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Palmer on Hoppe, Coase, and Wealth-Maximization

See the post on Daily Apology; text below:


In a recent post I noted that around 15 years ago, Palmer published two law review articles (Intellectual Property: A Non-Posnerian Law and Economics Approach and Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects) arguing against patent and copyright and also critiquing the wealth-maximization “law and economics” approach of Richard Posner. In the first article cited he criticizes “A jurisprudence that claims to be based on “law and economics” but that would constructively assign or rearrange rights as part of a strategy to achieve some pre-determined outcome (maximization of utility or of wealth, for example) …. ” Notice that Palmer characterizes Posner’s wealth-maximization framework as one that would lead to the rearranging of property rights to try to maximize wealth.

Now Posner is of course a Coasean. And in fact others such as Rothbard, Walter Block (2, 3), Gary North, and Hoppe (2) have made a similar observation about implications of Coase’s views (see also the views of Roy Cordato (2); Timothy Terrell‘s and Sebastian Storfner‘s summaries of Austrian critiques of Coase). Some of them note that the Coase Theorem could be interpreted as a recommendation that courts assign property rights so as to maximize wealth–in fact this is exactly what uber-Coasian Posner recommends, at least according to Palmer.

What is interesting is that in Palmer’s campaign to smear Hoppe by repeatedly distorting Hoppe’s views, he also has attacked Hoppe several times (1, 2) for interpreting Coase the way Palmer interprets Posner. He says Hoppe’s and Rothbard’s reading of Coase as meaning that “that courts assign property rights to contesting parties in such a way that ‘wealth’ or the ‘value of production’ is maximized” is an “absurd parody of an interpretation” and a “bizarre misstatement” of Coase. Palmer goes on:

Hoppe once attacked another panelist at a conference who had discussed the Coase Theorem by accusing the panelist (and Coase) of arguing that judges should be empowered to confiscate and rearrange property whenever the judge determined that the new distribution would be efficient. Now Coase has never said that and that’s not a part of or even an implication (at least, not without a number of questionable additional premises) of the Coase Theorem.

So, let me get this straight: Palmer’s interpretation of Coasian wealth-maximizer Posner is reasonable, while Rothbard and Hoppe’s interpretation of Coasian wealth-maximizer Coase is absurd and bizarre…? Of course a given interpretation of Coase is open to reasonable criticism, but is Palmer’s attack here–given his history of blatant distortions of Hoppe’s views, repeated even after being exposed, and given his similar views on one of the chief Coasians–a reasonable one, or merely evidence of his desperate attempts to smear Hoppe?

For links to other libertarian critics of Coase, see this post.

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