Mandatory Participation Series Contents
Rather than referring to a hypothetical social contract, some critics of UBI argue that taxation, regulation, and redistribution of income and wealth violate a natural right to private property and supposedly make people less free from interference. This argument is not specific to UBI; it rejects all forms of redistribution.
As I’ve argued, UBI is equally compatible with a system in which most resources are privately owned and with a system in which most resources are publicly owned. Although the argument below is critical of the existing situation, it is only an argument for sufficient taxation and regulation to support UBI. No major change in the property rights system is necessary to support UBI.
The government’s power to tax, regulate, and redistribute property is recognized as legitimate in law almost everywhere. Although the property-rights-based argument rejecting all these things is an extremist position, it is worth addressing because people favoring redistribution often concede the existence of natural private property rights and their supposed connection to freedom—even if they are willing to override those concerns to achieve other goals. I argue that neither point should be conceded.
Although the private property system without (sufficient) redistribution effectively establishes mandatory participation for the vast majority of people who aren’t independently wealthy, the private property argument feigns indifference to participation. The argument is supposedly about the relationship of owners to their property rather than between people and people. The existence of billions of people who have no other legal means to survive other than by providing services for property owners is supposedly an inconsequential side effect of our respect for the far more important natural relationship between owners and the things they’ve made out of the Earth’s resources.
Advocates argue that an unfettered private property is a natural right that people will establish if and when they are free from interference. As Grant S. McCall and I argue in our book, the Prehistory of Private Property, this argument involves false claims about history and about people’s wants and needs. The first people to work with resources almost everywhere in the world established common rights to property. Government-led violent interference was necessary to establish and maintain the private property system around the world.
Property rights do free owners from interference, but property rights also subject nonowners to interference. Ownership is a license for one person (the owner of a resource or something made out of resources) to interfere with another (anyone else who might want to use that resource). The natural property rights argument is not about promoting freedom from interference for everyone but about declaring that some interference doesn’t count (especially the kind that forces most of us to get a job and take orders from property owners most of our lives).
If we want to promote freedom as noninterference for everyone, the people who get to control the Earth’s resources need to make a reciprocal payment to the people who don’t, as described in the first post in this series. Without a reciprocal payment, private property is inconsistent with the basic principle of equality before the law. Under the existing nonreciprocal system, some people are born with more “rights” to this Earth than others. A system in which people are born with unequal “rights” is a system of legally enforced privilege.
A world in which one group of people controls resources essential to everyone’s survival does not establish a meaningful form of equality before the law. We are all born equally subject to the whims of the previous generation of property owners. They might give, bequeath, or trade property for our labor, or they might not—their choice.
If Jeff Bezos wanted to put an elephant in space and bring it back safely to Earth, society would provide the natural and human resources necessary to make it happen. Currently, charities are trying to raise money to eradicate polio, the cost of which is estimated to be a little over $5 billion—about 2-3% of Bezos’s net worth. If he wanted it done, society would make the resources available to make it happen. It’s the whim of the world’s owners that matters—because “natural rights,” which didn’t exist before colonial governments forced the world to adopt them.
Property rights advocates will argue that the value of resources is negligible. What’s important, they say, is the value that people have added to it. This argument has three problems. First, and most importantly, the question is not how much resources are worth to people who buy and sell them, but how much is independence worth to everyone who has had it taken away against their will? The answer, of course, is that independence is priceless.
Second, if it were true that resources aren’t valuable, people wouldn’t fight so hard to keep the world’s resources in the hands of the privileged. We wouldn’t be chopping down the last of our rainforests to get land for our production system. We wouldn’t think twice about giving away 40 acres and a mule right on Manhattan Island for anyone who preferred it to the jobs on offer. The cost of undeveloped Manhattan real estate—to which no value has been added—is in the range of $1,000-$3,000 per square foot, which makes the cost of one farm about $1.7-$5.1 billion dollars—plus the mule. We could offer people cheaper land in faraway places, but that’s not freedom—that’s banishment. Besides, even the remotest places in the United States are unavailable to people who don’t want to participate in our economic system. Ask a Native American how that happened.
Third, the value added by people wasn’t all added by owners. Often, past owners got land from the government and had value added to it by taking advantage of people who had no legal means to survive other than to work for property owners.
Although some workers are paid handsomely, the big rewards in our economy don’t go to people who do stuff but to people who own stuff. For example, according to Thomas Piketty, Harvard’s $40-billion endowment well out-performs the market with average returns of around 12% per year, but the firm they hire to manage it receives only a 0.5% per year—1/24th of the total return. The other 23/24ths go to Harvard: it gets more simply because it has more. The property works. The owner doesn’t have to.
As Piketty writes, the entrepreneur eventually becomes a rentier, meaning that people might start companies with innovative ideas and hard work, but successful companies accumulate assets, and eventually, the return on those assets swamps any value that can be attributed to the entrepreneur’s work or ideas. If returns are a reward for past work, the Rockefeller family is still “earning” delayed rewards for some questionable business dealings their several-times great-grandfather conducted 150 years ago.
A theory that demands we refrain from all interference with owners’ “natural right” to every cent of returns like these while being unconcerned that we interfere with other people in a way that gives them no choice but to serve the whims of owners, displays a one-sided concern for freedom from interference.
Property rights advocates argue that observations like these are unimportant because an unfettered private property system makes us all so much better off that quibbling about how to divide those benefits is unnecessary. Grant S. McCall and I debunk this claim in our book, Prehistoric Myths in Modern Political Philosophy. It uses extensive empirical evidence from anthropology and history to show that although the average person might be better off, the least among us are worse off than they could reasonably expect to be in a stateless society with common property rights.
If it were true that everyone was better off, we could offer that multibillion-dollar subsistence farm in Manhattan, and no one would want it. But if any land at all were available for free to nonparticipants in Manhattan, we all know what would happen; it would be instantly filled with the tents or shanties of homeless people.
One thing is certain: the starting point—the default position—of everyone who isn’t independently wealthy in society today is far worse than the starting point of someone who begins with direct access to resources. If it were true that society makes everyone so much better off, we wouldn’t need to make their starting point so much worse.
Reconsider a UBI plan that compensates all nonowners with a UBI large enough to meet their basic needs and a little extra for their trouble, and then offer them jobs. If capitalism makes everyone as much better off as its advocates claim, people will gladly take all the available jobs, and the net cost of UBI will be almost nothing. If property rights advocates are not bluffing about the benefits of capitalism, they have nothing to lose. If we need to force people to participate in capitalism by lowering their starting point to one in which they have no access to the resources they need to survive, that’s very strong evidence that the system isn’t actually making everyone better off than they would be with direct, independent access to resources.
This post has made some harsh criticisms of private property as we know it, but the problems it discusses can be cured with well-targeted taxation, regulation, and redistribution without fundamentally changing the system.
UBI is a good deal for property owners. All they have to do is pay their taxes and bargain for labor from a genuinely free labor force—people who are available to work if you make them a good offer but have the power to say no to bad offers. That’s a freer market than the one we have, and it’s not going to break the bank of the wealthy people of the world.
AUTHOR’S NOTE: Most of the posts in this series were written with the intention of going into my forthcoming book, Universal Basic Income: Essential Knowledge for MIT Press, and many, if not most, of the ideas presented here did make it into the book, but the publisher suggest I soften the wording and some of the arguments, because as is, in this version of it, “the anti-UBI crowd seems like a bunch of mustache-twirling robber barons,” and she rightly thought that the antagonistic stance would be less convincing than more confrontational one here. So, for the book, I made those changes, but I liked what was left out as well. I thought there must be a place for it. And I decided that place was on my blog. I refer everyone to the book because it has a different approach; because it benefits from peer review, copyediting, and more extensive proofreading; and because it has important ideas that aren’t here. Also, many of the arguments here are developed more fully in other books and articles of mine, most of which you can find on my website: www.widerquist.com.
Karl Widerquist, Karl@Widerquist.com