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On the Obligation to Negotiate, Compromise, and Arbitrate

As I argue in my forthcoming book Legal Foundations of a Free Society (LFFS), and as Hans-Hermann Hoppe has argued in his work and in the Foreword to my book, it is the fundamental fact of scarcity, and the possibility of conflict that this fact gives rise to among human actors—conflict over their bodies or other, external scarce resources that serve as means of action. Thus, for civilized humans—those who prefer to live in peace and cooperation with each other rather than violence and destructive conflict—they favor property norms, or laws, to assign unique owners to each contestable, or “conflictable,” resource.1 Humans can only decide which norms are justified in the course of discourse, in which, as Hoppe argues, all participants undeniably presuppose the value of prosperity, peace, cooperation, as it is an operative presupposition of the very activity of argumentation. (I discuss this further in LFFS.)

The purpose of these property rights and the laws that enforce them is precisely to help make conflict avoidable. Accordingly, no norm could ever be accepted as justified if it generates conflict instead of making conflict avoidable. The norms that naturally emerge, and as recognized in the private law systems, are self-ownership, in the case of one’s body (that is, as opposed to other-ownership or slavery); and in the case of previously-unowned scarce resources, ownership is determined by rules of original appropriation and contractual title transfer (plus the subsidiary rule of transfer made for purposes of rectification).2

Or as is now summarized in the Libertarian Party’s Platform, which I helped to draft last year:

2.1 Aggression, Property and Contract

Aggression is the use, trespass against, or invasion of the borders of another person’s owned resource (property) without the owner’s consent; or the threat thereof. We oppose all acts of aggression as illegitimate and unjust, whether committed by private actors or the state.

Each person is the presumptive owner of his or her own body (self-ownership), which right may be forfeited only as a consequence of committing an act of aggression. Property rights in external, scarce resources are determined in accordance with the principles of original appropriation or homesteading (whereby a person becomes an owner of an unowned resource by first use and transformation), contract (whereby the owner consensually transfers ownership to another person), and rectification (whereby an owner’s property rights in certain resources are transferred to a victim of the owner’s tort, trespass, or aggression to compensate the victim).3

So why these basic rules? As I point out in “How We Come To Own Ourselves,” ch. 4 in LFFS, Hoppe argues for self-ownership on the grounds that the person’s direct control over his own body takes logical-temporal priority (precedence) as compared to any indirect control that a second person would have to use to control the person’s body. As Hoppe explains in the Foreword, “if body-ownership were assigned to some indirect body-controller, conflict would become unavoidable as the direct body-controller cannot give up the direct control over his body as long as he is alive” (emphasis added). In other words, direct control has priority as compared to any indirect control, since otherwise conflict is unavoidable, contrary to the very purpose of property norms. A norm that generates conflict cannot be considered a property norm aimed at reducing conflict, and thus cannot be justified and will not be accepted by a civilized society.

And it could also be argued that any property-allocation rules other than original appropriation and contractual title transfer would also generate conflict. If no one could first use an unowned resource, then the human race would die out. Any property norm that would doom the human race cannot be accepted. And if the first possessor could lose ownership to a second party, there are no property rights, and only might-makes-right and conflict. And if the owner of the resource could not abandon it or transfer it to others by contract, again conflict would be generated because the first owner could seek back the resource even after selling it to someone else, who would think of it as his property.

Thus, the core private law property norm principles noted above tend to be accepted and then worked out in further detail as the legal system develops over time. So the point I am emphasizing here is the very need for property rules—to make it possible for fellow humans to avoid conflict, so that they can live amongst each other, trade, specialize, cooperate, and so on—plays a role in which property norms and laws can be justified. It occurs to me that the purpose of property norms can also give rise to some subsidiary obligations, namely, obligations to negotiate, compromise, and arbitrate (seek dispute resolution).

Why is this? We must recognize a few truths. First, perfect knowledge is not always possible, errors can be made, and reasonable people of good faith can disagree over facts or how a given law or property rights should be construed or applied in a given case. Second, there can be close calls and gray areas. There can also be diminishing returns in some cases to pursuing justice to the limit. And there can be differing opinions on intractable issues, like abortion. There may also be cases of non liquet (a situation where there is just no applicable law).4

So when we are considering property rights and laws, and the administration of justice, again we must be informed by the very purpose of property rights: to reduce conflict in order to make peace, trade, and cooperation possible.

When two or more people have a disagreement or dispute, then they have a reason to and an obligation to agree to accept the outcome of the just property norms, if a solution can be determined. But if the parties still disagree, then instead of resorting to violent conflict, they have an obligation to engage in good faith negotiation, and to comprise if possible, as this solution is peaceful and cooperative and thus preferred to conflict. And if the parties cannot privately reach a compromise, then they should each be willing to submit the dispute to a neutral forum like arbitration or a private court, and to abide by the outcome. Again, this is the solution the reduces conflict and maintains social order.

As for the diminishing returns observation—suppose two neighbors have a fence separating their property but there is disagreement over exactly where the property line is. Suppose it is only 1cm. This thin strip of land makes almost no difference and has very little value.5 Even hiring surveyors and experts to figure out the location more exactly would probably cost more than it is worth. So in such a case one could envision the courts refusing to hear such matters as a waste of everyone’s time when the parties are perfectly able to compromise.

So, we have to admit that the world is messy and opinions and knowledge often vary or are uncertain. This means that in some cases of conflict or dispute, there will be cases where there is no immediate, obvious answer—there can be gray areas, uncertain evidence, and so on. In such cases, if the goal is to avoid conflict, to peacefully interact and cooperate—and as noted above, this is something no participant in peaceful, rational discourse can deny, on pain of contradiction—then instead of just fighting, the parties must prefer the path of negotiation, compromise, and a willingness, if no compromise can be reached privately, to resort to arbitration—to submit their dispute to a well-respected king, jurist, or forum, whose decision they agree to abide by.

This is similar to the private-law notion that, although self-defense is permissible when there is no other choice, by and large, the idea of taking the law into your own hands, the idea of self-help, the idea of being a “judge in one’s own case,” the idea of being a lawless vigilante, is generally disfavored.6 If you are able to call in a neutral law enforcement agency, you should do so. After the fact, instead of acting as a vigilante, you should accuse your wrongdoer in the appropriate forum.

  1. On Conflictability and Conflictable Resources.” []
  2. See  Hoppe’s pithy summary of these basic rules, in “A Realistic Libertarianism,” LewRockwell.com (Sept. 30, 2013) and in idem, “Of Commons, Public, and Private Property and the Rationale for Total Privatization,” in The Great Fiction: Property, Economy, Society, and the Politics of Decline (Second Expanded Edition, Mises Institute, 2021), at pp. 85–87. []
  3. See Libertarian Party Platform, at https://www.lp.org/platform/, and https://perma.cc/GF6J-GPWV; Kinsella, “Aggression and Property Rights Plank in the Libertarian Party Platform,” StephanKinsella.com (May 30, 2022). []
  4. Wikipedia, Non liquet. But see the The 1804 French Civil Code, Code Napoleon: or, The French Civil Code (London: William Benning, 1827, art. 4: “The judge who shall refuse to determine under pretext of the silence, obscurity, of insufficiency of the law, shall be liable to be prosecuted against as guilty of a refusal of justice.” []
  5. See also Kinsella, “What Libertarianism Is,” n.26, re Rothbard’s discussion of the “relevant technological unit” in Murray N. Rothbard, “Law, Property Rights, and Air Pollution,” in Economic Controversies (Mises Institute, 2011; https://mises.org/library/economic-controversies; also at Mises Wire); also B.K. Marcus, “The Spectrum Should Be Private Property: The Economics, History, and Future of Wireless Technology,” Essays in Political Economy (Oct. 29, 2004; pdf) and idem, “Radio Free Rothbard.” []
  6. On the danger of being a judge in one’s own case, see “The Theodosian Code,” in The Theodosian Code and Novels and the Sirmondian Constitutions, trans. Clyde Pharr (Princeton, N.J.: Princeton University, 1952), § 2.2.1; John Locke, “An Essay Concerning the True Original, Extent and End of Civil Government,” in Social Contract (New York: Oxford University Press, 1947), p. 9 (“When men are judges in their own cases, it can be objected that “self-love will make men partial to themselves and their friends: and on the other side, ill-nature, passion, and revenge will carry them too far in punishing others.”). []
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