In the eyes of governments, the private sector is a big buffet table. The enticing cuisine is just sitting there, waiting to be dished out to satisfy the appetites of the rent seekers who reinforce government power. This is not merely a consequence of the statist inclinations of the ministers and bureaucrats in power at any given time.
In fact, the interests of these rent seekers is carefully entrenched in the very fabric and vocabulary of the government decision-making process, where they are routinely consulted as “stakeholders” in decisions that concern their “interests.” And of course, this includes decisions that encroach on the rights of property owners to the benefit of these rent seekers, either through restraining the ability of the former to freely use their property, or through outright confiscation.
In order to legitimize its encroachments on property rights in the eyes of the public, governments must obscure any argument over the legitimacy of the claims of property owners and the claims of rent seekers. That is, they must circumvent any discussion of property rights. They must ensure that the legitimacy of the claims of rent seekers is implicit, already settled, already presumed, by the very nature and language of the decision process.
Package-dealing property owners and rent seekers — the “stakeholder”
This trick is accomplished by the language of the decision process itself. In particular, by framing the discussion in terms of a conceptual package deal[1] — a concept that equates property owners and rent seekers by virtue of some characteristic that is nonessential to the legitimacy of the government’s action. This allows the government to easily ignore the crucial difference between property owners and rent seekers — namely, the issue of property rights.
In government decision-making, this package deal is the concept of the “stakeholder,” which is used to refer to any party with some significant “stake” or “interest”[2] in the government’s decision. And since both property owners and rent seekers have a significant interest in government actions that encroach on the property rights of the former for the benefit of the latter, this term subsumes both parties, allowing the government to group property owners and rent seekers into a single conceptual unit and to refer to both in the same terms.
This concept of the “stakeholder” is used to obscure the nature of the claims of the various parties affected by government actions. By concentrating on the nonessential fact that all stakeholders have “an interest” in the outcome, the crucial issue of the nature of this interest is avoided.
To the property owner, the nature of their interest is their rightful ownership and control of their property and their attempt to prevent government aggression against this property. But to the rent seeker, the nature of their interest is the fact that they stand to gain some benefit from the government’s violations of the rights of property owners — that is, they stand to gain some unearned special privilege.
Thus, if a construction company wishes to acquire land from property owners through the use of eminent domain — i.e., by coercion from the government — then they are said to have “an interest” in the government’s decision on whether to exercise this power. Their interest is the fact that they stand to gain from this acquisition. Similarly, if an employee union wishes to secure its members an additional day off work through a legislated requirement for additional leave — again, by coercion from the government — then they are said to have “an interest” in the decision. Their interest is the fact that their membership stands to gain some extracontractual benefit from this requirement.
By package-dealing property owners with rent seekers in the scope and language of its decision process, the government ensures that the issue of special privilege is not on the agenda for discussion. And in fact, the situation is even worse: by referring to both property owners and rent seekers by the amoral term “stakeholders” in its decisions, the government is able to make it sound as if all of the parties are merely special interest groups, so as to make the public agnostic as to the outcome of the decision. But of course, the property owner’s “stake” in a decision to encroach on his property rights is merely the fact that he stands to be plundered by the government if he does not defend himself. It is not so much in his “interest” to have the government take a particular action; rather, it is in his interest to have the government leave him alone.
The failure to distinguish property rights from special privilege in government decision-making means that rent seekers are more easily able to hijack the decision process and capture the power of government.[3] In fact, the only real requirement for stakeholding is that the stakeholder has something substantial to gain or lose from the government’s decision.[4] A party may even be made a stakeholder in government decisions simply by being able to propose some government action that would give them a special privilege at someone else’s expense.
Utilitarianism and the harm principle in government decision-making
In defending its actions, governments argue that the interests of these stakeholders may be “harmed” — i.e., may be negatively affected in some way — if they fail to provide resources and assistance to these groups, even if those resources must be taken from property owners. They argue that their actions are calculated to balance the interests of the various stakeholders, allegedly ensuring the greatest overall good to the parties and to the public in general.
This is a form of short-term utilitarian argument that ignores the issue of property rights and merely concerns itself with the optimal “distribution” of resources. But contrary to this short-term utilitarian view, and the pernicious harm principle that it engenders,[5] we are not entitled to use or threaten force against another merely because their use of their own property may negatively affect us in some way. Rather, it is only when another person aggresses against us or our property — i.e., initiates the use of force against us or our property — that we may rightly use force in defense. This is the only “interest” we may legitimately protect through the use of (retaliatory) force.
We all stand to gain or lose by countless decisions of others in which we have no legitimate right to forcibly interfere. We are all affected by the decisions of others. We all have an interest in what others do. We are affected when an employer offers a job we wanted to someone else. We are affected when a good we wanted to buy is bid up in price by demand from others. We are affected when a potential love interest is chatted up by someone else. We are affected when a neighbor paints their garage in an unsightly color that offends our aesthetic tastes. In none of these cases may we legitimately use force to prevent others from “affecting our interests.” Nor may we legitimately turn to the government to do the same.
In fact, any use that a person makes of a scarce resource affects others, in the sense that, if not for that person’s use, others might use the resource for their own benefit instead. This is the very nature of scarcity. And it is precisely why we have property rights to demarcate the property that we may rightfully use, and the property that belongs to others.
Package-dealing and other ‘bureauspeak’ as a tool of government power
We can see that the government obscures these vital issues by the use of vague and euphemistic language in its decisions, and in particular, by the use of the package-deal concept of the “stakeholder.” This is part of a wider pattern of vague and euphemistic language used in politics and in the bureaucracy.
This is hardly surprising. After all, Orwell has warned us that language can be used as a tool of power.[6] In particular, in his seminal work Nineteen Eighty-Four,[7] we see how the intentional use of limitations in language that shrink our available concepts can be used to avoid conceptual distinctions that threaten the power of our rulers.
This explains why, in all of the glossy pamphlets of government departments, and all of the soothing idioms of government decision making, ministers and their bureaucrats invariably speak in a dialect which ignores important conceptual distinctions such as consent and force, and which avoids such threatening concepts as property rights. Indeed, Orwell (1946) has observed that, because of the coercive nature of the decisions made by governments, “political language has to consist largely of euphemism, question-begging, and sheer cloudy vagueness.”
By referring only to groups of “stakeholders” and their “interests” without any discussion of the nature of these interests, governments are able to keep discussions of their actions entirely at the level of an arbitrary zero-sum game. The government is thus able to anesthetize the public to tolerate — and indeed expect — decisions that are made without regard to right or wrong, but solely on the basis of the relative political influence of rent seekers and property owners.
Notes
[1] Ayn Rand identifies and discusses the fallacy of “package dealing” in her discussions of epistemology. For further explanation, see her article, “Extremism” or The Art of Smearing, printed in Rand (1967) Capitalism: The Unknown Ideal. Signet: New York.
[2] The notion of having some “interest” in the decision is the common denominator used to define the package-deal concept of the “stakeholder.” It is nonessential in the sense that — as will be shown — a mere interest in a decision regarding private property does not legitimize interference with the property rights of another.
[3] For more information on this topic, the reader should see the abundant literature on public choice theory and capture theory.
[4] In fact, as I have previously discussed here, this requirement for substantial stakeholding may itself bias the process further towards rent seekers, especially where special privileges are financed by the diffuse spreading of costs, as is usually the case for tax-funded privileges.
[5] The harm principle was most notably advanced by the utilitarian John Stuart Mill in On Liberty:
[T]he sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.
Note that this harm principle is weaker than, and ultimately inconsistent with, the libertarian non-aggression principle. For a critique of the harm principle and the authoritarian consequences of Mill’s philosophy, see Hamburger, J. (1999) John Stuart Mill on Liberty and Control. Princeton University Press: New Jersey.
[6] See Orwell (1946) “Politics and the English language.”
[7] See Orwell (1949) Nineteen Eighty-Four. Martin Secker and Warburg: London.
