Related posts:
I post below my interchange with Gus “DiZerega” from a Hayek list (of Higgs-spanking fame; update: see Hilarious Higgs versus a befuddled author), about the nature of aggression and whether minarchists or other statists are criminal-like (most recent at top):
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[Laurence Moss wrote: “I do have a challenge. Suppose I could persuade a “private property anarchist,” ( that is my term for what you are calling minianarchist or libertarian anarchist, etc.) that in the absence of the state, a huge Janjaweed-like mafia will emerge on each and every college campus that will terrorize, rape, mutilate and burn every copy of Human Action including your sacred autographed copy. Wouldn’t you then praise the gods that there is “a state” to protect the community? In his early Latin writings, Hobbes saw the state as a logical development out self-help militias that often arise spontaneously in the face of enemy attacks such the onslaught of Janjaweed anti-Misesians. (Hobbes would have had in mind the Mongol invasions or Moslem counter-invasions of earlier centuries).”
Your hypo is problematic in that it implicitly presumes that to be an anarchist is to have some kind of prediction that anarchy will be achieved, or how it “would” work if it were achieved. Let me try again to clarify: as I pointed out in my article What It Means to be an Anarcho-Capitalist, an anarchist simply (a) believes aggression is unjust; and (b) the state necessarily commits aggression–institutionalized aggression, at that. Therefore, the anarchist believes that states–in particular, the aggression they commit–is unjustified.
Your question seems to be of the following type. Imagine a person–call him C, for civilized–opposes aggression–he thinks it is immoral, or unjust. Now he thinks both private aggression (crime), and public aggression (institutionalized aggression perpetrated by the state) are immoral. In a society in which enough people voluntarily oppose aggression, and voluntarily respect their neighbors’ rights, to such a degree and extent that the state is widely seen as illegitimate and therefore does not exist and/or whithers away–then there would still be occasional acts of private aggression. The civilized people would still oppose this and believe it to be immoral.
In such a society, you might pose a hypothetical where C would face an alternative–where some mafia A arises and threatens his copy of Human Action–and ask him if he would be glad if another mafia B intervened and killed mafia A. But note: even if C says he is glad mafia B attacks mafia A, he still believes aggression is unjust as are mafias! In short, if you tell someone that aggression 1 or 2 WILL be committed, and he has a preference for which he opposes most, it does not mean he endorses either.
Note, you said: “just because every single time the state “acts” it involves the initiation of coercion or aggression it does not follow that ONLY the state acts by initiating coercion or aggression.” True: but as I implied above, anarchists oppose all aggression: both institutionalized aggression, and private aggression. I think it might be fair to say that libertarian minarchists oppose all or most private aggression, but do not oppose all institutionalized aggression. Perhaps they believe that “the choice” is between widespread private aggression (chaos-anarchy), and limited, channeled, “legalized” aggression committed by a state who helps minimize private aggression. Now, I think that reason and experience shows that public aggression is obviously more extensive than private aggression; but even if one made the other choice, *it still does not mean one thinks the state is justified*. It just means you think that aggression is unavoidable and you prefer to minimize it by having a state.
In my view, if you believe this, you can technically still be an anarchist, if you maintain the state is unjustified–it is just that you believe the aggression the state permits is not as bad as the private aggression that would be committed in its absence. So you still oppose aggression and believe the state is unjustified. Where you differ with other anarchists is they recognize the state is a far worse aggressor so any idea of having them protect us is ludicrous and dangerous.
However I think what happens is that libertarians who begrudgingly maintain that the state’s aggression is preferable to the private aggression that would rise up in the state’s absence, make the mistake of thinking this means the state is “necessary” or even “justified.” Once you take this leap, you now change your fundamental stance re aggression: now, you maintain that some aggression is actually justified: if a little aggression can be committed to stop greater aggression, for example, it is justified. This is a type of rights-utilitarianism.
My suspicion is that this kind of libertarian feels like a sell-out when confronted by anarchists who refuse to compromise, refuse to sanction aggression, refuse to admit that state violence is better than private violence. So they turn around and attack them as not being “realists” etc.
***
As I see it, “extreme” libertarians–anarcho-capitalists–disagree with each other quite often on concrete applications and questions of whether a given action in a given context *is* aggression. Where we all agree is that we oppose aggression, to the extent something can be identified as such. All libertarians oppose most aggression, and recognize that your average citizen condones a lot more aggression than they do. Whether these libertarians want to be “judgmental” or “label” your mainstreamer advocates of aggression as such; whether you believe it makes the mainstreamer criminal in that respect; is a side issue. The point is that according to even minarchist or classical liberal libertarianism, most mainstream people do condone aggression.
By the same logic, a libertarian who explicitly endorses (a small amount of) aggression, however reluctantly, is similar, from the point of view of the anarcho-libertarian, to the mainstreamer as seen by the minarchist libertarian.
I really don’t see what the minarchists are so offended about. All we anarchists are saying is the state is not justified, since in our view, initiated force against innocent people is not justified. Maybe you reject our view because you think it is too simplistic. Fine. But that is our view. The p
oint is, *we are losers*–we are not getting our way. I do have to pay taxes and give allegiance to the state, despite my abhorrence for it. For those who think a state is necessary, *you have won*–you are getting your way. For example, for libertarians (or others) who think some amount of taxes are justified–hey, you are getting my tax dollars. I am being clubbed out of them, *despite* my opposition. And surely we all know my bitching has no realistic chance of changing this. If anything, I should be offended that the statists are coercing me to go along with their vision of the great society; rather than advocates of the state being offended by complaints. Boy, if I had your deal, I would take it in a second. If I could just have a free society where institutionalized aggression was widely viewed as unjust, thereby preventing the advocates of the state from actually taking my property or drafting or killing me, but I had to let the statists bitch and moan about it, I’d take that deal in a second.
What is it, then, that advocates of the state really want? Is it not enough to ride roughshod over the opposition and non-consent of anarchists? Is it not enough to force us to go along with these insane collectivist mafia schemes? Do we also have to stop complaining about it?
—–Original Message—–
From: Stephan Kinsella
Yes, some of this is semantical: failure to define terms or use them consistently. Aggression is used by most libertarians to refer to the initiation of force–which I think is best described as an unconsented-to use of, or invasion of the borders of, another’s property or body.
Many libertarians, possibly influenced by Rand’s (mis?)use of the term “coercion,” use it as a synonym for aggression. But I would think “coercion” simply means inducing someone to do something by means of a threat of force; i.e., it is a species of, or threat of, force–and can be initiatory, or responsive. That is, coercion might be aggression; or it might be legitimate.
In my opinion, there are many flavors of libertarian. My own flavor happens to be non-utilitarian, principles-based; and non-statist, non-minarchist, anarcho-capitalist position. I have tried to explain what I mean by anarcho-capitalism in my article What It Means to be an Anarcho-Capitalist (available at www.StephanKinsella.com/publications). It does not mean one predicts or believes that we will achieve it; or even, really, that it is possible to achieve it. Rather, to be an anarcho-capitalist is simply to recognize that (a) aggression is unjustified, and that (b) states necessarily commit systematic, institutionalized aggression. As I see it, anyone who is not an anarchist–that is, who favors the existence of any state at all, even a minimal one; who believes that a state is *justified*–has to deny one of these two points.
Now non-libertarians really don’t have any problem with this test, because they just don’t really care about being very principled about aggression. They are quite used to the notion that sometimes the indiviual has to be sacrified for the masses–most of them support a draft, or a version of it such as the income tax. Etc. But as far as I can tell, libertarians are a lot more squirrelly when they are confronted with this anarchist test. They have a bit of discomfort with aggression, and probably are used to feeling superior to your average layman who is not nearly so scrupulous as they are about endorsing aggression. They are the ones used to feeling morally superior to their fellow “statists”. So they get miffed when they find a more “pure” libertarian in effect calling them on their own endorsement of aggression. You see this all the time in Objectivists, who feel compelled to label libertarians “nihlists” and anarchists as more dangerous than socialists or criminals. Methink they doth protest too much.
So you have minarchist libertarians or classical liberal types respond to my test in a few ways. One is pure outrage or other forms of evasion. Another is a desperate attempt to change the subject by saying that anarchy won’t work–which is exactly why I wrote that article, to explain that a believe that anarchy will “work” or will be achieved is not what being an anarchist is about. THe anarchist simply refuses to say that states are justified, since he opposes aggression and believes states commit aggression; the anarchist is similar to the libertarian who would condemn all acts of murder even though he thinks we can never achieve a murder-free society.
So when you can get a non-anarchist libertarian to actually answer the question: which do you believe?–that aggression is (sometimes) justified, or that states do not necessarily commit aggression, you get one of two answers. Some will take the latter. Objectivists do this, by blathering on about “context”. They say that “because” an objective law enforcer is needed, “therefore” the actions necessary for that agency to perform cannot be aggression or a rights violation. Etc. Or you will get the California types who say states don’t necessarily commit aggression, since aggression is not “what libertarianism is about” or that it’s not a coherent concept.
And some will say that unfortunately, sometimes aggression is justified. I can respect this answer; I think it is honest, and usually sincere. This position is the position of people who believe that if you don’t allow some aggression to be permitted (at least the aggression necessary for a minimal state to exist), then even worse aggression will be committed in the state’s absence. I think this position is flawed, but it is respectable, and honest, and sincere, and can be debated. And I think it is, at root, the real position of most libertarian statists–sorry, I mean non-anarchist libertarians. But most of them don’t want to admit it this starkly, because then it makes it clear that they do endorse aggression in some cases. Or maybe it makes them look as if they have become compromisers or something. I do not know.
But it does seem to me that this way of classifying and distinguishing types of libertarians is useful and perfectly sensible.
As for those libertarians who try to wriggle out of this classification scheme by denying the coherence of aggression as a concept, let me just say that I think that really, this response simply means these libertarians do not have opposition-to-aggression as their highest political value. That is fine. Nonaggression is the *reason* I am a libertarian. It might not be others’ reason. Why they are reluctant to admit this is a mystery. But I believe the libertarian concept of nonaggression is related to our concept of property rights: to the idea that the way to assign ownership of a given scarce resource is to assign it to the first user, or to his transferee. Basically, all non-anarchists do not believe that first acquisition is the primary or only rule for assigning property rights. They believe in some other rule. For example, if you favor a state, even a minarchy, then you favor some aggression committed by the state–such as its outlawing other agencies, or taxing its subjects. But these actions basically mean the state assumes partial ownership of property that it did not homestead: for example if it outlaws another agency, it is telling that agency what it can do with its own property; or it is telling me what I canno
t do with my money, because it will not let me hire the other agency. Therefore the state is assuming co-ownerhsip of my or others’ property. Libertarians who are in favor of this are saying that title to property is assigned to the state for some reason other than its having first possessed the property or having voluntarily received it. So all non-anarchists favor a property title rule other than first-use. They believe that it is legitimate in some cases for the state to in effect take property by force from the original owner or his transferee. Those of us who are opposed to aggression on principle believe that the owner of property is he who first appropriates it or whoever he gave it to. We think that if the state takes it, it is obviously theft and illegitimate. That is the difference between principled, anti-aggression, anarcho-capitalist libertaraisn, and all others.
Note that this dichotomy does not seek to justify one position over the other; it is just a clear way of identifying our differences.
Stephan
N. Stephan Kinsella
—–Original Message—–
From: Gordon Sollars
MessageStephan Kinsella writes – in response to Gus diZerega:
Yes, but Kopple flat out admitted he is in favor of some forms of
aggression– as you do below. My view is this. Anarcho-capitalists oppose all aggression.
We should be careful here about whether ‘aggression’ or ‘coercion’ are taken to be what some philosophers call “moralized” terms or not. That is, are all instances of the term moral violations of some kind or not? If I understand Stephan, he takes all instances of ‘aggression’ (and perhaps
‘coercion’) as morally wrong. Roger and Gus appear not to take ‘aggression’ (or ‘coercion’ ?) as “moralized”, so that not all instances must be wrong.
One problem that some of my libertarian brethren – who press very hard on ‘aggression’ (or ‘coercion’) – face is that they do not think that it is a moral violation to /respond/ to aggression (or coercion) with actions that, taken by themselves, appear identical to actions that mark aggression (or coercion). Thus, it seems that even libertarians do not oppose /all/ aggression (or coercion).
Even this conclusion must be qualified, since some definitions of ‘aggression’ refer to “unprovoked” attacks, while others refer to “offensive” or “hostile” behavior. The idea of ‘provoking’ helps the libertarian, but perhaps Roger or Gus would not necessarily claim that a wrong-doer has always ‘provoked’. Definitions of ‘coercion’ typically refer simply to “compelling by force”, and, as, such, would seem not to support the idea that ‘coercion’ is a moralized term even for the libertarian (who would compel a wrong doer to, say, make restitution).
Gordon G. Sollars
>NSK> You yourself oppose most aggression that I also oppose, I am sure, even if you are not an anarchist, but are merely a minarchist, classical liberal, etc.; and this means that you necessarily categorize those committing those acts of aggression as being aggressors–criminals.
So — things that you admit are aggression (say, murder), … the people who commit these things are not … criminals? In your view, aggression (of the type that you yourself condemn) is not criminal?
>NSK:> . . . I think there is an obvious and direct correlation between civilization, and the willingness of the general populace to respect each other’s rights (whatver those rights are). Would you really disagree wiht this?
> Yes I would. I would not use rights language, which implies a lot of metaphysical assumptions about the nature of human beings that are not necessary for peaceful and mutually satisfying relationships. If you used the term “respect for others” and leave off rights talk – which can but need not indicate respect, (nor need respect indicate a belief in rights in any strong sense) – I would agree with you. <
I think this is just semantics. I think respect for others is indeed civilized and is the very reason and the root of respect for others’ rights. But this is all irrelevant. My main point is that some of us libertarians are extremely opposed to aggression. In my own case, I view the predisposition to avoid aggression as linked to the desire to be civilized… but this is more of an analysis or personal way of looking at it. I readily admit the concept “civilized” is not rigorous, but more evocative. But I still think the essence of civilization–the reason something of value gets produced by human interaction–is due to the peaceful, cooperative aspects of it. Not the aggressive aspects.
> I generally avoid the term “civilized” because it has been used to justify so many horrible actions against those deemed uncivilized. <
Well, I tend to try to focus on truth, not self-censoring out of fear for how others might misuse a given idea.
> If you act in a respectful manner towards someone or something, you act in a civilized manner towards it. <
I quite agree. As between two individuals, if they are really respecful, they don’t go around bashing each other in the head.
>NSK:> Third, of course there are uncertainties about *what is aggression* in a given case. If you said you cannot necessarily join me in denouncing a given institution or practice because you are not quite *sure* it is aggression, that is one thing.
> And that is the main thing. In at least some cases where you might think something is aggression, I am quite sure it is not. <
Yes, but Kopple flat out admitted he is in favor of some forms of aggression– as you do below. My view is this. Anarcho-capitalists oppose all aggression. You could say that avoidance of aggression is their highest political value. Minarchists and others down the spectrum–classical liberals, democrats, welfare-statists, conservatives, etc., all oppose many forms of aggression but also endorse some forms of aggression. Most people, for example, favor taxes. I don’t see how you can deny that this is aggression. These people–I don’t deny many of them are sincere–believe that for whatever reason the aggression they favor *is justified*. But all this means is that all non-anarchists–which is to say, all statists–value something more than non-aggression. For example you might prefer egalitarian results, to avoiding all aggression; you are willing to have a bit of aggression to have a more egalitarian society. Or whatever. The point is that if you endorse what you acknowledge or plainly is aggression, in any case at all, then you evidently have something *other* than non-aggression as your highest political value. If I valued X more than non-aggression, I would of course be willing to accept some aggression to achieve X; but I would not be ashamed to admit it; and I would not attack principled opponents of aggression who merely pointed out the difference between me and them. I really find it baffling that some minarchists (or worse) want to have it both ways: they want to favor institutionized aggression (often for sincere reasons, to be sure), but not to be accused of favoring aggression. It is truly bizarre. Why not just take the honest approach and say something like, “Hey, it’s not my fault that the world is such that it’s better to have some aggression in some cases, than to always refrain from its use.” If that’s what you believe, just say so. But I think most libertarians or classical liberal types know intuitively how distasteful aggression is. In fact my theory is that this is the reason most of us become libertarain. But some of us apparently abhor aggression more than others; some of use find it distasteful but also have other things that drove them to libertarianism–some kind of utilitarian-related desire to “increase overall wealth” or whatever. So they have several value they want to achieve, and they see some as in conflict, and some as more important than others when push comes to shove. So for example they are willing to endorse aggression to achieve some other value that is more important to them.
(Incidentally: I have discussed this before, as detailed in the last 2 paragraphs of this post (: In particular, this post has links to threads which show some conservative types trying to wriggle out of being labeled advocates of aggression despite clearly endorsing it: e.g., my debate with Ed Feser et al. about the nature of criminality and aggression in this thread; the Chronicles thread I participated in with Scott Richert about the non-aggression principle (see his The Limits of Economics; Economics, Catholic Social Teaching, and Dissent); also the recent post on LewRockwell blog lately about this and Thomas Woods versus Thomas Fleming, Storck, et al.; and a Chronicles blog thread I participated in with Fleming et al. )
> I am not sure anyone on this list endorses aggression for the same reason no one on this list endorses murder, Both are BY DEFINITION morally loaded terms that imply a wrong is being done. <
But Koppl did say he endorses aggression, as do you. Kopple said, “Yes, yes, that means I would vote to have the state coerce you, Walter, aggress against you, force you to do things you don’t want to do! This is the bedlam into which one is led when one lives without the non-aggression axiom.” And you say below: “I can also conceive of at least hypothetical instances where I would endorse aggression however personally painful it would be.“
Aren’t these outright admissions of favoring aggression? Now you are saying that some people do not actually endorse aggression, despite saying that they do? It seems very clear to me that if you do endorse aggression then you must value something higher than non-aggression. That is fine–hey, you might even
be right. Maybe my obsession with avoiding bashing my neighbors’ over the head with a brick is too extreme. Maybe I should not be so inflexible in my view that you should not use or take someone’s property without their consent.
Moreover, besides the “emergency” or “extreme cases” you allude to: I assume you are not an anarchist (if I am wrong please correct me). But anarchists simply are those who deny the legitimacy of states. So if you are not an anarchist, then that means you think states are legitimate (yes yes, I realize you say you think democracies are not states–I don’t care what label you want to use or avoid, but for me the essence of the “state” is a monopoly on law enforcement and/or the power to tax; do you support either of these for your “non-state”? If not you are an anarchist like me, and I am not sure what you are objecting to. So I have to assume you do favor instittutionalized aggression, despite your reluctance to say you endorse a state and desire to call it by some other name like “democracy” instead. The point here is that you are not only in favor of aggression in emergency or extreme cases — unless you are an anarchist, you are in favor of regular, omnipresent, systematic, institutionalized aggression–of however low a level. 1% taxes is better than 51%, but still institutionalized aggression, in the form of legal robbery.
>I think people have what we can call intrinsic value, which is rooted in my understanding of Hume’s concept of “sympathy,” and that outcomes matter. <
I am not sure what “intrinsic value” is–seems a bit metaphorical and imprecise for me, but in any event, my own view is that *empathy* for others is what gives rise to a general reluctance to engage in violent interaction with others… what I might think of as the “civilized” predisposition (apologies)—hence the desire for most people–not criminals or outlaws, but civilized people, yes–to find justifications for force, and to engage in it only when they satisfy themselves that despite their prima facie reluctance, it is justified in this type of case. My view is that the person who is most reluctant, and has the highest standards or thresholds to be satisifed for justifying proposed or desired violence, are just libertarians. And that the most consistent among them recognize that the only good justification to be found is for force that is *in response* to aggression, or initiated force; and the most hyper-consistent among them are the anarchists. In short, the most “true” libertarians are those who oppose all aggression. It is like an ideal to aspire to.
> You take a word that every English speaker agrees refers to unjustified action, at least in the absence of overwhelming necessity, and regrettable even then, and give it a meaning that most people will reject. Thus, you abuse the term in general use unless you can make a persuasive case. And calling those who disagree aggressors and uncivilized won’t convince anybody. <
Two comments. First, as I quoted you and Kopple above, you apparently do endorse “unjustified action,” if by that you mean the aggression. Second, what is the relevance of your comment that it “won’t convince anybody”? Is that supposed to mean that it is wrong? If so, do you mean to imply that an idea’s validity is measured by how persuasive it is likely to be? (Would that imply that a woman who is unable to accuse a rapist not to rape her must be wrong in saying it is a rights violation? that the rapist “disproves” her contention by simply overpowering her and not being moved by her objections?) Or are you trying to give me advice about whether it’s “worth it” (to me?) to expend effort trying to futilely persuade others of something (that might be true)? I never understand this activist mentality that confuses strategy with truth.
> I would argue, and have incessantly, that democracies are not states, they are spontaneous orders. States are instrumental organizations in Hayek’s sense. I would also argue that any coherent democratic theory relies on the value of consensus, not majority rule. <
Ah, so your “democracies” don’t commit acts of institutionalized aggression? They don’t tax, they don’t outlaw competitors, they don’t force all people in their grasp to become members? News to me.
Dear Mr. Kinsella-
You wrote
First, I don’t think my clear assertion of my views about aggression and what it entails–and that it correlates with being civilized–is “smug”.
I consider it smug for someone to take for themselves the title civilized, and apply to others the less flattering characterization of uncivilized, ESPECIALLY when the person claiming the title, and those with similar views, comprise a statistically insignificant portion of humanity AND the overwhelming majority of human beings oppose aggression. Where they differ is what constitutes it and the fact that so many disagree suggests there may be room for honest disagreement rather than barbarism.
You yourself oppose most aggression that I also oppose, I am sure, even if you are not an anarchist, but are merely a minarchist, classical liberal, etc.; and this means that you necessarily categorize those committing those acts of aggression as being aggressors–criminals.
No I do not.
. . . I think there is an obvious and direct correlation between civilization, and the willingness of the general populace to respect each other’s rights (whatver t
hose rights are). Would you really disagree wiht this?
Yes I would. I would not use rights language, which implies a lot of metaphysical assumptions about the nature of human beings that are not necessary for peaceful and mutually satisfying relationships. If you used the term “respect for others” and leave off rights talk – which can but need not indicate respect, (nor need respect indicate a belief in rights in any strong sense) – I would agree with you.
In other words, it is inevitable that if we have different concepts of justice and rights, then we will have necessarily different views about what constitutes “civilized” behavior.
I generally avoid the term “civilized” because it has been used to justify so many horrible actions against those deemed uncivilized. If you act in a respectful manner towards someone or something, you act in a civilized manner towards it. That is how I usually use the term, if I have to.
Another legitimate use of the term is to refer to literate cultures, and that says nothing at all about the moral behavior of its residents. Rome had a civilization. It also acted horribly in all too many cases. So has every such civilization. So this very legitimate use of the term does not require us to agree about justice and rights to agree that a particular society is a civilization.
Third, of course there are uncertainties about *what is aggression* in a given case. If you said you cannot necessarily join me in denouncing a given institution or practice because you are not quite *sure* it is aggression, that is one thing.
And that is the main thing. In at least some cases where you might think something is aggression, I am quite sure it is not.
I am not sure anyone on this list endorses aggression for the same reason no one on this list endorses murder, Both are BY DEFINITION morally loaded terms that imply a wrong is being done. One MIGHT endorse actions that will injure peaceful people if there seems no alternative and the costs of not doing so are deemed prohibitively high. However undesired and unfortunate, this is a logical possibility for anyone who would not be willing to run the risk of injuring an innocent person if the cost of not doing so were the destruction of the world, or even the universe. The example is absurd – but I use it because I am inclined to regard most kinds of moral absolutism as absurd. Like Roger I am powerfully influenced by Hume, though maybe not in the way he is.
I think people have what we can call intrinsic value, which is rooted in my understanding of Hume’s concept of “sympathy,” and that outcomes matter.
. . . The plain fact is that I and probably Block would view any minarchist as *mistaken* to the extent he advocates aggression–and in fact, as advocating criminality. Just as the minarchist views the conservative as advocating criminality in many of the policies the conservative endorses. I see no reason to hide or to evade or to pretend otherwise.
But that is just the point. You take a word that every English speaker agrees refers to unjustified action, at least in the absence of overwhelming necessity, and regrettable even then, and give it a meaning that most people will reject. Thus, you abuse the term in general use unless you can make a persuasive case. And calling those who disagree aggressors and uncivilized won’t convince anybody.
You can make a persuasive case to me by rebutting the various points I listed in my original post in this thread. And I will then become an anarcho-capitalist – as I once was long ago.
. . . libertarians who say they are not anarchists, and support the existence of some minimal state, must either: (a) maintain that the state does NOT necessarly employ aggression;
I would argue, and have incessantly, that democracies are not states, they are spontaneous orders. States are instrumental organizations in Hayek’s sense. I would also argue that any coherent democratic theory relies on the value of consensus, not majority rule.
. . . What I do not understand is why people who frankly acknowledge that they sometimes endorse aggression, are reluctant to admit this, and react hysterically when called on it.
Because they think you use the term incorrectly. I agree with them. As you see, I can also conceive of at least hypothetical instances where I would endorse aggression however personally painful it would be. Indeed, I can logically conceive of cases where the aggression I endorsed might cause greater pain to me than to the person aggressed upon – and I would still endorse it.
best,
Gus diZerega
Dept. of Government
St. Lawrence University
Canton, NY 13617
First, I don’t think my clear assertion of my views about aggression and what it entails–and that it correlates with being civilized–is “smug”.
Second, smugness is irrelevant to the substantive correctness of my assertions. In any event, I prefer to focus on substance, not meta-issues like smugness, presentation style, tactic, rhetoric, strategy, and activist concerns. It has always seemed to me that truth is more important. Call me crazy. It has also always seemed to me that there should be no reason one cannot state his views plainly and bluntly; that people being thin-skinned and ever ready to resort to meta-argument, which amounts to a change of subject and evasion, is just a time-wasting distraction.
You yourself oppose most aggression that I also oppose, I am sure, even if you are not an anarchist, but are merely a minarchist, classical liberal, etc.; and this means that you necessarily categorize those committing those acts of aggression as being aggressors–criminals. Just like I do. Even if they are committing or endorsing those acts out of ignorance, or even good faith. The question of whether being mistaken in a given case is excusable is a separate issue. So it would appear that you and I would
both label a large number of people as “aggressors”, and as engaged in what we both consider to be wicked or unjust. Is this “smug”? Or is your main objection that I correlate my own aggression-related norms to being civilized? Is this seriously your objection? What is civilization? It is organized human interaction, which of course at its base depends on peaceful interaction. I think there is an obvious and direct correlation between civilization, and the willingness of the general populace to respect each other’s rights (whatver those rights are). Would you really disagree wiht this? In other words, it is inevitable that if we have different concepts of justice and rights, then we will have necessarily different views about what constitutes “civilized” behavior.
Third, of course there are uncertainties about *what is aggression* in a given case. If you said you cannot necessarily join me in denouncing a given institution or practice because you are not quite *sure* it is aggression, that is one thing. But Koppl, if I recall, off-handedly and casually admitted he believes in aggression in some cases. Not that he disagrees with Block about whether a given policy or law or institution is aggression–reasonable libertarians can disagree about this. But that he actually endorses aggression. Now this is fine; he is entitled to endorse aggression; are others of us not free to condemn aggression? And given these simple observations about differences among types of libertarians, are we supposed to avoid acknowledging implications of this, out of some rule of politeness? No. The plain fact is that I and probably Block would view any minarchist as *mistaken* to the extent he advocates aggression–and in fact, as advocating criminality. Just as the minarchist views the conservative as advocating criminality in many of the policies the conservative endorses. I see no reason to hide or to evade or to pretend otherwise.
I have tried to detail some of this in my article What It Means To Be an Anarcho-Capitalist (http://www.lewrockwell.com/kinsella/kinsella15.html). As I explain there, those libertarians who say they are not anarchists, and support the existence of some minimal state, must either: (a) maintain that the state does NOT necessarly employ aggression; or (b) maintain that some aggression is justifiable. I see no logical way out of this. I think the answer, to be honest, is (b) in most cases. What I do not understand is why people who frankly acknowledge that they sometimes endorse aggression, are reluctant to admit this, and react hysterically when called on it. IT is akin to liberals nowadays not wanting to be called liberals (by contrast, conservatives don’t mind being called conservatives; and libertarian anarchists like me do not mind frankly admitting that we oppose aggression period). If you think aggression *is* justified, why not just admit it? Why turn it into a meta-discussion about the propriety of having the discussion?
Stephan Kinsella wrote:
My point here is not to justify our end of the spectrum; some people prefer
to be civilized and deal with others in peaceful ways wherever possible;
others do not.
I had intended to stay out of this, but the smugness of the above broke my resolve.
Some libertarians find aggression easy to define because they define it in a way that most reasonable people find unsatisfying, even if it leads to a simple world.
Of course armed robbers are aggressors, and I know of next to none who think otherwise. Does someone who wants a national park fall in the same category? The surrealists in part of the libertarian movement would say yes. 99 % of humanity would likely say no.
Libertarians with such views seem to rest their argument on several assumptions not supported by fact or logic.
1. The market is a perfectly neutral means for facilitating peaceful human cooperation.
It is not. That it is not is a major reason Hayek favored certain kinds of government action. For example, it breaks down customary ties that served to assist people who are caught in misfortunes not of their own making. I am very well aware of the argument that free people can find alternatives sources of support. I am also well aware that large numbers of people fearing such things happening to them have been far from convinced. Democracies can be ways of rationally reducing organizing costs for large numbers of relatively isolated people if modest means, at the risk of having some of the benefits siphoned off by those who game the system.
2. Property rights are justly owned, or a perfectly just system of property rights can at least in theory be imagined, such that there would be no need in the name of justice to intervene in property ownership.
There is no generally agreed upon theory of property rights that can meet the latter criteria – in no small part because libertarian theories of property rights assume a Newtonian kind of world, where boundaries can be firmly delineated and in principle inexpensively defended. That model breaks down as people become ever more intricately involved with one another, in no small part because of the market’s success. And existing systems of property rights hardly reflect perfectly just allotments by any criterion. Please, tell me how I can objectively determine whether sound waves or photons or odors violate my property rights? Who draws the line if a line must be drawn? Why should I accept the judgment of the line drawer? If I do not accept the judgment, by the radical libertarian standard of aggression isn’t it an act of aggression against me?
To ask victims of unjust actions to refrain from seeking government help because governments are or can be aggressors is simply asking those who are weak in the absence of government to submit to those who are strong in its absence. Of course, all real examples of this happening in the world we live in are belittled as occurring in a non libertarian world, and so are not really indicative of libertarianism’s practicality. But the market exists in a non libertarian world, and libertarians have no trouble saying it is evidence that their principles are solid. Yet key elements of the market are defended by government – su
ch as contracts and property rights. It is skimming the cream to take those less than perfect examples of today as evidence for your position and rejecting the less than perfect examples that challenge it.
3. As has been discussed earlier on this list, public values are not always reflected in consumer choices, as Mark Sagoff memorably and convincingly showed in his book, The Economy of the Earth. Check his discussion of Mineral King and Disney locatable in the index. I have used similar cases in my teaching every year for over ten years, ALWAYS with the same results. I also know it is true for me personally regarding things like the Trail Ridge Road in Colorado – I drive it frequently, would pay tolls to drive it if necessary, in fact, in a sense I do when I pay a park entrance fee and plan only on driving through it. And I wish it did not exist.
4. If theorists from Aristotle to Madison to lesser contemporary figures like myself are correct, what we today call democratic theory can only be coherently developed with its ideal being consensus, not majority rule. Rules that can be supported unanimously do not need to require unanimity, in fact they probably would not, because that leaves the community open to blackmail by a single party. In practice super majorities are more reasonable for the most important decisions except when speed is of the essence – and are relied upon in efforts to create governments based on consent, such as our own. That such rules can be subverted is perhaps evidence the task is impossible, but it may also be evidence the task needs to be done better.
I send this post only because of the irritating smugness of the author taking upon himself the label of civilized, and denying it to those of us who see the world as more complex.
On an unrelated matter, I also suggest we go back to what was once a rule for posting- that we identify who we are. I have noticed some posts were virtually anonymous. Who in the name of the Gods is “Bill” or whoever that was?
i think that is more civilized.
Gus diZerega
Visiting Assistant Prof.
Dept. of Government
St. Lawrence University
canton, NY 13617
—–Original Message—–
From: Stephan Kinsella
Roger,
At least you admit that you are in favor of aggression. But you seem to think you can dismiss those who oppose aggression on principle, like Walter and real libertrians, with a wave of the hand and some vague comment implying that if you are concerned about “actual details of how things really get done in a given market or region” then, why, of course, you would support aggression. Such considerations may suffice for you to favor aggression in a given case, but of course, it does not, for true libertarians–that is, for those of us who sincerely and on principlied grounds oppose aggression, and think violent force should be applied to our innocent neighbors *only* if it is truly justified and called for–that is, only in response to their acts of aggression.
True libertarians simply are those people who have a very high threshold to be satisfied when seeking justification for violent conflict with our neighbors. At the other end of the spectrum are the utterly criminal minded, and the might-makes-right types, who simply do not give a damn whether their violent actions are justified–they want what they want, and that’s that. They are hardly humans, hardly civilized; they are near-animals. Between the uncivilized, animalistic, criminal-mentality, thuggish end of the spectrum, and the civilized, anti-aggression, libertarian end, there are people who oppose some aggression, and who are to that extent civilized, and who also favor some aggression, to that extent rejecting civilized human life.
My point here is not to justify our end of the spectrum; some people prefer to be civilized and deal with others in peaceful ways wherever possible; others do not. But my point is that the existence of mean criminals at the bad end of the spectrum does not serve to prove to us libertarians that our preference for peace is wrong; it just means there are unfortunately people out there who are willing to live as savages and harm the rest of us. Likewise, the fact that there are people in between, like you apparently, also does not serve as any kind of disproof of our principled opposition to aggression. A bandit has, I suppose, if you press him, some weak set of reasons for his willingness to aggress against others; it is irrelevant, since he simply has a very, very low threshold for being willing to commit or condone aggression. Likewise, the fact that your concern about “actual details of how things really get done in a given market or region” seems to satisfy for you the appropriateness of using initiated, physical violence against innocent people is also irrelevant–it only shows that you have a lower threshold for approving violence than a real libertarian does. So my point is, what is the relevance of your announcing that you happen to have a lower threshold than does, say, Walter? How in the world does the fact that you have a lower threshold even suggest that his threshold is too high?
Stephan
N. Stephan Kinsella
—–Original Message—–
From: Roger Koppl
Walter, I didn’t mean to sign onto just everything Hayek might have said. On the other hand, I agree with Hayek on the particular shocker you indicate: “limited support for rent control.” His “support,” as you know, consisted merely in favoring a gradual, not instantaneous, elimination of such controls. I haven’t examined how to exit rent controls, so I don’t have a strongly held position to defend. But the general suggestion that you don’t just pull the plug seems right to me. I think de-regulation is a very difficult matter and should be approached carefully. Yes, yes, that means I would vote to have the state coerce you, Walter, aggress against you, force you to do things you don’t want to do! This is the bedlam into which one is led when one lives without the non-aggression axiom. You end up having to sort out, you know, actual details of how things really get done in a given market or region. When bereft of the non-aggression axiom, you have to study the world to form an opinion about many of the phenomena within it. It’s very messy business and may drive one to support various forms of coercion. You see, Walter, I really am not a libertarian. I really do leak at least as much as Hayek. I love it that Pete calls me “left.” Who else would give me such a label?
Cheers,
Roger
—– Original Message —–
From: “Walter Block” >
> Dear Roger:
>
> I agree with you entirely in your criticism of Pete. Certainly, this
> material is not “out of bounds.”
>
> But I’m puzzled by your remarks about the non
> aggression axiom. You favor the initiation of
> aggression against non aggressors? Surely not?
>
> We need not go there, however, to look askance at
> Hayeks support for all sorts of leftist welfare
> schemes. Don’t tell me you go along with those,
> included limited support for rent control?
>
> Best regards,
>
> Walter
>
> — Roger Koppl wrote:
>
> > Sure Pete, of course. If you want to put forward
> > any research agenda in any field, then the point of
> > about predecessors is their frameworks and tool
> > sets, not a checklist of beliefs with which one
> > agrees or disagrees. No kidding. Indeed, my recent presidential
> > address before the Society for the Development of Austrian Economics
> > is given in this general spirit. It lays out how Austrian economics
> > has become “mainstream” again:
> > http://alpha.fdu.edu/~koppl/sdae.doc. (What a
> > shameless plug!) The context of my recent comments
> > on this board, however, was Juliet Williams’ post,
> > which raised the question of w
hether Hayek the man
> > was or was not a “staunch libertarian.” That’s less
> > interesting, but not a out-of-bounds, Pete.
> >
> > I happen also to believe, by the way, that the
> > Hayekian framework does not lead to
> > anarcho-capitalism. Some of the issues have come up
> > on this board before. Humean status quo bias is a
> > big issue in this regard. I’m very much the Humean
> > on that point. This is a conservative element in
> > the though of both Hayek and Hume. I think the
> > criticism of hubris and constructivism cuts against “staunch
> > libertarianism” as well, if only because it tells us to dispense
> > with any supposed fundamental axioms on which we might hope to
> > build.
> >
> > This brings me to Walter Block who is surprised
> > that I like Hayek’s leaking. Well, Walter, it is
> > for a reason that Pete calls me “left”! This is the
> > sort of thing that happens when you let go of the non-aggression
> > axiom. Tsk, tsk, tsk. 🙂
> >
> > Cheers,
> > Roger
“The person or company who does a deal with ABC Corp. is in effect agreeing not to pursue the assets of the shareholders if the company owes him money. So whose rights are violated?”
But how many firms of any size don’t use the goverment sanction that is a “veil of immunity,” otherwise called incorporating? I mean, if you can get a large immunity from debts just by the relatively smaller cost of incorporating, why wouldn’t a self-interested investor/owner do so?
So once every firm of any substantial size is incorporated, what real “agreement” (really choice) is there?
Published: October 27, 2005 10:13 PM
The question, it seems to me, as I already stated, is: whose rights are violated by incorporation? If no one’s rights are violated, what is the (liberarian) complaint? If you feel incorporation actually violates a given individual’s rights, please specify who and how. it it not clear from your amorphous question exactly who you think has their rights violated, and why exactly what action or institution or mechanism. Can you be explicit?
Published: October 28, 2005 1:25 AM
Or am I missing something?
Published: October 28, 2005 7:10 AM
Would a moral person want credit without liability?
Published: October 28, 2005 10:05 AM
My reservation, and the reservation many of my far-left anticapitalist and anarcho-syndicalist frends have about corporations is with the special, government-conferred advantages enjoyed by certain corporate forms after the Santa Clara County v Southern Pacific Corporation case (http://www.ratical.org/corporations/SCvSPR1886.html), specifically with the differential tax treatment and conferring of an artificial corporate “personhood” upon the corporate entity as opposed to the individual stockholder’s real personhoods.
My own conviction is that if corporations were transparent to law except for their contractual limitation of liability, and the shareholders of the corporation obtained no legal advantage whatsoever over unincorporated businesses or individual persons, then I would have no objection to the corporate form at all. But just taking into account the egregious difference in taxation between a privately-owned business at its owners’ death and a corporation’s tax liability at corporate succession it should illustrate how the interaction of the corporate form with the law as we now know it confers assymetric advantages on stockholders that individuals are prevented from enjoying.
Published: October 28, 2005 10:25 AM
Published: October 28, 2005 11:27 AM
You can do collective action via private contract.
When you create something called a corporation, it is normally to avoid problems like people dying (so a corporation could own something in perpetuity), or liability (instead of a real person, you have an amorphous blob to try to sue).
Lets say I incorporate myself. Should Me, Inc. have any greater or lesser rights or responsibilities than Me, the person? The corporation can’t marry. But what else is different? If nothing, then there is no reason to have corporations. If there is a difference, then it might be a method to violate rights. If I can protect Me, the person’s assets from a suit against Me, Inc. (can Me, Inc. be jailed?), then there is a problem.
Published: October 28, 2005 1:29 PM
Seriously, the ideal of a corporation really does leave very little to quarrel with in an Austrian sense. But the Constitution, bless its founders hearts, is ostensibly written to protect the rights of individual PEOPLE, not GROUPS of people. Union Pacific v Santa Clara changed this, basically saying the rights allegedly guaranteed to individuals by the Constitution were also guaranteed to particular arrangements of people in groups. If we believe that the Constitution as such has any integrity (and I am not as ready yet as some to give up on it completely), then the supremes of that day should have remanded the case to the states, which is where corporation law and contracts was rooted until that time.
Published: October 28, 2005 4:30 PM
Published: October 28, 2005 5:00 PM
Whether or not the victim can collect damages from the corporation’s assets is beside the point. The point is that the original damage to person or property is encouraged by a protectionist type scheme, allowing some to take injurious action towards others, in a legal atmoshphere they know will apportion the damges incrementally to shareholders.
The law may not say that such a dynamic is it’s intention. There may be no law stating that this behavior is legal. Rather the incentive to injurious conduct is an unintended consequence of a protectionist scheme. The scheme removes the disincentive to injurious conduct, by apportioning the penalty for such conduct among share holders.
If it is argued that laws of incorporation are benign, and that the entire structure could be created by contract, or is an implicit contract, the contract envisioned would have to include the victim also. The implicit contract would then be something such as: “I agree to participate in a system where an injurious act may be committed against me due to incentives created by laws of incorporation, etc…”
To the extent laws of incorporation shield (protect) the wrongdoer, by apportioning penalty to a larger group, this system is harmful from the point of view of those harmed,who may have preferred not to be harmed in the first place, even if they can collect financially from the corporation’s share holders.
Published: October 29, 2005 11:35 AM
Check your premises. The state is a corporation. This is explicit in local governments and public service monopolies (dams, water districts, PBS), but equally true of nation-states. Privately held corporations are no different in legal character. Their existence as “fictional legal persons” and the impersonal character of limited liability distorts the entire legal system. Think Enron. No one individual was personally liable, all were shielded more or less by the byzantine structure of an impersonal corporation.
Wolf DeVoon
Published: October 30, 2005 8:43 AM
Published: October 30, 2005 2:59 PM
It depends on whether you think this sort of freedom of contract exists under Bork’s ink blot. If you don’t, then your question is understood and requires no answer. If it does exist, then the government granted immunity effectively destroyed this particular right of contract (implicit elimination of the right).
Published: October 30, 2005 7:23 PM
I’m not following you. Are you saying that incorporation protects everyone associated with the company, from shareholders and upper management to the delivery truck driver, from any legal ramifications of their actions at all?
I thought Stephan’s point was that this is not the case. The truck driver can be charged for negligence etc, and so can his superiors. My understanding is that the point of incorporation is to simplify contracts which are permissible on a one-by-one basis: that is an agreement that creditors can hold the shareholders only responsible for debts only to the extent that the pooled funds of that corporation can cover them, and not leave the shareholders personally liable for such debts.
That means that we can buy shares in a company, and at worst loose our entire investment, but no more, and we don’t have to hire a lawyer to write up a contract each time stipulating we only agree to be liable for our investment.
Published: October 31, 2005 9:58 AM
Published: October 31, 2005 12:31 PM
Let me reply in reverse order to some of the posts so far. Note that I have posted a reply or two already to Gil Guillory’s separate post about this topic (in which reply I elaborated on the nature of “fraud”).
adam knott:
Not sure what you are trying to say. Talk of incentives is irrelevant; this is the language of a utilitarian. We are talking about principles–rights–here. The issue of what to do with the prospect of “waste” of assets available to pay damages, in the period between filing of a suit and its resolution, is technical and uninteresting, not really relevant to the question of whether limited liability is libertarian or not. It is not related to limited liability, since the issue you describe could occur in a partnership or other type of entity. It is not only corporations that have employees. Or maybe I am missing your point. If so, please clarify and restate it clearly, making your assumptions clear, with a clear question.
Gregory White:
Rights have nothing to do with recognition in a constitution, especially the federal Constitution which protects rights (from federal invasion) primarily by limiting and enumerating federal powers. Legal recognition of incorporation does not, in any event, destroy any right. It simply gives an option to individuals to conveniently organize their affairs exactly like they have a right to do by private contract, anyway.
Wolf DeVoon:
I’ll answer despite the “Check your premises” comment that always sets off my Rand-dar. I think you are confused. I am not arguing that there should be corporate law. I am anarchist and think it should all be private. But some libertarians–increasingly apparently those ignorant of just what corporate law says–say corporations are illegitimate becuase of their limited liability. As you are assuming here. In a private society you could have a company called Enron, based on a founding contractual agreement among shareholders whereby each shareholder’s liability for contractual debts of the entity is limited to his investment. Each contract between Enron and some third party would be subject to these limitations. Every third party is voluntarily agreeing not to pursue the assets of the shareholders in case of a claim, but to go only after the defined assets “of the company”. This is not unlibertarian. Libertarianism does not counsel hostility to “impersonal” corporations any more than it counsels wearing birkenstocks and smoking weed.
Vince Daliessio:
The Constitution has nothing to do with state recognition of corporations. This is a state law matter. The state does not need to find authority in the federal Constitution to enact a law; and there is no limit on states recognizing corporations in their state constitutions or in the federal one.
To call a corporation a legal person is just a convenient legal fiction. In a libertarian society it would just be a way to conceptualize a complex contractual arrangement.
However, you are right, in a sense: I would like to see incorporation law changed so that the corporation is not viewed as a “person”, at least for income tax–corporations should not be taxed; rather the real owners should be the only ones taxed, and only once, not twice.
tz:
Corporations are formed to provide a convenient way to invest in a company without having to have direct control or input and liability. This is not rocket science.
This betrays a confused understanding of this area. It is utterly silly to say that if there is any real reason to form a corporation then it must be because it violates right. Bah.
Vince:
It’s the other way around. Corporations should not be taxed at all–since this is just double taxation of shareholders. Conferring personhood on corporations actually subjects them to unfair taxation on top of what the shareholders have to pay.
The primary complaint about the corporate form is that it gives limited liability. It has nothing to do with its tax status. Of course, there would be no taxes in a free society so this is irrelevant.
Today, however, a corporation is a legal person so has to pay (corporate) income tax. Then, any dividends paid to shareholders are taxed again. This means the shareholder is taxed twice. Compared to the investor in a different form of business, such as sole proprietorship or partnership, who is taxed only once.
Billwald:
This is almost not worth replying to. It is neither unlibertarian, nor immoral, to “want” credit, without liability, nor to arrange it, if you can, without committing fraud.
Quasibill:
Yes, it should be simple, but so many laymen have such a confused notion of the issue of limited liability yet still feel compelled to have strong opinions on this, that an explanation is needed.
Published: November 2, 2005 2:18 PM
I think you are missing my point as stated above. If the question is whether laws of incorporation are “un-libertarian”, I’m saying that laws of incorporation comprise a protection scheme. If….fines are levied against corporations for crimes committed by individuals. Then, laws of incorporation “protect” individuals from having to pay the full amount of the penalty. Thus, those people “get-away” with committing the crime, to the extent the law allows the penalty to be paid by the “corporation” via laws of incorporation. Laws of incorporation have the effect of a protection scheme, if, fines are levied against corporate assests, for crimes committed by individuals. From a libertarian point of view, this, to me at least, seems un-libertarian, and I would want to opt-out of a system that lessened the penalty to some, for a crime committed against me.
If the question is, whose rights does this violate? Then it would appear this would depend on one’s definition of “rights”. I assume the exact definition of rights varies from libertarian to libertarian such that honest libertarians can disagree as to what constitutes ones rights ?
Published: November 2, 2005 6:05 PM
No and Yes. Habeas Corpus is in the original federal Constitution, for example. The orignal Anti-federalist argument was that if any right was in the original — such as Habeas Corpus — then those rights not enumerated could not be assumed to exist. In other words, it was inconsistant. The Federalists finally turned what had been the anti-Federalist argument into Federalist favor by promising a Bill of Rights. (See Levy’s Origins of the Bill of Rights.) These amendments, by definition, are part of the federal Consitution and they include enumerated and unenumerated rights. The 9th is limitless regarding the number of rights (see Barnett’s Restoring the Lost Constitution).
Stephan K writes: “Legal recognition of incorporation does not, in any event, destroy any right.”
I already mentioned that it will implicitly (effectively) destroy available contracts. You’re left with saying there is no such specific right of contract, or saying that implicit destruction is somehow more acceptable than explicit destruction. Even if the implicit effect is deemed low, it opens a very large door.
Stephan K writes: “It simply gives an option to individuals to conveniently organize their affairs exactly like they have a right to do by private contract, anyway.”
So you’re saying you can write a contract that will survive bankruptcy? How is that? And could it effectively happen? After all, the legislation reverses what the “would be” contracts would say . It goes from a contract saying “I will release you from your debts to me should you become insolvent” without the legislation to “We need a contract that does not absolve you from your debt to me should you become insolvent.” Are the comparative costs of these two contracts different, and who is burdened most by each?
If the legislation doesn’t change the nature of the private contract and the burdens of creating it, then it has no reason to exist and no one should object to its termination.
Published: November 2, 2005 9:35 PM
The founders of Empire hereby agree that they shall not be jointly or severally liable for the actions of Empire’s managers, employees, or secret agents.
Published: November 3, 2005 5:15 AM
Wolf DeVoon:
You do not understand. When shareholders agree to limit their liability what they are doing is appointing managers and instructing those managers that in every agreement the manager makes using or obligating the “firm’s” assets, the agreement will make clear to the other side that they cannot pursue the assets of the shareholders. It is not just a decree exempting themselves from liability; rather, it is a refusal to enter into a contract (indirectly) with third parties with unlimited contractual liability. This is contractual liability only; not tortious.
This is in no way analogous to DeVoon’s “Empire” case.
Published: November 3, 2005 8:13 AM
More than anyone else in the ancap realm, I’ve had real hands-on experience as general counsel. There is no improvement in moral character or business fidelity when government is unable to govern.
Published: November 3, 2005 8:54 AM
Published: November 3, 2005 9:55 AM
Published: November 3, 2005 10:23 AM
Wolf: Re your cryptic last opst– why don’t you clearly, carefully, coherently spell out exactly what your position is? Are you still trying to maintain that organizing the firm with limited liability is somehow antilibertarian? If so, spell it out–and without the ignorant mischaracterizations of how corporations and corporate liability actually work, that accompanies many of the attacks of the left-libertarians.
Published: November 3, 2005 10:42 AM
I don’t think there’s anything cryptic in that forecast. The meaning of minarchy is less public scrutiny of private action. Anarcho-capitalism abolishes regulation altogether. I’m in favor of both, provided that we abolish corporations.
There is no fundamental human right to incorporate as a state, a family trust, or a limited liability hippie commune. The thing at issue is the rule of law and the definition of legal persons who are competent to sue or be sued.
An association (mafia, corporation, trade union) blurs the existence of natural persons and shifts the blame for intentional wrongdoing. I used the example of a security service. Subscribers and lenders form a privately-held company. It grows by merger with another PDA whose customers are dope dealers and arms merchants. The entire enterprise is predicated on evil, and its shareholders are culpable for organizing the damn thing.
Nominee shareholders and anonymous cyberbanking compound the problem. What is needed urgently is to “pierce the corporate veil” and hold people individually responsible for their actions — especially what purpose they advance by paying in funds to an impersonal corporate collective.
I’m always prepared to be mistaken. But I think 19th century history suggests that individual entrepreneurs were benefactors, whereas the worst actors were states, membership orgs, and limited liability corporations.
Published: November 3, 2005 11:20 AM
I feel like you must either be an anti-industrialist lefty type, or ignorant of what you are talking about, to make these comments. Have you read the seminal work on this by Robert Hessen, In Defense of the Corporation?
What exactly do you mean, “abolish” corporations? Suppose 100 people want to each contribute $1000 to start a company, but not be actively involved in its management or be personally on the hook for contractual obligations and debts of the company, as they would be if they were partners in a partnership. So they all sign a shareholder’s agreement which sets up procedures to hire and appoint managers to use the funds and run the business. This agreement also permits the managers to enter into agreements with third parties–employees, customers, vendors, contractors–but requires that all such agreements include a clause limiting the liability of the sharholders to their initial investment.
So for example an employee’s agreement basically says he will be paid for his labor–but only out of a defined pool of assets; and if this pool is insufficient, he is out of luck and cannot sue the owners/shareholders individually. Is this contract unlibertarian in your view?
The limited liability afforded corporate shareholders is similar to this. So what is the problem?
What about liability for harm done to third parties with whom there is no privity of contract? If some tortious action harms someone, it is committed by an individual–some employee of the firm. Of course that employee is liable. Arguably, his managers or those who authorize or direct this action, are also liable. But why would the shareholders be liable? Did they cause the harm? They are not active managers. Their primary contribution is money. Customers also give money to the firm–are they also personally liable for all torts committed by employees of the firm? What about suppliers–by selling supplies to the firm, aren’t they enabling its torts? Surely, they are liable too, right? And banks who lend the company money–well, they are just adding fuel to the fire. Let’s outlaw lending of money, purchasing of goods, and selling of supplies, forthwith!
In my view a reasonable theory of libertarian causation would not hold a shareholder necessarily liable for harms committed by employees hired by a corporation in which the shareholder owns a share. So the fact that a shareholder of a modern corporation is not liable for torts of the company is also not contrary to libertarian principles.
As Hessen argues in his seminal but apparently largely unknown work, the corporation indeed should not be seen as an entity. Rather it should be seen as based on contract.
Do people have a right to “incorporate”? Depends on what you mean. To me it simply means a convenient shorthand for a complex contractual arrangement. Do people have a right to collectively invest their money in a business? Sure. Do they have a right to agree among themselves as to who is going to run the business? Sure, why not. Do they have a right to refuse to deal with outsiders who do not agree to give them limited liability? Sure. If you invest in a company are you automatically causally responsible for harms committed by its employees? I don’t see why you are.
I was unaware that “blurring” was a crime. This is the problem with trying to reason by metaphor and analogy.
What does this have to do with anything? If you want to make out a case in a given situation, that some individuals’ actions are causally responsible for harms committed by others–go ahead and make the case. Don’t just assume it. And don’t assume that it applies *in general*. Most companies are not “predicated on pure evil” (whatever that means). The investment of funds in a business is not per se enabling evil. If thereafter the company’s personnel start to perform evil actions, then you have a question, as with all crime, as to who is responsible. Maybe some managers started going bad–they would be responsible. But why would the shareholders be? I own 10 shares of IBM. If an IBM vice president I never heard of decides to use IBM cash to start up an assassination division, why am I responsible for this? I didn’t cause it. What can I possibly do to prevent it? Sell my shares to someone else? “Vote” for a different board of directors at the next annual shareholders meeting?–sure, we all know how causally efficacious voting is.
No one disagrees that people should be held responsible for their actions. BUt you have to first establish that in some reasonable libertarian theory of causation, the *mere act of investing* makes one culpable for actions committed by the company one invests in. And if you try to argue this, you are going to have a difficult time exempting customers, vendors, lenders, etc.–anyone who “aids and abets” this company.
I say it takes more than just “dealing with” the company to be responsible for its actions–just as my “dealing with” you does not make me responsible for your actions. Take a murderer who is employed by ABC Corp. You could argue that ABC Corp. “invested” in the murderer by paying him a salary; enabling him to purchase his weaponry etc. So now, all the sharehlders, bondholders, lenders, vendors/supppliers, contractors, and even customers of ABC corp. should be liable for the murders right? After all, they “enabled” ABC Corp., which enabled the murderer.
How far down the chain do you want to go? Any moron can show that the chain of literal, “but-for” causation extends forever. What we have to find in the law is proximate cause–the real, responsible cause for a crime. It is absurd, in my view, to maintain that investing in a company makes you causally responsible for the actions of its employees.
(Moreover, at a given point in time, most shareholders of a company never actually invested a dime in it–they just purchased the shares from an original shareholder.)
Could be. What does this have to do with anything? Hell, you could argue that history suggests that most terrible crimes have been committed by white males. Most congresscritters are white males. So what? Want to outlaw them too?
Published: November 3, 2005 11:45 AM
I don’t wish to derail the discussion from your point, but I feel compelled to point out that merging with a company “…whose customers are dope dealers and arms merchants�? is not an unethical action from a libertarian point of view. One person’s dope dealer is where another person buys pain relief medicine, or recreational drugs.
But swapping in “murderers and thieves�? as customers, does not seem to add to your argument. If I have a murderer for a customer, and I am a grocer and I sell him food, is my operation unethical? Should the shareholders be liable for murder or conspiracy to murder?
But maybe your objection is: the employees themselves become murderers and thieves on behalf of the management of the company. I don’t think that incorporation protects any of these people from legal ramifications of their illegal activities. Furthermore, if it can be shown that individual shareholders are also responsible for instigating murder and theft, then I also don’t think incorporation protects them either.
I just think it would be hard to show that the majority of shareholders of some company could be shown at fault individually for any illegal activity some employees may have participated in. It’s like this: should most American tax-payers be tried for assisting in mass murder in a foreign country? I think it is fair to argue that they had no direct say in the event, regardless of the degree to which they may have financed it.
Published: November 3, 2005 11:48 AM
Yes, absolutely. The Bush Administration refused to ratify the International Criminal Court. Claims executive power to detain indefinitely and torture anyone, anywhere, without due process of law. U.S. taxpayers had a moral duty to stop it. Too late to claim ignorance.
What we do with our capital is leverage good or evil. There are very few “wertfrei” economic results.
Published: November 3, 2005 2:57 PM
LOL
SK> “You are confusing individual rights with positive rights;”
Hardly, and you never outlined a needed distinction, (you actually wrote “any right”).
SK> “… and failing to recognize the distinction between the feds and states.”
Nonsense. So you were asking about rights — individual or positive — and the whole time referring simply to those rights recognized/generated only on a state-by-state basis, rather than on a federal basis? Who knew you were purely standing on the 10th while simultaneously asking about whose rights were violated?
SK> “Yes, I would agree the ninth amendment arguably provides extra limitations on the feds; but it has nothing to do w/ the sttes, whcih are the ones that establish incorporation laws.”
1. It isn’t only the 9th that imposes “extra limitations.”
2. The 14th directly gives the Feds reach into the states, including commercial matters.
3. There is not now, nor has there ever been some sweet and clear line regarding when “states rights” will prevail, and when an issue will come under federal jurisdiction. That’s why they’re called cases rather than classes. The two contra-ideas have always been in tension. (By Separation of Powers design.) To originally ask about “whose rights” and then 35 posts deep wave off the original question by claiming “states rights” is to say you never took the question seriously.
I have enjoyed the following quote from Rothbard’s Man, Economy, and State (http://www.mises.org/rothbard/mes/chap15d.asp):
Rothbard is saying people should be free to incorporate, and I agree. He’s also saying government should have nothing to do with it, including an explicit grant of immunity from debts (by “privilege of limited liability” and charter grants), as I originally said and you rejected.
With limited liability to debts granted by government charter, the “right of a free individual” to effectively choose the contract is destroyed by implication. In practice they have little choice but to accept the limited liability condition, since it is a government granted privilege that any business person would quickly seize on. You have not justified the privilege. Moreover, even if you argued there would be no net outcome difference since “free” corporations would simply “announce the limited liability,” it does nothing for your argument, since this claim simply says the legislation does nothing and thus has no reason to exist.
Shareholders/investors/owners get personal immunity from their firm’s debts by the government grant of privilege, via firm bankruptcy. This means creditors can’t recover their property (their money). Most libertarians believe in property rights as actual rights, not as some metaphor or whatever you believe it is.
You apparently don’t like free markets and free contracts when it comes to corporate liability. You have done nothing to justify the legislation. Whether it is state or federally generated is fundamentally irrelevent to the underlying principle.
It would be one thing to argue that the loss of certain rights may worth the returned benefit. But that is not your tact. Your’s is to deny creditors claim to their property by government sanctioned immunity.
Published: November 3, 2005 3:32 PM
…we all know how causally efficacious voting is.
“causally efficacious” Heh. Love that phrase–I’ll have to use it some time…
Published: November 3, 2005 3:49 PM
Published: November 3, 2005 3:51 PM
I am a libertarian. I am talking about rights–meaning our individual rights. Now whatever the local state happens to enforce.
this is boring and nitpicky. but you started pointing to the constitution as the source of rights. It is only the source of positive rights–and only as pertains to the feds, at that. I was talking about individual or moral or natural rights. Moreover, the states are the ones that have corporations so even if we are talking positive rights, the constitution is irrelevant.
I don’t agree. The 14th only gives the feds limited authority over states–primarily to make sure they treat blacks and whites equally. Anyway, it was illegally ratified, so there.
No, it’s saying I don’t give a damn if teh corporaiton takes your positive rights from you, if they are not also genuine, libertarian rights.
Yes, and I agree completely with this.
I am not sure that limited liability for torts is granted anyway. And it does not seem to me that shareholders would be liable for such torts in the first place. They did not commit them.
Er, I agree dude.
It’s not granted by government charter. It’s granted by people voluntarily dealing with an entity that has adopted the corporate form. By incorporating and naming myself ABC Inc., it’s equivalent to what Rothbard said: by incorporationg, one is “simply announc[ing] to their creditors that their liability is limited to the capital specifically invested in the corporation, and that beyond this their personal funds are not liable for debts, as they would be under a partnership arrangement. It then rests with the sellers and lenders to this corporation to decide whether or not they will transact business with it. If they do, then they proceed at their own risk.”
You are confused. Who cares if people “quickly seize” on it? If it’s something they have the right to do, so what?
“You have not justified the privilege.”
It’s not a privilege. It’s just recognition of exactly what you quoted Rothbard above as saying they have the right to do.
Dude, I am an anarchist and against all legislation. I do not think there should be this kind of legislation. This whole debate, however, is a response to the lefties who continuously whine that corporations are illegitimate *because the shareholders have limited liability*. This is NOT what is wrong with corporations, since indivdiuals have a right to form corporations without the aid of the state.
THis has nothign to do w/ limited liabilty. That is the bankruptcy law. Criticize that if you want.
I don’t think the legislation is justifed; no legislation is justified (except a law disbanning government and nullifying all other legislation). THe question is, is a corporation with limited liabilty unlibertarian? Hessen has demonstrated it could form on the free market solely by means of private contract and free association.
Some people voluntarily organize themselves as limited liabilty, just as Rothbard says. They use the state’s mechanism since the state has monopolized the field, but it’s the same thing. Creditors then deal w/ this entity with eyes open. they are not defrauded; they accept the risk.
If anyone argues libertarians should form their own corporations by private contract instead of using the corporate form provided by the state, I say this is stupid. No one is obligated to be a martyr. This is why libertarians are such LOSERS.
Published: November 3, 2005 3:55 PM
I agree. I don’t understand what is so difficult about it either. I think the explanation is some people are abysmally ignorant of the way real corporations and business work, and/or they have adopted the luddite, leftist hatred of “big business.” It’s really embarrassingly stupid.
Published: November 3, 2005 3:57 PM
Well that is flatly wrong. The Bill of Rights is loaded up with natural rights, not the least of which is the 9th. In addition, and as you wrote, “the [original] federal Constitution which protects rights (from federal invasion) primarily by limiting and enumerating federal powers.” True enough, the Constitution has natural rights, liberty, freedom (pick your favorite) written all over the face of it, even if not explicitly. Sure, there are positive rights that do exist as trades by the people for the police powers granted to the government. But underlying a positive right such as “trial by jury,” however, is the natural right to be free. That is, the state has to use due process to justify taking your natural rights away. In addition, I believe many of the states call out natural rights in their own constitutions. So that part of your argument likely doesn’t wash even on its own terms.
SK> “I was talking about individual or moral or natural rights. Moreover, the states are the ones that have corporations so even if we are talking positive rights, the constitution is irrelevant.”
No, it’s not irrelevent because if you’re talking natural rights, some arbitrary legal boundary such as state/federal holds no principled barrier. You plop these boundaries down where argumentatively convenient and ignore them otherwise. Since natural rights theory says “first come rights, then comes the law” (including constitutions), it wouldn’t matter if natural rights were articulated in any constitution, state, federal, or otherwise. You can’t be consistant and limit your argument to states creating incorporation laws and in the next sentence totally delimit the breadth by saying your concern is natural rights.
gw>> To originally ask about “whose rights” and then 35 posts deep wave off the original question by claiming “states rights” is to say you never took the question seriously.
SK> “No, it’s saying I don’t give a damn if teh corporaiton takes your positive rights from you, if they are not also genuine, libertarian rights.”
A claim to one’s own property is profoundly a Lockean natural right (covered, at least, under the 9th), not a positive right. I’ve argued no “positive right” issue, so you’re way off base. In fact, the government corp charter is the associated positive right, or even license. You’ve got it exactly backwards.
gw>> In practice they have little choice but to accept the limited liability condition, since it is a government granted privilege that any business person would quickly seize on.
SK> “You are confused. Who cares if people “quickly seize” on it? If it’s something they have the right to do, so what?”
LOL. The problem is you refuse to see the real distinction between the two arrangements. If you were simply to argue that the difference between the arrangements was quite small, I might be able to agree. But you just don’t want to admit it or address it in any way, so I reckon little more needs to be said.
gw>> You have not justified the privilege.”
SK> “It’s not a privilege. It’s just recognition of exactly what you quoted Rothbard above as saying they have the right to do.”
No and no.
SK> “I do not think there should be this kind of legislation. This whole debate, however, is a response to the lefties who continuously whine that corporations are illegitimate *because the shareholders have limited liability*.”
I’m not a lawyer, so maybe you’re using “limited liability” in a way that has specific meaning I don’t know about. I’m talking about liability regarding debts, and I only mean it in a basic way, not legal lingo if it happens to be exclusionary here.
gw>> Shareholders/investors/owners get personal immunity from their firm’s debts by the government grant of privilege, via firm bankruptcy.
SK> “THis has nothign to do w/ limited liabilty. That is the bankruptcy law.”
They are granted personal immunity from the firm’s debts by government law, not by private contract. Creditors are legally cut off from recovering their property (a natural right) by law rather than by free contract. Free contract is circumvented here. (If creditors chose to do so by free contract there would be no discussion between us.) This is the distinction you’ve ignored since the beginning. That the immunity finally happens to show up at bankruptcy — a separate set of laws — is notwithstanding. I’m simply noting it, and you’ve not justified your legal compartmentalization — especially when you also claim to care about boundaryless natural rights.
SK> “THe question is, is a corporation with limited liabilty unlibertarian?”
I believe we agree that it is very much “libertarian” if it is done under free contract and it is clearly anounced and agreed upon by creditors. But that is not strictly the question you originally asked. You play very loosely.
SK> “If anyone argues libertarians should form their own corporations by private contract instead of using the corporate form provided by the state, I say this is stupid. No one is obligated to be a martyr. This is why libertarians are such LOSERS.”
Oh, give me a break. I said in my first post that is what a business owner could and should do and now you’re repeating it back to me. I would no more restrict myself from the immunity granted than I would refuse to use the internet. There are principles and there is common sense.
Published: November 3, 2005 7:22 PM
Positive rights are whatever is decreed by teh state. If they happen to match natural rights, they are still positive rights.
This is all irrelevant and beside the point.
Move along, sir, move along.
Sidetracks. I’m not gonna do forensics on what you said, blah blah blah, it does not matter. Limited liability corporations are not unlibertarian, because they don’t violate anyone’s rights. That’s the issue.
Actually that is not at all my argument. My argument is that luddites and leftists and business-ignoramuses say corporations are invalid *because they have limited liability*, and they view this as some privilege bestowed by the state. They have accepted the Ralph Nader anti-corporate propaganda. The point is there is nothing magical about limited liability; it can be constructed by private contract, so whatever objections you people have to the corporation, limited liability is not one of them.
LImited liability means your liability as a shareholder is limited ot what you invested; unlike your liability if you are a partner in a partnership, in which case you are personally liable for the debts of the partnership, without limit.
No. The government only helps hang a bright neon sign *recognizing that* the shareholders are broadcasting to all third parties: if you deal with us, you can’t come after our personal assets.
There is no natural right here since it is not “their property”–they never had an agreement to recover against the shareholders’ property.
It is a “free contract”. If you don’t want to buy toothpaste from Crest, go buy it from the homeschooling luddite down the corner who makes it in his spare time.
Tutorial over, GW, this has become boring, elementary, monotonous, and depressing.
Published: November 3, 2005 8:38 PM
Quite a smear. All opponents are dolts.
The “free contract” litmus test amuses me. It would be alarming, except that no enlightened society would tolerate it. Equity routinely trumps contract. And the less we legislate, the more we need common law courts. Think asbestos you can about product liability and the duty of care that comes with a profession like banking, medicine, dentistry, structural engineering, law, etc. A “free contract” with a child or an idiot is void on its face.
I sympathize with those who want Proctor & Gamble to float common shares and commercial paper. The idea, however, is to hold Mr Proctor and Mr Gamble or their heirs and successors personally liable for everything done or not done in pursuit of commerce. For instance, if an ingredient in Crest’s secret formula is strontium 90, or they made a batch of poison Colgate to ruin a rival, there must be something other than “free contract” as a first principle of public justice.
A free society is not made more free by closing the law courts, nor by replicating the worst features of statism — in this case, corporate charters, trusts, nonprofit orgs, unions, etc.
I agree that the thread became elementary and depressing, albeit for another reason altogether.
Published: November 3, 2005 9:44 PM
You had me at being “tried for assisting in mass murder in a foreign country”!
Honestly, do you believe any of us has any effect whatsoever on the federal Leviathan?
Published: November 3, 2005 10:08 PM
Yes, of course. It’s a democracy. If you mean ancaps and libertarians, rather than the broad electorate and mainstream parties, the answer is still yes. I was part of the antiwar vanguard in the 60’s and experienced what a handful of activists (Dave Dellinger, the Berrigans, Tom Forcade) can achieve.
In the present context, I think it is a moral duty to expatriate, communicate secretly about what can be done. The press is doing a good job of busting White House lies and recently outing CIA torture centers in Eastern Europe.
Look at it another way. 9/11 was punishment. We were tried and found guilty. Insurgents in Iraq and Afghanistan are inflicting more punishment. Cindy Sheehan and a growing number of military veterans are on the march.
In WWII, the civilian populations of Germany and Japan were punished so severely that both were transformed into peaceful free-market societies.
I am often wrong. I could be wrong about moral consequences, but it’s hard to understand why an American citizen should be exempted from guilt for the criminal actions of his government.
Published: November 4, 2005 6:36 AM
Wolf: First, it was a joke. Lighten up. Second, I did not say all homeschoolers are luddites–I was imagining some character who might make his own toothpaste, and invented this one.
What exactly are you saying? My position is rather simple (and it echoes that fleshed out by Robert Hessen in his definitive book on this, which apparently no one bothers to read before fumbling around, trying to reinvent the wheel). IF A has a contract with B, and if the contract limits what assets of B’s that A can pursue, then that should be given effect. And then it recognizes that the shareholder is in the position of B and the creditor or customer of B’s corporation is in the position of A. All talk of “equity trumping free contract” is just a distraction.
I have no idea where you are coming from, but it does not sound like libertarianism. It sounds like some leftist anti-corporate animus. Am I wrong? If not, please enlighten me.
Your view, as best I can make it out, does rest on an implicit theory of causation. You need to flesh this out; you can’t just assume it.
Again, these abstract, amorphous sweeing principles are unclear in application. I have no idea what you mean by “free contract” and its relation to “a first principle of public justice,” whatever this latter thing might be. Look. In libertarianism, people are of course responsible for “their” actions. But other than clear cases of directly causing harm, you need a coherent theory of causation to connect the actions of someone only indirectly related to the harm done. If you want to argue that a shareholder is causally responsible for the actions committed by his corporation, you need to explain why–you seem to think you can just assert it and it’s obvious. It is not obvious. AS I have mentioned several times, the shareholder has no direct control or active involvement in management. He might not even have given money to the company–he might have purchased the share from another shareholder. So on what theory are you saying he is liable? That he has the right to vote to elect the directors? Why does *having this right* make you causally responsible?
In fact with your ridiculous comments about US citizen responsibilty for US government actions, it is apparent you apply a sweepingly broad notion of causation. That is your right, but in my view, it is not libertarian, and in any event, it takes more than just assertion–it must be established. I believe that if you make a genuine effort to show that US citizens per se are responsible for the government’s action, or that shareholders per se are responsible for the corporation’s actions, you’ll see that the effort founders. For example, if you were to have a theory of cause broad enough to implicate shareholders, you would also implicate its employees, vendors, bondholders, etc.–there is nowhere to stop, really. If you are hung up on shareholders being “special” because they are “owners” of the company, then you are focusing on a conventional positive law categorization. From the point of view of praxeology and economics, there is nothing categorically different or “special” about a shareholder compared to others who help and have influence on a company’s actions–a large bank who loans it money, for example, has far more influence on what the company does than does an individual shareholder (and gives it more money too). So would you hold the corporation’s lenders liable too? Where do you draw the line? Coherent line drawing requires a coherent theory of causation, not a kneejerk, leftist hostility to “the Man”.
WE libertarian advocates of the corporation do not advocate the state or the corporate form. We only say it is not inherently unlibertarian because it would be imitated by means of a web of contracts in a free society.
WEll, if you mean my smartass comments, I apologize if I offended anyone, especially those who have the greatest need to lighten up.
And here we see again how there are two separate strains of libertarians: the “principle” libertarains, and the “tactic” libertarians. The latter type deludes itself (IMHO) into thinking victory is just aroudn the corner; that we “should do more”; that “we” “could do more”; and ends up adopting a “blame the victim” mentality. As Wolf seems to be doing here–after all if you are born here and don’t devote your life to some wasted cause of fighting The Man, then it’s your fault. Ridiculous. I don’t believe in blaming the victim, nor in attributing responsibility to people for others’ actions.
NOw that said, I would say that many Americans are somewhat responsible for the US’s actions, because they endorse or support it. But Wolf seems to think even those who oppose the state are responsible. This shows his un-nuanced implicit theory of causation is out of control.
Okayyyy. Suree.. This is why libertarians have a somewhat … non-real-world reputation. I guess we all have a duty to buy and read The Black Arrow, too.
THe burden is the other way around, Wolf: they are exempt unless you can demonstrate by a good causal link, because they did not commit the actions. Hell, why shouldn’t a German citizen be responsible for American actions? After all, he could mount a private army and take on the US government–and if he dies trying, why, it’s his obligation as a Freedom Fighter, eh? No one has a right to a life, they have to pretend it’s Red Dawn and join the Wolverines, eh?
Published: November 4, 2005 7:50 AM
The brunt of my criticism is purpose in founding a company. I’ve organized numerous corporations over the years and always chuckled at the boiletplate “…and all other lawful purposes.” What I am suggesting is that agreements to pool capital should be explicit regarding purpose, else the owners and assigns are no better than financial drunk drivers.
About a German citizen having a hyperbolic duty to attack the U.S., no comment. Instead of reading Vin’s fantasy, I suggest that U.S. citizens have a legal duty to control their government, just as corporate shareholders have a duty to control their enterprise.
Published: November 4, 2005 8:14 AM
Why does there need to be a “purpose”, other than to make money (by any lawful means)? Where do you people come up with these standards? It amazes me that you trot them out as if everybody knows this, as if it’s not controversial, as if it’s quite obvious to everyone.
Why? The German lives in “the world” doesn’t he? One of the world’s governments–one of “his” governents–is causing problems. He need fixee, no? by your logic, anyway.
A *legal* duty? Of course they do not. You mean a moral or libertarian obligation? Why? You can suggest or assert it, but where is the proof? Why do you call it “their” government? Do they own it? Have a right, or power, to control it? Furthermore, you also just assume shareholders have a “duty” to control their enterprise. Actually, they explicitly do not have active control; they only have a right to select, by vote, the *directors*, who then appoint officers, who hire managers– is is these people who have the control and thus these people who have any duty to control the enterprise and make sure it does legal things only.
Published: November 4, 2005 12:16 PM
When I had a seat on the Pacific Stock Exchange, the Exchange did not allow Corporations to own seats because of the limited liability. Large entities can pick and choose who they do business with and the terms under which they do it. The same with banks, leasing companies etc. If a bank or lending institution wants more safety when lending to a corporation, they can (and do) demand collateral. The fact that there is a hierarchy of priority of claims against the assets of a corporation allows people with different aversity to choose an investment vehicle with the appropriate level of risk.
Published: November 4, 2005 2:02 PM
A total non-sequitur — totally irrelevent. It doesn’t matter if it is true (it is), since the matter isn’t about positive rights. You’re the one who asked about rights, and then stated your concern about “individual or moral or natural rights.” Both the federal constitution and state consitutions call out natural rights. I only thought it would help you get a grip.
SK> “This is all irrelevant and beside the point.”
You don’t remember your own question.
SK> “Move along, sir, move along.”
Dude, you’re the one who’s making the same basic mistake repetitively and causing the hangup (because you don’t know foundations).
SK> “My argument is that luddites and leftists and business-ignoramuses say corporations are invalid *because they have limited liability*,…”
No problem there if they acheive the limited liability via their own wits.
SK> “… and they view this as some privilege bestowed by the state.”
Which has at least some truth to it, even if small in actual practice. Or rather it certainly is bound to affect some number of contracts and prevent some creditors under some situations from recovering property they otherwise could have.
There is plenty of low hanging fruit when it comes to topics of leftist nonsense. Choosing to argue on a rare issue where they are nominally or partially right is probably not the brightest move.
SK> “so whatever objections you people have to the corporation, limited liability is not one of them.”
Which I never came close to objecting to. I have absolutely nothing against a corporation forming limited liability with its vendors if it can do it via its own wits.
SK> “LImited liability means your liability as a shareholder is limited ot what you invested;”
And so we see your remarks are quite beside the point. The legislation distorts the market by destroying some measure of bargaining power on the part of creditors.
SK> “The government only…
Stop right there. That’s the crux of the elementary error you make over and over and over again. That is not all the “sign hanging” does. It guarantees an immunity, destroying possible terms of negotiation. Without government, the corporation can do no more than ask for agreement (sure, they can “announce” their resolute terms as well as I can announce the sky is green). If you were to say that many contracts, and maybe even most, would end up the same way if it were solely private, I would probably agree. But that won’t be the limit. The government distorts the market here — no question about it. And that distortion plays into natural rights. Some will not be able to recover their own property, where without the distortion, they could have otherwise formed a different contract. It will distort bargaining power in some circumstances. No doubt about it.
SK> “…helps hang a bright neon sign *recognizing that* the shareholders are broadcasting to all third parties: if you deal with us, you can’t come after our personal assets.”
Blah blah blah. The same endless assertion. Simply saying a firm can privately announce their “terms” does not mean those are the terms that will eventually be agreed upon in all cases. You don’t get it because you don’t want to: you have an agenda.
SK> “Tutorial over, GW, this has become boring, elementary, monotonous, and depressing.”
You give a great course in Logic-Lite! Thanks!
Published: November 4, 2005 8:39 PM
I have repeatedly maintained that adopting the corporate form is not unlibertarian. You people have yet to supply a single coherent reason that shows that it is.
They did: they added “Inc.” to their name, and filed a few papers to make sure the state’s monopoly court system will recognize it. That puts people on notice. Good enough.
Sigh. Tacitician libertarians always end up blaming the victim. It is the lefty types who are always in a little tizzy about big corporations who have made the challenge. We have just denied it.
As everyone knows, the libertarian principle of “by your own wits” applies here.
The notion of “bargaining power” is leftist to the core.
You are completely wrong. Because people are free to organize as a partnerhsip, or as a corporation; and because creditors are free to insist on personal guarantees (and they often do), you are utterly mistaken.
It does not guarantee an immunity. First, the creditor can insist on personal guarnatees from sharholders. This is common in small corporations. Second, the creditor can refuse to deal with corporations, and only deal with sole proprietorships or partnerhsips.
In the free market it would be the same. Some people would organize themselves into a “limited liability company” by means of pure contract; others would be partnerships. Creditors could refuse to deal with the former if they wanted.
What? If I make an offer subject to certain terms, and you accept, then you have accepted these terms.
Yes, I do–opposing lefties, anti-industrialists, anti-corporate hippies, and those who oppose what free individuals do with their own property.
Published: November 4, 2005 9:28 PM
Published: November 5, 2005 1:10 PM
You say “if”. Do you have any reason to believe that if a crime is committed by an individual who happens to work for a corporation, that he is granted immunity from this crime by virtue of the state’s incorporation law? IF so, please point me to a single example or statute that specifies this.
I believe indeed some crimes corporations are accused of are #2. Also it is rare for corporations to be charged wiht crimes, since corporations are not actually “persons” and do not have intent, so to speak.
But this is all irrelevant. IF you could show that a given actual crime by a corporate employee meant only the corporation was liable, and not the employee, then I would agree, this aspect of “limited liability” is incompatible with libertarianism. So what? We are defending the corporation from the charge that limited liability for contractual debts is unlibertarian–since this is what most critics harp on.
Keep in mind also that the state has an unlibertarian scheme of punishment/torts.
Published: November 5, 2005 4:32 PM
Published: November 5, 2005 5:21 PM
Sure. Of course, I regard even the imposition by the state of a tax on a company as a “fine”.
Really? I would not make that assumption at all. We know for example that companies cannot really commit murder–only people can. So what kind of “crimes” they are dreaming up, who knows? IF they are legitimate crimes, they must be committed by individuals. These are the guilty parties.
The problem is the entity theory of the corporation–that it viewed as a legal person. There is no need that it be so–as Robert Hessen demonstrates in his classic book that apparently only 3 people have read. The attack against corporations is that in having limited liability it is getting a privilege from the state. Hessen shows that this is not true: people have the right and power to set up the same arrangement by means of contracts alone.
But you are here citing hypotheticals. Is this your basis for opposing corporations–that IF they get unfair benefits, then you “would” oppose them? In actuality, what we have is this: lefties and those hostile to industrialism and capitalism hate the corporation, capitalism, and business; and they do view the corporation as receiving priveleges from the state; therefore, they reason, the state does not need to grant these privileges–or it can condition the grant of these privileges on the corporation changing its behavior or paying more taxes, etc. BUt his whole notion rests on the positive argument that granting *shareholders* limited liability for contractual debts of the company, is somehow a grant of privilege. IT is not.
Any other issues about criminal penalties are irrelevant. If the state were to merely fine a company, and fail to prosecute the individaul who actually committed an action, that is simply another demonstration of the ineptness of public law enforcement. IT has nothing to do with whether free people ought to be able to arrange their affairs so that shareholders have “limited liability” as classically understood.
If the state fails to prosecute a given individual who is actually guilty of the commission of a crime, this is bad; this shows the state is inefficient; what it has to do with corporations I have no idea.
My contention is simply the recognition of shareholder limited liability by the law of incorporation is NOT problematic, because shareholder limited liability is a result of freedom of contract. PEriod.
Published: November 5, 2005 5:59 PM
Published: November 5, 2005 6:36 PM
But it’s not that limited of a point–the entire attack on corporations rests on this little thing.
I don’t know what this means. Do individuals have a right to organize by means of contract in a way that resembles the features of today’s corporation? I say, yes. That the state recognizes this is no more problematic than it recognizing and giving effect to any other contract.
Published: November 5, 2005 6:52 PM
I thought leftists attacked it on the grounds that you could conceivably have a bunch of people pool their money together, commit some crime, pay off the proceeds as dividends, and when people sue, you stiff them because the “corporation” is bankrupt.
Published: November 6, 2005 1:04 AM
Limited liability regardless of purpose? purely to make money? Sure, you can do it today, by riding on Bill Gates’ coat tails or Warren Buffett’s — but it presupposes greenbacks and the NYSE. An anarchist society is not very likely to resemble the current one.
Anyway, I quit, having said my piece many times in this thread. Hold shareholders responsible for the actions of directors and managers, who are their fiduciary agents.
Published: November 6, 2005 1:12 AM
Published: November 6, 2005 1:36 AM
I don’t think so. As far as I am aware, corporate laws regarding limited liability do not exempt you from liability for commission of a crime. Where do people get this notion?
This argument by analogy is question-begging. You have yet to show that a group of people having a certain contract with third parties is unlibertarian.
Okay. THe purpose is to make money by any legal means.
You throw “fidiciary agents” around as if it’s some magical term that does all your work for you–you have failed to even attempt to show how or why shareholders are causally responsible for torts or crimes committed by employees of the corportations in which they are shareholders.
Yes, but these people are not listening; they have been somehow brainwashed by leftist anti-corporate propaganda. In my view, this issue has become so muddled that any libertarian who has a critical view of the corporation without having first read Hessen’s book is irresponsible and holding forth on serious, complicated matters that he has not bothered to educate himself adquequately about.
Published: November 6, 2005 9:54 AM
I think this is the pivot, so I snipped all the rest. You essentially claim universal equivalency when it comes to rights (legislation v. non-legislation), and I do not. There is little argument on particulars — and you’ve given some valid examples that I have agreement with. I haven’t even questioned that your assertion is substantially true. However, a set of true particulars does not prove the universalness (generality) of the theory. The limited set fundamentally can’t.
To be brief and restate, unlike you, I believe it is likely the legislation shifts (distorts) contract cost burdens such that some liability contracts — those which might have been acquired by creditors without legislation — are in essence priced beyond the value of acquiring them (what I meant by “bargaining power”). Also, I have not been able to wave off the possiblity that the legislation effects competitiveness in acquiring these contracts due to the cost burden shift. If I am correct — and I cannot prove my assertion either — then I believe this is a rights issue, since it affects rights to form contracts and rights to property.
In any case, I have zero objection to free corporations since the idea is well within the rights of those choosing to do so.
Published: November 7, 2005 2:38 PM