Two Powerful Words

How Does Kirzner Sum Up the Basis of a Free Society?


Filed Under : Free Markets, Private Property

Last year Israel Kirzner, one of the economists I most enjoy, said something during a lecture that was at once simple, true, and deceptively powerful. How powerful I did not appreciate immediately. But in the ensuing months, I have come to see how much was packed into that statement.

Professor Kirzner said that the market economy can be reduced to two words: private property. At first glance that may seem so obvious as to be uninteresting. At second glance it might summon an objection along these lines: No, private property isn’t enough. The market also requires individual liberty, the rule of law, limits on government, respect for contracts, and more.

But as I understand the matter (and Professor Kirzner), all those things are subsumed by “private property.” A society characterized by private property will necessarily have the other features we typically associate with free markets.

Property, for example, is a limitation on government power (one’s property of course includes one’s person) because it necessarily entails rules governing how people may be treated, whether by other private individuals or state officials. (See Bradley Smith’s book review this month.)

Property helps to separate the wheat from the chaff in the matter of civil liberties, such as privacy and freedom of speech. Take the issue of falsely shouting “fire” in a crowded theater. This is traditionally used to demonstrate that freedom cannot be “absolute.” But as Murray Rothbard long ago pointed out, it does nothing of the sort. On the contrary, it affirms property and its extension, contract. If a theatergoer shouts fire, he violates the property rights of the theater owner. If the theater owner does the shouting, he violates his contract with the patrons.

Privacy issues, which modern law and the American Civil Liberties Union have so badly muddled, can only be sorted out when the right to privacy is understood as rooted in private property. For example, contrary to the ACLU, it is not a violation of privacy for an employer to refuse to hire smokers, even if they smoke only at home. It is simply a matter of freedom of association, which is an extension of private property.

If you’re ever asked to stand on one leg and sum up the free society in two words, you now know how to do it.

* * *

The great pyramids of Egypt fascinate tourists, real and vicarious, by the millions. Yet few, unfortunately, appreciate the tragedy they represent. Christopher Mayer contemplates what might have been and looks at one of our own modern pyramids.

President Clinton’s impeachment crisis has ended. His legacy is now set. Calvin Beisner fittingly revisits another leader whose problem with truth-telling got him into hot water.

Many philosophers have offered definitions of freedom. Perhaps the most pernicious has been “freedom from want.” James Bovard looks at the implications of that twisted definition.

Much of the steam of the interventionist environmental movement has been provided by certain horror stories that everyone has heard and everyone believes. What if those stories are grossly exaggerated or untrue? Roger Meiners trains his magnifying glass on the Green Scare.

Anyone who puts his mind to it can be a spokesman for the freedom philosophy. A ready platform exists wherever you are. The Internet is one method, but, as John Landrum explains, the old-fashioned way still affords ample opportunities.

F.A. Hayek, one of the twentieth century’s greatest advocates of the free society, was born 100 years ago this month. Richard Ebeling surveys the long and fruitful career of the 1974 Nobel prize winner.

The U.S. government has gone to a lot of trouble redesigning the money to thwart counterfeiters. George Leef says there’s a better way to accomplish the objective.

Richard Timberlake continues his series on monetary policy in the fateful 1920s and 1930s. In this installment he looks at the Federal Reserve’s gold policy after the Great Depression hit.

The political philosophy at the root of the American Revolution was a novel mixture pestled in the mortar of a remarkable historical moment. Joseph Stromberg leads a tour through the compound.

In the columns department, FEE President Donald Boudreaux celebrates the birthday of his hero, F.A. Hayek. Lawrence Reed lampoons corporate welfare. Doug Bandow reminds us that the era of regulatory government is not over. Dwight Lee writes of the need for costs to be revealed. Mark Skousen concedes he was wrong about Japan and Germany. And Charles Baird looks at the labor policy of the British Bill Clinton. Roger Garrison reflects on Paul Krugman’s belief that Hayek and Austrian business cycle theory are insignificant and protests: It Just Ain’t So!

We proudly announce that Thomas Szasz will join us six times a year with a new column, The Therapeutic State. For about half a century Tom Szasz has been the chief and at times only opponent of the medicalization of morality, particularly through the alliance of Psychiatry and State. His regular contributions to The Freeman will cover an area too often neglected by advocates of freedom. The inaugural column skewers the strangely selective professional skeptics.

In the book department our reviewers pass along their impressions on such topics as neo-socialism, the arts in a market economy, the politicization of nonprofit health organizations, a classic on the “humane economy,” higher education, property in American legal thought, and political philosophy.

—Sheldon Richman


May 1999



Sheldon Richman is the former editor of The Freeman and, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families.

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