StephanKinsella.com

Below is an edited transcript of my presentation “Argumentation Ethics, Estoppel, and Libertarian Rights” delivered (by remote video) at the 6th Adam Smith Forum, Moscow, Russia (Nov. 2, 2014).

Video and audio for the speech, plus further information and related resources, are available at Kinsella on Liberty Podcast, Episode 161.

 

Argumentation Ethics, Estoppel, and Libertarian Rights 

Stephan Kinsella
6th Adam Smith Forum, Moscow, Russia
Nov. 2, 2014
(Edited transcript)

Hello. This is Stephan Kinsella. I am speaking today from Houston, Texas in the United States. I am happy to be able to present to the Adam Smith Forum and I appreciate the invitation to speak. I did speak here in 2011, ¹ remotely that time as well. I was unable to attend in person. And I hope to remedy that someday and to visit Moscow and Russia. But I appreciate the invitation.

Today’s topic will be on “Argumentation Ethics, Estoppel, and Libertarian Rights”. I have spoken and written on these topics before. More detail can be found in the notes to the podcast I will do of this lecture after the event. But if you want to follow up you can go to my website which is stephankinsella.com and I will have resources available there, primarily a previous Mises Academy course called “Libertarian Legal Theory” and also a course on the social theory of Hans-Herman Hoppe. ²

So a brief introduction. I am an attorney in Houston, Texas. I am a long-time libertarian and follower of the Austrian School of Economics, primarily the thought of Ludwig von Mises, Murray Rothbard and Hans-Herman Hoppe, and also have been an anarchist libertarian for quite some time. I have developed my own set of views about libertarian rights and related matters and that’s what the topic of today’s conversation will be. [continue reading…]

1. KOL108 | “Why ‘Intellectual Property’ is not Genuine Property,” Adam Smith Forum, Moscow (2011). [↩]
2. See:
   • KOL153 | “The Social Theory of Hoppe: Lecture 1: Property Foundations” (Mises Academy, 2011)
   • KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
   • New Rationalist Directions in Libertarian Rights Theory
   • Argumentation Ethics and Liberty: A Concise Guide
   • Defending Argumentation Ethics: Reply to Murphy & Callahan
   • A Libertarian Theory of Punishment and Rights
   • How We Come To Own Ourselves

   [↩]

Kinsella on Liberty Podcast, Episode 161.

This was my (remotely delivered) presentation at the 6th Adam Smith Forum, Moscow, Russia (Nov. 2, 2014):

From the programme:

“Entitled “Argumentation Ethics, Estoppel, and Libertarian Rights,” Kinsella discusses the nature and definition of libertarianism and surveys different arguments and theories for its particular conception of rights and politics, including natural rights, consequentialist, and utilitarian approaches. He concludes with an overview of two more recent and unique approaches to justifying libertarian rights, the “argumentation ethics” approach of Austrian economist and political philosopher Hans-Hermann Hoppe, and Kinsella’s own “estoppel” theory of rights.”

This is my second speech at the Adam Smith Forum; the first was “Why Intellectual Property is not Genuine Property,” 3^rd Adam Smith Forum, Moscow, Russia (Nov. 12, 2011), also via remote video. [continue reading…]

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 40:13 — 27.6MB)

Kinsella on Liberty Podcast, Episode 160.

I was on Ben Stone’s “Bad Quaker” podcast yesterday, episode 449. We discussed IP and then some of Ben’s previous comments on Hans-Hermann Hoppe’s views on immigration law.

Related links:

• Bad Quaker podcast: 0448 pc383 Hoppe’s Immigration (corrected)
• Hans-Hermann Hoppe’s “Immigration And Libertarianism” at Lew Rockwell
• My article  Simple Libertarian Argument Against Unrestricted Immigration and Open Borders

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:14:15 — 29.1MB)

Related:

• Property Title Records and Insurance in a Free Society
• Mises, Rothbard, and Hoppe on the “Original Sin” in the Distribution of Property Rights
• Many of these issues are also discussed in Legal Foundations of a Free Society, e.g. in ch. 2, n.36, ch. 11, n.12, ch. 25, text at n.42
• Kinsella on the Chicago Sit-in: “Shoot ’em” (Freedom demonrats); Shoot the looters!, LewRockwell.com (Sept. 22, 2008)
• Murray N. Rothbard, “Confiscation and the Homestead Principle (1969),” Panarchy
• Jeff Deist, “Rothbard on Slavery Reparations,” Power & Market (July 12, 2019)
• Jeff Deist’s breakdown of Rothbard’s approach to such property issues in “A Libertarian Approach to Disputed Land Titles,” Mises Wire (June 3, 2021)

In the June 15, 1969 issue of The Libertarian Forum, in an article “Massacre at People’s Park,” Murray Rothbard writes:

The cry has gone up that all this was necessary to defend the “private property” of the University of California. In the first place, even if this little lot was private property, the bayoneting, gassing, torturing, and shooting of these unarmed park-developers would have been “overkill” so excessive and grotesque as to be mass murder and torture and therefore far more criminal than the original trespass on the lot. You do not machine-run [sic] someone for stealing an apple; this is punishment so far beyond the proportion that “fits the crime” as to be itself far more criminal than the original infraction. So that even if this property were legitimately private the massacre is still to be condemned.

Secondly, it is surely grotesquerie to call the muddy lot “private property”. The University of California is a governmental institution which acquires its funds and its property from mulcting the taxpayers. It is not in any sense private property then, but stolen property, and as such is morally unowned, and subject to the libertarian homesteading principle which we discuss below. The people of Berkeley were homesteaders in the best American—and libertarian—tradition, taking an unused, morally unowned, muddy lot, and transforming it by their homesteading labor into a pleasant and useful people’s park. For this they were massacred.

This has hints of the leftist and left-libertarian view of property rights—that if there is “taint” or “original sin” in the origin of title to current possessed resources, then the title is not legitimate, and the resource may be regarded as “unowned” and is legitimately subject to homesteading. Why something that is stolen is to be regarded as unowned, as opposed to owned by some dispossessed claimants and original owners, is not clear, and seems to contradict later writing by Rothbard. ¹

[Update: see also Kevin Carson on Confiscating Property from the Rich, discussing Rothbard’s “Confiscation and the Homestead Principle,” from Libertarian Forum, vol. 1.6, June 15, 1969, making similar left-libertarian arguments. And see also Mises, Rothbard, and Hoppe on the “Original Sin” in the Distribution of Property Rights as well as Justice and Property Rights: Rothbard on Scarcity, Property, Contracts… ]

But in any case, later writing by Rothbard, as of 1974 at the latest, seems to reject any such implications. As I noted in my post Justice and Property Rights: Rothbard on Scarcity, Property, Contracts…, Rothbard published his article “Justice and Property Rights,” 1974, and in two forms: first, in Egalitarianism as a Revolt Against Nature and Other Essays, which is available online here; and also, a second version, in Property in a Humane Economy, Samuel L. Blumenfeld, ed. (the second version is also included as a chapter in The Logic Action One, which is not online, and in Economic Controversies, which is available online). The two pieces seem identical but the latter version, from the Blumenthal collection, appends an important concluding paragraph that is not present in the earlier version:

It might be charged that our theory of justice in property titles is deficient because in the real world most landed (and even other) property has a past history so tangled that it becomes impossible to identify who or what has committed coercion and therefore who the current just owner may be. But the point of the “homestead principle” is that if we don’t know what crimes have been committed in acquiring the property in the past, or if we don’t know the victims or their heirs, then the current owner becomes the legitimate and just owner on homestead grounds. In short, if Jones owns a piece of land at the present time, and we don’t know what crimes were committed to arrive at the current title, then Jones, as the current owner, becomes as fully legitimate a property owner of this land as he does over his own person. Overthrow of existing property title only becomes legitimate if the victims or their heirs can present an authenticated, demonstrable, and specific claim to the property. Failing such conditions, existing landowners possess a fully moral right to their property.

It appears that language was added by Rothbard to combat the arguments of some, such as some left-libertarians, who want to argue that existing property titles are illegitimate because of their non-immaculate origins and, presumably, ought to be wrested from current nominal owners, especially the wealthy, and I suppose redistributed to the proles.

Or, as Rothbard wrote in ch. 9 of The Ethics of Liberty (1982):

To sum up, for any property currently claimed and used: (a) if we know clearly that there was no criminal origin to its current title, then obviously the current title is legitimate, just and valid; (b) if we don’t know whether the current title had any criminal origins, but can’t find out either way, then the hypothetically “unowned” property reverts instantaneously and justly to its current possessor; (c) if we do know that the title is originally criminal, but can’t find the victim or his heirs, then (c1) if the current title-holder was not the criminal aggressor against the property, then it reverts to him justly as the first owner of a hypothetically unowned property. But (c2) if the current titleholder is himself the criminal or one of the criminals who stole the property, then clearly he is properly to be deprived of it, and it then reverts to the first man who takes it out of its unowned state and appropriates it for his use. And finally, (d) if the current title is the result of crime, and the victim or his heirs can be found, then the title properly reverts immediately to the latter, without compensation to the criminal or to the other holders of the unjust title. ²

I do not see a closely corresponding passage in For A New Liberty (1973) (I stand to be corrected on this), so it appears to me that sometime between 1969 and 1973, Rothbard’s thought on this matter developed.

See also the related thoughts of thinkers like Mises and Hoppe on this issue, as discussed in Mises, Rothbard, and Hoppe on the “Original Sin” in the Distribution of Property Rights.

1. I’ll have to find this language; I forget where it is. [↩]
2.  But cf. some arguably inconsistent comments elsewhere in ch. 9, and also in ch. 10. [↩]

My monograph Do Business Without Intellectual Property was released by Liberty.me earlier this year. The PDF file is here.

I release this material, insofar as legally possible (see Copyright is very sticky!), with a CC0 “no rights reserved” license.

The Table of Contents is listed below. A Liberty.met seminar discussion of these topics  is available at “KOL159 | Seminar: “Practical Solutions to the IP Trap”

[Update: Liberty.me discussion forum about this topic.

In addition, I could have added more detail about defensive patent publishing and defensive patent pools:

• “The Patent Defense League and Defensive Patent Pooling” (Aug. 18, 2011)
• Defensive Patent Publishing
• Jefferson on Anonymous Defensive Patent Publishing]

Table of Contents

• INTRODUCTION 3
• WHAT IS IP? 5
• WHY DO BUSINESSES NEED TO CARE ABOUT IP? 5
• SHOULD WE ABOLISH IP? 6
• IP VERSUS PROPERTY RIGHTS 7
• HISTORY OF PATENT AND COPYRIGHT LAW 9
• INTELLECTUAL PROPERTY IS CONTRARY TO FREE
• MARKETS AND HUMAN FREEDOM 10
• WHY DOES IP PERSIST? 12
• IP, INNOVATION, AND FREEDOM 13
• WHAT SHOULD YOU DO? 14
  • First, Do No Harm 14
  • But While IP Exists … 15
  • To IP or Not to IP 16
  • Steps You Can Take Now 17
• EXAMPLES OF IP CONTRARIANISM 18
• PUBLISHING AND COPYRIGHT 19
  • Music without Intellectual Property 21
  • Inventing without Intellectual Property 21
  • Dying without Intellectual Property 21
  • Patents 22

Kinsella on Liberty Podcast, Episode 159.

This is my seminar, Practical Solutions to the IP Trap, delivered to Liberty.me members on May 19, 2014, based on my monograph Do Business Without Intellectual Property (Liberty.me, 2014). This discussion, moderated by Matt Gilliland, provides an overview of IP and the issues faced by people in their careers and lives and offers suggestions as to how to ethically and practically navigate challenges posed by the existing IP system.

Transcript below.

Youtube:

See also:

• Profiting without IP
• “Conversation with an author about copyright and publishing in a free society” (Jan. 23, 2012)
• Do Business Without Intellectual Property (Liberty.me, 2014)
• “Innovations that Thrive without IP,” StephanKinsella.com (Aug. 9, 2010)
• “Examples of Ways Content Creators Can Profit Without Intellectual Property,” StephanKinsella.com (July 28, 2010)
• “The Creator-Endorsed Mark as an Alternative to Copyright,” Mises Economics Blog (July 15, 2010)
• Diomavro, Avengers endgame or do movies need copyright?
• Creators SHOULDN’T Own their Creations

TRANSCRIPT

Liberty.me Seminar: Practical Solutions to the IP Trap

Stephan Kinsella

Liberty.me, May 19, 2014

 

00:00:10

STEPHAN KINSELLA: Let me briefly define the background, the topic, and if I say anything that is confusing or anyone has questions, feel free to raise your hand, and Matt can let me know and I’d be happy to address something that I go over too quickly or that needs more elaboration.  Intellectual property, in the modern, capitalist, 21^st century age, is an entrenched part of the western legal system, America, Europe, etc. and other countries as the west tries to push it and gets it entrenched in those countries.  It is considered widely to be part of the capitalist, property rights system.  In fact, patent and copyright, trademark and trade secret and other types of intellectual property are called intellectual property for a reason.

00:00:59

It was for a propaganda reason to try to get these things thought of as a property right.  Originally, they were thought of as privileges or policy tools by the monarch or the state, but under attack by free-market defenders, the proponents of IP started calling them property rights.  So this is where we are now.  We have a system where patent law, copyright law, trademark, trade secret, and other types of IP, which I can go into, are basically part of the landscape.

00:01:36

Now, the libertarian position, which I’ve argued for over a decade now, almost two decades now – the libertarian position is that patent and copyright law and other types of IP law are completely, 100% incompatible with free markets, competition, freedom of expression, freedom of speech, and individual property rights.  So I’m totally opposed to patent and copyright law.  I don’t think we should reform it.  That would be a good step.  But I think we should totally abolish it.  I believe that patents impose hundreds of billions of dollars of damage on the economy of the US, let’s say, every year.

00:02:27

I believe copyrights also impose damage and cultural distortion, and it represses and suppresses freedom of speech, freedom of expression, and it arms the state to come up with excuses to regulate the internet and restrict internet and digital freedom.  So there’s basically nothing whatsoever good about patent and copyright and other forms of intellectual property like trademark and trade secret.  But they are definitely entrenched, so that’s a fact of the modern world.

00:03:01

And I’ve talked at length on this.  I’ve got tons of podcasts and lectures and articles, and so do other people, which I have collected at my website, C4SIF.org.  So the background is that we live in a world with lots of non-free-market, non-libertarian interventions and measures and policies and practices and institutions like the drug war, taxation, minimum wage law, regulations, immigration restrictions, war itself, conscription lurking in the background, all these things.  They’re there.  They’re un-libertarian.  We don’t like them, and intellectual property.  So the question is what do we do about them?

00:03:46

Well, the political answer is that we should work to abolish them, but this course is more about practical ways that, as a person living in the real world, what do you do about it?  So my way of looking at it is that there’s different approaches.  Number one, there’s the moral approach.  So if your question is, what do I do as a moral person, in particular, as a libertarian, how do I act in the world?  Is it legitimate or moral for me to take part of the given system?  Can I drive on public roads?  Can I take part in the patent and copyright system, etc.?  So that’s one type of question.

00:04:33

And then there are other practical questions that relate to this.  For example, if I don’t want to use intellectual property, how can I avoid it?  Or is it a good idea for me to avoid it or to use it?  So all these issues arise.  So let me focus really quickly on the two main types of intellectual property, which is patent and copyright.  Patent law governs inventions.  Copyright governs creative expressions, artistic works.

00:05:10

These are the two big things.  So let’s take copyright first.  In a way, the question is a little bit moot because the way copyright works is it’s automatically granted ever since 1989 in the United States after acceded to the Berne Convention, which eliminated formalities, which was previously you had to register a copyright, and they put a copyright notice on a work to get a copyright.  Now, those requirements are eliminated.  So under the current law, ever since 1989, copyright is automatically granted.  So every time you write something down, make a painting, write a software program, you instantly have a copyright granted by the federal government whether you want it or not, and it’s almost impossible to get rid of it.

00:05:58

Okay, so the first thing to do is to recognize what the landscape is, what the threats are, what your rights are, what your options are, and the same thing is true for patent law.  So for copyright, the question would be what should you do?  What can you do?  Now, one of the approaches I think you can take is most of the things that people author, we want the word to get out there.  And so because the copyright automatically attaches to these things, it is a restriction on what others can do with it.

00:06:44

So for most people, as Cory Doctorow, for example, says, if people don’t know about your works, obscurity is going to doom you.  You want your works to be spread.  So one thing you can do is try to release your works into the commons as much as possible.  There’s both a moral and a practical reason for this.  The moral reason is because copyright is totally unjustified and illegitimate.  So that’s the moral reason.  The practical reason is that you want people to spread your ideas and your work, and you cand o this in today’s world by means of using the creative commons licenses.

00:07:25

Now, the one I recommend that people use is the creative commons attribution only.  That’s CC-BY.  I would prefer CC0, which is basically making it almost public domain.  I’m just concerned that the way the law works, that that is not an effective, legally enforceable license, and that means that people that read your works or want to use your works can’t rely on the license because they don’t trust it, and it’s like it’s copyrighted still.  So I think the most safe license would by the CC-BY, which is what I try to use as much as I can.

00:07:59

Now, practically, how does that help or hurt you?  It helps you because it helps get the – it makes your work easy to copy and spread.  And does it really hurt you?  I don’t think it does.  There is lots of ways you could profit from your writing, and we have to recognize most people don’t write or create for profit.  They do it for other reasons, or if they profit, they profit without the benefit of copyright law.  So in the cases where you would profit monetarily, having a CC-BY license wouldn’t really hurt you at all.  You’d get your reputation out there.  You’d get known more, and you – so one blog post I have is an example.

00:08:49

If you think about J.K. Rowling, the author of the Harry Potter novels, who is now the first or second-most rich woman in England – she’s a billionaire because of the movies and the merchandising and the novels from the Harry Potter series.  Take her, for example.  If she had released Harry Potter on Amazon Create Space, the first novel, and it had become popular, she would have made some money because the books are $1 or $2 or $3 each.  In a copyright-free world, let’s say, maybe she would have been pirated right away, but she still would have sold many copies.  She would have made a good sum of money, but she would have established her name as the author of a very popular series.

00:09:30

She could have, for example, said I’ve got book number two and three written already, and I will release it as soon as 100,000 or a million of my fans pledge $10 each to buy the book.  I guarantee she could have done that.  That’s $10-$20 million right there just for the next book or two.  So she easily is already at a 10-or-20 millionaire after one or two or three books, and she wrote seven, by the way.  So we can already see she’s approaching $100 million of value in a copyright-free world.

00:10:07

In a copyright-free world, anyone could have made a movie on the Harry Potter series.  But if there’s one or two or three studios trying to make the first Harry Potter movie, someone would have an incentive to approach her and get her cooperation, advisor, executive producer status, and endorsement to make the movie be the most popular one.  The Harry Potter fans are going to flock to the movie that is endorsed and authorized by the author of the books.

00:10:39

So we could easily see a profit-sharing arrangement where she makes another $10-, $20-, $30-, $40-, $50 million.  So already we can see that, in a copyright-free world, someone who has a popular work like a J.K. Rowling can easily become a multimillionaire.  So I see no reason why we can’t have authors of very popular works reworded.  So that’s one thing you can do.

00:11:07

Another thing, let’s take the patent field.  The patent field is a case of inventions.  What do you do?  Well, there’s a couple things you can do.  I’m not saying no company should ever – should never apply for patents.  Sometimes you need to in today’s world.  You need to, to acquire an arsenal of patents that you can use defensively.  But most smaller companies don’t have the resources to acquire enough patents that would really be effective defensively in most cases against competitors.  And in any case, patents are never defensive against trolls, patent trolls because you can’t countersue a troll.

00:11:49

I mean the whole purpose of having a patent arsenal is to have a weapon stash that you can use to countersue someone who sues you for patent infringement, so a competitor usually.  So if a competitor sues you for infringing one of their patents, you look through your stack of patents, and you try to countersue them back.  That is a useful technique.  It’s a big deadweight loss on society in innovation, but I can see why companies do that.  However, patent trolls don’t make anything themselves, so they’re not vulnerable to a countersuit.  So one of the big threats of patents is patent trolls, and acquiring patents doesn’t help you with that.

00:12:27

Moreover, like I said, having a patent stash doesn’t guarantee that you’re going to have an arsenal that you can use to defend yourself because there’s no guarantee that the person suing you can be countersued for one of your patents.  Moreover, these patents are expensive, and in any case, it’s extremely expensive to engage in a patent battle with a large competitor.

00:12:52

And so it’s – one approach some companies could take is, instead of wasting money acquiring patents and acquiring an arsenal of patents that they could never use in the first place, and they could never afford to defend because the attorney’s fees are so high, just make a decision never to use patents.  In fact, you could do what Twitter did and what Google has kind of quasi-done.  You could announce we have an anti-patent policy.  Twitter actually tied its own hands by agreeing with all of its engineers that they have kind of a co-ownership right in its patents so that it cannot cert its patents aggressively but only something defensively.

00:13:36

So what you could do is you could make a strategic decision not to ever use patents, not to even waste money acquiring patents.  And you could announce this to the world.  You could save money, and you could avoid getting locked into the trap of chasing a product design or something like that just because you happen to have a patent on it.  You could just be free to follow the innovation where it takes you.  Now, what about the danger of someone else patenting the same design that you’ve come up with?

00:14:06

Well, you could take advantage of the current law, which ever since the 20 – I think ’11, the America Invents Act under Obama.  If you just simply publish like on a blog or a website or a journal, if you publish your idea, then it prevents – it would serve as a prior art defense against someone else patenting the same idea later.  So you could just be totally open.  You could publish your ideas and say here’s what our ideas are.  We plan to pursue some of these.  The rest of them we don’t, and now these ideas are public, and so anyone in the world can use them, even our competitors.

00:14:49

But any patent that’s filed after this date would be challengeable as being invalid.  So those are some of the techniques that you can use.  There’s a whole strategical mindset to trying to get along in the world without intellectual property and patents and copyrights.  You could talk to lawyers like me, although most patent attorneys and copyright attorneys you talk to are going to be baffled by the idea that you don’t want to use these laws to your advantage, that you want to find a way to not use them.

00:15:29

But in the software industry, for example, this has been going on for 20 years, the GNU movement, the open-software movement.  There’s a growing free-culture movement, which is similar.  There’s a growing use of creative commons licenses among the artistic community.  Companies like Wikimedia, they provide open-source images and things like this people can use.  And so, of course, documentary makers and website designers are going to these sources instead.  If you design software, you’re going to use open-source software.  So there’s an increasing advantage to being part of the growing openness movement and advertising.  If you’re going to do it, advertise it, I would say.

00:16:20

You do have to sometimes use intellectual property.  Sometimes people get confused about what intellectual property means.  So, for example, people think that unless you have a patent on an idea, you can’t use it.  That’s not true.  The patent is only necessary if you want to prevent other people from using it.  The primary advantage of a patent – well, there are three ways you could use a patent on an image.  Number one is to sue competitors to try to extract royalties or rents from them.  If you think that’s too extensive or immoral or not your business model, that’s not really a concern, and I think it, by and large, should not be a concern.

00:17:01

Number two, you could use it defensively.  But as I said, it’s only a rare situation where you are going to be able to find a patent in your arsenal of patents if you’re a small company, let’s say, that happens to apply to a competitor’s products.  And it’s also a rare situation when you have the funds available to afford the $3 million or whatever it’s going to take to pay attorneys to fight back against a patent attacker in the first place, so it’s really just a huge waste.

00:17:35

For a startup company, let’s say, it is true that if you start looking for funding from investors and venture capitalists, they will often ask you what your intellectual property situation is.  Their main concern, especially for a small startup company, they don’t – they’re not really betting that you’re going to become a patent troll and take your one or two or three or five or ten patents and sue competitors and make a trillion dollars.  That’s not what they’re betting on.  They realize that it’s too expensive to assert your patents.  They understand that the primary purpose of patents is defensive, to defend your rights.

00:18:14

But if that’s the case, there are other ways to do that, which are cheaper, as I said earlier.  You could simply publish your ideas proactively and early on and establish a prior public written record, which prevents other people from patenting the same thing.  So if a venture capitalist says what’s your IP strategy?  What’s your IP portfolio?  You could say, well, we have a bunch of proprietary and good ideas.  Some are trade secret.  Some are kept secret.  And some we publish to prevent other people from patenting them.

00:18:48

And otherwise we don’t want to waste your good investor’s money, hundreds of thousands of dollars a year, on patents that we could never use.  Instead, we choose to be nimble and quick and flexible and just use our innovations and our technology as we need to without being locked into a given set of patents.  And to protect ourselves, we save our money, and we make sure we don’t infringe other patents, and we publish our ideas as soon as we come up with them to prevent our competitors from patenting them.

00:19:21

So there’s a whole philosophy and strategy there, which is not normal in the business industry because everyone is so linked into this IP mentality.  But there are definitely ways to survive in the world without IP and even to save money doing it and to prosper while doing it.  I can keep talking about some different examples now that I have in the paper and in other articles and blog posts I have written.  But let me see here what the – what questions we have now.  Travis – I don’t know if Matt wants to link anyone in.  If anyone has a question, feel free to link them in, or I can start – go ahead.

00:20:09

MATT GILLILAND: We’ve got one question here from Wesley Matthew.

00:20:13

STEPHAN KINSELLA: All right, go ahead.

00:20:14

MATT GILLILAND: So how does J.K. Rowling or other authors make money to support themselves to keep writing books, that is, before they become popular?

00:20:22

00:20:27

STEPHAN KINSELLA: Okay, so here’s my response to that kind of question.  First of all, I tried to address that already with the actual J.K. Rowling example.  How do you support yourself?  Let’s first realize what kind of question this is.  This is a question – it’s a legitimate question, and quite often the IP or the copyright advocate asks that question in a loaded way.  In other words, they don’t really want the answer.  They just – they’re shouting the question out at you as a challenge.

00:20:58

They’re saying that – they’re basically saying unless you can show me how authors can make a lot of money in your free market society, I’m not going to be in favor of it.  So that’s what they’re saying.  Now, I don’t think the questioner here is asking that, but we have to be wary of questions that are really loaded questions or statements posed as questions.  And we also have to understand that if you don’t know the answer to a question, it doesn’t mean that the copyright or patent system is legitimate.

00:21:34

The example I give is imagine that you lived in Soviet Russia in the 1970s or ‘80s or ‘60s, and someone was advocating for abolishing the communist system and establishing a free market.  And someone says, well, how many brands of toothpaste will there be?  How can we guarantee enough toothpaste will be sold?  I don’t understand how I’m going to choose between all these different brands of toothpaste that are going to be sold.  Even if you don’t know what’s going to happen in a free market, you can’t predict how many brands of toothpaste, what the free market is going to look like.

00:22:14

Just because you don’t have a direct answer to that question because you can’t predict the future doesn’t mean that communism has to be kept in place.  So that’s kind of the first answer.  The other thing to be aware of is most authors in today’s society, most authors in today’s society, don’t make any money at all, or much money, and there’s several reasons for that.  I mean just imagine the typical blog or even everyone’s participating in Facebook chat sessions and commenting.  People do this.  They don’t do it for money.  They do it because they’re interested in doing it for some reason.

00:22:54

Most academic texts or scholarly works are journal articles like in the social sciences, libertarian articles, economic articles don’t get paid a dime.  In fact, several journals you have to pay thousands of dollars just to be published there.  So most – the bulk of most creative work is done not for money anyway in human history and even in today’s copyright world is done not for profit.  And in the cases where it’s done for profit, it’s done for profit primarily of the publishing industry.  The publishing industry, the publisher’s, Hollywood, etc., they – or the recording industry, the studios, they have been propped up.  The whole system has arisen because of copyright, the whole publishing institution that we have.

00:23:49

Again, most authors don’t make very much money, which is why a lot of authors are self-publishing, are going to CreateSpace on Amazon, things like this now.  Most authors, if they make $5-, $10-, $20,000 a year off of something are pretty happy because, for a lot of people, it’s a side hobby or a side pursuit, or it’s something they would pursue anyway.  So I think we have to compare today’s situation, which has copyright, to a free market.  And you can’t just say there’s no way I can think of that most authors wouldn’t get paid or would get paid in a free market, and therefore, there’s something wrong with this idea because most of them are not getting paid now.

00:24:30

And, in fact, under today’s situation with the state in control of so many things, with so many regulations and taxes, people are made worse off because of that alone.  So, for example, to take a silly example, if the government tomorrow reduced the income tax rate by 50%, then most people that are just – they have a regular job doing something, making their money and they write on the side, well, it’s like they’re getting $10-, $15-, $20,000-a-year payment right away.  So they could use that to subsidize their creative pursuits.

00:25:10

So if we want there to be more creativity, we have to reduce the size and scope of the state.  We have to reduce taxes.  We have to reduce the state’s controls, the state’s – we also have to reduce the state’s copyright system in the first place, which causes some works to be impermissible, remixing, borrowing, derivative works, sequels, unauthorized movies, things like this, documentaries which are blocked for years because of the bizarre copyright claims, privacy claims, etc.  Allowing the state or counting on the state to prop up the creative process is totally unrealistic and unworkable.

00:25:58

So I just want to lay that out there.  It doesn’t really answer the question directly, but it points out that there’s only two really – there’s only two real alternatives.  That’s freedom or the state.  And the state situation just cannot work.  The state solution ends up causing people to be taxed and regulated, put in jail, restricted from using previous works.

00:26:24

There’s a privacy decision just last week in Europe, which is called the Right to be Forgotten, where, if you have a fact about your previous life or your earlier life somewhere on the internet, you can go to a court in Europe, and they will issue an order to Google to remove the link to a search on you, so people can’t find out a certain fact about you in the past.  Basically, it’s air-brushing history.  It’s Orwellian.  This is what totalitarian dictatorships do.  They just rewrite the past.  So in the name of all these attempts of the state to step in and be guardian of people’s creative works and their privacy rights, it ends up restricting our freedoms.

00:27:09

So the only real alternative is the free market and freedom.  So how would authors make money?  Well, some would have a job, a regular job, and they would do this as a side hobby.  There’s nothing wrong with this.  I think Francis Ford Coppola, one of my blog posts on C4SIF.org – if you just search for Francis Ford Coppola, the director, he says what’s wrong with getting up at 3 or 4 or 5 in the morning and writing – working on your play for two or three hours and then going to work during the day in a regular job?  So some people would have to support themselves.  They would be their own patrons basically.

00:27:49

But as we see in the world today with the internet, we’re having an emerging set of institutions and practices that enable – there’s something called – I think it’s called Patraon – P-A-T-R-A-O-N, A-E-O-N.  I may be misspelling it.  Patraon – it’s patron.  There’s Indiegogo.  There’s other things like this where – Kickstarter, where people can find ways to get supported by their fans or by people who support their works.  So the ultimate answer is an entrepreneurial one.  It’s basically how do you find a way to get supported or to support a project that you want to engage in either for profit or not for profit?

00:28:35

It’s really an entrepreneurial question, and there’s lots of suggestions about this.  On my blog, C4SIF.org, I have some posts about how can innovators get – make – get rewarded without intellectual property.  And there’s different techniques people use.  I’ve mentioned some of them already tonight.  There’s Indiegogo campaigns.  There’s patron support.  There is – you can do what Louis C. K. did, which he sold one of his – he had a website where he sold one of his comedy performances for $5 a download, totally open source, DRM-free, and he made several million dollars in just a week, way more than he needed to, to cover his costs.  And then he gave his staff $200,000 bonuses for Christmas and all this.  It was great.

00:29:24

And so maybe it petered off after a while, but so what?  It’s better than it would be in a copyright-controlled society.  So the ultimate answer is we don’t know exactly how you can make money in any endeavor in the free market.  But there’s lots of ideas about how you could, and there’s lots of reason to believe that there are things you could do absent copyright and patent to make money, and not only that.  Remember this: There are more ways to make money absent copyright because your restrictions that tie you down are now gone.  So lots of companies and producers and creators that are now restricted by copyright would be freed.

00:30:10

So they would also lose the ability to go around suing people for royalties.  That’s true.  But they would also be free to use whatever they wanted.  If you want to have a Michael Jackson hologram at a concert, you can do that.  If you want to perform someone’s song and do it in a better way like the Canadian astronaut performing the David Bowie song, you can do it.  I don’t know if you guys know what I’m talking about, but just like last week, David – there was a David Bowie song performed on the space station by a Canadian astronaut a year ago.

00:30:44

And he took the time to get a copyright license from David Bowie’s representative, but he could only get it for a year.  And so he performed some kind of acoustic rendering in space of a David Bowie song, and it was very popular on YouTube.  I actually never saw it, but I read about this.  Well, just a couple days ago it had to come down because the one-year license expired.  So those are just examples of the ways that copyright stifles freedom of expression, freedom of speech, and experimental artistic uses, which would flourish absent copyright.  It would be more of a challenge to find a way to make a profit, but there would be more ways to make a profit as well.

00:31:27

00:31:30

MATT GILLILAND: All right, so we’ve got another question here from Bern McCarty.  Regarding the defense where you try to establish prior art by publishing your idea, what minimum level of publishing is recommended?

00:31:42

00:31:47

STEPHAN KINSELLA: Okay, so in the past, there was a practice of – let’s say before the internet age, companies like IBM, one of the biggest, most prolific patentors in the world, and the most prolific, innovative companies in the world would also make it a strategic decision every year about which ideas they had that they wanted to patent and which ones they did not want to patent.  The ones they did not want to patent, they would publish – they would often publish a little short paper by the engineers in a journal that they published.

00:32:23

It was like the IBM Technical Journal or something, and they did that solely to establish a record, a prior-art record.  With the advent of the internet – excuse me – it’s a little bit easier.  And, by the way, there are other ways you can do it too.  There is something you can do on the – you can go to the USPTO.gov.  That’s the United States Patent and Trademark Office website, USPTO.gov.  And instead of hiring a patent attorney to file a patent application, which takes thousands of dollars, you could do something called an SIR, statutory invention registration.  There’s a small fee involved.  I think $100-$200, something like that, and that would be a way of publishing it too.

00:33:12

But you don’t need to go to that expense.  In today’s world, you could really simply just publish it on a blog.  Make sure the blog is going to be around for a few decades, and just publish the idea.  What’s key is that you have to disclose the idea in sufficient technical detail.  So this is a case where I wouldn’t worry about being boring or verbose or being overly technical.  More is better, so just publish everything you can think of.  Have a long post, or put a paper that you can link to in a blog post, which has all the details that you can think of.

00:33:48

You basically have to enable – you have to have an enabling disclosure.  An enabling disclosure means you have to provide enough written details and a written description sufficient to enable someone skilled in the art to make and use your invention without undo experimentation.  Now, that’s a lot of technical legalese, but that’s basically the criteria.

00:34:15

From a practical standpoint, what that means is you want to have a good technical disclosure, which explains how your idea works and that, if you imagine someone else in a similar technical field that read it for the first time, they would read the paper and they would say, oh, I get this idea.  And they would be able to go out and go in their garage or their workshop or their laboratory, and they would be able to make this eventually because you gave them enough details.  So if you disclose that level of detail, then on the day you publish it, from that day forward, no one else – well, I won’t say they won’t be able to patent it because they could patent it because the patent office doesn’t find that disclosure.

00:34:57

But even if they were patenting it, then that reference that you had published would be there and could be used to invalidate the patent later.  So – and by the way, let me just make clear.  This changed – the law changed when Obama changed the patent law a few years ago in the America Invents Act.  Before that point in time, there was a one-year grace period.  So if you published a paper on day one, then there was a still a danger that in the next year someone else could still patent it.  They couldn’t patent it if they’d learned about it from your paper because they wouldn’t be the inventor, but if they independently invented it, they could still file a patent on it.

00:35:38

But under the Obama America Invents Act, that changed.  And so from the day you publish it, it serves as a – what’s called an absolute statutory bar.  There’s what’s called an absolute novelty requirement now.  In any case, the quicker you publish it and the more detail you give, the better.  Now, the danger is that you’re going to let your competitors know what you’re doing, and they can start competing with you.

00:36:09

But realistically, if you have a real product, that’s going to happen anyway if you don’t have a patent.  If you start selling a product that’s popular, you’re going to advertise its features, and/or its features and secret sauce will be able to be discerned by reverse engineering anyway.  And competitors will start reverse engineering this and making knockoffs, which means competing with you, very soon anyway.  So you’re really not out anything by publishing it.  So that’s the answer to that question.

00:36:41

MATT GILLILAND: All right, for our next question, we’ve got Travis, The Green Guy, who would like to come on air to ask.

00:36:52

00:36:56

TRAVIS: Yes.  If you don’t mind, I have two questions.  One, how would you deal with trademark specifically?  For example, if Coca-Cola has a trademark on their symbol, the whole nine yards, what would it – it would be relatively easy to make another can with the exact same symbol with the exact same – maybe even the same product, especially if that product ingredients got released, what protection would there be, and how would that work in a free society without trademark?

00:37:31

Because I completely agree with you on copyright and patents, but I just don’t – that’s really the only example that I can think of as far as protection that’s needed because, on the internet, it doesn’t matter.  You can change a logo.  But for companies who invest millions of dollars in creating these logos and creating this brand, it’s almost impossible and very expensive just to flip the switch and change the logo.  I was reading some of your podcasts – or listen to your podcasts and reading…

00:38:06

STEPHAN KINSELLA: Explain – why did you mention the ingredients of Coca-Cola?  Tell me what the relevance of the ingredients because the ingredients is more about the trade secret, not the trademark.  Are you getting at two things here?

00:38:18

TRAVIS: That was me correcting the example.  Let’s say if that secret did get out, it’s a product that can be remade and a logo that can be copied.  What’s to protect them from – especially if it’s a physical product, not an internet product.  If it’s a physical product that can be remade and then the logo can be copied, that’s the only thing I can think of that would throw a hole in this.

00:38:44

Because I completely agree with you, and I’ve listened to your podcasts, and I’ve read some of your essays on this topic.  And I think you’re brilliant.  It’s just I can’t think of a way the system would protect people in a situation like that where the product can be copied and the logo.  How would you differentiate yourself, or how would it be – how would it work?

00:39:06

STEPHAN KINSELLA: Okay.  So that’s a good question.  Trademark is a confusing issue, especially because libertarians are a little bit sloppy with the fraud concept that they throw out there.  So libertarians will often say we’re against the initiation of force and fraud, but then they never quite explain why fraud is part of aggression or initiation of force or exactly what it means.

00:39:33

And then they’ll sometimes use fraud to mean being dishonest, and – which would imply that any time you tell a lie that you’re basically violating someone’s rights, which is not really true.  Dishonesty is not a good thing, but it’s not always a rights violation.  So this fraud concept of – and not only that, if they support trademark law because they’re against fraud, why do we need trademark law because fraud is already allegedly a crime or a cause of action in a libertarian contract or whatever legal system.  So it’s not really clear exactly what they mean.

00:40:11

So here’s what I think would happen.  First of all, think about the case of just people and names, like your name, my name, Matt’s name.  I mean what’s to keep me from naming my son Matt Gilliland if I wanted to?  Or maybe there are 20 Matt Gillilands in the country right now.  I don’t know.  It could be the case.  Now, what’s to keep that from happening?  Well, first of all, nothing is going to keep it from happening, and there are probably more than one – my name is a little bit unique, but there’s probably more than one Normal Kinsella in the world.  There’s probably more than one Travis in the world, so it’s not really a problem that there’s more than one.

00:40:56

So you could have more than one Mr. Hamburger in the world, and it probably wouldn’t be the world’s biggest disaster.  It only gets to be a problem when the reputation gets to be big and you use it as part of your sales pitch and your marketing.  So here’s what I think would happen.  I do think fraud would be a cause of action in a libertarian society but only in a narrow sense, that is, fraud understood as a type of deceit and theft from a customer by trick or by deception.

00:41:29

TRAVIS: Oh, so you would have the customer basically doing the lawsuit and not the…

00:41:36

STEPHAN KINSELLA: So that’s – part of the problem with trademark law is that the person who holds the trademark is the company using the mark, the trademark holder.  So they can sue someone using their mark even though the allegedly wronged victim is not the trademark holder but the customer.  And number two, if the customer is wronged, it’s only because they’re defrauded.  But if they’re defrauded, they already have a fraud right, so why do they need a trademark right?  And in fact, trademark law gives them the right to sue even when there’s no fraud, and in fact, it gives the trademark holder the right to sue, not the customer.

00:42:15

So, for example, take the case of – I just think that this is really not a problem.  I do think that the problem of copyright and patent advocates point to is a real problem.  Well, I don’t think it’s a problem, but it’s a real phenomenon.  It is true that if you start making a new pharmaceutical drug or if you sell a novel, it is true that people without a copyright or patent system will be able to compete with you and copy that.  That is true.  I don’t think it’s a problem.  I think it’s a good thing, but that’s the way it is.  But in the trademark case, I think there’s really a non-problem because there’s really two main situations.

00:42:56

Number one, we have a cheap knockoff, which is not fraudulent.  So, for example, a fake Rolex watch for $20 being sold by some guy with a heavy briefcase – heavy trench coat full of watches on the streets of New York or a van, kind of one of these shady situations.  In that case, there’s no fraud whatsoever going on.  The customer has no complaint.  The customer knows he’s buying a knockoff watch.  So no one’s property rights are being violated whatsoever, and that should not be prohibited.

00:43:31

The other situation would be where, imagine I want to buy a Rolex watch, and I have $5,000 saved up to buy a Rolex watch.  I’ve always wanted one for my whole life, and I’ve worked my life, and I’ve saved up.  I go to the Galleria here in Houston, the Houston Galleria, and there’s all these nice, posh stores, Louis Vuitton and Zegna and all these nice stores, and I walk into a store with a Rolex label of it, and I buy a Rolex watch for $5,000.  Well, then I find out later it was a fake.  Well, if that really happened, I suppose I would have a cause of action for fraud against this company, and I do admit that there would be a cause of action for fraud.

00:44:18

It’s hard to imagine that actually happening in real life though because how would this company get set up?  How would they actually have a storefront in a Galleria?  The Galleria is not going to host a knockoff company that’s getting sued left and right every day for fraud.  The company is not going to be able to survive for very long if they’re getting massive lawsuits by one customer after another for fraud.

00:44:42

The fact is that when people start their own companies, and they’re legitimate businessmen, they want their own names on it.  They want to distinguish themselves from the customer.  Just think of the hamburger industry in the US.  It seems like a homogenous thing.  Everyone’s got hamburgers.  There’s really no difference between McDonald’s, Wendy’s, Burger King, and yet the people that started these companies think there’s a difference.  Burger King didn’t say McDonald’s.  They said Burger King.  Wendy’s called themselves Wendy’s.  You have Hardee’s, Wendy’s.  You have Krystal Burger.  So everyone – any legitimate company is going to want their own name on it.  So I just don’t think it’s a real problem.  But to the extent there’s a problem, basically fraud law, I think, would cover it.

00:45:27

TRAVIS: But in that situation, you would have the customer doing the legal action and not the company per se.

00:45:35

STEPHAN KINSELLA: Yes, and you could theoretically have class actions.  Let’s say there’s thousands of customers defrauded by some company.  And you could imagine situations, but almost every trademark case you hear of in today’s world is totally bogus.  You have Toyota, which sells Lexus, L-E-X-U-S, cars.  I’m sorry.  It’s the other way around.  You had LexisNexis, L-E-X-I-S, the news service, suing Toyota 15 or so years ago when they came out with their Lexus car because they said that was confusingly similar to customers.

00:46:15

Now, who is really going to buy a Lexus automobile and believe that it’s being sold to them by LexisNexis news publishing?  I mean no one.  So there’s no fraud whatsoever.  This is what happens all the time, and in fact, trademark law is used primarily nowadays for censorship and free – to shut down – I think one of the cases – there’s a guy up in Maine or Connecticut, one of these New England states, who was selling – he sells t-shirts that say Eat More Kale, K-A-L-E.

00:46:47

And Chick-Fil-A sued him because they have – their slogan is Eat Mor Chiken, spelled M-O-R, misspelled actually because the cows can’t spell right.  And so this poor individual has been defending himself for a couple years now with donations because some giant corporation is just trying to run him into the ground for no reason.  There’s no competitive threat whatsoever.  There’s no fraud whatsoever.  There’s no harm to their market whatsoever.

00:47:18

But trademark law, under the current statutes, gives them the right to do this to him, and I don’t know if they’re going to win or not.  I don’t know what actually happened.  It may be still ongoing.  But even if he wins, he’s going to have spent months of his life and millions of dollars defending himself.  So trademark law is not as horrendous I think in its effects as patent and copyright, but it’s 100% completely illegitimate in my view.  And so is trade secret law, by the way.  Trade secret law is totally unnecessary and illegitimate because you don’t need a law to permit you to keep information secret.  You can just do it if you have property rights protected.

00:47:58

What trade secret law does is it gives you the right to go to a court to issue an injunction against third parties to tell them they can’t use information that they got if it’s still pretty much secret, if you have a trade secret in it.  Apple has done this, for example.  I think they used the cops to bust into some guy’s house about three years ago.  Remember that iPhone was left by an Apple employee on a barstool somewhere.  And the next day or three or four days later, Apple busted and used the cops to burst into someone’s apartment and to issue – used trade secret law to do this.

00:48:40

Look.  It’s their fault that they left the iPhone out.  It’s not someone else’s fault that they found the iPhone.  Maybe they still owned the actual iPhone.  I would say that under property law principles, they could get their iPhone back.  I don’t deny that.  But if the guy had taken a picture of it or learned something about it and publicized it in the meantime, I don’t think he’s violated anyone’s rights.

00:49:00

MATT GILLILAND: All right, thank you, Travis.  I’ve got a question from Max Hill.  Does a public disclosure, such as publishing in an academic journal, prevent others from patenting any science disclosed?

00:49:17

00:49:21

STEPHAN KINSELLA: Yes.  Well, it doesn’t prevent them because the patent system is not perfectly efficient.  So it is – as I said, that would be like saying if you don’t do anything wrong, it doesn’t mean you can’t be sued.  No.  You can still be sued.  It just means you should win.  You probably will win if you haven’t done anything wrong.  Same thing here.  The patent system provides that you should not be able to obtain a patent on an idea that is already public.

00:49:57

That doesn’t mean that the patent office is going to realize that when someone applies for a patent.  But what it would do is it would give you a defense.  So let’s say you published your paper on day one.  And six months or a year or two years later, someone else independently invents this idea and files a patent on it, and let’s say they get a patent because the patent office never sees the – your paper that you had published.  Well, you don’t really care if they have a patent.  All you care about is that they assert it against you, and if they threaten you with a patent or if they sue you for patent infringement, then you would have a defense.

00:50:37

You could simply say, listen, you have sued me for patent infringement, but I have a paper published before you filed for your patent, which means that your patent is invalid, and I will be able to prove that if you sue me in court, so go away, please.  So it would at least give you a defense.  Moreover, if you publish the invention in a paper, let’s be clear.  The only way you’re supposed to get a patent is if you are the inventor of the patent, of the invention.  So unless the person who filed a patent independently invented it, they’re still not entitled to a patent, so there’s two barriers.

00:51:21

So if someone learns of the idea from you, they’re not the inventor.  You are.  You just chose not to get a patent on it.  You published it.  You basically released it into the public domain.  By the way, there’s no counterpart procedure for this in the copyright system.  There’s really no easy way to make your copyrighted works non-copyrighted or in the public domain.  It’s almost impossible to do it.  There’s CC0, but it has dubious validity, and even that is not easy to do the right way.  But patents at least you can.  If you just refrain from filing for a patent and if you publish the idea, it basically becomes public domain.

00:52:01

MATT GILLILAND: All right, we’ve got a question from Wesley Matthew.  In countries with little or no copyright protection, how does innovation compare to those with copyright?

00:52:14

00:52:20

STEPHAN KINSELLA: In today’s world, most countries have acceded to the modern conventions like the Berne Convention for copyright, the Paris Convention, and the Patent Cooperation Treaty for patents and the WIPO, World Intellectual Property Organization, all these different conventions.  So most countries have minimum standards of intellectual property but mostly at the behest of American and the western countries.  Primarily America, at the behest of the pharmaceutical industry, the music industry, and Holly wood, have twisted the arms of most other countries in the world to go along with our type of system, even though they are basically harmed by it.

00:53:04

It’s basically a wealth transfer from every other country to the US and to these three industries in the US: the pharmaceutical, the music industry, and the movie industry, Hollywood.  So I would say – and so there are some countries with lower copyright protections, but I would say that’s an instance – and they tend to be poorer countries, but I think that’s not an instance of causation and correlation.  That’s more of an instance of just – it’s just correlation.  You could make other correlations with antitrust law or tax law enforcement.  For example, you could say that your typical poor country has more corruption, more bribery, and worse tax law enforcement than the US.

00:53:54

But you couldn’t draw the conclusion that, if you have greater tax enforcement and greater antitrust enforcement and less corruption and bribery that you have more wealth.  You couldn’t draw that conclusion.  I think the problem is that you have these relatively liberal, free-market economies like the United States, and they become rich because they have relatively free market internal policies, or we have a very large free market here, pretty much an unregulated, free market, capitalist, property rights system.

00:54:43

But the state is there, and the state taxes and survives off the revenues produced by the underlying economy.  So you have these states, which become powerful and rich because they’re parasitically taking money off of the underlying economy, and they also tend to expand their own power and authority.  They start exerting minimum wage laws, affirmative action laws, anti-discrimination laws.  They start becoming more bellicose internationally.  They become more imperialistic, more warlike.  So you have these things going hand in hand.  I would say that the richness of the underlying free-market society is the cause of the non-free-market things that the state that depends upon the society does rather than the other way around.

00:55:35

Now, if you want to take some actual examples, there have been examples in the past of some historical episodes I think in the 1800s or about 50 years.  Let’s say Germany had almost no or very lax copyright laws.  And the empirical evidence shows that they were out-producing England, which was a comparable society at the time, in the number of published works and things like this.  And Italy and Switzerland I think for a good 50 or 100 years had no patents on pharmaceuticals, and yet they were two of the largest producers of pharmaceuticals at that time.

00:56:15

So there are episodes in history where we can point to where there’s been a lack of or much more reduced form of patent or copyright and which we can see that there was still a huge amount of innovation and research and development and artistic creativity being done anyway.  And I’ve got some surveys and some studies on my C4SIF.org website to that affect.

00:56:43

00:56:46

MATT GILLILAND: All right, we’ve got a question from – another one from Travis, The Green Guy, which I actually like this question a lot.  Can a public disclosure from person A also protect person B from company C’s patent that was filed after the publishing date?

00:57:07

STEPHAN KINSELLA: Yes.  Yes.  Once it’s public – there is in our – yes.  Yes, it doesn’t matter who published it.  As long as it’s published, then company C’s patent is potentially invalid.  So company – person B would be able to use person A’s publication as a defense and say that person C’s patent is invalid because it shouldn’t have been issued.

00:57:34

Now, there is a unique twist in the law that Obama had passed, which is that company A – in the hypothetical you just gave, person A has one year to file a patent.  They can still file their own patent, so person A could disclose their invention on day one.  They have up to one year to decide whether they want to file a patent.  They have a one year statutory – they have a one-year sort of grace period, we call it.  But no one else does.  It’s a bizarre situation.  So I can’t get into the weeds here, but you could imagine a bizarre situation where person A files on day one.  I’m sorry.  Person A publishes their invention on day one, and person B publishes – or files a patent on day two.

00:58:32

Now, under the Obama America Invents Act, we changed our priority system to where the first person who files is entitled to the patent.  If there’s two competing inventors, the first one who files is entitled to a patent, which is what the rest of the world has in their patent systems.  America, until two or three years ago, had a different system where it was the first to invent.  That’s one reason they made this change.  But because of this change in the publication grace period, a strange twist of this is that if person A invents the invention first and person B invents it later, then person B can still get the patent if they file first.

00:59:18

That’s the basic law right now.  But if person A makes it public first, then person B is now prohibited from getting a patent on it.  But person A has a year to decide to file – they have a one-year grace period, but it only affects A, not B.  So the only example – the only exception to the answer to the question is that B is protected by A’s publication from C’s patent, but B wouldn’t be protected from A’s patent.

00:59:47

00:59:50

MATT GILLILAND: All right, I’ve actually got a question.  You said – you suggested using creative commons by attribution license.  Now, why would you suggest that instead of creative commons by attribution, share and ShareAlike, which for the audience means that they have to both attribute the work, and they have to release everything they create under the same kind of license, which prevents them from using copyright against others using works that are based on yours?

01:00:21

01:00:26

STEPHAN KINSELLA: So my basic thinking is that I want to release my works from copyright as much as possible.  If I could just say this is hereby public domain, that’s what I would do, which is what CC0 tries to get at.  I’m just afraid CC0 wouldn’t be legally effective.  It might be.  It’s not clear.  To be honest, I’m not even sure CC-BY or any of the CCs are legally effective, but apparently, they’re being treated that way right now.

01:00:53

The reason I’m not sure any CC license is legally effective is, number one, I’m not clear what the consideration is for the contract.  And number two, I’m not sure how the alleged licensee is going to prove he had a license.  In a normal copyright license, you and I would have a document we would sign where you pay me some money, or you do something for me in exchange for me granting you a license.  So there’s consideration, which is you’re giving me something back, and you have to have consideration to have a binding contract in most common law countries.

01:01:29

And number two, you have proof of it because you have a copy of the contract.  So if I ever sued you for copyright infringement, you could simply say what are you talking about?  You gave me a license.  In the creative commons case, I’m concerned that there’s no consideration, and I’m concerned that the person who might be sued for copyright infringement—the licensee, the user—wouldn’t be able to prove he had a license because – so let’s say I publish a novel on my website, and I put CC-BY on there.

01:01:57

And then, in the meantime, you download it and you start making copies of it.  Okay, you’re permitted to do that.  But let’s say a year later I just change the – I just update the file on my website, and I change it from CC-BY to copyright, and then I sue you for copyright infringement.  Now, you claim – your defense is that you have a license.  Well, how do you prove you had a license?  When did I grant you this license?  Did we negotiate it?  Do you have a written, signed copy?  So you see there’s a question of proof, and there’s also a question of consideration.  Even if you can prove that I had the CC-BY notice on there, so what?  Where is the contract?  Where is the – what did you give me?  What consideration did you pay me as a user to make the contract valid and binding?  So I’m concerned about that.

01:02:48

But let’s put that aside.  Let’s assume that the creative commons is enforceable.  The reason I prefer CC-BY to CC0 is because I think CC-BY has a greater chance of being enforceable than CC0 does, and I’m just going by what the Creative Commons Foundation itself says on their website.  They had these warnings that CC0 may not be enforceable in every jurisdiction and all this kind of stuff.  So they have some concern that CC0 is not enforceable probably because of what’s called moral rights and also the inalienability of copyright in some countries like in Europe.

01:03:24

CC0 sort of tries to undo what they view as an inalienable human right, which is copyright, or something like that.  So that’s my concern about CC0.  I would use CC0, and in fact, I try to use it in a creative way on my website just to shut people up who say I’m a hypocrite for not using it even though they don’t understand that it may not be enforceable, but whatever.  So I use CC-BY because all it requires is attribution, and I figure that’s a restriction that almost no one minds anyway because, if you copy someone’s work, you pretty much want to say who wrote it because otherwise no one’s going to want to take the copy you made because they don’t have the full copy because the copy includes the author’s name.

01:04:05

Now, the other ones like ShareAlike and also ND, which is no derivative works, and NC, non-commercial use, I don’t like those at all.  I certainly don’t like non-commercial and non-derivative because it’s an attempt to use copyright law to prevent people from using your work as they want to use it.  If you’re going to NC or ND, no creative works – I’m sorry – no commercial use or no derivative works, you might as well just have a copyright notice and prevent people from using your work.

01:04:35

I don’t really see why you would use CC at all in that case.  And in fact, I think they’re vague.  I don’t really know what a non-commercial use really means because if I have a “not-for-profit blog” or a hobby blog like I do, but I had Google advertising in the corner of my website, and I copy someone’s CC, NC work, am I using it commercially because it’s helping draw traffic to my website and I’m making some Google AdSense revenue?  I don’t know, maybe.  But the point is that’s not a good license because it’s restrictive.  So I do understand the ShareAlike license.  The ShareAlike license is the one that some libertarians and others prefer to use instead of BY, which is attribution only.  It’s more similar to what’s used in the copy – in the software case of the open-source-type licenses, which is – I forgot – GNU or something like that where you have to…

01:05:38

MATT GILLILAND: Yeah, the GNU GPL.

01:05:40

STEPHAN KINSELLA: GPL.

01:05:41

MATT GILLILAND: General public license.

01:05:42

STEPHAN KINSELLA: So if you use someone’s source code, the only condition is you have to release your source code that borrows from it under a similar license.  I can understand that idea.  I think it makes – I don’t like it even in software, to be honest.  I prefer to just open things up and let people do what they want with them.  One reason people do that is they have a mistaken understanding of what copyright is.  They say, well, if I don’t copyright my works, then someone else is going to run around and copyright it.

01:06:09

Well, first of all, you don’t copyright anything.  As I said, it’s automatic, so that’s a mistaken understanding of how copyright works.  So I don’t think that’s a good reason to do it.  I just don’t like ShareAlike because – let me give you one example.  If I have a – like the Journal of Libertarian Papers, which I created and which I’m the executive editor of, we have a CC-BY policy.  If we had a CC ShareAlike policy, then – well, under our current policy, any publisher that wants to use one of our articles in one of their books – like let’s say there’s an anthology of articles on a certain topic and they want to take one or two Libertarian Papers articles.

01:06:54

They can do that without asking our permission.  They don’t need my permission.  They don’t need the journal’s permission.  They don’t need the author’s permission.  They already have their permission.  It’s built into the article under the CC-BY.  They can use it, and we want our ideas out there, so that’s a good thing.  Okay, so if I can’t find the author, if the author is dead or his widow is around and she’s crazy or whatever, that’s not going to be a hindrance to this idea getting out there.

01:07:16

If it’s CC ShareAlike, most books are being published by publishing companies with fairly standard copyright policies, and they’re not going to have a CC-BY policy or even a CC ShareAlike policy.  So they can’t include this article in this book unless they make the whole book CC ShareAlike.  So I’m restricting what they can do with it, and it’s like I’m trying to use copyright law to twist their arms to become a libertarian or to have a libertarian policy, and I just don’t like that.

01:07:49

I prefer to have it open and let them do with it as they see fit.  The article is still CC-BY even if they include it in their book.  Their book may be copyright normally, so someone still couldn’t copy their book, but that’s their decision, not mine.  So I don’t feel it’s my obligation to use my copyright leverage to force other people to adopt similar policy in their other published works.

01:08:16

So that’s my reasoning.  I respect other libertarians who prefer to use the CC ShareAlike as more of an activist tool, but I think they’re hurting themselves because, as I said, you basically are preventing your work from being used in any other kind of journal or omnibus volume or collected anthology because they just – the CC ShareAlike copyright provision is tantamount to a copyright provision, which means they can’t use it without getting the permission of the author.  And the whole purpose of the CC-BY is so that people can use it without having to come to you for permission, so that’s sort of my thinking on that issue.

01:08:56

MATT GILLILAND: All right, one last question before we call it a night.  I know there are ton a more questions.  That just means that Stephan’s going to have to come back some time.

01:09:08

STEPHAN KINSELLA: I’d be happy to come back.  People can email me too, by the way, so that’s fine, but go ahead.

01:09:12

MATT GILLILAND: From Bob Vacanti, could blockchain technology by adapted to record patents as it authenticates Bitcoin transactions?

01:09:19

01:09:29

STEPHAN KINSELLA: I’m trying to think how to answer this.  I think patents are completely illegitimate grants of monopoly privilege by the state.  So I don’t want to find a way to make them more efficacious.  And also, this question gets at a non-problem.  I mean patents are – the word patent means open.  That’s what it means.  They’re, by definition, public, which is why these people that think that there are these secret patents out there that the oil industry has gobbled up and kept 100-mile-per-gallon carburetors and engine designs off the market makes no sense because if they existed, you could find them with a search on the USPTO.gov website.

01:10:13

So, in other words, we already have a record of the patents.  It’s the USPTO.gov website and other websites around the world, WIPO websites and the PCT search engines, things like that.  So there’s no problem with knowing who has which patent.  Every patent as a unique serial number already.  It’s already made public.  It’s already easily searchable.  And believe me, if you’re sued by someone for patent infringement, they will be able to prove they have a patent.  So there’s no problem of the – there’s no inability of patent holders right now to prove they have a patent.

01:10:46

I think what the question is getting at is something different.  I think they just worded it legally imprecisely.  I think what they’re saying is could you have a free-market system, which doesn’t rely upon the state or a state patent office where people could register their inventions and get some kind of protection for them that way.  And I think that’s a premature question because you don’t need Bitcoin for that or something like the blockchain for that.  That would just make it more efficient.  The question is would that make sense in the first place.

01:11:25

I think the Tannehills, by the way, in The Market for Liberty, which is an anarchist book from the ‘70s, Morris and Linda Tannehill, they were basically Randians objectivists who became anarchists.  But they still clung to the IP idea, and they proposed in a few paragraphs in that book that maybe you could have some kind of private, free-market system for protecting inventions other than the patent system.  What they proposed was that you could register your ideas with some title agency, and you wouldn’t have to rely upon the government to do that.

01:12:00

But once you had it registered, you could use some kind of private legal system to sue people who were using your ideas because you had shown that you were the first one to invent this idea, and you could point to a public record of it.  So I guess you could imagine a blockchain-type system would be a more efficient way of recording information like that.  I just don’t think information like that is relevant in a free market.  In other words, it’s not legally relevant who first came up with an idea because there’s no property rights in ideas in the first place.

01:12:33

So yes.  I think the blockchain could be used for that.  Probably a more realistic or practical example or use of the blockchain would be registering ideas for credit.  Like, for example, Leibniz and Newton – there’s a fight over who came up with calculus first.  And Einstein and others had fights over who came up with certain physics theories first.  But it wasn’t for legal property or IP reasons or patent reasons.  It was just for credit in the scientific community.

01:13:04

So I suppose you could imagine a blockchain being used for that, but that’s totally a private, social convention, which has nothing to do with the law.  So I would say because ideas and information cannot be owned and are not the subject of property rights, it wouldn’t make sense to imagine a private record-keeping system, including blockchain, being used to track the authorship of ideas for some kind of property rights purpose in a free society anyway.

01:13:38

01:13:41

MATT GILLILAND: All right, thanks, everybody.  And thank you, Stephan.  We’ve had a great time here tonight, and we’ll definitely have Stephan back here soon.  Tomorrow night at 8 o’clock, we’ve got an author’s forum with Tom Palmer over the new SFL book, Peace, Love, and Liberty.  So join us there tomorrow night.  Hope to see you there.  Thanks everybody for coming, and take care.  Have a good night.

01:14:11

STEPHAN KINSELLA: Good night.  Thanks.

01:14:12

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:14:12 — 51.0MB)

My exchange with a high school teacher from Norway, whose class had some questions about the libertarian approach to certain issues.

I am teacher at a high school in Norway. During my classes I have spent some time trying to explain libertarianism to my students, and I have used some of your articles, and of course Murray Rothbard has been central.

Some of the students have really dug into the material, to my surprise really. Regarding the extent anyway.

I am writing to you because I simply have trouble answering their questions up to a point, and I would sincerely appreciate it if you would help me with some questions here:

1) What happens on a territory – in a stateless society – where a person or a group of persons are starving to death because nobody will employ them, do business with them, help them etc. What are they supposed to do? Starve to death because, after all, those who wont help them have gained their properties just and should thereby not be attacked? What if survival for them triumphs “justice”? Will this not be an unstable society? Is it not easy to understand that these people will choose war rather than death?

2) Mobility: How can a stateless society avoid that a rich misantrophe uses his rights to block important trade routes and roads?

3) Is it reasonable to accept that private persons can own nuclear weapons or high-tech modern war weapons?

4) The ethics of Liberty by Rothbard; do you hold this as the primary work in freedom ethics, and do you find any flaws in it? Or is it as you see it flawless, and thereby a document which should be basis for a “common law”?

5) There has been some talk about Rothbards work on children here in Norway; is it correct that he meant that not feeding ones child should not be a punishable offense by common law? Do you support this and his reasoning behind it?

Best regards,

[X]

[continue reading…]

Note: An updated and revised version of this transcript is included as chap. 25 of Legal Foundations of a Free Society (Houston: Papinian Press, 2023). The transcript/speech is below as well as the text of chapter 25.

Note: on the origins of modern libertarianism, see also Murray N. Rothbard, “Towards a Strategy for Libertarian Social Change” (April, 1977):

“The contemporary libertarian movement in the United States may be precisely dated as beginning just after World War II. … Into this wasteland there stepped Leonard E. Read, late of the Los Angeles Chamber of Commerce and the National Industrial Conference Board, who, in 1946, founded the Foundation for Economic Education. The creation of FEE marked the beginning of the modern libertarian movement in America.”

See also Rothbard, “Listen, YAF” Libertarian Forum (Aug. 15, 1969).

And Rothbard, quoted in Rothbard on Leonard Read and the Origins of “Libertarianism”: “More than any other single person, Leonard was the founder of the modern libertarian movement. … ” ¹

See also many, many references to “modern libertarianism” or “the modern libertarian movement” in The Complete Libertarian Forum (1969–1984). See also Roderick Long’s Foreword to the Laissez Faire Books edition of Jerome Tuccille’s classic It Usually Begins with Ayn Rand (2012): “It Usually Begins with Ayn Rand is a jazz improvisation on the early history of the modern libertarian movement …”

See also Matt Zwolinski and John Tomasi, The Individualists: Radicals, Reactionaries, and the Struggle for the Soul of Libertarianism (2023), p. 7:

After introducing libertarianism in chapter 1, we turn to introducing the three major periods or waves of libertarian thought. The first, “primordial” era covers the latter half of the nineteenth century, with special focus on Britain, France, and the United States. The second “Cold War” era runs from the 1930s through the 1980s and mainly centers in the United States. Finally, and more tentatively, we discuss the emerging “Third Wave” of libertarianism. ²

I agree that there are precursors to modern libertarian thought in the nineteenth century and before, but would not count the “primordial era” as modern libertarianism proper; in my estimation, and that of Rothbard, as noted above, modern libertarianism finds its beginnings in the 1950s and 1960s, with FEE and Ayn Rand’s works, especially Atlas Shrugged (1957), Milton Friedman’s Capitalism and Freedom (1962), and many other works by Bastiat, Mises, and so on.

See also Timeline of libertarianism in the United States.

As for my comment in the chapter that “the modern libertarian movement is only about five or six decades old,” this of course means there is still work to be done. As Ayn Rand herself wrote of Objectivism in 1978, just 4 years before she died (as quoted by Barbara Branden in the Foreword to Nathaniel Branden’s The Vision of Ayn Rand:

Much work remains to be done, as Rand was quick to acknowledge. In an interview with Garth Ancier of Focus on Youth in 1978, Rand was asked: “Miss Rand, is there anything more to say about your philosophy that you haven’t said already?” I’m glad you are not that acquainted with my philosophy, because if you were, you would know that I haven’t nearly said everything yet. I do have a complete philosophical system, but the elaboration of a system is a job that no philosopher can finish in his lifetime. There is an awful lot of work yet to be done. ³

We have made progress since the early days of Rand and Rothbard and their earlier progenitors and contemporary colleagues. Libertarianism has become more radical and more integrated with insights from Misesian-Austrian economics. Its numbers have grown, as have the numbers of scholars and books written.

As we do not have a fully libertarian world in which detailed libertarian law can organically develop, we have no body of concrete libertarian law developing. This will eventually be essential to have in a free society, since there are limits to what theory alone can do. Deduction, reasoning, and armchair theorizing can only get you so far. ⁴ The legal system of a free society will need to have concrete rules or legal precepts that are operational and that develop organically in decentralized legal systems, but based on more general and abstract libertarian principles of justice. ⁵ Such a libertarian legal order cannot develop until it starts being used.

In the meantime the activists can try to bring about more freedom more quickly and the theorists can keep trying to advance our understanding of liberty and libertarian principles. Again, there is much work left to be done in libertarian theory. Theorists since the days of Rand and Rothbard have continued to contribute to the edifice of libertarian thought, and there is much more that calls out for attention. ⁶

It is not for everyone. Some are not libertarian at all. Others are more or less libertarian in their lives but otherwise not interested in thinking about it or doing anything about it. That is fine. It’s enough to just be a productive, peaceful person. Still others are passionate about understanding the ideas, both to enrich their own lives and understanding and to help understand what can be done to make things better. Some are activists, both political and intellectual; others more cerebral and focused on understanding, teaching, correcting, writing (even if the activists, in their impatience and often with an anti-intellectual kind of snobbery, often disdain or even scorn or mock theory and the theorists).

Why work on understanding the ideas of liberty, on repeating them, preserving them, teaching them, correcting and developing and extending them, in an unfree world which largely sees this as unserious, pointless, a parlor game? In a sense, it is for the remnant, biding its time until it can be called into action. ⁷ We want to advance libertarian theory so that it can be used by jurists when a freer world emerges. ⁸

***

Below is an edited transcript of my speech “Libertarianism After Fifty Years: What Have We Learned?” delivered at the NYC LibertyFest (Brooklyn, NY, October 11, 2014; available at Kinsella on Liberty Podcast, Episode 152). The original title was “Libertarianism After Fifty Years: A Reassessment and Reappraisal” but I was allotted only about 15-20 minutes so condensed the scope and could only touch briefly on many of the matters discussed.

[ORIGINAL CHAPTER IN Legal Foundations of a Free Society (Houston: Papinian Press, 2023)]

25

Libertarianism After Fifty Years:
What Have We Learned?

 

This chapter is an edited transcript of my speech “Libertarianism After Fifty Years: What Have We Learned?”, delivered at the NYC LibertyFest in Brooklyn in 2014. I was allotted only a short speaking time, so the speech was somewhat condensed. I expanded on the issues touched upon in a transcript posted on my site, which is the basis for this chapter.^[*]

 

INTRODUCTION

Hello. I’m glad to be here. Thank you to Ian and Mike for the invitation. I do have my eleven-year-old son with me. It’s the second or third time he’s seen me speak. He’s been to Auburn with me. I went to the New York Comic Con with him on Thursday. So turnabout’s fair play although it was fun. Comic Con was great.

I have fifteen minutes. My topic is “Libertarianism After Fifty Years—What Have We Learned”? If I get cut off, I will continue this in a private podcast. You can find more information, if I run out of time, because this is a big topic for fifteen minutes.

This is my own view of libertarianism. It might not be shared by everyone here. But what I would like to talk about is—what is the libertarian movement? How old is it? Where did we come from? What have we learned, and what’s to come?

THE MODERN LIBERTARIAN MOVEMENT^[1]

In my view, the modern libertarian movement is only about five or six decades old. The ideas that have influenced our greatest thinkers can be traced back decades and centuries to previous movements and thinkers^[2]—to the Enlightenment, to classical liberal thinkers, to thinkers from the Old Right, to luminaries such as Hugo Grotius, John Locke, Thomas Paine, Herbert Spencer, David Hume, and John Stuart Mill, and to more recent and largely even more radical thinkers, such as Gustave de Molinari, Benjamin Tucker, Lysander Spooner, Bertrand de Jouvenel, Franz Oppenheimer, and Albert Jay Nock.^[3]

The beginnings of the modern movement can be detected in the works of the “three furies of libertarianism,” as Brian Doherty calls them: Rose Wilder Lane, Ayn Rand, and Isabel Patterson, whose respective books, The Discovery of Freedom, The Fountainhead, and The God of the Machine, were all published, rather remarkably, in the same year: 1943.^[4] But in its more modern form, libertarianism originated in the 1960s and 1970s from thinkers based primarily in the United States, notably Ayn Rand and Murray Rothbard. There’s a reason Jerome Tuccille’s hilarious satirical memoir is entitled It Usually Begins with Ayn Rand.^[5] Other significant influences on the nascent libertarian movement include Ludwig von Mises, author of Liberalism (1927) and Human Action (1949, with a predecessor version published in German in 1940); Nobel laureate F.A. von Hayek, author of The Road to Serfdom (1944); Leonard Read, head of the Foundation for Economic Education (founded 1946); and Nobel laureate Milton Friedman, author of the influential Capitalism and Freedom (1962).

The most prominent and influential of modern libertarian figures, however, were novelist-philosopher Ayn Rand, the founder of “Objectivism”—the political wing of which, dubbed “capitalism” by her, is more or less co-extensive with libertarian minarchism—and a “radical for capitalism”; and Murray Rothbard, the Mises-influenced libertarian anarcho-capitalist economist and political theorist. Rothbard’s seminal role is widely recognized, even by non-Rothbardians. Objectivist John McCaskey, for example, has observed, that out of the debates in the mid-1900s about what rights citizens ought to have:

… grew the main sort of libertarianism of the last fifty years. It was based on a principle articulated by Murray Rothbard in the 1970s this way: No one may initiate the use or threat of physical violence against the person or property of anyone else. The idea had roots in John Locke, America’s founders, and more immediately Ayn Rand, but it was Rothbard’s formulation that became standard. It became known as the non-aggression principle or—since Rothbard took it as the starting point of political theory and not the conclusion of philosophical justification—the non-aggression axiom. In the late twentieth century, anyone who accepted this principle could call himself, or could find himself called, a libertarian, even if he disagreed with Rothbard’s own insistence that rights are best protected when there is no government at all.^[6]

We can date the dawn of today’s libertarianism to the works of Rand and Rothbard: to Rand’s Atlas Shrugged (1957), and to Rothbard’s Man, Economy, and State (1962), Power and Market (1970), and For a New Liberty (1973), plus his journal The Libertarian Forum (1969–1984). For a New Liberty stands today as a brilliant, and early, bold statement of the radical libertarian vision. By the mid-60s, the modern libertarian movement was coalescing, primarily behind the non-initiation of force principle and the “radical capitalism” of Ayn Rand and Rothbard’s systematic libertarian corpus based upon the non-aggression principle, or axiom. It is no surprise that the Libertarian Party was founded in 1971, as these ideas, and the liberty movement, were gaining steam.

In the ensuing decades, many other influential works appeared expounding on the libertarian idea.^[7]

So the movement is about fifty or sixty years old. It’s a relatively young movement as far as ideologies and political philosophies go. We still have our disagreements over certain controversies like abortion and other issues. But a lot of progress has been made in the last fifty years. We’ve had a lot of development, partly because of incessant libertarian internal debate, criticism by outsiders, criticism by minarchists, criticism by insiders. But at the fifty year stage, I do think it is a good time to step back and reflect and think what have we learned over the last fifty years. How we could use this going forward to further refine and develop our ideas.

WHAT HAS BECOME CLEARER

So let’s talk first about what has become clearer in the last fifty years. And, again, not everyone is going to agree with this—but this is my take. My take is from the position of an Austrian and anarchist influenced libertarian; from someone influenced greatly by Rothbard, Mises, Ayn Rand—and Hans-Hermann Hoppe, whom I regard as the greatest living libertarian theorist and Austrian economist.

This first insight may not be the most popular with everyone here, but I think the one thing we’ve learned is that political activism as a primary means of progress is limited at best.^[8] I don’t want to discourage people from doing it, but not everyone agrees with voting or that electoral politics is the way to go.^[9] And the sort of sorry history and state of the Libertarian Party since 1971—incompetence, corruption, and inefficacy—shows that electoral politics has not succeeded very much so far.^[10]

I would also say that we’ve learned that a principled libertarian position is preferred over an ad hoc or single purpose one like NORML or marijuana legalization or a utilitarian approach. Those have their purpose. They have their role. But a principled approach is superior and necessary. You really need to have a love for liberty, a love for libertarianism. You have to believe that aggression is really wrong, not just impractical.^[11]

It has become clear that libertarianism has to be 100% anti-war, not merely against “unjust” wars—as even Rothbard said, in the history of America, there have only been two “just” wars: the Revolutionary War and the war to prevent the independence of the South. We need to condemn both of those wars, the Revolutionary War and the Civil War, on both the South’s and the North’s side. These are both wars waged by the state.

In the case of the Revolutionary War, it was a war that involved conscription, shooting deserters, tons of war crimes, taxation, inflation.^[12] And it resulted in the current state that we have now. The American Revolution was a failure as well.^[13]

Libertarianism is anti-state, or at least it is increasingly becoming so.^[14] There’s an increasing number of libertarians and an increasing number of those that get drawn to anarchy. What’s the old joke? “What’s the difference between a minarchist and an anarchist? About six months.” To be against aggression, you have to be against all aggression: private aggression, that is, crime, and public aggression, or institutional aggression, which is what the state always does.

Libertarianism is radical. It’s not incremental. There is nothing wrong with being incremental, but libertarianism is really a radical doctrine. And it’s also unique and radical and different from, and superior to, the Left and the Right. We have to recognize that. We’re not “of the Left.” We’re not “of the Right.”

Also, libertarianism is now increasingly, overwhelmingly, anti-intellectual property.^[15] Intellectual property, patent and copyright law, and related laws like trademark and trade secret used to be the boring province of specialists and policy wonks, but with the advent of the internet and the increase of global trade and high tech, the so-called “abuses” of patent and copyright law have become evident to all of us.

We have to realize that intellectual property is one of the top five or six horrible things the state does to society. After war, public education, the drug war, central banking, taxation—intellectual property is up there.^[16] It’s one of the worst things that helps support the police state and suppress individual liberties and reduce innovation and impose hundreds of billions of dollars of cost on the globe every year.^[17] This kind of view upsets a lot of the old guard libertarians, Objectivists and minarchists and utilitarians and “Constitutionalists,” who still attempt to defend IP … but modern libertarians, left libertarians, tech libertarians, young people, people who actually “use the Internet”—they all know that there’s something wrong with a law that prevents you from learning and sharing in what we call, in the free market, “competition.” There’s nothing wrong with competition!

Another thing we’ve learned in the last fifty years, due to the work of writers like Bruno Leoni, Hayek, others: legislation is not the way to make law. Law has to arise from custom, from contract, from agreement, from decentralized processes like the common law or arbitration.^[18]

Also, I think we’ve learned, due to the work primarily of Hans-Hermann Hoppe and others … we’ve had to recognize that democracy was not a step on the road to progress towards a libertarian society. Moving from monarchies in the ancient regimes to democracy might have been better in some ways, but it wasn’t unambiguously better, and it’s definitely not a simulation of a libertarian or a liberal society.^[19]

And along those lines I think we also have to recognize that we need to quit thinking of America as some kind of proto-libertarian paradise back in the day of the Founders. The Constitution is not libertarian. It was a centralizing document. It was a power grab. It failed… or rather, it succeeded in what it was really meant to do, which is to centralize power in the hands of the federal government.^[20] So we need to wipe these illusions from our eyes about the American Founders being proto-libertarians. They were not. The Constitution is not libertarian. America was not a libertarian country early on. There’s any number of victim classes you could ask, and they would probably agree with this.

Another thing that has become clear, just in recent years, has been the libertarian approach to peace and cooperation as informing the issueof children. That is, there has been a reexamination of how we rear our children, how we discipline children and how we educate children. Thus we have the rise of the anti-spanking and the “peaceful parenting” movement. And we have an increasing resort to homeschooling and even so-called unschooling. So these are all things that we are starting to learn.^[21]

The two most important things I think that have become clear—and some of these were known to earlier thinkers before—number one is the importance of a solid understanding of economics to inform your case. And I think that means Austrian Economics.^[22] You have to be economically literate. And the rise in the popularity of Austrian Economics has been stunning to see.^[23] There is a reason for that. You don’t see the Chicago school or the Coasean school being passionately argued for by most libertarians now.

Finally, the most important point, it has become clear, and we need to return to this and emphasize this, libertarianism is essentially about property rights. That’s really what it’s all about.^[24] Liberty is a consequence of property rights. It’s what you can do when your property rights are respected.

ISSUES THAT DIVIDE OR CONFUSE

Now there are still some issues that divide or confuse us. There is this left vs. right debate.^[25] Are we of the left? Or are we of the right? There is the thick vs. thin debate. Should we be thick libertarians or thin libertarians?

There’s the debate whether we should be activists or whether we should be theorists or whether we should just mind our own business and not work for the state.^[26]

There are esoteric issues like voluntary slavery. Should I be able to sign a contract and sell my kidneys, or myself? This is the alienability issue.^[27]

There is sometimes debate about whether you should be responsible for the actions of others. I have had people tell me that Adolf Hitler really never pulled the trigger, so he really didn’t commit murder.^[28] Only the henchmen are guilty. Truman didn’t really drop the bomb on Japan. A mafia boss doesn’t actually pull the trigger. His hit man does. So you have this kind of confusion, I would say.

And on the topic of intellectual property, even though libertarians are largely moving in our direction on this—there is still widespread confusion among people about this issue.

And there is also still confusion about the basis and the nature of property rights; about utilitarianism or consequentialism vs. deontological or natural rights thinking vs. intuitionism vs. Popperian conjecturalism.^[29]

DANGER OF UNCLEAR LANGUAGE AND METAPHORS

Now one reason for this confusion is the lack of careful attention to speaking clearly, thinking clearly, and being aware of the danger of the use of metaphors.^[30] When libertarianism arose in the middle of the last century, it was so much superior to the prevailing thought that we could speak in sloppy terms. It was still better, even with imprecise language. After all, our competitors also employed, and still employ, vague and nonrigorous terms. But even though the libertarian approach seems obviously superior to statist alternatives, even in its early days, as it gets applied to more and more issues, harder issues arise and the older ways of thinking and reasoning don’t always suffice. We need to revisit our foundations and we need to think more carefully about this.

Let me give some examples of metaphors or uncareful use of terms, things that can lead to equivocation by our opponents, things that can lead to confusion when we try to analyze difficult issues.

So one is, for example, most libertarians have always been against what we call “public schools.” And in recent years, maybe in the last decade or two, I’ve heard libertarians say, they’ve used the term “government schools,” because they want to make clear, “I’m against government schools.” They’re trying to call to the attention of the proponents of “public” schools that they’re really in favor of the government being in charge of educating people.

Well, even the word “government,” in my view, is a dangerous word to use. I use it from time to time but I increasingly try to use the word “state” to make it clear that I’m against the state because the state has a definition. It’s a monopoly in a geographic area over the provision of law, justice, and force.^[31] The word government has ambiguous meanings. And your opponent—either a minarchist, which we can call a mini-statist, or a regular statist—by the word government, they mean the governing institutions in society. And they also use it as an equivalent to the state because they believe the state is necessary for these governing institutions. So they are smuggling in their presuppositions, a type of question-begging.

So if you say, as an anarchist, I’m against the government (meaning: against the state), they will take you to mean you’re against law and order. So if they ask you, “Well, do you believe in law?”

You say, “Yes.”
Then they say, “Well, then you believe in government.”
And I say, “Well, I believe in government as law and order.”
And then they say, “Well, then you must believe in the state.”

You see there’s that trick there. So we have to stay focused on being opposed to the state, defined in a certain way.

Here’s another one. It’s the use of the word aggression in sloppy ways. Some libertarians, or some of our opponents, will use it just to mean force. So they’ll say, “Well even you guys aren’t against aggression. You believe in force to defend yourself.”

Well, aggression is the initiation of force. And then you see other sloppy terminology, like I’m against “the initiation of aggression.” Well, that’s saying I’m against the initiation of the initiation of force. It’s just not clear terminology.

Another one, it’s just a little issue, is the word “coercion.” Coercion technically means the use of the threat of force to compel someone to do something. Now just like force or violence, which is sometimes justified if it’s used defensively, coercion can be justified sometimes too. If I coerce a guy trying to rob me, there’s nothing wrong with that. So we should quit using the word coercion as a synonym for aggression.^[32] And we should never refer to defensive force as aggression.

There is also the labor theory of property and its close cousin, the labor theory of value.^[33] This is what I think the fundamental mistake in a lot of libertarian thinking is, which is what led to intellectual property, and it also led to communism and the deaths of tens of millions of people in the 20^th century.^[34] It all started with John Locke who was responding to Filmer and understandably used this labor metaphor. But we have to stop thinking of labor as a special thing (it’s just a type of action), and we have to get rid of this confused idea that we own our labor. You don’t own your labor. Labor is what you do with something you own: your body. (You don’t own your “self” by the way. That’s another vague term. You own your body.)^[35]

Property rights are rights to control scarce, or conflictable, resources in the world. These are the only things that can be conflicted over. Your body is an example, and other things in the world are examples. Property rules always specify the owner of that thing. Owning your body is sufficient to allow you to act as you please, but it doesn’t mean you “own your actions.” It doesn’t mean you “own your labor.” If you start thinking this way, you’re going to get to intellectual property. This is what results. I own my labor. I own what I mix it with. I own my labor. I own whatever it creates that “has” “value.” But there are no property rights in value, as Hans-Hermann Hoppe has pointed out. I could elaborate, but I would run out of time.^[36]

Another issue is the word “contract.” Libertarians are confused by contract. Rothbard and Bill Evers have written revolutionary work on this topic, viewing contract as the exercise of property rights in resources that are owned. It is not an “enforceable promise.” That way of thinking leads also to confused conclusions like debtor’s prison which leads to the idea of voluntary slavery, etc.^[37]

Another one is the word “fraud.”^[38] Libertarians throw this word, fraud, around a lot, especially advocates of intellectual property; also the word plagiarism. They totally confuse fraud, contract, plagiarism, property rights, labor theory of value, and patent and copyright law.^[39] They mix them together into a big gumbo of confusion. And, you know, they’ll imply that if you’re against patent law then you’re in favor of fraud or you’re in favor of dishonesty or you’re not in favor of giving someone attribution for their ideas. These are all confused, and they’re all disingenuous usually, or they’re said in total ignorance of what these terms mean and how the law really works and what property rights really are.

There’s another confusion, which is the common paired set of expressions which everyone takes for granted. There are two paired notions. “If you own something, well, you can sell it”—which is wrong actually. “And if you sell something, that must mean you had to own it to sell it.” That’s also wrong.^[40] Those ideas lead to the idea of voluntary slavery on the one hand^[41] and the idea of intellectual property on the other. And I’ve taken those apart in other contexts as well. I can revisit them at some point when I have more time.

Now another source of confusion is the idea about where property rights come from and the idea that just because we believe that the first user of an unowned resource, like Locke’s idea of original appropriation or homesteading—just because we believe he is the proper owner of that resource, that because there’s been this “original sin” or this “taint” of property titles throughout human history, because we can rarely trace our title to a resource back to the original owner, back to Adam, let’s say, then that means our entire theory of property rights is flawed. And then what’s the next step? Then we’re going to say, well, we are going to have to have redistribution someday. The current allocation of resources, the property rights that the rich have, really came from conquests 700 years ago. So no one is really entitled to their wealth. “You didn’t build that,” as Obama might say. And that when we have a libertarian revolution, a left-libertarian revolution, we need to redistribute these titles and everyone is going to be equal. Egalitarianism is driving these people.^[42]

So whenever I hear someone say that there’s something wrong with your theory of property, I hold on to my wallet, because I know they’re coming after it. The people that condemn materialism and rich people and money always want your money. So you have to be very wary of these people.^[43]

Now there’s another related problem which afflicts a lot of quasi-left libertarians, and that is this idea that if you are in favor of property rights, you’re really in favor of “aggression.” Now, how do they come up with this idea? Basically, they don’t believe in ownership. They believe that if you are using a resource that you have the right to use it in an undisturbed fashion, but as soon as you set it down and walk away, it’s up for grabs. And if you maintain the right to use force to retrieve your resource, or to get damages from them for damaging or using your property, you’re committing aggression.^[44] This is obviously confused and unlibertarian.

MOVING FORWARD

So this is the fundamental problem that we need to focus on here. We need to understand that aggression is not the fundamental concept of libertarianism. Aggression is a shorthand description of our view of property rights. Every political philosophy, every person on the planet, has an implicit or explicit view of property rights. Because property rights arise only because we live in a world of scarcity, a world of scarce resources, which means a world where conflict is possible.^[45] If you understand Mises’s praxeology and his analysis of human action and how human action is the purposeful employment of scarce means—things that are causally efficacious in the world to achieve your end, guided by your knowledge (which is why there are no property rights in ideas)^[46]—then you’ll understand that property rights are always the right to control a given resource. It’s about that.^[47]

Aggression is just a shorthand for our particular view of how property should be assigned.^[48] Communists, socialists, liberals, environmentalists all believe in a certain allocation of property rights. They believe the state should own the property or maybe the poor people should own the property. So the question is what makes libertarianism unique? It is our particular property allocation scheme.^[49]

And I will conclude by just summarizing the way I think we need to view the libertarian paradigm and how, if you think about it consistently, it will answer all the questions I just went through that are confusing to people. That is this: the rule of libertarianism is very simple. It is that when two or more people—because if you only have only one person, then there’s no dispute, there’s no problem to be solved; there is no social problem—when two or more people both want to use a given resource, when there is a possible dispute or conflict, the question is simply, for the resource in question: which of those two or more people has the better claim to the resource?

We answer that question by resorting to some very simple and common sense and almost undeniably true rules.^[50] In the case of a person’s body, which is a resource over which there can be dispute, the rule is self-ownership, or self-body-ownership: each person is the presumptive owner of his own body. We oppose slavery, which is “other-ownership” and instead favor self-ownership. Controversial, I know.

And as for previously-unowned, external resources, the types of things that can serve as scarce means of action, there are three simple rules. The first one is: who had it first? Or as between those two, who had it first as far as we know? You don’t have to trace back to Adam. You can trace it back to a common ancestor as the law has it.^[51] This is original appropriation, or homesteading. This has to be the basic property allocation rule, because for people to survive, they must use resources, and there must be a first user. His use has to be rightful if we are to have ownership and property rights as a concept distinct from mere possession.

Second: was there a consensual transfer from an owner to someone else? That’s contract, or contractual title transfer.

And third: did one person harm the other, commit a tort or a crime, so that he owes compensation or rectification or restitution to the other guy, leading to a transfer of money or some resource from one guy to the other.

So if you look at those three principles, that will tell you who owns the resource in question. If I had it first, I am the owner—unless I gave it to someone else, and then they own it. They have a better claim than me. Every other philosophy, other than libertarianism, violates one of those three rules. They ultimately believe that someone has the right to a resource even though they didn’t obtain it by contract, even though they weren’t harmed by the previous owner, and even though they may have never found the resource or started using it and put it to productive use.

Basically every philosophy, other than libertarianism, believes either in a lawless world, a world of might makes right—or in some form of slavery: owning the products of other people’s efforts or owning their bodies.^[52] That is why libertarianism is superior. And if we focus on property rights and this foundational view of looking at things, it helps us to move forward and improve the libertarian project. Thank you.

[Endnotes
some italics missing]

^[*] My talk was originally billed as “Libertarianism After Fifty Years: A Reassessment and Reappraisal,” NYC LibertyFest, Brooklyn, NY (October 11, 2014), but I changed the subtitle before speaking. The speech is available at “KOL152 | NYC LibertyFest: ‘Libertarianism After Fifty Years: What Have We Learned?’”, Kinsella on Liberty Podcast (Oct. 12, 2014); the transcript was posted as “Libertarianism After Fifty Years: What Have We Learned? (transcript),” StephanKinsella.com (Oct. 12, 2014). I have updated and reworked it for this chapter.

^[1] This section did not appear in my original talk for lack of time. It is an expanded version of my introductory remarks, and was included in a long footnote in the transcript posted on my site. I have adapted this section from Kinsella, “Foreword,” in Chase Rachels, A Spontaneous Order: The Capitalist Case For A Stateless Society (2015; https://archive.org/details/ASpontaneousOrder0). For another interesting retrospective, see Mark Thornton, “Libertarianism: A Fifty-Year Personal Retrospective,” J. Libertarian Stud. 24, no. 2 (2020; https://mises.org/library/libertarianism-fifty-year-personal-retrospective): 445–60.

^[2] See Brian Doherty, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (New York: PublicAffairs, 2008); and David Boaz, ed., The Libertarian Reader: Classic & Contemporary Writings from Lao Tzu to Milton Friedman (Simon & Schuster, 2015).

^[3] See Boaz, The Libertarian Reader.

^[4] See Doherty, Radicals for Capitalism, chap. 3.

^[5] Jerome Tuccille, It Usually Begins with Ayn Rand (New York: Stein and Day, 1971).

^[6] John P. McCaskey, “New Libertarians: New Promoters of a Welfare State,” JohnMcCaskey.com (April 14, 2014; https://perma.cc/259E-K2AB). See also Wendy McElroy, “Murray N. Rothbard: Mr. Libertarian,” LewRockwell.com (July 6, 2000; https://perma.cc/H7P2-P2YD). Writes Hoppe in the Foreword to this book, “through his work Rothbard became the founder of the modern libertarian movement.”

^[7] See various works listed in Kinsella, “The Greatest Libertarian Books,” StephanKinsella.com (Aug. 7, 2006) and in Kinsella, “Foreword,” including works by the Tannehills, Hospers, David Friedman, Henri Lepage, and many others.

Regarding the proliferation of books presenting or re-stating libertarian thought in the last couple decades, recall this comment by scholar A.H.J. Greenidge, in his “Historical Introduction” to Gaius’s Institutes of Roman Law: “The Institutes of Gaius are a product of this activity; for it is necessary that a great deal of detailed and special work shall be done in a science before a good handbook on the subject can be written for the use of students.” A.H.J. Greenidge, “Historical Introduction,” in Gaius, Institutes of Roman Law, with a translation and commentary by Edward Poste, 4^th ed., revised and enlarged by E.A. Whittuck (Oxford: 1904; https://oll.libertyfund.org/title/gaius-institutes-of-roman-law), p. li (§ 20; emphasis added). This important work by Gaius was mostly lost until found in nearlycomplete form in a palimpsest in Verona in 1816. (See Wikipedia entry, “Institutes (Gaius),” https://en.wikipedia.org/wiki/Institutes_(Gaius)). The “activity” referred to by Greenidge above is described in the preceding section thusly:

The literary activity in the domain of law, during the period which intervened between the accession of Augustus and the time of Gaius, was of the most varied character. Religious law (Jus Pontificlum) attracted the attention of Capito. Labeo wrote on the Twelve Tables. The Praetor’s Edict was the subject of studies by Labeo, Masurius Sabinus, Pedius and Pomponius. The Edict of the Curule Aediles was commented on by Caelius Sabinus. Salvius Julianus, besides his redaction of the Edicts, produced a work known as Digesta, which perhaps assumed the form of detailed explanations of points of law systematically arranged. Comprehensive works on the Civil Law were furnished by Masurius Sabinus and Caius Cassius Longinus. Other jurists produced monographs on special branches of law, as the younger Nerva on Usucapion, Pedms on Stipulations, Pomponius on Fideicommissa. Some lawyers wrote commentaries on the works of their predecessors. It was thus that Aristo dealt with Labeo, and Pomponins with Sabinus. Other works took the form of Epistolae, which furnished opinions on special cases which had been submitted to their author, and collections of Problems (Quaestiones). Nor was history neglected. There must have been much of it in Labeo’s commentary on the Twelve Tables; and Pomponius wrote a Handbook (Enehiridion), which contained a sketch of the legal history of Rome from the earliest times.

Greenidge, “Historical Introduction,” § 19, pp. l–li.

On the issue of the preservation and transmission of bodies of knowledge, such as legal systems, see also Alan Watson: “The Importance of ‘Nutshells,’” Am. J. Comp. L. 42, no. 1 (Winter 1994; https://digitalcommons.law.uga.edu/fac_artchop/668): 1–23.

^[8] Kinsella, “The Trouble with Libertarian Activism,” LewRockwell.com (Jan. 26, 2006; https://archive.lewrockwell.com/kinsella/kinsella19.html).

^[9] For a libertarian argument against voting, see Wendy McElroy, “Why I Would Not Vote Against Hitler,” Liberty 9, no. 5 (May 1996; https://perma.cc/5NE3-BWES): 46–47.

^[10] That said, since this speech, I have joined the LP. See Kinsella, “Aggression and Property Rights Plank in the Libertarian Party Platform,” StephanKinsella.com (May 30, 2022).

^[11] Kinsella, “Why I’m a Libertarian–or, Why Libertarianism is Beautiful,” Mises Economics Blog (Dec. 12, 2006).

^[12] Kinsella, “The Murdering, Thieving, Enslaving, Unlibertarian Continental Army,” LewRockwell.com (July 3, 2009).

^[13] See Kinsella, “When Did the Trouble Start?”, LewRockwell.com (Sep. 5, 2003); idem, “Happy We-Should-Restore-the-Monarchy-and-Rejoin-Britain Day!”, Mises Economics Blog (July 2, 2009).

^[14] Kinsella, “The Nature of the State and Why Libertarians Hate It,” StephanKinsella.com (May 3, 2010).

^[15] See “Law and Intellectual Property in a Stateless Society” (ch. 14), at n.5; “Against Intellectual Property After Twenty Years: Looking Back and Looking Forward” (ch. 15), at n.21.

^[16] Kinsella, “Where does IP Rank Among the Worst State Laws?”, C4SIF Blog (Jan. 20, 2012).

^[17] Kinsella, “Copyright and Free Trade; Patents and Censorship,” C4SIF Blog (Feb. 29, 2012); Kinsella, “Death by Copyright-IP Fascist Police State Acronym,” C4SIF Blog (Jan. 30, 2012); “SOPA is the Symptom, Copyright is the Disease: The SOPA Wakeup Call to Abolish Copyright,” The Libertarian Standard (Jan 24, 2012); idem, “Masnick on the Horrible PROTECT IP Act: The Coming IPolice State,” C4SIF Blog (June 2, 2012); idem, “Copyright and the End of Internet Freedom,” C4SIF Blog (May 10, 2011); idem, “Copyright Censorship versus Free Speech and Human Rights; Excessive Fines and the Eighth Amendment,” C4SIF Blog (Sep. 6, 2011); idem, “The Overwhelming Empirical Case Against Patent and Copyright,” C4SIF Blog (Oct. 23, 2012); idem, “Yet Another Study Finds Patents Do Not Encourage Innovation,” Mises Economics Blog (July 2, 2009); idem, “Costs of the Patent System Revisited,” Mises Economics Blog (Sep. 29, 2010).

^[18] See “Legislation and the Discovery of Law in a Free Society” (ch. 13).

^[19] See Hans-Hermann Hoppe, Democracy: The God That Failed (New Brunswick: Transaction, 2001; www.hanshoppe.com/democracy). As Hoppe notes in the Introduction: “although aware of the economic and ethical deficiencies of democracy, both Mises and Rothbard had a soft spot for democracy and tended to view the transition from monarchy to democracy as progress.”

^[20] Kinsella, “On Constitutional Sentimentalism,” StephanKinsella.com (Jan. 16, 2011); idem, “Black Armbands for ‘Constitution Day,’” The Libertarian Standard (Sept. 17, 2010); idem, “The Bad Bill of Rights,” LewRockwell.com (Dec. 17, 2004; www.lewrockwell.com/lrc-blog/the-bad-bill-of-rights); idem, “Goodbye 1776, 1789, Tom,” StephanKinsella.com(June 29, 2009); idem, “Rockwell on Hoppe on the Constitution as Expansion of Government Power,” StephanKinsella.com (Aug. 3, 2009); idem, “Richman on the 4th of July and American Independence,” StephanKinsella.com (July 2, 2009); idem, “The Murdering, Thieving, Enslaving, Unlibertarian Continental Army”; idem, “Napolitano on Health-Care Reform and the Constitution: Is the Commerce Clause Really Limited?”, StephanKinsella.com (Sep. 17, 2009); idem, “Was the American Revolution Really about Taxes?”, The Libertarian Standard (April 14, 2010); idem, “Bill Marina (R.I.P.) on American Imperialism from the Beginning,” StephanKinsella.com (July 8, 2009); idem, “Happy We-Should-Restore-the-Monarchy-and-Rejoin-Britain Day!”; idem, “Revising the American Revolution,” StephanKinsella.com (July 6, 2009); idem, “The Declaration and Conscription,” StephanKinsella.com (July 6, 2009); idem, “Untold Truths about the American Revolution,” StephanKinsella.com (July 7, 2009); idem, “Jeff Hummel’s ‘The Constitution as a Counter-Revolution,’” StephanKinsella.com (July 1, 2009).

^[21] See Kinsella, “Montessori, Peace, and Libertarianism,” LewRockwell.com (April 28, 2011); idem, “KOL059 | Libertarian Parenting—Freedomain Radio with Stefan Molyneux (2010),” Kinsella on Liberty Podcast (May 22, 2013); idem, “Stefan Molyneux’s ‘Libertarian Parenting’ Series,” The Libertarian Standard (July 21, 2010); idem, “Montessori and ‘Unschooling,’” StephanKinsella.com (Oct. 16, 2010).

^[22] Kinsella, “Afterword,” in Hans-Hermann Hoppe, in The Great Fiction: Property, Economy, Society, and the Politics of Decline, Second Expanded Edition (Auburn, Ala.: Mises Institute, 2021; www.hanshoppe.com/tgf); Kinsella, “Foreword,” in Hans-Hermann Hoppe, A Theory of Socialism and Capitalism: Economics, Politics, and Ethics (Auburn, Ala.: Mises Institute, 2010 [1989]; www.hanshoppe.com/tsc).

^[23] For a recent example, the LP’s Mises Caucus (https://lpmisescaucus.com) completely took over the US Libertarian Party at the 2022 convention. See Brian Doherty, “Mises Caucus Takes Control of Libertarian Party,” Reason.com (May 29, 2022; https://perma.cc/US78-Y24C); Zach Weissmueller, Nick Gillespie & Danielle Thompson, “Inside the Mises Caucus Takeover of the Libertarian Party,” Reason.com (June 15, 2022; https://perma.cc/QCK5-3HND). See also Kinsella, “Aggression and Property Rights Plank in the Libertarian Party Platform,” StephanKinsella.com (May 30, 2022).

^[24] Murray N. Rothbard, “‘Human Rights’ as Property Rights,” in The Ethics of Liberty (New York: New York University Press, 1998; http://mises.org/rothbard/ethics/fifteen.asp); Hoppe, A Theory of Socialism and Capitalism, chaps. 1–2 et pass.

^[25] Kinsella, “The Limits of Libertarianism?: A Dissenting View,” StephanKinsella.com (April 20, 2014)

^[26] Kinsella, “The Trouble with Libertarian Activism.”

^[27] See “A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability” (ch. 9); “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection” (ch. 11); and Kinsella, “KOL004 | Interview with Walter Block on Voluntary Slavery and Inalienability,” Kinsella on Liberty Podcast (Jan. 27, 2013).

^[28] See “Causation and Aggression” (ch. 8), at n.31 et pass; also Kinsella, “KOL149 | IP And Beyond With Stephan Kinsella—Non-Aggression Podcast,” Kinsella on Liberty Podcast (Aug. 30, 2014).

^[29] Hoppe’s approach is not a standard natural rights argument, but he grants that it could be interpreted “as falling in a ‘rightly conceived’ natural rights tradition….” See Hoppe, A Theory of Socialism and Capitalism, pp. 156–57, n.118, quoted in “Dialogical Arguments for Libertarian Rights” (ch. 6), n.14. For Randy Barnett’s argument distinguishing consequentialism from utilitarianism, and on Jan Lester’s Popperian “conjecturalism,” see references in “Dialogical Arguments for Libertarian Rights” (ch. 6), n.3.

^[30] See discussion and references at “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection” (ch. 11), notes 1 and 33; “Against Intellectual Property After Twenty Years” (ch. 15), Part IV.D and n.83; “On Libertarian Legal Theory, Self-Ownership and Drug Laws” (ch. 23), n.29 et pass. See also Kinsella, “On the Danger of Metaphors in Scientific Discourse,” StephanKinsella.com (June 12, 2011); idem, “Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors,” Mises Economics Blog (Jan. 3, 2008); idem, “KOL044 | ‘Correcting some Common Libertarian Misconceptions’ (PFS 2011),” Kinsella on Liberty Podcast (May 2, 2013); idem, “KOL045 | ‘Libertarian Controversies Lecture 1’ (Mises Academy, 2011),” Kinsella on Liberty Podcast (May 2, 2013); idem, “KOL118 | Tom Woods Show: Against Fuzzy Thinking,” Kinsella on Liberty Podcast (March 31, 2014).

^[31] Writes Hoppe:

Let me begin with the definition of a state. What must an agent be able to do to qualify as a state? This agent must be able to insist that all conflicts among the inhabitants of a given territory be brought to him for ultimate decision-making or be subject to his final review. In particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent. And implied in the power to exclude all others from acting as ultimate judge, as the second defining characteristic of a state, is the agent’s power to tax: to unilaterally determine the price that justice seekers must pay for his services.

Based on this definition of a state, it is easy to understand why a desire to control a state might exist. For whoever is a monopolist of final arbitration within a given territory can make laws. And he who can legislate can also tax. Surely, this is an enviable position.

Hans-Hermann Hoppe, “Reflections on the Origin and the Stability of the State,” LewRockwell.com (June 23, 2008; https://archive.lewrockwell.com/hoppe/hoppe18.html), quoted in in Kinsella, “The Nature of the State and Why Libertarians Hate It,” StephanKinsella.com (May 3, 2010). Hoppe’s article was based on his 2008 speech, available at Hoppe, “PFP020 | Hans-Hermann Hoppe, Reflections on the Origin of the State (PFS 2008),” Property and Freedom Podcast (Dec. 24, 2021; https://propertyandfreedom.org/pfp).

^[32] See Kinsella, “The Problem with ‘Coercion,’” StephanKinsella.com (Aug. 7, 2009); also “Legislation and the Discovery of Law in a Free Society” (ch. 13), n.2.

^[33] See “Against Intellectual Property After Twenty Years” (ch. 15), Part IV.D.

^[34] Kinsella, “KOL037 | Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory,” Kinsella on Liberty Podcast (March 28, 2013); “Against Intellectual Property After Twenty Years” (ch. 15), Part IV.C, and other references in notes 51 & 57 et pass.

^[35] See “What Libertarianism Is” (ch. 2) and “How We Come to Own Ourselves” (ch. 4). But admittedly, it is difficult to avoid using these terms, as I have indicated elsewhere in this book. Though it might be better to refer to the state instead of government; to an owned resource in which someone has a property right, rather than to calling the resource “property”; to aggression instead of coercion, it is sometimes more convenient to use more conventional or colloquial terms to avoid tedium. I don’t even like referring to patent, copyright, trademark, trade secret as “intellectual property” rights, but if one is to communicate with normies, sometimes one has to accept conventional terminology, even if it is loaded or ambiguous.

^[36] Kinsella, “Hoppe on Property Rights in Physical Integrity vs Value,” StephanKinsella.com (June 12, 2011); “On Libertarian Legal Theory, Self-Ownership and Drug Laws” (ch. 23), n.7 et pass. As Justice Holmes recognized in passing in a dissent in a case establishing a quasi-property right in the product of the sweat of the brow, or the fruits of one’s labor: “Property, a creation of law, does not arise from value, although exchangeable—a matter of fact.” International News Service v. Associated Press, 248 U.S. 215, 246 (1918; https://supreme.justia.com/cases/federal/us/248/215/).

^[37] “A Libertarian Theory of Contract” (ch. 9).

^[38] See “A Libertarian Theory of Contract” (ch. 9), Part III.E.

^[39] See Kinsella, “KOL207 | Patent, Copyright, and Trademark Are Not About Plagiarism, Theft, Fraud, or Contract,” Kinsella on Liberty Podcast (Feb. 21, 2016); idem, “If you oppose IP you support plagiarism; copying others is fraud or contract breach,” in “Hello! You’ve Been Referred Here Because You’re Wrong About Intellectual Property” C4SIF (2023); Kinsella, “Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense,” Mises Economics Blog (Nov. 21, 2009).

^[40] See “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection” (ch. 11).

^[41] See “Inalienability and Punishment: A Reply to George Smith” (ch. 10) and “A Libertarian Theory of Contract” (ch. 9).

^[42] See related discussion in “What Libertarianism Is” (ch. 2), at n.36 and “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection” (ch. 11), at n.12; also Hans-Hermann Hoppe, “A Realistic Libertarianism,” LewRockwell.com (Sept. 30, 2013; www.hanshoppe.com/2014/10/a-realistic-libertarianism), discussed in “On Libertarian Legal Theory, Self-Ownership and Drug Laws” (ch. 23), n.15.

^[43] See “On Libertarian Legal Theory, Self-Ownership and Drug Laws” (ch. 23), at n.14.

^[44] This is also similar to the views of some mutualists, who in effect basically conflate possession with ownership, since “absentee” owners lose title to squatters, tenants, employees, and so on. See “What Libertarianism Is” (ch. 2), n.31; also “Law and Intellectual Property in a Stateless Society” (ch. 14), n.38.

^[45] See “What Libertarianism Is” (ch. 2), the section “Libertarian Property Rights”; “Selling Does Not Imply Ownership, and Vice-Versa: A Dissection” (ch. 11), at n.6 et pass.; “On Libertarian Legal Theory, Self-Ownership and Drug Laws” (ch. 23), at n.16 et pass. See also Hans-Hermann Hoppe, “Of Common, Public, and Private Property and the Rationale for Total Privatization,” in Hoppe, The Great Fiction; Hoppe, “A Realistic Libertarianism.”

^[46] See “Law and Intellectual Property in a Stateless Society” (ch. 14), Part III.D; and “Against Intellectual Property After Twenty Years” (ch. 15), Part IV.E.

^[47] “What Libertarianism Is” (ch. 2); also “On Libertarian Legal Theory, Self-Ownership and Drug Laws” (ch. 23), text at notes 6–7 and 18–23 et pass.

^[48] See “What Libertarianism Is” (ch. 2), n.4.

^[49] See ibid.

^[50] See ibid., the section “Libertarian Property Rights.” See also “How We Come to Own Ourselves” (ch. 4) and “Goods, Scarce and Nonscarce” (ch. 18); as well as Hoppe’s summary of these basic rules in “A Realistic Libertarianism” and in idem, “Of Common, Public, and Private Property and the Rationale for Total Privatization,” pp. 85–87. See also Kinsella, “How To Think About Property (2019),” StephanKinsella.com (April 25, 2021).

^[51] See the discussion of the civil law’s solution of tracing title back to a “common author” (meaning ancestor in title) at “What Libertarianism Is” (ch. 2), at n.33 and “Law and Intellectual Property in a Stateless Society” (ch. 14), at n.41.

^[52] See “What Libertarianism Is” (ch. 2).

 

[ARTICLES/NOTES BASED ON TRANSCRIPT]

Libertarianism After Fifty Years: What Have We Learned?

Stephan Kinsella
NYC LibertyFest, Brooklyn, NY
October 11, 2014

Introduction

Hello. I’m glad to be here. Thank you to Ian and Mike for the invitation. I do have my eleven year old son with me. It’s the second or third time he’s seen me speak. He’s been to Auburn with me. I went to NYC Comic Con with him on Thursday. So turnabout’s fair play although it was fun. Comic Con was great.

I have fifteen minutes. My topic is “Libertarianism After Fifty Years – What Have We Learned”? If I get cut off I will continue this in a private podcast, if I run out of time. You can find more information, if I run out of time, because this is a big topic for fifteen minutes.

This is my own view of libertarianism. It might not be shared by everyone here. But what I would like to talk about is—what is the libertarian movement? How old is it? Where did we come from?

In my view, the libertarian movement is about fifty years old—the modern libertarian movement. I think we can date it, you know, the glimmers of the movement started with Ayn Rand and Isabel Patterson and Rose Wilder Lane with their books in 1943. Of course, there are precursors to the libertarianism in the Enlightenment and classical liberal thought. There are other writers, Leonard Read, Milton Friedman. But I think we can really date the dawn of the modern libertarian movement to 1957 with the publication of Atlas Shrugged by Ayn Rand. And then the works of Rothbard, more importantly, with Man, Economy and State in 1962. ⁹

So the movement is about 55, 45 years old. It’s a relatively young movement as far as ideologies go and political philosophies go. We still have our disagreements over certain controversies like abortion and other issues. But a lot of progress has been made in the last fifty years. We’ve had a lot of development, partly because of incessant libertarian internal debate, criticism by outsiders, criticism by minarchists, criticism by insiders. But at the fifty year stage, I do think it is a good time to step back and reflect and think what have we learned over the last fifty years. How we could use this going forward to further refine and develop our ideas. [continue reading…]

1. See Rothbard’s obituary of Leonard Read in his journal Libertarian Forum, Vol. 17.5-6, May-June 1983; the PDF and HTML versions of the journal are apparently down now, but .mobi and epub versions are available here. [↩]
2. Zwolinski seems to be unsure whether he is a libertarian or just a classical liberal, despite having published articles or books on libertarianism. See, e.g., Aaron Powell and Trevor Burris, “Bleeding Heart Libertarianism: A Retrospective (with Matt Zwolinski),” Free Thoughts Podcast, Libertarianism.org (June 26, 2020; Youtube), at 30:20. But see Zwolinski and Tomasi, “Introduction,” in The Individualists, p. 8: “We both have long identified ourselves as libertarians.” [↩]
3.  Barbara Branden, “Foreword: The Dawn of Objectivism,” in Nathaniel Branden, The Vision of Ayn Rand: The Basic Principles of Objectivism (2011), quoting Objectively Speaking: Ayn Rand Interviewed, edited by Marlene Podriske and Peter Schwartz, p. 239. [↩]
4. The Limits of Armchair Theorizing: The case of Threats; also Libertarian Answer Man: Corporations, Trusts, HOAs, and Private Law Codes in a Private Law Society; KOL359 | State Constitutions vs. the Libertarian Private Law Code (PFS 2021); KOL345 | Kinsella’s Libertarian “Constitution” or: State Constitutions vs. the Libertarian Private Law Code (PorcFest 2021). [↩]
5. On the distinction between abstract legal rights and more concrete rules that serve as guides to action, see “Legislation and the Discovery of Law in a Free Society” and Kinsella, “Knowledge, Calculation, Conflict, and Law,” in LFFS, the subsection “Abstract Rights and Legal Precepts” and the section “The Third-Order Problem of Knowledge and the Common Law,” text at n. 24 et seq. [↩]
6. Areas That Need Development from Libertarian Thinkers. [↩]
7.  Activism, Achieving a Free Society, and Writing for the Remnant. [↩]
8. See Stephan Kinsella, “Legislation and the Discovery of Law in a Free Society,” in Legal Foundations of a Free Society [LFFS] (Houston, Texas: Papinian Press, 2023), Part V.B; also Roman Law and Hypothetical Cases. For an example of a concise statement of the basic principles of libertarian justice, see Aggression and Property Rights Plank in the Libertarian Party Platform. [↩]
9. The following is an excerpt I wrote to a Foreword for a forthcoming libertarian book:

   Modern libertarian theory is only about five decades old. The ideas that have influenced our greatest thinkers can be traced back centuries, of course,[1] to luminaries such as Hugo Grotius, John Locke, Thomas Paine, Herbert Spencer, David Hume, and John Stuart Mill, and to more recent and largely even more radical thinkers such as Gustave de Molinari, Benjamin Tucker, Lysander Spooner, Bertrand de Jouvenal, Franz Oppenheimer, and Albert Jay Nock.[2]

   The beginnings of the modern movement can be detected in the works of the “three furies of libertarianism,” as Brian Doherty calls them: Rose Wilder Lane, Ayn Rand, and Isabel Patterson, whose respective books The Discovery of Freedom, The Fountainhead, and The God of the Machine were all published, rather remarkably, in the same year: 1943.[3] But in its more modern form, libertarianism originated in the 1960s and 1970s from thinkers based primarily in the United States, notably Ayn Rand and Murray Rothbard. Other significant influences on the nascent libertarian movement include Ludwig von Mises, author of Liberalism (1927) and Human Action (1949, with a predecessor version published in German in 1940); Nobel laureate F.A. von Hayek, author of The Road to Serfdom (1944); Leonard Read, head of the Foundation for Economic Education (founded 1946); and Nobel laureate Milton Friedman, author of the influential Capitalism and Freedom (1962).

   The most prominent and influential of modern libertarian figures, however, were the aforementioned novelist-philosopher Ayn Rand, the founder of “Objectivism” and a “radical for capitalism,” and Murray Rothbard, the Mises-influenced libertarian anarcho-capitalist economist and political theorist. Rothbard’s seminal role is widely recognized, even by non-Rothbardians. Objectivist John McCaskey, for example, has observed, that out of the debates in the mid-1900s about what rights citizens ought to have,

   “grew the main sort of libertarianism of the last fifty years. It was based on a principle articulated by Murray Rothbard in the 1970s this way: No one may initiate the use or threat of physical violence against the person or property of anyone else. The idea had roots in John Locke, America’s founders, and more immediately Ayn Rand, but it was Rothbard’s formulation that became standard. It became known as the non-aggression principle or—since Rothbard took it as the starting point of political theory and not the conclusion of philosophical justification—the non-aggression axiom. In the late twentieth century, anyone who accepted this principle could call himself, or could find himself called, a libertarian, even if he disagreed with Rothbard’s own insistence that rights are best protected when there is no government at all.”[4]

   We can date the dawn of today’s libertarianism to the works of Rand and Rothbard: to Rand’s Atlas Shrugged (1957); and, especially, to Rothbard’s Man, Economy, and State (1962), Power and Market (1970), and For A New Liberty (1973), plus his journal The Libertarian Forum (1969–1984). For A New Liberty stands today as a brilliant, and early, bold statement of the radical libertarian vision. By the mid-60s, the modern libertarian movement was coalescing, primarily behind the non-initiation of force principle and the “radical capitalism” of Ayn Rand, and Rothbard’s systematic libertarian corpus based upon the non-aggression principle or axiom. It is no surprise that the Libertarian Party was founded in 1971, as these ideas, and the liberty movement, were gaining steam.

   In the ensuing decades many other influential works appeared expounding on the libertarian idea, such as Linda and Morris Tannehill, The Market for Liberty (1970), John Hospers, Libertarianism: A Political Philosophy for Tomorrow (1971), David Friedman, The Machinery of Freedom (1973), Robert Nozick, Anarchy, State, and Utopia (1974), Henri Lepage, Tomorrow, Capitalism (1978), Samuel Edward Konkin III, New Libertarian Manifesto (1980), Jan Narveson, The Libertarian Idea (1988), Anthony De Jasay, Choice, Contract, Consent: A Restatement of Liberalism (1991), Richard Epstein, Simple Rules for a Complex World (1995), Charles Murray, What It Means to Be a Libertarian: A Personal Interpretation (1996), David Boaz, Libertarianism: A Primer (1998), Randy E. Barnett, The Structure of Liberty (1998), and, more recently, Jeffrey A. Miron’s Libertarianism, From A to Z (2010), Jacob Huebert’s Libertarianism Today (2010), Gary Chartier’s The Conscience of an Anarchist (2011), and Gerard Casey’s Libertarian Anarchism (2012).

   [1] For more on this, see Brian Doherty, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (2008), and David Boaz, The Libertarian Reader: Classic and Contemporary Writings from Lao Tzu to Milton Friedman (1998).

   [2] See Boaz, The Libertarian Reader, id.

   [3] See Doherty, Radicals for Capitalism, id.

   [4] John P. McCaskey, “New Libertarians: New Promoters of a Welfare State” (April 14, 2014), See also Wendy McElroy, “Murray N. Rothbard: Mr. Libertarian,” LewRockwell.com (July 6, 2000). [↩]

An interchange with someone with questions about one of my articles, which sets out my “estoppel” theory of libertarian rights. For more background on these issues, see the links interspersed below, and those here:

• Argumentation Ethics and Liberty: A Concise Guide
• “Libertarian Legal Theory: Property, Conflict, and Society,” Mises Academy course, lecture 1 (episode KOL018)
• The Social Theory of Hoppe,” Mises Academy course, lecture 3 (episode KOL153)
• New Rationalist Directions in Libertarian Rights Theory
• Defending Argumentation Ethics: Reply to Murphy & Callahan
• A Libertarian Theory of Punishment and Rights
• How We Come To Own Ourselves
• Causation and Aggression
• Hoppe: First significant thinker to get libertarianism totally right
• other material linked at Selected Supplementary Material for Law in a Libertarian World: Legal Foundations of a Free Society

From Mr. S:

I just read your article “A Libertarian Theory of Punishment and Rights”, which was very interesting, thank you.  It raised a number of questions in my mind which I wanted to raise with you in case you’ve dealt with them elsewhere and can point me to these sources.

(Note that I am ignoring for now that both aggressor and victim may have protection insurance policies and so the punishment scale might already have been agreed to; I’m more focused on what a libertarian judge should decide in the absence of preset penalties.)

1. I raised with [a certain libertarian philosopher] the problem of failed attempts.  You deal with this a little in the area of assault (p.640), but not sufficiently to answer my question.  If A shoots at B but misses, what is the punishment B can levy on A?   Is it just that B can shoot at A and miss, which seems pointless?   But if that wouldn’t instill in A the same amount of fear that B suffered, per your assault example, is B justified in actually hitting A with the bullet and potentially killing him, with A being estopped from complaining about this?  Should failed attempts be punishable at all?  According to Rothbard, neither deterrence nor rehabilitation are valid bases for punishment; rather, only restitution and retribution are appropriate.  But in my example, there is nothing to be restituted and retribution would imply shooting and missing.  Then, to make things more interesting, what if A shot at B and missed, and B didn’t even know A had shot at him, so never suffered any fear (but witnesses saw it and reported A)?   Again, what is the basis on which failed attempts should be punishable?  In a failed attempt there has been no physical invasion of body or property, and mental distress cannot be the basis for action since one cannot have property in one’s feelings (that would raise a host of conflict-creating problems).
2. It seems to me that the estoppel principle should be more narrowly stated.  In your examples, you say that if A murders B then  A is estopped from complaining about being murdered as punishment.  Yet shouldn’t this be restated to say that A is estopped from complaining about being murdered as punishment by B or his representative?  In other words, I don’t think you mean to imply that A is estopped against the whole world from complaining about being murdered; D (a complete stranger) cannot murder A and then claim that by A’s action in murdering B, A is estopped against anyone from complaining.  Yet that would be one reading of the estoppel principle as stated, since A has by his actions apparently indicated that he sees nothing wrong in murder, so it could be open season on A.
3. If, as stated on p.635, the goal of punishment is to equalize damage suffered, not just the actions that caused the damage, then that could work against the victim.  If nice person A beats up gang member B, since B is used to getting beaten in his daily life the damage suffered is probably not that great.  Thus he would have to reduce the punishment beating he exacts on A.  Perhaps the theory should be that the victim can exact the greater of (x) equalizing action and (y) equalizing damage.  However, saying “should” is somewhat normative, and I wonder what the positive theory behind such a “greater of” concept would be.
4. That raises a broader point: what is actually being estopped and therefore what forms the basis for outlining the bounds of punishment: (A) the actions of the aggressor [e.g., punching the victim], (B) the result caused [e.g., burst spleen] or (C) the damage suffered by the victim [e.g., inability to continue working as a laborer]?  Can an aggressor be estopped from any one of these that was not obvious at to him at the time?  If so, then does estoppel not really rest on what the aggressor has actually acknowledged by his actions, but rather what a “reasonable aggressor” should have realized what he was doing?
5. Moreover, why can the victim choose to exact a dollar remedy for a physical aggression (leaving aside the situation where the aggressor bargains for this with the victim to avoid physical retaliation)?  Under estoppel the aggressor has only acknowledged he does not believe hitting is wrong, but it doesn’t mean he has acknowledged that taking someone’s money is wrong.  It seems that the broader the range of remedies the victim is entitled to exact, the looser the connection to the aggressor’s actions which give rise to the estoppel.  We could end up effectively concluding that the aggressor indicated by his actions that he does not believe in the sanctity of private property at all, and thus any punishment is warranted.  Surely that’s not where we should end up?
6. What is the theory underlying why heirs can take action on behalf of a murder victim (assuming there is nothing in the victim’s will saying so, and there is no protection policy for which the heirs are the beneficiaries)?  If each person’s body is his own property, how can an heir claim to have been damaged when only the victim’s body was invaded?

[continue reading…]

Kinsella on Liberty Podcast, Episode 158.

This is the final  of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.”

The slides for this lecture are appended below; links for“suggested readings” for the course are included in the podcast post for the first lecture, episode 153.

Transcript below.

LECTURE 6: POLITICAL ISSUES AND APPLICATIONS; HOPPE Q&A

Video

Slides

TRANSCRIPT

The Social Theory of Hoppe, Lecture 6: Political Issues and Applications; Hoppe Q&A

Stephan Kinsella

Mises Academy, Aug. 15, 2011

 

00:00:01

STEPHAN KINSELLA: Final class.  We have a lot to cover.  Before I start, let me say don’t be intimidated by the length of the slides if you see them later.  There’s a lot of slides.  I put a lot of text in there for your reading pleasure later.  We’ll skim over some of that.  It’s there for – just for a full sort of, almost like a paper for you to study later and for resources.  I’m going to try to cover as much of it as I can, and I suspect we’re going to go the full 90 minutes on the lecture.  And I’ll be happy to stay as long as we need after that for Q&A, so that’s my plan.

00:00:39

So let’s get going.  Slide two.  So we talked about economic issues and applications last week.  We have a few more to finish tonight, and I will post the final quiz later this week.  I think only maybe 15-20% of the class took the midterm, which is fine.  You’re not – don’t feel under an obligation to take it.  But some of you might find it fun and a good refresher, and you’re not really graded on a per-class basis.  It’s just personal grading.  So today, we’re going to cover the – we’re going to finish the economic applications and issues from last time.

00:01:19

We’re going to go over the Hoppe Q&A.  He did provide me with answers to a bunch of questions that you guys submitted.  And then we’re going to talk about a variety of political issues and applications.  In addition to the ones we’ve already discussed, of course, argumentation ethics, which is a political-type issue, but some other applications tonight.  I didn’t give any suggested readings for this week.  There’s just so many little issues.  All the links are in these slides, and we’re going to go over them tonight.

00:01:48

So I thought that was sufficient rather than giving you – Karl is asking about the midterm.  I don’t – I think it’s probably close already, but Danny can let you know that.  If it’s not, I wouldn’t mind having it held open a little bit longer if people who haven’t taken it yet want to take it.  Okay, fine.  Stephen says it’s still open, so just – it’s only 16 or 18 questions, all multiple choice.  Some are funny.  Some are harder.  Some are easy, so feel free to take it as a refresher.

00:02:21

00:02:28

Karl says sounds went out.  Can anyone else hear me?  Okay, Karl, it’s your issue.  Maybe Danny can help you.  Okay, now – so I’m going to get to one of the remaining issues that we had here.  I’m only – I’m going to go over these, and a lot of them cover what I think are the highlights so that we can cover a lot.  Okay.  So a brief review.  There is, in the Austrian economics literature, an issue called the “Economic Calculation Debate,” 1920 or so.

00:03:10

Mises wrote a famous article where he argued that one problem with a centrally planned socialist economy, that is, an economy where the government, the state owns the means of production, is that there won’t be market prices for these things.  And therefore, you won’t know how to compare alternative projects.  When entrepreneurs think about the future, they compare possible uses of resources they have available.  And they compare them in terms of what kind of profit they can make in the future, that is, monetary profit.

00:03:42

So the only way to do that is to try to imagine, if I do project A, I might make a million dollars.  If I do project B, I might make $2 million, etc., and you compare the projects that way.  And then you choose the one with the highest profit, other things being equal, risk, etc., and you do that.  So that’s the standard Austrian idea of entrepreneurship, and Mises pointed out, well, without private property ownership of the means of production on a free market, you won’t have prices.  And then so the central planners won’t know how to compare these things.  They won’t know how to compare a bridge versus a tunnel.  You won’t know which one uses more resources.  You won’t know which one is more efficient.

00:04:24

So the action they – the decision they make will not be economic even if you just – even if you forget about all the other problems with it, which is self-interest and collusion and corruption etc.  So there’s a – for a long time – and then Hayek came along, and Hayek built on Mises’ theory with his knowledge ideas about how – Hayek said that, well – at first he was working within this idea of Mises, the criticism of socialism.  And he said, well, another aspect of this is that actors on the market know things, but they don’t know how to express them.  Like you know how to tie your shoe, but you might not be able to say that.  You know other things.

00:05:07

He called this tacit knowledge, but his point was even though knowledge in the economy is dispersed and widespread and held by different people and a lot of it’s tacit, it can be expressed in action when people make decisions on the market.  They affect prices, and so this knowledge that people have tacitly and in a dispersed form is spread throughout the economy by sort of a signaling mechanism of the price system.  And for a long time, Austrians said that Hayek had sort of illustrated Mises – or sorry, expanded on Mises or built on that or was sort of the flipside of the coin.

00:05:49

In 19, I want to say, 90-something Joe Salerno, in a postscript to the republication of Mises’ 1920 or ‘21 argument, points out that Hayek’s argument was really different than Mises’.  That’s called the de-homogenization debate.  He de-homogenized Hayek and Mises, and that started a series of articles in the review of Austrian economics, which are fascinating to read if anyone is interested in this.  Look in the later issues in the 1990s, articles by Leland Jager and Hoppe and Joe Salerno and Jeff Herbener and others about this calculation debate.  It’s a fascinating debate.

00:06:36

So I can’t go into it in detail, but Hoppe takes the side of the Salerno de-homogenizers here, and let’s go to slide five.  Just a few quotes here.  You’ll see the basically Misesian/Hoppian take on this is that Rothbard himself – this is before he died, 1995 – he concluded, the entire Hayekian emphasis on knowledge is misplaced and misconceived.  And Guido Hülsmann, a Hoppe student, also discusses how the knowledge problem is irrelevant.  And Salerno talks about how the price system cannot be what the Hayekians claim it is, and it I can’t go into that here.  But finally, let me just mention Hoppe comments that Hayek’s contribution to the socialism debate is false, confusing, and irrelevant.

00:07:28

So just be aware of that.  If you’re interested in going into that in more detail, I suggest some of these papers I have linked here.  But just be aware that there is a difference at least on the Misesian side.  They believe that the way the Hayekians and the Misesians view knowledge and calculation is fundamentally different.  Okay.  But you’ll hear Hayekians like, I don’t know, Steve Horowitz and Pete Boettke and these guys – Pete Boettke; I just typed his name there – who will say that the Hayekian knowledge stuff is a flipside of the coin.  Or it’s like another way of explaining the insight Mises had, or it’s complementary to it.

00:08:11

But some of the Hoppians and Misesians still believe that.  They believe that it was a misleading emphasis.  I tend to think they’re correct, although I do think there’s something about Hayek’s emphasis on knowledge that you could integrate into the way of looking at the role of knowledge in human action that I’ve been talking about lately with respect to intellectual property.  But that is neither here nor there, and I’ll leave it for now.  If anyone has any questions about this, we can maybe take it up at the end, but let’s move on now to what would have been, I think, the final topic I was going to talk about last time.

00:08:48

Some of you may have seen one of Hoppe’s graduate – advanced graduate seminar talks on Mises University from a few weeks ago where his topic was about Malthusianism.  He also gave a similar talk about this at the Property and Freedom Society earlier.  I think it was this year or last year.  I’ve got the link up here.  And he’s got a draft paper as well, which I think is not online.  I have a copy, but it’s not up yet.

00:09:17

And as Hoppe notes, Mises actually talks about, Thomas Malthus’ theories.  Now, some of you may have heard of Malthusianism, and you might have thought of it as an outmoded or crankish doctrine.  But in fact, Mises was extremely praiseworthy of it and said it was one of the most amazing achievements of human thought, etc.  The basic idea of Malthusianism, Thomas Malthus was a thinker, oh God, I don’t know, in the 1600s or something.  Maybe someone else knows when he had his ideas.  Modern-day Malthusians are people that are afraid of population increase.  They think that if we have too many people, it’s bad.

00:10:02

That grew out of Malthus’ ideas where he basically formulated some economic laws.  So he talked about, in capital accumulation in an economy, you have different factors that combine to produce your goods.  And so he said, well, you have to have an optimal combination like two parts of this and three parts of that to produce the optimal outcome.  So he said, well, if we if we focus on two of those factors, labor, human effort, or which depends upon the number of humans, and other resources—human bodies, etc.—that, if we look at land and labor, then you get the law that there’s – for a given fixed amount of land or natural resources, then there’s an optimal amount of population.

00:10:54

So the idea is that, when you have a low number of humans, as they increase in population, we become more productive.  But at a certain point, when you reach this optimal combination of land and labor, then if you have more population, then income per person would go down.  Income per capita would go down.  Now, Mises says this is a brilliant law, and it seems to actually be true for most of human history until about 200 years ago.  Okay.

00:11:31

Let me flip to the next page.  If you if you download these slides, by the way, I think that’s on the next page.  Let’s go on and go to slide – yeah, Danny, this is right.  This is – if you see on slide seven, Danny is right.  This is about the law of returns.  It’s an application of the law of returns.  It’s the Malthusian law of population, which is the case of the law returns, but let’s go to slide eight.  Well, slide nine is where the figures start.  I have a couple of figures that Hoppe used in his recent lecture.  And if you – they may be hard to see here.  If you download these slides, which are available, you can see a full-size view of these things.

00:12:15

So the idea is that if – now this is a key part.  This is a key part to explaining what I’m about to talk about, Hoppe’s theory about how we got out of the Malthusian trap because, you see, the idea is that when technology is fixed at a given level, then a population increase beyond the optimal level leads to a decline in income, so that’s the Malthusian idea.  Okay, but as you can see from this trap from – this is, like B.C. 1000, and my understanding is records go back even farther than this.  Human income was roughly constant until around 1800.  You can see there’s a sharp spike in income in the year 1800.  And this is called the Great Divergence.  So we were in the Malthusian trap, and then the Industrial Revolution happened around 1800, and society took off.

00:13:05

Now, some actually got worse, and of course, some of the socialists have said that the reason the West has done well is because of exploitation of the South or the third world.  But of course, look at the graph here.  There’s no way that – there was not enough wealth to rob from the south to make the West as rich as it was.  Something else happened here for the Great Divergence.  Likewise – let’s go to slide 10.  This is – it’s hard to see here.  This is a graph of human population, and you can see it rose slowly until around 1800, and then it expanded exponentially.  I believe we had less than a billion humans at 1800, and now we have like 7 billion in the world.  So it’s risen exponentially, along with the rise in income per person, which is contrary to Malthusianism.  Both are contrary.

00:14:02

So, now Hoppe points out that during the Malthusian age until 1800 or so, what would happen – the reason you can have some population growth is because, as population would grow – well, there was gradual technological improvement.  So there was some room for growth of humans because we learned to exploit the resources a bit better but not radical and different.  And people expanded to take over new continents and new lands, but gradually the world became, so to speak, as Hans would say, filled up.  There’s also a really funny part of his lecture where he talks about Mises’ term, the supernumerary specimen, which are the extra people who come at the margin of when you surpass the optimal number of humans.

00:14:45

And they’re basically useless, and they have to be weeded out, and they’re weeded out by evolution.  And this is where what’s called the iron law of wages held sway, where when you’re at or near or above the optimal level of population, then people’s incomes tend to be right at the subsistence level.  So all these things sort of go together, and I have a little note here.  Just had a friend about 20 years ago, a Spanish friend, and she told me that in Spain that there was a way to categorize all the young men who had to come do their mandatory military service.

00:15:25

And they would classify you if you’re healthy, you’re healthy, but if someone was like, I don’t know, had colorblind or flat feet or some other physical issue, the army would classify them as totally useless.  And I just thought that was funny, and that reminded me of Hoppe’s being tickled about the supernumerary specimens comment, reminded me of that.  Hoppe makes a joke in his lecture that if you come across a lowlife in the future, just don’t call them a lowlife or a loser.  Call them a supernumerary – think of them as a supernumerary specimen.

00:15:59

In any case, Stephen says, like Paul Krugman.  Yeah, he’s a supernumerary specimen.  Right.  So economists and social scientists have often wondered how did we get out of the Malthusian trap.  And the standard answer is, well, property rights and institutionalization of property rights.  But as Hoppe argues, there’s actually little evidence for this theory because there is actually nothing in history that shows some kind of radical improvement in property rights in 1800.  In fact, they were probably more secure in 1400 than they are in 2011 in a lot of ways.

00:16:42

So Hoppe points out that property rights are not enough, and savings are not enough because, if you don’t have ideas about what to do with savings, then you cannot progress.  Okay.  And he points out that if Crusoe on his on his island didn’t have the idea of a net, then having secure property rights, which he would have, because there’s no other people, and saving a lot of fish wouldn’t help him because he wouldn’t use the extra time to build the net to improve his efficiency.

00:17:19

So it’s about ideas.  It’s about improving technology.  So Hoppe’s theory is that it was intelligence, so he goes by a more Darwinian idea that there’s natural selection in human history.  And he believes that humans of today are different than humans of 10,000 years ago, and 100,000 years ago.  And, as he points out, in earlier ages when we were hunters and gatherers and then agriculturalists, the people that were intelligent, that is, they had the ability cognitively to adapt to reality, would tend to be more successful.  They will live longer.  They would be wealthier.  They would have more children, and so they would have children that were more intelligent than other people.  So, in other words, he believes until the modern age, evolution bred out selected for intelligence.

00:18:12

And so then the – then he resorts to just general evidence, the idea that, in certain climates, Northern Europe, etc., they evolved faster, and they got to this intelligence threshold first, a threshold where we can escape from the Malthusian trap.  Basically, his idea that certain areas of the Earth, humans finally became intelligent enough where we could escape the Malthusian trap.  We could come up with enough ideas to become technologically efficient enough to escape the Malthusian trap.

00:18:47

Now, he talks about some theories out there that the distribution has to be a certain shape, like you have to have enough geniuses and enough average intelligence.  So the geniuses have – you have to have enough geniuses to come up with the ideas, and by genius, we mean like the top 10%, the very intelligent people.

00:19:14

Danny says this is opposite of Mises’ position.  It may be, although he does recognize the Malthusian trap.  I don’t recall, Danny, what Mises’ theory was for how we got out of the Malthusian trap.  He might have had the standard idea.  Yeah, probably right.  But if you look at Hoppe’s talk, he rejects this idea.  In other words – well, Karl says capital formation.  Well, I think Hoppe’s right that there was no radical revolution in property rights around 1800, say, in England or in other places in Europe.  Capital formation – that could be an explanation, but you wonder why it didn’t happen in other countries like Africa, South America, etc. – well, South America wasn’t very developed at that time.

00:20:07

Jock suggested closures. I don’t know, Jock, whether that’s – I don’t know the theory of how that – I don’t know a lot about that theory as a solution to the Malthusian problem, could be.  Anyway, Hoppe admits this is just an empirical theory of his.  I think it’s interesting, and it’s worth reading.  He may write about it sometime in the future.  But as he points out, one implication of it is that – well, egalitarianism is to be rejected because it shows that different levels of intelligence in different populations is what causes the success and prosperity and our ability to get out of the Malthusian age.

00:20:49

He’s also got a really fascinating analysis of the role of state and how it’s different in the Malthusian age and in today’s age, the post-Malthusian age, and how, in the Malthusian age, the government could only expropriate so much because we weren’t that prosperous.  And in fact, when they weeded out the population, they might have done some good because they helped increase per capita income, whereas in today’s age, we have ever increasing prosperity every generation, and the state can just parasite off of that.  And they’re just like a huge permanent drag on growth that we otherwise would have.

00:21:28

And also, he talks about how, under regular Malthusian conditions, intelligence is selected for by natural selection.  That is, more intelligent people tend to have more offspring.  But in today’s system, number one, we have welfare etc., which basically means there’s little penalty to people that are stupid, basically, and on welfare.  So – and intelligent people tend to be more intelligent about the resources.  They have fewer kids, and people are bred – people are rewarded for being more political in their tendencies instead of being more successful technologically or with their ideas.  So we sort of have a different effect going on now.  And Hoppe even supposes that we might be regressing now.  Humanity might have reached the point where we’re getting stupider.  Yeah, Dante is right.  We’re basically paying stupid people to have kids.

00:22:24

Cam talks about Idiocracy.  Actually, Idiocracy, which is a movie, which is – I didn’t find it that funny.  A lot of people did, but it’s a pretty good illustration of the eugenic effects of our current state.  I actually should mention that to Hoppe.  That’s a good point, Cam.  I don’t – Karl mentions Nietzsche’s view of the last man.  I actually don’t know about Nietzsche’s view of the last man.  I do know – I’ve read Fukuyama’s Hegelian book, The End of History and the Last Man, but I don’t think it’s different.  Fukuyama, by the way, has a brand-new book out.  In any case, let’s move on, cover some more things.

00:23:02

So let’s get to the Q&A.  Someone had asked – and some of these I’ve already answered in writing to the class, not all of them.  And I’ll put my answers here, and I’ll go over what Hoppe replied.  So I sent these questions and my sort of initial answer to him, for him to agree with or add to or adopt or disagree with or whatever.  So someone in the class asked earlier about how Marxism itself defines property and how they could define it as anything other than an answer to the question, who gets to use a scarce resource at a given time?

00:23:38

And I had mentioned earlier Hoppe’s view is essentially that every political system has to have an answer to that question.  Who owns this thing now?  So slide 17.  So Hoppe said he agreed with what I had written, which was reiterating what I just said.  He says that the Marxists basically avoid this question because they assume that humans’ nature would transform under socialism, and there will be no conflict.  And remember, conflict is the basis of property rights in the Rothbardian, liberal, Misesian tradition.

00:24:18

The purpose of property rights is to respond to the fact of conflict over resources.  So if you assume there’s some kind of harmony of men’s interest and they can never conflict with each other, then you would have no concept.  You wouldn’t need to answer the question who owns this thing, but as Hoppe said, of course, that’s unrealistic.  And if you drop this assumption of harmony, then the only alternative is what the socialists did in Russia and communism, etc.  They put the state in charge of the means of production, which is the most important sort of property in that kind of economy, and they decide who owns it.  So they have an answer.  It’s whoever the state says owns it.  The state owns it, and then they direct who can use it.  So basically, that’s Hoppe’s answer there.

00:25:06

Now, someone asked about abortion.  Is it a crime?  What about positive obligations of parents to children or fetuses?  And my argument is that, well, you can have positive obligations.  You can have positive obligations under libertarianism, things that you’ve undertaken by your actions or in other ways that you’ve undertaken.  And some libertarians, myself included, believe that if you create a child, which has natural needs—it’s an infant—the natural relationship between the child and the parent is that the child has needs.  It’s similar to pushing someone into a lake who needs to be saved from drowning.  In that case, you would have an obligation to save the person you’ve pushed in the lake.

00:25:57

Some people believe that if you create a child having similar needs of support without which they’ll die or be seriously harmed, then the person who put them in that situation, which is the parent, has an obligation to help them.  So you could argue that, well, that also means you have an obligation to the fetus not to abort it, to save it, to keep it healthy, etc.  So my view, which I propose, is that I think the best libertarian way to look at it is if you leave out religion, etc., at some point humans develop rights.

00:26:32

I mean it’s pretty clear that young children have rights.  They’re similar to adults.  Most of us believe that infants, newborn babies have rights.  And there’s not much of a difference between a newborn baby and a late-term fetus, so they probably have rights too.  Maybe you could say a one-celled zygote or whatever one day in the pregnancy has no rights, but it’s something odd or maybe immoral about aborting on purpose, a young, young embryo or fetus just optionally, although it’s not a rights violation.

00:27:05

So you can imagine a spectrum.  So that’s kind of my take on it.  It’s a spectrum where it’s immoral kind of from the beginning.  It gets more and more immoral until becomes a rights violation.  However, that doesn’t mean that it should be against the law because—I’m on page 19 now—because that would require an invasive or an intrusive state.  Basically, the idea under libertarianism is that such a thing is a family-centered affair.  The family, the mother should be the one who decides.  So basically, the right way to look at it is the jurisdiction for settling these issues should be with the mother.

00:27:43

So – and as Hoppe said, he basically agrees with his take, and he said, look, even if there’s something wrong with the abortion issue, with aborting, morally or even legally, who is the representative of the fetus if not the mother?  Who’s going to go after the fetus?  Is it the state?  Well, there should be no state.  Is it the public at large?  Really, what business is it of a public at large to rescue this unborn baby from the actions of a family?  That is sort of my approach.  I do suspect that abortion would be frowned on and much less likely in a free society.  But it’s hard to imagine that would ever be a crime like murder would be, although an optional late-term abortion for no purpose but convenience of the mother may be so close to being treated like murder that there will be such social penalties that it would be rare.  That’s my guess.

00:28:51

Danny – talking about Malthusianism, Danny is talking about how Mises talks about, in the West or the North, they created property institutions to permit capital accumulation.  But still the question is – but there was no really difference in the institutions in the 1800s that explained this.  Now, it could be that capital just accumulated to a certain point.  Danny’s got a previous quote here which – anyway, I can’t go over that here now, but you guys are free to read that, and maybe I’ll send this to Hoppe later.

00:29:31

Okay, let’s go here to this.  This is an interesting topic.  Oh someone asked about abortion, Stephen.  Regarding abortion, what about parental rights and the requirements to notify others that you’re abandoning your property rights?  Well, this is something I think Walter block has written about.  He’d use it that – well, for children, he thinks that you don’t have a positive legal obligation to take care of your children.  But that sort of your right to be their caretaker is conditioned upon your doing that, so if you choose not to be their caretaker, then you have no right to take care of them anymore.  And then you have to notify others or at least allow them to come rescue the child.  So you couldn’t stop someone from entering your house or your property to get the kid, or you should deliver the kid to a new caretaker.

00:30:26

Now, for abortion, I believe Block’s view is that if a trespasser, and you have the right – the mother had the right to eject that trespasser.  But she should do it in the least invasive way possible.  But under modern technology, that means killing it.  But the killing is just a byproduct of ejecting it.  There is a book called Solomon’s Knife by Victor Koman, which says – which imagines a future history – it’s a libertarian science fiction novel, which says that it imagines that there’s a possibility of a procedure called transoption, which means one pregnant woman could be – have the fetus taken out and put in another woman’s womb and carry to term.

00:31:12

And he says that would change the dynamics of the debate.  And I think by Walter Block’s view, it would because he would have to argue that you would have to – instead of just aborting the baby, you would have to allow it to be transopted because that’s the least harmful way to eject the fetus.  Hoppe’s view I’ve already gone over what I think Hoppe’s view.  I don’t know how he would answer this question.

00:31:35

Edward asks about friends of babies’ organizations.  Actually, I tend to think that could be a possibility that they would be a representative of the baby.  So I think Hoppe’s – now, his answer here was off the cuff and informal in response to these questions in this class.  So I don’t think he gave it much thought, but I do think there could be a representative of children or babies or fetuses.  The problem with, again, whether it’s a state or some vigilante or charitable group, it’s just too intrusive and invasive to police internal family relations to even know that there was an abortion, to know that she was pregnant to get involved in it.  I doubt that that’s going to be policeable.  Babies and children that are born I think are a different matter.  But let’s go on so we have more time to cover more things here.

00:32:31

By the way, Rand – Antonio Lopez mentions Rand’s view on that.  I think Rand was wrong.  Rand actually mentioned explicitly that in late-term abortion, it could be a different matter, but she didn’t elaborate.  So she implied that she could see an argument that late-term abortion is infanticide.  But of course, that contradicts her view that unborn people are just potential humans.  So I think even her view, if you think about what she said about late-term abortion, is similar to the spectrum idea that I mentioned earlier.

00:33:10

My view is that the mother morally ought to try to have the baby.  You can’t take it – if you don’t want the child and have the baby and have an adoption.  There’s plenty of parents.  I mean it does seem to me that in most cases, the abortion is for convenience to avoid embarrassment or inconvenience.  And it seems to me that if you perform an action that results in a new child in your stomach, then take it to term and then live – move on with your life, but why kill a young human?  I mean – anyway, that’s my idea.

00:33:48

Dante asks about whether – about Frank Van Dun’s paper, “Argumentation Ethics” and whether we can extend the law of reason to babies.  I mean, look, libertarians differ on this issue: Randians, Hoppians, Rothbardians, Lockians, others.  It depends on what you think is a source of rights.  Loren Lomasky has an argument, which I think is interesting, in his book Person’s, Rights, and the Moral Community where he says, look, there’s sort of a contractarian, societal basis for rights.  And he looks at people that are sort of in comas or very old and defective or severely disabled or retarded or fetuses as edge cases that we allow to piggyback, he calls it.  If you’re interested, look up Loren Lomasky and search for piggybacking.

00:34:45

He said they piggyback onto the main case of rights. ¹ I think there’s something to it, but it’s – Hoppe’s view is that rights proceed from the capacity to respect other people’s rights, which means rationality.  Now, how you would extend this to an infant or to a fetus, which doesn’t quite have that capacity yet, or maybe has the potential for capacity, I don’t know.  I think you can look at it as a borderline case or a continuum issue as Walter Block calls it.  So libertarians can differ on exactly when rights start.  Now, Christian or religious libertarians think it’s our humanity, and that starts from the day of conception because you have a soul.  I’m not sure how that kind of argument can be made rationally.  To non – people who don’t share your religious views.

00:35:38

Okay, so let’s talk about this now.  This is something – I’ve written – in 1995, I wrote an article, which Hoppe published as editor of the Journal of Libertarian Studies, discussing the civil law and the common law.  And I believe someone in this class sent me this quote, which I liked and which I sent the Hans for his comments.  And he points out that – that’s right.  I did respond to this already in the class.  So let’s go over it.  So the loose transcription of Hoppe’s earlier talk, he talks about how people from the English – England and its colonies are sort of arrogant about how superior the common law is, and this has infected a lot of libertarian talk too, primarily because the main libertarian movement has been in America, which is the English former colony and a lot in England too, to some degree.

00:36:36

And so they talked about the Commonwealth superiority.  He said Max Weber had a comment that the alternative system is the civil law in Germany, the Netherlands, France, Spain, etc., France, everywhere really in Europe.  And they have these civil codes, which are written codifications of the law unlike the common law, which is sort of scattered.  It’s a bunch of decisions of judges.  And he sort of points out Max Weber hypothesized that, look, it’s in the interest of the lawyers in England to keep the law inscrutable and hard to figure out. ²

00:37:18

So maybe it’s not as much an advantage as the English talk about to have this sort of, we’ll say, unwritten but not codified set of law.  And in fact, Americans are often confused at the idea in England of the unwritten constitution.  There’s a constitution, but it’s unwritten.  We’re used to thinking of a constitution as a document, like a meta document or a charter or an articles of incorporation of the government, which we have in the US.  We have a written constitution.

00:37:53

So when the Brits say, well, we have a constitution too, there’s a famous treaty.  I think it’s Dicey’s Constitution.  They say, well, where is the constitution?  And the Brits say, well, it’s sort of spread across the institutions of the queen and the monarch and the parliament and our tradition and the Magna Carta, etc.

00:38:13

Right.  Antonio mentions the Magna Carta.  That was written, but that wasn’t for everyone.  That was just for some.  By the way, on this topic, if any of you are interested, the movie Robin Hood, the most recent version, has a fascinating part about the forest charter.  And I had a blog post maybe a year ago, when the Robin Hood movie came out.  I think it was on the Libertarian Standard about the forest charter.  You might want to look that up.

00:38:41

There’s some fascinating stuff about how the forest charter sort of complemented the Magna Carta and was even better in some ways because it applied to the common people.  And it was narrow and specific about forest rights, like hunting and all this, but it was interesting.  So look up – if any of you are interested, look up the forest charter.  It’s on the Libertarian Standard.  I think I blogged that there, maybe on Mises.org.  Anyway, now, I have a long comment to this, and I’ll just explain it here.  I have the comments here on pages 21 and etc.

00:39:21

But my point is this, and I’ll give you a brief lecture on the civil law and the common law.  I’m from Louisiana, which is the one state in the United States of the 50 states that has a civil law-type system because we were influenced by Spanish and French traditions at the time of Louisiana Purchase or when Louisiana was ceded to the US.  So we have a civil law system, so I’ve always had an interest in it, and I wrote on it, and the way to look at it is contrary to the standard way you’ll hear about it.

00:39:55

You’ll hear – here’s – let me just lay it out.  The best way I think for the libertarian to look at it is the Roman law is a magnificent body of law, legal principles developed over a roughly a 1000-year period from minus 500 to plus 500 B.C. roughly, which was like the common law which came later in England.  They were both similar in that they were decentralized.  They were basically the accumulation of decisions of judges or jurists or judicial experts applying previously developed legal principles to new [indiscernible_00:40:35] situations or cases basically.

00:40:38

So they’re actually similar in this way, and in fact, the Roman law greatly developed the common law.  And then what happened was later on in the 1600s/1700s, you started having codifications of the Roman law principles in Europe by Napoleon, for example, his Code Napoléon or his famous civil code and others.  So it codified the Roman law principles that were still surviving, and they survived, by the way, because of the earlier codifications of the Emperor Justinian.  They weren’t modern, systematic, codifications, but they at least collected the existing Roman case law – excuse me – and teachings.

00:41:31

Anyway, the civil law, as it exists now, is a codified version of the Roman law plus canon law, church law, and customs that had developed over the ages in Europe.  But its hallmark is not only that it’s codified.  It’s also that it enshrines legislative supremacy.  So Napoleon says, here’s the law.  We’ve gathered all these customs and these Roman laws and these decisions, and this is going to be the law.  It’s what’s written down here.

00:42:03

So it had the advantage that the average person, which is what Weber and Hoppe were referring to.  The average person can open the civil code and look at it and say, well, this is the law.  Whereas there’s no such code in the common law.  You have to pour through thousands of decisions, which is the expert – the domain of experts like lawyers.  So that’s one thing they’re talking about there.  But now, I would say this.  Nowadays, in today’s world, the distinction between – so I would say this.

00:42:36

The Roman law and the common law were similar.  They were both decentralized.  They’re both very good, although Roman law was superior in most ways, I believe.  The civil law is good because it’s a codification of the Roman law principle.  So it’s – there were great intellectual achievements and good for the common man.  But they also enshrined legislative supremacy or legal positivism.

00:42:57

Anyway, in the meantime, in the last, say, 200 years since codes arose at the peak of the common law in England, the common law and the Commonwealth countries—England, the United States, etc., Canada, Australia—have been overwhelmed by an increasing body of legislation.  So – and the same thing has happened in France and other countries that have civil codes.  The civil code is still great largely, but now there’s a whole superstructure of other statutes that surround it at the European level or at treaty level or at the national or state level.  So basically, nowadays, in both the common law countries and the civil law countries, the dominant form of law is special purpose and ad hoc and unsystematic legislation.  So the common law is getting – largely being lost.  The Roman law, as codified in the civil codes, is being submerged, so that’s our current situation.

00:44:03

Antonio says the civil code cannot address all possible instance of the law and yields more and more code.  Well, the theory of the civil code is that – I have a quote in the article that I mentioned, my 1995 article, which I think I have a link to here.  The civilians view the civil code as existing in a plasma, they call it.  So they basically think of all the code articles as being consistent with each other, and if you can’t find the code article directly on point to a given situation, you try to basically interpolate between code articles, or you analogize because there’s an assumption that every code article is part of a plasma, an organic, harmonious whole of law, whereas in the common law, the judges have always been jealous of their domain, and every time a statute is written, it’s seen as an intrusion into their space.

00:45:03

And therefore, the judges in the common law always interpret or have tended to interpret statutes very narrowly, which is one reason statutes and legislation in the common law is uglier than in the civil law because the legislators know they have to enumerate every possible – so they have so many synonyms.  They’ll say a vehicle, a car, an automobile, a truck, whatever, whereas in the civil law, they know the judges want to try to expand the interpretation broadly in this plasma idea.  So they’ll just say a transportation device, or they’ll say some general term.  So you’ll – and this difference actually leaks into contract drafting in civil and common law countries too.  In the common law world, the contracts are uglier.  They specify everything in such detail because they’re afraid that if you don’t, that someone will read around it.  Anyway, let’s get to what Hoppe said about this.

00:46:11

You can see these slides 23 and 24, I’ve got a lot more material than I actually went over here, but I think you can read it later if you’re interested in following up on this in more detail.  So Hoppe says he agrees, and he says the better distinction is not between, say, decentralized and centralized or between Roman and common or civil and common.   But it’s between private law and public law.  And common law and civil law were initially private law.

00:46:40

And he’s right—civil law, if you think of its roots in the Roman law.  So the English common law and the Roman law were private in a large sense, but they’ve become increasingly democratic or public, that is, legislation.  And he calls it elsewhere statutory – democratic lawmaking.  That’s what statute law and legislation is.  Okay.  Someone had a question, which I did not answer because I didn’t know the answer, but Hoppe did give an answer.

00:47:12

Someone asked, in Hoppe’s book, he says – he uses the term conservative socialism with a negative connotation to talk to people who use the state to conserve their place in society.  But later, he uses the term conservative socialism or conservativism in a positive way, and Hoppe wrote back to me that he only later, after TSC, which is 1988 or so, became aware of the work of Robert Nisbet.  And I’ve got actually several of his books here that Hoppe recommended to me, and he’s great, which gives a different and better understanding of conservativism.  So that explains his shift in meaning, but he said that his sort of interpretation of conservativism that Nisbet uses and as Hoppe uses later in his later book, Democracy: The God that Failed, he wouldn’t count people like Reagan as a conservative, so it’s a different meaning of the term.

00:48:18

So I would highly recommend like – oh sorry.  I thought I had the book right on my shelf.  I could grab it to show you, but it’s – they’re not in alphabetical order today.  Anyway, there’s a lot of Nisbet books.  If anyone’s interested, email me, and I’ll give you a list of the top two or three that Hoppe – actually, Stephan says The Quest for Community.  That is one of the ones Hoppe recommends.  Okay, so let’s go on to this one.

00:49:02

Now, I tried to give an answer to this.  I’ll go over it briefly because I already answered in detail, and Hoppe basically – I think he just agreed.  He rubber-stamped it.  Let me go to last one and make sure I’m right.  Yeah, Hoppe had no comments on this.  So let me just briefly explain this.  Someone said, in part of TSC, Hoppe says – he wanted to know if there’s a contradiction between what he talked about, socialism’s effect on personality types because he says, number one, it makes people rely on family relationships, personal relationships.

00:49:39

On the other hand, it makes them uninteresting and have uniform personalities, and these seem to be at odds.  Quickly, you can reread my answer I gave earlier because Hoppe basically agrees with it.  He’s just talking about two incentives that the state sets up.  And remember, the state doesn’t have to be consistent.  It can set up competing incentives.  For example – excuse me – with income tax, the state punishes hard work, especially with a progressive tax.  So in a way, it penalizes you from working harder because the harder you work and the more income you earn, the less you’re able to keep of it.

00:50:25

So in a way, it disincentivizes people from working hard.  On the other hand, by its spending policies and by its taxation, it impoverishes people, and it makes them poorer.  So it makes them have to work harder to survive.  So there are contradictory incentives there.  So the fact that there might be contradictory incentives set up by the state is the state’s fault, but it’s possible.

00:50:51

Now, in this case, we’re just talking about two sort of different phenomenon, and I actually don’t think they’re actually contradictory to each other.  So one is simply that, to get – to be successful or to get things done in a socialized economy, you have to be more political.  You can’t just – if you need your plumbing fixed, you can’t just call a plumber because they’re in short supply.  You have to have a cousin who’s a plumber or have done a favor for someone.  So that sort of political-type relationship becomes more important.  Yeah, as Jock says, you have to play the system.

00:51:25

So that’s one tendency that comes out under socialism.  But Hoppe also talks about a different phenomena, which is that the state regulates and taxes things that it can see, that are visible.  So they tax income.  They don’t tax bartering because bartering is not in money terms.  It’s harder to see, so people tend to move into areas that are invisible to the state or harder for the state to regulate.  And to do that, they keep a low profile.  No, I know they do try, but it’s just – Jock says they try to tax barter.  Yeah, of course, they tax bartering here too, but that’s not the main source of the state’s income.  And the fact is it’s easier sometimes to evade income tax if you barter because there’s no record of it.

00:52:10

And like there’s – it’s easier to evade it if you do cash transactions, which people do in the sort of gray market or black market or our agorist market, whatever you want to call it.  So I think those are just two different phenomena.  Basically, one is you have an incentive to become more political, to get good at relationships and political to get things done because you can’t just pay someone in person like a plumber.  And the other incentive – the other tendency is to keep your head down if you’re engaged in activities that are trying to escape the radar, trying to keep the state from noticing you, so I don’t think those are inconsistent and Hoppe agrees with this.

00:52:50

So freewill.  We talked about this earlier.  I won’t go into too much detail because I’m not going to finish now as I can see.  I tried to explain earlier that on the dualist point of view, the Misesian view that you look at – you can explore two realms of a phenomena systematically.  One is teleology, human actions, purpose of action.  And one is trying to figure out causal laws.  And from that perspective, you could look at humans, either from either perspective.  If you look at them as actors, then you’re thinking of them as actors, as acting, which means as choosing.  So you have to format or categorize your thinking of them in terms of human choice, which means freewill in a sense.

00:53:43

On the other hand, if you were to view human bodies as collections of particles governed by the four physical laws, and you look at their behavior or emotions instead, we really can’t do that.  We’re not super computers.  We’re not omniscient beings.  That’s one reason we look at them as actors as to how we understand each other.  It’s more conceptually efficient for us.  But as Mises and Hoppe say, that theoretically, if some external super being could look at our actions in terms of causal laws and predict what we’re going to do by using causal laws, that is, if we’re determined, then maybe that’s possible.

00:54:24

And from that perspective, our action from the action perspective is just an illusion, but it’s a necessary illusion.  So this, to me, helps to think about and solidify what has long been the attempt to bring the dilemma of freewill versus causality and determinism into compatibility, which is called compatibilism.  So I sort of lean personally towards compatibilism, although it’s still a mystery to me.  But I think that the Misesian/Hoppean/dualist position helps make the most sense of it.  So all I can say here is that Hoppe agrees with this way to present it. [Update: See also quotes from Hoppe related to this, in KOL154 | “The Social Theory of Hoppe: Lecture 2: Types of Socialism and the Origin of the State”.]

00:55:09

So I’m going fast here I know, and it is because I’m not going to cover everything, but if anyone wants to slow down or go over anything again or answer any questions now, I can do that.  Then we can take a short break and continue with more material.  Any requests, questions at this point?  You need coffee, Cam?  Cam says he needs coffee.  Okay.  All right, let’s continue for a few more minutes, and then we’ll take a short break.

00:55:49

By the way, quick question for the class.  Let’s take a quick and just chat for a couple things.  Number one, feel free to send anonymous or private or whatever constructive criticism later.  This is my fourth or fifth class now, and I sometimes feel I’m going too fast, but if I don’t go this fast, I’ll leave out material.  And luckily, you can rewatch things, so should the general pace of these things be slower or faster, or is it okay?  I mean I think it should be as fast as possible as long as people can absorb it.  So I’m curious about feedback on that either now or later or privately or anonymously or whatever.  Send it to Danny if you want to.  You can send it privately.  He can send it to my anonymously if you like.

00:56:39

Number two – yeah, actually, someone said that quote is from Economic Science and the Austrian Method.  I think I actually quoted that in my – in an earlier set of slides or somewhere.  In any case, I think I’ve got a blog post where I quote this and a Mises quote, which is very similar.  Mises has a very similar book.

00:57:06

Jock says, David Gordon goes through one philosopher a week.  How is David’s latest courses?  Is it interesting, Jock, and useful, informative?  Anyway, while you consider answering that, the second question is I am considering – not this year, maybe in a year or two or three, writing a book, sort of like – there’s a series of books.  It’s called the – maybe you’ve seen it.  It’s called Past Masters series.  I think it’s called now A Very Short Introduction.  I think they’ve changed it.

00:57:53

Anyway, it’s about a 100-page, systematic overview of the thought of a given philosopher.  I’m thinking about doing a book on Hoppe similar to that, and I’m curious if anyone thinks that might be taking the material from this course and expanding it of course and covering some gaps.  I’m curious if anyone has a thought about whether that might be a worthwhile thing to do.  So feel free to send me feedback about that.

00:58:20

Okay, it is 7 o’clock p.m. central time.  I guess it’s – what is it, midnight?  1 in the morning, Jock, your time in England, in Oxford?  1 a.m.  So why don’t we take a seven-minute break and pick it up in a few minutes?  Smoke them if you’ve got them.

00:58:42

… the feedback, Stephan.  Edward asks about the various – yeah, I think the Very Short Introduction series – I’ll show you.  Yeah, so this is what the series used to be.  It’s called the Past Masters, and there’s a lot of them there, but then they replaced it with this Very Short Introduction, which – so you’ll see books on Amazon like this book.  You can find this book under either title.  And there’s another one that’s similar called the Fontana Modern Masters, and these are about 150 pages each.

00:59:43

These – I like these.  These are about 100, and I think these are better from what I’ve seen in the – I’ve read about maybe a dozen of them.  So they’re pretty good overviews from people.  I’m not proposing doing a Hoppe book for one of those.  I doubt they would take it because he’s not a past master.  He’s still living, but maybe the Mises Institute would publish it, something like that.

01:00:07

In any case, by the way, for people – let me just mention something quickly while we’re – this is one of my favorite books, and everyone here is probably interested in philosophy.  This is one of my favorite books I’ve ever read.  I read it 25 years ago.  It’s – can you see it?  From Socrates to Sartre: The Philosophic Quest by T.Z. Lavine.  It’s a paperback.  It’s a really, really, really, really wonderful overview of philosophy in a lively way.  If anyone is interested in philosophy and you don’t have a lot of background in it yourself, this is a really good introduction.

01:01:02

Okay.  Anyway, so let’s get going again.  Any other questions before we continue?  And it’s wine time now.  I always get my wine out for the Q&A for the last 30 minutes.  Antonio says it’s in Kindle format.  What’s in Kindle format?  The Philosophic Quest is in Kindle format now?  Is that what you mean?  Oh, cool.  I didn’t know that.  That’s new.  It’s really good.  I read it – you can see.  I read it, for those that are interested in – Budapest 1991.  I used to write down in my books when I read them, and I was backpacking across Europe in ‘91 and read it.  I loved it, loved the book.

01:01:57

Anyway, good deal.  I’d love your – Jock, email me what you think about it after.  I have some friends that are philosophers that have never heard of it, which surprised me because it’s so good.  Anyway, let’s go on.  Any other questions before we resume?  By the way, I’m sorry I couldn’t get Hoppe to do a guest actual lecture.  That just couldn’t be worked out because of timing and because of technical issues.  What do you call a reading pile on a Kindle?  I don’t know, but I wish Kindle would allow you to sort your books into different categories like iBooks does, and I bet you they’ll do that in the future.  Oh, do they?  I think you’re right.  I’ve got to try that.  I’ve seen that, Jock.  They do allow that now, don’t they?

01:02:47

Okay, let’s – we might not get much into the topics beyond the Q&A, but I tried to organize these slides into the priority like the less important ones to cover are at the end.  Okay.  Let me try to explain what this is about.  So someone talked about Walter Block’s view on inalienability.  And what’s interesting about this course, and you guys then put in the questions this actually – this question made me think about it, and I wrote Hans.  He agreed with me.  But his answer and my thinking about it made me realize I think I was wrong in my earlier writing about Rothbard.

01:03:33

Let me quickly try to explain it.  I won’t go over my slides here.  You can read them later.  Let me just present it in a few minutes how I see it.  So I view Mises as the culmination of Austrian economic thinking.  I mean he wasn’t the first.  Carl Menger, etc., came first, but Mieses was really the most systematic and comprehensive and rational and scientific presentation.  Now, in the years we’ve improved on it, there’s been elaborations, etc.  Well, happy birthday Carl and Jock whenever that is.

01:04:18

But in any case – and I think Rothbard is sort of like the Mises of libertarianism, and I also give credit to Rand.  She inspired Rothbard in lots of ways, and she was a big influence as well.  But Rothbard is the guy.  But I think Hoppe sort of cleared up and improved by combining the two on a lot of Rothbard’s stuff under this modern Hoppian/Misesian/Rothbardian, but primarily Hoppian framework.  Here’s how I view this issue of inalienability.  It comes up because people ask the question, well, could you voluntarily alienate your rights?  Could you become a slave by signing a contract to be a slave?  Would that be enforceable?

01:05:06

So that question is one of these perennial questions.  Now, my view is Walter Block, people like him, who are a minority of libertarians I believe – there’s only a few libertarians.  Probably, I don’t know, 0.1%.  I mean not many libertarians believe this, but there’s a small minority of libertarians that think that if you sign a contract saying you’re going to be someone’s slave, then it’s enforceable.  And the master, the slaveowner, is entitled to use force against you to do whatever, what you agreed to, to kill you or to beat you or to punish you or to discipline you or to kidnap you or to jail you or to prevent you from running away, etc.

01:05:46

Rothbard’s view is opposite.  And for a long time, I thought Rothbard was correct in his conclusion but confused in his reasoning.  But my current view, gathered just a few weeks ago, is that Rothbard wasn’t confused in his reasoning.  He just – he hadn’t fleshed it all out.  But the way he wrote about it led me to think he was confused.  So let me just tell you what my view is and what I think is Hoppe’s view.  And then I’ll go back and talk about – I’ll talk about Rothbard and Block.

01:06:26

So my view is this.  If you remember the Hoppian view, what is the connecting – what is the central thing?  What is the common element between property rights in our bodies and in other things?  It’s the libertarian idea that the person with the best connection or link or claim to a thing that’s scarce should have the ownership of it.  So that’s what’s in common.  It’s not the first user, which is the homesteading idea of Locke.  That is how you apply the general idea, best link.

01:07:01

You apply that to the case of bodies.  You apply it to the case of things we own differently because they are different.  You can’t homestead your body because homesteading implies you already own your body.  Homesteading means there’s a person walking around the Earth who already owns his body, who is using his body to homestead new things.  So homesteading already presupposes body ownership, so they can’t be based upon the same principle.

01:07:31

So the bottom line is – and by the way, this is not that explicit in Hoppe either because, when I wrote my article on how we come to own ourselves, I thought about it a long time.  And I actually had to find, Hans – Hoppe finally told me he had written something in German, like in 1982 or something that had never been translated.  And I think I got Guido Hülsmann to translate it for me, and that’s the paragraph I cite, and it finally became clear to me.

01:08:00

This is the essence of what Hoppe is getting at, that we own our bodies because we have the best connection to it because we have a direct control of our bodies.  This goes back to that natural condition Hoppe talks about.  I – we use the – in language, we use the possessive.  I own my body.  It’s my body.  Now, that’s a natural thing, and if I want to move my arm up, I move it up.  So I have a direct control over my own body.  And this central fact is what gives me the better claim to my body than other people have to it.

01:08:35

So if someone else – A and B are fighting over who should have the right to control A’s body, well, naturally A has the better connection to it.  A has the better claim to it.  And in fact, for B to claim he should own A’s body, he has to presuppose he owned his body first.  Why?  Because he has the direct control over it.  So he had to presuppose a basis for my ownership of my body in his challenge to my body.

01:09:06

So that’s the basis of body ownership.  The basis of ownership of things that we acquire is that it was previously unowned, and then I used my will and my actions to transform it and emborder it.  I incorporated it into my patrimony, we might say, or my estate, and I put up a signal to others that, hey, I’m claiming ownership of this.  There’s already a signal put up about my body because I’m the one using it.  Everyone knows that I’m using my body.  They’re using their body.  So the signal, the borders of my body is already established.  It’s inherent in who I am.  I mean even dogs know property rights.  If one dog is munching in a bowl and the other approaches them, they start growling.  I mean this is not hard to understand.  But the point is that property means the right to control.

01:10:02

Now, by the way, I’m going to discuss this in detail.  I already discussed it in my last class on libertarian legal theory, and I will discuss it again in the libertarian controversies course coming up next month.  But there is a common, I think, misconception that owning something means implies the right to sell or alienate.  The reason we think that is because we’re used to thinking of that in the case of owned things, like things that we homestead or acquire.  But like Walter Walker says – he says, well, if you’re a self-owner, then you can sell yourself into the slavery.  That’s his whole argument.

01:10:47

The problem with that is that, if you think about it, ownership means the right to control.  It doesn’t mean the right not to control, which is what selling means.  It means you got rid of your rights of control.  So my view is this.  When you homestead a thing that was previously unowned, you homestead it because you’re not temporarily possessing it.  You’re owning it as an owner, and you’re making this claim clear to the world by establishing some border and by representing yourself as the owner.

01:11:21

But that means that if you cease to own it, if you cease to claim it as an owner, then you don’t own it anymore.  In other words, you can abandon your ownership of something.  In other words, it’s a symmetrical thing.  If you acquire something, you can unacquire it.  So in the case of acquired things, you could unacquire them.  And of course, you could arrange it so that you can unacquire it so that someone else that you want to have it after you could have it.

01:11:51

So for example, I acquire a staff, a branch of a tree that’s fallen down in the common.  Then I acquire it.  I use it for years.  I put runes on it.  I carve it.  It’s nice and polished.  And one day, I’m tired of this thing, or I want to trade it for something Jock owns.  How do I get rid of my ownership of this thing?  Well, I could just leave it in the field and walk away from it and leave it, and I’ve abandoned it.  Now, it becomes subject to re-homesteading by anyone.  But if I want Jock to give me something in exchange for it, I need to make sure Jock is going to be the new owner.

01:12:25

So I hand it to Jock like a loan, so temporarily Jock owns this thing.  He’s holding the staff that I own, but I’m giving him temporary right to use.  That’s what ownership means.  I have the right to decide who gets to use it, so I’m lending it to Jock.  And then, while Jock is holding it, I abandon it.  I say I hereby relinquish my claim to this.  So what happens?  There’s an instantaneous moment when the staff is unowned, and then Jock, as the new owner of it, as the new possessor, becomes the new owner.  He re-homesteads it.

01:12:57

Anyway, this is my theory, building on Rothbard’s contract theory, by the way, of how and why, when you have ownership of an acquired thing, that means that there’s a way you can get rid of it and alienate it.  But it’s not an essential feature of ownership.  It’s just getting rid of ownership.  It’s abandoning it.  But your property right in your body, according to Hoppe, is based upon your direct control of your body.  That doesn’t go away if you sign a piece of paper saying I’m your slave.

01:13:31

You still have direct control over your body. Therefore, if you say I give myself to you, so what?  It actually doesn’t abandon your body as it does in the case of the staff that I just gave.  So to me, this is the distinction.  Ownership of property does not imply the right to sell.  It implies it as an application of ownership in the case of acquired goods, but your body is not acquired in the same way because, to acquire, you have to be an acquirer.  To be an acquirer is to be a human actor.  To be a human actor is to be a person who already has a body.  You can’t act in the world without a body.

01:14:16

Now, what’s interesting is – now, Hoppe agrees with this approach, as you can see from the following slides.  But Hoppe has a – I’m sorry – Rothbard has a comment that the reason you can’t sell yourself into slavery is that the will is inalienable.  Now, I thought his argument was this originally.  Your will is inalienable.  It’s impossible to alienate your will, and therefore, it’s impossible to sell yourself into slavery.  But I immediately thought, well, but what about criminals?  What about someone who you are punishing for a crime?  Well – or what about animals?  If we own an animal, they have a will.  We use force against them to force them to do what we want.  Or criminal—if you punish someone or at least use force against a criminal in the act of crime to defend yourself, you are using force against their body, but they have a will.

01:15:14

In other words, your use of force against their body is justified according to Rothbardian theory, even though they haven’t alienated their will.  So my immediate thought was, well, Rothbard is a little bit off here because he’s wrong that the fact that you can’t alienate your will doesn’t mean you can’t alienate rights to your body.  In other words, I can have the right to commit force against an aggressor, even though he hasn’t alienated his will.

01:15:47

In other words, it’s justified for me to use to – to overcome his will.  It’s justified for me to use force that invades his body, even though he says no because he’s an aggressor.  But this recent conversation made me realize, well, Rothbard was talking about the consensual case only because Rothbard clearly believes that if you commit aggression, you can be punished.  So I think the context was he was only talking about this, and I think what he was getting at was something that Hoppe made more explicit later, which is that the basis of self-ownership is the fact that we have a will, or as Hoppe puts it, that you have direct control over your body.

01:16:30

So I think Rothbard, again, as he did with other things Hoppe made explicit later, had a proto-Hoppian theory, and this is because, I believe, a lot of this is implied in Misesianism in the first place.  And I think Rothbard was such a great libertarian because he was such a great Misesian, and Hoppe the same, but Hoppe came after and built upon Rothbard’s progress, and so he had further insights himself.

01:17:00

Anyway, I’ll stop with that on this issue to go on to others.  If anyone has any questions, let me know, but on the further slides – but my point is I believe Rothbard wasn’t confused.  I think Rothbard was confused when he said debtors’ prison was theoretically justified, but that’s what made me think he was confused about inalienability because he didn’t have a consistent framework.  And I think it was not consistent.  He did make a mistake there.  But I think in retrospect he was correct with his focus on the will.  I think that was a crude way of saying what Hoppe had said – excuse me – more explicitly.

01:17:40

So any questions?  Anything?  Let me know now.  I’m going to turn to the next topic.  If there’s any questions, I’ll address them.  Okay.  Now, I’ll be quick on this one too because I answered this in writing already, and I assume everyone has seen this.  Someone had a question in one of the previous lectures about the praxeological status of imaginary numbers because remember we talked about proto physics, how there are certain assumptions in math and physics that you can prove in human action that are realistic-based.

01:18:24

So someone said what about imaginary numbers?  And now, I don’t know if a lot of non-engineers understand what this is about.  In mathematics, the imaginary number i, which is the square root of -1 – it’s called i, small i.  Actually, in electrical engineering – I was an electrical engineer.  We call it j because i stands for current.  I don’t know why.  Anyway, i or j, whichever one you use to represent the imaginary number, square root of -1 is used in physics and in engineering as a convenient way to manipulate complex phenomena that have something to do with frequency, the frequency domain.

01:19:21

It’s not relevant here, but when you have radio signals, and you want to talk about the frequency of an FM signal or whatever, you want to manipulate it in the frequency domain.  You sometimes move up, convert to the complex.  We call it complex domain.  So in my mind, it’s just a mental way of formatting the tools we’ve developed to manipulate frequencies, just frequencies, which is a real thing.  How we think about these math tools and how we label them – I mean just because we call it imaginary doesn’t mean it’s imaginary.  It turns out that’s a way to do it.

01:20:02

Anyway, I ran this by Hoppe.  Now, I actually don’t know how much he knows about this application of physics and engineering and how imaginary numbers are used in real science or natural sciences.  But his response was – let me go to – so he agreed with what I said, which I’ve just summarized.  So he said some parts of math are aprioristic because they’re praxeologically grounded in praxeological reality, like action, like counting, the numeration, numbers.  And so they’re realistic, but he thinks some parts of higher math deviate from reality much like a lot of economics today does.  It’s just sort of gameplay.

01:20:50

So it’s just – it’s actually tautological.  In other words, it would be subject to the criticism that empiricists make of apriorism.  They say it’s all analytic.  It’s all tautological.  It’s all circular.  So he’s saying some math is like that.  And he says that Lorenzen, who I had mentioned earlier, who is the proto physics guy, talks about this a lot more detail.  He thinks a lot of math is idle games, just like a lot of modern economics is when it tries to add and multiply and divide utility or utils.

01:21:30

Okay.  Look, I am happy to go longer, but I know it’s late for a lot of people.  So why don’t we do this?  We reached the end of the 90 minutes, and I’d be happy to take any questions at this point and go as long as people here have perseverance to stand.  So – and in the upcoming weeks, if you want to go over the remaining slides, and there’s about 30 more slides, feel free to email me questions, and I can reply, and the whole class can – we can talk about it that way.  And I will post the final exam in a couple of days, and I’m going to cover up to slide 37 of tonight.  Any questions, comments, anything anyone else wants to discuss?  Feel free to shoot.

01:22:16

01:22:30

Edward says if monarchy is so much better than democracy, why did monarchists lead us into World War I, which destroyed monarchy?  That’s an interesting question.  Stephen has a question too, which I’ll get to.  Let me try to think what Hoppe’s answer would be.  Well, number one, Hoppe is not a monarchist.  He is an anarchist, so he thinks monarchy and democracy are both flawed.  And, of course, monarchy and democracy can both lead to war, and the outcome of war is unpredictable.  And of course, World War I was sort of an unpredictable thing caused by this weird circumstance and confluence of events.  And I guess you could also argue that war has been even worse.  In the 20th century, war was worse in the advent of democracy.  So I get the answer be monarchy is just another type of state, and they can make mistakes too.

01:23:21

Stephen asked, how am I able to be a patent lawyer in clear conscience?  So I do not participate in lawsuits against innocent people.  What I do is I help my company acquire patents, which serve as a defensive deterrent against other companies suing us.  And it’s only, say, 5% of my job, and I do want to get out of it because I don’t like it, and I’m working in that direction now.  So that’s my answer.  If I had to sue a company that was an innocent company for patent infringement, I wouldn’t feel comfortable doing that.  I wouldn’t feel it was justified.  But some people do things to put food on the table in a given system.  I try not to.

01:24:13

Edward, and maybe someone else can answer this question.  My history is weak.  Were European nations not very monarchical prior to World War I?  Didn’t Germany have a welfare state started by Bismarck?  Well, yeah, it did.  It was – I guess I don’t understand the question.  Yeah, they were monarchical before World War I, and sure they weren’t perfect.  Bismarck did start a proto welfare state.  Yeah, I think Hoppe’s idea is that the ideal form of monarchy would be this sort of earlier version of it that was somewhat limited by some constitutional or parliamentary institutions but more of a real monarchy rather than the ones we have now.  But he explicitly says, and I have it in the slides here, which we didn’t have time to get to, but he is not a monarchist.  He does not favor monarchy or a return to monarchy.

01:25:10

01:25:16

Jock says Hoppe’s explanation of socialism affects productivity helps understand Spencer’s survival of the fittest.  I don’t quite follow that, but that’s good.  Kevin: thoughts on corporate personhood?  Well, that might take too long.  I’ve written on this before.  If you search my blog – search stephankinsella.com for Hessen, H-E-S-S-E-N.  Robert Hessen has, I think, the sort of best treatment, although Roger Pilon from Cato, P-I-L-O-N, and Rothbard have some good stuff on this too.  My view is that, in a free society, people could arrange their affairs by private property-based contracts to have collaborative ownership.

01:26:17

And they can call it different things: partnerships, firms.  But the state took over part of this, and they monopolized it, and they claim the right to grant corporate charters to incorporate.  And they said to be a corporation, you have to have legal personality, have to be a legal person we call it.  And only we can grant you that, so then we can condition this grant.  It’s a privilege, not a right.  So we can tax you, regulate you, make you follow our SEC laws, Sarbanes-Oxley, etc.  I think the state is wrong.  I think you don’t need a legal entity status or personality to be a corporation.

01:27:05

I think it’s just a totally private thing, so get rid of the state.  Have a free market.  People can form these firms.  They can call them whatever they want.  Corporation is probably not the best term because it does imply a body or a separate legal personality.  I don’t know.  Maybe it would be used.  Maybe it wouldn’t.  But it can be done privately by contract as Hessen and Pilon explained in detail.  So just blog my website for Hessen and Pilon, P-I-L-O-N.

01:27:42

Antonio: He’s still confused about the difference between property and value.  People thrive for wealth, not property.  Property is a foundation of wealth.  You can’t accumulate wealth without property.  Well, I think – so we’re human actors.  We live in a real world of scarcity.  We have no choice but to employ scarce means to achieve our ends.  Scarce means are things that we get property rights in so that we can use them productively.  And so there’s one owner assigned to it so we can use it without people fighting over it with him.

01:28:18

So property in a way is a means.  It’s a means to satisfy our desire to change the future, which is to achieve our ends.  And when you do achieve your ends, when you make things better, we call that a profit, and another word for that is wealth.  So yeah, they’re different.  And value is just what you manifested in your action, what you want to achieve.  So property is just a means to action, sure, of course, although it’s an end as well in the world we live in.  I mean I might – my end might be to own this item, but in a way it’s a means to satisfying psychic or psychological ends, and then it’s a means to wealth in a sense.  So yeah, I agree with you on this.

01:29:05

Karl asked question about limited liability.  I mean I can talk about it, but it’s going to – it would take a whole lecture.  I would just suggest blog my website for limited liability and corporations and maybe Hessen, the word Hessen.  My short view is this.  There are two types of liability.  There’s liability for contracts, and liability for torts.  The contractual case is easily taken care of.  If someone loans my corporation, the ABC Corporation, money and they know that we’re calling themselves a corporation and that has a certain context or meaning they know that they can only go after the assets of the corporation, whatever those are, defined in a certain way, not the assets of the shareholders.

01:29:59

So they have no right to complain.  And what happens actually in reality is, in a small company – well, in a large company, people take this risk because the company has more assets than the shareholders typically.  And they have sufficient assets, and they tend to have insurance.  In a small company, then the bank or the creditor or the customer who is extending credit, usually insists that the main shareholder, the founder, they have to sign something guaranteeing it.  So basically, they look through this, and they make the owner become personally liable, but the point is it’s contractual.

01:30:39

For torts, to me, the question is, one – I have an article called – with Pat Tinsley in the QJAE on causation theory where I discussed this issue.  Just look on my website, stephankinsella.com, for the article I co-wrote with a key named Pat Tinsley, Patrick Tinsley.  And, by the way, Tinsley is the same name as Kinsella in Gaelic.  They both come from some strange Gaelic name.  In any case, my theory is that – my view is that, and I think Hoppe agrees with this, by the way.

01:31:16

The person who causes damage that is not consented to, if it’s a crime, it’s a crime.  If it’s a tort, that’s sort of less intentional, but it’s still negligent.  That person is the one that’s primarily responsible.  So let’s take the case of a Coca Cola Corporation truck driver.  He’s driving, and he’s negligent, and he runs over someone.  He has a wreck.  He damages someone negligently.  Well, the basic theory is that he is responsible.  To hold anyone else responsible, anyone else at all, you have to have another theory.

01:32:00

Now, in history, this is – by the way, we have to stop in a few minutes because I know it’s getting late for some people.  So let’s finish this up in maybe a few more short questions.  Anyway, the driver of the truck is responsible.  To hold anybody else responsible is called vicarious responsibility.  You have to find a reason to hold someone else responsible.  Now, the laws that developed in the common law did find a way to hold the master or the employer responsible for the acts of the servant or the employee.  It’s called respondeat – let me type it here, respondeat superior, which is a type of vicarious liability.

01:32:45

Now, that was based upon this feudalistic idea that there’s a master and servant, almost like a father for his child or a farmer for his goats.  He had to be responsible for the acts of his servants or his serfs or his slaves.  So you see a sort of paternalistic aspect to this, and that has been extended nowadays to say that the entire corporation responsible for the acts of the employees.  And the people that want to argue against limited liability for shareholders have to say the shareholder should be liable as well.

01:33:20

But my response would be the employee is the one who committed the act.  Unless a manager directed – excuse me – directed him to do this, why would his boss be liable?  Maybe he set up a dangerous situation.  Okay, so maybe you can find a few people liable in the chain of causation, which is why I refer to the causation article.  But you can’t say the shareholders are liable.  They just gave money to the company, and giving money to a company is not enough to make you liable.  I mean a customer gives money to the company when they buy a product.  A vendor benefits the company when they sell a product to the company.

01:33:59

A bank that lends money to the company gives them money.  So getting money or getting benefit – is this aiding and abetting?  Is this like a crime, a conspiracy?  I don’t think so.  So I think there’s no reason to hold a passive shareholder liable in the first place under the theory of vicarious responsibility or respondeat superior for the actions of an employee.  The employee is the one that’s negligent.  Now, I think in most cases the corporation would have insurance.  By the way, Rothbard explicitly rejects the basis for respondeat superior.

01:34:35

If you look – again, some of these blog posts I’ve done, you’ll see links to that.  If a shareholder knows – someone says if a shareholder knows a manager is committing a tort, well, but what if you know it?  I mean a shareholder can’t control everything.  They can only vote at the annual meeting for who’s going to be the director.  The directors have control over who the officers are.  The officers hire the managers, the managers and the employee.  The managers hire the employees.  I mean it’s a chain of command.  You have to find causally who is liable for this.

01:35:18

But if you’re curious, look at my causation article and also blog my website for posts about – if you look for the word Hessen you’ll find them, H-E-S-S-E-N, Robert Hessen.  He’s got a great book, In Defense of the Corporation.  Maybe Hessen, Pilon – Google my site, stephankinsella.com for that, and you’ll find a lot of discussion about this for whoever is interested.

01:35:55

We still have 17 people up.  That’s pretty impressive.  I know it’s getting late for some.  I’ll be happy to talk further if anyone wants to discuss anything.  If I missed any of the questions above that you want to discuss, let me know.  Let me see, Stephen.  Stephen says Hoppe says a potential way out of our predicament is secession of small areas.  What are the prospects for this, and how can we escape the grip of the state?  Yeah, okay.  So he does recommend secession, so this is why – he’s been criticized a lot for his views on immigration etc., but his real view, which I quote later in these slides, is that we should decentralized the power down to the smallest level possible.

01:36:42

Hoppe’s view, and you’ll see it was mirrored in the talk we had about Marxism and class consciousness – Hoppe’s view is that the central mistake of society is the error held by most people that the state is necessary.  So ultimately, the only answer is education, somehow informing people, enough people, a critical mass of people, that the state is a mistake, and the state is not necessary.  How do you do this?  It comes from economic education.  It comes from the leadership by elites.

01:37:21

So that’s why he’s devoted his life and why most of us libertarians try to educate ourselves and others about the possibility of a natural private property society, a free market order, and why the state is destructive to that and not necessary.  Whether there’s any prospects, I’m skeptical.  I will say one thing.  Education can come not only from formal education like reading books or going to university or attending Mises University conferences or things like this, but it can come from experience.

01:38:03

And my view is that, since the fall of communism and ‘89/‘91, that event by itself educated a lot of people around the world in a sort of implicit empirical sense, or maybe an osmosis sense that communism just doesn’t work.  So they have a sense that we need free markets.  So my view, my hope, is that as the richer- I’m sorry – as the more liberal nations become more technologically advanced and more rich, that that will continue to give a lesson to people.

01:38:41

We might reach a tipping point someday where the difference between controlled economies and relatively free ones is so great that people will get the message more and more and that you’ll have a runaway effect at some point.  That’s my hope, and I assume it’s Hoppe’s hope too because he fights for a reason.  But basically, it’s about education, how we educate humanity, enough people to be aware of the benefits of private property rights is a technical question.  And it’s difficult evidently, but I think there’s hope, but it may take a while.

01:39:29

Did I miss any questions above, by the way?  I see a lot of chatting about secession and charter cities, and that’s interesting stuff.  It’s hard to persuade people.  Edward asked me to comment on Hoppe talking about his encounter with the prince of Liechtenstein and his recommendations to the prince.  Edward, maybe you can comment on that.  I vaguely remember something about that, but I don’t remember exactly what the tenor of his conversation was.  I do know that he’s told me in the past.  He’s talked to a couple of monarchs like that.  It may have been this one or one or two others, and he always is pretty frank with them, and they’re pretty receptive in a general way.  But I don’t remember the details of that, sorry.  Thank you, Karl.

01:40:23

Edward says Hoppe advised the prince how to stop the pro-democracy referendum that they had voted on.  And the prince had threatened to leave Liechtenstein if any of his power was taken, and then the referendum failed.  Interesting.  I actually don’t know much about that.  That doesn’t ring a bell.

01:40:39

Jock says the entire economy in African countries, some African countries, is smaller than that of a small English town.  There’s the opportunity for something like charter cities.  Yeah, I agree.  I actually think – I mean I think these floating island things that Patri Friedman and the other guys come up with, I mean we’ve had these kind of ideas for decades now.  They never come to anything.  I don’t blame them for trying.  I sometimes think the best hope is some kind of recognized regime that is desperate and uses its sovereign status in the world community to just try some experiment.  But we’ll have to see.  I mean I don’t know.  Liberia didn’t work out, but I’m hopeful.  I mean I think that the future lies with technology and knowledge and freedom, but it’s not going to be an easy battle.

01:41:45

Anyone have anything else?  Feel free to post a question.  Antonio wants to know if I think the US is at risk of splitting.  I’m not the best person to ask.  I don’t know.  I don’t know any more than any of you do.  I tend to think that the answer is no.  I think that we are still the wealthiest country, and the state can use that wealth to maintain control for a long, long time to come.  I do think if we had a severe economic problem, then Texas itself where I live could use the idea that we used to be a country, the Republic of Texas or the Lone Star State.  They could overcome this patriotism that most people have and secede, which I would favor as a general matter.  But no, I don’t think we’re going to have Mad Max world or – I think what we’re going to have is continued economic improvement, to be honest, because of technology.

01:42:58

And the market has not been killed.  That’s my guess.  Now, most Austrians would disagree with me maybe.  I think the US and the West is going to keep improving because we have enough resources and technological improvements to keep overcoming the state increasing parasitic actions.  That’s my guess.  We could go up and down for a while, but I think we’re going to keep going up, and my hope is that eventually the technological free market sector can just outrun the state maybe 50 years from now, maybe 100 years.  I don’t know.  That’s my hope.

01:43:41

Stephen wants to know how to discuss anarcho-capitalism with people who are in the mainstream.  Oh God.  I don’t know.  What stories have I had conveying messages, converting people?  I mean there’s an essay by Nock I think.  I think I’ve got a blog post on it.  It’s called – or maybe it’s Leonard Read on the power of attraction, and it’s like, really the best way to persuade people is to have them come to you instead of being an annoying burr in their saddle.  Being a good person, being successful, being intelligent, always having a measured response, and people will gradually come to you.  When they come to you, it’s called the power of attraction.

01:44:22

And you can convert more people that way, and in a way I think I’ve kind of influenced heavily a few dozen people in my life just in family, friends, and things like that just because they hear the message repeated over and over in cocktail parties and work situations.  And, well, things like this don’t count because people like this are already [indiscernible_01:44:44] ideas.  But I try not to – there’s two approaches.  One is like the burn your bridges and don’t give a damn and just go all out.

01:44:53

You might – some of you might want to blog Google for – there was a libertarian in the ‘70s called Michael Cloud, C-L-O-U-D, and he talked about what’s called the libertarian macho flash.  That’s a sort of newbie libertarian impulse at a family Thanksgiving dinner to just stand up and tell his brother-in-law that he’s a statist and just be all libertarian, but then you alienate everyone.  It’s called the libertarian macho flash.  It’s kind of an interesting image of it.  I mean over the years I tend to try not to word it that way. ³

01:45:29

You have to measure how receptive people are to radical ideas, and if they talk about something – like for example, I talk to a lot of conservatives in Texas and Louisiana, and they just bitch about Obama left and right.  And I’ll just calmly say, well, you just complained about X, Y, and Z with Obama, but George Bush did X, Y, and Z in bigger or littler ways himself.  And they will usually say, yeah, yeah, you’re right.  And then they’ll – what can they say?  That that’s not the facts.  So it sort of blunts their attempt to distinguish between how bad it is under Democrats and how bad the Republicans are.  So you sort of get them to see that the left and the right are really the same.  So if you take what they’re criticizing, and I’ve done this to the left as well.

01:46:19

When the left criticizes the right, I’ll point out that, well, Obama is locking people up in Guantanamo still too.  And you finally get them to see that the left and the right are not really that different, and I’ve done the opposite with conservatives.  I’ll say, well, the George W. Bush did what Obama’s doing too or vice versa, and that sometimes works.  I find they have little response to that.  I think it makes them think, and then you can emphasize your message that the left and the right are the same.

01:47:00

We are 25 minutes past.  Maybe we should consider calling it.  Let’s see what Stephen says here.  You tried that approach, but people think their guy is slightly better than the other, and anarcho-capitalism is never going to happen.  Well, yeah, but they’re not really – you’re not trying to get them to vote anarcho-capitalism.  I think you’re trying to get them to see what policies we should favor.

01:47:29

That’s the main issue, and I think you can – of course there’s a Nolan chart kind of idea too.  You just say, listen, if you’re a favor of this kind of freedom, you should be in favor of this kind of freedom.  I mean you can always point out look.  If you believe in freedom of the press and freedom of speech, you realize you can’t have that if the government owns all the presses.  And I think they’ll see that nowadays.  So they understand the importance of private property.  And if they believe in due process, and you say, well, they take people’s property without due process, etc.  It’s an uphill battle.  I agree.

01:48:09

Edward says wouldn’t a secessionist community or a charter city suffer from a lack of capital goods and a lack of division of labor?  Even a totally free society would be poorer without a developed economy.  Can a complex economy with a large capital stock be created?  Well, I don’t know if I follow your question because – by the way, Jock has a good point they condemn the looters in London, but the government loots even more.  But people think it’s orderly, Jock.  It’s orderly looting.  It’s by the rule of law.  It’s according to statute or whatever.  Edward, I think – I mean I don’t know if you’re making the mistake that a lot of people make when we argue for – I mean you don’t have to be part of a self-sufficient nation like South Africa or France or the United States or Canada to be a sovereign area.

01:49:03

I mean we could secede down to the county level.  That’s what free trade is about.  You trade with other people that have goods that you don’t have.  You can have the division of labor in a small area because you’re part of the division of labor.  I mean maybe one small town makes oranges and that’s pretty much all they do, so what?  They’re part of an international division of labor, even if they’re trading with other areas that are part of states.  I don’t see the problem there.

01:49:34

If you’re talking about trying to turn a backwards area like, I don’t know, some province of Liberia or whatever, into part of the modern economy, I don’t think that’s a big problem nowadays.  It just takes monetary investment and intelligence.  This is Hoppe’s point in his Malthusianism thing.  I mean if people that are Western capitalist move there, set up something, they can specialize in whatever they want specialize there.  Maybe it’s gambling.  Maybe it’s pirating.  Maybe it’s drug production.  Of course, some of those things would be frowned on and subject to attacks by the outside countries.  So they have to be careful not to irritate the big countries too much, but they could specialize in lots of legal things: services, legal services, different havens, tourism.  Who knows?  Some kind of mining natural resources, etc.

01:50:38

Guys, I think we’re 30 minutes past.  I think we should call it to an end.  I’ve enjoyed very much the class.  You’ve been a great class, and I welcome any requests, comments, further questions, discussions, feedback.  So feel free to email me or post things in the class.  Thank you, Danny, very much.  Thanks, Kevin.  Thank you guys.  I enjoyed it too.  Very much.

01:51:11

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1. As Lomasky writes at p. 40 Persons, Rights, and the Moral Community: “I shall offer an account of basic rights that is multivalent. By doing so I hope to avoid the troubles that plague theories of rights purporting to find in all rights holders some one essential property vouchsafed by nature (or Nature) such that it, and it alone, guarantees the possession of rights. Most, but not all, adult human beings are project pursuers. Therefore, they have reason to accord to themselves and to other project pursuers the status of rights holder. Unless there were project pursuers, there could be no basic rights. However, project pursuers are not the only holders of rights. Others, young children for example, also enjoy that status. They do so in virtue of the social relations to project pursuers in which they stand. They, as it were, piggyback on project pursuers. The development of this argument is found in Chapter 7.” [↩]
2. Update: See the more extensive comments by Hoppe in this regard in the book based on these lectures, as quoted in Roman Law and Hypothetical Cases; see his Economy, Society, and History (Mises Institute, 2021; https://www.hanshoppe.com/esh/), p. 111. [↩]
3. See Michael Cloud, “The Late, Great Libertarian Macho Flash” (1978; preserved at https://perma.cc/KY9P-V7K7). See also Jeff Wood, “The Triumphant Return of Libertarian Macho Flash,” (March 8, 2017; https://perma.cc/KE6W-WQK4). [↩]

Kinsella on Liberty Podcast, Episode 157.

This is the fifth of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.” I’ll release the final lecture here in the podcast feed shortly.

The slides for this lecture are appended below; links for“suggested readings” for the course are included in the podcast post for the first lecture, episode 153.

Transcript below.

LECTURE 5: ECONOMIC ISSUES AND APPLICATIONS

Video

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Slides

TRANSCRIPT

The Social Theory of Hoppe, Lecture 5: Economic Issues and Applications

Stephan Kinsella

Mises Academy, Aug. 8, 2011

00:00:00

STEPHAN KINSELLA: … question about – someone sent me in the class course page.  Well, I mean if you’re just asking me my opinion, I mean I don’t think Hoppe has written very much on abortion.  I actually did include an abortion question in the questions I submitted to him that hopefully he’ll give us some feedback on it for discussion next week.  I believe he is generally pro-choice because I remember he asked me one time about, oh, 12 or 15 years ago to try to come up with an argument to justify it.  So I don’t know.  I’m not assuming there is a flaw in Rothbard’s argument about abandoning the fetus.

00:00:52

My personal view is that certain actions give rise to positive obligations.  So if you harm someone or put them in a position of peril, then – push someone in a lake who can’t swim, you have an obligation to rescue them.  And I think there’s a similar argument that, because of the nature, the dependent nature of the child, that you have positive obligations to your children because you brought them into the world.  So that’s the basic argument.  I mean another could be that the fetus is a human who has a right to life, and there is no reason the parent needs to kill it.  It’s not really a threat.  Now, there are some people written – there’s a book called Solomon’s Knife by Victor Koman, a libertarian science fiction novel, which posits this trans-option procedure.

00:01:47

And the idea is that medical technology permits any woman who’s pregnant to take the baby out and put it into another host mother.  So there’s really no reason anymore to have abortions.  If you want the baby out, you give it to another woman.  That would change the complexity of the debate.  Okay, so let’s get going.  So I have a lot of slides here.  I don’t think we’re going to cover them all.  The ones that we don’t cover we’ll talk about next time.  A lot of these topics blend into politics and economics.

00:02:20

So some of these are somewhat political as well, and so it would make sense to cover these in the next week as well.  So where we left off, we talked about epistemology, and last week, economic methodology and dualism.  Okay, so for the methodology part.  Today, I want to continue the end of that lecture and talk about a few more things, and then we’ll get to some economic issues and applications.  And you see the suggested readings I have here.  For next week’s classes, a lot of smaller topics.  A lot of blog posts cover these.  I don’t know if I will assign the reading ahead of time, but I will have links in the slides for all the things we talk about.

00:03:04

00:03:08

Okay, so let’s go to slide five.  Excuse me a second.  Let me close my door.  Excuse me.  Okay, I mentioned last time in the epistemology discussion, there’s a lot of hostility by Rand and objectivists to Kant.  And as I mentioned, that is directed towards an idealistic, subjectivist-type interpretation or construction of what Kant wrote.  And to the extent they’re characterizing him correctly, I think a lot of their criticisms make sense.

00:03:49

But there – as I mentioned, there’s a realist tradition of Kant that Hoppe and Mises share, and so actually, there’s a lot more similarity between Hoppe and Mises-style Kantianism and Rand’s own view of epistemology.  So for example, Ayn Rand talked about an axiom, if you remember, that is sort of analogous to what Kantians would call a priori statements.  And she says it’s a statement.  It’s like – it’s a fundamental statement and base of knowledge.

00:04:19

And if you look at the end of this quote in the bold, she says: It’s 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.  So this is very similar to some of the basic a priori propositions, which you commit a contradiction if you deny them, including Hoppe’s argumentation ethics.  She talks about existing and how, if you grasp that, that implies to corollary axioms or propositions, that something has to exist that you’re perceiving and that you exist as a conscious perceiver.

00:04:58

So basically, just right recognizing that there is something gives you the distinction between an observer, a conscious person who exists, and reality.  So that’s another way of proving certain things about the world.  And again, she notes here that it’s a contradiction in terms to be a consciousness but you’re conscious of nothing outside of yourself.  So you can see how she has a similar argument structure to some of the basic operative propositions of Mises and Hoppe, anyway, the way they interpret Kant.

00:05:33

I prepared this chart some time ago trying to sort this out, trying to show the parallels between the thought of Rand on the one hand and the sort of Misesian or even Rothbardian or maybe a more normal type of terminology.  So what Ayn Rand called her philosophy of objectivism, in that philosophy, she does recognize sometimes—she’s not always consistent—that the value of things is relational.  It’s a relation between a person who values something.  Now, she might go astray on the intellectual property stuff, and they talk about creating values.

00:06:13

But, for the most part, when she talks about objectivism in terms of value, she’s talking a relation.  And this is similar to what Mises would refer to as subjectivism, that basically value is from the subject’s point of view.  Now, when Rand talks about subjectivism, she means what we would call relativism.  Okay, so when she criticizes Kant for being subjective, but she’s saying he’s a relativist or an idealist.  In other words, we can’t know anything true or certain about the real nature of the world.

00:06:49

Now, Rand has a formulation that value is something you act to gain or keep, and/or keep, and this is very similar to the Misesian notion of demonstrated preference, that you demonstrate that you value something when you act to achieve it.  Now, what Rand calls action in general, that is, just anything humans do, that is what you can think of in Misesian terms as rational action.  In other words, they think of all action as rational in that sense.  Now, what Rand would call rational action is what Misesians would call efficient or moral action, that is, action that achieves what your goal is.  So if you think about how – I have a blog post, by the way.  I think there’s a hyperlink in the title.

00:07:39

00:07:45

I think if you click on that Axioms there on the previous page, there’s a blog post I did, which explores this in more detail.  Now, as I mentioned before, Rand – her ethics is consequentialist or hypothetical because she’s like, if you choose to live as a man, or you could say, it’s what Roderick Long and others call an assertoric.  Let me type it in here, assertoric.  An assertoric hypothetical, that is, since you choose to live, then the following results.  So her ethics is consequential as is Mises’ utilitarianism.  If you want peace and prosperity and harmony and cooperation productivity, then you favor the free market, etc. ¹

00:08:29

Now, as far as terminology Rand and even Rothbard’s terminology is more Aristotelian, whereas Kant’s is – Mises and Hoppe are more Kantian.  And finally, when Rand talks about something being intrinsic, Mises would call that objective, but not too important here but interesting nonetheless.  Oh, here’s the post here.  The top link there has more detail about this for anyone who is interested.  There’s a couple of articles that talk about this too, about the compatibility between Austrian economics and objectivism despite the protests to the contrary of the objectivists.

00:09:05

Now, there’s something we – I think I talked about logical positivism in last class.  I want to bring up one other related thing here.  Some of you may have heard of legal positivism, and for years, I struggled in my mind.  I’d think, why are they using the same word?  Is there a link between them?  Is there a relation?  And it’s hard to find anything good on this.  I’ve blogged about it a little bit.  Here’s how I think about it.  So legal positivism is a school of thought in legal theory, which says that – well, it has a couple of parts.  First, it says there’s no inherent connection between law and morality.  And then another claim is that laws are made, or say, constructed by humans.

00:09:55

So a lot of times, people that advocate natural law are on the other side of this.  They think there’s a connection between law and morality.  Now, when they say there’s a connection, it’s never clear whether they mean conceptually, whether they’re saying there should be a connection, whether they’re talking about the best way to classify by law.  And largely, these discussions are empty because they’re by non-libertarians who don’t have a clear grasp of political theory and reasoning.  And so they tend to resort to the second meaning of this.  That is, we can’t know what laws there should be, so it’s got to be whatever, sovereign state issues like the legislature, Congress or whatever.

00:10:41

Okay, so in my view, of course laws should have a moral base, but you can still identify a law that exists in a given society as some kind of legally enforced rule or rule that’s given widespread legal enforcement by whatever the enforcement mechanism is in a society.  If it’s a society of the state, it’s going to be the rules that the state ends up enforcing, not dead-letter laws that are never enforced anymore but things that generally you can expect to have a good chance of having some kind of serious consequence if you break it.

00:11:13

So I think you can identify laws without saying that they’re moral, so the first part of legal positivism, I think, is perfectly compatible with natural law thinking and with the libertarianism.  I can say there is a law against evading income tax.  There is.  That doesn’t mean I justified it.  See, the libertarian has the luxury of saying, just because I identify a law listing doesn’t mean I have to grant that it’s legitimate because we don’t have to resort to whatever the legislature’s done to determine what the law should be because we have a fear of it.  We don’t have to resort to what the majority thinks.

00:11:50

Now, the second part of it, I think, is objectionable.  Law should not be thought of as being made.  That is, legitimate law just should be principles that can be shown to be justified and compatible with justice and individual rights, libertarian property rights, basically.  So that’s legal positivism.  It has to do with how we can recognize what a law is, even if it’s not a just or a fair law or a moral law and with where laws come from.

00:12:18

00:12:21

Slide nine.  Now – okay, so I’ve already talked about this part.  So let’s go to slide ten.  This is also a type of legal realism, so let’s skip that for now.  You guys can read up on this later if you’re interested.  Now, logical positivism, as I mentioned, is this monist view, empirical view, scientistic view, the idea that we have to test things to know if they’re legitimate.

00:12:56

Okay, so we’ve talked about that already.  So what could the possible link be between them?  Now this is just kind of my tentative thoughts on this.  Maybe someday I or someone can write a longer article about it, but this is what I’m thinking.  Both of them share an antipathy for what’s called metaphysics in the derogatory term.  They’re both monist and empiricist.  Okay, and here’s why.  Well, I’ve already talked about why logical positivism is, but if you say a law – if we say a law is unjust or just, the legal positivist would say that’s an unscientific metaphysical claim.  It doesn’t have any teeth to it.  It doesn’t have a legislature or decree.  It doesn’t have the vote of the majority, something sort of non-normative they can sink their teeth into.

00:13:45

So basically, the legal positivist in the bad sense doesn’t see any reality to a normative realm.  This is why they’re like monists.  So it’s sort of like the empiricists or the logical positivists because you see things as – like only count them as real if they have some kind of direct or physical consequences.  So in the realm of logical positivism, that means that your theory is testable somehow.  You have to have some data to it.  The only count things as real if there’s data.  Otherwise, they dismiss it as merely analytic statements or what they sometimes call metaphysics.

00:14:16

Likewise, the legal positivist says that a law is real only if it’s enforced or issued by some authority.  So I think that’s sort of a link between those two types of thought, and they’re both flawed in a way.  So it leads the legal positivists to dismiss more reasoning, like we would have – say that’s just mere word play or it’s babble.  So this is why they resort to – I believe they resort to legalisms and wealth, law and economics, so they come up with welfare criteria where we try to maximize utility.

00:14:58

They try to give it a scientific veneer to make it seem like they’re not interjecting metaphysical, moral reasoning.  And I have an example here.  I mean I used to listen, in law school to Rush Limbaugh, and he would always say – someone would say, why shouldn’t – if alcohol is legal, why shouldn’t marijuana be illegal?  He would say, well, it’s illegal.  So in other words, he took that as a sort of fundamental given.

00:15:24

Okay, so you start having your principled opposition to positive law that’s bad eroded because you don’t really have a sound, normative, or moral reasoning to oppose it.  And so then you start thinking of legislation, like in the civil law as the supreme source of law.  Okay, so that’s just a link I’ve seen here.  Now, let’s – we’re past the issues from last class, so let’s go on to talk about some economic and some political issues.  A lot of these are sort of interrelated, but all I can do is take what I thought were some interesting and provocative illustrative areas of Hoppe’s thought.

00:16:08

Now, we’ve already talked about his economics in the earlier lectures in different ways, talked about his classification or his taxonomy of types of socialism, his views about the source of wealth, property and scarcity views, things like this, and also his epistemology, which is part of his economic methodology.  We talked a little bit about his economic views in the banking and nations states article discussion as well.  So let’s take now some concrete areas.  So one issue that I’ve always found very helpful, one of Hoppe’s formulations, I found it useful in the – all the discussions about intellectual property and getting it sorted in my own mind.

00:16:51

What is the sort of central mistake that’s made behind a lot of socialistic-type argument, and quite often, the mistake they made is believing in a property right in value.  Okay.  Now, as I mentioned, even Ayn Rand seemed to do this sometimes when she talks about people being creators of values.  We are producers of values, and as producers or creators, you own what you create.  You create a value.  You own that value.  But of course, this is very sloppy thinking, sloppy terminology, and it’s not rigorous thinking.

00:17:31

If you go back to the original, sort of foundational concepts that Rothbard and Hoppe lay out in their beginning of their political theory and their economic theory, it’s very rigorous and clean and crisp.  And Hoppe is very clear: property ownership is the exclusive control over a specific physical object in space.  And so then an invasion would mean the uninvited physical damage or control of these things without the permission of the owner.

00:18:05

So basically, property rights are in the right to control economic goods or scarce resources, and so invasion would be the invasion of the border of that thing or the use of that thing without the permission of the owner.  Okay, so as Hoppe notes here, a widely held view holds that the damage or diminution of the value of someone’s property is also a punishable offense.  So the problem with this, and this view infuses a lot of the reasoning we have, a lot of the reasoning behind people when they advocate socialist laws and things like this.

00:18:43

The problem with it, as Hoppe notes, if you have a proper understanding of the subjective nature of value, you realize that value is not a thing you can own.  Value is a relationship, and it’s subjective.  That’s between the subject or the person valuing something.  It’s how he regards the thing.  It sort of informs what he would do or what he wants to do with that resource.  So you can’t own the relationship.  You can own the thing.  You can [indiscernible_00:19:08] control the thing.

00:19:09

If you allow property rights and value, the problem is almost every action any individual can ever reform could alter the value of someone else’s property.  So for example, if Person A enters the market for the marriage market or another market, it can change someone else’s value.  And if A changes his own valuations of beer and bread or decides to become a brewer, that changes the value of the property of other brewers and bakers.  In other words, if someone moves in across the street from you and starts competing with you, then the value of your business may go down.

00:19:51

But you don’t have a right to the property in your business.  That’s because that would mean you have a right to what other people think about your property.  That would mean you have a right to their bodies in a sense, their head or their evaluations, which is, of course, un-libertarian.  Okay, and this is actually the logic behind protectionism in mercantilism.  When the government protects people from competition, it’s because the competition hurts the value of their business or their property.  Okay, but as Hoppe notes, while a person has control over whether or not his actions will change the physical properties of another’s property, so you can choose to be a trespasser or not.

00:20:31

You can choose to respect the borders of actual physical property owned by people.  You have no control over whether your actions affect the value of another person’s property because that’s what’s determined by other people’s actions.  So how could you be responsible for changing the value of other people’s property?  You have really no control over that.  And again, I’ve mentioned this before, but there’s only – well, there’s two fundamental ways to acquire wealth.  Number one, the private way, which would be either homesteading, production, which remember means transforming your own property into a more valuable configuration, or contractual exchange, so either exchange, production, or homesteading or by expropriating and exploiting homesteaders, producers, or contractual exchangers.  There’s no other ways.  Exactly.  That is Oppenheimer, Jock.

00:21:25

00:21:29

So – but you have to think here.  You have to recognize this.  Production is a way of gaining wealth, but it’s not an independent source of ownership.  Okay.  So you can make your property more valuable by transforming it, but you don’t acquire new property rights when you do that because you had to own the thing already.  You had to own the resource already in order to transform it.  So production doesn’t create new titles.  Homesteading is the only way to create a new property title.  Contractual exchange is a way of acquiring a previously owned thing as a transfer the title, and production is the reworking of something that you have title to already.

00:22:08

00:22:13

Okay, so how does this play?  What kind of implications of this do you have?  So as I mentioned, it plays into mistaken views on IP and property theory and on defamation law, which is reputation rights.  So Rothbard saw this already.  As Rothbard explained, if you had a right to reputation – see that’s similar to what we’ve been talking about, the idea that you have a reputation in the market, which has a certain value.  That’s how the Randians would see this.  So you own that value.  You created your reputation through your hard work, let’s say.

00:22:54

You’ve built up this reputation, and so, therefore, you own it.  And therefore, you can stop someone from invading that reputation, from damaging the value of your reputation.  So this is the danger of believing in property rights and values.  As Rothbard saw, you can’t have a property right to the knowledge in someone else’s head, which is what you would have to have to have a reputation because you would have to be able to tell other people what they can think about you.

00:23:23

On intellectual property, Lysander Spooner, who’s good on so many things, but on this one area he will go off the rails.  He even wrote: So absolute is an author’s right of dominion over his ideas that he may forbid their being communicated even by human voice if he so pleases.  So he believes that you create this intellectual work, which has value, and therefore you own it, and you can even use that to stop someone from – like if they remember it.  They memorize a poem you wrote.  You could actually physically stop them from saying the words out loud with your own body.  Okay.  Let’s change topics now.

00:24:05

00:24:10

There is – this is a fairly narrow topic here.  Hoppe’s got a good passage in that banking/nation states article where he talks about and gives an explanation about why it is that America and the Western countries tend to be more imperialistic in some ways.  Now, this was something Rothbard believed, and he was really strongly criticized by objectivists for this.  They hated him for that because the Randians sort of view America as the almost-perfect country, the quasi-libertarian or objectivist country.  And any strong criticism like that drives them nuts.  So when Rothbard wrote about how the Soviet Union was a lot less aggressive and imperialistic than the US had been, it just drove them bonkers.

00:25:06

But what’s his reasoning for that?  What Hoppe explains is that when you have a country like the US, which has a relatively liberal, in the European sense, internal free market basically, then it’s going to have a lot of wealth that’s generated.  So the countries that tend to be more – let’s say, more free market or more libertarian are going to tend to have a richer private sector.  A lot more wealth is generated.  But then, assuming you have a state that is in control, that state is able to feed off of that excess wealth through taxes.

00:25:42

So the states that are states in control of freer-market economies have a lot more wealth at their disposal, and of course, these states aren’t really any better than the more totalitarian states.  And they will follow the natural logic of states to try to use the resources they have at hand to dominate other nations and to exercise their power.  So states that tend to have a free market on the internal, tend to be more aggressive militarily.  So that’s – I think that’s a really good insight.

00:26:15

00:26:25

This plays, by the way, into what we’re going to talk at the end of this lecture or the end of the slides next lecture on Malthusianism.  And this also plays into – Rothbard has, in Power and Market, the second part of the combined Man, Economy, State/Power and Market volume.  He’s got an analysis of the types of taxation, and I think he calls them binary intervention and triangular intervention, different types of state regulations and taxation.  And Hoppe is drawing on this here.  He said that the states like, say, the Soviet Union are the ones that don’t have – so look at this bottom quote here on slide 21.  Regulations have a peculiar characteristic of requiring the state’s control to become enforceable without simultaneously increasing the resources at its disposal.

00:27:24

So it’s – from the state’s point of view, it’s a waste.  To have a regulation that just tells A and B what not to do doesn’t really give the state wealth they can use.  But if you simply allow a free market and tax it, you can take a lot of the gains from it that way.  So as Hoppe describes this kind of regulatory state, it requires the state’s command over taxes, but they don’t produce any monetary income from the state.  They satisfy pure power lust, as when A prohibits B and C from engaging in trade, so when you stop the free market, but taxation does help the state.  Since these are sort of discrete topics, if anyone wants to ask any questions along the way, I can break for questions.  So let me see here what Stephen is writing.

00:28:20

Oh, so Danny says, this would explain the imperialism of ancient Greece and Rome, which had better legal order than other nations.  I think it probably does go a long way to explain that.  Stephen: Plus the better that people in such states perceive their lives to be, the more ardently they are apt to support a war effort.  Yeah, because they don’t have economic – I think that’s right.  They may be more – they think they’re the best country in the world., and so we must be doing something right, etc.  I think that’s a good point.  Now, here’s a – there’s a really interesting paper Hoppe has called “Marxism and Austrian Class Analysis” or “Marxist and Austrian Class Analysis.”

00:29:13

In this paper – so what Hoppe argues is that he’s going to present the basic claims of the Marxist theory of history, their class analysis.  And he’s going to argue that they’re all correct but that they come from a false starting point and to show how to give a correct spin on this.  So let’s go to the main tenets of the Marxist belief system.  So number one, and remember, Hoppe agrees with all these.  He thinks the Marxists are right.  He says, well, first of all, the history of mankind is the history of class struggles.  We agree with that.  It’s the history of struggles between a small ruling class and a large class of people who are exploited.

00:30:00

And the primary form of this exploitation is economic.  That is, the ruling class, whoever they are, expropriates the productive output of the exploited.  Or as the Marxists say, it appropriates a social surplus product and uses it for its own consumptive purposes.  Okay.  Now, we’ll see that we disagree on some other applications of this, but the Austrian, Misesian, libertarian, Hoppian system would agree that this is the history of mankind.

00:30:30

And number two, the ruling class is unified by its common interest in upholding its exploitative position and maximizing the surplus product that it’s exploiting.  It doesn’t deliberately give up its power or its income.  If it loses it, it’s got to be wrested away from it through struggles.  And that ultimately depends upon the class consciousness of the people being exploited, that is, whether they’re really aware of their status as being exploited.  And finally – or not finally, number three, the class rule manifests itself in certain arrangements regarding how you assign property rights.

00:31:10

Okay, and so when the ruling class, to protect these arrangements, gets in command of this, it forms.  It gets in command of the state apparatus to control this arrangement.  So it sets up and administers a system of class justice, and it helps create an ideological superstructure designed to lend legitimacy to the existence of class rule, in other words, propaganda.  So basically, it takes control of property, sets up the state to do this, and propagandize the people so that they’re not even aware that they are in a different class or that they’re exploited.

00:31:52

Okay.  And then finally, because if you have competition within this ruling class, you have – you tend to have concentration and centralization.  Okay, so then you have a smaller and smaller exploiting class and a larger amount of people that are exploited.  And then this leads to wars, imperialist wars and territorial expansion because this group in control wants to seek power outside their own region as well.

00:32:21

Okay, so that’s the main tenants of the Marxists, and then the final one would be, as they get bigger and bigger, trying to dominate the entire world, the class rule is going to stifle economic development so much you’re going to have economic stagnation and crises.  And that would give rise to the potential conditions of the emergence of class consciousness, a revolutionary class consciousness.  So this is the idea of how this class control is unstable, and finally results in the classes or, sorry, the exploiting class realizing their status, having a class conscious, and then overthrowing the state.  Okay, so those are the main parts of the Marxist belief system.

00:33:15

So what Hoppe says is you can justify all these things, but Marxism cannot because they derive these tenets from an absurd exploitation theory.  So basically, their view is this.  The pre-capitalist social systems like slavery and feudalism are characterized by exploitation.  That is correct, and we would agree with him on that.  Okay, so they’d have that correct insight.  But then where they go wrong is they believe that basically nothing has changed in terms of exploitation under capitalism.  If the slave becomes a free laborer, they think that’s the same thing, or if the peasant starts farming land that was homesteaded and pays rent to someone in a voluntary free market.  So this is what Hoppe and libertarians would disagree with.

00:34:04

00:34:10

Dante, I see your question here.  I’m not sure if I understand it.  David Gordon said, told you to ask Hoppe.  Is Hoppe doing praxeological historicism since he’s predicting what’s going to happen?  My understanding is when Hoppe talks about predictions, and we have some at the end of this class here, he said it’s not praxeological.  It’s not a priori.  But I really – I’m not sure what praxeological historicism is to be honest.  I can try to ask him, but I’ve already sent him the questions.  It may be too late to get them in.  If anyone else knows, feel free to chime in.  I don’t know what praxeological historicism would be.  Or do you mean possibly – well, I have heard the expression among Mises that the entrepreneur is the historian of the future.  Is that what you mean?

00:35:09

So in other words, what an entrepreneur does in trying to predict what the future will be when he’s deciding what projects to engage in, what prices he forecasts there will be, he’s trying to understand human purposes and motives and figure out what they’re going to do, similar to what a historian does when he analyzes historical facts to try to understand the reasons and motives of the actors on the scene at the time.  But that’s not praxeological I don’t think to try to forecast the future.  That’s entrepreneurship.  Maybe missing your question.  I don’t know what else praxeological historicism would be.

00:35:49

00:35:52

Okay, so according to Hoppe – so Marx does point to the role of plunder, enclosure, and conquest, and there he’s correct to label feudalism as a type of exploitation.  But then he has an equivocation here because he is against capitalism even when it doesn’t have those features.  In other words, Marx points out that existing capitalist systems of his time did have a history in plunder and conquest.  Okay.  So then he acts like that tarnishes capitalism, so he’s against capitalism, per se.  Capitalism, per se, leads to exploitation.

00:36:33

But he would say that even about what Hans calls clean capitalism, capitalism that is not based in these things.  So there will be no plunder there for Marx to put his hat onto here.  So as Hoppe writes, yet one should be aware of the fact that, here Marx is engaged in a trick.  I think it’s like a type of equivocation.  And engaging in historical investigations and arousing the reader’s indignation regarding the brutalities underlying the formation of many capitalist fortunes, he actually sidesteps the issue at hand.  Okay, so his thesis is now really a different one.  Even if we were to have clean capitalism where the original appropriation of capital was the result of nothing else but homesteading, work, and savings, then Marx would say he’s still engaged in exploitation.

00:37:22

Now, why is this?  It’s the essential Marxist confusion.  It’s the idea that factor prices, which is the wages paid to laborers by the capitalists, if they’re lower than the output price, that is, if there’s a profit that the capitalist makes that he doesn’t give back to the workers, he’s exploiting this surplus value.  Now, of course, this is – yes, Lucas mentions the labor theory of value.  I agree.  And actually, in another class I did, I mentioned how this mistake was present even back in Locke, Locke’s idea of when he mixed – the idea of labor as part of his labor mixing – the labor-mixing part of his homesteading idea, and then also that idea was used by Adam Smith in economics, and then later it was taken over by Marx.  So they all have this bad idea that you can own value, or that labor is some ownable thing, and this is the fundamental mistake, and I think it is mixed up with the labor theory of value.

00:38:27

00:38:32

Danny: Hoppe isn’t proposing laws of history.  He’s deducing praxeological insights into the nature of institutions based on assumptions used to conceive of those institutions.  Well said.  I think that makes sense.  Karl, hold on.  Let’s get a page or two down and let’s see if we address that in Hans’ analysis.  If not, remind me.

00:39:02

00:39:06

Okay.  So but in Hoppe’s view, the reason an employer in a clean capitalist or in a free market would make you become an employee is because time preference and risk.  I mean he wants the money now.  He doesn’t have to wait for it, and also he doesn’t want to take the risk that he might not get paid.  The entrepreneur takes that risk and takes the role of waiting, and therefore, gets rewarded for it.  Okay.  So basically, if you look at the Austrian theory of exploitation, then this makes sense out of this class theory of history.

00:39:41

Okay.  By the way, I agree with what Danny’s typing here is that predicting history is not the same thing as positing laws of history.  And I don’t think it’s praxeological to predict history.  It’s just an attempt to forecast.  If you remember and I think it’s – I may have it repeated down here in a minute, but Hoppe believes that knowing praxeology can help you, everything being equal, be a better forecaster of the future because they kind of eliminate certain things that are possible, but it doesn’t make you infallible.  So basically Hoppe, what he does is he says, look, what’s some key differences between our class theory or his and the Marxist theory?

00:40:24

Okay.  So he says, well, they’re right that there does indeed exist something like an exploitation and a ruling class, or like exploitation done by a ruling class.  So Marx was correct that exploitation did characterize the relationship between the slave and the slave master and the serf in the feudal war.  But not in clean capitalism, and why not?  The difference is, in clean capitalism – sorry, under feudalism, let’s say, there is no recognition of the homesteading principle and self-ownership.  Okay, so what happens is the serf doesn’t get full ownership of his body and his property that he might have homesteaded.

00:41:11

He’s exploited because he’s robbed, but if you homestead unowned goods, if you transform them into wealth by production, or if you make contracts with others, you are not exploiting them.  This is actually the generation of wealth.  It’s not exploitation.  So in Hoppe’s view – Karl, I’ve never heard the term clean capitalism before except in this book, so if it’s someone else’s term, I don’t know it.  I’m assuming it’s Hoppe’s term.  Karl asks about whether clean capitalism is Hoppe’s phrase or a Marxist phrase, and I like it.  It’s, I think, what the left libertarians now who don’t like the word capitalism – it’s what they mean by the free market I think.

00:41:56

When they say capitalism, they mean necessarily dirty capitalism or crony capitalism or corporatism.  Hoppe defines exploitation as the expropriation of homesteaders, producers, and savers by people who – late-comers, he calls them, late coming.  That’s someone who comes after the fact and takes you stuff from you, late-coming, non-homesteaders.  So basically, as I mentioned earlier, there are two ways to acquire wealth: homesteading, production and contracting, or expropriating those or exploiting those people.  Okay, so the ruling class initially consists of the members of what Hoppe calls an exploitation firm, like a proto state, a little kingdom or fiefdom or the feudal lords.  So that’s what they are.  That is what the ruling class is.  It’s the ones that exploit people by basically being aggressors.

00:42:50

Now, here’s another thing the Austrians – oh, Karl, I don’t know if Marx ever had a word for clean capitalism.  I don’t even know if he had a concept for it because he views capitalism as inherently exploitative because the workers don’t get the surplus value.  Yeah, I think Jock is right.  He wouldn’t recognize the concept.  So history is essentially the history of victories and defeats of the rulers in their attempt to maximize exploitatively appropriated income and of the rules in their attempts to resist and to reverse this tendency.

00:43:38

Now, Hoppe thinks that basically – so I’m about to get to that, Antonio, about the class struggle, and when we realize – I mean Hoppe basically used that the state exists because of a mistake, a mistake on the part of the exploitive class that believes a state’s propaganda that the state is legitimate and necessary.  And therefore, they sort of are confused by the nature of their exploitation.  It’s hard to say you’re being exploited if you believe that the exploitation is somehow justified or necessary.

00:44:28

Also, as Hoppe notes, with the rise of democracy since World War I basically, the state co-opts people into thinking they’re part of the state.  They have the right to vote.  We are the state.  We are the government.  And so if they draw the line between the ruling class and the exploited victims, and so that makes it even harder for people to resist.

00:44:56

Okay, now Hoppe notes that ever since World War I, which is when democracy started becoming – taking over, exploitation has been on the rise.  And he says Marxism has to take much of the blame for this because they misdirected attention from the correct exploitation model, which is the homesteader-producer-saver-contractor versus the non-homesteader-producer-saver-contractor to the fallacious model of the wage earner versus the capitalist, and so they muddled things all up.

00:45:27

Okay, so contrary to what Marxists stay, the state is not exploitative because it protects capitalists’ property rights.  But it’s exploitative because it makes itself exempt from having to acquire for property productively and contractually.  It sets up two different rules: a rule for itself as the ruling class and a rule for the exploited people.  They can only acquire property legitimately.  The state can acquire property by taking it from them, so they set up two rules.  So what Hoppe believes is the class consciousness that we need to raise is the awareness of this nature of the state as the exploiter.  Okay, so this is what basically the goal of libertarianism is.  It’s to make people aware of the true nature of the state.

00:46:24

So back to the questions earlier, he has more in that article on this – excuse me – about how he thinks it could unfold and what hope there could be for a revolution.  Now, he talks about this a lot.  But the basic goal is to try to make people aware, to try to educate people about the nature of the state.  But if you are trying to educate them about why they’re being exploited by their boss when they’re living in a world of increasing riches all the time, going to vacation at Disney World, it’s hard to persuade people of this because it’s just not true.

00:47:00

So we need to get off the sidetrack that Marxism put us on, stop worrying about surplus value and the labor theory of value, and focus on the nature of the state as the fundamental ruling class that exploits the people.  Any questions before we go on?  Did I address the earlier questions if not?

00:47:38

Okay, let’s go on.  So now we’re going to talk about monopoly a little bit here.  This is not too extensive of a discussion, but basically Hoppe here talks about – well, first of all, the standard view in economics, of course, is that you could have monopolies arise in the free market.  And the government’s got to come in and regulate these monopolies with all – the variety of federal antitrust law, the Sherman Antitrust Act, the Clayton – get the names of them all.  That’s one of my least fun experiences in law school was taking the antitrust class.  I hated it.  It was horrible for a number of reasons.

00:48:22

Now, Rothbard and Walter Block and Hoppe are really good on this.  Mises, I believe, was less so.  He had a few remnants of the older approach, but Rothbard was more radical.  So the idea – the libertarian idea is that, of course, as long as you’re not committing aggression, then no monopoly that forms voluntarily on the free market or peacefully should be prohibited.  It doesn’t violate anyone’s rights.  So if two manufacturers want to collude and set prices, they have every right to try to do that.

00:48:59

People want from a cartel they can do that.  If they want to have vertical price restraints, price fixing, all that’s fine.  I mean this is part of the free market.  But – and so the real view is the only real monopoly is the state.  The state is a genuine monopoly, and of course, when you have the state as a monopoly, having a monopoly over law and justice, you’re going to get what the traditional classical economists have said about free market monopolies, which is you’re going to have higher prices and lower-quality services.  That means the monopolist has little interest to not sit on its monopoly and just rake the money in.

00:49:40

Hoppe’s view is there is absolutely no tendency toward the increased monopoly under an unhampered market system.  Now, he talks about two periods, about how, after the Civil War in the US, 1867 or so to about World War I, the US – that was a period of extremely unregulated market activity, much more free market than we have now.  Ever since World War I, the government has become a lot more interventionist.  So according to the classical theory, you would expect to see monopolies forming on the free market in that first period.

00:50:21

But historically what we saw, there was insane, intense competition, and prices were continually falling.  Okay, so in fact, what actually happened was we started having monopolization in industries only when the leading businessmen became successful at persuading the government, the state to interfere with the fierce system of competition like in that first phase and start passing regulations to make competition more orderly, to protect firms with what they call cutthroat competition.

00:50:56

What Ayn Rand called in Atlas Shrugged the dog-eat – I think the anti-dog-eat-dog rule.  And as I’ve noted in another context, a lot of the people that support IP law say they’re against unbridled competition.  In other words, there’s just too much competition.  So basically, under the free market, we see that there’s a lot of competition, and that competition starts going down, and monopolies start to rise when these businesses get in bed with the government, and we have crony capitalism.

00:51:29

And the government starts passing laws, regulations that help these guys.  Now, this is agreed to by some leftists like Gabriel Kolko, a famous historian.  He said: It was not the existence of monopoly which caused the government to intervene in the economy but the lack of it.  He sees this more clearly than a lot of conservative economists would see it.  If you look at this post I have here, I have a lot of examples from Rothbard and Kolko and others about how law – the federal government, for example, in the US has passed lots of laws that, ostensibly on paper, most people are used to thinking of as hurting big business.

[Update: But see Robert L. Bradley, Jr. and Roger S. Donway, “Reconsidering Gabriel Kolko: A Half-Century Perspective,” The Independent Review (Spring 2013). According to Sheldon Richman (private correspondence, Dec. 15, 2025: “I’ll give him [Donway] and Rob Bradley credit for showing that Kolko’s scholarship was flawed.” See also Is Macy’s Part of the State? A Critique of Left Deviationists — and related posts; State Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law; Where the Critique of Right-Libertarianism Goes Wrong]

00:52:10

They think of the minimum wage and pro-union legislation and environmental laws and the FDA as harming big business.  But the truth is actually the opposite.  Big businesses almost all wanted these regulations because they can afford to pay the regulation tax, but they knew that the small upstarts couldn’t.  So it’s a way of basically putting a wall up around your market and protecting yourself from competition.  So monopoly doesn’t rise on the free market.  Monopoly rises from the interventions of the state.

00:52:52

Antonio says, if you take away – oh, Danny says Mises considered monopolies to be harmless.  I actually – I meant to look this up, but I forgot.  I didn’t have time.  I forgot exactly in what way Rothbard thought he had corrected Mises.  I mean I know what Rothbard’s view is, but I forgot what Mises would have disagreed with him on.  But if I recall, Mises didn’t go quite so far as Rothbard on the monopoly question, but you may be right.

00:53:20

Antonio Lopez: If you take away the ownership of value, this conception of monopoly is easier to understand.  Anti-monopoly advocates try to defend the value of the customer.  There may be something to that.  In fact, I think this ownership of value and the labor idea is pernicious and pervasive.  It really corrupts and infects a lot of reasoning on the market: reputation rights, intellectual property, Marxism, some of Adam Smith’s economic missteps, etc.  So it’s a big thing to clear up.  Danny is saying that Mises recognized the fleeting and minor instances of monopoly prices are possible on the market.  He never said the state would be able to know.  Okay, I think that sounds right.  He didn’t think it was a big problem, but I think he recognized theoretically the possibility of monopoly price.

00:54:13

Yes.  Danny says Rothbard denied the existence of anything that could be identified as a monopoly price as opposed to – I’m actually going to cover that in just a second here.  That’s Hoppe’s view as well.  But, by the way, you see how this ties into Hoppe’s other view we talked about earlier about Marxist class analysis because his view is the only monopoly comes from the state.  Just like that’s where exploitation comes from.

00:54:47

Okay, so this is basically similar Rothbard’s view as well.  Maybe I don’t have a slide on here.  So you’re right, Danny.  This plays a role in the public goods issue too, which we’re about to turn to.  But yeah, you’re right.  There’s no way to distinguish between a monopoly price and a non-monopoly price on the free market.  The only way to do it would be to actually bring in a coercive invasion, and that ties into Rothbard’s value theory, his idea that we know that people are better off if they exchange.  They’re both better off after a voluntary exchange, but because value is not numerical, not cardinal, the utility is subjective.  And you can’t compare it interpersonally.  You can never say that if A takes something by force from B that everyone is better off on net because on net has no meaning.

00:55:46

All we know is that someone is worse off, that is, the coerced party.  So you see that Rothbard’s utility and welfare economics ties into this idea too.  The only way we can say there’s a non-monopoly price corresponds to the idea that the only time we can say that someone is harmed is when they’re coerced.  Otherwise, if they voluntarily trade, we have to assume they’re better off.  That’s why monopoly prices cannot exist unless there’s coercion or aggression actually.

00:56:20

All right, let’s turn to a related discussion.  This comes in the chapter right after this one, actually.  Well, there’s two chapters.  There’s one in – by the way, I think in the class notes I had the wrong chapter.  I had chapter 10 as the monopoly chapter, but as you can tell, it’s chapter nine.  Chapter 10 is on public goods, which is not completely unrelated.  So the idea of public goods – well, when I say not unrelated, what I mean is the fallacy of the public goods idea is similar to the fallacy of the monopoly idea, in that there is no way to distinguish between a monopoly and a non-monopoly price if there’s no aggression involved.  And there’s also no way to distinguish between a public good and a non-public good.

00:57:04

But the theory is that there are some goods and services that are special, and basically, there’s a free-rider problem because you cannot restrict the enjoyment of this good or service to people who pay for it.  Like defense, if you have defense that covers a whole nation, then everyone benefits from it.  So if someone’s able to get out of paying, then they’re benefiting without paying, and that would lead to a free-rider problem, and it be under-produced or not produced at all.  So the idea is that the free-rider problem, this public goods problem causes certain public goods to be under-produced.

00:57:42

And then the second part of the theory is, well, and therefore, the state should form to provide these public goods and to tax people to pay for them.  Okay. But now, the problem here is, number one, the public goods idea is said to justify the state, but almost everything the state does has nothing to do with even these alleged public goods.  I mean the government produces railroads and roads and telephone services and postal services.  These are all not public goods because you can restrict every one of these to people who are willing to pay for it.  Charge people to use the postal service.  Charge people to use the telephone.  Charge people to use the railroad or the road.

00:58:29

So why does the government do these kinds of things?  These aren’t justified by this.  And furthermore, there’s free riding of even private goods, and so Hoppe gives a rose garden example, which, by the way, he gives also – I think he uses this example in his discussion of ownership of value.  If you own a rose garden, your neighbor might benefit from seeing that beautiful rose garden, so the value of his house might be higher because he’d have a rose garden, or he might have some subjective value that’s higher.

00:59:00

Well, if I chopped down my rose garden, now I’ve reduced the value of his property.  If he has a right to – a property right to the value of his property, he could stop me from chopping my rose garden down.  So you can see how assigning property rights and value would actually lead to undermining property rights, which is exactly what intellectual property does, by the way.  It gives someone the right to stop you from using your property how you see fit based upon this fallacious notion of ownership of value.

00:59:27

The same is true with reputation rights.  In any case, Hoppe gives an example of a rose garden.  So your neighbor doesn’t pay for you to upkeep and build and construct this rose garden, yet he benefits off it.  He’s a free rider.  Now, so in other words, clearly, even by the arguments of the public goods advocates, not every private good should be produced by the state just because there’s free riders.  So where’s the line?  Now, and Hoppe also explains that history can show that all of the so-called public goods states provide have, at some time in the past, actually been provided privately, or even today are provided in some country, postal service, lighthouses, help to the poor like charity, police, arbitration.

01:00:26

If you remember from the banking/nation states article, Hoppe argues that this is exactly what the government does to seize power.  They gradually take control of these institutions in society that already existed: transportation, roads, money, banking.  And they, over time, are seen as the natural source of these things even though they didn’t originate with the state.  So as Hoppe argues: A clear-cut dichotomy between private and public goods does not exist.  This is similar to the point that you couldn’t distinguish a monopoly from a non-monopoly price on a free market, as I have noted here.

01:01:10

As he notes – now, this is where the Austrian focus on the subjective nature of value comes in.  By the way, we’re going to take a break in a few minutes, but just let me finish this little section up, and then we’ll take a break.  As he notes, under Austrianism, we view goods as subjective – or sorry, value is subjective.  So all goods are more or less private or public, and they can change with respect to their degree of privateness or publicness as people’s values and evaluations change.  They change dynamically.  They change all the time.  They change from person to person.  So all goods have some public aspect and some private aspect, different blends.

01:01:51

It just depends upon how able you would be to charge someone else to benefit from it and how much free riding is going on because for something to be a good, it has to be recognized and treated as scarce by someone.  Nothing is a good as such.  Goods are only goods in the eye of the beholder.  This is the Austrian approach.

01:02:12

So at least one person has to subjectively identify something as a good.  You can’t do a test on it to see if it’s a good.  It’s something that’s regarded as a good by a person.  So they can never be private or public goods as such.  It’s not a quality inherent in the good.  So the private and public character depends upon how many people—how few people or how many people—consider them to be goods.  That’s what determines if their classification is public or private.

01:02:39

Okay, now, Hoppe makes another good point.  Even if the distinction made sense, even if we can identify some public goods, well, this first of all doesn’t provide a good reason for why they should be produced.  Just because it’s a public good doesn’t mean it should be produced or why the state should do it.  Okay, and there’s no end to this reasoning, and you just say, well, unless the state comes in and produces this good, then it won’t be produced, or unless we force people to pay for it.

01:03:09

And then a lot of people will benefit from it that wouldn’t have been able to benefit from it if we didn’t produce it.  Well, but there’s no end to this reasoning.  I mean you could dream up things all day long that you want the state to just tax people to pay for and make, and you can make the whole country into parks.  Okay.  Why should we do that?  In fact, you have to rob people of their resource, a form of taxation, to pay for these public goods.

01:03:35

Now, they’re not able to purchase some private good they otherwise could have purchased.  Why is it better to produce the public good than the private goods?  You cannot know that this public good use is a better use than the private use.  This, again, ties into this Rothbard view of utility and welfare economics, the view that we can only know for sure that something is of value to someone, if they act to gain and/or keep – I’m sorry; that’s the Randian terminology – if they demonstrate it in action, which means they voluntarily do it.  It’s a voluntary exchange on the market.  That’s the only way we can know, so you can never know that this is a better use of private funds because you’re robbing them from – you’re robbing the money from the taxpayers.  And you’re forcing them to support some public good.

01:04:24

You can never know that they prefer that.  In fact, they evidently don’t prefer it because they have to be forced.  Hoppe gives another example that – I mean look.  You need a lot of things for a market to exist.  You need a legal system.  You need a common language.  Does that mean the government has to provide and police the language?  And I have no French friends here because you know the government polices the French language.  But of course it’s ridiculous.  You don’t need these things to be done by the government just because they’re essential to the market.

01:05:00

Okay, now, he does have an extensive discussion about how this plays into the production of security.  And that’s more of a political topic, so I’m going to leave that for the next class.  So what I will do is – it’s four past the hour.  Let’s take about a six-minute break, so at ten past let’s start again, and I’ll cover a few more of the slides and take questions as well.  So see you in six.

01:05:23

01:05:31

Anyway, okay.  It’s ten past so all right.  Before we go on, is there anything anyone would like to discuss or go on?  Rick asked about property taxes in the US.  I think there are some states that don’t have property taxes, and there are some that don’t have sales taxes and some that have no income tax.  I don’t think there’s any that have – that have none of all three.  I think there’s a couple that have only one like maybe New Hampshire only has maybe property tax.  Any questions?  Anything?  I’m curious.  What did David Friedman give a lecture on last year?  Was it about monopolies, or what was it about?  Texas has no income tax, so that’s good.  Oh okay.  I got you.  Hold on just a second.  Okay, sorry.  Oh, market failure, okay, okay.  Yeah, I just don’t know.  I mean Friedman is such a utilitarian on the law and economics stuff.

01:07:12

I don’t know how he would oppose in principle every single possible law that you could imagine being passed to stop some of these problems, but he’s an anarchist at least.  Let’s talk about something, the role of uncertainty.  I mentioned this earlier.  So the Misesian view is that what explains why someone is a good forecaster.  That’s what entrepreneurs do.  They have to forecast the future, predict the future.  They have to try to guess what the future is going to be like and how that will affect the price array.

01:08:00

And then they can compare future projects.  You can say, well, I’ve got three projects I can do.  I forecast this will happen here, here, and here.  And so the one that gives you the greater forecasted profit may be the one you want to engage in.  So he says it’s an unteachable art.  You cannot teach someone how to forecast, and it’s just called verstehen, or the understanding, the [indiscernible_01:08:27] or the ability to grasp what’s going to be in the future.

01:08:32

Now, of course, you can never predict the future perfectly, but we’re not completely ignorant either.  And some people are better than others at it, and the ones that are better, tend to make more money, make more profit.  But anyway, as Hoppe points out, basically, praxeological knowledge has very limited predictive utility.  That’s why – I wasn’t clear about earlier the praxeological historicism stuff.

01:09:01

Now, let’s switch to another discussion about uncertainty.  So Hoppe explains in this article, it’s called “Time Preference, Government, and the Process of De-Civilization.”  I don’t think I had that on the reading list.  I discussed it a little bit in an article I wrote in ‘95 as well, which I have linked here on slide 44.  So Hoppe explains when you have democratic-made law, legislation basically, that causes uncertainty.   Why is this?  Well, I mean some of you may have heard the – seen the little bumper sticker or the sign that says, no man’s life, liberty, or property is safe when the Congress is in session.

01:09:43

Well, I mean the idea that if law is not a private body of law that’s developed slowly and gradually over a long period of time and has some stability, if law is seen in this legal positivist way as whatever the government decrees.  And gradually, that’s how people think of law.  I mean 200 years ago, 500 years ago, people didn’t think of law, as whatever the parliament said.  They thought of law as a body of rules in place to serve justice.  But nowadays, when people say there ought to be a law, they’re talking about a statute.  They almost think of law as equivalent or equated with statutory law, legislation.

01:10:29

So we tend to adopt this positivist mentality, legal positivist mentality where we think of the government at the source of law, and we think of law as something malleable, that can be changed from day to day, and in fact, it is.  When law, when legislation becomes the dominant mode of making law, then the character of the population changes.  The character of law changes.  People realize that the law can change at any time.  I mean right now in the US, I mean who knows what kind of new budget is going to pass and what changes to the political action system will come out of that?

01:11:07

Who knows what the taxes are going to be in a few years?  We’re always in a state of uncertainty.  Or put it this way: The level of uncertainty is greater.  Some people – I know people myself that are afraid of going into medicine right now in the US because of uncertainty about how Obamacare may affect them or what new regulations are going to happen down the road.  So some people, because of uncertainty, just stay out of whole areas.  So in other words, legislation, just the mere fact of having a legislative system in place in society as a primary way of making law—that causes uncertainty.

01:11:41

Now, uncertainty increases time preference, and when you have higher time for – now, why is this?  It’s because, if the future is uncertain, it’s that things you could expect to get in the future are relatively less certain, so the present value of that goes down.  So people always have a certain degree of time preference, and the lower time preference, the better off we are overall because we have a longer structure of production.

01:12:12

People – this is how we have productivity in the free market, why people have a lower time preference, be willing to invest in the future.  Well, if you’re choosing between some current present gratification and a future one, if the value of the future one goes down because the future is now more uncertain, then the differential is smaller.  So you might want to choose the present value.  I think I’ve got them backwards.  The present value has this much value, and if you have time preference.

01:12:44

Anyway, the point is it’s clearly the phenomena that the higher your time preference is, and it will go up if there’s more uncertainty, then the lower our productivity is.  And crime increases as well.  So as Hoppe writes: The mere fact of legislation—of democratic law-making—increases uncertainty.  So rather than law being immutable and predictable, it becomes increasingly flexible and unpredictable.  So what’s right and wrong today may not be so tomorrow, so the future is more haphazard.

01:13:20

So all-around time preferences will rise, and consumption and short-term orientation will be stimulated.  And at the same time, respect for all laws will be undermined, and crime would be promoted because if there’s no immutable standard of right and wrong, there’s no firm definition of crime.  I mean we’re all lawbreakers, everyone on this lecture, everyone that you know because there’s so many laws.  So if you know you’re breaking a law, it’s because there’s now a separation between what law used to be and it’s just an arbitrary whim of the government.  People don’t respect law much, and that means they don’t even respect the good parts of the law, like the parts that are libertarian.

01:14:01

Okay.  So as Hoppe notes, look, here’s how it works in the free market.  You have to work for a while before you get paid.  You have to wait.  You have to be patient.  But specific criminal activities like murder and assault, robbery and theft don’t require that kind of discipline.  So the reward for the aggressor is tangible and immediate, where the sacrifice, the possible punishment lies in the future, and the future is now more uncertain, so you have more crime.  And Hoppe cites studies by E.C. Banfield like Unheavenly City Revisited and others in this article about the analysis of how increased uncertainty and lowered – and increased time preference generate more crime.

01:14:48

Okay, Hoppe’s got an article called “The Ethics and Economics of Private Property,” kind of a confusing title because it’s similar to the title of his book The Economics and Ethics of Private Property.  But this is a separate article, and in that article, there’s a section on Chicago diversions [in “The Ethics and Economics of Private Property,” in The Great Fiction] where he does a nice takedown of the Chicago mentality of these legal and – legal theorists and economists like Coase and Demsetz and Richard Posner who is a judge now, a federal judge.  This is the law and economics crowd and Chicago-ites.  So for Rothbardians, for Hoppe, for libertarians, for Austro-libertarians, private property rights and ethics logically precede economics because how the economic analysis – it takes for granted certain assumptions like what type of legal system is in place, what property rights are, what contract rights are, etc.

01:15:48

But for the Chicago school, these things, property ethics, are subordinate to economics and economic considerations.  And according to, say, Posner, he says, whatever increases social wealth is just.  In other words, he defines justice as that which increases wealth.  So they give a classic example.  So imagine you have a railroad next to a farm, so the train passes by.  Let’s assume this is all private, private railroad, private farm, and the engine emits a spark, and it damages – it causes a fire, burns down part of the farmer’s crop.

01:16:26

So what is to be done?  Now, the classic answer would just be property rights.  It would be well – the classic answer is property rights.  And that question, certainly the law or nuisance or homesteading of easements, things like this, and the idea would be, well, if the farmer was there first and then the railroad came up later, then they should be liable because they damaged his property.  If the railroad was already there, then you could say, well, maybe they homesteaded a certain spark-emitting easement because that’s part of the nature of running a railroad.  And if a farmer planted his crop next to the railroad after, he came to the nuisance we would sit in the law.  And he can’t complain about the railroad harming his property because he took that risk.  He assumed the risk.  So basically, it’s just a property analysis.  It’s just a justice analysis.

01:17:34

Now, the Chicago answer would be this.  He says first of all, it doesn’t matter how you allocate property as long as you allocate them in some kind of way.

[Note: For more on this, see Rothbard, “Value Implications of Economic Theory,” in Economic Controversies (Auburn, Ala: Mises Institute, 2011), p. 246–47:

The relation between the Compensation Principle (as well as the related Unanimity Principle) and theories of justice can be starkly demonstrated from the example of slavery. During the debates in the British Parliament in the early nineteenth century on abolition of slavery, the early adherents of the Compensation Principle were maintaining that the masters must be compensated for the loss of their investment in slaves. At that point, Benjamin Person, a member of the Manchester School, declared that “he had thought it was the slaves who should have been compensated.”2 Here is the stark example of the need, in advocating public policy, of an ethical system, of a concept of justice. Those of us who hold that slavery is unjust would always oppose the idea of compensating the masters, and indeed would think rather in terms of reparations: of the masters compensating the slaves for their years of oppression. But what is there here for the wertfrei economist to say?

A similar argument applies to the Coase-Demsetz analysis of property rights and external cost. Coase-Demsetz declare that “it doesn’t matter” from the point of view of allocation of resources whether, for example, a railroad is given the property right to pour smoke onto the land of neighboring farmers, or the farmers are given the property right to require compensation for invasion of their land by the railroad. The implication is that the effect is “only” a matter of distribution of wealth. In the first place, of course, the decision “matters” a great deal to the railroad and the farmers. I contend that it is totally invalid to dismiss such “distribution effects” as somehow unworthy of consideration by the economist, even though it is clear that ethical considerations are directly relevant to any treatment of such distribution. But apart from this, the Coase-Demsetz analysis is not even correct for short-run allocational problems (setting aside its validity or invalidity for long-run allocation) if we realize that social costs are psychic to the individual and therefore cannot be measured in monetary terms. One or more of the farmers, for example, may love his land so deeply that no feasible monetary compensation for the smoke loss could be made by the railroad. As soon as we admit these psychic costs into the picture, the Coase-Demsetz analysis becomes invalid even for the short-run allocation of resources. This is apart from another consideration: that in law, an invasion of property can be stopped completely by court injunction and not merely be compensated after the fact.

See also On the Non Liquet in Libertarian Theory and Armchair Theorizing; Adam Haman and Matt Sands on Immigration, Property Rights, and Hostile Encirclement ; Hoppe, “The Ethics and Economics of Private Property,” in The Great Fiction, in sec. VI, “Chicago Diversions” section.]

What he’s saying is it doesn’t matter if you give it to the farmer or to the railroad if you let them win.  It doesn’t really matter if transaction costs are zero, so this is what Coase is famous for his talk about transaction costs.  But transaction costs in the real world are not zero, so it could matter, but let’s assume transaction costs are zero.

01:18:07

That means the ability to negotiate deals and to get an optimal deal done.  So he says, suppose – he takes an example.  Suppose the crop loss is $1,000 to A, but to make – to install a spark apprehension device on the railroad or on the train, an S-A-D, a SAD, is $750.  So if that’s the case, now, if you find B liable, that is, the railroad, then they’re going to have to put a $750.spark arrester on.  But if B is not found liable, that is, the farmer has no cause of action, then he will be willing to pay somewhere between $750 and $1,000, maybe up to $1,000 to the railroad to install this, so we’re assuming those transaction costs that the railroad wouldn’t object.  As long as he pays them, they’ll do it.  So he pays them, let’s say $800 to put it on.  That’s worth it to him because his crops are worth $1,000, so he still benefits.

01:19:11

So basically, in this situation, in both cases, no matter who you find liable, a SAD will be put on the railroad.  Now, if you assume the numbers are reversed, the crop loss is $750 and the SAD is $1,000, so if B is found liable—that’s the railroad—you’ll pay A $750.  But he won’t install the SAD because that would cost $1,000.  He’ll just give B $750, which makes up for the lost crop.  And if B is not found liable, A wouldn’t have enough money.  He couldn’t justify paying $1,000 to the railroad to save a $750 crop, so in both cases, the result would be the same.

01:19:52

So Coase uses this to argue that in both cases, whether the value is this way or that way on the SAD price and farms, in both cases, no matter who you choose to win the case, the same result would happen.  Okay.  In the first case, there would be an SAD installed no matter who wins the lawsuit.  In the second case, there would not be an SAD installed no matter who wins a lawsuit.  So he’s saying it doesn’t make any difference.  And then there’s a second claim of the Chicago school here that they think what courts should do is use this idea and they should assign property rights.

01:20:35

When you have a contest like this, like the railroad versus the farmer, they should give it to the person to maximize wealth.  Okay, now they do this in part, I think, because they believe those are transaction costs, so they want to assign it the right way.  But now, here’s how Hoppe responds.  Okay, number one, it does matter who wins.  It matters to the farmer because either he’s got to pay or the railroad has got to pay.  So it does matter to some people, real people in the real world.

01:21:06

And it also matters for social production because the property owned by the farmer, the property owned by the railroad, are the result of previous acts of homesteading and contracting and production.  So if you don’t recognize there are property rights in these things, you reduce wealth and production.  So if you don’t get it right then you would reduce overall wealth.  In other words, if we had a rule in society that you couldn’t be sure you would get to keep some unowned land that you homesteaded, why would you bother homesteading it?  Or you have a smaller incentive to homestead it, so you’d have less homesteading, less wealth being created.

01:21:49

Furthermore, Hoppe explains that Coase wrong that it doesn’t matter how you do it because he gives an example.  See, if you don’t treat value as cardinal and objective and intrinsic, if you treat value the way Austrians do, as subjective and non-cardinal, then you could have a case that matters.  So he gets – Hoppe says, let’s say he doesn’t have a garden worth $1,000 on the market.  He has a flower garden that he subjectively values at $1,000.  Well, if he loses the lawsuit, in the first case we gave earlier, he wouldn’t be able to justify spending $750 to the railroad because he has no surplus.  He has no crop money.  It’s not a crop.  It’s not a money-producing crop.  It’s a subjective value-producing garden.  So he actually – it would make a difference in that case.  So actually, because they have the wrong view of value, the Coasians get it wrong.

01:23:03

Finally, Hoppe points out, if you understand value is subjective, and not interpersonally comparable, this entire idea that the courts should make a decision about maximizing value is completely incoherent.  Number one, you cannot scientifically compare.  You can’t do these cost-benefit comparisons.  Value is not measured in utiles or numbers.  Okay, so number one, it ignores psychic costs.  If you just look at the money price as a proxy for value in the case I just gave, you would ignore the value of the garden because we can’t know how much it’s really worth to the farmer.

01:23:41

It doesn’t have a fair market value.  It also makes the assumption that money is valued the same by people across time and between people, and of course that’s not true either.  So it’s a completely unscientific enterprise.  This entire idea that the government court should look at the situation and make a decision about what’s the best way to rule based upon how we maximize wealth in society.  And again, this contradicts Rothbard’s utility and welfare economics.

01:24:11

Danny says, the question isn’t whether a particular instance leads to greater general welfare.  It’s whether the rule, which a particular instance is an instance of, is liable to lead to greater general welfare.  Well, I think that’s correct.  You not only have that problem.  I mean when I was in law school and we had torts class, we had similar discussions.  And my teacher was – did this all the time.  He was repeating the line, Posner’s and all these other guys’ lines that if you want to decide if someone was negligent, you need to look at the total cost.

01:24:47

But to what, of putting this rule?  In other words, it depends on how you draw the line around things.  I mean what if the rule is governments have to be in power and have a lot of control over the economy just to have the system in place in the first place?  I mean there’s no end to the consequences.  There’s no objective way to say what rule is being decided here.  I think I agree with what you’re saying, Danny.  The other problem is, so the courts are supposed to make this cost-benefit analysis, but you’ve got to use data, market data.

01:25:22

Of course, you’ve got to use the current market data.  You’re not going to use future market data.  It doesn’t exist, and you’re not going to use data that’s ten years old.  You’re going to use the current data.  Well, data changes from time to time.  So on day one, a court might decide in the farmer’s favor.  But two years from now in a similar lawsuit, the court might decide in the railroad’s favor.  In fact, it might be the same party.  So as Hoppe says, different circumstances will lead to a redistribution of property titles.

01:25:52

No one can ever be sure of his property.  Legal uncertainty is made permanent.  This is neither just nor economical.  And anyway, who in their right mind would ever turn to a court?  He’s talking about a private system I think, that announced that it might reallocate property titles in the course of time, depending upon changing market conditions.  Property needs to be owned by the owner until he gets rid of it.  It doesn’t just shift back and forth at the changing whim of a panel of experts.

01:26:20

I think we can stop here, good stopping point.  We’ll pick up the rest next week and turn to some political issues and hopefully go over Hoppe’s answers to some of these questions if he has time to do it.  We’ve gone 90 minutes.  I’d be happy to go further and answer any questions or talk about anything else.  Any questions?  The floor is open.

01:26:45

01:26:59

By the way, I have a new class coming out set next month called Libertarian Controversies, a five-week class.  So some of you might be interested in that.  I think Hoppe is not working on a book anymore.  He was working on a book about – it was the same topic that he did a ten-lecture series at the Mises Institute.

01:27:36

It’s about history and sociology and sort of the whole history of mankind, not as a history but as a reframing of it.  But I think he gave up because he thinks it’s just too empirical, and it takes way too much digesting of historical research, and he gave up on it.  He’s got some other ideas he’s working on I think.  The lectures will be at the same time as this, Jock, the same time as this, 7 p.m. Eastern Time on Monday nights for five weeks starting in mid-to-late September.  I think it is September 19 to October 23 if I recall.

01:28:24

01:28:32

Edward asks about Hoppe and IQ.  I’m actually – I’m going to talk about that at the end of this set of slides next class, his Malthusian stuff.  So if you heard his lecture, you’re going to have heard most of what I’m going to say about it.  I don’t think it was too much about IQ itself.  It was more about intelligence, the role of intelligence in productivity, human productivity.  Well, I guess everyone understands everything perfectly that we went over tonight, so that’s good, no question, or maybe there’s nothing controversial.  Okay, guys – oh no, Dante asks, I don’t think Hoppe will take a course.  Good night, Jock.

01:29:38

Random question from Stephen: Are there any criticisms of a private law society that have any merit?  Do you see any potential problems with the private law society with competing insurance agencies?  I’ve heard Hoppe say the worst thing that can happen is we end up with a state again.  I never heard him say that, but that’s – I think that’s a good point.  I’m going to try to find time to discuss this next class but – thank you, Antonio.

01:30:09

I think that there are no serious criticisms of it.  I mean the biggest criticism is maybe a – you know the problem where bad laws get passed because there’s always a special interest group to lobby for it because they get a lot of benefit from it.  But the costs of it are diffused and spread over a lot of people who don’t have an interest in fighting it.  I guess – I wonder if in an anarchist society whether a determined group of people could form a state again, but similar reasons.  But if so, then we have a state again, like Hoppe says.

01:30:50

Someone asks which weeks the midterm covers.  Weeks one, two, and three, and we’ll do a final at the end that covers all six weeks, but primarily the last three weeks.

01:31:02

01:31:11

All stateless societies had been conquered.  How is that problem to be avoided?  Yeah, that’s a tough one when you have murderous empires with nuclear weapons.  I’m not aware of all stateless societies being conquered, but who knows?  Maybe we move to the oceans.  Maybe we move to outer space.  Maybe someone invents private – some new private weapons that will scare even states and make them leave them alone.  But the fact that it might be impossible to defend yourself against states doesn’t justify states.

01:31:58

01:32:02

Does Hoppe have a stand on free cities?  If you mean that project in – where is it?  Is it Guatemala or somewhere?  Honduras.  I think at the Property and Freedom Society last May – this May – where Hoppe – where I attended it and Hoppe was there, one of the participants came up to me and was talking to me about it.  I don’t know if he talked to Hoppe about it, but I’m sure he’d be in favor of it.  He asked a question in front of the audience, and Hoppe was there.  I assume he’s in favor of it.

01:32:36

01:32:42

Stephen Davis asked me are there – the area being Zonia.  Stateless societies—are there any now?  And I familiar with James Scott’s work?  No, I’m not familiar with James Scott’s work.  And I don’t know what Zonia is.  I think some people say Somalia is sort of stateless right now, but whether that’s really true I don’t know.  I’ve heard there’s a relatively stateless little enclave in India that’s doing really well.

01:33:05

01:33:09

Chris says, on IP, he’s heard some people suggest that, in a free market, entrepreneurs could start a patent and copyright firm where people register their ideas and the firm would enforce them, presumably with police.  I think you’re thinking of the Tannehills.  Morris and Linda Tannehill on The Market for Liberty arguing for a free society tried to explain how different things we’re used to could be done privately.  And they make a weak attempt to show about IP, but I don’t think they think it should be enforced by police.  J. Neil Schulman thinks something similar, by the way.  I would imagine there would be a demand for this service from inefficient businessmen.

01:33:43

But aside from the moral and economic problems, do you see any way this would be profitable?  No, I don’t.  I think it would be like these groups now that claim to own the stars and the moon, and you put your name in a registry and claim ownership of Alpha Centauri.  It’s a joke.  I don’t think anyone would listen to this.  I don’t think anyone ruling in a court following libertarian principles would award the land to the guy claiming IP because they would recognize he’s someone who wants physical control over someone else’s resources when he’s not the homesteader.  Having an idea about how to use your property is not homesteading someone else’s property.

01:34:26

Do I think statelessness is identical with anarcho-capitalism?  Do I think anti-capitalist customers can exist in a stateless society?  Yeah, I think stateless could be a broader term than anarcho-capitalist.  It could refer to any society with no state.  And that could include a chaotic situation where there’s massive crime and poverty, but I think to the extent you have – if you have no state and you have some kind of society, that is, an economy, division of labor, cooperation, prosperity, societal customs, then it’s pretty much got to be anarcho-capitalist.  Well, it doesn’t have to be anarcho-capitalist.  It could be pre-capitalist.  It could a primitive barter-type society.

01:35:17

But we can expect that wealth would increase, people would start accumulating capital, and eventually become capitalist.  I don’t really think anti-capitalist customs could exist in any kind of prosperous, civilized, stateless society if by capitalist you mean the private ownership of means of production.  So if you mean by anti-capitalist hostility towards employers, and a propensity of people to want to have localized production, decentralized control, and looking down on bossism, I suspect that that could exist with it.  I don’t think it’s very likely, but I think it could.

01:36:01

01:36:07

Do I – does Hoppe know about Holcombe?  It has come to me twice regarding the free-state world.  You mean Randall Holcombe?  I think he’s got an article where he is sort of arguing for, if I remember, why a state would always have to exist or something like that.  I’m not sure.  David Gilmartin: How do I compare Hoppe with Gary North or Walter Block on the Coase theorem?  I don’t think I’m familiar with exactly what Gary North has written on it, but I believe it’s pretty compatible with what Walter Block has written on it, on Coase.

01:36:44

01:36:47

Danny says, what if capital accumulation was considered wrong, and extended family members felt justified in confiscating any unseemly excess held by a prosperous family member?  Well, I don’t think a society would be very advanced number one.  We wouldn’t have a wealthy advanced society be kind of a primitive-type society.  And if they felt justified in taking it, then I would say to that extent it’s not anarcho-capitalist because that’s a type of private crime they’re committing.  They’re just stealing.  So it would be private crime.  It wouldn’t be institutionalized, but if that view was widely held, it’s hard to see why that wouldn’t be institutionalized, and a state would arise again.  That’s interesting, Stephen, about small societies comprising about 100 million people in relatively stateless groups around the world.  Could be, could be.

01:38:00

David Stone—he found it curious Hoppe lives in Turkey.  What’s the reason why?  Well, so Hoppe married about five, six years ago a woman who is Turkish, and she is an Austrian actually.  She’s a wealthy businessman over there, and her family has hotels and other things that were there, and so when he married her, he moved there.

01:38:37

I think he lives in Austria part of the year too where his family has a home I believe.  So he moved there to live with his wife, and he did it right around the time he retired from UNLV, and I think he’s had it with the US and wanted to go back to Europe.  Is the place free-ish?  Yeah, it’s great.  I’ve been there several times.  It’s wonderful.  Turfs are great.  There are some issues there.  There’s issues everywhere, but he actually – it’s nice.  I like it.  Istanbul, of course, is wonderful, but so is Bodrum where he lives some of the time, Bodrum, which is a coastal town.  Is the PFS hard to get into?  I don’t know.  I know you have to apply, and there’s a procedure.

01:39:41

But I’m actually not sure how the decision gets made.  If you want to email me offline, if you want, I’ll talk to you about the best way to look into it.  Yeah, ask Dante actually.  Dante was there last May, and Dante, maybe has an idea how to get in.  Oh, Stephen Davis: Some Austrians think Hoppe and others are too critical of Coase, Friedman and think they help our cause.  What do you think?  Well, not on his economic stuff I don’t think they’re too critical.  I think it’s important to get economics right.  On liberty, I don’t think Hoppe is too critical of Friedman.  He’s got his deviations, but we acknowledge Friedman as an important figure.  Coase has some good stuff too, I think.  I think all the transaction costs stuff is all right, and there’s something else he’s done that was all right.

01:40:47

But on this policy stuff and the long economic stuff, I think it’s horrible. I mean I think the leftists are almost better than these Chicago-ites in some ways.  The leftists have a sounder view of the nature of the state and of exploitation.  Anyway, all right, well, why don’t we call it a night?  And I will see everyone next Monday.  Have a good week.

01:41:20

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1. See Geoffrey Allan Plauche, “Aristotelian liberalism: an inquiry into the foundations of a free and flourishing society” (unpublished PhD diss., Louisiana State University,  2007), p.125; Douglas B. Rasmussen & Douglas J. Den Uyl, “Why Individual Rights? Rights as Metanormative Principles,” in Norms of Liberty: A Perfectionist Basis for Non-Perfectionist Politics (Pennsylvania State University Press, 2005), p.125 (“the fundamental nature of an ethical imperative for a natural end ethics of the sort that we are presenting is best explained by reference to the following classifications: ‘‘Categorical imperative—regardless of what ends you seek, you must take the following steps. Problematic hypothetical imperative—if you seek this end, then you must take the following steps. Assertoric hypothetical imperative—since you seek this end, then you must take the following steps’’ (emphasis added).” (quoting Roderick Long, Reason and Value: Aristotle Versus Rand (Poughkeepsie, N.Y.: The Objectivist Center, 2000), 61 n. 65.). [↩]