Property or Travel?

Ideologies are cobbled together. They come from compromises. When it comes time to prescribe for the real world, ideologies rely on observations that are drawn from history, which is doubtful, open to interpretation, and inductive. Finally, ideologies are filtered through human minds, which face difficult and possibly intractable biases and conflicts of values.

Your ideology is no exception. Neither is mine. That doesn’t mean that we aren’t sincere in what we believe. Of course we are. But you and I are also products of our times.

As such, we’re going to be a little bit messy.

It seems to me that there is a serious tension in libertarianism between two ideals: One is that property owners should have exclusive control over their property, and that all things should be under such ownership. The other is that any two individuals should be able to interact with one another without ever facing costs that are imposed arbitrarily by third parties.

I would love it if we could fully instantiate both of those ideals, but I don’t think we can.

Now, both ideals seem to point toward individual autonomy in some sense: We want people to be able to build things for themselves, to shape their environments in the ways that they – and not others – find best. We want individuals to bear the consequences of their own choices, whether good or ill, and we want them never to foist the bad consequences of their choices on anyone else. Achieving anything like these aims requires, and justifies the holding of, private property.

But we also want people to cooperate with one another, and cooperation requires travel. It requires someone leaving their property and going to someone else’s. Or, at the very least, it requires the transit of objects. To which property holders may very well object. And they may do so legitimately, per our previously stated ideal: I don’t want your stuff crossing my property.

Enter private roads: Some property owners, the argument goes, will face incentives to allow the transit of people and goods over their property. Those incentives will become so great, we are told, that people will build roads and charge tolls for their finance and upkeep. This is not at all unreasonable. After all, many private roads do exist, and many more have existed in the past.

Yet there is a very real collective action problem to the creation and maintenance of roads. I don’t mean a problem regarding who pays for or builds them – that part’s actually very easy. Rather I mean who keeps the tolls to a reasonable level, one that does not arbitrarily destroy commerce.

Each different road operator along a given route has an incentive to collect the entire surplus value of the transaction taking place: Get all but one of the operators to coordinate on a lower toll, and the holdout is rewarded with more of the profit. When none of the operators cooperate, and when all try to seize as much as possible, commerce dries up.

Internal tariffs — because that’s what these really are — are terrible for business. That’s exactly why internal tariffs have been forbidden in the United States, and why Old Regime France — which had them — did not commercialize or industrialize as fast as Britain — which lacked them.

The rationale that forbids internal tariffs applies equally to external tariffs, which likewise should not exist. And that rationale is identical to… a very powerful argument for why at least some roads should be publicly operated via tolls or other fees that collect no more than the roads’ operating costs. Given the choice of two less than ideal solutions, a network of public roads provides both greater economic efficiency and more individual autonomy than a system in which every propertyowner is sovereign, but potentially landlocked by every other.

Those who champion the free flow of people, goods, and services need to take a long, hard look at privatization of the roads. It will restrict the things that they claim to love. Indeed, many restrictionists — the people who would prevent the free flow of people, goods, and services — actually adore private roads. And they adore private roads for precisely this reason. They want to keep the riffraff out.[1]

Meanwhile, those who champion private property need to take a long, hard look at the free flow of people, goods, and services. Without commerce, their property isn’t going to be worth much. Worse, many of their own plans for self-authorship will be severely compromised. One thing we certainly don’t need is private property owners acting like so many petty feudal barons, extracting as much as they can from businesses and drying up the capitalist enterprise in the pursuit of their narrow, short-term self-interest.[2]

It’s for reasons like these that the work of Mark S. Weiner is so interesting to me. Weiner has argued that many of the forms of individual liberty that we rightly value can only arise from – and are only secured by – a relatively strong central state. In the case we are considering, a Weinerian state would be a state that was at least strong enough to maintain a highway system. (I would challenge Mark to consider that this isn’t at all a very strong state, as modern states go. To libertarians, I would say that Weiner’s “strong” state perhaps only needs to be strong enough to deter personal violence and provide a few fairly minimal public goods, which is precisely what Adam Smith prescribed. In other words, not very strong at all.)

Anyway. Bringing back feudalism certainly isn’t what I signed up for. What is? I’ll give it a try…

By historical standards, the world we inhabit is rich, healthy, peaceful, literate, well-mannered, urbane, and tolerant. (No, it’s not perfect. Complaints to that effect bore me.)

So why has our world become so great? Unraveling that mystery has been the work of the social sciences since around the time of the Scottish Enlightenment. I am convinced that the classical liberals made a magnificent stab at answering the question. I am further convinced that modern libertarians have systematized and clearly set forth much of what the classical liberals found.

Our knowledge has advanced tremendously. But I am not at all convinced that the project is over.

As my former colleague Will Wilkinson put it:

[F. A.] Hayek argued that the rules that give rise to the higher-level order of the market are not the result of government planning—at least not initially. They emerge from a chancy process of socio-cultural evolution, and it’s by no means bound to happen. Neither Adam Smith, he of “the invisible hand”, nor Hayek believed that one can simply throw people together and the institutions of modern liberal capitalism will “spontaneously” appear. The puzzle of modern economic growth is a puzzle precisely because for millennia nothing like it ever got going and then suddenly it did get going with alarming and immensely beneficial consequences. Thinkers such as Smith and Hayek are so profoundly valuable because they have helped us to recognise the role these rules play, once chanced upon, in bringing about the wealth and well-being of the extended market order.

One attempt to explain the origin of the modern world looks a lot like private property. Another attempt looks a lot like the free flow of goods and services. I think we need a high degree of both to get where we’re going. I don’t think the boundaries between them are quite settled yet.

Notes

[1] Many propertarians really are counting on private roads to keep the riffraff out. No links for this, but Google it if you must:

But on what grounds should there be a right to un-restricted, “free” immigration? No one has a right to move to a place already occupied by someone else, unless he has been invited by the present occupant. And if all places are already occupied, all migration is migration by invitation only. A right to “free” immigration exists only for virgin country, for the open frontier.

Privatize everything, and immigration will stop. That’s purportedly a good thing because…

[I]t is white heterosexual men, who have demonstrated the greatest ingenuity, industry, and economic prowess… it is societies dominated by white heterosexual males, and in particular by the most successful among them, which have produced and accumulated the greatest amount of capital goods and achieved the highest average living standards…

[B]e and do whatever makes you happy, but always keep in mind that… your existence and well-being depends decisively on the continued existence of others, and especially on the continued existence of white heterosexual male dominated societies, their patriarchic family structures, and their bourgeois or aristocratic lifestyle and conduct.

As I said, not what I signed up for.

[2] It’s worth noting that while this problem has real bite for those who care about free trade, it also stands to bruise those who seek a racially hegemonic society. The incentive to be a defector – and to let the Mexicans in – will rise and rise with the number of exclusionists who buy up property along the border.

5 thoughts on “Property or Travel?

  1. Muh roads!

    What about the arguments (I have the left-libertarian folks in mind) that public subsidization of transport allows corporations to socialize the costs of their large size, i.e. socialize the increasing marginal costs of growing larger, while reaping all the marginal benefits? Or is this a feature, rather than a bug for you?

    What about the arguments (I have James C. Scott in mind) that public roads are a technology of domination, used by the state to extend the reach of its armies to more peasants/serfs? Even in the US, roads serve a “defense” purpose, i.e. and empire purpose.

    Your focus on the operation, rather than the construction, of private roads strikes me as novel and potentially interesting. How is the price of transport that different than the market price for any other factor of production, though? Bringing goods to market is just part of the production process, isn’t it? And yet producers of final goods still make a normal profit. They don’t get choked off by producers of intermediate goods and raw materials.

    I’m not sure what you gain by picking on Hoppe. His scheme only works if everyone else is as racist and sexist as he is. I would totally invite Mexicans (or whoever else) onto my property. Besides, the problem of national-border immigration isn’t “solved” by total privatization, it’s *obviated.*

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  2. What about the arguments (I have the left-libertarian folks in mind) that public subsidization of transport allows corporations to socialize the costs of their large size?

    Collecting tolls from users of the state-operated roads would focus the costs on those who were willing to bear them.

    What about the arguments (I have James C. Scott in mind) that public roads are a technology of domination?

    They have often been used as such, yes. The roads will be as good (or as bad) as the people and practices that make use of them.

    Bringing goods to market is just part of the production process, isn’t it?

    I’m not so sure of this. Giving veto power to everyone who owns a bottleneck along the road will be very dangerous, because once the goods are made, they must either be brought to market or frequently lose their value. In such a state there isn’t time to build a competing road.

    I’m not sure what you gain by picking on Hoppe. His scheme only works if everyone else is as racist and sexist as he is. I would totally invite Mexicans (or whoever else) onto my property.

    I’m sure you would. But what if anti-immigration folks buy up all the land around you?

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  3. I would love it if we could fully instantiate both of those ideals, but I don’t think we can.

    Interestingly, hidden in that sentence is the problem which you’re seeking a solution to: the psychological/emotional desire to realize a state of affairs which inconsistent with logic.

    Surely it’s logically possible for that state of affairs to be possible: we just imagine a situation in which perfect information is accessible to and internalized by property holders (with some stipulations, of course) and they then act according to their own best interest. (Which is now no longer subjective but objectively determined.)

    In the real world, emotion and prior commitments – as you note prevent the logical possibility from being considered as anything other than a fairytale. People are just too unpredictably complex for that.

    Nice post, too, I should add. Lots to think about there. For my part, I’m not persuaded that a principled, logically coherent formula for determining political disputes is possible (well, to be honest I don’t think it is, which you concede in your opening paragraph) or even desirable. Maybe it’s the last point that separates us ideologically.

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  4. I’m curious about how network effects play into this. Where the value to society of a networked resource — communications networks generally, of which roads are a special case — increases exponentially with the number of people attached.

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