Latest notable terms from this and last week’s Slate Culture Gabfest (feel free to email me suggestions or leave them in the comments to the main page, which keeps a running collection of the terms from this series of posts).
And added to the list of terms I’m waiting to hear: stigmergic and Cockaigne.
A mainstream friend of mine living in Hong Kong asked me a question about the libertarian perspective on antitrust law (what Europeans ungrammatically call “competition law,” just as they quaintly and awkwardly refer to corporate law as “company law”). He noted that there is a libertarian think-tank in Hong Kong that is vehemently opposed to its proposed first competition law. Its leader proclaims himself a libertarian and opposed to antitrust law on those grounds.
My friend asked me if it is correct “that libertarians of all stripes oppose antitrust? I’m sure they oppose regulation, but doesn’t the libertarian belief in markets allow some support for pro-market law? If you know of any good writing on this theme, I’d be interested if you could point me towards it.”
My reply is below, as I thought others might find it of interest.
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Some more moderate libertarians probably think some mild version of antitrust law may be necessary, but honestly, I don’t know of many. Virtually all Austrian and radical libertarians oppose all antitrust law on principle, especially anarcho-libertarians as they oppose the state itself and the state would be necessary to impose antitrust law. I oppose it completely and think it is an abomination. The only monopoly I want to get rid of is the state itself. It’s the only real monopoly.
In a recent TWiT podcast (I think it was the last episode of MacBreak Weekly), one of the guests observed that “Children are like Hitler.” What he meant was that in a political discussion, if you drop “children” or “Hitler” it becomes impossible for the opponent to proceed. You cannot use an argument that sounds like you are”against children” nor can you use an argument that fails to condemn Hitler. So these are conversation-stoppers. They are meant to be, e.g. in the titles Congress-critters come up with in names of legislation, such as the PROTECT-IP or American Invents ACT, the No Child Left Behind Act, and so on–if you vote against them it sounds like you are against property, or innovation, or children or education.
[From my Webnote series]
From my recent TLS post: Stephan Kinsella, “Corporate Personhood, Limited Liability, and Double Taxation,” LibertarianStandard.com (Oct. 18, 2011). Reprinted below.
Also cross-posted at Mises; archived comments below. Comments from the TLS version are also reprinted below. See also this Grok conversation about shareholder liability and extending D&O insurance to cover shareholders.
See also:
Update: See Henry G. Manne, “In Defense of the Corporation. By Robert Hessen. Stanford Hoover Institution Press.,” U. Mia. L. Rev. 33, no. 5 (1979): 1649–55. As I noted on this Facebook post by Sheldon Richman:
“Well he [Manne] gives no strong reason for it, and I disagree w/ him: It is THE MAIN issue people use to attack corporate limited liability; all the other issues Hessen dispatches are easy ones; this is the main issue and it is good Hessen mentioned it; I wish he had done more. Here is Manne: “The third concession examined, and the one most frequently referred to by corporate critics, is the limited liability of shareholders. Hessen correctly identifies the problem as being related exclusively to the area of involuntary liability, i.e., tort rather than contract. Voluntary creditors after all are free to establish any limit on liability they wish in their private agreements. To preserve corporations’ political purity, however, Hessen would abandon the limitation of individual shareholders’ liability for personal injuries and for other risks not voluntarily assumed by injured parties. Given the minimal economic impact of the rule, and the great complexities of administering any alternative rule, Hessen would seem to have taken the whole matter too seriously.”
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The politics of the left-oriented Occupy Wall Street (OWS) movement, like that of the right-oriented modern Tea Party movement, is not very well defined. But one of the things some of the OWS participants are calling for in their list of “demands” is an end to “corporate personhood.” In this they echo the views of left-libertarians who contend that state-chartered “corporations” are the source of grave social ills. [ See vol. 20, no. 1 and vol. 19, nos 3-4, of the Journal of Libertarian Studies, focusing on these and related issues, in particular articles by, and in response to, Piet-Hein van Eeghen’s anti-corporation views, and Kevin Carson’s views on mutualism. ]
Some of these issues were recently debated on the pages of Roderick Long’s blog, in the comments to his post “Double Standard.” Left-libertarians who oppose incorporation, and usually also “capitalism,” argue that firms derive some great benefit from the state by the privilege of incorporation. The standard leftist critique of the corporation is the “concession” theory outlined by Robert Hessen in his seminal study In Defense of the Corporation (see a key excerpt from Hessen corporation tort liability excerpts). They argue that the state grants to corporations three features: entity status, perpetual duration, and limited liability to shareholders, all of which are artificial and would not exist absent state intervention. Left-libertarians maintain that these privileges grant corporations more power than they otherwise would have, which distorts the market, nay, society in general. This gives rise to more “hierarchy” and “authoritarianism” than would prevail in what Hans-Hermann Hoppe calls a private law society, and indeed, to “exploitation” of the workers by the bourgeoisie.
The Alleged “Privileges” of Incorporation
Labor Theory of Value
There are several problems with the left-libertarian and leftist critiques of corporations. One is the acceptance of a Marxian-type labor theory of value—the idea that employers per se “steal” or exploit from workers the “social surplus product”—a discredited, hoary, unscientific view based on deeply flawed economics.
Entity Status
And as Hessen has pointed out, each of the three corporate features pointed to as a state-granted privilege—entity status, perpetual duration, and limited liability for shareholders—can be created purely by private contract. As for entity status (being able to represent the firm in lawsuits or for property ownership purposes, in the firm’s name) this is just a convenient legal fiction that could be created by means of trustees, or other contractual techniques (including agreements with private defense agencies, insurance companies, arbitral agencies, and the like). In any case, even stripped of this procedural convenience, firms could still organize themselves as joint stock companies or “corporations”.
Perpetual Duration
Hessen also easily disposes of the myth that perpetual duration is a privilege granted by the state; this can be achieved easily by means of continuity agreements and the like.
Limited Liability
The big objection to corporations is usually limited liability for shareholders. Now first let me mention that many non-attorney critics of this notion seem confused about what it means (and many attorneys also misapprehend it). They think the doctrine insulates a tortfeasor from liability even if he was negligent, so long as he is a shareholder. Or that the doctrine exempts managers and officers of the corporation from liability for torts of others. They are wrong. The doctrine merely says that shareholders are not jointly and severally liable for all the debts of the company that they have a share in. If a company that A owns shares in is sued and driven to bankruptcy, A loses the value of his shares but is not personally liable for the lawsuit against the company. (N.b.: to the extent some state incorporation statutes also limit the liability of managers for torts of the corporation, and not just that of passive shareholders, this is another matter and is more objectionable. However, the primary purpose of limited liability laws is to protect the shareholders from general liability; and in any case, officers and directors are routinely protected from any personal liability by the use of D&O insurance.)
Second, we have to distinguish here between contractual debts, and debts arising from torts (or even intentional crimes). As for the former, this is easy to dispatch: someone loaning money to, extending credit to, or engaging in a contract with a corporation is implicitly agreeing to pursue only the assets of the corporation itself in case of a claim, not the personal assets of shareholders (unless it insists on some shareholders personally guaranteeing a loan or contract, as if often the case for smaller companies).
So what about torts? The typical example is a truck driver for a company who negligently harms an innocent third party. The third party has no contract with the firm, unlike in the case of contractual debts noted above. The opponent of corporations maintains that the victim should be able to sue not only the employee-tortfeasor, and the corporation itself (to go after its assets and deep pockets, including its insurance policies), but shareholders themselves. After all, they are the “owners,” and should be liable too. Right? And thus, state limited liability provisions are short-circuiting the liability that shareholders would normally have. This lowers the cost faced by corporations; it makes shareholders less responsible in their decisions about who they elect for the firm’s board of directors; it lets the firm externalize costs onto the market.
The problem with this theory is the assumption that in a private law society, “shareholders” should be vicariously liable for the negligence of others. There is, in fact, no libertarian justification for this view, as libertarian theorists such as Robert Hessen, Murray Rothbard, and Roger Pilon have argued. [See Roger Pilon’s Corporations and Rights: On Treating Corporate People Justly, which has some very good stuff on why limited liability does not give any special privilege to shareholders; also my posts Legitimizing the Corporation and Other Posts; Rothbard on Corporations and Limited Liability for Tort; Defending Corporations: Block and Huebert (archived comments); Pilon on Corporations: A Discussion with Kevin Carson; Corporations and Limited Liability for Torts (archived comments); In Defense of the Corporation; also my comments (archived) to “Jeff Tucker’s post Scrupulosity and the Condemnation of Every Existing Business“; and list of resources on this in Sean Gabb’s Thoughts on Limited Liability (archived comments). ]
In this situation, some employee of a firm has committed some tort—a negligent act (such as a FedEx truck driver negligently crashing into some victim). Here the victim has a right to sue the negligent employee-tortfeasor. The question is: Who else’s assets can the victim go after? Can he sue the managers, or the directors, or go after corporate assets, or sue shareholders?
We have to recognize that the prima facie answer—the default condition—is no: each person is responsible only for his own torts, not for those of others. To hold someone else liable requires some kind of “vicarious liability” theory. To do this, you need a theory of causation and responsibility, which Pat Tinsley and I have tried to sketch out in Causation and Aggression. Yes, you can be jointly responsible with the actions of others if you engage with them in cooperative action to cause the illicit result: for example co-conspirators in crime, a gang of bank-robbers, and so on.
But holding employers—or shareholders—vicariously liable for actions of their employees relies on the offensive, paternalistic, feudalistic concept of respondeat superior—a master is responsible for his slaves’ or servants’ transgressions. As Hessen notes, this is just a vestige of the medieval mentality. Why would a shareholder be liable for actions of some employee? There are two aspects to being a shareholder that could conceivably give rise to vicarious liability for another’s direction actions. First, the shareholder may have contributed capital (money) to the firm. On the other hand, he may not have: he may have bought the share from a previous shareholder. This latter possibility is routinely overlooked by those who blame the shareholder for contributing money to a company that has an employee who commits a negligent act during the course of his employment. They assume that giving money to the corporation is akin to “aiding and abetting” it, so that the shareholder is responsible for all its debts that it incurs as a result of actions it engages in with the “aid” of the money contributed by the shareholder.
But contributing capital to a firm is nothing more than aiding it, which co-employees, customers, creditors, vendors, and suppliers also do. If you broaden causal responsibility so much that you would implicate a shareholder just because he gave financial aid to a firm (though as I noted, not all shareholders give money to a firm), then employees, customers, creditors, suppliers are also all liable, which is obviously absurd.
Second, the shareholder may have a vote in electing directors. But then again, he may not; not all shares are voting shares. Further, the shareholder might not exercise his right to vote; and if he does, he might vote against the directors who win; and even if his choice wins, his vote is almost never decisive; and, in any case, rarely is it the case that the director campaigns on a platform of directing managers to permit employees to engage in torts and negligence. These latter qualifications are rarely noted by corporate opponents who blame shareholders for corporate actions simply because they have a right to vote. But possessing a right to vote for directors does not obviously imply vicarious liability for torts committed by employees hired by officers appointed by those directors. In fact, the right to control property does not automatically imply responsibility. If I own a knife and it is stolen by a thief, I am not guilty of murder if the thief kills someone using the knife, even though I still own it. Ownership implies the right to control. It does not imply liability. Liability flows from actions, whether those actions employ means owned by the actor or not. In other words, whether one owns a means employed in an act of aggression is irrelevant. Likewise, having an ownership (control) right does not automatically imply responsibility. [ See my posts The Libertarian Approach to Negligence, Tort, and Strict Liability: Wergeld and Partial Wergeld and The Non-Aggression Principle as a Limit on Action, Not on Property Rights; also IP and Aggression as Limits on Property Rights: How They Differ. ]
(A related point is that shareholders are not even “owners” of corporate assets in the same way that I own a knife. The state legally classifies shareholders as owners, but we have to be wary of relying on state classifications. [ See my post The Over-reliance on State Classifications: “Employee” and “Shareholder”. ] The shareholder can influence board composition by vote, and has a right to receive dividends if paid, and some pro rata right to receive part of the assets of the corporation upon liquidation, but a Google shareholder doesn’t have the right to use the Google headquarters or corporate jet.)
What this means is that if you attribute vicarious responsibility to the shareholder merely because he has a vote—that is, he has “some influence” on who the directors are—then everyone who “influences” the firm is also potentially liable for torts of its employees—again, as in the case of holding people liable for aiding and abetting a firm, this can include creditors, who can influence company policy or board composition, employees and their unions, important suppliers, and the like. Again, this is obviously absurd.
The kneejerk and simplistic rules that would implicate shareholders for torts of employees based simply on the fact of ownership, voting, and contributing capital, would also render hundreds, thousands, maybe tens of thousands of people jointly and severally liable for the negligence of Pepsi truck drivers. This is obviously not a result compatible with libertarian theory.
So it seems that a shareholder who is truly passive and does not manage the affairs of the firm, nor make management decisions or direct the actions of employees, should not be liable for torts committed by such employees. Why should he be? Hessen, Rothbard, and Pilon are right.
It is important to recognize this because opponents of state incorporation claim that the state’s grant of limited liability to shareholders is a huge privilege granted to them that would disappear if the state were to get out of the business of granting corporate charters. In fact, here the state and the left-libertarians share the same presupposition: that absent state incorporation privileges, shareholders would be vicariously liable, via respondeat superior, for torts of employees of companies the shareholder owns stock in. The state uses this false claim to justify regulating the company; the left uses this false claim to exaggerate how much benefit existing state-chartered corporations must be receiving, and to predict that a state-free world would look vastly different, and that our current “capitalist” order is dominated by the state and not really free at all.
Likewise, as already mentioned, another fallacious view shared by the state and the left-libertarian opponents of incorporation is the idea that a corporation cannot exist unless the state grants it the privilege of “legal personality,” i.e. makes it a separate legal entity. The state makes this claim to hold itself out as the firm’s benefactor, and claims the right to place conditions on this grant—various regulations, etc. And if it’s a separate legal person or entity, why, gosh!, it owes income taxes! It’s a person, after all, isn’t it? And the left-libertarians join in this refrain by claiming that state incorporation grants the legal entity privilege to corporations, and they could not exist without it. Some privilege, that subjects you to regulation and income taxation! So: we can see that the state’s fallacious claim that it is granting a privilege of legal personhood to the corporation is used to justify double taxation: first, the corporation, as a “legal entity,” is subject to corporate income tax; then the shareholders are subject to capital gains or income tax when they receive dividends. Effectively, the shareholders are double-taxed. Some privilege.
But this view is confused too. As Hessen has explained (see previous references), a company having a “corporation”-like structure could arise on a free market using private contract alone. It could sue in “its own name” (as a convenience); it could have perpetual life; contractual debtors could go only against the corporate assets and not those of shareholders, since they agreed to it; and victims of torts of employees of the free-market “corporation” could sue the employee-tortfeasor but not the shareholders, since they are not causally responsible for his torts any more than the customers are.
Ending Incorporation
In any case, we can agree with the left-libertarians that the state ought to stop granting incorporation status. Contractual firms would arise—I don’t know if they would be called corporations, joint stock companies, limited liability firms or what—and the state would have less justification to subject them to income taxation—to impose double taxation on shareholders. Firms would be far better off—and shareholders would still have natural limited liability. What’s not to like?
Why left-libertarians think corporate status is some net “benefit” to every firm in the Fortune 500 (again, see the comments to Long’s post “Double Standard”) is a mystery to me. Removing SEC “public company” regulations (which cost each public company about $3–4M a year) and removing corporate income tax alone would be a huge boost to American capitalism. So what if the name of the standard form of organization changed? Small price to pay.
In sum, yes, get rid of state corporate chartering, and the corporate taxation and regulation that accompanies it.
For some more discussion of these and other ideas, see my post Capitalism, Socialism, and Libertarianism; I also discuss some of these issues in Episode 133 of This Week in Tech.
Appendix: Corporate America being “part of the state” and the calculation problem
(Update to this section: see also: Left-Libertarians on Corporations “Expropriating the Efforts of Stakeholders”; Is Macy’s Part of the State? A Critique of Left Deviationists; and my comments in response to Kevin Carson’s claim that “there’s probably some fraction of income over $250k that was really earned through hard work and enterpreneurship.” in “I’ve Never Seen a Poor Person Give Anyone a Job”.)
Some final comments. Note that the left-libertarians’ confused adoption of the state’s underlying rationale for monopolizing, regulating, and taxing corporate-firms causes them to conclude that the US economy is basically dominated by companies that are in reality parts of the state. Instead of viewing only some firms as closely in bed with the state—defense contractors, say—they view virtually all of corporate America as agents of the state. Even a Walmart or Apple are thought of as parts of the state—in a fascist sense, that is: they are nominally private but really parts of the state because of the various state “benefits” and “privileges” these companies receive. (See my post Apple vs. Microsoft: Which Benefits more from Intellectual Property?) Walmart benefits—maybe disproportionately—from state subsidies to highways etc. (though the local mom n’ pop shops ship things in from far away too). Nevermind the corporate taxes and SEC regulations. It “benefits” from the “privilege” of the state grant of entity status (which it does not need to exist, as Hessen shows) and from exempting its shareholders from general liability from torts of employees (which they do not need since they would not be personally liable anyway in a free society; and which could be taken care of easily anyway by a simple and cheap extension of D&O insurance; and which the corporation usually has sufficient assets to handle in any case).
Take Walmart: the left-libertarian thinks it is unlibertarian (in a “left-thick” sense) because it has bosses and hierarchies that allows it to “boss people around” in ways it could not get away with on the free(d) market. It is only able to get away with these thick-libertarian oppressions and exploitation because of the net benefit and privileges it gets from the state. The non-left-libertarian agrees Walmart and other companies’ structure etc. is distorted because of the state but sees no reason at all why a Walmart of some type could not exist on the free market—in fact, I would think it highly likely Walmart could do even better, shorn of the costs the state imposes on it too. (That is not to say that there would not also be more local, small, diverse companies, more self-employment, more self-sufficiency, more early retirement. The free market would be rich and diverse.) Even an Apple Inc., which now does benefit in some ways from patent and copyright law that it uses to suppress competition, could exist and prosper, by selling high-end hardware, like the Mercedes of computers—even if it would be less able to stop clones or maintain its closed model.
In the recent debate on Roderick Long’s blog, some of the left-libertarian commentators imply that virtually every one of the top 500 public corporations in the US is illegitimate, and part of the state. This of course implies that many others are too, and even that a vast swath, if not most, of the US economy is effectively part of the state. Now I’ve detected this implicit view before, and I’ve (informally, in blog posts and comments) observed one problem with this view is that it implies that the apparent “capitalist” prosperity we see is all a mirage. (See Is Macy’s Part of the State? A Critique of Left Deviationists.) This is because, if you accept Mises’s calculation argument, a centrally run economy cannot be economically prosperous. If most of corporate America is “really” part of the state, then the calculation argument means we must be in a USSR-style shambles, despite appearances to the contrary. Sure, I realize the GDP measure has methodological problems, and that the state exaggerates and propagandizes, but what’s more plausible: that we are really all poor, living in a 1970s Soviet-Style morass with just faked prosperity (hey, maybe we never made it out of the Malthusian trap in the 1800s after all; maybe the whole Industrial Revolution is a mirage!); or that there is actually a vast amount of prosperity generated by the underling genuinely free market economy despite the state’s depradations? As far as I can see, the left-libertarians have to argue the former; I think most sensible libertarians will take the latter view.
The former view is what results from the idea that most state corporations are “net beneficiaries” of the state. As the state cannot produce wealth but can only destroy it, if the bulk of US enterprise is a net beneficiary of the state it must come from the remainder of society, meaning an overall impoverishment for everyone—meaning the apparent prosperity and productivity of the last 20, 50, 200 years is a mirage. Simply declaring “hierarchical” firms that have a corporate charter “net beneficiaries” of the state is obviously the wrong criterion, since it leads to absurd results: it leads you to deny the evidence of free market generated prosperity that is before our eyes. (This may be one reason Kevin Carson objects repeatedly to my Misesian calculation argument along these lines.) Obviously we need a more selective way of determining whether a given firm is a net beneficiary of state aid or not. It has to be a minority of firms—otherwise we would be living in a USSR-style third world shambles. A firm that is heavily dependent on something that would not appear the same way in a free society would be suspect, such as the military defense contractors. Firms heavily dependent on subsidies, or IP (like Microsoft), would be more suspect than others, but even here, Microsoft provides a useful product, albeit at prices inflated by its copyright monopoly. It may not be possible to develop rigorous criteria, but why do we need to? We have systemic and economic reasons—plus common sense and experience dealing with many firms in society that obviously do more harm than good—to doubt the claim that most of corporate America is a net beneficiary of the state. Hell, most of us even think that individual humans who rise to the top of power, like Barack Obama, are harmed in a deep sense by achieving “success” and power the way they do.
Update: See David Henderson’s EconLog post, Hummel on Moss on Limited Liability, and Jesse Walker’s 2001 Reason post, Killing Corporations.
UPDATE:
{ 26 comments… read them below or add one }
October 18, 2011 at 7:41 pmThis is some tasty and strong stuff, brother.
October 19, 2011 at 9:07 amKinsella: “The problem with this theory is the assumption that in a private law society, “shareholders” should be vicariously liable for the negligence of others.”
Let’s not use the word “shareholder.” Let’s call the stockholder what he is: the (or, an) owner. There is nothing vicarious about the damage caused by the (an) owner of anything, whether it be a dangerous pit bull or a dangerous corporation, such as a nuclear-power generating corporation.
Kinsella: “We have to recognize that the prima facie answer—the default condition—is no: each person is responsible only for his own torts, not for those of others. To hold someone else liable requires some kind of “vicarious liability” theory. ”
The pit bull can’t pay, so his owner is responsible. Same with the owners of corporations. No need for any “vicarious liability” theory because there is nothing vicarious about the relationship nor the liability of an owner for his pit bull or her corporation. There is no “vicarious liability” theory involved because there is no “someone else.” There is only the owner.
Kinsella: “But holding employers—or shareholders—vicariously liable for actions of their employees relies on the offensive, paternalistic, feudalistic concept of respondeat superior—a master is responsible for his slaves’ or servants’ transgressions. As Hessen notes, this is just a vestige of the medieval mentality. Why would a shareholder be liable for actions of some employee?”
What is offensive is this is that this statement is deceptive and utter nonsense. The agent-principal relationship is alive and well in law and in relationships recognized as such throughout the world. It is ancient, of course, but most truths are, and modern lawyers are as unable to refute them as were their medieval predecessors down through the ages. Why didn’t the author or Hessen use this modern, non-offensive, non-paternalistic, non-feudalistic term? And since you repeat the same unjustified assertions over and over, let me also be repetitive: We are not talking about a “stockholder” liability for “some employee,” what the author is talking about is an owner’s responsibility for his or her potentially dangerous property or operation. The author would incise the owner from his property, but the ownership of property (viz., private property) is crucial to every libertarian theory I have ever encountered.
Kinsella: “On the other hand…he may have bought the share from a previous shareholder. ”
This is a silly argument. Whether one bought the pit bull as a puppy or a trained fighting dog is immaterial to our owner’s relationship to the property.
Kinsella: ” They assume that giving money to the corporation is akin to “aiding and abetting it…”
This is a strawman, one of so many in this article that I can’t even begin to count them let alone address them all. For this one let me just say, no one need assume anything of the sort, and I doubt anyone so assumes. No owner (stockholder) of a business “gives” it money. An owner either creates the business by an initial investing, or buys it as a going concern. Obviously how ownership is obtained has no affect whatsoever on the pit bull’s behavior nor on whether or not the reactor core melts during a tsunami. Nor does this point have any place in a *rational* argument. Like the argument in total, it is a lawyer-like attempt to ameliorate if not eliminate the personal responsibility involved in human action upon which liberty utterly depends.
If I were to characterize the argument in this article, as it characterizes any imagined opposing view, the kindest thing I could say is that it is silly. Not only is personal responsibility compatible with libertarian theory, it is the ultimate foundation of liberty. The author’s attempt to relieve owners of responsibility for their pit bulls or their dangerous operations engaged in for profit is essentially an attack on individual liberty in the manner of a lawyer defending a losing cause with one frivolous argument piled upon another until the judge finally orders her to “shut up.”
I could pick the rest of the article apart straw man by indirect ad hominem aimed at whoever might have the temerity to oppose this sanctimonious view, but suffice to say again that the only “vicarious” relationship is a figment of a creative imagination. And if my counter to this diatribe should be characterized as left-libertarian, I would have to classify this article as pure statist, but that would be adopting the methodology of this author’s endeavor to oppose personal responsibility and the individual liberty resulting therefrom.
There are other good reasons why corporations, which are purely products of State legislation, are harmful to liberty not addressed by the article. One big one is the so-called “legal fiction,” which holds that corporations are “persons” for the purpose of standing in legal proceedings. As a direct result of this fiction, many court rulings (including those of the Supreme Court) have been made in cases wherein the parties were the State and a corporation which established important precedents, which precedents were later applied to cases involving the State and individuals as though the latter were equivalent to corporations and without the human rights that can only be claimed by individuals. An example of this is the famous case of Brushaber vs. Union Pacific Railroad (http://laws.lp.findlaw.com/getcase/us/240/1.html), in which SCOTUS declared that the newly enacted federal income tax did not violate the Constitution as claimed in that case and therefor Union Pacific must pay it. From then (1916) until the present, that case has been cited in lower federal courts as having determined that the income tax was constitutional. It has been cited as precedent to deflect thousands of cases of individuals who have tried to challenge the constitutionality of the income tax as applied by the IRS against them, even though Brushaber never even considered the constitutionality of the income tax as applied to real individuals who are not legal fictions created by State legislation.
The State and corporations are so intimately tied to one another that defending the latter is virtually defending the State and its illicit powers, without which no corporation has ever existed.
October 19, 2011 at 10:41 amOwnership of a pit-bull is more akin to owning a (potentially leaky, probably perfectly safe) propane tank than it is to partial ownership of a stockholding company. You yourself referred to the principal-agent relationship, the asymmetrical nature of which arises primarily because the latter commands faculties and resources unavailable to the former. This does not characterize an owner and his pet, which has (obviously) little by way of personhood but still generates liabilities for its owner. Tracing negligence from dog, which has no purposeful, rational action in the Misesian sense, to owner, who presumably does, is a trivial matter; establishing a causal relationship between (to use Kinsella’s example) the Pepsi driver and stockholders of Pepsi is not so trivial. This is not to suggest that liability is not, in some tenuous, circuitous manner, traceable, only that the claimant would encounter greater difficulty in trying. I can see a case being made for holding the employer responsible, and by extension, Pepsi Co., if the driver’s history or particulars about his habits are unearthed of which his superiors can credibly be shown to have been aware, or have overlooked. Perhaps the regional manager directed freighters to overload Pepsi fleet vehicles by an amount just above the optimal weight for safe braking distance. This seems actionable. However, this is a far cry from holding Pepsi’s boardmembers, and then stockholders, liable of same, beyond the diminished flow of rent by holding stock in a company now party to litigation. The relationship is there, but the existence of purposeful action on the stockholders’ part, bringing about an undesirable outcome, is not apparent.
Which cuts to the heart of my contention with this whole line of thinking. This seems to me more of a continuum problem, and more justifiably handled by the courts on an ad hoc basis rather than (as now exists) blanket immunity or (as Netterville suggests) enforcing total liability against all parties, regardless of participation. If the claimant can establish a causal relationship of purposeful action, bully for him; I doubt he can in any meaningful way, beyond the flow of capital and rent between the primarily responsible and the putative, peripheral parties. But I wouldn’t wish entirely to close off or open up the potential for liability.
The points you bring up regarding legal precedents are well taken, and I’ll read more about it—I’d love to see a response from Mr. Kinsella. Off the top of my head this seems moot if only because courts also find against individuals and thereby set unlibertarian precedents. The recent Angel Raich case comes to mind. A contentious issue like income tax, especially given the judicial activism surrounding its passage, would doubtlessly have found safe harbor in any number of cases. I’m not suggesting this particular case was not ultimately harmful, or that the modern conception of taxation does not turn on this decision, but merely that some court, somewhere, would doubtlessly have found in favor of the federal income tax, and that case would now serve as the precedent. Would the outcome have been materially different if textbooks instead referred to a conceivable case for the constitutionality of income tax withholding in which the court found against Vivien Kellems? I don’t know. We can’t say.
Thanks for the food for thought, both you and Mr. Kinsella. I am so novice about all of these concepts, I can really only bring up the untutored layman’s perspective and try clarifying my own position. I just wish the rhetoric weren’t so acerbic.
October 19, 2011 at 5:41 pmD. Storey, Thanks for engaging. See my reply to Wildberry below, which I think responds to you comment as well.
October 19, 2011 at 11:20 amNed,
I can see this has gotten you fired up, but your understanding is a little shakey.
Rarely have to rushed to the defense of Kinsella, but I think you are not deriving your criticisms from a correct understanding of the principles being discussed.
Shareholders are not employees, agents, or owners. They are shareholders, whose liabilities and powers are statutorily defined at the outset. Now you come along and want to change the nature of that in retrospect, not what the shareholder bargained for.
Your interpretation of vicarious liability is backwards, because the shareholders are neither employers or employees; they are investors whose proprtionality is a measure of share price.
A pit bull owner is liable for the tort of the Pit Bull, because it is the owner’s tort, negligence, which is at issue. The owner is not liable because of VL theory making the owner out to be the employer of the dog.
Also, an employee is not liable for the torts of the employer, and the employers is not liable for the torts of employees unless they are within the scope and course of their role as employee.
Shareholders are not “employers” precisely because they cannot exercise any control over the scope and course of the corporation, other than to vote and/or ratify materials acts of the BOD. They cannot ratify something that is illegal in the first place. The BOD controls the Executives adn the Executives control the employees. Shareholders buy in or sell off. That’s it.
I enjoyed your rant, but it would be helpful if you departed from some solid understanding of what you are criticising.
October 19, 2011 at 2:48 pmRarely have to rushed to the defense of Kinsella, but I think you are not deriving your criticisms from a correct understanding of the principles being discussed.
Wow, you must be off (or on?) your meds.
Shareholders are not employees, agents, or owners. They are shareholders, whose liabilities and powers are statutorily defined at the outset. Now you come along and want to change the nature of that in retrospect, not what the shareholder bargained for.
Your interpretation of vicarious liability is backwards, because the shareholders are neither employers or employees; they are investors whose proprtionality is a measure of share price.
Did you not read the original piece either? ARe you, like the others, total naifs and inepts who know nothing about the business world they have the gall to weigh in on? Being a shareholder HAS NOTHING OT DO WITH BEING AN INVESTOR. Helllooooo. shares are tradeable. You guys are such amateurs. Jesus. Why do you have a public opinion about things over your station? Jesus.
Shareholders are not “employers” precisely because they cannot exercise any control over the scope and course of the corporation, other than to vote and/or ratify materials acts of the BOD.
Shareholders vote to rafity “material” “acts”of the Board? Really? I thought they voted for nominated shareholders. Hmm, where did you get this hodgepodge layman theory from?
They cannot ratify something that is illegal in the first place.
What does this statement even mean?
The BOD controls the Executives adn the Executives control the employees. Shareholders buy in or sell off. That’s it.
Well the shareholders vote for board members, but I guess we cannot expect you to grok this.
October 19, 2011 at 4:12 pm@ Stephan Kinsella October 19, 2011 at 2:48 pm
You’re a funny guy, Kinsella. Watch out, I may be equivocating on the connotations of “funny”.
And here I am trying to support your battle against ignorance, and you say something like this:
Being a shareholder HAS NOTHING OT DO WITH BEING AN INVESTOR. Helllooooo. shares are tradeable.
Tradable for what? Money? Who issues the stock and for what reason? Raising capital?
When someone pays money for a share of an enterprise, what are they doing? Investing?
The fact that they are subsequently tradable goes to liquidity. Shares in a close corporation may not be tradable because there is no market save a few other shareholders. Right?
Why do you have a public opinion about things over your station? Jesus.
Just what is my station? I’ve always wondered about that. I know you think highly of yourself, but when did you starting signing stuff “Jesus”?
Shareholders vote to ratify “material” “acts” of the Board? Really? I thought they voted for nominated shareholders. Hmm, where did you get this hodgepodge layman theory from?
Well, let me pull some layman theory out of my bum; how about the corporation wants to sell off is primary assets, or accept a takeover bid? Is that material? Is that electing a BOD? Does it require a shareholder vote?
What does this statement even mean?
Oh, I don’t know. How about the BOD wants to invest in a nuclear bomb by selling off all its assets and puts it to a shareholder vote? If they vote yes, is that OK?
Well the shareholders vote for board members, but I guess we cannot expect you to grok this.
You know how us laymen are, sort of on the stupid side. And all this time I thought there was more that a shareholder could vote on besides directors.
Here’s what I do grok. You are pretty predictable. You focus on trivia and bark at the smallest provocation. It reminds me of one of those little doggies that bark whenever the doorbell rings. You know the type?
Excuse me for agreeing with something you said. It was a momentary lapse. The fact that most of the criticisms I’ve seen here and elsewhere about the evils of corporations are based on rather fundamental misunderstandings of how they work and what they can and cannot do because they are corporations and not people.
The state is not required for corporation, just like the state is not required for something like IP. Free humans are also free to arrange their affairs to structure their cooperation. As Herman Cain might say, you are talking about apples and oranges. But if you and I don’t agree about that, I’m sure it’s because I’m completely, utterly, and stupidly wrong. Do I hear an Amen?
This post reminds me of one of the most common objections raised to anti-IP advocates; they make fallacious statements about what IP law actually does, and then rail against their own creations. That is what Ned is doing, and, (ahem!) what you do regularly.
After me saying all of this, Kid Salami fires the shot that hits the mark with just a few sentences. I admire his succinctness. You don’t strike me as an “expert” who is interested in actually addressing objections that are raised on the basis of something you say or claim. You are much more interested in indulging you nasty attitude against those you perceive to be beneath the staggering heights of your self-declared station. Don’t look now, but I think the train has left that station.
Are shareholders “co-owners” of something in the libertarian sense that you employ the term relative to easements, servitudes, and the like? Since you are a “pure libertarian”, excuse me for testing your assertions against reality. Is the concept of good will consistent with pure libertarianism? Just asking.
October 19, 2011 at 4:30 pm October 19, 2011 at 5:46 pm@Stephan Kinsella October 19, 2011 at 4:30 pm
Let’s see; opening monologue; cut to commercial; yada yada yada….
I do not pay the cash TO THE CORPORATION. HELLOOOOOOOOOOO.
Let’s see now, a corporation makes an IPO or an offering of additional shares and makes them available to the public and guess who the money goes to? HELLOOOOOOoooooo….They are offered on condition that they are fully alienable. Is this where you start paying attention?
Why, why, why are you guys who are so clueless about the business world compelled to weigh in on it in public. Why.
Let me try to respond in terms you might understand. Look stupid, for a lawyer you often fail get your facts straight. Did you actually have to pass the bar to do what you do? Did you only start paying attention after the first day was over? Didn’t that impact your score?
I detect a pattern. You start your analysis of shares after they have been issued and purchased for the first time, and then conveniently forget that the reason they exist in the first place is because a corporation issued them to raise capital.
This reminds me of your analysis of copyrights, where once you have a copy of an authors book, you conveniently forget that you only have it because the author produced it in the first place. That is why your property rights argument looks dumb. Mises himself showed you how dumb it is here: http://mises.org/libprop/lpsec5.asp
The socialists must admit there cannot be any freedom under a socialist system. But they try to obliterate the difference between the servile state and economic freedom by denying that there is any freedom in the mutual exchange of commodities and services on the market. Every market exchange is, in the words of a school of pro-socialist lawyers, “a coercion over other people’s liberty.” There is, in their eyes, no difference worth mentioning between a man’s paying a tax or a fine imposed by a magistrate, or his buying a newspaper or admission to a movie. In each of these cases the man is subject to governing power. He’s not free, for, as professor Hale says, a man’s freedom means “the absence of any obstacle to his use of material goods.”[6] This means: I am not free, because a woman who has knitted a sweater, perhaps as a birthday present for her husband, puts an obstacle to my using it. I myself am restricting all other people’s freedom because I object to their using my toothbrush. In doing this I am, according to this doctrine, exercising private governing power, which is analogous to public government power, the powers that the government exercises in imprisoning a man in Sing Sing.
Shareholders and book readers don’t snatch their goods from the air. They belonged to somebody before you got them, and they exist for the economic benefit of those who produced them. Any analysis must acknowledge that fundamental fact. Of course, plugging your ears, stomping your feet and humming loudly while this is being pointed out must mean that it is safe to ignore whatever it was you didn’t want to hear. See the pattern?
Not always. Sometimes you give it to employees in the form of options.
Raising human capital.
BUt that is really irrelevant. The point is an existing shareholder may not be an investor in the company: they may have acquired it from a previous investor. But anyway so wht? so what if A gives $$ to a company. CUstomers do this too when they buy things. Are they now implicated too for all the torts of its employees?
Is it possible you just don’t understand that no matter how ridiculous your path here might be, I agree with your conclusion? Shareholders nor customers are liable. Neither did what they did (bought something) with the knowledge or understanding that they would be thereby liable of acts of the company that produced the product. That is the benefit of the bargain; an explicit understanding that liability is limited in a specific way.
So, I AGREE, it is stupid to argue that shareholders or customers should be liable in any way for the decisions and conduct of the corporations behind the share purchase transaction. Don’t let it go to your head. It looks like a ripe watermelon already. I’m concerned for bystanders.
Maybe, but they are not giving money to the company.
Never? Really? Is this a joke? The money from an IPO goes where, initially????
This is irrelevant. Stop trying to obscure the deficiencies in your overall business acument in an inept attempt to say something quasi-sensible about an irrelevant side-issue. It’s embarrassing. Oh, wait, I guess this is why you use a ‘nym.
I use a nym because you look a little bit like Freddy Krueger, and it scares me to think you might learn where I live. Nothing in your conduct assuages that perception.
Liquidity is a feature and benefit of shares, and one reason why people buy them. They are liquid. They can be easily traded for cash, especially if they are publicly traded. Think about how much harder it would be to raise money by selling shares if they weren’t. Owned shares in a close corp. lately?
Why do you have a public opinion about things over your station? Jesus.
Just what is my station? I’ve always wondered about that. I know you think highly of yourself, but when did you starting signing stuff “Jesus”?
Well you are just a nym, and a gadfly at that, so who really knows, or cares? Maybe you are an AS machine (artificial stupidity).
No no no…You have to respond to the whole joke. No fair cutting out the punch line. What about the Jesus part?
And that is what you are doing, as these diversions are utterly irrelevant to the point at hand.
You have made yourself, as is your MO, the point at hand. You exhibit little common courtesy or decorum. If you would grow up a little, we could cover more ground, in which you are clearly not interested. You seem to prefer to argue about things we seem to agree upon, and create points of disagreement for your own pleasure. That is my point. It was a pretty good image, don’t you think?
The arguments are not analogous, you twit.
Ah, but they are. Did you read the link that Kid supplied from Brian Macker about the cows? Things that may and do arise in a free market do not assume a state, and are interesting for that fact. Corporations, a state enacted form of business organization, and IP, as state enacted form of property organization, are two such examples; both would naturally arise in a free society, with or without a state, as would a state itself.
By the way, your vocabulary for insults is almost a big as Don Rickles. That is not the only similarity.
that you quote that moron in support of your positions does not commend itself well. His blabbering about apples and oranges was confused nonsense.
He did not make up the analogy. Thanks for letting me know you watched. Got a favorite?
Yes. With a host of other people. Just as you are a co-owner of a Hertz rental car for a couple days when you rent it, just as you are a co-owner of a condo that you rent for a year to some tenants.
See, I ask a simple question and you make me argue with you.
Shareholders do not have an ownership interest in other people’s stock, do they? What do they “co-own” and with whom do they have this relationship?
You never obtain an ownership interest in a rental car. You are a licensee. Your rights to use are very tightly defined. You cannot sub-rent it, for example.
Tenants are leaseholders. They don’t own anything about the condo. They purchase a right of possession, not an ownership interest.
You are making this up, and it is some pretty thin gruel. There is such a thing as a co-owner, like tenants in common and joint tenants, but these are not the examples you bring.
Did you actually pass the bar? I don’t see you listed in the Texas Bar. Just asking.
October 19, 2011 at 6:08 pmAhhh. It’s under NORMAN! Yep, member of the Texas Bar. There it is right there.
October 19, 2011 at 6:58 pm October 19, 2011 at 7:16 pmKinsella: “Being a shareholder HAS NOTHING OT DO WITH BEING AN INVESTOR. Helllooooo. shares are tradeable. You guys are such amateurs. Jesus. Why do you have a public opinion about things over your station? Jesus.”
Mr. Kinsella, during my ten years as a professional OTC securities trader, and five years as a member of the New York Stock Exchange, we referred to wannabe-traders and side-line lawyers like you as pluckable fowl, and welcomed your kind as the centerpiece of our trading, poker or backgammon feasts. So, stick to your intellectual property law and other areas where you are licensed-by-the-State and your statist expertise may win you some lucre. FYI, even if you’re were an algorithmic robo-trader, which you obviously are not, during the hours, minutes or nanoseconds that you are long shares, you is de owner, like it or not. Call it trading or investing, call yourself a shareholder, pretend you are a computer, or merely an intermediary, try as you might to avoid reality, the shares and all that goes with their ownership are yours during that interim. (The only exception being when you buy securities to cover prior short sales, in which case you never own the shares. And, unless it was a naked short, a trader’s liability, if any, during the interim of the short which might attach to the shares borrowed to make good delivery would make for an esoteric discussion, but obviously this is not an issue you are competent to address.)
But aside from a little fun and games dust up and go at each other in the rhetorical lists, my point is that both you and Wildberry are defending shareholders on the basis of corporate and securities law, both of which, like corporations themselves, are products of State or statist legislation. And IM(not)HO, your (plural) arguments based on legal theories that shareholders ought not be liable for this or that only serve to make or substantiate my contention that corporations are a State-created means of dispersing personal responsibility at the cost of individual liberty.
October 19, 2011 at 6:15 pmWildberry, I’m sorry to have put you in a boat with Mr. Kinsella, which I know must be unconfortable–because, among other good reasons, his boat is about to sink even further when I respond to his silly, pit-bull rejoinder, in which he couldn’t resist attacking you as well. However to address your concerns directly:
“Shareholders are not employees, agents, or owners. They are shareholders, whose liabilities and powers are statutorily defined at the outset. Now you come along and want to change the nature of that in retrospect, not what the shareholder bargained for…Shareholders are not “employers” precisely because they cannot exercise any control over the scope and course of the corporation, other than to vote and/or ratify materials acts of the BOD. They cannot ratify something that is illegal in the first place. The BOD controls the Executives adn the Executives control the employees. Shareholders buy in or sell off. That’s it.”
Wild, you make my case. (As an aside, keep in mind, that the agent-principle relationship undoubtedly predates the state and human laws as does the ownership of private property. I believe both of these assertion can be deduced from the action axiom as Menger deduced that money predates the State, and, although I am neither an “economic anthropologist” nor an ethnologist, I doubt if there is any conflicting empirical evidence to the contrary.) The point is that before the State or in the absence of the State and its step child, the corporation, there was no such thing as a “stockholder.” There was the owner, responsible for his or her property. The corporation with its shareholder-owner, like the State itself, is a means of dispersing that all-important self-responsibility upon which liberty depends. Now if you’ll excuse me, I have to fit Mr. Kinsella with a new rectal orifice.
October 19, 2011 at 1:05 pmIf I own a single $23 share of GM stock, the victim of a defective GM car should be able to seize my house? Nonsense.
D Storey makes an excellent point:
“Perhaps the regional manager directed freighters to overload Pepsi fleet vehicles by an amount just above the optimal weight for safe braking distance. This seems actionable.”
In this case, the principal had direct control over the circumstances that resulted in injury. If the pit bull analogy has any weight at all, it is here. The pit bull owner has complete and direct responsibility for the dog at all times. If the dog injures someone, the owner is rightly held liable because of his negligence. The shareholder, however, has no direct involvement in the actions of employees, and therefore have no liability under this standard.
Aside from direct involvement, as I recall, the principal is only held liable when the agent injures someone while performing duties within his scope of employment, or if the agent was only able to injure another party because of the means supplied by the principal. I.E. a truck driver crashes a company vehicle while making a delivery, or a hotel employee robs a guest. In the first case, the driver was performing his duty (and using means supplied by the company), and in the second, the hotel provided the employee with access to the guest’s property. In both cases the principal is only liable because he supplied means that were misused or abused. This is where shareholders bear some liability, and it is entirely appropriate that this liability is limited to their contribution/stake in the firm. If a Pepsi driver gets drunk and crashes, the principal’s relationship to the injury is strictly commercial. The means that were supplied that occasioned the injury were strictly commercial. So, it’s entirely appropriate that, when the principal had no direct involvement in the injury, that his liability be limited to his contribution to the injury. Strictly speaking, you might say the liability is limited to the truck itself, but since the entire commercial operation is interdependent, it’s appropriate to expand liability to the entire commercial operation. It is not appropriate, however, to expand liability to the personal property of the principal when that personal property was not involved in or tied to any property that was involved in the jury.
To what extent should shareholders be liable when they have no direct involvement in the tort? The extent that they supplied means to facilitate the injury, which is their stake in the company.
October 19, 2011 at 2:43 pmKinsella: “The problem with this theory is the assumption that in a private law society, “shareholders” should be vicariously liable for the negligence of others.”
Let’s not use the word “shareholder.” Let’s call the stockholder what he is: the (or, an) owner.
Well you are just buying into the state’s classificaiotns. Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?
There is nothing vicarious about the damage caused by the (an) owner of anything, whether it be a dangerous pit bull or a dangerous corporation, such as a nuclear-power generating corporation.
well if you call him an owner, as the state says, I guess you are done! How convenient for you. And why, again, does the right to control a resource imply that you are responsible for harms caused with that resource being used as a causal means? I realize you just want to rely on this without justifying it –but bear with me–how do you know this?
Kinsella: “We have to recognize that the prima facie answer—the default condition—is no: each person is responsible only for his own torts, not for those of others. To hold someone else liable requires some kind of “vicarious liability” theory. ”
The pit bull can’t pay, so his owner is responsible.
Is your chauffer or delivery man your property? do you own him?
Same with the owners of corporations. No need for any “vicarious liability” theory because there is nothing vicarious about the relationship nor the liability of an owner for his pit bull or her corporation.
Again, you are speaking simplistically. Did you read my post? I explained the problems with assuming ownership implies liability. And in any case, the owner of a corporation owns property, not people. Helloooo
There is no “vicarious liability” theory involved because there is no “someone else.” There is only the owner.
So…. if a fedex truck driver runs you over, he is not really there?
Kinsella: “But holding employers—or shareholders—vicariously liable for actions of their employees relies on the offensive, paternalistic, feudalistic concept of respondeat superior—a master is responsible for his slaves’ or servants’ transgressions. As Hessen notes, this is just a vestige of the medieval mentality. Why would a shareholder be liable for actions of some employee?”
What is offensive is this is that this statement is deceptive and utter nonsense. The agent-principal relationship is alive and well in law and in relationships recognized as such throughout the world.
Well that settles it, then! Let’s hang up libertarian theorizign–the “world” has “established” the “right way” to proceed!
We are not talking about a “stockholder” liability for “some employee,” what the author is talking about is an owner’s responsibility for his or her potentially dangerous property or operation.
Ah, well when you put it that way it’s all settled! Wow.
Kinsella: “On the other hand…he may have bought the share from a previous shareholder. ”
This is a silly argument. Whether one bought the pit bull as a puppy or a trained fighting dog is immaterial to our owner’s relationship to the property.
So… owning a piece of paper that represents a legal title to a sliver of a legal claim to the assets of a firm upon dissolution is … “dangerous”, “like” a pit bull? Wow.
Kinsella: ” They assume that giving money to the corporation is akin to “aiding and abetting it…”
This is a strawman
It’s not a strawman at all. Since you ignorami cannot even articulate a coherent explanation of how corporations work much less what is your theory of rights or liability or causation, I am tyring to help you out by charitably articulating your implicit views for you.
No owner (stockholder) of a business “gives” it money. An owner either creates the business by an initial investing, or buys it as a going concern.
This sounds like an amateur observation by a clueless grad student in a dorm room session bullshitting about stuff they have no clue about. With David Letterman playing in the background, and the whiff of Mary Jane from the suite-mate next door. Good for you! But when you buy a share of Exxon stock from a previous owner, using the stock market to facilitate the exchange, how do you “buy it”?–and what is “it?”; as a “going concern”–and pray tell, what is the relevance of GAAP terminology like “going concern” to libertarian theory? methinks you are utterly clueless.
October 19, 2011 at 3:05 pmWow, you must be off (or on?) your meds.
Ok, that was funny, but now you see the problem with “co-ownership” that appeared from the clear blue sky a while ago, namely where you say
Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?
This statement is not sufficiently general. The owner of an easement does not have the right to “control” the “resource” ie. the land in which he has a property interest eg. to cross to get to the beach.
October 19, 2011 at 3:10 pmKid: “now you see the problem with “co-ownership” that appeared from the clear blue sky a while ago, namely where you say
” Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?””
No, I see no problem with it at all. Ownership vests rights of control in a given resource to a given individual. Then this owner can transfer some or all of these rights contractaully to someone else, whether the rights are partial or limited or whatever. In some such cases the owner A becomes a co-owner with B. This is not hard to grok.
“The owner of an easement does not have the right to “control” the “resource” ie. the land in which he has a property interest eg. to cross to get to the beach.”
Yes, he has a defined right of control, related to other rights of control of other co-owners.
NEXT!
October 19, 2011 at 4:19 pmYes, he has a defined right of control, related to other rights of control of other co-owners.
Yes, (oops! There I go again) just like all rights “relate” to other rights of control. Just like IP, and your right to use your bat and your paper and ink. Very good.
October 19, 2011 at 10:28 pmStephan, see my reply to you above, written before this you’re more comprehensive response to my initial post, but after my reply to Wildberry, which for some cyber reasons appears following. And in my reply to Wild I wrote and reiterate: “The point is that before the State or in the absence of the State and its step child, the corporation, there was no such thing as a “stockholder.” There was the owner, responsible for his or her property. The corporation with its shareholder-owner, like the State itself, is a means of dispersing that all-important self-responsibility upon which liberty depends. Now if you’ll excuse me, I have to fit Mr. Kinsella with a new rectal orifice.” So, now let me don my surgical gloves:
First let me notice and address your use of the disparaging term “left libertarian” with a quotes from two prominent libertarians in Mises Wiki page on Libertarianism: “Like many libertarians, Leonard Read rejected the concepts of ‘left’ and ‘right’ libertarianism, calling them ‘authoritarian.’ Libertarian author and politician Harry Browne wrote: ‘We should never define Libertarian positions in terms coined by liberals or conservatives – nor as some variant of their positions. We are not fiscally conservative and socially liberal. We are Libertarians, who believe in individual liberty and personal responsibility on all issues at all times. You can depend on us to treat government as the problem, not the solution.’” Stephan, why do you use such a provocative term? You must begin to see government authority as the problem.
Kinsella: “Well you are just buying into the state’s classificaiotns. Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?”
No, Stephan, you are the one defending the State, its corporations, and its stockholders–its creations. I can hardly be said to be buying into the State’s classification since the concept of ownership predates the state and corporations. Who says ownership is the right to control? Ownership is the responsibility of controlling what you own because you cannot have a right without the attendant responsibility, at least not for long.
Kinsella: “Is your chauffer or delivery man your property? do you own him?”
Nah, he is the employee of the owner(s) of the business, and you are responsible to him and, in respect to what he does on your behalf, you are responsible for his actions. That is the essence of the agent/principle relationship, which long predates the State and its efforts through laws to abate that relationship and its attendant responsibility. And because of its abatement no one is responsible for the “collateral damage” or other murders committed by State agents. And, btw, what are the responsibilities, if any, of shareholders?
Kinsella: “This sounds like an amateur observation by a clueless grad student in a dorm room session bullshitting about stuff they have no clue about. With David Letterman playing in the background, and the whiff of Mary Jane from the suite-mate next door. Good for you! But when you buy a share of Exxon stock from a previous owner, using the stock market to facilitate the exchange, how do you “buy it”?–and what is “it?”; as a “going concern”–and pray tell, what is the relevance of GAAP terminology like “going concern” to libertarian theory? methinks you are utterly clueless.”
Stephan, I’ve stated my experience in the securities investment (broker/dealer) industry. Your credentials as a a state-licensed (approved/indentured/subserviant/statist) lawyer virtually disqualifies you from commenting on libertarian principles. I read your article and I even read your citation to yourself as an authority, wherein you say, “For libertarians, the purpose of a legal system is to establish and enforce rules that facilitate and support conflict-free interaction between individuals. In short, the law should prohibit aggression.”
Stephan, you purport to speak for libertarians and yet you talk of “legal systems,” “enforce rules,” and what “the law should prohibit.” This statement of yours (and Patrick Tinsley’s) is a clear demonstration that you accept what Larken Rose calls THE MOST DANGEROUS SUPERSTITION, in his book with that title. He points out–and logically proves–that belief in authority is irrational and self-contradictory. Perhaps because your livelihood as a lawyer makes you utterly depends on the State and its laws, you have yet to shake that superstition. But not to worry. When I was a young and inexperienced libertarian like you back in the 1960s, I too had yet to realize how insidious and thorough the State’s and society’s subtle indoctrination of me into the cult of “legitimate authority” had been. The way I see you going, I’m confident you’ll get over it.
I would also like to comment on your lawyerly manner of arguing: Lately I’ve been reading Keynes GENERAL THEORY (re-reading, actually). Based on a comparison of his supercilious rhetorical style with yours, youngster, I believe if he was still around, K could secure you membership in the Bloomsbury Circle. However, don’t worry, when I was your age there were lots of things I hadn’t figured out yet. Stick with libertarianism; you’ll eventually get it.
October 19, 2011 at 12:57 pmI own a little over a share of Wal-Mart stock (big investor that I am!) and yet I have no control over Wal-Mart property, employees, or policy (or I should say, no more control than any other customer can exert). Why should I be out more than the value of my share if Wal-Mart executives or employees do something wrong or objectionable?
October 19, 2011 at 1:12 pmLikewise, why should you be held liable if you hire a trader to make investments on your behalf, and she buys a single share of Wal-Mart stock without your knowledge.
Likewise, why should you be held liable if you work for a company that offers a pension that includes stock in Wal-Mart, but you have no direct involvement in the investment decisions being made on your behalf, other than your continued willingness to work for your present employer.
October 19, 2011 at 1:06 pmThe heretofore analysis has been narrowly confined to tort exposure.
Is there any consideration of shareholder gains that directly result from fraudulent corporate activity? E.g., Distillery XXX has been selling watered down booze and paying handsome dividends as a result. Are the shareholders’ earnings available to pay claimants in a class action suit brought by defrauded customers? Is the decline in price of Distillery XXX shares as a result of the de-capitalization of the corporation due to settlement payments just recompense for shareholders’ fraudulent gains?
This seems to be the area where “liability” is most murky. Is the concept of “fraudulent conveyance” applicable, or are shareholders shielded from such exposure?
October 19, 2011 at 4:48 pmCrickets. . . . ?!
October 19, 2011 at 5:59 pm@jasontgordon October 19, 2011 at 1:06 pm
Would you hold the investors that Bernie Madoff swindled liable for his fraud?
Fraud woud apply to them only if they knew Bernie was a crook and relied on that knowledge in making their decision to invest.
Those that lost money don’t have to pay a penalty to others who also lost money. But those that did make money might have to disgorge their profits which may be used to pay restitution to those who lost, but not because they are liable in the way you are thinking of it, but becasue they were unjustly enriched by the fraudulent conduct of Madoff.
Liability is murky where the facts are murky. But for fraud to apply, someone has to knowingly deceive someone for the purpose of getting some of their stuff. Shareholders are not fraudulent by accepting dividends that as far as they know, are legitimate.
October 19, 2011 at 9:57 pmnot because they are liable in the way you are thinking of it
I don’t have a clue how or what you presume to be my thinking regarding investors, am I not clearly referring to shareholders?
So according to you Wildberry, dividends based upon fraudulent profits are justifiably owned so long as the shareholder accepted them in good faith? Give me a break. That logic would be convenient for a buyer of stolen goods, would it not?
Are shareholders in an actionable position to obtain damages related to their being payed dividends obtained fraudulently?
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Stephan Kinsella, Sean Gabb’s Thoughts on Limited Liability (Sep. 26, 2006) archived comments:
{ 49 comments }
September 26, 2006 at 10:55 amGroan – a great long response thrown right back at me.
I shall need to go away and think about these matters.
I shall also think about the best way of continuing the debate. I hate little more than interleaved replies. I much prefer the sort of deabte in which each response is complete in itself – rather like the three made so far.
September 26, 2006 at 11:17 amI actually have a lengthy discussion of this issue in a word format that I’ve been unable to post in a decent way. Quick summary is that agency law is a major source of liability for sole proprietors, but is arbitrarily cut off in the case of shareholders merely by invoking the statutory grant of incorporation. One can argue that the corporate veil can be pierced, but the standards are not the same; in essence, so long as the shareholder is extremely negligent in how the business is run, he’s insulated from responsibility. In contrast, agency law places a burden on a sole proprietor to be responsible about his choice of agents.
I also agree that there is nothing wrong in theory about limited liability for contractual debts. The problem is that corporations, as they exist now, are statutorily created privileges, and not a creature of common law. The idea of a fictitious person is the source of much confusion and misapplication of fundamental principles. It would be far better to just call it what it should be – contractually limited liability, and move on.
September 26, 2006 at 11:43 amHere:
“[Incidentally: I am actually not sure whether modern corporate limited liabilty does prohibit a victim of a tort done by personnel of a company from suing shareholders–if he could somehow establish the shareholder played a role.”
is the key. It does, so long as the shareholder can demonstrate that he “respected the corporate identity.” So, as long as he didn’t mix and mingle assets, or fail to hold corporate meetings, he’s protected from liability. In fact, so long as he colludes with his fellow shareholders, he can make it airtight by demonstrating that after all corporate formalities were followed, they all voted for the same result. In this case, they are all enforcing their own claim to having respected the corporate personality, thereby benefitting all of them equally.
In contrast, a sole proprietor who turned the day to day operation of his business over to a hired manager would be bound by the acts of his agent that were taken in the scope of the agency, period. The sole proprietor is responsible for choosing that person and imbuing him with authority. Especially if he didn’t supervise the manager very well and the manager uses the business to defraud customers. It doesn’t take much to see that a sole proprietor could be held liable for his negligence in such a situation. In contrast, the shareholders are actually encouraged to take LESS care in how the day to day manager is operating the business. The less care he takes, the more he can claim he respected the corporate personality.
It doesn’t mean that he will always be held liable when the agent acts negligently in the scope of the agency, but he can be. And that is more than can be said about shareholders, so long as they obey the rituals set forth in business incorporation statutes.
September 26, 2006 at 12:30 pmThis reminds me of immigration debate: what would we do if the state didn’t exist. Corporations are creatures of the state and as such are imbued with as much potential for evil as any other creature of the state. As Van Eghan pointed out in his wonderful papers, the state creates this artificial being to which managers owe a duty of loyalty and from which shareholders are owed some undefined right. The ultimate arbiter of what is “good” for the corporation is….the State!
Having litigated corporate issues from small to large, from local to international, it amuses me still to depose managers who have no idea what a corporation is.
The corporation question is a prism through which we discern pressing issues of liability, contract law and business organizations. That said, there’d be no “secretary of state” office to file “incorporation” papers in Libertania, and the so there is no issue of whether corporations as we know it would exist. They couldn’t. Just like in Libertania there would be no “immigration question.”
That said, would corporations exist in Libertania? For sure, because certain humans desire to cheat, steal and lie, and there is no better mechanism to achieve this ends than a corporation. “Give me money and I will give you this piece of paper that allows you to vote for candidates for board of directors once a year.” Very similar to “Delegate to me your rights and I’ll let you vote once every two or four years.”
Great bargain! As Mencken said, no one has gone bust underestimating the intelligence of the American people.
September 26, 2006 at 12:33 pmWould or could a corporation exist sans the state? In a true free market, the answer would be no. Stockholders could not limit their liability and erect an alter ego, i.e. corporate personhood. Corporations, as we know them today, are creatures of the state and are part and parcel of the state. If the state ceased to exist, corporations would die with it.
Thus, I would have to say that libertarians would have to reject corporations on principle.
Certainly, that would radically alter business, but capitalization would still be possible for very large companies. People could form old fashioned joint stock companies, the stockholders being fully liable of course. For people who wished to avoid liablity, they could capitalize via debt instruments. Entrepreneurs will find a way, they don’t need our help and certainly don’t need governments hindrance.
September 26, 2006 at 12:42 pmStephan: You may be surprised to learn I agree with what you’ve posted here. I want to add a few things:
Along the lines of creative alternative financial instruments to get the benefits of stock ownership while cutting the responsibility for decisionmaking for minority shareholders would be something like this: The corporation could issue “variable bonds” that give payments (coupons) in exactly the amounts dividends would, but give no voting rights until you own a notable amount of them (say, 1% of the total outstanding). Then, at least minority shareholders can’t be said to have “control” over the corporation. Index fund buyers could keep the returns and you could takeover just the same.
A lot of the opposition to incorporation is grounded in the idea that, conceivably, the corporation could commit a tort, and someone “connected” to the corporation’ management could be insulated from liability after assets are liquidated. However, it’s unclear exactly what the limits on this are. Presumably, individual shareholders should be allowed to “insure this away”. But then what if the insurer can’t pay? Is it settled then?
Also, opponents of incorporation are remarkably inconsistent. Yes, it’s true a corporation could commit a tort it couldn’t compensate. But then, so could most poor people today. It’s unfair in my eyes to act like corporations are evil for this, while poor people still roam the earth without some huge liability insurance policy, putting others at risk of being victimized but not able to compensate them.
September 26, 2006 at 12:50 pmLee: I’d advise against referencing the Van Eghen paper. It was painful to read because of the twisted logic. If there’s a point you want to take it, I’d recommend remaking the argument in your own words so as to save us the time.
Mark_Brabson: You have to be careful about the problem of meaning vs. reference, i.e., “Oedipus wanted to marry Jocasta, not his mother!” I think it would be more precise to phrase your position as being that libertarians are against incorporation, not “corporations”. Your position is basically that corporations as managed today could accomplish the exact same things through different financial instruments. Therefore, your critique of current corporations is the far weaker claim of “You should structure your financial arragements with different names.”
By the way, the term is “without”. No one’s impressed by your ability to pepper your posts with French.
September 26, 2006 at 12:53 pmPerson:
My opposition to corporations doesn’t spring from my views on torts. It springs from the simple fact that corporations are NOT of the marketplace, but are of the state. As a Libertarian, I must oppose distortions of the marketplace by the state, so by principle I must oppose corporations. No inconsistenties in my position. I can’t speak for others, of course, just myself.
September 26, 2006 at 1:05 pmI am not sure one French term constitutes peppering. 
Now mises.org, they are peppered with foreign words.
September 26, 2006 at 1:37 pmThe nominal reason for the invention of the corporation was to limit the financial liability of investors to what they put into the corporation. It was an asset protection scheme at its conception.
Although it quickly became a device for shielding investors from criminal liability, that was not its theoretical foundation. The operation of modern corporations isolate owners from being responsible for all kinds of malfeasance, but there is no moral basis for granting such protections. The classic two-level arrangement of an LLC owning a corporation to shield a sole propietor or partners from any legal action is reprehensible since it is obvious that the purpose is to act in any manner desired with impunity.
Corporations can and do defraud lenders and investors. People should loan or invest money carefully when dealing with a non-entity since its purpose is to shield real people from being financially liable. Corporations can and do empower agents to commit all manner of criminality and malfeasance.
But corporations do not commit crimes; people commit crimes–using corporations! Anyone who can be shown to have authorized or perpetrated a crime should be liable and punished. That includes officers, employees, agents, shareholders, lenders, or anyone else no matter what their relationship.
September 26, 2006 at 2:07 pmPerson:
“Also, opponents of incorporation are remarkably inconsistent. Yes, it’s true a corporation could commit a tort it couldn’t compensate. But then, so could most poor people today”
Person, here are two more important foreign terms to wrap your mind around so you can see your analogy is less than meaningless: de facto and de jure.
Poor people can’t compensate, but are still held liable. Shareholders may or may not be factually able to compensate, they are just legally insulated from liability regardless of their ability to pay.
Your whole argument, as usual, is a red herring. The question is, are corporations, as they currently exist, the product of principled legal reasoning, or are they the product of privileges granted by the state. Step one: Read the statutes on every state’s books that create them. (hint, that actually answers the question).
Now, as noted above, contractually limited liability is nothing novel – it is explicitly a matter of contract law. No libertarian should be against it being legal (although there are certainly arguments against the wisdom of buying into certain business arrangements). Further, it does provide a bit of a shorthand to what would otherwise require up-front disclosure during every contract negotiation – however, that’s such a minor point that it really is no big deal.
On the other hand, it’s really clear to anyone who spends more than 2 minutes actually researching the concepts of agency law and piercing the corporate veil that corporations currently provide statutory privileges that go beyond any common law privilege against tort liability.
Do I think it’s a major impetus behind current incorporation? No – quite likely, the contractually limited liability is the driving force. But that doesn’t somehow magically change the fact that corporations do enjoy state granted privileges that are not fundamentally sound.
September 26, 2006 at 2:33 pmLee–God help me, I have to agree w/ Person here, re Van Eeghen’s paper. May the gods forgive me!!
Mark et al.: “My opposition to corporations doesn’t spring from my views on torts. It springs from the simple fact that corporations are NOT of the marketplace, but are of the state.”
But this argument could be used to say that marriage is not libertarian. After all, who cares whether there “would” be marriage still, absent the state–? the fact is, that “now”, the status of marriage “is” a creation of the state now. So it must be opposed.
September 26, 2006 at 3:05 pm“But this argument could be used to say that marriage is not libertarian. After all, who cares whether there “would” be marriage still, absent the state–? the fact is, that “now”, the status of marriage “is” a creation of the state now. So it must be opposed.”
Uh, okay. How about this – nothing about voluntarily choosing your intimate or business partners should be illegal in a libertarian society. However, the legal ramifications attached to your decisions may or may not be consistent with a libertarian society. Hence –
“marriage” and “shareholder common ownership agreement” are never objectionable. Granting certain legal privileges to either arrangement, on the other hand, can be debated thoughtfully.
You gotta be careful agreeing with Person – you pick up his sloppy habit of focusing on red herrings. Next you’ll be complaining that everyone else is out to get you because they don’t understand your sloppy reasoning…
September 26, 2006 at 3:27 pmquasibill:
Poor people can’t compensate, but are still held liable. Shareholders may or may not be factually able to compensate, they are just legally insulated from liability regardless of their ability to pay.
Okay, maybe I wasn’t clear. There are two separate issues at play here: 1) whether corporations unfairly expose others to risk they can’t cover, and 2) whether a person should be held liable for a specific tort. In my original post, I was addressing the general sentiment that (with respect to 1) ) corporations expose others to risk they can’t cover by noting that if they do, they do it to a far less extent than poor people, whom these ardent opponents of incorporation on the left (not surprisingly) give a free pass. You don’t necessarily endorse this point, so it may not apply to you.
Then, regarding 2), you’re claiming that as a shareholder, liability for (a certain set of) corporate torts inheres in my position. But my point here (and I believe Stephan’s) is that if I can achieve the exact same relationship with the corporation as currently stands, with some kind of bond (that I described above) — a bond which you agree does not put me on the hook for the corporation’s wrongdoing — then your claim just reduces to “corporations are bad because they use the wrong names for financial instruments in their dealings”. Not exactly a biting indictment.
Stephan said:the fact is, that “now”, the status of marriage “is” a creation of the state now. So it must be opposed.”
quasibill responded: Uh, okay. How about this – nothing about voluntarily choosing your intimate or business partners should be illegal in a libertarian society.
Hold on — you’ve already missed Stephan’s point. We all understand that you can go through an dileneate which parts of marriage are compatible with libertarianism and which aren’t. That wasn’t in dispute. The point is, by singling out an objectionable part of corporations, and using that to attack “corporations” as such (when so many parts of them are not objectionable), you’re making a statement exactly as useful and true as Stephan’s hypothetical statement about marriage.
And I’d drop the little jabs against me, if I were you.
September 26, 2006 at 6:13 pm“a bond which you agree does not put me on the hook for the corporation’s wrongdoing — then your claim just reduces to “corporations are bad because they use the wrong names for financial instruments in their dealings”. Not exactly a biting indictment.”
Person(and Stephan for that matter), this is exactly right.
Wouldn’t Quasibill also have to concede that CONVERTIBLE bonds do not “put me on the hook for the corporation’s wrongdoing.
You can even have bonds that can be converted to stock and back again.
September 26, 2006 at 8:58 pmTo up the ante, can Stephan or any one (or any person ) explain why such a thing as a “corporation” would be necessary from a strictly commercial standpoint? I can’t see one and joke with clients all the time that sole proprietorship is the way to go — unless you want to defraud public, in which case a corporation is THE way to go.
Also, someone once referred me to a very interesting paper on how Amex was once a pass through liability corporation. (Don’t Leave Home Without It: Limited Liability and American Express by Mark I. Weinstein)
That’s right, it was publicly traded with the understanding that owners of shares could be hit with a big bill a la Lloyd’s in the 80′s. Amex was also monsterously profitable during this time and its shares were considered desireable. Interesting, eh?
September 26, 2006 at 9:53 pmA learned friend has suggested that I correct my spelling of monstrously and desirable. Done.
September 26, 2006 at 11:09 pmLee,
The reason why such a thing as a “corporation” would be necessary from a strictly commercial standpoint (in anarchy) is that it would facilitate faster and more efficient formation and accumulation of capital while at the same time accommodating the need for contractual agreements between property owners.
The corporation is a shorthand for a limited liability towards creditors, employees, clients, customers and whatever. It says basically if we are a limited company, and you agree to do business with us, you agree not to go after more than the worth of the assets of the company if you sue as a creditor, or as an unsatisfied customer. This could be accomplished in other ways, such as individual contracts but such an approach would be unnecessarily cumbersome and expensive. Limited corporations relieve groups of capitalists from having to pay for that particular administrative/legal overhead.
Obviously, capitalists will be much less likely to take equity positions in any given venture if the liability they take on for such an undertaking is unlimited. Any attempt at restricting contract making between property owners can only be deemed unlibertarian and aggressive. There can be no justification for disallowing market participants from coming up with innovations in contractual arrangements such as this. All that is required is proper notification and clarity of what a limited corporation means, and buyer beware.
September 27, 2006 at 2:04 amQuasibill,
September 27, 2006 at 11:22 amBriefly, my understanding is that corporations became somewhat popular when merchants would undertake one-shot ventures with a fixed terminus. Think of a ship sailing from London to India loaded with metals and expecting to return full of spices. At the conclusion of the venture, all investor/owners would receive a pro-rata share of the proceeds, minus costs. The corporation as such would end, and then another formed for yet another venture, etc.
As a business enterprise this made perfect sense. Each investor/owner had a pro-rata ownership interest that would be liquidated at the conclusion of the venture. He would invest knowing that his potential downside was the amount of investment, and his potential upside was whatever profits could be brought about by the traveling merchant manager and the intrepid ship captain.
It also neatly seperated liability according to the fairly commonsensical idea that if it’s captain and traveling merchant who will “act” while far far away, it shouldn’t be the shorebound investor/owners who pay for misdeeds of the traveling merchant or captain.
Prior to the advent of the corporation one had choice of lending money (no liability but limited upside) or being partners (big liability and potential big upside). Corporations made perfect sense and, indeed, allowed for the accumulation of larger sums of money allowing for “longer structures of production” in the form of ever-bigger ships and longer voyages, etc. (More spice spice, baby.)
The problem was that cunning conmen immediately saw the potential for making this otherwise harmless social fiction of a ‘corporation’ into a money-making machine. Let’s make the corporation immortal, they thought. It lives forever. Investor/owners give us money, we buy lots of assets, make the corporation look profitable, watch as ownership shares rise in value on the secondary market, and then rip everyone off! I can almost see the gleam in the eyes of our early railroad and shipping barons, et al.
On a more serious note, there is no a priori reason why corporations should be a more efficient or effective means of raising large sums of money for capital-intensive ventures. I believe many of our glorious capitalists of the past were quite capable of raising capital by other means, such as limited-life partnerships, hybrid loans with partial promise of share of profits, traditional bank loans, internal financing through cashflow generated by other ventures, etc.
It is, I think, a myth that the corporate form was necessary for anything, save making conmen rich. It’s like the myth of government — but if we don’t surrender our sovereign rights to the king/elected officials/fuhrer then anarchy will prevail. This is a lie. As is the claim that corporations ever were “necessary” for anything but fleecing the public.
Finally, as to liability, of course Stephan is right (as usual). If it is the act that causes the effect, we should follow the chain of action back to the actor. The path can be a twisted one (eg, Stephan tells me to shoot patent office clerk who denied his patent for Cajun Martini Blender), but the concept seems clear. Afterall, there can be but two basic categories, action and thought. Punishing the latter is rather unfair (think of difference between spouse denying you meatloaf because you said he/she looked fat in that outfit versus the denying you meatloaf because he/she thinks you thought he/she looks fat…ponder that).
September 27, 2006 at 12:42 pmPerson:
“And I’d drop the little jabs against me, if I were you.”
Coming from the king of personal jabs (often pre-emptively), that’s rich.
“then your claim just reduces to “corporations are bad because they use the wrong names for financial instruments in their dealings”.”
No. I’m saying that if you hold an equity share, meaning you a) claim ownership of the res, and b) maintain a claim to profits from the res, essentially unlimited in an absolute sense by any contract term, you are not a mere creditor. Once again, we can play all sorts of games, calling a duck a frog, so long as we have an asterisk and all sorts of legalese afterwards, but if we want to ground this discussion in a meaningful way, we have to recognize there is a difference between claiming ownership and being a creditor. And if shareholders don’t own the assets of the corporation, who does?
“The point is, by singling out an objectionable part of corporations, and using that to attack “corporations” as such (when so many parts of them are not objectionable), you’re making a statement exactly as useful and true as Stephan’s hypothetical statement about marriage.”
And once again reading comprehension fails you. My point was merely that those who reflexively defend corporatins AS THEY CURRENTLY EXIST, are akin to those defending the entity that is state regulated marriage. I’ve noted that I agree with Stephan’s ultimate point – that causation is really the important question. My post was merely to point out that “fictitious personhood” as it currently exists, actually does not accomplish what Stephan thought it did.
Araglin,
good points. I agree that an argument can be made that liability for sole proprietors may be the area where there is a problem with current law from a libertarian standpoint. My default position, though, is that anything developed through hundreds of years of common law with respect to business practices is the default right answer, that must be shown to be wrong. In the same vein, I view any recent (100 years or so) statutory law in the same area very suspiciously, with an assumption that it is the result of some social engineer.
“Even if the requirements for a bare agency relationship are met, the doctrine of Respondeat Superior only applies in a certain type of agency relationship known as master-servant relationship.”
I tended to shy away from respondeat superior, because it’s actually somewhat different from the point I was trying to make, and I actually believe that RS isn’t entirely fundamentally sound. Under traditional agency law, an agent can have several types of authority, including “apparent”, and with that authority bind the principal by his acts. Now in terms of contracts, quite clearly those who understand corporations understand that agents are limited in their authority. But in the case of where the agent uses his apparent authority to commit a tort, traditionally the principal could be held liable for the tort.
To me, the question is whether the principal has acted responsibly with respect to how his property is utilized. RS, corporations, and even to a small extent agency law, all add confusing legalese that detracts from, instead of clarifying, this basic issue.
Note that this is different from being a creditor in that a creditor has a contractually defined absolute return. Any “loan” instrument that allows for an unlimited absolute return is not a loan, it’s a share in ownership. A loan is a temporary surrender of ownership of property, where as a share of a corporation is a surrender of the right of possession of property while retaining ultimate ownership.
“The question is, does a non-controlling shareholder in a publicly-traded corporation meet this basic control requirement?”
Where no shareholder has a controlling stake, who is the principal? Who owns the corporation? Not the managers, clearly – we refer to them as agents, of course to a fictitious person, but that’s the problem. A real person must actually be an owner somewhere along the chain. So the only logical place for ownership is shareholders.
So you challenge control. Okay, minority shareholders can’t control anything directly, but then again, who put themselves in that position? Where they no claim of control over something they claim to own? Should we reward them for such careless behavior with a blanket immunity? Or should we just treat them like any other owner of property owned commonly (joint tenants and tenants by the entireties also)?
In the end, as you note, the problem is that this differential legal treatment is not based on a reasoned foundation, and therefore distorts capital structure. I prefer levelling the playing field with the simple question, like Stephan in his original article, to “did D’s negligence cause the injury stated?” No need to drown in legalese about master/servant, corporate veils, etc. In the absence of that, I’ll take either shielding sole proprietors like shareholders, or exposing shareholders like sole proprietors. It’s more important in the big picture that the law treats owners equally.
September 27, 2006 at 2:46 pmQuasibill: God help me, I tend to agree w/ Person here (except you are right about his jabs in many cases).
Person: “then your claim just reduces to “corporations are bad because they use the wrong names for financial instruments in their dealings”.”
QB: No. I’m saying that if you hold an equity share, meaning you a) claim ownership of the res, and b) maintain a claim to profits from the res, essentially unlimited in an absolute sense by any contract term, you are not a mere creditor.
The problem I have with this is that you are relying too heavily on terminology. What does it *mean* to “own the res”? Why is this relevant anyway? Because of what ownership itself means–which is the *right to control*. It makes perfect sense to focus on this, when trying to find causal responsibility for what someone else does directly. If I have some kind of signficant influence or control over the others’ actions, then yeah, maybe I’m implicated. But it’s because of the right to control–whatever you call it.
Once this is realized, then you see there are many forms of “right to control” which the law does not classify as ownership (e.g., a significant customer or creditor can pressure a company or even have contractual covenants); and many things the law calls ownership that have little right to control (the “naked owner” (owner of the residue or estate in reversion) of a piece of land that someone else has a life usufruct (life estate-life tenant) over has very little control of it). It is putting form over substance to fixate on the legal terminology used to describe certain relationships–especially the legal terms flowing from state positive law.
“I tended to shy away from respondeat superior, because it’s actually somewhat different from the point I was trying to make, and I actually believe that RS isn’t entirely fundamentally sound.”
Right–that’s why I said (as Gabb quoted me) that you have to first show RS is libertarian to have liability in the first place. The responsibilyt of the employer or the owner of the company-employer for the actions of the employee rests on RS.
“To me, the question is whether the principal has acted responsibly with respect to how his property is utilized.”
Maybe. But without RS, in order to hold the owner of property liable for torts committed by a third party using that property, you would have to say that loaning to someone is itself negligent, which is ridiculous. If I rent a car from Hertz and use it to ram into a crowd, why should Hertz be liable?
I believe many libertarians have some kind of bizarre, yet unstated and unjustified, assumption that Hertz should be. Why? Why? It needs to be shown, not just assumed.
“Note that this is different from being a creditor in that a creditor has a contractually defined absolute return. Any “loan” instrument that allows for an unlimited absolute return is not a loan, it’s a share in ownership.”
Nonsense. Or: it does not matter. You are trying to pigeonhole things as either being “officially” ownership, or “not” ownerhsip, and then making a decision based on this determination. Why not just focus on the underlying reality instead.
“Okay, minority shareholders can’t control anything directly, but then again, who put themselves in that position?”
But when you buy a share from another shareholder you don’t cause anyhting to happen. the company already exists; you don’t even give them money.
September 27, 2006 at 3:02 pmIs there a form of libertarianism that allows for differences on issues like this? In other words, could one society allow corporations and another not and both be considered equally consistent under libertarianism?
The reason I ask is that people have two ways of thinking about law: 1) One groups says that nothing is permitted except what is in the law. Europeans tend to lean this way. 2) Another group says everything is permitted except what the law forbids, which is more American.
It seems to me that the discussion above tends toward #1. Does a libertarian group that follows #2 exist?
September 27, 2006 at 3:24 pm“Because of what ownership itself means–which is the *right to control*. ”
Yes, a form of property right. Hence, it describes a person as well. Who owns the property rights in corporate property? Who can assign the right to possess, or control? As I’ve noted, it can’t be the managers, as we automatically refer to them as agents. Agents of who? Well, the fictitious person, of course! So a fictitious person owns property? hello, State, welcome to my house…
“right to control” which the law does not classify as ownership (e.g., a significant customer or creditor can pressure a company or even have contractual covenants”
Are you seriously arguing that a customer has a property right in the property of a seller? It’s the difference between “right” and “influence”. Leftists make that mistake all the time – I expected more from you. The customer can influence the seller by offering enough money to encourage the seller to agree to a term. He has no property right until the seller transfers it.
“If I rent a car from Hertz and use it to ram into a crowd, why should Hertz be liable? ”
Funny you used this example, as I was thinking along similar lines when I made my argument. Here’s my re-statement:
QB is locking his car door as W, the town drunk approaches. W, reeking of alcohol and somewhat twitchy with white powder around his nose, asks QB for the keys to his car so he can pick up his friend at the airport. If QB gives W the keys to the car, can QB be held liable for W’s act in driving through the line of schoolchildren at the next intersection?
Does your answer change if QB first performs the magical incantations, calls himself QB taxicabs, Inc., grants equal shares to his next door neighbors, and then signs W to an employment agreement to be the director of QB taxicabs, with full management authority, before giving W the keys to the car (which of course, QB has assigned to the corporation)?
“But when you buy a share from another shareholder you don’t cause anyhting to happen. the company already exists; you don’t even give them money. ”
So? When I buy the dam on the river upstream, I don’t cause anything to happen – it already exists, and I don’t add any capital to the dam. However, I AM now owner of it, and CAN be held liable for a subsequent breach that causes damage down stream.
It’s really quite amazing to see you make Marxist arguments about property ownership. That it’s just some metaphorical construct, that abstractions can have rights, etc. Property rights are held by someone or someones in common to any owned property. Until you define who owns the property, it must be unowned. Who, by your tortured definitions, owns the corporate property, if not shareholders?
September 27, 2006 at 3:42 pmSomewhat bill:
“right to control” which the law does not classify as ownership (e.g., a significant customer or creditor can pressure a company or even have contractual covenants”
Are you seriously arguing that a customer has a property right in the property of a seller?
Depends. They can–they can have contractual guarantees that force the seller to do certain things or not, w/ their own property. Is this not a form of co-ownership? It’s divided right to control. Same w/ creditors.
It’s the difference between “right” and “influence”. Leftists make that mistake all the time – I expected more from you.
But if I were exploring a theory of ownership, maybe so. The issue is *causation*. For that, we look at relevant factors. One of them is influence or control. Owenrship is relevant *only* because and to the extent it means control. In my view.
The customer can influence the seller by offering enough money to encourage the seller to agree to a term. He has no property right until the seller transfers it.
First, why does there have to be an ownership-based influence for it to matter for responsibility? If a wife pays a hit-man to kill her husband, she is responsible not b/c she owns the gun used or the hit-man. But beause of her role–her influence, her causal role. I discuss the importance of causation here: http://mises.org/journals/qjae/pdf/qjae7_4_7.pdf
Or what if she seduces her boyfriend or otherwise persuades him to kill her husband? She’s still liable (IMO).
Second–the customer can have property rights–there might be a contract having many obligations on waht the seller does with his property.
QB is locking his car door as W, the town drunk approaches. W, reeking of alcohol and somewhat twitchy with white powder around his nose, asks QB for the keys to his car so he can pick up his friend at the airport. If QB gives W the keys to the car, can QB be held liable for W’s act in driving through the line of schoolchildren at the next intersection?
Maybe–but you changed the context. Here QB is more involved. It’s like handing a gun to someone who is obviously likely to immediatley use it to go on a shooting rampage, and selling one to a hunter.
It’s really quite amazing to see you make Marxist arguments about property ownership. That it’s just some metaphorical construct, that abstractions can have rights, etc.
It’s not Marxist to say property means the right to control. It’s not Marxist to believe responsibility for others’ actions requires a coherent theory of causation; and that in order to prove such causation, “ownership” might be relevant primarily if and to the extent the ownerhsip implies some kind of relevant control; and that if so, other types of control or influence might also be relevant for a causal analysis.
Property rights are held by someone or someones in common to any owned property. Until you define who owns the property, it must be unowned. Who, by your tortured definitions, owns the corporate property, if not shareholders?
Why do you keep assuming A is liable for any tort commited by a third party who is using A’s property? This is an assertion that needs a justification.
September 27, 2006 at 4:13 pmThe problem here is in assuming that ownership of any particular asset must be unitary. It’s not. When a potential share-holder pays in capital to the corporation, he receives in return certain contractual rights: (1) to receive a pro rata share of any declared dividends; (2) to receive a pro rata share of assets minus liabilities upon liquidiation; and (3) the right to vote in certain situations. These contract rights (to the extent that they are enforceable) rest upon the parceling out of the various constituent parts of ownership among the parties of the corporate assets. If one has an enforceable right to insist that certain actions be/not be taken with certain property, under libertarian theory, that has to be because one or more of the “sticks” in the property “bundle” has passed into his hands. An asset isn’t unowned merely because no one possesses each and every one of the ownership rights.
Hope this finds all of you well,
Araglin
September 27, 2006 at 7:04 pm“They can–they can have contractual guarantees that force the seller to do certain things or not, w/ their own property.”
At which point, the seller has sold that property right to the customer. But he did, in fact sell it. That right existed before he entered into the contract.
“he issue is *causation*. For that, we look at relevant factors. One of them is influence or control. Owenrship is relevant *only* because and to the extent it means control.”
I actually agree. The problem is you are arbitrarily ending the chain at a given point. Noone forced the shareholder to enter into the agreement he did. He did, in fact, have absolute control of the property he exchanged for the share, and in fact, had every right in the world to demand more control in return. The fact that he intentionally tries to shirk responsibility for how his newly acquired property is then used doesn’t exactly make him automatically blameless for how it is used, in my view. He can be seen as contributing to the action by supplying the necessary means. Again, you and your newfound soulmate are fighting a bit of a strawman – I am not arguing for automatice liability. I’m merely arguing against automatic immunity.
“Or what if she seduces her boyfriend or otherwise persuades him to kill her husband? She’s still liable (IMO).”
Exactly. Or how about the situation where the teacher seduces a student, provides him a gun, and then blithely mentions that she can’t continue the relationship as long as her husband is alive? She has no control over what the student then does, and she hasn’t exercised any direct control over him, but she can still be found liable (IMO). Of course, if she incorporated herself and merely hired the student as a director and gave the equivalent information (here’s a nuclear plant, but unless we can find a cheap way to dispose of the waste so I can make a profit, I’ll have to fire you), current law saws – immunity! Wonderful, ain’t it?
“Here QB is more involved. It’s like handing a gun to someone who is obviously likely to immediatley use it to go on a shooting rampage, and selling one to a hunter.”
I see no change of context. You were claiming that there could never be liability for merely lending property to another. I showed that quite clearly there is an argument that there can be such liability. Shareholders voting in a CEO with a record of putting profits ahead of any concern for third parties are perfectly analogous – if the director then proceeds to violate 3rd party rights in pursuit of higher profits, can you honestly say that the shareholders had no causal connection?
What was the referrent to my “marxist” comment was your intimation that there is no real owner of corporate property – that an abstraction (such as “the proletariat” or a fictitious person) had property rights. I say, some real, living, individual has the property rights, individually or common with other real, living individuals. They do, in fact, delegate these rights when they make contracts. And, in fact, they can arguable be held liable for delegating those rights in a non-responsible manner.
“Why do you keep assuming A is liable for any tort commited by a third party who is using A’s property? This is an assertion that needs a justification.”
See above comment regarding the Ray Bolger you keep bringing to the table.
Araglin,
“The problem here is in assuming that ownership of any particular asset must be unitary.”
I think the only people assuming this are Kinsella et al. I’m merely saying that each right exists, and that in most pertinent situations, it originated as unitary ownership rights, either in an individual or in a group. The original unitary owner then delegated or sold some rights to others. These are, in fact, actions. It doesn’t just happen magically. Humans actually act to accomplish the transfer. The manner in which this transfer occurs *may* give rise to liability on the part of the transferor. NOthing more, nothing less.
September 27, 2006 at 10:18 pmpseudo-bill:
“he issue is *causation*. For that, we look at relevant factors. One of them is influence or control. Owenrship is relevant *only* because and to the extent it means control.”
I actually agree. The problem is you are arbitrarily ending the chain at a given point. Noone forced the shareholder to enter into the agreement he did. He did, in fact, have absolute control of the property he exchanged for the share, and in fact, had every right in the world to demand more control in return. The fact that he intentionally tries to shirk responsibility for how his newly acquired property is then used doesn’t exactly make him automatically blameless for how it is used, in my view. He can be seen as contributing to the action by supplying the necessary means. Again, you and your newfound soulmate are fighting a bit of a strawman – I am not arguing for automatice liability. I’m merely arguing against automatic immunity.
No, I’m saying it could be either way too. Some shareholders could clearly be liable. For their particualr actions or role.
I simply say taht as a general matter, someone is responsible for another’s direct actions only if you can establish a sufficient causal link. Now, if you think *merely owning shares* in the company that pays money to someone to do something (an “employee”) is necessarily liable for any tort committed by that employee, I simply think it needs to be established. The burden is on you; and if you think it’s “obvious” or “obviously followS” from the fact that he’s a shareholder–it doesn’t. You have the burden. I don’t see how you can satisfy it but you are welcome to try.
That brings up another issue: “employee” is also an artifical concept; economically, waht’s teh difference between paying an independent contractor, or an “employee,” to do a task for you? Or even outsourcing something to another company?
I think the problem is some people have a general hostility to corporatism either b/c they have a left-libertarian aspect, or a paleo-agrarian one, or b/c they dislike the intertwining of global capitalism with government. So they come up with the limited liability complaint. But it’s not set in any carefully articulated, coherent theory of responsibilty.
I mean, let’s hear it: in a private joint stock company in your version of libertopia, what *exactly* is your theory of what liability shareholders should have? Are you saying they should have unlimited liability, for … what? any actions performed… by whom? By “employees’ of the company? or only by employees, performed in the couse of their employment? What about outsourced tasks done by “other” companies? what about the actions of “independent” contractors? Does the action have to be done “with” “property” owned by the shareholders/company? Or does merely being paid by the company implicate the company?
SEe, not only do you guys fail to set forth a careful theory of resonsibility and causation, you fail to even specify *what* you are trying to justify. I believe you need to carefully show what liability you think shareholders *should* have (that the law is currently somehow immunizing them from), and also what is the *justification* for this theory.
Or how about the situation where the teacher seduces a student, provides him a gun, and then blithely mentions that she can’t continue the relationship as long as her husband is alive? She has no control over what the student then does, and she hasn’t exercised any direct control over him, but she can still be found liable (IMO). Of course, if she incorporated herself and merely hired the student as a director and gave the equivalent information (here’s a nuclear plant, but unless we can find a cheap way to dispose of the waste so I can make a profit, I’ll have to fire you), current law saws -immunity!
I am not so sure you are right. But if so, that part is not justifiable. I have pointed out repeatedly that if someone is causally responsible, fine. In this case, it’s easy to make the case.
But notice: she is not responsible *merely because she is a shareholder*, but because, as yo uset up the hypo, she was orchestrating the whole thing.
This example does NOT show that a *mere* shareholder of a company is necessarily responsible for all torts committed by individuals the company pays to do things.
I see no change of context. You were claiming that there could never be liability for merely lending property to another.
Did I? I believe I was pointing out that if you say a shareholder is necessarily liable, it must be based on *something*. It has to be because he gave money to, or has control over, the company. In the former case, if you base it on this–then you would implicate all lenders too. Surely we don’t want this.
This dos not imply no lender could be liable. I can conceive of situations where they would. Where they pressure the company into committing a crime, etc.
Shareholders voting in a CEO with a record of putting profits ahead of any concern for third parties are perfectly analogous
Perhaps–but that is not merely because they are sharehodlers–it’s b/c of particualrthings they did in this case–and how would this theory implicate those who voted against the CEO, or who didn’t vote (anyway shareholders elect the directors, who hire the CEO).
– if the director then proceeds to violate 3rd party rights in pursuit of higher profits, can you honestly say that the shareholders had no causal connection?
Of course in some cases this can be shown. Sure, why not? I just say it’s not automatic.
What was the referrent to my “marxist” comment was your intimation that there is no real owner of corporate property
Of course it has an owner. Or owners. It’s divided; it does not rest all in the hands of shareholders (or not necessarily). As I pointed out: can the shareholders use the corporate jet? No. CAn the company sell all its assets? No, not if the bank has covenants or liens preventing it. Etc. Ownership–the right to control–is spread among many entities. Deal with it.
See above comment regarding the Ray Bolger you keep bringing to the table.
What?
“The problem here is in assuming that ownership of any particular asset must be unitary.”
I think the only people assuming this are Kinsella et al.
Im not assuming this. The opposite, if anything.
September 28, 2006 at 12:17 amquasibill: are you going to address the issue of convertible bonds that Kristian brought up or the variable bonds that I brought up?
September 28, 2006 at 7:43 amStephan,
Let’s step back and see if you agree with my summary so far, and see what you disagree with:
uncontested:
1. sole proprietorships and corporations are treated differently with respect to liability for employee actions. Sole proprietors have respondeat superior, while shareholders have limited liability.
2. Limited liability has no connection to the concept of causation. Piercing the corporate veil is not based on determining whether there was control or causation, rather it merely attempts to determine if the shareholder didn’t respect the corporate identity.
3. Respondeat superior may or may not be justified as to sole proprietors (and therefore corporations as well) – but if you believe it isn’t, RS should be changed, instead of granting artificial privileges to shareholders in corporations. There is no valid reason to distinguish between the two forms of ownership in this respect. What holds for one as a general rule should hold for the other.
Any problems with that?
(Ray Bolger had an important role in the Wizard of Oz)
All of which leads us to:
“I believe I was pointing out that if you say a shareholder is necessarily liable”
Strawman – I never, not once, claimed automatic liability. In fact, I have, from the beginning, only argued AGAINST automatic immunity, which is what current corporate law provides. You keep trying to rotate the positions, but it doesn’t work. YOU are defending an absolute position. I’m merely arguing that corporations, as they exist, posess privileges that they wouldn’t absent the state.
“Perhaps–but that is not merely because they are sharehodlers–it’s b/c of particualrthings they did in this case–and how would this theory implicate those who voted against the CEO, or who didn’t vote (anyway shareholders elect the directors, who hire the CEO).”
Exactly. And under current law, none of this is considered. You can only get this far if you first jump through the hoops of “piercing the corporate veil.”
“Of course it has an owner. Or owners. It’s divided; it does not rest all in the hands of shareholders (or not necessarily). As I pointed out: can the shareholders use the corporate jet? No. CAn the company sell all its assets? No, not if the bank has covenants or liens preventing it. Etc. Ownership–the right to control–is spread among many entities. Deal with it.”
I have dealt with it. You can’t seem to get past the point that you are defending an entity, as it currently exists, that doesn’t. As in this statement:
“I am not so sure you are right.”
After you spent your first several paragraphs excoriating leftist and agrarians for their supposed inability to present a coherent defense of their vision, you come up with that? You’re going to the mat to defend corporations as they exist based on that? Okay…
Let’s put out there again, nice and slowly –
Shareholders currently have no liability for how they use their share rights, unless they fail to respect the corporate identity. You consistently claim that this is just peachy in your world, while out the other side of your mouth claiming that the only issue should be causation (“Of course in some cases this can be shown. Sure, why not? I just say it’s not automatic.”) Surprise! – I agree with the second statement (“I am not arguing for automatice liability. I’m merely arguing against automatic immunity.”) (nice spelling on my part, BTW). Just not the first. In that vein, as I’ve already clearly stated above, both RS and limited liability serve only to confuse the question.
Person –
Answered several times. In fact, just re-read the exchange between NSK and myself, and it is addressed at least 3 times over. In fact, I have clearly stated several times what my standard would be (hint, that helps other people actually determine what you mean when you argue – I know someone who fails to do this repeatedly in the IP context…)
September 28, 2006 at 8:34 amquasibill: No, you did not address convertible or variable bonds. You may have given a standard, but you never applied it to those cases. And considering how hard your position is to follow, no, you can’t count that as an explanation. Earlier in the thread you said, essentially, “managers ‘are considered’ agents, so obviously they can’t be owners” — that’s right, because of how economists describe the principle-agent problem, that determines the relationships between the actors. So, no, it’s a bit hard to get answers out of you. Try to explain how convertible bonds and variable bonds fit into your narrow framework.
September 28, 2006 at 11:01 amNot-quite-bill:
1. sole proprietorships and corporations are treated differently with respect to liability for employee actions. Sole proprietors have respondeat superior, while shareholders have limited liability.
I think I see what you’re trying to get at here. You see a sole proprietor as responsible for employees’ torts; yet you think there is an artificial exemption for “joint owners”. If they just “stand in the shoes” of a sole proprietor, why aren’t they collectively liable?
But a sole proprietor is liable because he directs the actions of the negligent employee, and actually runs the company–sets policies, controls is, manages it. In a joint stock company, the shareholders don’t do any of this. They elect the board, which appoints managers. In my view, the managers are more analogous to the sole proprietor than the shareholders are.
Let me also ask you: have you read Robert Hessen’s by-now classic work on this, In Defense of the Corporation? It’s a very thorough, learned defense, based on libertarian principles. I really think anyone wanting to weigh in on this needs to be familiar with this pioneering work. He handles tons of these kinds of objections.
Before proceeding further, let me list here some good resources on this that really should be studied by anyone seriously interested in this issue:
Richman notes:
What about torts, or actions that harm people who are not parties to any contract? (We’re primarily concerned with unintentional torts here.) Partners in an unincorporated firm can personally be sued by someone, say injured by a company vehicle, but not so a shareholder. This seems to confirm that corporate status is a privilege.
Hessen explains that in England long ago the “principle of vicarious liability” was established, holding that a master was liable for the torts of his servant. This was reasonable because the master hired, trained, and supervised the servant. Later the same principle, reasonably, was “extended to sole proprietorships and general partners.” However, he says, it doesn’t follow that it should be applied to all holders of corporate stock. Hessen writes,
Vicarious liability should only apply to those shareholders who play an active role in managing an enterprise or in selecting and supervising its employees and agents. The tort liability of inactive shareholders should be the same as that of limited partners — that is, limited to the amount invested — and for the same reason; namely, inactive shareholders and limited partners contribute capital but do not participate actively in management and control.
I had forgotten this but must have absorbed it when I read Hessen long ago. Hessen here is making the same basic causation point I have made here: that vicarious liability must be relied on to hold someone liable for the servant’s actions–and in the case of a sole proprietorship, it is reasonable to do so because the proprietor/master is hiring, training, supervising the servant/employee. But in the case of a joint stock company, the same idea applies only to those sharehlolders who “play an active role in managing an enterprise or in selecting and supervising its employees and agents”.
This makes sense to me. Merely being a shareholder is not sufficient. It’s having control. I believe most of the corporation opponents have some view that inherently connects liability to property. I think this is confused and wrong. Liability flows from one’s actions–from control–from causing the harm to occur.
2. Limited liability has no connection to the concept of causation. Piercing the corporate veil is not based on determining whether there was control or causation, rather it merely attempts to determine if the shareholder didn’t respect the corporate identity.
Look. The point is this. Le’ts not stray. Libertarian critics of the corporation base this criticism on certain features, namely limited liability. The question is: in a private society, with no state privilege, could private actors form the basically same type of arrangement that had the features you guys complain about. We have shown that contractual limited liability is no problem. What about torts? See above.
3. Respondeat superior may or may not be justified as to sole proprietors (and therefore corporations as well) – but if you believe it isn’t, RS should be changed, instead of granting artificial privileges to shareholders in corporations. There is no valid reason to distinguish between the two forms of ownership in this respect. What holds for one as a general rule should hold for the other.
See Hessen’s comments above re vicarious liability. I think this is a sound analysis.
Bottom line: Hessen solved all this back in the 1970s. Critics usually ignorant of what has gone before keep reinventing the same critiques, that have already been addressed.
“I believe I was pointing out that if you say a shareholder is necessarily liable”
Strawman – I never, not once, claimed automatic liability. In fact, I have, from the beginning, only argued AGAINST automatic immunity, which is what current corporate law provides.
Does it? If an employee–say a truck driver of FedEx–is also a shareholder, and negligently runs over someone, does his status as a shareholder immunize him? Nope.
You keep trying to rotate the positions, but it doesn’t work. YOU are defending an absolute position. I’m merely arguing that corporations, as they exist, posess privileges that they wouldn’t absent the state.
Shareholders *per se* do not seem to exert enough control to be liable vicariously. The shareholders that do exert enough control, ought to be liable.
“Perhaps–but that is not merely because they are sharehodlers–it’s b/c of particualrthings they did in this case–and how would this theory implicate those who voted against the CEO, or who didn’t vote (anyway shareholders elect the directors, who hire the CEO).”
Exactly. And under current law, none of this is considered. You can only get this far if you first jump through the hoops of “piercing the corporate veil.”
But I am not defending this aspect of corporations. So long as people would be free in private society to (a) limit shareholder’s contractual liability for debts of the corporation; and (b) not be held to be automatically responsible vicariously for actions of the company’s employees merely becuase they are shareholders, then we have the seed of a simalcrum of a corporation.
You can’t seem to get past the point that you are defending an entity, as it currently exists, that doesn’t.
You seem to not be able to get past the convenient use of legal fictions. It’s just a way of conceptually dealing wtih something. It’s not like it hast o have a platonic essence.
Shareholders currently have no liability for how they use their share rights, unless they fail to respect the corporate identity. You consistently claim that this is just peachy in your world,
No. What i claim is that in a free society I see no problem with shareholders having a form of limited liability, even for torts, becuase being a shareholder does not in and of itself mean you are necessarily actively controlling what the tortfeasors do. I also see no problem holding a particular shareolders–or director, or manager, or lender, or customer, or vendor, or employee, or wife of the CEO–liable vicariously for the acts of a particular employee, if it can be shown that there is sufficient causal connection. I only maintain that merely being a shareholder is not sufficient. The libertarian critics of the corporation implicitly rest their critique on the idea that *merely* being an “owner” is sufficient. that is what i deny. ARe you now retracting this? Note that Gabb, above, does imply this.
In any event–as Hessen also points out:
Regardless of one’s view about limited liability for torts, the whole issue is irrelevant to giant corporations, which either carry substantial liability insurance or possess sizeable net assets from which claims can be paid.
September 28, 2006 at 11:31 amLet’s be clear, certain “libertarian critics” of the corporation don’t focus on limited liability as much as they focus on how useless and meaningless the corporate form is. The mistake made by many (I have yet to digest 126 pages of Pilon’s thinking on this), is that they assume the corporate form serves a legitimate purpose. It doesn’t, it can’t and it never has (contrary to popular myth — similar to the myths of “rights granted to us by constitution” and “government is necessary to secure our rights, build roads, provide justice, secure patent rights,” bla bla). That’s the illusion we need to dispense with, and then we can lollgag around on issues of liability in a world of disjointed actions and perfect freedom.
September 28, 2006 at 11:35 amPerson –
forgive me if I fail to respond to your posts – its clear we have a communication problem. You have, in the past, claimed to have clearly refuted certain arguments. I see your alleged refutations, and they are as clear as mud to me. The opposite appears to be true as well. What to me is a clear answer to your point, you don’t understand. We seem to speak different languages. I gain nothing from our exchanges, and its clear my posts aren’t useful to you. In the end, we degenerate to name calling, which is not beneficial to either of our positions.
Stephan,
“But a sole proprietor is liable because he directs the actions of the negligent employee, and actually runs the company–sets policies, controls is, manages it.”
But that is not all. He is also the ultimate owner, who has the right to decide that someone else will run the company. For example, the common practice of franchisees to hire a location manager, who in actuality is responsible for all day to day operation. But the manager ultimately derives his authority from the owner, who has non-permanently delegated it to him. This delegation is, in itself, an act that has consequences in the world. For this act, the sole proprietor can be held responsible, including a situation where the sole proprietor hired a dangerous manager because that manager was likely to yield higher profits.
As I’ve noted, the shareholder’s decision to hire a director is, in fact, absolutely immune as long as they follow some statutorily defined rituals. They ARE the ultimate owner involved, and they ARE the one(s) that delegate the right to control to the managers. This delegation IS an action for which liability can possibly accrue, under a libertarian theory. Under current law, it can’t, unless the shareholder disregards a fictitious concept.
I have at some time or another, read all of those sources, although, like you, I don’t have handy recall to all of the points contained therein.
As for Hessen, I don’t agree entirely with his analysis of vicarious liability with respect to inactive shareholders. To the extent that they are inactive by legal inability, his analysis is fine. To the extent they have the right to be inactive, but fail to exercise that right, they can be held liable for their failure to use their right in a responsible manner. Other than that, his analysis seems to agree with everything else we seem to have agreed upon.
“Does it? If an employee–say a truck driver of FedEx–is also a shareholder, and negligently runs over someone, does his status as a shareholder immunize him? Nope.”
Strawman. He is not liable in his identity as a shareholder, he is liable in his identity as an employee. Again, the point is that to the extent he has exercised a right that can be linked in the causal chain to the harm caused, there is an argument that he should be liable. Current corporate law arbitrarily protects shareholders from the possible consequences of their actions.
“So long as people would be free in private society to (a) limit shareholder’s contractual liability for debts of the corporation; and (b) not be held to be automatically responsible vicariously for actions of the company’s employees merely becuase they are shareholders, then we have the seed of a simalcrum of a corporation.”
Well, I’d limit (a) to “contractual debts” in the sense that at least one *real* person would have to be responsible for its tortious debts – that would be a matter of contract (indemnity, etc.) between the shareholders, but they could not extinguish the rights of non-parties to their contract.
And 2nd, “simalcum” is a good description. It is not, in fact, what we currently have. The extent of the difference in practice is impossible to predict with certainty.
“You seem to not be able to get past the convenient use of legal fictions”
Maybe because legal fictions are a front for defrauding the less sophisticated. Look, I have no problem (legally) with hucksters swindling the unsophisticated out of their money, but I prefer that they are actually forced to spell it out up front, during dickering. Can you honestly argue that a person who doesn’t understand the meaning of “inc.” consented to limited contractual liability? To me, you only can by using arguments akin to you consenting to the current Constitution.
“The libertarian critics of the corporation implicitly rest their critique on the idea that *merely* being an “owner” is sufficient. that is what i deny. ARe you now retracting this?”
Not totally. I think you are too glib as to the concept of who delegates the rights of control, but beyond that, I think we agree.
As far as Gabb’s critique, I agree with much of his criticism of the cultural effects, but I don’t trace the problem to corporations per se, but to the “public” markets as established by states as well as the central banks. “Close” corporations absent Fed currency manipulations, would, in fact, probably not have created so many cultural negatives.
September 28, 2006 at 11:55 amLee:
Let’s be clear, certain “libertarian critics” of the corporation don’t focus on limited liability as much as they focus on how useless and meaningless the corporate form is. The mistake made by many (I have yet to digest 126 pages of Pilon’s thinking on this), is that they assume the corporate form serves a legitimate purpose. It doesn’t, it can’t and it never has (contrary to popular myth — similar to the myths of “rights granted to us by constitution” and “government is necessary to secure our rights, build roads, provide justice, secure patent rights,” bla bla). That’s the illusion we need to dispense with, and then we can lollgag around on issues of liability in a world of disjointed actions and perfect freedom.
What is the purpose of arguing that a corporation has no purpose? What is the relevance? Even if this were right, it has nothing to do with libertarianism.
Bit-of-Bill:
“But a sole proprietor is liable because he directs the actions of the negligent employee, and actually runs the company–sets policies, controls is, manages it.”
But that is not all. He is also the ultimate owner, who has the right to decide that someone else will run the company.
for some reason you guys see some relevance in being able to Name that sommeone is the Ultimate Owner. I think you’re putting the cart befor the horse; you are failing to provide an *argument* for why mere ownerhsip interests give rise to *vicarious liability*.
For example, the common practice of franchisees to hire a location manager, who in actuality is responsible for all day to day operation. But the manager ultimately derives his authority from the owner, who has non-permanently delegated it to him. This delegation is, in itself, an act that has consequences in the world. For this act, the sole proprietor can be held responsible, including a situation where the sole proprietor hired a dangerous manager because that manager was likely to yield higher profits.
I believe the world has nuances. Context and facts matter. Not all cases are alike. I think there is a difference between what a sole proprietor does and what a shareholder does. Apparently you do not. I think the manager is more analogous to a sole proprietor. They have similar control in making policy, hiring and directing employees. You think the shareholder and proprietor have more in common–becuase they are both “owners”. I focus on control and causation as elements of what determins “vicarious” responsibility. I have given reasons why (in my paper on Causation). You by contrast seem to focus on the Officail Deeming that someone is an Ultimate Owner. I have yet to see a reason given for connecting Ownership with vicarious liability.
As I’ve noted, the shareholder’s decision to hire a director is, in fact, absolutely immune as long as they follow some statutorily defined rituals.
I don’t agree that they should be. I can conceive of some cases where there might be liability. Perhaps.
They ARE the ultimate owner involved,
So??
and they ARE the one(s) that delegate the right to control to the managers.
No, they select the Board of Directors. The Board hires managers. Managers then supervise employees or contractors.
This delegation IS an action for which liability can possibly accrue, under a libertarian theory. Under current law, it can’t, unless the shareholder disregards a fictitious concept.
to the extent this is true, I would agree, that would not be teh case under libertarian law. But this is minor.
“Does it? If an employee–say a truck driver of FedEx–is also a shareholder, and negligently runs over someone, does his status as a shareholder immunize him? Nope.”
Strawman. He is not liable in his identity as a shareholder, he is liable in his identity as an employee.
It’s not a strawman; I’m trying to make sure the description you are resting your critique upon is accurate.
Again, the point is that to the extent he has exercised a right that can be linked in the causal chain to the harm caused, there is an argument that he should be liable.
Yes. I just say mere ownership is not enough to show this. Do. You. Agree?
“So long as people would be free in private society to (a) limit shareholder’s contractual liability for debts of the corporation; and (b) not be held to be automatically responsible vicariously for actions of the company’s employees merely becuase they are shareholders, then we have the seed of a simalcrum of a corporation.”
Well, I’d limit (a) to “contractual debts” in the sense that at least one *real* person would have to be responsible for its tortious debts – that would be a matter of contract (indemnity, etc.) between the shareholders, but they could not extinguish the rights of non-parties to their contract.
sure, by (a) I am refering to contractually acuiqred obligtions wtih third parties. They are on notice they can only pursue the assets of the company, not the shareholders individually.
And 2nd, “simalcum” is a good description. It is not, in fact, what we currently have. The extent of the difference in practice is impossible to predict with certainty.
Yes but you people are critiquing features we say are not problematic about corporations. I find in fact the whole obsession w/ corporations to be crankish and kind of leftist or something.
Maybe because legal fictions are a front for defrauding the less sophisticated.
Oh. Now it’s an argument for fraud. Sheesh.
Can you honestly argue that a person who doesn’t understand the meaning of “inc.” consented to limited contractual liability?
? I don’t frankly care. If people parties to an agreement don’t take the time to specify it carefully enough, they are to blame. If enough people are harmed by the wrong legal presumption, then practices will change.
As far as Gabb’s critique, I agree with much of his criticism of the cultural effects,
Sure. But I find that a-libertarian. Interesting, but irrelevant.
September 28, 2006 at 12:44 pm“I think you’re putting the cart befor the horse; you are failing to provide an *argument* for why mere ownerhsip interests give rise to *vicarious liability*.”
No, you put the cart before the horse, as you must determine who is delegating a power before you can determine whether there can be vicarious liability. No person who does not have superior rights to the property can be found to be vicariously liable. Quite simple, no? Then, you move on to whether the delegation was a responsible use of that property right. Apparently it’s okay to just assume someone might have a property right and then begin the vicarious liability analysis. I say it flows the other direction.
And that’s important, because you need to know where the corporate manager’s authority comes from. It’s not an inherent right – in most cases, his powers are revokable at will by someone else. Who might that someone else be? Were they responsible in their delegation to that manager in the first place? Were they responsible in not revoking the delegation earlier?
You seem to be arguing that these questions aren’t relevant, because you don’t like identifying who actually owns the property rights at stake. I say that that is the first question that must be answered.
“I believe the world has nuances. Context and facts matter. Not all cases are alike”
I agree. Which is why blanket immunities (and for that matter, blanket liabilities) given to distinct classes are *always* problematic.
“I think the manager is more analogous to a sole proprietor. They have similar control in making policy, hiring and directing employees. You think the shareholder and proprietor have more in common–becuase they are both “owners”. I focus on control and causation as elements of what determins “vicarious” responsibility. I have given reasons why (in my paper on Causation). You by contrast seem to focus on the Officail Deeming that someone is an Ultimate Owner. I have yet to see a reason given for connecting Ownership with vicarious liability.”
You’re skipping right over it. By what right does the corporate manager have control? By what right does the sole proprietor have control? Hint – corporate managers don’t have a “right” at all, but a “power under authority”, just like the day to day manager under a sole proprietor does. This is where you are constantly returning to a Marxist conception of property rights being held by some abstract entity. The entity does not exist. It is in fact composed of individuals who must act for it to have any ability to actually act.
“But this is minor.”
Ah, well there it is. You value it to be minor, whereas I see it as non-trivial. Can we resolve this conflict? Well, you, as a Randroid type, probably think so. We’ll just have to agree to disagree on your valuation. But it’s nice to finally have the concession.
“Yes. I just say mere ownership is not enough to show this. Do. You. Agree?”
I. am. saying. that. mere. ownership. is. enough. to. ask. the. question. whether. the. owner. delegated. his. property. rights. in. a. responsible. manner. The rest of the analysis flows from there. If the owner wasn’t negligent (or worse) in this decision to delegate, and that is the only link in the causal chain to the owner – no.liability.
“Yes but you people ”
Can I pick up anything written by Rand and state that “you people” argue [x]? Please, stop with the collectivism. I’ve made my individual argument. Don’t ask me to defend positions I have not taken, and I’ll do the same for you.
“Oh. Now it’s an argument for fraud. Sheesh”
Read carefully, and you’ll note that I’ve declined to call it legal fraud. I’m not using the term in the technical sense in that sentence, and again, I’m not claiming that it should be illegal.
“I don’t frankly care. If people parties to an agreement don’t take the time to specify it carefully enough, they are to blame. If enough people are harmed by the wrong legal presumption, then practices will change. ”
I agree. I just find it funny that some libertarians (not you, but IIRC it was PE in this thread) claim the need to create legal privileges to make it easier for a given class to accomplish its objectives. I merely suggest that if you want contractually limited liability, it is fairly easy to include a standard clause in every contract you make. Then there can be no argument that the parties weren’t aware of some convenient legal fiction. It would revert back to standard contract analysis. However, I will agree to the extent that this is, in general, not a very big deal. But it is important to note that it isn’t fundamentally sound.
“Sure. But I find that a-libertarian. Interesting, but irrelevant.”
Fine – but you were the one to post his article. And further, as noted above, I’m clarifying my position contra the “you people” that you seem to confuse me with.
September 28, 2006 at 1:09 pmAs an aside, if we argue liability in situations involving corporations, we shouldn’t forget that corporations are persons at law. As legal creatures it must act through physical beings, ie, corporate managers and employees. As such, imputing liability from managers and employees to corporation is very easy and commonly accepted today.
Further, pass-through liability to a corporation by necessity implies direct liability of employee and manager. So if I am hurt by employee of corporation, I get my compensation from employee and corporation, jointly and severally.
Directors can also be liable. (If employees and managers are arms and legs, then directors are brains — as hard as it may be to swallow while witnessing the Hewlett Packard fiasco involving the ladies who ran board, ran in-house counsel and used to run corporation…). Directors usually have something in their contract that says corporation will pay all bills unless director intentionally and knowingly acted in an illegal manner, etc.
Shareholders can only be liable to extent of their capital contribution to enterprise or money paid for shares.
That said, in libertania, if corporations existed (which I maintain would not be the case any more than cow pie pizza would exist in libertania), attributing liability to shareholders would be be difficult even without grant of immunity by ___________. This is because shareholders are not technically on site for the wrongdoing. But beware, if you are a shareholder of a corporation and, while in the course and scope of your duty as an employee of the corporation, you commit a tort, you are on the hook for the whole kit and kabooble notwithstanding your shareholder status.
But if you only own shares and are kicking back in Houston eating cow pies when the tort is committed by the corporate employee in Oklahoma, of course there is no liability to you. (Some may argue that giving the employee instructions to commit the tort somehow imposes liability on our cow pie loving shareholder, but I doubt that for many reasons, beginning with the concept that shareholders don’t give order to corporate employees, managers do, and managers get their instructions from directors, and directors almost NEVER ask for shareholder approval first.)
Oh, and corporations serve no purpose in real life. At all.
September 28, 2006 at 1:53 pmOh, and corporations serve no purpose in real life. At all.
Dude, I have trouble believing you are serious here. This is just bizarre.
As an aside, if we argue liability in situations involving corporations, we shouldn’t forget that corporations are persons at law.
I assume you have actually read Hessen and are familiar w/ his extended discussion of this issue?
As legal creatures it must act through physical beings, ie, corporate managers and employees. As such, imputing liability from managers and employees to corporation is very easy and commonly accepted today.
This does not imply that it’s justified to automatically hold a shareholder vicariously liable for the actions performed by other people (which actions? which people?).
Further, pass-through liability to a corporation by necessity implies direct liability of employee and manager.
liability for what, exactly? For what actios? For those of some monk in timbuktu?
Directors can also be liable.
Sure, why not–if and to the extent it is establihsed they are vicariously responsible for the tort in question?
That said, in libertania, if corporations existed (which I maintain would not be the case any more than cow pie pizza would exist in libertania), attributing liability to shareholders would be be difficult even without grant of immunity by ___________. This is because shareholders are not technically on site for the wrongdoing. But beware, if you are a shareholder of a corporation and, while in the course and scope of your duty as an employee of the corporation, you commit a tort, you are on the hook for the whole kit and kabooble notwithstanding your shareholder status.
Lee, what in the world are you talking about?
But if you only own shares and are kicking back in Houston eating cow pies when the tort is committed by the corporate employee in Oklahoma, of course there is no liability to you.
Uhhh…. so you are disagreeing w/ us how?
All we are maintaining is this. First, by contrat people can become limited liability “shareholders” liable only to the extent of their initial investment, to third parties who contract with the company. Second, *merely holding shares* does not appear to involve the shareholder in enough active control of what employees of the company do to make them vicariously liable for whatever the company is vicariously liable for in tort. That is all. I think you people are all very confused about what it is you are arguing against.
September 28, 2006 at 2:24 pmStephan,
Okay, I am having some fun here, but I don’t mean to be obtuse.
—
You say:
“All we are maintaining is this. First, by contract people can become limited liability “shareholders” liable only to the extent of their initial investment, to third parties who contract with the company. Second, *merely holding shares* does not appear to involve the shareholder in enough active control of what employees of the company do to make them vicariously liable for whatever the company is vicariously liable for in tort. That is all. I think you people are all very confused about what it is you are arguing against.”
—
Assuming contract law in libertania allows for this, I agree with this statement. I only ask whether corporations as we now undertand them to be would exist in libertania. And the answer has to be nay. There may be some creature similar to corporation, but not corporation.
As for my example of shareholder who is also employee, surely you agree that if I create “Cow Pie, Inc.” and then hop in the cowpie-mobile and run Person over on the highway, my shareholder status would not reduce my liability to Person in the slightest. I just mentioned this point in passing because some people think the corporate shield shields actual acts by individuals. Not so. Person would be entitled to judgement against me and my corporation.
September 28, 2006 at 2:27 pmLee: “Assuming contract law in libertania allows for this, I agree with this statement. I only ask whether corporations as we now undertand them to be would exist in libertania. And the answer has to be nay. There may be some creature similar to corporation, but not corporation.”
But this is ridiculous. marriage as we now konw it would not exist in libertania, since it would not be a creature of the state. Does that mean there would be no marriage in a free society?
“As for my example of shareholder who is also employee, surely you agree that if I create “Cow Pie, Inc.” and then hop in the cowpie-mobile and run Person over on the highway, my shareholder status would not reduce my liability to Person in the slightest.”
Uh— of course not. It does not NOW.
September 28, 2006 at 3:16 pmRidiculous? You jest.
Alternative forms of marriage will exist. It will likely be Christian in nature, but maybe it will be Muslim or something else. In modern civil law marriage has a different meaning and effect than in, say, classical Christian communities. Today, I can get a marriage certificate from the state that has a fixed set of rights/obligations (if you are male, it’s mostly obligations, but I digress…as eddie murphy joked “eddie, I want half!”). In libertania things will be different. So, too, with business entities.
What’s so ridiculous about that?
September 28, 2006 at 4:05 pmScore so far:
QB: 10
NSK: 1
It would be closer but QB scores multiples for making the same logical point over and over but NSK simply can’t comprehend. NSK scores one big point (the first point) for saying that “corporations” could exist without a state and no libertarian rule could prevent it.
September 28, 2006 at 6:51 pmMr. Kinsella and Quasibill,
I’ve been quite pleased to see something approaching a consensus emerging on these issues, but have one technical point to make about terminology, which I think is important:
The drunken truck driver employee who runs over the child is “directly liable.”
The employer who knowingly sends the drunk employee out after smelling the stench of moonshine on him may be held liable on one of two theories:
-He is “indirectly liable” if he was negligent or somehow causally responsible in the sense that Mr. Kinsella (rightly) insists upon.
-He is “vicariously liable” if he is held liable automatically simply by virtue of the fact that he bears a certain relation to the employee. To the extent that we’re defending the possible responsible of those who did not physically cause the harm, we ought not to call that liability “vicarious” unless, perhaps it can be justifiably said, that a certain class of person’s always would in fact be causally responsible in situations where they did in deed bear a certain sort of relationship to the direct tortfeasor.
That’s all for now,
Araglin
October 13, 2006 at 3:10 pmIt is true that modern limited liability statutes only go back to the 19th century – but the concept itself is ancient (the idea of the corporation can be found, for example, in the idea of a church or a university college)
Regardless of the age of the concept (I accept that many evil things are old) there is the point of freedom of contract.
If a group of people (or even one person) say IN ADVANCE “if this business venture goes wrong, we will not sell all we own to pay your loss, we will only give you want we have put into the business” then a customer or supplyer has a choice.
They can refuse to do business with the business these people have set up (i.e. only do business with non limited liabilty concerns where the people who own the business are open to losing all their private wealth – their homes and so on), or they can accept this condition.
It is wrong to do business with something that clearly called itself “Limited” (in Britain) or “Incorporated” (in the United States) and then say “the business has gone bankrupt, but the shareholders still have homes and cars (etc) I demand they pay me!”
Only someone who did not know in advance that they were dealing with a limited liability organization (due to some deception) has a possible case against the shareholders.
Although I am disturbed by the quiet dropping of the term “Limited” (in Britian) and “Incorporated” (in the United States).
A corportaion should not just call itself “I.B.M.” (or whatever) it should be careful to call itself …… INCORPORATED (in the United States) or …….. Limited (in Britain).
After all some organizations are not limited liability (such as Lloyds insurance in Britian) and (on moral if not legal grounds) the practice of just giving their name (without having to state that they are limited liability) should be reserved for them.
No one should have to do business with a limited liability concern without knowing what it is – and be open about what it is should be the responsibility of the limited liability concern.
I am not asking that there should be a great sign outside every building of such an organization saying “If this place goes bust you do not get paid for you have sold us, and you get to watch the shareholders drive off in big cars to their nice houses”, but surely asking for the words “Limited” or “Incorporated” after the name is not asking for too much.
October 14, 2006 at 3:42 amTexas is one of the few regions which have greatly benefited from the tort reforms. Armed with billions of dollars from settlements in the tobacco lawsuits and other big money cases, trial lawyers are seeking to discredit and take away many of the benefits of tort reforms adopted around the country in recent years. Fortunately, a new Texas study is providing facts to combat their campaign of disinformation.
The study looked at inflation, personal income, job creation and other economic factors to determine the success of Tort Reforms, championed by George w. Bush and administration. The overall impact of tort reforms on the Texas economy is estimated to include $ 23.207 billion annual total expenditure for the year 2000. The benefits represent 5.64% of the total income growth, 5.32% of output expansion and 11.4% of the net job creation during 1995-2000. In addition to these specific effects, legal reforms also helped in creating a better environment for economic development within Texas.
Tort Reforms were responsible for creating almost 295,151 permanent jobs in Texas during the past few years. This shows that the tax reforms have had a direct and positive impact on the lives of the consumers. The savings to the typical Texas household in terms of lower prices and increased total personal income amount to $1078 annually, and those savings are projected to grow over time. Many of the cases lying unsolved in the courts have now been cleared, giving the citizens greater access to the courts. So the study confirms that tort reforms have benefited the consumers and businesses and also the courts with civil justice reforms.
Mr. http://www.pacificresearch.org/press/clip/2006/clip-05-24-06tlr.html
October 14, 2006 at 1:16 pmQuasibill makes precisely the argument I would make against corporations, and I would go further: the corporation – as it currently exists – is a mechanism by which this “minor” delegatory power is dehumanized by disinvesting responsibility from human actors. It allows the profit motive to attain a rational, dispassionate role disconnected from authentic, personal human agency – in much the same way that the State systematizes the exercise of power to hide what is otherwise naked coercion. Both corporations and the State reflect similar bureaucracies, and this is the product of more than coincidence – although I suppose that is also an “a-libertarian” viewpoint (much as senseless disparagement of “the Left” is, true?).
I also concur with Quasibill that if a business practice such as limited liability is so useful, it doesn’t make sense why it should be institutionalized by State fiat. I happen to think that the State rationalization of business by legal means in favor of certain parties IS a big deal. Simply dismissing unwitting consumers as unsophisticated is insufficiently libertarian. It ignores a massive and complicated corporate legal code that nobody fully understands – another way in which a “system” is substituted for authentic human conscience and masks otherwise unsavory activities.
October 27, 2008 at 1:48 pmLiability:
How does a form of enforcable liability arise other than via a “legal system” having coercive powers, usually derived through the political (and occasionally social) structure.
Thus to say how far and when that power shall be used is really a limit on powers.
On Torts: ever hear of absolute liability without fault?
R. Richard Schweitzer
August 22, 2009 at 12:51 amI’m amazed that the concept of strict liability was completely ignored in this conversation until one person mentioned it two years later.
The overriding concern with tort is to see that the damaged parties are made whole again, as they never entered into a contract or otherwise took any willful risk.
This is why it is important to attach ultimate liability to the property owner, who happens to be responsible for the initial delegation of power.
For obvious reasons, liability should be applied first to the individuals (if any) found to be negligent or worse (although the corporation may be contractually obligated to cover its agents’ liability in certain predetermined circumstances), followed by, if necessary, the assets of the corporation itself. However, it remains imperative to recompense the injured party to the full extent of his damages, should the negligent individuals and the assets of the corporation be insufficient to recompense the damage done.
As was given in example in the related discussion on Kevin Carson’s blog, a corporation operating heavy, potentially dangerous machinery, inherently incurs elevated risk as a cost of doing business, outside the realm of actual negligence (or worse). Nearly everything in society entails a certain amount of risk, and that is generally OK, until someone is hurt. Such injury may be impossible to attribute to a specific act or acts of negligence, even though there remains an injured party in need of recompense and as well a party responsible for the property which incurred the liability. In this case it remains only proper that the injured party be “made whole” once again, at the expense of the owner of the property which bears the casual relationship to the tort.
Why the owner, in cases where their delegatory authority isn’t quite relevant, as there isn’t a specific act of negligence (or worse) to specify blame? Simple, it remains their property which caused the harm. They maintain the existence (and thus actions, if any) of their property, at their sole (presumable) benefit. Thus, they should bear ultimate liability if their property happens to damage someone in an unpredictable fashion outside the scope of negligence or aggression.
This, of course, assumes that you recognize the practical reality that a tortfeasor may be neither an aggressor nor substantively negligent, and yet still incur liability from the small but still real, societally accepted risk that so many actions (especially profitable ones) entail. We take these risks and are not (nor considered) negligent for doing so, yet we ought still to be responsible if we hurt others when those small risks pan out to be real.
I suppose the obvious example is the hypothetical case of a dog on a leash, with no demonstrated or suspected temperament or aggression issues, who, without provocation or forewarning, “snaps” and lashes out at a child passing by on the sidewalk, biting him in the process. Nobody would say such a dog owner is negligent merely for walking his apparently well-tempered dog. Yet, he should still be liable for the damages incurred by the attack. The child, who did not maintain a potentially dangerous chattel, accepted no willful risk, and has no resources to pay for his injuries, should certainly not have to bear damages sustained from an impossibly unpredictable attack while walking peacefully down the sidewalk.
Extrapolating from the example of “heavy machinery”, we see that the resources of a corporation may allow much greater potential harm at what remains an acceptable (read: non-demonstrative of negligence) miniscule risk than what may be redeemable by the assets of the corporation. This is when shareholders should bear ultimate distributive liability for the remainder of the damages, regardless of specific fault, and beyond the value of their initial investment, if necessary. This would simply be one of the risks of owning shares in a company. In reality, the risk would not be immense — proportionally no worse than the risk to random individuals incurred from the cumulative danger of all these societally acceptable miniscule risks which do not imply negligence — only the damages would fall on parties with some relationship to the property at fault.
September 28, 2009 at 7:30 pmAll that matters in my mind is this:
It is not possible (under natural law) for multiple individuals to get together and write a contract that absolves ALL parties from liability. Liability may be divided equally, among several parties, or placed on one individual, but it /cannot/ be contracted away entirely. They cannot form a ‘collective person’ and place liability on it.
It doesn’t matter to me how many people are liable, as long as /someone/ is liable. That person will then have the incentive to make sure his business operates morally and responsibly (both socially and financially). If he does not, he will lose everything.
Naturally, contracts will be written so as to give those with greater liability greater ownership, as no one who is liable will want to forfeit his control (and his fate) to an individual who is not held liable.
I’ll be a guest in an hour or so This Week in Law with Denise Howell. The live cast starts at 11 a.m. Pacific.
See Conspiracy Libertarians, Waystation Libertarians, Activists vs. Principled Libertarians
Ah, this movement of ours. Full of conspiracy nuts, layabouts, dope heads, gun nuts, anti-evolutionists, survivalists, weird diet obsessives, adherents of homeopathy and contrarian health views and fads, “unschoolers,” self-destructive losers, doom ‘n gloomers, activists who get worked up about electoral politics every four years… Ah, me.
I was reminded of this when I stumbled across my 2006 post Omega-Chloride-Redford on my “Plagiarism”, which recounted a bizarre interaction with one James Redford, aka Count Lithium von Chloride, Tetrachordine Omega, and Tetrahedron Omega, in which he tried to argue that my view that you can’t get an ought from an is, but you can get an ought from an ought, was due to his “teachings.” Uhhhh, yeah.
As I noted in that post: over on the Mises blog, my post Don’t worry–you don’t exist: Or, why long-range planning is really impossible drew some comments from one James Redford. Now years ago he had written some good things about my theory of rights on some boards or groups. So we had some exchanges. I confess I had forgotten most of this.
In any event. On the Mises blog post he wrote in a comment that he was glad “that some of my teachings have had an effect on you.” I had no idea what he was jabbering about but had a vague recollection that he was some kind of loon or nut. He was insinuating, I thought, that I was using in my arguments something he taught me… and vaguely implying I should have given him credit. I thought this ridiculous and said so; he escalated with attempts at “proving” how I had plagiarized him and was a liar.
So I have refreshed my memory. First, as to who this dude is. I remember now: he has gone in the past, on various boards, as Count Lithium von Chloride, Tetrachordine Omega, and Tetrahedron Omega. He has written before about his various experiences with drugs, and how this has given him insight into the universe, and the “omega point,” some nonsense like this. See, e.g., my discussion of this stuff in my post God-Trips] and in this anti-state thread, where he talks about his “god-trips”. In his article Jesus is an Anarchist, he signs off thus:
Born in Austin, Texas and raised in the Leander, Texas hill country, the native-born Augustinian James Redford is a young born again Christian who was converted from atheism by a direct revelation from Jesus Christ. He is a scientific rationalist who considers that the Omega Point (i.e., the physicists’ technical term for God) is an unavoidable result of the known laws of physics. His personal website can be found here: http://geocities.com/vonchloride
Uh, yeah–the Omega Point… direct revelation of Christ via drugs which incude various so-called Levels of so-called God-Trips. Like, wow, man. I think he actually believes this stuff. Another funny comment: in our email conversation in 2000, I jokingly used the term “jelly head” to refer to stoners or those who do drugs, after he started going on about all the revelations he’d gotten from doing drugs. He didn’t know the term “jelly-head,” so I explained:
Jelly head–slang for junkie, drug head, stoner. I guess the term implies that you do so many terms it turns the brain to sludge, jelly.
His humble reply? “Well, my brain is still quite intact and functioning on an I.Q. level higher than almost all people.” Uhhh, HOkay.
And in His website shows he’s a 9/11 conspiracy nut, too. 1 And let’s not forget his various handles: Count Lithium von Chloride, Tetrachordine Omega, and Tetrahedron Omega. He reminds me a bit of Per Malloch, another smart young libertarian who also liked my estoppel theory and Hoppe’s argumentation ethics, and who also liked drugs, unfortunately a bit too much–he OD’d in college a few years ago. I wonder how long Redford will be with us. Oh well, at least he’s a “Christian,” so if he OD’s he’ll just ascend to the Jesus Omega Point, I guess, where drugs will be free and plentiful.
Anyway, he wrote in the recent Mises thread:
I’m glad that some of my teachings have had an effect on you. Ergo, your somewhat recent statement of “an ought from an ought.” (Your September 8, 2006 11:19 AM reply under “How We Come to Own Ourselves.”)
He was referring to my comment there to someone: “I agree you cannot get an ought from an is. I am not. I am getting an ought from an ought.”
Redford is implying I got this from him. Why? Here is something he wrote me long ago (which I had of course forgotten). During one of those conversations he agreed with my Humean point that you can’t derive an an ought from an is; and he said he liked my own theory because in it I derive an ought from an ought. He wrote (back in February of 2000):
One remarkable thing about your rights argument is that it seems to totally by-pass the is/ought dichotomy. Rather than simply derive an “ought” from an “is” (which alone is impossible), it derives an “ought” from an “ought”: an “ought” which any objector to libertarian punishment necessarily already holds.
Note that he here was simply agreeing with what my own theory did: that it derived an ought from an ought. Therefore avoiding the ought from an is problem, which I was of course already aware of. (It permeates my arguments; and see also p. 1432 of my 1994 review essay on one of Hoppe’s books (discussing how Hoppe’s argumentation ethics overcomes the Humean is-ought dichotomy; and p. 136 (text at n. 13) of Hoppe’s 1989 A Theory of Socialism and Capitalism, which I had of course devoured by the time I wrote my estoppel theory: “In fact, one can readily subscribe to the almost generally accepted view that the gulf between “ought” and “is” is logically unbridgeable. …. On the problem of the deriveability of “ought” from “is” statements cf. W. D. Hudson (ed.), The Is-Ought Question, London, 1969; for the view that the fact-value dichotomy is an ill-conceived idea cf. the natural rights literature cited in note 4 above.”)
Now. I have used “ought from an ought” on occasion, at least in the last couple of years, as I have explained and defended my views on rights, and the problem with the is-ought dichotomy. Did I get the phrase from Redmond? I have no idea. I suppose it is possible that a phrase he used to describe my own theory stuck in my head and bubbled to the surface years later. If so, I would have no problem “admitting” it, as he charges; why not? After all, it’s just a natural way to describe what my own theory does, as he admitted way back in 2000. And although he seems proud that if you google the phrase “ought from an ought” in usenet groups his is the first one mentioned, as if he had some great achievement (in just finding a way to describe why my own “remarkable” rights argument!), as I showed him, if you google the phrase on the web, several uses of it show up, e.g. one in 1973. (Redford’s emphasis on the fact that he has the first use of the phrase on usenet, and that there are only 13 or so in a web-wide google search, is also odd: there are no doubt various ways to word the idea that you can only get an ought from an ought, other than the literal phrase “ought from an ought”, which his and my google search espicked out, so the basic insight or idea or way of putting it is probably out there many more times than that simple one search would show. Not to mention that there are tons of publications not yet searchable.)
Regarding my citing of the 1973 use of the phrase, of course I did not list that to imply that I got the phrase from that source rather than from Redford; but to show that it’s probably a natural way for people to describe this, that many people can either independently come to, or that is floating around out there and occasionally used. I think it’s likely I either read this phraseology in various places, or maybe independently came up with it myself. I mean if you say that an ought can’t come from an is, so you have to start with a presupposed ought (as Hoppe and I both argue, in a sense; even Rand, as I noted before, with her hypothetical ethics), it’s, um, natural to say that you can’t get an ought from an is, but only from an ought. Redford’s attempt grab fame for such an obvious insight is frankly bizarre. If the thought of using that simple phrase to describe my very own rights theory was put in my head by Redford’s email to me back in 2000, whoop de doo. Fine. Who cares?
So, he lists part of our email conversation from 2000 (he, um, saved it, you see [appended below as his site is now down]), to prove I’m a plagiarist and liar. Okay, so let’s recap. I think his “ought from an ought” phrase is a kind of obvious way of stating one good thing about my own rights theory. That, er, I came up with. I think it’s good Omega, er Redford, came up with it. I think many people have. I may have too; or may have remembered it from Redford’s email to me, um, 6 years ago, or maybe from seeing others’ writings on related subjects. I’m even grateful Redford was friendly to my rights theory, but I think it’s frankly bizarre of him to keep score of such minute things and to try to take credit for such a thing, or to accuse me of plagiarism, or lying. On the other hand, I guess there are worse things than being insulted by a self-admitted drug-using conspiracy-theorizing born-again Chloride-Omega Christian with Direct Revelation to God.
Latest notable terms from this and last week’s Slate Culture Gabfest (feel free to email me suggestions or leave them in the comments to the main page, which keeps a running collection of the terms from this series of posts).
The relation between the non-aggression principle and property rights: a response to Division by Zer0, Mises Blog (Oct. 4, 2011) (archived comments below)
There was an interesting exchange recently between a left-libertarian (I think that’s what he is) who goes by Divide by Zer0, and anarcho-libertarian Stefan Molyneaux. “dbzer0″ argued against property rights and the non-aggression principle in his post Why the Non-Aggression Principle is useless as a moral guideline. Molyneux replied on Youtube; dbzer0 replied in Responding to Stefan Molyneux: “Theft of time”, NAP, and common sense.
Molyneux’s response is good, though I might quibble about some of his metaphor usage–saying that stealing someone’s improved/transformed property is a theft of the “time” he put into improving/transforming the item. Such metaphors can be helpful to picturing and really grokking the nature of the crime. But one has to be careful not to take this particular metaphor too literally, as it lead to various confusions that result from the labor theory of value, which has itself partly corrupted even Lockean and classical liberal thought, not to mention the errors of Marxism, and can lead to the confused idea of intellectual property.1
I think dbzer0′s criticism is unfounded, but it is based on some confusions about the nature of libertarianism and the interrelationship between the non-aggression principle and property rights. This confusion is understandable as even many libertarians mangle this.
Many libertarians focus on the non-aggression principle as the essence of our political philosophy. Ayn Rand formulated a version of it in Atlas Shrugged: “So long as men desire to live together, no man may initiate — do you hear me? No man may start — the use of physical force against others.”2 Some, such as Rothbard, have even called it the non-aggression “axiom”:
The libertarian creed rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else. This may be called the ‘nonaggression axiom.’ ‘Aggression’ is defined as the initiation of the use or threat of physical violence against the person or property of anyone else. Aggression is therefore synonymous with invasion.3
Now the word “axiom” has different meanings (see wikipedia axiom entry). In math and logic it can refer to an assumed starting point, such as the presuppositions of Euclidean geometry;4 or, as Rand uses the term, to truths that are self-evident because denying the claim leads to self-contradiction. Ayn Rand usedthe word “axiom” in this way:
An axiom is a statement that identifies the base of knowledge and of any further statement pertaining to that knowledge, a statement necessarily contained in all others, whether any particular speaker chooses to identify it or not. An axiom is a proposition that defeats its opponents by the fact that they have to accept it and use it in the process of any attempt to deny it.
In this sense, Rand’s “axioms” resemble Misesian/Kantian “apriori” concepts the denial of which leads to self-contradiction.5 For this reason alone, it’s better to refer to the non-aggression principle instead of the non-aggression axiom.
Another reason is that it’s not clear that “non-aggression” is really the most fundamental libertarian principle. In fact, I think it’s not. I think the libertarian conception of property rights is more fundamental than aggression. If I use force to take an apple from your hand, is it aggression? Is it trespass? Well, that depends on who owns the apple. If it is my apple, and you have just stolen it from me, then it is not trespass. If it is your apple, then it is trespass, or aggression. Classifying an action as aggression or not requires knowing who owns what.
Confusion has arisen, I believe, because of failure to treat separately self-ownership and ownership of external objects. Self-ownership means one owns one’s body. As Hoppe writes, “Every person is the private (exclusive) owner of his own physical body.”6 And as I have written previously, “each person is prima facie the owner of his own body.”7 Why prima facie? Because these rights can be alienated or forfeited by committing aggression.8 Though some object to the notion of self-ownership on the grounds that it is incoherent or implies religious or mystical views, this objection is without foundation. The body is a scarce resource, and to avoid conflict over its use, either the person whose body it is owns it, or someone else does. The choice is self-ownership, versus other-ownership, i.e. slavery. The quintessential libertarian view is self-ownership. And this common sense, natural, intuitive notion is not new or hard to appreciate. As Richard Overton wrote in 1646, in An arrow Against all Tyrants: “To every individuals in nature, is given an individual property by nature, not to be invaded or usurped by any ; for every one as he is himself, so he hath a selfe propriety, else he not be himselfe”. And Locke, in 1690: “Though the Earth, and all inferior Creatures be common to all Men, yet every Man has a Property in his own Person. This no Body has any Right to but himself.”9
When we speak of interpersonal conflict between human agents, that is, interpersonal violence involving their bodies, the idea of “aggression” and “self-ownership” express the same idea. To oppose the “initiation of force”, to oppose aggression, is merely another way of stating self-ownership. They each directly imply the other. This is one things dbzer0 glimpses.
But, as noted previously, when we speak of externally owned resources, a theory of property becomes primary. One first has to identify who the owner of a good is, to determine whether an action attempting to causally control the object is aggression, or just the exercise of ownership. In the case of the body, the agent, the person, himself, is the default owner of the body, so the answer is immediate and obvious (assuming he is not an aggressor). This is why in the case of interpersonal conflict, it makes sense to describe the libertarian anti-slavery, self-ownership principle by saying we oppose “initiation of force” or “aggression” (as Rand does in Galt’s speech).
And this is also why people get tripped up when they try to use the “initiation of force” language to describe why trespass–use of someone’s (non-bodily) property without their consent–is aggression. And again, this is what dbzer0 senses in his criticism of the coherence of treating external property the same as bodily-property.
The mistake lies in thinking property rights in one’s body are acquired in the same way and for the same reasons as property rights in external resources. Though they are linked, and though self-ownership is in a sense more fundamental, they are not the same. But it is a confusion to think of the basis of self-ownership as the same as the basis for ownership of external objects. We are used to thinking of Lockean homesteading–original appropriation, or initial use–as the basis for ownership of the latter. Thinking that all ownership must be of the same character and even origin, the assumption is also made that we own our bodies because we were the first users of our bodies. We try to fit self-ownership into the same framework we use to justify rights to inanimate, external objects.
As I explain in What Libertarianism Is, ownership of one’s body, and ownership of external objects, do have something in common, but it is not “first use.” It is rather that in each case, the resource in question is assigned to the person with the best link to the resource so as to avoid conflict and permit peaceful, productive use of the resource in question. This analysis draws on that the pioneering work of Hans-Hermann Hoppe, in his monumental treatise A Theory of Socialism and Capitalism (esp. chs. 1, 2, 7). The institution of property arises only because of the fundamental fact of scarcity, or rivalrousness, in the world. This makes violent conflict over the use of various scarce resources–Misesian means to action–possible. For those living in society who prefer peace, prosperity, and productive use of resources instead of violent conflict, it is obvious that it is desirable to assign an owner to each such contestable resource. These resources include our bodies, and other means we use in action to causally bring about our ends. Such rules, to suffice as social rules, must be objective and fair to ever be accepted by individuals and as an improvement over a world of might makes right. Thus, the search among civilized people in society is always for objective (what Hoppe calls intersubjectively ascertainable) property assignment rules. Human bodies and other resources share in common that they are both scarce resources, and property rules are needed for each.
In the case of one’s body, the libertarian position is simply that each person is the prima facie owner of his body–not because he first used it, but because he has a better claim to it, because he has an objective link to his body: namely, his ability to directly control it, not to mention the intimate connection between each “person” or “agent” in a legal personality sense, and “his” body. It is not first use that matters here; otherwise each person would be a slave of, owned by, his mother, who had the first use. It is not “appropriation” or homesteading, since the act of homesteading property presupposes features that are simply not present in the case of body-ownership. Consider: for A to homestead an object, A already has to have and own his body; and the object is previously unowned. That is, to be a homesteader presupposes one is already a self-owner. For this reason it makes no sense to speak of homesteading one’s body and becoming a self-owner that way.
So, in my view, and in the Hoppean framework (which extends and builds on that of Mises and Rothbard), all ownership is based on the fundamental fact of scarcity, and the consequent possibility of conflict. Property in one’s body is based on the fact that each person has the best link to his body, because of his direct control over his body. Property in external objects is based on Lockean homesteading, where first use, or original appropriation (“embordering,” as Hoppe refers to it), serves as the link between agent and resource. (And the reason first use gives the first user a better link to the resource is because ownership is based on the prior-later distinction, as Hoppe explains; if the first user did not have a better claim than the second claimant, who is a latecomer with respect to him, then the second claimant would not have a better claim than a third claimant, i.e., property rights evaporate and we have only possession and might makes right, which is contrary to the entire endeavor of property allocation rules in the first place.)
But once this relationship between assignment of body rights, and of rights to previously unowned resources, is understood, along with their connection to the libertarian project of finding objectively fair rules that permit peace, prosperity, and productive, conflict-free use of resources, the confusion of what it means to “initiate force” against someone by stepping on their land disappears.
With this perspective, we can see that criticism such as that leveled by dbzer0 is simply mired in confusion. To address just a few of his comments:
“Anarcho”-Capitalists, and assorted propertarians very frequently cite the Non-Aggression principle or Zero Aggression principle (Commonly called NAP or ZAP) as a core tenet of their ideology.
First, I think it’s better, as a rule, to call ourselves anarcho-libertarians than anarcho-capitalists. Not that I agree with condemnations of “capitalism” by modern left-libertarians (I agree with their criticism of crony-capitalism, but not with the capitalist aspect of the type of advanced economic order that would doubtlessly arise in a free society), but capitalism only describes one part of the economy of a free society. Second, the scare-quotes around “anarcho” imply doubt as to whether anarcho-libertarians are genuine anarchists. To the contrary; I would say that all consistent, principled libertarians are anarchist; and any genuine anarchist has to be a libertarian–if you are not a libertarian then you are in favor of abrogations of property rights that invariably require institutional force, i.e. a state. Third, dbzer0 here assumes the NAP is the “core tenet” of libertarianism; yet as I have explained, the NAP is merely a compressed way of re-stating self-ownership, and in the case of external property it is indeed a dependent concept on the more fundamental concept of the libertarian-Lockean first-use-first-own property rights allocation rule.
But what exactly is the NAP? The specific details might differ depending on the encompassing ideology, but the central point generally seems to be that no human should aggress over another human. This is meant to mean the initial use of coercive force as well as the threat of such.
As argued above, this is a way of restating self-ownership; but in the case of acquired objects, it is a consequence, not primary.
Now, if left to this end, this is not a half-bad principle, basically saying that people shouldn’t attack or threaten to attack others. However at this stage, it is also pretty much unnecessary to be given an explicit existence as a “principle” as the generic principle of freedom already encompasses this (i.e. attacking another person would violate their freedom). Other moral theories, particularly the utilitarian variants already encompass such rules (with stipulation) as a natural consequence of their suggestions.
“Freedom” here is a murky, ill-defined concept. It is the fact that opposing interpersonal, violent, bodily aggression necessarily implies self-ownership, whether anti-propertarians want to use the correct labels, words, and concepts, or not.
But propertarians do not generally leave it at just that but rather try to sneakily expand it by linking it with private property rights. You see, the NAP is frequently derived directly from the Self-Ownership “axiom” and thus the wrongly derived property rights are treated as an extension of the self. Therefore one can then treat violation of private property rights as an act of “initated force”, even though no actual violence or threat of violence has been perpetuated. This is turn is used as a cause to use actual violence or threat of violence on the violator of property rights.
He has somewhat of a point here, as I have explained above; except that it is not “sneaky.” Rather, libertarians who favor self-ownership as well as ownership of homesteaded resources use the word “aggression” to describe not only the former, but the latter, since there are analogies and similarities. But failure to treat body and external resource ownership separately and clearly, in the context of a social theory designed to permit cooperation and productive, conflict-free use of resources, has led to some confusion, which has been adopted, or seized on, by libertarian opponents. (Not that they have any better or more coherent theory in the first place.)
While it’s easy to understand that someone “aggresses” when they steal something from another person (which is why most other moral systems do not require a NAP to label theft as wrong), things get pretty murky when one goes beyond that. Do I “initiate force” when I use a productive machine without paying rent? How about if I pay only enough rent to cover the cost of the machine? Do I “initiate force” when I toil the unused land that is owned by someone else? How about when I trespass?
A given scarce resource that is the subject of a possible contest or conflict–as the machine noted above–has an owner. It is either the worker seizing it, or the homesteader (or his contractual transferee), or the state or some collective. And this is the crux of the matter. No one, even dbzer0, can deny argumentatively the value and desirability of property rules. Argumentation is itself a civilized, conflict-free activity, and arguing about who should get to use the resource is itself a search for fair, universalizable property allocation rules (again: even if the left-libertarian stubbornly abjures the term “property rules,” that is what he is arguing for). So the only real argument people like dbzer0 can have is that they think some property assignment rule other than first-use is more objectively just, that it establishes a better link between claimant and resource. And this, he has not done, or even tried to do. He has sidestepped this problem. The other possible property assignment rules would include some type of communism, a world of everyone-owns-everyone, which, as Rothbard has shown, is of course unethical and unworkable;10 might-makes-right, which is no property rule at all; or some kind of rule, inspired by the deeply flawed labor theory of value and muddled Marxian notions of “exploitation,” that ridiculously rests on the notion that employers/capitalists “exploit” the worker by “stealing” the “social surplus product”–the difference the employer’s revenues and the value of the worker’s labor, i.e. to the extent there is capitalist profit there is exploitation.11 Of course, no coherent property assignment rule can rest on hoary, severely flawed economics and social analysis.
My view is that no non-libertarian property rule can be justified, precisely for the reasons that the libertarian, Lockean property appropriation rule is valid: only it recognizes man’s nature as an acting being that needs to employ external, previously-unowned scarce resources to act productively and successfully. For man to be able to ever use a previously unowned resource at all, much less peacefully or productively, it must be used first. Someone has to be the first to emborder it, transform it, employ it as a means. But those seeking peaceful, conflict-avoiding property assignment rules that permit such productive use of resources cannot deny the right of the first user to use the resource–otherwise it would never be employed at all. I.e., the first user has to have an ownership right. But if the first user has an ownership right, then that means latecomers have a worse claim–and that is, after all, what theft is: A owns a thing; B, a latecomer, takes it from A by violent force. To deny the importance of the prior-later distinction is to obliterate property rules, for anyone can take things from others, even if they come later, meaning we have a war of all against all, and right devolves into might–which is contrary to the very endeavor of searching for civilized norms in the first place.
{ 56 comments }
October 4, 2011 at 4:24 pmzer0 indeed knows /not/ what he’s talking about:
“Why would a market come out when people get what they need whenever they need it? Of course a market would probably create inequalities, which is why I’m opposed to it, and this is one of the main sticking points between collectivist and individualist anarchists.”
http://dbzer0.com/blog/private-property-vs-possession#IDComment21595899
Subscribe to communism and Mana will start falling from the sky.
October 4, 2011 at 8:06 pmThere are two ways to convince people to work:
1. Convince them through voluntary agreement.
2. Force them through threat of physical violence.
Everywhere that pure socialism or communism has been practiced the state always ends up resorting to the latter.
Somebody needs to explain to these know-nothings is that when people work for one another under voluntary agreements, even if one financially benefits more then the other, they both gain.
That is a factory worker makes less then the factory owner, but the factory worker still makes more then he would if the factory didn’t exist or if he worked on his own… otherwise he wouldn’t be a factory worker.
Ultimately all collectivism really means is that you remove certain ‘disagreeable’ types of specialization out of the market place. It’s inefficient and you will just end up costing the workers as much as the owners in the long run.
October 4, 2011 at 9:15 pm“Everywhere that pure socialism or communism has been practiced the state always ends up resorting to the latter.”
This leaves the door open for something like ‘Everywhere libertarianism has been tried it leads to X’, followed by ‘Well that wasn’t true libertarianism,’ followed by ‘Well it was the closest thing ever attempted,’ followed by more recursion into the no true scotsman fallacy.
I think you’d be better pointing out how, as Mises did, no society can rationally allocate resources without prices and markets (which require private property to exist).
October 5, 2011 at 7:52 amTHanks, but this was just a blog post… I could only do so much. Of course Mises’s insights on the calculation problems facing socialism bolsters the Rothbardian-Hoppean view here.
October 7, 2011 at 11:53 amOh, I was replying to nate-m’s criticism, not to your article, Mr. Kinsella.
I thought the article was laid out pretty well 
I agree that it would simply take far too much digital ink to actually go through the entire calculation problem in addition to all the other issues you addressed… I often run into the problem myself trying to explain such views via conversation.
October 7, 2011 at 11:59 amYes, and Mises’s insights on the resulting external economies bolsters the argument for IP.
I’m sure you meant to mention that.
October 7, 2011 at 12:07 pm
October 7, 2011 at 12:25 pmWildberry,
Mises’ insights refute the praxeological justification for IP, he merely says that other considerations might be relevant. It is a sad that demagogues misrepresent his words. If nothing else, this should be proof enough of invalidity of your approach. Have you read Cordato yet?
October 7, 2011 at 12:51 pmI doubt he has read Cordato, but others may want to–I assume you are referring to this stuff by Kirzner and Cordato: http://blog.mises.org/16570/cordato-and-kirzner-on-intellectual-property/
October 7, 2011 at 2:45 pmDear Peter and Stephan show:
If Mises “merely says that other considerations might be relevant”, then I suppose it is reasonable to raise them here. Problem?
As to Cordato, no I have not, but I just downloaded it and will take a look.
In the meantime, given your familarity and expertise in the area, Mr. Kinsella, wish to drop the essential pearl of wisdom? I have never seen a comment from you on the issue of externalities. Did I just miss it? You seem to have written on everything else.
October 8, 2011 at 7:43 amStephan,
that’s the book I mean, although I read it before you made your post.
Wildberry,
again you are mixing several unrelated things and present double entendres, except you don’t expect your posts to be treated as a comedy.
October 4, 2011 at 6:27 pmI have to ask Stephan, why do you insist on arguing with these leftists? They seem hellbent on doing nothing but redefine words. They are esentially the result of a lot of intelligence being invested in ignorance – the need for illusions is deep in them. I just don’t get why someone like yourself would devote so much time to these trolls.
October 4, 2011 at 8:02 pmFascinating article and really well thought out. I’m with you all the way up until this bit:
“My view is that no non-libertarian property rule can be justified, precisely for the reasons that the libertarian, Lockean property appropriation rule is valid: only it recognizes man’s nature as an acting being that needs to employ external, previously-unowned scarce resources to act productively and successfully. For man to be able to ever use a previously unowned resource at all, much less peacefully or productively, it must be used first. Someone has to be the first to emborder it, transform it, employ it as a means.”
Now… this may simply be confusion on my part, or perhaps an overly pedantic way of looking at the problem, but it strikes me that the traditional concept of land ownership is far broader in scope than is necessary to facilitate a peaceful society. Embordering something, for instance, seems to me to be a distinction grown out of the might-makes-right ethos of a right to all that which you are capable of defending.
Transformation, or employment as means, both strike me as rights generating activities, but their scope seems to be naturally limited. For instance, it seems that one can rightfully lay claim to all oil one is able to pull up from a well, but the oil still in the earth, unmodified and unemployed, seems very clearly to be an unowned resource. If some other person were to set up a well next to the first, and tap the same oil, I can see no reason to think that theft has occurred. It seems that so long as no one destroys something created by another, and no one takes anything transformed or employed as means, then no aggression has occurred and there is nothing for a libertarian to complain about. Yet, this implies a sense of property far more limited than is commonly understood. Is there something wrong with my thinking, or is there something wrong with the current conception of property rights (especially with respect to land/natural resource ownership).
October 4, 2011 at 8:18 pmEmbordering something, for instance, seems to me to be a distinction grown out of the might-makes-right ethos of a right to all that which you are capable of defending.
It’s not a description of a ideal, it’s a observation of reality. It answers a very basic question:
Question: How does matter become property?
Answer: Through homesteading; except for your own body.
Everything that has existed on the planet Earth has always existed on the planet Earth. Always, with few exceptions. It belonged to nobody until some person at some point decided to pick up a rock or cut down a tree or plowed the earth…. then that is when it became property.
That’s all there is to it. It’s just a statement of fact. There is no ‘might makes right’ about any of it.
I think there is a lot of confusion people have because when you talk about ‘land’ in a economic sense it’s not just dirt or ground. It can be anything and everything physical. Any sort of resource.
If some other person were to set up a well next to the first, and tap the same oil, I can see no reason to think that theft has occurred.
It can and it can’t be theft. It really depends on the specifics of the situation.
Mineral rights are a complicated thing and is not something that can be discussed well in sweeping generalities.
October 4, 2011 at 9:13 pmI’m just having trouble figuring out what the appropriate scope of a homesteading claim is. Does intending to use something kind of near you that no one else was near enough to intend to use before give you sufficient claim? If I build a building on some land, how much of the surrounding space do I automatically acquire claim to (if it is previously unclaimed)? Can I claim every unclaimed thing I see, or do I have to do something in order to gain ownership of those things? Does marking out the boundaries of what I’ve claimed on some sort of document validate my claim?
Historically, it seems that you could get what you could defend from competing claimants through coercive forces (either legal or, ahem, more direct).
October 5, 2011 at 7:51 am
October 4, 2011 at 9:06 pmThank you for this article. It has helped clarify my thinking. Where I still get confused is in the epistomology that forms the foundation for austrian economics. I’ve read the article by Hoppe where he ties together Mises’ action axiom with the a priori synthetic, and ties it to another axiom, which I can’t think of off the top of my head. Anyway, it seems like whenever you argue with someone who actually keeps an open mind, arguments lead back to epistomology and first principles. Has anyone else attempted to summarize the links from epistomology to the action axiom to the laws of austrian economics? I’d definitely be interested in works along those lines.
October 4, 2011 at 9:07 pmseconded! That’s a spectacular question.
October 5, 2011 at 7:48 am
October 5, 2011 at 8:55 amBut those seeking peaceful, conflict-avoiding property assignment rules that permit such productive use of resources cannot deny the right of the first user to use the resource–otherwise it would never be employed at all.
Here’s the sticking point that /0 would probably rebut as his best argument against libertarianism: There are people that are not “seeking peaceful, conflict-avoiding property assignment rules”. Most people, as libertarians recognize, are simply looking out for themselves. The NAP, when applied to a starving man with a stubborn neighbor whose grain silos are overflowing, would be resigning to death.
Indeed I think that there is room for compromise: the NAP is the utopian vision of the individualists, the all-knowing distributive state is the utopian vision of the statists. But how about we recognize that some aggression is JUSTIFIABLE, and implore the statists to recognize that redistribution, if it is to happen at all, is best left to competing individuals?
I think that the NAP is a great PERSONAL philosophy, but no institutions could impose this philosophy onto the statists. Instead, we must acknowledge that justice is just another personal value, and as such should be left to voluntary decision makers. The more we value a certain theory of justice, the more we can spend enforcing it. Hopefully the NAP would win out in an organically evolving market, but likely there would be a minimum level of coercion/aggression left in the world because the marginal costs of eradicating the remaining injustices would outweigh the marginal benefits of getting one step closer to utopia.
October 5, 2011 at 10:37 amWhat do you mean when you say “some aggression is justifiable”? Give me an example please.
October 6, 2011 at 8:38 amWhether an action was “just” or not is a subjective determination. Like the extreme “life-boat” situation or the more mundane decisions like those made while driving, all actions can arguably affect other people, and there are differing opinions on what level and types of disturbances are unjust, or rights violating.
An example of generally justifiable aggression is bumping into someone while passing them in a crowded area. You meant to come into contact with their body, but you did so because that was justified by the situation.
Some people may disagree, however, and say it was unjustifiable. That’s fine, let them try to (justly) enforce a remedy. If they do so unjustly, then others are free to demand justice from the enforcers.
The NAP is a choice made by individuals, and may be used to develop a philosophy of things like laws and regulations, but in the end, what constitutes redress-able or unjust aggression is a subjective determination.
October 5, 2011 at 10:45 am“The NAP, when applied to a starving man with a stubborn neighbor whose grain silos are overflowing, would be resigning to death.”
These lifeboat scenarios are always interesting to me. I’ve never understood how people can get so worked up over them, when they really almost never happen. They’re always the same — a man crossing the desert needing water, a guy drowning and his erstwhile rescuer bargaining with him for a floatie, a guy bleeding to death needing surgery but the doctor makes him sign his life away first, etc. They all have a certain cartoonish quality to them.
But I don’t think that the NAP needs to be tossed out merely because its application to vanishingly rare and extreme situations is somewhat difficult.
The solution to these conundrums is to be found in examining what the appropriate remedy would be if the property right or contract in question were violated.
What is the proper remedy for someone stealing a loaf of bread, or a cup of grain from an overflowing silo? Death?
What is the proper remedy for someone trespassing on your yard? For the aggrieved owner to blast the interloper into the afterlife with a shotgun?
It’s sort of like the slavery question — do people in a free society have the right to sell themselves into slavery? Well, yes and no. People have the right to enter employment contracts. But the problem with this slavery question (another type of lifeboat scenario) is: what is the remedy for an employer when an employee violates this type of extreme (de facto slavery) employment contract? Whips and chains for life? What has the purported slave-owner really lost when his lifetime employee decides to quit and work for himself?
Under ordinary, free, contractual rules, the person who suffers a breach of contract is expected to go out into the market and get a replacement, and can only sue the breaching party for the difference. If the employer can go out and get, on balance, as good a deal from someone else, then he hasn’t really suffered a loss. If A and B have a contact to sell a car for $1,000, but the buyer defaults and fails to close the deal, but the seller goes out and sells it to the next guy for $1,005, the seller hasn’t lost a thing. It’s a breach without damages.
If a trespasser walks across your yard, yes, under the strictest property rules imaginable, the landowner has been wronged. I fully sympathize. But the remedy is not an instantaneous death penalty. It’s virtually zero damages.
The draconian employer who suffers a breach of his draconian employment contract when his de fact slave quits his job is not entitled to use chains to get him back. He should be expected to go out and hire replacement workers at the best rate he can. If people are willing to sell themselves into slavery, I imagine there are other employee bargains to be had. And what if he does that, gets an inferior bargain from the next employee, and sues his ex-slave and wins? What then? Great, he’s just won a judgment against a penniless man.
So, too, with the starving thief. If a man is in such extremis that stealing a loaf of bread is what stands between life and a permanent dirt nap, then necessity dictates that he will steal. So be it. Sure, the victim has his property right violated. Now, his remedy shall be to collect the value of one loaf of bread, and collect it from a penniless man. Good luck with that.
October 5, 2011 at 3:38 pmExcellent points. Yes, it’s not enough to merely consider when someone has been wronged, but to what extent they have been wronged, and what would constitute restitution for the wrongdoing. Thus, I think libertarianism implies appropriate restitution for there to be justice.
October 5, 2011 at 10:58 amStephan, What constitutes ‘first use’? Also, does the first user own the property even if he stops using it?
If he uses 10,000 acres of land, puts a fence around the land, and after 1 week, he completely stops using the land. 20 years later, does he still have the right to exclude others from using it?
October 5, 2011 at 12:02 pm“Stephan, What constitutes ‘first use’?”
If A and B have a violent contest over a particular resource, it has to be scarce, and the nature of the resource in quesiton is thereby illuiminated. Then it’s a question of who was the earlier user: A or B, which is factual.
” Also, does the first user own the property even if he stops using it?”
No.
“If he uses 10,000 acres of land, puts a fence around the land, and after 1 week, he completely stops using the land. 20 years later, does he still have the right to exclude others from using it?”
Yes, but unless he is actively using it productively he probably won’t have resources to stop squatters from adversely possessing it.
October 5, 2011 at 1:02 pmThe reason I asked is because when I try to defend the homesteading principle on blogs, I get questions like this: Who will determine what constitutes “use”. Do you have to mix your labor with every square inch of the land, etc.?
Is the best answer to this — a free market in law will decide the best answer to ironing out the details.
October 5, 2011 at 1:06 pm“Yes, but unless he is actively using it productively he probably won’t have resources to stop squatters from adversely possessing it.”
This is exactly the might-is-right ethos I am talking about. When it boils down to it, the validity of a homestead seems to depend on the capacity to defend it. I just can’t see any other formulation that is consistent with common understanding of the right.
My personal feeling is that, as C. Rakish Spagaletto suggests (as a reductio ad absurdem I think), you possess only those things which you have actively mixed your labor with. The land on the fence, but not the land surrounded by it, if you will. Anything more seems to rest very heavily on the threat of force.
October 5, 2011 at 5:12 pmTo Pope Kinsella, et al.
Great way to contradict yourself Pope Kinsella. If he stops using the resource then he no longer owns it, but if he stops using it and only fences it, then he still owns it, unless of course someone else comes along and uses it. Such is the failure of religious beliefs.
You also said ” I agree that you own things you emborder.”
You are postulating a right to fence a piece of property and specifically and deliberately not use it. If you do not use it, you do not own it, that follows directly from the principle of first use. Again, if you do not own (use) the land outside the fence, and you do not own (use) the land inside the fence, where does your right to obstruct the free movement of other people come from?
Also from you: ” It’s the fact that if you don’t defend your claims from squatters you acquiesce in their re-homesteading, i.e. you abandon.”
How can the “squatting” be anything but criminal in the first place? For “squatting” to be allowed at all is a denial of property rights, UNLESS it is based on the idea that the previous owner has already lost ownership through non-use, or “abandonment”.
I love this completely faith based statement in your article: ” Though some object to the notion of self-ownership on the grounds that it is incoherent or implies religious or mystical views, this objection is without foundation. The body is a scarce resource, and to avoid conflict over its use, either the person whose body it is owns it, or someone else does. The choice is self-ownership, versus other-ownership, i.e. slavery.”
What about the third possibility, that people by their very nature cannot be owned, they are not property.
Just as scarcity is a prerequisite for things to be property, so they must also have other qualities before the term property correctly applies. One of these qualities is transferability, the thing must be capable of seperation such that multiple people have the physical ability to possess it. This may sound strange, but remember, as Hoppe and Pope Kinsella like to point out, property rights are about avoiding conflict. How can there be a property rights conflict over something that by its very nature cannot be seperated and taken away? Remember the context too, property rights presuppose the abandonment of force or violence as a means. If there is no possibility of conflicting use of a resource (within the context of property rights) then there is no application of property rights.
The Heretic and Poor Lost Soul, Sy Akhplart
October 6, 2011 at 1:55 amHow can the “squatting” be anything but criminal in the first place? For “squatting” to be allowed at all is a denial of property rights, UNLESS it is based on the idea that the previous owner has already lost ownership through non-use, or “abandonment”.
The question you should be asking is: who has the right to prosecute the squatter for his crime? If you own the land, someone squats on it, and you choose to do nothing, you have clearly abandoned it, and the squatter gains rights through homesteading (after some time, which isn’t determined a-priori). If you want to let the “squatter” live there without giving up your rights, you have to do something that demonstrates his acknowledgement of your ownership—maybe charge him $1 a year in rent or something; then it’s not “adverse” possession.
October 6, 2011 at 7:09 am October 6, 2011 at 9:39 pmPeter
“The question you should be asking is: who has the right to prosecute the squatter for his crime? ”
No, I don’t care who has the right to prosecute at this time, you have completely missed (or ignored) my point. You say yourself that what the squatter is doing is a crime, how do you legitimize title to property that you obtained through a criminal act? That is entirely my point, you can’t. The issues you bring up speak only to the various ways that the two parties prove their respective positions to be correct. The squatter claims the property was already abandoned when he squatted on it, the nominal owner tries to show that was not true. The legitimate justification for adverse possession as a way to acquire ownership of property is based on showing that the property had already been abandoned BEFORE the squatter moved in. That the facts might be in dispute is true of all methods of acquiring property, not just adverse possession.
The Heretic and Poor Lost Soul, Sy Akhplart
October 6, 2011 at 1:30 pm“What about the third possibility, that people by their very nature cannot be owned, they are not property.”
Slavery? And yes, your body most assuredly -can- be owned.
October 6, 2011 at 9:30 pmInquisitor
Really? You actually believe that slavery is a legitimate form of property? That people have and sometimes still are enslaved does not make slavery a property right, it is still a violent criminal activity. Just as murder is still not permissible even though it sometimes happens. Please pull your head out and take a deep cleansing breathe.
The Heretic and Poor Lost Soul, Sy Akhplart
October 7, 2011 at 8:08 pmIt is a form of appropriation of other persons. Not legitimate. However, that is why libertarians are focused on self-ownership, to de-legitimise slavery. If you mean to say that the very nature of one’s control over one’s body entails this, fair enough, but that’s precisely what Hoppe argues through his own arguments on self-ownership.
October 10, 2011 at 12:06 am“20 years later, does he still have the right to exclude others from using it?”
This says nothing about the value that is being gained by the owner. Perhaps the land is being kept as a tract of natural ‘virginal’ countryside, to be enjoyed by the owner whenever they like. To someone else this may appear to be abandoned. Does the concept of ‘use’ involve constantly manually altering the land in some way?
October 10, 2011 at 11:52 amGraham
Good question, it points right at the general confusion regarding property rights in the Church of Libertarianism. The question of what constitutes “use” in regards to property rights is generally glossed over. First, the “tract of natural ‘virginal’ countryside” that you reference in your example, how did the owner acquire title to this land in the first place? If unowned land can ONLY be acquired by “first use” how did this land, that you have defined as unused, become someones property in the first place? Your example requires something other than first use as a basis for property rights. The confusion over “use” has been made worse by Pope Kinsellas sloppy and confused discussion of “scarcity” as a prerequisite for property rights. This is compounded by the conflating of “economic value” and property in most explanations. That something has no economic value (money price) does not prevent it from possibly being property. Property rights are about conflicting uses, where different uses do not conflict, or where conflicting uses are not possible there is no question of property rights. To finally answer your question, “use” as employed in the principle of “first use” as a basis for property rights means ONLY use which conflicts with someone else’s use. Standing and gazing across a tract of untouched land with awe and reverence does not convey any property rights BECAUSE it does not conflict with anyone else’s similar use.
The Heretic and Poor Lost Soul, Sy Akhplart
October 10, 2011 at 12:52 pmFirst, the “tract of natural ‘virginal’ countryside” that you reference in your example, how did the owner acquire title to this land in the first place? If unowned land can ONLY be acquired by “first use” how did this land, that you have defined as unused, become someones property in the first place? Your example requires something other than first use as a basis for property rights.
This makes no sense. Unowned land is acquired by first use. Then it’s no longer unused. I cannot even understand this bizarre objection. No one else can object to A’s homesteading an unowned resource precisely because they are not the owner.
See de Jasay on this, in the references and links here http://blog.mises.org/9611/down-with-the-lockean-proviso/ and also http://blog.mises.org/archives/006992.asp, and notes 19 and 24 to http://mises.org/daily/3660#note19
October 10, 2011 at 1:29 pmPope Kinsella
Ahh, the blindness of faith. You do not understand the phrase “defined as unused”? How about the phrase “tract of natural ‘virginal’ countryside”? Just exactly what is the first use of this particular untouched piece of land that converted it from unowned to owned? Do you maybe ascribe to the communist view that we all use gravity and gravity is a property of the entire earth therefor we all own all of the earth?
“This makes no sense. Unowned land is acquired by first use. Then it’s no longer unused. I cannot even understand this bizarre objection.” This is so stupid it actually made me laugh out loud. Apparently you see no contradiction in saying that land that has never been used, has been used. As objectivist fools love to say, you believe in A and not-A at the same time.
The Heretic and Poor Lost Soul, Sy Akhplart
October 14, 2011 at 4:10 pm October 14, 2011 at 5:14 pmPope Kinsella
What are you talking about? Have you even read my posts? I have not switched my discussion at all. You are once again raising the issue of heresy, any difference in the minutia of Church Doctrine constitutes a rejection of all Holy Scripture. I have never rejected, at any point, Lockean homesteading, I have discussed the basis of Lockean homesteading and the confusion engendered by yours and others blind faith in the Gospel of Libertarianism.
“Seems to me you are now switching to a discussion of what counts as to first use.” No, that has been my discussion from the beginning, it is my opinion that defining property rights as being based on first use, and at the same time holding the question of what constitutes “use” as heretical, as you do, is dishonest. You cannot understand property rights by starting in the middle, you must have an understanding of your initial conditions to proceed rationally rather than simply by faith.
The Heretic and Poor Lost Soul, Sy Akhplart
October 5, 2011 at 1:32 pmPerhaps I misunderstand what you mean by “defend”. I can’t imagine a sense of defending a claim on unused land that doesn’t ultimately rely on force. I mean, is complaining sufficient defense to validate my claim? Can I abandon something unwillingly?
I’m sorry, I’m not very well read on these issues. Perhaps I should be going through the literature you’ve mentioned instead of trying to hash things out on the forums, but I find it useful to have this sort of exchange to help me frame my questions. Thanks for continuing the conversation 
October 5, 2011 at 4:00 pmI think all conflict resolution at least hints at resolution by force, or the threat of force, but it is a misunderstanding to think all conflict resolution requires force. I suspect a lot of people have a cartoonish vision of a property owner pointing a shotgun at trespassers and warning them to get off their property. In reality, most people are going to be much more reasonable, and merely talking to someone and explaining the situation can often resolve the issue. If not, there would still be legal and procedural means (arbitration and mediation) for resolving differences, so the actual use of coercion should be rather limited in practice.
October 5, 2011 at 3:48 pmThanks for distinguishing between self-ownership and ownership of external property. They are not the same thing. The point about the context of the force used in relation to property rights is well-taken, too, but I’m not sure I see how all property rights boil down to first use/homesteading. Sure, I see how all previously unowned property had to become owned at some point, and then after that, owned property is transferred either peacefully through sale or gift, or else unpeacefully through theft or fraud. But all the details hardly seem to resolve themselves down to a simple principle, but rather treat homesteading as a first cause for property, followed by subsequent transactions, and participants get into murky transactions where we generally assume that a trade is based upon legitimate property ownership without being sure of it, unless we have a full history of the acquisition and transfer of the property.
October 5, 2011 at 8:34 pmAny discussion, ever, anywhere, on “non-aggression” should reference the work of Konrad Lorenz. Just because you are talking abstract economic philosophy, (which may, I agree, apply to real situations) you should not ignore cultural anthropology or consider it, even tacitly, as irrelevant.
Last time I tried to mention this, you moderated me out. Dirty pool.
October 5, 2011 at 9:09 pmI never moderated you.
October 5, 2011 at 10:14 pmFunny, we have a rather large club for people that you moderated out when you couldn’t deal with their comments. Afraid you fall a little short in the “believable” category when you deny moderating Virginia. Dirty pool is your specialty.
The Heretic and Poor Lost Soul, Sy Akhplart
October 6, 2011 at 10:40 pmI apologize for pointing an accusing finger at anyone specifically. It just seems that sometimes my comments get by and sometimes they do not. I shouldn’t get caught in your spam filter as I am properly registered. And, honestly, Mr. Kinsella, and I say this in my most respectful tone, I did not know you were one of the powers. I thought you were just a prolific commentator. I’m not much good at research unless it involves goldfish and grizzly bears.
October 11, 2011 at 10:57 pmMy thoughts on the matter:
October 14, 2011 at 1:30 pmYup, the whole post is the intro to the epiphany which would be the last two paragraphs. Thanks for your attention, Stephan.
Did you know that you are the *only* person who I have seen convince Stefan Molyneux that he was mistaken about something to the extent of leading him in a 180 degree turn?
It’s not because Stef is arrogant or stubborn — he is not, it’s usually the case that people who disagree with Stef are the ones who are wrong, and very amateurishly or pettily so. It’s that Stef is almost all the time correct on what he speaks about, and the people who disagree with him just present specious arguments or insults.
In contrast with that, you are the only person I’ve ever seen be so compellingly right (remember the intellectual podcast with you and him and I think Wendy McElroy?) and presenting a case so watertight, with so much intellectual closure and consistency with observable reality, that Stef just… changed his mind completely after the cast.
I had read your book Against Intellectual Property before, so I sorta expected to listen to that cast and see some lively debate between you and Stef (who until that point believed in Ayn Rand’s theory of property, thus intellectual monopolies as well). There was NO DEBATE, LITERALLY. Everyone listened to you make your very simple, very straightforward points, Stef asked you a couple of questions (politely but clearly disagreeing), you answered them, that was it. No one got angry, no one got defensive.
That’s the power of simple, correct ideas. You are the man. Respect for that.
One problem with minarchism is that it makes it difficult to find a principled opposition to various state policies and actions that violate individual rights. And just as controls breed controls, 1 one compromise leads to another. Ayn Rand, for example, maintained that the subpoena power was legitimate–that state courts could legitimately compel people to show up at court to give testimony or evidence in a trial. 2 However, she argued against compulsory jury duty. But if the state courts can compel witnesses to attend trial, why can’t it compel people to serve as jurors? In fact, Rand’s “intellectual heir” Leonard Peikoff makes just this argument. 3 Some Objectivists, such as Diana Hsieh, disagree, 4 but as Peikoff’s ex-wife, Amy Peikoff, says, “What I am trying to figure out is whether the jury issue is more like the subpoena issue, or instead is the same as military service or compulsory taxation.” 5
Another issue that some minarchists waver over is eminent domain. Richard Epstein, in his book Takings, builds an entire political theory around the idea that the state is justified because it can take private property when the taking generates enough surplus proceeds to compensate the victim and thus make everyone overall better off. Ayn Rand initially favored eminent domain, as indicated in Murray Rothbard’s correspondence, because the Constitution implicitly authorized it–until around 1954, when Herb Cornuelle convinced her to oppose eminent domain. 6 Neo-Objectivist Tibor Machan still argues that eminent domain may be legitimate. 7
Then, of course, there is also Rand’s half-baked views on taxation. She claimed the minimal state was legitimate, yet she was honest and perspicacious enough to realize that compulsory taxes are illegitimate (though, if I recall, she put elimination of taxes low on the list of important reforms she would press for). She opined that the state could perhaps be financed by some voluntary scheme–donations, contract fees, or a lottery. None of which make sense.
In a 2004 LRC post, How Stupid are Europeans?, I noted that unless an explicit right to secede or exit from the then-proposed European Constitution were added, any countries joining would likely be prevented by force from leaving later. Happily, the EU Constitution was never finally ratified, due to the heroic stubbornness of French and Dutch citizens. (However, many of its provisions were snuck into the Treaty of Lisbon in 2007.)
As noted in Greece Considers Exit from Euro Zone,
It remains unclear whether it would even be legally possible for Greece to depart from the euro zone. Legal experts believe it would also be necessary for the country to split from the European Union entirely in order to abandon the common currency. At the same time, it is questionable whether other members of the currency union would actually refuse to accept a unilateral exit from the euro zone by the government in Athens.
Never join a political union. Never centralize. It could be a one-way ratchet, as the CSA was forced to realize. Decentralization—and the Catholic idea of subsidiarity—is always to be pushed for, down to the individual level.
As I noted previously, after the lesson of the US Civil War–which is that if you want a right to secede from a “voluntary” union you better be VERY EXPLICIT—still, they have signed a draft EU Constitution that is not crystal-clear on this. True, Article 59 covers “Voluntary withdrawal from the Union”. It provides:
1. Any Member State may decide to withdraw from the European Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention; the European Council shall examine that notification. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be concluded on behalf of the Union by the Council of Ministers, acting by a qualified majority, after obtaining the consent of the European Parliament. The representative of the withdrawing Member State shall not participate in Council of Ministers or European Council discussions or decisions concerning it.
3. The Constitution shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, decides to extend this period.
Note the bolded “weasel-word” language. If any rich state, say France, Germany, or Britain, tries to leave, a majority of poorer states could stop it by simply indefinitely “extending” the period that the EU Constitution applies to the State desiring to leave. As this article notes,
It was always the case that a member state could leave by simply repealing its own legislation [TELL IT TO SOUTH CAROLINA! –SK]. Now there is a formal procedure designed to show that the EU is a voluntary association. However a departing member would have to agree terms so there is an implied threat that it would not be that easy. This clause is presumably designed never to be used.
See also discussion of “exit clause” proposal; more comments on the “exit clause”; and Europa info page on the EU Constitution.
All I can say now is: I bet the UK is glad it never entered monetary union with the Euro; and Switzerland is glad it never entered the EU; and Germany is probably regretting it all!
Here’s an interesting series of posts back in 2004 (including an exchange with Tim Sandefur, back when he was still civil with me):
Courts may be stripped on pledge — discusses the attempt by some House Republicans to try to prevent the Supremes from overturning legislation related to the pledge. The idea is to simply strip the Court of jurisdiction over certain matters, using a neglected provision in the Constitution: Article III, Section II, which provides:
The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;–to all Cases affecting Ambassadors, other public ministers and Consuls;–to all Cases of admiralty and maritime Jurisdiction;–to Controversies to which the United States shall be a Party;–to Controversies between two or more States;–between a State and Citizens of another State;–between Citizens of different States;–between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.
In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned , the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.
This is, IMO, a very good idea. Strip away. (No offense, libertarian centralists [2, last 4 Gene Healy articles here].)Note: As explained here:
Article III, Section 2, clause 2’s reference to cases in which `a State shall be Party’ does not include suits by citizens against states. See United States v. Texas, 143 U.S. 621, 643-44 (1892) (`The words in the constitution, `in all cases . . . in which a state shall be party, the supreme court shall have original jurisdiction’ . . . do not refer to suits brought against a state by its own citizens or by citizens of other states, or by citizens or subjects of foreign states, even where such suits arise under the constitution, laws, and treaties of the United States, because the judicial power of the United States does not extend to suits of individuals against states.’) (emphasis added). The Eleventh Amendment provides that `The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another State, or by citizens or subjects of any foreign state.’ U.S. Const. Amend. XI.
This is why a suit by a citizen against his own State based on a claim of violation of federal constitutional rights would not be a case where a “State is Party” and original jurisdiction. So, e.g., a lawsuit challenging the pledge, or an abortion law, or a state’s hetero-only marriage laws, even if the state is being sued, is a case of appellate, and not original, jurisdiction. It’s not a case where a “State [is] a Party” because that language refers to paragraph 1 situations, which do not include a citizen suing his own State. Therefore jurisdiction for a citizen suing his own State can only be based on a claim “arising under” federal law or the Constitution, and thus a case of appellate jurisdiction.
Mises post; archived comments below.
Update: see also Ayn Rand Endorses Big Government, LewRockwell.com Blog (May 31, 2009)
{ 72 comments… read them below or add one }
September 28, 2011 at 8:02 amCalling her a “demonrat” in the first paragraph is either the most amazing Freudian slip of all time or the new party epithet.
September 28, 2011 at 2:48 pmStephan does not slip.
September 28, 2011 at 8:25 amThe State isn’t anything like the mall. The mall doesn’t take away 60% of your inventory if you let your rent lapse and go elsewhere nor does it continue to ask for a rental payment even though you set up in the building across the street.
September 28, 2011 at 9:53 amThere’s a big difference here. First, a tenant signs a contract which gives them exclusive access to that particular space. This means no other business can occupy it, thus the owner of the mall is incurring risk and opportunity cost. What if the business fails? He is now out not only the rent, but the loss of a more successful firm renting. He is, in effect, loaning capital to the firm and expects a return greater than the marginal utility of liquidity.
If the business folds the owner is entitled to be compensated for his loss. Likewise, if the firm moves, the owner is also entitled to loss compensation. This is based on the necessity of contracts and contractual enforcement. Let’s just say that there is a law of some sort that prohibits such “confiscation” by a mall owner. The risk would be much greater and the rent much higher. The mall owner would know that at any time a firm could leave and he’d be out not only the rent but would incur the loss of future rent until he found a new tenant. And he’d have to incur the costs of locating a new tenant as well.
Bottom line is that the mall is peaceful and voluntary. Both parties entered into the contract of their own volition. Implicit in the contract (if not specifically stated) is that it will be open certain hours, have available and reliable utilities, facilities for customers such as restrooms and parking, et al. Let’s take the other side of the coin. You dislike the mall’s “confiscation” but what if the mall falls into disrepair, the utilities don’t work consistently, etc. Does not the firm who has incurred loss from that a right to compensation? Both sides must uphold their end of the contract. It is fundamental to a free market. And no, it’s not theft if the mall confiscates, as the firm caused the mall some loss.
The state is entirely a different issue altogether. It is one purely of force, where one party arbitrarily decides what you will pay, that you do benefit, and how much. And if you choose not to submit to the “contract”, they will imprison you. In addition, what Ms. Warren completely doesn’t get is that the government takes no risk in building roads, schools, et al. If a road fails (i.e. doesn’t provide benefits greater than costs), oh well. If a bridge collapses and kills people, bummer. If roads fall into disrepair, as the freeways in my home California have, then again, oh well. If the police break into your house and shoot and kill you because they got the address wrong, the again, oh well. If they fail to educate kids, then again, oh well. If the mall fails, it closes down. The owner loses his investment. If the owner chooses poorly in tenants, it fails and closes.
The worst error of her thinking is that she has no understanding that the wealth created by the evil thugs she despises is what allowed the government in the first place to build all that. The wealth came first. It’s why poor countries have no roads, not the other way around.
September 28, 2011 at 10:32 amThere is no difference – you can’t continue to reside in the mall as a squatter without repurcussions. In theory the government taking risks – primarily people could leave the country and renounce their citizenship or refuse to be particularly productive bringing the country’s economy down. It’s would be little different from a shortage of mall owners and the owners are bleeding the tenants for everything they’re worth.
September 28, 2011 at 11:28 am@Rob Mandel September 28, 2011 at 9:53 am
…where one party arbitrarily decides what you will pay…
In the U.S., do you believe this is literally true? Does “government” or “the state” arbitrarily decide, use force to coerce compliance, and can only be opposed with violence?
September 28, 2011 at 11:21 pmLet me turn that around and ask you if you get to choose how much your government takes from you in taxes.
September 29, 2011 at 11:19 amNate,
For me it is a two-fold problem: spending and taxation. Both are much too high.
In case you have not been following the news, that very issue is at the center of the national politcal debate taking place at the moment. Of the two positons; 1) big government, big spending, big taxes; v. 2)smaller government, spending and taxes, which do you favor?
Or do you honestly not care how it comes out because the state is so evil, it really doesn’t matter, so you are holding out for option 3), whatever that is?
September 28, 2011 at 10:29 amWhy can’t it? If you can’t service payments on a debt then the lender can seize your assets. Alternatively, the U.S. Government doesn’t tax the non-U.S. citizens around the world.
September 28, 2011 at 10:29 amNormally I agree with Stephan Kinsella but in this instance I believe he has allowed Elizabeth Warren’s definition to rule his logic. Warren assumes that becuase the state supplies services it essentially has ownership of those who use those services. Kinsella takes essentially the same position but where Warren believes any government service is essential and so entitles the government to ownership, Kinsella believes no government services is justified so the government is not entitled to anything. Warren and Kinsella live in the same neighborhood but on opposite sides of the street.
But the Warren/ Kinsella basic premise is foolish. Simply because you OFFER a service to me does not give you ownership to anything I have. And using your services does not give you unlimited ownership.
Exchange is a negotiation not a right. You bargin for your interest and I bargin for my interest. If we determine that we are both better off then there is exchange, but if we do not there is no exchange. The government has a right to be a party to the negotiations just as individuals have a right. If in the negotiation I determine that a government service benefits me and the government leaders believe that providing the service benefits the ones who established the government there is no reason that services cannot be provided.
The problem with a Warren/Kinsella world is that negotiation is not an option. Warren takes it all and Kinsella takes nothing.
The brilliance of the US system of government is that it was essentially designed with enumerated powers and all other powers were reserved to the states and the people, but the enumerated powers were not chiseled in stone. Provision was made to expand the enumerated powers if the states and the people found it necessary.
Sadly the world of Warren/Kinsella has become the world we live in and the debate is about all or nothing. Negotiation where everyone wins is not longer part of the debate. Because of this everyone loses; you are either robbed of what is rightfully yours or you are robbed of using the services that best serve you. This is the wisdom and miracle of the free market.
September 28, 2011 at 11:20 am@Dick Fox September 28, 2011 at 10:29 am
I normally disagree with Kinsella about just about everything, but I won’t let that detract from your excellent point. I think it is true that Kinsella here has merely framed the debate as his “nothing” against the straw man “all” which he himself creates.
First, your point is correct; there is no correlation between taxation imposed ostensibly to pay for those roads, etc. and some future claim of ownership of means of production. At best, one could say that Warren’s reasoning is something like, “Since you benefited from government’s use of past tax payments, you are obligated to keep paying them.”
The direct relation between the public roads and the taxes collected to build and maintain them is where a legitimate connection exists. In this view, taxation is a means by which the desired ends can be achieved on a non-profit basis, i.e. a bureaucratic means. Mises has covered this thoroughly in his little book Bureaucracy. Whether government bureaucracy is the best means to achieve what all agree are desirable ends, free and efficient freedom of movement, is a legitimate topic of debate.
But more importantly, as is Kinsella’s style, he pretends that these taxes are being imposed by a dictator or monarch, and that the only way to view a taxpayer is as a “victim” of the state. In a government in which voters have some say, they also take some responsibility for the government they choose. There is no getting around that simple fact.
It is not necessary to agree or oppose the twisted logic of Warren to hold that there is something wrong with our level of taxation, how effectively it is being used, or even the purposes for which taxes are being used. But it is a fact that the imposition of those taxes is not by decree, and do not exist solely on the basis of violence or threat of it by a tyrant who can only be removed by violence.
It is equivocation on the concept of taxes and tyranny to assert or even imply that in all cases taxes only arise by the will of a tyrant. This is ridiculous. But it does conveniently serve as a straw man for Kinsella to attack with the same rhetoric he would use to attack the Henry the 8th, Hitler or the Mob for that matter, as he later demonstrates. It is much more convenient to his conclusion to maintain the fallacy that only a tyrant demands “protection” in the form of taxation, and naturally tyrants should be eliminated.
Tyranny is wrong, but is not the fundamental condition of our form of government in the U.S. This is a shameful rhetorical trick of an ideologue, which lacks even a modicum of scholarship.
September 28, 2011 at 11:42 amNothing in the government is my own choosing. I have no control over who was elected in the past and I have more control over the flow of the Mississippi river then I do over who gets elected to congress. Nobody alive had any choice over the type of government we had. They had no voice, yet they are inflicted with the full burden of paying for it and are required to obey all laws.
Democracy is used as a veneer to create the illusion of legitimacy. They system is rigged and it is getting more and more rigged with every passing month. True democracy means that the individual has the right to choose their government… nobody in this country has that right. Not for over 200 years.
If you want to argue that the state is necessary then by all means do so. There is valid arguments to be made, but stop regurgitating the propaganda the system has force-fed you your entire life. It’s not healthy.
September 28, 2011 at 1:09 pm@ nate-m September 28, 2011 at 11:42 am
Yes, I’m familiar with this view. You are saying you are a victim without any recourse. Fortunately this is seldom the actual fact, and certainly not the facts here.
Even the flow of the mighty Mississippi can be altered, given sufficient cooperation.
What you are really saying here is that although everything COULD be changed, it just isn’t fair that they don’t change the way YOU think they should, just because YOU say so, and you really, really mean it.
You don’t get things you really, really want, especially when they are complicated and hard to achieve, unless you really, really work at it.
I don’t have to disagree with you that the system is getting more and more “rigged” every month to disagree with your diagnosis of the problem, and your prescribed remedy. And I don’t have to be a victim of brain-washing to hold this view.
I do argue that a state, in some form, is necessary and inevitable. Therefore it matters quite a bit to distinguish between one form and another.
Finally, if you are opposed to propaganda, check out your own. Notice the use of words of absolute certainty and finality. You seem very confident of your wisdom to know precisely the difference between right and wrong in all things.
September 28, 2011 at 1:40 pmes, I’m familiar with this view. You are saying you are a victim without any recourse.
haha, you are such a dishonest discussant. Our libertarian view that people who have money stolen from them by the state, does not rest on the assumption that these victims “have no recourse.” They are victims whether they “have a recourse” or not.
Fortunately this is seldom the actual fact, and certainly not the facts here.
Fortunately! Hey, what is the definition of democracy? Two wolves and a sheep deciding what to have for dinner. I’m sure the sheep is comforted that it “had a vote”.
What you are really saying here is that although everything COULD be changed, it just isn’t fair that they don’t change the way YOU think they should, just because YOU say so, and you really, really mean it.
Nah, we’re just saying you have no right to use violence against innocent people.
I do argue that a state, in some form, is necessary and inevitable.
Necessity and inevitability are independent. Crime is inevitable. Is it “necessary”? I dunno. I would say liberty is “necessary” for us to have society–but is it inevitable? People like yourself, and other more direct criminals, show that it is not inevitable. In any case, even necessity does not prove legitimacy. “For me to have enough money to buy a house, it is necessary that Bill Gates give me some money.” Well, even if that were true, it does not automatically mean it’s legitimate to take that money from Bill Gates by force.
September 28, 2011 at 2:49 pm@Stephan Kinsella September 28, 2011 at 1:40 pm
And I thought you were going to play nice, right up until only 6 words in call me dishonest…
Our libertarian view that people who have money stolen from them by the state, does not rest on the assumption that these victims “have no recourse.” They are victims whether they “have a recourse” or not.
Of course, speaking of dishonesty, the validity of this turns on how you defend the use of the word “stolen”. If one authorizes money to be withdrawn from his bank account, it is not legitimate to then say it was “stolen”, right? You could hardly say that such a person was a “victim” of wrongdoing. The recourse I speak of, naturally is the right to rescind consent, to refuse to so authorize.
You, Stephan Kinsella private citizen, do not have the right to unilaterally refuse to pay a tax that has been legally imposed. You Stephan Kinsella citizen/activist, DO have a right to organize your supporters and repeal that same tax, if you can. That is your recourse, fortunately, since your many of you ideas run contrary to common sense, and so general support is a problem for you.
Fortunately! Hey, what is the definition of democracy? Two wolves and a sheep deciding what to have for dinner. I’m sure the sheep is comforted that it “had a vote”.
No, that is not the definition, but you are always entertaining. Ever heard of limitations on tyranny of the majority? Let me help you.
http://en.wikipedia.org/wiki/Tyranny_of_the_majority
Nah, we’re just saying you have no right to use violence against innocent people.
Good. We agree. We may disagree about what you mean by “violence” and “innocence”.
Necessity and inevitability are independent.
Yes. That is why I used the word “and”; it is meant to conjoin independent things.
People like yourself, and other more direct criminals,
I am an “indirect criminal”?
show that it is not inevitable. In any case, even necessity does not prove legitimacy. “For me to have enough money to buy a house, it is necessary that Bill Gates give me some money.” Well, even if that were true, it does not automatically mean it’s legitimate to take that money from Bill Gates by force.
Congratulations! You have proven the obvious against an argument that has not been made. There must be a fancy libertarian word for that…
September 28, 2011 at 3:27 pm September 28, 2011 at 4:17 pm@Stephan Kinsella September 28, 2011 at 3:27 pm
I gave you the “stupid” out.
Well yes, it MUST be one or the other; stupid or dishonest.
Okay, you twisted my arm: you can choose: “horribly confused and ignorant” if you prefer.
Yes, that is better.
NOt really–it depends on what you think are property rights. And we libertarians think if I homestead an unowned thing first, then I own it. You criminals, on the other hand, think your mafia owns it.
Hmm. You own your money before you spend it. I don’t think you homestead it though, right? When you spend it, you don’t own it anymore. Do you complain to the person you gave it to that they have the money you own?
Yes, but I assure you, I do not authorize your criminal mafia gang to take a “hunk” of my paycheck every 2 weeks.
Funny. I did not authorize the speed limits on the freeway either, so I should not pay the fine for speeding?
Oh, but I do. As “legality” does not mean legitimate
True. But “legal” is a matter fact, “legitimate” is a matter of opinion. If you hold that a given law is not legitimate, you may legally act on that opinion by using legal processes to change the law, or repeal it entirely. What’s stopping you? It’s not like you need a tank or a fighter jet or something. You have all the legal rights you need to turn the whole thing out. Why not do it? Isn’t that an interesting question?
You are evil, and a criminal, Wildberry, and in a just world you would be run out of polite society. Go to hell. You condone theft, loathsome parasite.
How ironic for you to be speaking of polite society.
September 28, 2011 at 4:35 pm September 28, 2011 at 1:35 pmWildberry,
I humbly apologize to you if it offends you that I refuse to condone aggression used against you. But sorry, I won’t change my mind.
You and Dick are confused with this “all or nothing” comment. It is simply not an argument. As a principled libertarian, I am opposed to aggression–on principle, and consistently. If you identify an evil, or a poison, you oppose it–completely. It’s not as if someone opposed to evil ought to be “reasonable” and “moderate” and instead advocate a moderate amount of evil.
Aggression–to the libertarian–is evil. And it is impossible to deny that the state necessarily engages in widescale, institutionalized aggression. The libertarian to the extent he is a libertarian necessarily opposes the state. That is why it’s “all or nothing”. Your whining about my “all or nothing” stance is just a way of disguising, covering up, your own implicit endorsement of aggression. Again, I apologize for refusing to condone aggression being used against our neighbors, or even you, as you yourself want to do. Go and join in the pillaging on your own, and don’t expect me to join in. If while you are taking someone’s property with violence, muttering “hey, at least i don’t believe in all or nothing” assuages your conscience–good for you. Clap. Clap. Clap.
But more importantly, as is Kinsella’s style, he pretends that these taxes are being imposed by a dictator or monarch, and that the only way to view a taxpayer is as a “victim” of the state. In a government in which voters have some say, they also take some responsibility for the government they choose. There is no getting around that simple fact.
So those of us who vote against it or refuse to endorse it–we ought to be let out of our taxes? Hey, I’ll take that deal. Or–do you really say, well no, everyone has to pay taxes even if it’s not their fault, even if they didn’t vote for it–? I take it you would take the latter position. Meaning you are just engaging in sophistry above. Since you are not anchoring the legitimacy of taxation on people being “responsible” for it–rather, you are really saying ALL “people”–as a whole–are responsible, since after all, they can vote. In other words, you are squirming around and sneakily using a disguised version of the Elizabeth Warren collectivist argument. You are saying the same thing.
It is not necessary to agree or oppose the twisted logic of Warren to hold that there is something wrong with our level of taxation,
Too big of a hunk?
how effectively it is being used, or even the purposes for which taxes are being used.
The state is misusing its stolen plunder? Gasp!
But it is a fact that the imposition of those taxes is not by decree, and do not exist solely on the basis of violence or threat of it by a tyrant who can only be removed by violence.
Just partly on the basis of violence? Can I object to that part? Or are you gonna pitch a hissy fit about that too, now?
It is equivocation on the concept of taxes and tyranny to assert or even imply that in all cases taxes only arise by the will of a tyrant.
Hunh? Who said that? I said taxes are theft, and unjust. The state is criminal. Eye on the ball.
Tyranny is wrong, but is not the fundamental condition of our form of government in the U.S.
It just happens to be tyrannical, it doesn’t *have to* be. that’s comforting.
September 28, 2011 at 3:59 pm@Stephan Kinsella September 28, 2011 at 1:35 pm
I humbly apologize to you if it offends you that I refuse to condone aggression used against you. But sorry, I won’t change my mind.
Thank you, I am not offended. However, we may differ on what you call “aggression”, but as a general matter, we agree that aggression is bad.
As a principled libertarian, I am opposed to aggression–on principle, and consistently.
Well, I suppose even “unprincipled libertarians” and “principled non-libertarians” might oppose aggression, assuming they agree what they mean to oppose. I personally am opposed to aggression. Is that OK, or do I have to be for aggression because you say I’m an “unprincipled non-libertarian”?
If you identify an evil, or a poison, you oppose it–completely. It’s not as if someone opposed to evil ought to be “reasonable” and “moderate” and instead advocate a moderate amount of evil.
Again, we agree. One cannot be a “little bit” pregnant, or be opposed to “too much” evil.
We may differ, however, on a given diagnosis and preferred remedy.
Aggression–to the libertarian–is evil.
Apparently libertarians have something in common with other people.
And it is impossible to deny that the state necessarily engages in widescale, institutionalized aggression.
Impossible? Deny? THE state? Ah, it seems there might be some room here for a little more specificity.
The libertarian to the extent he is a libertarian necessarily opposes the state.
Let’s see if I catch your meaning; “I hate THE STATE!” Is that about it?
That is why it’s “all or nothing”. Your whining about my “all or nothing” stance is just a way of disguising, covering up, your own implicit endorsement of aggression.
I agree equivocation is fun. It allows you to make ridiculous conclusions appear to follow from logic. But if you want to actually construct sound arguments, well pardon me, but some of us can be a little picky about using words with some precision.
Again, I apologize for refusing to condone aggression being used against our neighbors, or even you,…
Don’t apologize. I agree with everything you say here, except this:
…as you yourself want to do.
Sorry, Stephan, but I don’t want to condone aggression, especially against my neighbors. How can this be? One of us must be wrong…
Go and join in the pillaging on your own, and don’t expect me to join in.
With your inability to distinguish one thing from another, you would make a pretty poor pirate. And in a more general sense, I certainly don’t expect you to join in. To paraphrase Woody Allen, I doubt you would join any club that would have you for a member.
If while you are taking someone’s property with violence, muttering “hey, at least i don’t believe in all or nothing” assuages your conscience–good for you. Clap. Clap. Clap.
It is hard to come up with something intelligent in response to this. Let’s see, you compared me to a mugger who leaves a couple of bucks with the victim because it makes me feel better for robbing him. And you’re clapping. Am I right to guess you are being sarcastic in your clapping gesture, maybe rolling your eyes, and you don’t really think this is good for me?
So those of us who vote against it or refuse to endorse it–we ought to be let out of our taxes? Hey, I’ll take that deal. Or–do you really say, well no, everyone has to pay taxes even if it’s not their fault, even if they didn’t vote for it–? I take it you would take the latter position. Meaning you are just engaging in sophistry above.
Huh? What do you consider cleverly devious about what you’ve said I said? In any case, I didn’t say any of this so I don’t know what you’re talking about.
Since you are not anchoring the legitimacy of taxation on people being “responsible” for it–rather, you are really saying ALL “people”–as a whole–are responsible, since after all, they can vote.
Ultimately, I think I am saying that I am anchoring the legitimacy of taxation on people being, ultimately, responsible for it. For example, slightly over half of all voters wanted Obama to be their president. They are responsible for getting what they wanted and the rest are responsible for not getting what they wanted, and we are all responsible for the fact that nobody got what they really wanted. Does that help?
In other words, you are squirming around and sneakily using a disguised version of the Elizabeth Warren collectivist argument. You are saying the same thing.
Well, you are certainly accusing me of meaning and saying things I don’t mean and didn’t say. What I did say was:
It is not necessary to agree or oppose the twisted logic of Warren to hold that there is something wrong with our level of taxation,
This doesn’t sound like a very strong endorsement.
Too big of a hunk?
Yes.
The state is misusing its stolen plunder? Gasp!
By the way, when did you stop beating your wife? “Stolen plunder”??
But it is a fact that the imposition of those taxes is not by decree, and do not exist solely on the basis of violence or threat of it by a tyrant who can only be removed by violence.
Just partly on the basis of violence? Can I object to that part? Or are you gonna pitch a hissy fit about that too, now?
No “hissy fit”, pitched or otherwise. Taxes are not imposed here in the USA by violence. They are enforced by the threat and/or use of violence, like all laws. If you are opposed to this in principle, being a principled libertarian and all, then you cannot endorse the use of PDAs either. Now what? Rights without enforcement are what? Laws without enforcement are what?
Hunh? Who said that? I said taxes are theft, and unjust. The state is criminal. Eye on the ball.
You did not say this. It is the implication of what you did say. Theft is an act of force. You said taxes are theft. The question is, are taxes theft? If they are imposed by a tyrant (i.e. government without restrictions and by power of force), a case for theft can be made. If they are imposed through a process of consent, even if indirect, you cannot make a case for theft. If the state actually steals from its citizens under threat of force, that is criminal. If on the other hand they are the result of legitimate and legal functions of self-government, it is no more theft than an authorized automatic withdrawal from your bank. To call such an arrangement criminal is without foundation.
You equivocate on taxes and tyranny by assuming away this distinction. Eye on the ball.
It just happens to be tyrannical, it doesn’t *have to* be. that’s comforting.
As if to punctuate my point: It just IS tyrannical? I see.
September 28, 2011 at 4:33 pm September 28, 2011 at 5:40 pm@Stephan Kinsella September 28, 2011 at 4:33 pm
Having been down this road with you before, I sense you are about to go off the rails. One sign is the increased reliance on ad hominem.
Not true, as you think the state is good, yet the state necessarily uses aggression. So, you are choosing state aggression. Unless you seriously want to maintain that the state, ha hah aha, does not use aggression? Hahhaha
We don’t even agree on what you actually mean by “state” so I hardly think you are prepared to tell me what I think. You can’t seem to construct a single sentence without trying to put words in my mouth that not only are not a accurate reflection of anything I’ve said, they are crammed full or your ideological assumptions that you no longer even pretend to smuggle in; you fly them like a flag…
The “state” (whatever you mean by this. I think it means to you the opposite of the absence of something you like, whatever that is) does not “necessarily” use “aggression”. I can imagine an ideal government that only uses defensive force. Now what? So no, I am not choosing aggression. I do seriously want to maintain that aggression is bad, used by the state or anyone else. Of course we might have disagreements about what aggression is in a given set of facts, and whether it is being used, by the state or anyone else.
they might, but they don’t. If they did, they would be principled.
It seems that you are saying that you have a lock on the “right” principles, and everyone else is just a “technical problem”. One shudders at the thought that you would be the one to direct the “technology” to the “problem”. Speaking of tyranny!
You are not opposed to it, since you endorse the state, which necessarily employs aggression.
There you go, telling me what I think again. Doesn’t liberty have anything to do with being able to think my own thoughts without you telling me what they are? Are you doing a poor imitation of Carnac here?
You are just a liar, or confused.
At least you are mixing up the false dichotomies.
Aggression–to the libertarian–is evil.
I agree with libertarians on this point, then.
“Apparently libertarians have something in common with other people.”
No, we do not; if you oppose aggression consistently, you are libertarian. If you are not libertarian, that is just b/c you commit or endorse it to some degree or another. Congratulations on not being as bad a criminal-statist as FDR.
If libertarians don’t have something in common with other people, that might explain why it is such a politically impotent force. I don’t know how FDR got in here, but I think I oppose aggression pretty consistently. I get that you disagree. I have been wondering how that can be true, I mean we can’t both be right. Could it be that you call some things aggression when I don’t? Could that be it?
No. Libertarians oppose all aggression: private, and public. But that implies they also hate the state–the agency of public (institutionalized) aggression.
See, again with a new definition of “state”. I oppose all aggression, both private and public. But then when you say state means an agency of public aggression, well I’m against that too! What’s happening here? Could it be ambiguity of terms?
You are. You believe in taxation–hey, your neighbors are taxed.
I really never said I believed in taxation. I just said that the fact that taxes exist does not make them necessarily theft. But even if they were, they may not be in all cases. We might have some differences of opinion.
For example, you think policing of rights can be done by a private enterprise, a PDA. I don’t think you can sell coercion for profit, and both victim and accused should be subject to a neutral third party, not a hired gun of one or the other. If such an enterprise was to be non-profit, then the services they provide cannot be the subject to the price mechanisms of a free market. You would need a bureaucratic model. Taxes are one way to fund such a bureaucracy, but perhaps not the only way. Let’s assume free people on Van Dun’s Quasi-Earth agreed to set up such a bureaucracy, would those taxes be theft? I don’t think so.
Actually the mugger is more honest. He does not deny he is a mugger. He leaves me alone after he absconds w/ the loot.
I see, a mugger but less honest. That puts me pretty low on the scale of “principled libertarians” and pretty high on the list of “technical problems”. I think I get it.
Taxes are not imposed here in the USA by violence. They are enforced by the threat and/or use of violence, like all laws.
What you are saying is disgusting. Laughing off the very evil you condone. Shame.
What have I “laughed off”? Just because you think all laws are “dripping with evil” doesn’t mean I have to. But I agree some are. CTEA is bad law, for example.
I didn’ characterize it as a “tyrant”. only as a thief. you dishonest distracter.
If I’m going to go to all the trouble of explaining myself, I wish you would pay attention.
I know you didn’t characterize taxes as a tyrant. I am the one who drew the connection, saying there is a distinction between taxes imposed by a tyrant, and those which are not. They wouldn’t both be theft. Your failure to make that distinction is the basis of my objection. In the case of my quasi-earth example above, taxes would not be theft.
September 28, 2011 at 6:19 pm September 28, 2011 at 9:40 pm@Stephan Kinsella September 28, 2011 at 6:19 pm
It is not ad hominem. I have a quite rational antipathy for those who endorse criminality. You do realize you are commenting on a libertarian blog, talking to a libertarian, right?
Me too. Point? I am aware that I am talking to the Kinsella brand of libertarian. I am not making you responsible for an entire philosophy that you personalize as “we”. I am just reflecting my interpretation of what you actually say. That seems sufficient.
This snide comment does not justify the state violence you support. It is pathetic that you and your statist kind get your way, then seek to mock your victims for complaining about it.
I think the impotence as a political force is a rather obvious statement of fact. You keep saying what I think and what I support, but you seem to use only your own words to support this. So your accusations of my support for violence, and that I get my way, and that I’m mocking my victims for being weak and ineffective for complaining is, well disingenuous. If you wish to take issue with something I say, please do. If you are going to provide both sides of the dialogue to sharpen your libertarian knives against an opponent of your own creation, well you realize you are doing it, right? The alternative is a little scary.
Exactly. I am complimenting you on being less of a statist than FDR. But a statist, you remain.
Thank you? If statist means that I hold a position that falls short of your ancap litmus test, you are correct. Categorizing anyone who merely rejects your brand or anarchism as statist is, well to be kind, stupid. From such a point of view, there is no difference between me, FDR and Stalin except by degree of evil. Is it any wonder that such a view does not seem to be catching the world by storm?
Yes, you don’t “call” actual aggression by the word “aggression” sometimes–instead you “call” it “legitimate state action” to masque the aggression that you favour.
I would offer that action is “legitimate” when it is consistent with one’s ethical codes of conduct, whether done by a state or individual. I just allow for the possibility that a perfectly reasonable and legitimate ethical code might permit a society to voluntarily choose to fund some services that do not accommodate the profit motive without creating undesirable consequences, with taxes. That does not automatically make them evil.
Libertarianism, unlike the confused views of the outside, does not permit having it both ways. So, you are out of luck here. Try a Rick Perry board.
Outside? You should try getting off the island once in a while. It is not taxes you oppose, it is the state, as you visualize it. But because the state has taxes, you hate taxes too. You remind me of the Queen of Hearts; “Off with their heads!”
I think I have said before, one way to define wisdom is the ability to distinguish one thing from another.
No I don’t.
I’ve misunderstood you on PDA’s?
My case against anarchy
Typo?
is that aggression, including state violence, violates rights and is illegitimate.
As I’ve said, we agree that aggression is bad, but not all state violence, if I assume I understand what you’re talking about, is aggression. That is a question of rights, which determines what acts are aggressive and which are defensive. There is an important distinction there.
This observation does not imply or rest on any viw about what I think private enterprise “can do”. But you are an unprincipled, fickle, pragmatic consequentialist, so I don’t expect you to even understand what I mean here.
Wouldn’t it be a mind-blower if somehow you figured out I know exactly what you mean, and still think what I think? It is not necessary that I misunderstand to disagree. There are other possibilities.
Your observation seems to be that the state in all its forms and manifestations is dripping with evil. You believe this because you opine that the state seizes power by aggressive force, and uses this aggression to remain dominant over its subjugated victims. Once it has this power, it uses it to achieve its own ends, and as the means to grant privilege to those it favors and to oppress those it does not.
You hold that all states, regardless of how they originate or what designs they adopt, move inevitably to totalitarianism. Your prescription for what we should do about it is: Let is collapse and try not to get hurt by the falling pieces. Once it is gone, cooperate with all of the gratefully liberated to keep it gone. Because you believe humans are logical and rational when not oppressed by the violent and illegitimate powers of the state, the free market will be the cornucopia of all that is needed for this paradise to prosper. Humankind will realize that the concept of a benevolent state was all an illusion propagated by the state propaganda machine, financed by the selfish crony capitalists.
Out of the natural state of stateless chaos, comprised of billions of unorganized and unrestrained humans now free from the aggression of the state, will emerge peace and order powered by the internet and entrepreneurs in a totally free market.
New codes of law will naturally emerge from a system of private courts and private security agencies just to make sure there are not technical problems that can’t be handled by forceful and decisive defense. You believe in Quasi-Earth.
Is that about it?
September 28, 2011 at 5:03 pmTaxation is theft regardless of who imposes it.
“But this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: ‘Your money, or your life.’ And many, if not most, taxes are paid under the compulsion of that threat. The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful. The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a ‘protector,’ and that he takes men’s money against their will, merely to enable him to ‘protect’ those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful ‘sovereign,’ on account of the ‘protection’ he affords you. He does not keep ‘protecting’ you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.”
– Lysander Spooner
September 28, 2011 at 5:46 pmYes, an interesting opinion from someone who wrote in wrote in the mid 1800′s, an anarchist, and whose post-office was put out of busines by the USPS monopoly.
I hope you don’t mind that I migh take some minor issue to his thesis? For example, I would not palce the highway robber above a legitimate governement, but that’s just me.
September 28, 2011 at 6:06 pmAhhh, but the government is not “legitimate”. Did you sign the Constitution? Did you agree to its terms? Did you send someone to represent you?
A one-sided, open ended contract is not a valid contract. It takes at least two, mutually agreeing parties.
I do not agree to the terms and conditions of the US Constitution. How can you justify imposing it on me?
October 1, 2011 at 6:33 pm“Did you sign the Constitution? Did you agree to its terms? Did you send someone to represent you? ”
I’m curious – what system exactly do you propose, one to which new born babies are able to sign up? Or when “should” children sign up and why?
If your point is that there should be nothing at all to actually sign up to, it would seem that only systems which follow logically from some assumptions can be “imposed” on new borns – there must be some argument that babies later in life once they learn to speak couldn’t possibly disagree with.
Do you agree? WOuld you care to point out what these assumptions/arguments are?
October 1, 2011 at 7:01 pmI’m curious – what system exactly do you propose, one to which new born babies are able to sign up? Or when “should” children sign up and why?
I decided on my terms when I started working, and bought a car, and rented a house. Actually I have a pretty significant number of social contracts and obligations that I must adhere to that I agreed to. 
Didn’t need a state government for any of it.
So one way they would be An-Cap style government.
Then the answer to ‘when should children sign up’ would be when are emancipated from their parents and decide to join the adult world. They then can choose to take on responsibility and adjust to society or they can deny it all together and go off and live in exile in the wilderness or whatever. (of which there is plenty of room for people that want to be hermits)
A less perfect, but probably more practical, approach would be to try to get to as close to ‘pure democracy’ as humanly possible. Which means to restrict government to the size of city-states were people have a wide variety of ‘official’ governments to choose from based on geographical location. In the case of the USA this would mean to relocate the bulk of State (as in like Nevada) and Federal power down to the county level through constitutional amendments.
The only reason the Federal government can be as terrible as it is is because it’s very difficult to escape it’s grasp. If we reduce the size of Washington DC’s influence to just Washington DC then that would solve a huge number of problems for a huge number of people.
October 2, 2011 at 11:20 am“Then the answer to ‘when should children sign up’ would be when are emancipated from their parents and decide to join the adult world. ”
So you agree then that parents are free to initiate at least some force against their children, without worry of any punishment, until such time as the child reaches some age (an age on which we would all no doubt disagree but lets leave that for now). Whether I agree or disagree with this is irrelevant – the question is, how does what you say follow from the NAP? Can you explain this to me please?
October 2, 2011 at 12:11 pm October 3, 2011 at 12:05 pm“since they are consented to by the child (by his parental agent-guardian)”
Well that makes no sense at all. What other scenarios are there where a “guardian” can make decisions about whether you “consent” or not for you and how does this follow from the NAP? I think you’ll find that it doesn’t.
October 1, 2011 at 6:48 pm“wrote in wrote in the mid 1800′s”
Oh, yeah.. forgot all those people who wrote in the past should be shrugged off..
“an anarchist”
Which no one chooses based on any merit in your opinion.
“put out of busines by the USPS monopoly.”
This is at best incomplete, if not downright inaccurate.
Congress intervened so that the USPS could compete..
http://books.google.com/books?id=wPmIGtrxXb0C&pg=PA27&dq=%22lysander+spooner%22+%22post+office%22+monopoly&hl=en&ei=fw9QTaryCcbngQfFqPnmDw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC0Q6AEwAA#v=onepage&q=%22lysander%20spooner%22%20%22post%20office%22%20monopoly&f=false
“above a legitimate government”
He made the argument shortly after a civil war, a war that should fairly clearly have settled the issue of whether the government really rested on consent of the governed. Clearly for a very large part of the country, it did not.
October 1, 2011 at 7:57 pm@Matthew Swaringen October 1, 2011 at 6:48 pm
Your points have some merit, but you assume too much about what I’m saying. I agree one could find the inferences you draw if you wanted to.
If you are asking…
No, we should not shrug off historical writers, but it can be helpful to keep in mind the historical context from which they are speaking.
I am sure anarchists see merit in their position, and reasonable people can disagree. But I think you can also agree that it is difficult sometimes to separate the ideology from one’s analysis, and that foregone conclusions have a tendency to smuggle in their favored assumptions. I think that is probably the case here.
The story about the USPS is admittedly incomplete. Thank you for the links. I was only pointing out that he was personally harmed by the system he criticizes, not that his criticisms are solely the result of his experience as a victim of state action in his business, but the again perhaps they are. There have been a number of milestones in the history of the USPS, and apparently it is not over, as they find today it is difficult to compete with private firms. I don’t claim to know the merits of the case here.
And yes, the motives for the Civil War were complex and there is much to criticize about the heavy-handed and in my view unfair actions of the north relative to trade tariffs imposed on the southern cotton exporters to the benefit of northern textile manufacturers. Not every historical event can be viewed as fair or legitimate with the benefit of hindsight. As to whether the outcome would have been for the better or worse had the south successfully seceded, we will never now. But it came with a terrible price, as all war does. Perhaps the rights of states to secede will be tested again soon. That seems like a remote possibility, but more likely today than 100 years ago.
Nonetheless, you seem to have gotten distracted by all of this, and missed my essential point, which is that anarchists have a tendency to equivocate the actions of a highway robber and governments in a very general way, and the views expressed here illustrate that observation, in my opinion.
I take your point regarding the North’s aggression on the South, but even that cannot be generalized to every single action that government has ever taken before or since.
That is too broad a brush, and reduces a complex subject to sloganeering. It is an effective metaphor, I agree, to prefer the highway robber to the conduct of government, but I object on the basis that the existence of the highway robber is one justification for the existence of the government you oppose.
It is not necessary for me to choose sides between the two. Robbery is a crime, no matter who perpetrates it. We apparently differ on whether the concept of crime applies to government in all cases and circumstances, but probably agree that it always applies to the highwayman. So I can be sure to consistently oppose the highwayman, but can oppose government only on a case by case basis. You and other anarchists seem to consider them equivalent, I do not. But that’s just me.
October 2, 2011 at 3:15 pm@Stephan Kinsella October 2, 2011 at 12:11 pm
No. The parent is just an agent for the child. He makes decisions for the child until the child is compos mentis.
If what Rothbard says is true, that all rights are negative rights, then how does a parent attain this right to act as the child’s agent? The theory of agency means that the agent acts with authority only within the scope of the principal’s consent to act. If the child is the principal, why would the child consent to acts of aggression in enforcing decisions contrary to the wishes of the child?
If you claim that the child is incapable of consent due to infancy, the how does the child consent to agency? If the child does not consent, what is the justification for aggression by the parent to enforce obedience?
In other words, by what principle does the child consent to parental agency, and then consent to forego the right to withdraw that consent? How does that wash with NAP?
Also, I also have to wonder how this washes with your criticism of the State for “inflicting violence on the innocent”? It is OK for “libertarians” to inflict violence in this case?
He is presumed to be the one to speak for the child, unless duties of parenthood are breached
By whom is he “presumed” to speak for the child? Who imposes the “duties of parenthood”?
If the parent uses force against the child to coerce obedience to the will of the parent, is that a breach of parental duties or is the parent’s failure to do so a breach? How do you distinguish between one kind of obedience and others? Can the parent require the child to play on the freeway?
So the parent can consent on the child’s behalf to certain manipulations and bodily touchings, so that they are not aggression, since they are consented to by the child (by his parental agent-guardian).
If a parent beats the child, then it is presumed by your rule that the child consents to this beating?
If the parent kills the child, and neither the parent or child has any living relatives, who enforces the rights of the child to his own life, or is that something he only obtains upon majority? Wouldn’t your theory ultimately imply that the child consented to his own murder?
Apparently Rothbard says that this period of agency last until the time that the child makes the voluntary choice to leave home and become independent. If a child remains in the house until 30 years old, does the parent have the right to murder the “child” with his consent? What if he is mentally disabled?
Are you saying that the parental right of agency, once established at birth, is unlimited until the child leaves home?
October 2, 2011 at 5:38 pm October 2, 2011 at 7:20 pm@Stephan Kinsella October 2, 2011 at 5:38 pm
In any case, he “attains” it because when in society you have rights-bearing agents who are temporarily incapacitated, or due to their nature as developing children, people will want to know what is consented to by the child, or on the child’s behalf. So the institution of guardianship (agency) will naturally arise, and people will ask: who is this kid’s guardian?
Naturally I already understand the elementary points you are making. The question is whether positive rights exist on planet Kinsella.
Such a theory of assumed agency by right of parenthood implies that parents have the positive right to impose discipline on a child, and the child has no negative rights against aggression by parents. That is the normative rule of which you speak, correct?
Of course, the default assumption will be the parents, do to their natural connection to the child. THis is really not hard.
Nothing is hard if you assume enough. We may agree to assume that the natural candidate for guardian of an infant is the parent, and further simplify by assuming there is only one, or the two agree perfectly on everything. What I’m asking you not to assume but to state explicitly is how this guardian fulfills their role without violating NAP?
And no, Wildberry, before you take your next leap: this kind of reasoning does not justify the state or social contract theory.
This question has nothing to do, or at least I am not asserting it does have anything to do with either.
Same reason I as a husband, if I have an epileptic seizure, might be deemed to have consented to my wife’s authorizing medical personnel to secure me physically until my seizure has passed.
Yes, I agree that under these facts we may assume that if you were not incapacitated by your seizure, you would reasonably consent to restraint.
But what if a parent decides it is not in the best interest of the child to learn to read or to take medicine? Is that still OK and squares with NAP?
But unless you want to argue this [infanticide] , the infant has rights, but it obviously unable to fully exercise them, so his guardian does in his stead.
You are assuming that everyone in the “community” agrees that what the parent decides is in the “best interest” of the child. That does not present much difficulty in a discussion of the relationship of rights between the parent and child, and the operation of NAP. I am asking you to assume a negative case, where there is disagreement about what “best interest” means, and tell me how the application of NAP sorts that out. As Van Dun points out, it is a strict liability rule. If it is really not hard, walk me though it.
Really. Wildberry, this is not very difficult. And no, it does not justify the mass violent aggression of your cherished state.
meh
The state may not aggress against innocent victims, no offense you. The parent may decide for the child for things in his interest. There is no conflict.
This seems like a good rule. I am wondering how it works in this case, where we assume there IS a conflict. That is what illuminates how the NAP is applied consistently.
By those in the community.
Well, that is a rather large leap, isn’t it? In this community, I presume there is uniform adherence to NAP. I am assuming there is some conflict between what some see as being in the interests of the child, and therefore within the scope of this agency concept, and what others see as being against the child’s interests. How does NAP apply such that strict liability can be assigned to the correct party?
Are you saying that the agency powers are unlimited, or they are limited only by the most obvious standards, like murder? I am asking who seeks justice for the child who has no advocates, since obviously the child cannot hire a PDA.
Does the “community” assume the enforcement responsibilities for anyone that lives within a territory? Does the parent decide which community, and therefore what rules the child lives under based on what decisions the parent makes under its agency authority?
If the child is beaten the day before he wanted to leave home, because the parent believed it was in the best interest of the child to stay home, is that OK and within the limitations of NAP?
The parent does by becoming a parent.
OK, let’s agree; the parent assumes the duty of guardian/agent by the act of becoming impregnated and delivering a child. Let’s assume that child turns out to be mentally deficient, and will never reach an age of competence. The parent decides that it is in the best interest of the child to stay locked up in the basement. Can the “community” trespass on the land of the parent and take the child against the will of the parent? Whose rights prevail, the agency rights of the parent, or the individual rights of the child?
Whatever agency would defend the rights of unrepresented people.
OK, what agency in the Ancap world protects the rights of underrepresented people? I have given an example; a murdered child who has no relatives other than the murdering parent. Who protects that “underrepresented person”? I think Kathleen Touchstone has argued pretty persuasively that under Ancap, there is no such agency.
But perhaps she is wrong? You have an explanation? If you have an answer, I would be interested in the reason such an agency would endeavor to seek justice for a victim who cannot pay, and how the expense of such an agency is funded through market forces.
Of course there could be other penalties imposed on the parents here–ostracism etc.
Of course, but I am not raising the question of methods or effectiveness of various forms of coercion.
BUt in most cases there are other people standing in line to take the child from the abusive parent: uncles and aunts, grandparents, older siblings, cousins, even close family freinds, or rescue charities.
Again, yes we can assume that, but it is not the case I am presenting. I’m asking what happens with the child who has no advocates that depend on these types of motivations. It is reasonable to assume that relatives or even childless couples would seek to intervene on the child’s behalf. That is the easy case. I am asking you for some explanation of the more difficult case, where the child has no relative save the wrongdoer. Does the child have a right and a cause of action only if some advocate steps forward? What is the strict liability case, where wrongdoing as defined by the legal rule holds the actor strictly liable for their acts.
If the parent is the agent of the child, and the child cannot consent, and the parent exercises her right to act is a way that raises the question of prevailing rights between the parent and child, how does NAP work to provide for justice under a strict liability rule?
To put it another way, if positive rights do not exist, the parent has a free hand? Or can the rights of the child can be expressed in terms that result in retribution even if there is no advocate to pay for it, and even if the victim cannot be compensated for their loss.
If positive rights do exist, then a violation of those rights is aggression and violates NAP. But Rothbard says there are only negative rights; i.e. freedom from aggression. How are the marginal cases of parental discretion interpreted such that I can understand how to apply the strict liability rule?
It should be easy to demonstrate to a neutral forum that the child would not consent any more to guardianship by the abusive parents, and would consent to the next one in line instead. Again: this is not difficult;
Yes, I agree that a neutral forum (how does the child with no relatives or assets pay for that, especially if dead or disabled?) would find it easy to recognize murder and similar cases of abuse. But what about the marginal case that I’ve raised, like the right to read, or to take drugs, or the rights of someone mentally incompetent? I’m not saying there is not an answer; I’m just asking what it is?
and, again: no, Wildberry, none of this justifies the state.
I agree, but that is not my question. In fact if I can understand how the NAP works in this case, I think it is a strong argument that the state, at least in this instance, is not necessary to the administration of justice.
No. The parent’s guardian authority is limited by the duty to care for the child.
OK, so the parent has a duty to satisfy the positive rights of the child to receive “proper care”? That conflicts with Rothbard, I think. Also, any need to define “proper” so that strict liability applies? If not, then how do you deal with the ambiguities of facts in the application of NAP?
If I loan you my car does this mean I consent to you running me over with it? No, of course not. He authority is circumscribed by purpose and context–again, no offense, you.
Yes I agree. You are an adult and competent (for the sake of argument) and if you survived, you would be able to argue that your consent for me to use your car did not include consent to run you down with it. If you didn’t survive, are you assuming that one of your relatives or friends would put up the cash to come after me with a PDA?
It is exactly the “purpose and context” that I’m asking about. It is trivial to understand this when the facts present an obvious case. If we assume vehicular manslaughter, it is not difficult to apply strict liability. If however we assume some marginal case, where the distinction between aggression and non-aggression is beyond the third-grade level, like say a parent’s use of corporal punishment for a child’s choice of clothes, reading material, or music, then it becomes a little harder to say what is aggression and what is not. I’m asking you to help me see the light.
No worries, I am well conditioned to not be offended by you.
October 2, 2011 at 8:43 pmAnd what happens when the child initiates violence? I know it is very very rare but it might happen.
Wildberry, there is a wonderful interview with Tibor Machan here:
http://www.thedailybell.com/3020/Anthony-Wile-Tibor-Machan-on-Private-Morality-Versus-Government-Perfectionism-and-Who-Wins-
September 28, 2011 at 11:21 amThe problem is that the state does not just ‘offer’ services. Some services are ‘offers’ others are completely involuntary. And what is more the payment for these services are completely involuntary… you are forced to pay for the services whether you use them or not. That’s the fundamental problem with Warren’s logic here. The government does not ‘own’ services it ‘offers’… It uses violence to get what it wants. It’s not a voluntary exchange. There is no market going on here and the rules of peers in a society do not apply because of the use of violence.
The relationship that the government has with society is much more akin to mafia extorting shop owners then a business or individual offering garbage collection or lawn care.
If you do not pay the state for their ‘protection’ and their ‘services’ they ‘offer’ they will send gangs of armed men to your house to seize your property. They will ruin your livelihood, destroy all your relationships, and if you resist they will throw you in a cage like a animal. If you resist strongly enough they will simply gun you down in the street.
Having the desire and ability to use violence to get what you want is fundamentally corrupting. It doesn’t really matter who is in government, or what a piece of paper from 200 years ago says, or if it’s a democracy or not… the state is going to do evil things because it’s made up of enough selfish people who sole purpose in life is to attempt to gain much with little work. They use violence because they can and because it’s profitable. It’s fundamentally corrupt. Not just corrupting… the corruption is necessary for it to even exist.
Maybe it’s true we need to use evil to counteract evil. But lets never pretend that the state is our friend or that it chooses to exists for our benefit. It’s a rabid dog on a lose leash at the best of times.
September 28, 2011 at 11:38 am@nate-m September 28, 2011 at 11:21 am
Which “offers are “completely involuntary”? Is the standard you use that say, if you don’t use a road, you should be excused from the tax bill to the extent that taxes are used for roads?
Also, what is it that the “government wants” and is willing to use violence to get it?
Also, your analogy to the Mafia is also misplaced. One distinction between the Mafia and government (at leas a democratic form) is that the only way to get rid of the Mafia is by superior force. To the extent that is also true for the form of government you oppose, I might agree. This is the problem being faced by those participaing in the Arabian Spring.
But how does your view change if you distinguish a form of government subject to fair elections? Any difference?
September 28, 2011 at 1:41 pm
September 28, 2011 at 1:55 pmI’m curious to know about a form of government subject to “fair” elections. Every state in the U.S. has restrictions on independent and third party candidates, some more restrictive than others. Is this fair? And even if it is, is it fair that a majority of voters get to force their will upon the minority?
Exactly how are “fair” elections supposed to protect freedom, and not just the will of the majority or a powerful minority?
And if you want to actually vote on an issue, and not just on a candidate, ballot initiative petitions are as difficult to put up as third parties, or worse. What does it matter if you can vote if someone else controls who or what you are voting on?
September 28, 2011 at 4:41 pm@ Michael A. Clem September 28, 2011 at 1:55 pm
First, you are holding up a system that is twisted and contorted and corrupted beyond recognition of the fundamental principles I reference, and then challenge me to defend it. That is not what I’m about. What we have sucks, despite all the whining Kensella does about me being a “tool”.
I can agree with you about all of these things you say, and still not hold that the US design for government is equivalent to the mafia or Libya.
Exactly how are “fair” elections supposed to protect freedom, and not just the will of the majority or a powerful minority?
In theory or in practice? Even with a flawless theory, determined special interests can hijack the means for their own selfish ends. That is the basis for mercantilism, etc.
As to the will of the majority, do you acknowledge that we have limits of individual liberty that cannot be infringed by a majority? If so, then you have to temper your rhetoric to accommodate to that fact. This is the classic “tyranny of the majority” problem that Kinsella thinks is the concept of a “howdy doody civics class stooge”. I happen to disagree.
And if you want to actually vote on an issue, and not just on a candidate, ballot initiative petitions are as difficult to put up as third parties, or worse. What does it matter if you can vote if someone else controls who or what you are voting on?
I agree with you. The question I am asking about is not whether you support everything you see around us, I am asking about the ideal, and the principles of that ideal. I do not think we need a blank piece of paper to fix things, to evolve beyond the mess we find ourselves in. Thank God for that!
I do think we need to be clear about what our ideals are and why we hold them. I have ideals concerning the concepts of self-government. My ideals are not tied to an unshakable commitment to “hate the state”, especially when, at least among the small population that occasions Mises.org, there is such diversity of meanings applied to the word “state”.
September 28, 2011 at 4:56 pmThe “ideal” of democracy is majority rule–simple as that. To provide protections for the minority means to diminish or dilute democratic ideals. Admittedly, the U.S. was not strictly intended to be a democracy, but a constitutional republic. But alas, the ideals of a constitutional republic are a bit more hazy, as there seems to be no particular principle that it adheres to.
September 28, 2011 at 5:04 pm October 1, 2011 at 8:16 pmMichael and Stephan,
I think you illustrate perfectly my point to Matthew.
Certainly, the ideal of self-government based on principles of equal representation does not rest on the purpose of “initiating violence against innocents”.
Likewise the ideals of a constitutional republic do not exist as means to that end.
A constitutional republic rests on the ideal “of the people, by the people, for the people” which in a very general sense, is a fully a libertarian ideal. You are simply objecting on the basis that it fails to achieve that end. I say that to the extent it serves that purpose, to empower the governed to govern themselves, it is legitimate means to a legitimate end. To the extent is does not, it should be opposed.
One way to view wisdom is the ability to distinguish one thing from another. Wisdom is much harder to attain and act upon than mere sloganeering.
The blanket statement that “government initiates violence against innocents” is better suited to a bumper sticker than anything else.
September 28, 2011 at 1:26 pm
September 28, 2011 at 11:36 amYup, it is an all-too-common argument to morally justify taxation is that public services (schools, roads, libraries, etc.) enable people to make a living. For instance, Bill Gates benefited from many of those government services.
The problem with this argument is that it has no logical limit, it proves too much. It would justify that government owns all your labor and even your life.
Fundamentally, because those tax-funded services are “free” (no price tag), it is impossible to determine what you owe, therefore you can never be done and clear.
Instead you have a “pact with the devil”, for which you cannot opt-out.
September 28, 2011 at 2:58 pmYou, Stephan Kinsella private citizen, do not have the right to unilaterally refuse to pay a tax that has been legally imposed. You Stephan Kinsella citizen/activist, DO have a right to organize your supporters and repeal that same tax, if you can.
Seriously? It’s morally okay as long as it’s legal? That’s your argument?
September 28, 2011 at 3:27 pmOf cousre; he’s a moron legal positivist; an apologist for the state. In a just world he would merely be a technical problem.
September 28, 2011 at 4:51 pmThank goodness you are not the Sultan of Justice.
This sounds suspiciously like a “final solution”.
September 28, 2011 at 5:06 pmYou mean like the “final solution” to the Indian problem that your beloved legitimate democratic US government focused on, while exterminating the Plains Indians? I guess they were not victims. After all, they “had options”.
September 28, 2011 at 6:52 pmNow I’m personally responsible for the Indian Wars? Next I’ll be the creator of measles.
No, I mean like Hitler’s final solution, as you know. It makes me feel grateful you are mostly powerless when you refer to me as a “technical problem” in want of a “just world” as you define it.
September 28, 2011 at 8:08 pmWildberry,
In a libertarian society your endorsement of institutionalized violence against innocent people would be a “technical problem” because you would lack the power to get away with it.
Whereas today you present a much more meaningful problem because the government you endorse is actually committing aggression and getting away with it, in part because of the approval of people like you. You might say you don’t approve of the violence, but you approve of the system that enables it, so that is a moot point.
September 28, 2011 at 8:52 pmAnthony,
It seems to me that the endorsement of institutionalize violence against innocent people would be more than a “technical problem” in any society that is not organized around conquest.
Is it permissible that I question whether your use of “violence” and “innocence” might be debatable?
If the mere levy of taxes is aggression, by our definition, then I understand one of our differences, since I can imagine a situaiton where they exist by mutual consent, quite apart from the issue of whether what you have in mind is or is not such a case.
If I say I categorically oppose violence that is aggressive, meaning non-defensive, why is that contradictory to the position explained above?
If you read through what I’ve posted, I have not actually said what I support. I have objected to the premise that taxes, by definition, is either theft or aggression. That may not be the case in every circumstance.
Let me ask you what I posed to Kinsella; in Dun’s Quai-Earth, where libertarian principles are followed faithfully and voluntarily by every inhabitant, is the very concept of taxes beyond possibility?
September 29, 2011 at 12:18 pmPerhaps what needs to be done is to ask what definition of the word ‘tax’ everyone here is using.
When Kinsella and most others around here say the word ‘tax’, I believe they are referring to an involuntary charge, levied for the government, which is theoretically taken to pay for services provided. The problem is that those services are also involuntary. When the word ‘state’ is thrown around, a government which engages in that kind of behavior (involuntary services, involuntary taxes) is also being referred to.
I’m sure you can see why that’s considered aggression, or theft. Quite simply, I don’t consent to a lot of the things the government does. I object to the War on Drugs; I object to the War on Terror; I object to the vast majority of laws and regulations. But I get to pay taxes anyway, taxes which go to support all those things.
Is there a way to change those things? Yes. Theoretically. But. . . why should I have to change them? Why can’t I just not participate? I never signed any contract, or made any agreement. I certainly never agreed to any penalty clause for leaving the system. Government is supposed to be providing services, right? Making life better for people? Well, I don’t think my life is better than it would be. So how about I simply don’t pay taxes, and then don’t demand government services? I’m not receiving service, so I don’t pay for it. Fine. Let the people who benefit from the government pay for it, and the people who don’t won’t, and everyone will be happy.
Except, uh, no. That’s not allowed. If you try, the government does, in fact, send armed men who throw you in jail and steal your possessions. THAT is aggression. It’s unjustified use of force. You weren’t hurting anybody, or infringing on anyone’s rights. You just wanted to live your life without either demanding help from the government or giving them any of your money. The aggression comes in once the government declares that isn’t an option.
Could there be a libertarian government? Sure. It would be voluntarily funded by donations from members (can’t call them ‘taxes’, really, because they have very little in common with the involuntary tax system), who would all have contracts stating the fees charged and the services provided. If one of them stopped paying, he would stop receiving service. Now, since the government would likely want people to join, they would have a very strong pressure to develop efficient and just laws which would reflect the desires of their members. If they didn’t, dissatisfied members would leave, and might form their OWN government, which reflected their desires better. In time, one government might lose all its members to other, competing governments, and end up going. . . bankrupt. . .
Say, wait. This sounds suspiciously like a free market in government. Isn’t that one of those crazy anarchist ideas?
September 29, 2011 at 12:51 pmQuick correction; I made an error my post above. Strike out “donations” in the sixth paragraph and replace with “fees”.
September 29, 2011 at 1:01 amYour? Beloved? What do Libertarians think when a someone shoots dead a cop? Why should anyone who thinks government should have a place in society be obliged to defend any and every government action?
September 28, 2011 at 4:50 pm@Michael A. Clem September 28, 2011 at 2:58 pm
Seriously? It’s morally okay as long as it’s legal? That’s your argument?
No. That is not my argument. Morality is matter of opinion. A law may both be legal and immoral.
In my opinion, in the face of an immoral law, like slavery, the citizenry is morally bound to abolish it. If there are legal means for doing so, bloodshed may be avoided or at least minimized. If there is no legal means, the only way to change is through violence.
Therefore, a system of government which provides for legal means to change its own laws is more consistent with principles of peace and liberty than one that does not.
If you live in such a government system, and to not avail yourself of the legal means to achieve your objectives, based on your personal moral convictions, you have no one to blame but yourself.
That is my argument.
September 28, 2011 at 5:05 pmMorality is matter of opinion.
Is THAT a matter of opinion?
A law may both be legal and immoral.
Hmm, can a law be both illegal and moral? Or do you not have any clue as to what you are talking about?
September 28, 2011 at 6:58 pmYes, it is. I think that is not a matter of fact is obvious.
Yes, that is another possibility, legal and moral.
Yes I do.
Any more questions?
September 28, 2011 at 5:12 pmIt is too late to work within the system, and too soon to shoot the bastards
– Claire Wolfe, 101 Things to do Until the Revolution
September 28, 2011 at 5:22 pmSo if a law is legal and immoral, why do you consider it wrong to disobey it? Can’t disobedience be a part of the process of abolishing it? And if not, how many people must suffer the injustice of obeying an immoral law or be prosecuted for disobeying it while one goes through the tedious and expensive process of abolishing it (worse if the special interests who had it created are more powerful than those who wish to abolish it)?
September 28, 2011 at 6:56 pm@Michael A. Clem September 28, 2011 at 5:22 pm
Sure, why not? Civil disobedience is a long and honorable tradition.
If those with a moral conviction find that they face more powerful forces, they have to figure out a way to prevail. That is the history of liberty.
Doing that while holding to higher principles, like non-violence, (unlike the quote here offered by Mr. Whipple), makes it a tricky problem.
September 29, 2011 at 1:03 amAre you going to complain when you get caught or are you going to take it on the chin?
September 29, 2011 at 3:24 pmIf one were to get caught disobeying an immoral law, I would think that that would be an excellent time to take advantage of the media attention to make one’s case against the law. That is, IF one is disobeying as part of a strategy to abolish the law, and one is not complaining merely because they didn’t get away with it.
September 28, 2011 at 6:48 pmI’m surprised it has not been stated here yet. The obvious and most ridiculous error made by Warren is that she has the proverbial cart before the horse. She argues that private individuals and businesses generated their wealth because of the facilities and contrivances “provided” by the government. It is precisely the opposite. It was the wealth generated by private individuals and businesses which enabled the government(through taxation[read: theft]) to “develop” those “public services” that she lauds.
(I must tip my hat to Peter Schiff as he is the one I first heard make this point on his radio show last week.)
September 28, 2011 at 9:11 pmWildberry: “In my opinion, in the face of an immoral law, like slavery, the citizenry is morally bound to abolish it. If there are legal means for doing so, bloodshed may be avoided or at least minimized. If there is no legal means, the only way to change is through violence.”
Wild, IMHO, you are wrong in your assumption that the alternatives are legal means or violence and bloodshed. Unquestionably the most effective tool against the repressive State–all States are repressive–is nonviolent, adamant resistance (peaceful persistent lawbreaking), such as was advocated and successfully practiced by MLK, Gandhi, Welesa, Mandela, those resisting E. Germans and resisting Russians, to name only a few. As you say, people are morally bound to abolish immoral laws like slavery and taxation, and with the abolition of forcible taxation the State, as we know it. is doomed. Of course, as we witnessed during the “Arab spring,” civil disobedience can and often does result in violent repression by the State, which is to be expected from such an evil institution, but if those resisting remain peaceful their prospects of success are greatly enhanced.
BTW, what difference do you see between State-sanctioned slavery and State-sanctioned taxation?
The State itself is an immoral (viz., evil) construct because its immunizes its agents from the just consequence of their actions, which, in many instances, are blatantly criminal, including such heinous crimes as murder and extortion. Without their State-granted immunity, every IRS agent would be doing time, and the congresscreeps, bureaucritters, presidents, and judges who conspire in the illicit act would be convicted as accessories before the act, and citizens who shared in the loot would be found guilty as accessories after.
September 29, 2011 at 11:11 am@Ned Netterville September 28, 2011 at 9:11 pm
Wild, IMHO, you are wrong in your assumption that the alternatives are legal means or violence and bloodshed.
Yes, you are right. I meant to convey that in my earlier comment regarding civil disobedience. True, those are not “legal means” in all cases, but such non-violent protest is a legitimate means, and often within legal bounds.
However, I want to remind you that in the cases you cite there were not state-established and sanctioned means to bring about peaceful revolution, including the abolishment of immoral or even unpopular laws, or to replace even the system of governance. That is an important distinction, don’t you think?
As you say, people are morally bound to abolish immoral laws like slavery and taxation, and with the abolition of forcible taxation the State, as we know it. is doomed. Of course, as we witnessed during the “Arab spring,” civil disobedience can and often does result in violent repression by the State, which is to be expected from such an evil institution, but if those resisting remain peaceful their prospects of success are greatly enhanced.
Of course, but how does your argument accommodate a state that provides for a peaceful means for its own demise?
BTW, what difference do you see between State-sanctioned slavery and State-sanctioned taxation?
Slaves do not have the means, at least legal means, to vote for their own freedom. That is a crucial distinction.
The State itself is an immoral (viz., evil) construct because its immunizes its agents from the just consequence of their actions, which, in many instances, are blatantly criminal, including such heinous crimes as murder and extortion. Without their State-granted immunity, every IRS agent would be doing time, and the congresscreeps, bureaucritters, presidents, and judges who conspire in the illicit act would be convicted as accessories before the act, and citizens who shared in the loot would be found guilty as accessories after.
You seem to be lumping all states in a big pile, and make no distinction between Stalin and FDR. Look, you did not personally vote for speed limits, right? Are you saying that anyone who drives should be immune from them unless they personally vote to support them? At some point that position becomes ridiculous.
I understand you think all forms of government are just well organized conspiracies to oppress the citizens. But I don’t think you are stupid or dishonest because you hold this view. I think you are wrong, but reasonable people can disagree.
It seems to me that a government based on a principle that reasonable people who have disagreements can peacefully coexist is not all bad, in every circumstance, absolutely.
September 29, 2011 at 2:59 pmDon Boudreaux also picks apart Warren’s broken logic: http://cafehayek.com/2011/09/still-unwarrented.html
Stephan Kinsella is a libertarian writer and patent attorney in Houston, Texas. He has published widely on various areas of libertarian legal theory and on legal topics such as intellectual property law and international law. His publications include Legal Foundations of a Free Society (Papinian Press, 2023), Against Intellectual Property (Mises Institute, 2008), and International Investment, Political Risk, and Dispute Resolution: A Practitioner’s Guide (Oxford, 2020).
My Failed Libertarian Speaking Hiatus; Memories of Mises Institute and Other Events, 1988–20192025
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Yes, he probably should, because he helped cause it–in the sense that Pat Tinsley and I lay out in the Causation article linked above.
Where is the case? I don’t think this case can be made. Some do. Not all, or even most, IMO.
If Bob knew about the purpose, then anybody would agree. If not, it’s a different story, and every state around the world disagrees in principle, because they immunize every officer that is responsible for the abuse. The state simply claims capricious power to apply the principle at whim.
If Bob knew about the purpose, then anybody would agree. If not, it’s a different story, and every state around the world disagrees in principle, because they immunize every officer that is responsible for any such abuse. The state simply claims capricious power to apply the principle at whim.
I didn’t think I was unclear:
Your “Labor Theory of Value” paragraph simply has no place in this piece. Apart from falsely characterizing the LTV as universally characteristic of left-libertarians (which is apparently its intent), it serves no function whatsoever. It neither introduces nor illuminates any of the subsequent material.
Well, that’s kind of the point.
You didn’t throw in a paragraph falsely claiming all left-libertarians prefer pistachio ice cream.
Or a paragraph falsely claiming all left-libertarians practice bestiality.
Why throw in the false LTV claim, since it has nothing to do with the piece?
You just changed the claim to “some” left-libertarians. The original claim was universal in scope. I can prove the original claim wrong with two four-word sentences:
I am a left libertarian. I am an Austrian subjectivist.
QED, not all left libertarians are LTV supporters.
All that said, my objection is less that the claim is false than that it has nothing whatsoever to do with anything in the rest of the piece. It’s as relevant to the question you’re addressing as the pistachio or bestality claims would be, which is to say not relevant at all.
I don’t remember making it universal. But if it was, I would agree that it is wrong insofar as some self-described “left-libertarians” reject this hoary doctrine. Okayyy. But then, you would need to carefully and rigorously define what ‘left-libertarian” means.
Okay. I am glad.
So, may I assume you join me in rejecting the LTV views of the other left-libs?
Right–so it’s like an editor’s comment. THanks, and as I said, it was jsut a blog post.
blockquote> It’s as relevant to the question you’re addressing as the pistachio or bestality claims would be, which is to say not relevant at all.
IT seems to me that what is relevant is substantive truth and accuracy, not the “appropriateness” of the placement of a given commentary.
I reject all variants of the Labor Theory of Value of which I am aware, regardless of whom is advocating for said theory.
“Value” is entirely subjective. What is something worth? Whatever it’s worth to the person valuing it.
Even the instrument of “price” doesn’t reflect some imaginary “objective” value. All that can be said about the price of an unsold item is that it reflects at least the lowest value its would-be seller places on it, and that nobody’s come along yet who places a higher value than that on it. All that can be said about price of a sold item is that it sold for at or more than the lowest value the seller placed on it, and for at or less than the highest value the buyer placed on it.
I am glad you say this, but elsewhere you said:
This implies, I am afraid, that you “own” your “labor” and its “results”.
This is a strawman, one of so many in this article that I can’t even begin to count them let alone address them all. For this one let me just say, no one need assume anything of the sort, and I doubt anyone so assumes. No owner (stockholder) of a business “gives” it money. An owner either creates the business by an initial investing, or buys it as a going concern. Obviously how ownership is obtained has no affect whatsoever on the pit bull’s behavior nor on whether or not the reactor core melts during a tsunami. Nor does this point have any place in a *rational* argument. Like the argument in total, it is a lawyer-like attempt to ameliorate if not eliminate the personal responsibility involved in human action upon which liberty utterly depends.
If I were to characterize the argument in this article, as it characterizes any imagined opposing view, the kindest thing I could say is that it is silly. Not only is personal responsibility compatible with libertarian theory, it is the ultimate foundation of liberty. The author’s attempt to relieve owners of responsibility for their pit bulls or their dangerous operations engaged in for profit is essentially an attack on individual liberty in the manner of a lawyer defending a losing cause with one frivolous argument piled upon another until the judge finally orders her to “shut up.”
I could pick the rest of the article apart straw man by indirect ad hominem aimed at whoever might have the temerity to oppose this sanctimonious view, but suffice to say again that the only “vicarious” relationship is a figment of a creative imagination. And if my counter to this diatribe should be characterized as left-libertarian, I would have to classify this article as pure statist, but that would be adopting the methodology of this author’s endeavor to oppose personal responsibility and the individual liberty resulting therefrom.
There are other good reasons why corporations, which are purely products of State legislation, are harmful to liberty not addressed by the article. One big one is the so-called “legal fiction,” which holds that corporations are “persons” for the purpose of standing in legal proceedings. As a direct result of this fiction, many court rulings (including those of the Supreme Court) have been made in cases wherein the parties were the State and a corporation which established important precedents, which precedents were later applied to cases involving the State and individuals as though the latter were equivalent to corporations and without the human rights that can only be claimed by individuals. An example of this is the famous case of Brushaber vs. Union Pacific Railroad (http://laws.lp.findlaw.com/getcase/us/240/1.html), in which SCOTUS declared that the newly enacted federal income tax did not violate the Constitution as claimed in that case and therefor Union Pacific must pay it. From then (1916) until the present, that case has been cited in lower federal courts as having determined that the income tax was constitutional. It has been cited as precedent to deflect thousands of cases of individuals who have tried to challenge the constitutionality of the income tax as applied by the IRS against them, even though Brushaber never even considered the constitutionality of the income tax as applied to real individuals who are not legal fictions created by State legislation.
The State and corporations are so intimately tied to one another that defending the latter is virtually defending the State and its illicit powers, without which no corporation has ever existed.
Mr. Kinsella, I’ve embraced your arguments in opposition to intellectual property. IMHO, in this case you’re case falls flat.
Well you are just buying into the state’s classifications. Who says he “is” an “owner”? Ownership is the right to control. What resource does he have the right to control?
well if you call him an owner, as the state says, I guess you are done! How convenient for you. And why, again, does the right to control a resource imply that you are responsible for harms caused with that resource being used as a causal means? I realize you just want to rely on this without justifying it –but bear with me–how do you know this?
Is your chauffer or delivery man your property? do you own him?
Again, you are speaking simplistically. Did you read my post? I explained the problems with assuming ownership implies liability. And in any case, the owner of a corporation owns property, not people. Helloooo
So…. if a fedex truck driver runs you over, he is not really there?
Well that settles it, then! Let’s hang up libertarian theorizing–the “world” has “established” the “right way” to proceed!
Ah, well when you put it that way it’s all settled! Wow.
So… owning a piece of paper that represents a legal title to a sliver of a legal claim to the assets of a firm upon dissolution is … “dangerous”, “like” a pit bull? Wow.
It’s not a strawman at all. Since you ignorami cannot even articulate a coherent explanation of how corporations work much less what is your theory of rights or liability or causation, I am tyring to help you out by charitably articulating your implicit views for you.
This sounds like an amateur observation by a clueless grad student in a dorm room session bullshitting about stuff they have no clue about. With David Letterman playing in the background, and the whiff of Mary Jane from the suite-mate next door. Good for you! But when you buy a share of Exxon stock from a previous owner, using the stock market to facilitate the exchange, how do you “buy it”?–and what is “it?”; as a “going concern”–and pray tell, what is the relevance of GAAP terminology like “going concern” to libertarian theory? methinks you are utterly clueless.
We look for someone to blame, to take responsibility for actions that cause harm to others. When a corporation is the face of that blame, it rarely suffers as a private individual would. Even something as seemingly insignificant as social stigma can have a heavy effect on an individual and the way the rest of society relates to them – conversely, a corporation can perform a whitewash, pay off some directors and replace them. It is harder for an individual to do this, “finding God” may work once with one or two people but, generally ‘man’ is viewed by their actions. The corporation can blame previous corporate culture (ie the actual “real” people) and continue on with little real consequences after time.
If Dr Evil is responsible for forcing native Australians into slavery to ensure profits in his pearl diving industry, Dr Evil may well have his life shortened by someone who cares (I am being extreme only to stress a point). The Dutch East India company will simply replace their pearl diving manager with another individual who will likely carry on the same business practices.
Netterville was more thorough in his analysis of your paper, and I find his points compelling. I have tried to limit my position, to this single point of “responsibility and consequences”.
A share of stock in a corporation is an undivided ownership interest in the assets of that corporation.
Because it’s an undivided interest among many, control is exercised through collective instrumentalities, and there are options for exercising more control (common stock) or less control (preferred stock) as compared to other owners of interest, but the claim that control is not exercised is absurd.
“Is your chauffer or delivery man your property? do you own him?”
I own his work — that’s what employment is.
That’s how the state’s positive law classifies it. So what? Is it libertarian? Is it accurate? Do I, as a Google share owner, have a right to use the HQ for a meeting or the google corporate jet for transportation?
In any case: you guys seem wedded to the conventional notion that if you own something you “are” “responsible” for “it”. Why? This is not libertarian. Ownerhip is the right to control. It does not mean you are responsible for anything involving those means, unless you employ them as means.
Well I don’t think Rothbard, Pilon, and Hessen’s careful arguments about this are absurd.
Nonsense. You are in thrall to imprecise and metaphorical–maybe leftish?–concepts. No one owns “work”. Not the worker, not the employer. Work is just an action. You don’t own your actions. This is nonsense. It leads to confusion and imprecision. You own your body. Period. Not your “work”.
Like you say, ownership is the right to control.
You have the right to control — in other words you own — your actions.
The employer-worker relationship is an agreed transfer, on given terms, of ownership of the right to control certain of one’s actions, e.g. “from 9am to 5pm, Monday thru Friday, my hands will be doing what YOU want them to be doing rather than what I’d otherwise have them doing, in return for which you shall pay me $X.”
I disagree completely. First, the employment relationship is NOT one of slavery. The employer does NOT own the employee. HE does NOT own the employee’s body, or time, or actions. Rather, he transfers title to money on the condition that the employee use his body to perform certain specified actions. The employee’s ability to control his body, combined with his legally recognized right to his body, gives him the legal and practical ability to decide to perform an action to trigger the payment, or to withold services to induce the employer to enter into the bargain. IN short: the employment agreement is a one-way transfer of title: of money, which is conditionally transferred upon a certain specified triggering condition (which happens to be an action the employee can perform). But the action is not owned by either the employee or employer.
Right?
I find your elaborate construction more confusing than my simpler one.
Energy and the direction of it (“action”) are scarce resources, and I own some of them by virtue of having created them from other scarce resources (e.g. food) which I homesteaded or otherwise honestly acquired.
Since I own them, I can sell them. And in a wage labor scenario, that’s exactly what I’m doing.
As an example, when I worked at a factory where boat trailers were built, I was not selling the factory owner X trailers per day. Sometimes I came to work and was put to work loading trailers onto trucks for shipment. Sometimes I came to work and was put to work on the assembly line, hanging trailer parts on racks to be run through a paint sprayer and oven. One time, for about two weeks, I came to work and was told to get in a minivan and pull this or that trailer to this or that boat factory so that the fit between prototype boat and prototype trailer could be tested. The result of my work and the work of others was X trailers, but that’s not what the employer was buying from me. He was buying the use of my body and my energy at his direction for a set period of time.
As a side note, I don’t consider commodification of labor or the wage system to be inherently exploitative in some evil way as some left libertarians seem to. I suspect that the incidence of wage labor would go down, and its price up, in a freed market, but my toes would still be tapping if that were not the case.
Okayyy… but… so? this is an irrelevant comment, and distracts from substance.
No you don’t. This is all confusion and liberal arts metaphorical nonsense. You don’t own energy, or the “direction of it”. Now you wonder why I accused you guys of falling prey to a version of the labor theory of value.
Wrong. This does not follow at all. A huge confusion. Owning something does not mean you can sell it: for example your body (or do you believe in voluntary slavery?!).
And selling something does not mean you own it: You do not own your actions but you do own your body which gives you the ability to perform, or withhold, certain actiosn and thus “exchange” or “sell” them for payment.
“And in a wage labor scenario, that’s exactly what I’m doing.”
No, it is not “exactly” what you are doing at all. In a wage labor “scenario,” you are simply using your rights over your body to induce an employer to agree to transfer title to money to you if you perform certain actions. That is all. It is a one-way transfer of title. There is no *legal* exchange.
Right: legally speaking you were not “selling” anything, since you did not part with title to anything that you owned. How hard is this to grok?
Economically, he gave you title to his money, in “exchange” for getting “what he wanteD” which was your “doing X”. But that does not mean you owned X, or that you transferred title to X or to “doing X” to him. This is just a confusion. You guys really need to read Rothbard’s title transfer theory of contract. Sheesh.
I don’t either, but I really don’t care if it is, since “exploitation” is not aggression, and thus exploitation, whatever this means, is not a rights violation.
How else would one interpret relationships within an institution created by state fiat than with reference to “the state’s positive law?” Get rid of the state’s positive law and the corporation doesn’t exist, so the question goes away.
The right-libertarian argument that criticism of corporations are illegitimate since institutions like corporations might come into existence absent the state is like arguing that since some other economic actor in some other economic system might produce a car like the Volvo 740 wagon, it’s illegitimate to complain about the seat-warmer in my actual 740 wagon not working.
How is it that you think you know that?
“Same with corporations. At present they are companies, or firms, that receive a certain entity status from the state. Remove state incorporation and they remain companies with shareholders, employees, assets, products, contracts, customers. The company would exist. Amazon Inc. would now be Amazon LLP or Amazon Firm or whatever.”
Agreed. Companies absent state privilege would still be companies — companies without state privilege.
“So what?”
Yup.
You don’t.
Cool. Thanks for resolving that. Now that I know that, I’m just going to scrawl “you didn’t own those 667 kilowatt hours that I used last month, or the direction of them to my breaker box, so I’m not paying you for them” on my bill from Ameren UE instead of paying it.
“Owning something does not mean you can sell it: for example your body (or do you believe in voluntary slavery?!).”
No, I don’t believe in voluntary slavery any more than I believe in dry water. If it’s voluntary, it isn’t slavery. And if I can’t sell something, I don’t own it.
This is eristic. This sarcasm proves nothing. Today’s contract law is based on the idea of binding promises backed by consideration, for one. So who cares about what current law is? Are we legal positivists? Second, the contract can be viewed as a single unilateral title transfer from customer to “Ameren” [I assume this is some yankee utility company]: I hereby transfer $x to you IF such-and-such event happens (where the event may be: provision of certain kilowatts of electricity; it could aslo be: “if it rains tomorrow,” which does not mean either party “owns” the rain).
Evasion. The question in libertarian circles is whether a contract to sell your body into slavery is legally enforceable. Your trite formulation in your last sentence sounds like that of a politician, and does not answer the issue.
This is nonsense. Ownership means right to control. It is not obvious that the right to control implies the “rihgt to sell”. This is yet another assumption unbacked by anything but inchoate intuition and not carefully squared with other libertarian property rights principles.
Whether or not something is “legally enforceable” is, as you’ve pointed out numerous times, irrelevant to whether or not it is a right.
If I (voluntarily) contract to sell my body, it’s not slavery, any more than if I (voluntarily) contract to sell something else I own it’s robbery.
Slavery is involuntary servitude.
“It is not obvious that the right to control implies the ‘right to sell.’ ”
The right to control does not imply the right to sell, it subsume it. The specific activity of “selling” is an instance of the broader category of activities of “controlling.”
Correct. I should have said, whether it ought to be legally enforceable.
the contract is not slavery, but enforcing it might be. You are aware of the debate in this area, right? And you realize most libertarians do not believe a contract to sell your body ought not be enforceable, right? And I would think almost no left-libertarians think voluntary slavery agreements ought to be legally enforceable.
To enforce a slavery contract the master would need to be able to legitimately use force against the slave’s body, if the slave tried to run away, if he tried to change his mind. At that point, it would be involuntary–that is, not consented to. Your argumet would then be, “no no, he consented earlier, and that consent…. is somehow irrevocable.” Your argument relies on this last key step: saying that an earlier grant of permission cannot be undone; that you cannot change your mind. BUt where does libertarianism say this? Suppose a girl consents to a kiss. THe guy kisses her. It’s not a battery, since it’s consented to. What if she says, “You may kiss me anytime you like, from now to the end of time!” and so the guy plants a kiss on her at random times, every day, over the following week. Then one day she gets upset with him, and says, “Don’t you ever kiss me!” If he kisses her now, it is not with her consent. Why not? Because she changed her mind. Because when an action is to be performed that uses the body or property of, or that changes the physical integrity of, or that crosses the borders of, someone else, the question is of course: at the time of the use, is it consented to or not? And so that is just a question of proof and evidence and communication: if the person just said 3 seconds ago “go ahead” then we reasonably assume that he is consenting now. That is, the previous communication serves as evidence that this is a standing order or standing presumption he has set up, that persists until the moment of use. In the kissing example the girl’s consent given a week earlier persists into the future, as a default presumption of what her consent is at the time of each kissing act. Yet that is only because she has not changed this default assumption with a new communication.
If I step into the boxing ring to box you, we both consent to blows. If I say I will box you tomorrow, but then 5 seconds before stepping into the ring I get cold feet, you can’t physically drag me into the ring so that you can hit me.
Same with a guy who promises to be a slave. So long as he does not object to following orders or letting the master hit him, no problem; but when he changes his mind, at that point, he is no longer consenting.
I don’t think you’ve thought this through. You’re assuming that an contingent incident of one type of ownership is an essential feature of ownership per se. Ownership means the legal right to control. That does not imply the right to get rid of the right to control. I have explained this in detail elsewhere, e.g. http://blog.mises.org/18608/the-relation-between-the-non-aggression-principle-and-property-rights-a-response-to-division-by-zer0/ and http://www.mises.org/journals/jls/17_2/17_2_2.pdf . When you, as a body-owning agent, use your rightful control over your body to engage in the action of appropriating some previously-unowned and unused external scarce resource, then you become its owner by homesteading. This type of ownership can obviously be undone by the nature of its origin: an acquired thing can be un-acquired, or abandoned. The right to abandon it gives rise to the ability to sell it, since you can abandon it “to” a given recipient. Thus, the nature of ownership of acquired things means that you can, in fact, sell or give away the thing. However, the same is not true of the nature of ownership of our bodies, since we do not acquire our bodies by homesteading, in the same way; there is no original act of body-appropriation to “undo”. You own your body because of your intimate connection with it, not because you homesteaded it.
Thus, ownership does not imply the right to sell.
Only if the contract is defective in some respect.
“You are aware of the debate in this area, right?”
I’m aware of the existence of discussions in this area, and of their content. Characterizing those discussions as “debate” seems to be to me taking it a little far, given the crystal clarity of the matter. If it’s a voluntary contract, it’s not slavery, period.
“And you realize most libertarians do not believe a contract to sell your body ought not be enforceable, right?”
No, I was not aware of that. And I’m still not.
“And I would think almost no left-libertarians think voluntary slavery agreements ought to be legally enforceable.”
Since there’s no such thing as “voluntary slavery agreements” (if it’s a voluntary agreement, it’s not slavery), I suspect you’re right.
“To enforce a slavery contract the master would need to be able to legitimately use force against the slave’s body, if the slave tried to run away, if he tried to change his mind.”
Except that there’s no slave or master involved in the scenario. Your statement is the equivalent of “To enforce a contract under which one party was entitled to a television, that party would need to be able to legitimately use force against anyone trying to take the television, if someone tried to take the television, or if the party who owed and had delivered the television tried to steal it back.”
Which, of course, is in fact that case and is hunky dory in anything resembling rational libertarian theory.
“At that point, it would be involuntary–that is, not consented to.”
Only in the same sense that it would be “involuntary” for you to keep the television that you offered me $100 for, that I accepted $100 for, and that you now possess.
” Your argumet would then be, “no no, he consented earlier, and that consent…. is somehow irrevocable.’”
Whether or not the consent is revocable is a matter of the terms of the contract.
“Your argument relies on this last key step: saying that an earlier grant of permission cannot be undone”
I’m not saying that NO earlier grant of permission can be undone. I’m saying that a binding contract without provisions for its undoing can’t be done at the whim of one party.
You can’t have it both ways. Either you own your body, or you don’t. If you own it, then it is your property, and absent some convincing proof otherwise, the rules that apply to property in general apply to it specifically.
“If I step into the boxing ring to box you, we both consent to blows. If I say I will box you tomorrow, but then 5 seconds before stepping into the ring I get cold feet, you can’t physically drag me into the ring so that you can hit me.”
Actually, whether or not I can do that depends on the terms of any contract we have or don’t have pertaining to the matter.
“Same with a guy who promises to be a slave. So long as he does not object to following orders or letting the master hit him, no problem; but when he changes his mind, at that point, he is no longer consenting.”
And it doesn’t matter whether or not he’s “consenting.” If he’s sold his body, his body no longer belongs to him, so his consent or non-consent is irrelevant.
I think you don’t realize how much you are taking for granted and that you are reversing things, assuming too much. Contract is not a source of rights, as you are implicitly thinking of it; it is just a transfer of title to alienable property. Rothbard wrote on this in Ethics of Liberty. You could profit from reading it. This means that you can only transfer title to things that are alienable. You can’t assume it’s alienable because you make a contract. That’s question-begging. It’s frustrating you can’t see this. You can’t just make these mainstream-ish pronouncements relying on legal doctrines as if it settles it. You are just engaged in question-begging, because you apparently cannot even see that you are doing it.
It’s not crystal clear at all, and you are just being obstinate here. Talk to your fellow libertarians, man. This is an empirical matter, but I’d be willing to put some money on it.
Well, then I think you are a bit clueless. Ask around.
I cannot debate you on this if you are going to pettifog. You konw what i’m talking about. This is eristic and not serious, Tom. We are not really having a semantic debate, are we? If so, I’m not interested.
This is such eristic nonsense. Put effing quotes around “slave” and “master” if you want. Are you just trying to evade serious discussion? If so, you are doing a good job.
You are qeustion begging again. Can you not see this? This is now how you establish your point dude. YOu can’t show that contract includes the power to sell or bind your body, by just asserting that if you make a contract with the right terms it is effective to do this. tHat is just restating your conclusion.
THe questio nis whether it is “binding”. You seem to be totally unfamiliar wiht the libertarian view of contract–again, i urge you to read rothbard’s ethics of liberty chapter on this. Contracts have nothing to do with “binding” promises. They are just transfers of title to alienable property. And you can’t prove that bodies are alienable propety just by saying that you can make a contract to bind yoursefl–this is a perfect case of question-begging, circular reasoning.
I’m not thinking of contract as a source of rights, either explicitly or implicitly. Contract is merely an instrument. You can only contract with things you “own” — a word which we seem to agree means “have a right to control.”
Which brings this whole discussion down to the notion of property as alienable or inalienable. I have never seen any good case for the existence of the latter.
I think you are, when you characterize it as binding obligations.
But then you are question begging since you are assuming “right to control” implies “right to bind/alienate my future decisions about how to control”. It is question-begging, whether you see it or not. I am not saying you are wrong: there are good arguments for body-alienability. But you are not making them. You are question-begging. You apparently do not even see that your proposition is controversial and that you bear the burden of proof. You think it’s sufficient to hand-wave and spout statist legal positivistic legal doctrines as if that settles the issue. Sort of how the Civil War “settled” the issue of secession, I suppose.
Which brings this whole discussion down to the notion of property as alienable or inalienable. I have never seen any good case for the existence of the latter.
I believe that: you don’t seem to have read much in this area. I’ve given you resources: my articles, and many cites therein; Rothbard’s contract theory. You can handwave and pretend it’s simple, but you are wrong. And you are also wrong to think most libertarians would agree that a contract binding your body ought to be legally enforceable–or so I think: I’d bet good money on it. Find 5 of them. There’s you, Walter Block, and … crickets chirping.
I most manifestly do NOT bear the burden of proof. We both agree that I own my body. If you think there’s something I shouldn’t be able to do with that which I own, it’s your job to prove that to me, not my job to prove it to you.
As far as previously made arguments on the subject go, I’ve read some of them. I guess I’ll go re-read some of them, after looking back up the trail that we took into this dry hole to decide whether or not it’s worth it.
Again, you do not seem to see the issue. Yes, we agree you own your body. But that just means we agree that you have the right to decide who gets to use it. That is what we agree on. You are equivocating b/c you are saying we agree on ownership, but we only agree that you have the right to control your body; then you later use the ownership-means-right-to-sell meaning in an equivocating way.
You are so stuck in conventional legal thinking that you cannot see your error. You think “ownership of COURSE means the ‘right to sell’”. But that is wrong.
the “dry hole” is your arguing that we ought to be able to sell ourselves into slavery. sorry, “slavery.” Yeah, um, that’s really what will win over democrats to our side….
If the people protesting the injustice (perceived or real) of Wall Street Billionaires continuing to fatten their pocketbooks at the direct expense of working people is offensive to you because it doesn’t meet your intellectual standards regarding their ‘corporate personhood’ argument, then I suppose there is no real harm in making an argument out of it and declaring yourself a winner. I think that you could just as easily make the argument that it is unlawful and immoral to use the power of government to deprive one class of people of their rights (property – through taxation) to protect another class’ property through this privilege.
Do you not understand the damage that it does to all of us, our rights and our society to perpetuate the myth that what is good for corporations is good for the people? If not, I don’t think a thorough explanation will help.
Balderdash!
Rich
Or do you fail to understand its relevance to your argument?
Perhaps you misunderstood.
Person A is asked by person B to take him to a bank, being a good friend, person A obliges. After being dropped off at the bank, person B procedes to rob the bank, and then leaves.
Unaware of anythng amiss, person A drives off with person B.
Police soon catch up and person A immediately pulls over and submits to arrest.Now this:
Person A knows person B plans to rob a bank and agrees to help him by driving. He drives to the bank and person B procedes, as before, with the robbery. Person A drives off with person B but soon the police catch up. Person A pulls over, realizing there was no use in trying to escape and submits to arrest.Certainly, you could be tempted to say that the first person is not guilty but the second certainly is, but quickly it becomes apparent that this is in practice absurd. No one can know the workings of another persons mind, and therefore cannot, by the very laws of physics, be allows as evidence in a court room.
In neither instance did person A do anything objectively wrong, and therefore cannot, and should not, be prosecuted for thievery.Crimes are in actions, not thoughts.You are further wrong when you say that a person holding a knife threatingly to another person is simply an act of speech and is aggression because of the intentions of the individual in question. This is wrong, holding a knife threateningly puts the victim at *objective* risk, that he would not otherwise be in, regaurdless of the intentions of the knife wielder.Perhaps I am misunderstanding your position. I hope I am, because you seem to intelligent for this, Kinsella.
In summary, we let the owners of capital off the hook regarding a fundamental requirement of free societies. In the same way I am wary of a consultant who tells me what to do with my money, I am wary of making a deal with anyone who does not have considerable investment on the line. It has a way of steadying their words and deeds. This should be the entry price of everyone in a free society. Bar none.