With life there is the possibility of extinction versus continuation, demise versus flourishing, destruction versus improvement, failure versus success, on many fronts, not only the entity’s biophysical condition. Life, unlike inanimate matter, does not simply change its form and goes on forever, indestructibly. It comes into being and then can be extinguished or enhanced, destroyed or preserved.

This is evident enough when we consider that whatever is alive can be evaluated, even if it lacks consciousness. Gardeners, ecologists, botanists, biologists, zoologists all engage in evaluating the living things they study. They often identify certain conditions as valuable, others as dangerous for the particular life form at hand. What enables them to do this is their knowledge of what kind of life is being considered. Knowing what it is to be a redwood tree enables the botanist to evaluate how some given redwood is doing; knowing what a beaver is enables the zoologist to evaluate the condition of a given beaver. Indeed, even as we shop for vegetables, we can tell from what a bell pepper or watermelon is how good is some given instance of it. In these latter cases, of course, we often judge on the basis of our own wants or purposes, which could introduce different standards. But even apart from what we want some tree or plant for, these living entities can be evaluated as to how successful they are doing, whether they are flourishing or deteriorating.

I will only sketch this idea here but it is necessary to make the point credible for our future reference. If we take into consideration those facts that pertain to the nature of life, in virtue of which life can be either improved or worsened, we can identify objectively the norms of living. The facts concerning what enhances or thwarts living are, then, objective, resting on facts of reality, grounded on cognition. Those facts are what can give us some common reference point for judgments of good and bad in the world. (We, of course, are also free to fail to ascertain those facts and make false or merely accidentally true normative judgments.)

Let me just defend the point briefly. It is, again, fully embedded in how we address our own topic here. The reason is that when we consider the issue at hand, we do this critically, in terms of certain standards or criteria of right and wrong. One is either right or wrong (or confused) about the matter. So even our thinking and talking about the very topic of norms exhibits the point that human life is inescapably, necessarily normative.

In examining human life, some of the facts that we can take note of will enhance, others will endanger it. Others pertain to our capacity to initiate our own behavior. These facts about us, in turn, have lead us to produce the two disciplines of normative inquiry of greatest concern, namely, ethics and politics. They concern our choices regarding the difference between right and wrong conduct in private and public contexts.

Our human lives can be lived successfully or badly in very different though mutually compatible ways. This is what has contributed, in part, to the widely held view that ethical judgments are subjective, merely a matter of the individual’s will, tastes, or preferences. In fact, though, the differences are due to the often unique attributes, circumstances, opportunities, and available information pertaining to different human individual.

The above is a very brief answer to some of the worries people have about whether norms can be objective. To summarize, the fact of life—not only human life, but life everywhere around us—gives rise factually to the question, "Is it good or is it bad?" Different kinds of life will require different answers to this question. It's not just any life, it's life of a specific type that matters. And thus, when we are considering good and bad for, say, a banana versus a human being, we will get very different answers. But there is one common element, as well. This is that the enhancing of the life of any being is good; the destruction of it is bad, very, very broadly speaking, as regards that being.

Is there an intimate connection between this objective normative framework for understanding human life and economic science, including conclusions regarding the system of free market economics or capitalism? To suggest that there is, let me quote from Professor James Buchanan, Nobel Laureate ion economic science in 1986, well-known to many people in the classical liberal arena. This is from his The Limits of Liberty:

Buchanan states that the science of markets or of exchange institutions, commences with a normative component, namely, a system of individual rights.

'Rights,' however, is a normative concept. It states what ought to be the case, how people ought to act, not just what they do, how they behave. The right to private property, for example, identifies the fact that every person ought to be left free by others to seek to hold, keep and dispose of items of value.

Accordingly, following Buchanan here, the very foundation of the free market economic system involves a normative component, contrary to what some other economists appear to believe. The set of individual rights and, more particularly, private property rights, are at the foundation of the science of economics.

This is not really difficult to appreciate. Consider that one cannot even think of exchange or trade without the concept of, for example, the individual’s rights to life, liberty or property. If one’ life doesn’t fall under one’s own authority to govern, one cannot offer part of it for employment by others on mutually agreed upon terms. The basis of the significance of people establishing terms of trade rests on their having these rights. If they lacked the right to liberty, all the actions associated with trade—manufacture, invention, research, marketing, labor, etc.—would have to be performed at the mercy of everyone else, without whose permission one would be morally paralyzed. It would abolish a free market in services. And if one has got nothing, one can't trade anything. One can't give it away. One can't lend it or sell it. One can't hold on to it for oneself. One can't invest it, use it, abuse it, bequeath it. One can't capitalize on it or save it for a rainy day. Nor can one lose it. If one hasn’t got anything, there is no market in goods.

All of this is very important for classical liberal institutions, as well as for the proper understanding and analysis of the market place. Prior to embarking upon the analysis of market forces in the way economic scientists want to, one already has to have some confidence that the market itself, as a system of human activities, has some measure of moral and political legitimacy. Indeed, today markets don't have much legitimacy in the legal sense. In most societies the right to private property is seriously compromised, indeed, grossly violated, by the legal system itself, not only by criminals. So when one proposes that markets ought to be established, that trade should be protected among free citizens, as is done by promoters of, for example, capitalism and privatization, then we need to provide a normative justification. We need to argue that this is a good thing, that it ought to be pursued.

Only after this has been achieved, can we become positive economic scientists and address the issue of how it all works out, what laws develop from this institution. Without such a justification, it can be argued without much resistance that markets are a bad thing and students of markets are no different from students of, say, criminal activities. Indeed, that is the opinion of many among Western intellectuals, namely, that market activities are but expressions of greed, the immoral pursuit of wealth.

Free institutions such as the market are, however, very difficult to establish, maintain and protect from those who regard them morally odious, such as Marxists, fascists, democratic socialists, theocrats, or care little about whether they live or die. Legal institutions require human initiative, even if at the micro-behavioral level, in most cases. Some people in society (the more the better) need to guard against their destruction or corruption.

We can now turn to the topic of why individual human rights exist, including the right to private property. What gives these rights a valid standing as a normative concept applicable to human community life? Are they just a myth, as some critics maintain? Do they have a realistic foundation, analogous to the realistic foundation of, say, a given exercise program, fire fighting technique or health regime?

Individual rights are an abstract way of designating a sphere of authority for human individuals. Perhaps the best way that I can make this more concrete is to recall one of the major differences between the feudal and the liberal eras of Western culture.

In the feudal era, people who lived in a country were regarded to be subjects of the king, the royal family, the monarchy. In the liberal era, however, individual human beings who are members of a society are regarded as sovereign citizens. "Sovereignty" means ruling oneself rather than being ruled by others.

But why is this true? That goes back to the issue of what sort of a being one is. This is the naturalist part of the natural rights theory that is associated with one wing of classical liberal thought. The naturalism comes in as a sort of clarifier of how one can show that you have these rights, namely, by reference to what human nature is.

In contrast to the naturalist position, for example, Professor Buchanan, who is a contractualist, has in mind by "a structure of well-defined rights" a set of rights agreed to or contracted into, not something that is justified by reference to human nature. His form of classical liberalism, although it touches the natural rights approach, departs from the way those rights are supported in the tradition of Lockean liberalism. These rights for Buchanan are a matter of having reached an agreement, an agreement that serves all of our interests if we are alike enough. Yet this support is weak because if one is clever enough, one could subvert the agreement and get by without adherence to the laws. If there is no natural right requiring people to adhere to their promises, to live by their consent, no morally binding reason exists for them to live by the terms to which they have agreed. Furthermore, the advantages to be gained from such an agreement are only specified subjectively, so they are subject to change at the whim of the agents. And if one can hoodwink others and get away with it, there is nothing objectionable about it outside of other’s displeasure. The assumption of social contract theory is that most of us are not smart enough to do that, so we will probably live by the social contract.

The natural rights position, in contrast, holds that quite apart from any agreement—although agreements do come into the picture at some point, namely, when consent is given to being governed—everyone has the right to his or her life, liberty and property, since only that secure everyone the personal sphere of jurisdiction within which life choices can effectively, meaningfully be made. Basic rights themselves are not a matter of agreement. They are supposed to be an objective feature of the human social world. Thus, when we study human nature—by reference to history or whatever other intellectual tools we have at our disposal—we notice certain basic, defining facts about human beings. We notice their creativity, individuality, moral agency, etc. We notice that they can choose to be bad or good. We notice that some fail, some succeed, and many are somewhere in between as they proceed to guide their lives.

Now, as the natural rights outlook sees it, we ask: "What do all these facts tell us about the way we ought to live?" Well, they tell us clearly enough, to paraphrase John Locke, "if we but think about it," that everyone ought to be free and be protected in his or her freedom.

Although Locke had no well worked out theory of human free will, his political thinking presupposes that ordinary human adults are free to attend to the issue of how they ought to live and interact with others persons. Since some will, however, fail to do this and thus fail to act properly, governments are needed to secure for everyone the basic rights of individual human beings. Those who fail to observe the law of nature—those, that is, who are immoral—pose a threat to the rest in their mode of social interaction.

Accordingly, if we but think about it, which will make it evident, we will learn that we need some place where we are in charge as individuals, where we can distinguish ourselves as the individual human beings who we are individually despite our complex social entanglements. If we don't have this area where such distinction can be achieved, there is going to be what economists refer to as dumping, although in a broader sense than they mean it.

"Dumping" is a term used in different senses. In environmental economics it means that people simply transfer burdens they incur from themselves to other people, usually without anyone noticing this—for example, when one drives down a road and one’s car emits pollutants and people vulnerable to respiratory ailments nearby are assaulted. Yet nobody knows who did this to them. This dumping is possible because we do not have a clearly defined private property rights where in order to make use of another’s domain, one must ask that person for permission—"May I dump my automobile exhaust waste on you, please?" If one could do that, maybe they would say, "Yes, for $5,000 a year." Environmental degradation would contract severely if this were the legal norm or even merely used as the basic standard of environmental property law to which a community aspires. (The term "dumping" is also used to refer to the activity of a foreign government to export subsidized goods at lower than market prices.)

The kind of dumping that pertains to environmental issues can be more widely applied. A broader form of it involves forcibly imposing the consequences of one’s immoral or even simply unlucky conduct on others within society. This is what the welfare state makes so easy: sharing one’s burdens and achievements, not because one chooses to do so but because law makers require it.

When this happens in a society, the likelihood of taking care to avoid destruction and to embark upon achievements diminishes. Aristotle noted this fact some 2500 years ago:

Thus far we have mostly indicated the flaws with systems that fail to recognize private property rights. The question remains, "Ought we to have these private property rights established in the society, and do we have good arguments of the sort that any person who is not brain damaged can understand and thus ought to listen to and attend to and embrace?"

There is yet something else to be considered. We now have seen an indication of what justifies the system of private property rights. To assign property, to determine who actually owns what, that's a distinct problem. In other words, once one can grasp the general need for the system, one is still left with the problem of how do we know, especially in cases of conflict, who ought to have what.

Clearly, there is a lot of material in the world, stuff that can be turned into valuable products that we want and need, products for which others will be willing to exchange other valuables or media of exchange such as money. How do we determine whose these valuables products are supposed to be? The private property rights system, when it operates and when it is given legal, official protection, needs some way of establishing what belongs to whom, as well as why some property belongs to some person and not to another, to some company or corporation but not to another.

Sort of Lockean Property

Here is where we are reminded of John Locke’s famous labor theory of property acquisition, whereby mixing one's labor with something is supposed to be the way to tell who owns what. Such mixing, of course, includes buying a thing in the market, with honestly obtained income. It's a very broad concept. It's quite sophisticated. But is it really sound?

I don't think it's enough. But here I can only hint at the kind of improvement the Lockean theory needs to improve on it.

Another way to put this is that when someone has made a prudent judgment and acted on it in the wild or the market place, and has thus insightfully engaged with that part of reality that can have value, that person then appropriates the thing in question. Among contemporary members of communities that kind of acquisition arises via voluntary exchange. It includes even harmful exchange, exchange that ultimately is mistaken, because the connecting act is the choice to treat or regard something as valuable, never mind whether this choice is correct.

The fundamental principle is that when someone has made and acted on the judgment that something is of value, before anyone else, whether this amounted to buying 1,050 stocks in IBM or buying a toilet seat for your house, it's the judgment that leads to private ownership, the judgment that this item will matter, that it has value for people. When one makes the judgment and does what is necessary to act on that judgment, that's how we tell that something is that person’s.

The institution of private property rights, then, which is the fundamental basis of market transactions, lies in the ethically significant (if not always successful) act of judging what is best for someone to do. It is also this that explain the close linkage between free markets and individual human responsibility, sovereignty or human dignity. Without the concrete stuff private property rights can secure for us, there would be no determinate sphere of personal jurisdiction. Only with the aid of such jurisdiction is the a clear enough opportunity to establish wherein a person’s responsibility lies and what falls outside it. We might call this avoiding the moral tragedy of the commons.

In any case, this normative base grounds the "well-defined structure or set of individual rights" with which, according to James Buchanan, economics commences. It is here that normativity infuses the market, even if in the course of their scientific work that fact may be entirely ignored. It is significant only when the system itself requires justification.

One final point. Some economists and political theorists in the classical liberal arena seem to be at odds with each other when they speak about property rights. Many economists, for example, advance what they refer to as the economic theory of property rights. When they use the word "property rights" in this sense—and everybody who is familiar with the law and economics or the public choice schools of economic analysis will run across a good deal of such usage, what is being said from the point of view of political theory is not that you are buying and selling property rights. Notice, in order to commence buying or selling, you are assumed to have the right to private property. You can't buy and sell anything prior to having property rights.

So, what is really meant by "property rights" in this economic context? It is having legal title to things, the legally protected power to decide about the disposition of something.

If, however, value judgments can be shown to be true, then whatever is infused with them, including economics, could well be given (or denied) objective support instead of simply resting on arbitrary human interest. Moreover, economics could well be the instrumental science or technology of human prosperity, just as medicine is the instrumental science or technology of health, which is a human value. Prosperity, as health, could, in turn, be shown to be an entirely justified objective for us to pursue, perhaps even as a priority when compared to other alternatives such as order, acculturation, health, environmental fitness (especially if the latter presuppose it for their flourishing).