I posted this comment at Akrasia's place. He has recently authored a review arguing that libertarian/classical liberal political theories come aground on the realization that rules of property acquisition, use and disposition are necessarily constructed by some system of positive law. The comment is based on my thinking about Epstein's Takings, although I'm sure he wouldn't endorse it. I attributed the theory to a "modest libertarian", but it might more properly be a conservative theory:
There's a more modest libertarian argument that survives recognition that property rights are necessarily defined by some system of positive law.
Let's suppose a state has set out a just regime of property entitlements at T1. No one can complain about taxes and regulations and transfer payments at T1 since they (along with the civil code) are just constitutive of how property rights are acquired in the society. These policies may or may not be wise, but by hypothesis there is nothing unjust about them.
But then suppose that at T2 the rules are changed. If everyone who loses under the rule change can be and is compensated then things are still just. But if someone has an uncompensated loss of an entitlement at T2, the (modest) libertarian would claim there is a wrong. After all, the person's entitlement was justly obtained at T1. None of the individuals who made up the political coalition that gained as a result of the rule change would have had the right to take the entitlement, so how can they all have that right now?
So the only changes that are permissible are ones which generate a social surplus out of which the losers are compensated.
If at T1 you have a nineteenth century liberal society, you have an argument for continuing classical liberalism. If at T2 you have a social democratic system, the situation is more complex, but its arguable that some shrinkings of the state would be just, while expanding it wouldn't be. In any event. some massive Rawlsian-inspired redistribution would be forbidden, although a safety net might not be. In fact, it might be required to compensate for loss of entitlements due to liberalization.