Roger Pilon of the Cato Institute presented at talk at a Cato event entitled \”The Moral Implications of the Deficit, Debt and the Budget Battles\” on June 9, 2011. His talk was part of a debate with Amatai Etzione that was inspired by Pilon\’s article in the Wall Street Journal. Starting around 30 minutes in he outlines the core roles for government starting from first principals. This was the clearest exposition of the core beliefs of the libertarian cause that I have ever heard. He grounded the position in core fundamental rights and the basic rules that we can derive from those rights as we move from a state of nature into a civilized society. I searched for a copy of Pilon\’s speech but did not find it, and so instead I will quote the key bits (from my point of view) below.
The theory of rights says you have two fundamental rights: property and contracts. Property as Locke put it is lives, liberties and estates. Property in your life. The property in the liberty you have. The property you have acquired in the world. Such that a right violation is the taking of something that belongs free and clear to another. â€¦ The second great right is through contract, whereby we associate with each other in various ways that will lead to the creation of civil society or civilization as we can think of it.
Now there are three basic rules which apply in this state of affairs before you turn to government. â€¦ They are so simple you can understand them even on the playground. Rule Number 1: Don\’t take what belongs to somebody else. That is the whole world of property. Rule 2, keep your promises. That is the whole world of contract. And Rule 3, if you fail in one or two, give back what you have wrongly taken or wrongly withheld. That is the whole world of remedies and that is what we create government to do.
Now there is a 4th rule, but it is optional, it is voluntary, it is: Do some good as you work your way through life. Be a good Samaritan. But notice the good Samaritan is good only because he acts voluntarily, not through force of law. In other words, you are at perfect liberty to be a good Samaritan or not, â€¦ that is why it is an optional rule.
Those are the four basic rules you can derive from the theory of rights to sort out the vast array of human relationships no matter how complex they may subsequently be. When we come out of the state of nature into the state of society there are certain reasons we do that. As Locke put it there are inconveniences in the state of nature. We may disagree about what our rights are and our obligations are. We may disagree about what rights we have if they are violated. Indeed, Hobbes put it very poignantly, life in the state of nature is solitary, poor, nasty, brutish, and short.
When we come out of the state of nature for these prudential reasons it turns out that there are three basic powers of government that you can think of when you think of government analytically.
The first power is the police power. â€¦ that is the main power we yield up in the original position to government to exercise on our behalf. And we use it to secure our rights both with respect to our neighbors and with respect to foreigners who may threaten us from abroad. And it is also used to create public goods. But you have to understand the nature of public goods in a strict sense, those are goods that as the economist define them are entailed by non-rivalous consumption and non-excludability. Goods such as national defense or clean air. The idea is that a non-rivalous consumption of a good by one individual does not reduce the availability of that good for any another individual. Non-excludability – no one can effectively exclude another from using it.
The second great power is the eminent domain power, which is the power to take someone\’s property provided you pay him just compensation and it is for a public use. This is much more difficult to justify. It is justified in our constitutional order, first of all because we agreed to it in the original position – the Fifth Amendment recognizes by implication the power of eminent domain. Secondly, it is a power that when exercised properly is pareto superior as economists would put it, at least one person is made better off, namely the public as is evidenced by its willingness to pay and nobody is made worse off. The individual from whom the property is taken provided he receives compensation that makes him indifferent to whether he keeps the property or takes the compensation. â€¦ Second great power, it is used to prevent the hold out in the state of nature, the person who simply will not relinquish his property and therefore can extract monopoly rents accordingly.
The third great power is the redistributive power, literally the power to take from A and give to B or the regulatory use of that power. â€¦ Regulatory power which is used to prohibit A from doing what he would otherwise have a right to do or require him to do what he would otherwise have a right not to do for the benefit of B. Unfortunately this third redistributative power is the one that defines most of what government does today. That means that most of what the federal, state, and local governments do today is illegitimate because there is no justification for this ultimate redistributative power.