Contractual limit cases

Limit cases – i.e. situations where one or many variables are stretched to their limit – are interesting constructs, because they permit us to analyse clearly the merits of various systems compared to each other by the simplification inherent in pushing a variable to a limit. They are a valid analysis tool, but one must not forget that they are only that – limit cases. They are not normal, nor should they be considered normal.

I will discuss here a limit case of contractual freedom, how it seems to defeat the idea of freedom more strongly in people’s minds, and why this feeling is wrong.

Everyone a nazi

The classical example is racism (for example, shops refusing to serve blacks), but any form of undesirable ideological position by various types of citizens can be used. Imagine that land-owners, for example, all become nazis, and desire to impose nazi-type regulations on their tenants. This seems an undesirable state of affairs, and therefore seems to argue against the freedom of people to associate contractually.

However, it is always important to compare a given result with comparable results. What kind of general state can we conclude from what we know, and how does it compare to other political systems from a practical standpoint ?

For this we need to understand the difference in motivations between government and the free market. The personal interest of a politician is, depending on the system, to gain as much support as possible and to retire monetary benefits from his situation. The personal interest of a private citizen is usually to gain the maximal benefit from the products of his labour. The two interests are usually at odds, as the desire for control over society of the politician as a means to his ends clashes with the desire for the rational citizen to live in an efficient and healthy society.

What this means in the context of social trade is that while a citizen will tend to desire his own profit above ideological considerations, politicians will not hesitate to bank on these considerations. Therefore the more we deviate from an ideal context of capitalism, the more undesirable social trades become. This has been illustrated in many instances, as for example the American government being the prime catalyser of racism. Excess demand brought about by government-fixed prices can also be a motivator. In ten years, the amount of landlords in Chicago refusing blacks on principle rose ninefold in ten years because of rent control (see “The Evils of Rent Control”, Gene McDonough and Walter Block, Consent #27).

To come back to our example, the argument may be raised that the monopoly of land-owners on living space gives them the power to regulate our freedoms, and that such a regulation is bad. However, we may raise two major objections against this idea. First, that it is not the case that democratic agreement is good or bad, whatever side one is on : indeed, the only rational way to resolve an issue in a free society is by a free exchange of honest ideas. To refuse the land-owners the freedom to associate in the way they find best is not a proper answer to a clash of values, even if they are demonstrably dishonest.

The second objection is the market principle which I highlighted previously. It is not in the general interest of the land-owners to pursue a brand of prejudice when it can hit their wallet. The more extended capitalism is, the less likely it is that the general culture will show forms of negative prejudice.

It may also be argued that land-owners as a class do not really exist, because of free trade. I will not explore this argument here, because it would require more discussion about group dynamics than I care to pursue here.

With such an analysis, we can now easily see why a sociolibertarian system is pragmatically superior to any other in terms of mutual respect. At least, it is easy to see why it is superior to any authoritarian system. That is is also superior to a democratic system is due to the objections I just described – for the market principles to be so ineffective at pushing back prejudice would require a general atmosphere of hatred and mistrust, which is the equivalent of saying that a majority of people would adopt measured based on this mistrust. Therefore the democratic society would impose a uniform, oppressive law, for example, to make every tenant obey nazi principles. Such a law could obviously not exist in a sociolibertarian society.

And we do tend to find that statist countries foster less respect for others, since people are caught up with the basic antagonism which characterizes the state. In a rational society, as Rand said, there is a harmony of values and motives which comes about because all motivations lead to the same desired result, that is, a free and prosperous society.

The right to be wrong

The root of the misunderstanding that a sociolibertarian society would be irrational in this regard is a confusion between rights and a contractual agreements. In practical terms, a right is a principle that must be upheld by the government, either by a limitation of its own power or its monopoly on the supreme law of the land. In the case that one has them (that is, barring some rights of children and the mentally crippled), rights are inalienable and cannot be superseded by any conceivable construct or situation. Just like values in ethics, rights are the bedrock of politics and, in their own discipline, answer to no other concept or idea.

The notion of a contractual agreement seems at first glance to be an exception. Indeed, virtually all contracts involve a trade of obligations, and rights cannot be obligations – they only describe the sphere of freedoms which is proper to all individuals. So does one trade away one’s rights when one signs any contract ? It cannot be so, since rights are inalienable. Rather the contrary, any possibility of agreement relies on the existence of one’s rights. We say when discussing politics that our rights are ceteris paribus : if a contract already exists on that domain, then we say that one has temporarily traded a part of his own freedom for a higher gain.

Such a thing is not catastrophic. The very act of trade itself is based on an implicit agreement that one will pay a certain amount for certain goods. Any notion of economical organisation beyond the family unit is based on the notion of implicit or explicit contracts. Without any notion of association and contract, we might as well bomb ourselves back to the stone age. While some contracts may be disastrous for the person entering in them, that is solely his decision to make. The point is that you have “the right to be wrong”. The best way to live in freedom with conflicting ideals is a free market of ideas.

Do the points I have discussed here apply to a libertarianism in general, and not only to sociolibertarianism ? That is, should a libertarian uphold the principles of sociolibertarianism as far as they pertain to the extreme scope of free association given to the people ? Surely not.

Libertarianism regroups a vast scope of ideologies, with their sole guiding principle being the notion of a minimal state. While it seems to me that not recognizing the full extent of the right of association is a disastrous affair for the edifice of natural rights, it is not necessarily so that all libertarians must agree with the notion of natural rights, let alone of their completeness. This line of thinking is applicable to all distinctly sociolibertarian ideas : and while I think they are noble and just, I have no intention of using them to ideologically bludgeon people to death.

Finally, one objection I’d like to dismiss has been given to me by a fellow libertarian in all seriousness. His idea was that since one may be, as a child, trapped in a oppressive community or group, and now at adult age one may not have the resources necessary to move, then one’s freedom is restricted by money. I hope you already see that while such a case would be saddening, the reasoning behind it is patent nonsense. To take an analogous example, since it takes more money than I can afford to buy a radio station, does that mean that my freedom of speech is useless ? As I mentioned already. my right to something cannot in any case be an obligation for someone else to help me get it.