Myth: There's no such thing as a "social contract."
Fact: Our constitution and laws form our social contract.
Our constitution and laws form our social contract. These are enforced by the government, on the grounds that it is the ultimate owner of all the nation's territory. The decision to live on its territory constitutes the agreement to abide by its social contract, much like boarding a train constitutes an agreement to pay the conductor when he comes around to collect. Those who refuse to abide by the social contract must not reside on its territory; they should avail themselves to the market of nations, which offers nearly 200 selections. Libertarians who object that they shouldn't have to move (for a number of reasons) are inconsistent, because their proposed society would recreate the market of nations on a smaller scale. That is, they would create a market of sovereign property owners, and would expect dissatisfied customers, renters and workers to simply go elsewhere on the market.
[Note: some of the arguments in this essay have been copied or borrowed, with permission, from the Non-Libertarian FAQ and some personal communications with its author, Mike Huben. The arguments in this essay are based on, and are an extension of, the essay entitled "No one has a right to my property."]
The nation's constitution and laws comprise our social contract. In this contract, voters have agreed to exchange their money for the government's goods and services, and to abide by laws passed by their democratically elected legislators. Like any contract, refusal by either party to live up to its end of the deal is considered breach of contract, and justifies the appropriate law enforcement measures.
Most of the objections to the idea of a social contract stem from libertarians. They object that there cannot be a social contract because the government doesn't own anything to contract about. But, as argued in the previous section, the government is the ultimate owner of society's territory, because it is vested with the force (military, police) and control (legislative, judicial) to defend and maintain our system of property. Therefore, our social contract is an agreement between the owner of property (society, as represented by government) and a constituent who wants to make use of that property.
The decision to reside on U.S. territory is the fundamental agreement to abide by its social contract. If people refuse to accept this contract, then they must not reside. The situation is akin to owning a condominium. The condominium is yours, but it comes with a contract between you and the condominium association. In it, you agree to pay fees in exchange for specified services and to abide by the rules of the association. Of course, you have an equal vote with the other condominium owners concerning the budget and rules. However, if you have no intention of abiding by these rules, then you have no right to reside. Indeed, if the rules strike you as tyrannical, then you should move. There are many other places to live in the housing market.
Libertarians object that they should not have to move to another country if they wish not to abide by the social contract. Admittedly, this is a rather drastic and unappealing option; most people would be dismayed by a system that does not allow its members to solve their problems in place, but simply tells them to move elsewhere. Hold onto this dismay for a moment; we will show how libertarianism produces the same problem, only worse.
The libertarian objection to the social contract is inconsistent with their philosophy for two reasons. The first is that this is not an argument they would support concerning any other type of contract -- indeed, libertarians are spirited defenders of contracts in all other cases. The only difference between the contract of a condominium complex and that of a nation is the number of residents and level of complexity. Why, then, should one be honored, the other dishonored?
The second inconsistency is with their faith in markets. There is a market of nearly 200 nations to choose from, which is a very rich choice indeed, especially compared to domestic markets. (Can you name a brand of soup other than Campbell's or Lipton's?) Most people would have no trouble recognizing that the millions of foreigners trying to immigrate to the U.S. are the equivalent of customers making a selection on the market of social contracts. The same opportunities exist for libertarians. If they object to this market of contracts for any reason, then they must explain why recreating the same system on a smaller scale would prove any better.
Put another way, the objection to moving is inconsistent with the libertarian goal of awarding individuals sovereign rights to their property, since that would essentially recreate the market of nations on a smaller scale in our society. That is, landlords and business owners would become the rulers of their own pocket principalities, and renters and workers who disliked their conditions would simply be advised to look elsewhere on the market for jobs and apartments. Libertarians balk at the same principle on a larger scale, but they can't support a market of sovereign property owners only in those cases where it suits them.
Libertarians also object that there is no libertarian country to emigrate to. But if libertarians cannot find exactly what they want on the market of nations, that's because no one realistically expects a market to supply customers with exactly what they want -- just as no market produces cars which let you travel at the speed of sound and get 2,000 miles per gallon. And although libertarians may not find their desired nation, they would in fact find many nations with greater libertarian features than the U.S. Many Third World countries, for example, have far smaller tax rates and public sectors than ours. Most are less burdened with business regulations. Chile, for example, underwent 17 years of radical free-market reform under the guidance of the University of Chicago, and reduced its government as much as was humanly possible. (The result was South America's worst income inequality and pollution problems.) Some, like Somalia, even practice pure anarchy and Social Darwinism.
Of course, few people would want to live in these places. The flow of international emigration is from low-tax Third World countries to high-tax First World countries, not vice versa. And there is a reason, at least among democratic countries, why the richest and most appealing nations have the highest taxes. Liberals argue that prosperity results when the people commission their governments to look after the common interest; this comes in the form of economic infrastructure (like highways), public goods (like national defense) and law and order (not just against street crime, but business crime as well). Libertarians want a free lunch; they want the prosperity of America combined with the low taxes and regulation of Angola. However, this combination doesn't exist for a reason.
In fact, the "market of nations" is one that libertarians would applaud in any other circumstance. It is an anarchic international system with no super-government controlling emigration. And this market has been exposed to the concept of individual freedom for over 200 years. The complete lack of purely libertarian nations is therefore a problem for them. One could say that the winners in this free market are those nations which receive the most immigrants. Why, then, does immigration generally flow from the low-tax Third World to the high-tax First World? (To say that they are attracted to the handouts of the welfare state is to miss the point; why are welfare states generally richer than non-welfare states in the first place?) And why have governments almost universally grown larger, not smaller, over the last 200 years?
Libertarians can try in four different ways to explain why the market of nations has not produced their desired society: