What Does A Libertarian Society Look Like?
Laissez-faire capitalism, also called free market capitalism, occurs when all of the following conditions are met.
- Private ownership of the means of production. All or at least most the resources in society are owned privately, instead of being owned collectively via the state. While some public goods may be necessary, they will be limited to the bare minimum like roads, etc. Private property rights are respected and protected by the state.
- Economic freedom. Private companies and individuals are free to buy, sell and trade as they please so long as they come to voluntary agreements. Transactions and exchanges between mutually consenting adults and/or companies are not subject to restriction.
- Government non-interventionism. The government does not intervene into the economy except only for the purposes of protecting property rights, enforcing contracts and upholding the rule of law. Such a limited government will not be subsidising, regulating and protecting industries and redistributing wealth from one group to another. Taxation and government spending are kept at a bare minimum necessary for the abovementioned core functions.
But why is such a system justified? Why should we embrace it?
1) It is the most efficient economic system in human history.
There is no other way to allocate scarce resources to the best uses possible, generate economic growth and prosperity for the greatest number than the free enterprise system. Recent studies reveal that countries with greater level of economic freedom, fare better on almost all indicators of welfare.
Comparing capitalist societies with socialist ones like North Korea, Cuba, and the Former Soviet Union would reveal a sharp contrast in living standards, and prove the notion that economic freedom works. Looking farther back into history, one would observe that human prosperity only really experienced Promethean levels of increase during the age of industrial capitalism.
2) Not only does it lead to the greatest possible human welfare, it is also a profoundly moral system.
The moral case for capitalism has been often neglected, allowing communists and socialists to win the moral high ground in the debate. Capitalism has been disproportionately defended on grounds of pragmatism, as a form of necessary evil in light of human selfishness and weaknesses. But capitalism is itself a system that we should want to live under even with the best of human nature.
Of course, critics of capitalism have leveled all kinds of charges against the supposed immorality that this system brings. According to them, it exploits workers, extols unfettered materialism and consumerism, allows for commodification of important assets, leads to corruption and concentrations of power, etc. However, most of such criticism are either born out of misconceptions, or a failure to understand how capitalism can actually resolve those very issues it is accused of creating. Explore other segments of this website to learn more.
3) It is necessary for a free society
The political economist Friedrich Hayek argued in Road to Serfdom, that without the market system, which facilitates decentralised social cooperation amongst individuals, central planning would eventually concentrate more power in the hands of the state. This would move countries on a path to totalitarianism, since socialist goals would require authoritarian means that socialists themselves would not approve of.
A regime of private property is essential in maintaining an individual’s freedom and his meaning of life. The philosopher Loren Lomasky explained that individuals are “project pursuers”. Accordingly, private property rights carves out a private jurisdiction in which the rights-holder enjoys sovereign authority over his sphere. This ability to exclude others empowers the individual to shape his life, pursue his projects, and thus experience meaning.