Home > Fallacies, foundations of econ, libertarians, Morality > Economic Rights are Positive, Political Rights are Negative

Economic Rights are Positive, Political Rights are Negative

Simon Wren-Lewis has a great post up which relates to a point I’ve wanted to make for a long time…  It’s not really a new point, per se, (I heard similar points being made with respect to “right-to-work” laws and there is this from Brad DeLong in a similar issue), but… well… Simon just has a great thought experiment:

Employees are already beset by red tape if they try to improve their working conditions. Now the UK government wants to increase the regulatory burden on them further, by proposing that employee organisations need a majority of all their members to vote for strike action before a strike becomes legal, even though those voting against strike action can still free ride on their colleagues by going to work during any strike and benefiting from any improvement in conditions obtained. Shouldn’t we instead be going back to a free market where employees are able to collectively withhold their labour as they wish?
I doubt if you have ever read a paragraph that applies language in this way. Yet why should laws that apply to employers be regarded as a regulatory burden, but laws that apply to employees are not?
Here’s how I’d make the same point more generally:  Economic rights are always positive rights–rights provided by the government to expand citizen’s choice set–while political rights are always negative rights–that is, freedom from interference.
The fundamental unit of an economy–the economy’s “atom”, if you will–is the Transaction.  I do something for you, then you do something for me.  That’s what makes an economic system economic.
But a transaction cannot be defined for an individual.  Transactions always involve two (at least!).   That’s key.  There’s you, there’s me and we’re trying to trade something.  So what does this have to do with economic rights?
Consider freedom of contract.  There’s you, there’s me and we’re trying to come to agreement.  Obviously, we can come to agreement without government interference.  If we do, though, what happens when both of us are caught off guard by how events actually play out?  Well, we renegotiate.  But the possibility that we will renegotiate itself makes certain contracts/agreements undesirable, because each of us knows that we may be at a disadvantage if we have to renegotiate (this is called the hold-up problem).
Doesn’t sound like a big deal?  Consider the example of the humble spot transaction.   There’s no government, so suppose I have a horse you need to get around on (since there are no roads anymore) and you have a fistful of gold (since there’s no currency without government to provide it).  I’d like to trade my horse for your gold.  We meet, I get off my horse, you hand me your gold… now, what’s to stop me from jumping back on my horse and riding away?  Now I have both horse and gold.
Stealing the horse is a “spot-renegotiation” because it happened while the transaction was proceeding.   It just so happens that at one point during the transaction, I had all the bargaining power because I was physically in possession of both goods.   If we can’t manage to trade horse for gold simultaneously, this will always happen to one of us or the other, so we probably won’t even bother trying.   Really, this is a point you should already be familiar with from movies or TV when the good guys need to trade something with the bad:   doesn’t something always go wrong?
On the other hand, if there’s a government, guys with guns come to my home, take the horse back and lock me in jail.  That makes it easier for us to come to come to an agreement in the first place so we can trade that horse for gold.  The government provides the ability to make contracts  which will be upheld by our counter-parties because the government will actively use force to make sure everyone lives up to their agreements.  It’s what I called the “visible hand” of the market in previous posts.
This need not be a particularly anti-libertarian view.  After all,  this is the reason that libertarian philosophers like Nozick argue for minarchy rather than anarchy.  The government needs to exist to provide economic rights (at a minimum), because economic rights are always positive rights–they only exist when the government provides them.   Whenever people transact, there must always be someone to say to them, “live up to your agreement!”   And that someone is “the government” whether they want the designation or not.
The libertarian mistake is thinking that economic rights flow from a principle of non-interference.  Government is a necessary, if silent, collaborator in every transaction because government is what makes everyone play by the rules.  Non-interference is a property of negative rights and only negative rights are political rights.
Political rights govern our interactions with government itself.   “Free speech” doesn’t mean I can say what I  want without consequence.   I can get fired for trashing my company in front of clients, and rightly so.  Free speech only means that the government has no standing to punish me for my views about government.   Political rights are the activities with which government can’t interfere.
Libertarians are trying to have it both ways.  They want economic rights (ownership, contract) to be supreme over political rights (suffrage, speech, religion), but they also want non-interference to be supreme over positive rights.   Positive rights over negative rights over positive rights.
Nozick’s Wilt Chamberlain thought experiment tries to get around this problem by simply ignoring issues of ownership (an economic right) in his theory of distributive justice.  It’s not that he’s wrong precisely, but instead it’s weird to say “a distribution is fair if it resulted from non-interference”… right after assuming that all ownership rights are sorted out and agreed upon by all parties.    Agreeing on and sorting out those property rights is exactly the reason government exists.   It’s almost like saying “assume government isn’t needed, ergo non-interference by government is best”.  Well, duh.   It’s easy to miss this, because Nozick concentrates on Chamberlain’s human capital–which no one objects to his owning–and ignores everything else.
So, libertarians, this is your challenge.   Choose which is more important to you, economic rights above political rights, or non-interference/negative rights above positive rights.  Those positions are in direct conflict.
I’ve ranted on long enough.  So let me leave it at that.
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