Note: Updated and revised version included as chap. 9 of Legal Foundations of a Free Society (Houston: Papinian Press, 2023).
See also Stephan Kinsella, “The Title-Transfer Theory of Contract,” Papian Press Working Paper #1 (Sep. 7, 2024), forthcoming in David Howden, ed., Palgrave Handbook of Misesian Austrian Economics (Palgrave, forthcoming 2025), which elaborates on the material discussed the chapter above and which also includes additional arguments not explicitly made there.
***
“A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability,” J. Libertarian Stud. 17, no. 2 (Spring 2003): 11-37, based on paper presented at Law and Economics panel, Austrian Scholars Conference, Auburn, Alabama (April 17, 1999).
Update: In the chapter I argue that having a right to to own or use a resource does not automatically imply the right to alienate or transfer it. Apparently Hume made a similar point. See David Owens, “Does a Promise Transfer a Right?,” in Gregory Klass, George Letsas, & Prince Saprai, eds., Philosophical Foundations of Contract Law (Oxford University Press, 2014), p. 80, 87–89, et pass, citing David Hume, A Treatise on Human Nature (L. A. Selby-Bigge ed., 1978), at 516–25. As Owens writes (p. 89):
The idea that we “own” our rights to control our performances tends to obscure Hume’s Point because, in Grotius’ words, it is “in the very nature of property” that we are able to transfer or otherwise modify our property rights by declaration. In fact Hume’s Point calls the possibility of property (so understood) into question quite as much as the possibility of promise. Why should I have both the right to decide whether or not to drive my car and the power to give that right away by declaration? How does the former right explain the latter power? Indeed how can the latter power be explained at all?
Owens also discusses how Grotius thought that “the power of transfer by declaration is invovled in the very idea of ownership.” p. 80: “Men who are masters of their own goods have by the law of nature a power of disposing of or transferring all or any part of their effects to other persons; for this is in the very nature of property.” Quoting Hugo Grotius, The Rights of War and Peace (Richard Tuck ed., 2005), at 566.
Related:
- Łukasz Dominiak & Tate Fegley, “Contract Theory, Title Transfer, and Libertarianism,” Diametros (10 Sep. 2022; doi: 10.33392/diam.180)
- KOL225 | Reflections on the Theory of Contract (PFS 2017)
- KOL197 | Tom Woods Show: The Central Rothbard Contribution I Overlooked, and Why It Matters: The Rothbard-Evers Title-Transfer Theory of Contract
- Interview of Williamson Evers on the Title-Transfer Theory of Contract (Aug. 5, 2014) (KOL146)
- Thoughts on Walter Block on Voluntary Slavery, Alienability vs. Inalienability, Property and Contract, Rothbard and Evers
(Jan. 9, 2022) - Justice and Property Rights: Rothbard on Scarcity, Property, Contracts…, Libertarian Standard (Nov. 19, 2010)
- The Problem with “Fraud”: Fraud, Threat, and Contract Breach as Types of Aggression (July 17, 2006)
- “Libertarian Legal Theory, Lecture 3: Applications I: Legal Systems, Contract, Fraud,” Mises Academy, Feb. 14, 2011 (KOL020)
- KOL338 | Human Action Podcast Ep. 308 with Jeff Deist: Rothbard on Punishment, Property, and Contract
- KOL372 | Discussing Contract Theory, Restitution, Punishment, with Matthew Sands of Nations of Sanity
- KOL285 | Disenthrall: Contracts with Stephan Kinsella
- KOL 029 | First Degree Liberty Interview: Argumentation Ethics and the Title-Transfer Theory of Contract
I have a question about the title-transfer theory of contract:
Imagine that a man writes on a contract: “I hereby transfer the titles to all the non-essential¹ property I acquire from the day X onwards to Robinson Crusoé IF he gives me $10,000 today”.
¹Consider as “non-essential” all property that is not require for the man’s subsistence.
Assuming that Robinson fulfilled the conditional part by giving the man $10,000, could he claim all “non-essential” property titles from the man from day X onwards? If so, wouldn’t this be a kind of voluntary slavery?
The man can still work on the market in whatever job he pleases, but all income would be redirected to Robinson.
The difference from slavery per se, I think, is that the man can choose where, how and when to work, as well as to choose to not produce anything more than what is required for his own survival. If there isn’t “non-essential” property to be alianeted from the man to Robinson, then force cannot be used to force him to work more. Still, for the man, this would be a very precarious position to be in.
This contract deals with a conditional title-transfer of alianable property that doesn’t exist yet. In some way, I believe this would be analogous to a loan with an infinite interest rate.
I wish to hear your opinion on this!
Thanks in advance for your time.
I have a question about the title-transfer theory of contract:
Imagine that a man writes on a contract: “I hereby transfer the titles to all the non-essential property I acquire from the day X onwards to Robinson Crusoé IF he gives me $10,000 today”.
¹Consider as “non-essential” all property that is not require for the man’s subsistence.
Assuming that Robinson fulfilled the conditional part by giving the man $10,000, could he claim all “non-essential” property titles from the man from day X onwards? If so, wouldn’t this be a kind of voluntary slavery?
The man can still work on the market in whatever job he pleases, but all income would be redirected to Robinson.
The difference from slavery per se, I think, is that the man can choose where, how and when to work, as well as to choose to not produce anything more than what is required for his own survival. If there isn’t “non-essential” property to be alianeted from the man to Robinson, then force cannot be used to force him to work more. Still, for the man, this would be a very precarious position to be in.
This contract deals with a conditional title-transfer of alianable property that doesn’t exist yet. In some way, I believe this would be analogous to a loan with an infinite interest rate.
I wish to hear your opinion on this!
Thanks in advance for your time.
Probably. But it could be complicated. but yes, I think so, if the contract is specific and formalized sufficiently.