Libertarianism: Lesson 1

Libertarianism

For citations I’ll just include the page number, as everything is from Sandel’s Justice: What’s the Right thing to do

“Economic inequality is steeper in the United States than in other democracies. Some people think that such inequality is unjust, and favor taxing the rich to help the poor. Others disagree. They say there is nothing unfair about economic inequality, provided it arises without force or fraud, through the choices people make in a market economy.

Who is right? If you think justice means maximizing happiness, you might favor wealth redistribution, on the following grounds: Suppose we take 1 million from Bill Gates and disperse it among a hundred needy recipients, giving each of them $10,000. Overall happiness would likely increase. Gates would scarcely miss the money, while each of the recipients would derive great happiness from the $10,000 windfall. Their collective utility would go up more than his would go down” (59).

?What kind of logic is this?|Utilitarian

“This utilitarian logic could be extended to support quite a radical redistribution of wealth; it would tell us to transfer money from the rich to the poor until the last dollar we take from Gates hurts him as much as it helps the recipient.

This Robin Hood scenario is open to at least two objections – one from within utilitarian thinking, the other from outside it.

The first objection worries that high tax rates, especially on income, reduce the incentive to work and invest, leading to a decline in productivity. If the economic pie shrinks, leaving less to redistribute, the overall level of utility might go down. So before taxing Bill Gates and Oprah Winfrey too heavily, the utilitarian would have to ask whether doing so would lead them to work less and so to earn less, eventually reducing the amount of money available for redistribution to the needy” (59).

?Why would the overall level of utility go down?|the economic pie would shrink because of the reduced incentive to work and invest

“The second objection regards these calculations as beside the point. It argues that taxing the rich to help the poor is unjust because it violates a fundamental right. According to this objection, taking money from Gates and Winfrey without their consent, even for a good cause, is coercive. It violates their liberty to do with their money whatever they please. Those who object to redistribution on these grounds are often called libertarians” (59).

?True or False, calculations are besides the point in the eyes of libertarians|true

?According to this objection, taking money from Gates and Winfrey without their consent, even for a good cause, is _____|coercive

“Libertarians favor unfettered markets and oppose government regulation, not in the name of economic efficiency but in the name of human freedom. Their central claim is that each of us has a fundamental right to liberty – the right to do whatever we want with the things we own, provided we respect other people’s rights to do the same” (59).

?Libertarians favor unfettered markets and oppose government regulation, not in the name of economic efficiency but in the name of _______|human freedom

The Minimal State

“If the libertarian theory of rights is correct, then many activities of the modern state are illegitimate, and violations of liberty. Only a minimal state – one that enforces contracts, protects private property from theft, and keeps the peace – is compatible with the libertarian theory of rights. Any state that does more than this is morally unjustified”(60).

?What 3 things may a minimal state do?|enforces contracts, protects private property from theft, and keeps the peace

“The libertarian rejects three types of polices and laws that modern states commonly enact.

1.No Paternalism. Libertarians oppose laws to protect people from harming themselves. As long as no third parties are harmed, and as long as motorcycle riders are responsible for their own medical bills, the state has no right to dictate what risks they may take with their bodies and lives.

2.No Morals Legislation. Libertarians oppose using the coercive force of law to promote notions of virtue or to express the moral convictions of the majority.

3.No Redistribution of Income or Wealth. The libertarian theory of rights rules out any law that requires some people to help others, including taxation for redistribution of wealth” (60).

?What 3 policies must a modern libertarian reject?|paternalism, morals legislation, redistribution of income or wealth

“According to the libertarian, redistributive taxes are a form of coercion, even theft. The state has no more right to force affluent taxpayers to support social programs for the poor than a benevolent thief has the right to steal money from a rich person and give it to the homeless” (61).

?Redistributive taxes are a form of _____|coercion

“The libertarian philosophy does not map neatly onto the political spectrum. Conservatives who favor laissez-faire economic policies often part company with libertarians on cultural issues such as school prayer, abortion, and restrictions on pornography. And many proponents of the welfare state hold libertarian views on issues such as gay rights, reproductive rights, freedom of speech, and the separation of church and state”(61).

?True or False, Libertarian philosophy is inconsistent in the political spectrum|true

“During the 1980s, libertarian ideas found prominent expression in the pro-market, antigovernment rhetoric of Ronald Reagan and Margaret Thatcher. As an intellectual doctrine, libertarianism emerged earlier, in opposition to the welfare state. In The Constitution of Liberty(1960), the Austrian-born economist-philosopher Friedrich A. Hayek (1899-1992) argued that any attempt to bring about greater economic equality was bound to be coercive and destructive of a free society. In Capitalism and Freedom(1962), the American economist Milton Friedman (1912-2006) argued that many widely accepted state activities are illegitimate infringements on individual freedom. Social Security, or any mandatory, government-run retirement program, is one of his prime examples: ‘If a man knowingly prefers to live for today, to use his resources for current enjoyment, deliberately choosing a penurious old age, by what right do we prevent him from doing so?” Friedman asks. We might urge such a person to save for his retirement, “but are we entitled to use coercion to prevent him from doing what he chooses to do?’”

?Who are the two libertarian economists|Hayek and Friedman

?According to Friedman, should we force a person to save for retirement?|no

“Friedman objects to minimum wage laws on similar ground. Government has no right to prevent employers from paying any wage, however low, that workers are prepared to accept. The government also violates individual freedom when it makes laws against employment discrimination. If employers want to discriminate on the basis of race, religion, or any other factor, the state has no right to prevent them from doing so. In Friedman’s view, “such legislation clearly involves interference with the freedom of individuals to enter into voluntary contracts with one another”(61-62).

?True or False. In Friedman’s view, it’s wrong for the government to fine a business to discriminate against minorities|True

“Occupational licensing requirements also wrongly interfere with freedom of choice. If an untrained barber wants to offer his less-than-expert services to the pubic, and if some customers are willing to take their chances on a cheap haircut, the state has no business forbidding the transaction. Friedman extends this logic even to physicians. If I want a bargain appendectomy, I should be free to hire anyone I choose, certified or not, to do the job. While it is true that most people want assurance of their doctor’s competence, the market can provide such information. Instead of relying on state licensing of doctors, Friedman suggests, patients can use private rating services such as Consumer Reports or the Good Housekeeping seal of approval.

?True or False. In Friedman’s view, the state wrongly interferes by requiring doctors have state licensing|True

?What 3 things may a minimal state do?|enforces contracts, protects private property from theft, and keeps the peace

?A minimal state may not force state licensing of doctors because minimal state can only do three things, what are they?|enforces contracts, protects private property from theft, and keeps the peace

?What 3 policies must a modern libertarian reject?|paternalism, morals legislation, redistribution of income or wealth

?Redistributive taxes are a form of _____|coercion

?A racist employer who happens to be a libertarian refuses to hire a minority. What policy is the racist rejecting?|morals legislation

The next section is Free-Market Philosophy from Robert Nozick

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