All men are born free and equal, and have certain natural, essential, and unalienable rights; among which may be reckoned the right of enjoying and defending their lives and liberties; that of acquiring, possessing, and protecting property; in fine, that of seeking and obtaining their safety and happiness.CONSTITUTION OF THE COMMONWEALTH OF MASSACHUSETTS (1780)
I like this version of the constitution better, since it’s more precise and detailed, especially regarding property rights. Although these are also implicit in the original version, I think it’s important that they are mentioned here in particular. Property rights are essential to a free society, if they are not absolute, they serve as an entry point for anti-liberal policies. As can be seen here in Germany, where § 14 (2) of the basic law says “Property obliges. Its use should also serve the public good.“ and leaves the door wide open for certain red elements in german politics to demand nationalization of housing and whole branches of industry.
“Rights” are a moral concept—the concept that provides a logical transition from the principles guiding an individual’s actions to the principles guiding his relationship with others—the concept that preserves and protects individual morality in a social context—the link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law.Ayn Rand, The Virtue of Selfishness
Bear in mind that the right to property is a right to action, like all the others: it is not the right to an object, but to the action and the consequences of producing or earning that object. It is not a guarantee that a man will earn any property, but only a guarantee that he will own it if he earns it. It is the right to gain, to keep, to use and to dispose of material values.
The only proper function of a state is the protection of individual rights.
With individual rights I mean, like Rand, only non-contradictory rights like life, liberty and the pursuit of happiness (negative freedom) as guaranteed in the american constitution. Not the phony welfare rights which require another persons (the producers) rights being violated.
Rand only mentioned Police, Military and Courts to protect individual rights, but I think it needs a little more. For example an institution that oversees medical research to avoid things like the contergan-scandal.
I think this is still well in the area of responsibility of a minimal state (though I’m not sure if it still constitutes as “laissez-faire”).
Men have the right to dispose of the product of their efforts and to engage in voluntary, mutual benefiting trade with one another. Capitalism protects this right “by placing the retaliatory use of physical force under objective control” (aynrand.org) to make peaceful trade between Individuals possible. The superiority of free trade over central planning is so obvious when you look at history (especially eloquently demonstrated in West- vs. East-Germany or North- vs. South-Korea) that anyone denying that and still favors an evil collectivist-regime like socialism, is beyond help. Though the moral reason of capitalism is far more important:
America’s abundance was not created by public sacrifices to “the common good,” but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes. They did not starve the people to pay for America’s industrialization. They gave the people better jobs, higher wages, and cheaper goods with every new machine they invented, with every scientific discovery or technological advance — and thus the whole country was moving forward and profiting, not suffering, every step of the way. Do not, however, make the error of reversing cause and effect: the good of the country was made possible precisely by the fact that it was not forced on anyone as a moral goal or duty; it was merely an effect; the cause was a man’s right to pursue his own good. It is this right —not its consequences— that represents the moral justification of capitalism.Ayn Rand, Capitalism: The Unknown Ideal
I’m still not sure though which kind of capitalism is the best: Anarcho-capitalism, minarchism Laissez-faire or Ordo-liberal? Something between if that is possible?
Anarcho-capitalism, in my opinion, cannot be put to practical use, since the idea of ”competing governments” would only end in tribal warfare.
With Laissez-faire I have the problem that I do not know exactly what that means. Are e.g. authorities like the above mentioned to monitor medical and pharmaceutical research already regulation and therefore not laissez-fair? And what do you do with the people who really do not find work at all and have no family, friends, etc. that support them? Leave them rotting on the street?
And although ordo-liberalism provides basic help in emergencies (“help for self-help”), it supports too many state interventions and state monopolies. Thus again the violation of negative freedom and the spiral of intervention come into play. One can see from the example of Germany how such a system mutates within a very short time into an escalating welfare state (a precursor to socialism).
So I see myself somewhere between laissez-faire and ordo-liberal and – for the time being – restrict myself to this statement: Markets should be as free as possible. Where the limits are, others have to find out.
The big question is, how do we create strong government (which reliably secures individual rights and free trade) without creating big government (that first leads to a paternalistic welfare state which eventually evolves into an authoritarian/totalitarian regime)? The best system, as far as I can tell, is the representative democracy secured by a liberal/libertarian constitution. About democracy:
Persons and systems in the government of non-democratic states can be changed by violence alone. The system and the individuals that have lost the support of the people are swept away in the upheaval and a new system and other individuals take their place. But any violent revolution costs blood and money. Lives are sacrificed, and destruction impedes economic activity. Democracy tries to prevent such material loss and the accompanying psychical shock by guaranteeing accord between the will of the state — as expressed through the organs of the state — and the will of the majority. This it achieves by making the organs of the state legally dependent on the will of the majority of the moment.Ludwig Mises, Socialism: An Economic and Sociological Analysis (p.72-73).
Maybe anarcho-capitalists are right and every attempt to create a minimalistic state will eventually also result in a “maximal state”. But even then, you can – with a good constitution and proper separation of powers – slow the process down considerably.
Just look at how long it took the USA (a nation explicitly based on minarchistic principles) to become somewhat of a welfare state and how long it took Germany (which has some socialist elements in its basic law). And as far as I can tell, even today the US still has – if you ignore the madness at the universities – in general a fundamentally different (i.e. a positive) attitude towards freedom and entrepeneurship.
In a free society without redistribution people have more money and more incentives to help others. Plus, voluntary charity is much more effective.
Welfare on the other hand requires expensive and intensive bureaucracy, finances lazy parasites, decreases incentives and creates a downward spiral with ever growing state interventions, which raises social security taxes for productive people and therefore leads to growing injustice, thus resulting in resentments towards the unproductive (social security recipients). The society is split. Maybe voluntary charity won’t help everyone, but neither does the coercive welfare-state which additionally creates a whole lot of other problems.
 Sure the market will eventually correct itself when products like contergan fuck up a whole generation, because everyone will sue them to hell, thus serving as an example for other companies how not to do it. But why let it even come to this? Same goes with (hardcore-)drugs, which undermine peoples ability to reason and places them in a dependency of their dealers (or worse, see BioShock).
Picture source: tarcherbooks.net