We have a curious situation in our world today. In the days of yore, when the discipline of economics was first being formalized, both capital and labor were relatively immobile. Transaction costs were so high that locating a factory in China would have seemed like madness, and therefore concluding that labor markets would clear- that is, assuming that allowing workers and employers to arrange their own contracts with each other would yield the best outcome for both the workers and the employers- was a perfectly reasonable thing to do.
Now, the situation has changed. Capital moves freely. Containerized shipping and the communications revolution have so reduced transaction costs that making McDonald's toys in China and shipping them across the Pacific is a reasonable proposition. Labor, however, cannot move. Workers in China cannot look at wage rates in America and decide to move. Capital can look for the cheapest labor and relocate, but labor cannot seek out the most productive capital, and hence the highest wage, since wages are the marginal product of labor.
So now we have a world in which some workers are paid a pittance to make goods that are then shipped across the world and sold for many times those workers' daily wage, the difference being pocketed by the business owner. And many libertarians are outraged if you call this "exploitation."
"Working in a sweatshop is better than subsistence farming!," they shout. And maybe it is. I've never done either, but certainly many of the workers in question prefer factory work to farming. Good for them. I am glad their lives are improving. But here's the thing: just because their lives have improved doesn't mean they aren't being exploited. Slaves sold by a cruel master to a kind one might also report an improvement. Does that justify their enslavement? Forcing people to remain in Haiti to work for a low wage isn't very different from forcing them to remain on a plantation and work for a low wage.
We are the only species I can think of that imposes coercive limits on migration. Individuals of other species may fight for territory, but we stencil lines on maps and declare that across these lines, none shall pass. How long do you think wolves would last if a group of alpha males got together and decided to plan well in advance just what the ranges of the packs would be? That is in essence what we've done with our restrictions on migration. We have denied ourselves our ability as a species to adapt to our environment and instead decided that each individual band of humans, which we are pleased to call "nations," will be always and forever restricted to a certain territory, and that movement from territory to territory will be forcibly restricted.
Here's the difference between other animals' territoriality and ours: we don't care if we're using the land others are trying to use or if these others want to challenge us at all. A chimpanzee troop will chase another chimpanzee troop out of the territory it actively inhabits, but only the primates called 'humans' would bother to travel to the opposite end of the forest for no other reason than to keep foreigners out.
But it isn't just people generically who act this way. It's governments that act this way. A man owns his house and won't let others in uninvited, but most will not spend their time chasing people out of the unowned lot down the street. That's what governments do, it's what they must do in order to survive. Max Weber defined the state as an institution that enjoys a monopoly on the legitimate use of force within a defined territory. If governments stop restricting migration, then these territories would start to lose their definition, and governments would begin to crumble. In a sense, the anti-immigrationists who argue that "we" have to defend "our" borders if the "nation" is to survive are correct, except they identify themselves with the state and assume that the state's survival is a good thing.
Forcibly restricting people's freedom to move restricts their ability to adapt to circumstance and hence our species' ability to adapt to its environment. Private property also restricts people's freedom to move, but with a crucial difference: you can deal with the property owner himself and he is not hidebound by bureaucratic procedure. If my kid hits his baseball into my neighbor's yard, I can ask my neighbor if I can go into his backyard and retrieve it. If my 11-year-old hits his baseball into Mexico (he's a badass, what can I say?), I have to have all my documents in order. See the difference? Individual property owners are more responsive than bureaucratic institutions, and furthermore are atomized in a way governments aren't. If Mexicans who wanted to come to America simply had to negotiate with one of the many, many Americans who own property along the Mexican border, they'd have no problem getting in. All it takes is one to say, sure, cross my land or use my road, and the door flies open.
I've written this essay using bits and pieces from two sorts of arguments- economic and ecological. The economic argument about wages and marginal product led to my conclusions about exploitation, and the ecological one about territoriality and migration led to my conclusions about adaption. But I think these are just two different ways of stating the same thing. I think property and markets are best viewed as characteristics our species has developed to adapt itself to its environment. Economics tells us that wages are the marginal product of labor, and that in seeking higher wages, labor is inadvertently seeking higher productivity. In ecological terms, this means that individual humans will seek to move to areas where they are best adapted to live. Just as individual wolves and their packs are best suited to determine where the best place to be a wolf is, individual humans and their families are best suited to determine where the best place to be a human is.
The continuity between economic and ecological adaptation goes on. Prices force us to economize our use of scarce goods and drive people out of places where the cost of living is too high. In ecological terms, prices keep us from 'overgrazing' and force us to move on if the land can't support us. Attempts to circumvent the price system often lead to ecological disasters, such as in our fisheries, where the price of fish in the ocean is set to zero by laws mandating "freedom of the seas," or in other words, socialized ownership of the fish.
Socialism is unnatural. That's more sloganeering than argument, but what I mean is, property, prices, and free exchange are spontaneously evolved adaptations, while government and government interventions are planned and imposed maladaptations. We can see the evidence of their maladaptive nature all around us. We are in the midst of a climatic shift brought on by what Kurt Vonnegut memorably called a huge bout of "transportation whoopee." What the late, great Mr. Vonnegut didn't see was how this carbon orgy has at every turn been subsidized and advanced by the state, which has insulated us from the natural market forces that would have driven us to live in our natural state, cheek by jowl in naturally 'green' cities. It's more than just state-built roads, although that's a big part of it. It's wars to secure access to resources, governments backed because they'll sell us oil, airport construction, pipelines, port facilities- the list goes on and on.
Nowhere does the individual bear the full cost of his decision to produce more carbon emissions (or any other type of pollution or environmental degradation) at the time he makes the decision. Nowhere do we even come close. Perhaps externalities and market failures exist, but we are nowhere near the efficiencies that could be attained through purely market forces, so discussing them at this point is pointless. Debating externalities now is akin to seeking to improve your gas mileage by properly inflating your tires rather than untying the anvil from your rear bumper.
I am starting to think that debating various philosophical justifications for markets and property is rather like attempting to establish a firm philosophical basis for the existence of thumbs. Right and wrong, deontology and utility, none of those enter into it. Markets and property are good because they are adaptive. Government is bad because it is maladaptive.
Obvious question: governments evolved along with markets and property, so why are the latter good and the former bad? I don't have a full answer yet, but my thumbnail sketch of one is this: governments were adaptive at a particular historical moment, probably around the time of the adoption of agriculture, but due to their nature have remained in existence far longer than was adaptive. They're basically an example of path dependence, an inefficient historical hangover. If markets and property are thumbs, government is the appendix.
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