The Real Social Contract
Mises believed that private property is useful only insofar as it serves human ends:
Private property is a human device. It is not sacred. It came into existence in early ages of history, when people with their own power and by their own authority appropriated to themselves what had previously not been anybody’s property. Again and again proprietors were robbed of their property by expropriation. …
Ownership in the market economy is no longer linked up with the remote origin of private property. Those events in a far-distant past, hidden in the darkness of primitive mankind’s history, are no longer of any concern for our day. For in an unhampered market society the consumers daily decide anew who should own and how much he should own. The consumers allot control of the means of production to those who know how to use them best for the satisfaction of the most urgent wants of the consumers. …
The meaning of private property in the market society is radically different from what it is under a system of each household’s autarky. Where each household is economically self-sufficient, the privately owned means of production exclusively serve the proprietor. He alone reaps all the benefits derived from their employment. In the market society the proprietors of capital and land can enjoy their property only by employing it for the satisfaction of other people’s wants. They must serve the consumers in order to have any advantage from what is their own. The very fact that they own means of production forces them to submit to the wishes of the public. Ownership is an asset only for those who know how to employ it in the best possible way for the benefit of the consumers. It is a social function. (HA, 683ff)
For Mises society is not just a spontaneous order but a deliberate construction based on an explicit ideology. It is part of the liberal ideology that private property (in the factors of production) is a means to greatest happiness for the greatest number. In this sense it could be considered a “social contract” entered into by all people with the purpose of making social cooperation both possible (as contrasted with socialism) and most efficient (as contrasted with interventionism).
This is precisely the social contract that I would insist on making behind the veil of ignorance.
Posted: March 31st, 2009 under Philosophy, Political.