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Correcting Some Common Libertarian Misconceptions (2011)

This is a lightly edited transcript of my speech “Correcting Some Common Libertarian Misconceptions,” delivered on May 28, 2011, at the Annual Meeting of the Property and Freedom Society, and podcast previously at KOL044 | “Correcting some Common Libertarian Misconceptions” (PFS 2011). The video and the powerpoint presentation are embedded below.

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Correcting Some Common Libertarian Misconceptions

by Stephan Kinsella

(Transcript of a speech delivered May 28, 2011, at the Annual Meeting of the Property and Freedom Society)

00:00:08

STEPHAN KINSELLA: Thank you Hans.  Before I start, let me mention one thing.  Today, this article will appear on Mises Daily – well, yesterday, but this is the current issue.  So this is a summary of the Hoppian argumentation ethics theory, so anyone who’s interested in this idea you may want to take a look at this.  Also, at the bottom of this page there’s an ad for an upcoming Mises Academy course I have here, which is starting July 11, the Social Theory of Hoppe.  So it’s a six-week course where I’ll go into detail on Professor Hoppe’s economic and political theories.  So anyone who’s interested in that, take a look.

00:00:59

I’ve taught two – well, three Mises Academy courses already, my Intellectual Property Theory twice and Libertarian Legal Theory.  And in the course of doing these and in the course of my thinking over the years, I have started to collect a bunch of libertarian fallacies, confusions, and misconceptions, which I’ll try to go through here.  And if you disagree with me, I guess I’m promoting some libertarian misconceptions.

00:01:29

So I’ll start with a fairly easy one that’s always sort of bugged me.  You’ll find libertarians will use the word coercion quite often as a synonym for aggression.  The word means coercion.  This is more of a semantic point, but technically we’re not against coercion.  Coercion just means to use force to compel someone to do something.  So if someone is breaking into my house and I get my gun and I force him to leave, I’m coercing the guy, and there’s nothing wrong with that.  So I think we just need to be clear on our terminology and avoid equating aggression with coercion.  And libertarians will also, in like vein, sometimes say that we’re against violence or we’re against force, and of course we’re not.  We’re only against the unjustified use of force.

00:02:15

By the way, this is a PowerPoint slide, and I have tons of links in here, and I posted this on my website this morning if anyone wants to look it up and look for – I’ve often got links to articles or blog posts that have further discussion of the topics in the slide, and my website is stephankinsella.com.  By the way, in a like vein, I always get annoyed when people use the word capital-L libertarians to describe me or other libertarians.  Libertarian with a capital L means member of the Libertarian party to my mind, and I’ve never been a member of the Libertarian party and don’t plan to be, although I did run for office one time under the Libertarian ticket in Texas.

00:02:58

A related idea is – you’ll hear this idea.  When people talk about PDAs, private defense agencies in an anarchist or private property society, a lot of these guys almost sound pacifist in the sense that they say that you can only assert jurisdiction over someone who’s already signed up to be a customer of one of these PDAs who have agreements with each other.  But, of course, I think that’s false.  A criminal in effect consents to jurisdiction over him by committing an act of aggression.  So you can think of it this way.  There are two ways that force could be justified against someone that is invading the borders of their body, using their body or their property.

00:03:43

One would be consent.  If someone gives permission or invites them like a girl invites you to kiss her.  It’s not aggression because it’s invited or consented to.  But committing aggression would be another way that you can think of as giving a type of consent to force being used against your body.  And the reason basically is sort of the Hoppian argumentation ethics or symmetrical idea that you really have no grounds for objecting to force being used against your body if you are committing aggression yourself.  You sort of agree to that type of rule of ethics.  So these are some kind of initial ones.  Let’s get into another one.

00:04:23

Restitution and punishment or retribution—these two things are often confused by libertarians.  They’re all over the map.  Some people believe retribution is primary.  Some think restitution is primary.  Some think we should have both.  Now, my view on this one is that the general libertarian view is that we’re for non-aggression.  But what that means is force that is not aggression is not impermissible.  What that means is force that’s in response to aggression is what is permissible.  So I think the general category of what type of force is permissible is responsive force.

00:05:01

Now, that includes different types of force.  That includes defense, using force in self-defense because that’s in response to aggression or using force to achieve restitution after the fact or using force to incapacitate someone or to punish them for deterrents purposes or even for rehabilitation.  All of these are examples of responsive force.  So the purpose or the motive of the victim who is using his right to retaliate, his right to respond forcefully against an aggressor, that is what determines the characteristic of that force.  So he might have a – he might want vengeance.  He might want retribution, or he might want to threaten the victim.  I’m sorry – threaten the aggressor and say I have the right to torture you or to jail you or to kill you even for the crime you committed.  But I’ll bargain it away for an award of money, restitution.

00:06:04

So the purpose that the victim can put his right to punish or his right to respond forcefully to determines the type, but it’s up to him.  Now, so I would disagree with the idea that there’s restitution is the only basis of a libertarian society because there is a right to respond with force to an aggressor.  He basically is – his rights are not violated if an aggressor is – if force is used against him or in response to his aggression.  However, this does not mean that in a libertarian society restitution would not be the dominant mode of justice, and I actually think it probably would.  There are several reasons for this.  Number one is that punishment is more costly than restitution.  There’s always the possibility of error.  If you make an error in an award of restitution, then that can be undone.  If you make an error in punishment, it can never be undone, and it could lead to retaliation against you or a high award of damages from your insurance company or something like that.

00:07:09

Another reason it’s more costly is it is probable that the standard of proof would be higher to justify punishing an accused aggressor than to get restitution.  Arguably you would need proof way beyond reasonable doubt to justify punishing, whereas it may only be a preponderance of the evidence standard for getting restitution because there the dispute is just over property.  Basically you’re saying this purported aggressor, this alleged aggressor has $10,000.  I claim that I am entitled to that money for damages for restitution to me.

00:07:48

So it’s really a property dispute at that point, and in a property dispute, while the burden of proof can be on the plaintiff, which would be the victim, the standard of proof could be just preponderance of the evidence.  And for people who aren’t familiar, this is a legal standard.  Preponderance of the evidence is basically more likely than not, 51%.  And you can think of beyond a reasonable doubt is 99%, and there’s an intermediate standard in the US called clear and convincing, which is – I don’t know – 75%.  And there are several other reasons that restitution would probably be the dominant mode of justice, although punishment you could imagine would happen on occasion in an ad hoc fashion, even in an institutional fashion.

00:08:31

Another reason that we need to keep in mind that there is a right to punish is that without the right to punish restitution, except in cases of property theft, is fairly arbitrary.  If there’s rape or murder or assault or kidnapping, that can never be undone, and an award of money never truly compensates the victim for the crime that was done.  And so there is just no objective way to determine how much money the aggressor should have to pay.  And, in fact, in most cases, aggressors are usually low-lifes and don’t have any money anyway, so you need the right to punishment to determine the proper amount of restitution.

00:09:15

So, for example, if you know that you have the right to punish an aggressor proportionately for the crime they committed, the worse the crime the more severe the punishment could, in theory, be inflicted.  Then that amount of punishment could be used to bargain with the aggressor for a more objective restitution award.  And, in fact, this also solves the rich aggressor problem where people have said that if you just have a restitution award then Bill Gates can go around murdering because he can just pay off the $3 million set penalty for murder.  But that actually would not be the case because the aggressor’s – the victims’ families would have the right to punish Bill Gates, and because he’s a billionaire, he would maybe pay $50 billion, half of his fortune, to avoid being punished.  So there’s a sort of sliding scale there that comes into play.

00:10:06

So the right to punishment helps to make restitution more objective and helps to solve the rich aggressor problem.  It’s often said that libertarianism believes that there are no such things as positive obligations, that we only believe in negative obligations.  And typically what they mean is the correlative idea of the only duty we have is to avoid aggression.  That is, you have to refrain from committing aggression, which means don’t trespass.  Don’t invade others’ borders, and don’t use people’s property without their consent.  But I think this is actually mistaken. Libertarianism does not oppose positive obligations.  It’s just that they have to be voluntarily assumed.

00:10:54

So, for example, if you commit a crime, then you have – by that action you have acquired a positive obligation to, say, make restitution to the victim.  If you commit a negligent act or even an intentional act like a tort, like you push someone in a lake, especially if they can’t swim, you do have a duty to rescue that person.  You have a duty to mitigate the damage you’ve already done, whereas a passing-by stranger does not have a legal duty to rescue a drowning stranger.  He may have a moral duty, and I think he probably does, but he doesn’t have a legal duty.  But the aggressor or the tortfeasor does.

00:11:33

Other actions can also give rise to positive obligations in my view.  For example, having a child gives rise to parental obligations.  Now, they may be difficult to enforce, but in theory I do believe that there are legal obligations of parents to children, at least to a certain age, and I do discuss this in one of my articles.  Now, some ask whether this – how this relates to the issue of abortion, and I won’t get into that here, but you could make arguments one way or the other.  Now, what about just by mouthing words, by saying things?  Does that give rise to positive obligations?  Most people would think so because of a sort of standard mainstream understanding of what contracts are.

00:12:15

Most people think of contracts as binding obligations, binding promises.  So you make a promise, and therefore it’s enforceable.  This is problematic under libertarian theory for several reasons, and it is best explained by Murray Rothbard and Williamson Evers who have written a lot on this issue.  Basically, they start from a propertarian perspective.  The only right, as Rothbard argued, are property rights.  Even the rights in your body can be viewed as property rights, and so the fundamental right is the right to control exclusively scarce resources that you have appropriated or come to own in some kind of way.

00:12:55

So a contract is simply viewed as an exercise of one of your ownership rights that is alienating the title to some property that you own.  So a contract is not a binding promise.  It is rather a title transfer.  This may seem like just a minor semantic difference, but it’s not.  It has lots of implications.  It’s a much more clear way to view this whole area, and it has implications for inalienability, for example, which I’ll get to later if I have time.  I also think that libertarians who say that there is free speech rights, for example, there are actually – as Rothbard explains, there are no free speech rights.  There are no freedom-of-the-press rights.  There are only property rights, the property right in your body.  You can think of a couple of examples where – to show that there are no free speech rights, for example.

00:13:42

So in one example, if I own my body, then I’m free to use it to say words, so owning my body is sufficient to give me the right to speak.  So the right to free speech is really a consequence or an implication of my more fundamental right to my body.  So if you say there’s a right to my body and a free speech right, you’re double counting, so it’s redundant.  It’s not necessary to say there’s a right to free speech.  On the other hand, if you’re on someone else’s property, you have to abide by their rules.  You may not speak on someone else’s property if they don’t permit you to.

00:14:13

So the right to free speech, if it existed, would trump their property rights, so it doesn’t exist in that case either.  And furthermore, there are cases where speech and this is my opinion.  A lot of libertarians would disagree.  Even Rothbard has this view and Walter Block that incitement, for example, can never be a crime or that, say, a mafia boss or someone like that is only liable for the actions of his henchman or other people who perform the direct crime if there’s a contract or if there is coercion.  So, for example, Walter would say that Truman was implicitly coercing the bomber and the pilot of the Enola Gay who bombed Japan.

00:14:57

But of course that is not always the case.  There’s not always coercion, and I still think there’s liability.  I discuss this in more detail in the article linked at the bottom of this page, but in my view we need to have a more general view of causation.  We have to anchor it in the Misesian, praxeological structure of human action.  We have to understand human action is the intentional use of means to achieve an end.  That is what human action is, and the use of a means is using something causally efficacious in the world to achieve the intended end.  And these means can be other human beings.  As Mises explicitly discusses in Human Action with regard to economics and the division of labor, of course other humans in cooperative action can be our means to achieve our ends.

00:15:50

Now, this – another misconception of libertarianism – some libertarians make is they seem to have this fixed-pie responsibility mentality where they’re afraid to say that the mafia boss who gives an order – or let’s take a better example.  A wife who seduces her boyfriend or promises him sexual favors and persuades her boyfriend to kill her husband so she gets the insurance money and gets rid of him, Walter Block would have to say that she’s not liable in that case because there’s no contract, and there’s no coercion.  But of course I think that’s nonsense.  Some libertarians would be afraid to say the wife is liable in this case because they think that that means 100% of the responsibility falls on her, and the boyfriend is no exculpated.

00:16:37

But of course this is not true.  There’s such a thing as joint responsibility, and I think they’re both 100% responsible in that case.  Cooperative crimes are possible, and in this case, if you look at the structure of the wife’s action, her end was the death of her husband, which is a crime.  The means she selected as persuading her boyfriend, so it fits perfectly into the Misesian structure of action.  So the point is, in some cases, speech can be the means of aggression.  So imagine the firing squad captain, and he says ready, aim, fire.

00:17:10

Now, Walter might say – Walter Block might say that he’s not shooting the victim of the firing squad.  He’s just saying words.  I think this is just a too-simplistic view of the reality of human interaction and cooperation.  Likewise, you stir up a crowd.  You say lynch him and you get your way, and the crowd lynches this innocent victim.  I think you’re responsible.

00:17:39

Now, there are obviously limits, and this is the job of judges and juries and legal science to figure out the limits, but we can’t just say there’s a right-line rule that speech is never aggression.  Also I think that one way to view this problem, imagine you’re in a bar and you walk up to – some guy walks up to a big, burly biker and he just looks at him and says you’re mama is ugly.  Now, some libertarians would say, well, if the biker punches him in the face, then that’s aggression.  Even though the guy was asking for it, even though the guy is doing something risky and maybe immoral, technically the biker is committing aggression.

00:18:18

I don’t think that’s necessarily true.  I think in that context you’re basically inviting a fight, so by the words your mama is ugly, you know you’re going to anger this guy, and you know he’s going to punch you, and you’re standing there ready to receive it.  So it’s similar to stepping into a boxing ring or onto the rugby field.  You’re consenting to the fight.  But anyway, this is an example of how there can positive obligations assumed by word as well.  So I mentioned already the contract issue, the confusion that contracts should be viewed as binding promises, but instead, as I mentioned, Rothbard and Evers argue they should be just viewed as exchanges.

00:19:03

Now, one related thing to this is this has implications for the body, alienability in the body.  Now, Rothbard, who is great on the title transfer theory, tries to argue for why – and this relates to some of the debate yesterday about walking away and contracts.  We – the body is a different type of property than acquired things, so we acquire property by appropriating it or by purchasing it.  That means we – there’s a thing that – what used to not be owned.  It was a formally unowned resource.  And now, by our act of will and our physical embordering or possession of this object, now we have acquired it into our own ownership.  Because of that, we’re now the owner.  That means you have the right to the exclusive use of that thing.

00:19:59

You can consent to others using it.  You can invite people, permit them to use, or you could deny them permission to use it, and you can use it yourself for whatever you want.  But by the same token, because you acquired it, you can unacquire it.  When you cease to have the desire to own it, you can abandon this thing.  So the reason we can alienate title to some things that we own is because these are things that were previously unowned and that we didn’t own before.  So you basically undo the ownership, the acquisition of this thing.  So alienation of title is not part of property rights.  It’s just an application of property rights to the specific type of – to the case of unowned objects, things that were unowned.

00:20:44

The body is a different matter.  You don’t really homestead your body.  You don’t see your body unowned one day and one day acquire it.  You are a homesteader.  Human beings are homesteaders.  When we homestead objects, it is a human with a body doing the homesteading.  So the body is clearly owned in a different way than things that we homestead.  Because you don’t acquire your body in an act of homesteading, there’s no way to undo it by an act of will.  This is the reason, in my view, for inalienability.  It is simply that if I say I promise to be your slave, well, contracts are not promises.

00:21:21

They’re not binding promises, so that mere expression of words does not give rise to the right on the part of my would-be master or owner to use force against me.  When he uses force against me, it’s aggression like, say, to keep me from running away when I change my mind.  Now, it’s only justified if it’s not aggression.  So it’s only not aggression if it’s response to my aggression.  But by just saying I will be your slave, I didn’t commit aggression against this guy.  I didn’t do anything like in the previous example of ready, aim, fire.  I didn’t hurt this guy at all, and because I can’t undo the ownership of my body, there’s no title transfer either.  So this, in my view, is the reason inalienability is the case for human bodies.

00:22:08

Now, Rothbard argues that it’s because our will can’t be alienated.  I think that’s not correct.  I think that it’s clearly the case that we can own other people’s bodies like criminals, for example.  You’re in effect asserting ownership of a criminal’s body when you’re defending yourself against him or when you put him in jail.  He’s basically a slave even though he disagrees.  So it’s perfectly legitimate in some cases to, in effect, own someone else’s body even though they disagree.  So there is no impossibility that prevents that, and if there’s no impossibility that prevents it in the case of a crime, there’s no impossibility that prevents it in the case of a voluntary, say, slavery contract.  The problem with it, as I’ve mentioned, is that body ownership is different from ownership of external resources.

00:23:02

00:23:07

Another fallacy I’ve noted is the sort of sloppy, imprecise way a lot of libertarians use the word fraud.  It’s used quite often as a synonym for dishonesty, but of course dishonesty is not a crime.  So fraud is one of these vague, general words that can lead to intentional or unintentional equivocation where the libertarian will agree that fraud in the technical sense is a type of rights violation, although they’re not really clear exactly how to define it.  And then later on, you’ll talk about a trademark case or something, and someone trying to justify modern trademark law will say, well, the reason Chanel can go after the knockoff Chanel bag is because the lady walking around with the fake Chanel bag is committing fraud.  She’s just a fraud.  People see and they think she’s rich, or they think she has a real Chanel bag, but she doesn’t.  She’s defrauding everyone.

00:24:04

Well, okay.  She may be lying in that sense, but is that a type of rights violation?  Is that the type of fraud we mean when we say libertarians are against aggression and fraud?  I think what we have to do is we have to view fraud in the context of the title transfer theory of property.  I’m sorry—the title transfer theory of contract, and we have to view it as basically what the common law calls theft by trick.  That is the only type of fraud that is actually a rights violation, and so you can think of it this way.

00:24:37

I want to trade my basket of apples for your chicken, so we’re going to make a contract, and this contract is a bilateral contract.  It’s a double exchange.  It’s a two-way exchange.  Some contracts can be unilateral by the way.  If I give my nephew a $1000 gift, that’s a contract.  It’s a one-way transfer of property.  It’s gratuitous.  It’s not onerous, but it’s still a contract because it’s a transfer of title of property.  Some contracts are one-way, and I’ll get to this in a minute.  This has implications for another fallacy regarding service contracts.

00:25:17

But in a typical exchange, two-way exchange, apples traded for a chicken, there are explicit or implicit representations made by each party.  A contract results from communication and language or intentionality.  Both parties are – I’m saying I’m giving you my apples conditioned upon your giving me your chicken.  Well, this has meaning.  The chicken seller is saying I’m hereby giving you title to this chicken.  I’m getting rid of it.  I’m abandoning it in your favor conditioned upon your giving me X where X has a meaning.  It means a basket of real apples, not a basket of plastic apples or a basket of rotten apples or a basket of poisoned apples.

00:26:04

So if the seller of the apples has poisoned apples or wormy apples and he’s aware of this, then when he hands the apples over and takes the chicken, he knows that he’s actually not fulfilling the condition that the chicken seller is putting on the sale of the chicken.  So he knows he’s getting that chicken without informed consent or without the genuine consent of the seller, so basically it’s theft by trick, so this is why fraud is a crime.  It’s basically a way of committing a type of theft.  So by his dishonesty in representing the nature of the apples that serve as a condition to transfer the title to the chicken, he is basically stealing the chicken.   But only in this type of case is fraud a libertarian crime.

00:26:54

And so when people throw around, oh, that’s fraud; that’s fraud; that’s fraud, you have to stop and ask is it a case of the chicken and the apples?  Is the Chanel bag – is the woman using the misrepresentation about the genuineness of her purse as a means to obtain someone else’s property without their genuine consent?  No, she’s not, so it’s not any type of fraud that can be prohibited.  These are two fallacies that I think are kind of nice to look at together related to the inalienability issue I talked to already.

00:27:31

So quite often this comes up in the intellectual property context when people are trying to justify intellectual property, and quite often the argument will involve saying that – trying to say that, well, you own your labor, and therefore, you own things you mix your labor with including an idea that’s valuable.  So the idea has value.  You created it.  You owned your labor.  Your labor is sort of embodied in this valuable idea, so you own it.  This is their argument, and to support – which I think is nonsense.  You don’t own your labor.

00:28:09

But they will try to justify this and say, well, what about a service contract when you work for someone, an employment contract or a service?  You’re selling your services.  How can you?  So they’ll say if you can sell something you must own it.  I mean how can you sell it if you don’t own it?  So they’ll use this to sort of sneak in the idea that, well, you must own your labor.

00:28:30

Now, this is another confusion based upon a lack of understanding of the title transfer theory of contract.  Really a sale contract is not – this is the danger of metaphors.  So we use this metaphor to say we’re selling our labor, and then we start thinking it’s a convenient way to describe what’s going on, but it’s not really a sale of labor.  A labor contract is a unilateral title transfer.  There’s only one thing being transferred.  That’s the money.

00:28:56

Now, it’s not gratuitous.  It’s not gratuitous in the case of a gift.  It’s conditional.  So what’s going on in an employment contract, for example, is the employer says I own money.  I hereby transfer $1000 to you if you perform certain actions.  Now, this condition could be anything.  This condition could be I hereby transfer $1000 to you if it rains tomorrow.  Now, does this mean that he owns the rain?  No.  It’s just the fact that he owns the property gives him the ability to condition and to decide what conditions will trigger the alienation of that property.

00:29:38

And the fact that the employee owns his body gives him the ability to not work unless he’s induced by a conditional one-way transfer of title to money.  So there are no sales of services.  There are no sales of labor.  And the converse of this is also interesting.  People will say – this is, say, Walter Block’s view.  This is his argument for body alienability.  He says, well, you agree that we’re self-owners.  That means you own your body.  But if you own something, you can sell it.  So this is just this sort of taken-for-granted idea, and as I mentioned earlier, I think this is confusing.

00:30:17

I think that ownership does not fundamentally mean the right to alienate title.  Ownership means the right to use something or the right to control something.  It’s not by itself the right to get rid of the right to own.  As I mentioned, it only – a consequence of having the right to control an acquired good is that you can unacquire it.  That’s why you can get rid of title to that, but it doesn’t apply to your body.  So I think it’s actually not true that if you own something you can sell it.

00:30:48

00:30:56

Okay, I mentioned this already about alienability, and these links here are articles and blog posts I’ve written, which I discuss a lot of this in a lot of detail, and as I mentioned it’s on my site.  And I’d be happy to answer questions by email too after this if anyone wants to if we don’t get to discuss it in the Q&A period.

00:31:14

Okay, here’s another one.  Some libertarians strangely will object when you say that one libertarian view—in fact, I believe the fundamental view—is that we believe in self-ownership.  They either are religious people thinking that you’re taking an atheist view, or they’re atheists thinking you’re inserting a religious view.  For example, I made this – just the offhand comment in an article that we have self-ownership.

00:31:42

And Leland Yeager in Liberty, who’s an atheist, and I’m not a big religious person either, so he thought I was assuming that there’s – I have a soul and the soul is the owner of this body, and there’s some kind of distinction.  I think this is just nonsense.  It’s a very common-sense view.  You don’t need to be religious or atheist to believe that there is a person and there’s a body.  They’re distinct.  Just like the mind and the brain are distinct conceptual entities, the mind is not the brain.  I believe that you need to have a brain to have a mind, but the mind is not the brain just like my memories are not my brain.  I don’t think there are mind surgeons.  There are brain surgeons, and I don’t think I change my brain.  I change my mind.  I mean these are different conceptual entities.

00:32:32

So self-ownership simply means that my body is a scarce resource, and I get to decide who uses it rather than someone else.  I mean if you reject self-ownership, then you’re either in favor of slavery or some kind of chaotic world of some kind of category of war.  So body ownership is the fundamental libertarian view whether you’re religious or whether you’re not.  And this is – I mean this is not new to me or this is an old view, and I – it’s shocking to me that it’s controversial at all.

00:33:08

I’ve just got a couple of quotes here.  This is Richard Overton, 1646: To every individual in nature is given an individual property right—property by nature—not to be invaded or usurped by any: for everyone as he is himself, so hath a self-propriety, else he not be himself.  And Locke said: Though the Earth and all inferior creatures be common to all men, yet every man has a property in his own person.  This nobody has any right to but himself.  I mean this is not controversial in my view.

00:33:38

00:33:42

Let me go this final one here.  Then we can open up for questions.  This is a fallacy that is made quite often, and it’s used to justify intellectual property, and as I mentioned earlier, the argument is that if you create something of value, you mix your labor with it, then you own it.  And therefore, patents and copyrights, ideas or property right in those is justified.  So the confusion here is this.  Libertarians recognize that production is a valuable activity to engage in, and it’s a source of wealth.  But they will sometimes say that there are three ways of coming to own things: homesteading or original appropriation, contractual exchange, or production.  But this is actually not true.  Production is not a source of property rights.

00:34:37

It is a source of wealth, but we have to keep these things distinct.  We have to keep in mind the difference between acquiring title to property and producing wealth.  What does it mean to produce wealth?  To produce wealth simply means to transform scarce resources into a more valuable configuration.  Now, value is, of course, objective.  Who is it more valuable to?  More valuable to you or to a potential customer?  Value is not in the thing.  The value is not a thing that you create, which is another mistake that Randians make.

00:35:08

They’ll say man creates values.  I don’t know what that means.  I’ve never stepped on a value.  I’ve never seen a value.  Things are valuable.  I value things.  You demonstrate value by – you demonstrate your preferences in that you value something by your actions.  So if I – and the only way to produce is to already own the resource that you’re transforming.  Of course, you can’t transform something that’s unowned.  It makes no sense.

00:35:30

If I beat some metal into a sword, the metal had to be owned by me.  It was owned by me during the act of transformation.  The reason I own the transformed, more valuable product is because I owned the raw materials that I transformed it into.  And the reason I own the wealth is because I own this material that is more wealthy to me or more valuable to me.

00:35:58

Hoppe notes this explicitly: One can acquire and increase wealth either through homesteading, production, and contractual exchange or by expropriating people.  There’s no other way to acquire wealth.  But that doesn’t mean that production is a way of creating property rights because you can’t produce without owned goods in the first place.  So you could think of it this way.  Homesteading creates new property titles because the thing that was formerly unowned now is owned.  Contract transfers existing property titles, and production transforms already owned goods.  They’re already owned, so production cannot create property rights.

00:36:42

00:36:46

Ayn Rand recognized this, and she should have recognized that her theory of intellectual property was completely inconsistent with this.  She wrote herself: The power to rearrange the combinations of natural elements is the only creative power man possesses.  It is an enormous and glorious power, and it is the only meaning of the concept creative.  Creation does not mean the power to bring something into existence out of nothing.  It means the power to bring into existence an arrangement of natural elements that had not existed before.  She’s actually right.  This is why intellectual property is illegitimate.

00:37:16

Rothbard saw this too.  Rothbard wrote: Men find themselves in a certain environment or situation we decide to change in some way to achieve our ends.  Man can work only with the numerous elements that he finds in his environment by rearranging them in order to bring about the satisfaction of his ends.

00:37:33

And I’ll close on one more slide.  Rothbard is often accused of plagiarizing Ayn Rand, and of course even if he did, that shouldn’t be a crime because intellectual property is illegitimate.  So he’s often accused of, when he’s was in Rand’s circle learning things from her and then using it later in his theory and not giving her credit, so I’ll just quote Mises here on this to show that this isn’t Rand’s idea either.  He was talking about the widespread misconception about the nature of production: There is a naïve view of production that regards it as the bringing into being of matter that did not previously exist as creation in the true sense of the word.  So then he says the role played by man in production always consists solely in combining his personal sources with the forces of nature in such a way that the cooperation leads to some particular desired arrangement of material.  No human act of production amounts to more than altering the position of things in space and leaving the rest to nature.  And with that, I’ll conclude, and I think we have time for Q&A.

00:38:42

[clapping]

00:38:53

00:38:55

STEPHAN KINSELLA: Yes.

00:38:55

M: Stephan, it was brilliant.  There are so many things I disagree with that I don’t know where to start.  But maybe I’ll pick up two or three and see if [indiscernible_00:39:11] One, when you say that a young boy or anyone says your father is ugly, then the other person is entitled to hit you or punch you or something like that.  I don’t think this is quite correct [indiscernible_00:39:32] is right too is to retaliate at the same level rather than the verbal level, but not change the level by hitting him back or hitting him back or hitting him, not back because he hadn’t hit him.  So that’s one thing.

00:39:48

The other thing, the distinction that you make by incitement to violence, like if you say lynching, and it’s very different from the order that an officer gives to a subordinate – drop the bomb.  The subordinate has to obey, so the officer is clearly co-liable, but on the other hand, if I tell you lynch him, it is your decision to lynch him because I [indiscernible_possibly lord slightly over you_00:40:26].  So when I say simply a – simply words, so there, that is a distinction.

00:40:37

And the third thing is freedom of speech on someone’s property, I don’t think of that being on someone’s property limits your freedom of speech.  Or when it does, it’s that the owner of the property may ask you to leave, and not come back, or the owner of the property may say in my house nobody says anything about politics, about religion, or something like that.  By entering the house, you’re a free person, but if there was no a private agreement, I [indiscernible_00:41:09] on someone’s property and forcing self-censorship unless customs or [indiscernible_00:41:17] things like that would agree.  So only [indiscernible_00:41:21]

00:41:26

STEPHAN KINSELLA: Okay, so on the – I mean I’m not saying that, as some kind of rigorous rule that if you insult someone they have the right to punch you.  What I’m saying is in some contexts, the meaning of what the guy is doing is an invitation to a fight, in some cases maybe not.  And in the case I gave, he was actually punched, so that’s an indication that this is what these guys are intending.

00:41:48

In most cases I would agree that it would be aggression to punch someone for an insult.  But in some cases, I think you’re really asking for it, and you know what you’re getting, and I think it can rise to the level of an invitation more than just asking for it.  And I was just trying to give an example that in some cases speech can – that was just an example of how positive obligations can arise by actions or even by words in some cases.  So I mean it’s just an example, and if you quibble with the example, I’m not too concerned because – so that’s fine.

00:42:23

Now, I think you’re question begging a little bit when you use the word authority with regard to the – and you said has to.  Now this is a little bit of a smuggling in some norms here, when you said that the commander ordering someone to do something.  You said he has to obey, and then you said – you implied that there’s authority, and there’s not authority in the other place.  Well, when you say there’s authority and he has to, I don’t know what that means other than to justify your attributing liability to the higher-up – the indirect actor in this case.  The example – what was the example you disagreed with there?

00:43:00

M: Freedom of speech in someone’s property.

00:43:03

STEPHAN KINSELLA: No, no, the – in…

00:43:06

M: Well, on one slide I think there is a clear line [indiscernible_00:43:09]… if an officer gives an order, which is – I agree with that.  Your subordinate could say, well, I’m going to go to jail or I’m going to face fines [indiscernible_00:43:19]

00:43:19

STEPHAN KINSELLA: Well, okay, so…

00:43:21

M: … disobeying an order.

00:43:22

STEPHAN KINSELLA: So my view there, I mean we may just disagree because I don’t think that there’s always coercion, and I think that you don’t have to have coercion to say that there’s authority.  I think that some social structures, people cooperate with each other, and they use people as means to get things done.  And there doesn’t have to be coercion there to say that – I mean in the military I don’t know if there’s always a direct threat of jail if someone disobeys an order if they just say I don’t want to do that.  Or are you saying that if I give you a gun and then say would you please go shoot that man for me and you go do it for me that I’m off the hook because you didn’t have to?

00:44:03

See, I disagree with this idea that there’s an intervening act of will on your part, which rights the chain of causation and all this kind of stuff.  If you believe in that, there’s no such thing as cooperative action or joint crime at all, but I think joint crime can happen.  I think the guy that plans the mob heist, when he sits back in his lair while his henchmen go out there and rob the bank, I think he’s just as guilty as they are, even if he’s not forcing them at all, even if they have free will, even if they have the right to walk away, even if he doesn’t have a contract with them.

00:44:29

So I would disagree.  I think that – and again, my point is not the particulars here.  My point is that you can’t have a bright-line rule saying the only time you’re liable for someone else’s actions is if there’s a contract or if there’s coercion.  I just think it’s a more general thing than that.  Now, how you apply it to particular cases we can discuss.

00:44:51

And in fact, I think the view that contract is relevant to determining whether or not there’s causal connection between the indirect actor and the crime is based on the misconception of the nature of contract.  Contract is not a binding promise.  Contract is just the exchange of title II goods, but by the Austrian view of value, money is nothing special.  Property is nothing special.  It’s just what we value.  I mean the woman promising sexual services to her lover to kill her husband is giving him something that he values.  Why does it have to be a contract with property exchanged?  So to focus, to fixate on these bright-line rules like it’s got to be a contract flies in the face of the Austrian view of subjective nature of value.  And I’m sorry.  I’ve forgotten your third.

00:45:45

M: Freedom of speech on someone’s property.

00:45:48

STEPHAN KINSELLA: Oh, well, I agree with you that in general it’s not prohibited, but I think it’s – my point is just that you don’t have an independent right to free speech that would give you the right to go on someone’s property and use it in ways that they object to, stated clearly in a contract ahead of time or something like that.  But the point is that free speech is not an independent right.  Free speech flows from your right to control your body, whatever that means.  So any other questions?

00:46:17

00:46:19

M: Thank you for the presentation [indiscernible_00:46:22] into this general concept [indiscernible_00:46:25] in order to treat something as property, you have to have certain conditions like the thing has to share some control in general [indiscernible_00:46:37].  The idea of doing something with scarce [indiscernible_00:46:44].  But [indiscernible_00:46:55] Rothbardian theory of this clear distinction regarding transfer and [indiscernible_00:47:07] just to give one example [indiscernible_00:47:09] sell your service as a title it’s like the same as saying [indiscernible_00:47:19] your contract will be [indiscernible_00:47:23].  But in the case of [indiscernible_00:47:30] usually do not control [indiscernible_00:47:33] while in the case of service you usually control what you are able or you not able to do.

00:47:38

And [indiscernible_00:47:38] if you would have some means to control the rain or some [indiscernible_00:47:43] it would be again, the service contract or labor contract if you [indiscernible_00:47:49] like cleaning a window.  But you would just – or selling [indiscernible_00:47:55] two hours of your – tomorrow’s day [indiscernible_00:48:00] so when you think about it, this is somewhat artificial.  This is a distinction because, at the end of the day, your service is controllable and scarce because [indiscernible_00:48:17] or they will contract again.  It’s scarce because we do not have plenty of hours to hour life [indiscernible_00:48:26] to decide [indiscernible_00:48:29] this also [indiscernible_00:48:34]

00:48:35

STEPHAN KINSELLA: Okay, so – well, I mean I agree completely with Hoppe’s view of property acquisition and homesteading, and I think it’s compatible with Rothbard and Mises, just the idea – and I think you’re right that ownable resources have to be excludable and controllable.  And then they’re acquired, and that’s how they’re owned.  You either emborder them or transform them.  You put up a fence around it or you possess it, and you thereby demonstrate to others that you own this thing, and they can see the boundaries of their owned things so they can avoid trespassing on it.  I don’t see how that’s incompatible with anything I said.

00:49:12

The point about the service contract, you’re right.  The two cases are not the same.  You do have the right to control your body if you’re a laborer or you’re performing a service.  That’s why you’re able to extract money from someone for it, but you don’t see – so the thing you control is your body.  You own your body.  That gives you the right to perform a service.  I would agree that the amount of service you can perform is scarce in that sense.  The amount of time we have on the Earth is scarce, but they’re not technically scarce resources.  Your body is a scarce resource.  You act with your body.  You perform actions.  You don’t own your actions.

00:49:45

I think it’s just a confusing metaphor to say we own our actions.  If you sell your labor to someone, you have to – there’s only one thing that’s being transferred.  That is the money.  The labor is not transferred.  It’s an action that’s performed.  I mean after it’s done, does the employer have your labor in his pocket or something?  I mean where is the labor?  So I don’t – I think there are unilateral transfers of title, and there are bilateral transfers of title.  They’re different types of contracts.

00:50:13

00:50:17

M: [indiscernible_00:50:17] transfer to [indiscernible_00:50:23] so I’m sure you considered as title inheritances in your property title.  In the case where there’s not [indiscernible_00:50:32] homesteaded, which was, in fact, [indiscernible_00:50:38] how this tie to retribution be homesteaded, just by killing the murderer or by being the first claim?  This right to retribution [indiscernible_00:50:53] am I protecting the murderer from unintentional [indiscernible_00:50:59]

00:51:00

STEPHAN KINSELLA: Well, I think – I agree in general that that claim – it’s a little bit of a metaphor to say it’s a homesteadable right.  But I think it’s true because the aggressor still has no right to complain if this retaliation is carried out upon him if the victim wanted that to happen.  So I think you first looked through the guy’s will.  I mean the will would specify.  Even if you don’t have any heirs, you might have a legatee in the will.  You would leave it to some agency or maybe a charitable agency that makes money by extracting restitution with a threat of punishment against these guys.  So first you look to the will, and presumably it would have heirs in the will.

00:51:39

If there’s no will, then you look to the default laws of intestacy, and there’s very few people that don’t have someone down the chain of priorities that inherits their property, their estate, family and then distant family.  And then maybe if there’s no family at all, if you don’t know any person at all, I mean there’s something called escheat in the law where it goes to the state, or if there wouldn’t be a state in private society.  So I think in that case, in that final little residual case, I think it would be homesteadable by anyone.  So I guess the first guy that kills him would be the one who has homesteaded that right.

00:52:16

00:52:19

M: Professor Kinsella.

00:52:19

STEPHAN KINSELLA: Yes.

00:52:19

M: [indiscernible_00:52:20] somebody has not given you your land back, it’s not fraud.  It’s not theft [indiscernible_00:52:27]

00:52:29

STEPHAN KINSELLA: I have this in here, but I didn’t have time to get to it.  So Rothbard – and Walter Block has a similar view too.  Rothbard in the title transfer of contract article or chapter in Ethics of Liberty, has an – so he’s correct largely except he has this example of a dead contract.  So bank loans A $1000 on day one to be repaid with interest in a year, say $1100.  Now, technically that’s another confusing metaphor.  It’s not repaid.  You can view this as a bilateral contract.  It’s a bilateral two-transfer contract.

00:53:16

On day one, $1000 is transferred.  It’s unconditional.  Well, the only condition is that the other guy makes a future title transfer of $1100, so there are two separate title transfers.  And we have to keep in mind the $1100 – I’m sorry – the initial $1000 that is loaned, well, it’s intended to be used by the borrower.  He needs to spend it.  That’s why he’s borrowing the money.  So to spend it, to give it to someone else, he has to have title to it.  So the title is 100% in this guy’s hands right now.  That can never be changed.  That is a fact.

00:53:50

A year from now, the title transfer that was set up a year ago of $1100 happens, so if the borrower has $1100, that $1100 now is owned by the bank even if it’s not turned over yet.  So at that point in time, the borrower is in possession of property owned by the bank, and if he refuses to turn it over, then he’s committing a type of theft or conversion.  Now, if he is penniless and is unable to pay, Rothbard says that technically the guy is committing implicit theft.

00:54:25

Now, I don’t know what implicit theft is, and therefore, technically debtor’s prison would be justified, although Rothbard says it’s disproportionate.  So he tries to sort of get out of his predicament by saying that it’s technically a type of theft.  Because – the confusion here is Rothbard I think here is failing to keep his own title transfer theory straight because if you say it’s implicit theft, there’s only two possible candidates for what has been stolen: the $1100 that’s owed now or the $1000 that was given earlier.

00:54:57

Now, if the guy is penniless and doesn’t own anything, there’s no $1100 to be stolen.  I mean it makes no sense to say you’re stealing something that’s nonexistent.  So Rothbard has to be talking about the initial $1000, and in fact, he is.  But that violates the idea that we have to know at any moment in time who owns something.  You can’t wait a year to find out who owns something.  You can’t retroactively go back in time like a tachyon wave or something and say that, well, the $1000 that was loaned to the guy so he could go spend it on supplies for his business venture really – it turns out really a year later we find out really he didn’t own it because the condition wasn’t satisfied.

00:55:38

It’s not true.  The condition was satisfied.  The condition at the time of the loan was that the borrower make a future title transfer right now, and he did that.  But everyone knows the nature of human action is that the future is always uncertain.  It is an implicit, inherent, unavoidable part of any future-oriented title transfer contract that the future thing to be transferred might not exist because the future is uncertain.  So it’s built into the contract, the nature of the contract, that this future title transfer may not be able to happen.  The borrower might die.  The Earth might explode.  Money may cease to exist.  He may be bankrupt, etc.  So failure to repay a loan is – in my opinion is not theft if you’re bankrupt.

00:56:21

00:56:25

M: [Paul Gottfried] I hate to open up this can of worms [indiscernible_00:56:27]  I’m not quite sure what it is that you mean when you say that your body [indiscernible_00:56:34] is owned by you.  Now this is not historically true.  It’s not even logically true.  It does operate as a deontological statement, especially with you associate it with everyone who’s [indiscernible_00:56:52] intention [indiscernible_00:56:58] and reality.  It also operates as a [indiscernible_00:57:03]  That is to say a woman says I own my body, which means she has the right to an abortion, but I do not have a right to oppose her or even to express an opposing view because I don’t own my body.  I’m a male and [indiscernible_00:57:17] fetal rights in the woman.

00:57:19

Now, I can understand why people who take this position are amongst those who say you belong to the state.  But to me it is not something which is true.  We do not, in fact, own our bodies.  We belong to social context.  We are part of existing society, and we are part of historical arrangements, and in fact most individuals do not think that they own their bodies.  I suppose this is [indiscernible_00:57:46] travel throughout the entire world [indiscernible_00:57:51] and has found very few places in which people who [indiscernible_00:57:56] social contract [indiscernible_00:57:58]

00:58:01

Therefore, I do have problems with a philosophy [indiscernible_00:58:05] that’s based upon what seems to me to be an untrue assumption about [indiscernible_00:58:10] possession or [indiscernible_00:58:13] possess our bodies.  And [indiscernible_00:58:17] that I can see this with an intellectual framework [indiscernible_00:58:24] right to an abortion or something like that.  I can also see it’s something that some people would like to see is true.  It’s like the fact that I say that God exists does not mean that he, in fact, exists.  It means I say that God exists.  If I say that all people own their own bodies, it’s something I am saying.  It does not necessarily make it true.

00:58:47

STEPHAN KINSELLA: Well, I’m a libertarian, and so I’m not really trying to argue here for the libertarian view of self-ownership.  I’m trying to express that that is the fundamental libertarian view.  If you disagree with it, I don’t think you’re libertarian.  Now, I think there’s a distinction between fact and value, between is and ought, and I think I’m not making the crude pro-choice argument: I own my body; stay away from it.

00:59:16

In fact, in that case, I think ownership of your body doesn’t determine your position on abortion.  I mean you could believe the fetus has rights too.  In fact, I think – but I mean – so as your first point, I’m not – I mean I think we can clearly distinguish between norms and facts.  Now, it is a fact that humans have direct control over their bodies.  This is our nature, of course.  I think that that fact, as Hoppe argues, justifies the normative conclusion that you should have the legal right to control your body.  So to own your body doesn’t mean you’re not a slave.  It means you shouldn’t be a slave.  So I distinguish between fact and norm.  I have no problem whatsoever making that distinction.

01:00:03

So because some people are born in chains, I think the fact that they have direct control over their body means they have the better claim to control their body, means that slavery is unjustified.  It doesn’t mean we’re not in social context, and if you say that we don’t own our bodies because we’re in a social context, the only other choice is someone else owns your body because your body is a scarce resource.  Someone’s got to decide who gets to use it.  It’s either you or someone else, so it’s either slavery or self-ownership.  And I believe self-ownership, as a normative principle, is the fundamental libertarian view and completely justified and…

01:00:40

M: [Hoppe] If I may make a comment I find Gottfried’s argument somewhat strange.  It’s just a plain matter of fact that everybody does own his own body in the sense that everybody has control over his body in a way that nobody else has control over his body.  If I say I want to lift my arm up, I can lift up my arm.  You cannot do this with my arm, and I cannot do it with your arm.  So in this sense, this is the most self-evident statement of something that exists in nature that is possible.

01:01:19

And anyone who would deny this would contract himself by simply opening his mouth and saying things, because I cannot make you say this.  Only you can make that say this and self-ownership of our bodies does not mean anything more than this, and this is the most self-evident statement that exists.  There’s almost nothing that is more self-evident than this.

01:01:46

01:01:50

M: There’s one more question.

01:01:51

01:01:56

M: Can you reconcile the non-aggression principle with the idea of preemptive force?  In other words, if I think Iraq has weapons of mass destruction in which they will use against me, do I have the right to bomb the hell out of them so they won’t?

01:02:10

STEPHAN KINSELLA: Well, I’d put it in an individual context because, of course, states are illegitimate and war is always illegitimate.  I deal with this in my “Punishment” article.  It’s a long article from ’95 I think in the JLS, which talks about individual rights, and just as I try to explain why fraud is a species of aggression, whereas most libertarians just assume it.  They just say that.  They have this litany.  They’ll say, well, we’re against theft and fraud, but they don’t really have a clear definition of what fraud is or why fraud is a type of aggression.  And, as I explained, I think that if you view it in the context of contractual exchange, that explains how and why fraud can be a type of aggression.  And by the same context, they always say threats.  They’ll say aggression, fraud, and threats, like these are separate things.

01:03:00

Now, really they’re species of aggression.  In my view, a threat is what you’re talking about.  So preemptive force would basically be using force against someone who is a standing threat to you or some kind of threat to you.  And the reason that threat is a type of aggression is because you have the right to respond to it.  In other words, if someone is threatening to use force against you, they are putting you – in the civil law this is called – it’s actually called assault.

01:03:31

People think assault is battery.  Battery – assault and battery are two different things.  Battery means physically hitting someone.  Assault means attempting to aggress or batter or putting someone in fear of receiving a battery.  So in my mind, that’s what a threat is.  A threat is assault as defined in the civil law as making someone reasonably afraid of about to be battered or aggressed against or attempting to do it.  And by the logic of – so reciprocity of my kind of estoppel argument in Hoppe’s argumentation ethics, whatever the aggressor is doing or whatever the threatener is doing to you, he can’t object if you do the same to him.  So if he is putting you in danger of receiving battery, you can put him in danger of receiving a battery, which means to retaliate.

01:04:16

M: Can I batter him?

01:04:17

STEPHAN KINSELLA: I think you can, yes.  And because you can, that is why it’s not aggression, and that’s why what his action is—that you’re responding to—is a type of aggression.  So that’s my view on that.

01:04:29

01:04:33

M: Thank you.

01:04:33

STEPHAN KINSELLA: Thank you.

01:04:34

[clapping]

This speech was discussed previously on the Mises blog with extensive comments (archived here) and also on my blog, and pasted here:

From my blog:

  • Helio BeltraoMay 29, 2011, 6:14 am

    It was an awesome speech, very densily packed with ideas, and the best I had so far at PFS.

Stephan KinsellaMay 29, 2011, 6:23 am

Wow that is high praise. Thanks Helio. I did enjoy it a lot. It was less scripted than most of my speeches, and I think my teaching Mises Academy courses helped since I had gone over a lot of this already. Anyway it was great to see you, and thanks for the feedback.

From Mises blog:

Gil June 5, 2011 at 6:04 am

Two obvious points:

1. Since people who commit vile acts of violence and/or fraud have little moral conscience what makes you think they’ll merely turn up to someone sort of private court ready to be punished with private jail time or restitution? Just as trying to get Roman Polanski to stand trial is near impossible because he is in another government jurisdiction so too will it be for a criminal who is in another private jurisdiction to be forcibly removed. If we considering schoolyard bullying to be one example of an anarchic arena most people tend to ignore the victim’s plight and it’s up to the victim to find his own justice which may be impossible. The tradeoff would have to be that in Anarchia people would be obliged to put much more effort into not being a helpless victim in the first place

2. Why can’t you cede ownership of your physical body? Libertarians already believe people should be able to sell off all their organs – so why can’t sell their body to science and give the proceeds to their family? Alternatively what if someone drugs you and steals a kidney from you? It would show that your capacity to claim ownership over your body is tenuous.

sweatervest June 5, 2011 at 2:01 pm

“If we considering schoolyard bullying to be one example of an anarchic arena”

That is crazy, a schoolyard is populated with subjects of the most totalitarian regimes that exist in the world: schools. That is nowhere close to voluntary association.

“Since people who commit vile acts of violence and/or fraud have little moral conscience what makes you think they’ll merely turn up to someone sort of private court ready to be punished with private jail time or restitution”

Because part of the contract they signed with their security/justice provider requires that they show up to any trials from any other recognized security/justice providers. The second they do not they lose their own security/justice services. All private security/justice agencies would have this as part of the contract because if they did not they would fail to produce what people are paying them to produce.

“Why can’t you cede ownership of your physical body? Libertarians already believe people should be able to sell off all their organs – so why can’t sell their body to science and give the proceeds to their family”

How would that work? If you sell your body you obviously die in the process so what becomes of the money that was paid for your body? It ends up in the hands of someone else who becomes the de facto seller of your body.

Andras June 5, 2011 at 2:20 pm

@sweatervest “How would that work?”
Watch The Tenth Man with Anthony Hopkins.

Gil June 6, 2011 at 12:19 am

Firstly, the schoolyeard is a perfect place for Anarchism to be tested because violence isn’t punished or is a slap on the wrist.

And Secondly, no one is going to be forced to sign a contract (“I signed no stinkin’ Social Contract” – every Libertarian) however even if a criminally-prone person did then they just break it anyway. It’s like the joke about a lawyer ask the accused on the stand if he knows the difference between perjury and murder and the accused replies “I do and the penalty for perjury is a lot less than that for murder.”

sweatervest June 6, 2011 at 4:35 pm

“Firstly, the schoolyeard is a perfect place for Anarchism to be tested because violence isn’t punished or is a slap on the wrist”

No, that is insane and a complete misrepresentation of what anarchism is. First of all, by no stretch of the imagination can anarchism be tested in a 100% totalitarian regime. The children in a schoolyard did not congregate their voluntarily and so nothing they do is a test of voluntary association, which is what anarchy is.

Who said anarchy is when violence isn’t punished? That almost sounds like something you’d hear on a mainstream news channel!

“And Secondly, no one is going to be forced to sign a contract”

Contracts came into existence by themselves because lots of people understand that cooperation is more fruitful than self-sufficiency. People will decide for themselves to abide by contracts because they recognize meaningful contracts as useful means for interaction. To suggest otherwise is to imply that contracts have no value beyond the fact they are something the state enforces.

“however even if a criminally-prone person did then they just break it anyway”

And no one will enter contracts with them again and they can’t get insurance, security, justice, running water, electricity, cable, internet, etc. Is that not a good enough reason to abide by contracts?

Gil June 6, 2011 at 11:21 pm

Yeah, in your perfect little world everyone wants to magically cooperate and only does minor transgressions which are easily punished.

nate-m June 5, 2011 at 2:02 pm

1. Since people who commit vile acts of violence and/or fraud have little moral conscience what makes you think they’ll merely turn up to someone sort of private court ready to be punished with private jail time or restitution?

Same reason they show up to public jail: You hire people to go and fetch them. The difference between public and private is that with public the ‘justice’ is involuntary and carried out by people with almost no accountability and no liability.

If you want some details on how this could possibly work:
http://mises.org/media/category/215Chaos-Theory-Two-Essays-On-Market-Anarchy

There are two essays with that give a theoretical framework on how private justice and private defense can be made to work in a ‘state free’ market anarchist society.

2. Why can’t you cede ownership of your physical body?

Because you cannot separate yourself from your body unless you kill yourself or perfect ‘out of body’ spectral projection (that is a joke). Your physical body is the one piece of property you never homestead. It is unique in this manner and has some unique properties to the individual that other types of physical property does not possess.

so why can’t sell their body to science and give the proceeds to their family?

That’s tangential to what is being discussed. Of course you can do that.

Gil June 6, 2011 at 12:27 am

However in Anarchtopia PDAs and bounty hunters have no jurisdiction and if they’re not careful they’ll be the ones engaging in kidnapping (or get shot at for attempted to kidnap someone). Indeed the whole point of justice is that it’s involuntary – crime is not supposed to be optional. Few who commit crimes do so out of sense of meanness but out of their twisted view of morality. Hence a criminal usually believes he has his reasons for what he did. Alternatively, a thief will defend his booty against the actions of other thieves.

sweatervest June 6, 2011 at 5:01 pm

“Indeed the whole point of justice is that it’s involuntary – crime is not supposed to be optional”

Production of security does not involve the criminal at all. The purpose of security is to prevent a crime from happening (i.e. building a fence). If a crime occurs, the security has failed to do its job. Nothing that happens after a crime is committed (i.e. chasing down and arresting the criminal) has anything to do with the production of security.

Once a crime is committed and property is damaged or lost that is where insurance and justice come in. Insurance simply pools together dues and uses them to pay for damages and, again, does not involve the criminal at all. The only one of these three that involves the criminal is justice.

Justice would be produced along with insurance. Insurance companies would design their contracts so that if any case is made against a client and the other party wins, that client is required to pay restitution. Failure to do so would be a breach of contract, and the insurance company would immediately cancel their policy, leaving the criminal’s property uninsured. Security providers would do the same. Both would do so because to not put those terms in their contracts would severely hinder the quality of their services. The second any one firm does this it will gain all the market until other competitors adopt those terms themselves.

Because his property is now uninsured, the victims of his crimes, or their insurers (possibly the very company that just canceled their policy with this criminal) will have little opposition in attempted to seek restitution (they could also seek much more than this, and commit crimes themselves against the criminal. If the criminal is worried about this, he should probably show up to his court case and pay the restitution as his insurance contract spells out, so he can continue to enjoy his insurance and security services.

But we don’t need to wait for big established security or justice producers to come around to do something about criminals. No private property owner, business owners especially, ever wants to deal with a property violator. Dealing with them puts them around your property. As soon as it becomes known to the general public that a person has committed a crime, and especially if he has refused to pay restitution for that crime, one can almost be assured that every business will close their doors to this person, not out of some overblown selfless concern for society but out of a concern for their own property. This criminal will be cut out of productive society and be forced to do pretty much everything on his own. He cannot buy a house because no realtor will deal with him. If he has a house he cannot get any utilities. He can’t buy food. He can’t buy clothes. He’ll get fired from his job and run out of money anyways. That’s a pretty big incentive to not commit crimes, much bigger than anything a statutory law could muster up.

Gil June 6, 2011 at 11:23 pm

I would agree with notion that dealing with crime in Libertopia would be more focused in prevention/fortification as well as catching the criminal in the act.

Andras June 5, 2011 at 1:49 pm

Stephan,
When you narrow the concept of property to the physical Homesteading becomes your “Deus ex machina”. However, as soon as you start scratching your bubble hard enough, from the inside, it will pop and reveal the fact that Property is a human device based only on consent of the majority. I think it is time to return to von Mises, not to the .org. Just try to explain all the title transfers during and after the upcoming bloodshed will be called the Second American Revolution. (You can practice on the French Revolutions).
The only way to reach more freedom is through minds and souls to reach the consent of majority. I highly doubt that canonizing libertarianism, your libertarianism, will lead there.

sweatervest June 5, 2011 at 1:55 pm

“it will pop and reveal the fact that Property is a human device based only on consent of the majority”

No, property does not exist just because enough people think it does. That just determines whether property rights are recognized or trampled on. If everyone steals at will it doesn’t stop being stealing. The concept of property itself does not disappear when everyone decides to act in defiance of it.

Kid Salami June 6, 2011 at 5:03 pm

What is “property” then? For you to say what you just said, you must have a very clear definition of property – what is it?

Wildberry June 8, 2011 at 12:08 pm

@sweatervest June 5, 2011 at 1:55 pm

In light of your recent complaint about my lack of clarity on property rights, I’m surprised you didn’t jump right on this challange from Kid Salami.

Waass up?

Kid Salami June 8, 2011 at 1:03 pm

Indeed – what gives? I’ll give him one thing, he’s certainly good at repeating stuff he’s seen Kinsella and his hero Hoppe say. I’ve nearly finished that Friedman book by the way, there is some great stuff in there.

Wildberry June 8, 2011 at 2:25 pm

Great. He does a good job with externalities, theories of remedies, and property v. liability, and much more. What a great resource, I thought. Glad you’re enjoying it.

Not to suggest a reading list, but have you had a chance to check out Kathleen Touchstone?

Stephan Kinsella June 8, 2011 at 4:41 pm
Kid Salami June 8, 2011 at 4:52 pm

Its a great book and not just the theory but the examples in it too. I’m very surprised I’d not heard of Stack Island before – it sounds like something that would be brought up here when someone wants to derail an argument.

I did read one of her papers a while back – one which i recall is about arguing that there was some inconsistency about children in ancap heaven or something. Was that the one you meant?

Wildberry June 8, 2011 at 5:13 pm

Check out Stephan’s link. I read that paper and on the strength of that ordered her book.

It wasn’t about kid’s heaven, it was that children and the infirm could not be protected under ancap natural rights theory. Her analysis is pretty interesting and goes back to the difference between deriving natural rights from the Crusoe device, where man is alone and participation in society is voluntary, which leads to ancap theory, v. mother/child as the Primary Social Unit, in which the cooperative relationship is not voluntary, and how the existence of positive natural rights exist for the child, and transition to the negative rights of an adult over the course of attaining majority.

Stephan, how do you keep track of all the links you generously post along with your comments? How can you be that organized?

Have you read her book yourself? Unlike me, she is an accomplished scholar, and her treatment of property theory and property rights is pretty fantastic.

Wildberry June 8, 2011 at 6:17 pm

Here is what he says about Stack Island: “In the law of real property, fuzzy boundaries are the exception. In patent law, which tries to draw boundaries around ideas, they are the norm.”

It is unfortunate that he uses the word “ideas” since I criticize SK for conflating IP with ideas, but I’ve commented on the fuzzy boundary problem of property rights here before. I have never thought to enlist the Stack Island analogy.

This story, along with the one concering how property lines shift with the undulations of the Nile, are two great examples illustrating how the human device of property rights operates in situations which defy normal property rights assumptions; i.e. the physical boundaries are fixed, known and obvious.

Cheers.

nate-m June 5, 2011 at 2:16 pm

When you narrow the concept of property to the physical Homesteading

That’s not what is happening. First off: physical property can be acquired through many different means other then homesteading.

Homesteading is just how physical property comes into being. It is how physical property first becomes acquired. Once property is acquired via homesteading then it can be modified and transferred from individual to individual. Ideally through voluntary means.

However, as soon as you start scratching your bubble hard enough, from the inside, it will pop and reveal the fact that Property is a human device based only on consent of the majority.

That’s far from true. Properties rights describe the mechanism in which human beings decide who gets to acquire and use physical property. Physical property has the natural aspect that in order to be used it must be in the possession by a individual. That is in order to use a piece of property you have to have sole possession of it in some manner.

The most obvious example is the ‘spoon’. You can have a ‘community’ spoon in a communist society were it’s officially declared that the spoon has no owner… but that is just semantics: a twist of language or a confusion of metaphors. In order for any individual to be able to use the spoon to eat (or whatever) they must acquire the spoon and be in sole possession of it. Property rights describes the mechanism which how people decide who gets to use the spoon at any one point.

There are de facto property rights and there are de jure property rights. De Jure property rights get decided via a variety of means… a majority of people agreeing to it is just one possibility. De facto physical property rights have existed as long as human action has.

Wildberry June 6, 2011 at 5:39 pm

Brialliant! Your use of the Latin sums things up nicely.

Andras June 5, 2011 at 2:45 pm

@nate-m, “Homesteading is just how physical property comes into being. It is how physical property first becomes acquired. Once property is acquired via homesteading then it can be modified and transferred from individual to individual. Ideally through voluntary means.”That is what I am talking when I call it “Deus ex machina”. Please realize that the very act of homesteading, its rules and its processes are all totally arbitrary! You are building your system on quicksand.

@nate-m & sweatervest,
Yes, I agree, there is inherency in unalienable human property rights, at least in theory. But try to invoke it when you are clubbed to death protecting your “property”. I am talking about established, consented Economic Property Rights, exchangeable on markets. Once you recognize and respect its rules you can move away, by gaining the majority through education, from the “Might is Right” view on your cited level of the “spoon”. Yes, it is slow and sometimes painful but not unprecedented. I think our struggle is a cakewalk compared to the early age of capitalism.

nate-m June 5, 2011 at 3:34 pm

Please realize that the very act of homesteading, its rules and its processes are all totally arbitrary! You are building your system on quicksand.

How so? There is minerals, plants, animals, land. etc. If it does not belong to anybody else and I reach out and take it… in what situation does it NOT become my property?

In what way can property be created if not by homesteading?

Andras June 5, 2011 at 4:02 pm

Just for a start, how do you decide on the size of the property, especially in an environment surrounded with alternative claims?

sweatervest June 6, 2011 at 5:09 pm

It would involve the details of the specific situation. What matters is that homesteading provides a means to do that, when the details are given (i.e. how much land or whatever is actually transformed permanently by being used). When they are not no sound theory will help us make a decision.

Andras June 5, 2011 at 4:03 pm

“In what way can property be created if not by homesteading?”

In any way people consent to it and accept it.

nate-m June 5, 2011 at 6:02 pm

Just for a start, how do you decide on the size of the property,

That’s just legal details. It doesn’t change anything about the requirement for homesteading to initially create or obtain title to property.

Whether it’s a single guy going out into the wilderness to stake a claim in the dirt, or a child picking up a discarded book, or a committee of ten thousand people deciding how to best divide up a newly created volcanic island it doesn’t change anything about the validity of the concept of homesteading.

especially in an environment surrounded with alternative claims?

What do you mean ‘surrounded’?

Like a circle around that the property has property claims around it, but does not have any claims on it yet? If that is what you mean then I don’t see how it matters, except maybe in some legal technicality when it comes to documenting the title on the property or something.

But if nobody owns it I don’t see how it really matters if somebody else owns something in close proximity to it. At least not whether homesteading is a valid concept or not.

If your talking about ‘surrounded’, but you mean that there are competing claims on that particular property…. then either it’s not homesteading at all and has nothing to do with it (since it’s already ‘homesteaded’ by somebody else and you have no right to it unless you buy it or convince the owner to do some sort of title transfer) or your going to have to depend on arbitration to determine who is the owner of the property since the ownership of the property is in dispute.

If you want to prove your point you going to have to come up with some actual concrete examples of what your talking about. Asking vague questions about legal technical details and then hoping I’d guess at what your getting at isn’t going to work out very well for you. I need something a bit more to understand how you think that homesteading is a invalid concept.

To me it seems a very basic matter-of-fact item based simply on the physical laws of the universe:

* In order to use a item you need to be able to have sole possession of it for the period of time you use the item.
* Property rights lies at the core of how you determine who gets possession of it.
* If nobody owns a property then homesteading is how it comes into the possession of a individual initially.

RC June 5, 2011 at 7:07 pm

nate-m,

“If nobody owns a property then homesteading is how it comes into the possession of a individual initially.”

But possession isn’t property, you know… If something is your property then you have a right to exclude others from it, even with a threat of force. Possession, on the other hand, is temporary – you can possess a plucked apple, for instance, but once you let it go, someone else can take it (possess it).

nate-m June 5, 2011 at 8:11 pm

Yeah that’s a important distinction.

Andras June 5, 2011 at 8:26 pm

@nate-m, “If you want to prove your point you going to have to come up with some actual concrete examples of what your talking about. Asking vague questions about legal technical details and then hoping I’d guess at what your getting at isn’t going to work out very well for you. I need something a bit more to understand how you think that homesteading is a invalid concept.”

I certainly don’t believe that homesteading is an invalid concept. However, ignoring the characteristics of homesteading will mislead you. Homesteading, that is of economic properties, is not some natural right but also a human device. For you all those details are but puny legal matters. But that is the very point! Just try to walk through the technicalities of these details.
Have you driven through the US? Have you ever noticed that everything is fenced? What makes Americans love barbed wire so much? Is it in their genes, i.e., natural? Or this is the way they advertize that the land is taken. How did this happened? From an unfenced, free roaming indian land to this monstrosity. Does it has to do anything with the customs they came from? They wanted to leave that behind. Or just the scarcity of barbed wire? Who knows?
So they fenced (how much?) and then you walked into some Title Office to register their claim(, while you try to protect your fence to uphold your claim). What happens meanwhile? Your competition does the same. How do they decide? Customs! Let the kabuki start. But what happens if they arrive to a virgin land from different cultures? Some cultures appreciate rights based on fight, even blood. Again, we are getting closer not farther from Might is Right. Not knowing will not save you.
The point is, customs, cultures etc are all human devices. These are what ossifies homesteading whether you admit it or not.
And so many other arbitrary factors in the process.

sweatervest June 6, 2011 at 5:15 pm

Forgive me if I am oversimplifying, but it seems to me like you are simply acknowledging that humans are in fact capable of trespass.

Property is very different from a cultural custom. Cultural customs (clothes styles, music styles, etc.) have varied across a wide spectrum for different cultures, and yet property has remained a central device to all cultures, much how math is central to all cultures (perhaps more for some than others). Deciding to respect property may have been an arbitrary decision and cultural custom, but that property exists and can be respected (and that property works a particular way) is like two and two being four. People can write down that two plus two is five, and act according to it (and fail as a result) but they of course cannot undo the truth that two and two is really four.

Likewise, different cultures may have recognized property rights to different degrees, but if any of them were to deny that they exist they would be manifestly wrong. Is math a human device? Well, yes it was constructed by humans. But it is not fiction, it is constrained by something that humans did not decide upon. So property may be a human device in the sense that humans had the idea of property and constructed the theories concerning it, but it remains that such an idea is rooted in reality and those theories are descriptions of something real. No particular dress or music style is any more rooted in reality than any other, but only one concept of property is rooted in reality.

nate-m June 8, 2011 at 12:54 pm

For you all those details are but puny legal matters. But that is the very point! Just try to walk through the technicalities of these details.

Not puny technical details. Legal technicalities created to deal with the complexity of human action and relationships. It doesn’t change anything about the fundamental concepts, however.

Have you driven through the US?

I’ve lived there most of my life, so yes.

Have you ever noticed that everything is fenced?

Some of it.

What makes Americans love barbed wire so much?

It’s a cheap and effective animal control mechanism. It’s necessary for the management of domesticated animals.

It’s not terribly useful at preventing humans from trespassing. Which is ok since that it’s not it’s purpose.

BTW, I hope you understand that homesteading has to do with more then just land (ie: ground) grants.

Wildberry June 8, 2011 at 12:22 pm

@ nate-m June 5, 2011 at 6:02 pm

In this limited sense of homesteading, it is equivalent to the rule of capture in standard property law. However, property law extends beyond this narrow rule covering very limited circumstances.

Most land finds its original title in conquest and decree. Therefore, most property does not find its original title in the act of homesteading, so the theory as the sole basis for property rights is fundamentally bankrupt.

Rothbard deals with this by declaring that if the “crime” is so far back in time that the original owners cannot make a case for misappropriation, then the present owner has legitimate title.

This is a negation of the very theory he proposes, since in most cases property is acquired by the exception rather than the rule.

It is better to simply understand that property is a human device, and it arises to serve a purpose in a cooperating social unit; i.e. society.

One example of this has to do with indigenous Americans in the Eastern territories of pre-colonial America during the beaver trade. They did not have a property rights system, but developed one under the pressure of beaver trapping.

Stephan Kinsella June 8, 2011 at 12:48 pm

The rule of capture is not the only possible rule. Libertarian homesteading theory as applied to subterranean minerals is not yet well developed. Rob Bradley touches on it in his Cato treatise (http://www.cato.org/pubs/policy_report/pr-nd-rb.html), and I, as a former oil & gas lawyer and libertarian legal theorist, have had thoughts on it (http://www.stephankinsella.com/2009/08/mutualists-and-randians-on-arab-oil/), but don’t assume, “Wildberry.” You know what happens when you ass-u-me, right?

Wildberry June 8, 2011 at 2:18 pm

OK Stephan, but it looks like I was pretty close, given the “not yet well developed” nature of the alternative/derivative rules.

At any rate, I would find it useful and refreshing if you found it possible to acknowledge the reasonable similarities between your theories (or at least the ones you ascribe to) and the body of traditional rules that we currently live by.

It appears that the rule of capture and homesteading have something fundamental in common. No harm in admitting that not everything “libertarian” is by definition contrary to every existing rule or law.

sweatervest June 8, 2011 at 2:27 pm

“Most land finds its original title in conquest and decree. Therefore, most property does not find its original title in the act of homesteading, so the theory as the sole basis for property rights is fundamentally bankrupt.”

Aha! I just caught one of those railing against us “IP communists” quoting Marx more or less!

Not that you ever called us communists, Wildberry, but I want to point that out to those who do. And, yes, that little bit about homesteading not being the reality is straight out of Marx’s writings.

And it always involves the same semantic trick (thank you Hoppe for stating this in a very clear and concise way): current so-called property was hardly ever homesteaded, therefore the very concept of homesteading is bankrupt.

That’s a big non-sequitur right there. That most current property titles are invalid does not invalidate the very concept of property titles, and it certainly does not stop us from identifying them as invalid property titles.

It was never the purpose of property rights theory to be a history of human interactions.

But this seems to go along with your (perhaps unconscious) insistence that ethics is pointless and the only things worth saying are historical facts. It doesn’t matter that all that conquest was undeniably a violation of peoples’ rights, it just matters that it was the way things happened!

“No harm in admitting that not everything “libertarian” is by definition contrary to every existing rule or law.”

I do believe this is one of those straw men.

nate-m June 5, 2011 at 3:45 pm

But try to invoke it when you are clubbed to death protecting your “property”.

That’s the sort of violence we are trying to avoid by getting rid of the state and such things as ‘IP’. You know, evolving society and improving the general welfare of humanity.

I am talking about established, consented Economic Property Rights, exchangeable on markets.

It’s all just a logical evolution of society’s sophistication based on some basic fundamental rights that never change.

Once you recognize and respect its rules you can move away, by gaining the majority through education, from the “Might is Right” view on your cited level of the “spoon”.

How is the fact that you must be in possession of a item in order to use it have anything to do with ‘Might is Right’?

My example was actually in a communistic society that denied the concept of property rights, yet it was obvious that property rights was still in effect. Absolutely despite anything the majority agreed on. You can’t get away from it.

Show me a example of how a person can use a spoon to eat while not being in possession of it in some manner because the majority agreed on it. How multiple people can use the same spoon to eat soup simultaneously. Nothing you can do can change it. Any sort of complex economic system must be based on these sort of basic premises in order to be valid.

I suppose I am just not understanding your point here.

Andras June 5, 2011 at 4:32 pm

There is no communistic society in isolation. They die fast as it can not function. There are communistic people temporarily converging in a communa/kibutz.
The very definition of spoon includes feeding the individual. However, consider a cafeteria. You do not own the spoons but you can have access and you can also be denied access to them. And still a bully can come any time and overwrite the rules if he is allowed.
When you want to comprehend society and steer it into your preferred direction you need to consider all of these factors not just an idealized system with selected people. Also keep in mind the consequences on individuals, not only on their survivors. After all, libertarianism should be about individuals.

nate-m June 5, 2011 at 5:45 pm

There is no communistic society in isolation.

Sure, but that’s besides the point. You stated that
“””Property is a human device based only on consent of the majority.”””

I created a example were even though the majority of the people did not consent, or even acknowledge, the existence of private property it did nothing to negate the need for it in order to function. The best they can do is refuse to acknowledge it.

The very definition of spoon includes feeding the individual. However, consider a cafeteria. You do not own the spoons but you can have access and you can also be denied access to them.

Sure. Typically I pay the cafeteria a fee and the spoon is provided to me by the cafeteria operator or somebody leasing space in the cafeteria. Something like that. That still doesn’t change the fact that I need to be in possession of the spoon in order to use it. There there is exclusivity involved at multiple stages here. You can choose to make the example as complicated as possible, but it doesn’t change anything about my original point.

And still a bully can come any time and overwrite the rules if he is allowed.

Ok? That’s called violence and is immoral. What is the point here? I don’t get it. If the Bully takes the spoon through force then that is immoral and violent, but that doesn’t change anything about the basic concept here. I lost my de facto rights to the property and he gained de facto rights to the property through the use of violence. I may still retain De Jure rights and those De Jure rights can be created and defended in many different ways.

However completely regardless property and property rights still exists. The fact that a guy is a dick about it doesn’t change anything.

When you want to comprehend society and steer it into your preferred direction you need to consider all of these factors not just an idealized system with selected people. Also keep in mind the consequences on individuals, not only on their survivors. After all, libertarianism should be about individuals.

I still don’t get it. How does this negate anything that Stephan said?
Do you think that I don’t understand the necessity for cooperation or the ability to defend property or something?

Andras June 5, 2011 at 7:47 pm

Nate,
I agree, there are valid points in Stephan’s presentation, he speaks the truth in certain directions. (So did Marx.) Stephan bases his ideology on accepting only the physical as potential property. I believe if the foundation is wrong the rest can not be better.
Furthermore, as almost every serious debate initiated by Stephan boils down to anarchy vs. minarchy I thought let the fluff out and go directly there. Claiming that libertarianism equals anarchy is his favorite obsession. I guess the rest you can put together.

nate-m June 5, 2011 at 8:48 pm

Stephan bases his ideology on accepting only the physical as potential property.

Except in order own property it must be physical. You can’t own labor, you can’t own concepts or ideas. At least not in the same way as physical property.

In order to perform a human action on a piece of physical property you must be in exclusive control of it one way or another. Physical goods, by their nature (how the universe functions) are scarce. This is the foundation to all property rights.

These two properties when combined necessitates a framework of property rights in order to have a the ability to have peaceful coexistence with other humans. However the framework, however formal or informal it appears; it must exist. Both de facto and de jure property rights.

A idea, however, requires no exclusivity. Two people, 3 people, or 4000 people can use the same idea at the same time with out issue. A idea has no real physical substance. It has no physical need for exclusivity of control in order to perform a human action with that idea. It requires a level of abstraction to even comprehend a idea.

You can’t even hold or touch idea, except abstractly or poetically. You can have a written expression of a idea, but that is only so much paper and ink. It is not a physical manifestation of a idea anymore then a tree falling in a forest with no one to hear it has a sound. In order for a idea to exist it must be read, interpreted and learned. Then the idea exists in the mind of the beholder.

The nature of physical property which necessitates property rights is completely absent when it comes to ideas.

This is why IP is diametrically apposed to physical property rights. That is you simply cannot have IP without violation of property rights. IP tries to a apply rules that cover physical goods (rules created because of their physical nature) to items that have no physical element. So it’s a non-sequitur.

The only way that IP rights manifest themselves is through de jure law that gives you the ability to control the physical property (and the related human actions) owned by other people without their consent.

You can create something resembling IP based on contract law, but it will lack fundamental features are core to the legal functions of patents and copyrights.

Andras June 5, 2011 at 9:13 pm

@nate-m,
We have arrived to IP. As Wildberry so eloquently shown in his scores of postings IP is not about owning ideas. In fact, IP laws are exactly against owning ideas. Let start again from here.

Peter Surda June 6, 2011 at 8:03 am

Andras,

Wildberry is not eloquent. He’s a demagogue. He compensates for the lack of quality with quantity, uses words in fluctuating meanings, denies elementary logic and avoids any serious debate. He accompanies it with misleading statements or outright lies, such as when he said that Mises wrote a lot about externalities (in reality he only wrote about five pages), or how Schulman was being verbally abused (whereas in reality Schulman was the one using derogatory statements).

The claim that IP is not about ownership of ideas is easily disproved by pointing out that it is impossible to interact with an idea without the use of a medium, and these media are what IP covers. I explained it many times. It is an simple fallacy. From the existence of two names for the same phenomenon IP-confusists incorrectly deduce that there are two separate phenomena. But no, you can’t have logic in a debate. You must have feelings, “think about the poor inventors” and in general anything that can distract from the logic.

BTW I’m reading Failures of Kenynesian Economics by Hazlitt. Keynes’ words remind me of the mental misuse that the IP-confusist are committing. First Keynes says that saving and investment are a part of the same thing, and subsequently builds his whole theory on the assumption that they are different.

If you want to persuade me, Andras, you need to start acting like a scientist. You know, logic and stuff.

Andras June 6, 2011 at 10:39 am

@Peter Surda,
I gave up persuading you.

sweatervest June 6, 2011 at 5:21 pm

“We have arrived to IP. As Wildberry so eloquently shown in his scores of postings IP is not about owning ideas. In fact, IP laws are exactly against owning ideas. Let start again from here.”

I don’t think Wildberry realizes he gave up the entire pro-IP position by admitting that point, one that the anti-IP side had been pushing for a while. If you admit IP is not about protecting ideas as property then you admit it is a deceptive way to justify stealing other people’s real property.

Beyond that, that IP is actually against owning an idea just seems confusing to me. How does IP *stop* what would otherwise be an ability to own an idea?

sweatervest June 6, 2011 at 5:21 pm

“I gave up persuading you.”

Well, are you trying to persuade him of something that is not persuasive, or that no one should be persuaded by?

sweatervest June 6, 2011 at 5:25 pm

Also, as I think Peter is trying to explain, Wildberry often “refuted” what other people said without actually illuminating what the truth is. He often said IP is not about protecting ideas but I at least did not see any insight into what, then, IP *is* about. I suppose that’s not necessary for the refutation, but it certainly begs a question that was never answered. Besides we cannot start talking about IP by simply knowing what it does *not* concern.

Wildberry June 6, 2011 at 5:49 pm

Andras,

Nothing will bring out Peter Surda faster than mentioning my handle.

You posts are brilliant. You definately have a handle on this. Well done.

Wildberry June 6, 2011 at 5:51 pm

@ sweatervest June 6, 2011 at 5:21 pm

I don’t think Wildberry realizes he gave up the entire pro-IP position by admitting that point, one that the anti-IP side had been pushing for a while. If you admit IP is not about protecting ideas as property then you admit it is a deceptive way to justify stealing other people’s real property.

Huh? I’m having a little trouble understanding what I gave up. Can you try to explain?

sweatervest June 8, 2011 at 2:59 pm

“You posts are brilliant. You definately have a handle on this. Well done.”

Oh yeah, you say he has a handle so he must! High fives are the path to the truth!

“Huh? I’m having a little trouble understanding what I gave up. Can you try to explain?”

The explanation is in the quote: If you admit IP is not about protecting ideas as property then you admit it is a deceptive way to justify stealing other people’s real property. It’s sitting right in front of you, you just don’t want to deal with it.

Are you suggesting that calling something “intellectual property” when it is actually *opposed* to the ownership of ideas (that is total nonsense, you have nothing to back up such a claim, it’s probably just a meaningless assemblage of words) is not dishonest?

If it’s not about property rights in the intellectual (i.e. ownership of ideas) then it is a clear act of deception to call it intellectual property. You have may something else in mind, but the discussion has always been over *intellectual property*. It *is* about the ownership of ideas. What else could it possibly be about!? It’s called intellectual property!!

nate-m June 6, 2011 at 7:43 pm

We have arrived to IP.

You’ll have to spell it out for me.

As Wildberry so eloquently shown in his scores of postings IP is not about owning ideas.

Well this is why it makes it difficult to walk through these things.

Because people speak of ‘Intellectual Property’, yet seem to insist that there is no intellect and no property involved in the same sentence paragraph as stating how it’s just another form of property.

I am using the term ‘ideas’ to cover a variety of different intellectual products. Formulas, recipes, stories, plotlines, concepts, music, etc etc.

In fact, IP laws are exactly against owning ideas. Let start again from here.

IP laws, copyright and patents, are monopolies created to control other people’s property and other people’s actions. They are handed out by the state governments and enforced by institutional violence.

IP laws in all forms that they ever existed are a direct violation of private property.

This is a undisputed fact and there is no possible way you can find a example to the contrary. A framework of IP that does not involve institutionalized violence and violation of property rights has not yet been created by humans.

I contend that it’s impossible.

It’s up to pro-IP libertarians to prove that IP _can_ exist without violating private property and without state enforcement. So far the best that most people can come up with arguments that consist little more then a string of twisted metaphors and leading questions.

Stuff like: “Property is only what the majority of people decide it is”.

I can create a theoretical framework based on contracts and purely voluntary agreements that can create something resembling IP law… This is easy and has been done a dozen times over by many people. But it always is going to lack at least some basic elements which is core to IP.

Andras June 6, 2011 at 6:48 pm

@sweatervest June 6, 2011 at 5.21pm
Andras (to Peter Surda): “I gave up persuading you.”
You: “Well, are you trying to persuade him of something that is not persuasive, or that no one should be persuaded by?”

I think Peter Surda is trying to do what Zeno of Elea (http://en.wikipedia.org/wiki/Zeno_of_Elea) did 2500 years ago. However, he is just repeating himself and goes to ad hominem when he is asked, politely, to check his premises. He has still a long way to go in order that his sophism surpasses the master’s.

Peter Surda June 6, 2011 at 7:52 pm

Andras,

However, he is just repeating himself and goes to ad hominem when he is asked, politely, to check his premises.

On the contrary. I’m a falsificationist, I have no problem with eliminating assumptions. Rather it is you IP confusists who start with dogmas and are unable to coherently argue.

nate-m June 6, 2011 at 8:08 pm

You know, restoring to ad hominem only serves to undermine your own position. Your essentially admitting failure and giving up on your arguments half way through. Simply ignoring him would increase your credibility.

This sort of thing makes it very easy for people to dismiss your arguments as trolling ( http://en.wikipedia.org/wiki/Troll_(Internet) ) and even sock puppetry ( http://en.wikipedia.org/wiki/Sockpuppet_(Internet) )

Andras June 6, 2011 at 9:40 pm

If you addressed me I can only say that I meant it as a compliment.

nate-m June 9, 2011 at 6:51 am

ok. Sorry for the misunderstanding.

sweatervest June 8, 2011 at 3:01 pm

“I think Peter Surda is trying to do what Zeno of Elea (http://en.wikipedia.org/wiki/Zeno_of_Elea) did 2500 years ago.”

Do you have anything at all to back this up? I didn’t see Peter rejecting the idea of motion or change anywhere? Where/how did he resemble Zeno in the slightest way?

“He has still a long way to go in order that his sophism surpasses the master’s.”

What sophism?

Peter Surda June 8, 2011 at 3:44 pm

By the way, regarding Zeno’s paradoxes. I did not look at the wiki page about Zeno but I remember reading about them as a kid in a book about the history of math (I think I won the book in a math competition or something).

Zeno formulated his paradoxes, just like I try to formulate my “paradoxes”. But in order to refute them, you cannot just say “that’s a paradox and Zeno was a moron”. You need to formulate a counterargument. For example, the one with the Achilles and turtle can be refuted by pointing out that Zeno is making an unfounded assumption: that there cannot be a convergent series. Looks like even the wiki article on series references Zeno.

But even if refuted, that does not mean Zeno was a moron. On the contrary, he found an interesting question and challenged others to answer it. Some people took the challenge and were successful. If they just said instead “he’s a moron”, they would only underscore their own incompetence.

With a bit of exaggeration it could be said that I try to follow in Zeno’s footsteps. I formulate my arguments in a clear manner, and even explain how they could be countered should they be wrong. That IP proponents retort with logical fallacies is regrettable.

Andras June 8, 2011 at 6:29 pm

@Peter Surda, Thank you Peter for explaining Zeno’s relation to you to sweatervest.
About you: This is not intended as an “ad hominem”. If it feels like I apologize.
You are and could be a formidable debater. You appreciate logic, you can master a good body of background info and you have the stamina and temper. One thing, I believe, is still missing: what I have learned during my scientific carrier, allowing room for failure. What I mean by that is in order to explore you need to allow yourself to be wrong. (Sound un-American where “failure is not an option”.) The rest is simple: explore, admit failure, especially to yourself and build on its lessons. Being a “falsificationist” you limit yourself to ideas of other’s and approach them only in a negative sense. Upon accepting their axioms you have no way to surpass or develop these systems. You can only scratch them from the inside. If they are not strong enough they pop. But there is no next level to accept as you always approached it from the inside and have no experience of the outside. Your system collapses with the pop. As a defense you got emotionally attached to your bubble.
I don’t want to hurt you but to manage these approaches the axioms need to be attended. That is why I have targeted Kinsella’s axioms, 1) the exclusivity of only the physical accepted as property and 2) the subjectivity of what and how property is defined. If these axioms are shaken the whole system will be stronger or … falls apart.
For both issues, the next argument should, at least, give you pause: I guess you heard about the derivative market. There are lots of complains about their dangers: their size and their unregulations threaten to destroy the financial markets (allegedly). Let’s see: their size is somewhere between $500T and $1.5T (that T is a trillion). It is just an estimation as they are between only the two parties involved (no third party or discounting) and there are no reporting or other obligations. They are absolutely unregulated or free market products. Yes, I agree, some of the parties are not the champions of free markets but their derivatives are still as close to that as possible. This size is at least ten times the global GDP! And these are all derivatives written on prices, interests, or just the weather. Bets on anything. Sometimes third, fourth or even higher derivatives on derivatives. Hardly any connection to physical property, unless you call the paper written on that. However, there are some that not even paper is present just handshakes. People make and honor these contracts in mass with free will. Are they property when they written or come to payments? Are they property when they counted in accounting and future planning between writing and payment?
Are they property?
If so, what are the consequences?
And if not, what are the consequences?

Peter Surda June 9, 2011 at 4:35 am

Andras,

This is not intended as an “ad hominem”. If it feels like I apologize.

Let me assure you, there is no need to apology. I did not refer to ad hominems because I was offended, rather to point out that it’s a logical fallacy.

You are and could be a formidable debater. You appreciate logic, you can master a good body of background info and you have the stamina and temper.

Thank you, that’s a bit unexpected. But I’m not here in order to gain praise. I’m here in order to learn.

One thing, I believe, is still missing: what I have learned during my scientific carrier, allowing room for failure. What I mean by that is in order to explore you need to allow yourself to be wrong.

I think you are missing something here. This is precisely what I’ve been repeating, and pointing out that this is what my opponents are lacking.

Being a “falsificationist” you limit yourself to ideas of other’s and approach them only in a negative sense.

Being a falsificationist refers primarily to one’s own arguments, rather than other people’s arguments. Allowing for the option of being wrong is the core of falsificationist methodology. Please note how I (try to) explicitly formulate the assumptions, and also explain how it would be possible to disprove them, should they be wrong. I do not see the equivalent behaviour in my opponents. On the contrary, they make a bunch of incoherent unsubstantiated assumptions and when challenged on them, they get emotional.

Upon accepting their axioms you have no way to surpass or develop these systems. You can only scratch them from the inside. If they are not strong enough they pop. But there is no next level to accept as you always approached it from the inside and have no experience of the outside. Your system collapses with the pop. As a defense you got emotionally attached to your bubble.

The point of falsificationism is to eliminate assumptions rather than create new ones. You have your argument backwards. The result is that you have a scientifically stronger position, however at the cost of having fewer conclusions. To paraphrase Nicholas Taleb, it is better to be approximately correct than precisely wrong.

I don’t want to hurt you but to manage these approaches the axioms need to be attended.

And that is precisely what I have been doing.

the exclusivity of only the physical accepted as property

Let me repeat once again: if this assumption was wrong, it would be able to demonstrate how to interact with something non-physical without interacting with anything physical. This way the assumption is not only formulated in a proper falsificationist manner, it also explains one of the methods to refute it.

the subjectivity of what and how property is defined

I admit that any definition is subjective, but my point is that some definitions are self-contradictory and/or too vague, rather that they are subjective. We need to eliminate those first. Once we have done that, we can debate which among those that are left over has more merit. This point has not been reached yet, however, because IP proponents fail to address the logical fallacies in their arguments.

If these axioms are shaken the whole system will be stronger or … falls apart.

Correct. And, since I have been unsuccessfully challenging my opponents to refute them, I am baffled why you mention this. I do not mind if my assumptions are disproved. The scientist in me would rejoice. It is my opponents, however, whose assumptions, incoherent as they may be, are the foundation of their ideological stability. Any attack on those provokes an irrational emotional response.

People make and honor these contracts in mass with free will. Are they property when they written or come to payments?

I kindly refer you to the theories produced by Evers/Rothbard/Hoppe/Kinsella. A contract, specifically a conditional transfer of title, does not require the ownership of the condition by the party of the contract. The condition is just a logical construct. Merely because you use a noun to refer to it does not mean that the transfer of title requires that one of the party of the contract owns it, or that this is relevant for people who are not a party to the contract. Derivatives are just that: a conditional transfer of title. So, you are making here the assumption that if you put a noun into a contract as a condition, it means that in order for that contract to be valid, whatever the noun refers to must be ownable by one of the parties. I already explained this to Wildberry about two months ago, and he, as usual, completely ignored it with a grandiose brouhaha.

Are they property when they counted in accounting and future planning between writing and payment?

You are here making a very similar assumption. Assigning economic value to a noun does not require the target of that noun’s reference to be ownable by the entity that makes use of that economic value.

In a way, you are the Zeno in this thread. You’re making fallacious implicit assumptions.

Are they property?

They are property, but not in the way you mean it. They refer to property owned by other people. You are just using a new way of referring to existing property. You are not creating new property. You are merely enhancing (or reducing) the value of existing property.

If so, what are the consequences?
And if not, what are the consequences?

Reinterpreting a phenomenon under a new name does not create new property. So the questions are pointless. It would be more accurate to ask “are they a property separate from the property they refer to?”.

If yes, you’d end up with a contradiction from a theoretical point of view, and with expropriation from practical point of view.

If no, you’d have a coherent theory of property and a more predictable legal environment.

Stephan Kinsella June 9, 2011 at 6:45 am

Peter, on somewhat of a tangent — I am curious if you have read and/or what your thoughts are on the “conjecturalist” approach of, say, J.C. Lester in his Against Leviathan? This is the Popperian mode that rejects the idea of justificationism per se, instead choosing to “conjecture” bold theories, then to “test” them rigorously — sort of taking the empirical method of falsificationism and applying it across the board (see David Gordon’s review here mises.org/journals/jls/17_4/17_4_4.pdf

Also, have you any thoughts on Hoppe’s view about empiricism/natural science, that even if you get a fact contrary to a theory/hypothesis, you don’t just chuck the theory, unless you have a better theory. See his detailed evisceration of D.N. McCloskey http://mises.org/journals/rae/pdf/RAE3_1_16.pdf
p. 191 et pass.

Peter Surda June 9, 2011 at 8:06 am

Stephan,

unfortunately I have to put these on hold, I’m now reading about monetary theories, digital currencies and currency competition because I want to understand Bitcoin. But I’ll put the articles you referenced onto my Kindle and will come back to them eventually.

Stephan Kinsella June 9, 2011 at 9:14 am

Interesting, Peter–curious what you conclude about bitcoin. I can’t make heads of tails of it; seems like the money equivalent of a floating anarchist nation scam to me, but I haven’t looked at it closely.

Peter Surda June 9, 2011 at 9:50 am

Stephan,

I don’t think there’s anybody can make head or tails of Bitcoin. I think the reason for it is that its future development, success or demise depend on future empirical variables (which are, of course, uncertain) and cannot be praxeologically derived. That is why it’s so difficult to understand it.

Andras June 9, 2011 at 3:39 pm

@Peter Surda June 9, 2011 at 4:35 am
Let me ask this.
When someone makes a bet how does this fit into your property theory?
Bet: anything, e.g., the number of corners in the next match of Barcelona.
What is the meaning of winning (and of loosing)?

Stephan Kinsella June 9, 2011 at 5:05 pm

A one-way bet is a unilateral, conditional transfer of title. A two-way bet contains two such transfers, each triggered by opposing conditions. E.g. if you and I bet $10–I say that it will rain tomorrow, you that it will not, then each of us has made a conditional title transfer: me, of $10 of my property, to you, IF it does not rain; you, of $10 to me, if it does rain.

In no case do we “own” the condition, the rain. It’s jsut a trigger. Same with service contracts: a service contract is actually just a one-way title transfer: money from employer to employee IF employee does X.

Peter Surda June 9, 2011 at 5:30 pm

Andras,

Stephan explained it better than I can. I’ll just turn the question around: if you make a bet, does it mean that the referenced phenomenon must be owned by one of the parties in order for that bet to be valid? Let’s say we bet who wins a football match. Now here are the questions:

– does the validity of that contract (bet) require that one of us has a property right in some of the aspects of the match, for example the field or the ball, or that we employ the players?

– does the opinion of the owners of the field, ball, or the players have an influence on the validity or effects of that contract (bet)?

Not only in accordance with the theory presented by Stephan, but also according to current law, the answer in both cases is no. Analogically, the same should also apply to derivatives (I’m not sure if that’s the case with current law but I’m pretty sure that’s the conclusion Stephan would draw). Financial derivatives reference already existing property (which may or may not belong to the people involved in the trade, but the point is they already belong to someone). They are not a new kind of property. They are a new way of looking at old property.

Wildberry June 9, 2011 at 6:34 pm

@Stephan Kinsella June 9, 2011 at 5:05 pm

This is no different that an obligation to perform on the occurance of a condition precedent.

The difference between standard contracts, and the “title transfer” theory is more to the point of the question.

In standard contract theory, a property interest in the promise is alienable, can be traded or used as a security interest, and would be enforceable agaist failure to perform. In this regard, the contract creates a property interest in the promise to perform.

In the TTT framework, my understanding is that the promise is not enforceable, because will in not alienable. The only way around this is to pre-negotiate a preformance bond that establishes liquidated damages for failure to perform. Let’s ignore the issues with negotiating liquidated damages.

Under TTT, there is no property interest created, or at least you would not describe the same outcome using a property interest concept. I assume you would say that you create an interest in the future transfer of title, secured by a performance bond, or something like that?

My question is, is this semantics, or is there a material difference in outcomes?

Andras June 9, 2011 at 6:39 pm

@Stephan and Peter,
I have never expected that any of the parties own the underlying asset (here the rain). My stand is they bet their property and at the end the winner owns the looser (or correctly its property). So their contract is about their property.
Can a contract beyond (i.e., not about or not of) your property with material consequences be valid in your system?
By the way, is it true then, that in your system, these bets (say even a winning lottery ticket) are not property?

Stephan Kinsella June 9, 2011 at 7:41 pm

Andras:

Can a contract beyond (i.e., not about or not of) your property with material consequences be valid in your system?
By the way, is it true then, that in your system, these bets (say even a winning lottery ticket) are not property?

A bet is not property. a bet is a contract. it’s a way of transferring title to property.

The penumltimate question — I don’t get. Oddly worded.

Wildberry:

This is no different that an obligation to perform on the occurance of a condition precedent.

The difference between standard contracts, and the “title transfer” theory is more to the point of the question.

In standard contract theory, a property interest in the promise is alienable, can be traded or used as a security interest, and would be enforceable agaist failure to perform. In this regard, the contract creates a property interest in the promise to perform.

In the TTT framework, my understanding is that the promise is not enforceable, because will in not alienable.

That is not my reason. That is Rothbad’s argument for inalienabiliyt. The reason a mere promise does not suffice is it is just a promise. It’s a statement of prediction about what I may do. You can rely on it or not, up to you. But a title transfer is an actual transfer of the title–even if it’s a trasnfer set up NOW, to be effective in the future, based on a conditional event (and all future title trasnfers are uncertain and conditional since the future is uncertain–the party or the property may not exist, etc.).

The only way around this is to pre-negotiate a preformance bond that establishes liquidated damages for failure to perform. Let’s ignore the issues with negotiating liquidated damages.

No. this is not rihgt. You can pre-negotiate a liquidated damages PAYMENT. You don’t need to pre-pay it as a bond. You can just arrange it. E.g., “If you sing at my kid’s party, I will give you $1000. If you fail to show up, you will pay me $7000 damages.”

Its may be SAFER to make the singer deposit $7k first in some escrow but this is not necessary. If the singer fails to show up then the condition to trigger the transfer of $7kis fulfilled and it is transferred. Then at that point the singer is in possession of $7k of money owned by the other guy, and if he refuses to hand it over it’s a type of theft.

This theory is very differnt than normal theories, and I explain why here

http://mises.org/journals/jls/17_2/17_2_2.pdf

Andras June 9, 2011 at 8:54 pm

@Stephan,
Can you put a price on a contract and can you trade it?

Peter Surda June 10, 2011 at 4:45 am

Andras and Wildberry:

merely because an act superficially looks like a sale does not mean that it actually is an exchange of a good for money. Whether you call it a sale or not is irrelevant from a legal point of view, regardless of what legal system you are using for evaluating that. I already explained that merely using a noun inside a contract does not necessarily mean that that noun represents the object of the contract. It’s a linguistic issue.

Wildberry June 10, 2011 at 12:17 pm

@Stephan Kinsella June 9, 2011 at 7:41 pm

You might be surprised to learn that I’ve read your paper as well as some others on TTT.

After all that and your explanation, I think in some large part we are talking about two systems of contract theory that arrive at similar outcomes.

For example, I continue to insist that this:

But a title transfer is an actual transfer of the title–even if it’s a trasnfer set up NOW, to be effective in the future, based on a conditional event (and all future title trasnfers are uncertain and conditional since the future is uncertain–the party or the property may not exist, etc.).

…is in fact equivalent to a condition precedent in standard contract theory.
What I’m trying to zero in on is what interest the oblige has in the obligor’s promise under TTT. If the time for performance comes, and the person or property in question doesn’t exist, is the contract is automatically void under TTT? Is this different than the impossibility defense in standard contracts?

No. this is not rihgt. You can pre-negotiate a liquidated damages PAYMENT. You don’t need to pre-pay it as a bond. You can just arrange it. E.g., “If you sing at my kid’s party, I will give you $1000. If you fail to show up, you will pay me $7000 damages.”

OK, but doesn’t that amount to the same thing? If you contract for a certain performance in the future (payment) based on a condition precedent, when the obligation matures, the payment is in fact performance of the duty contracted for (payment in lieu of singing).

If singer fails to perform the duty to sing, there is a right to action to collect the performance guarantee. How is “and if he refuses to hand it over it’s a type of theft” different than a breach of contract and a suit for breach? Both theories allow coercion at that point in time, correct?

Its may be SAFER to make the singer deposit $7k first in some escrow but this is not necessary. If the singer fails to show up then the condition to trigger the transfer of $7kis fulfilled and it is transferred. Then at that point the singer is in possession of $7k of money owned by the other guy, and if he refuses to hand it over it’s a type of theft.

Whether the “singer” buys a bond or self-funds the deposit, it is in effect a performance guarantee. Failure to perform as promised transfers the title to the money to the “other guy”.

The question is about property rights. In standard (normal?) theory, since the promise is enforceable, it can be treated as a property interest in the performance (singing and & $7k), and traded or securitized.

In TTT theory, since performance is only guaranteed by a performance bond (or deposit), only the payment for failure to perform could be traded or otherwise assigned, is that right?

The original performance is uncertain, and therefore has little value to a third party, if I understand correctly. In other words, there is no alienable property interest in the original promise to perform. Rather failure to perform might be an alienable property interest, but the likelihood of the condition occurring would be relevant to a third party; (in fact such a trade would give a financial incentive for the 3rd party to prevent performance).

Whereas in standard contract theory, no bond is required (although may be advisable in some circumstances) because the promise itself is enforceable.

It seems, therefore, that TTT does not create a property interest in the promise to perform, while standard contract theory does. Is that a valid statement?

Andras June 10, 2011 at 3:18 pm

@ Peter Surda June 10, 2011 at 4:45 am
Peter, for god’s sake, the notional value of these derivatives are more than ten times the global GDP. People treat them as property when they trade them. If it walks like a duck, if it quacks like a duck, if it shits like a duck… It is a duck!
In principle, there can be an infinite number of possible (contract) theories. Their only measure is how they fit reality. If you have to massage too much the existing concepts (the meaning of the words) to fit your theory it, at least, should give you a pause. It is not just semantics, it is common sense.
You can call us anything here to avoid facing reality but don’t try to drive against the tide on the freeway. Loud cursing and ad hominems won’t help.

Peter Surda June 10, 2011 at 3:57 pm

Andras,

you have fallen prey to metaphors. A terrible mistake for a scientist.

Stephan Kinsella June 10, 2011 at 4:13 pm

Wildberry:

I continue to insist that this:

” But a title transfer is an actual transfer of the title–even if it’s a trasnfer set up NOW, to be effective in the future, based on a conditional event (and all future title trasnfers are uncertain and conditional since the future is uncertain–the party or the property may not exist, etc.).”

…is in fact equivalent to a condition precedent in standard contract theory.
What I’m trying to zero in on is what interest the oblige has in the obligor’s promise under TTT. If the time for performance comes, and the person or property in question doesn’t exist, is the contract is automatically void under TTT? Is this different than the impossibility defense in standard contracts?”

Well, pat of my argument is that you can get almost all of the features of the current contract system using a more sound and libertarian property based TTT. The fact that you can do this with TTT is a good feature not a weakness. It’s simpler and cleaner and easier to justify.

But the only reason it’s the same result is that the conventional system makes exceptions. For example there are obligations to do, and to give, in theory; but you can only enforce the former with awards of money–so it’s like a big sham since all obligations to do (to perform) are really just title transfers. Why not just call it that? That solves immediately the debate over the efficient breach hypothesis; it separates ethical or moral aspects of promising from legal transfers of title.

and it solves also IMO the difficult issue of specific performance and even voluntary slavery. The current account has to say there are obligations to do, then backtrack on this to avoid slavery. Libertarians that think promises are binding then either have to support voluntary slavery and debtor’s prison, or they have to come up with contorted reasons why it does not apply. the TTT avoids all this. It makes clear exactly waht is the status of a defaulting debtor: he owes nothing; he has no obligation; he is not stealing. It was simply a title transfer that failed.

“No. this is not rihgt. You can pre-negotiate a liquidated damages PAYMENT. You don’t need to pre-pay it as a bond. You can just arrange it. E.g., “If you sing at my kid’s party, I will give you $1000. If you fail to show up, you will pay me $7000 damages.””

OK, but doesn’t that amount to the same thing? If you contract for a certain performance in the future (payment) based on a condition precedent, when the obligation matures, the payment is in fact performance of the duty contracted for (payment in lieu of singing).

I don’t think it’s teh same–it’s not a perofrmance it’s a trasnfer of title. A performance needs the cooperation of the obligor. A title transfer does not.

Think of it like this. I own a watch. You ask to see it. I hand it to you, basically loaning it to you for a few seconds, and/or until I tell you to return it. DUring that interval you have a right-to-use it, which is like ownership, but due to the contractual undersatnding between us, the full right to control will revert to me upon a condition: my demanding it back. When I do, you must return it and if you refuse you are committing conversion (theft, trespass). The transfer of status–your having the right to control it; your losing this right–did not require your cooperation. It only requred a contractual title transfer arrangement set up ahead of time. Then, when the condition is fulfilled (the time ran out, or I demand it back), the full ownership reverts to me automatically.

This is no different in principle to a case where you own the watch and agree to transfer the title to me in 5 minutes, in excahnge for my giving you my autograph. I autograph your book, and so at that point, now the owenrship of the watch is mine automatically. This transfer does not require your cooperation any more than in the first case. IN fact in both cases if you drop dead while holding the watch, the watch still becomes my property per the previously arranged title conditions. You have no obligations at all. It is only that you acquire an obligation at the moment the title transfers: for at that moment you are now in possession of my property, and have an obligation to return it to me or not to use it without my consent etc. So any obligations that arise are soley a consequence of the current property allocation landscape, whcih itself is rearranged and determiend by contract (consent of ther owners).

So there is a differenc.e TTT is cleaner, based on property, libertarian, and solves many doctrinal problems or avoids complicated exceptions.

Wildberry June 11, 2011 at 2:46 pm

@Stephan Kinsella June 10, 2011 at 4:13 pm
Sorry for taking so long to respond, but I had other fish to fry.

Well, pat of my argument is that you can get almost all of the features of the current contract system using a more sound and libertarian property based TTT. The fact that you can do this with TTT is a good feature not a weakness. It’s simpler and cleaner and easier to justify.

Based on what I get from your responses, it does appear that you can arrive at the same (or very similar) outcomes with either system. We haven’t resolved the property issue yet, though. I am asking (lest you think I’m pettifogging) because I am trying to understand if you can create property interests in TTT contracts, which you can within traditional contract theory.

You said earlier that you cannot re-create IP using contracts. I’m trying to explore the why of that statement.

For example there are obligations to do, and to give, in theory; but you can only enforce the former with awards of money–so it’s like a big sham since all obligations to do (to perform) are really just title transfers. Why not just call it that?

As you mention below, there is the equitable remedies of specific performance. But the fact is that most contracts are financial arrangements in one form or another. Damages for breach are most naturally reduced to economic recovery for expectations unfulfilled because of breach. Also, remedies for breach calculate the size of the financial award based on the facts presented during trial, for example. This is why liquidated damages are rarely enforced, except in those rare cases where damages are difficult or impossible to calculate in advance.

Also, nearly all contracts involve a title transfer of something, although the concept of title transfer gets a little fuzzy when you are talking about a contract for a service for a service. It would be a stretch to call that a title transfer, wouldn’t it?

That solves immediately the debate over the efficient breach hypothesis; it separates ethical or moral aspects of promising from legal transfers of title.

How so? It seems that the efficiency of breach depends on the obligations likely for damages for breach. It is only when the damages for breach are less than the costs of fulfilling the contract that breach is efficient. I may be looking at this incorrectly, but it seems to me that under traditional contract theory, title transfer is most often the final result of most contracts.

Even in your example of a service for a fee, which in traditional terminology is a promise for a promise, in TTT terms it is simply a unilateral contract on a condition precedent. I’m not sure what advantage there is in one over the other, as it is just a terminology difference, unless I’m missing some other subtlety.

And it solves also IMO the difficult issue of specific performance and even voluntary slavery. The current account has to say there are obligations to do, then backtrack on this to avoid slavery.

What is difficult about specific performance? It only lies in those rare cases where money damages are inadequate, like in the sale or real estate or the sale of a work of art, etc. Does TTT not contemplate any form of equitable remedy?

I suppose the exception you are thinking of for slavery is the defense of illegality. What is difficult about that? If the contract is for something that is otherwise illegal, the contact is void; murder and slavery are out, just like with TTT.

Libertarians that think promises are binding then either have to support voluntary slavery and debtor’s prison, or they have to come up with contorted reasons why it does not apply the TTT avoids all this.

Well, obviously neither of these assertions is true. I think legal promises are binding and I don’t support slavery or debtor’s prison. You can’t accomplish things that are otherwise illegal just because you make what would otherwise be a binding contract. What is contorted about that?

It makes clear exactly waht is the status of a defaulting debtor: he owes nothing; he has no obligation; he is not stealing. It was simply a title transfer that failed.

I think this is the crucial issue I’m trying to raise. If a defaulting debtor owes nothing, if his other assets, for example, cannot be reached, then the TTT contract does not create a property interest in the debt payment. It eliminates the possibility of trading or securitizing the contract, because the assignee has no assurance that the promise is good. Therefore it has no value, or would have to be traded at a large discount under face value.

In traditional theory, however, a promise is enforceable, and collateral can be reached to make the obligee whole. This creates a property interest in the contract that will trade at closer to face value. Debtor prison is outlawed on public policy grounds, just like slavery, and bankruptcy stands as an option for the debtor to avoid losing essential assets in repayment, like the home.

What problem here does TTT solve?

“No. this is not rihgt. You can pre-negotiate a liquidated damages PAYMENT. You don’t need to pre-pay it as a bond. You can just arrange it. E.g., “If you sing at my kid’s party, I will give you $1000. If you fail to show up, you will pay me $7000 damages.””

OK, but doesn’t that amount to the same thing? If you contract for a certain performance in the future (payment) based on a condition precedent, when the obligation matures, the payment is in fact performance of the duty contracted for (payment in lieu of singing).

I don’t think it’s teh same–it’s not a perofrmance it’s a trasnfer of title. A performance needs the cooperation of the obligor. A title transfer does not.

Isn’t this equivalent to saying that failure to perform is a breach, which entitles the obligee to damages, which would be, in this case, payment of the liquidated damages? There is no coercion on the part of the obligee to make the obligor sing. Upon breach (non-singing), the condition is met and the obligor’s interest in the money amount is released to the obligee. If the obligor refuses to pay, the obligee has a cause of action, and the obligor would have to offer some defense or excuse, or be ordered to pay. Same result in both theories, as non-payment authorizes coercion. I don’t see an advantage here, just another way of describing the operation of law.

Think of it like this. I own a watch. You ask to see it. I hand it to you, basically loaning it to you for a few seconds, and/or until I tell you to return it. DUring that interval you have a right-to-use it, which is like ownership, but due to the contractual undersatnding between us, the full right to control will revert to me upon a condition: my demanding it back.

This appears to just be another way of describing a bailment; a conditional transfer of possession, but not ownership, (an analogy to copyrights, in some ways).

When I do, you must return it and if you refuse you are committing conversion (theft, trespass). The transfer of status–your having the right to control it; your losing this right–did not require your cooperation. It only requred a contractual title transfer arrangement set up ahead

Bailment theory does not require that the parties reach a detailed agreement in advance. It only requires that the bailor make his intentions clear. In any case, if you gave me your watch, and I refused to give it back, saying that you sold it for example, I would have to show that I gave sufficient consideration. In the absence of such a showing, you could not legally keep the watch.

The doctrine of bailment eliminates the need for parties to recreate the doctrine in an explicit and properly worded contract in advance, greatly reducing the transaction costs of such an exchange. Imagine if I asked to see your watch, and you refused until we negotiated a contract describing the bailor/bailee arrangement intended. Are you suggesting that unless this is done, I could keep your watch and you would have no recourse?

of time. Then, when the condition is fulfilled (the time ran out, or I demand it back), the full ownership reverts to me automatically.

In the bailment doctrine, the ownership does not need to revert, because the condition of transfer did not transfer ownership, only possession. That give the owner the right to demand the property at any time, under his undisturbed property rights to the watch. What is the advantage of TTT here?

This is no different in principle to a case where you own the watch and agree to transfer the title to me in 5 minutes, in excahnge for my giving you my autograph. I autograph your book, and so at that point, now the owenrship of the watch is mine automatically. This transfer does not require your cooperation any more than in the first case. IN fact in both cases if you drop dead while holding the watch, the watch still becomes my property per the previously arranged title conditions. You have no obligations at all. It is only that you acquire an obligation at the moment the title transfers: for at that moment you are now in possession of my property, and have an obligation to return it to me or not to use it without my consent etc. So any obligations that arise are soley a consequence of the current property allocation landscape, whcih itself is rearranged and determiend by contract (consent of ther owners).

This is simply a promise for a promise where performance is not simultaneous, but condition on some occurrence before the other’s obligation matures. If I sell the watch to you, the mutual duty to perform (pay money and transfer watch) arise simultaneously. If I condition my performance on some precedent condition, your duty to perform (sign) arises before mine (payment) matures. When you sign, my duty to pay matures, and your executory interest in my watch vests; same exact result.

So there is a differenc.e TTT is cleaner, based on property, libertarian, and solves many doctrinal problems or avoids complicated exceptions.

I respectfully disagree, based on my current understanding. There appears to be a distinction without a difference, save at least two important ones.

In TTT, the inalienability of will prevents formation of a property interest in an obligation, and instead substitutes a performance guarantee that must be negotiated in advance. In addition, since it does not rely on existing doctrine, TTT terms are only operational if the parties specifically negotiate them and reduce those terms to a legally enforceable agreement.

Since this significantly adds to the transaction costs of doing business, this means that it encourages inefficient economic outcomes.

For example, if I want to hire you to sing, and am willing to pay you $100 for that service, but require that you pay me $1,000 of you don’t show up, we may not reach an agreement on the performance guarantee, even though you would accept $100 for singing and I’m willing to pay you that amount. That is an inefficient outcome, and such results would seem to be more likely under TTT than tradition contract theory.

So, while it is possible to theoretically reach similar outcomes with either theory, TTT has these two major disadvantages; the inability to form enforceable property interests in promised performance, and higher transaction costs.

I am presuming that this is why you say that IP cannot be recreated between two parties by contract? One, because you cannot enforce performance of a promise except through pre-negotiated damages for non-performance between the parties, (which of course has no effect on third parties), and second, because since you deny any property rights in an original work, for example, it is not possible to transfer by contract what you don’t already own.

Is that a fair summary?

Wildberry June 10, 2011 at 11:17 am

@Peter Surda June 10, 2011 at 4:45 am

Reasonably intelligent people can figure that out on their own without much help.

Whether you call it a sale or not is irrelevant from a legal point of view, regardless of what legal system you are using for evaluating that.

I only highlight this comment for its comedic value. Spock, are you feeling OK?

You mean we could reinvent the English language and call the concept “sale” “piano”.

By golly, I think you’re right!

Peter Surda June 10, 2011 at 12:20 pm

Wildberry,

instead of confronting the arguments, you ignore 95%, misrepresent 5% and then use it as a distraction. Subsequently you present yourself as a victor. Instead you’re just a pitiful clown. But I’m not here for entertainment.

Responding to your accusation and teaching you about the basics of linguistics is a waste of time, since you’d react the same way. I already explained the problem several times. Until now you ignored it, and then suddenly make fun of it. That speaks for itself. I can’t even find words anymore to describe the level of intellectual dishonesty you present.

Wildberry June 11, 2011 at 2:53 pm

@Peter Surda June 10, 2011 at 12:20 pm

Do you really think I need you to tell me that the name for a thing is not the same as the thing itself?

Fortunately, language gives us the ability to assign meaning to words, and we can use them to communicate about concepts. Take that away, and all language is gibberish.

This expalins why so much of what you say is gibberish; you reduce language to a meaningless mish-mash of gobledygook and expect your “opponents” to try to sort is all out. It is a worthless endeavor.

Peter Surda June 11, 2011 at 7:33 pm

Wildberry,

Fortunately, language gives us the ability to assign meaning to words, and we can use them to communicate about concepts.

Oh, the audacity of someone who revels in vagueness. Pathetic.

Furthermore, I’d like to point out that again you have not confronted any of my arguments, just distract.

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