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KOL395 | Selling Does Not Imply Ownership, and Vice-Versa: A Dissection (PFS 2022)

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Kinsella on Liberty Podcast: Episode 395.

From the recently-concluded Sixteenth Annual (2022) Meeting of the PFS, Bodrum, Turkey (Sep. 17, 2022). The video as well as slide presentation is also streamed below (ppt). I also recorded a version on my iphone. A transcript is in preparation.

Transcript below. See published article based on this talk, here: Stephan Kinsella, “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection,” The Libertarian Standard (Oct. 25, 2022; https://libertarianstandard.com/selling-does-not-imply-owning-and-vice-versa-a-dissection/); also at Freedom and Law substack.

For others, see the PFS YouTube channel, including the PFS 2022 YouTube Playlist.

[For those interested in the Hoppe ringtone mentioned in the beginning: see this Facebook post or the opening to this podcast by Jared Howe.]

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Panel discussion:

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Transcript

Selling Does Not Imply Owning, and Vice Versa

by Stephan Kinsella

From the Sixteenth Annual (2022) Meeting of the Property and Freedom Society, Bodrum, Turkey (Sept. 17, 2022)

00:00:11

STEPHAN KINSELLA: Guido opened with some jokes.  I’m not going to have any jokes, but I’ll open with a little light-hearted humor.  This is my iPhone’s ring tone, my default ring tone [ring tone].  My wife really loves that, at restaurants.

00:00:32

Okay.  My topic is—my title is Selling Does Not Imply Ownership—Owning, and Vice Versa, a Dissection.  So I want to explore two related beliefs, which I think are fallacious, and they stem from confusions about core libertarian principles and confusions introduced by the sloppy use of language and overuse of metaphorical thinking.  And, by the way, I did touch on this topic in less detail at the PFS here in 2011 when I talked about a bunch of libertarian misconceptions and also in a libertarian controversies lecture from Mises Academy about 10 years ago.

00:01:09

00:01:12

So, the first one: Ownership implies selling.  Walter Block uses this a lot.  In fact, I heard him say it last week again in Nashville at the Libertarian Scholars Conference.  So the idea is this.  If you own yourself or your body, you should be able to sell it, so a voluntary slavery contract should be enforceable.  And if the legal system does not permit voluntary slavery, then it means you really don’t own yourself.  So the implicit assumption there is that one aspect of ownership is the right or ability to sell.

00:01:40

Fallacy two: Selling implies ownership.  So some contracts that we’re used to are exchanges of owned things like a simple one, like an apple for an orange, 10 chickens for a pig, 1 ounce of gold for a horse, or $3 for a cup of coffee.  Now, we also have labor contracts where it’s considered to be a sale of a service, which implies that you own your labor because you sold it.  And also there’s the sale of knowledge, information, or know-how like teachers who get paid to give information, publishers, speakers.  And this argument is also used to argue for intellectual property.  People say, well, if you can sell your ideas, you must have owned it, so intellectual property is a legitimate concept.  Similarly with Bitcoin, the idea is that Bitcoin can be possessed and sold, so it’s also said to be owned by the proponents of Bitcoin, of which I’m one.

00:02:33

Now, let’s revisit some elementary categories of libertarian thought.  So first of all, action is when humans in the world employ means or scarce resources as tools to help achieve their ends or goals.  When there’s society, there’s a possibility of conflict.  Now, it’s good that we live in society because we have the division of labor, trade, and intercourse with other people.  But there can also be conflict among actors or humans in the use of these scarce resources including our bodies because of the nature of these resources.

00:03:07

So what this means is the scarce resources, which we employ as human actors in a purely economic sense are precisely things over which there can be conflicts.  So sometimes, to avoid confusion in recent years, I will refer to these things as contestable or conflictable resources.  They are the types of things over which there can be conflict because, quite often, an intellectual property proponent will say something like, well, I don’t know about you, but good ideas is pretty scarce.  So they can’t say good ideas are conflictable though.

00:03:39

Now, in civilized society, property or ownership rights are assigned to reduce this conflict.  So what are property rights?  All rights are human rights, and all human rights just are property rights because the very purpose of property rights is to avoid conflict over scarce resources.  So ownership means property rights.  So to own a thing is to have a property right in the thing.  So it’s actually better to refer to property as the relationship between a person and a thing, although, over time, we sometimes are careless with language, and we will refer to the thing itself as property.  Like we’ll say that care is my property.  But precise language would be, I have a property right in that thing, in that car, or I own that car.

00:04:30

All right, so ownership and property rights.  A property right in a thing gives the owner the right to use it.  This is what property rights are.  Now, to be more precise, which is—this precision is not necessary for today’s discussion, but owning a thing actually does not give you the right to use it, but it gives you the right to prevent others from using it.  It’s an exclusionary right.

00:04:49

As a practical matter, that usually gives you the ability to use the thing.  So, for example, if you own a gun, that means you can prevent anyone else from using the gun.  But it doesn’t mean you have the unlimited right to use the gun because other people have property rights, and their property rights prescribe your actions.  So I can’t use the gun to shoot someone.

00:05:09

Now, most people make the mistake of saying, well, this shows that property rights are limited, but this is actually not correct.  The reason I can’t shoot the gun at my neighbor is because he has a property right in his own body.  And it’s a limitation on what actions I can perform.  It’s not a limitation on my property rights in my gun.  In fact, if I was—if I had a stolen gun, which I didn’t own, I still couldn’t shoot my neighbor.  So the ownership of the gun is not limited by property rights.

00:05:34

This mistake is used also to argue for intellectual property because people will say—I’ll point out that intellectual property rights restrict other property rights, so they’re actually an infringement of property rights because they’re effectively an unconsented, negative servitude because, if I have a patent, I can prevent you from using your factory to make iPhones.  So that’s a limitation on your use of your property.

00:05:58

And the response will be, well, all property rights limit other people’s property rights, but that’s not true.  Property rights limit only actions.  And the owner of a factory making iPhones is not committing any action that invades the borders of anyone else’s property.  So that’s why that’s another fallacy.  It’s a related fallacy but not the one I’m addressing directly today.

00:06:20

So libertarianism and property rights.  So the purpose of property rights is to prevent conflicts over the use of scarce resources to be avoided.  So they assign these exclusive rights so that others can avoid the conflict.  So how does this work?  The property rights are assigned in accordance with whoever actor has the best link or connection to the resource.  This is the only way you can have a workable system of property rights because any system of property rights has to be voluntarily respected, and for it to be voluntarily respected, it has to be seen as objectively fair, which means it can’t be based upon arbitrary differences like I have the right to you, and you don’t have the right to me because I’m me, and you’re you.  That’s a particularistic rule.  Or I have the right to your land because I’m stronger.

00:07:04

Those types of arguments and justifications—or reasons are not justifications.  There has to be an objective best link.  So how does that work out?  In western private law and in libertarianism, which is a far more consistent working out of this, there are basically two types of links—the type of link applied to your body, which is a unique scarce resource, and the type of link applied to external resources in the world, which were previously unowned.  So for the body, the link is a self-ownership link.  You own your body, and the reason is because of your direct control over it, which I will get to in a minute.

00:07:38

And then for scarce resources in the world, they’re always owned first by someone first using them from their unowned state.  That’s called homesteading or original appropriation.  And then ownership can be transferred for two reasons: contractually—that’s a voluntary transfer of title of the resource to someone else of your ownership title either by sale or by gift; or rectification, which can be seen as a subset of contract because it’s also a transfer of title from an owner to someone, but it’s because the owner committed a tort against the victim and gave him a right to recover some of the aggressor’s property.  So homesteading, contract, and rectification are the—basically the only three principles.  So these four principles are how we determine the best link, and this is the core of all property rights.

00:08:28

In every socialist system, in every law that deviates from this, they always end up deviating from this in one way or the other including intellectual property.  Now, so we commonly say self-ownership.  This is another phrase that can be misleading because you can have people object to it and say, well, how can you own yourself because that’s a religious view because it implies that yourself is different than your body or something like that, and they’ll criticize it that way.

00:08:58

So to be precise, self-ownership is just a shorthand for body ownership because your body is a scarce resource.  Yourself is not a scarce resource.  Self is bound up with the concept of personality and the person that you are, your identity as a person in the world, as an actor, as an agent.  So every person is the presumptive owner of his body.  That’s the basic libertarian rule.

00:09:20

Now, I say presumptive because it’s not absolute.  The right can be lost by committing aggression because the victim has the right to defend himself during a crime or to retaliate after.  And when they do that, they’re using the body of the aggressor without his consent.  So he’s, in a sense, lost ownership of his body to the extent that the victim needs to be able to use force against the aggressor.  So the basis here is not homesteading, but it’s the direct control over your body.  This is the best link between the given actor and the resource of his human body.

00:09:54

And actually, I think the first person who was explicit in—explicitly recognizing this was Professor Hoppe in a German publication in 1985.  You actually weren’t explicit about this in your later English book, but it’s implicit in there.  And if you remember, you told me about that passage, and you translated it for me for my article.  And so Hoppe’s argument is that you own your body because you directly control it.  So each—this gives each person or actor logical, temporal priority or precedence as compared to anyone’s indirect control.  What that means is if you were to enslave someone or claim to own their body, the only way to control that body is by coercion, by directing threats of force to get them to act the way you want them to act.

00:10:40

But in that case, they’re the ones still directly controlling it, and that always has precedence, and it’s a better link than the indirect control I can exert over you by coercion.  Not to mention that the coercer himself would be in contradiction because he claims ownership of his body for the purpose of being the one who can punish you or threaten you.  So this is what the best link means here.  It’s not homesteading, although people think it’s homesteading.  It can’t be homesteading because to homestead means you’re an actor in the world, and you find an unowned resource, and you appropriate it to yourself.

00:11:14

But this presupposes there’s already a person with a body, so it’s impossible to imagine that you homestead your body unless you have some religious view where the soul goes down there and grabs it.  But that’s not the domain of science as I think Guido and Mises would agree.  We could make an analogy.  We could say that when a child wakes up at the right moment when he becomes sapient enough to be said to have rights, he homesteads himself.  But it’s really a loose analogy.  It just means that’s the point in time in which he’s a person with rights.  It’s not like his body was unowned, and he just homesteaded it.

00:11:52

Now, for external resources, these are things that are previously unowned.  This is a key point, and they’re external to the human body, so they’re not part of people’s bodies.  So in this case, as I said earlier, the best link is determined by the three principles.  First, we have original appropriation or homesteading.  What this means is you possess something, which is an economic category.  It means to be able to use or manipulate.

00:12:15

Mises—I’ll get to this later, but Mises calls it sociological—I’m sorry; he calls it catallactic or sociological ownership, but what he really means is possession.  So mere possession, like Crusoe on an island, he can never own anything because there’s no society to have norms with respect to.  He controls, and he uses things.  He possesses these things as means, but he doesn’t own them.

00:12:38

In society, you can also do the same thing.  You can just possess something and not intend to own it, and you pick up a stick and throw it away.  Or you can possess it with the intent to own, and you take certain steps to transform it or to put a barrier up around it, or to, as Hoppe calls it, emborder it, which basically means to put up a visible public link between you and the thing demonstrating to everyone this thing is no longer unowned.  I’m owning it.

00:13:03

So this requires the merger or the combination of actual possession or transformation or embordering with then intent to own.  So those two things are essential to owning a thing that was previously unowned.  And then, once you own a thing, you can contractually transfer it to someone by your intent, and I’ll get to the mechanics of that in a moment.  And then, again, rectification—if you have to transfer something to someone to compensate them for damages you caused them.

00:13:28

Okay.  Oh, and by the way, this formulation of rights that I just went through, this way of looking at the best link and the breakdown between the body, I’m happy that I was able to help the Mises Caucus in the US get this basic formulation put into the Libertarian Party platform last May at the Reno Reset, we call it.  I won’t read it here, but it’s basically exactly how I put it, and the reason was there was no definition of aggression in the Libertarian Party platform.  It was just implied.

00:13:57

Getting back to the problem of confusing selling and ownership, thinking there’s a necessary relationship between them.  How do we sell an external resource that we own like the contractual title transfer we talked about early?  So when you own a resource, because the ownership requires the merger of possession and the intent to own, you can lose it by losing the intent to own, by making it clear I no longer intend to own this.  It’s called abandonment.  So if you acquire a thing, you can unacquire it.  And because of this ability, it gives you the right to sell because you can basically abandon it in favor of someone else.

00:14:29

Imagine you’re on a tree, and you have an apple, and there’s people walking.  You can kind of toss the apple to whoever you want.  You can direct this—you can direct the re-homesteading in effect.  So if I have an apple and I give it to you to hold temporarily, you’re the possessor, but you’re not the owner.  But I’m the owner, but I’m not the possessor.  So ownership and possession are distinct.  But if you’re holding my apple, and I abandon it, now you’re holding an unowned apple, and you can just re-homestead it right away.  So that’s how the mechanics, the juristic or legal mechanics of why and how you can sell things.  So the way that we come to own unowned resources is the reason why they can be sold.  So it’s not an incident—it’s not an aspect of ownership per se.  It’s an aspect of the way external things come to be owned.

00:15:16

Now, what about selling yourself, like Walter Block thinks we can do?  So external things can be sold because they were previously unowned or acquired by an actor-owner who is already a self-owner, and they can abandon it.  But your body rights don’t arise by homesteading or by your intent to own yourself.  They arise because of the best link based upon your direct control.

00:15:39

So if you try to make a contract, I promise to sell or I promise to be your slave forever, those words do not change the fact that I still have the best link to my body.  And because my words are not an act of aggression, which is the only way to come to own someone else’s body if they commit an act of aggression, then promising to be someone’s slave is simply not enforceable because it doesn’t transfer any title to anything.  You still own your body.  You can always change your mind, in other words.

00:16:07

So Rothbard seems to notice this in his kind of convoluted arguments about his in his contract theory.  But it’s implied, and I think Hans later clarified it, maybe unknowingly, but—so Rothbard wrote: It is true that man, being what he is, cannot absolutely guarantee lifelong service to another under a voluntary arrangement.  Thus, Jackson, at present, might agree to labor under Crusoe’s direction for life, in return for food and clothing, but he cannot guarantee that he will not change his mind at some point in the future and decide to leave.  In this sense, a man’s own person and will is inalienable and cannot be given up for someone else for any future period.

00:16:49

So I think the reason he focuses on the fact that the will is inalienable is Rothbard senses that that’s the reason you own your body, although he never quite says it explicitly, but he gets really close.  I mean, what’s the relevance of the fact that your will is inalienable to the fact that a voluntary slavery contract?  The only relevance could be that your direct control or your will is the reason you own your body.  Okay, so again, after you promise to be a slave, you still have direct control, so you’re still the owner, and you have not committed aggression, so you can always change your mind.

00:17:25

Okay, now what about the other fallacy—owning what you sell?  Okay, in a simple exchange, for two material resources that are both owned by two different people like an apple for an orange or an apple for a silver coin, the sellers do own what they sell.  There are two title transfers: The orange changes ownership, and the apple changes ownership.

00:17:46

But in a sale of service, labor, or information, the contract in legal terms only involves one title transfer.  This is in legal terms—whatever is “paid” to the person performing the service.  So if I give you a chicken to pay you for giving me a haircut, the title to the chicken transfer to you.  But you don’t transfer title to any labor to me.  It’s not like there’s a bucket of labor, which I’m handing over to you.  So these are actions, not things that can be owned.  So labor or services or action are things that we do with things that we own like our bodies or other owned resources.  They’re not themselves owned resources.  So you don’t really sell labor.  So why do we describe it this way?

00:18:30

Now, here’s where I think the reason for the confusion.  I think the reason is we have to keep a mode similar to what Guido was mentioning earlier.  There are different modes of understanding for different realms of phenomena and different conceptual frameworks.  So, for example, in the teleological versus causal realms, we have human action and purpose of behavior on the one hand versus causal laws of nature on the other.  We have praxeology versus the empirical method, the scientific method.  We apodictic or a priori versus tentative or contingent knowledge.  We also have normative or juristic, legal, types of realms of understanding versus factual.  So have human laws and norms versus empirical facts.

00:19:16

I’m getting to the point.  So, now, Mises was careful to distinguish the juristic or the legal or the should from the factual, but he used the word ownership in both, which is potentially confusing.  So he said: Regarded as a sociological category—in Socialism in 1922, he changed the word to catallactic later probably because he hadn’t come up with it yet.  I don’t know.  But he calls it the sociological or economic category of ownership is the power to use a good.  Now, that’s possession.  That’s what we would call possession or control.

00:19:48

And then he says the sociological and juristic, by which he means legal or normative, concepts alone should be different.  Ownership from the sociological point of view is the having of a good.  It’s just what Crusoe could do.  So that’s natural or original ownership, and it’s a purely physical relationship of man to goods.  But the legal is the should have.  Who should have it?  Who has the right to it?  This is where property rights and law come in.  So—and then later in Human Action, he goes on in a similar vein.

00:20:21

So as I said earlier, it’s better to distinguish ownership and possession to use those words rather than two senses of the word ownership because it could be potentially confusing because people say they own Bitcoins, but what they really mean is they possess the Bitcoins.  They say they own their minds, but your mind is just an epic phenomenon of your physical brain, which you own your brain, but you can change your mind, but you can’t change your brain.  They’re different concepts.

00:20:48

A dead body has a brain, but it doesn’t have a mind.  There’s a well-known Roman law, civil law scholar who passed away a couple years ago from Greece, but he was a Louisiana professor, Yiannopolous.  And he also defines, and the Louisiana civil code also defines possession as actual control or the factual authority a person has over a corporeal or a material thing.  I like these phraseologies.  And again, calling Bitcoin possession ownership is one reason for the confused idea that it’s ownable.   So if you say I possess a Bitcoin, that’s fine.  But it doesn’t imply that you own it.  Plus, Bitcoins can be sold, and so people think if you sell something, you must own it, so that’s why they make that mistake.

00:21:33

Yiannopolous also points out something I mentioned earlier that the accurate use of the word property should be the designation of rights people have with respect to things.  In other words, property is not the thing itself.  It’s the relationship between you and the thing.  I have a property right in the thing.  I’m the owner of the thing.

00:21:49

So why do we refer to a sale of labor or information when I already pointed out there’s only a one-way title transfer of the payment made to the labor former?  Why do we call it that?  What happens is, just like in the way the word ownership is used in both senses sometimes to mean possession or economic ownership or juristic ownership or real ownership, we use the word sale in that way too.  Sometimes we use it as economists to describe the structure of a given human action, and sometimes we use it as lawyers to describe the rights that are transferred.

00:22:24

So in the law, sell refers to transferring title to an owned thing.  So you don’t literally sell your labor.  You just perform your labor.  But in economics, it can be used to describe or characterize an action.  So all action involves an actor using scarce means to pursue some goal or purpose.  So when we try to describe what someone does, we try to discern their goals and also the means that they’re using.

00:22:49

So that’s what history does as well, right, which Guido was mentioning earlier.  We try to understand the actions of people.  So when we say as an economist, A sold his labor to B, this is just a concise way of explaining the praxeological nature of that action.  We’re saying why A performed the action, his labor.  Well, he performed it to get money from B.  So we’re describing his goal.  His goal was to get money from B.  That’s why he engaged in the means of using his body to perform an action, which he knew would satisfy B.  And why did B transfer ownership of his money to A or he actually did legally sell his money to A to induce him to perform an action.

00:23:26

So there’s only one title transfer.  So in this case, the economic and the juristic uses of the word “sell” are different because, in legal terms, B transfer money to A conditional on him performing an action.  There’s only one title transfer—the money that was transferred.  But in economic terms, A sells his labor to B in exchange for money, and B sells his money to A in exchange for A’s action.  So we can use selling in an economic sense, but we should be careful.  Otherwise, you might end up justifying intellectual property.  Thank you very much.

00:23:57

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