TCS Daily

Whither Libertarianism?

By Pejman Yousefzadeh - February 20, 2004 12:00 AM

A recent Reason magazine debate on "how to think about liberty" produced this piece, which includes arguments from professors Richard Epstein, Randy Barnett and David Friedman, and from TCS's own James Pinkerton. While the participants in the debate provide interesting and provocative arguments on whether libertarians should accept some expansion of state power -- primarily in the fields of taxation and eminent domain -- they ignore alternative policies that can shape the exercise of the taxation and eminent domain powers in a manner that libertarians would like. And while Pinkerton raises interesting arguments regarding a libertarian vision for foreign policy, he fails to show how that foreign policy vision comports with explanations for how international relations are conducted, and makes other comments regarding the Bush Administration's foreign policy that are contradicted by recent and prominent developments affecting the debate over the shape of U.S. foreign policy.

First, some background on the arguments made in the Reason debate. Epstein makes consequentialist arguments in favor of libertarians accepting taxation and eminent domain as powers afforded to the state, because those powers are required by the concept of limited government, and are a practical means towards the achievement of certain policy ideals like the public enforcement of private rights.

Epstein's opponents generally counter by citing the potentially unjust applications of state power. They argue that private arrangements can oftentimes prove superior to the use of taxation and eminent domain in enforcing private rights. Pinkerton argues that Epstein does not address libertarian concerns regarding the drug war, pollution, the war on terror, Iraq, or concerns regarding the Bush Administration. Pinkerton also argues that the Administration has done nothing to make the case against anti-libertarian policies and interest groups.

With regard to the taxation power, all parties fail to acknowledge that whether they like it or not, taxation will remain a province of state power for years to come. Time is therefore better spent thinking about how to structure a taxation system around which all or most libertarians can form a consensus than to argue about whether taxation should be a legitimate exercise of state power in the first place.

To that end, may I take the opportunity once more to push for the replacement of our current "progressive" income tax structure with the establishment of a consumption tax? Libertarians wary of giving the state the power to tax should love the consumption tax, since in addition to its many policy benefits, with a consumption tax scheme, the state no longer determines how much money it will take from you based on your income. Rather, you will determine how much money you give to the state with your purchasing decisions. Concerns about overweening state power are therefore considerably reduced, if not entirely eliminated.

As for the issue of eminent domain, the Fifth Amendment to the Constitution demands a "public use" to a taking via eminent domain, and mandates that "just compensation" must be afforded to parties from whom property is taken. Opponents of Epstein are right to point out that there have been significant abuses in the exercise of eminent domain -- namely through takings that are not for "public use," but merely transfer property from one private owner to another.

But it should be pointed out that there has been a profound restriction in the power of the state to effect a taking, as evidenced by the Supreme Court's 1992 decision in Lucas v. South Carolina Coastal Council. And given the low probability that eminent domain power will be taken from the state, libertarians should instead seek to further check against that power. This document serves as a good start towards creating a consensus among libertarians on how to check against the abuse of eminent domain by calling on Congress to draft legislation that:

  • (1) specifies the rights of property owners under the Fifth Amendment's "Just Compensation" clause,
  • (2) follows the traditional common law in determining the definitions of "private property," "public use" and "just compensation,"
  • (3) equates property taken through regulation with property taken through physical seizure, and
  • (4) provides a single forum for the resolution of takings issues. In the interests of practicality, libertarians should focus on these and other policy proposals as a way to check against the expansion of the eminent domain power.

It is well and good to expand the debate on the "limits of liberty" beyond economic issues, as Pinkerton argues we should do. But many of Pinkerton's arguments don't hold water. In light of the current raging debate over potential intelligence failures regarding the issue of Iraqi WMD's and whether Iraq had ties to terrorist groups, it is more than a little bizarre to read Pinkerton arguing that "[i]n today's America, the spending of blood and treasure for foreign wars -- even those, such as Iraq, that violate international law and are based on government deception -- is practically unquestioned." Pinkerton complains that the U.S. has made more enemies through "offensive wars" while failing to acknowledge the various security benefits that have accrued to the U.S. and to American allies through the prosecution of the war in Iraq -- including this one. Finally, Pinkerton's policy prescriptions fail in many respects to take into account the power of realist theory -- whose principles are summed up here -- to explain past nation-state behavior on the global stage, and to predict future behavior. Pinkerton must show that the current state of international relations is more amenable to his foreign policy vision than it is to the vision of the Bush Administration.

So, whither libertarianism? On the issues of taxation and eminent domain, libertarians can embrace policies that provide an effective check against overweening state power, even if they do not remove the tax and eminent domain power from the state. This appears more feasible than carrying on about whether those powers should be afforded to the state in the first place. But libertarians are obliged to engage themselves in justifying a Pinkertonian foreign policy vision that eschews "offensive wars" and embraces the traditional libertarian hesitation to prosecute war in light of international relations theories like realism, which argue that such a vision is not commensurate with the way the world works. Otherwise, libertarians like Pinkerton leave themselves open to the charge that in constructing their foreign policy platform, they have failed to take into account the practical obstacles that make the implementation of such a platform impossible.

The author is a TCS contributing writer. He last wrote for TCS about the present and future of blogging and politics.


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