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 highschool 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?
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.
“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).
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 …”
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.
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.
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?
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 20th 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).
[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, 4th 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).
[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).
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/).
[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.
[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.
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…]
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. [↩]
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.” [↩]
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. [↩]
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).
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:
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.)
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).
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.
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.
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?
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?
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?
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.
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.” [↩]
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
[fvplayer id=”11″]
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.
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.
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.
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.). [↩]
This is the fourth of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.” I’ll release the remaining lectures here in the podcast feed in upcoming days.
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 4: EPISTEMOLOGY, METHODOLOGY AND DUALISM; KNOWLEDGE, CERTAINTY, LOGICAL POSITIVISM
Video
Slides
TRANSCRIPT
The Social Theory of Hoppe, Lecture 4: Epistemology, Methodology, and Dualism; Knowledge, Certainty, Logical Positivism
Stephan Kinsella
Mises Academy, Aug. 1, 2011
00:00:01
STEPHAN KINSELLA: … and methodology and epistemological dualism, the Austrian approach. So if you recall, last time we talked about argumentation ethics and libertarian rights, and as I said, the midterm will be posted shortly. And some of you may be interested in the IP talk I gave at Mises University on Wednesday, which I have a link to here on the slide two. And Hoppe also gave two – he has several lectures, but two of them are particularly relevant for tonight actually. The science of human action and praxeology as a method of economics are both great. They cover a lot of what we’re going to talk about tonight, actually.
00:00:42
00:00:47
So we’re going to talk epistemology and methodology and dualism, which are the Misesian approach, and related aspects of logical positivism and knowledge and certainty. And I’m just going to outline here the readings I had suggested that you read with certain pages of A Theory of Socialism and Capitalism, Hoppe’s pamphlet, “Economic Science and the Austrian Method.” I have my ragged old copy here from years in the past. I don’t know what the current version looks like, notes, so this is my favorite copy, and another paper from EEPP and another journal article on rationalism.
00:01:25
And then there are some supplemental readings if you want to go further. But we’re going to try to cover as much as we can here. So let’s start off talking about what we’re talking – the subject of our lecture is the economic science and the methodology appropriate economic science or the discipline of economics. So what do we mean by the word science? I mean when I was in college and growing up, the word science to me meant what most people think of it now as technology, gadgets, gizmos, physics, theories, chemistry, things like this, things that are testable.
00:02:01
This is actually sort of a fairly new twist on the word science as caused by the rise of positivism and empiricism and what we might call scientism. It’s a much older term of course. You see the little diagram on the right of some spooky government agency, the Information Awareness Office, but they have the all-knowing eye on top of the pyramid looking at the earth and the motto, Scientia est Potentia, which means knowledge is power. So you see the word science there, meaning just general knowledge. In the Lionel Robbins, famous sort of proto-Austrian economist, at one point, wrote a treatise in 1932, very influential treatise until the ‘50s probably called “The Nature and Significance of Economic Science.”
00:02:57
So you can see the word science is being used for even economics, although nowadays, most people would restrict it to the technical or natural sciences. Back in the US Constitution in 1789, in the clause authorizing patent and copyright, look at how the words are arranged here. This is the power granted to Congress to promote the progress of science and the useful arts by securing for limited times to authors and inventors the exclusive right to their writings and discoveries.
00:03:30
So I’ve got in red here the words that pair together: science, authors, and writings. Now, most people would think science has to do with inventions and inventors and discoveries. But no, that’s the useful arts like artisan crafts, machines, things like this. Science meant just the general field of human knowledge, and in particular here, it was referring to artistic creatings of authors like novels or paintings, things like this. So the word science is a general broad term.
00:04:07
Now, we’re going to talk today about epistemology and the nature of economic science. Epistemology – I don’t want to be too basic here, but for those who don’t know, epistemology is a term that used to confuse me when I started reading it in high school and college. It mystified me. But basically, it’s just the study of knowledge. It’s a branch of philosophy, and it’s what Hoppe actually specialized in, which is one reason we’re bringing it up. Now, as Hoppe lays it out, the modern concept of science that I just explained as a narrow idea of science as being technical and causal knowledge, the natural sciences like physics and chemistry, is a fairly modern occurrence.
00:04:56
It started in maybe the 1950s with the rise Popper’s thought and empiricism. Okay, so as Hoppe lays it out, you can think of the big battles or the big divisions in philosophy and epistemology as the rationalist versus the skeptics. Okay, the rationalists were Plato, Kant, and now Mises you can think of some of the big ones there. The skeptics or the empiricists were Hume and now Popper. You can think of him as a good representative.
00:05:32
Now, Hayek and Robbins are interesting, Friedrich Hayek and Lionel Robbins. Well, Hayek was a student of Mises and was very much influenced by him early on. And Lionel Robbins, also in the 1932 treatise I mentioned, was extremely influenced by Mises’ epistemology. But they were colleagues of Karl Popper, the sort of arch-positivist, at London School of Economics, LSE. And so over time, they actually came to adopt some of Popper’s methodology and epistemology and to sort of veer away from the museum type of framework.
00:06:13
We’ll go into some detail in a few minutes. But the basic idea here – by the way, I’ve got like 55 slides. There’s a lot of material here. I don’t think we’ll get to all of it. I might lecture most of the class and try to cover as much as we can, and if I don’t finish next class in the first, say, 30 minutes, we’ll try to finish up and then get to the economic stuff next time.
00:06:33
00:06:36
Okay, good. I will be very basic then, Jock. That’s fine. By the way, I am collecting questions to send to Hoppe. I talked to him last week about this. He is on board. So I have some questions to send to him, and if anyone has any more questions for Hoppe that we don’t address, say, between – by the end of next class, go ahead and send them to me. And I’ll submit them to Hans for any answers he wants to give, and then we’ll go over them on the sixth and last class.
00:07:04
Anyway, so the basic idea of the skeptics, or the empiricists, was they believe that all propositions or statements of knowledge can be divided into two types. They’re either analytical, or they’re empirical. So this is their basic view. Analytic means a statement like all bachelors are married. It’s basically a statement that’s almost true by definition. So they think that analytic statements say nothing really real about the world. They don’t give you any new information. They’re just manipulation of formal rules.
00:07:44
Or the statement can be empirical. But if it’s empirical, or another word for that is synthetic—you’ll sometimes hear analytic and synthetic used—empirical statements say something about the way the world is. But it only says things about the way the world happens to be, and the only way we can find out these things is to use the scientific method. That’s to test or to try to falsify these statements. So they view any statement that is not something that’s testable as unscientific. Okay, so this is the basic view of the empiricists, influenced heavily by Hume and lately by Popper.
00:08:24
Now, there are several words you’ll see used a lot. It took me a while to sort of grapple with all these, and you don’t really need to know a lot of the nuances and distinctions because they’re not always used carefully by critics of these views or by the adherence of these views themselves. But most of them are related to each other and are sometimes used as synonyms for each other. And I will use some of them as synonyms in this lecture tonight.
00:08:49
So let’s start off with empiricism. So empiricism – the idea is the only testable or falsifiable statements are meaningful or scientific. You say testable or falsifiable because the older view was that you had to be able to formulate a statement so you could test it. So like you could say I propose that there is a relationship between mass and gravitational attraction of a certain equation. And therefore, let’s go test it with an experiment and see if the results confirm my theory.
00:09:26
Now, Popper put a different twist on this, and he said, well, you’re not really confirming it. You’re trying to falsify it, so basically, every bit of scientific knowledge, according to the empiricists is always contingent, never, ever finally certain, and always subject to falsifications. So all you can say is that, so far, we haven’t falsified this theory. Now, one thing to note: Karl Popper called his own theory critical rationalism. Hoppe’s view, and I agree with him, is that this is a misnomer. It’s a mislabel. He wasn’t a rationalist in the sense of Kant.
00:10:04
He was a logical positivist and an empiricist. It’s sort of like the word liberal, how the word liberal has been hijacked in the United States by the left, by the democrats, in the last 100 or so years so that the word liberal now means the opposite of what it used to mean and what it still means in Europe, which means to refer to sort of progressive, pro-property rights, pro-enlightenment, classical liberal values. Any case, now, there’s a related doctrine called logical positivism. This is related to the empirical view. The view is that all a priori assertion or propositions are merely analytic. An a priori proposition is something that you don’t need evidence to confirm. So what they would say is these are all analytic. So basically, they said the laws of logic can’t tell us anything about the real world.
00:10:59
Now, monism means one, only having one method, trying to treat all the sciences by the same model, and the model would be the model that they think is valid, which is the scientific method, which is used in physics and chemistry, etc., that is, coming up with hypotheses, formulating hypotheses, and trying to come up with a way to test this hypothesis to see if you can falsify it. And until you do, it can be held a tentative causal law or hypothesis that has not yet been falsified.
00:11:32
And we’ll get into this later, but this has to be contrasted with the Misesian approach of dualism, meaning we believe there are two separate realms of study or knowledge, not just one. Now, scientism is closely related to monism. Scientism is the view – it’s basically the tendency to try to analyze the humanities, the social sciences, like economics, trying to use the methods of the natural sciences for that. So that would be, again, because you believe that there is only one true science, that is, things that can be falsified and hypothesized along the lines of the scientific method.
00:12:21
So scientism would be what we would – is a derogative term or a pejorative term that we use to describe people that try to use inappropriate methods of the natural sciences for fields of study that should be – that should have other ways of analyzing them, namely, economics. Now, again, skepticism – this is a quote from Hoppe describing what they believe, and remember, we talked about the origins of the skepticism, and they’re skeptical of knowledge that’s not empirical.
00:12:53
So they believe that nothing can be known with certainty to be impossible in the realm of economic phenomena. How could you know anything is impossible if all your knowledge is empirical, and you just have to hypothesize laws and try to falsify them? You could never get any kind of hard, absolute law of economics, what Mises would call apodictic, A-P-O-D-I-C-T-IC, apodictic, which means a priori or just absolutely certain or laws that you don’t need to test to verify. You can know that they’re absolutely correct.
00:13:27
Finally, we have something you’ll see Mises discuss a lot, sort of a predecessor to empiricism and positivism called historicism. This was a view of the economist before they became systematic and started thinking about causal laws, which they were doing in Mises’ day before Mises and until positivism became ascendant in the mid-1950s, let’s say. It was the idea that we have to look at history like a literary text, like a novel, and we have to give it subjective interpretations.
00:14:00
There are really no objective laws at all. Now, this leads to a sort of relativistic point of view, which is related to and similar to in some ways, empiricism and positivism, but we don’t need to concern ourselves with it here too much except to know that Hoppe and Mises are strong critics of all of these things and for similar reasons. Now, the ultimate problem as Mises points out, and Kant too, but maybe in different language, with empiricism and positivism is that it is a self-contradictory idea because it claims to be a statement of knowledge about the way the universe is. It says the universe is such that you can – there can only be two types of statements, that is, analytic or empirical.
00:14:52
And the analytic ones have no formal – they have no content. They don’t say anything. And the empirical ones are hypothetical, always tentative and contingent, never, ever confirmed. As an example of that, let’s say you posit the law of gravity is the inverse square, and there’s a certain coefficient attached to it, and it’s related to mass. Well, you can test it. You can never test it down to infinite precision, and you can never know whether tomorrow the results might be off because of some previously hidden or unknown variable that wasn’t being revealed previously. So you can never know for sure that any [indiscernible_00:15:32] is really a law, like the law of gravity is just what we know so far. So far, we haven’t found that exception to it.
00:15:42
Okay, so the problem with this very idea, the monist view of empiricists and positivists is that the statement itself, by its own content, has to either be analytic or empirical. It means one or the other. This is what they’re [indiscernible_00:16:01] so let’s take them one by one. Is this statement itself is analytic? If it’s analytic, then it doesn’t have any content. It doesn’t say anything about reality, so we have no [indiscernible_00:16:14].
00:16:15
If it’s empirical, then it’s not a law. It’s just a current hypothesis that could be falsified. And furthermore, where is the evidence for it? So you see, it’s pretty easy to see that the very foundational principle of positivism is completely incoherent and self-contradictory. I have yet to hear a good defensive by a positivist. They just brush it aside and ignore it, almost anti-intellectual.
00:16:46
00:16:49
Okay, let’s go to slide eight. This is a quote from Mises by the way, in one of his best books, The Ultimate Foundation of Economic Science, where he talks about logical positivism. And he says, like at the end here where I have bolded the obvious objection to it is that this proposition itself – that there are no synthetic a priori propositions is in itself a synthetic a priori proposition because it could not be established by experience. You can never look around the world and see that the world’s structure is such that there are no synthetic a priori propositions. So it’s just a proposition with no evidence for it. So – and, by the way – but it claims truth, which it claims to be true. So it’s got to be synthetic a priori.
00:17:35
Now remember, the positivists say that there are only two types of propositions: analytic or empiricist, and the empiricist is always hypothetical and tentative. So they do not admit that it’s possible to have a priori knowledge that is also synthetic. Now, I’m going to turn to Kant now to show – to contrast this. Oh, before we do that, let me mention one other thing. Well, let me mention before that, just to make sure it’s clear, the essence of the Kantian position – we’ll get to this in a minute – and the Misesian position and the Hoppian position is that synthetic a priori knowledge is possible. That is, you can have knowledge that is about the real world. That’s what synthetic means. You can call it empirical if you want, that is, a priori.
00:18:25
That is, it’s not analytic in that it’s empty of content because it’s synthetic, and it’s not empirical in the hypothetical testing sense. In other words, we don’t have to test it to know that it’s true. It’s a priori, and I’m going to get in a minute to a definition of a priori and its opposite a posteriori.
00:18:47
Now, let me mention this now on slide nine. Despite the fact that formally economists now will say that they’re positivists, influenced heavily by Milton Friedman, by the way, who was an arch positivist. They don’t really follow their own methodology. They claim to be positivist, but quite often, they will balk at studies that seem to be counterintuitive and go against what Misesians would say are laws of economics, not just hypothetical laws. In other words, theoretically, according to the positivist methodology, if you want to formulate, say, the law of supply and demand or the idea that a minimum wage causes unemployment, you would have to say, well, I propose the law is that the higher the minimum wage, the more there will be unemployment, and then let’s go test it and gather some data.
00:19:44
But if they actually did that, if they raised the minimum wage to a high level and they found that it had increased employment, most economists that claim to be empiricists would think something was wrong with the result and they would redo it, or they will look at the data. So they have an intuitive feeling that they have these laws that are guiding their empirical studies. But they just can’t go all the way and use that as the main method. But thankfully, most of them actually are not really positivist in all of their reasoning.
00:20:16
00:20:21
John said – now John is an economist: A positivist – John McGinnis I mean – a positivist economist would conclude that labor in some situations is a Giffen good so that its demand goes up with its price. Well, I think we could find some examples that would work. How about inflating the money supply? And a lot of these are ceteris paribus laws too, right John? We’re saying that, all things being equal, if you – but I agree. The Giffen good might be kind of an exception, or we have to work around that for our example, but we can think of lots of other examples.
00:20:56
Anyway, now, another problem with the entire positivist program or approach is that falsificationism itself, even – this is the subtle twist added by Popper, it doesn’t make any sense either. So the idea is that if you have a hypothesis, let’s say this worked for a while, like Newton’s laws of physics, and then it was superseded by some of the Einsteinian and other modern physics ideas: relativity and quantum mechanics, etc.
00:21:30
If you have something that has actually been working successfully for a while and you falsify it, the idea that you just jettison this theory, as Hoppe argues, is totally insane because you wouldn’t throw it away unless you had a better theory to replace it. It was better in every single case because if your old theory works better in some circumstances, you would still use it. Even though it didn’t work in some cases, you wouldn’t get rid of it altogether, so there’s actually something wrong even with the idea of falsificationism.
00:22:01
00:22:10
Now, there’s another thing here too. There is the idea that there is a type of apriorism in the physical sciences. In other words, the Misesian view, and I’ll get to this in a few minutes, is that we use apriorism, that is, a type of deductivism, for the economic laws, for the study of human action. And we would use the scientific method, which is hypothesizing causal laws and doing testing for the natural sciences. But as Hoppe explains, there – you don’t even use the scientific method exclusively even for the scientific – for the causal realm.
00:22:49
In other words, there’s even a priori assumptions even there. So for example, in the old days, the rationalists, who believed in certain knowledge, would claim that we can know for certain that geometry is Euclidean and an a priori thing that we know. We don’t have to test it to know that this is true. But when the empiricist view became dominant, then in relativity and things like this, and when non-Euclidean geometry was discovered, then the empiricist view sort of took over.
00:23:23
And so now, most people would say, well, the Euclidean geometry is not really an absolute law of the universe. It’s just one possible geometry. And in fact, the universe is really a 10-dimensional blah, blah, blah. In other words, they’ve given up on the idea that geometry is a priori. But there are some theorists, philosophers, and others who believe that there’s a type of apriorism in physics itself.
00:23:49
So for example, the idea that if you want to verify, let’s say, a non-Euclidean geometry, hypothetical law that you propose, how would you do that? You would do it by using, say, a lens and the telescope, but the lens is constructed with three-dimensional Euclidean geometry principles. So it’s almost like you’re presupposing the validity of Euclidean geometry and the very attempt to deny it, so you can see something similar here to the laws of praxeology itself.
00:24:20
00:24:24
Let’s go on now. So this is called proto physics by a guy named – what is his name? Lorenzen, Dingler, Karnbartel, and some others. So what they believe, and I don’t know if I accept this, but there’s something to it I believe, and Hans Hoppe thinks there’s something to it. He doesn’t talk about it in a lot of detail, but basically what he talks about is how a lot of the basic notions of geometry and physics are embedded in our concept of human action, manipulating our physical bodies in this three-dimensional – apparently three-dimensional world.
00:24:56
And you can see the bottom quote here. Lorenzen says this: Geometry, chronometry—which is time—and hytometry—which is classical mechanics but without gravity—or a priori theories, because they make empirical measurements of space, time, and materia possible. They have to be established before physics in the modern sense of the fields of forces, since the fields of forces can begin. So he calls them proto physics. So these are sort of a priori assumptions of physics themselves. The point here is that there could be some a priori assumptions, even of the natural sciences.
00:25:33
And by the way, there are some political implications of empiricism, which we’ll just briefly mention here. As Hoppe mentions in one of his papers, when you see empirical results of the failure of socialism, let’s say, when East Germany imploded, and Soviet Russia imploded in the late 1980s. How could the advocates of socialism not admit that it had been refuted, right? Well, because they’re empiricists.
00:26:03
Okay, so basically, they said that you can’t know anything a priori about reality with certainty, and no experience can ever prove anything definitely or not. So what they say is they say, well, maybe there’s a reason. Maybe socialism failed for other reasons. Maybe it wasn’t socialism. Maybe we did socialism the wrong way. So in other words, it gives them an excuse to keep tinkering around.
00:26:29
Let me go to the next page here, slide 15. So here’s another example. They would say you can’t know for sure, as an economic law, that inflation would cause higher prices, right? So you would have to test it. Or you can’t know that the minimum wage would cause higher unemployment, all things being equal. You can’t know that socialism would ruin the ability to calculate, as Mises demonstrated in 1921 I believe. And therefore, socialism would just cause mass impoverishment. They would think you can’t know these things a priori.
00:27:02
So they would want to – let’s try it. Well, let’s put a minimum wage in place and see what happens. And it looks like – oh, thanks Danny. It was 1919 that Mises socialism pamphlet was published. So in other words, the empirical mindset gives permission to the state to keep trying things and to never get rid of them when they’re obvious failures because they can explain it by any number of variables because nothing is certain.
00:27:33
It’s all just hypotheses. Someone has a question here. Jock: Wouldn’t all imaginary numbers be a priori assumptions that are fundamental to mathematics and physics. I don’t understand what you mean by imaginary numbers being a priori assumptions. Mathematics, I think in a sense, is held to be an a priori type of study. And it’s part of the experience of human action, what it means to count. We count when we do things.
00:28:06
But I think – I mean imaginary numbers is just a – it’s a mathematical trick to allow us to manipulate frequencies in the frequency domain. It’s sort of like a transform. So I just think it’s a mathematical trick that works. It’s like a formula that works. But I don’t know how to answer that. I don’t know. Imaginary numbers are implied in some a priori way. I could ask Hoppe what he thinks about that. That might be a good question.
00:28:36
00:28:40
Okay, Tito says, can we say that empirically, mathematics isn’t science? It doesn’t follow the scientific method. Well, that’s what the empiricists will say, yeah. I do think an empiricist would say that mathematics doesn’t say anything about the universe as such. It’s just manipulation of symbols. It’s basically analytical. So I agree, but I think they’re wrong. I think that math is a type of science. Of course it is.
00:29:02
00:29:06
Now, let’s turn to the Kantian approach, at least as a variant that Mises has adopted and incorporated into his economics. Now, I put realist in parentheses here because – we’ll get to this in a minute. A lot of people especially some modern libertarians, namely, objectivists, Ayn Rand followers and Ayn Rand herself, are strong critics of Kant. In fact, they think he’s one of the – I think the most evil man that’s ever lived or something like that. It’s my understanding Kant was actually a fairly good liberal in the classical liberal sense in the actual policies he recommended, so it’s just his pure epistemology and metaphysics and philosophy that the Randians hate. But the basic idea here – and by the way, this is not dissimilar from Rothbard’s more Aristotelian view.
00:29:59
It just has a different conceptual breakout and different names, different labels and words, but we’re going to stick here with the Mises and Hoppe, more Kantian terminology. So basically, they say you can classify every proposition two ways. First, you can classify it as analytic or synthetic. And the analytic again is more like a definitional – something is true by definition. Like all bachelors are unmarried, or synthetic, which says something about the world. That’s just something that happens to be true. And then you could also classify every statement as either being a priori or a posteriori.
00:30:38
What this means is prior means before. Posterior means after. What that means is a priori means you can know it’s true logically and even chronologically before you test it to verify it. That means you don’t have to test it to verify it; a posteriori means you can only verify that it’s true by looking after the fact after you formulate it to test it or to compare it to some kind of evidence. Now, the view of the empiricists is that there is no such thing as a statement that is both synthetic and a priori.
00:31:10
Okay, there’s only analytic statements, and those are a priori. And all synthetic statements are a posteriori or empirically verifiable. So that’s their view. The Kantians say no. You can have synthetic a priori statements. Antonio Lopez asks about the Kelley book. I’m going to get to Kelley in a few minutes, but I think you’re talking about The Evidence of the Senses: A Realist Theory of Perception, which is a really good book, but it’s just a defense of realism. But I don’t think it takes a – I don’t remember what its position is on the analytic, synthetic, and a priori/a posteriori divisions.
00:31:53
I do know that it’s a standard Randian line to deny that the analytic-synthetic dichotomy even makes sense. I think they’re wrong. I think it makes perfect sense, and it’s a good way to look at to categorize statements. In any event, the key Kantian view for our purposes is that synthetic a priori knowledge is possible. And again, this is why empiricism is self-defeating because their very denial of synthetic a priori knowledge itself has to be synthetic a priori to be true and to be relevant, which is contradictory. If it’s analytic, then it’s just formal and empty. If it’s merely synthetic and empirical, then it’s not a final law. It’s just a hypothesis.
00:32:35
00:32:38
Okay, now, let’s talk about David Kelley and Ayn Rand and Kant because this is a subject of interest. It interested me greatly when I was younger and learning all this. And I actually was a big Kant sort of hater for a long time because of because of Rand. So there are statements in Kant that you could interpret in an idealist way instead of a realist way. A realist way would mean we are what we think we are, what we appear to be. We’re human beings with bodies living in this world, having the characteristics that we sense and that we understand by conceptual means and with our minds.
00:33:19
Now, the Randians are realists as well, and I think their epistemology in this regard is pretty much compatible with the Misesian realist view. But the Randians despise Kant because they believe he’s an idealist. That is, he thinks we can never know the world as it is, that we can only see some transformed version of the world or basically, we can never see the real world. So we’re always hampered in our ability to know reality. Now, he does have a comment, and David Kelley sort of marks it in this clever comment.
00:33:59
Okay, so Kant says that the standard traditional view is that knowledge that we have has to conform to things in the world for it to be valid knowledge. But he says that under that supposition or that premise, we’ve been unable to establish the validity consciousness. Well, we won’t get into that why. But Danny asks do I mean the Rothbardian realist point of view? I’m not sure what you mean. No, I meant the Misesian. Mises is a realist, and so his Hoppe.
00:34:31
And they have a Kantian – they basically take a realist interpretation of Kant. In other words, you could think of Kant as having two sets of followers now. This is crude, but you can think of the idealists, and that might include the critics too, the critics who believe Kant was an idealist, and the people that interpret Kant in a realist way. I don’t really care what Kant really was. All I care about is the current ideas that we’re promoting, and the Misesian interpretation of Kant is realist and so is Hoppe’s. So anyway, Kelley says, why don’t we make an analogy with driving a car? So he’s making fun of Kant.
00:35:05
Hitherto it has been supposed that our steering must conform to the road, but we hadn’t been able to prove the validity of steering. So maybe we should make the experiment that we would have more success with the problems driving by assuming the road must conform to our steering. So he’s sort of mocking the idea that reality has to conform to what our brain imposes on it, which is the Kantian idea of categories. Now, let me let me say what – Hoppe admits that this – that there is some murkiness in Kant’s epistemology that has given some excuse to some of this critics to interpret him in this idealist way. Now, Hoppe says, so it’s been a common quarrel of Kantianism that it might imply a type of idealism.
00:35:51
00:35:54
But he says – you can see the bolded part here in the first paragraph: I do not think such a charge against Kant is justified, but some of his formulations have given this charge some plausibility. Then he repeats the statement that Kelley criticized: So far it has been assumed that our knowledge had to conform to observational reality. But instead, we should assume that observational reality conforms to our knowledge. Now, my view, and I’ve even read Kant in the original German. My view is Kant was a realist, and he did not mean that we are changing reality with our mind, but that we have to form concepts and we have to organize our perceptions in a certain way, and that’s the only way we can understand it.
00:36:34
In any case- and by the way, there are some books out there that talk about the realist tradition of Kant. I’ve got one of them listed here. And I’ve got a blog post here: “Mises and Rand (and Rothbard)” where I talk about this, and we’re going to talk about this in a few minutes. Rothbard himself – now remember, Rothbard was Aristotelian realist, similar to Rand. He says that Randians were going to be upset by Hoppe’s system because it was grounded on the satanic Emmanuel Kant and his synthetic a priori.
00:37:09
But he thinks the Randians could be mollified if they understand that Hoppe was influenced by a group of German Kantians, that is, the Continental Kantians that were not like the Americans. The Americans are more idealistic, but the American philosophers who are influenced by Kant, but apparently there’s a continental tradition or European tradition that is a more realist interpretation of Kant. Again, Lorenzen, who is the guy who was the one pushing the proto physics ideas like I mentioned earlier, which is definitely – it may be going too far with apriorism, but it’s not unrealist at all.
00:37:49
00:37:54
So what Hoppe’s view is that one of Mises’ great contributions, which is not really fully appreciated, is that he basically reformed and improved and put Kantian epistemology on a more sound footing by clearing up some of the confusing language and by making very clear how it’s rooted in praxeology. So when Mises came up with praxeology as this sort of rigorous structure of human action, a way of understanding human action, it clarified a lot of the previous problems with Kantian epistemology. So, in other words, what you do is you have to realize that all of our mental categories are really grounded in the category of action. And that means that all of the a priori categories of action have to be realistic, and the reason is because action – look at the bottom part – action is how the mind and reality make contact.
00:38:54
Let me go to the next slide and talk about this a little bit further. So what he’s saying is action – remember, action is a human being who employs means. Now, remember, means is a scarce means to achieve an end, and an end would be some situation in the world, in the universe that you would not obtain unless you perform the action, something you prefer to the situation that would obtain if you didn’t act, something that you’re hoping to relieve some felt uneasiness that you have.
00:39:26
And the means that you choose is causally efficacious. This is important. In other words, you believe that there’s a set of causal laws in the universe that exist out there and you believe the means are selecting will operate in accordance with these causal laws to achieve the end that you want. So all your action and all the categories that come from action in the means and even the laws of logic, etc., which I’ll get into in a minute, have to do with acting with a physical body in reality with a means that is causally related to the ends you’re trying to achieve.
00:40:02
So you can see how all action is in contact with reality. So this is the Hoppian view and the Misesian view or Hoppe’s explanation of the significance of Mises’ achievement. So basically, he would say that action is itself an a priori notion, the action axiom that humans act. And action is a link to reality because it’s the interaction of our physical bodies with the external world with means. And knowledge, when we have knowledge, knowledge is knowledge of people that are actors who are acting in the world.
00:40:41
Knowledge is a tool of action. That is what it is. Knowledge would have no purpose if we couldn’t act, and you couldn’t act without knowledge because knowledge, remember, is what informs and guides our choices. So when we act, we select an end and we select a means. How do we do this? We have to have knowledge about what ends we might like or what are possible to achieve and what means can be used to achieve these ends. So knowledge is something that is an essential part of action. It guides action in interacting with reality.
00:41:16
By the way, Hoppe’s PhD dissertation, which is in German, but the English translation of the title would be “Acting and Knowing.” I mean this was what he was specialized in from the beginning. And I don’t know if I talked about this already, but according to Hoppe’s story, he goes into this story in his first lecture I mentioned above on economic science and Austrianism. He came to basically the same conclusions as Mises on praxeology on his own, and then when he read Mises, he saw that it was all laid out and systematized and was just brilliant.
00:41:56
But it confirmed the way he was going. So basically, Hoppe had discovered – Hoppe had discovered praxeology on his own through philosophy, not through economics. Antionio Lopez says, the essay “The Analytic-Synthetic Dichotomy by Peikhoff, right. That is the standard Randian criticism of the idea that there – that knowledge can be divided into either analytic or synthetic, which I think is not a – I mean, look. You can classify action into jogging and not jogging if you wanted to. So all human action is either jogging or not jogging.
00:42:38
Now, you might say that division is not very useful, not very interesting, doesn’t produce very much, doesn’t help you figure out a problem. But there’s no logical reason you couldn’t divide action into jogging and not jogging. And there’s also no reason you can’t divide propositions into analytic and synthetic in my view. I’ve read that essay a long time ago, but I don’t think it’s correct. I think if Rand had realized that there was a realist interpretation of Kant and that’s what Mises was doing, maybe she wouldn’t have been as hostile to Kant or would have realized that the idealist tradition of Kant was more of what her target should have been, not a realist interpretation of Kant.
00:43:19
In any case, I want to talk really quickly about – just go over some things here. So, again, we’re talking about the realist version of Kantian epistemology, which upholds the possibility of synthetic a priori knowledge and which the positivists – the logical positivists deny. Okay, now, Mises based his version of this on his insights into praxeology, as I said, and dualism, a more sort of more rigorously circumscribed dualism than Kant had. And if you think about the structure of human action, as outlined in Mises’ praxeology, we employ means to achieve ends.
00:44:05
Now, the end is what your goal or purpose is, so this is what human action is about. This is what makes it action versus behavior. So that is the field of teleology or teleology, the study of human purpose. And this is one of the two realms of study – of human knowledge, things we can know about human purpose, purpose of conduct. And then action also employs means, and these means are causally efficacious. Our bodies and the means we employ interact with the world in a causal way to achieve something, some physical result that we wouldn’t otherwise obtain. That presupposes causality. That is what the scientific method and the natural scientists study.
00:44:52
So ends and means lead to different ways of studying what they’re aimed at, purposes and goals. Teleology studies those. Causality studies how you can get things accomplished. Now, there’s a parallel here to the idea of human behavior versus action. This whole praxeological breakdown presupposes that there is action, and that human action is something distinct from behavior. Behavior would just be the motion of human bodies, looking at a human body like a car or like a cloud of quarks following the laws of physics versus looking at it as you look at yourself as an actor having goals and choice and purpose, and trying to think of these other humans as an actor because if you can usually understand them and what they’re going to do and why they’re doing something if you understand them as actors rather than mechanistic, meat clouds of quarks anyway with our current technology.
00:46:01
I will go quickly over the next few slides because it was not essential for this lecture. I think I’ve talked about it already previously. But you could view the Misesian epistemological framework as a way to justify compatibilism. Compatibilism is the idea that both free will and determinism or causality are true at the same time in some kind of way. It’s a way out of this dilemma a lot of people have that it seems like how can we have free will if there’s causal laws.
00:46:34
And on the other hand, if you have free will, wouldn’t that break a causal law? They seem like they’re contrary to each other. The view of Mises and Hoppe is that if you had a god or a prime mover or a supercomputer that had all knowledge and could predict the motion of human particles and bodies, maybe you could see that freewill was an illusion. But the point is, from my point of view, when we understand people as actors, we are presupposing that they’re acting and that they have choice. Action implies choice, so it’s a necessary and unavoidable illusion if it’s an illusion.
00:47:08
00:47:12
I’m going to skip these here. So let’s talk about these two realms of knowledge, the teleological and the causal realms of knowledge. And again, I mentioned earlier the structure of human action implies this. Now, what makes them different is, number one, their realms of knowledge of different phenomena. We’re talking about what causal laws exist that govern the interaction of existing physical things in the world. That’s the causal realm. So we’re trying to understand what these causal laws are.
00:47:44
And on the other hand, we’re trying to understand human action, why someone did something, etc. Now, because the nature of the subjects are different, we have different ways of validating this knowledge. That’s what makes them different realms of knowledge. So the empiricists are right we believe, that causal theories, that is, what they would call scientific theories – we call them natural science or causal theories – are always hypothetical. You can never know for sure that a given physical law – you can never verify it. You can never finally confirm it.
00:48:22
Now, the Randians would say you can have what they call contextual certainty, but I believe they’re sort of cheating with this contextual certainty stuff because they meant you could still be wrong, but you have reason to act like you’re right or something like that. I mean, look, we can all treat gravity like it’s established because it’s a reasonable thing to do. But, theoretically, there’s no logical reason why there couldn’t be an exception to the law of gravity discovered tomorrow.
00:48:51
I mean we could start floating off the surface of the Earth tomorrow. We have no a priori reason to think that that can’t happen. So that is causal theory, and because they’re causal, the way to determine what causal laws are is we come up with hypotheses, and we do an experiment, and we gradually improve our knowledge over time. This is correct, although it’s never certain. See, we don’t have direct access to the causal laws. We can assume there are some causes, but we never know exactly what they are.
00:49:21
We don’t have any kind of direct perception of causes. In this respect, Hume was correct when he said we can’t see causes, but we do have direct knowledge of the ultimate causes in teleology. We know – I know why I am building a mousetrap. It’s because I want to catch a mouse. I mean I know exactly what my goal is, and I know why I do it. I have introspection. I have internal knowledge of my action, aspects of my action. So the knowledge of that is going to be different. This gives us knowledge of the structure of human action or praxeology, and that is a priori. Every part of that is undeniably true. You would contradict yourself in the attempt to deny it.
00:50:10
So let’s go over a few examples. These are from Hoppe’s Economic Science and the Austrian Method, what he would call a priori knowledge. So whenever two people, A and B, engage in voluntary exchange, they must both expect to profit from it. It’s hard to deny that this is what it means to engage in exchange, and they must have reverse preference orders for the goods and services exchanged so that A values what he received from B more highly than what he gives to him. And B must evaluate the same things the other way around. See, this could not be – this could never be falsified by experiment.
00:50:46
I mean this is what it means to trade. If I give you $1 for a candy bar, I give it to you because I value the candy bar more than the dollar. That’s why I gave it to you. And vice-versa, you value my dollar more than the candy bar you’re selling to me. So that’s what he means by the reverse preference orders, and that they both expect to profit from it, to be better off.
00:51:05
So let’s not go through all the examples here. You can read them later. But the point is, these are examples of a priori knowledge. Now, they’re if-type statements. If someone does this, then this is the case. They make assumptions about there might be exchange. To the extent they hold true, they’re really solid, deductive knowledge that can’t be denied, and you don’t – not only do you not need to test it, but you could never even, in principle, falsify it. How could you ever falsify this first sentence?
00:51:38
00:51:45
Rick is challenging the second bullet here. The second bullet says, whenever an exchange is not voluntary but coerced, one party profits at the expense of the other. And he says – Rick says, you forget that I know better what it’s good for you than you do, so the second bullet is not necessarily true. Well, I think it is necessarily true because “at the expense of” is talking subjectively from the point of view of the coerced actor. And if he has to be coerced, that shows that you prefer not to do it. Oh, I don’t know. Maybe he was being sarcastic. Sorry Stephen. I have to ask because a lot of people are not.
00:52:23
Okay, so you can go through these. These are pretty good examples topics as the Ricardian law of association, increasing the supply of money, making the purchasing power of go down, minimum wage laws causing unemployment, etc. Now, as I mentioned before, the difference is in how they’re validated. And Hoppe has a quote here. He says, look – he gives an example of a triangle. He goes, if you really try to test these different a priori laws by – let’s test them in nature.
00:52:58
Let’s test them with an experiment or with data to see if they’re true or see if we can falsify them. It’s as if you wanted to establish the Pythagoras theorem by measuring the sides and angles of an actual physical triangle. And if anyone tries to do that, they’ve just intellectually confused. I mean the laws of geometry are not established by getting a ruler out and measuring an actual angle.
00:53:23
Another difference would be when you’re looking for a causal law, you’re looking for a general time-invariant law that persists across time and that is a type of law that describes a class of entities in the world. It’s not a unique isolated thing. You’re looking for a law. But human actions are all unique. They’re all unique in space and time and subjectively. So that has implications for probability theory and for the certainty of predictions, which we may have time to get to.
00:53:57
00:54:01
I’ve mentioned earlier there are different categories of action, and I think in the last class or the one before that, someone asked whether laws of logic, etc. were actually part of praxeology. And that is the Hoppian, and I think Misesian, view as well. So the first is the basic law – those basic categories of action: values, ends, means, choice, preference, cost, causality, scarcity, all these things. They’re implied in what it means to act. If you understand what human action is, you could never deny that there’s such a thing as ends and means.
00:54:37
You couldn’t deny that there’s choice. You couldn’t deny that there’s profit and loss. Profit means when you achieve what you aimed at. Loss means when you didn’t. You can’t deny that there’s time. You can’t deny causality because the means you’re selecting are presupposed to be causally efficacious at achieving your end. You can’t deny scarcity because means are necessarily scarce, as Mises says.
00:55:03
By the way, something that helps you achieve an action that is not a means, not a scarce means, or it’s called sometimes general conditions of human action, or you could call them free goods, like the knowledge that we use could be looked at as a free good, but it’s not a scarce means. But scarce means are always employed in action if only your human body, which is a scarce means. But as Hoppe points out, there are other things, logical primitives like “and” and “or”, “is” and “is not” and numbers and counting. They all have a basis in praxeology because – and they’re not just arbitrary, analytic statements. They’re not just empty.
00:55:39
They’re not merely a convention, as the empiricists might say. They’re actually based on the reality of human action, like having to choose between things, this or that, for example, combining actions to achieve – to reach an end. Like it takes two or three steps to reach a given result. That’s additive or repeating or counting etc. So all these concepts are rooted in praxeology or human action itself, and even the basic laws of logic like the law of identity and contradiction.
00:56:14
Now, empiricists would have to say that the law of identity and the law of contradiction, which is that nothing can be A and not A at the same time, in the same way, empiricists would say, well, that’s just a convention. It’s an empty statement. But I mean what’s the alternative? See, when the empiricist says that’s just an arbitrary convention, he’s implying that it could be something else. Well, that itself implies the law of non-contradiction, and by the way, this is similar to the arguments Rand makes in defense of law of contradiction because he’s saying that X is true as opposed to it being false.
00:56:53
So he’s setting truth and falsity opposed to each other. He’s saying that the opposite of what is true is not true. He’s implying and he’s presupposing the law of non-contradiction in the very attempt to deny it. And also, of course, causality is implied in action. We never know the exact causes. We never know the exact physical laws in the world. But we have to presuppose that are some causes. Otherwise, we couldn’t act. There would be no reason to act if you can expect that – you expound through your knowledge some way of affecting things in the world to achieve what you wanted. Everything would be random or chaotic.
00:57:32
00:57:36
So the action axiom itself, praxeology. Economics is a type of applied logic, and the action axiom itself is an a priori true synthetic proposition. And again, the things you can derive from this, like the law of exchange that we talked about earlier, what Hoppe thinks is and which I agree is the most important economic law of all, the law of diminishing marginal utility. The Ricardian law of association, price controls, quantity theory of money can be logically derived from the action axiom.
00:58:14
So that’s why they’re not the same epistemological type as those in the natural sciences like saying, I think there’s a fourth physical force, the strong nuclear force that has the following characteristics and the interrelationship between subatomic particles following this mathematical law. That is one type of proposition, but these others are not because you couldn’t even imagine testing them or falsifying. So this leads us to the unique Misesian view of what the nature of economic analysis was.
00:58:50
Now, as I mentioned, until, say, the mid part of the 1900s, the 1950s, it wasn’t that unique. It was sort of the predominant mode of economic analysis. In the beginning of Hoppe’s Economic Science and the Austrian Method book, he goes into the history of a lot of thinkers before Mises who said basically the same thing as Mises, maybe not in as rigorous a way. But they had the same idea, Cairnes and Lionel Robbins and many others. But now, the Austrians are basically the lone voice, holding this traditional view of economic reasoning, the nature of economic science because of the rise of positivism and empiricism.
00:59:35
And if you remember earlier, I mentioned one of the political dangers of empiricism is that it gives the government warrant or permission to do experiments. We got to just keep trying one new social program or one policy after the other, and if it fails, we can’t say that it shows any economic loss, just maybe we didn’t get it right. We didn’t get the variables right. Well, of course, this is one reason positivism has risen is because the state likes it because it gives the state permission to interfere with the economy and to control to control our lives.
01:00:12
Why don’t we take – it’s one past the hour now. Unless anyone’s strongly objects, we have – I’d like to make some more progress. So instead of stopping for questions, I’d like to keep lecturing. I’ll take a – let’s take a five-minute break starting now. Come back at seven past. Smoke them if you’ve got them. I’ll see you at seven past the hour.
01:00:38
[break]
01:02:52
Danny says, I don’t think empiricism lends to government intervention any more than it does to government de-intervention. Well, I don’t know. The argument is that it does give ammunition to statists because it gives the state permission to tinker. This is one reason the economics profession is coddled by the state – I mean it’s just an argument. Hoppe makes the argument, and it makes sense to me. He does make it – in this article I quoted on the earlier slide on the political dangers of empiricism.
01:03:37
There’s a link to an article of Hoppe’s. He also talks about it in his recent speech at Mises. I can’t remember which one, but one of the two I linked, but that’s his view. Well, so Danny says, by the same reason, you could say rationalism is statist because they could derive a priori justifications for intervention. Well, I don’t think they could because socialism is not justifiable, so actually, they could not. In any case, I don’t see a question here, so let me let me go on here.
01:04:23
So given what we’ve talked about so far, here’s how Hoppe says you need to look at the nature of economic analysis. So it says that all economic propositions which claim to be true, you have to show you can deduce them by formal logic, from incontestably true material knowledge regarding the meaning of action. So in other words, you have to reason deductively from the human action axiom itself, from the categories of praxeology.
01:04:55
Again, as opposed to the empirical idea that we hypothesize laws similar to the way physicists would do and then test them. We don’t test these. We logically make logical deductions from certain basic, incontestably true, basic starting points. So the first part of economic reasoning is this. There’s three parts according to Hoppe. Number one, you have to understand the categories of action and what it means to change these things like values, preference, knowledge, means. What happens when they change?
01:05:31
Number two, you have to describe a given world where these categories of action have a concrete meaning, where you identify particular people of actors, with definite objects, and with certain goals. Okay, now, this gets back to – I’ve talked about this in my speech. Economics consists of you have your basic laws. Then you introduce contingent assumptions or facts to make the analysis interesting.
01:06:04
So for example, you would say, well, we’re not just actors. We happen to be humans, so let’s assume that the humans are actors, and they usually cooperate and that they have certain laws that protect private property rights that regulate how they use scarce resources, and that they live in an economy that is advanced and has money. So if you make these assumptions, then it makes your analysis more interesting. Now, it makes your analysis contingent. The result that you deduce are only true in a world in which those assumptions hold, but since they do hold in our world, that’s why we do those.
01:06:43
And then finally, you logically deduce the consequences of performing some action in that kind of world, or you say what would change if something else changes in certain way. So, as Hoppe says here: Provided there is no flaw in the process of your deduction, the conclusion that you reach must be valid a priori because it would go back to nothing but the indisputable axiom of action. Now, if the situation and the changes you introduced into it are fictional or assumptional, that is, you introduce some contingent assumptions which turn out to not be true, or they just happen to be true in some worlds like a Robinson Crusoe world.
01:07:29
That’s a world with only one or maybe two men, or a world that doesn’t have homogenous factors of production, etc. Then those conclusions would only be true of that possible world. But if you can identify the assumptions that you make as real, then the conclusions are a priori truth. Now, we’ll get to this in a minute, but this does not mean that Austrians believe in infallibility, like say the pope believes in infallibility. We’re sometimes accused of this, but you’ll see in a minute that Hoppe expressly denies this, and I think he is correct.
01:08:05
01:08:12
I will skip over this quickly. This just some background for what I just mentioned. I’ve got some citations here to Rothbard on what praxeology is and what the nature of economic analysis is. Also, this is some stuff from Hoppe and Mises where they talk about explicitly introducing assumptions into empirical reality to try to make your analysis interesting. Otherwise, it would just be a boring, fairly trivial analysis of human action in general, but it wouldn’t take you anywhere.
01:08:40
You have to assume that there’s money or barter or a Crusoe economy or political – government intervention in the economy. You can do that. You could analyze the effects of government intervention in a free-market economy etc. You could assume a free-market economy. You could assume a stateless society. You can assume a state, and that would lead you to make a public choice-type analysis. You could make some assumptions and analyze gain theory. You can make some assumptions about war being present and analyze how people would act in war, etc., different types of applications of praxeology.
01:09:16
01:09:21
So I mentioned earlier, if you can assume there’s a Crusoe economy, just one person on an island or maybe two and catallactics is what Mises calls the economics of the market economy, that is, assuming private property rights and maybe money existing, etc. I mentioned earlier that one thing interesting about Hoppe’s approach is that he derived sort of his own version of praxeology on his own, which is impressive. But he did it from philosophy. Rothbard recognized this in one of his articles. He wrote: Hoppe has proven to be productive and creative, partly because he’s the only praxeologist as far as I know who arrived to the doctrine originally from philosophy rather than from economics.
01:10:07
So he brings certain philosophic credentials to task, and this might explain the power of Hoppe’s thinking because he has a fresh approach to this and a unique approach and was brilliant enough to come up with his own version of praxeology on his own. Now, when he read Mises, of course he learned more, and it was already formalized and systematized. But he was already heading in that direction when he stumbled across Mises.
01:10:35
01:10:40
Another thing to notice here is that – so empiricists, not only do they deny the scientific character of economic laws because they’re not – that is, a priori economic laws because they’re not testable. But they also deny that normative discourse, that is, discussion about what rights there are, what is right and wrong, what rules there should be, they deny that has a set scientific character as well. It has to be totally descriptive and value-free. Now, Mises actually also has the same view. Mises restricts his analysis of economics to what he calls the value-free or wertfrei economic phenomenon.
01:11:29
But as we discussed in the last lecture Hoppe, himself has tried to, and he believes he succeeded in, extending a type of praxeological analysis to the domain of ethics and norms. Rothbard himself believed this. I think I had part of this quote last time. There’s a quote from Rothbard here, commenting on Hoppe’s achievement in argumentation ethics, how Hoppe starts from standard praxeological axioms.
01:11:58
Now, notice Rothbard is using the word axiom like Ayn Rand does to mean some kind of uncontestable truth. The Kantian would say that’s an a priori proposition, anyway, the basic laws of action like every human acts, employs means to arrive at goals. And he uses this to arrive at an anarchist-Lockian-political ethic, his argumentation ethics. So this is Rothbard’s opinion that the field of praxeology has been extended.
01:12:30
01:12:36
Danny says, Mises never uses the term action axiom, by the way. That’s interesting. I’m not surprised because, again, axiom is used normally by people to refer to an assumption of like an artificial system, like a mathematical system or something like that, not used in the Randian sense to talk about things that we know that they’re fundamentally true because their denial is self-contradictory. That’s what Misesians would call a priori – categorical a priori knowledge.
01:13:11
01:13:15
Okay, slide 40. Look at the second quote here. So Rothbard even suggests that it would be interesting for someone to research whether you can extend it even further, take this axiomatic approach. Well, it’s – again, it’s the argumentation ethics approach he’s talking about extended into other spheres of ethics. So not only does he think Hoppe has established in extending praxeology to political ethics, but he thinks that maybe that approach could go farther, and maybe others can take it farther, and no one has yet as far as I’m aware of, or at least not too far.
01:13:49
Okay, now, I mentioned earlier that sometimes Misesians or Kantians will be accused – or people that believe in a priori knowledge will be accused of claiming infallibility. But this is actually just simply not true. As Hoppe says, it doesn’t imply a claim of being infallible. All it means is that you think there are different methods of validating different types of knowledge. There’s one method for validating what you think is a given causal law where you do experiments.
01:14:21
You hypothesize law and you do an experiment to falsify it or to test it, or you reason deductively from things that you can establish as a priori true in the first place. But it doesn’t mean you can’t make a mistake in either realm of human reason. You can always make a mistake. And Hoppe gives an example here. He says, one of his spoils is Deirdre McCloskey, says that rationalism assumes infallibility. And she says something like, even in a pure science like mathematics, some allegedly watertight arguments have turned out to be wrong.
01:14:57
And so she says, well, if you thought you were infallible before, apparently you’re not infallible, so there’s something wrong with apriorism. But, but as Hoppe says, this only shows the argument previously thought to be a priori was not. In other words, someone made a mistake. Rothbard has a similar comment not related to Hoppe. But he just says, no one is omniscient or infallible, and that’s a law of man’s nature. There are some other interesting articles for anyone who wants to read further. You can take a look at the two here. I have linked one by Barry Smith and one by Steven Yates. Both talk about a fallibilism and the Austrian approach. Barry Smith is more of an Aristotelian, I believe, but he still is very familiar with the Misesian-Austrian approach.
01:15:49
01:15:54
Okay. Now, we talked about the nature of knowledge of the causal realm and nature of knowledge of human action. So these causal laws, we have gradually evolving and improving scientific knowledge, knowledge about causal laws, which you gradually refine over time. Humans learn things. They learn more, but these laws are never exact. They’re never 100%. Newton’s laws seem to be exact until more accurate laws of physics replace those. But you can still use Newton’s laws for certain phenomena that are not too relativistic in speed, etc. And they work they work pretty damn well. But to be able to predict the future, you’d have to take into account causal laws and also the fact that there are a bunch of humans out there acting.
01:16:56
Okay. Now, you can know some things about the structure of your human action and every action, but you don’t know exactly what the action will be. In fact, you can never predict what people will do in the future because they have choice and also because you don’t have direct access to their minds. And you don’t even know what you’re going to do in the future. You can never predict what you’re going to do in the future. But Hoppe, in his article on uncertainty, makes the point that we have to draw a middle ground, and I have a slide coming up on this.
01:17:30
Let me see if I can find it here. Yeah, right here. So the future is not perfectly predictable. It cannot be perfectly predictable because we know we can learn. If we can learn, that means that there’s something we’re going to learn in the future that we don’t know what it’s going to be. If you knew now what you are going to learn, then you would already have the knowledge. So the very possibility of learning implies the future is uncertain, but it’s not radically uncertain like some like Lachmann and others would say. We can know some things about the future.
01:18:06
So as Hoppe says, only a middle-of-the-road position between the two extremes of perfect knowledge and perfect ignorance is consistently defensible. Okay, so this is a very reasonable approach, and you can see what it means. So in other words, if you are a complete empiricist, you almost have to believe the future is radically uncertain because we don’t have – there are no laws we can know a priori to be true that bound what might happen.
01:18:31
I mean anything can happen in an empirical universe, and the universe is conceived of by empiricists. So as Hoppe explains, he can predict and with perfect certainty, that, regardless of whether he will speak or write in English or German, that as long as he will speak or write at all, all of his speaking and writing will have a certain constant and invariable logical propositional structure. He’s going to use certain expressions etc. You can make all these sort of if-laws, like if I do this or to the extent I do that, then this will follow.
01:19:05
Okay. So look at the second paragraph – or the first one. As long as I act, there will be goals and means and choice and costs, etc. So he can predict the general logical structure of every action he might perform. You don’t know what the actual will be, but you know some things about it. The second paragraph: I may not be able to forecast that money will actually come into existence, and it’s possibly we could revert back to barter. But if we have money, if and to the extent there is money, you can say certain things that will be characteristic of transactions that employ money. Okay, it’s an indirect medium of exchange. It permits calculation, etc.
01:19:48
Now, what I want to get to here was this, and I have a – I’m going to go back to slide 43. You see the link down here at the bottom. “Verstehen and the Role of Economics in Forecasting.” Or, if you’re so rich, why aren’t you smart? [Verstehen is the Misesian word for understanding.] So you’ll get this all the time. Someone will say, well, if you’re such a good economist, why aren’t you rich? If you know the business cycle is coming, why don’t you make a lot of money off of it?
01:20:18
Well, so Hoppe’s view is this. First of all, the future is uncertain and has to be. It’s not radically uncertain, but it’s uncertain. So knowledge of economic laws helps to bracket the possibilities out there, and so as Hoppe says, in the long run, the praxeologically enlightened forecaster would average better than the unenlightened ones. But that’s a ceteris paribus thing. In other words, he’s saying you can have two identical forecasters and one is ignorant of the law of economics and one knows economics. Then the one that knows economics knows certain things are impossible or unlikely or more likely or whatever.
01:20:56
So his forecast, his investment decisions would be more fine-tuned to that reality, so he would tend to do better in the long run. However, no investors are the same. Warren Buffett may not know much about Austrian economics, but he has a good knack of investing. And that characteristic may be orders of magnitude more important than knowing Austrian economics. That’s what Mises calls verstehen, the art of forecasting, entrepreneurial forecasting, the understanding. Basically, it’s being a historian of the future, trying to predict what people will do in the future or what things will – how people would act in response to how you predict the world will change, etc.
01:21:42
Okay. So anyway, Hoppe concludes: Praxeological knowledge has very limited predictive utility. Now, it could be that in certain times, it has relatively more enhanced predictive utility, like in recent times with this massive recession, which only the Austrians seem to be able to understand and explain with the Austrian business cycle theory, which again, is an a priori rooted theory, a theory rooted in human action. So in times like this, it could be that someone who really doesn’t – really is not usually that good of an investor could do better than normal relative to other investors, given his Austrian knowledge.
01:22:25
01:22:32
Okay, I have time to get to some of this now. I tell you what. We covered a lot today. Why don’t we do this? I will save the remaining slides starting on slide 47 for next class. I’ll cover the remaining slides before we start on the economics material. And we only have two minutes left before we officially are over. So why don’t I just open the floor to any questions if there are any?
01:23:01
01:23:10
Okay. Lucas asks, all knowledge must conform to the laws of logic, whether teleological or causal. Does this lend itself to another sort of rational monism? Well, I think all knowledge has – to be valid knowledge of course it has to be – comply with the laws of logic. It can’t be inconsistent because contradictions can’t be true. And in a way, there is a monism, and the Misesian approach is – or at least the Hoppian approach is that apriorism is the main thing. In other words, we know that there are two realms of knowledge because of a priori knowledge, the praxeology, the action axiom or the category of action. But no, I think that they recognize that there are – the very nature of human action recognizes the existence of causality and human purpose. And those things require study in different ways. It’s unavoidably so. That implies a type of methodological or epistemological dualism.
01:24:18
John asks: Did Mises or Rand ever interact much professionally or personally? I think they did. There is – I think he wrote her a very nice letter, which is published on the Mises website somewhere. Actually, maybe I republished it in Libertarian Papers the first year. I can’t remember to be honest. He wrote her a letter upon publication of Atlas Shrugged, praising it to high heaven. And I do believe they interacted with regard to FEE, the Foundation of Economic Education. And they interacted at cocktail parties.
01:24:56
I believe – the story I heard was that Ayn Rand heard at a cocktail party – I think it was Mises said something like Ayn Rand is the most courageous man in America. And when the person related that anecdote to Ayn Rand, she said, did he say man? And they said yeah, he said man. And she clapped her hands in glee. She thought that was precious. There’s another story. It’s in one of the recent books the Mises Institute published where there’s a story. She showed up at a cocktail party somewhere, like New York.
01:25:32
I think Henry Hazlitt wrote this up. He has in his memoirs or somewhere. Mises and Rand and Hazlitt were there, and Mises and Rand kind of got in an argument about something. And Mises just dismissed her and called her something like a silly little Jewish girl or something like that, and it really upset her. There’s another comment in that a lot of her followers say why do you like Mises so much because he’s this Kantian? And she kind of famously said, oh, leave him alone. He’s done enough. So she basically laid off of Mises. I think she realized he was a towering figure. She learned a lot of economics from him to her credit.
01:26:12
01:26:18
Tito, you might be right about the quote being the most intelligent man I knew. I think it’s the most courageous, but my memory could be failing me. Antonio Lopez asks, does Hayek disperse – by the way, John McGinnis, if you want, I’ll try to find links and send them to the class later. Yeah, there’s two sources. There’s the Hazlitt source, and there’s another source. I can’t remember who wrote the other one. Maybe it’s in that Brian – who is the guy married to Angela Keaton? Brian Doherty book, Radicals for Capitalism. He may have the anecdote in there.
01:26:58
Anyway, Antonio Lopez asks: Does Hayek disperse knowledge? Is that another form of dualism being the contextual knowledge manifestation of the action axiom? Well, I mean I think it depends on who you ask. Hoppe himself and a lot of the very Misesian and praxeologists like Salerno, Hülsmann, these guys, are very, very skeptical of the coherence of the Hayekian knowledge approach. And I sort of share that skepticism. To the extent Hayek’s knowledge problem was a restatement or another way of explaining the problem Mises articulated in his 1920 essay on socialism, then it’s just a more confused way of explaining the calculation problem, which is not really a knowledge problem.
01:27:59
It’s a formatting or a comparison problem. It’s like you can’t compare things unless there’s a common unit of measure. But it’s not really a knowledge problem. It’s just prices help you compare things because now they’re reduced to a common unit of comparison. And to the extent it was something different from the calculation problem, I think it was confused.
01:28:24
I think it implies that prices encode and convey information, this tacit information, etc. that’s – I think that is an overly metaphorical and non-rigorous and – I mean, look. I’m not a professional economist, but that’s my opinion. There is disagreement among Austrians about this, most of the Hoppian, Misesian, Rothbardian types—and Rothbard, by the way, had this view—economists believe that the Hayekian knowledge idea is kind of confused and takes us down the wrong end. Oh, Danny says the Jewish girl insult was debunked by Hazlitt. Yeah, you could be right. You could be right. I vaguely remember that. Anything else? Let me get to the last page. We stopped at 47. We’ll pick it up here next time.
01:29:24
On the last page, I have – in the next class we will talk about – we’ll finish the epistemology, and we’ll talk about just some particular economic issues, and here’s some things you can read if you’d like. There are about six or seven there. Most of them are fairly short chapters. Some of them are just blog posts, actually, and there’s some optional stuff here if you want to go even farther.
01:29:47
01:29:54
I’m glad Tito. I hope I’m not going too fast for everyone or too slow for anyone. It’s hard to judge. If there are any other questions, I’d be happy to take them. Thanks, John. And what was the – does anyone remember? What was the question we were going to ask Hans? It was somewhere up in the chat up earlier on. Maybe I will – I think it was when – I’m scrolling up now. Oh, imaginary numbers. I’ll ask him. I don’t know what an answer will be to that. I’ll see if I can add that to the list. Okay, I enjoyed it guys. So I will see you next Monday, and the midterm should be up in a couple of days. I apologize for the delay. Thanks very much, Cam.
This is the third of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.” I’ll release the remaining lectures here in the podcast feed in upcoming days.
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 3: LIBERTARIAN RIGHTS AND ARGUMENTATION ETHICS
Video
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Slides
TRANSCRIPT
The Social Theory of Hoppe, Lecture 3: Libertarian Rights and Argumentation Ethics
Stephan Kinsella
Mises Academy, July 25, 2011
00:00:01
STEPHAN KINSELLA: … later. So tonight we’ll talk about argumentation ethics. I have a lot of slides, but some of them will go very fast because they’re just background in case you want to look at them later or if we need some quotes. But let’s go ahead and dive right into tonight’s lecture. By the way, before we start, I’m curious. Who here – well, let me get to the readings page first. I don’t know if I have that up there. Who here read more than the required or suggested reading and onto the more optional reading? I’m just curious how many students have actually read into the argumentation ethics literature beyond the basic stuff I recommended. Anyone?
00:00:49
00:00:54
Okay, Jacob has. Jacob, I’m curious. What did you read beyond the basic stuff? Method essay. For argumentation ethics? Okay. In any case – oh, just by the way, so we’ll have a short quiz for the first – covering the first three weeks, which will start – I’ll have it posted in a few days. I’m leaving tomorrow morning, by the way, for the Mises University, so I’ll be traveling tomorrow, but I’ll try to get it up in a couple days. I wanted to finish this class first before I finish the test so I could make sure I covered only what we talked about in class. Oh interesting, Jacob. Good, so you’ve read a lot. Well, maybe you can help me with some of the difficult questions in here.
00:01:45
So the multiple-choice test will be up in a few days. It’s optional. Don’t feel compelled to take it if you don’t want to. It’s not meant to make anyone feel like they’re going to fail or anything. It’s just a refresher on the course. It’s going to be fun, test your knowledge, and to get the certificate if you’d like. And again, it’s based upon what I say in the lectures, the slides, and also the reading material I mark as suggested but not on the optional reading material.
00:02:11
00:02:15
Okay, so last class we talked about various property issues, how the state arises and the nature of the state, the types of socialism. We started to talk about de-socialization. I don’t know if we’ll have time to get to that tonight. I do have some slides on it at the very end, but I doubt we’ll be able to get to it very much. Anyway, the article is pretty self-explanatory in any case. Maybe we can cover it in lecture number six on political topics or number five on economic topics.
00:02:46
By the way, let me – well, we’ll talk at the end a bit about – next class will be on epistemology and methodology. Okay, so today we’re going to talk about libertarian rights and argumentation ethics. By the way, I have this little mini ad for my last course because I just want to remind people, I did cover some of this in that course in a more summary fashion. And some of that’s included in these slides. I modified it for tonight, and there’s extra stuff here too, but for anyone who took the previous course, some of this I talked about before. But I’m actually leaving out here a lot of the stuff I talked about in the Libertarian Legal Theory course because it’s not directly pertinent to Hoppe’s approach, but some of this will look familiar to some of you.
00:03:29
So tonight we’re going to talk basically about two main questions. We’re we talk about what libertarianism is, at least in different conceptions. And then we’re going to talk about the justification Hoppe provides for it. And if we have time, we can talk about some related approaches to argumentation ethics. The readings for tonight – the suggested readings were primarily my kind of concise overview and Hoppe’s article “From the Economics of Laissez Faire to the Ethics of Libertarianism.” And also his “Justice of Economic Efficiency” and this his “Appendix: Four Critical Replies.” So that was – there’s a lot more out there, but that’s a good sort of overview of what to read to get the flavor of this whole debate.
00:04:18
Now, this will be a little bit elementary for everybody, so I’m going to go over this quickly because I think we probably already know this, but just to kind of get us in the right framework and to refresh us on where we’re going. So let’s think about what is libertarianism about. So it’s a type of political theory compared to other types would be Marxism, forms of leftism and socialism, conservativism, and even modern liberalism or welfare statism or social democracy. It’s concerned with justice in a certain way, and if you think about the traditional classic formulation of justice by – in The Institutes of Justinian, the Roman emperor who helped codify a lot of Roman law, he had said “Justice is a constant and perpetual wish to render everyone his due.
00:05:08
And the maxims of law are these: to live honestly, to hurt no one, to give everyone his due. Now, these are nice formulations. They’re a little bit circular. They sort of – they circle back on each other because – it’s like defining ought is what you should do, and should – what you should do is what you ought to do. Some of these normative terms are kind of basic, and they feed back on each other.
00:05:31
So we talk about political theory and justice, and we say, well, justice means giving someone his due. You say, well, what are they do? Well, the most coherent way to think about it is that what you’re due depends on what your property rights are. And you’ll see the significance of this in a second when we talk about aggression.
00:05:50
Now, what’s different about libertarians – oh, thanks Rick. You read Hülsmann’s too. Thanks. By the way, the Hülsmann article and also the Larry Seacrest article as well as one of Hoppe’s and one of mine all arose from a seminar we did at Mises on Reinach, Adolf Reinach, who was an amazing and fascinating German thinker. He was killed I think in World War I. He died very young, but he was a brilliant guy, produced some great stuff before then that was on the a priori of the civil law and on the criminal law as well.
00:06:32
In any case, a lot of good stuff resulted from that seminar. It’s on my website if anyone is interested. And that’s where Guido’s piece came from. They were all published in the QJAE maybe ten years ago. In any case, we don’t own the word justice, we libertarians. But we do have a particular conception of what it means. And according to that conception – so basically, I think of it like this. Our conception of justice tells us what the rights we have are, and that tells us what laws there should be.
00:07:06
So it tells you what we’re due, what others owe you, which are obligations and duties, and that corresponds to your rights. So our idea is that the actual law enforced in a given society, whether there’s a state or not, should conform to what we conceive of as natural law. So you can think of natural law as an ideal template of laws that should exist, so we’re always aspiring or trying to make laws that do exist conform to that to be just. So you can think that a conception of justice informs your conception of what rights there are, and that informs your idea of what laws there should be. So this is just sort of general orientation of framework here.
00:07:47
Slide number seven. Now, libertarianism is sort of described in a lot of pithy sayings, examples, analogies, metaphors, aphorisms, and kind of summary or condensation statements. So, for example, Leonard Read, the founder of FEE, in a famous libertarian book in ’54 said people should be free to do anything that’s peaceful. That’s a pretty good summary of some of the basic normative aspects of libertarianism, but it doesn’t tell you too much.
00:08:21
Dave Boaz said: Libertarianism is the view that each person has the right to live his life in any way he chooses so long as he respects the equal rights of others.” That’s a pretty good – gives you the flavor of it too, but what does it mean to respect the equal rights of others? I mean if everyone had a right to welfare, then you’re respecting their equal rights, and I mean it only gets you so far. Ayn Rand put it a little bit colorfully in Galt’s speech: “So long as men desire to live together, no man may initiate—do you hear me? No man may start the use of physical force against the others.” And this is a sort of a good capsule way of stating the – what we call the non-aggression principle.
00:09:05
Rick asks about Bastiat, whether I consider him a libertarian in the strict sense. I mean I’ve read a lot of Bastiat. I’ve read him early on. He was influential to me. I haven’t revisited him lately on a lot of his issues. I don’t believe he was an anarchist, but I do believe that – well, for his time I’d say he was a strong libertarian, very radical, very clear thinking. And the things I’ve heard him write on seem to be pretty much all compatible with libertarianism. I don’t know if I heard him write on a lot of other libertarian or political views like drug regulations and social and moral regulations, but he seemed to be leaning strongly in the libertarian direction. He seems to at least be a classical liberal.
00:09:45
So let’s go on, slide number eight. So we’ve come to a better formulation, the non-aggression principle. Some call it the non-aggression axiom. I tend to say non-aggression principle. Most others nowadays, from what I’ve seen, tend to say principle instead of axiom, and they sometimes call it the NAP, NAP, the NAP. And Rothbart said: The libertarian creed—or belief—rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else.
00:10:17
Okay, and aggression is defined as the initiation of the use or threat of physical violence against the person or property of someone else, so it’s synonymous with invasion. So you can see he’s getting a little bit more descript now. He’s defining it in terms of the person, which is your body, or the property. But still, we haven’t defined what the property of someone is. So if someone is not entitled to the money they earned from doing a job, and the state takes it in the form of taxes, or if a robber robs them of it, is that aggression?
00:10:49
Well, it’s only aggression if it’s their property, so you have to first define who owns that money, who’s entitled to keep it. So in a way, property is prior to the concept of aggression. The concept of aggression depends upon filling in the details of what property rights there are. Now, so there’s different types of libertarianism based upon how strictly you construe the non-aggression principle and how you apply it. So you have classical liberalism, also sometimes called the nightwatchman state. Maybe the American founders were somewhat of an example of that.
00:11:28
It’s somewhat libertarian, not completely libertarian. Then you have minarchists, which I would say is a branch of libertarianism. I think it’s confused in that it is not anarchist and still believes there’s a role for the state, but at least the strict minarchists believe in an extremely narrow and circumscribed and limited role for the state. This would include Randians. Well, I used to think so, but at least nowadays they express, or nowadays I see that they have always expressed some serious deviations from even what I would consider to be minarchism such as some acts of war and intellectual property, for example.
00:12:09
But they are close to being minarchists anyway. From what I’ve seen, most minarchists are utilitarians and consequentialists except for Randians. But I think even Randians have consequentialist and even utilitarian aspects, primarily consequentialist, and we’ll get to this in a minute. Utilitarian in, for example, Rand’s defense of intellectual property and her opposition to anarchy was kind of utilitarian.
00:12:39
Then you have anarcho-libertarians, which are the anarcho-capitalists, which I believe are the most consistent. That would include, of course, Hoppe. Finally, you have one flavor of libertarian, the left libertarians. They tend to be anarchist libertarians, but they have a slightly different emphasis on workers and exploitation and capitalism and some terminology.
00:13:04
Oh, so let’s go. Dante asks a question about the word axioms versus principles. Well, Ayn Rand – I mean, in math sometimes the word axiom just means an assumed starting point. Ayn Rand used axiom more like the Misesians would use the concept of a priori to mean some kind of fundamental principle or proposition that is almost self-contradictory to deny it. Therefore, we can know that it’s true, and it can’t even be denied. For example, I think Rank talked about axioms, like the law of non-contradiction, the law of identity, the fact that you exist, that there’s consciousness, things like this.
00:13:45
She would call those axioms, and I think Rothbard was coming from her camp. He might have used non-aggression axiom as a starting point type thing, or maybe he believed it was self-evident or self-contradictory. But most people, when they say non-aggression axiom, they mean it’s a foundational principle. So I think it’s better to call it non-aggression principle because different libertarians have different opinions about whether the principle is just assumed, or whether it is self-contradictory. So to avoid question begging, I think it’s better to call it the non-aggression principle.
00:14:17
00:14:21
All right, I’ll go quickly through this. This is the way some libertarians in the past have tried to categorize libertarians. There’s the famous Nolan Chart. I think it was originated by Dave Nolan, who was one of the original Libertarian Party founders in the U.S. So he looked at the left right spectrum, as you can see here on slide 10. – he looked at a two a two-dimensional – excuse me – chart with one axis being personal liberty, and the other axis being economic liberty. So he tried to show that conservatives tend to be bad on personal liberties but good on economic liberties, and liberals or leftists are vice versa, so that’s the left right spectrum.
00:15:03
Libertarians are sort of better on both, and statists and totalitarians are worse on both. I think this is useful to see if there’s disagreement on some of the questions that you’re scored on because libertarians don’t agree on everything, of course. But I think that – one problem with it is that I think that, in some ways, the right is worse than the left on both economic and personal liberties.
00:15:31
And on the other hand, the left is worse than the right on both issues, at least in terms of hypocrisy. So I can see left and right as being both bad on both personal and economic liberties, but anyway, we’re just defining what libertarians are. The reason I’m going through this definition to look at it is because we want to look at Hoppe’s justification for it so we first set it out; then we talk about how you can justify it. First, you describe what we believe; then you describe why we believe it.
00:15:58
There’s another bell curve that Tom Knapp came up with from Center for the Study of a Stateless Society. Anyway, you can agree or – you can disagree or disagree whether or not he’s right and where the endpoints meet. I have another picture here on 12, a bigger one. He chose the classical anarchists and the anarcho-capitalists almost having those, kind of looping around and having the same views. In any case, he has in this percentage of how much force you advocate, so that’s another way of looking at it.
00:16:32
Now, let’s go back to – I mentioned some of this earlier in lecture one, what Hoppe’s view is and so is Rothbard’s when they describe what the natural situation is. So this corresponds to basically libertarian principle, and also it corresponds to what Hoppe seeks to justify his argumentation ethics. So you could say that the libertarian view is a normative view. It’s a view of norms, rules of social conduct, and rules of conduct, things you should follow.
00:17:01
So that, of course, the libertarian normative view corresponds to the natural position Hoppe and Rothbard have identified. And, if you remember, that basically corresponds to their views on ownership of bodies, the right to contract and homesteading. I think I mentioned this before, but Hoppe talks about how we don’t usually think of our bodies as a scarce good, but you can – it is a scarce good. And it’s the prototype of a scarce good for what need property rights for. That is, we establish – we assign property rights in things that are scarce, including our bodies, so that we can avoid physical, violent clashes over these things and use them peacefully, cooperatively and productively in society, and then a division of labor.
00:17:48
00:17:51
Okay, so as Hoppe says here, what is the natural position regarding the property that’s implicit in the natural way speaking about bodies, like I say my body. You say your body. And he just states that the rules is – now this is the – you can think of this as the libertarian rule with respect to bodies. The rule is every person has the exclusive right of ownership of his body within the boundaries of its surface. And every person can put his body to those uses he thinks best for his immediate or long-run interests, well-being, or satisfaction, as long as he doesn’t interfere with another person’s right to control the use of his or her respective body. Now, this is just descriptive. We’re just stating what the view is, and what the natural view is.
00:18:35
00:18:41
Okay, my poodles will stop barking in a second. Sorry for that. Now, what’s the natural view about – that underlies this way of looking at it? So what Hoppe says is that the reason we think it’s natural to say you own your body is because every person can say there’s a determinant natural link between me and my body.
00:19:08
And then he looks at it as being produced, not in a sort of metaphysical sense, like creating it out of nothing, but in that I have basically changed it according to a plan. I’m the one who uses it. Okay, everyone, excuse me for two minutes so I can shut my poodles up. Excuse me for just a second. Okay, my apologies. All right, so I’m just – I’m describing Hoppe’s views here about why he thinks that there is – what is natural about owning your body, and that is that there’s a production aspect to it. And this is key to Hoppe’s property theory is that the essence of establishing a property right is to establish borders around the thing, that is, to produce borderlines for things. So by using your body, you’re demonstrating to the world that this determinant physical object is under your control, and they can avoid transgressing the borders of it if they want to. The borders of bodies are clear.
00:20:43
00:20:45
Okay, so let’s go to slide 16. Now, there’s a notion of contract. We normally think of contract, at least in the Rothbardian sense, as having to do with physical objects that we own. But the general sense of contract in this Rothbardian-Hoppian sense is just the exercise – the owner’s prerogative to exercise who gets to use the resource. So the respect to your body, that means you have the right, as the owner of your body, to invite or agree to other people doing something with or to your body. So you can let someone kiss you, inject drugs into your body, etc. if you choose to, and so this is sort of the prototype or the general notion of a contractual exchange.
00:21:35
And by contrast, aggression would be using someone’s body without being invited, that is, without their consent or permission. Okay, so that’s what aggression is with respect to bodies. So you can see now that aggression depends upon the concept of property, saying that the owner of the body is the person that controls the body. And therefore, they have the right to invite or deny permission to others to use it.
00:22:00
Now, what about other scarce resources in the world, things other than someone’s body, basically goods in the world? Now, this is a key point, and we’ll bring it up later tonight, but Hoppe says that unlike bodies which are never unowned, which have a natural owner always. The natural owner is the occupant of the body, you could say, or the person who controls the body. All other scarce resources can be unowned, so this does make a difference for concepts of alienability and how we ground these rights, which we’ll see later.
00:22:35
A lot of libertarians think that you justify the ownership of things and your body in the same way by saying that the first owner – the first user is the owner by homesteading. But you can see here that you’re not really the owner of the body because you homestead it. You’re the owner because you have a direct determinant link to it, and you are the first user usually but not with respect to your parents. But you have a special connection to it, which gives you a better claim to it than other people.
00:23:02
Okay, but basically to appropriate things outside of your body, you think of yourself as a homesteader, that is, a person having a body that’s already owned, moving in the world, and using action to appropriate things that are outside of human bodies and that are currently unowned. And we call this original appropriation, and basically this is also embordering, establishing border lines, putting up a fence, transforming the resource so that others can tell what its boundaries are, and that it’s claimed as owned.
00:23:39
00:23:42
And again, contract, with respect to external resources, would again be the owner giving permission or denying permission of others to use it. Now, this is why Hoppe says a capitalist system is a social system based upon this natural position. H calls this pure capitalist, but this is just semantics at this point. Quickly, by the way, this view of contract that Hoppe uses is compatible with the Rothbard and Evers title-transfer theory of contract. I have an article on it here linked on page 19 – slide 19 – which describes it in detail, but we don’t need to go into the details here because I want to have time to cover everything else.
00:24:22
But the basic idea is that contract is the transfer of title to owned things. It’s not like a promise that you make that then is binding or enforceable in the law. It’s rather the transfer of title to a particular object is recognized in the law, so you can change owners of things. So that’s the theory of contract. It’s similar in result to the current view contract, which is the binding-promise view, but not identical. There are some differences, for example, with respect to alienability and the concept of breach of contract, etc.
00:24:54
But that goes a little bit too far afield, but I just want to note here that Hoppe’s view, which is similar to Rothbard’s, is, of course, compatible with the Rothbard-Evers title-transfer theory of contract. Okay, so if we think of these notions of aggression and property with respect to political systems, so the basic Hoppian view is that we own our bodies, and we have the right to appropriate or homestead and the right to contract with respect to these things that we own. That’s why you can call socialist systems, systems that basically institutionalize aggression against private property, and capitalism is the one that respects these things.
00:25:33
Okay, so, now let’s talk about what justifications there are for libertarianism because we’re going to get to Hoppe’s in a second. So we have several approaches that have been offered: the natural rights, or deontological-type approach, which is the more principal-type approach, more classical-type approach. There’s a consequentialist-type approach, like that of Mieses. That is – and I’m going to go over these in a little bit more detail in a second. So there’s the more rationalist and hypotheticals-type approaches, kind of like mine and some of the ones I survey in my article, “New Rationalist Directions in Libertarian Rights Theory.”
00:26:14
There is a more utilitarian defense, which is not the same as consequentialist. Randy Burnett has a good – I think it’s the introduction to his Structure of Liberty, where he explains why he believes that consequentialism is not the same as utilitarianism. Utilitarianism is more a subset of consequentialism, but not all consequences is utilitarian. It’s not online unfortunately. I think he does have an article on his website, randybarnett.com, about consequentialism, which talks about that a little bit too, and that one is online.
00:26:47
So Jeremy Bentham of the law and economics movement, the whole wealth maximization approach or kind of utilitarian. Mises was more of a consequentialist in my view, from what I’ve read, like in his Liberalism. He wouldn’t accept utilitarian economics behind utilitarian politics because it is of opposition to that in his subjectivist economics. And then you have constitutional approaches like Ron Paul’s and religious approaches. There’s an article I’ve seen called “Jesus is an Anarchist.” And on the other hand, I’ve met, of course, Christians that claim that Jesus is on America’s side in all of our wars. So I’m not so sure that religion is the most solid foundation for right, but it gets some people partway there.
00:27:35
Okay, on to slide 22. So natural rights, most of you are familiar with that, the idea that by human nature or natural law, we have certain natural rights or human rights. These are the inalienable rights spoken of in the American Declaration of Independence. The founding fathers were somewhat of this persuasion, or somewhat libertarian I should say. John Locke was sort of a proto libertarian in this sense. Rothbard takes this in a more consistent direction and has sort of a neo-natural law approach in The Ethics of Liberty.
00:28:10
00:28:13
Now, one more thing before we jump into Hoppe’s approach to all this, there’s a classic problem in philosophy. Some reject this as a problem. Some accept it. I think it makes sense. I think Rothbard recognized it. Hoppe certainly did. It’s the is-ought problem. I won’t read this quote here. It’s – this is from David Hume’s formulation. But the idea which I’ll go to slide 24 now, is, as Hoppe said, “one can readily subscribe to the almost generally accepted view that the gulf between ought and is, is logically unbridgeable.”
00:28:48
And in the quote below from Rothbard, which I’ll repeat later for another reason, but he talks about the famous is-ought dichotomy, which has plagued philosophy. And he talks about how Hoppe’s argumentation ethics gets around this. But the basic idea is that whenever you try to form an ought statement, which you have to do to come up with political norms, you have to smuggle a norm in somewhere. You have to build it upon other norms because if it’s just built on facts, then you have to sort of sneak in a norm to get there because otherwise you could just say, well, people have this nature. But to say, and therefore, they should do this, that’s where you’re introducing the should, but it can never follow.
00:29:31
Now, some Aristotelians would disagree with this. I think they actually are hypotheticalists of a type because, for example, what they would say is, if, or since even they’ll say, and they’ll call this an assertoric hypothetical. Roderick Long has written on this. 1Since you want to flourish as a human, therefore, according to your nature, you should do this. I think that type of reasoning is generally correct, but the sense is not that as an assumption. It doesn’t have to be true. I mean some mass murderer or some very evil person may say, well, I don’t want to flourish. I want to dominate and kill people, and I don’t care if I flourish.
00:30:20
So I think you’d have to appeal to some kind of adopted ethic. You have to show how the ethic or the normative value gets put into the argument to build on it. And this is what Hoppe does, in my view, in his argumentation ethics. And by the way, whether you agree with his argumentation ethics or not in this class is not really the point. I’m not really so much trying to defend it here, although the I’ll be glad to. I’m just trying to elaborate and explain what his view is.
00:30:49
00:30:53
By the way, I agree Hume had some problems with his epistemology, but I do think his is-ought problem makes sense. Now, Ayn Rand tried to dismiss the is-ought problem, sort of a neo-Aristotelian. If you look at the bold part here, the fact that a living entity is determines what it ought to do, so much for the issue of the relation between it is and ought. Well, I don’t think her quick dismissal succeeded. It was just too easy. It’s not that easy. And even Ayn Rand wrote that it is only an ultimate goal, an end in itself that makes the existence of values possible.
00:31:35
It is an – at the end of her quote here – it’s only the concept of life that makes the concept of value possible. She admits in other places too – I mean she doesn’t go so explicitly, but it’s clear from what she wrote that her ethics was hypothetical, hypothetical meaning that it was an if-then type thing. She said that the choice to live cannot be subject to moral judgment because, if you choose to live, then certain moral consequences flow from that choice.
00:32:06
So you could never say whether – you can never criticize someone’s choice not to live, and one of her followers, Harry Binswanger, has an article, again, not online because he’s a pro-IP objectivist, I guess. I’ve got it cited here on page 26, “Life-Based Teleology at the Foundation of Ethics.” Mises was a consequentialist in this sense. He would say if you want peace and prosperity and so on, then you need to have individual liberty – let me make sure someone’s not pinging me for the class.
00:32:45
Anyway, then you need individual liberty and free market as a means to accomplish it. That was his view as an economist is that we know economics is value free. All we can tell you is that the scientific and economic way to achieve things efficiently or economically is to use the appropriate means. And if you want to achieve peace and prosperity, then economics and some other reasoning can tell you that you need free markets and individual liberty. And, of course, because he was a decent person and believed in peace and prosperity, then he was a libertarian or a classical liberal.
00:33:21
And this is a quote from the Randy Barnett stuff on distinguishing consequentialism from utilitarianism where he says libertarian rights are appropriate given the widely shared goals of enabling people to survive and pursue happiness, peace, and prosperity. So you see, he takes these goals as for granted. Okay, any case, let’s go on. I’m just trying to explain what Hoppe was trying to deal with. Now, Hoppe criticized the standard natural rights approach, not only because it didn’t overcome the is-ought gap, but because the concept of human nature is far too diffuse and varied to provide a determinate set of contents of natural law. In other words, just by pointing to what human nature is—we’re the rational animal—doesn’t get you very far. It doesn’t give you much content to what norms you’re going to get from that.
00:34:17
00:34:24
I’ve already mentioned this consequentialism here on page – slide 28. Now, utilitarians I mentioned earlier, they would – you could think of that as a subset of consequentialism. They would choose a rule that maximizes overall happiness or utility. Richard Epstein, David Friedman have similar views to this. The law and economics movement does, the idea that we should maximize wealth, have this kind of presupposition. Now, Austrians would, and Rothbard and Mises would say there are many problems with this approach, mainly economic, if not – and also moral.
00:35:06
But the economic problems would be, number one, values are not cardinal. They’re ordinal. They’re not interpersonally comparable. They cannot be added and summed up, and they’re subjective and relational. They’re not intrinsic substances or quantity. And further, even if you could add them up, it’s not clear why it’s moral to rob A and give his wealth to B if B gains more from it than A loses. I mean you’re still robbing from A. So utilitarianism is very problematic as a justification.
00:35:41
So I mentioned before Hoppe had a sort of a neo-Kantian and rationalist upbringing in Europe, influenced by Jurgen Habermas and also another German philosopher named Karl-Otto Apel, which is discussed in some of the readings. But he also been heavily influenced in a more realistic and more liberal and libertarian sense direction and then more so by Rothbard and Mises’ writings. So what he did was he took the discourse ethics argument of his – of Habermas and Apel, and he reworked it into a libertarian direction using insights of Austrian economics.
00:36:30
So by doing this, he can break out of a natural law approach, so instead of focusing on human nature per se, that is, natural law, nature, as the justification and grounding for political norms and political ethics, he used a praxeological approach being an Austrian. So he said, “It is not the wider concept of human nature but the narrower one of propositional exchanges in argumentation, which must serve as a starting point in deriving an ethic.” Now, why do we say this? Let’s revisit the Habermas-Apel discourse ethics. Well, their argument was, is that there are certain norms that are presupposed in the activity of arguing.
00:37:21
And also combine that with the recognition that any norm or ethic that you ever hope to justify has to be justified in an argument as a context. Argument doesn’t mean you’re fighting with people, but it means some kind of discourse or propositional exchange, some kind of intelligent discussion where you’re both trying to use reason to figure out the truth of the matter, what norms or ethics are justified. Recognizing that every norm that is ever debated or set out as being true has to be justified in argumentation, leads to what Habermas and Apel call the a priori of communication and argumentation.
00:38:05
Now, this point is very general. All we’re doing is saying that, if there are any norms or assumptions, any kind of presuppositions that necessarily accompany the activity of argumentation itself, then that is relevant to what norms you could possibly justify within the context of argumentation. I mean as a very simple example, you could never justify the proposition that arguing is impossible because, by arguing, you would demonstrate that it is possible.
00:38:39
Now, that’s not a normative thing, but that’s an example. Now, it is true that Habermas and Apel, being good European philosophers, or soft socialists or social democrats of the European stripe, and so they had this kind of fuzzy argument that, well, kind of like democracy, a discussion – democracy is sort of like a discussion and the presuppositions that everyone needs resources to survive to be part of it. And to get the resources, they have to have certain basic needs provided for by the state. I mean, it’s not really an airtight argument, but they were trying to use their argument to argue for mainstream political conclusions, but to show that it had a solid foundation. Hoppe took what he thought made sense in that, but he rejected, of course, their application of it.
00:39:32
Now another insight of this approach by Habermas and Apel and also Hoppe is the idea that anytime you have a normative discussion – okay, well, Kevin C asked what if you’re indifferent to arguments? We may want to hold some questions to the end, but I’ll break apart right now. I haven’t had too many questions. So it’s not – but I think Rick is right. By saying it, you prove you’re not. I mean if someone – this is my sort of spin on it from thinking from thinking about it for a lot of years.
00:40:13
If someone refuses to engage in rational discourse, they refuse to try to justify anything, then they basically are outside the realm of human reason. So then we have to regard them as a technical problem. In other words, if people have a dispute about how to use a given resource, and they come together as civilized people in a genuine, peaceful, rational discourse aimed at trying to find who has the right to use this resource, then they can try to do that.
00:40:48
But if one person refuses and he just attempts to – then either if he goes away and lets you use the resource, or he attempts to use force to control it, and at that point in time, if you believe and can demonstrate to people that are interested in rational argumentation that you do have a better claim than him, then from your point of view, he’s simply a criminal or a technical obstacle. He’s really not much different than an elephant or a tiger or some force of nature that you have to treat as a technical obstacle and try to use force to defend yourself or use the organized system of the community to institutionally respect your rights. So basically, this is a discourse that is among a certain circle of people.
00:41:31
In any case, it’s important to understand also that one requirement of – this is one norm or one requirement of argumentation, that is universalizability, sort of the Kantian idea of the golden rule. Basically it’s the idea that if you are in an argument where you’re civilized and peaceful, trying to come up with a rational justification for what you’re proposing to be true, or the rule that you’re proposing can be adopted, then you’re giving reasons for it.
00:42:02
But to give a reason means to try to point people to some objective, or as the Kantians would say, intersubjectively ascertainable, some objective reason why the norm is grounded in the nature of things, why it’s true. It can’t just be an assertion. It’s got to have a reason behind it. But the idea of giving reasons means the reason has to be something that’s universalizably acceptable by every potential participant in the argumentation. It can’t be particularizable, that is, just making up an arbitrary reason that says, well, I get to do it because I’m me. Let me go on to slide 33.
00:42:45
00:42:51
And by the way, before we go on to particularizable, look at the middle part here. No one could deny in an argument that universalizable norms are justified because, by participating in an argument, you are already engaging in the activity of providing reasons for what you assert to be true. And, as Hoppe observes that particularistic rules of the type I can hit you, but you’re not allowed to hit me, are at the very base of all practice forms of socialism. This is why, in essence, socialism is irrational and unjustifiable because it violates universalizability.
00:43:26
And the key thing to recognize here is that, if you make a particularizable argument or to claim in an argument, it’s really the same thing as not making an argument at all because, if I just say I get to hit you because I’m stronger or better than you, that’s really the same as giving up on trying to justify by the force of reason and resorting to real force. So it’s contrary to the entire nature of argumentative justification. Okay, so we can assume that any argument someone can make has to be tested by universalizability, has to be universalizable, can’t be particularly visible.
00:44:05
But as Hoppe observes, this only is a formal criteria. It’s like a filter, but it doesn’t filter out every norm. It filters out some socialist norms but not all socialist norms, and remember, we’re using socialist and Hoppe’s sense of some institutional rule that aggresses against private property rights. So as an example, you could formulate a rule, anyone who drinks alcohol will be punished. And that rule is universalizable because it’s generally applied to everyone. It’s not particularizable, but it would still fail other tests of argumentation.
00:44:40
So that’s why Hoppe then turns to – he says, well, other than universalizability, what other things are presupposed by the very nature of argumentation? And remember, argumentation is the activity of trying to justify, with propositional exchange and reason, norms that you propose to be adopted or accepted as justified. And it turns out, according to Apel and Habermas and Hoppe, that some of the things presupposed in argument – I mean you could say there are facts presupposed in argument, the fact that there are at least two people in the world who exist, metaphysical facts like that.
00:45:19
Even the law of contradiction could be maybe argued to be part of the logic of argumentation, but those are not normative. There are some norms adopted, presupposed as true by argumentation, and as Hoppe says, to recognize these norms, you have to call three interrelated facts to attention.
00:45:41
Oh, Rick La Greide just asked something similar to what I just mentioned that at a basic level, you have to presuppose the laws of logic and deductive principle as well as universals. Yes, I believe that’s true. I think that’s true too, but we want to find what norms are presupposed because then we can hold up any proposed norm to see if it’s incompatible with these norms. I mean, as a simple example, suppose you were to argue no one should ever argue. I mean it doesn’t make any sense.
00:46:09
You’re arguing that no one should argue, so you’re practically contradicting yourself. So you can see already there are some norms you could propose that are incompatible with what you’re presupposing is true and justified just by virtue of engaging argumentation. So as Hoppe says, here are the three interrelated facts. First, argumentation is not only cognitive but a practical affair. That is, we have physical, real bodies that are in the world and living and sitting next to each other or somehow interacting with each other to discuss and communicate.
00:46:39
Second, argumentation is a form of human action, and that means it implies the use of scarce resources including your body. And third, argumentation is a conflict-free way of interacting. What does he mean by that? I mean if you’re trying to persuade me to adopt your proposition as true, there’s not an implicit threat that if I don’t agree with you, you’re going to hit me over the head because, if you are, you’re coercing me and it’s not a genuine argument.
00:47:11
The nature argument is that the participants recognize that each one is trying to persuade the other by the force of reason alone and that he can deviate from that. Or if you cannot reach agreement, then you’re free to disagree. You’re free to agree to disagree. That is a norm in itself. That is a respect of each other’s domain over their body, for example. Okay, so this is the essence of the Hoppian – the initial insight he had, and you can see why he results – he achieves different results than Habermas and Apel do because of his awareness of the Austrian view of praxeology, the nature of human action. That is informing a lot of his insights here.
00:47:56
Okay, slide 36. I’ve already kind of gone over some of these things, but basically, the Hoppian argument is that, in argumentation, you have to be able to agree to disagree. So you have to agree to each other sides’ control over his own body so that you’re not coercing him, for example. By refusing – by endorsing the rule, I shouldn’t coerce you. I’m respecting that you have the right to control your body, so this is where self-ownership pops out. Okay, so this is the primary political norm that comes out of argumentation or the first one is that people have the right to control their bodies. Otherwise, they wouldn’t be able to make – engage in genuine argumentation.
00:48:38
00:48:41
Okay, now what it really means is each person’s body needs to be owned, but who’s going to be the owner? And again, we have to come up with some reason to say who owns which body. Now, obviously, the natural case for body ownership, which Hoppe has already given, is the obvious candidate. You cannot just say I own you because I’m stronger, or I own you because I said it first. That would be particularizable. It wouldn’t be a rule grounded in the nature of things. It’s not a reason.
00:49:13
However, if you point to the direct control people have over their bodies, that gives them a special link to their body. That is something grounded in the nature of things, something every participant in argument could recognize because they’re all actors in this sense. Excuse me. I’m on slide 38 now. So this is why Hoppe writes, and I’ll get to a quote in a second, but remember, he said that unlike bodies, which are never unowned but always have a natural owner, all other scarce resources can be unowned. So you see the distinction here. What this means is homesteading cannot be the source of ownership of bodies because it’s not like you’re just some disembodied spirit out there wandering the cosmos.
00:50:08
Now you may believe this religiously. It doesn’t change the political fact. You’re not a homesteader before you have a body. You are an agent or a person that has a body. So you can’t even homestead something until you have a body first. So homesteading can’t be the source of ownership of your body. Instead, the key is having some kind of objective link that is better than anyone else’s claim to the scarce resource of your body. And let me just mention quickly here, there’s an interesting aspect of this. Some of this I’m extrapolating from Hoppe, by the way.
00:50:44
I don’t think it’s incompatible with it, but he never said a lot of this directly. But if you had to acquire a body by homesteading or by contract, which are really the only two ways to obtain other scarce resources, you could never own yourself because, if you became an owner of your body, at some point, your mother would be the owner first. So you would be stealing from her because you didn’t homestead it because she was the homesteader in a sense, and you didn’t have it by contract.
00:51:19
Now, by the way, there is an argument you can make, and I have made it in this article I have linked here, that you could make a contract argument. You could argue that the parent has certain natural positive obligations to the child by virtue of the nature of the parental-child relationship and has an obligation to free the child. So you could view the parent as an owner, like a slaveowner, of the child initially, but at a certain point, the parent has a duty to manumit or free the child. That’s not Hoppe’s argument. I think you maybe could make that. But my point is that’s not his argument.
00:51:54
00:51:59
Also, it doesn’t mean slavery is always impossible or always unjustifiable because, for example, if someone commits aggression, in this case you could argumentatively justify using force against them because there’s a reason for it in this case. It’s not just a particularizable, arbitrary assertion. I get to hit you because I’m better than you, or I get to hit you because I’m stronger than you. No. Your argument is I get the hit you because you hit me first, and now you have no right to complain, or something like that. You consented to it by committing the aggression.
00:52:34
But the point is, some people criticize argumentation ethics by saying, well, it’s possible for a master to argue with his slave. It’s possible, but it’s not possible for the master to justify his claim to own the slave, or it’s not possible for him to justify his forced use against the slave unless he can point to some act of aggression the slave committed. But unless he can do that, he couldn’t point to a reason, so his claim would be unjustified, and it would be contrary to the peaceful nature of the discourse itself.
00:53:04
00:53:10
Now, that is how we get to body ownership. When we come to external resources, we go back to Hoppe’s recognition that argumentation is a practical affair. We don’t live on love alone, as Hoppe says, and love and air alone. We have to be able to act to even survive and to get to the argumentation or to participate, but all action employs scarce means in the world. So to be able to participate in this conflict-free interaction of argumentation, you have to use means. Those means have to be used, and either they’re conflicted over, or they’re used peacefully. So you can see that the participants’ argumentation are endorsing the rule that people should be able to use resources peacefully in order to participate in argumentation.
00:53:56
Okay, so that means they’re already agreeing that we need to come up with some property assignment scheme. And again, we come back to what should the rule be, not should there be a rule. No one can argue there should be a rule, and no one can argue it shouldn’t be based upon some objective link. Otherwise, they’re saying it should be arbitrary, and everyone can just say I own that resource, and then we’d have fighting over it because it wouldn’t be one person because any number of people could verbally assert, I own that resource because I claim it first or whatever.
00:54:28
So none of these rules would serve the purpose of argumentation, which is to come up with a rule to allow conflict for use of resources. No one in argumentation could deny that the rules have to be universalizable. No one can deny that the rules have to comply and be consistent with the peaceful, cooperative, civilized aspect of the argumentation in the first place. No one can say – no one could deny that they’ve already accepted ownership of bodies, so they’ve already accepted the implicit idea that the best link to this thing is the one that should decide the question of who gets to use that thing.
00:55:07
So when you establish all these sorts of, what I call what I call grundnorms or ground norms, basic norms, all you need is a little bit of political knowledge and economic knowledge. And libertarianism just pops out as the only norm, the only sophisticated, high-level, political, or ethical norm that can survive all these other norms. Everything else is inconsistent with it. Socialism, in all its forms, is just incompatible with the peaceful, pro-objective link, pro-universalizable, pro-body ownership norms that are at the ground of all argumentative justification.
00:55:49
00:55:52
Okay, so if we remember that the body is a prototype of a scarce good and that we have to find a link for that, now for bod, the link is direct control. But for external goods, these are things that were one point unowned. This is a key fact. Because they’re unowned, and because argumentative participants have to endorse the value of people being able to productively use the resources in the world—that’s what it means to act—then they cannot object to someone at some point practically homesteading or appropriating these goods out of the wilderness.
00:56:29
Someone’s got to use it first for it to ever be used, and because of that fact, we can see that the first user is always going to have a better claim or more objective link to the resource than anyone else. If he didn’t, then there wouldn’t be ownership in the first place, and remember, the participants in argument are always seeking for ownership rules because that is what it means to avoid conflict and to allow resources to be used peacefully. Okay, so they are trying to overcome conflict, so they are trying to come up with an ownership rule.
00:57:04
And if they’re coming up with an ownership rule, that means at some point in the world, there’s an owner of a resource. And that means that owner has a better claim than who? Than interlopers, outsiders, which are late-comers with respect you. That means they come later. So what that means is, implicit in the very idea of ownership, which participants in an argument are undeniably searching for, is this prior later distinction, as Hoppe calls it. That means the fact that there is – it matters whether you came earlier or whether you came later.
00:57:35
It matters who comes first. In other words, it’s implicit in the idea of ownership that the person owning the resource now has a better claim than someone else later. Now, if you think about the Misesian Regression Theorum of Money, for example, he traces the value of money on day – today back in time until we reach a point where the money was a commodity, that is, money had only a commodity value, and no money value and was used only for commodity purposes.
00:58:06
He sort of breaks the infinite regress that way. Well, a similar type of analysis can be used in this respect. If you recognize we want ownership, if you recognize that the owner has a better claim than a late-comer, then that means – and if you recognize that things that are owned were previously unowned and had to be plucked out of the commons at some point by an actor who would then be the first owner, if you realize that there was no previous claim that their owner, who possibly had a better claim than the first owner, then you basically have no conclusion left but to say that the very first owner always has the better claim to property. That is the libertarian rule.
00:58:51
Now, there are some exceptions to this. He wouldn’t have a better claim than someone he contractually gave it to. By contractually giving your property to the second person, now the second person has a better claim. He has a better claim with respect to the world because, with respect to the world, he has an earlier use than them. With respect to the first guy, he’s got a better claim because he can point to the agreement, the act of contractual change. So that’s not a particularizable reason. That’s a reason grounded in the nature of things, in the contractual power of the original owner to use his will to alienate title, etc.
00:59:27
It also – another exception, again, would be if you’re a criminal. If you commit an act of crime or a tort and you damage someone, then that person might be able to claim your property as some kind of compensation. But again, his reason wouldn’t be particularizable. It wouldn’t be arbitrary. It would be based upon the nature of things. It would be based upon the nature of aggression, the non-aggression principle that’s already come out of this, and the fact of the crime or the tort.
00:59:53
00:59:56
I know I’m going fast here, but there’s a lot here and we’re almost done, so we’re making good time, and I can answer questions at the end. So let’s go a little bit farther here. I’ve already talked about this stuff here on page 42. Now, what’s interesting, and it’s shouldn’t be surprising, remember, Hoppe had the strong influence from Kantianism, or at least a realistic form of Kantianism and rationalism and Habermas and Apel in Europe, but was strongly and most powerfully influenced by Mises and Rothbard.
01:00:30
And Rothbard, remember, had a sort of neo-Aristotelian approach. Rothbard’s approach also was somewhat similar to Ayn Rand’s. And remember, Rand would deny any Kantian influence. Rand would deny that her ethics is hypothetical, although I’ve shown that it sort of is, that hers is like Hoppe’s. It’s an if-then thing. I call Hoppe’s approach if-then because that’s the context of the argumentation. If you participate in argumentation, you demonstrate that you’re a civilized person, let’s say. If you adopt these norms that are part of argumentation, then you can’t deny the implications of these norms, the higher-level political or ethical implications of these norms.
01:01:10
And again, that’s similar to Rand’s approach. If you want to live as a man, then you must follow certain rules that are compatible with man’s nature. So it’s no surprise that Rothbard’s approach would be seen by Hoppe as having some similarities to his. Now, and I’ll kind of read parts of this here. What Hoppe wrote was: This defense of private property—that is, his argumentation ethics— is essentially also Rothbard’s. In spite of his formal allegiance to the natural rights tradition, in Rothbard’s most crucial argument in defense of private property, he chooses the same starting point or argumentation but also gives a justification by means of a priori reasoning almost identical to the one just developed.
01:01:55
And so he quotes Rothbard here, this is from The Ethics of Liberty. Here’s what Rothbard said. Now any person participating in any sort of discussion, including one on values, is by virtue of so participating, alive and affirming life. You can see the Randian influence here because she talked about choosing to live. If you were really opposed to life, he would have no business continuing to be alive. Hence, the supposed opponent of life is affirming it in the process of discussion. This is the part that’s like Hoppe’s discussion. Hence, the preservation in furtherance of one’s own life takes on the status of an incontestable axiom.
01:02:31
Now he’s using axiom like Rand did, and I mentioned earlier that’s similar to the a priori type of proposition of Kant – of Misesianism, so you can see the similarity that Hoppe saw here. And another common point comment I’ll make here – what I’ll do is in about five minutes I’ll try to take a break, and then we can have questions after that.
01:02:55
Hoppe also said, look, I’ve criticized natural rights, and I’m not saying that you couldn’t view my approach as a natural law or natural rights approach in the sense because he’s appealing to the nature of man. What he’s appealing to is nature as an arguer, as a rational, justifying being, not just his nature as a rational man, his nature as a justifying person, people who engage in discussion and discourse to justify. So he’s talking about that aspect of our nature to ground and root what he views as natural rights.
01:03:31
01:03:35
Now, so given what I’ve just said about Rothbard and Hoppe’s view that Rothbard’s ethics was sort of a proto version of what he did, Rothbard – it’s not surprising that Rothbard jumped wholeheartedly onto the argumentation ethics bandwagon and this Liberty symposium where Hoppe sort of came out. Rothbard wrote, in a dazzling breakthrough for political philosophy in general and libertarianism in particular, he’s managed to transcend the famous is-ought or fact/value dichotomy that has plagued philosophy since the days of the scholastics and that had brought modern libertarianism into a tiresome deadlock.
01:04:16
Not only that, Hoppe has managed to establish the case for anarcho-capitalists’ Lockian rights in an unprecedentedly hardcore manner, one that makes my own natural law, natural rights position seem almost wimpy in comparison. Now, I think he’s being a bit too self-deprecating here, but I think it’s important. It’s interesting at least to note how impressed Rothbard was by this approach.
01:04:41
I can give a quick sort of anecdotal story here about my own evolution on these lines. In 1988, I was in my first year of law school. And I was already strongly libertarian and vowed to be anarchist or probably already was. But I remember vividly in 1988, that is when the symposium in LibertyMagazine came out that – when Hoppe sort of burst onto the scene. He had sort of been talking about this at some seminars from ‘86 or ‘87 on, getting excitement, but he really came out maybe ‘88 with the first – can you hear me? Are there problems with the video or the audio? Any problems? Can anyone hear me? Oh okay.
01:05:38
01:05:42
Anyway, I read that Liberty symposium, and it just struck me. It’s just finally the most brilliant approach. I mean I’ve been fascinated with it ever since. Now, also in 1988, it was my first year of law school. I had a contracts class, and in contracts class, there is a doctrine of estoppel. And I remember vividly the professor telling us that the sort of legal reasoning behind the doctrine of estoppel. And the idea was that if you make a promise to someone or you make a representation, you lead them to believe you’re going to do something, and they rely on that. And then later, you say, oh, no, I didn’t mean that, or I didn’t really mean to have a promise to obligate myself, then you would be estopped or stopped or prevented from saying something inconsistent with what you had said before.
01:06:36
Now, I thought the reasoning for estoppel in contracts was a little bit confused and weak for various reasons, for example, the idea of detrimental reliance, which what that goes along with is a little bit circular. That’s the idea that if you rely upon – if you reasonably rely on someone else’s promise to your detriment, then then it’s going to be an enforceable. Well, but you see that’s circular because it’s only reasonable to rely on it if it’s enforceable. If the law said those kinds of promises weren’t enforceable, it would be unreasonable to rely on it.
01:07:11
But in the context of the libertarian non-aggression principle, and probably because I had just read or maybe was just about to read—I really don’t remember—Hoppe’s article, and then I soon devoured his TSC in ‘89 or so. In any case, it struck me as the perfect way to envision the non-aggression principle itself because there’s a perfect symmetry about the non-aggression principle, right? There’s the idea that we only believe force is justified in response to force. Now, of course, this is in the context of a theory of property rights.
01:07:46
As I said, the idea of force or aggression is a dependent concept. But still, in the basic sense of forcing its bodies, they collapse into each other. Aggression means hitting someone’s body without their consent. So you’re sort of restating the property view as well when you say non-aggression in the context of interpersonal bodily violence. It just seemed obvious to me. This is brilliant. It seemed to me like a eureka moment, like, oh, well, of course, the libertarian non-aggression principle is justified because what we say is you can justify retaliating against someone for committing aggression, but you can’t justify committing aggression.
01:08:29
And the reason is because the aggressor would be estopped from complaining about me implementing the rule it’s okay to hit people without their consent because he just did that to me. But on the other hand, if he hadn’t done that to me, he wouldn’t be estopped or prevented, but all that means is there’s an inconsistency between objecting to being retaliated against and arguing that – and having committed the aggression. So you cannot justify your early act of aggression, so this is really compatible with and similar to the argumentative idea of the argumentation ethics idea of having to have consistency in your arguments and having to have universalizable reasons instead of socialistic or particularizable reasons.
01:09:19
I had some other detail here. I was going to end here if I had to, so this is why I have my notes for the next class, which will be on epistemology and methodology. And I have here the readings, which I suggest and which – and some additional optional readings as well. I’ve got several slides after this, which you guys are free to pour over and look at the links after the class. I assumed I would not have time to finish all this now, but I think I’ve got the basics of it down. So it’s 7:10 p.m. central time. Why don’t we take a six-minute break and come back at 16 past the hour, and we’ll do some Q&A if anyone has any?
01:10:00
01:10:04
It’s both cognitive and practical. I think that’s actually true. Hoppe actually has some comments somewhere sprinkled in all these writings where he says that an argumentation or discourse even counts discourse with yourself. I think what he means there is your hypothetically reasoning out something, trying to imagine ways to justify. I don’t know how far you can take that, but he has made comments about that, Lucas.
01:10:28
Oh, Jacob says, why does argumentation imply universalization? Could you elaborate on that? That’s a good question. That’s one of the things that has fascinated me for a long time. I think it’s simply because you’re giving reason. In other words, you just have to distinguish between giving reasons and not giving reasons, in other words, just saying something arbitrary and irrelevant or actually using force to dominate the other person. If you’re giving reasons, then that means something. It means you’re trying to come up with something that can appeal to all the participants.
01:11:01
Now, there are some comments in Hoppe, which are, I think, drawn from the Kantian tradition where he talks about universalizability, and by the way, there’s whole books written on universalizability. It’s a very sticky, complicated thing if you look into it too deeply, but I think the essence of it that Hoppe means is the sort of brick in his wall of building this edifice. It’s pretty simple and obvious. It’s basically the idea of giving a reason. Giving a reason means giving something that you can – excuse me – is objectively grounded in the nature of things. And objectively grounded means everyone you’re addressing can see that. It’s an arbitrary thing.
01:11:43
And the whole reason is if you think about this, the purpose of argumentation to justify norms is to avoid conflict. The only way you can avoid conflict is if you come up with a unique reason or a unique assignment of an owner for a good. That’s why Hoppe talks about the problem with having mere verbal assertion be the ground for owning things. So if just having verbal decree would suffice to give you the ownership of something, like I own that land over there because I say so, well, anyone could say that.
01:12:15
A million people could say it at once, and so it wouldn’t solve the purpose of this kind of argumentation. It wouldn’t solve the purpose of conflict resolution or dispute, or avoidance, sorry, because there’s nothing unique about that rule. You need to find an objective link that everyone can see and that can be seen as objectively better in some sense by all fair-minded participants in the argumentation.
01:12:45
01:12:52
Lucas says, doesn’t it go back to Aristotelian logic? You have to concede certain universals when you engage in arguing basic logic. I agree completely. So, for example, that’s why I always say when I’m sort of summarizing it in a more casual way that the idea is that, if you agree with the basic goals of argumentation, which is to allow people to survive, to allow people to have peaceful discussion, to allow people to act in the world, to allow people to employ means, to allow these means to be used peacefully, which means conflict-free, which means you need to assign an owner, if you agree in assigning, coming up with reasons for things, if you agree in this kind of discourse, this kind of propositional exchange, then, of course, you have to agree with the basic laws of logic.
01:13:36
You have to agree with the law of contradiction because that’s where the idea of consistency would come from. If you say, yes, I agree with you that you have the better claim to that resource. I agree that by participating in discourse, conflict is a good thing – conflict avoidance is a good thing, I agree that your claim is better. I agree your arguments are better. I agree that the logical implication of that is that all socialist norms are unjustifiable, and yet I’m still in favor of socialism. I mean it’s just not consistent. It’s self-contradictory. So of course, the basic laws of logic are presupposed, along with the universalizability in any propositional exchange. That’s what the use of reason is.
01:14:23
01:14:28
Dante: I think maybe Rand’s – I think that maybe Rand’s explanation that some humans are kind of savages who contradict themselves, but if they’re civilized enough, they’ll have to respect these rules. Yeah, that’s how I view it. I view it as we haven’t grown up as a species yet, but to the extent people want to engage in this kind of civilized exchange and discourse, they cannot help but conclude that any non-libertarian ethic is unjustified. The entire point of Hoppe’s sort of thought experiment here is to show that you could never justify aggression. It’s that simple because – and the reason is justifying has got to be done as part of argumentation, that argumentation is a non-aggressive activity.
01:15:18
So you can’t justify aggression. He just – he’s not saying you can’t be a socialist. He’s not saying you can’t be contradictory. He’s not saying you couldn’t be a criminal. He’s simply saying it could never be justified. Literally it could not be justified because justification is argumentative. In other words, most people don’t recognize that subtle point, and that’s why they say things like might makes right.
01:15:41
What they’re saying there is that force is justification. They’re saying it doesn’t need an argument. Well, of course, they’re confusing the concept of justification there. If I teach you over the head or if I kill you, it doesn’t justify my having done it. It doesn’t prove that it was justified or right. It just means I got away with it. Jacob asks, while the argumentation ethic provides an argument against physical aggression, does it provide any argument against fraud? Okay, so the way I look at that is the argumentation ethic basically establishes the fundamental idea of assigning property rights in accordance with these objective links.
01:16:25
So in the case of the body it’s self-ownership. In the case of other things, it’s the Lockian idea of homesteading or original appropriation. And as sort of a corollary is the idea that someone who uses force to violate that is demonstrating that they’re not part of the civilized order. They’re not respecting these norms, and they provide a reason or an exception to treat them differently than other people who haven’t agreed to be respectful of other people’s property rights. So they can be treated as technical problems or outcasts or outlaws or enemies basically. So it’s just a straightforward implication of that, that fraud, if you view fraud as a species of theft, not just dishonesty, but fraud basically is when two parties are engaging in an exchange, and one of the parties is giving say, his money to the seller conditioned upon certain conditions.
01:17:27
As the owner of the money, he has the right to place conditions on that. He has the right to say the title to my money passes to you only if and when you give me those apples. And the word apples has a meaning, and the seller knows what it means because of a certain determinant meaning.
01:17:44
So that’s a condition of the transfer. So if the seller pawns off rotten apples or poisoned apples to the guy, then the cellar knows he’s not satisfying the condition. So the title to the money never transfers, and yet the seller is taking possession of that money and maybe spending it. So basically, he’s in knowing possession of someone else’s property. The property title never transferred to him because the condition was never satisfied because of the deception. So fraud is simply a way of causing there to be an unsuccessful transfer of title, which leads to an active conversion or theft really by the seller. So I view fraud as just a case of theft by trick or a case of uninformed consent, and so that’s just a natural consequence of the interplay of these property assignment rules that come out of argumentation ethics itself.
01:18:38
Rick La Greide asks, doesn’t the negation of the underlying foundations of argumentation undermine the laws of logic and what it means to be human? People cannot avoid them even if they say they don’t believe them. I think that’s a fair statement. I do agree with that. I do.
01:19:00
Dante says, in a practical sense, the 300-pound man can rape a young girl anytime he wants, and the girl needs guns. Well, the word “can” has a special meaning here. Yeah, he can. It’s possible to violate rights. It’s possible to not care about justifying your actions, and it’s possible to commit an action that could not be justified argumentatively like that. So argumentation ethics only establishes what rights we have. But establishing what rights we have just shows a normative truth.
01:19:35
It doesn’t – rights are not self-enforcing in any system. People can violate rights. Injustice is possible. Crime is possible. So of course – now, as a practical matter, I do believe that understanding and promulgating and persuading people of right and wrong and of rights can have strategic or practical value. In some cases, you can persuade people to leave you alone and respect your rights, and I think actually that’s what happens in society.
01:20:06
Most people privately respect other’s rights. They’re not consistent about it because they vote contrary to that, but they do it basically. So I think, as a practical matter, this type of argument – it’s a framework. This type of normative and rights framework is used to persuade the members of a certain community of what types of laws are justified. And then we set up procedures based upon those, and then the community of people feels justified in, say, punishing or killing or hunting down or ostracizing people that are on the outside.
01:20:52
Now, as a practical matter, society will only survive if that community of people is large enough, relative to the criminals in our midst to survive. It’s possible that that would be 1%, and we’d all die or we’d live in some kind of chaotic, barbaric state. But if you look around the world today, as a practical matter, I don’t think we do. I think we have society, and it’s only because and to the extent most people respect rights, and then they come together and support each other when they need to, to fight against the outlaws.
01:21:24
01:21:35
Any other questions? Unless there’s anymore, why don’t we call it a night? I don’t know who hear is at the Mises or university. Oh, there’s one more here. Okay, this is just a comment by Dante. Yeah, I agree with that comment, Dante, about guns and states with power. Hoppe has a comment about how states that are economically more liberal internally tend to be more aggressive externally, and the reason is because they have more wealth produced by the free market internally. Of course, America is the classic example, and that gives the state, which parasites off of the economy, more weapons than other states, so it’s able to dominate them, so it’s sort of a paradoxical thing.
01:22:40
01:22:45
Rick says – well, Tito says, the USSR didn’t aggress abroad by that reasoning. Well, Rothbard actually argued that they were less imperialistic, and I think Hans Hoppe would agree that the USSR is less able to be imperialistic because they had less resources to do it because their economy was in tatters. Jacob – okay, let me take one more – another question here. Rick asked about property rights being a necessary condition to argumentation and what you said is being reliant upon on property rights. Is this a major point? Sorry, maybe you can restate it. I’ve kind of lost what – I don’t know what the major point is.
01:23:32
But let me ask Jacob about – let me talk about Jacob’s question about – Jacob Hill asked does the inability to sever the direct link with one’s body make it incapable for a person to willfully sell themselves into slavery? Okay, I think this is one of those areas of libertarianism that has been dealt with only in sort of scattered ways, not extremely systematically. I don’t know what Hoppe has written about this. I think he’s roughly in agreement with what I’m about to say.
01:24:04
Rothbard said that because – see, Rothbard’s argument for inalienability was that it’s impossible to sever your will from your body. Now, I don’t think that’s the best argument for it because you – there are ways you can be a slave even though you still have your will. For example, you commit a crime. I mean it’s justified. It’s hard to argue that it’s justified in some cases.
01:24:37
It’s hard to argue that it’s not justified at least in some cases for the victim of an aggressor or his agent to imprison or use force against – basically to enslave the aggressor, to jail him, to kill him, to hunt him down, to at least incapacitate him until the authorities arrive. So you’re treating this person like a slave, even though he has a will even though he objects. The question is, is it justified? I mean how do we own animals? We own animals even though they have wills of a sort because we have the right to dominate them, to use physical force to have our way.
01:25:18
Now, you can only own resources in accordance with their nature. I can own an inanimate object in a certain way. I can own a river in another way. I can own the airways in another way. I can own land in a different way than I own a sword. And likewise, I think you can own other humans in a different way. You can’t control their bodies directly because they have direct control, but you could physically use force against them to coerce them into doing – to abiding by your commands.
01:25:45
You could put a fence up around them, or you could shackle them and basically have a will, makes it impossible to enslave him or justify it. So the better argument in my view is, if you look at the distinction, which I’ve tried to draw and which is implicit in an Hoppe’s framework, which I elaborated tonight, that the body was never unowned. And it was not acquired by homesteading, but alienable objects were. The right to own something only means the right to control it.
01:26:16
That doesn’t – that just means you have the right to say yes or no if someone else wants to use it in a certain way. It doesn’t necessarily mean you have the right to sell it or abandon it. We’re used to thinking that the alienability is an aspect or an incident of ownership because you can do it for owned things, that is, external resources. But it’s not a feature of ownership per se. Ownership per se only means the right to control. The reason that the right to control translates into the right to alienate in the case of acquired things is because you acquire them.
01:26:53
If you acquire it as an owner, that means there was a moment in time when you took possession of this thing and made it clear to the world that you intended to own it as an owner. You put up borders. You maintained possession of it. You defend it against attackers, etc. But as soon as that ceases, as soon as you cease to want to be an owner, you unacquire it or abandon it, let’s say.
01:27:19
So that gives you the ability to take these things into your patrimony, we might say, or your estate or your ownership, and to undo it. It’s just an external object. You can acquire it. You can unacquire it. So ownership translates into the right to sell or to give away or to abandon in the case of acquired things. But you never did acquire your body, so there’s really no way to undo it. There’s no way to undo the fact that you have the direct link that gives you the better link to your body – you have the direct control that gives you a better way to control your body than other people.
01:27:53
There’s no way to undo that fact. In my estoppel terminology, what you could say is, if you promise to be someone’s slave, you’re just mouthing words. And if the purported master tries to use force against you later to stop you from running away if you change your mind, he is committing aggression because you didn’t commit and you didn’t – because you never committed aggression against him, so his use of force is not retaliation. It’s not in response to my use of force. See, I never committed aggression. I just said something. So there’s no justification for him to stop it. In other words, there’s nothing in libertarianism that says you can’t change your mind.
01:28:35
If a guy says I’m going to box you tomorrow, and tomorrow comes and he steps into the ring, he’s consenting to being hit. But if he refuses to step into the ring, he can’t be thrown into the ring and forced to box. He’s not a criminal. He hasn’t committed a crime that justifies him being treated like that. So that’s my approach to inalienability is that the only way to alienate your rights is to commit an act of aggression.
01:28:59
01:29:05
I’ve written on this in two or three articles on my website. Just search for the word inalienability on my publications page. Rick says I’d like to hear Walter Block’s contribution to the slavery discussion. Do you know what he thinks? Yeah, I’m pretty sure what Walter thinks. So Walter says, well, ownership means you can sell something, and you agree we’re self-owners, right? So you can sell yourself. I mean that’s it. That’s his argument. So I think where he’s being tripped up is he is assuming that ownership includes the right to sell, ownership by its nature, but it doesn’t. Ownership means the right to control. The right to control doesn’t mean the right to sell necessarily.
01:29:52
It only means that you have the better claim to control than someone else. In fact, if you think about the right to control per se, it means you don’t have a right to sell. It means that your rights – you always have the right to say who controls this resource with respect to others because you are the owner. But as I said, in the case of an acquired good, you can abandon it, and that gives you the right to get rid of that ability to have the better claim because you’ve now abandoned your ownership of it by selling it or whatever. But there’s just no way to do it with something you didn’t acquire with your body.
01:30:24
01:30:34
He thinks is plausible. I’m not sure – Walter thinks you can sell yourself into slavery. He thinks you should be able to. And in fact, Walter is a strong advocate of Murray Rothbard’s views, and Rothbard had a few, I think, a little bit confused and contradictory comments in his contract theory, which are tripping Walter up. Now, if Walter were here, he’d disagree with me. We can have a nice argument about it. But what Rothbard says is, his contract theory is great. But he has a comment that if you promise to pay someone or if you have a debt contract, and you owe someone money, like let’s say $1100. You borrow $1000, and then a year later you’re supposed to repay $1100, $1000 with interest.
01:31:23
And then you are unable to repay the creditor on the due date, then you’re committing what Rothbard calls implicit theft, implicit theft, which I don’t know what that is. And then he says, theoretically, debtors’ prison would be justified, except he thinks it’s disproportionate. He thinks it’s too extreme. But theoretically, you’re committing an act of theft, so you could be jailed. Now, I think that is wrong because there is no theft if something doesn’t exist. The $1100 doesn’t exist. The borrower doesn’t possess it. He doesn’t own it. How can you steal something that doesn’t exist?
01:32:04
So Rothbard will sometimes change his emphasis, and does Walter Block in that kind of case, and he’ll say, well, no, but you stole the original $1000 because that was given conditionally. Well, no, it wasn’t. The $1000 was given outright, had to be for the borrower to be able to spend it. The $1000 was given unconditionally. It was given in exchange for a future promise to a future thing.
01:32:32
If you can reclassify that act of transfer of the $1000 a year later as being theft, well, that means you’re going back in time and changing the nature of what happened year ago. Well, that violates what Hoppe points out as an important aspect of property is every moment in time, any normative system needs to be able to tell you what you’re permitted to do with what resource right now. Who is the owner of this resource? So if the borrower is the owner of the $1000 the date he borrows it, which he has to be to be able to lend it – to be able to spend it for the project he’s borrowing it for, then you can’t change that later. You can’t set some time where you go back in time, so neither one of these things can be stolen.
01:33:17
The $1000 was not stolen. The $1100 doesn’t exist. So there’s no possible act of theft, but because Rothbard said there was, Walter uses that, I believe, to say that a promise to sell something and failure to live up to it could be a type of theft, and he even means your body. So Block has this criticism of Hoppe, says Tito Warren. Which one is that? The only one I’m aware of that is significant is on immigration, which we probably will talk about if we have time during the political issues, lecture number six. But I think he is for immigration. Defense of national borders, I don’t know about that one. I’m not aware of any difference between them on that. I think they’re both anarchists and believe in private defense in that regard.
01:34:12
01:34:15
Dante asks a question about argumentation ethics and brute force. If we want a world with more freedom, we need to balance the distribution of guns. But always the savage with more guns will do whatever he wants. That’s always been the story. Well, of course, that’s – this is the problem of the state I believe. The state is inherently an aggressive institution and doesn’t respect individual rights. To the extent you have a private society order, capitalism as Hoppe defines it, you have to have widespread societal respect for property rights in the first place. And so I think you would have people arising to be criminals, and they would be outlaws and hopefully be able to be subdued.
01:35:05
Jacob asked, is there any recourse for the lender against a non-paying borrower? Well, sure, of course. I mean I don’t think he can be sent to debtors’ prison. But in the simple contract that I gave, I didn’t specify further conditions. But of course, knowing this reality, knowing that it’s possible that the borrower could be penniless on the due date, then the – you could imagine a set of subsidiary, or what we call ancillary title exchanges that accompany and support and relate to the original exchange, which is the creditor says, in exchange for me giving you $1000 now, you hereby give me, in one year $1100 if you own it. See that if-you-own-it is always there because the future is uncertain. That’s an inherent condition of the deal.
01:35:56
And the creditor knows this, of course. So he would say, and if you don’t have the money on the due date, then you owe me – then whenever you come into the ownership of subsequent funds at a future date, that becomes my property with interest accrued at a certain rate, etc. So of course, or you could have a deal that, if you have a job, then one-third of your salary becomes mine as soon as you’re paid it by your employer. That’s a way of garnishing wages to pay the debt off. But yeah, you’d have to make these agreements, or they would probably be implicit, but they’d probably be made explicitly if they had to be as part of the original debt contract. But it would be a series of title transfers, conditional, future-oriented, title transfers.
01:36:42
01:36:57
Oh, Andre says – he meant defense of national borders from immigrants. Well, we will talk about the immigration issue in lecture six. But what Hoppe has pointed out with respect to immigration, in my view, is that, in a statist world, there are costs to people because of the state’s role, costs from immigration that would not exist otherwise. And I think he’s right about that. He calls it a forced integration and other effects. But he explicitly says that he does not favor the federal government, say, in the US enforcing this. And he favors devolving it down to states and then the cities and the towns and ultimately down to the individual, which is the anarchist view.
01:37:48
01:37:52
Lucas says – well Hermang Tanna has got to go. Thank you very much, Hermang. I won’t go much longer so people that have to leave early don’t miss much. It’s 25 past the end, so let’s go a couple minutes more at the most. Lucas says, isn’t it impossible to have rights and be considered property? Selling oneself into slavery would be an invalid contract because there’s no legitimate property involved in the transaction.
01:38:17
Well, I mean that is another argument I’ve heard. Another argument I’ve heard is that, if you become someone’s slave, you would have to obey in order to commit aggression, and that’s illegitimate. I don’t think those are the best arguments against voluntary slavery contracts. I do think your body is property, and if you could sell that somehow, then that would be a valid contract. I just think the problem is what I said before, that to be a slave means the master has the right to use force. But the right to use force is only legitimate if it’s response to aggression. It’s not legitimate if it’s not in response to aggression, and the slave, by saying I promise to be your slave, hasn’t committed any aggression.
01:39:01
I’m not so sure if that’s the best argument, although it’s on the side of the right answer, but that’s not my approach. What we might want to do is ask Hoppe a question for the Q&A and just get him to elaborate on or confirm his specific view of inalienability because I believe he has the same view as I do on this, but I don’t remember him writing on it. So I may add that to the list of questions that I’ve been developing.
01:39:30
01:39:34
So why don’t we call it a night? Oh, sorry, one more. It’s okay. I’m sorry having rights and being owned – well, that’s true. But I think if you become a slave and you have no rights or reduced rights, I mean imagine a criminal who’s in jail. He does not have the right to escape. He does not have the right to use force to object to being punished or whatever by the victim or the victim’s agents or representatives.
01:40:01
So to the extent you’re owned by someone else, you don’t have rights. I mean if you own a goat, the goat doesn’t have rights. If you own a human, for some reason the human doesn’t have rights, so it’s not impossible. This is sort of a variant of the Rothbard idea that it’s impossible to alienate your will. I don’t think it’s relevant that it’s impossible to alienate your will. I don’t think it’s impossible to have less rights. If and to the extent you are someone else’s property, you’d have less rights. The right is the right to control that body, that scarce resource. So the question is, who owns it? Is someone else the owner, or are you the owner? And it’s logically possible for someone else to be the owner, as we see in the case of criminals. The question is, is it justified? And I think it’s just not justified by making a promise or a statement.
01:40:48
Lucas: in a free market for criminal defense, there would still be no coercion. It would all be contractual. Well, that’s a different argument. Oh, contractual punishment. Well, we’ll talk about that in one of the lectures too about Hoppe’s view about the anarchist world. But there’s a lot of debate among libertarians about whether physical punishment, even if it’s theoretically justified, would be resorted to on a systematic, institutionalized basis in a free society. I tend to believe that a restitution and ostracism system would be what would emerge for various reasons. It’s cheaper. It works better for everyone, etc. Danny, you’re right. Block does make the argument about the child. I’ve heard that before. I just don’t think it’s a good argument.
01:41:44
Block argues that if you could sell yourself into slavery to save your child, you get the money and then you renege, then you stole it. See, you’ve stolen the money that you got earlier. He’s making the same argument I pointed out earlier. He’s using that Rothbard debtors’ prison argument. He’s using this idea that you could do something in the future that changes the character of an earlier transaction because, if you’re given a million dollars, you spend it on your kid. You save him, and then you refuse to be a slave. You don’t have the million dollars, so you can’t steal the million dollars in the future because you don’t own it.
01:42:21
And what Walter’s only resort is to say, well, you steal it retroactively. Well, how is that? How can you change in the future by your actions what the characteristic of an active transaction was in the past? I don’t think you can do it. So I do disagree with Walter on that issue. We’ve had fun debating it, but he’s great, and he has some good points. So let’s call it a night. I appreciate it. Thank you. You’ve been a great group tonight, and it was fun.
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.). See also Freedom and Flourishing: The Works of Rasmussen and Den Uyl Edward W. Younkins. [↩]
This is the second of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.” I’ll release the remaining lectures here in the podcast feed in upcoming days.
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 2: TYPES OF SOCIALISM AND THE ORIGIN OF THE STATE
Video
Slides
TRANSCRIPT
The Social Theory of Hoppe, Lecture 2: Types of Socialism and the Origin of the State
Stephan Kinsella
Mises Academy, July 18, 2011
00:00:00
STEPHAN KINSELLA: Can you guys hear me okay? Video and slide showing? Hello? Test, test. Okay, hey, good evening, everyone. It’s 6 p.m. central time US, later for some of you I know. So let’s get started. If there’s any initial questions about last week’s lecture, which I’ll go over some of in a little bit, I’ll be happy to take them now. But tonight, what I would like to concentrate on, I’ll catch up on some of the things I didn’t cover last time and talk about Hoppe’s views on types of socialism and the origin of the state. And I don’t know if I’ll have time to get to de-socialization. So, by the way, I posted last week a couple of funny things to the forums about “Drop It Like It’s Hoppe,” a sort of rap thing by a friend of mine. And also, a Facts About Hoppe, which I thought were amusing, so hope people enjoyed that.
00:01:02
So let’s go on here. So quick review, last class we talked about basically Hoppe’s place in the Austrian and liberal sort of literature and scheme, his influences, his style, his background, his basic orientation. And we talked about basic fundamental property-based and human-action-based, praxeology-based foundational concepts and principles, which run through most of his work, various implications of the human action axiom like conflict and scarcity, choice and cost, and profit and loss, and ends and means and causality, and the sort of methodological dualistic approach of Mises, which basically is looking at the causal world with the scientific method approach and more empirical approach, that is paucity, physical laws, and then trying to test those laws to see if you can falsify your hypothesis, which is the sort of standard way most people think of science.
00:02:14
But the Austrian view is that’s one type of science. Another type of science is the social sciences, which are focused on – can anyone hear me, or is it just Rick that’s having a problem? Okay, so I’ll keep going. Methodological dualism, which looks at the causal world in one sense and which, in the case of humans, would be human behavior, just analyzing what motions human bodies go through, or trying to understand the human ends and means and purposes – excuse me – which is the teleological realm. And from that realm, we know certain things a priori. We know that humans have ends or purposes. They employ means. There’s opportunity cost. They have choice. There’s a presupposition of causality.
00:03:09
If you didn’t presuppose causality, you couldn’t act because action employs means, which are scarce means in the world, which are causally efficacious at achieving your ends, which are believed to be. So an operative presupposition of action would be causality as well. So these are the a priori things that come from this side of dualism. Then we talked about different property-related concepts like contract, aggression, capitalism, socialism, even the state, which are all defined in terms of this fundamental concept of property.
00:03:43
00:03:46
I’m going to go to slide three. So today we’re going to continue the discussion of property, talk about how the state arises and what its definition is, and then talk about different types of socialism or statism. And if we have time, we’ll get to de-socialization, which I doubt we will actually, but that’s okay. We can cover that next time. The readings would be chapters three, four, and five and, to some degree, six of TSC, Theory of Socialism and Capitalism, also Hoppe’s article “Banking, Nation States, and International Politics,” which is chapter three of his EEPP book, and finally, “De-socialization in a United Germany,” which we may not get to today.
00:04:33
Okay, so let me just make one note. I don’t know if I made this clear enough last time about the concept of property. Many of you may have noticed that this word is used a little bit carelessly by a lot of people, libertarians and others. It’s used sometimes to refer to the scarce resource itself. Like you’ll say my car is my property. So they use the word property to refer to the thing that is owned. But technically it’s more of a relationship or a denotation of the ownership right that’s a legally respected right.
00:05:14
Now, legally doesn’t mean state law. It could mean private law, but basically some kind of institutionalized, legally recognized relationship, that is, a right to control a given resource. So I think to be careful, we need to think most of the time of property as the ownership right in a resource, not the resource that is owned. And this usage sort of goes back to the traditional usage of the word property, which has been used for hundreds of years in liberal thought, in classical liberal thought.
00:05:52
Richard Overton in 1646 put it this way, talking about self-ownership: “To every individual in nature, is given an individual property by nature, not to be invaded or usurped; for everyone as he is himself, so he hath a self propriety, else he not be himself.” So you see the propriety is sort of like a proprietorship or ownership over yourself. It’s not yourself. It’s the ownership over yourself.
00:06:20
And John Locke in 1690 in his Second Treatise of Government has this classic formulation. Though the Earth, and all inferior creatures be common to all men, yet every man has a property in his own person, and nobody has any right to it but himself. So we need to think of property as the relationship between an actor or an agent, that is, basically a human being, and some scarce resource, including his own body, which is also a scarce resource. So property answers the question who has the right to control this resource. It’s not who has the actual control of the resource. Actual control can be thought of as mere possession or – so think of Crusoe on a desert island.
00:07:07
He would actually have control of resources that he employs as means in his actions, but he really wouldn’t have ownership because he wouldn’t have any legal right, because a legal right is something that other people can respect. So the legal right is more of a social concept, which is compatible, by the with way, with Ayn Rand’s view of rights as social sort of devices.
00:07:32
Now, there’s a really good definition by A.N. Yiannopoulus. He is one of the world’s leading civil law scholars. He’s in Louisiana. The civil law is one of the two great legal systems in the world, the common law, which is in England and many of the former commonwealth or former commonwealth countries like most of the US, most of Canada, etc. And then the other great legal system is that in the continent, so it’s sometimes called the continental system in Europe and also in Louisiana in America for historical reasons and in Quebec in Canada and Scotland to a degree actually, in England. That’s called the civil law or code-based systems.
00:08:20
00:08:24
And Yiannopoulos – now, he’s not a libertarian, but it’s striking how compatible his analysis is with the Austrian libertarian way of looking at property. As he defines it, his treatise, which actually I’ll show you. I love this. This is [indiscernible_00:08:44]. It’s the civil law theories from Louisiana, property, fantastic, very expensive books, but they’re great. So this is this book here, such great works of scholarship. In any case, he defines it as I have it on the page here. I won’t read the whole thing, but basically I’ll read part of it. Property is the exclusive right to control an economic good.
00:09:04
It’s the concept that refers to the rights and obligations that have to do with the relations of man with respect to things of value, and he even goes into here about scarcity. He says that some things are needed, and because of the demand on them, they become scarce, and then laws help govern the use of these things. And then he says property rights are a direct and immediate authority over a thing.
00:09:28
Now, authority is sort of a loaded normative term, which means a legally recognized authority or right to control. He has another nice, compact expression at the bottom of the page here, on page five slide five. Ownership is the – I’m sorry. Possession – ownership is the right to control, or you can think of the right to possess by it where a mere possession is the factual authority that someone has over a thing. So even a thief would have temporary possession over a car he stole, for example, but he wouldn’t have the right to control it. He would just have actual or the factual authority but not the legally recognized authority. So that’s how we need to think of property, and this is how Hans Hoppe thinks about it throughout his work.
00:10:18
Now, let’s continue with what we were talking about last time about homesteading. So homesteading, or sometimes called original appropriation, would be assigning ownership. Hold on a second. Ethan, would you get that for me? It’s right there behind you. Assigning ownership to something that was previously unowned, a scarce resource that was unowned. Hold on a second. Okay, based upon a certain link, an objective link between the owner and the resource, so that is what homesteading is in the Lockian sense and is sort of reformulated by Hoppian and Misesian and Rothbardian terms.
00:11:10
Now, this intersubjectively ascertainable language is more of a Kantian kind of language. Objective is how we would describe it, so he uses those sort of synonyms as you can see here. So in Hoppe’s terminology, in Hoppe’s conceptual framework, any assignment of ownership to an unowned resource other than by this objective link, that is, by mixing your labor or embordering it, would be basically the equivalent of just asserting by verbal decree that you own it.
00:11:44
The problem with this is, this is just a subjective opinion. It’s something anyone can do. Any number of people can use this at the same time, and it doesn’t suffice to establish any kind of link that’s a unique link between the person claiming the ownership and the property. So it doesn’t serve the function of property, which is to assign an owner to this resource so that conflict can be avoided, so that the resource can be used productively and peacefully and as part of an economy in a society.
00:12:14
So as Hoppe looks at it is to homestead something is to emborder. That’s what you can think of it as embordering, to produce border lines. So if there’s any empty field, you could build a house on it or put a farm on it or put a fence around it. So you can put a border up that others can observe in some kind of way. Possessing an apple would be embordering it, showing that you own it and what the limits of your ownership are by the fact of possession for example. So there are different ways of embordering things or homesteading them based upon the nature of the good, the nature of the use to which the human will put it as a means to action.
00:12:55
00:12:59
Let’s go on here. Now, I mentioned earlier there are several fundamental concepts, and some of them imply other concepts that are very fundamental as well. Scarcity is sometimes used by people in a sloppier way to mean things that are not very common, like not very abundant, like if there is some kind of disease among chickens and so we have fewer eggs being produced, you could say eggs are getting more scarce. But that’s more of a colloquial, not a rigorous, economic concept of scarcity. Scarcity does not mean merely nonabundant.
00:13:41
It means that the particular object is a scarce object or what economists call rivalrous. It means there can be rivalry over it. What this means is only one user can use this good at a given time, and if two or more people try to use it, they would have to have physical conflict over it. So you can actually think of a scarce good as something that is conflictable, something that is possible to have conflict over, something that cannot be used simultaneously by more than one person at the same time as a means of action. So you have to think of scarcity meaning this, and this is crucial to Hoppe’s entire political framework and his economics.
00:14:28
And conflict, what he means is physical violent interaction and strife where two or more actors want to employ the same means or where they’re attempting to achieve or use the same end thing, which is basically a means of action. But anyway, it’s a scarce resource. So what is conflicting is actions. It’s not desires. It’s not interests. It’s actions that conflict. Actions always employ scarce means, and when two or more actors seek to use the same scarce good at the same time, it’s not possible. That is where the conflict is.
00:15:06
So, for example, people often use overly metaphorical or sloppy language, and they’ll say something like people fight over religion. But technically that’s actually not true. People never fight over religion. Religious differences might be the motivation for the action. They might be the reason why you clash, but what you’re clashing over is always necessarily scarce resources including land or bodies or the property owned by people, like their money, whatever. So if one religious group invades another to convert them to their religion, they’re actually physically – using physical spears and axes and bows or guns or whatever against the land and property and bodies of the people that disagree with them.
00:16:02
It’s always a clash over scarce resources whereas the dispute’s motivation could be a religious difference, but that’s not what the fight is actually over. It’s always physical means being used against physical scarce material and goods. Imagine if everyone in the world were just some kind of intangible ghosts and can pass through each other and couldn’t actually affect each other or harm each other. There would be no possibility of conflict or disagreement, and there would be no need for the concept of property.
00:16:30
So again, always keep in mind about the Misesian concept of action as action is something that employs means, which are scarce resources that are causally efficacious at achieving a given end. And again, you can see that by viewing human action this way, all actions imply choice. Now, this doesn’t mean that there is actually free will in some kind of ultimate sense. In fact, the question is really irrelevant. If you view another human being and try to understand what they’re doing in terms of human action, that is, teleologically, that is, you understand them the way you understand yourself as an actor, having choice and values and preferences and goals and employ means to achieve ends, then you are viewing them as actors, and you are understanding what they do as action and teleologically. You’re not viewing them as some kind of deterministic or mechanized cloud of subatomic particles following the four laws of physics. Theoretically you could according to Mises and Hoppe
00:17:40
So this is an interesting comment here, which goes into an issue that’s very controversial with a lot of people. It goes to religion. It goes to philosophy. It goes to the issue of free will and determinism. And in my view, it’s not characterized this way by Hoppe or by Mises, but I believe the right way to characterize what they are saying is a type of compatibilism, which I actually agree with. Compatibilism is the view that, in a sense, both determinism and free will are true. And if you have a dualist perspective of human action, I think it helps to explain that because what it means is when you view people as human actors, you’re necessarily presupposing and understanding what they’re doing as if they have choice. So you can’t really say they don’t have choice when you’re looking at them as actors.
00:18:36
If you look at them as mechanistic meat robots basically, then you’re not looking at them as actors. You’re looking at their behavior, not their action, and that would be the causal and possibly deterministic realm. So Hoppe says in Economic Science and the Austrian Method, one of his epistemological works: No scientific advance could ever alter the fact that one must regard one’s knowledge and actions as unpredictable on the basis of constantly operating causes.
00:19:06
You might hold this conception of freedom to be an illusion, and one might well be correct from the point of view of a scientist with cognitive powers substantially superior to any human intelligence or from the point of view of God. But we are not God, and if our freedom is illusory from his standpoint, and our actions follow a predictable path, for us this is a necessary and unavoidable illusion. So, in other words, it might be an illusion. Hoppe’s not really taking a stand, but what he’s saying is you cannot help but regard action as being uncaused or as being free, volitional. That’s free will, even if our bodies really follow a predetermined path as could be seen by some super intelligence outside of our universe or whatever. He’s basically saying that, to me, this is a type of compatibilism because he’s saying it’s possible for both to be true.
[Update: for more on Hoppe’s writing related to this issue, see, e.g.: p. 292 and 301–302 of EEPP:
“One can not know a priori what the specific values, choices and costs of some actor are or will be. This would fall entirely into the province of empirical, a posteriori knowledge. In fact, which particular action an actor is going to undertake would depend on his knowledge regarding the observational reality and/or the reality of other actors’ actions. It would be manifestly impossible to conceive of such states of knowledge as predictable on the basis of time-invariantly operating causes. A knowing actor cannot predict his future knowledge before he has actually acquired it, and he demonstrates, simply by virtue of distinguishing between successful and unsuccessful predictions, that he must conceive of himself as capable of learning from unknown experiences in as yet unknown ways. Thus, knowledge regarding the particular course of actions is only a posteriori. Since such knowledge would have to include the actor’s own knowledge— as a necessary ingredient of every action whose every change can have an influence on a particular action being chosen—teleological knowledge must also necessarily be reconstructive or historical knowledge. It would only provide ex post explanations which would have no systematic bearing on the prediction of future actions because future states of knowledge could never be predicted on the basis of constantly operating empirical causes.”
… “For anyone who is capable of learning, his or her knowledge and actions cannot logically be regarded as determined by a complex of causes operating in a constant way (whether statistically or deterministically). There can only be constants in relation to the causes of events where one is dealing with a world of nonlearning objects, or more correctly, where one conceives of an objective sphere of reality as a world of nonlearning objects. One cannot, however, think of oneself as nonlearning. Not only is an intellect functioning in accordance with the constancy principle necessarily a learning intellect (we learn about how objects conceived of as non-learning behave), but the statement “I can learn” also proves to hold true in other respects. It is in principle not falsifiable, for in order to falsify it one would need to be able to learn. And from another point of view, one cannot justifiably argue against the statement since, qua argument, there must be possible replies to it, and as the validity of an argument (as opposed to that of a stimulus) would be independent of the nature of the reply, such possible replies must be regarded as contingent reactions, and therefore it must be possible to learn.”
“No scientific advance can ever alter the fact that one must regard one’s knowledge and actions as uncaused. One might hold this conception of “freedom” to be an illusion, and from the point of view of a “scientist” with cognitive powers substantially superior to any human, that is, from the point of view of God, such a description may well be correct. However, we are not God, and even if freedom is illusory from His standpoint, for us human beings it is a necessary illusion. 5 We cannot predict in advance the future states of our knowledge and the actions manifesting that knowledge on the basis of previous states; we can only reconstruct them after the event.6”
5The same illusion would also arise in relation to God, if one assumed that He too could learn.
“39. It is true that advocates of the positivist-falsifi cationist research program deny the categorical distinction drawn here between natural events (accidents) and actions and claim that one and the same methodology applies to both realms of phenomena (monism). According to them, both natural events as well as human actions are to be explained by hypothetically valid (and hence empirically falsifi able) general, time- and place-invariantly eff ective causes. In both cases, we “explain” by formulating causal hypotheses, which are either confi rmed or falsifi ed by actual experiences. However, if actions could indeed be conceived of as governed by time- and place-invariantly operating causes just as natural events are, then it is certainly appropriate to ask: what then about explaining the actions of the explainers, i.e., the causal researchers? Th ey are, after all, the persons who carry on the very process of fi rst formulating causal hypotheses and of then assembling confi rming or falsifying experience. In order to assimilate confi rming or falsifying experiences—to confi rm, revise, or replace his initial hypothesis—the causal researcher must assumedly be able to learn from experience. Every positivist-falsifi cationist is forced to admit this. Otherwise why engage in causal research at all? However, if one can learn from experience in as yet unknown ways, then one admittedly cannot know at any given point in time what one will know at a later point in time and, accordingly, how one will act on the basis of this later knowledge. One can only reconstruct the “causes” of one’s actions after the event, as one can explain one’s knowledge only after one already possesses it. Indeed, no scientifi c advance could ever alter the fact that one must regard one’s knowledge and actions based on this knowledge as unpredictable on the basis of constantly operating causes. One might hold this conception of freedom to be an illusion. And this might well be correct from the point of view of a scientist with cognitive powers substantially superior to any human intelligence, or from the point of view of God. But we are not God, and even if our freedom is illusory from His standpoint and our actions follow a predictable path, for us this is a necessary and unavoidable illusion. We cannot predict in advance, on the basis of our previous state of knowledge our future state of knowledge and our actions manifesting this knowledge. We can only reconstruct them after the event. Th us, the positivist-falsifi cationist methodology is simply contradictory when applied to the fi eld of knowledge and action—which contains knowledge as its necessary ingredient. Th e positivist-falsifi cationist who formulates a causal explanation (assuming time- and place-invariantly operating causes) for some action is simply engaged in nonsense. His activity of engaging in an enterprise—research, whose outcome he must admit he cannot know in advance because he must admittedly be able to learn—proves that what he pretends to do cannot be done. See also Hoppe, Kritik der kausalwissenschaftlichen Sozialforschung (Opladen: Westdeutscher, 1987); and idem, Economic Science and the Austrian Method (Auburn, Ala.: Ludwig von Mises Institute, 2007 [1995]). “
“43. In contrast to the behavior of non-communicative entities, then, which is timeinvariant, human actors vary in time and we must communicate with them again and again in order to predict their actions. If man proceeds, as positivists say he does, to interpret a predictive success as a confi rmation of his hypothesis such that he would, given the same circumstance, employ the same knowledge in the future, and if he interprets a predictive failure as a falsifi cation such that he would not employ the same but a diff erent hypothesis in the future, he can only do so if he assumes—even if only implicitly—that the behavior of the objects under consideration does not change over the course of time. Otherwise, if their behavior were not assumed to be timeinvariant— if the same objects were to behave sometimes this way and at other times in a diff erent way—no conclusion as to what to make of a predictive success or failure would follow. A success would not imply that one’s hypothesis had been temporarily confi rmed, and hence, that the same knowledge should be employed in the future. Nor would any predictive failure imply that one should not employ the same hypothesis again under the same circumstances. But this assumption—that the objects of one’s research do not alter their behavior in the course of time—cannot be made with respect to the very subject engaging in research without thereby falling into self-contradiction. For in interpreting his successful predictions as confi rmations and his failed predictions as falsifi cations, the researcher must necessarily assume himself to be a learning subject—someone who can learn about the behavior of objects conceived by him as non-learning objects. Th us, even if everything else may be assumed to have a constant nature, man as a researcher cannot make the same assumption with respect to himself. He must be a diff erent person after each confi rmation or falsifi cation than he was before, and it is his nature to be able to change over the course of time. See also footnote 39 above.”]
00:20:02
In the causal realm, we might be caused and determined. Therefore, in the teleological realm, we view our actions as being explained in the human action framework, which necessarily views our actions as being volitional or making choices. Now Mises says something similar in Human Action. We do not assert that man is free in choosing and acting. We merely establish the fact that he chooses and acts. Now, what does he mean by you can choose but it’s not free?
00:20:38
I think what he’s saying is you don’t have to take this monistic freewill approach and say that we’re completely free. What he’s saying is we choose, and choice has a meaning. It means that the human actor evaluates more than one possible act he could perform. He makes a choice and thereby demonstrates the one that he prefers. Whether it’s determined or not is really not necessary to answer.
00:21:04
So Mises goes on. Some philosophers are preparing to explode the notion of man’s will as an illusion and self-deception because we must follow the laws of causality. He says something similar to what Hoppe said. They may be right or wrong from the point of the prime mover, which is God or the cause of itself. But from the human point of view, action is the ultimate thing. We don’t assert man is free in choosing and acting.
00:21:31
We merely establish the fact that he chooses and acts and that we are at a loss to use the methods of the natural sciences for answering the question why he acts this way and not otherwise. So they sort of regard human choice as a fundamental that you can’t challenge, and whether or not it can be explained or somehow compatible with the apparent determinism that comes from a scientific view of the causal world he doesn’t really care about. It really doesn’t matter, and I tend to agree with that as well.
00:22:00
Now, and the bottom I’ve already gone over, how dualism explains how you can approach things this way. Now, again, the various fundamental concepts—cost, profit, ends, means, and causality—are all implied in action. What does that mean? Well, every action is aimed at a certain goal you’re trying to accomplish. That’s your end. And you’re trying to alleviate some kind of uneasiness that you feel or make the world result in a state of affairs that’s different than it otherwise would and that you evidently prefer. So if that happens, if you succeed in what you want to happen, then you achieve what we call a profit.
00:22:43
Now, profit is not always monetary. In general terms, it’s a psychic profit. That means you’re better off now, or at least you’re better off. You assume that you will be better off when you perform the action. That is, your ex ante perspective is that the action, if successful, if your predictions are right will make you better off. That’s the profit. Now, typically we speak of monetary profit. Now, that’s in an advanced economy having money in a market economy, or as we say, a catallactic economy. That would be catallactic profit. That’s sort of a type of or a subset of profit.
00:23:21
Now, all action has to employ some kind of scarce means, that is, some kind of means that can help you achieve the end you want. So you can see how this way of looking at action, which is really undeniable because the act of questioning is an action itself, looking at action with this structure help you see that these other concepts that are packed into it or built into it are themselves also undeniable. Now, one word that Mises and Hoppe use sometimes is apodictic, A-P-O-D-I-C-T-I-C, apodictic or apodictic, which just means basically ineluctable or undeniable, something that is so fundamental and basic that you presuppose it in the very act of questioning it, so to deny it would be contradictory.
00:24:07
Okay, now, think of it this way. This is an important thing to get, which I mean I don’t think I understood this, this clearly until a few years ago actually because it’s never made explicit. But it’s very implicit in the work of Hoppe and also in Rothbard and Mises. So you can think of these fundamental concepts working together this way. All have to do with property manipulation and ownership. Homesteading or appropriation is how we create new property titles, and we do that by embordering.
00:24:40
And you could call that a productive act because you’re creating something subjectively into the world of commerce and human value that wasn’t there before, in a way – before something is unowned, in a way it doesn’t really exist. It’s brought into human existence by the act of homesteading. So homesteading is the only way to create a new property title. Contract is the owner of property using his dominion over that thing to transfer the ownership of it, so contract transfers property, titles.
00:25:15
And we can think of that as a general concept that includes not only exchanges or even unilateral commercial transfers but gifts and bequeaths or bequests at one’s death by a will, etc. Basically, it’s a transfer of ownership from a current owner to a new owner, however you do it. Now, production transforms owned goods, and we’ll get to this in a minute, but a really important thing to recognize here, and this comes into the intellectual property debate, it creates wealth and value, but it doesn’t create property.
00:25:52
So production means you own something and you work on it using your intellect, using your ideas about causality, using your ideas about what ends are possible what things you can do with it, using your information and ideas about what possible means you can employ to change this or what shapes you could rearrange it into. Basically, you rearrange it into a more valuable configuration. So these are the fundamental property concepts: homesteading, contract, and production.
00:26:22
00:26:26
Okay, so the way Hoppe looks at it and the way I agree is the proper way is to view property rights – first of all, human rights – the only human rights are property rights. Or put it this way. All human rights are property rights because rights are always about who owns what, who gets to do what. And that’s only a question that pertains to scarce goods because anything else can’t be conflicted over, and there’s no social problem to solve there. There’s no need for a rule. There’s no need for a norm. There’s no need for a right. There’s no need for a law. It makes no sense. So all human rights are property rights, and property rights are necessarily only in scarce resources. This is why information is not ownable, and this is why we have to be careful.
00:27:12
I’ve already mentioned a few times how they’re a certain sloppiness with concepts and words, which is okay usually, but you have to be careful not to let it lead you to equivocation on accident or to overuse of metaphors. So, for example, Rothbard explains that all rights are property rights, and the things we talk about like the freedom of speech, freedom of the press are not really independent rights. They’re just consequences of property rights. Okay, so as you can see from the previous breakdown on page 11.
00:27:49
Let me go back – from homesteading, contract, and production, that – back on page 12 now – that creation is not an independent source of ownership. And this is a common view even among Rand who contradicted this somewhat when she’s talked about intellectual property. But Mises, Rothbard, and Hoppe and even Rand were explicit about this. What they view is wealth is created by rearranging already owned factors of production or scarce resources.
00:28:19
I have a blog post that discusses this in detail, which I’ve linked for here on this page, and I’ll quote some of it on the following pages. So let’s take Hoppe first because he’s the subject of the course even though he came later than the others I’ll quote. Hoppe writes: One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. Now, what he’s doing there is distinguishing between peaceful and violent ways of acquiring wealth.
00:28:53
But what I want to focus on here is the first half of that sentence. You can increase wealth by homesteading. Now, that’s true. If you acquire an unowned resource and make it your own, now you have something that’s valuable to you that you didn’t have before. If you have a contractual exchange, by definition, both parties to an exchange, let’s say two people exchange a chicken for a pig. Each one demonstrates by his action that he values the things he receives more than the thing he gave up.
00:29:25
It’s actually not what conventional economists would say. It’s an even exchange, that the value of the pig is equal to the value of the chicken. It’s actually not true. The guy that receives the chicken values that chicken more than the pig he gave up. The guy that receives the pig, receives the pig more than the chicken he gave up to acquire it. So each one is better off after the exchange, which is why every contractual exchange actually increases the sum total of wealth in society, not by a cardinal number, not that you can measure utility, but you know that both parties are better off after.
00:30:02
Lucas says this screws up the model so don’t say this. You’re right, and in fact, this is a presupposition of income tax law. The way it operates, they quite often will tax you for the value they say of something, by its monetary value. But this is actually unscientific because if I pay $10,000 for a car or someone gives me a car that someone else would pay $10,000 for and the IRS will tax me on $10,000 worth of value, well, actually the car may be worth more than $10,000 to me because I paid $10,000 for it, so I value the car more than the $10,000. So you could see that these – the state actually requires unscientific economic principles.
00:30:48
Okay, but now, I left out production. So production, by production, Hoppe means rearranging something you already own to make it more valuable. That is an increase in wealth. So let me go onto the next page and let you see what Rothbard and others said about it. So even Ayn Rand wrote this. This is a fascinating quote, which I don’t think she quite realized the implications of it when it comes to patents and copyrights or intellectual property, which she supported. She acknowledges here very powerfully: The power to rearrange the combinations of the natural elements is the only creative power man possesses. Creation does not mean the power to bring something into existence out of nothing. Creation means the power to bring into existence an arrangement of natural elements that hadn’t existed before.
00:31:43
So you can see what this implies is you own some property, and then you rearrange it to make it more valuable. Apple takes plastic and metal and – excuse me – silicon and turns it into an iPod. If you put it into the blender and see if it will blend, then you turn it back into a useless hunk of matter. But you have to own this matter to rearrange it into something more valuable. Now, the Randians will say you’re creating values, and therefore you own these values, but of course you can see this as double counting or it’s unnecessary. You don’t need to say you own the value that you create. You don’t need to own the product that you create to own the iPod that you fashioned because you had to own the raw factors first that went into it. And you own them because you already own the property that goes into it.
00:32:34
Rothbard says something similar. Man finds himself in a certain situation, and you decide to change the situation to achieve your ends, but you can only work with the numerous elements that he finds in the environment by rearranging them to bring about the satisfaction of his ends. Now, some of the objectivists and Randians have accused Rothbard of plagiarizing from Rand because he used to be in her orbit.
00:32:58
But let me show you what Mises said earlier than both of them about the nature of production. He says there’s a naïve view that regards it as bringing into being of matter that didn’t exist before as creation. But then he says this is inadequate. The role played by man consists solely of combining his personal forces with those of nature so that your cooperation leads to a particular desired arrangement of material. No human act of production amounts to more than altering the position of things in space and leaving the rest to nature. And that part means relying upon causal laws that will get you what you want, but basically, they’re all talking about the same thing.
00:33:41
Okay, now, let’s switch to the origin of the state, the nature of the state, and then we can talk about different types of socialism.
00:33:56
So this is Hoppe’s – a quote from Hoppe. Let me begin with a definition of the state. Now, this is one characteristic of Hans Hoppe which I have always admired is his ability to have very, concise, and essentialist definitions. He doesn’t leave a lot of things to implication like a lot of writers do, and making it explicit helps to clarify just what you’re arguing. And you’ll see this also with Rothbard. Rothbard is a very clear writer. You can understand what he’s saying. If you try to read a lot of political theorists of other schools, even the Hayekian school sometimes, but especially the leftists and the Marxists and others, they are awful, very vague and slippery, and they change definitions from minute to minute. So this is an admirable quality. So his definition of the state is really good here.
00:34:48
What must an agent be able to do to qualify as the state? He must be able to insist that all conflicts – now remember, this goes back to his view of conflict as conflicts over the use of a conflictable or rivalrous or scarce means. All conflicts among the inhabitants in a given territory must be brought to him for ultimate decision-making for his final review. In particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent.
00:35:20
Now, implied in this 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, that is, to unilaterally determine the price that justice seekers must pay for his services. Now, you can see that this actually applies to any state, even a minarchy, and Hans says in other places – he combines the power to tax with the power to have a monopolistic decision-making power in a given territory. And these are actually sort of both sides of the same coin. And in fact, either one is sufficient for the other.
00:35:58
Imagine an agency that didn’t have a monopolistic right to outlaw competition in adjudication services but it has the power to tax. Well, if it has the power to tax, then it can outcompete all other agencies because it can take money from the people and use it to subsidize its services, similar to the way that public or state schools, government schools in, say, the US are hard for private schools to compete with, and that’s why private schools are a minority. Conversely, if you didn’t have the power to tax but you had the power to outlaw competition, then the agency could simply charge a monopoly price for its services, which people will be forced to use because you’re preventing them from using competing services. So that’s the same as a tax. So basically, taxing implies monopoly, and monopoly implies taxes.
00:36:55
00:36:58
Edward asks, what about the mafia and the black-market arbitration that escapes the state’s jurisdiction? I’m not sure what your question is about it. If you want to elaborate, you can, and I would say the state doesn’t have to have 100% complete control to exist. That’s obvious. Even now, there’s a black market, but the state just has to have enough to survive and prosper and stay around.
00:37:20
Now, one difference between – no, nothing is perfect. It’s just sufficient to be an institution that can survive. The mafia is very similar to the state. The main difference is it’s not seen as legitimate. In fact, that’s the primary difference. It’s not seen as legitimate by the people that it persecutes. It also basically taxes people and outlaws competition with violence to some degree. But it’s not seen as legitimate, so it’s always the extent to what it can get away with before people start fighting back. It’s more limited.
00:38:00
The state deludes people into thinking primarily by democracy and the right to vote and by employing them and giving them benefits it makes people – I think – actually Jock says, the state is like Stockholm syndrome. I actually think that’s a good analogy to explain the mentality of people that believe the state is legitimate. They are basically victimized by the state, but they believe the state’s lies that they need the state to survive and to have a good society.
00:38:33
Lucas mentions private arbitration. Yeah, but private arbitration that’s open and legal operates under the sort of umbrella of state control and only with the state’s permission. In fact, if you have an arbitration and there’s a determination and you have your arbitral award and you want to enforce it, if the loser refuses to comply, then what you have to do is actually take that to a state court for ultimate enforcement. And the state actually will not enforce arbitral awards that it deems to be contrary to public policy.
00:39:12
That is, if you try to escape – let’s say you had a – you made your employees sign an arbitration agreement, the rules of which or the rules of the arbitration agreement or the agency that you agree to hear it don’t permit the employees to argue based upon environmental protection laws or human rights protection laws or minimum wage or pro-union legislation. Well, then the state’s courts simply wouldn’t enforce that. So it’s all basically puppets of the state or operating under the state’s wings or control.
00:39:49
So the conclusion to this quote by Hoppe – excuse me – based on this definition of the 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 whoever can legislate can tax, and this is enviable position, and I have a couple links here. I have a link to Hoppe’s article, which this quote comes from, and this thinking runs through a lot of his work, and also a blog post by me, which quotes this and elaborates on it a little bit.
00:40:22
Okay, now, how does the state arise, that is, something that’s different than a mafia that can only get away with so much? So Hans has a fantastic article, which is now a chapter in the expanded edition of his Economics and Ethics of Private Property, chapter three, “Banking, Nation States, and International Politics.” I can’t go into that whole article here, but the fundamental thing to get from it for this purpose here is he goes into a systematic analysis of exactly how the state sort of insidiously takes control of certain institutional features of society to slowly have its tentacles in everything and to basically take control.
00:41:06
So, as he argues, the state takes over and corrupts many institutions and aspects of life such as roads and transportation. I mean all the roads in society are primarily state-owned, which leads, by the way, in Hans’ view, which we’ll discuss in another lecture, to forced integration because, for example, the roads the government puts up are free to use. It makes it easy for citizen A to travel across the country, and the state has antidiscrimination laws so that if the road takes you to a neighborhood that could be private and might have a restriction against people that are culturally different or whatever, but now they can’t enforce this, and so it’s easy for people to get there.
00:41:50
So it’s a way of the state forcing integration on people, which has implications for Hoppe’s immigration views. Communications—as soon as the radio waves started being privatized in the courts, in the common law in the early part of the 19 – I guess 1900s – sorry – yeah, 1900s, the FCC was created and basically appropriated it and monopolized it. I’m talking about the US here. And now they’re trying of course to regulate the internet and communications because communications is a – and of course there’s extreme censorship in more authoritarian regimes, what people are permitted to read, what people are permitted to say, who they’re permitted to talk to, freedom of the press, freedom of speech, of course law and justice, the courts, the police, healthcare now. Money is another extremely important one. The government takes over money. These are all private institutions and features that would arise.
00:42:51
But the state insidiously starts taking over, the financial and banking sector of course and money and education, another extremely important one. That’s explicitly for propagandistic purposes. So when the government takes over so many things like this, it starts getting its hooks into the entire fabric of society.
00:43:12
And then finally the big one—slide 19 now—would be democracy itself. So we have a system of state education, which makes people sort of believe the myths of democracy, and we are the state. And then the state redistributes state power itself, makes everyone a shareholder in the state in a sense, a stakeholder in the state. My mom might be taking social security payments. Someone else might be on welfare. Someone else might have a job at the local prison. Someone else may be manufacturing munitions that – in the defense industry that the Army – the military buys. Someone else may be going to a subsidized school or college. And so everyone starts thinking of themselves as part of the state and dependent on the state and beneficiaries of the state. And they have a stake by their voting and by their lobbying to try to use the state to take from others to get for themselves, and that helps reduce resistance to state power.
00:44:25
So when people view themselves as owners of the state or we are the state, when you can vote and you believe the myth that your vote matters and you can control things when you’re dependent on the state for your survival, then you’re not going to resist the state expansion of power as much as you would if it was, say, a monarchy or even a despot or a mafia where the distinction between the ruler and the ruled is clear. And the fact of the violence and basically the theft that this ruler is committing is visible and evident. And you might put up with a king as long as he provides some benefits to you. He’s kind of harsh. He taxes you. You grudgingly pay it, but at least he sort of helps keep foreign armies away and does some kind of justice.
00:45:15
So the role of these isolated states is that of state actors to be clear, but not in the modern democratic state. Anyway, the point of this article, this chapter is to talk primarily about money and banking, so that’s why he concludes that with the monopolization of law and security production, traffic, communication, and education – oh, by the way, we can mention the TSA here of course and airplane traffic and transportation – excuse me – which the government regulates, as well as the democratization of state rule. All features of the modern state have been identified but one: the monopolization of money and banking, and then he goes into talk about that.
00:45:58
And of course, you can see how horrible that is as well with our current recession and economic cycles, etc., which the state creates, and then the state comes in and rides into the rescue or uses this as an excuse to seize more power in emergency level or to print literally trillions of dollars of money and to hand it over to cronies of the state like Goldman Sachs, etc., GM, the airline industries. And everyone just puts up with it because they believe the state’s lies that the state can protect us from this horrible disaster, which the state itself of course has caused.
00:46:39
00:46:43
Tito has a question. Well, actually, you don’t have a question. Okay, here it is. Tito says, given Hoppe’s definition of the state, will we then presume that, rather than government per se, the state is more precisely a form of government? We can’t accurately suggest that a monarchy is a monopolistic expropriator by its nature, and neither is democracy. Both are governments. The state is, by its nature, a monopolistic expropriator. Well, okay, my view of this, and I think it’s compatible with Hoppe’s views, the word government of course is widely used by libertarians and others again in a sloppy fashion, sometimes as a synonym for the state and sometimes not as a synonym for the state. Hans tends to use the word state, which I believe is more precise.
00:47:31
I would tend to think that the word government means – the best meaning of the word government is some kind of institutions of justice and law in a given society whether that’s a state government or whether it’s a private government. So I would agree with you that, in a way, a state is a type of government. It’s just a – it’s a bad type of government. So I would agree with you on that, but that’s why we talk about the state because that’s a more clear definition.
00:47:59
00:48:04
And, by the way, you might notice this too. So the – when the state takes all these – has all this control over our institutions, they gradually infiltrate our language and our concepts with what I call classificationism. Basically, everything comes down to a state arbitrary classification. Like they’ll say is that a marriage or is that not a marriage? And if it is, then certain rules apply and certain don’t. I mean there’s millions of – hundreds of these things of what an employee is, what – if you’re not an employee, then you’re not subject to certain rules, what money is, what it means to be practicing law or practicing medicine, what income is, what interstate commerce means, etc. I have a blog post on this as well, which you can click on there.
00:48:48
And Hoppe’s view is the state is fundamentally based on a mistake by the populace. That is, it rests upon societal consent because it’s always a small group parasitically leaching off society at large. So it could not survive. It doesn’t have enough physical might to survive if every – if 90% of society saw it as a mafia. It couldn’t get away with what it gets away with. So it’s – the only reason they exist is because people have a mistaken notion about its legitimacy. And this is because of ideological propaganda, which again is accomplished because of its control over media, communication, and especially education and because of widespread economic illiteracy of the people.
00:49:39
Most people, I believe, are decent, and if they really understood the economic consequences of the law that they support, they would be much less willing to support statist and socialist policies and also because of the problem of vested versus diffuse interests, that is, special interest groups are motivated to lobby Congress, for example, to pass laws that help them. And it only affects everyone else in society a small amount, and they don’t have an organized interest in countering it. In this way, we get to a point of warring special interest groups and basically a system like we have now where everyone is trying to get theirs at the expense of everyone else.
00:50:17
00:50:23
By the way, I’m not much of a conspiracy theorist myself. I think Hoppe is more sympathetic to them than I am. And Rothbard was far more sympathetic, but he does have a good point here, Rothbard does, about – this goes back to the state ideology point. He says that the state tries to poo-poo the idea of conspiracies, and the idea if you look at the bottom, this quote here, is that a conspiracy theory could unsettle the system by causing the public to doubt the state’s ideological propaganda. So he’s saying that conspiracy theories are useful because they help people to distrust the state, and I think there’s something to that, but that doesn’t mean that they’re all correct.
00:51:04
00:51:13
Now, back to Hoppe’s essentialist definition of socialism. Remember, he defined it as socialism has to be conceptualized as an institutionalized interference with or aggression against private property and private property claims. Now, you’ll notice here that the standard definition of socialism talks about state control or collective control over the means of production. But Hoppe looks at that as just one – he generalizes beyond that and says look, there’s nothing special normatively or politically about the means of production. It’s just one type of useful property, but there’s lots of types of useful property. They all serve as means to – means as part of action, scarce goods, scarce means that are part of action.
00:51:56
And so – and he also – the word institutionalized distinguishes it from private crime. Now, he’s, of course, a libertarian opposed to private crime and views that as aggression. But it’s just private aggression, not institutionalized. Institutionalized would have to be some kind of regular, systematic, repeated, sustained interference or aggression committed by an institution, an agency in society that is seen as legitimate, and therefore, can impose these laws on people. And capitalism correspondingly is defined as a social system based on explicit recognition of private property and a contractual, non-aggressive exchange between private property owners. So he defines it this way, and some people objected to this because they want to maintain the word socialism to refer to basically communism or state control of the means of production.
00:52:51
But Hoppe’s essentialist definition allows him to sort of see common threads in things that are less than full-fledged or outright socialism or communism and see the common thread between them. And basically, this goes back to his definition of the state. Basically, in Hoppe’s terminology, the state, any state, even a minarchy, is necessarily and to the extent that it exists is socialistic, so that even a minarchy has to commit some kind of systematic aggression, which is socialistic.
00:53:25
And conversely, socialism is necessarily a state, so he basically looks at them, and that allows him to look at it as a spectrum, different types, blends, flavors of socialism, types of states that is, which have different effects on society because they’re different types of states, different types of socialism. So this is why he says there must exist varying types and degrees of socialism and capitalism, that is, varying degrees to which property – private property rights are respected or ignored. Societies are not simply capitalist or socialist. Indeed, all existing societies are socialist to some extent.
00:54:09
Now, he doesn’t mean here that all societies have to be socialist to some extent. What he means is in today’s world, because everywhere that there’s society, there’s a state, and then there’s socialism. And he breaks it down into different types, and I’m only going to touch on some of his key analyses and features of these because once you start reading into this, you get the hang of it. I mean he breaks it down into socialism Russian-style, which most people would call socialism or communism, socialism social-democratic-style, the socialism of conservativism, and the socialism of social engineering. These are – excuse me – chapters three, four, five, and six of TSC.
00:54:53
So why don’t we do this? Let’s talk – let’s continue on for another – a few more minutes before we have Q&A or before having a break and go into some of these so that we can get close to finishing today. So first he talks about socialism Russian-style. Now, there’s not too much surprising here. It’s just that his framework allows him to first analyze the most pristine or paradigmatic type of socialism and analyze its effects.
00:55:27
A lot of these are common to libertarian and Austrian critics of socialism. But basically, he first talks in the book around page 28 about how, if you have any type of institutionalized socialism, that is, redistribution of property rights, then this is going to have bad effects on society. Even in the Garden of Eden it would result in reduced investment and also in non-productive personality types. Basically, people would become more aggressive, and that’s because aggression would become more profitable. And non-aggression is not as legally respected, and you can’t profit from it as much.
00:56:10
So he said even in the Garden of Eden, but now in this chapter, he’s talking about what he talks – what most people call socialism par excellence, that is, that kind of standard thing they think of as socialism, a Marxist sort of social system where the means of production, which means the scarce resources used to produce consumption goods, are nationalized or socialized, that is, controlled collectively instead of being owned privately by private property owners like capitalists.
00:56:39
And you notice here that he’s talking here about the means of production is a type of scarce resource or scarce good. It’s a means of action, but it’s a subset of all scarce resources. It’s the subset that is used to produce consumption goods, which are another scarce resource or scarce good. Now, Hans’s essentialist definition, he would include both of those, the systematic aggression against both of those as a type of socialism. But here we’re talking socialism par excellence or Russian-style, so it’s the typical type of socialism most people think about. The type that the Democrats will laugh when they say it’s ridiculous to call Obamacare socialized medicine.
00:57:25
It’s ridiculous to call that socialism. Now, in one sense they’re correct that it’s not really the state control of the means of production. But it does amount to an institutionalized interference with private property rights, the taxes we need to pay for it, the regulations that tell people what to do or doctors, etc. So it would have similar effects to – at least similar negative effects to standard socialism.
00:57:54
Anyway, Hoppe in this chapter analyzes many aspects of communism or this Russian-style socialism. So for example, he looks at the economic effects, and he breaks it down into three primary effects, and one would be there would be a relative drop in the rate of investment and rate of capital formation. And the reason is when you socialize goods, you favor the non-user and the non-producer, and the non-contractors of the means of production. So you basically get what you subsidize, and this raises cost for users, producers, and contractors, so there’s fewer people acting in those roles.
00:58:30
00:58:34
That means there’s going to be less original appropriation of natural resources, less production and upkeep of the old factors, and less contracting. And these are the ways that wealth is generated remember, so there’s less wealth. Now, this is true. This first effect he notes is true of all types of socialism. Even in a minarchy you’re going to have this effect to some degree, maybe not as extreme or severe, but the same effect. Now, a second effect is it’s going to result in a wasteful use of the means. So that’s also a way of destroying wealth because when you use property for its most desired ends, then you have less wealth being produced.
00:59:16
00:59:20
To stay on track let’s skip over this. You can – if you’ve read these chapters, you’ll see he goes into a lot of detail about the intricate analysis of the different ways these different types of socialism affect society. So then number three, it causes relative impoverishment, a general drop in the standard of living by overutilizing the factors of production. And the reason is, if you’re a caretaker of property, then you have a different incentive to maintain it and use it effectively that a private owner would.
00:59:51
This is sort of the tragedy of the commons to an extent, just a traditional incentive problem of socialism. He also mentions lastly that socialism Russian-style has important changes in the character structure of society. It changes people’s personality over time, and this is true. It makes people less alert to opportunities for profit, less productive. They don’t care as much about anticipating changes in consumer demand because they can’t do anything about it, or they can’t profit from it as much. They don’t develop as many market strategies.
01:00:27
So people’s initiative declines. Their work habits decline. And then if the state has to reintroduce a little bit of capitalism because they’re just going – they’re becoming impoverished, it’s too late to get the people to change. You’ve already ruined the whole character of a society. And in this chapter – let’s go on to the next one, socialism social-democratic-style. So as Hoppe argues, even if you have a moderate-market socialism, you still can’t prevent a relative impoverishment of the population if there’s socialized production to any extent.
01:01:17
So what he explains is that the failures of communism were too apparent, and it was too unpopular. So a lot of these countries, even though they had the same egalitarian and anti-capitalist impulses, didn’t want to put central planning in place. So they put a softer version, which is social-democratic-style, and one – there are two central features.
01:01:40
01:01:45
So unlike Marxist socialism, private ownership in the means of production is not outlawed. It’s permitted except with some exceptions—except for education, traffic and communications, central banking, and the police and the courts. And remember, in Hoppe’s “Banking and Nation States” piece we just went over, these are important ways the state gets its tentacles and control over society. And the second thing is the owners of the means of production only own part of their income that they can acquire from using these means of production, and then part of it goes to the state like in the form of taxes or some other kind of controls.
01:02:20
And of course, this is going to have systematic effects too, similar to but not the same as but similar to Russian-style socialism. There will be less production, more impoverishment, less wealth formation, more leisure. People will value leisure more because it’s – productivity is relatively less rewarding, so they’re lazier, spend more time at leisure. And then people also shift their activities to less productive activities or gray market or black-market activities or things that are not taxes or taxed relatively less. So it distorts the structure of society that way as well.
01:03:02
Now, this – a really interesting shift is when – and most people would recognize that social democracy is sort of a soft type of socialism even though it’s not outright central control of the means of production. But Hoppe, of course, shows that using the essentialist definition of aggression and statism that he has that, of course, every state is socialist to some degree, and conservative policies and conservative types of governments and regimes also are socialistic but in a different way.
01:03:34
So he starts off here with a fascinating overview of the history of feudalism which, by the way, is compatible with the left-libertarian, mutualist-type criticism that is common nowadays of existing property structures that came from feudalism or state favoritism in the past. I mentioned – I don’t know if I mentioned earlier or in another lecture that Hoppe’s views on homesteading of easements is also compatible with the sort of left-libertarian criticism. His idea that, if you have people in a community and they’re traveling to the river, but they haven’t really homesteaded the land, they might have homesteaded an easement, the right of way, over the land, and if someone then homesteads that land, they homestead it subject to the easement or right of way.
01:04:23
This is similar to some of the complaints a lot of left libertarians have, and the fact that this is built into Hoppe’s work shows I think that some of their concerns are already addressed by anarcho-capitalists like Hoppe. So, for example, here he talks about the assignment of property rights to these feudal lords where they started acquiring all this property didn’t come from actual appropriation or contract. They just were given a special privilege by the state or by the system, and then that allowed them, of course, to collect rents from the serfs and to have extra market power and to develop these feudal kingdoms. And this is a type of socialism as well because it’s an institutionalized interference with private property rights.
01:05:16
Whose rights would it be interfering with? It would be interfering with the rights of the people that were actually using the property, for example, the serfs. Basically, it’s taking their property rights from them, and of course this is a different type of socialism than Russian-style or even social-democratic-style, but it’s also going to have negative effects. Hoppe calls this aristocratic socialism. Now, this is perfectly compatible with his other writings, which we’ll get to in another lecture, about the relative superiority of some kind of constitutional monarchy, traditional monarchy.
01:05:48
It doesn’t mean he’s a monarchist. In fact, he’s not, and it doesn’t mean that to the extent these monarchies are feudalistic like this that they don’t have problem as well. They do. But you can still say one type of state is institutionally inferior or superior in different ways than other types. And, as Hoppe notes, these conservative states tend to use price controls, regulations, and behavior controls, which are socialistic in Hoppe’s framework because they interfere with people’s use of their property or their bodies, which is a type of property.
01:06:26
01:06:30
Finally, I’ll pause here, and we’ll take a break. But he also has a long chapter, and we won’t get into this too much because a lot of it has to do with his build-up to his methodology and his attack on positivism. But he’s talking here about, in America and pragmatic, practical societies, which are not really that principled thinking but use a lot of the methods of the natural sciences, a lot of empiricism, influence from Karl Popper where we have more piecemeal social engineering which, by the way, is becoming more systematized.
01:07:04
But one policy here, social security for example – now these, of course, have similar effects to the socialist policies of the other types but different. So why don’t we take a break here? It’s 7 past the hour. Let’s come back at 15 past the hour, and we will resume with a few more slides and then some Q&A. I’ll be back shortly. See you at 15 past.
01:07:31
01:07:34
[indiscernible_01:07:34] question about Hoppe’s arguing that government or really the state is not necessary for law and justice enforcement. Yeah, he makes it explicitly in several places. I think it’s in his book The Myth of National Defense or something like that. He’s got a chapter or two in there on that, and he’s got one or two other pamphlets or articles about this, and I’m going to cover that in our subsequent lecture. But try his book, The Myth of National Defense.
01:08:02
01:08:07
Let me go through a few more of my slides here. I actually – so no, I’ve actually kind of finished what I wanted to go over here. He’s got a nice article, which I’ll cover briefly next lecture on “De-Socialization in a United Germany.” He also has an extended sort of discussion in the previous chapters we just discussed comparing East Germany and West Germany. It’s showing how the difference between those two is striking. It’s a great laboratory case showing the – how sort of this example bears out some of his predictions about his economic predictions about how socialism can affect a society, culturally, personality wise, spiritually, politically, and of course, in varied economic ways.
01:09:06
Now, what he does – you’ll note that Hans is an apriorist. That is, he’s an Austrian in the Misesian tradition who believes in the use of deductive laws, that is, a priori laws. What Mises does and what Hoppe does is they take a starting point, certain undeniable propositions like, for example, the action axiom or the a priori of action. And they deduce certain facts from this that cannot be denied, and then they introduce certain contingent facts to make the analysis more tailored to what we have and more interesting. But these introduced facts are usually a little bit less controversial, or they’re not controversial at all.
01:09:59
For example, the assumption is made that we don’t have a barter economy, that we have catallactic commercial, roughly free-market economy with money. And if you assume that there’s money, then you can make other deductions based upon your basic, fundamental economic laws, and then that hold as long as the assumptions are true, that is, as long as there is money. So this is a common technique of Mises and Hoppe. And so what he does in his chapters analyzing the effects of socialism is he says, listen, I’m deducing all these effects, systematic effects, by basically pure reason, by deductive reason.
01:10:39
Now, he can’t say what the extent of the effects are. He can say if you diminish property rights in this following way, then you can expect to see these types of consequences. There’s a tendency. He can’t say what the extent or magnitude is. And what Austrians believe is that you don’t really – you can’t test or verify a priori laws, but you can illustrate them with historical examples. So that’s what Hans is doing with the Germany and East Germany/West Germany analysis. He’s saying that, look, my preceding analysis is – stands on its own as a deductive exercise with certain empirical assumptions.
01:11:24
But let’s take a look at the West Germany/East Germany case to illustrate it, not to test it fully but just to illustrate it and get an idea of the magnitude of some of these tendencies. So he also has – like I say, we’ll talk in detail next time, and let me explain what we’re going to talk about in the next one.
01:11:43
We’ll talked about the de-socialization. In the next class, we’re going to switch to ethics and Hoppe’s case about libertarian rights and argumentation ethics. We may get into a little bit of more political matters as well, so that’s a reading assignment. I’ll post it on the course page later today. So we have plenty of time. There were some questions which I didn’t get to earlier because I wasn’t – I didn’t stop for all of those. So if I’ve missed any that you want to repeat here or refer me to, or if you have any other questions, I’ll be happy to discuss anything, or if anyone wants to discuss anything, go for it.
01:12:21
01:12:28
Tito Warren asks, what are my thoughts on geolibertarianism? I assume you mean Georgism. I think it’s unlibertarian. I think it’s based upon bad economics, kind of crankish views on value, and the Austrians disagree with. The idea of a single tax is insane I believe. I mean basically it’s a type of socialism because it’s a type of institutionalized interference with private property rights, that is, the right to land.
01:13:04
Now, it probably would be better than what we have now if that’s all you had, but it would, of course, metastasize and turn into a worse tyrannical state like we have now. So I don’t think it’s very sound. I don’t think it makes any sense, and I think it has a fixation on land, with land as some kind of special type of good, but I don’t think there’s any economic case for that. I think land – now I don’t know if Hoppe has written much on Georgism. I know Rothbard did. Rothbard demolished Georgism in some of his articles.
01:13:38
But anyway, the idea of tax is a bad idea, and the idea that you don’t own the product – or the rent comes from land because you didn’t create the land. You only improved on it or something like that I think is nuts. But the libertarian idea is simply always to answer the question who has the right to control this scarce resource? And the libertarian answer is the person with the better connection to it. And so, a piece of land is a scarce resource, and the original homesteader has a better claim to that land than anyone else including this single-taxing agency, whether it’s the community or whatever. So I don’t agree with it, and I know Hoppe doesn’t agree with it. I know Rothbard supposes it.
01:14:31
So are there any other questions? Anything I missed in the – let me scroll up here and see if there’s any questions I missed. If I miss anything, you can call it to my attention. I think most of this was your chatting among each other. I do see Jock posted Proudhon’s definition of government. Let me see here. To be governed is to be watched, inspected, spied upon, directed, law-driven, numbered, regulated, enrolled, etc. You know, I mean this is this sort of leftist conflation of authority with tyranny or with statism, and – so let’s see.
01:15:16
Do I have this on the wrong – I have it on all participants. Let me see if I’m not looking at everything right. Is there something I’m missing here? I have the chat window open. That’s all I can see. I don’t see something about Michael. Oh okay. Let me see what the forum question is here. Hold on a second. There’s a Moodle forum question here, which I missed. Oh I don’t know how I missed this. I thought I had a subscription. Maybe it was just posted. Okay, this is from Eric Stabe.
01:16:07
I’m confused by what seems to be a contradiction in Hoppe’s TSC this week. Let me flip back through the slides. Is this what you guys are talking about, Eric Stabe’s? Oh quickly, I see John McGinnis has asked a question here. Hoppe uses the argument – I wonder why I’m not seeing this. So maybe it’s not focusing it to all. You’ve got to send to all participants I believe. Hoppe uses the argumentation theory but says Mises took Hoppe to a new level. Will you discuss this? Yes, I will in the epistemology discussion. I will discuss that probably two lectures from now.
01:16:49
Okay, let me go back to Eric Stabe’s question. He thinks there’s a contradiction in TSC. In chapters two and three, Hoppe speaks of how socialist economies force people to rely on family – let me cut and paste this here so everyone can see it. This is from Eric Stabe. Okay, socialist economies force people to rely on family, relationships, and persuasion to advance their economic standing rather than ingenuity and skill. Later, on page 70, he says people develop uniform and uninteresting personalities, and the state kills creativity. These statements seem to be at odds. How can a person’s behavior – I’m sorry I didn’t see this question before. How can a person’s behavior be at once – I might need to reply to this later after thinking about it because this is sort of [indiscernible_01:17:49]. Hold on a second. How can your behavior at once, reacting to the same stimulus, become both more private and more political?
01:17:59
Having to rely on interpersonal relationships to achieve advancement would seem to force people to become more personable and seek interaction with others. I’m actually – I’d have to look at it and see. Maybe someone here can – I’m having trouble concentrating on this right now. Does someone else here have a thought on what he’s talking about? Socialist economies force people to rely on the family. I don’t know what he means – to advance their – I’m not sure what you’re talking about in the first part. What I’ll do is I’ll either address this next week, or I’ll try to answer in writing that everyone can see later this week to answer that question. I’ll look at the quotes you’re talking about.
01:18:46
01:18:54
Manjula Guru says, in the readings, socialism is said to be liberalism in the US. Can you explain this? I think you mean the terminology question. I’ve never quite understood exactly how this bizarre shift happened. I mean, from my perspective, the word liberalism used to denote sort of a progressive, pro-individual, enlightenment sort of improvement in the human condition.
01:19:24
Free-market, classical liberalism it’s called now in the US. And somehow the leftists and socialists in the US co-opted that term where its meaning has been changed in the US where liberalism means basically social-democratic socialism, whereas in Europe I believe the word liberalism still means what we call classical liberalism here.
01:19:49
I mean Mises had a book, Liberalismus, classical liberalism, or I think in the American market they called it Liberalism and the Classical Tradition so people wouldn’t think we’re talking about Bill Clinton and the Democratic party. So it’s just a terminology thing. It’s bizarre. Libertarianism has more than one meaning. I believe it has a philosophical meaning, having something to do with free will. And of course, the word civil libertarian is usually a leftist sort of ACLU-type term that refers to people that believe in personal liberties but not really economic liberties, so words just have different meanings.
01:20:27
Edward Dehm: Do you prefer a term to refer to yourself as a non-left libertarian? Well, I actually – I mean I’m sympathetic to a lot of the insights of the left, and I’m sympathetic to the argument that a lot of our history came from the left tradition. There’s also intertwining with the right in some ways. I think that the left-right spectrum is a flawed way of looking at things, and I think they are both types of socialism, and they are both wrong. And they both have more in common with each other than we have with either of them, and I don’t think libertarianism is either left or right.
01:21:03
And I personally – and Hoppe has the same view. I personally get a little bit – I won’t say upset, but I resist the idea, the call among left libertarians for us to learn from our origins on the left. I mean I’m all for recognizing the insights of left libertarians, but as for the pure left itself, I think they’re utterly evil, so is the right, but I think they’re utterly evil and completely unlibertarian. And if anything, they have something to learn from us like economic literacy and intellectual honesty and consistency, and the same with the right.
01:21:45
So I just think I’m a libertarian. Now, I used to say I’m an anarcho-libertarian or maybe an Austrian or Rothbardian libertarian. I don’t even like the term anarcho-capitalist myself, but again, this is about Hoppe, and Hoppe does use the term anarcho-capitalist. He doesn’t mean he’s a capitalist in the sense that it’s criticized by the left libertarians. When they criticize capitalism, they mean the existing corporatist monopoly capitalist institutions we have in place now, which of course, so-called anarcho-capitalists are not in favor of either. It’s just another semantic difference.
01:22:22
John McGinnis asks, capitalism and libertarianism seem interchangeable synonyms according to Hoppe. I think so. I think he’s going with – I guess in the ‘60s and ‘70s, ‘80s, the big libertarians like Milton Friedman and Rand and even Rothbard, they all, for some reason, used capitalism as a synonym or as maybe a proxy for – like a type of metonymy for a free-market order with strong private property rights and a thriving free-market advanced economy, maybe an industrialized economy. So it has – it did become that way, and I think Hans does use it as more of a synonym.
01:23:09
I think Dannys says – Danny Sanchez from the Mises Institute says some left libertarians don’t like the good kind of capitalism either. I agree with you, and this is my problem with their use of the word capitalism because, if you try to corner them and say, well, what we mean by capitalism is this, so we don’t really have a disagreement, they will still disagree with you saying that for some of them it really is substantive. For example, they will say that, well, we’re against authority with libertarians, authoritarianism and being bossed around, pushed around by bosses, this kind of stuff, which sort of buys into this Marxist, leftist view of human nature and the economy and exploitation and alienation from your labor and all these kinds of things, which I think is not – first of all, it’s not part of libertarianism. And I don’t even think it’s compatible with it. It’s certainly not required by it.
01:24:09
01:24:14
Tito Warren: How should we reply to the leftist assertions that hierarchy is bad? And they don’t really answer the question. How should we reply? Well, because it’s – well, first of all, I think it’s not a clearly defined term. What does hierarchy even mean? I mean libertarianism has a clear conceptual framework. When we talk about scarce resources, property rights, aggression, these are all really clear. We oppose aggression. We think aggression is unjustified or immoral. Now, we have our reasons for this, and that is our fundamental view.
01:24:55
And any kind of law that you want to set up that would prevent something that you think is bad like hierarchy, if the hierarchy is not aggression, then a law against it is aggression, so we oppose that, so we have a really simple view. So if they would define what they mean by hierarchy, some types of it are wrong like a state’s hierarchy or laws that impose state power or that give power to some actors like unions, giving them the power to force citizens to negotiate in good faith with them, etc. then we oppose that because it violates property rights. This is the problem with leftists I believe is they don’t really – clearly, they don’t have clear concepts, so I mean I don’t know what to say.
01:25:50
If people don’t want to be rational and think clearly, I don’t know how to communicate with them. But I would say that it’s obvious that some types of hierarchy, if you use a broad term, are justified: natural hierarchies, family relationships, societal relationships. I mean hierarchy just means some things are ranked higher than others in some way, so we can’t be complete egalitarians. I mean maybe give them the Wilt Chamberlain example from Nozick’s Anarchy, State, and Utopia where he says that let’s say we have a completely egalitarian society where everyone is equal.
01:26:20
But then we have freedom, and everyone will want to see Wilt Chamberlain play basketball because he’s great. So they all voluntarily give him a quarter or a dollar or whatever, and after a while he’s going to have an unequal distribution of wealth, yet it was done totally legitimately. No one’s rights were violated. So the only way to stop it would be to come and prevent people from trading voluntarily with each other. But that would be a type of hierarchy, so you can see how it could arise, so it depends on the process.
01:26:50
01:27:00
Sure, you’re welcome, Tito. Sorry, did I miss a question? Any other questions? Something about luck here. I don’t know who brought that up, but of course that is the – that is basically the argument of John Rawls. Let me type it here. I don’t know how many of you are familiar with him. He had a book called A Theory of Justice in ’70 something, early ‘70s, one of the most famous political theory books of all time. And the book that came along as a response to it was Robert Nozick’s Anarchy, State, and Utopia, which I believe, and Hoppe – by the way, if you look at the introduction to Ethics of Liberty, Murray Rothbard’s Ethics of Liberty, written by Hoppe – the introduction was written by Hoppe. He’s got a great section in there where he just totally devastates Nozick by comparing him and his approach to Rothbard.
01:27:52
I mean he argues that Nozick was more of a flashy kind of guy, a razzle-dazzle guy and dilettante, not a systematic thinker, not a foundational thinker unlike Rothbard who was systematic and careful and rigorous. And so, it’s no surprise that Nozick wrote his book and never responded to criticisms and recanted of his libertarianism to a degree later on. And actually Anarchy, State, and Utopia is an argument in defense of the state. Most people think it’s an anarchist argument. It’s not. It’s an argument in defense of the state, how a minarchist state could be justified.
01:28:33
But in any case, John Rawls’ argument that Nozick was replying to was that people are born with – some people are born by luck with better skills or social status than others, and that’s unfair that they can benefit from that. Therefore, we can justify imposing a type of egalitarian leveling effect on society, etc.
01:28:58
01:29:02
Danny asks – well, let me continue this real quick. Jock says Rawls doesn’t prove a rationale for having coercive mechanisms of distribution. You can diagnose the same problems as the veil of ignorance but still find voluntaristic ways of dealing with them. Yeah, I agree with that, but I think he – I don’t know if he does, but I know that his argument is used to justify redistribution. Of course, I think it fails, so I agree with you. It doesn’t actually provide a rationale. But I do think the veil of ignorance argument is very problematic.
01:29:47
Cathy Cuthbert is right. Harrison Bergeron is the Kurt Vonnegut story. Actually, Hoppe cites that story in – I think it’s in The Theory of Socialism and Capitalism or the other book that we went over tonight. In one of his footnotes, he talks about that. It’s basically the state imposing egalitarianism on people’s looks or capacities or skills, handicapping people that are better than others to make everyone equal.
01:30:13
Okay, Danny asks, in TSC, Hoppe uses the term conservative socialism and in general uses a negative connotation of the term referring to people using the state to coercively conserve their place in society. In later works, he uses that term in a positive way. What explains the shift in terminology? Well, I think he’s – in the positive sense, I think he’s talking about cultural conservativism, so he’s talking about traditional, culturally conservative values like the importance of natural elites and family ties and natural leaders and private institutions like marriage and the home and maybe small cultural communities that – so he’s using it in that sense there that he’s in favor of.
01:31:11
And he’s explaining there how the state undermines and erodes that and how, in the absence of state, these things would be more important and would supplant a lot of the institutional functions that are poorly accomplished by the state now. But I think in the first usage, conservative socialism, I think he’s referring to more like feudalism basically and also the republican or the conservative party’s opposition to change and the use of the state to prevent change and to preserve people’s place in society. So I suppose the word has many meanings like a lot of words if he’s using it in one nuance one place. I don’t think they contradict each other. I think it’s just a little confusing because the same word is used in both.
01:32:04
01:32:19
Jock has a comment about European conservatives and being identified with aristocracy and feudalism in Hoppe’s time. I tend to agree with that, but like I said, he’s got – his views on monarchy – most people sneer at this and say, oh, monarchy is ridiculous. But of course, he’s not in favor of monarchy. He uses that to criticize democracy. He’s showing that the common assumption that the move from monarchy to democracy was – the common view is that that was progress. He’s saying that that common view is mistaken. He’s not saying it’s not better in any way. He’s just saying that the common view that was this whiggish, unalloyed progress in society is not good.
01:33:01
Jock says economically a private state is less capital destructive. Yeah, we’re going to discuss that in one of our lectures. I mean he even has a letter to the editor to Chronicles magazine about 15-20 years ago where he argues that private slavery is less economically destructive than public slavery, not that he’s justifying either one, but he’s explaining the systematic economic effects of those. So public slavery is kind of what we have now or what you have in common I would say. Everyone is a slave of this big institution. You have just massive destruction and impoverishment and waste, whereas chattel slavery in the US where there was an owner of a slave, you could expect the owner of the slave to have an incentive to take care of his property. I mean it’s horrible to talk about, but you can analyze these things in a way and basically a private situation – or a public situation tends to be worse economically in a lot of these settings than a private one would.
01:34:07
01:34:11
Yeah, Yuri Maltsev does make that point. Anyway, if you look on Hoppe’s website, hanshoppe.com, under the publications page, if you search for the word chronicles, you’ll see that letter. Just search for the word chronicles. Any other questions?
01:34:31
01:34:35
Edward asks about the is-ought problem in argumentation ethics. Yeah, I’m going to go into that, as much detail as I can, and we can have a good discussion about the whole thing. Cathy, I think if you look at the letter, I think he uses communism as the example unless you’re talking about Yuri, but if you’re talking to me – hold on. Let me try to find it. It’s right here, and I don’t have it in front of me right now. I’ll just give you the link. Here it is right here. Oh, this is a long time ago I think, before he was really well-known, and this is just a letter to the editor to Chronicles, so I don’t think he got much for that, although his uncharitable critics could see them if they wanted to.
01:35:38
01:35:42
Danny says, is it true that Rothbard derived the homestead principle from self-ownership while Hoppe does the opposite, deriving self-ownership from the homestead principle, that we own ourselves because we’re first users of ourselves? I don’t think that’s quite right. I think – okay, we’ll talk about this next lecture more in the argumentation ethics. But my perspective on it is this. I think Rothbard actually didn’t derive it. Rothbard sort of states his natural case like we’ve done already in the first lecture here like Hoppe does as well. And he just takes it as sort of intuitive, illogical consistencies from [indiscernible_01:36:21]. But I think he takes it as sort of a Lockian given that we own ourselves. Hoppe – I don’t think he says we’re first users. That’s his argument for property.
01:36:35
Sorry for my poodle barking. There’s someone walking by. Hoppe’s argument is that you own a resource if you have a better link to it, a connection to it, than anyone else. In the case of owned resources, external goods, the first user has this best connection to it because it was previously unowned, and you have a better connection than anyone else. But his argument in the case – and I wrote about this in my article on “How We Come to Own Ourselves,” “How We Come to Own Ourselves.” It’s on my website along with the Mises Daily. Hoppe argues that the reason you have a better connection to your body is because you have direct control over it.
01:37:24
Now, in a way, that’s just a way of restating the Lockian idea that you’re a self-owner if you think of ownership as an actual thing rather than a normative thing. You are the actual owner. You are the natural owner, the one who actually does control your body. So he has an example. If I want to raise my arm, I can just will it and raise my arm, so obviously I have the better connection to my body. I have an intimate connection with my body. My personhood and my identity are infinitely bound up with this body because I’m the one actually directly controlling it.
01:37:56
That is his argument, and I think it actually is different than the homesteading argument, the first-use argument because if you go with first use, then parents would own their children because the mother – excuse me – the mother owns the matter in her body that grows into the baby. And when it’s born, it’s just coming from her body. She owns it. But Hans’ view is no. The baby or the human, when he reaches a certain point, has self-control, and so basically, he reappropriates the body that you could say is owned by the mother at a certain point. It becomes owned by the baby or by the child at a certain point. So there’s a shift in ownership of that physical resource from the parent to the baby because the baby has a better connection to it, not because of first use but because of direct control.
01:38:57
01:39:04
Any other questions? Tito asks, are children property? I don’t view children as property, and I don’t believe Hoppe views children as property. I think the view is that children are self-owners, but there’s a continuum or spectrum when they develop from a state where they need care and someone to be a guardian for them. So I think the view is that a child has rights. A very young child has rights but doesn’t have full capacity to make decisions, etc. And so, the presumption is that the parent, who has a natural link to the child, is presumed to have sort of the implicit consent of the child to be his decision-maker for his interest like a guardian until he reaches a certain level of maturity.
01:40:04
So the parent is a guardian. That’s why I believe that the Hoppian/Rothbardian view would be that if a parent abuses a child, then the presumption is overcome that this human being is the one the child would – we can assume the child would appoint to be his guardian to exercise his affairs for him. And it would go to some third party who could adopt the child or rescue the child or whatever.
01:40:29
01:40:33
Tito says, are they stewards of the child? Yeah. I mean the word in the law is guardian or in the civil law is tutor or tutrix. Is there a claim to parenthood until the child reaches maturity? I think there is a claim to parenthood, but the claim is – there’s two different claims. There’s a claim of the parent with respect to the child, and that relationship with respect to the outside world. With respect to the outside world, the outside world has to respect the child’s rights and views the parent as the spokesman for the child. So the child doesn’t consent to being abused by an outsider because the parent makes it clear that you’re not going to do that to my child, exercising speaking for the child. But between the child and the parent, I think that the parent doesn’t own the child. The parent has the right by its natural link to the child to be the first one to be presumed to be the spokesman for the child.
01:41:39
Now, I personally believe that the parent has obligations to the child, positive, legally enforceable obligations as I argue in that article, “How We Come to Own Ourselves.” I actually am not sure that Hoppe agrees with that because I think he is pro-abortion rights, although he hasn’t written much on this. But I think that my argument could be used to argue that at least some abortions are at least somewhat aggression because it violates your obligation to the rights-bearing entity that you’ve created. But this is – this course is not about my views. I mean I’m happy to answer questions, but it’s about Hoppe’s views. And maybe we can ask Hoppe. I don’t know if he’s going to want to answer it because he asked me a long time ago to come up with an argument justifying abortion, and I gave up on it.
01:42:38
How would circumcision be viewed in this regard? Well, look. I’ll give you my perspective on this. Oh, well, Jaya Dixit asked about the child wanting to leave. Well, that’s Rothbard’s view, and I presume that Hoppe agrees with that. When the child is mature enough to say no basically or I want to run away, the I think he has demonstrated a certain maturity. But I mean I think practically, social customs and practical common sense would establish guidelines for that. I don’t think it’s going to be a 3-year-old or a 5-year-old.
01:43:17
But in any case, about circumcision, I mean look. I’ve read all the debates about this. My view is that female circumcision would be such an unnecessary and mutilating type of act that, if the parent does that, you wouldn’t – the parent would lose their – they would lose their right to speak for the child because most people would assume that the child would not appoint such a person to be their guardian. Male circumcision – I mean my personal view is even if you’re against it or you wouldn’t do it yourself or you think there’s arguments against it, I don’t think it’s so heinous and so obviously wrong that you can’t say that’s not within the parent’s scope of authority to decide for the child.
01:44:07
And most people that are circumcised that I’m aware of tend to be glad that they were or don’t resent it, sort of blessing it retroactively, indicating that there’s empirical evidence to think that it’s reasonable that the child would consent to the parent having the authority to make that decision for them, even if it’s largely on cultural or cosmetic grounds, so that’s my view.
01:44:34
01:44:46
Oh, well, some of you are talking about Block’s view on evictionism. Again, I’m actually – Hoppe has hardly written on abortion that I’m aware of like I said. I believe he’s loosely in favor of it, which we all have to be in the sense that would not want to empower the state to have that invasive power to police these types of private matters. So as a practical matter, you pretty much have to be pro-choice legally speaking. But I wouldn’t be surprised if he would take a dim view of it in the later stages like I would. Now, whether he thinks that’s a type of aggression or murder or just immoral or unseemly I don’t know.
01:45:27
01:45:37
Edward asked a question about civil law and common law. You said Hoppe has mentioned civil law is better than the common law because it’s written down and less subject to arbitrary interpretation by the state, and do I have an opinion of this? Well, actually, I’m not aware of him writing that. If you could find that, I’d be curious about it because I don’t think he’s actually ever written that. It doesn’t sound like something he would say. Well, if you can find that, I’d be really curious. I don’t recall anything like that.
01:46:02
Now, I wrote a long article on the civil law in 1995 for the JLS when he was the editor, and he published it, so maybe he was getting something from that. I’m from Louisiana, which is a civil law jurisdiction, and I have written a good deal on it, and I do think that the civil law is superior to the common law but not because it’s written down but just because it comes from the Roman system, which has better legal – cleaner legal concepts than the common law system. Both the common law and the civil law are basically written down now. I don’t think that – I don’t think, and I don’t think Hans would think that being written down is really a superior aspect to it.
01:46:49
Now, that is the view of some legal positivist types. But if you find that, I’d be happy to look at it. I’m actually curious. So if he actually thinks civil law is superior to common law in some ways, this is news to me, but it could be for the same reasons I do. I think it’s just better because it’s a more scientific, more rational foundation for law. Please let me know.
01:47:13
Exactly. Cathy says the Constitution is written and where did that get us, and I know Hoppe is just disgusted with the US Constitution and views it as a mistake. So I don’t think he would fixate on the written aspect of it, and again, like I said, the common law is written down now. Cases are published in written form, and there are treatises that summarize and systematize and categorize it in a written form, so I don’t think that’s the difference.
01:47:42
Jock talks about how the origins are about monopoly being the common law across the land. Of course, there’s elements of that in the civil law as well. In the Roman law, there was one law – now I’m forgetting the term. There was one law for the Roman citizens and one law for the outsiders. There’s actually a Latin or some kind of term for that, ius gentium I think, ius gentium, ius gentium – it’s some other – a term for the other. Anyway – but actually this helped to develop a common law that wasn’t like the monopoly of the king’s law. It helped the Roman law develop a magnificent body of legal rules that it has developed into. But someone can Wikipedia that term and make sure I’m thinking of it right, but I think it was ius gentium and – anyway. If anyone is curious, I’ll try to find it and talk about it next class.
01:48:45
Well, we’re almost 30 minutes over. I don’t mind going over, but I know some people are very late, and people listening to the lectures later tend to get annoyed if we go too long because they don’t have any predictability. So I’d be happy to answer a couple more questions, but I think we should cut it off soon or by the hour at the latest. Any other questions? Okay, it’s getting late for everyone, so thank you guys. I enjoyed it. Good questions, and we will pick this up with argumentation ethics and rights next week. Thank you all much.
This is my speech “Libertarianism After Fifty Years: What Have We Learned?” delivered at the NYC LibertyFest (Brooklyn, NY, October 11, 2014). 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.
This audio was recorded by me from my iphone in my pocket; video and a higher-quality audio should be available shortly.
The outline and notes used for the speech is appended below, which includes extensive links to further material pertaining to matters discussed in the speech. An edited transcript is available here.
Modern libertarianism began in the 1960s, about 50 years ago, with the writing of Ayn Rand and Murray Rothbard, primarily, and others like Leonard Read, Milton Friedman, Hayek, Mises, etc. Over the years, certain canards or confusions keep appearing, some from insiders, some from our statist critics. There’s a continual need to debunk and counter some of these. As the theory of liberty continues to mature and advance, the mistakes that need to be addressed become more obvious, at the same time that we are more able to address them.
I’d like to discuss here a couple of paired confusions relating to property rights. One relates to the “Lockean” argument for homesteading, or original appropriation of property; the other concerns rectification for past injustices. Both are interrelated. You’ve probably heard both of these in various forms. For example, the opponent of libertarianism just assumes that our theory is based on the Lockean idea of original appropriation—then makes the “original sin” argument that all property rights are tainted by various acts of theft or statism, and therefore, since you can never trace your property title back to the original pristine owner, no current property title is really valid.
My instant reaction to such comments is always: they are (if they are statists) trying to justify taking my property. If they are libertarians, they are trying to justify not being anarchist. Basically, when I hear people talk like this, I brace myself for the inevitable theft that they are about to endorse or condone or advocate. Two favorite quotes of mine come to mind here:
“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter.” —Ayn Rand, Francisco’s Money Speech
“Is there a need to reform taxes? Most certainly. Always and everywhere. You can always make a strong case against all forms of taxation and all tax codes and all mechanisms by which a privileged elite attempts to extract wealth from the population. And this is always the first step in any tax reform: get the public seething about the tax code, and do it by way of preparation for step two, which is the proposed replacement system.
“Of course, this is the stage at which you need to hold onto your wallet.” —Lew Rockwell
When I hear people saying the libertarian theory of property is flawed because it relies on theft, etc., I know this is just a precursor to some kind of advocated aggression. I hold onto my wallet. I keep an eye on these people.
These issues are related but somewhat different. Let me take them one at a time. [continue reading…]
This is my recent speech “Balancing Intellectual Property Rights and Civil Liberties: A Libertarian Perspective,” presented at Branford College at Yale University, New Haven, CT, Oct. 2, 2014, in a lecture series called “The Politic Presents.” It was held in the beautiful Trumbull Room at Branford Court, where the accompanying picture was taken. The initial speech is about 33 minutes and was addressed mainly to non-libertarian undergraduate students. I tried to set the stage for those not familiar with Austrian economics, IP or IP theory, libertarianism, without being too basic. These were smart Yale students, after all.
This was recorded in my iPhone in my suit pocket, but the quality is okay anyway; and it includes the 33 minute initial lecture and the following 20-minute Q&A session, but then I forgot to turn off my iPhone as I walked to a restaurant with a group of students for dinner, so it also includes some informal but fun Q&A and related conversation as we walked to dinner, for the last 10-20 minutes.
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