"This book provides an original defense of classical liberalism. Tomasi argues that the high liberal conception of free and equal moral persons requires robust economic liberties as a condition of individual independence and self-authorship, while also justifying social supports for the less advantaged. Free Market Fairness is an important contribution to liberal thought."--Samuel Freeman, University of Pennsylvania

"Tomasi's 'market democracy' is a fresh, important research program."--Elizabeth Anderson, University of Michigan

"The great political power of free market ideas in recent decades has been unmatched by philosophical and moral defenses. John Tomasi's fresh exploration of market liberty will challenge orthodoxies left and right. An important and timely book."--Stephen Macedo, Princeton University

"This is one of the very best philosophical treatments of libertarian thought, ever. John Tomasi cements his position as one of America's leading social and political philosophers."--Tyler Cowen, author ofCreative Destruction

"This book represents the most ambitious recent effort by a political philosopher to square the circle: free marketsand fairness. Even readers who disagree with Tomasi's conclusions will find insight and clarity on every page."--Richard Epstein, New York University

"Tomasi's elegant book resembles a long and friendly conversation between Friedrich Hayek and John Rawls--a conversation which, astonishingly, reaches agreement."--Deirdre McCloskey, author ofBourgeois Dignity and The Bourgeois Virtues

"Tomasi is sympathetic to, and captures much of the point of, positions to the right of his, and positions to the left. The result is disarming and genuine. Readers will find themselves turning the pages, hoping not so much to spot the flaw as simply to learn something, and they will not be disappointed."--David Schmidtz, University of Arizona

"This book makes a case that needed making and that will have a large impact on contemporary thinking about social justice."--Michael Zuckert, University of Notre Dame

"Hayekian freedom and Rawlsian social justice both evoke attractive visions of how human beings might live together--something seldom acknowledged in our polarized political world. John Tomasi's Free Market Fairness treats both traditions with depth, nuance, and unremitting fair-mindedness, and then points us toward a synthesis. Social democrats and libertarians equally need to read this book."--Charles Murray, American Enterprise Institute

"Political philosophers are apt to dig in to carefully constructed ideological bunkers from which they lob argumentative mortar shells at their opponents. John Tomasi prefers instead to build bridges. Well-crafted and provocative,Free Market Fairness will surely stimulate much conversation--and perhaps a few mortar rounds in response."--Loren Lomasky, University of Virginia

"This is a terrific book--lively, stimulating, novel, and important. Written with clarity and lightness, it is appealingly wide-ranging, spanning political philosophy, intellectual history, and more. It will be widely read and cited."--Jacob T. Levy, McGill University

"This book provides an original defense of classical liberalism. Tomasi argues that the high liberal conception of free and equal moral persons requires robust economic liberties as a condition of individual independence and self-authorship, while also justifying social supports for the less advantaged. Free Market Fairness is an important contribution to liberal thought."--Samuel Freeman, University of Pennsylvania

"Tomasi's 'market democracy' is a fresh, important research program."--Elizabeth Anderson, University of Michigan

"The great political power of free market ideas in recent decades has been unmatched by philosophical and moral defenses. John Tomasi's fresh exploration of market liberty will challenge orthodoxies left and right. An important and timely book."--Stephen Macedo, Princeton University

"This is one of the very best philosophical treatments of libertarian thought, ever. John Tomasi cements his position as one of America's leading social and political philosophers."--Tyler Cowen, author ofCreative Destruction

"This book represents the most ambitious recent effort by a political philosopher to square the circle: free marketsand fairness. Even readers who disagree with Tomasi's conclusions will find insight and clarity on every page."--Richard Epstein, New York University

"Tomasi's elegant book resembles a long and friendly conversation between Friedrich Hayek and John Rawls--a conversation which, astonishingly, reaches agreement."--Deirdre McCloskey, author ofBourgeois Dignity and The Bourgeois Virtues

"Tomasi is sympathetic to, and captures much of the point of, positions to the right of his, and positions to the left. The result is disarming and genuine. Readers will find themselves turning the pages, hoping not so much to spot the flaw as simply to learn something, and they will not be disappointed."--David Schmidtz, University of Arizona

"This book makes a case that needed making and that will have a large impact on contemporary thinking about social justice."--Michael Zuckert, University of Notre Dame

"Hayekian freedom and Rawlsian social justice both evoke attractive visions of how human beings might live together--something seldom acknowledged in our polarized political world. John Tomasi's Free Market Fairness treats both traditions with depth, nuance, and unremitting fair-mindedness, and then points us toward a synthesis. Social democrats and libertarians equally need to read this book."--Charles Murray, American Enterprise Institute

"Political philosophers are apt to dig in to carefully constructed ideological bunkers from which they lob argumentative mortar shells at their opponents. John Tomasi prefers instead to build bridges. Well-crafted and provocative,Free Market Fairness will surely stimulate much conversation--and perhaps a few mortar rounds in response."--Loren Lomasky, University of Virginia

"This is a terrific book--lively, stimulating, novel, and important. Written with clarity and lightness, it is appealingly wide-ranging, spanning political philosophy, intellectual history, and more. It will be widely read and cited."--Jacob T. Levy, McGill University

Free Market Fairness

PRINCETON UNIVERSITY PRESS

Contents

Chapter One

Property and Equality

Liberalism has a complicated history. If asked to draw a quick sketch, however, most contemporary theorists would find the main lines of liberal thought easy enough to depict. Liberalism passed through two great, evolutionary stages. There was an early "classical" stage that emphasized private property. It claimed that people are respected as equals if the law treats them all the same, regardless of material inequalities that might emerge between them. The classical view was eventually displaced by modern, "high" liberalism. As the masterworks of the High Renaissance represent the culmination of a creative movement begun by early Renaissance artists, so high liberals see their political view as the fulfillment of a normative ideal first discussed, but only partially understood, by classical liberal thinkers: the ideal of political equality. Thus while classical liberalism was founded on a formal conception of equality, high liberalism develops the idea of equality into a substantive moral ideal. High liberalism affirms social justice as the ultimate standard of institutional evaluation and, perhaps as a consequence, relegates private economic liberty to a secondary place. High liberalism, on this telling, is an unambiguous moral advance over the early liberal view.

If I were set to work on the task of sketching liberalism's history, my picture would also depict two great schools of thought, with the (self-described) "high liberal" school emerging after the (temporally) "classical" one. However, my picture would depict the lines of moral advancement and regression between the two schools as decidedly mixed. Along the dimension of equality, for example, my drawing would depict the substantive ideal of equality developed by high liberals as a moral improvement over the purely formal classical liberal ideal. Regarding the protection of the basic liberties of citizens, however, my drawing would depict the classical liberal respect for private economic liberty as appropriate and the high liberal neglect of such liberty as a significant moral defect. In terms of the relative moral standing of the two views, therefore, my drawing would feature big arrows pointing in opposite directions.

I discuss classical liberalism in this chapter, high liberalism in the next. While not presented quite in stick-figure terms, my account will be simple, broad stroked, and intentionally stylized. Most histories of liberalism emphasize the role of religious conflict. I mention such conflicts barely at all. This is because my aim is to describe the origins of a conflict within liberal thinking—the conflict between those who see liberalism as a doctrine of limited government power and wide individual economic freedom, and those who see it as a doctrine calling for extensive direct government involvement in the lives of citizens, most notably in economic affairs. In particular, I hope to show the power of the stage-evolutionary interpretation of liberal history that dominates contemporary academic discourse, the one that depicts the latter view as morally superior to the former one. So I shall focus on the key adaptive mechanisms that allowed the high liberal view to propagate and become widely hailed as fit. The history of ideas I provide will be interspersed with references to events within actual liberal societies. I do this in order to draw attention to a line of ambiguity that runs through this evolutionary tale: an ambiguity about the moral value of economic liberty.

As an intellectual movement, the start of the liberal revolution is usually traced to 1689, the year John Locke published his Second Treatise of Government. Locke was writing against two strong undercurrents of English social life: first, the lingering psychological eddies of feudalism, with its ideal of social order based on status and rank; second, a stream of worries springing from the recent attempts by a series of English kings to establish themselves as absolute monarchs. To appreciate Locke's contribution to liberal thought, we must first dip into those background currents.

Under the Norman system of feudalism, political power was concentrated in the person of the king. Members of other strata were connected to the king either by oaths or by station of birth. A large class of serfs could own no property. They worked the land and paid tithes to a small class of barons who, in turn, were tied by pledges of fealty to the king. Power was highly personal in nature. People experienced life not as free and equal citizens but as embedded members of hereditary groups. One's place of residence, occupation, and even the particulars of family life were typically assigned on the basis of social rank. Far from affirming equality and freedom, the feudal order was grounded on differentiation and constraint. The central function of the political system was to preserve the peace and stability of this hierarchical order.

Of course, the particulars of feudal life did not conform neatly to this idealized form. In England, there were stirrings of political freedom almost from the start of the Norman period, typically dated to Battle of Hastings in 1066. In 1101, less than fifty years after Hastings, William's son, Henry I, assented to the Charter of Liberty, which proved to be the first in a long line of such charters. These charters, the most important of which was the Magna Carta of 1215, represented a strong and building set of restraints on royal power by means of law. Secure rights of property, held against the king, were among the most important checks provided by the Magna Carta.

The Great Charters defined property rights relations between the king and barons. By extension, they also provided an early platform for the development of a system of rules governing the daily interactions of English subjects. Many of these rules, known as the common law, concerned ordinary commercial transactions. Reforms introduced by Henry II allowed the common law gradually to displace idiosyncratic customs of feudal and county courts, bringing more uniformity to the experience of English subjects. By defining rights of holding and rules of exchange, the common law carved out relatively secure areas for private interpersonal action. By securing claims to property, these precepts enabled people to better assess the risks and rewards of ventures they might consider launching with one another. Common law made the social world increasingly navigable to individuals in their everyday lives.

The main struts of the status-based legal framework of Norman feudalism remained in place during this period, though they were sinking ever lower now. Status-preserving features of that framework, such as the doctrines of primogeniture and entailment, continued to impose differential horizons on people's life-prospects. Still, through the fifteenth and sixteenth centuries ordinary Englishmen grew ever more accustomed to directing their own affairs and living within social structures created by their own actions. Increasingly, they saw the system of common law as a cultural inheritance. The liberties protected by common law came to be seen as the birthright of every English subject. Slowly, over centuries, changes in the circumstances of life were outpacing the dogmas of the old order.

The depth of these changes was dramatically sounded during the seventeenth century, when a series of English kings attempted to establish themselves as absolute monarchs: first James I and his son Charles I, and later James II. Under absolutism, a monarch asserts authority over all aspects of political life without any constitutional checks on his power. Claiming to hold sovereign authority directly from God, these kings asserted that none of their subjects—including those subjects who served in parliamentary bodies—had any right to limit royal power. All political authority, all land and property was by divine right vested in the person of the king, and he could grant monopoly rights and levy taxes as he saw fit.

By this time, however, the idea of the "rights of Englishmen" and the tradition of parliamentary democracy were too strongly rooted to permit the movement toward absolutism. People resented the royal monopolies and preferred a more open system of competition based on merit. Taxes levied by Charles without the consent of Parliament, in particular his infamous "ship money" scheme, met bitter opposition. The attempts by James and Charles to establish absolutist rule in England led to the English Civil Wars (1642–49), capped by the execution of Charles on January 30, 1649. A few decades later, an attempt by James II to establish an absolutist monarchy led to the Glorious Revolution of 1688, effectively ending absolutist ambitions in England.

English monarchs were now understood to hold their authority only by the consent of a representative assembly. The passage of the 1689 Bill of Rights codified these important changes. As a matter of established law, English monarchs henceforth lacked the authority to levy taxes, make appointments, or maintain a standing army except with the permission of Parliament. People had a right to petition the monarch; rights to freedom of speech and assembly were first exercised. England had become a constitutional monarchy.

Locke was writing in the period immediately downstream from these events. He was aware that many of his fellow citizens were close to accepting "the dangerous belief that 'all government in the world is merely the product of force and violence.'" By beginning his argument with an account of man's condition in the state of nature, Locke sought to present the possibility of legitimate government in a more hopeful way.

State-of-nature arguments are heuristic devices. To glimpse the true nature of persons, we filter out the culturally specific assumptions about people's stations and roles that muddy our moral vision. Considered in their natural state, Locke argued, people are born free and equal as children of God. They are free in that they need permission from no other person to act. They are equal in that there is no natural political authority of one person over another. People are also by nature needful. They must cooperatively interact with the raw, God-given bounty around them in order to fill their stomachs, shelter their bodies, and flourish as children of God. The political problem facing people was a common and public one: how might they devise a form of government appropriate to the condition of freedom, equality, and need into which people by nature find themselves?

Locke found the beginnings of an answer to this question in his doctrine of self-ownership. Owning themselves, people own their labor too. By mixing their labor with things in the world, people develop ownership relations with those things. For Locke, property is part of the natural fabric of the universe. Because some people work harder and more effectively than others, inequalities of holding are also part of that fabric. In the early stages of social development, these inequalities will be limited by the requirement that no one takes any more than they can use before it spoils. The invention of money amplifies the degree of inequality while increasing the productivity of labor. Since people accept the custom of money, they accept those greater inequalities too. On Locke's telling, the process of property acquisition that generates an increase of wealth also supports a growth in the population, even as productive land becomes scarce. To escape these "inconveniencies," Locke says people agree to establish a civil society and government.

Legitimate government must be founded on the consent of those to be governed. People who are free and equal, however, would not consent to be governed by a legal order that forced some, by birth, into lives of bondage or submission. Nor would they accept that they were born into a position of submission to a divinely appointed king. The status-based feudal system, like the claims of the absolute monarchs, had implied just that. Against these ideas, Locke insisted that governments are legitimate only when they preserve the natural freedom of all citizens, no matter their parentage or place of birth. Governments did not exist merely to enforce order. So too, government was not a device for enhancing the glory or wealth of any hereditary class, whether aristocrat or king. Political power, Locke suggested, was a public rather than a private power. The only legitimate function of government was the equal protection of the natural rights to life, liberty, and property. "The great and chief end, therefore, of Men's uniting into commonwealths, and putting themselves under government, is the Preservation of their Property."

Later writers hailed property as the institutional pivot of this new political system. David Hume, for example, set out "three fundamental laws of nature," all of which concerned the protection of economic liberty. Those laws protected the "stability of possession," the free transfer of property by consent, and a guarantee that promises and contracts be performed. Hume saw the protection of economic freedom as fundamental to the welfare of society as a whole. He wrote: "Tis on the strict observance of those three laws, that the peace and security of human society entirely depend; nor is there any possibility of establishing a good correspondence among men, where these are neglected. Society is absolutely necessary for the well-being of men; and these are as necessary to the support of society." Property supports society and human well-being.

The contrast with the feudal and absolutist conceptions of social order is stark. Those schemes see social order as something that must be imposed from the top down onto society. By contrast, the development of a relatively autonomous economic sphere opens the possibility of more complex social orders. With a secure system of property rights, individuals and associations are free to interact peacefully in pursuit of diverse goals and ideals. Rather than being a product of conscious control, social order emerges spontaneously from the cooperation and competition of ordinary citizens.

Market Society

If Locke provided the moral foundations for liberalism, Adam Smith explained the feature of this new political order that was most radical and, to many, most mysterious. If economic life were freed from direct political control, Smith explained, the result would be prosperity at a level hitherto unimagined. Throughout the medieval era, prices of goods and services were set with an eye to doing justice—at least, justice in the eyes of those in positions of privilege. Local leaders and church authorities had substantial power to set the prices at which commodities could be bought and sold. Laws against usury allowed the Church and a small number of politically connected bankers to earn monopoly rents. Under absolutism the monarch claimed the authority, in principle at least, to be able to determine the distribution of goods and opportunities across the society.

The quasi-market system that had slowly emerged increasingly freed prices from direct political control and instead matched supply to demand. Smith described key mechanisms that made this motor run—the principle of the division of labor, for example. Most important for our purposes, Smith suggested that this system of free, unplanned pricing might work in a way that created general prosperity. By separating the economic and political spheres, the new order sought to break up the old systems of patronage and concentrated power. It brought reforms allowing individuals and associations to control their destinies in economic affairs and thus determine the shape of their own lives.

According to what Smith called "the system of natural liberty," governmental activity should be limited to three areas: national defense, the provision of a limited range of public goods, and the exact administration of justice. It is the conception of justice that most strikingly differentiated this new system of liberty from the system of royal patronage it sought to displace. As with Locke, the essence of this emerging "liberal" program lay in the idea that the purpose of the state is to protect the freedom of citizens equally. The proper way for the state to accomplish this goal is to limit the range of its own activities.

(Continues...)

Excerpted from Free Market Fairnessby JOHN TOMASI Copyright © 2012 by Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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