Hoppe on Property Rights in Physical Integrity vs Value

Note: This issue is discussed in Stephan Kinsella, Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023). See, e.g., ch. 5, at n.16; ch. 8, at n.17; ch. 23, at n.27; ch. 25, at n.36. See also discussion of defamation law in my forthcoming chapter “Defamation Law and Reputation Rights as a Type of Intellectual Property,” p. 286 et pass.

Update: See Hoppe, Hans-Hermann and Walter Block, “Property and Exploitation,” International Journal of Value Based Management 15, no. 3 (2002): 225–36 (also in Walter Block, Iulian Tãnase & Bogdan Glãvan, eds., Building Blocks for Liberty: Critical Essays by Walter Block [Auburn, Ala.: Mises Institute, 2010]). Abstract:

The authors contend that what can legitimately be owned in a free society is only rights to physical property, not to the value thereof. You are thus free to undermine the value of our property by underselling us, by inventing a new substitute for our property, etc. But you cannot legitimately physically agress against our property, even if its value remains constant despite your efforts.

See also: Hoppe, “The Justice of Economic Efficiency,” in The Economics and Ethics of Private Property: Studies in Political Economy and Philosophy (Mises, 2006 [1993]), at 337–38:

Such proposals are absurd as well as indefensible. While every person can have control over whether or not his actions cause the physical integrity of something to change, control over whether or not one’s actions affect the value of someone’s property to change rests with other people and their evaluations. One would have to interrogate and come to an agreement with the entire world population to make sure that one’s planned actions would not change another per- son’s evaluations regarding his property. Everyone would be long dead before this could ever be accomplished. Moreover, the idea that property value should be protected is argumentatively indefensible, for even in order to argue, it must be presupposed that actions must be allowed prior to any actual agreement because if they were not, one could not even argue so. Yet if one can, then this is only possible because of objective borders of property, i.e., borders which every person can recognize as such on his own, without having to agree first with anyone else with respect to one’s system of values and evaluations. Rawls and Nozick could not even open their mouths if it were otherwise. The very fact, then, that they do open them proves what they say is wrong.

Update: see also

• Van Dun on Freedom versus Property and Hostile Encirclement (Aug. 3, 2009)
• “Aggression” versus “Harm” in Libertarianism

From Rand on IP, Owning “Values”, and “Rearrangement Rights”:

By viewing “values” as things that we create, Objectivists then think there should be property rights in values. They are things, after all, right? But this is a fundamental mistake. As I noted in Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors, a common mistaken belief is that one has a property right in the value, as opposed to the physical integrity of, one’s property. For elaboration, see pp. 139-141 of Hoppe’s A Theory of Socialism and Capitalism; also see my comments re same to Patents and Utilitarian Thinking. This assumption sneaks into or lies at the basis of many fallacious notions of property rights, such as the idea that there is a right to a reputation because it can have value. It ties in with the (especially Randian) notion of “creation” as the source of rights, and the confusing admixture of the “labor” idea, when we talk about using our labor to “create” things of “value” (like reputations, inventions, works of art). As Hoppe notes in The Economics and Ethics of Private Property:

According to this understanding of private property, property ownership means the exclusive control of a particular person over specific physical objects and spaces. Conversely, property rights invasion means the uninvited physical damage or diminution of things and territories owned by other persons. In contrast, a widely held view holds that the damage or diminution of the value (or price) of someone’s property also constitutes a punishable offense.As far as the (in)compatibility of both positions is concerned, it is easy to recognize that nearly every action of an individual can alter the value (price) of someone else’s property. For example, when person A enters the labor or the marriage market, this may change the value of B in these markets. And when A changes his relative valuations of beer and bread, or if A himself decides to become a brewer or baker, this changes the value of the property of other brewers and bakers. According to the view that value damage constitutes a rights violation, A would be committing a punishable offense vis-à-vis brewers or bakers. If A is guilty, then B and the brewers and bakers must have the right to defend themselves against A’s actions, and their defensive actions can only consist of physical invasions of A and his property. B must be permitted to physically prohibit A from entering the labor or marriage market; the brewers and bakers must be permitted to physically prevent A from spending his money as he sees fit. However, in this case the physical damage or diminution of the property of others cannot be viewed as a punishable offense. Since physical invasion and diminution are defensive actions, they are legitimate. Conversely, if physical damage and diminution constitute a rights violation, then B or the brewers and bakers do not have the right to defend themselves against A’s actions, for his actions – his entering of the labor and marriage market, his altered evaluation of beer and bread, or his opening of a brewery or bakery – do not affect B’s bodily integrity or the physical integrity of the property of brewers or bakers. If they physically defend themselves nonetheless, then the right to defense would lie with A. In that case, however, it can not be regarded as a punishable offense if one alters the value of other people’s property. A third possibility does not exist.

Both ideas of property rights are not only incompatible, however. The alternative view – that one could be the owner of the value or price of scarce goods – is indefensible. While a person has control over whether or not his actions will change the physical properties of another’s property, he has no control over whether or not his actions affect the value (or price) of another’s property. This is determined by other individuals and their evaluations. Consequently, it would be impossible to know in advance whether or not one’s planned actions were legitimate. The entire population would have to be interrogated to assure that one’s actions would not damage the value of someone else’s property, and one could not begin to act until a universal consensus had been reached. Mankind would die out long before this assumption could ever be fulfilled.

Moreover, the assertion that one has a property right in the value of things involves a contradiction, for in order to claim this proposition to be valid – universally agreeable – it would have to be assumed that it is permissible to act before agreement is reached. Otherwise, it would be impossible to ever propose anything However, if one is permitted to assert a proposition – and no one could deny this without running into contradictions – then this is only possible because physical property borders exist, i.e., borders which everyone can recognize and ascertain independently and in complete ignorance of others’ subjective valuations.

From Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors:

A common mistaken belief is that one has a property right in the value, as opposed to the physical integrity of, one’s property. For elaboration, see pp. 139-141 of Hoppe’s A Theory of Socialism and Capitalism; also see my comments re same to Patents and Utilitarian Thinking. This assumption sneaks into or lies at the basis of many fallacious notions of property rights, such as the idea that there is a right to a reputation because it can have value. It ties in with the (especially Randian) notion of “creation” as the source of rights, and the confusing admixture of the “labor” idea, when we talk about using our labor to “create” things of “value” (like reputations, inventions, works of art). Actually, if you labor transform a homesteaded thing into something more valuable, you own the resulting valuable thing not because you created it; not because you own your labor–but because you were the first user of the underlying property that was transformed. Yes, your creative labor made the object that you owned more valuable to you (presumably, ex ante, as this was your goal), but it is not a source of ownership. Therefore, it’s a non-sequitur to leap from these observations and say that you own anything you create that has value.

As Hoppe notes in his classic article Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order,

“One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. There are no other ways.”

Note that Hoppe here acknowledges that “production” is a means of gaining “wealth”. But this does not mean that creation is an independent source of ownership or rights–production is not really the creation of new matter; it is the transformation of things from one form to another; things one necessarily already owns. Therefore, the resulting more valuable finished products–the results of one’s labor applied to one’s property–give the owner greater wealth, but not additional property rights. If I carve a statue out of my stone, I already owned the stone, so I naturally own the resulting statue; what has changed is that I have transformed my property into a new configuration that is worth more to me, and possibly to others. (This is discussed further in Owning Thoughts and Labor.)

Update: See also Murray N. Rothbard, Man, Economy, and State, with Power and Market, Scholar’s ed., second ed. (Auburn, Ala: Ludwig von Mises Institute, 2009; https://mises.org/library/man-economy-and-state-power-and-market), chap. 2, § 12, pp. 183:

what the enforcing agency combats in a free society is invasion of the physical person and property, not injury to the values of property. For physical property is what the person owns; he does not have any ownership in monetary values, which are a function of what others will pay for his property. Thus, someone’s vandalism against, or robbery of, a factory is an invasion of physical property and is outlawed. On the other hand, someone’s shift from the purchase of this factory’s product to the purchase of a competing factory’s product may lower the monetary value of the former’s property, but this is certainly not a punishable act. It is precisely the condition of a free society that a property owner have no unearned claim on the property of anyone else; therefore, he has no vested right in the value of his property, only in its physical existence.

Update: As Justice Holmes recognized in passing in a dissent in a case establishing a quasi-property rights in the product of the sweat of the brow, or the fruits of one’s labor: “Property, a creation of law, does not arise from value, although exchangeable—a matter of fact.” International News Service v. Associated Press, 248 U.S. 215, 246 (1918; https://supreme.justia.com/cases/federal/us/248/215/).