some limitations on the state that I endorse which many non-libertarians oppose:

The strong moral presumption against the initiation of interference

Unlike many non-academic libertarians who believe a person or the state should never initiate interference against another person’s body or property, I believe that there are cases where a person or the state may be permitted to initiate interference (because I think rights are defeasible, for reasons I gave in a previous post). However, I do hold that there is a strong moral presumption against the state initiating interference against a person’s body or property. My current position is that the state may initiate interference only under very specific circumstances that I outlined earlier (see the “sufficientarian” section from above). Outside of this exception, the state should not initiate interference.

To see how this departs from non-libertarians, consider freedom of association. I believe that private businesses should be allowed to discriminate customers and employees based on any characteristic, including characteristics that constitute protected classes, e.g. race, color, national origin, religion, sex, age, or disability. The one exception to this general rule is if rampant discrimination against a particular group deprived them of the opportunity to acquire certain essential goods such as housing, education, medical care, occupation, etc. (as this would violate the “sufficientarian” condition described above). However, even with this exception, my view is still far from the typical view because I don’t believe this exception applies to any groups in the U.S. today (aside from, perhaps, the disabled), which means I don’t think anti-discrimination laws in the U.S. today are just. More importantly, even if this exception applied to certain groups in the U.S. today, the proper solution need not be to force private businesses to associate with these groups. A better solution would be to redistribute resources to members of the disadvantaged group and/or tax businesses that discriminate against such individuals. My position on freedom of association also applies to other freedoms, such as e.g. freedom of speech and freedom to engage in “victimless crimes” (e.g. recreational drug use, prostitution, etc.).

The insignificance of well-being and suffering

Unlike many non-libertarians, I do not believe that the promotion of well-being or alleviation of suffering is, by itself, sufficient to justify the initiation of interference. The state may initiate interference only to guarantee that everyone has the opportunity to acquire certain essential goods (recall that “sufficientarian” condition described earlier). Note that this initiation of intrusion is not justified because of well-being or suffering. Rather, the intrusion is justified when such intrusion is reasonable and is necessary to help faultless individuals escape perilous circumstances.

One might argue that a person’s circumstance is “perilous” if and only if they have sufficiently low (high) levels of well-being (suffering), therefore (according to my “sufficientarian” condition) the promotion (alleviation) of well-being (suffering) is sufficient to justify the initiation of interference. I have three responses to such an argument: (1) “peril” can be defined without appealing to well-being or suffering (e.g. many sufficientarian theories define their threshold in terms of resources, capabilities, or autonomy, as opposed to welfare), (2) even if perilous circumstances are determined by well-being/suffering, this would still only permit initiating interference to bring individuals up to a certain threshold, as opposed to permitting any interference that improved well-being or alleviated suffering, and (3) there are 3 other necessary conditions to justify initiating the interference (the interference must be of a reasonable cost, it must be necessary, and the beneficiary must be faultless).

The insignificance of inequality

Unlike many non-libertarians, I believe that the state is prohibited from redistributing resources solely for the sake of reducing inequality. I only have two requirements concerning the distribution of economic resources. I require that (1) that everyone has a certain sufficientarian opportunity to acquire certain essential goods, and (2) that everyone has the opportunity to acquire equally valuable natural resources. Note how this second principle, while egalitarian in spirit, permits rampant inequalities in economic resources. This is because (a) the principle is concerned with natural resources specifically, as opposed to economic resources in general, and (b) the principle is concerned with equality of opportunity to acquire resources, as opposed to equality of outcome (see: equality of opportunity vs equality of outcome). The rampant inequality permitted here is incompatible with, say, Rawlsianism which permits economic inequalities only if they are “to the greatest benefit of the least-advantaged members of society”. My theory permits rampant inequalities even if they do not benefit the least-advantaged members of society, so long as these inequalities are not the result of unfair opportunity to acquire natural resources.

The strong presumption of decentralization

State activities, both negotiable and non-negotiable, should be as decentralized as is reasonably possible (in accordance with the subsidiarity principle). In other words, when determining the scope (e.g. city, state, or federal) over which a particular government policy applies, there should be a strong presumption towards applying the policy over more local levels. State activities should extend over broader levels of government only if the activity cannot be applied over more local levels (e.g. national defense). This differs from the political views of many other individuals who seem to want their preferred policies to extend over the broadest scope possible.

There are a few reasons why I favor the localization of government power. Some of these reasons do not depend on my formulation of libertarian ownership rights. For example, decentralizing state power can be a useful remedy against tyranny of the majority. Other reasons do appeal to my formulation of libertarian ownership rights. For example, here are a few such reasons:

• State activities that enforce collective property rights should apply at local levels because different collectively owned resources are often owned by groups in different geographic regions, and the rules regarding the use of any collective property ought to be determined by the group owning the property.
• State activities that prohibit negative externalities should apply at local levels possible because the effects of the negative externalities are often (but not always) limited to the specific regions within which the transactions take place.
• When the state forces individuals to compensate others for their excess share of resources, this should typically be done at local levels because when one party is wronged because another party has control over an excess share of natural resources, this typically happens because the two parties are within a similar proximity. For example, if person B controlled slightly more than their fair share of land, then person A cannot claim that this interfered with her access to a fair share of land if A lives on the other side of the planet. Because parties can typically only wrong each other in this way when they are within a similar region, the adjudication and compensation for these wrongs should be handled by institutions within that specific region.

Conclusion

Regarding the state, I believe there are some activities that the state is permitted/obligated to practice regardless of whether the activities serve the common interest or common will of its citizens. This includes state activities to guarantee a certain egalitarian distribution of opportunity to acquire natural resources and state activities to guarantee a certain sufficientarian opportunity to acquire certain essential goods. Possibly, the state may also have a non-negotiable permission/obligation to provide and protect the institutions necessary to properly facilitate democratic decision making (if democracies are the best systems for determining the common interest/will of its citizens). There are also activities that the state is permitted/obligated to practice only if, and because, the activities serve the common interest or common will of its citizens. This includes enforcing the rules of collective property and regulating economic transactions that have sufficiently damaging negative externalities.