The Right of Private Property as Basic Liberty

Rawls versus Liberalism

Last month, I reviewed Alexandre Lefebvre’s book Liberalism as a Way of Life. Regular readers may remember that I was surprised that, among the many features that constitute the liberal way of life, Lefebvre completely omits to mention the centrality of (private) property. To quote myself:

“Some readers will be surprised to observe that in a book about liberalism, the expression “property rights” (nor even the words “rights” and “property” separately) appear. Now, that might be because Lefebvre implicitly associates property rights with capitalism, i.e., one of those systems that turn liberalism into liberaldom. This is problematic, however, and not only because many (most?) persons who think of themselves as liberals think that a system of property rights is needed to regulate conflict and permit cooperation. I said above that the requirement of public justification may be the constitutive principle of a liberal ethic. Obviously, we don’t have to publicly justify everything we do to others. As I explained in a preceding post, that’s because public justification stops where jurisdictional rights start. A constitutive feature of liberalism is the belief that there is a legitimate separation between the private and the public. Rawls would probably agree on this, as virtually all liberals. Maybe more contentiously, private property rights are part of those jurisdictional rights without which the private/public separation is nonexistent. I’ll not repeat the very strong economic arguments that indicate that a society without private property rights would be grossly inefficient, and so, unfair. I would argue however that the recognition of property rights is definitely part of both our public political and background culture. We all think in terms of what is mine and what is yours, including Rawlsian liberals.[8] This is not only part of our liberal culture, but also maybe of our nature.[9] You cannot have a proper account of what a liberal ethos could be without acknowledging the role played by our views about property. This is also part of the liberal way of life. I understand that this may not turn very well into the nice spiritual exercises that Lefebvre discusses. It may also be answered that the acknowledgment of property rights is implicit in any discussion about the fairness of distribution. But still, if there is water in which we are swimming, it is that most of the stuff around us is the property of someone and that this is one of the bases of our freedom.”

As this quote indicates, I (and I’m of course not the only one) view private property rights as one type of the broader category of jurisdictional rights that suspend disagreement by “devolution,” i.e., ascribing to individuals absolute sovereignty over a set of goods and activities.[1] If we agree that jurisdictional rights are necessarily part of any form of liberal social morality, then the question is whether private property rights are among these much-needed jurisdictional rights.

Lefebvre’s omission of private property in his account of the liberal way of life is directly related to John Rawls’s ambivalence about this issue. Rawls is indeed unclear about the status of private property with respect to the basic liberties that are the subject of its first principle of justice. In its latest version, Rawls’s first principle reads like this:[2]

“Each person has the same indefeasible claim to a fully adequate scheme of equal basic liberties, which scheme is compatible with the same scheme of liberties for all.”    

At times, Rawls seems to include a right of private property within this scheme of equal basic liberties. At the beginning of Justice as Fairness, he mentions for instance property as being part of the “liberties of the modern” that may eventually feature within the basic liberties.[3] However, Rawls’s most consistent position seems to have been that “while a right to property in productive assets is permitted, that right is not a basic right but subject to the requirement that, in existing conditions, it is the most effective way to meet the principles of justice.”[4] Rawls’s discussion of its most favored socioeconomic system, “property-owning democracy,” suggests that he does not regard ownership as contrary to his principles of justice. In particular, Rawls is willing to grant that individuals must be allowed to own objects to be in the capacity to realize their two “moral powers,” that is (i) forming, revising, and living by a conception of the good and (ii) applying and acting from principles of justice. But, referring to general equilibrium theory, Rawls also writes that it “is evident, then, that there is no essential tie between the use of free markets and private ownership of the instruments of production.”[5]  According to Rawls, the market system brings not only efficiency but is also “consistent with equal liberties and fair equality of opportunity.”[6] Nonetheless, implicitly appealing to the two welfare theorems, he notes that while the market mechanism can be used to achieve allocative efficiency without compromising individuals’ basic liberties, distributive considerations can be dealt with outside the market system:

“It is necessary, then, to recognize that market institutions are common to both private-property and socialist regimes, and to distinguish between the allocative and the distributive function of prices. Since under socialism the means of production and natural resources are publicly owned, the distributive function is greatly restricted, whereas the private property system uses prices in varying degrees for both purposes. Which of these systems and the many intermediate forms most fully answers to the requirements of justice cannot, I think, be determined in advance.”[7]

Rawls’s views are from this point of view fully compatible with “market socialism.” Rawls’s latest preferences evolved toward a regime that distributes productive means such that individuals are put on an equal footing. Hence, in Rawls’s liberalism, private property rights are allowed as long as they effectively promote fairness by ensuring that “social primary goods” (liberties and opportunities, income and wealth, the bases of self-respect) are distributed equally unless an unequal distribution favors the least favored. The justification of private property rights is in this sense purely instrumental and dependent on their contribution to the realization of a fair society.

There are several ways to respond to Rawls for those who are not satisfied with the contingent moral status he gives to private property rights. The most straightforward is probably to point out that the way Rawls separates efficiency and distributive consideration is problematic – though it was quite standard at the time Rawls was working on A Theory of Justice. A long list of arguments has been developed to the effect that the distribution of productive assets is not neutral in terms of efficiency as soon as we exit the world of perfectly competitive markets. Informational asymmetries in particular constrain the organization of productive activities within the firm and may justify an unbalanced distribution of private property rights over assets.[8] So, even if we take Rawls’s principles of justice for granted, his agnosticism is probably misplaced, at least if we assume that allocative efficiency is required to achieve a fair society.

A more general argument is that the kind of civil and political liberties that figure in Rawls’s scheme of basic liberties are more likely to be secured with a high level of economic freedom.[9] Brute statistical analysis suggests that there is a correlation between political and economic freedom (source):[10]

We should take this kind of statistical correlation with caution. We have however reasons to think that behind the correlation stands a real causal relationship. Suppose that, following Rawls, we grant private property of consumer goods but decide that capital goods such as buildings and residences would not be ascribed private property rights. Whatever people do with buildings would be subject to the authorization of the state – or some other collective entity. Then, surely, that could put other more “fundamental” civil and political liberties in jeopardy. For instance, the freedom to associate would surely be interfered with because people obviously need places to meet. Capital goods as much as consumer goods are essential to permit individuals to pursue their multiple and plural ends. Indeed, private property rights on both consumer and capital goods might be a requirement for the full realization of pluralism that, as Rawls acknowledges, is a feature of an open society. The pursuit of ends requires resources and the only way to secure the effective possibility of pursuing these ends from the arbitrariness of political power (whether exercised by a ruler or the “People”) is to secure the property of the required resources. Private property over assets offers opportunities to live a flourishing life that would not exist otherwise (by becoming for instance an entrepreneur) or to free oneself from the domination of other persons that is curtailing our ability to live per our wants and values.

These arguments in no way license the libertarian conclusion that private property rights are natural and absolute, and should systematically trump any other considerations. All we can say is that individuals surely should be given a right of private property that covers not only basic consumption goods but also productive assets. If we accept Rawls’s first principle of justice, this basic right should be balanced with other basic rights, but in no way a liberal position can admit the pure contingent justification that Rawls gives. To say this presumes nothing about the way private property rights should be distributed, though obviously, the fact that they cannot be systematically overridden indicates that “forcing” an equal or even a “fair” distribution is unacceptable. Also, as Gerald Gaus notes,[11] private property rights can themselves be decomposed into bundles of rights and allowances. Minimally, property rights seem to entail a right to use and a right to exclude. In some circumstances, we may agree that they do not entail for instance the right to destroy or modify or even a right to income. Proposals such as Glen Weyl’s and Eric Posner’s “common ownership self-assessed tax” (COST) are interesting from a liberal perspective because they are compatible with the idea that while we need an extensive system of property rights both for efficiency and freedom reasons, this does not necessarily imply “full ownership.”[12] In Weyl’s and Posner’s system, individuals would have property rights over productive assets in the sense of rights to use and exclude, but those rights would be weakened by a tax system and the possibility for other individuals to automatically acquire the property by paying the self-assessed price set in advance by the current owner.

What we have with Weyl’s and Posner’s COST is probably the weakest conception of private property that leans toward the Rawlsian view while still somehow respecting the liberal requirement of property rights as part of basic liberties. Now, to end this essay where I started, I encourage readers to test Weyl’s and Posner’s proposal with people they know. My personal experience is that people tend to not like the idea because it weakens the right to exclude too much. If this happens to be a general reaction, this confirms that property rights as we know them are really part of our liberal way of life.  

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[1] I’ve other recent essays on jurisdictional rights, see in particular the last one.

[2] John Rawls, Justice as Fairness – A Restatement, 2Rev Ed (Cambridge, Mass: Harvard University Press, 2001), p. 42.

[3] Ibid., p. 2. See also John Rawls, Political Liberalism (New York: Columbia University Press, 1993), p. 4.

[4] Ibid., p. 177. My emphasis.

[5] John Rawls, A Theory of Justice (Oxford University Press, 1971), p. 272.

[6] Ibid., p. 272.

[7] Ibid., p. 273-4.

[8] A good textbook treatment of this kind of issues is Samuel Bowles, Microeconomics: Behavior, Institutions, and Evolution (Princeton University Press, 2006).

[9] Gerald Gaus, “Coercion, Ownership, and The Redistributive State: Justificatory Liberalism’s Classical Tilt,” Social Philosophy and Policy 27, no. 1 (January 2010): 233–75.

[10] The y-axis displays economic freedom as measured by the Heritage Foundation Index of Economic Freedom. The x-axis shows a measure of political and civil freedoms as rated by the Freedom House. The data are from 2018.

[11] Gerald Gaus, The Order of Public Reason: A Theory of Freedom and Morality in a Diverse and Bounded World, Reprint edition (Cambridge New York,NY: Cambridge University Press, 2012), p. 375-6.

[12] Eric A. Posner et al., Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Comme illustré. édition (Princeton ; Oxford: Princeton University Press, 2018).