The first and probably the most important subsidy of history is land theft, by which peasant majorities were deprived of their just property rights and turned into tenants forced to pay rent based on the artificial “property” titles of state-privileged elites.

Of course, all such artificial titles not founded on appropriation by individual labor are completely illegitimate.

As Ludwig von Mises pointed out in Socialism, the normal functioning of the market never results in a state of affairs in which most of the land of a country is “owned” by a tiny class of absentee landlords and the peasant majority pay rent for the land they work. Wherever it is found, it is the result of past coercion and robbery.

Murray Rothbard, in The Ethics of Liberty, explained the injustice of feudal landlordism:

But suppose that centuries ago, Smith was tilling the soil and therefore legitimately owning the land; and then that Jones came along and settled down near Smith, claiming by use of coercion the title to Smith’s land, and extracting payment or “rent” from Smith for the privilege of continuing to till the soil. Suppose that now, centuries later, Smith’s descendants (or, for that matter, other unrelated families) are now tilling the soil, while Jones’s descendants, or those who purchased their claims, still continue to exact tribute from the modern tillers.Where is the true property right in such a case? It should be clear that here . . . we have a case of continuing aggression against the true owners—the true possessors—of the land, the tillers, or peasants, by the illegitimate owner, the man whose original and continuing claim to the land and its fruits has come from coercion and violence. Just as the original Jones was a continuing aggressor against the original Smith, so the modern peasants are being aggressed against by the modern holder of the Jones-derived land title. In this case of what we might call “feudalism” or “land monopoly,” the feudal or monopolist landlords have no legitimate claim to the property. The current “tenants,” or peasants, should be the absolute owners of their property, and, as in the case of slavery, the land titles should be transferred to the peasants, without compensation to the monopoly landlords.

So rather than defending all existing land titles in the name of the “sanctity of property” and protesting when some left-wing government institutes a land reform that transfers feudal land titles to the peasantry, Rothbard favored 1) dividing up Southern plantations and giving freed American slaves “forty acres and a mule,” and 2) transferring the latifundia from Latin American landed oligarchies to the peasants.

In the Old World, especially Britain (where the Industrial Revolution began), the expropriation of the peasant majority by a politically dominant landed oligarchy took place over several centuries in the late medieval and early modern period. It began with the enclosure of the open fields in the late Middle Ages. Under the Tudors, Church fiefdoms (especially monastic lands) were expropriated by the state and distributed among the landed aristocracy. The new “owners” evicted or rack-rented the peasants.

Expropriating from the Peasantry

The Restoration Parliament of the seventeenth century carried out a series of land “reforms” that abolished feudal land tenure altogether—but only upward. There were two ways Parliament could have abolished feudalism and reformed property. It might have treated the customary possessive rights of the peasantry as genuine title to property in the modern sense, and then abolished their rents. But what it actually did, instead, was to treat the artificial “property rights” of the landed aristocracy, in feudal legal theory, as real property rights in the modern sense; the landed classes were given full legal title, and the peasants were transformed into tenants at will with no customary restriction on the rents that could be charged. The most important component of this “reform” was the Statute of Frauds of 1677, which nullified rights of copyhold by making them unenforceable in royal courts.

Finally, the Parliamentary Enclosures of the eighteenth and early nineteenth century robbed the peasantry of their rights of common. The propertied classes of England saw the economic independence provided by the commons as a threat, first to an adequate supply of agricultural wage labor on the landed oligarchy’s own land, and later to an adequate supply of factory labor willing to work the long hours and low pay demanded by the owners. The literature of the propertied classes of the time was quite explicit on their motivation: the laboring classes would not work hard enough or cheaply enough so long as they had independent access to the means of subsistence. They had to be made as poor and hungry as possible so that they would be willing to accept work on whatever terms it was offered.

A version of the same phenomenon took place in the Third World. In European colonies where a large native peasantry already lived, states sometimes granted quasi-feudal titles to landed elites to collect rent from those already living on and cultivating the land; a good example is latifundismo, which prevails in Latin America to the present day. Another example is British East Africa. The most fertile 20 percent of Kenya was stolen by the colonial authorities, and the native peasantry evicted, so the land could be used for cash-crop farming by white settlers (using the labor of the evicted peasantry, of course, to work their own former land). As for those who remained on their own land, they were “encouraged” to enter the wage-labor market by a stiff poll tax that had to be paid in cash. Multiply these examples by a hundred and you get a bare hint of the sheer scale of robbery over the past 500 years.

Contrary to Mises’s rosy version of the Industrial Revolution in Human Action, factory owners were not innocent in all of this. Mises claimed that the capital investments on which the factory system was built came largely from hard-working and thrifty workmen who saved their own earnings as investment capital. In fact, however, they were junior partners of the landed elites, with much of their investment capital coming either from the Whig landed oligarchy or from the overseas fruits of mercantilism, slavery, and colonialism.

In addition, factory employers depended on harsh authoritarian measures by the government to keep labor under control and reduce its bargaining power. In England the Laws of Settlement acted as a sort of internal passport system, preventing workers from traveling outside the parish of their birth without government permission. Thus workers were prevented from “voting with their feet” in search of better-paying jobs. You might think this would have worked to the disadvantage of employers in underpopulated areas, like Manchester and other areas of the industrial north. But never fear: the state came to the employers’ rescue. Because workers were forbidden to migrate on their own in search of better pay, employers were freed from the necessity of offering high enough wages to attract free agents; instead, they were able to “hire” workers auctioned off by the parish Poor Law authorities on terms set by collusion between the authorities and employers.

Legalized Discrimination Against Laborers

The Combination Laws, which prevented workers from freely associating to bargain with employers, were enforced entirely by administrative law without any protections of common-law due process. And they were only enforced against combination by workers, not against combination by employers (such as blacklisting “troublemakers” and collusive setting of wages). The Riot Act (1714) and other police-state legislation during the Napoleonic Wars were used to stem the threat of domestic revolution, essentially turning the English working class into an occupied enemy population. Such legislation criminalized most forms of association.

Even fraternal associations for mutual aid, burial and sick benefits, and the like operated in the face of hostility from the state, according to historians of the friendly-society movement such as Bob James and Peter Gray. Under the terms of the Combination Act, friendly societies were subjected to close judicial supervision lest direct craft production be organized for barter among the unemployed, or the societies’ benefits cross the line and function as de facto unemployment insurance for striking workers. The Corresponding Societies Act, passed around the same time, prohibited all societies that administered secret oaths or were federated on a national scale.

So the Industrial Revolution was, in fact, built on a system of legal peonage in which employers were directly implicated. The form taken by the factory system surely reflects this history. In a Britain composed of peasant smallholders, with no restraints on free association, workers would have been free to mobilize their own properties as capital through mutual credit institutions. Absentee ownership and hierarchy would likely have been far, far less prevalent, and the factory system where it existed far less oppressive and authoritarian.

A similar process occurred in the colonization of settler societies like America and Australia, by which the colonial powers and their landed elites attempted to replicate feudal patterns of property ownership. In such colonies, the state preempted ownership of vacant land and restricted working people’s access to it. Sometimes they gave title to vacant land to privileged land speculators, who were able to charge rent to those who homesteaded it (the legitimate owners).

E. G. Wakefield, an early nineteenth-century British theorist of colonialism, advocated just such preemption on the same grounds that the propertied and employing classes of Britain had supported Enclosure: it was easier to hire labor on favorable terms to the employer. In England and America, he wrote:

In colonies, labourers for hire are scarce. The scarcity of labourers for hire is the universal complaint of colonies. It is the one cause, both of the high wages which put the colonial labourer at his ease, and of the exorbitant wages which sometimes harass the capitalist. . . .

Where land is cheap and all men are free, where every one who so pleases can obtain a piece of land for himself, not only is labour very dear, as respects the labourers’ share of the product, but the difficulty is to obtain combined labour at any price.

Consequently, “[f]ew, even of those whose lives are unusually long, can accumulate great masses of wealth.”

Wakefield’s disciple, Thomas Merivale, wrote of the “urgent desire for cheaper and more subservient labourers—for a class to whom the capitalist might dictate terms, instead of being dictated to by them.”

Land preemption was a major element of colonial policy in early American history. Gary Nash, in Class and Society in Early America, described land grants in colonial America comparable to those of William I in England after the Conquest. In New York, for example, the largest estates granted by the British colonial administration (after the New Netherlands was acquired in the Dutch Wars) ranged from the hundreds of thousands to over a million acres. Governors continued to grant tracts of land in the hundreds of thousands of acres to their favorites, well into the eighteenth century. Under Governor Fletcher, some three-quarters of available land was granted to 30 persons.

Albert Jay Nock, in Our Enemy, the State, argued that “from the time of the first colonial settlement to the present day, America has been regarded as a practically limitless field for speculation in rental values.” Many leading figures in the late colonial and early republican period were prominent investors in the great land companies, including George Washington in the Ohio, Mississippi, and Potomac Companies; Patrick Henry in the Yazoo Company; Benjamin Franklin in the Vandalia Company, and so forth.

In The Ethics of Liberty, Rothbard condemned such preemption (“land-engrossing, where arbitrary claims to virgin land are used to keep first-transformers out of that land”) on the same grounds that he criticized feudal landlordism. He called for voiding all current titles to vacant and unimproved land, and opening it up to free homesteading. In addition, in cases where current mortgage holders and landlords trace their title to state grants of land, the proper claim lies with those who first homesteaded the land, or their heirs and assigns.

The Homestead Act of 1862, an apparent exception to this general trend, was really just another illustration of it. The majority of land, rather than being claimed under the terms of the Homestead Act, was auctioned to the highest bidder. Even for land covered by the Act, according to Howard Zinn, the $200 fee was beyond the reach of many. As a result, much of the land was not homesteaded on Lockean principles at all, but initially went to speculators before being partitioned and resold to homesteaders. And compared to the 50 million acres covered by homestead legislation, 100 million acres were given away as railroad land grants during the Civil War—free of charge! In other words, the privileged classes got the gravy, and ordinary homesteaders got the bone.

Keeping the System Going

What I have described here are only the initial acts of coercion and robbery on which our existing form of industrial capitalism was founded. Of course it didn’t stop there. Once the system was up and running, it depended on the state’s ongoing efforts to maintain a legal structure of privilege, based on artificial property rights and artificial scarcity: enforcement of absentee titles to vacant and unimproved land; entry barriers for the banking industry to make credit artificially expensive and scarce; the artificial property rights of patent and copyright; and more. And starting in the late nineteenth century the modern form of corporate capitalism depended on even more massive state intervention: subsidies to long-distance shipping to make market areas and firm size artificially large; the cartelizing effects of patents and tariffs; regulatory cartelization; and entire industries and sectors of the economy either brought into existence or guaranteed a taxpayer-funded market by the post-1941 perpetual war economy.

Contrary to popular mythology, the New Deal was not a departure from some preexisting idyllic state of “laissez faire.” There never was anything remotely approaching laissez faire. Capitalism—that is, the existing historical system as it actually developed—has had very little to do with free markets and a great deal to do with robbery and coercion.

This is not to say that all avenues to economic advancement through independent entrepreneurship have been closed off. But it’s much more of an uphill struggle than it would be in a free market, and the field is unfairly tilted in favor of the big players.

In seeking to institute a genuine free market, libertarians shouldn’t lose sight of these facts. What lessons are libertarians to learn from the previous historical account?

First, there is nothing “libertarian” about the instinctive tendency to rally to the defense of existing property titles without regard to justice. As Karl Hess said in The Libertarian Forum, back in 1969,

[L]ibertarianism wants to advance principles of property but . . . it in no way wishes to defend. . . all property which now is called private. Much of that property is stolen. Much is of dubious title. All of it is deeply intertwined with an immoral, coercive state system which has condoned, built on, and profited from slavery; has expanded through and exploited a brutal and aggressive imperial and colonial foreign policy, and continues to hold the people in a roughly serf-master relationship to political-economic power concentrations.

Second, in advocating free-market reform, we must consider the role of this historical legacy of injustice (the subsidy of history) in determining the winners under the present system. A “free-market reform” that simply locks in the beneficiaries of past robbery and privilege, and ratifies the past theft from which they benefit, will merely reward injustice and secure its ill-gotten gains.

From a libertarian ethical standpoint, the standard model of “privatization” (selling off state property to a large, politically connected private corporation, on terms most advantageous to the corporation) is therefore highly dubious. That’s especially true considering that much of the property was created in the first place—at taxpayer expense—for the primary purpose of subsidizing the operating costs of big business. Much of the state-owned utility and transportation infrastructure in the Third World was created, at the behest of transnational financial elites, as a precondition for profitable Western capital investment. And the odious debt thus incurred, often by corrupt dictatorships acting in collusion with global finance, is then used by the World Bank to blackmail those countries into selling off their infrastructure to the very same transnational corporations it was created to benefit—usually at pennies on the dollar.

An Appropriate Model for Privatization

Rothbard’s model of privatization is far superior: to void state titles to property and treat it as unowned, subject to immediate homesteading by those actually mixing their labor with it. That would mean that state universities would be transformed into the property of their students or faculty, as consumer or producer cooperatives. Government-owned utilities would become consumer cooperatives owned by ratepayers, and state-owned factories would be handed over to the work force and reorganized as worker cooperatives.

We must also be wary of pseudo-Coasean arguments that it “doesn’t matter” who the property was originally stolen from, because it will end up in the hands of the “most efficient” owner. That’s essentially the same argument used for eminent domain. Regardless of whose hands the property winds up in, the rightful owners and their descendants—who never received compensation—are out the value of what was stolen from them. And even the most inefficient ways of organizing production are pretty “efficient,” comparatively speaking, when you have the competitive advantage of working with stolen property.

Besides, there is no such thing as generic “efficiency”; efficiency depends on the owner’s purpose. The most efficient technique for subsistence farming on a small plot—economizing on land by building soil and adding intensive labor inputs—is entirely different from that for a feudal oligarch producing cash crops with access to more stolen land than he could possibly use, and often holding a majority of his stolen land out of use altogether. In any case, the rightful owner would no doubt find it far more “efficient” to be feeding himself on his own land, than starving in a shantytown because he can’t afford to buy even the cheapest food from those “efficient” plantations occupying his stolen land.

The actual system of political economy that so many corporate apologists refer to as “our free market system” has in fact been characterized from the beginning by robbery. We must beware of “free market reforms” carried out by the robbers. They amount in practice to allowing the robbers—hands still full of loot—to say: “All right, no more stealing, starting . . . now!”

His piece gives a wonderfully clear view into the mind of a modern political “liberal”—someone who thinks it’s good to impose taxes on the citizens of a state so politicians will have enough money to do what they want. That’s the game of politics.

Leutze is alarmed that “we are losing 277 acres of natural or agricultural land every day to development.” Phrasing it that way makes it sound as though a black hole were sucking away precious North Carolina real estate. I would like to suggest an alternative and less alarming view: owners of agricultural or natural land sell 277 acres of land per day to people who believe that they can profit by building something on the land. I don’t see why we should worry about voluntary transactions in which both buyer and seller expect to be better off. When people take raw materials (iron ore or trees, for example) and use them to make products, we don’t say that the resources have been “lost to development” but instead understand that they have been transformed into a different, more valuable state. I submit that we should look at real-estate sales the same way.

Now, just what is it that Leutze wants to conserve? For one thing, he wants to ensure that we continue to have enough “open space.” In the abstract, that sounds desirable, but is there any possibility that North Carolinians would ever not have enough open space if the sort of land sales discussed above continue? I don’t see how. There are new developments going in all around Raleigh, but I have never for a second felt a shortage of open space. I didn’t even feel any shortage of space when I spent a weekend in New York City recently, and no part of North Carolina is ever going to be as heavily populated as New York. If this is really one of Leutze’s concerns, all right, but it isn’t one of this taxpayer’s concerns.

Another thing Leutze worries about is the decline in fish houses along the coast. He writes, “The salty-talking, sun-tanned, gnarled-handed, squinty-eyed, independent waterman is a valued part of our culture as captured in song and legend. But you better take a quick look because his way of life is being squeezed out. To take only the aspect of the problem relevant to this article, between 2000 and 2006, 39 of the 117 fish houses closed or were up for sale. That is a 33.3 percent decline.”

Perhaps to someone from around Wilmington, fish houses and the colorful characters who frequent them are charming, but—sorry—this taxpayer couldn’t care less. Whatever a fish house is, to me it isn’t a “beloved landmark,” and if the people who own them choose to sell their properties, that doesn’t make my life one bit worse. The same is true about the decline of other old-fashioned commercial enterprises, like barbershops and drive-in movies. Once they’re no longer economically viable, I see no reason to keep them around for the sake of nostalgia.

None of Leutze’s enthusiasms would matter to me if it weren’t for his proposed way of satisfying them. He wants the government to increase taxes to accumulate funds so the state can purchase and conserve property. As I see it, that is simply using the coercive power of the government to force everyone to give up some money so that conservationists can get what they want at little expense to themselves.

Leutze advocates increased taxes on a variety of things, including real-estate conveyances, building permits, and restaurant meals. The new taxes would only add a little bit to our cost of living in the state, he observes, so why not use them so the government can afford more conservation?

That’s modern liberalism for you. Let’s forcibly extract a little more from the wallets of the people so public officials can do “good things” with the money. The trouble is, there is no end to the demands that interest groups make for the government to do “good things,” and as a result, the tax burden continues to climb and climb. Focusing on the supposed benefit of saving fish houses and having more open space, Leutze ignores the fact that millions of individuals who have their own unique goals would be forced to give up some of their wealth to pay for conservation that is of no importance to them.

I can see no justification for employing the coercive power of the government against taxpayers just so a few individuals can bask in the warm feeling that they have done something for “society.” That the amounts involved are small (for example, a 1 percent restaurant meal tax) is just as irrelevant to the morality of this as it would be for a worker who steals from his employer to say, “I only take little things that will hardly be missed.”

The Moral Alternative

There’s an alternative to the use of government coercion. Those who want to conserve open space, fish houses, drive-ins, or anything else can attempt to raise the money through private contributions. The Nature Conservancy buys land that way. Leutze could set up a Save the Fish Houses Fund and ask for donations. That would no doubt be harder than importuning the politicians to raise taxes and buy the land he wants to protect from development, but it has the virtue of being morally respectable since it requires no coercion.

 It might also work better. Years could elapse before the General Assembly acts, but if Leutze and others who share his concerns wanted to pool their money, they could probably buy a fish house next week.

Looking to government to accomplish social objectives through coercion is a bad habit many Americans have gotten into. People easily convince themselves that the things they want are really high-minded benefits for the whole of society, and so they play the political game of pleading with elected officials to spend tax dollars according to their vision. That leads to a heavily politicized country where tremendous resources are squandered on campaigning and lobbying—and where taxes keep increasing.

We would be much better off if the government stuck to the few tasks necessary to protecting people’s rights and left everything else to voluntary efforts.

Thus far the typical libertarian response to the growing clamor has been to challenge the science behind it. Now it really is the scientific consensus that global warming occurred during the twentieth century. What is not so obvious is that (1) humans caused this warming and (2) this warming is necessarily bad.

Although it is interesting to explore the question of whether science has been perverted in the cause of environmentalism, there is a danger for libertarians in pinning their entire case on this strategy. After all, every serious student of science knows that when it comes to empirical claims, we never achieve certainty. For example, even if today one thinks that there are insurmountable problems facing the theory of manmade global warming, one still must accept the possibility that new evidence or theoretical advances could indicate that the environmentalists are perfectly right. Another possibility is that there is some other, similar disaster lurking unsuspected.

For these reasons, I believe it is crucial to accept provisionally, for the sake of argument, the scientific claims behind the case for manmade global warming. In the present article I will demonstrate that it still would not follow that the taxes and other regulations typically proposed by greens are the best way to address the problem. Just as the free market is still the optimal economic arrangement, regardless of how many citizens are angels or devils, so too does the free market outperform government intervention, regardless of the fragility of Earth’s ecosystems.

When trying to determine if the free market is to blame for possibly dangerous carbon emissions, a logical starting point is to list the numerous ways that government policies encourage the very activities that Al Gore and his friends want us to curtail.

The U.S. government has subsidized many activities that burn carbon: it has seized land through eminent domain to build highways, funded rural electrification projects, and fought wars to ensure Americans’ access to oil. After World War II it played a key role in the mass exodus of the middle class from urban centers to the suburbs, chiefly through encouraging mortgage lending.

Every American schoolchild has heard of the bold transcontinental railroad (finished with great ceremony at Promontory Summit, Utah) promoted by the federal government. Historian Burt Folsom explains that due to the construction contracts, the incentive was to lay as much track as possible between points A and B—hardly an approach to economize on carbon emissions from the wood- and coal-burning locomotives. For a more recent example, consider John F. Kennedy’s visionary moon shot. I’m no engineer, but I’ve seen the takeoffs of the Apollo spacecraft and think it’s quite likely that the free market’s use of those resources would have involved far lower CO2 emissions. While myriad government policies have thus encouraged carbon emissions, at the same time the government has restricted activities that would have reduced them. For example, there would probably be far more reliance on nuclear power were it not for the overblown regulations of this energy source. For a different example, imagine the reduction in emissions if the government would merely allow market-clearing pricing for the nation’s major roads, thereby eliminating traffic jams! The pollution from vehicles in major urban areas could be drastically cut overnight if the government set tolls to whatever the market could bear—or better yet, sold bridges and highways to private owners.

Of course, there is no way to determine just what the energy landscape in America would look like if these interventions had not occurred. Yet it is entirely possible that on net, with a freer market economy, in the past we would have burned less fossil fuel and today we would be more energy efficient.

Even if it were true that reliance on the free-enterprise system makes it difficult to curtail activities that contribute to global warming, still the undeniable advantages of unfettered markets would allow humans to deal with climate change more easily. For example, the financial industry, by creating new securities and derivative markets, could crystallize the “dispersed knowledge” that many different experts held in order to coordinate and mobilize mankind’s total response to global warming. For instance, weather futures can serve to spread the risk of bad weather beyond the local area affected. Perhaps there could arise a market betting on the areas most likely to be permanently flooded. That may seem ghoulish, but by betting on their own area, inhabitants could offset the cost of relocating should the flooding occur. Creative entrepreneurs, left free to innovate, will generate a wealth of alternative energy sources. (State intervention, of course, tends to stifle innovations that threaten the continued dominance of currently powerful special interests, such as oil companies—for example, the state of North Carolina recently fined Bob Teixeira for running his car on soybean oil.)

Private insurers have a strong incentive to assess the potential effects of global warming without bias in order to price their policies optimally—if they overestimate the risk, they will lose business to lower-priced rivals; if they are too sanguine about the dangers, they will lose money once the claims start rolling in. Individuals finding their homes or businesses threatened by rising sea levels will find it easier to relocate to the extent that unfettered markets have made them wealthier. Industrial manufacturers, as long as they are held liable for the negative environmental effects of their production processes—a traditional common-law liability from which state policies intended to “promote industry” have often sought to shield manufacturers—will strive to develop technologies that minimize the environmental impact of their activities without sacrificing efficiency. Government interventions and “five-year plans,” even when they are sincere attempts to protect the environment rather than disguised schemes to benefit some powerful lobby, lack the profit incentive and are protected from the competitive pressures that drive private actors to seek an optimal cost-benefit tradeoff.

If the situation truly becomes dire, it will be free-market capitalism that allows humans to develop techniques for sucking massive amounts of carbon out of the atmosphere, and to colonize the oceans and outer space. Beyond these futuristic possibilities, the obvious responses to global warming—such as more houses with AC, sturdier sea walls, and better equipment to evacuate flooded regions—are again only feasible when the free market is unleashed.

It is the poorest people and nations that stand to suffer the most if the worst-case scenario for global warming is realized, and the only reliable way to alleviate their poverty, and thus help protect them from those effects, is the free market.

Can the Market Meet the Threat Head-On?

In the first section I summarized some of the ways governments inadvertently contribute to the very activities that allegedly cause dangerous global warming; in the second I sketched some of the ways that free markets allow humans to better adapt to climate change. However, I haven’t really tackled the problem directly. Am I conceding that with a worldwide problem the market—which is just dandy for one-on-one interactions—can’t match the concerted “will of the people” working through their elected representatives for a common solution?

Of course not. Even when economic transactions generate so-called negative externalities (activities that shower harms on third parties), I still contend that the free market is the best institution for identifying and reducing the problems.

One way negative externalities can be addressed without turning to state coercion is public censure of individuals or groups widely perceived to be flouting core moral principles or trampling the common good, even if their actions are not technically illegal. Large, private companies and prominent, wealthy individuals are generally quite sensitive to public pressure campaigns.

To cite just one recent, significant example, Temple Grandin, a notable advocate for the humane treatment of livestock, asserts that McDonald’s is the world leader in improving slaughterhouse conditions. While many executives at the fast-food giant genuinely may be concerned with the welfare of cattle, pigs, and chickens, undoubtedly a strong element of self-interest is also at work here, as the company realizes that corporate image affects consumers’ buying decisions.

But that self-interest does not negate the laudable outcome of the pressure McDonald’s has applied to its suppliers to meet the stringent standards it has set for animal-handling facilities. Similarly, to the degree that the broad public regards manmade global warming as a serious problem, companies will strive to be seen as “good corporate citizens” that are addressing the matter. And this isn’t ivory-tower speculation on my part—I can see the “green friendly” ads already.

Critics of libertarianism sometimes denigrate it as a political program of “market fundamentalism” that, if put into practice, would reduce all human values to the price they can fetch as mere commodities. But that is a caricature of the social arrangements advocated by any sensible libertarian. The great figures of classical-liberal and libertarian thought have always recognized the vital contributions that nonmarket institutions, such as churches, families, charities, social clubs, communities of scholars and their students, art foundations, conservation groups, neighborhood associations, and youth athletic leagues, make to the healthy functioning of a free society. What libertarians offer as an alternative to statism is not a social order that judges every human interaction solely on a miserly calculation of profit or loss, but a society in which every desirable form of voluntary association is allowed to flourish, free from coercive interference by the state.

Customary Law

Besides the samples listed above, most libertarians recognize private or customary law as another important, nonmarket source of social order. A historical case in point is the Anglo-American common-law tradition in which legal norms evolved spontaneously from the customs of the people to whom it applied, rather than through legislation and state planning deliberately aimed at achieving some “public good.” The many centuries during which the common law sustained civic order in the face of inevitable divergences between individual citizens’ own interests demonstrate that a successful legal order does not inevitably require state sponsorship. The common law has shown itself to be fully capable of dealing with a number of issues that, while not exhibiting the worldwide scope of global warming, are still similar to our present concern in arising from the cumulative effects of many individual actions, each of which, regarded in isolation, appears to be unproblematic and not subject to legal sanction. For instance, the salmon-fishing streams of Scotland are a valuable natural resource, and the communities along them have developed quite successful institutions for ensuring the value of the streams is maintained, including private policing and legal penalties for overfishing and for polluting the water.

The many cases in which voluntary solutions to problems of collective choice have worked pose an empirical embarrassment for those who argue that “public goods” must be provided by the government. Most advocates of compulsory solutions to pollution abatement, for example, would assert that voluntary efforts will be vitiated by “free riding.” If individuals are not forced to contribute their fair share toward addressing these problems, this argument runs, each person rationally will hold back and hope others will pay for the proposed solution, since any free riders would gain the benefits (such as clean air) anyway. Since almost no one likes to be “the sucker,” it follows that the amount of resources devoted to the provision of the public good will fall woefully shy of the total that would be available if each person gave the amount he’d be willing to give if only he could count on everyone else pitching in equally. The sole solution that can be imagined is for the members of a society to create a “social contract” by which they are forced to pay for pollution abatement.

However, Anthony de Jasay notes in his book The State that this argument is severely flawed. If people cannot solve public-goods problems through voluntary cooperation, how can they rely on politicians’ promises to do so? There is no external authority to enforce those promises. There is only public opinion, the same thing that would enforce voluntary solutions. Moreover, government is itself a “public good” in the sense that free riders benefit from the efforts of those who try to get the government to produce public goods such as clean air.

Is Temperature a Public Good?

Another consideration is that the earth’s temperature isn’t such a public good after all. That is, certain people really do have more at stake, particularly if the warming is moderate. For example, if Manhattan became submerged because of rising sea levels, that calamity would not affect every human being equally. The residents of Manhattan and the owners of its skyscrapers would be hurt far more than people living in inland China. Because all the various potential dangers of global warming affect particular people more intensively than others, it is these groups that (in a free market) would have the incentive to reduce CO2 concentrations. For example, if rising sea levels would cause $10 trillion in damage to a comparatively small group of wealthy individuals, that’s a huge “pie” that the wealthy can offer others to motivate them to reduce emissions.

Despite my optimism about the potential to deal with environmental problems through voluntary means, I don’t wish to be misunderstood: If the official global-warming story is true, it presents a serious problem that humanity will find difficult to solve through voluntary means. But this isn’t a strike against voluntarism—of course a difficult problem will be difficult to solve! By the very same token, the government doesn’t do a terrible job at collecting stray dogs, because that’s a very simple task. When it comes to harder assignments, such as stopping terrorism or reducing teen pregnancy, the government’s record is quite a bit worse.

The very features of the official global-warming scenario that hamper purely private solutions would apply equally to government efforts. For example, even if the U.S. government passed draconian measures at home, that alone wouldn’t be enough if China and India don’t follow suit. And just as private companies in a free market may have an incentive to pollute if they can get away with it, so the state, under the influence of special-interest groups and run by leaders always tempted to ignore the public good in favor of increasing their own power and wealth, can have incentives to allow more pollution than is optimal. (It should be clear the “best” amount of pollution is not zero, because even using fire to cook generates some pollutants, and I doubt that anyone but the most misanthropic, fanatical nature worshippers want to reverse all of the last 40,000 years of human progress.)

As in all debates over public versus private choice, it’s inappropriate to measure a realistic free-market response to global warming against an idealized government program. We must try to envision what real people would do if their property rights were respected and compare that scenario with the probable outcome of actual politicians in today’s world being given a blank check in the name of saving the earth.

Government programs don’t ameliorate world poverty or sickness, and no libertarian would deny that these are serious problems. So even if manmade global warming is a real threat, why should we expect governments to get it right on this issue?

The central theme of this book is that the idealist theory of the state, which depends on the concealment of government’s coercive nature, has made the American republic something that would be unrecognizable to its Founders. They were so keenly aware of the clear and present danger of state coercion that they painstakingly sought to establish institutions designed to minimize it.

Freedom in Chains is proof positive that ideas have consequences. The author alternates between identifying the origins in political philosophy of the ideas that have corrupted the American experiment in limited government and providing numerous concrete examples of the unhappy results of such wayward thinking. The first culprit singled out is Jean Jacques Rousseau, who “effectively made self-delusion about the nature of government into the highest political virtue” by using the notion of the General Will to “prove” that any depredation visited on subjects by their government, no matter how egregious, was done with their consent. Bovard then shows how those ideas reached American shores by the late nineteenth and early twentieth centuries via Germany and England.

As the idea of the state’s benevolence grew, more American thinkers came to see coercion as a small price to pay for the “blessings” it could bestow on us. Thus John Dewey was only slightly ahead of his time (1916) when he opined that “no ends are accomplished without the use of force. It is consequently no presumption against a measure, political, international, jural, economic, that it involves a use of force.” Indeed, those sentiments today probably have the tacit support of the great majority of Americans.

Each chapter of this book is organized around an idea that has served as cover for the power grabs by the state. Prominent among them are democracy, fairness, sovereignty, equality, and pragmatism. Bovard’s chapter on democracy is particularly well done. He takes on not democracy itself, but rather the extent to which democracy has been oversold as a protector of liberty. Democracy is merely a means to select leaders. Like government itself, “Democracy can be more noble for what it prevents than for what it achieves.” Of far greater import to the health of our liberty are restrictions placed on what those leaders can do. As the author aptly puts it, “since there is no sure-fire method of choosing good rulers, the amount of power available to any ruler, good or bad, must be minimized.”

To illustrate the consequences of the idealist theory of the state, Bovard produces a depressing parade of trampled rights ranging from the state-sanctioned murders of the Branch Davidians at Waco to killing with kindness those it has entrapped in its welfare system. Indeed, the litany of depredations at times makes the reader feel things are hopeless. But, if things were that hopeless, this book would not have been written; indeed it would not have been allowed to be written.

Bovard writes with an admirable passion for liberty. Occasionally, that passion leads him to overstate his case. For instance, he cites the fact that 6 percent of the entire U.S. population was arrested in 1996 as prima facie evidence of government perfidy. It would have been helpful had he broken down the arrests into those resulting from violations of the “traditional, accepted principles of justice” and those from running afoul of arbitrary edicts.

As one might expect from a book that identifies the root of the problem as the glorification of the state, Bovard’s solution begins with demystification and desanctification of the state. This requires that we call things by their right names, and Bovard does so with gusto. Thus he unmasks trade policy as the “arbitrary power to restrict Americans’ freedom to buy from and sell to 96 percent of the world’s population,” labels the community service some states now require for a high school diploma “a Kiddie Draft,” and characterizes the Motor-Voter Act as making “it a federal crime for state and local governments to be vigilant against voter fraud.” Statism thrives on the use of language to manipulate people’s thinking. Bovard fights back hard.

Freedom in Chains is a wonderful polemic aimed at alerting Americans that they are being duped into surrendering their freedom bit by bit to government. I recommend it enthusiastically.

Entrepreneurs have the unparalleled ability to satisfy our material wants and needs. To seek and win customer approval on a daily basis, market competitors must continually offer improved quality and lower prices.

Our well-being is also profoundly affected by another entrepreneurial function that is less understood. It is a task that echoes the feats of self-assertion of barons, landed gentry, and others in centuries past who defended their private rights against encroachments by kings, emperors, monarchs, and parliaments. Such actions were frequently associated with the expansion of freedom. Similarly, it is the entrepreneur’s dogged pursuit of private interests in a competitive environment that can create new industries and engender a greater liberty.

Many developments in the political life of the eighteenth century reflected John Locke’s proscriptions for limiting power.^[1] Guided by the wisdom of Locke and other philosophers, including David Hume, James Harrington, Montesquieu, and Adam Smith,^[2] America’s Founders created peaceful, constitutional methods for defending life, liberty, and property.^[3] When Chief Justice John Marshall successfully instituted a procedure in 1803 by which legislative measures believed unconstitutional can be overthrown, entrepreneurs gained the right to challenge confiscatory statutes in court.^[4]

Entrepreneurs have defended their property using several constitutional provisions including the “contract clause” of Article 1, Section 10, and the “due process” and “takings” clauses of the Fifth and Fourteenth Amendments. During the first three decades of the nineteenth century, entrepreneurs made substantial use of the “contract clause,” which forbids states from enacting any law “impairing the obligation of contracts.” Constitutional rulings under the “contract clause” prevented states from breaching their contracts with individuals, from repealing corporate charters, and from nullifying certain tax exemptions extended to prior owners of property.^[5] The importance of the “contract clause” in the defense of property diminished when states discovered they could get around it by adding their own clauses to legislation reserving powers to repeal or modify statutes.

The next constitutional provision to gain ascendancy in the defense of property was the “due process clause” of the Fifth Amendment. Inherited from the Magna Carta and ratified in 1791 as part of the Bill of Rights, it declares that “no person shall . . . be deprived of life, liberty, or property, without due process of law.” Initially applicable to federal legislation, its scope was broadened to encompass state legislation with adoption of the Fourteenth Amendment in 1868. By the end of the nineteenth century, entrepreneurs were using this clause to curb regulation that restrained economic activity.^[6] The Court would evaluate a challenged law by comparing its effects to a legislature’s intent. The Court would overturn a statute if it was considered excessively harsh or unrelated to the legislature’s stated purpose. This interpretation of “due process” resulted in nullification of many state regulations from the late 1800s to the middle 1930s with the written opinions of Justices staunchly supporting economic liberty and individual freedom.^[7]

During much of President Franklin Roosevelt’s first term, the Court used the “due process clause” as justification for striking down New Deal legislation. But the court began to slip away from its mooring. When it abandoned the “due process” protection of property in 1936, a regulatory leviathan began to grow. For the next half-century, entrepreneurs were consistently defeated in Court decisions that applied a double standard of constitutional review. While the Court accorded substantial protection to nonmaterial civil or human rights, it simultaneously ignored the material rights of private property.^[8]

When “due process” protection of economic rights was lost, America became vulnerable to the confiscatory acts of public officials. Corporations must now spend more than four times as much for compliance costs as they pay in taxes.^[9] The unabated growth of regulation will continue to weaken property rights until there is nothing left but a title to ownership and an obligation to pay taxes.

To destroy the Trojan horse of tyranny, a battle for economic rights must be waged on many fronts. Entrepreneurs must fight these officials and other regulators in the courts, through public discourse, and at the ballot box. Strategies to strengthen property rights include requiring government to compensate property owners for regulatory “takings,”^[10] reform of legal liability laws,^[11] and forcing public authorities to compare a proposed regulation’s costs and benefits.^[12]

Defending Property Rights

Recent Court interpretations of the “takings clause” of the Fifth and Fourteenth Amendments have offered hope to entrepreneurs in their defense of property. This clause, declaring “nor shall private property be taken for public use, without just compensation,” was applied for the first time to a regulatory “taking” in 1992.^[13] In Lucas v. South Carolina Coastal Council, the state was forced to pay a contractor for a “taking” after regulation had effectively reduced his property value to zero. In a more recent case, the High Court ruled in favor of an entrepreneur who had resisted the confiscatory actions of a town that would only give her a license to expand her business if she forfeited ten percent of her property for public use. In a ruling that strengthened property rights and untied the hands of entrepreneurs, Chief Justice Rehnquist wrote: “We can see no reason why the Takings Clause of the Fifth Amendment, as much a part of the Bill of Rights as the First Amendment or the Fourth Amendment, should be relegated to the status of a poor relation.”^[14] Because of these rulings, the “takings clause” is now the entrepreneur’s most important constitutional means of defending property.

A principled defense of property rights requires the intellectual virtue of knowledge about liberty’s “first principles.” It also demands the moral virtue of courage. If the genius of markets is that entrepreneurs are not required to possess much information beyond factors directly affecting their products or services,^[15] then absence of knowledge about economics as a science of human action poses no immediate threat to profitability. Such ignorance, however, makes sustained action advancing liberty impossible because of unavoidable missteps in the wilderness of political permutations. For example, when entrepreneurs seek preferences they expect that advantages gained as producers will outweigh their consumers’ losses. They are oblivious to the long-run consequences of their acts; consumer losses will equal or exceed producer gains and the standard of living and productivity will fall precipitously.^[16]

Ignorance also leads entrepreneurs to sometimes assert that their privileges are compatible with the public good.^[17] Nothing could be further from the truth. Privilege-seeking flies in the face of ethical behavior, blurs the distinction between justice and injustice, and fosters widespread legal theft.^[18] Plundered groups gaining political ascendancy seek reprisal resulting in an abrogation of the “rule of law” and universal plunder.

The majority of people in a democracy cannot or will not think through the problems of private property and liberty. It is particularly important that business leaders who possess the means of challenging political authority understand the “first principles” of freedom and use this knowledge to light the path toward a principled defense of their property.

A second virtue required by the defenders of property is that of courage. In ancient civilizations, courage was honored when nobles and aristocrats followed rules that tended to preserve the society in which they lived.^[19] For example, military valor was the primary means by which the medieval nobility could earn honor. This was a natural consequence of an aristocracy that owed its very existence to war. In Rome, courage was so highly valued that the word virtue, in Latin, came to mean courage.^[20] This reflected the requirements of a nation bent on conquering the world.

Resisting privilege and fighting the encroachments of government in a constitutional democracy requires courage and sacrifice and deserves to be honored. Those who challenge political authority run the risk of being labeled antisocial in an age when legislative acts are believed to be reflections of the people’s will. Similarly, resisting preferential legislation that others unabashedly pursue may result in lower revenues. And the costs of defending property in the courts and in the legislative arena may be high. It is honorable for entrepreneurs to defend their economic rights against an acquisitive political authority because these acts satisfy requirements of the free society. It is dishonorable to seek preferences and privilege because doing so undermines social cooperation and facilitates the movement toward unlimited democracy. Freedom does not require entrepreneurs to be altruistic. It does demand that in the pursuit of profit they prevent a separation of the honorable and the useful. So it has always been: Cicero considered this to be the main problem of ethics.^[21]

Threats to liberty are ever present as utopian dreamers advocate state coercion to carry out their notions of the good, misguided citizens clamor for government to solve the so-called “problems” of the hour, and individuals seek preferential legislation at the expense of others. We must learn to recognize the fallacies of statist policies and understand the courageous role of the entrepreneur in promoting and extending liberty.^[22] As Mises reminded us: “The struggle for freedom . . . is not the struggle of the many against the few but of minorities—sometimes of a minority of but one man—against the majority.”^[23]

1.   Bertrand de Jouvenel, On Power: The Natural History of Its Growth, Liberty Press Edition (Indianapolis: Liberty Fund Inc., 1993), p. 316.

2.   The Framers continually quoted or paraphrased these philosophers in their correspondence and at the Constitutional Convention. Forrest McDonald, Novus Ordo Seclorum (Lawrence, Kan.: University Press of Kansas, 1985), p. 7.

3.   Ludwig von Mises considered peaceful changes made possible by constitutional democracies as this form of government’s “main excellence and worth.” Ludwig von Mises, Theory and History: An Interpretation of Social and Economic Evolution (Auburn, Ala.: The Ludwig von Mises Institute, 1985), p. 372.

4.   In Marbury v. Madison, 1 Cranch 137, 163 (1803), Justice Marshall wrote “The very essence of civil liberty certainly consists in the right of every individual to claim the protection of the laws, whenever he receives an injury.”

5.   James W. Ely, Jr., The Guardian of Every Other Right: A Constitutional History of Property Rights (New York: Oxford University Press, 1992), pp. 62-68.

6.   Ibid., pp. 87-100.

7.   Bernard H. Siegan, Economic Liberties and the Constitution (Chicago: University of Chicago Press, 1980), pp. 110-155.

8.   Ibid., pp. 184-246.

9.   Clichés of Politics, ed. Mark Spangler (Irvington-on- Hudson, N.Y.: The Foundation for Economic Education, Inc., 1994), p. 2.

10.   The argument that regulation is a partial confiscation of property may be found in Richard A. Epstein, Takings: Private Property and the Power of Eminent Domain (Cambridge: Harvard University Press, 1985), pp. 93-104.

11.   For example, “retroactive, strict, joint and several liability” gives the Environmental Protection Agency authority to make a company pay for violating a standard that may have been adopted after it departed from a site. A single company with “deep pockets” can be forced to fund an entire cleanup even though its contribution to pollution on the site was marginal. This is why a third of the $30 billion spent on 200 Superfund sites has been for litigation expenses with each site taking an average of twelve years to clean up. James M. Strock, “Wizards of Ooze,” Policy Review (Winter 1994), p. 42.

12.   This measure would presumably disqualify regulations such as the Occupational Safety and Health Administration standard for Benzene that costs $23 million per life saved and the Arsenic standard costing $24 million. John Hood, “OSHA’s Trivial Pursuit,” Policy Review 73 (Summer 1995), p. 60.

13.   Lucas v. South Carolina Coastal Council, 112 U.S. 2886 (1992).

14.   Dolan v. City of Tigard, 129 L Ed 2d 304, (U.S. 1994).

15.   See Friedrich A. Hayek, “The Price System as a Mechanism for using Knowledge,” American Economic Review 35 (September 1945).

16.   Mises, pp. 32-33.

17.   Assertions of fairness and justice may also represent a conscious attempt to deceive the public. The outcome of preference seeking is the same whether or not the entrepreneur is sincere in his public declarations.

18.   Seeking preferences and privilege necessarily violates a principle of ethics expressed by Immanual Kant thusly: “Act in conformity with that maxim and that maxim only which you can at the same time will to be universal law.”

19.   For a discussion of courage and honor see Alexis de Tocqueville, Democracy in America, ed. J. P. Mayer, trans. George Lawrence (Garden City, N.Y.: Anchor Books Edition of Doubleday & Company, Inc., 1969), pp. 616-627.

20.   See the life of Coriolanus in Plutarch, Plutarch’s Lives of the Noble Grecians and Romans, vol. 1, ed. A. H. Clough, trans. John Dryden (New York: Modern Library Edition, 1992), p. 291.

21.   See Cicero, On Duties, eds. M. T. Griffin and E. M. Atkins (New York: Cambridge University Press, 1991).

22.   “It is as true today as it was ten thousand years ago that a Power from which the magic virtue has gone out, falls.” Jouvenel, p. 87.

23.   Mises, pp. 66-67.