The foundation of a laissez-faire society is property, because property is the greatest social regulator of them all; it allows folks to account for rights to usage, and freedoms from aggression; and it allows folks to account for liabilities, and it allows a method of social organization wherein individuals can thrive and prosper and not exist in anarchy. However, a laissez-faire foundation cannot exist today under current the current establishment of property laws, because the system would be inherently unfair. This is a realization I made not long ago; it is not that laissez-faire economics or ideology is inherently flawed, but rather our method of determining property rights is flawed, and since property is the foundation of capitalism, when you have a flawed foundation, you are left with a flawed outcome. Therefore I now consider myself a geo-libertarian, and I adhere to the Georgist Theory of Property, which I feel is the most just and fairest. http://en.wikipedia.org/wiki/Georgism Georgism states that property is the fruit of your labor, and since land and natural resources were not created as the result of anyone's labor, they cannot rightfully be considered "property". However, an individual could still enjoy their right to private use of the land through the payment of a land tax, or "rent", back to the community, and they would be granted the rights to private enjoyment of the land insofar as they continue to pay that rent. This creates a situation wherein no land baron can simply claim land and profit from the ownership while producing nothing of value. Furthermore, you could also use Locke's Natural Rights theory where an individual "fuses labor with the land" and thus has a rightful claim to the land in order to determine how an individual is able to get rights to usage for land. And, under such a theory, improvements on the land would be owned and would be considered property, whereas the land itself would not be (i.e, if you owned a building, it's your building, but the land that it is on is not "yours" per se; you simply have the rights-to-usage). This would be the applied property theory for one's private residence and private commercial property. As for natural resources: Under such a property establishment, no person or group of people could bar another group of people from access to resources. i.e, if one person is chopping wood in a forest, he can continue to do so but he cannot prevent others from coming in and doing so, unless he gets the rights-to-usage for the land, and to do so he would have to have labor associated with the piece of land that he is laboring on. And if there is a lake, one may be able to bottle the water and sell it (and the thing that is being sold is not the water itself, but rather the labor associated with bottling it as a convenient product); but one cannot prevent others from acessing the lake. And since natural resources are considered common property, if an individual damages these resources, or otherwise negatively affects the welfare of others through a "spillover" of his actions, he is held liable for the damages. I feel that this is the most just property theory, and with it, we can have true laissez-faire capitalism and flourish in a fair society; and individuals themselves will create the emergent society in which they live, and it will be their responsibility to own up and commit to principle, or otherwise face the consequences of stupidity. Other property theories include the First Possesion Theory, which is just "I claim this, it's mine". Labor Theory of Property, and Locke's Natural Law theory. P.S. Under a Georgist property establishment, you would have property taxes which would account for the revenue of the 'community', rather than an income tax which is a tax on labor, or a sales tax which is a tax on consumption and activity.
Who is the Georgist "community" in your mind? The federal government? The local government? A neighborhood organization? If I move on to land in, say Louisiana, and begin to farm it, to whom should my rent be paid? Who determines the amount of that rent? Also, George proposed that real property taxes be the only taxes...but it's not clear that property taxes would or should be the only tax. In George's day, remember, land value was highly correlated with wealth and power in general, so proposing a land tax was to propose a tax on the wealthy, and with having the liquidity needed to pay that tax. These days, real property is an asset and so is some indication of wealth, but true wealth comes from a variety of types of capital, and land is viewed as a puculiarly illiquid asset. If you attempted to fund a modern state by taxing land owners only, the land taxes would be huge, which would bar a number of people from owning it, since they could never afford the tax. On of the beauties of the income tax is that it is so strongly correlated with one's ability to afford to pay. Personally I see all theories of property as largely meaningless. The current distribution of property is what it is, and no new theory is going to lead to a reallocation. Current property rights were collected under a mixture of legitimate and illegitimate means (with legitimacy being determined subjectively--by each individual according to whatever criteria appeals to that person). Even if the legitimacy were not subjective, the historical developments are largely lost to time, and you can never unscramble the omelette. For me them, legal positivism rules the day in thinking about rights in land, thopugh in an idealized sense I hold to the utilitarian view: Property, like everything else, should be allocated in a way that maximizes the well-being of society as a whole. Stated differently, but equivalently, property should be allocated to its highest valued use, and in turn the property right should belong to the person who will put it to that use. What you can hope to do, on that basis, is to adopt reforms that reduce the transaction costs in transfers of land. If transaction costs were zero, then, per the Coase Theorem, land rights would eventually be allocated to their highest valued uses regardless of how the property rights were originally allocated (or the legitimacy of that allocation). Now, transaction costs will never really be "zero" since even the time it takes to sign a deed is itself a cost, but the lower those costs, the closer those costs are to zero, the closer the allocation should be to optimally efficient.
As for your first point, I am not saying that we can "unscramble the Omelette". I'm simply discussing what a just property theory is; and therefore in a good future, perhaps some day we will find an uninhabited place to start society anew, and then we can begin with just principles. The community in this sense truly is "all of Humanity", but you can say the government; after all there is still a government in laissez-faire capitalism, just a small one.
How does a "just" theory of property prevent market failures and externalities? http://tutor2u.net/economics/content/topics/marketfail/market_failure.htm Those are the real reason why laissez-faire is viewed as wrong, rather than property allocations.
I don't find economics to be a legitimate science, first of all; and second of all, do we base our laws upon what is necessarily most efficient or most just? Laissez-faire is the most just principle and it should be our guiding principle. "live and let live". As for economics, it's a social science, not a natural science, and so you should tread softly when reading into it.
So tread softly with social science, but with mere philosophy we go all in, baby! Tread super softly when deciding what is "just" or what should be a "guiding principle". That isn't science at all, hard or soft. In this case, for example, "live and let live" is not an adequate description of laissez-faire economics. If there are no regulations on my business conduct, then I can impose costs on society around me (for example, I can sell you my new multivitamin that, in 20 years, will cause 0.5% of its users to develop cancer). The government may not impinge on yoru private living, but my private actions are. Without some form of regulation, meanwhile, there is limited recourse for you to stop me (until you actually develop cancer...and (i) my company may not be in business in 20 years, (ii) may have spend all its profits so you can't sue us for money for the harm and (iii)the burden of proving that my product caused the harm will be on you, not me, and my lawyers will argue that other factors caused your cancern). You can tell me that my foisting costs on you is unfair and try to boycott my products, but the former is ineffecive and the latter is tough to do. Courts do not enforce fairness ot boycotts. The reason laissez-faire falls apart is that laws are passed to regulate private infringement on your happiness...laissez-fare itself only limits government infringement. You can argue that some laws are excessive or do not effectively limit private bad acts, but you do not need to advocate laissez-faire econ to do that.
Private transactions are undertaken willingly; if you say that you may "harm" me, then that is perfectly true, but surely it is already understood by all that in order to be free you must accept risks. So you accept the risks; and if you are making your own voluntary decisions, then the consequences of your actions are as they are. If you are indeed a fraud, then yes, you should be held liable and that is a key part of the free market: being liable for your actions if they cause harm to others. I never said it's okay to initiate aggression against others.
