I got an e-mail from a frequent commenter here, Lee Newberg, which I will quote (with slight abridgment) and then reply to:
Perhaps it is already in your book, but … I’d like to hear your thoughts on the capitalism / socialism continuum — we live in the United States, often cast as an “ownership society” … where we have deeds, titles, etc. that indicate which property and assets are more-or-less for the exclusive use of specified individuals. However … there are other societies, such as some of the Native American nations, that would consider ludicrous the claim that, e.g., land could be owned by an individual … In a strange twist of perspective, I suppose these “socialists” might argue that it is the individuals who dare to claim titles to land who are the ones with an overactive sense of entitlement.
I think all rational beings agree that there is a proper balance between too much and too little ownership, though, of course, there is much disagreement as to where that balance should be … Although there may be no way to sway the most ardent supporters of one side or the other, what arguments might be convincing enough to sway some of the more open-minded capitalists and socialists? And how do these arguments apply to the topics of the day, such as public health care, financial institution reforms, inheritance taxes, ….
… Since I can imagine how either side might describe the other side as overly entitled, I am seeking reasons and arguments that avoid the use of the “entitlement” label.
MY RESPONSE: There is a viewpoint (e.g., John Rawls in A Theory of Justice) that regards wealth and property as fundamentally illegitimate, the result of mere fortuity or, worse, malfeasance; thereby justifying various egalitarian (or “socialist”) approaches to how we deal with wealth. There are two problems here.
First, the premise is simply wrong. Most possessions and wealth are acquired by most people by working, which actually means contributing to society by producing things for which other people willingly pay. Or else they are acquired by gift or inheritance from former owners who had to work (contribute) to get them. As for land in particular, some may have been granted royally, but most was again acquired by work (e.g., hacking it out of wilderness), and that work, making land useful, was likewise contributory to society. And anyhow, practically all owners of land today got it via legitimate purchase (i.e., exchanging something of value).
Accordingly, the notion of achieving some kind of “justice” by taking property or wealth away from its owners, to benefit others who did not work to earn it, strikes me as antithetical; quintessentially unjust.
The second problem is that severing the link between effort and investment, on the one hand, and wealth and property on the other, de-motivates effort and investment. “Share the wealth” presupposes wealth to share; but without effort and investment, wealth is not created. Thus socialism fails.
Of course, we as a society of highly social creatures care about the well-being of others, even strangers, and thus we willingly do share some of our wealth, through collective decisions to relieve distress. That is not “social justice;” it’s not because the wealthy are guilty toward the poor; it’s instead simply humane. And it avoids the toxic class antagonisms implicit in Rawlsian egalitarianism.
Still, some lefties imagine that institutions of private property are somehow bad for the poor. The opposite is true; worldwide, great numbers of people are stuck in poverty precisely because private property protections are weak. Where governance and rule of law are shambolic, people don’t have clear title to their property, making them vulnerable to abuse and inhibiting investment and development. The economist Hernando DeSoto has done great work highlighting this problem and promoting correctives; and it’s been shown that strengthening private property protections is a great boon for poor people.
(And yes, all of this is indeed covered in my recent and very excellent book, The Case for Rational Optimism.)