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Kinsella on Liberty Podcast, Episode 025.

This is my appearance on Michael Shanklin’s Triple-V: Voluntary Virtues Vodcast with Michael Shanklin (Feb. 26, 2013; originally recorded Feb. 25, 2013). We discussed intellectual property and a few other matters, such as the Ron Paul vs RonPaul.Com dispute, Aaron Swartz, Corporatism, and the like. For the initial discussion of IP and what is wrong with it, I relied on the type of explanation I provide in Intellectual Property Rights as Negative Servitudes.

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 55:41 — 127.5MB)

After much thought and debate about this topic over the last 25 or so years, here is my attempt at a lean, concise, precise definition of what a libertarian is:

A libertarian is a person who believes that the invasion of the borders of (trespass against) others’ bodies or owned external scarce resources, i.e. property (with property allocations determined in accordance with Lockean homesteading rules and contractual transfer rules), is unjustified, because they (for whatever reason) prefer or value grundnorms of peace, prosperity, and cooperation and who have enough honesty, consistency, and economic literacy to recognize that the libertarian assignment of property rules is necessary to achieve these grundnorms.

Such a person, if he is consistent, also cannot help but recognize that the state, being an agency of institutionalized aggression, is inherently criminal and illegitimate.

Note what this does not say: It does not say that the libertarian necessarily believes all aggression is immoral, but rather that it is unjustified; it does not imply that rights are a “subset” of morals. It also does not say why the person values peace, prosperity and cooperation and favors it above interpersonal violent conflict. It also does not make the common mistake of interpreting the libertarian-Lockean property allocation rule as requiring one to prove title all the way back to the very first use of the resource; rather, it says that whoever has the best claim to a disputed resource has a property right in it (is its “proper” owner), and that as between any two claimants, the one having an earlier claim (use) of the property has the better claim. This does not require title to be traced back to the beginning of time but only to the earliest time needed to defeat any actual or potential claimants; though it implies that someone who can trace title back to the first appropriation has the best possible claim of all (unless title has been assigned by contract). Note also that although the libertarian rule is the Lockean rule this does not imply Locke’s reasoning in justifying his homesteading rule was correct—in particular it does not imply that Locke was right to say that labor is owned or that labor-ownership is the reason why first possession of a resource is sufficient to establish property rights in the resource.

For more, see my posts and articles below:

• “What Libertarianism Is”
• “How We Come To Own Ourselves“
• The relation between the non-aggression principle and property rights: a response to Division by Zer0
• The Division of Labor as the Source of Grundnorms and Rights
• Empathy and the Source of Rights
• Thoughts on the Latecomer and Homesteading Ideas; or, why the very idea of “ownership” implies that only libertarian principles are justifiable
• Justice and Property Rights: Rothbard on Scarcity, Property, Contracts…
• What is Aggression?
• The problem of particularistic ethics or, why everyone really has to admit the validity of the universalizability principle
• Hume on Intellectual Property and the Problematic “Labor” Metaphor”
• Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’
• Locke, Smith, Marx and the Labor Theory of Value
• “Introduction to Libertarian Legal Theory”
• “What It Means To Be an Anarcho-Capitalist”

Also: Rothbard, Ethics of Liberty, chs. 4-5, 15; Hoppe, A Theory of Socialism and Capitalism, chs. 1, 2, and 7.

Update: See also these related and interesting comments of Rothbard, ch. 6 of Ethics. Rothbard writes:

If Crusoe had eaten the mushrooms without learning of their poisonous effects, then his decision would have been incorrect—a possibly tragic error based on the fact that man is scarcely automatically determined to make correct decisions at all times. Hence, his lack of omniscience and his liability to error. If Crusoe, on the other hand, had known of the poison and eaten the mushrooms anyway—perhaps for “kicks” or from a very high time preference—then his decision would have been objectively immoral, an act deliberately set against his life and health. It may well be asked why life should be an objective ultimate value, why man should opt for life (in duration and quality).” ¹

If Crusoe had eaten the mushrooms without learning of their poisonous effects, then his decision would have been incorrect—a possibly tragic error based on the fact that man is scarcely automatically determined to make correct decisions at all times. Hence, his lack of omniscience and his liability to error. If Crusoe, on the other hand, had known of the poison and eaten the mushrooms anyway—perhaps for “kicks” or from a very high time preference—then his decision would have been objectively immoral, an act deliberately set against his life and health. It may well be asked why life should be an objective ultimate value, why man should opt for life (in duration and quality).[5] In reply, we may note that a proposition rises to the status of an axiom when he who denies it may be shown to be using it in the very course of the supposed refutation.[6] Now, any person participating in any sort of discussion, including one on values, is, by virtue of so participating, alive and affirming life. For if he were really opposed to life, he would have no business in such a discussion, indeed he would have no business continuing to be alive. Hence, the supposed opponent of life is really affirming it in the very process of his discussion, and hence the preservation and furtherance of one’s life takes on the stature of an incontestable axiom.

[TLS]

1. By the way, this is yet another example of Rand’s influence on Rothbard. [↩]

Kinsella on Liberty Podcast, Episode 024.

[See also PFP102]

I previously podcasted my speech from September 2012 at the 2012 Annual Meeting of the Property and Freedom Society in Bodrum, Turkey (KOL001 | “The (State’s) Corruption of (Private) Law” (PFS 2012)). Later that day I and the other speakers from that day, including Jeff Tucker and Hans-Hermann Hoppe, participated in a general panel discussion and Q&A session, which is included in this podcast episode.

Topics discussed include the issue of preemptive attacks and standing threats, spanking and libertarianism, Gresham’s law and law and legislation, strategies for liberty in life and how to avoid corruption in an unfree world. On the latter topic, I talked about the power of attraction and also vocally objecting, speaking out, when hearing statist sentiments from friends, co-workers, etc. There were also questions about how victims of aggression can achieve restitution from the aggressor, what does he have the right to do to the aggressor—issues such as proportionality, punishment, ostracism, and so on.

For other speeches at the PFS 2012 meeting, see the links in the Program, or the PFS Vimeo channel.

Day 3 Q&A Part 1 from Property & Freedom Society on Vimeo.

Day 3 Q&A Part 2 from Property & Freedom Society on Vimeo.

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:09:01 — 63.2MB)

Kinsella on Liberty Podcast: Episode 023.

This is lecture 6 (of 6) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.”

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes:

[00:00–15:00] In the sixth and final lecture of the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” delivered on March 7, 2011, Stephan Kinsella wraps up the series by addressing advanced applications and common libertarian misconceptions. He recaps the course’s foundation: property rights, self-ownership, and the non-aggression principle as tools to resolve conflicts over scarce resources. Kinsella outlines the lecture’s goals: revisiting fraud, exploring punishment and restitution, and correcting errors like misapplying the non-aggression principle or conflating ethical and legal obligations.

[15:01–1:34:50] Kinsella delves into nuanced applications, such as the libertarian approach to fraud (a property violation via misrepresentation), blackmail (potentially permissible absent property violation), and punishment (favoring restitution over retribution). He critiques common libertarian mistakes, such as overgeneralizing the non-aggression principle to prohibit all coercion or assuming all contracts are morally binding. The lecture concludes with an extensive Q&A, where Kinsella addresses questions on practical implementation, edge cases like blackmail and defamation, and the transition to libertarian legal systems, encouraging rigorous property-based reasoning.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

This lecture’s topic is “Applications Continued; Common Libertarian Mistakes (Fraud Etc.),” and discusses:

• Defense of corporations
• Common libertarian mistakes
  • Self-ownership
  • Positive obligations
  • Fraud

For slides for all six lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

Slides:

The videos of all six lectures are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Course Recap

• Time Markers: [00:00–12:00]

• Description and Summary:

  • Kinsella opens the final lecture, welcoming students to a live session for the Mises Academy course and noting access to recordings and slides.

  • He recaps the course’s core themes: property rights as a solution to scarcity-driven conflicts, self-ownership, homesteading, and the non-aggression principle.

  • Lecture 6’s objectives are introduced: addressing advanced applications (fraud, punishment, restitution), correcting common libertarian errors, and answering student questions.

  • Kinsella emphasizes that libertarian legal theory differs from statist frameworks by grounding law in property rights, not state authority.

  • He encourages students to review prior materials and engage with suggested readings to solidify their understanding.

Segment 2: Revisiting Fraud and Related Issues

• Time Markers: [12:01–27:30]

• Description and Summary:

  • Kinsella revisits fraud, defining it as theft through misrepresentation that induces an invalid property transfer, violating the Rothbard-Evers title-transfer theory.

  • He distinguishes fraud from breach of promise, noting that only property violations (not unfulfilled expectations) trigger libertarian remedies, typically restitution.

  • Blackmail is discussed as a controversial issue; Kinsella argues it may not violate property rights unless it involves threats of aggression, challenging statist prohibitions.

  • Defamation is briefly addressed, reiterating that it does not inherently infringe property rights, though it may warrant private, non-legal resolutions.

  • Kinsella stresses the need for precise, property-based analysis to avoid conflating ethical concerns with legal obligations.

Segment 3: Punishment and Restitution

• Time Markers: [27:31–42:00]

• Description and Summary:

  • Kinsella explores the libertarian approach to punishment, advocating for restitution (compensating victims) over retribution or imprisonment, which often violate property rights.

  • He explains that restitution aims to restore the victim’s property or equivalent value, aligning with the non-aggression principle.

  • The role of private legal systems is highlighted, where arbitration and reputation incentivize fair outcomes without state coercion.

  • Kinsella contrasts this with statist criminal law, which prioritizes punishment and state power over victim compensation.

  • He addresses edge cases, such as when restitution is impossible (e.g., irreparable harm), suggesting proportional compensation as a practical solution.

Segment 4: Common Libertarian Mistakes

• Time Markers: [42:01–57:00]

• Description and Summary:

  • Kinsella critiques common libertarian errors, such as overgeneralizing the non-aggression principle to condemn all coercion (e.g., persuasion or economic pressure).

  • He warns against “armchair theorizing,” where libertarians speculate on legal outcomes without grounding arguments in property rights.

  • Another mistake is assuming all contracts are morally binding; Kinsella reiterates that only property title transfers, per the Rothbard-Evers theory, are legally enforceable.

  • He addresses the misapplication of terms like “aggression” to non-property violations, which muddies libertarian legal analysis.

  • Kinsella urges students to maintain intellectual humility and rigor, ensuring arguments align with scarcity and property principles.

Segment 5: Q&A and Closing Remarks

• Time Markers: [57:01–1:34:50]

• Description and Summary:

  • Kinsella opens an extensive Q&A, addressing questions on practical and theoretical aspects of libertarian legal theory.

  • He responds to queries about blackmail, clarifying that threats to reveal true information may be permissible unless they coerce property violations.

  • Questions on transitioning to libertarian legal systems are discussed, with Kinsella suggesting private arbitration and reputation-based mechanisms as interim steps.

  • He addresses edge cases, such as disputes involving children or animals, advocating for case-by-case analysis rooted in property rights.

  • The lecture concludes with Kinsella encouraging students to apply course concepts rigorously, review materials, and continue exploring libertarian theory beyond the course.

TRANSCRIPT

Libertarian Legal Theory: Property, Conflict, and Society, Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)

Stephan Kinsella

Mises Academy, March 7, 2011

00:00:02

STEPHAN KINSELLA: The cuckoo clock just went off.  It’s zero past the hour.  Okay, let’s get started on class number six, 24 people online.  This is good.  Oh, let me hit record.  Hold on a second.  And even my whiteboard is on.  Okay, by popular request of some students, what I will try to do is defer any non-urgent or pertinent – immediately pertinent questions until the end of the class or until the Q&A session, the office hours later in the week on Wednesday depending on how long we go today.  Or if I do stop, I will try to read the questions so people listening on audio only like in their cars will understand the context.  So let’s get going.

00:01:00

Today is really about more applications, a lot of the applications of the ideas we’ve developed and talked about in the first five lectures, especially the first four lectures.  So I’m going to talk for maybe one fourth – one third the class about corporations, which is a fascinating topic that I think confuses people when they don’t think clearly about it or don’t really have a good understanding of the underlying law that they’re really criticizing or discussing.  Then we’re going to talk about just a lot of smaller issues that I’ve come across and collected over the years that libertarians quite often fumble or confuse or misstate, common libertarian misconceptions.

00:01:44

I have a lot of those in here that are in the slides.  I probably will not be able to finish all those.  They’re kind of randomly organized with the more important ones first or the more interesting ones first.  But first let’s talk about corporations.  Some administrative matters.  So later this week, I’ll post the final exam.  It might not be until Wednesday or Thursday, try to give you about a week to get it done from when we post it.  Danny will announce that at that time.  It will be weighted 60%/40%, so 60% for this and 40% for the mid-term.

00:02:16

I’ll let Danny answer that.  Danny’s understanding is that these are all understood to be open book.  Jim Bowman just asked if the test would be closed book.  That’s what I’m answering now.  What I will feel free to put questions up about would be everything I state in the lectures or the office hours all the reading material I have listed as suggested, not the optional reading material, and also the slides, which do have some embedded links to blog posts and things that would be fodder for questions.  So go through all the slides, all the lectures, and the suggested reading material.  That’s basically what’s going to be covered.

00:03:00

00:03:06

Okay, go on to slide three now.  So if you remember, last class we talked about intellectual property law, and I just won’t go over all that here just to save time.  You know what we talked about last time, but it was, I think, a good course.  We covered basically all of IP law plus some clean-up from the previous lecture last time.  Excuse me.  I’m recovering from a sinus infection, so I might be a little cough-y.

00:03:31

So as I mentioned, today we’ll talk about defensive corporations, and then I’m going to go through a bunch of common libertarian mistakes, some of which we’ve already talked about in the class.  I’ll just mention them.  I won’t go over the logic of them.  I’ll just briefly mention those like self-ownership, which we’ve talked about before, so I’ll go over those more quickly.  Give me just a second here, guys.

00:03:55

00:04:07

Okay, all right, let’s talk about corporations.  Now, some of you may have read some of the literature on this.  Let me just mention, in my view, probably the single best work on this is a book from the ‘70s by Robert Hessen, libertarian, I think quasi-objectivist who wrote a great book In Defense of the Corporation.”  And I summarize a lot of his reasoning in some of these blog posts that I have here on slide five.  Also, Murray Rothbard and even Roger Pilon, who is a libertarian theorist at Cato, they’ve both written good things about this and kind of common-sense insights on this whole issue.  I’m a lawyer, and I’ve dealt with this, and I’ve seen a lot of confusion over the years on this issue.

00:04:52

Basically, you’ll have libertarians who object to the corporation because they say it’s statist and it gives limited to liability when it shouldn’t.  Quite often, I find they misstate what limited liability is.  For example, they believe it has something to do with the liability of the managers or even the employees of the corporation.  And to the extent that they criticize it as giving limited liability to the shareholders, I think there’s a misunderstanding that’s crept into their reasoning, which I’ll get to as I unfold this.

00:05:23

So let’s just back up a second.  Let’s talk about the current legal theory that the state advances for corporations.  It’s something called the Entity Theory or the Legal Personality Theory.  So the idea is that you have Mises Institute, Inc. I-N-C, which means incorporated.  So this is an entity that has legal personality.  It can be viewed – it can sue on its behalf in court so the government can make contracts.  It has perpetual existence potentially, and it has something called limited liability.

00:06:02

So the current theory is that it’s an entity, a separate legal personality distinct from individuals that make it up or that it employs or that own it or own shares in it.  And so the theory is this.  So remember, it’s got perpetual duration, limited liability, and legal personality.  But one thing to keep in mind is limited liability is for shareholders.  It does not extend to officers, managers, directors.

00:06:33

For directors, there’s something called the business judgment rule, by the way, which insulates them from liability from making bad decisions for the company, as long as they’re in good faith, from being sued by the shareholders.  So let’s say the directors of a company make a mistake and the company goes down in value.  Well, the shareholders could sue the directors in what’s called a derivative action.  They could sue them for mismanaging the company’s assets, etc.  But usually they’re going to be off the hook under the business judgment rule.

00:07:03

And even if they are liable, then usually the D&O, or directors and officers, insurance that the company usually carries for them would cover them anyway.  So limited liability says that a corporation is liable.  Let’s say BP would have been liable for more than it was worth for that oil spill in the Gulf last year.

00:07:26

Let’s say it would have gone bankrupt and still owed certain tort claimants billions of dollars more.  Well, the idea is that you could sue the shareholders directly for liability, and they would have to each be jointly and severally liable for the billions of dollars.  So the richest ones would have to pay out everything.  They’d go bankrupt too.  Limited liability says they’re only liable to the extent of the value of their shares, which is to say their shares could fall to zero value, but they’re not personally liable.

00:07:55

Now, this is what a lot of libertarians and especially a lot of left libertarians object to.  Barry just asked a question:  That is always legislated differently in different jurisdictions of course.  It may be.  I’m going by the American conception.  I believe it’s roughly similar to other countries.  But this is a hotly contested issue based upon at least this standard rule, which is at least in place in America and Britain.

00:08:22

Now, the thing is corporate – or consumer activists like Ralph Nader, for example, they believe all three of these features are privileges granted by the state, and the state claims this too.  So that’s legal personality having an entity theory, perpetual duration, and limited liability are all privileges.  So what they say is, well, the state grants you this privilege, and thus it justifies the state regulating the company imposing all the SEC regulations on public corporations imposing regulations on corporate shareholder and stakeholder relations, double taxing them, which means to – if they’re an entity, then they have to file a personal income tax because they’re actually an entity or a person in the eyes of the law.

00:09:12

But of course, this results in double taxation of shareholders because shareholders, really, if they get the income from the corporation, then they have to pay their own tax on it.  So it’s basically double taxation.  So this – by the way, this is similar to, for example, the government’s theory of attorneys.  So what they say is you don’t have a right to practice law.  You have to get a license from the state.  And it’s just a privilege that we grant you, and in exchange for that privilege, we can impose pro bono duty on you.  The judge can force me to go represent for free at some indigent defendant in a murder case, even if I’m not a litigator.

00:09:52

And the theory is, well, you don’t have the right to practice law, and if you don’t do what the judge says, we’re going to revoke your license.  So this is the danger of the state classifying exercise of natural rights as a privilege.  Then the state feels they can claim that they can condition that privilege on limitations and call it a fee instead of a tax, etc.  Okay, so this is what – this is the current theory.

00:10:20

And this is famously expressed in 1819 by Chief Justice John Marshall of the US Supreme Court.  His comment that a corporation is an artificial being, invisible, intangible, and existing only in contemplation of law.  So this is still widely quoted.  So the point is the government is saying we don’t have to let you exist, and if we do, it’s only at our pleasure, and so we can condition it as much as we want.

00:10:45

Now, as Bob Hessen showed, every one of these three features can be created by contractual networks.  So he has what’s called the inherence theory of the corporation instead of the entity theory.  That is, individual humans have a natural right to make contracts, etc.  And they can basically – you don’t merely need to regard it as an entity.  That’s just a convenience for filing a lawsuit or something, but it really just means the current people that own the corporation.

00:11:15

You don’t need the state for perpetual duration.  You can have a contract crafted so that it specifies procedures for who the members are and how they can evolve over time and how you can have votes and things like that.  So really, the only thorny issue is limited liability.  Now, there are two types of liability the corporation can have.

00:11:38

Now, remember, when the corporation has enough assets to pay the liability, whether it’s tort or contract, then there’s no problem.  And you never go the shareholders.  The corporation just pays it out of its assets.  The only question arises when the corporation can’t pay, and then the question is who’s on the hook?  Is it the person who’s owed money, or can he pursue some individuals other than the legal corporation itself?  So you have to divide the idea of liabilities into – excuse me just a second.

00:12:06

00:12:11

You have to divide the corporation into two different types.  I’m sorry – you have to divide the liabilities into two different types: contractual liabilities and liabilities from damage to third parties who didn’t consent, basically some kind of torts.  So for contract, it’s still pretty easily handled, although some left libertarians seem to have trouble even with this.  But for contract, you can just imagine a corporation takes out a loan from a bank.

00:12:49

Well, it’s holding itself out as a corporation, which has a certain meaning, and the bank is aware that basically it can only pursue as sort of security the assets of the corporation but not of the individual shareholders.  So that’s a voluntary contractual undertaking.  You don’t really need the state to do that either.

00:13:06

In fact, quite often in small corporations, closely held corporations, the creditors will insist that the main owner, the guy who started it, he will have to sign something saying I promise to be personally liable, a guarantor for the loan because they know that that will give him an incentive to make sure the company pays it off.  So that’s quite common, so it’s all negotiated.  So again, no problem.  You don’t need the state to form a corporation in that respect.  So really, the only difficult issue is torts.  But then the question is this: The assumption behind a left libertarian and the leftist and consumer activist, Ralph Nader-type critique of the corporation and limited liability law for torts is that it changes the status quo.

00:13:55

In other words, they’re assuming that if you didn’t have this law, then shareholders would be liable for torts.  But why is this?  Remember, the basic libertarian perspective is that you are responsible for your acts of aggression or negligence, for your actions.  You’re not responsible for other people’s actions unless there’s some special reason that you are responsible for them.

00:14:21

So in this case, let’s take the case of a FedEx truck.  The driver is negligent.  He is an employee of FedEx.  The driver is negligent, hits someone, injures them.  Now, this person has a claim against the driver.  He is the human being who committed an act of negligence and who is potentially liable.  They will also usually sue the employer, which is the corporation, as being vicariously liable for his – for the employee’s liability.  This is based upon a type of vicarious liability called respondeat superior, which means you’re responsible for the acts of your servants.

00:15:04

Now, whether even that’s justified is questionable.  But even if you are, the point is why would the shareholder be liable?  So all I have is shares of stock in, say, FedEx.  I have, let’s say, one share of stock.  I’m sitting at home.  I’ve never had a thing to do with the company except I have one share of stock.  All that share of stock gives me to is basically two things.  Number one, I have the right to participate in votes for the board of directors on a periodic basis, whenever that vote comes up.

00:15:40

I don’t have to vote, but I can.  Number two, the event of a liquidation event, which means the company winds up, it distributes its assets, or it just winds up, goes bankrupt or just winds up and decides to fold shop, then I get a [indiscernible_00:15:55] share of the remaining assets.  That’s basically what it means.  It’s a claim on assets.  It’s like an ownership claim and a right to vote, which is like a procedural claim.

00:16:04

Now, the point is shareholders who are passive according to Hessen and Pilon and Rothbard, they’re not the cause of the torts that are committed by the employees.  Now, maybe the boss should be.  Maybe the board of directors should be because they’re the ones running the company.  Those who are actively managing play a role in the torts committed by the negligent employee but not the shareholders.

00:16:30

Let’s go on to slide eight.  Now actually, I’m going to read a little quote from Hessen here.  Well, let me just read the quote.  Despite the widely held belief that the status of the inactive investor is a perversion introduced by the giant corporations in the 20^th century, this status actually was introduced in the 12^th century by Italian merchants who created limited partnerships or commenda, to attract capital from investors that did not desire any role in the management or any responsibility for decision making.

00:17:06

You see, there’s a type of legal arrangement firm called a partnership.  Typically, it’s a general partnership.  All the partners can help manage the partnership, and they all put their money into it, and they all have a partial ownership.  And they’re usually all considered to be equally – not equally but jointly and severally liable for all the debts of the partnership.  But when the limited partnership is created, there’s two classes of partners created.  One is a general.  Those are actively managing the partnership, so they’re responsible for the actions of the people that they supervise.

00:17:41

Passive partners or inactive partners are not liable.  They basically just gave money to the company.  And then they have a right to receive part of the profits upon winding up or distribution, something like that.  So they – and their status is similar, or they’re similar to passive shareholders in a big – in a joint stock corporation.  This is why, according to Hessen, Rothbard, and Pilon, they wouldn’t be liable in the first place for torts committed by shareholders that they – torts committed by employees of the corporation in which they just happen to own a stock.

00:18:22

So let me give some arguments that some people have advances for why the shareholders should be liable.  Number one, they sort of make the argument that, well, you give money to the corporation, so you’re profiting from it, so you’re responsible.  You have to take the good with the bad.  You’re aiding and abetting this company.  Well, this is based upon sort of a misunderstanding of how corporate law and the modern business world works.

00:18:48

Number one, being a shareholder doesn’t mean you gave money to the corporation.  I might have bought the share from one of the original shareholders, and I gave him money, but I never gave money to the corporation.  Number two, it’s not only shareholders that give money or investors who give money to the company.  Lenders do it.  Customers do it.  I mean if I buy – if I give FedEx $20 to ship a package for me, I’m giving them money too.

00:19:16

Am I liable for the negligent actions of the driver as he leaves my house?  And also, it’s sort of un-Austrian to focus on money as being something unique in terms of giving value or aid and abet.  I mean there’s lots of ways you can support a company and help it.  Employees help it by being employees, vendors and suppliers, landlords, and so on.  So they have such a loose standard of causality or responsibility, vicarious liability we could say.  You would not implicate only shareholders but also lenders and employees and everyone is liable for everything every employee does, which is ridiculous.

00:19:54

Another one is this sort of legalistic argument.  Well, the shareholders are the owners, and therefore, if you own, you’re responsible for it.  Well, you remember we talked about strict liability in the last lecture, and you have to be careful about distinguishing what ownership is from what responsibility is.  Ownership is the right to control.  It doesn’t necessarily or automatically imply responsibility to control.

00:20:18

I mean, look.  Let’s say I have a gun.  I have the right to use that gun, but it could be stolen from me.  Some thief could overpower my right to control it and take it from me.  Now, he uses the gun to hurt someone.  Is it my fault?  After all, I still own the gun.  I mean do I have to go run down to the clerk and abandon the ownership of the gun before a crime is committed with it so I’m not liable?  It’s ridiculous.  So the connection between me and the gun is my right to get it back, not my obligation to keep someone else from using it as a means to a crime.

00:20:49

00:20:53

Also, as a practical matter, the state might call the shareholder the owner, but as a practical matter, ownership is distributed and divided by contractual relationships.  So I mean I might be a part owner of Google as a shareholder, but I can’t go use their corporate jet or their HQ to have my kid’s birthday party.  Who controls that?  On a day-to-day basis, the actual managers and employees, and that’s done by contract.  They’re appointed by the board and the officers, and there’s the bylaws.  There’s the shareholders agreement sometimes.  There’s articles of incorporation.

00:21:29

Kevin is asking a question about ownership of a dog that bites a person.  I’m just going to defer that.  Ask that again at the end if we have time or on the office hours later.  So I don’t want to distract us too much for the 70 or so people that aren’t here live.

00:21:50

So basically, you have to say that those who actively participate in management and control, those are the ones that it makes sense to hold most liable for the actions of employees.  But even then, there’s a limitation.  I mean let’s say I send my driver off to go do something, and he’s negligent.  Am I responsible for his negligence?  I mean it’s sort of hard to argue exactly why I should be under respondeat superior or under some kind of causal theory.

00:22:18

But at least I have some role in telling him to do this.  But let’s say he runs home, off on a frolic, is what the law calls it, F-R-O-L-I-C, a frolic.  Or let’s say he decides to rob a bank using the FedEx truck.  Is that my responsibility?  I don’t think so.  So it’s got to at least be within the scope of the duties and be somewhat foreseeable that he might accidentally cause some damage, which we’re responsible for.  But beyond that, you have to attribute responsibility to the individual actor who does it.

00:22:51

Another one is – another argument given is that – another argument is that the shareholders can vote, and then they control or they influence the corporation’s actions.  But, as I mentioned, first of all, not all shareholders even have the right to vote.  There’s non-voting stock.  Number two, not all shareholders vote.  In fact, most ignore these ballots they get in the mail.  And number three, even if you vote, you might vote for a director who didn’t win.  You don’t vote for the winning director.  And number four, you’re not voting for the director to appoint negligent managers or negligent employees, and he’s not running on that platform usually.  And what if you vote against the director?  And finally, voting in that sense only has a very weak influence over the – who is actually hired by the company.

00:23:40

You basically are only appointing directors.  The directors themselves don’t even usually actively manage.  They basically appoint the officers who appoint the managers who hire employees, etc.  So you have to actually look at actual causality and responsibility.  And finally, as for influence, a corporation that has a big loan, let’s say, with a bank, has tons of ratios and restrictive covenants, things like this that they’ve agreed to.

00:24:08

They might even have to agree to let the bank supervise or veto certain actions.  So there are lots of outside companies like – I mean let’s say Apple has a huge influence over its vendors.  They can tell them what to do and not to pay these poor Taiwanese workers minimum wage so they’re committing suicide.  I mean you have lots of important customers, important vendors even, and suppliers, employees unions, stakeholders in the corporation, creditors, and lenders who have tons of influence over the actions of the company, not to mention the customers themselves who have influence over the corporation.

00:24:45

So if you’re talking just pure influence, again, it’s such an open-ended theory of causation and legal responsibility that it doesn’t ensnare only the shareholders who have the right to vote.  It implicates a lot more than them.  The point is, it shows you that these people who just sort of – they spout off these ad hoc, sort of regurgitated lines they’ve heard about why shareholders should be liable, they don’t have a coherent theory of causation that they’re applying.  And they’re not thinking carefully about it.

00:25:17

00:25:24

Now, okay, I think let’s move on now.  We are done with corporations.  I could – I would be willing to stop here and answer a couple of questions, but to keep on track, let’s try to stay more than – spend more than two or three or four minutes on this before we go on to some common libertarian mistakes.  So is there anything I just talked about that was not clear?  Someone here in the comments, Steve Allen says, this was – all these theories would imply that we’re all liable for war crimes our governments commit even though we didn’t support those.  Yeah, I think that’s true.  And in fact, that’s one of the arguments I’ve heard for the – somewhat justifying the Arab attacks on the Twin Towers on 9/11.

00:26:09

And yes, I do think it was what it seems to be, not a truther-type thing.  But some people say, well, the wars against Muslims in Iraq, etc. were financed by taxes of Americans and corporate capitalism centered in New York.  So the American people are liable for that.  Well, this is how you can extend these theories to harm innocent – relatively innocent people.

00:26:38

00:26:45

Matt says, even as an anarcho-capitalist, I believe to the extent I don’t fight the system complicit.  I’m complicit in its acts, hence, my moral responsibility to fight the system.  I mean that’s sort of a personal ethical view.  I won’t really comment on that.  I don’t pretend to know any better than you about that.   I mean we all have our motivations for being libertarian.  I’m skeptical of that myself because I think there’s no duty to be a martyr.  I think we have a duty to refrain from actively harming other’s rights.  But anyway, I feel the same compulsion, but I’m not sure it’s a duty in that sense.

00:27:22

Steve says, taxation is – I mean Steve says, taxation is involuntary.  Part ownership of companies is.  Well, okay, so – but some people would say taxation is voluntary.  You can just – you can refuse to have a job that makes that kind of money.  You can move out of the country, or you could pay the penalty.  You still can’t participate in helping to pay for missiles that are going to be dropped on brown people in Iraq, which I think is not a realistic argument, but some people make it.

00:27:52

But owning a share in the corporation is not causing harm.  You have to argue that owning a share causes harm.  The employee causes an act of negligence.  Owning a share does not enable the company to do it any more than these other actors do, in my view, like lenders and vendors and employees.  And Jock has some good comments here about how the market allocates liability.  Of course it does, and there’s a wide variety of these entities, and there would be still, absent the state involvement.

00:28:33

Now, of course, I think the state should get out of the business of chartering corporations.  They should just leave it alone.  Let it be a totally private contractual matter, whether they would still be called corporations or not I don’t know, probably not because corporation means body, which sort of implies it’s got a separate legal personality.  And in fact, as I mentioned, even today the state, if it grants limited liability to shareholders, quite often the creditors will insist that the main shareholder obligate himself personally to back the company’s loans.  So people negotiate these things.  It’s contractual.

00:29:06

Okay, it’s 30 past the hour, pretty good timing.  Why don’t we go on to some common libertarian misconceptions and mistakes?  Everyone ready?  Anyone not ready?  Speak now or forever hold your peace.  Okay, good.  What I’ll do is I’ll take a break in about 25-30 minutes, right at the hour, and for about five minutes, and we’ll continue on.

00:29:37

Okay, so the first thing is – and I encounter this all the time.  If you say something like the right to self-ownership, some libertarians will – they’ll start screaming that, oh no, it’s mystical.  You’re assuming the religious view of libertarianism or philosophy.  Now, I’m not actually religious myself.  It’s not my view at all.  I just think it’s a convenient, conceptual way to describe what our view is about who owns your body.  Is it you, or is it someone else?  It’s very simple.  It’s not metaphysical.  You don’t need to take a stand on religion or the soul or even mind-body dualism or anything.

00:30:14

You just have to conceptually be able to distinguish what your body is.  That’s it, and the fact that you’re a person, and there’s some relationship between you.  Whether you’re the same thing or not, I don’t care.  I mean this is libertarianism, not dorm room bull session in grad school at 6 o’clock at night eating pizza and watching David Letterman and trying to get sophisticated with philosophy.  It doesn’t matter to me for this purpose whether I am my body or whether I am a soul that has a body or whether I’m just an epiphenomena of my body or whether there’s a – it doesn’t matter.

00:30:58

I mean the point is you can identify me as an individual with a name and an identity, and I’m definitely closely connected to my body somehow.  I’m trying to mute this before I cough.  Excuse me.  And this is not some new, modern, new-fangled view.  I mean it’s just basically another way of saying we’re against rape and aggression and murder, and we’re against slavery.  We’re against other people owning your body.  We’re for you owning your body.  It doesn’t imply anything mystical or incoherent at all in my view, and I think criticism of this is ridiculous.

00:31:35

So just some famous quotes on this: 1646, Richard Overton said: To every individuals in nature is given an individual property by nature, not to be invaded or usurped by any; for everyone, as he is himself, so he hath a self-propriety, else he not be himself.  In other words, you have to own yourself.  You have to have a propriety or a sense of control or ownership over your own self.  Now, what does this mean in a metaphysical sense?  I don’t know, but we all know what it means.

00:32:08

We’re talking about stopping people from sticking holes in your body with knives without your permission.  It’s not that deep, but it’s profound, and it’s true.  John Locke, 1690: Though the Earth and all the inferior Creatures be common to all Men, yet every Man has a property in his own Person.  This, no Body has any Right to but himself.  So this is just kind of an expression of a common-sense, intuitive sense of justice that most normal people have.

00:32:38

Okay, let’s go on to the next one.  I think I mentioned this one earlier.  You’ll see, libertarians will sometimes say libertarianism is about negative rights only.  There are no positive rights, and there are no positive obligations.  Well, of course, there can be positive obligations.  The point is – Jock has a comment here, by the way, about self-ownership, which I agree with.

00:33:05

As Hoppe says, he says there are only two possibilities:  You own yourself, or someone else does.  And if someone else does, we couldn’t function.  Rothbard has a similar point.  Also, the third possibility would be like collective ownership.  If everyone owns everybody else, then we would just – no one could move because no one could get permission to do anything.  It’s just a self-contradictory idea, which is sort of the criticism I had of that book, Unincorporated Man.  I just didn’t quite understand how that overcame that problem.

00:33:32

Cheryl, let’s save that question to the end, okay?  Or to the office hours.  Okay, back on positive obligations.  The point is this.  Libertarianism is not against positive obligations.  It’s just against positive obligations that are not voluntarily undertaken.  So the common view of contract is that you can obligate yourself to do something.  Now, the title-transfer theory that I’ve adumbrated earlier, the Rothbard-Evers idea, is that contracts are not really obligations.

00:34:02

But you could imagine a sort of natural obligation or a moral obligation associated with a promise connected with a contract.  In any case, the contract issue is a little dodgy because they may or may not give rise to obligations, and the classical theory does, and our theory would not.  But you can also perform certain actions that give rise to obligations, like a certain tort or a crime.

00:34:28

Like let’s say you push someone in a lake negligently or evilly, intentionally, and now they’re drowning in the lake.  You have thereby incurred an obligation to mitigate the damage you’ve caused, and you have an obligation to rescue.  A stranger walking by has no legal obligation to rescue, no positive obligation to rescue, but you do because you have caused them to be in this position of peril.

00:34:51

Or arguably, according to some libertarians, some agree on this.  I actually lean towards this view.  Some libertarians lean away from this view.  But the argument is that if you have a child, at least voluntarily, it’s similar to pushing someone in a lake.  You’re giving rise to a dependent fetus or baby – not fetus, a baby, which is by the nature of the human – mammalian kind is more dependent and can’t function on its own.  So you have an obligation to care for the child, at least until it’s somewhat mature.

00:35:25

But whether you have that obligation or not is arguable, but if you do have it, it’s because of your action, so there can be positive obligations.  Someone asks whether it runs the other way around.  Trey asks whether the parental obligation goes the other way from parent to kid.  I think you mean from kid to parent.  Does the kid owe anything to the parents, like to take care of parents in old age?

00:35:47

I would argue no.  The child didn’t ask to be born.  However, if given the choice, like if you said we’re going to pass a law tomorrow, like I think they’re threatening to do in China where every child has an obligation to take care of their parents in their old age, I think it would be an improvement in the sense that it would put the responsibility on the family level instead of on the general welfare dole.  So it wouldn’t be ideal, but in a way, it would be an improvement, but that’s just a second-best issue.

00:36:21

All right, let’s go to slide 12.  We talked about this one already.  Libertarians quite often just mangle the word fraud.  They will use it left and right without defining what they mean.  Basically, they’ll use it in an equivocating way, not usually intentionally, but they’ll use it in a general broad way.  Fraud means just being dishonest.  That’s fraudulent.  But if you’re sloppy with that, then you end up calling some things illegal or aggression, which are really not.  They’re just dishonest or immoral.  So fraud is not merely dishonesty.  You have to root the idea of fraud in the title-transfer theory of contract.

00:37:04

Fraud, as I mentioned, the best way to think about fraud is this old doctrine of theft by trick.  You can look it up, theft by trick.  Basically, it’s a way of obtaining someone else’s property without their effective consent by deceiving them about the terms of the deal you’re doing with them, something like that.  So unless you’re actually receiving property without the effective consent of the owner, then it’s not really fraud in the sense that it’s a species of aggression under libertarianism.

00:37:37

All right, next issue.  I’m going to zip through these because they’re kind of fun.  If there’s anything you think I got badly wrong or need to clear up, just save it and ask me at the end or in the office hours because I’ve got a lot of these.  I’d like to get through as many as possible.  And, by the way, if I don’t cover any tonight, feel free to flip through the ones I miss, and if there’s any that you don’t – that my approach wouldn’t be obvious from the slides, call them out in the office hours or email them to the course page, and I’ll deal with them either in writing or in the office hours on Wednesday.

00:38:11

Okay, so the next one is forgetting the important point that all rights are property rights, which is Rothbard’s point.  And it has to be this way because every right is basically an allocation of control over some resource that people could otherwise fight about or conflict over or dispute.  So what we do is we use mental shorthand to come up with all these sort of consequences of the basic right to property, which are important, like we’ll say the right to free speech or the right to freedom of the press, the right to expression or whatever.  And that’s fine, but you have to keep in your mind that this is really just a way of describing one of the benefits of liberty, which means property rights.

00:39:01

Or it’s one of the consequences or a derivative of that, and so it can’t contradict it, and it’s not independent of it, and it’s not in addition to it, which is why, when some libertarians say, well, you have a right to free speech so you could never be in trouble for inciting a mob, as Walter Block’s view that it’s just mere incitement, well, if you have sort of a more unified view of causation, which we talked about in lecture three or four I think – two maybe.  I can’t remember now.  Then you’ll see that words can of course play a causal role in commission of aggression sometimes.

00:39:41

And this is what rights are about.  It’s about not invading someone’s property with whatever means is causally efficacious including speaking words like ready, aim, fire, or drop that bomb.  So you have to keep in mind that all these other rights are just derivative, and they’re just sort of shorthand descriptions of it.  You can’t lose sight of the real rights, which are property rights.  As Rothbard wrote: The concept of rights only makes sense as property rights.  For not only are there no human rights, which are not also property rights, but the former rights lose their absoluteness and clarity and become fuzzy and vulnerable when property rights are not used as the standard.  I think that’s absolutely brilliant and genius and absolutely correct.

00:40:29

Here’s – I mentioned already lynch him.  Lynch that guy.  He did it.  Or lying on the witness stand, how about that?   He raped my sister.  I saw him.  And you’re lying, and you get the guy put in jail.  Now, maybe the jury is guilty too.  Maybe the judge is guilty.  Maybe the jailer is guilty.  But you are too because you played a causal role in getting this guy wrongly convicted.  So these are words.

00:40:49

Here’s another interesting thing.  People always say, well – threats is another good example.  Steve says, what about threats?  Threats is another good example.  A threat is a communication to someone that aggression is imminent.  In other words, you’re letting them know you should be afraid because your life is in jeopardy or something like that, and so the person is justified in stopping that defensively.  That’s yet another good example where free speech is not absolute, not that it’s not absolute in the Oliver Wendell Holmes or the statist sense.  It’s just that it’s not an independent right.  It’s all derivative of property rights, and the question is, are you violating property rights?  And if you do it with words as a means, then you’re still violating property rights.

00:41:32

Here’s another interesting example.  This is sort of mine, and I don’t know if most libertarians would agree with me.  But most libertarians, if you pushed them, as long as you just insult someone, let’s say – I’m not talking about causing aggression like lynch him or I’m going to kill you or drop the bomb on Hiroshima.  I mean let’s say you’re in a bar and you walk up to some guy and you look at him and you say your mama is ugly.

00:42:01

Now, most libertarians, if you pushed them, would say, well, technically that’s not coercion, they’ll call it, or aggression.  It’s not a threat of force.  It’s not the use of force.  It might be insulting, but the guy who’s insulted, if he punches the other guy, he’s the actual aggressor.  I think technically that’s true, but I think there’s two considerations here libertarians should have.  Number one, even if we go with that analysis, you might have a right to insult someone and not get your nose punched.

00:42:32

But you don’t have the right to have other people pay for your defending your rights.  In other words, that’s up to you to do that.  And if you’re going to go around as a cocky guy engaging in reckless behavior that’s going to just cause trouble like this, other people are going to just not be involved in helping you remedy your rights.  If the guy beat you to a pulp, they might ignore it because you basically made yourself a nuisance to the community.

00:42:55

Everyone is trying to live their lives, and they don’t want to have to go out of their way to spend resources to help you out and to bail you out of jail or bail the other guy out of jail or be a witness in the trial.  And some people are just troublemakers, and they’re going to be kind of quasi-ostracized, and they might get what they’re expecting.  But I think a better way to look at it is that, in that kind of case, it’s actually not aggression when the guy gets punched in the nose because he’s basically inviting a fight.  It’s sort of like stepping into the boxing ring with a boxer or going into the football field with a bunch of football players.  American football I’m talking about, rugby.

00:43:35

00:43:41

So Jim says it’s like slapping someone with a glove and provoking you to a duel.  I think it is like that because that’s not really an aggression.  That’s sort of a very minor action in society, but you’re basically challenging him to a duel, and if they do the duel, that’s voluntary.  Interestingly, there’s a book by a soft libertarian named Patrick Burke called No Harm published I think in the ‘80s.  I reviewed it for Reason Papers years ago at my friend, Tibor Machan’s request, who was a friend of Patrick Burke’s, B-U-R-K-E.  And he’s got a pretty good argument.  He goes with this no-harm principle.  He says libertarianism is about not harming people.

00:44:16

I think the harm principle is too fuzzy and vague to really be rigorous.  I also think there’s a similar problem with Jan Lester’s book.  I think it’s called [no audio_00:44:26]. I was going to say libertarianism is not about not harming people.  It’s about not committing aggression.  It’s perfectly okay to harm someone if you do it in a legitimate way, like if you compete someone, if you steal their girlfriend, make better grades than them in the class, you become the valedictorian instead of them.  You can harm people in all sorts of ways.

00:44:44

Anyway, Burke also argues specifically – you just reminded me of this with the duel case.  He says that if you challenge someone to a duel, you are harming them because you’re kind of making them too embarrassed to back down, so it’s not really voluntary on their part.  Now, that’s just not libertarian reasoning.  I’m sorry.  And I criticize that explicitly in my review.  If anyone is interested, look up – just go to stephankinsella.com/publications and look up my review of No Harm.

00:45:12

Anyway, a couple of deviations that he has to – that come from sloppy use of principles like this no-harm idea, just – it won’t take you too far, and it leads you to error because these terms are too general and vague and fuzzy, wishy washy.  I understand, Julian, what you mean about Burke’s argument being rubbish.  He’s a good guy.  The book is good overall.

00:45:35

All right, I’m going to go to slide 13 now.  Here’s another one.  We talked about this a little earlier.  For fun, I would urge you guys to click on these links.  They’re pretty short links, two or three links here about these income tax protestors.  I call them income tax nuts.  Now, I’m as opposed to the income tax as anyone, but I don’t fool myself into thinking that it’s actually not the law.  This is wishful thinking, you know.  Along those lines, and we talked about this a little bit already about legal positivism, now, a lot of libertarians say they’re opposed to legal positivism.

00:46:16

But legal positivism is a confused doctrine, and there are sort of two parts of it that you can identify, one of which I think is not un-libertarian and one of which is.  The part that is not un-libertarian is sort of the H.L.A. Hart idea.  Hart is H-A-R-T.  I agree, poor Irwin Schiff.  He doesn’t deserve it, but he’s in jail because it’s illegal someone said.  We’re talking about the income tax.

00:46:38

Anyway, the idea that you can identify something that is a law without condoning it, so the idea that you can’t even call something a law unless it’s a justified law I think is just – is crankishness.  It’s ridiculous.  We need to – we do live in a somewhat unjust society.  There is a state that enforces certain rules with the use of force, and there is a practical consequence to not abiding by these rules.  Now, you might not want to do it.  You might choose not to, but by and large, you can identify as a legal scholar and as a citizen, enforceable norms in society, and these can be called laws.  That doesn’t mean that they’re legitimate.  It also doesn’t mean that any decree of a dictator is a law, as I think Hart points out also.

00:47:33

If Hitler just starts totally becoming a maniacal dictator and not having any semblance of the rule of law at all and just arbitrarily executing one guy after the other, you can’t even really call that a law at all just because it doesn’t follow the description of law.  But there are lots of things that are laws but that are not justified.  I believe the problem is most people don’t have a coherent theory of justice like we libertarians do.

00:47:59

So they are afraid to de-link their sort of intuitive, common-sense, religious ideas about justice and rights and the law because they’re afraid that if they don’t say law has to be just, then they lose all their morals.  I don’t think we have that problem.  I have no problem saying that is illegal but it’s wrong.  It is illegal for me to sell cocaine.  It is illegal for me to evade income tax.  But those laws are immoral.  They’re immoral by a higher-law standard, which I have.  I don’t need to consult the legislature to see what the law should be because I’m not a positivist in the bad sense.  So positivism in the bad sense is the idea that law can only come from an authorized source.

00:48:50

Now, I actually personally think that this is a flaw also of even some natural law thinking because, admitted, they will criticize a given state law or legislated law by comparing it to what they call higher law or like God’s law, like the abortion-type people, etc.  The problem is even they will sometimes say, well, the source of law is what God says.  It’s not what the legislature says.  But the common similarity from my point of view is both the natural-law type and the statist, they both see some entity that can decree the law and can decide what the law is, whatever they want.  So by their conception, God could make murder right tomorrow.  God could make up, down and evil, good.

00:49:40

Now, it’s not a religious thing.  I don’t want to get into a religious debate obviously, but I think that is contrary to the nature of libertarian justice.  We believe certain things are right and wrong.  And the religious libertarians think that thank God we have a good god.  But when they say a good god, they’re thinking there’s a standard of goodness outside of God himself that he happens to conform to, lucky for us.  But it’s not something he could change if he wanted to.  Now, that’s a religious debate, but that’s my perspective on that.  So I think there are hints of positivism in the bad sense even among some natural law and theist types.

00:50:21

So yes, I think you can distinguish just law from unjust law, and we’re in favor of just law.  We’re in favor of the positive law conforming as closely to possible to libertarian law is what I would say, which is justice.  All right, you can see this all the time, these income tax protestors.  They’ll say, show me the law.  Now, what they’re saying is they want you to point to something written on – they’re so used to this American idea of law being legislated and written down like a written constitution like we have, like Britain has an unwritten constitution.

00:50:49

That’s inconceivable to this protestant mentality.  If you click on these links by Doherty on this page here, on page 13, you’ll see what I’m talking about.  He explains why it’s a protestant mentality to want to look at the text and show me the law, and they sort of conflate what’s written down on a piece of paper with what the state actually does.  It’s like they think they can find some magic incantation or formula.  If they find the right spell, they can unlock the keys to the state, and they totally don’t see the nature of the state.  The state doesn’t care about these things.  The state is evil.  It just wants to get away with what it can, and it just uses these things as a pretext.  It’s not really going to unlock the jails if you can just find the right constitutional argument.

00:51:33

00:51:42

I’m going to skip this Rothbard quote on page 14.  It’s sort of redundant what we talked about already.  Here’s another common misconception or mistake, the idea that we can have limited government.  Now, this is the minarchist idea.  Now, I’m an anarchist, and most modern Austro-libertarians are anti-state.  But the problem for me is not that I wouldn’t prefer a limited state or a minimal state or a minarchy to what we have now.  Of course it would be infinitely preferable.  But the question is why do minarchists even think limited government is possible?  I mean public-choice economics, theory, history, and experience all point against it.  I mean every government on the face of the Earth is wildly un-libertarian.  Every government you can ever point to is wildly un-libertarian.

00:52:37

Now, sometimes they say, well, early America came close.  Well, that’s nonsense.  It didn’t come close.  Come on.  We had slavery.  We had taxation.  We had wars from the beginning.  It might have been better, but it wasn’t close, and it started metastasizing right away.  And closely allied with this sort of myth among some libertarians that limited government is even possible is this sort of common assumption that the move to democracy like in the early 1900s worldwide was progress.

00:53:09

Even Rothbard and Mises sort of believed that as Hoppe shows.  It wasn’t unalloyed progress.  It might have been progress in some ways, but it wasn’t necessarily better.  And another myth is that Hans-Hermann Hoppe is a monarchist.  Of course he’s not.  All he does is point out that monarchy is systematically less bad than democracy in many respects and maybe not even every respect.  But he explicitly says he’s not a monarchist.  He’s an anarchist like all anarcho-libertarians are.

00:53:44

Here’s another one: the idea that we can have something called restitution that can be objectively determined without at least a theoretical right to punish.  This is why I believe the right to punish is primary, and even if society would tend to almost never use it because of the unproductiveness of it and the extreme horrendous cost of a possible mistake, the idea of punishment being primary, the right to retaliate proportionately to a harm-none view can at least help tell the jury how to conceive of the magnitude of what the victim could do and then translate it into some kind of money.  It’s not perfect, but it’s better than having no standard, which is what restitution is absent that.

00:54:32

The reason I say that is restitution makes sort of intuitive sense for simple crimes like theft of a purse or a car.  You just give it back, or maybe twice that back, the two-teeth-for-a-teeth example of Walter Block and Rothbard.  If you take my car or you destroy my car, then you have to give me a car back of equal value, something like that.  But for other crimes like rape or murder, kidnapping, assault and battery, I mean restitution, the original idea, is restoring someone to the state they would have been in had the crime not occurred.

00:55:07

So if you take something from someone and you give it back, you’re sort of putting them back to where they were before, fine.  But if you – if a woman is – if a person is tortured and imprisoned for years, how could you – what does it even mean to restore?  They can never be restored.  Crimes cannot be undone.  This is why they have the right, I think, the fundamental right, to retaliate proportionately in kind.  Now, if society doesn’t permit that because it’s too expensive, at least that right can be used to mentally determine an appropriate monetary damages award or some kind of restitution.

00:55:44

Okay, I think I might have mentioned this in the anarchy talk earlier.  So there’s this idea among libertarians that you have these networks of PDAs, private defense associations, in anarchy.  There may be another acronym among some people.  Some of them – I think Bob Murphy or some other people – more modern anarchists use something other than PDA.  But I’m going by the old idea of the Tannehills, which is a great book, by the way, Morris and Linda Tannehill’s The Market for Liberty, fantastic book, one of the two or three that converted me to libertarianism.

00:56:25

Anyway, some libertarians say, well, you would have this society with multiple PDAs, and most people would be a member of at least one of them, and you would agree to a jurisdiction of each other.  They have interlocking treaties and agreements, so anyone who’s convicted of – accused of a crime would be hauled into court, and if they’re found guilty, they’ve already agreed to the jurisdiction of that court or its sister court or PDA, etc.  So you could hold them liable and do whatever.  But they’ll say, well, what about outlaws?  We say, well, you can’t get them because they haven’t agreed to anything.

00:56:57

I think that’s bunk.  I think that when you commit a crime – remember it’s like that pushing-into-the-lake-example.  When you commit a crime, it’s an action.  And that action itself is consent that’s irrevocable.  You can’t take it back.  It’s consent to basically response by the victim or his agent.  So that is consent to the victim’s justice system if you’re not a member of the court system.  Now, that doesn’t mean that we actually would use force against them or even against members.

00:57:28

Still, ostracism might be the preferred approach for people who refuse to cooperate, and I still tend to think some kind of restitution and ostracism system is probably the way a private justice system would look like predominately, and it would probably work fine.  But that doesn’t mean that theoretically it’s wrong to use force against these outlaws anymore than it’s wrong to use force against some stranger who is attacking you in self-defense.  I mean the guy attacking you has never signed an agreement that it’s okay for you to defend yourself against him.  He’s consenting to being hit by you by attacking you by his actions.  Okay, it is almost at the hour here, and I need to grab a glass of water, so why don’t we take a five-minute break?  And I’ll be back at about three – or let’s to four minutes past the hour.

00:58:22

As for incorporating, I think that – I’m not a tax expert, but I think even if you’re incorporated in Delaware, if your headquarters is somewhere else, you’re going to have to pay tax in the state where your headquarters are.  So it doesn’t insulate you from tax I don’t believe.  But Delaware is the best one to incorporate in.  They just have the most well-developed body of law.

00:58:51

Okay, let’s resume the questions now.  Here’s what I propose we do.  I’ve got 15 more pages.  I don’t think I’m going to be able to finish, which is fine.  I didn’t plan to.  I have more here than we need to.  I think I’ll talk for 15 – maybe 10, 12 more minutes.  Then I’ll stop and answer questions for the remainder of the time, and if we run out of questions, I’ll – if I have time left, I’ll do a couple more, but I think probably that will be the best division of time.

00:59:17

00:59:23

Okay, now, this is one that we already talked about in the IP lecture.  It’s sort of this common idea that creation and production or sources of property, so you’ll hear people say that you can come to own things by original appropriation, which is homesteading, or by contractual exchange or by production.  Now, I think what they’re doing is they’re conflating sources of wealth with sources of ownership.

00:59:55

It is true that using your labor, your creativity, innovation, and producing are sources of wealth, but what that involves is rearranging already owned property.  I mean you have to have something physical to work with, so you have to own it, and you have to transform it into some new product or some new configuration that’s more useful.  So remember we talked about this already.  So it’s okay to acknowledge, and you should acknowledge, the vital role of the mind and ideas and innovation and work and labor and production.

01:00:32

But they produce wealth, which means transforming already owned property.  They don’t produce property rights.  You have to already own the thing you transform, and this will help you avoid this whole mistake of intellectual property and reputation rights, which arose from this misidentification way back starting in Locke I believe.  And a related confusion is the idea that we own our labor.  This is just from overly metaphorical fuzzy use of language.

01:01:00

I mean labor is just a type of action.  Would it make sense to say you own your actions?  I mean what does it even mean?  This goes back to the Rothbardian idea that you can’t double count like right to free speech and the right to property.  The right to free speech is just a consequence of property rights.  It’s not an independent separate additional right.  Same thing with the right to labor.  If you own your body, you have the right to control what you do with it, which is your actions or your labor.  So you have the right to own your labor in the sense that you control your labor, but that’s because you control your body.  It’s not a separate thing.

01:01:34

And another related confusion is this idea that we have a property right in the value of our property.  But that’s not true.  We only have the right in the physical integrity of property.  If you don’t keep this clear, you’re going to have the right – you’re going to have the idea of reputation rights.  And imagine you have a neighbor with a nice rose garden which you enjoy looking at.  He’s got such a nice rose garden that it makes your house more valuable.  In other words, you could sell it for a higher price if you wanted to.

01:02:02

Well, one day he chops it down.  Well, he’s diminished the value of your property.  Well, you didn’t own that value.  The value is just what other people think about your property.  You don’t have the right to that, and you don’t have the right to the source of value, which is maybe your neighbor’s use of their own property.  So you’ve got to keep straight that property – someone sets up shop across from you.  They harm you.  They might lower the value of your business.  You have competition.  Well, that’s life.  That’s the market.  That’s freedom.

01:02:33

Let’s go to slide 16.  Here’s another couple of fun ones.  We already talked about one of them a little bit.  So it’s normally assumed if you can sell it, you own it.  And what – they do this to argue that you own your labor because they’ll say, well, if I don’t own my labor, why can I sell it?  You know, in a contract if I have a labor sale.  Well, that’s just a sloppy equivocation because they’re not using the title-transfer theory of contract to carefully analyze it.  Some contracts are unilateral.  Some are bilateral.  Some are exchanges of title to property, but some are not exchanges of title to property.  Sometimes it’s a one-way transfer of title to property that’s conditional upon another party using their body that they own to perform some action.

01:03:20

And if they perform that action, it serves as the trigger for the title transfer.  So you can call that a sale of that action, but it’s not really a sale of the action.  It’s the performance of an action to trigger the transfer of payment to them for doing that action.  So it’s only a metaphorical use that we say a sale of it.  So you don’t really sell your labor, so you don’t own it, so no.

01:03:43

How about the converse?  If you own it, you can sell it.  Now, this assumed in the inalienability debate by people like Walter Block.  So they’ll just say, well, if you own something, that includes the right to sell – imply the right to sell.  Ownership means the right to control, and selling means getting rid of the right to control it.  So it takes another step or another assumption or another argument or some kind of application of this idea in a particular context to get the right to get rid of the right.

01:04:15

And in other words, think about what getting rid of a right means.  It means abandoning.  So the question is can you abandon it?  I mean, look.  I can say I’m not a human.  I can abandon my humanity, but I don’t really abandon it, and just saying it doesn’t change it.  So maybe saying I don’t have the right to control my body doesn’t mean I don’t have the right to control my body.  Just saying it doesn’t change anything.

01:04:40

Now, I do have the right to consent at any given moment to someone touching my body or doing something to it.  But if I change my mind and say no, now I’m not consenting, and my previous self can’t bind my future self and prevent me from changing my mind.  So the theory that I have developed and which I think is correct in my contract theory is that the right to control a thing that you own combined with the particular nature of homesteaded things, which are acquired – if they’re acquired, they’re acquired by your intent to own, expressing that, and owning it as an owner, then you can just get rid of that.  You can stop having that intent to own as owner and make that clear to the world.

01:05:26

Basically, you can unown it or unacquire it.  You can abandon it.  So in other words, things that are acquired can be abandoned, and if you have this ability to abandon it, now they have it, and they can re-homestead it, so they have it.  This is why the right to own applied to an acquired homesteadable thing does give rise to the right to sell it.  But it’s only a consequence of this unique set of things combining together.  In the case of your body, it doesn’t hold.  Your body is unique.  You are bound up with your body if you are not, or your body in some way.

01:06:13

But the point is you are a body going around the world homesteading things.  You don’t homestead your body because without your body you don’t have your same identity, so it doesn’t make sense.  So you never did acquire your body in that sense.  You became you with your body of said unowned things in the world.  Your body wasn’t unowned and you just plucked it up as some kind of soul descending down, or at least if you make that argument, that is a mystical argument that is going to have a narrow set of adherence among libertarianism, and it’s not a general libertarian appeal.

01:06:50

And another related thing, we discussed this in the contract lecture.  You’ve got to not think of contracts as being binding promises.  They’re not.  They’re not enforceable or binding promises or obligations.  They’re just exchanges of title or maybe even one-way transfers of title to owned resources.

01:07:14

Here’s another interesting one.  Someone is asking a question about organs.  I don’t know if I have time to get to that one.  I have dealt with it a little bit in my contract theory article and also in another article with the world inalienability in the title.  It’s on my publications page, stephankinsella.com/publications.  I’ll try to get to it maybe in the office hours next time, but I’m going to touch a little bit on that right here in the next bullet item on page 16.

01:07:56

So Rothbard’s argument and a lot of other libertarians’ argument for inalienability, which means if you voluntarily try to sell yourself into slavery it wouldn’t be enforceable.  Rothbard’s argument is that there’s some kind of “impossibility” involved.  And there’s another argument too that you don’t have the right to promise to commit an act of aggression, and if you’re a slave, you might be ordered to perform an act of aggression.  I think that’s a weak argument against inalienability – or against alienability, sorry, because you could just say that the master has no right to order a slave to perform aggression, and the slave doesn’t have to obey that order.  So that’s not a big argument.

01:08:50

But Rothbard’s argument, and I’ve heard a lot of other people make this argument is that you could never willingly alienate your will.  Well, the problem with that argument is that I don’t think that’s relevant to what slavery is about.  Slavery acknowledges that the slave retains his will.  It just says that the master has the right to use coercion to overwhelm it, basically to threaten you with such physical harm that you will choose to obey his wishes and that your threats and your actual aggressions on him are justified.

01:09:24

And in fact, if Rothbard was right, we could never justify even self-defense against someone.  After all, if someone is trying to attack you and you’re using force against them, well, the aggressor hasn’t alienated his will.  He still has his will, so how is it justified that you’re using force against his will?  Well, because sometimes it’s justified to use force against someone’s will, which is what the alienability people say.  So that’s not the defect with alienability in my view.  I think Rothbard’s argument is not quite right there.

01:10:02

Now [indiscernible_01:10:03] because ownership does not imply the right to sell.  It just doesn’t.  It’s not part of ownership.  It’s part of ownership plus something else, which is present in the case of homesteaded property, but not present in the case of bodies.  I already mentioned this one here earlier.  I guess I jumped the gun about the positivism, when people say, well, what’s the source of rights.

01:10:28

Now, I think sometimes they’re just asking in a confused way what’s your proof of rights, or what’s your reason for believing in rights, or what’s your argument for rights, which is a fine question, although I would turn it around and say, well, what’s your reason for believing in rights?  And if they say, well, I don’t, I’ll say, well, nice talking to you because you’re basically uncivilized and an outlaw and you’re threatening me.  But if they say, well, okay, I do believe in rights, I’ll say, well, then you tell me why you believe in rights?  Why do I need to prove to you why you believe in rights?  In other words, this is sort of like the Hoppian argumentation ethics, by the way.

01:11:05

But when people say what’s the source of rights, it often has a positivist connotation like they’re asking who made it so.  Did someone legislate it?  Did God say it’s so?  Is it written down in the Bible?  Is it found in some book somewhere, some authorized decree?  So you see, there’s this idea of law emanating from some source, and I don’t like that idea.  To me, it’s vaguely positivistic in the bad sense.

01:11:33

And the second point here on page 17, the hypocrisy of demanding your argumentative partner prove why you have rights.  You’ll be talking with a fellow libertarian or some non-libertarian, and they’ll say, well, prove to me why we have rights.  And again, like I said, you can have – you can discuss, but you could take another approach, and you could say, well, you prove to me why you think there are rights.  And either they have an answer or they don’t.  If they don’t have an answer, well, then why do they expect you to have one?

01:12:02

And if they say you don’t have rights, then they basically prove themselves to be uncivilized or they’re insincere, in which case you can just walk away.  But if they admit that you have rights, then they either have a reason—let’s hear it.  Maybe it’s the same as yours.  Maybe it’s different, or maybe they don’t have a reason.  If they don’t have a reason, why do they expect you to have one?  I wrote an article a few years ago that affirmative action is not un-libertarian, and it’s kind of a legalistic argument, but libertarians have this knee-jerk sort of Randian, Superman, I’m the product of merit and I made everything myself kind of idea.

01:12:38

I don’t know if there’s anything wrong with the idea of affirmative action as a general matter.  You could imagine a university, for example, a private university thinking it could attract more students if it has a diverse body of students, and if they have underrepresented females or minorities, they might give a boost to them.  I mean there’s nothing wrong with voluntary adjustments and boosts like that.

01:13:01

Bu then the question is if you have a public university or a government university, is it wrong for them to do that?  Well, is it really wrong for them to have any policies whatsoever in admitting students?  It’s got to have some policies.  So why couldn’t some of them emulate what their free-market policies at private universities might be?  I mean the fundamental problem with public universities is they’re based upon theft, subsidized tuition subsidized by state tax funds, but that’s the primary harm.  Once that’s done, how it’s spent is of secondary import.

01:13:33

01:13:39

Here’s another argument I have, and I have a blog post here.  Do campaign finance regulations violate free speech rights?  In other words – and I’m going by the first amendment type of free speech right people assume, which is a valid right in the sense that it’s a limit on government power.  The government has no right to regulate speech and things like that.  As a libertarian, as I said, free speech is only a derivative of property, but if it’s used in a legal doctrine to limit the power of the state, I’m all for it.  I don’t want to put any limits on it, so that’s fine.

01:14:11

But the question is, given the kind of standard first amendment conception of free speech, when the government says the republican and democrat candidates can only spend so much money or can only receive so many campaign contributions from corporations, the knee-jerk assumption by libertarians is that that’s un-libertarian.  Anyway, just take a look at that post.  You’ll see some kind of fun reasoning of that, not anything heavy matter but just kind of fun.  Sorry about the freeze-up here.

01:14:43

Okay, I think let’s pause here.  We’re going to pause on page 18, and I’d be happy to entertain questions about what we’ve discussed so far or anything further.  And I might discuss some of these later, or I can answer them, as I mentioned, subsequently.  So shoot.  I’ll open the floor up to any discussions people might have now.  Julian, let me – okay.  Okay, Jock – I’m going to go to slide 20 now.  Jock has got a question about slide 20.  Let me go to slide 20.

01:15:25

Jock says:  Anarchists need not prove anarchy can work.  Do you mean that we don’t or that it’s a mistake to think we don’t have to prove it?  Okay, so I’m just saying – I’m back, right?  I’m just saying what it means to be an anarchist is, number one, to believe – well, I have it here in the middle.  To believe – to be against aggression on principle, and number two, to recognize that the state necessarily commits it.

01:15:57

That’s all it means to be an anarchist.  It doesn’t mean that you predict or believe that we’re going to achieve it in our lifetime or ever.  I mean, look.  Think about it in terms of murder.  What does it mean to be against murder?  Does it mean you think there will never ever be murder committed?  No.  It just means you think it’s unjust.  So when people say, well, anarchy is just impractical, I mean it’s the same as them saying, well, being against murder is impractical.  Believing we would never have murder just because I’m opposed to it is impractical.  It’s unrealistic.  So that’s what I mean.  I’m just saying about the essence of what libertarianism is.

01:16:39

Now, and I also mean that anarchy is not an advocacy of a given system.  It’s the opposition to a given criminal system.  And what we’re in favor of is whatever would result in its absence.  Now, of course, we go – we do engage in the endeavor of having to guess and formulate what it would be like, but is it incumbent on us to do it?  I don’t think so.  I think we should do it because it deepens our understanding, and it may help persuade some marginal empiricist-minded people or consequentialist-type people that are on the fence.  So that’s my perspective on it.  But anarchists aren’t saying we want to replace this institution with another institution.  We’re just saying we want to persuade as many people as possible that aggression is wrong and the state commits it, and so the state is illegitimate.  And so the state should stop committing public crime.  That’s it.

01:17:39

01:17:43

Joel asks, how can you ensure restitution/justice without outlaws that do not participate in PDAs?  Well, first of all, I don’t think you can ensure it.  I mean there is going to be injustice in the world.  There’s going to be cases where people get away with crimes, and I also think that, by and large, criminals tend to be the low-lifes of society.  They don’t have a lot of assets.  So even if you catch them, what are you going to do?

01:18:13

I mean even if you could put them in the salt mines and put them to work as slave labor and get most of their wages for restitution, will you ever get back enough restitution?  Probably not.  So probably the best thing you can do is preventive force, prevent crime, and that costs money too.  I mean we can spend X percent of the GDP.  Everyone’s salary is going to be spent on private patrols and things like that to stop crime in the first place, but that’s probably better than trying to stop it after.

01:18:45

But I think what you’re getting at is what can you do.  Well, I think you can have posses or more organized things.  They go after these guys.  They try to eradicate them sometimes and wipe them out maybe.  I think in a free society you’re going to have widespread wealth.  Most people are going to be libertarian-ish in their sympathies.  Crime is going to be marginalized and largely unnecessary because you’d have so much charity and wealth in the first place that people that are lazy or sort of scoff laws, people are going to help them out anyway.  And I mean what’s the point of – criminals are going to be so outnumbered by – and so outgunned by a prosperous and free people that they would just be a marginal element.  But occasionally they’re going to get away with it.

01:19:32

01:19:46

Jock points about – I think Jock has a good point here.  Jocke says in response to Joel that outlaws would be a miserable state, outlaw communities where there’s war of all against all.  I agree with all that.  I mean that’s why I think ostracism and outlawry would be very powerful.  There’s actually a Robert Heinlein novel.  I think it’s – I forgot the title, but [indiscernible_01:20:07] criminal thing, kind of like Escape from New York or Australia or something a long time ago.

01:20:13

So Danny said, in the first question – in the first lecture I said that my approach to libertarianism was a combination of a rationalist and a consequentialist approach.  Could I expand on that?  Well, yeah, and that’s sort of laid out in that “New Rationalist Directions of Libertarian Legal Theory” and sort of my estoppel argument.  It’s rationalist in the sense that I’m skeptical of natural law thinking and reasoning, trying to go from is to ought.  I think you can come up with some sort of a priori type truths based upon the structure of argumentation and human interaction and the search for justice and these kinds of things, like Hoppe’s argumentation ethics and estoppel.

01:21:04

So it’s rationalist in that sense, and in a way it’s even deductive.  But it’s consequentialist in that you always bring in a practical context, in Hoppe’s case, the discourse context, which is practical in that, according to Hoppe’s view, people in discourse all necessarily value the practical activity of living and being alive, which requires the use of scarce resources and requires homesteading and ownership and [no audio_01:21:31] shared consequentialist views that almost everyone necessarily has by virtue of being a participant in discourse or civilized society.  Or in my case, the context is more of like you imagine a confrontation between not just participants in discourse but a confrontation between an aggressor and his victim in a court setting or some other kind of idealized setting, and some of the same considerations apply.

01:22:18

01:22:23

Steven says, if I was in receipt of stolen goods and the thief was uncovered and pointed out I’d received them, could I be pursued for looked goods or damages?  Okay, so well, again, this is one of these questions where we have to be careful.  I have to give a lot of caveats because we have to – we can only go so far in our armchair engineering.  Damn, Jock, you’re a good Googler.  I haven’t read that in maybe 25 years, but I recall that it was cool.

01:22:58

Anyway, so here’s my view on stolen goods.  I mean it depends on if you’re a good – what’s called a bona fide purchaser or a good faith purchaser or if you’re kind of in the know.  I think if you know that you’re receiving stolen goods and your hands are not clean and – I mean most people like Rothbard would say – excuse me – in either case, like let’s say a stolen watch, you’ve got to turn it over to the owner even if the middleman, the thief, is long gone.  You’ve got to turn it over to the owner if he finds you.  I’m not sure in every case if that’s true.

01:23:35

I could imagine sort of after time and depending upon the circumstances, certain moveable goods or even immoveable goods like land but probably moveable goods being – having a sort of fungible quality that, after a while, we assume that title is in the new possessor, especially if he’s a bona fide purchaser and especially if the original owner is sort of more negligent than the buyer of the stolen goods is.

01:24:03

So let’s say you leave your Rolex watch unlocked on the counter when you got a bunch of unscrupulous workmen in your house, and one of them steals it.  I mean and then he pawns it to you.  I mean who’s more responsible for the harm here?  Is it the original owner, or is it you?  That’s sort of how law looks at it in the case of some hot checks and things like that.  I’m not sure.  But I tend to think that it really wouldn’t matter too much because I think most people would have title insurance, property title insurance like we do now for our houses.  So if your watch gets stolen, if it’s of enough value, you’re going to go to your insurer, and they’re going to pay you back.

01:24:41

Now, if you’ve already been paid back by your insurer, why would you get the watch back again from the guy who’s got it?  So I don’t know the answer.  The kind of plumbline answer is that the title is never lost and it goes back to the owner, but I could imagine cases where, over time or because of negligence of the original owner and having it stolen, not negligent with respect to the thief but negligent compared to the recipient of the good, that you choose [indiscernible_01:25:12] owner is out his watch, so someone is going to be a victim.  So the question is choosing a victim.  Which one is the worse victim?  And I suppose the best answer is the original owner is the better victim in most cases unless you have a good argument against it.

01:25:25

01:25:31

Erika: You say that you have a right to the physical integrity of your property, but the physical integrity of many of the things I own degrades over time, like things out in the weather decay, etc.  How do you reconcile this?  Would it be better to say you have the right to not have another person harm the physical integrity of your property?  Yeah, that’s exactly what I mean.  I don’t mean that you have the right that it stays the same.  What I mean is you have the right that no one invades the physical integrity of your body in its current state.

01:26:02

Of course, you don’t have the right that things don’t atrophy or degrade or – what’s that accounting term?  When houses and land go down in value?  I know I’m having a mental blank.  You know the standard gap or accounting – depreciation, right.  I don’t mean that.  I just mean that property rights are the right to have the physical borders of your property not be invaded by others.  There’s different ways to formulate that.  You could say the physical integrity not be changed without your permission.  You could say not have your property be used without your consent or permission or not be invaded.  Those are all sort of roughly synonyms.

01:26:45

Jock says, insurance might grow up to protect buyers rather than sellers or original owners.  Yeah, I know.  That’s why I say I think it’s going to – a chicken and the egg kind of thing.  I mean if insurance went one way rather than the other, then the default might go that way or vice versa.  If the default rule went towards the buyer or the owner, then insurance would be used to cover whoever the default rule is against.  So I don’t think it’s a big issue.

01:27:11

Kevin said, could you say that the Obama administration is justified in authorizing the killing of Muslim cleric, Anwar al-Awlaki, an American citizen, if you assume that his preaching, which advocates killing Americans, is intended to use overseas followers as efficacious means to commit murder?  Hmm.  Well, I think that’s a complicated question, and I don’t know all the facts.  I mean I have to assume some facts.  I mean we have to look into it in detail to make a better judgment about that.

01:27:48

But I think the first problem I see with that proposal is that – I mean I don’t think the Obama administration is justified in doing anything because they’re criminal themselves.  So I would say no.  They’re not justified in doing anything except disbanding themselves.  But if you ask me if they did that, would they violate his rights, they violate my rights by using my money to do it or something.  Or if a private vigilante goes over there and kills this Muslim cleric, first of all, I don’t think his status as an American citizen is relevant at all to libertarian theory, so again, let’s say there’s some Muslim cleric who is advocating the killing of Americans, I mean to me that’s what you’d call a borderline question or a continuum question.

01:28:39

I don’t know if – where you would draw the line, whether he sort of is using people as a means to do this.  And is it a real threat?  Is it really happening, or if he’s more just using his free speech, which is heinous?  Now, my personal gut judgment is if someone knocked him off given what you’ve said here, I think it probably would be justified, not that I’m advocating the commission of murder against any particular person.  I’m talking hypothetically here.  So yeah, I think that when you start advocating rallying these serious people who are really willing to use force against people and play a serious role in the threat against innocent people, and American citizens are basically innocent people, I think you’re basically conspiring to commit murder, and you’re trying to do it.

01:29:32

If it’s a completely unlikely to be carried out [indiscernible_01:29:38] but I would say it’s close to what I would think is calling for lethal – deadly force.  What do people here think about that?  I’m curious what most people here think.  Would you say kill him, or it would be murder to kill him?  Well, Jock, the problem is, of course, some of his criticisms are justified.  Of course we’re keeping Americans in jail unjustifiably as well.  Now, I’m not in favor of Guantanamo or the American state, but I think of all the people we have in jail, the people in Guantanamo are the ones I don’t feel as sorry for as the drug criminals in American prisons.  I mean – anyway, it’s a complicated situation.  I’m totally anti-war, but I have no illusions about the nature of a lot of these people we have in Guantanamo or that fight jihad against the West.  We may have stirred them up, but that doesn’t mean they’re libertarian either.

01:30:49

Julian, you never saw physical integrity before the mid-term.  Well, if you read Hoppe, there’s a lot of that in his writings, etc.  Matthew says, shouldn’t it be decided through due process of law?  Well, maybe it should, but that wasn’t the question.  The question is – I’m rephrasing it as would it violate his rights.  Now, to my mind, due process of law is a prophylactic measure.  No one has an actual right to due process of law.  Okay, either you’re guilty or you’re innocent of a crime.  The fact is that epistemically or from a knowledge point of view, we don’t know whether you’re guilty or not.

01:31:28

So we have to assume people are innocent until proven guilty, and you have to have a fair procedure to determine it to make sure you’re not punishing the wrong person.  And another reason is because the state is dangerous, and we need to have lots of procedures and rules in place to try to limit the state’s excesses.  But in an ideal system of justice without the state, we had some super-intelligent robot up in the sky with laser guns that could infallibly shoot down his laser and incinerate someone as soon as they committed a crime with no due process whatsoever.  I mean you can’t say that would violate their rights.  If they’re actually guilty, I don’t think it violates their rights.

01:32:10

01:32:20

Oh, Erika has got a question about the mid-term.  I’m sorry you have to – I remember someone had a question about that.  I think – Erika, I think I responded to your question already, and it’s a fair point.  I agree.  It was a subtle question, but I think that – I’m trying to remember exactly what the question was.  Erika is asking about the mid-term.  She felt all three statements were untrue since the actual wording didn’t specify depreciation versus a person aggressing.  I guess you’re asking about the question that has something to do with physical integrity.  If so, I apologize.  I thought I discussed it in one of the lectures orally, and it should have been clear from that.  But maybe it was too tough of a question.  I would remark them, but we’re not really – it wouldn’t matter really too much.  It would just adjust everyone a little bit.  If there’s class clamor for it, I could look into it.

01:33:19

01:33:26

Looks like some people are starting to drop out.  We’re down to – well, we have 23.  We can go a little bit longer.  Anything else?  Any more questions?  Oh, it’s good, isn’t it?  Jock is reading Daemon, the Daniel Suarez book.  It’s really – I was surprised by how good it was.  I thought it would be an amateur first effort, but it’s really a cool novel.  Wait until you get to Freedom, the second one.  The second one is like Daemon squared, I think.  I did the same thing, Erika.  I read it very quickly.  Interesting.  Well, it looks like the questions are petering out, so people that are listening in their cars, let’s go ahead and wind it up.  And I will be here for the regular time on Wednesday for office hours, so feel free to review the missing slides here and ask any questions.

01:34:47

And – oh okay, well, there’s one more question here.  I’ll do this one.  I have a blog – David has a question about how libertarians misuse the term coercion.  This is just a semantic issue that kind of bugged me, not bugged me but I noticed.  I used to do this myself.  So libertarians use the word coercion or aggression synonymously, but coercion, if you just look it up in the dictionary, just means to use force to coerce someone to do something.  So to my mind, coercion is neutral like the word force or even violence.  Violence is not always un-libertarian.  Neither is force, and neither is [no audio_01:35:25]

01:35:26

01:35:44

Okay, I’m back now, and I froze up, but anyway, I don’t know.  Did you get that about the coercion?  It’s just a semantic issue.  It’s just a – it’s a type of force or violence, but it’s not necessarily aggressive.  Some types are.  Some types aren’t.  But people use it as a synonym for aggression.  I think it’s just a little sloppy, and I have a blog post.  I think I have it linked in this slide series somewhere.  I think it’s called “The Problem with Coercion.”  Just look it up under my name.  Okay, it’s just a semantic point.  I’m just trying to encourage clear use of terms.

01:36:15

Okay, I’d better wrap it up.  I enjoyed it.  Okay, I think it is, Jock, and I try to avoid using it in a positive way.  I’m just trying to point out that coercion technically can sometimes be libertarian and justified, just like violence and force can.  That’s all.  Jock is saying it’s useful in talking about coercive state versus voluntary society.  And of course the state has no right to coerce or use force, but that’s because it’s the state.  Thanks, Steve.  I enjoyed it too.  I really did.  It was a lot of fun.

01:37:02

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:37:03 — 88.8MB)

Kinsella on Liberty Podcast: Episode 022b.

This is lecture 5b (in addition to the 6 main lectures) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.” The main lectures start at KOL018.

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes:

[00:00–15:00] In this supplementary Q&A session for the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” recorded in 2011, Stephan Kinsella addresses follow-up questions from Lecture 5, which focused on intellectual property (IP), trade secrets, and defamation. He begins by recapping the main critique from Lecture 5: IP laws, such as patents and copyrights, conflict with libertarian property rights by restricting the use of tangible resources. Kinsella sets the stage for an open-ended discussion, inviting questions on IP and related topics to clarify libertarian perspectives and address practical concerns.

[15:01–54:20] Kinsella responds to a range of audience questions, exploring the implications of abolishing IP, the role of contracts in protecting ideas, and the libertarian approach to defamation and reputation-based disputes. He elaborates on how innovation can thrive without IP through market mechanisms like first-mover advantages and voluntary agreements. The session also covers nuanced issues, such as the enforceability of non-disclosure agreements and the compatibility of libertarian legal principles with existing statist systems. Kinsella concludes by encouraging students to apply property-based reasoning to complex scenarios and engage with the course materials for deeper understanding.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

This lecture’s topic is “Q&A”

For slides for the six main lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

The videos of all six lectures plus this Q&A are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Recap

• Time Markers: [00:00–10:00]

• Description and Summary:

  • Kinsella opens the Q&A session, noting its purpose as a follow-up to Lecture 5 of the Mises Academy course, which critiqued intellectual property and discussed trade secrets and defamation.

  • He recaps Lecture 5’s key points: IP laws create monopolies that infringe on tangible property rights, while trade secrets can be protected via contracts, and defamation does not inherently violate property rights.

  • The session is framed as an opportunity to clarify concepts and address practical questions from students, with a focus on applying libertarian principles.

  • Kinsella encourages students to draw on the course’s property-based framework, rooted in self-ownership, homesteading, and the non-aggression principle.

  • He mentions the availability of course materials, including slides and readings, on the Mises Academy platform.

Segment 2: Intellectual Property and Innovation

• Time Markers: [10:01–22:30]

• Description and Summary:

  • Kinsella responds to questions about the impact of abolishing IP, arguing that innovation would flourish without patents and copyrights due to market incentives.

  • He cites examples like open-source software and historical periods with weak IP laws, where competition and first-mover advantages drove creativity.

  • The role of trade secrets is discussed, with Kinsella explaining that non-disclosure agreements (NDAs) can protect sensitive information without requiring state-enforced monopolies.

  • He addresses concerns about “stealing” ideas, clarifying that ideas are non-scarce and cannot be owned in a libertarian framework, unlike physical property.

  • Kinsella emphasizes that libertarian law prioritizes tangible property rights, making IP unnecessary and counterproductive.

Segment 3: Contracts and Enforcement

• Time Markers: [22:31–35:00]

• Description and Summary:

  • Kinsella answers questions about enforcing contract-based protections for ideas, such as NDAs, in a libertarian legal system.

  • He explains that breaches of contract, like violating an NDA, would be treated as property violations, with remedies focused on restitution (e.g., compensating for losses).

  • The role of private arbitration and reputation in enforcing contracts is highlighted, contrasting with statist courts that rely on coercion.

  • Kinsella discusses the practical challenges of enforcing contracts across jurisdictions, suggesting that market-driven solutions like reputation systems could incentivize compliance.

  • He stresses that contracts must be grounded in voluntary property title transfers, per the Rothbard-Evers theory, to align with libertarian principles.

Segment 4: Defamation and Reputation

• Time Markers: [35:01–47:00]

• Description and Summary:

  • Kinsella addresses questions about defamation, reiterating that false statements harming reputation do not directly violate property rights.

  • He suggests that libertarian societies could handle defamation through private mechanisms, such as public rebuttals, arbitration, or reputation-based incentives.

  • The distinction between defamation and fraud is clarified: fraud involves misrepresentation that induces an invalid property transfer, while defamation does not.

  • Kinsella explores the ethical nuances of defamation, acknowledging its harm but arguing that legal remedies should not infringe on free speech or property rights.

  • He encourages a case-by-case approach to reputation disputes, grounded in the non-aggression principle.

Segment 5: Closing Remarks and Broader Applications

• Time Markers: [47:01–54:20]

• Description and Summary:

  • Kinsella wraps up the Q&A by addressing miscellaneous questions, including the compatibility of libertarian legal principles with existing statist systems.

  • He discusses the transition to a libertarian legal framework, suggesting incremental steps like private arbitration and contract-based protections as interim solutions.

  • Questions about the broader implications of libertarian theory, such as its application to complex disputes or corporate liability, are briefly addressed.

  • Kinsella encourages students to apply property-based reasoning to real-world scenarios and to review the course materials for deeper insight.

  • The session concludes with a reminder to prepare for the final lecture, which will cover punishment, restitution, and other advanced topics.

TRANSCRIPT

Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A

Stephan Kinsella

Mises Academy, Feb. 28, 2011

00:00:03

STEPHAN KINSELLA: I’m reading Matt’s comment now.  I don’t understand how a lack of patent protection would work in some parts of the economy, pharmaceuticals for example.  Prices are inflated.  Okay, what were the incentives for these companies to extend large amounts of capital?  Okay, well, I think I know where you’re going.  I’ve heard this.  Let me just answer this in a couple of ways.  First of all, I don’t know if you’ve read a lot of Rand and others on the anti-trust question, for example.  Okay, let me read the rest of it.

00:00:54

Okay, well, I would say first as a libertarian, our view is moral.  Our view is moral.  That is, the question is primarily who has the property right.  So, for example, on anti-trust, a lot of utilitarian-type free market types would say – they have the arguments for why you don’t need anti-trust law.  But they’re not really against it in principle if you do need them.  They just think that there are good economic reasons to think that anti-trust is not necessary because companies can’t really collude that successfully because of the nature of the market.

00:01:29

But a more principled view is but companies have the right to collude.  They have the right to fix prices.  As long as they’re not violating anyone’s property rights, they have the right to do that, and I think that’s the fundamental approach to IP.  Why do you have the right to tell me I can’t use my own property in the way that I see fit, even with something, my own invention, which is what patent laws do?

00:01:54

So if two companies are competing and they’re trying to find this wonder drug and they both find it around the same time, the first one who gets to the patent office can stop the other one from using their own idea.  Why is that just?  And I don’t think saying – asking a question, well, what’s the first company’s incentive to invest in this R&D?  Asking a question is not an argument.  I’m not being critical of you.  I’m just saying it’s not an argument, and asking a question doesn’t justify the use of state force against my property rights.  I mean it just doesn’t.  The only thing that justifies that is if I commit aggression, and the competitor hasn’t committed aggression.  They’re just using their own property as they see fit.

00:02:36

Now, I would highly recommend that you go to the free online copy of the book by Michele Boldrin and David Levine called Against Intellectual Monopoly.  You can find the link on the resources section of C4SIF.org/resources.  There’s a link to their book there.  There’s a chapter on pharmaceutical patents, which is always trodded out as the best example of why we need patents.  And they do a great empirical case just showing that actually it is not in practice in today’s world that useful, or sorry – that it’s not essential.  You have to read it.  It’s thorough and just devastating.  They show that a lot of the cost of patents are for advertising or for things that are not protected by patents, etc.  So take a look at that.

00:03:29

And second of all, I would say this.  Just as sort of a common-sense matter, we have a situation where we have the state, which hampers human life in a severe way.  It imposes untold cost on companies: regulations, the FDA process itself, taxes, inflation, export and import controls, all kinds of things like this, which totally – like a huge weight impressed upon these R&D companies.  Just imagine if we could cut the corporate income tax rate by 90% and the income tax rate on personal people, on individuals by 90% so that they would be richer and have more money to spend on these drugs and things like this, and it would be cheaper to hire employees if you didn’t have pro-union legislation and environmental laws and all these things.  They would have so much more money in the first place that they would have a lot more money to spend with R&D.

00:04:34

And to – the idea of entrusting with the state, which imposes all these penalties and drags and weights on companies and on innovation and progress, to give that – to ask that state to give me a monopoly that I can use their state courts for to harm my competitors for a temporary time so I can charge a slightly temporarily monopoly price for my product to make it a little bit more attractive is insane.  I mean you don’t trust these criminals to do that, and if the state is imposing cost upon cost upon cost upon cost upon you, why would you not want to just say get rid of these costs instead of saying give me a temporary monopoly where I can have a little bit higher profit to make up for all the costs you imposed on me?

00:05:21

Just stop imposing costs on me in the first place.  So that’s my primary view on that, and as a practical matter, I mean just imagine this.  You go down to the store.  We’ve all seen this.  You’ll see Tylenol for $6 and generic acetaminophen for $3, half the price.  Some people buy Tylenol.  Some people buy acetaminophen.  Why do some people pay twice the price?  Because they trust the brand name.  I mean there’s an advantage to being first to market.  There’s an advantage to your reputation and your name.  There are spillover effects.  There are any numbers of reasons why you want to make money – why you would engage in R&D.

00:06:00

00:06:13

Julian:  Why should I not share the key to your course via Facebook?  Well, I would say it wouldn’t be morally wrong because you can have – libertarianism doesn’t pretend to be the sole source of ethics in society.  I mean there’s personal morals and there’s reputation effects, and there are personal commitments and promises.  And there’s also contracts, and you could say – I mean I don’t think we do it here because we don’t care too much.  I mean we’re not worried about it.  Mises is not into – is not a money-making organization, not that there’s anything wrong with making money.  They’re trying to spread the word of economics and liberty and truth and all this, and that’s why we open up so much for free.

00:06:56

This course is – the Mises Academy is done in a – we’re selling a service where there’s an instructor with personalized information and back-and-forth and things like this.  And to get these professors to teach, they want to let them have some – a little profit to induce them to do it.  So this is the one thing they do that they charge for, and they don’t open up to the world, and there’s a practical reason not to open it up.  Now, why shouldn’t you do it?  I mean if we had a contract, then you’d be in breach of contract.  I don’t think we would do that because we don’t care too much because we kind of trust people, and we’re not really worried about it.

00:07:32

I mean if people started doing that, I think we would just change the system a little bit, and make the – change the code every week, something like that.  I did talk about this earlier.  Someone asked that question earlier.  So I’d say it’s sort of just bad form, but that’s not a libertarian issue.  That’s more – yeah, you could make a contract.  You could say – I mean if you wanted to, you could have a contract that said every student who signs up agrees to pay $1000 damages to Mises if you reveal the key.  I mean I don’t know, but you could do things liked that, but there’s always the choice is that alienating your customer when you do things like that.  And I’m talking about a pure profit-type thing, not just something like this.  So I mean if you want to release it, go ahead.  I mean you might get booed by your fellow students, and then we would have to change the code.

00:08:36

One problem is – in Bob Murphy’s course, by the way, someone did that apparently, and there was a troll in the room, and they had to find a technical way to get around him.  He was – every other comment he was saying Austrian economics sucks.  Bob Murphy sucks.  I mean it was just – some troll was actually in the room.  So I would think the students who are really interested in this wouldn’t want outsiders involved who are going to interfere with the lessons they paid for.

00:09:04

Anyway, Atchafalaya:  Your thoughts on logos.  I was trying to utilize NFL logos for an event and got shut down for IP reasons.  How do you view – okay, so that’s a good question.  That’s a trademark issue.  Let me explain.  A trademark is a mark that is used to identify the source of a service or a good, nothing wrong with using a trademark.  This is what people would do.  It’s just the same thing as using your name, saying I am – I’m John Black, and I’ve had this job and this circle of friends, and this is my reputation, and please hire me.  I mean people use names as identifiers.  In my view, in libertarianism, in a libertarian society, the only type of trademark right you would have would be basically based on fraud.

00:09:58

So if I – let’s just say Coca-Cola.  There’s a Coca-Cola company, and they’re selling a certain Cola product under their name, Coca-Cola.  Now, if I make a knockoff of Coca-Cola and I’m selling it to people as Coca-Cola, but it’s not genuine Coca-Cola, I’m defrauding these people, and they should be able to sue me, which is why I think this would never be a major problem because you’re only going to have fly-by-night operators who are doing this because they’re going to be sued for fraud.  The problem with trademark law is that it gives the right to sue to the original trademark owner, not to the customer.

00:10:38

Now, in my view, the trademark owner is not – he’s not violated.  He’s not harmed because he doesn’t have the right to the customer’s business.  If the customer wants to change his mind because he – for whatever reason, he has the right to do so.  So Coca-Cola doesn’t have the right to sue.  Furthermore, trademark law is not always based upon fraud, so for example, if I sell you a $20 Rolex, which is a knockoff, now you’re not defrauded because you know you’re buying a fake Rolex.  This is common.  Rolex can still sue me even though there’s no fraud and there’s no consumer confusion.  So I think it should just be totally a fraud-based thing.  I think trademark law should be just basically abolished and replaced by pure fraud law.

00:11:28

Oh, Julian, I’m not saying it’s personal, but maybe I misunderstood your question.  Well, let me read – hold on a second.  Let me read your question again.  Why should you not share the key to the course by Facebook?  Well, I think if you understand the purpose of this Mises Academy system, it would be immoral because you know that there’s sort of a gentleman’s agreement-type thing here, which is – it’s a moral thing outside the realm of pure libertarianism, but it’s contemplated by it.  I mean people can have morals.  I just think it would be bad form because you’d be damaging what people are expecting here.

00:12:04

And if people don’t cooperate, then we might have a worse course, and the whole Mises Academy might not work.  I guess that’s the reason.  But there’s no penalty for you to do it if that’s what you’re asking, no official legal penalty.  And I would not be in favor of that.  I mean if someone did that, I would just say, well, we have to find a different way to – find a cost of exclusion to make this course work because I wouldn’t teach this course if I didn’t make a little money off of it, but I’m not doing it for money really.  I’m doing it for fun and for the experience and to interact and to spread the word.  So if we can’t find a way to make it work, then we’d have to find some other way.  So – I don’t know.  I don’t know if it was Krugman or not.

00:12:46

00:12:54

Okay, Atchafalaya:  Only I pretended to be officially representing the NFL organizations, I would be fraudulent, no?  Yeah, if I understand the hypo you’re giving me, yeah, I think that’s correct, and I think that we would have to have a strong presumption of caveat emptor.  In other words, look.  You’ve got to treat people as a grown-up, and if you’re having an NFL slogan – logo on your booth or whatever you’re doing, people shouldn’t assume that you are saying you’re authorized by the NFL.

00:13:24

I mean if you put on there “officially authorized by the NFL,” in fact, let me go back a couple slides.  This is – you should take a look at this post here by – about Nina Paley’s idea – Karl Fogel’s idea of the creator-endorsed mark.  So if you actually say I authorize the use of this and they put it on there, and then if they didn’t, that would be a trademark infringement.

00:13:46

00:13:51

Some people are leaving, by the way.  We’re at 9:30.  I don’t mind personally staying much longer, but I’m afraid to cheat some people out of the discussion who left at the course time, although they can watch the recording later.  So let’s not go too much longer, maybe, say 10 or 15 minutes max more, but go ahead.  We’ll see how it goes.

00:14:16

Okay, Julian’s question – well, this is basically the contractual copyright scheme that some have proposed, and it’s somewhat related to Rothbard’s idea.  And your question is, in the libertarian world, could a music company make a contract with each CD buyer so you’re not allowed to copy the CD?  Yes.  I think they could do that, but if you remember, number one, let’s go back to our contract idea.

00:14:39

Contract is not binding obligations.  It’s just a network of transfers of title to property.  So in other words, if I buy a CD and I agree to this clause or provision you’re talking about, I mean I have to agree to some consequence if I do copy it.  So really the contract just sets up a payment of money from me to the music company if I copy the CD and if they can prove that it, I guess.  The cost of the song is 99 cents.  I don’t know.  Of penalties [no audio_00:15:41].

00:15:42

00:17:53

This is – that’s another reason they wouldn’t even try.  I mean they’d know that it’s futile to even try to do this.  And in a libertarian world, you wouldn’t have government snooping and subpoenas and all these injunctions and orders from courts to even try to go on a fishing expedition to figure out this in the first place.

00:18:09

00:18:14

How do I view proprietary software code?  I don’t know.  What do you mean how do I view it?  I mean proprietary means different things.  Do you mean DRM’d?  Well, I mean of course I’m against it because software – I’m not against DRM and I’m not against password-protected software, or you have to have the encryption key to unlock it or the code.  That’s fine.  If you want to do that, that’s fine.  I mean like in this course, you have a passkey.  But proprietary usually means you own it.  Proprietary—you’re the property owner.

00:19:05

And that is – you’re only the owner of it if there’s IP, which is patented.  So patent and copyright, primarily copyright, are the two IP types that cover software code—software code itself.  I mean without patent and copyright, you would not need copyleft and GNU and, in fact, it would make no sense because those are all licenses, and a license is just permission.  That’s what a license means.  I don’t know.  I mean creating a false encryption key would be fraud.

00:19:43

00:19:48

I don’t understand.  Give me an example.  Who is creating the key and giving it to who?  You mean like if I’m fake Microsoft and I sell a bootleg copy of Windows, and I say if you pay me the money I’ll give you the key, and then but I can’t give you the key because I’m not the original vendor.  So it’s just a scam, you’re saying, just a scam by a – I think that would be some type of fraud or some type of theft, sure.  But that’s another reason why reputation would be more important in a patent-free and a copyright-free world.

00:20:31

You wouldn’t buy from some Joe Blow on the internet who you don’t know.  You would use trusted systems like an Amazon or some vetted software-distributing network, or you’d use the – go to Microsoft.com and use them, whatever.  Alexis, I think he was envisioning some software vendor who was a pirate who was pretending to have a key but they didn’t, so they’re just stealing the money.

00:21:00

So Locke says you get your money if you mix labor with it.  Well, that’s a good question, and I actually think you kind of hit on what I have myself seen as a big problem with the entire Lockian framework.  So Locke – I mean Jessica, I can’t say whether it’s wrong.  I mean that’s an ethical question.  I don’t think it’s wrong, but that’s because you could imagine a similar license in a copyright-free world, and then it would be a contract breach to do it.  But would that be a likely restriction that would be placed on you?  I doubt it.

00:21:51

Anyway, let’s go back to this Locke question with Julian.  So what Locke says is that you own yourself, and therefore you own your labor, and therefore you own whatever you mix your labor with, which was previously unowned.  The problem with that argument is that it’s crankish because to say you own yourself is not – I mean what is yourself?  I mean I don’t know what myself is.  I know that I have a body, and every human has a body, which is a scarce resource, and then there are sometimes scuffles and squabbles over these bodies.

00:22:26

There’s never a fight between two selves.  There’s a fight between people trying to control or hurt each other’s bodies without their consent.  So to be a self-owner means that you are the one who has the right to control who gets to use or touch or do something to your body, so that’s all self-ownership means.  Your labor is just one of the activities you can perform with your body, so it’s an action.

00:22:54

Now, would you say you own your actions?  I mean I don’t even know what that means.  So I don’t really know what they mean when they say you own your labor.  It’s not a substance.  It’s just a thing you do with your body.  So to say that you own your labor is just – it’s a failure to be precise in thinking.  Rothbard pointed out that we do not [no audio_00:23:15]

00:23:16

00:23:55

Sorry about that.  I hate when it does that.  I don’t know why it does that.  Am I back?  No, so okay – am I back?  Hello?  Test.  Test.  So I think Locke is actually correct in his basic argument, but he has an unnecessary step.  Instead of saying you own yourself; therefore, you own your labor; therefore, you own what you mix it with, I think a more direct argument is better.  Just skip that and just say, look.  If there’s an unowned resource out there and you were the first one to claim it by appropriating it, by mixing your labor with it, that’s fine.  It’s a metaphor.

00:24:36

But that means you transform it, or you use it.  You possess it, and you put up borders around it.  You demonstrate that you want to own it.  Sorry, not just temporarily possess it.  Then, by doing that, you establish a better claim than anyone else.  So the reason is because any time there’s a dispute over property, one of the people claiming it is a late-comer with respect to the earlier possessor.

00:25:07

And, in my view, the very idea of property, which is that you have the right to continue to use something that you were a previous possessor of not just bare possession, not just might makes right, not just the right to use it as long as you have it, but the idea that you have the right to settled possession of it, the right to possess it.  That very idea implies that whoever has it now has a better claim against someone who comes later and tries to take it.  That is, a late-comer has a worse claim than an earlier-comer.  That is why the first guy to own it has a better claim than anyone.

00:25:42

That is why homesteading works.  So I think Locke is correct.  He just includes these crankish notions of labor ownership, which I think was part and parcel of this quasi-mystical, confused idea of labor, which results from overreliance on metaphors, not scientifically clarifying the concepts that you’re using and not being specific enough.  I don’t want to be harsh on Locke.  I mean he was great, and he was not standing on the shoulders of giants like we are now.

00:26:16

Yes, not just transforming.  It’s basically – I think the fundamental concept, which is what Hoppe says, is embordering, which is setting up borders, somehow, doing something with this resource to show the world that you are claiming it as yours—putting a fence around it, plucking the apple and putting it in your possession.  All these things are signals or signs that to the world that, ah, that’s that guy’s property.

00:26:39

So now, I can navigate around it and leave him alone and let him use it in peace, and I’ll go get my own property.  So – and in fact, I believe that this confusion about labor also was mixed in with Adam Smith’s ideas about the labor theory of value and which led to the Marxian ideas about alienation, and all their class warfare between employers and the laborer they call it, the workers, and the labor theory of value itself.  So I think that this whole fixation on labor is unscientific, overly metaphorical, confused, and has led to, in political theory, the intellectual property and reputation rights mistake, and in the realm of economics, has led to Marxism and bad economics.

00:27:42

I’m actually not sure where this – I don’t know if Locke is the one that came up with this labor stuff.  I mean I think he was part of the milieu at the time, and I’m not a big historian, so I’m not sure where it came from.  I think it was around before him.  He was kind of putting it together.  And I’m not sure about the transmission of those ideas from him to Adam Smith in the economic realm, but there’s some connection I believe.  Yes.  In fact, I think creating is a bad – I think what you create is you create value – sorry, you create wealth by transforming things that you own already.

00:28:19

You could say that in a way an unowned piece of land doesn’t exist in a praxeological sense until someone regards it as a good and homesteads it.  But that’s hyper-subjective, and so you could say as soon as you homestead it you create it because it wasn’t really good before.  You just caused it to come into existence as part of the universe of goods by regarding it as a good.

00:28:50

This is the subjectivism of Austrianism, which is good, but you take it too far you and you become hyper-subjectivist, and I think it’s just complete nonsense to say that you create a piece of land by homesteading it.  No.  I think what you do is you appropriate it.  You appropriate it.

00:29:06

00:29:11

But I think you appropriate it by embordering it or fencing it, yes.  That is my view.  That is Hoppe’s view, and if you read in his chapters one and two of A Theory of Socialism and Capitalism, he goes into this a lot.  It’s really good.  Anything else?  Well, I agree.  That’s why I say embordering, embordering in general.  For land, it would be fencing.  For other things, it would be a different type of embordering.

00:29:49

00:29:58

Matt, that might be some pragmatism.  I mean pragmatism is not always bad.  I mean there’s a practical aspect to all this.  We all want to get along.  We all want to find rules that we can use to have prosperity and cooperation and peace.

00:30:10

Okay, let me answer this question, and then I will bail out too.  But for the value question, the point is that you cannot own value to things.  You only own the physical integrity of property that you own.  The value – I mean you don’t need to own the value of how you regard it.  You can regard it however you want.  But the value of how it’s regarded by outsiders, that’s how they regard it.  You don’t have the property right to how they regard it or value it.  So there cannot be any property right in the value of things because that would be like the property right in other people’s brains, how they think about or regard your stuff.

00:30:58

Anyway, let’s call it an end.  I’ve enjoyed it tonight, and feel free to – oh, oh, I have to make one announcement.  I’ll send it on the list.  I am going to Ohio for a Federalist Society debate on Wednesday, so I cannot do the regular Q&A at the same time.  I’ll be on a plane.  So I’m either going to do it earlier in the day on Wednesday or perhaps I will do it on Friday.  I’ll post on the list and ask everyone what they prefer.  So goodnight, everyone, and I will talk to you all the next Q&A sometime this week.  Bye-bye.

00:31:34

Podcast (kinsella-on-liberty): Play in new window | Download (22.0MB)

Kinsella on Liberty Podcast: Episode 022.

This is lecture 5 (of 6) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.” The remaining lectures follow in subsequent podcast episodes.

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes:

[00:00–15:00] In the fifth lecture of the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” delivered on February 28, 2011, Stephan Kinsella addresses intellectual property (IP) from a libertarian perspective, critiquing its compatibility with property rights. He recaps the previous lectures’ focus on property rights, the non-aggression principle, causation, and responsibility, which provide the framework for analyzing IP. Kinsella outlines the lecture’s objectives: explaining why IP, including patents and copyrights, conflicts with libertarian principles, and exploring related issues like trade secrets and defamation within a property-based legal system.

[15:01–1:31:20] Kinsella argues that IP laws create artificial monopolies that infringe on tangible property rights, as they restrict how individuals can use their own resources to create or innovate. He contrasts IP with legitimate property rights, which arise from scarcity and homesteading, and discusses alternatives like contract-based protections for ideas. The lecture also covers defamation, suggesting it does not inherently violate property rights, and trade secrets, which can be protected through voluntary agreements. The session concludes with a Q&A, where Kinsella addresses questions on the practical implications of abolishing IP, the role of innovation without IP, and libertarian approaches to reputation-based disputes.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

SEE ALSO Lecture 5b: Q&A [KOL022b].

This lecture’s topic is “Intellectual Property and Related,” and discusses:

• Overview of types of IP
• Origins of IP
• The nature of property rights, role of scarcity, and the function of the market.
• Pro-IP arguments: utilitarian and deontological
• Defamation
• Free Speech and Property Rights (Rothbard)
• Proposed Reforms
• Imagining a post-IP world

For slides for all six lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

Slides:

The videos of all six lectures are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Recap

• Time Markers: [00:00–12:15]

• Description and Summary:

  • Kinsella opens the fifth lecture, welcoming students to the Mises Academy course and highlighting access to recordings, slides, and course materials.

  • He recaps the prior lectures, which covered libertarian basics (property rights, non-aggression principle), contracts, fraud, causation, and responsibility.

  • The focus of Lecture 5 is introduced: analyzing intellectual property (IP) and related issues like trade secrets and defamation through a libertarian lens.

  • Kinsella emphasizes that libertarian legal theory grounds law in property rights to resolve conflicts over scarce resources, setting the stage for critiquing IP.

  • He encourages students to review previous materials and engage with the suggested readings to deepen their understanding.

Segment 2: Intellectual Property and Libertarian Critique

• Time Markers: [12:16–27:30]

• Description and Summary:

  • Kinsella defines IP, including patents (inventions), copyrights (creative works), and trademarks (brand identifiers), as state-granted monopolies.

  • He argues that IP conflicts with libertarian principles because it restricts how individuals can use their tangible property (e.g., creating similar products or expressions).

  • Unlike physical property, which is scarce and requires rights to avoid conflict, ideas are non-scarce and do not justify ownership in a libertarian framework.

  • Kinsella cites his own work, Against Intellectual Property, to support the view that IP laws infringe on genuine property rights.

  • He contrasts IP with homesteading and voluntary exchange, which legitimately establish property rights.

Segment 3: Implications of IP and Alternatives

• Time Markers: [27:31–42:00]

• Description and Summary:

  • Kinsella discusses the practical implications of IP, arguing that it stifles innovation by creating barriers to competition and creativity.

  • He proposes that without IP, innovation would thrive through market competition, first-mover advantages, and voluntary contracts.

  • Contract-based protections are explored as alternatives to IP, such as non-disclosure agreements (NDAs) to safeguard sensitive information.

  • Kinsella addresses the argument that IP incentivizes creation, countering that historical evidence (e.g., open-source software) shows innovation persists without IP.

  • He emphasizes that libertarian law prioritizes tangible property rights, rendering IP unnecessary and harmful.

Segment 4: Trade Secrets and Defamation

• Time Markers: [42:01–57:00]

• Description and Summary:

  • Kinsella examines trade secrets, suggesting they can be protected through voluntary contracts (e.g., NDAs) rather than state-enforced IP laws.

  • He argues that trade secrets align with libertarian principles when based on mutual agreement, unlike patents or copyrights, which impose restrictions on third parties.

  • Defamation is analyzed, with Kinsella asserting that false statements harming reputation do not directly violate property rights, challenging traditional legal remedies.

  • He suggests that reputation-based disputes could be handled through private mechanisms, like public rebuttals or arbitration, in a libertarian society.

  • Kinsella stresses the importance of grounding legal analysis in property rights to avoid statist justifications for restricting speech or innovation.

Segment 5: Q&A and Closing Remarks

• Time Markers: [57:01–1:31:20]

• Description and Summary:

  • Kinsella opens the Q&A session, addressing audience questions on the abolition of IP and its economic and social impacts.

  • He responds to queries about innovation without IP, citing examples like open-source software and historical periods with minimal IP laws.

  • Questions about enforcing contract-based protections for ideas are discussed, with Kinsella emphasizing the role of reputation and arbitration in private systems.

  • He addresses concerns about defamation, clarifying that libertarian law would not treat it as a property violation but could allow private remedies like restitution for direct harms.

  • The lecture concludes with Kinsella encouraging students to review the slides, engage with readings, and prepare for the final session on punishment, restitution, and other applications.

TRANSCRIPT

Libertarian Legal Theory: Property, Conflict, and Society: Lecture 5: Intellectual Property and Related

Stephan Kinsella

Mises Academy, Feb. 28, 2011

00:00:01

STEPHAN KINSELLA: I’m glad to be here, everybody.  I just flew in from Colorado about an hour ago, so I was worried I wouldn’t make it here, but I did, so very good, and I broke no bones skiing in Telluride, so glad to be here.  And we have about 21 people here, and thank you, Danny.

00:00:18

So today we’re going to talk about IP, intellectual property.  And remember, this is something we covered in the six weeks in detail in another course, so I’m going to cover kind of the main points here but obviously not everything, and I will also cover some things we left off last.  So last time – let’s go ahead and get into it because every class I think I’m going to finish in 60 minutes, and we go almost 90 minutes.  So where we left off:  We were talking about causation, aggression, and responsibility.  And we talked about how you can be liable for inciting a crime and then also limitations on property versus limitations on action and why the fact that you can’t commit aggression doesn’t mean that rights are limited.  It means that your actions are limited, not property rights.  We also talked about strict liability, and we’re going to continue a little bit of that here.

00:01:09

So today we’ll talk about strict liability, and then we’ll get into IP, so I’ll just kind of finish off where we left off on the strict liability issues.  So the concept of strict liability is one of these things.  It’s a term that’s thrown around a lot by theorists and non-lawyers and just libertarians sort of casually, almost like the word fraud, which we talked about last time, and people don’t really give it a lot of thought.

00:01:40

Now, if you remember from our talk about causation and responsibility, you have to distinguish between behavior and action.  So behavior would be something mechanical that you’re not responsible for like an epileptic fit or if someone picks up your arm and throws it at – or strikes someone else in the face with it, you didn’t do it.  They used your arm to do it, but you didn’t do it.  So we have to distinguish between mere behavior and intentional action, and this is actually why there’s a spectrum from first-degree murder and other crimes and down to mere torts, which are just negligence and things like this, all the way down to no responsibility whatsoever.

00:02:16

So the idea of strict liability is that you should be responsible, for example, for your property.  So – and this is usually used in tort law, so if you sell a product that causes damage to the user, even if you weren’t negligent – so under the old law, you would have to show the manufacturer of the product was somehow negligent in making the product.  But under strict liability, they don’t have to show negligence.  They just have to show causation.

00:02:47

Now, I think this is a nebulous idea.  It’s sort of un-libertarian and not really grounded in libertarian principles.  If you think about it, the general idea is that we should be responsible for our actions.  If you want to attribute responsibility to a person for something he didn’t directly do, you have to have a good reason for it.  So that’s called vicarious responsibility or vicarious liability.  And one example of that is respondeat superior, which I have listed at the bottom of the page here.  Let me turn on my pointer.

00:03:18

So respondeat superior is one type of vicarious liability.  What that means is I’m responsible for the wrongs that someone else commits, in this case, the wrongs of my employee.  So if I have an employee and he commits a negligent action in the course of his performing his duties for my company, then the corporation or the company that employs him is responsible for his liability.  He’s responsible too.  So the victim can sue him, and they can sue his employer under respondeat superior.

00:03:47

Now, whether that is libertarian or not is debatable because this idea of respondeat superior is just taken for granted.  Some libertarians like Rothbard have some hesitations about whether this is libertarian.  After all, usually you’re not ordering the employee to commit a tort.  You’re telling him drive carefully, etc.  So if you have a driver who runs over someone and hurts them, why am I responsible for that?  I mean you have to have a good reason for that if I didn’t order him to do it or cause him to do it.

00:04:21

And in fact, if you think about it, let’s suppose he’s driving – the FedEx driver takes his truck home for lunch and has lunch with his wife, and on the way home, he hits someone.  Now, why would that be FedEx’s responsibility?  In fact, in the law, that’s called going off on a frolic, F-R-O-L-I-C, a frolic.  It’s like basically something unrelated to his job.  But even if it’s related to his job, he’s not told to be negligent.

00:04:47

So you have to have a good reason to attribute responsibility.  Otherwise, you would have results like we have now where the tobacco manufacturers are sued for the damages that occur to smokers even though they voluntarily smoke.  Or if someone is killed with a gun, then the gun manufacturer is sued for that, or all they did was sell someone a gun, and a gun can be used for good or evil purposes, and as long as they didn’t intend it to be used for a good purpose – I’m sorry, an evil purpose, and they weren’t conspiring with someone like in a bank robbery, it’s not clear why they should be responsible.

00:05:24

Also consider this, and this goes back to what I talked about last time about how you’re responsible for your actions and there are limitations on your actions.  Other people’s rights impose limitations on your actions, not on your property.  So, for example, you can’t say property rights are limited because you can’t use your knife to stab someone.  Well, the problem with that formulation is you can’t use anyone’s knife to stab someone without provocation.  It has nothing to do with whether you own the knife or not.  It has to do with whether you use some causally efficacious means to achieve an illicit end.  That’s the structure of human action.

00:06:07

So the means could be a gun or a knife or your fist or hiring a hitman.  Whatever means you employ to achieve this end, that is what’s prohibited.  So it’s not a limitation on ownership rights.  It’s a limitation on what you can do with any means whatsoever, whether you own the means or whether you don’t own the means.  So, for example, let’s go to this example I have right here in the middle of a page.  If someone steals your knife and then they use that to commit a crime, are you responsible for that?

00:06:35

Now, under an extreme strict liability theory you would be because you own the knife.  But we have to keep clear in mind that ownership is the right to control, the right to control.  It doesn’t mean necessarily the responsibility to control or to prevent it from being stolen even.  I mean sometimes crimes happen.  So if you keep in mind that a property right is a right to control but doesn’t necessarily imply any obligations, that will sort of get you out of this conundrum where people say, well, your knife was used to kill someone, or your dog bit someone or your child hit someone, or you have an epileptic fit and your arm slapped someone unintentionally, which is mere behavior.

00:07:20

It’s not clear that that’s an action that you should be responsible for.  So the general point is you’re responsible for intentional action regardless of the ownership status of the means that you employ, regardless of whether the means is another person or not.  And if you want to hold someone liable or responsible for the actions of another person, you have to have a good reason for it.  Now, in the causality lecture last time, as I pointed out, I think there is a good reason in the case of a conspiracy or a joint crime where you’re cooperating to commit a crime.

00:07:52

In that case, you use means, which is your fellow co-conspirators and whatever other means you employ, to achieve a criminal end.  So that’s the structure of human action applied to show why that would count as giving me responsibility for the crimes committed by my fellow bank robbers in the course of the robbery.  That makes perfect sense.  But other cases, you have to have a good reason for it.

00:08:15

Alexis: Does it matter what means are used to secure the knife?  Could it be negligent if I don’t secure it properly?  Well, I think it could be in some cases, but that’s highly fact-specific and contextual.  I mean this is one of these cases where, in my view, it’s hard to answer from your armchair.  But we can’t say in general that you’re always responsible for what happens with your knife.  I mean, look.  If that was the case, if someone stole my knife, even if I was as careful as could be, I would just abandon the knife.  I’d say, look – I’d get rid of my ownership of it, so I don’t have any responsibility for it, but that’s just a stupid formality.  It doesn’t make any sense why you would have to do that.

00:08:50

Matt says it can be in some cases.  Well, I do know, for example, that there is an analogous situation where you – if you – like take the case of promissory notes, which are checks and negotiable instruments we call these in the law.  Normally, if you don’t sign the check, then you’re not responsible for the check because you actually didn’t sign it.  So if someone forges your signature, then you’re not on the hook for the check.  But if you leave the check out in a negligent way, like there’s a bunch of strangers milling around your house, you leave the checks out, in some cases I think the law in some jurisdictions says that you should be responsible because you’re more negligent than the bank who couldn’t tell whether your signature was forged or not.

00:09:38

00:09:43

Now, I don’t want to go too far on this because I want to get to IP in about five or ten minutes at the most, but let me just say on this case, in different jurisdictions, there is thing called the duty-risk analysis, which is how the positive legal system analyzes negligence.  So what they say is did you have a duty that you breached by some negligent action where the risk of what was going to happen or what did happen was contemplated within the scope of your duty?  It’s this kind of complicated legal test.  So what they would do in the handgun case is they would say, well, if you own something dangerous and it’s around children and it’s on your property and you have the right to control it, then you have the responsibility to use it prudently.

00:10:26

So you have a duty to not leave it in full view of a 3-year-old kid or something like that where they might accidentally shoot someone.  So it would be encompassed under that.  And I think that a libertarian system, if it was being developed, could draw on some of those ideas, but they would have to look at them really closely and make sure that they are fully compatible with libertarian principles.

00:10:47

Okay, Julian:  One thing which I don’t understand is this.  If I plan with three friends to rob a bank and one of the guys gets nervous and kills someone, why should I be in any way responsible for his killing?  Well, I think the law here is correct, and this is my view, and I think most libertarian theorists would agree with this.  The law is correct in this case, and the reasoning is this.  If you have to choose between the victim and one of the three bank robbers, who would you side with?

00:11:18

I mean this is the basic libertarian point.  We side with victims.  We oppose aggression.  And in this case, I would say that the – you are the one who helped to initiate this crime, which had the danger and the possibility of harm being occasioned to innocent people.  So you’re much more responsible for it than the victim is, and so basically, they’re all attributed with the responsibility of what all their co-conspirators commit, and I think that’s a perfectly libertarian rule.  Well, not only did you know there was a possibility, you helped to cause the possibility to arise, and you basically put fellow – you enabled and assisted – aided and abetted fellow dangerous criminal people to get into a position where they might do this.  So it’s more – I think it’s more than negligent.  It’s actually during the commission of an intentional crime.

00:12:15

00:12:24

Julian, you’re different people, but again, I would just think about this.  Collective action is possible.  Joint action is possible.  Cooperative action is possible.  And that’s what you guys are doing.  You are cooperating in the commission of a violent felony, which could well lead to serious death to an innocent person, and you are enabling that to happen.  You are helping it to happen, and you are on the side of the bad guys there.  Well, it might give some incentives, Julian, but I mean I think we have to be careful about basing what the right libertarian policy and rule should be based upon incentives.

00:13:09

That can be sort of a way to think about it, but we have to be careful about that.  I mean sometimes justice is justice, and if someone is a co-conspirator of a bank robbery and someone is murdered during it, I mean it’s hard to imagine many libertarian jurists feeling sorry for this guy.  And there’s a related doctrine called transferred intent, so in transferred intent, let’s say you have what’s called a specific-intent crime where, like manslaughter is not specific intent, or maybe second-degree murder is not specific intent.

00:13:42

But for the really most severe crimes like first-degree murder, it has to be premeditated, and specific intent means you have to specifically intend to kill that person in a certain way, and then you do it.  But there’s sort of an exception to that doctrine called transferred intent, and you might want to Google that on Wikipedia.  It’s kind of an interesting doctrine and which I’m not too opposed to as a libertarian.  And what it says is, let’s say you are shooting at Person A.  You’re aiming at Person A, and you want to kill them.  But you miss, and the bullet strikes Person B standing right behind them.

00:14:13

Well, the law will sometimes make an exception and say, well, we’re going to transfer your intent from killing A to killing B, and we’re going to call that first-degree, premeditated, specific-intent murder of B even though you really didn’t, in actual reality, specifically intend to kill B because it’s really irrelevant whether you wanted to kill A or B.  So we take out that distinction as being an irrelevant distinction.

00:14:36

Okay, page – slide five.  Good.  Okay, before we go to IP, and what I want to do is I think I’ll talk about 35 or 40 minutes, and hopefully we will finish the main lecture at 9, and then we can have questions.  And I’ve said that every lecture, so I may be unintentionally lying, so I apologize, but I will try to finish in 45 minutes.  But before we go to IP, does anyone have any questions to date about anything we discussed or before we get to IP?  I’d be happy to take it now for a couple of minutes.  Otherwise, I’ll go on to IP.

00:15:12

00:15:20

Okay, audio and video quality, we have had no freeze-ups yet so far for 22 minutes, so that’s pretty good.  It’s a record.  Maybe Dimdim is improving.  I don’t believe in bad luck, so sorry.  I’ll knock on my computer.  All right, what is IP?  Now, let me just explain briefly.  Okay, hands are off.  Hands are off.  Sorry.  There’s a gremlin in there, the homunculus.  All right, I’m back now.  Still don’t believe it.  As my son would say, it’s just a coincidence.

00:16:05

Okay, so what I was saying was this topic is important because it sort of illustrates a – what I think has been a big mistake made in libertarian thinking for a long time.  And it’s finally coming to a head in part with the rise of the internet, etc.  Oh, Julian, the joke was that I said we haven’t had a freeze yet.  It’s been 20 minutes, and Jock said don’t say that.  You’re going to jinx it, and I said I don’t believe in bad luck, and then it happened, so I guess I was proven wrong.

00:16:37

Anyway, so just to remind you guys, I’m a patent attorney, and I’ve been doing it for about 18 years.  And I’ve been a libertarian for 25-30 years, something like that, and what happened was I kind of believed IP was valid because I read Ayn Rand and other people, and it’s called intellectual property, and you’re strongly in favor of property and the western American capitalist system, so you sort of assume that IP is valid, and then you read people like Ayn Rand, which are supposed to be arch property rights advocates, and they’re really in favor of it.

00:17:08

So – but it never made a lot of sense to me.  In law school, it always puzzled me because her argument for IP is full of holes.  I mean she pretends to be a principled, deontological-type libertarian.  But her arguments for IP are full of sort of utilitarian concerns.  For example, patents last 17 or so years.  Copyright lasts, I don’t know, 50-70 years, and she was in favor of something like that.  I mean she was in favor of it not being zero, not being infinity.  Well, I mean regular property lasts forever, so there’s already something different about that.

00:17:45

And then even if it’s not going to last forever, where do you draw the line?  How do you pick – is a patent going to be 15 years, 17, two years, 21 years?  How do you know what the right number is?  So she obviously had no clue, so it bothered me.  So I started practicing patent law in ’93, and about that year I finally came to the conclusion simultaneously that this is nonsense, and I’ll go through my reasons why, and I’ve believed that ever since, and I’ve honed my reasons over the last several years.  And a lot of libertarians are coming this way too now, but this is not my argument, and it’s not a new argument.

00:18:22

I mean there was actually a whole debate about this in the late 1800s, and there were early libertarians like Benjamin Tucker and others who were against it, and then there were sort of fairly recent libertarians like a generation ago like Wendy McElroy, Tom Palmer, and Murray Rothbard even who noticed some problems with IP.  But they gave it some attention, but then it kind of faded away, in part because the battle has been lost and IP is entrenched and in part because it just wasn’t that big of an issue.

00:18:52

It was bad, but it wasn’t like the war on drugs or taxes or war or public education, government education, etc.  But I think what’s happened is with the advent of the internet and with the increasing speed of commerce and worldwide communication, there are a lot more outrageous patent lawsuits and copyright suits.  They are more frequent.  They are applied to evermore areas because of the ability of digital information, for people to be infringers more easily, pirating software and music and file sharing and copying and all this.

00:19:34

And the cases where it does happen are transmitted around the world instantly by blogs and RSS feeds on the internet, so people are aware of these things.  So it’s become more of a hot-button issue with everyone really, and libertarians, in my impression, the more principled, more radical, more Austrian type libertarians are almost universally against IP now and with really good arguments.

00:19:58

Okay, yeah, it was fun.  So this is why this topic is important.  I started writing on it because I practice patent law, and I saw some ineptness in some of the arguments because people just didn’t understand the law.  And I was just trying to gather my thoughts on it, and to be honest, this topic never was and still is not my most interesting topic to me.  I like the other things we’ve talked about so far better, but this one is so important to talk about, and it’s become increasingly important, and I can talk about it because I know something about IP.

00:20:37

And I’ve seen that it actually supplements and increases our understanding of different areas of Austrian economics and other areas of property rights itself, so it’s an important topic.  As for, Jock, your comment about Tucker, yeah, I agree.  Of course, the problem in my view with Tucker, one of his four great monopolies, was also land.  Now, to an extent, I think he had a point to the extent he was talking about the systems of property rights that had been created by state privilege.  But it wasn’t clear that it was that – that was his only criticism.  It was sort of anti-property or anti-land-rights focus.

00:21:16

And also, I recently discovered, by the way – I posted on this recently.  Proudhon, the famous, I guess, left anarchist, left libertarian, darling of the left libertarians who – the guy who said property is theft who also said property is wonderful.  Proudhon actually was in favor of state-granted patents and copyrights as long as they weren’t – that’s great.  I posted on this on Facebook the other day.  I don’t know if I did it on my blog.  But I think it’s on the C4SIF.org blog.  Just go there and search for Proudhon, and it was incredible to me.

00:21:55

I mean – yes, Jock, I do agree.  This is what’s really good about a lot of the left, especially the modern left libertarians but even the old left.  They were quite good on IP except for some exceptions like Spooner.  Now, I don’t know if I’d call him a lefty, but Spooner was completely crankish on IP.  I mean kind of like Rand or Galambos or someone.  And by the way, the greatest cranks on IP in my view are Rand, Galambos, and maybe Spooner, but I don’t give him too much grief because he was so early.  Rand should have known better.  Galambos should have known better I guess, but he was an engineer and infected with the scientistic mentality.

00:22:35

Okay, so let’s talk about what this is.  I’m just going to give a quick overview of what IP is.  Intellectual property is the term we use now to include a group of state-granted rights.  They didn’t used to be called property rights.  They used to be called monopoly or whatever they were.  So it includes four main types of legal rights and some other more recent ones, but they’re not that important.  But the main ones are patent, copyright – excuse me – trademark, and trade secret.  And you will notice that people who talk about IP like libertarians, especially those who are in favor of it, often don’t know what they’re talking about.  I mean they’ll mix up patent and copyright.

00:23:21

Now, I don’t blame them for mixing it up.  It’s a highly specialized field.  I mean most people don’t know a lot about brain surgery either.  But they don’t have a lot of opinions on the best brain surgery technique, but for some reason, laymen feel compelled to weigh in on why we need to have patent, copyright, trademark, and trade secret, and when they don’t even know really the difference between them.  And then they can’t explain why we don’t have to have fashion designs or maybe we should have them or database rights or moral rights, and etc.

00:23:50

So the main types of IP is patent and copyright, trademark, and trade secret, and then there are other things that are not traditionally called IP, which I think should be included in IP.  That would include things like reputation rights, which is sometimes called defamation or libel or slander.  That’s very similar to IP, also publicity rights.  I think there’s a recent controversy about whether J.R.R. Tolkien can be a character in a novel, and his estate is suing for the right to publicity, which is, of course, censorship and absurd.

00:24:27

And now, there are modern rights too, of IP rights like boat hull designs, which is sort of a subset of copyright, and semi-conductor mask work protection, which covers the way you lay out an integrated circuit like what Intel does.  And there are different types of patents.  There is – so patents cover – the main two I’m going to focus on here is patent and copyright.  These are the two worst in my opinion, the two most egregious.

00:24:53

Now, I think it’s helpful to go back and think about – okay, this slide here, six, is just a listing of the different types of rights.  And by the way, fashion rights are being proposed as we speak right now.  They’re being fought, but who knows?  It’s important to understand how these things came about and why – I think it helps to get your mind wrapped around that there’s been a mistake made all along by libertarians, for example, and why we would have done that.

00:25:31

So let’s just start chronologically.  Let’s go back in history and think what happened.  So the origins of copyright and patent, and let me just briefly say copyright is a monopoly right granted by the state in the expression of an idea, the way it’s expressed.  So that would include like a novel or a painting or a song or lyrics to a song or even software nowadays.

00:26:01

And a patent covers an invention, which is a practically useful design of a machine, for example, that does something useful or of a series of steps, a process to make something useful, which you could think of as a recipe.  Okay, so the origins of things – now, these things actually were hundreds of years even before their kind of modern origin in England in the 15-1600s, back in the mercantilist times and even before that.

00:26:33

But sort of the kind of modern origins of this was in England and Europe.  So here’s what happened with copyright.  Queen Mary created the Stationer’s Company, 1557, and she gave them exclusive rights over book publishing, and the purpose was to control thought and to censor thought and to prevent the wrong ideas from being published, so they were afraid of the printing press.  The church and the state were afraid of the printing press and the power of ideas.

00:27:06

So when the charter for this guild or this company expired 150 or so years later, the publishers said, hey, we kind of liked having the monopoly of this, and they asked parliament for a statute.  And instead of giving it to the publishers, they gave it to the authors.  So they gave the authors this copyright.  So its origins lie in censorship, but one reason that the authors were in favor of it was because they were glad that they had the right to decide to release their work.

00:27:37

In other words, it released the power of the Stationer’s Company or the state to control their work.  They had the power.  So in a way, the reason they wanted copyright was they were now free of state censorship.  It was up to them.  It wasn’t this modern mentality that, hey, I’ve got this copyright.  I can now go around extorting people.  They were primarily glad that they were able to release their works from the control of the state.  So that was 1710, the Statute of Anne, the first modern copyright statute.

00:28:05

Okay, now, in England was happened was you had the monarchs granting all these patents, letters patent they called them.  It was basically an authorization by the crown, which gave someone the exclusive right to do something.  It usually had nothing to do with inventions.  It was just you get the right to export this commodity.  You get the right to sell horseshoes in this town, something like that.  And they did this for favoritism, to gain loyalty among these people, and of course the consumer suffered, and the competitor suffered.  So you had this practice of monopolies being granted, explicitly called monopolies.

00:28:48

And what happened was – and by the way, one of the most famous examples was Sir Francis Drake who had a letter patent which authorized him to engage in piracy, real piracy.  Okay, so there was an uproar against this, and so parliament passed the Statute of Monopolies in 1624, and they said, look.  We’ve had enough of this.  We’re going to ban all these patents that are being issued by the crown except we’ll still allow them to be granted for novel inventions.  So they made an exception for this, so this is how patents that we have now squeak through.

00:29:26

So fast-forward to America, 1789.  By the 17—I think it was ’69, ’67, ’61—the first modern patent statute was for South Carolina actually, 17—I think—61.  In any case, so the founders of the American Constitution included the patent and copyright clause in the Constitution, 1789, because they were used to it, and they sort of were buying into this then-being-passed-around idea that, well, we need to have some kind of temporary monopoly for writers and artists and inventors and scientists to give them an incentive to create and to give scientists an incentive to disclose.

00:30:14

Actually, I think a lot of those were – Jock, the East India Company, I think that was a patent.  A lot of these companies, these old companies that had the monopoly on these trade routes, they were actually granted by letters patent.  The Bank of England – and I think that’s a different situation.  That’s a state monopoly itself.  But yeah, and what happened was – in fact, a lot of the land grants, Jock, were granted this way by these – the king would authorize some company in America [no audio_00:30:47].

00:30:49

Am I back?  Am I back?  Okay, sorry.  Oh, what I was saying was a lot of these – I was reading today, an 1823 or something US Supreme Court case about some of the original disputes about land grants in America.  And there was a dispute about whether – who had title to this piece of land.  And sometimes they would trace it back to this grant by a company that was authorized by a letter patent by the king in England to make land grants.

00:31:21

And so, of course, this ties into a lot of left libertarian opposition to property titles, and you can understand why.  But this is tied up with the whole idea of a patent that the crown or the state grants someone an exclusive right to do something that no one else can do.  Now, the bottom line is the original incorporation of the copyright and patent clause in the modern western systems like the American Constitution, was not based on natural law.

00:31:54

Thomas Jefferson, James Madison—these guys did not believe it was a natural right.  They explicitly put it in there as like a utilitarian thing.  Barry, I believe it.  I’d be curious to see exactly more about that.  Anyway, even John Locke didn’t believe that patent was – and copyright were natural rights that could be justified under his homesteading theory.

00:32:18

So nowadays you’ll hear people call it a natural right, but that’s just another attempt to reverse engineer or to justify it after the fact.  It was put in there for utilitarian reasons.  This is without doubt in my opinion.  So it was based upon the assumption – now, remember, this is 1789.  There was no data, no empirical science, no empirical economic studies, no econometrics.  They just assumed that, hey, we can make things a little bit better in society if we grant these temporary rights.

00:32:45

But the truth is that studies cannot verify this at all, and in fact, most studies show that, if they’re conclusive, most of these empirical studies conclude that patents and copyrights actually reduce overall innovation and distort the market and cost a lot more than they’re worth.  And so this is – this was what Fritz Machlup, who was a quasi-Austrian economist who was hired by Congress to do a study in 1958 of the patent system, he concluded – now, this was a mainstream study, one of the best, most thorough studies I’ve ever read.

00:33:22

And he said here, you see what I’ve got bolded.  No scientist – no economist on the basis of present knowledge could possibly state with certainty that the patent system, as it now operates, confers a net benefit or net loss on society.  And then he says, if we didn’t have a patent system, it would be irresponsible to recommend instituting one.

00:33:41

So this is what the report to Congress concluded.  So in my opinion, this is arguably one reason why the current patent and copyright law could even be argued to be unconstitutional, even though there’s a patent and copyright clause, because that clause says that the purpose of these laws is to encourage – to promote the progress of the arts and the sciences.  But if actually doesn’t promote it but actually hinders it, which I believe it does, then it seems like it’s arguably not even authorized by the Constitution.

00:34:12

Anyway, so the point is, because it’s part of this constitution of this capitalist, property rights, quasi-libertarian society, America, and the growing western countries too – oh, Karl, good.  Was he an Austrian or quasi-Austrian or what?  I always assumed he was a quasi-Austrian, but I’ve wondered if I’m describing him right.  Let me know.  Anyway, I’ll check back with you in a second, but the point is what happened was, first of all, it started being called the property right.

00:34:55

This was done – as Machlup noted, they started doing this – yeah, but he was at least Austrian sympathetic, at least that.  Anyway, as Machlup concluded with Penrose, the reason that they called it property was instead of using the word privilege or monopoly.  So they were doing it for completely propagandistic reasons.  So what happens is everyone assumes that this is a type of property right, type of a capitalist system.

00:35:27

And here’s what’s ironic.  So nowadays, we have this situation.  Right, I agree, Karl.  So now we have people saying, well, I’m in favor of IP because it’s a natural right, totally oblivious to its origin in utilitarian grounds, and before that, in complete state censorship and monopoly privilege control.  Or they’ll defend it on empirical grounds, but they never give any evidence.  They just say, well, we need it to incentivize inventions.  Well, how do you know?  And what’s the net benefit that we’re getting from this system?  And what’s the cost of it?  And how bad is the distortion it effects on the economy and the scientific research and industry?

00:36:11

So they – it’s sort of like they just say, well, theoretically it’s justified, but we don’t know if it is, and we don’t really care.  And this is one of these things where most economists seem to realize that IP is not justifiable on economic grounds like the minimum wage, which is also hard to kill even though most economists realize that the minimum wage cannot be justified economically.  So then you have Ayn Rand who’s a big influence on early-modern libertarianism who comes over here, and she sees this system, and she loves the American system because, to her, it’s a breath of fresh air.

00:36:52

She’s coming from Soviet Russia, and I can’t blame her.  I mean the America that she came to in the early 1900s was a libertarian paradise compared to Soviet Russia.  So she starts reading all this classical liberal thought and the Constitution, and she’s impressed by it.  And there’s even a story.  It’s in Rothbard’s unpublished correspondence that she originally actually supported eminent domain, which is the state’s ability to seize private property for public use if you pay adequate compensation to the person, which is un-libertarian.

00:37:28

She accepted that initially because it’s in the Constitution.  The Constitution authorizes eminent domain.  It just says if you take someone’s property, you have to pay them a fair fee for it.  She dropped that later because she became more radical, but the point is she was enamored of this constitution, and she really took to the patent and copyright idea.  In fact, she’s even said patents are the heart and core of property rights, and some of her followers say that all property is intellectual property.

00:37:54

And what their thinking is this Randian or objectivist idea that we have rights because we need them to prosper in life, and to prosper in life, we have to be able to create things, and to create things, we have to have property rights in these things that we create.  I mean it’s sort of that kind of argument.  But it kind of gets crankish because she says if you create a value, you own that value, so we create values.  Well, that’s actually not true.  We don’t create values.  That’s a crankish understanding of what values are.

00:38:27

If you have a good understanding of Austrian economics, say, values don’t exist as independent things out there in the world.  A value is more of a relationship between a valuer or an actor and a scarce resource in the world or some end state that you want to happen.  So if I have an apple, it’s not a value, and it doesn’t even have a value.  It’s that I value it, and I demonstrate that value in my action.

00:38:55

Okay, if I decide to part with a dollar to obtain the apple, then I’m demonstrating that I value that apple more than the dollar, so that’s all value means.  And let me go to the next page.  So Rand – I don’t have it in this slide here, but Rand even recognized this.  I have a post up at – I mean Rand, Rothbard, others – they’re pretty good on this.  They actually – well, Rothbard is really good on it.  Rand is good here, but she’s inconsistent with this later.  What they say is we don’t really create anything in the world because the universe is fully of matter, all we do is rearrange it.  And that’s true.

00:39:33

Now, that’s not trivializing the role of knowledge or innovation or creativity or thinking.  It’s just explaining what we do with it.  In other words, this is the correct view of how we act.  We, human actors, face a world of scarcity, and we face a world of a certain understanding of what’s going to unfold in the future and what’s happening right now.  And we have desires and values, things that we want to happen differently.  So I have a certain thing I want to happen in a year, in a month, tomorrow, five minutes that wouldn’t otherwise happen if I didn’t take some action to intervene in the state of affairs.

00:40:12

So that is why we act.  That is what action is.  Action is an intervention to try to change what’s going to happen.  Okay, so what you do is you use your understanding, your knowledge, information about the world to figure out what’s possible, to decide what would make you happiest, and to go for that and to select certain means to accomplish it.  So that’s the role of information.  The role of means is causally efficacious means that help you achieve your end.  That’s what an action is.  But deciding what end to pursue, deciding what means to use is informed by or guided by knowledge that you have.

00:40:53

So the greater your universe of knowledge – or sorry, the greater the amount of knowledge that you have, the greater the universe of possible ends you could think of, and the greater the universe of means you can think of to accomplish it.  So, for example, if I know that I can make a chocolate pie or a lemon pie, I might prefer the lemon pie.  And then I might – I can think of three means to achieve that.  I could make it myself, I could hire someone, or I could go to a store.  That’s three means.  Or I could rob someone.  I mean that’s another means.  If I learn more information and the body of information grows throughout human history, then I might realize, hey, there’s a coconut pie.  That’s possible too, so now I might choose that.

00:41:37

So now I have a wider universe of ends, and I might realize, well, there’s a different machine that can make pies too.  I mean so there’s – or there’s a more efficient technique for making pies.  So knowledge is what informs human action, helps guide our decisions, helps guide the means we choose, helps guides the ends that we pursue with these means.  The reason that there are property rights in the means is because they are scarce.  I couldn’t achieve my end if I’m not able to employ this means.

00:42:10

But because the means is necessarily scarce, as Mises points out, because the means is necessarily scarce, if I don’t have a property right to use that, if other people can try to use it too and fight with me over it, then they might get it from me, we might destroy it, or we might kill each other.  In any event, we’re not being productive – using our time productively, and we’re not using the means productively to achieve the end.  This is the very reason why there must be property rights in scarce resources, as we discussed in the first one or two lectures.

00:42:41

And this is why it makes no sense to have property rights in knowledge because knowledge is what guides your action, and there is no reason why multiple people couldn’t use the same recipe for pie at the same time.  But they can’t use the same ingredients and mixing bowl and oven and kitchen at the same time.  This is the fundamental difference.

00:43:00

Now, I think I’m going to get to this in a minute, but let me backtrack, and let’s go back to where I left off.  What are some of the arguments – well, actually, I’m going to skip this page.  This is just kind of silly.  These are silly arguments given for IP; 8:44.  I will go briefly over this.  Some of the key intellectual property statutes and treaties—just to give you a flavor for how bound up this is in statism and legislation and interference with the market.

00:43:26

So like I said – well, you had stuff earlier – you had stuff as early as 500 B.C.  There was some monopoly given to the winner of a cooking competition.  They had the right for one year to be the only one who could make that recipe, so you had stuff way back.  But sort of the modern development: 1624, the Statute of Monopolies.  It’s called the Statute of Monopolies of 1623, but I think it was enacted the next year, same thing with the next statute.  Anyway, that’s a key patent statute.  1710, the Statute of Anne—that was copyright.  And as I said, 1691, South Carolina enacted the first general patent law.

00:44:04

Okay, so then modern IP.  I think the US Patent Act is the oldest or one of the oldest 1790.  It’s authorized by the Constitution.  It’s administered by the US Patent and Trademark Office or US PTO.  Copyright is also authorized by the American Constitution, and it was initiated in the Copyright Act of 1790, and it’s administered by the Copyright Office, which is part of the Library of Congress.  Then you have trademark law, which is governed by state laws.  Plus there’s federal Lanham Act, which has a federal aspect to it.  That’s also governed by the US PTO.

00:44:45

Jock: What were things like Watt steam engines cited by Boldrin patented under?  That’s a good question.  I’m – it had to be the US patent system for sure, and I don’t know.  Maybe the British patent system too.  I’m not sure.  I can’t remember which system it was patented under.  It’s covered in detail in the early chapter of Michele Boldrin and David Levine book, Against Intellectual Monopoly.  But I’m forgetting which patent system covered it, but it was one of these modern systems.  That’s a good point.  This was written, wasn’t it?  I can’t remember.  I have to look it up.  That’s a good question.

00:45:27

Anyway, let’s go on to the next issue.  Okay, so there’s modern changes to copyright.  There was a No Electronic Theft Act, or the NET Act.  There’s the Sonny Bono Copyright Term Extension, sometimes called the Mickey Mouse Protection Act.  That’s 1998.  The extension added 20 more years to copyright.  Digital Millenium Copyright Act, DMCA, which is one of the worst, which has these criminal penalties for use of technology that could circumvent DRM even if you have the right to do it under exceptions to copyright law.  And this is what boat hull or vessel hull design came from, the DMCA.

00:46:15

The DMCA is one of the worst, and the problem is the ACTA, this treaty – I think I have it on a page or two.  Let me do this quickly.  Trademarks added something called anti-dilution rights in 1995, which made trademark law much worse.  And there’s a federal aspect to trade secret law in the Economic Espionage Act, which could make it a federal crime to misappropriate a trade secret.  The major international bodies that govern the international sort of treaties and international standards is the World Trade Organization and the WIPO, the UN’s world intellectual property organization.

00:46:51

So you don’t have to know all these details, but this is – it just gives you an overview of this horrible internationalized and statist legislated network for laws that govern all this.  As for treaties, we have the Paris Convention, which has to do with patents, 1883, the Patent Cooperation Treaty in 1970, the Berne Convention, which covered – and the WIPO Copyright Treaty of 1996, and the other one is 1886.  This has – this requires us to have international copyright standards.

00:47:23

Now, the problem with these treaties is let’s say we had a movement right now to radically change copyright or patent law.  We actually could – Congress couldn’t do it because they would be actually in violation of international law.  They’d be in breach of international treaties, which they actually pushed on the world.  It must have been a British patent, Jock.  I just think they weren’t quite as systematic then, but they were being granted, but I don’t remember the procedure.

00:47:55

Am I still there?  Okay, there’s also something called the Madrid System, which is what covers international trademarks, and then there’s the GATT, General Agreement on Tariffs and Trade, and they have something called TRIPS.  Anyway, there’s all these international things that give rise to the modern system.  Now, what do we have pending, coming down the pike?  We have the Anti-Counterfeiting Trade Agreement, or ACTA, which will impose DMCA-type controls on every country.  It’s horrible.

00:48:27

We have the COICA, the Combating Online Infringement and Counterfeits Act, which would allow domain names of websites accused of piracy to be blocked.  ACTA was negotiated in secret.  What happened with ACTA was it was done as a trade agreement, which is usually like a bilateral or maybe multi-lateral agreement between countries to have trade, and those are usually done in secret.  These IP treaties are treaties that are usually done openly, so this was done on purpose as a trade agreement so that it could be done in secret.

00:49:01

But this heroic law professor, Michael Geist, in Canada helped to expose this.  Someone leaked to him the ACTA drafts, and a lot of attention got shone on it, and actually it’s been diluted a little bit.  So if it gets passed, it won’t be as bad as it was before, but it’s still pretty bad.  And there’s also currently agitation to add IP laws for fashion rights, fashion design rights, and I’ve blogged a lot about that on C4SIF.  If you just go to C4SIF.org and just search the word fashion, you’ll see two or three posts about this.

00:49:35

Julian: Can one invent something and then release it?  Oh, quickly, by the way, anything that Schumer or Orrin Hatch has to do with on IP, especially Hatch – he’s horrible.  He’s nothing but a shill for these companies that want stronger IP protection.  He’s horrible.  Anyway, can someone – Julian says, can someone invent something and then release it under the GNU software license so that someone else can’t patent it first and then sue you for – okay.  This is – the GNU software licenses have to do with copyright, so it’s a way of licensing your copyright in the way that code is expressed.

00:50:19

There is a – I wish I could remember the post.  I posted on C4SIF.org recently about this.  There is – there are two or three companies out there that allow you to publish your idea.  I think I put this on the Mises blog too in the last month or two.  So here’s what happens.  Under patent systems around the world, you are entitled to a patent on a novel and non-obvious inventive idea if you invented it and if it’s not already known in what’s called a prior art.

00:50:54

So let’s say you come up with some great idea, but three years ago someone else came up with the same idea, and they sold a product that embodied this invention, or they published an article on it, but they never did get a patent themselves.  Well, if it’s been known for three years already, it’s part of the prior art and would block you from getting a patent.  Well, it actually might not block you because the patent office might not find it.  If they found it, they shouldn’t give you a patent.

00:51:17

Sometimes they make mistakes, and they grant these patents anyway, but at least you have some chance of preventing the patent from being issued, or if it does issue and it shouldn’t have, then if they try to enforce if against you or someone else, the victim of their patent suit could find the prior art because they have a much greater incentive when they’re sued for patent infringement for millions of dollars.  They have a greater incentive to do a $20- or $50,000 search and find that prior art when the patent office doesn’t and doesn’t really care too much.

00:51:47

Anyway, the point is there’s a good chance that it would be found then, and the patent would be invalidated, and they would lose the suit.  So companies do this quite often.  They will do – it’s called defensive patent publishing, and in fact, if you’re interested in this, go to C4SIF.org or Mises.org and search for my name, Stephan Kinsella, and defensive patent publishing in quotes, and you’ll find this blog post I had up recently, which discusses just this.  So what you would want to do is if you’re using an idea and you don’t want to patent it but you don’t want to be sued by someone else who later patents it, you just need to make sure the idea is public.

00:52:28

Now, if it’s part of software or if it’s embodied in some product that you’re selling, it’s already public in a sense.  But you could also publish an article on it somehow to try to make it part of the public prior art record.  That’s it, Jock.  Thank you.  All right, make sense, Julian?  Okay.  This page here – I’ve already kind of talked about this with – the point is that libertarians believe that the purpose of the law is to do justice, to protect property rights.

00:53:05

The fundamental problem with IP is that it gives someone a veto right over other people’s use of their own property.  This is the fundamental problem with it.  And the problem with that is that it’s a transfer of wealth or it’s a transfer of property rights.  So today, I have the right to use my car in any way I see fit as long as I don’t commit aggression.  Tomorrow, Joe Blow gets a patent on a way to tune a carburetor of a car engine because he figured out a way to tune his own carburetor of his car to get better mileage, let’s say, gasoline mileage.

00:53:42

So the government gives him this patent, which gives him the right to use the state’s courts to issue force against me to tell me I can’t use my own screwdriver and driveway and car and hands to tune my own car in a certain way, even if I thought of it myself.  So basically it gives him a veto right over how I can use my property.  This is a partial ownership right.  He is now a co-owner of my property with me.  And of course, this is inconsistent with the libertarian idea that the owner is the person who homesteads this property from the unowned state of the world, not someone who thinks of a way to use their own property.  This is just an excuse to rationalize or justify the monopoly that’s granted by the state to this guy.  It’s really granted to him to help prevent him from having to compete.

00:54:49

Okay, I’ve already discussed all this.  I’m going to go on so I try to stay on track here.  I’ve written an article with Jeff Tucker, and we tried to break goods down into scarce and non-scarce and also whether they’re goods or not goods.  It’s not too important for this.  It’s just as a way to try to categorize this and understand what’s going on here.  You can look up that article if you like.  It’s Jeff Tucker and Stephan Kinsella.  It’s “Goods: Scarce and Non-Scarce.”  I think that’s a hyperlinked title there in the slide.

00:55:23

And I’ve already talked about this – some of this.  The entire purpose of the market – think about this.  The free market helps us produce abundance in the face of a world of scarcity.  So we’re dealt with a world where things are scarce.  We can’t all have what we want all the time.  There’s not enough – maybe not enough food, not enough scarce resources to make houses, riches, clothing, whatever.  But despite that, when you unleash people’s energy with a property rights system and respect for individual rights and the free market, we have tremendous abundance that is possible in the face of scarcity.

00:56:05

So the free market and libertarian ideas being implemented this way helps us to see that the market and human society and activity is trying to overcome scarcity.  Scarcity – I won’t say it’s a bad thing because that’s part of the way the world is, but at least it’s a challenge to the way we have to live.  But as I mentioned, knowledge and information also plays an important role in human action.  But it already has a characteristic that is already not scarce.  It could be multiplied to infinity.  It can be shared.  This is why there’s human progress is because the body of human knowledge grows all the time.

00:56:43

So there’s more of these recipes and knowledge and information that people can draw on to make action – to make human action more efficient, to make there be more production.  So to actually impose scarcity on it, when the free market is trying to reduce scarcity in material things, and luckily, we already have non-scarcity in ideas.  To try to impose scarcity on that is absolutely insane and suicidal and is completely un-libertarian in my view.  I’m going to skip this page here, although you might want to look at the cartoon.  It’s kind of funny.

00:57:25

00:57:39

I’ve got some blog posts here that you might find of interest, what Mises’ views on IP were.  Mises was sort of agnostic on this.  He treated that – he looked on it like an economist.  He said, well, if you don’t have IP, you’re going to have underproduction of some things, but if you have it, there’s other problems.  I think he was a little bit ambivalent, but he was pretty good in some ways.  Hayek was a little bit better.  Rothbard was very good, although he gave a little bit – he thought there was more scope to what’s called contractual copyright than I think that really could work.

00:58:11

I don’t have time to go into that tonight.  I discuss that in detail in my article – my monograph, Against Intellectual Property.  But as Jeff Tucker pointed out in one of his talks, and I sort of talked with him about this and learned from this, you can look at the market as having three essential aspects.  I won’t say this is all the three aspects, but one is cooperation and the division of labor, and one is emulation and learning, and one is competition, and these things all go together.  I mean we cooperate because we have property rights in scarce resources.

00:58:43

But we have competition.  This is part of the market.  But competition requires that companies have the right to emulate each other.  You see a competitor doing something.  They’re getting customers, and you emulate what they’re doing, or you do it better.  This is why the market is always improving.  This is why there’s progress.  This is why the consumers are always benefitted, and this is why prices would always rise and there would always be constant innovation on the part of producers to try to attract customers.  There’s nothing wrong with emulation and learning.  Remember, we talked about the importance of recipes and the knowledge as a guide to human action.  So this is just the aspects of the economy.  Emulation is part of it, and patent and copyright seek to block that part.  This distorts the market in addition to violating individual property rights.

00:59:35

Let me quickly mention something here.  So as I mentioned earlier, reputation rights are part of IP, although they’re not typically classified by lawyers or legal scholars as part of intellectual property, but they are because it’s the same idea.  You created something of value with your effort, and therefore, you have a property right to it.  But of course, the problem is a reputation is just what other people think of you.

00:59:57

So if you have a property right in that, that mean you have a property right in other people’s brains, which again, is just like IP in that you have a property right, a partial veto right in what other people do with their bodies and their property.  I’m going to skip this part here because we’ve already talked about debtors’ prison in the other lecture.

01:00:20

I’m going to skip this too.  I’ve already actually mentioned this that Rothbard, Rand, Mises, and Hoppe – they all recognized that – well, let me go into this.  This is an important point to mention too here.  So one common mistake that’s made is people will sort of say, well, there’s three ways that you can acquire property.  You can find – you can appropriate it, something unowned, Lockian homesteading, you can purchase it from someone by a contract, or you can create it.  And so then they’ll say, well, the things that you create like your reputation or like a recipe or an invention, well, these things “have value” too.

01:01:01

This is just one way of creating things.  I’m sorry—this is just one way of acquiring property rights to things, so you should have property rights in these things too.  And I agree that if you can correctly describe an innovative and creative activity as creating something that is ownable, well, the creator is the one who should own it, sure.  The problem is this is double counting, and it’s confused thinking.

01:01:27

Creation is not a source of property rights.  Creation is a source of wealth, but wealth is just how you value or regard the usefulness of things that you own, that is, scarce resources.  So, for example, if I transform property that I already own into something more valuable, a new shape, then I have increased wealth, but I don’t have a new property right.  I already owned the thing, the raw factors and the materials.  Like if I have metal that I own and I transform it into a sword, well, I have a more valuable thing now than an unshaped mass of metal.  But I don’t have a new property right.  It’s just the metal that I owned is now in the shape of a sword.

01:02:11

So you can see there’s this confusion between the role of labor and creativity and the intellect and ideas and making things more valuable by rearranging them, which is another way of saying creating wealth or creating value if you’re not being too precise.  But you’re not creating a new thing that we have to find an owner for.  We already know the owner.  The owner if the owner of the factors that went into it.  So this is the entire mistake made by advocates of IP.

01:02:48

These are some quotes here on slide 28, some quotes along the lines of what I’ve already talked about, so you might want to read those yourself later, but let me go on so I don’t get too far behind today.  I don’t need to go into this in too much detail.  If anyone has questions about this, about exactly why I think Rothbard sort of is wrong in his idea that we could create a type of IP right by his contract example with a mousetrap, I can discuss that later.  It’s also discussed in detail in my Against Intellectual Property article on pages 45-55, so you can take a look at that, or you can ask me in the questions session, which I hope to start shortly.

01:03:28

Let me zip through these here.  As for patent reforms, I’m not going to go into this in detail.  I’ll just tell you.  We should abolish patent law and copyright law.  Short of that, probably the biggest two or three reforms would be the top two or three I have here: reduce the patent term from 17 years now to, like five years.  That would be a big improvement.

01:03:50

Remove the ability to get an injunction and only have the right to get money damages.  That would be the biggest improvement I would propose for patents.  As for copyright, again, the term for copyright is insane.  It’s over 100 years for most things.  I would go down to ten years, five years.  And probably the second biggest improvement would be the third one I have listed here.  Require active registration.  Right now, copyright is automatic, and you cannot get rid of it.  It’s almost impossible to get rid of it.  So what we have to do is make it be active registration.

01:04:29

Now, the problem is, like I mentioned earlier, the existence of the Berne Convention itself would arguably prevent us from getting rid of – from requiring active registration because the Berne Convention requires there to be no formalities, which is why don’t have to put a copyright notice or have active registration to have a copyright.  So we would have to change international laws to do this.  I’d also get rid of the DMCA.  It’s just an abomination.  And reduce the statutory damages [no audio_01:05:06].

01:05:07

01:05:13

Okay, let me – am I back?  I was just thinking for copyright, like these reforms here on this page, I would say the first one, reduce the term, and require active registration and also get rid of the DMCA, which is an abomination.  Those would be huge improvements to the copyright law.

01:05:34

Now, as for these other questions here, first acquisition in the foundation of homesteading and Locke, I don’t understand what the question – Julian, what’s the relationship to – maybe you’re talking to someone else.  You can ask the question later in the question session if I’m missing it here.  Sorry about that.  I’m going to skip trademark because that’s too arcane.

01:06:03

There are some possible reforms being proposed, by the way, and you guys can skim through these links if you like.  In the UK, there is talk about, yes, changing the fair use laws to make them more like the US I guess.  The Supreme Court has been moving in the right direction, but it’s minor.  There are some patent reform bills proposed, but Orrin Hatch is behind it, and apparently it might pass this year, so I am not confident at all.  I read parts of it today.  It looks like it’s sort of a grab bag.  I mean there are some things that are minor improvements, some that are – it’s technical, so I don’t have any hope for it being significant reform at all.

01:06:39

01:06:45

I’m going to skip this.  We’ve already talked about some of this.  Well, I have some posts about ideas about how we can have innovation without IP.  It’s not my obligation.  It’s not our obligation to predict what a free world would look like, but there are some ideas.  Let me just mention – I’ll stop in a couple of minutes after I get done with this.  Then we’ll come back for questions.

01:07:11

The basic idea is this.  People will say, well, if you get rid of IP, how am I going to make money selling my ideas?  Well, I don’t know.  It depends.  And why is it my job to tell you, as an entrepreneur, how to profit in society?  You have to figure it out.  I mean this is the job of every entrepreneur.  They have to figure out how to come up to satisfy customers and make a profit in a world where there’s competition, and they can be emulated right away and where they’re going to have to have cost of exclusion.

01:07:45

Think about this.  Almost every business has varying cost of exclusion.  For example, if you have a movie theater, I mean you have to pay a salary to the ushers and the clerk who takes your money in the beginning.  And you have to put locks on the doors.  Otherwise, you might have free riders come in, and they wouldn’t pay.  So you have to hire someone to make sure people pay.  Well, that’s a cost of exclusion.  Drive-in movie theaters in the States in the ‘50s, whatever, used to have these loudspeakers, and they had some technical problems with them, but also people could free ride.

01:08:22

They could sit on neighboring hills in their cars or just on the grass and watch the movie because it was outside and listen to it because it was on loudspeakers, and they could free ride.  So one thing that the drive-in theaters was they installed these little speakers next to each car at considerable expense.  So that cost them money, and yet they figured that that was worth it as a way to capture more of a market of customers and to exclude free riders.

01:08:53

But if they couldn’t have found a way to do that, then they would have either had lower profit, or they just shouldn’t have been in that business.  I mean this is the way life is and reality is.  So the bottom line is people have to think of ways, and if they don’t have the crutch of a copyright and patent to lean on, they of course would think of different ways to make money as some companies are doing now because even with these laws, there’s piracy.  And they have to find a way to make money in the face of piracy.

01:09:23

Okay, I’ve just got some more thoughts here, but I’ll skip over this because it’s not that essential.  We’ve already talked about a lot of this, skipping this.  You can read this later.  It’s pretty self-explanatory.  These are just some different ideas people have had about ways you could respond to a non-copyright world.

01:09:46

And upcoming topics:  We’re going to talk next class about defensive corporations, which is a fascinating – I love this topic.  And then I’m going to go through a bunch of somewhat related, somewhat unrelated just common libertarian mistakes.  Some are based upon what we’ve already talked about, and some are not.  So let’s take a break here.  It’s 11 past the hour.  Let’s take a five-minute break.  I’ll be back at 16 past the hour, and we’ll talk for 20 minutes, 30 minutes, as long as people like to, about IP or other things.  So I’ll be back shortly.

01:10:24

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:10:25 — 64.5MB)

Kinsella on Liberty Podcast: Episode 021.

This is lecture 4 (of 6) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.” The remaining lectures follow in subsequent podcast episodes.

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes:

[00:00–15:00] In the fourth lecture of the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” delivered on February 21, 2011, Stephan Kinsella focuses on the concepts of causation, aggression, and responsibility within a libertarian framework. He reviews the previous lectures’ emphasis on property rights, self-ownership, and the non-aggression principle, which underpin libertarian legal theory. Kinsella introduces the lecture’s objectives: examining how causation determines liability for aggression, defining aggression as the invasion of property rights, and exploring responsibility in the context of voluntary actions and their consequences.

[15:01–1:26:45] Kinsella elaborates on the role of causation in assigning liability, arguing that libertarian law holds individuals responsible for actions that directly violate others’ property rights. He discusses aggression as the unconsented use of force against persons or property, distinguishing it from mere harm or coercion. The lecture also addresses responsibility, emphasizing that only voluntary actions incurring property violations warrant legal remedies, typically restitution. The session concludes with a Q&A, where Kinsella responds to questions about complex scenarios, such as indirect causation, corporate liability, and the application of libertarian principles to real-world disputes.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

This lecture’s topic is “Causation, Aggression, Responsibility,” and discusses:

• Conspiracies and Incitement
• Strict Liability. Responsibility for Property.
• “Limitations” on property versus limitations on action

For slides for all six lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

Slides:

The videos of all six lectures are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Recap

• Time Markers: [00:00–11:30]

• Description and Summary:

  • Kinsella opens the fourth lecture, welcoming students to the Mises Academy course and noting the availability of recordings and slides on the course platform.

  • He recaps the prior lectures, which covered libertarian basics (justice, property rights, non-aggression principle), contracts, fraud, and private legal systems.

  • The focus of Lecture 4 is introduced: analyzing causation, aggression, and responsibility as critical elements in determining liability under libertarian legal theory.

  • Kinsella emphasizes that libertarian law resolves conflicts by assigning property rights clearly, contrasting this with statist systems that often obscure causation and responsibility.

  • He encourages students to review previous materials and engage with the suggested readings to prepare for the session’s technical content.

Segment 2: Causation in Libertarian Law

• Time Markers: [11:31–26:00]

• Description and Summary:

  • Kinsella discusses causation as the link between an action and a property violation, essential for assigning liability in libertarian law.

  • He explains that only direct, intentional, or negligent actions causing a property invasion (e.g., theft, trespass) trigger legal responsibility.

  • Indirect causation, such as influencing another’s actions, is generally not sufficient for liability unless it involves explicit incitement to aggression.

  • Kinsella contrasts libertarian causation with statist tort law, which often uses vague standards like “proximate cause” to expand liability.

  • He stresses that libertarian law prioritizes clear causal links to ensure fairness and avoid punishing innocent parties.

Segment 3: Defining Aggression

• Time Markers: [26:01–41:00]

• Description and Summary:

  • Kinsella defines aggression as the unconsented initiation of force against another’s person or property, aligning with the non-aggression principle.

  • He distinguishes aggression from harm (e.g., economic competition) or coercion (e.g., persuasion), which do not necessarily violate property rights.

  • Examples include physical assault, theft, or trespass, all of which involve direct invasions of property boundaries.

  • Kinsella addresses misconceptions, such as equating all forms of influence with aggression, and emphasizes that only property violations are actionable.

  • He notes that libertarian law seeks to minimize conflict by clearly defining aggression, facilitating peaceful resolution.

Segment 4: Responsibility and Remedies

• Time Markers: [41:01–56:00]

• Description and Summary:

  • Kinsella explores responsibility, arguing that only voluntary actions causing property violations incur liability in a libertarian framework.

  • He explains that remedies focus on restitution—restoring the victim’s property or compensating for losses—rather than punitive measures like imprisonment.

  • The role of intent is discussed, with Kinsella noting that negligence or recklessness may suffice for liability if they result in property harm.

  • He addresses complex cases, such as corporate liability, suggesting that responsibility lies with individuals who directly cause aggression, not abstract entities.

  • Kinsella advocates for a case-by-case approach to ensure remedies align with property rights and causation principles.

Segment 5: Q&A and Closing Remarks

• Time Markers: [56:01–1:26:45]

• Description and Summary:

  • Kinsella opens the Q&A session, addressing audience questions on applying libertarian principles to nuanced legal scenarios.

  • He responds to queries about indirect causation, such as whether advising someone to commit aggression incurs liability, clarifying that only direct incitement might.

  • Questions about corporate responsibility are discussed, with Kinsella arguing that individuals within a corporation, not the entity itself, are responsible for aggressions.

  • He addresses challenges of implementing libertarian law in a statist world, suggesting private arbitration and reputation-based systems as interim solutions.

  • The lecture concludes with Kinsella encouraging students to review the slides, engage with readings, and prepare for the next session on further applications, such as intellectual property and punishment.

TRANSCRIPT

Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility

Stephan Kinsella

Mises Academy, Feb. 21, 2011

00:00:01

STEPHAN KINSELLA: … anything procedural, administrative, random, libertarian in general.  And by the way, also, in addition to cramming a lot of material into six lectures, next week’s lecture will be IP, which we covered in six weeks in another lecture, so we’re cramming a lot in there.  So this course you’re getting a lot of bang for your buck I believe.  Okay, go ahead, Jock.  General question on economics.  Okay, you’re starting a BA in economics, mainstream economics next year.

00:00:42

00:00:51

Okay.  So your background is only in heterodox economics.  Okay, so what’s the question?  You know, I actually don’t know if I’m the best one to answer this question.  I’m a lawyer.  I’m not an economist.  I’m a student of economics, although I have some opinions.  I mean I would say I do think Murphy’s course is probably the best one to be honest.  But I mean I had a couple of economics courses in my engineering major back in college, and I just learned real economics on my own from reading books from Rothbard and Mises and other things.  So I think Murphy’s book looks really good to be honest.  I want to go through it myself with my son when he gets old enough, so I’m thinking that’s a good starting point.  But you’re going to have to learn to poop out the regular stuff to these guys so that you pass, so I would treat them separately, learning their economics and real economics.

00:01:59

Okay, let’s get started.  Yeah, and Murphy has a really great interview with Jeff Tucker about the Mises Academy and his course, and he talks about how he basically learned economics by writing his book, and I believe that.  I can understand that.  There are others, but I think he really tried really hard to distill it and to find a way to formulate it properly.

00:02:22

Oh, you know what?  I did not put the slides for this lecture on the course site.  Let me email those to – Danny, are you there?  I’ll email those to you.  Maybe you can do that while we talk.  Give me just a second, guys.  I’m going to send these to Danny right now.  Maybe he can upload those to me.  Give me five seconds.  Here we go.  Okay, I’m sending these to Danny right now, so hopefully he’s listening and can post them while we speak.  Sorry, I meant to do that before.  I did that last week, and I forgot to do it this time.  Okay, so they’ll be posted shortly.

00:03:15

All right, so tonight we’re going to talk about causation and some related things that – I’m going to cover a few things that we left off of last time and elaborate on a few matters.  So last time we were talking about the legal system of the libertarian world, about courts, private courts, anarchy, things like this.  We talked about contract theory, and also, I was going to get to why fraud is aggression, but I didn’t have a chance to get to that, so I’m going to talk about that tonight.

00:03:44

Okay, and there’s a couple things I wanted to just go over to emphasize and make sure I cover them in enough detail on contract theory.  So today I’ll talk about some final things about contract theory.  I’ll talk about the fraud issue, and then we’re going to go into causation issues.  There’s lots of issues related to causation.  Now, on contract theory, if you guys remember, we were talking about the Rothbardian and Evers title-transfer theory of contract.  We also talked about the problems of armchair – hello?  Am I there for everyone?  Sorry.

00:04:38

And Danny, let me know if you don’t get the file.  It should be received by you shortly for the slides.  Okay, so – okay, good.  I’m back.  Sorry about that.  I just want to mention something.  In the conventional understanding, not only is the conventional view that contracts are binding promises, which I discussed that the Rothbardian view is that they’re not really binding obligations or promises.  They’re really ways to transfer title to property that you own.  There’s also a view that a contract is a piece of paper with words written down on it, like that’s the contract.

00:05:25

But what you need to do is you need to think of the contract is really the assignment of title to property.  Now, how is that done?  That’s done because the owner, who has the right to get rid of his ownership of something he owns, is able to manifest his consent, to let the world know or let the other party know that he’s given up his ownership of it in favor of the other person.  So basically, it’s a communication.  It’s a manifestation of intent or consent.  Thank you, Danny.  Okay, so the slides are now up.  The slides we’re using right now are now up.

00:06:01

So the contract can refer to the written document, but really that’s just evidence of the party’s consent.  Now, I would agree that, in a society, we could expect that it would be customary to require a written agreement for certain types of contracts such as the sale of land or if you want to allow a physician to kill you for assisted suicide.  You could imagine that you would develop formalities where you would require people to have written evidence of this just because of the danger of proving – a doctor doesn’t want to be accused of murder.  He’s going to want to have solid proof that he was authorized to help the patient end his life, etc.  Okay, so that’s one thing to keep in mind.  Contract is not a piece of paper.  It’s just an evidence of what the party’s intent was.

00:06:57

Now, I also want to go into something here.  I mentioned in the last class different legal systems.  There’s basically the civil law system, which is Roman law-based, which is in place in most of the western world outside of the English or the British commonwealth countries.  And then there’s the common law.  I’m just going to use the civil law terminology here to discuss something.  There are different types of contracts, and I’m going to discuss this here.  You don’t really need to know this as a libertarian, but it’s helpful to understand how modern legal systems classify contracts and contractual obligations.

00:07:39

So the legal system says, well, a contract can be of many different types.  They can be unilateral or bilateral.  Okay, in the civil law, they say synallagmatic as another word for bilateral.  So that’s when two parties each give something up.  Okay, now this terminology is not quite compatible with our libertarian analysis for reasons we’ll see in a minute because they view contracts as binding obligations, or they say they do.  Contract can be onerous or gratuitous.  Onerous means it’s like a commercial contract where each side gives up something.  Gratuitous means it’s a gift basically.  Like I agree to pay for my nephew’s college tuition.  That’s a gratuitous contract.

00:08:22

Now, aleatory, which is an uncertain contract – that’s when the performance of either party depends on an uncertain event.  This is a key concept in the civil law of contracts, and I think it’s really important for libertarianism as well, as we will get to.  And if you want to go into this in further detail, you can look at some of the civil code articles in the Louisiana civil code as an example starting with article 1906, just about five or six very short articles, very short code sections.  It’s really fascinating to me and for anyone with an interest in legal theory, but I’m not requiring this as a part of this course.  I’m just showing you this and trying to develop terminology and to link what we think is the right way to look at contracts with the prevailing legal way of looking at contracts.

00:09:09

Okay, slide six.  Now, here’s what’s important to realize.  Every contract other than a contract that’s contemporaneous, like a contemporaneous contract might be I give you this teddy bear, and as soon as I do it, I hand it to you.  You have the title.  There’s nothing future-oriented about it.  Or I hand you a dollar bill, and you give me a Hershey bar as a trade.  It’s pretty much contemporaneous.  So there’s no future element to it.  But most contracts are not that simple.  Most have at least one future-oriented element.

00:09:51

So, for example, in a loan, you give me money now, and I have 100% title to that money to use it for the purposes that I’m borrowing the money for.  But what the lender gets is a claim to a future piece of property, but of course that’s in the future.  And because the future is uncertain, and this is a key Austrian insight, and if you want to look further into this, I have an article by Hoppe here.  Let me turn on my laser pointer.  We’ve had trouble with it.  Who can see my laser pointer right now?  Can anyone see this?  Who can see it, and who cannot see it?  I’m just curious whether this actually works.  I’m circling the word Hoppe right now.  Can anyone not see it?  Good, it is red.

00:10:37

Karl, who – I don’t know if it’s a computer type or a computer system, if it’s Apple, Linux, or Windows is the problem or what.  Anyway – or if it’s a browser: Firefox, Safari, Windows – Internet Explorer.  Anyway, there’s a great article by Hoppe, this article I have linked here, on certainty and uncertainty, and he talks about how it is inherent in the idea of human action that the future is uncertain, necessarily uncertain.  However, the future is not radically uncertain as some types of Austrians and others might say like Lachmann and others.  So we can know some things about the future, but we can’t know everything.

00:11:26

In any case, for our purposes, for libertarian theory, not Austrian theory, the point is that the future is uncertain so that if you transfer title to a thing in the future, there’s a necessary implicit condition on that obligation to transfer title.  And that is that the thing exists or that you have title to it because it is certainly possible that, in the future date in which the title is to be transferred, the obligee – I’m sorry, the obligor might not exist.  He might be dead, or the thing might not exist.  It might have been destroyed or never acquired, or the obligor may never have – may not have title to it at that time.  But the point is there’s an uncertain aspect or an aleatory aspect to all contracts that are aimed at some kind of performance in the future.

00:12:21

Now, I want to – this is something that you almost never see pointed out in law school or among legal theorists or libertarians or political theorists because they don’t have a clear idea of it, or they don’t do it.  I find it helpful because I feel like I’m stupid sometimes, and I want to just break things down to the bottom level.  So here’s the way this works.  An agreement is when you basically have a communication with another party, and you say that you agree to something.

00:12:53

Now, some agreements don’t result in any kind of binding legal contract.  It might be a non-legally binding agreement for some reason because it’s something inalienable, or you don’t specify with sufficient detail, or there’s no consideration, or whatever.  There might be legal formalities.  But if you make – if you have an agreement, and this can be written or unwritten.  It has to be a communication some way, but it doesn’t need to be a piece of paper.  Typically it is.  You have an agreement.  If it’s a binding agreement, that gives rise to a contract, and a contract is characterized by or gives rise to certain obligations.  This is how the law looks at it.  An agreement gives rise to a contract, which gives rise to obligations.

00:13:40

Now, like I said, an agreement is not a contract, although those words are sometimes used synonymously.  So the agreement is a broader term than contract, so just keep that in mind.  This is a good thing to know in the law, and even a lot of lawyers mess this up.  It’s good to keep these things distinct.  Now, in the civil law and even in the common law, here’s how they classify contractual obligations.  What they say is when you have an agreement that gives rise to a contract, then it can give rise to one of two types of obligations: an obligation to do, like to do something, to perform a service, or an obligation to give, that is, to give something to the other party.

00:14:22

Now – and I explore this, by the way, in my contract theory article, which I have linked here, which I have listed previously in the course materials.  Now, here’s what’s important to recognize.  In the Rothbardian theory of contract, all contracts are simply ways of alienating title to property.  And what’s important to realize here is that even though the modern legal system uses a different conceptual understanding of how contracts work, it really can be understood in terms of Rothbard’s theory, and Rothbard’s theory is not incompatible with it.  The reason is this.  Okay, if you have an obligation to give something, like a piece of paper, well, of course, that’s just a transfer of title to property.

00:15:09

Now, if you had an obligation to do something, now, if the court system would actually enforce that obligation to perform with an injunction and they would put you jail if you didn’t sing the song you promised to sing or paint the bench you promised to paint, then I would agree that the legal system would have two types of obligations it’s enforcing.  But they actually don’t do that.  Most modern legal systems are very reluctant to have what’s called specific performance.  That is, the court will not force you to perform an action or a service that you promised or obligated yourself contractually that you would perform.

00:15:48

What they will do instead is they will give an award of damages to the party that was promised the action or the service.  So if I promise to sing at your birthday party and I don’t show up, then you can sue me, and the court might order me to pay you $5000 of damages for non-performance or whatever.  But the point is you can understand that contract.  The contract instead could have been worded as a title-transfer contract.  It could have been worded as if I sing at your party, you will pay me $10,000, which is a title transfer.  If I don’t sing at your party, I will pay you $5000 of damages or whatever.  So basically you can understand even modern contract theory in terms of Rothbardian theory, which is quite nice.

00:16:36

Before we go on, are there any questions about that?  Does everyone understand that?  Atchafalaya – by the way, why the name Atchafalaya?  I’m curious.  I’m from Louisiana.  That’s sort of a Cajun name.  Are you from Louisiana, Atchafalaya?  All right, I’m glad everyone is clear, but nee dans – I don’t speak French, so I guess you’re saying you’re from Lafayette.  Is that Louisiana?  I’m glad I have a fellow coonass here.  Coonass is the derogatory term – not derogatory – slang term for Cajuns in Louisiana.  Okay, born there.  Good.

00:17:28

Remind me of what the Faust – what is the question?  Goethe’s Faust contract.  I don’t remember the Faust contract.  If you want to remind me what that is, I’ll talk about it.  I don’t remember the Faust contract.  I’ll tell you what.  You type it up, and I’ll get to it if you -oh, well, you mean just selling your soul to the devil?  I mean I don’t know.  I don’t know.  I mean in libertarian theory we talk about the real world, and we talk about the alienation or the sale of title to scarce resources that you own.  And I just really don’t know how to seriously analyze the sale of a soul because I don’t think it’s specified with enough realistic specificity to talk about it realistically.  I think it’s some kind of weird, fictional metaphorical tale.

00:18:27

Okay, so let’s go on to slide eight.  Maybe, but that gets us into an inalienability theory, and we have to talk about whether you could be forced to enter into a – or to go through with a promise to let part of your flesh be cut off, Jock, or something like that.  And as we discussed earlier, I would say if it’s got to do with your body, then you cannot be forced to perform an action unless you’ve committed aggression.  Merely saying you will do something is not sufficient because you’re just stating your future intent, but if your future intent changes, then it changes.  And if someone else wants to rely on that, that’s on them.  It’s at their risk to rely on your promise.

00:19:25

That’s my perspective.  Others believe you can sell your body like you can sell your apples, and so once you sell it, then you don’t own it anymore, and you can’t object to force being used against it.  I don’t agree with that analysis, but some do.  Right.  We talked about it last week.  So let’s go on to the next topic.  Now, this is a really interesting topic.  It’s sort of an application.  This is an area that a lot of libertarians and others in my view are not clear enough about, and therefore, the discussion about it is always – is quite often you’re spinning in circles because people don’t have a clear understanding of what they’re talking about.  So quite often, libertarians will say that we believe in the non-aggression principle, which means you can do anything you want except commit force or initiate force or fraud or the threat of force.

00:20:19

Now, we talked about threat last time and why, in my view, threat can be included as a species of aggression.  But what about fraud?  Now, the problem is, as I mentioned before – Jock, I missed your oops there, so if I need to address something, just let me know.  The problem is what I mentioned before.  A common mistake made in these kinds of discussions is the overuse and overreliance on metaphors and the lack of carefully defining the concepts and terms you’re using to discuss.

00:20:57

00:21:04

Barry, I’ll get to that in just a second.  Now, and also this can sometimes lead to either intentional or unintentional equivocation.  Equivocation is when a term or concept is used in a general way, and you get someone to agree with it because they’re applying it to a specific instance of that concept, and then they apply it in another way.  They say, well, you’ve already agreed.  So, for example, a left libertarian might say, well, do you agree that aggression is wrong?  Yes.  Well, don’t you agree that aggression is a type of oppression?  And you might say, well, sure.  So you’re against oppression.  Well, okay.  But what you mean by that is you’re against aggression.

00:21:44

And then they’ll say, well, it’s also oppressive when a father or a husband doesn’t let his wife do XYZ or doesn’t let his – or a family doesn’t let their children do X, Y, and Z.  That’s oppressive.  So if we’re against oppression in general, we should be against that too as libertarians, so there’s a kind of subtle use of equivocation in these cases.  So this happens also with fraud, and you have to be really careful.  Fraud is used sort of carelessly to mean dishonesty.  Now, most people are against dishonesty to one extent or the other, but as libertarians, we’re not necessarily against dishonesty per se as libertarians.  What we’re against is aggression or theft.  So the type of fraud that we’re against is when you – dishonesty helps you to steal someone’s property basically.

00:22:35

Let me stop for a second and talk about Barry’s thing.  Focus on the presence of intent to create legally enforceable obligations that link clearly to tort and criminal law as well.  Well, we talked about that a little bit last time, Barry, and that is – sort of links in with Randy Barnett’s consent theory of contract.  But my view is that your intent is manifested publicly, and if you’re the owner of an object that you acquired by your intent to own it.  Either you homesteaded it or you purchased it from some previous homesteader or owner.

00:23:09

Then when you reveal to another person or to the world that you want to abandon this thing—you want to give up your ownership—then that has effect because you’ve now severed your connection to this thing because you’ve abandoned it in effect.  So that’s how that intent basically works.  It’s not really an obligation.  It’s just the connection to a thing or the severing of a connection to a thing.

00:23:31

Okay, so here’s what Rothbard says.  He says that aggression is invasion.  Now, invasion means invading the borders of someone’s property.  He says it has two corollaries: intimidation or a direct threat of physical violence, which we talked about last class, or fraud, which involves the appropriation of someone else’s property without his consent and is therefore implicit theft.

00:23:57

Now, Rothbard uses this concept a lot.  I think he’s correct in general, but I don’t think he means this metaphor to explain it, and it leads to some confusion when he applies it.  So what I would say is that fraud – the reason fraud is un-libertarian is because it stems from the right of contract or the right to own property.  So let’s take an example of what I think fraud is in the sense that would be prohibited in a libertarian society.

00:24:29

So let’s say you and I are going to have a contract where I pay you an ounce of gold for a cartload of apples, maybe a bad example.  Apples are not that dear, but anyway, let’s just say.  Let’s say I’ll give you an ounce of silver for your basket of apples.  Now, the implicit trade there is this.  I will give you this ounce of gold now, 100% ownership for you, if you give me XYZ.  XYZ is the specifications of what you told me the apples were, that they’re actually apples.  They’re healthy apples, blah, blah, blah.

00:25:10

Now, if I’ve got a basket that has rotten apples at the bottom or they’re full of worms or they’re plastic apples and I hand these apples to you in exchange for the money, then I, as the seller of the apples, am aware that I am not fulfilling the condition for my receipt of the title to the silver coin.  So if I deceive the seller – the buyer, sorry – of the apples by this fraudulent claim, then I am in receipt of property that I did not have legitimate title to.

00:25:49

Now I’m back.  Am I here?  Okay.  The reason is – I think it’s freezing for some people at their end, but it’s not freezing for me.  I know it freezes for me sometimes.  I see it happen here.  But in any case, let’s keep going.  So you can see – now, in the law, there’s a funny concept in law called theft by trick, theft by trick.  And if you search for that, you’ll see common law and other discussions of theft by trick.  And in my view, this is all fraud really is, is theft by trick.

00:26:28

Basically, it’s the obtaining of possession or nominal title to something by means of a deception, which renders the permission that was granted to me null and void because the permission is always conditional.  So if I own the gold coin, the silver coin, what I’m saying is I’m giving you this coin only based upon the assumption that you’re telling me the truth.  You’re not defrauding me.  You’re not fooling me.  You’re not lying about the quality of the apples you’re giving me in exchange, etc.

00:27:02

So this is the origin of fraud theory.  Basically, it is a – some kind of deception or lie that renders the consent, which is conditional – it makes the consent not happen.  That’s why it’s basically implicit theft.  And this seems common sense.  I think it’s actually easy to understand, but this is not the typical way that this is explained.  You cannot use fraud to mean I put a toupee on when I dated this girl, and so she thought I had hair, so I defrauded her into having sex with me or going out on a date.  I mean these are dishonesty things, but they’re not really transfer of title.  Yeah, actually, theft by trick – you can find it on Wikipedia.  I didn’t actually link it, but you can find theft by trick in the legal dictionary somewhere.  That is an actual legal concept in the common law.

00:28:01

Atchafalaya: Threats other than physical violence would be considered coercion.  Well, I’m not talking about threats here.  I’m talking about fraud.  Threat we covered last time.  A threat basically is a communication that you intend to invade the borders of someone else’s property.  A threat is a communication that you intend to or are about to imminently commit aggression.  That’s not the same thing as deceiving someone to obtain title to their property by false means.

00:28:36

00:28:46

And by the way, before we go on to the next slide—I’m still on slide eight—at the bottom here I’m talking about some examples.  Just think about how you could use property that you own.  So let’s say I own a – this bottle of water here, and I tell Barry, hey, Barry, I hereby give you this bottle of water in one minute.  Well, if I do that, that’s a unilateral contract.  It’s unilateral, but it’s aleatory because it’s future oriented.  But it’s automatic in the sense that in one minute, now that I’ve already alienated title, in one minute, the title will transfer to you but only if I still own it.  I mean if lightning zaps it in two seconds and it’s gone, there’s no bottle of water left.

00:29:29

You can also do other things.  I could say, Barry, if you go to Oxford College next year, I will pay your tuition.  Now, you’re not giving me anything in exchange, but if you fulfill the condition, I have transferred the tuition money to you, assuming that I own it.  And you can do tons of interesting combinations.  This is what contracts are, and this is what lawyers do and would do in a free society.  They would use this ability to have conditions and communications – okay.

00:30:03

Next, now, I want to go into a little bit of a slight problem I think Rothbard has in his contract theory because, remember, Rothbard believes in inalienability.  Walter Block doesn’t, and Walter Block is a – okay, Trey is asking about asymmetrical information and Rembrandt.  I think basically it is the job of the buyer to ensure that he’s getting what he wants.  But if he is really promised something and he relies on it, I think that it’s technically fraud even if he shouldn’t have been so stupid and so careless or whatever.  I think – Karl, I think it just froze on your end for some reason.  Sorry about that.

00:30:52

In any case, let’s look at Rothbard’s examples of implicit theft.  So on page 78, I think this is Ethics of Liberty, sorry.  He says Smith is going to pay $1000 for Jones’ car, but Smith takes the car, but then he refuses to pay the money for it.  He has, in effect, stolen the $1000.  Okay, so let’s think about this case.  Smith and Jones agree that Smith will pay $1000 for the car.  So then Smith takes the car, but then he – this is not fraud because he’s not giving him bad dollars for it.  He’s basically refusing to turn over the money that he’s agreed to turn over.

00:31:38

So what I would say is that as soon as the car was given to him, he owns the car.  But now, the $1000 in his bank account or wherever is owned by Smith – I’m sorry, by Jones.  If he refuses to turn it over, he’s in receipt of stolen property in effect.  Everyone got that?  Okay, so what does Rothbard say?  So he says he’s in effect stolen the $1000.  That’s correct, and it’s important here to think what has Smith stolen?  Has he stolen the car, or has he stolen the $1000?  I would say he has stolen the $1000 because the deal was he gets the car, but then $1000 of his money is transferred to Jones in payment, and if he refuses to turn it over, he’s stealing the $1000.  So that’s important, and Rothbard is correct here, I believe.

00:32:35

Let’s go to the next slide, slide nine – slide ten.  Okay, now – sorry about that.  Okay, so now – but when Rothbard talks about a loan, here’s where he kind of gets this backwards, and so does Walter Block in my view when he applies this idea.  So think about a debt contract.  Rothbard says that debt contracts are enforceable, not because the creditor’s property is stolen if the debt is not paid.  Okay, so in other words, let’s take an example.  Brown lends Green $1000 now, so Green is the borrower in return for $1100, which is $1000 plus 10% interest the next year.  So if Green fails to pay, if the borrower fails to pay, he has stolen $1100 of Smith’s property.  This is what Rothbard says, and that’s why Rothbard says that debtors’ prison is, in theory, justified.  Now, he says that it’s disproportionate, so he’s against it because it’s disproportionate, but he says in theory, if you’re a thief, you can be punished.  And so debtors’ prison is, in theory, justified.  So if you don’t pay a debt, you’re, in theory, committing theft.

00:34:13

Okay, Alexis, we’re talking now about a loan between Green and Smith, so Rothbard was right.  Let me go back one page.  I believe he was correct in his example of Smith and Jones and the car.  I think he’s correct.  What was stolen was the amount of money that Smith was supposed to pay.  He didn’t pay what he was obligated to pay.  But in the loan example, what Rothbard says is the $1100 – so what I’m saying is this.  In this case, he switches to what’s being stolen, so Green owes $1100 a year from now to Brown.  If he has it, I would agree with Rothbard that he has to repay it because now the ownership of that $1100 has transferred to the lender.

00:35:08

But if he doesn’t – and if he refuses to turn it over, then you’re in possession of stolen property.  It’s a type of theft.  But if you do not have the money, let’s say you’re bankrupt because your plans for the use of the borrowed funds didn’t pan out.  It just doesn’t make sense in my view to say that there’s theft.  There’s nothing to steal.  If Green is bankrupt, what $1100 has he stolen?  So the problem with saying it’s theft is that there’s nothing to steal.  It just doesn’t exist.  Remember, all future promises are aleatory or uncertain.

00:35:44

And if the property to be transferred doesn’t exist, then it can’t be transferred on the day of the alleged assignment.  And if you don’t transfer something that doesn’t exist, how can you be blamed for it in the sense of theft?  Okay, now I’ve talked with Walter Block before, and they switch back and forth.  They’ll say, well, then it was the original $1000 that was loaned that was stolen because it was fraudulently used because it was not repaid a year later.  Well, that doesn’t make any sense.  The $1000 was given unconditionally.  If it wasn’t given unconditionally, then it could not have been spent and used, which is the purpose of a loan.  And not only that, you cannot wait one year to find out who owned the $1000 back in the original point of the loan because, according to libertarian property theory, we have to know who owns something at every point in time so we can know who is the owner of it.

00:36:37

Now, Colin – now, that’s a good question, Colin.  Can Smith force Green to sell $1100 worth of assets?  I would agree.  Sure, he can because we can assume that there are accessory contracts or implicit obligations or secondary title transfers.  So in other words, we can say that on the date of the original loan, Green said in one year I’ll pay you $1100, and if I don’t have it, then you get $1100 worth of my other property.  And if I don’t have that, then you get $1100 plus interest in the future whenever I acquire it, but the point is these are all subsequent title transfers.

00:37:15

And so Barry, no.  I would disagree with you.  There is no obligation.  There is just a sequence of title transfers.  Yes.  I’d say the money is still owed in the sense that there is always going to be a title transfer that would attach.  But the point is, it’s not theft, and it’s not fraud.  This is what’s important to understand, and Jock, I would agree.  You could look at it as a lien, but again, that’s just a title transfer to property.

00:37:46

Matthew, I don’t think they have to make a new contract because I think the original contract would be understood to have conditional accessory obligations or title transfers that cover all these things because this is a typical problem.  But the point is, it’s possible you’re never going to get repaid.  Sometimes people write off loans.  The question is for the libertarian.  Is it theft, and is it fraud?  And it’s not fraud if there was no deception in the beginning, and it’s not theft if there’s no property owned on the due date.  That’s the important point in my view.

00:38:19

00:38:24

Okay, Lauren, I’ll try to get to that later in this lecture about fractional reserve banking.  You’re saying if the money is warehoused, and they’re supposed to hold it, but they invest it.  Well, in that case, if you warehouse money and it’s clear that the depositor retains title to the money or the depositors retain title to the money in general, then the bank, if they invest it, they’re actually – what’s called conversion—stealing.  I think that actually is stealing.  You cannot loan someone’s money out if you don’t own it.  So we have to be really clear about who owns the money that’s “deposited.”  So it all depends upon the nature of the contract, the deposit contract itself.  Is it really a loan by the so-called depositor?  Or is it a real deposit by the depositor?  It depends on what was agreed upon.

00:39:15

Karl2: It’s a tort.  I don’t think it’s a tort.  A tort is the negligent invasion of someone else’s property.  But if you have agreed previously to transfer title to property that you may or may not own in the future, and at that future point in time you don’t own the property so there’s nothing to transfer, I don’t think a tort has been committed actually.  Basically, what’s happened is an event that triggers another title transfer, an event that triggers a future title transfer of future money of mine, if and when I own it, which is equal to an amount equal to the original debt plus interest.  So basically, it’s all title transfers.  You’ve got to think of it like that.

00:40:03

00:40:08

Now, as I mentioned, I have something here about fractional reserve banking.  Let me go over this really quickly for people who are not familiar with this debate.  This is sort of debated among the heavily associated with the George Mason University type Austrians, and what they believe is that, in a free society, in a free banking system, when you loan – when customers loan money to a bank, they would agree to let the bank loan some of that money out so that they could get interest on it, Steve Horowitz, etc.  Yes.  And they think this system would work and it would be stable, etc. and they think there’s economic reasons they give for why it’s necessary.

00:40:54

Personally, I disagree with them.  I agree with the Rothbardians like Murray Rothbard, Guido Hülsmann, Hans-Hermann Hoppe, Walter Block, these types.  I think that money should be sound money, and it’s either money or it’s not.  Now, this is my economic view.  I personally believe that if fractional reserve banking was tried, it would just be a disaster, and they would go bankrupt.  But I’m not opposed to that.  I mean I don’t even think, as a libertarian, that Ponzi schemes should be outlawed.  I mean I think that if you want to invest your money in a risky scheme, you have the right to as long as there’s no fraud.

00:41:32

Now, the second question and more pertinent for our purposes here is the libertarian question, and that is, is fractional reserve inherently un-libertarian, which means is it inherently fraudulent?  Now, I tend to agree with the Rothbardians who oppose fractional reserve banking that historically it tended to involve some types of un-libertarian regulations or deception, and that even in a free society there would be a temptation to deceive your customers.  But I do believe personally that it is possible to disclose clearly to a customer the nature of the contract, and if that customer wants to engage in it, they’re entitled to do so, and there is no fraud.

00:42:21

But legally what you would do is you would classify this as a loan or a credit arrangement, not as a warehousing thing.  So I think you need to make a decision.  When you put your money in a bank, you have to make a decision.  Is this a deposit or what you might call a warehousing function?  Or is it a loan?  If it’s a loan, then the bank owns the property, and you just have – the bank has an obligation to pay you future money, which they may or may not have as we mentioned.  So you’re taking a risk.  Then the bank loans the money out to other customers – not to other customers, to other lenders, and they make a return, or they might not make a return.  If they have a bunch of loans go bad, they’re not going to be able to repay them.

00:43:11

Barry, I know that’s a common view among some Rothbardians that fractional reserve banking is counterfeiting.  But counterfeiting – I really can’t go into that too much here.  I think we’re going to run out of time, but counterfeiting is a type of fraud.  So what counterfeiting is, is passing off something to someone and deceiving them of the nature of it to get title to their property.  So counterfeiting is theft by trickery, like we talked about earlier.  So there’s nothing wrong in libertarian theory with printing a piece of paper that has anything on it.

00:43:44

You can print whatever you want in your own house.  You can print a perfect copy of a dollar bill, a perfect copy of the Rothbard bank note, whatever.  The problem comes when you use it to spend it, when you try to spend it to pay someone for their service or for their good and when you tell them this is a genuine note.  If you disclose that it’s a fake note, no problem.  There’s no fraud, so there’s nothing wrong with counterfeiting.  So the only problem with counterfeiting is if and to the extent that it’s fraudulent in my view.

00:44:20

Yes, anyway, we have to go on with this, but this is how I look at this issue.  Free banking is prone to fraud.  Free banking from an Austrian perspective is unstable and probably would not last in my view.  But it is not inherently fraudulent so long as there’s full disclosure.  And by the way, full disclosure would include what’s called a suspension clause, which says the bank has to tell the customers there’s a chance that if you try to redeem your loan early, we might not be able to pay you because we can never be 100% sure that we’re going to have enough assets on hand at a given time to redeem your note.  So as long as they do that, that’s fine, and I think that’s an implicit condition unlike some fractional reserve bankers that think that you could arrange your affairs so that you can guarantee you could repay.

00:45:10

But I think it’s impossible.  If you’re loaning the assets out, it’s impossible to guarantee that you could repay every customer’s demand to get paid early because, in other words, it’s possible to have a run on the bank.  It is possible to have a run, right.  And if there’s a possibility of a run, that means that you have to have a suspension clause, either implicitly or otherwise.

00:45:34

Now, firstly, as a libertarian, I don’t mind putting that on the depositor looking at it caveat emptor.  If you’re stupid enough to give your money to a bank and they tell you you’re going to get interest, you should know that it’s going to be loaned out.  That’s a different question about who should have the obligation of making the relationship clear, but I do think that is a relationship.  So in my view, the libertarian perspective is that fractional reserve banking should be permitted so long as there’s not overt fraud.  But my view as an Austrian is that, if the bank is forced to be clear and not to commit fraud, then the fractional reserve banking scheme could not get along for very long.  That’s my personal view as an Austrian.

00:46:17

Okay, yes, Jock, and I am very close to some of the Cobden Centre people, Toby Baxendale and the others there, and I agree, and I helped draft the Carswell legislation that you just linked to.  And I would hope that it has a chance of making some change in British banking law to make the law more sound.  Okay, any questions about FRB before we go on?  Okay, as usual, running behind.  Well, that just means you guys are getting good bang for the buck.

00:47:02

Okay, let’s go to slide 12.  Okay, I tell you what we’re going to do.  I think we are going to run over, but that’s fine with me.  We can do questions if we don’t have time for them today.  I think we’ll have time for questions today but not a lot of time.  Let’s get to the final topic for today, and I think we can cover this in 15 or 20 minutes, and then we can have a few minutes for questions.  Once again, you guys are getting a 75–80-minute lecture.  This is kind of cool.

00:47:37

Okay, now, I wrote an article with Patrick Tinsley, who is a fellow lawyer and Austrian libertarian, a few years ago, and it talks about this issue, and it’s on the course page.  The reason we wrote this is because there’s sort of been – as I’ve mentioned before, one of the typical problems in libertarian legal theorizing is that libertarians often don’t have a sophisticated view of law, although they’re sound on libertarianism, so they can only go so far.  And lawyers have the opposite problem.  They know about law and legal theorists know about law, but they don’t have a sound political theory or know economics, so there’s always a gap.

00:48:24

So there’s actually a lot of room still for work to fill in these gaps and to close these gaps.  So one that we tried to close was the following issue:  There are some comments by Rothbard – I mean there’s a lot of talk about what’s called strict liability, when you should be responsible, and we – libertarians didn’t have a pretty good idea of when you should be responsible for your own actions that cause direct harm to other people.  But if you think about it, let’s imagine I shoot Jock with a gun.  Now, if the bullet enters Jock’s head and kills him, why am I responsible for that?

00:49:06

I mean I didn’t enter his body.  The bullet did, right?  Sorry Jock.  I hope you don’t mind me using you as a guinea pig.  If you do, this can be your evil twin brother, Jock Prime.  But the point is, what we all say is that, well, I actually caused Jock to be killed.  I caused Jock’s head to be used in a way he didn’t want to be used, that is, a bullet going into it.  Okay, and in fact, some of the penal codes, the legal codes specifically say this, that it’s a crime to cause XYZ to happen to someone’s body.  So this is an – the idea of causation is always implicit.  Now, the problem is the theory has not been expanded.

00:49:52

00:49:57

So what you have is you have Walter Block and Murray Rothbard, two of my favorite theorists by the way, and Walter is a good friend.  And they will say that, well, you are responsible – the question is this:  When are you responsible for other people’s actions?  That’s the question.  When are you responsible for other people’s actions?  Now, there’s a word for this in law.  It’s called vicarious, vicarious liability.  Let me type it here.  Vicarious.  And one example of that is called respondeat superior, which we’ll get to in a minute, which means you’re responsible vicariously for the torts committed by your employees of a company.  That’s just one example.

00:50:44

The question is when are you responsible for the actions of others?  Now, let’s clear up one thing here.  Let’s take a typical case.  President Truman orders the Air Force to bomb Hiroshima with a nuclear bomb.  Exactly.  Hitler is a good example.  Did Hitler actually kill anyone?  Did Charles Manson actually kill anyone, or did he just persuade his cult followers to do it?  Did Truman actually kill anyone, or did he just say something, and it ended up rippling down and causing some bomber and a pilot in a bombardier to drop a nuclear bomb on Hiroshima and Nagasaki and kill a hundred and X thousand Japanese?  So – or if a mafia boss orders someone to commit a crime, a hitman, who’s responsible?  Or if a wife who wants to kill her husband pays a hitman to kill her husband, is she guilty?

00:51:45

If she has a lover and persuades her lover through just persuasion to kill her husband for her, is she responsible?  Now, these questions always arise, and one thing I think we need to clear up is this.  One problem some libertarians and others will say – well, let’s take the wife example.  Well, if she persuades her lover to kill her husband, then if we give her the responsibility, that absolves her lover, and that’s not right, so we can’t do that.  Well, the mistake there is that there’s this assumption that there’s a 100% pie of responsibility, and we have to allocate it to different people.

00:52:28

So if we give her some responsibility like 90%, then the hitman or her lover only has 10% left.  Well, this is obviously nonsense.  There’s nothing wrong with the idea – I mean we’re individualists as Austrians and libertarians, but it doesn’t mean that we don’t believe in joint or even collective action and cooperation.  Sometimes you can have joint action to achieve a goal, and so if you have five bank robbers conspire and come together to rob a bank, they have each contributed to the robbing of the bank.  And if a bank teller is murdered during the course of the robbery, each one, under the current law, is held to be liable for the murder.  And that is the correct result or something like the correct result because it’s not like there’s a 100% guilt that’s there.  They each are 100% guilty.  That’s the libertarian view.

00:53:26

So we have to get rid of this idea.  So in other words, we have no dilemma to solve here.  We don’t have to choose between the guy that orders the crime and the guy that carries it out in direct action.  Maybe they’re both 100% liable.  So what we have to do is we have to think of it this way.  We have to realize that crime is an action, and this is another example of why Austrian theory and the praxeological approach to the structure of human action can help to inform an intelligent understanding of libertarian ideas.

00:54:04

So crime is an action.  What that means is it’s the use of a means.  Now, I say efficacious here in parentheses.  You guys see efficacious here because this is the idea of means that cause something to happen.  They have to be efficacious.  If I stick pins in a doll using voodoo to kill you, that’s not really efficacious.  I mean I don’t believe in magic, so I don’t think it’s efficacious.  So it’s not really causing your death.  I might be trying to.  The intent is there, but I’m not causing it.

00:54:31

00:54:38

That’s – actually, Danny’s comment here about, will no one rid me of this turbulent priest, I think that’s a good example.  Let me get to that one in a second.  That’s a great example.  It’s an example that shows the poverty of an ad hoc analysis.  I mean – so Walter Block and Murray Rothbard would say that, in general, incitement is not a crime, like inciting a crowd to riot, for example is not a crime because it’s merely free speech.  However, there are two cases according to Block, for example, two cases where you are responsible for the actions of others.  Let me go on to the next page.  Well, I have it here on this page.  Number one, if you pay them, like a fee.  You have a contract, or if you coerce them.  And the problem with this is these are two sort of ad hoc exemptions that are not undergirded by any kind of systematic theory, and they don’t really make any sense to isolate them this way.

00:55:53

Let me go on to slide 13.  In my view, the way to look at this is it’s aggression to cause the initiation of force or the trespass or to invade the borders of someone’s property or to change the physical integrity of someone’s property without their consent.  That’s an uninvited change, or to use their property without their consent.  That’s basically ways of looking at what aggression is.  So the question is did I employ means to achieve this end of using their property without their consent?

00:56:33

And I discuss this in more detail in my article that I have linked here, “What Libertarianism Is,” and you can look at footnote 11 and surrounding text and the text, etc.  And I already talked about the gun example.  So now what’s important here – let me go to the next page.  Mises points out that humans can be means to action, and we all know this.  This is what the division of labor is.  The means is normally a scarce resource in the world—a gun, a shovel, a knife, whatever.  Something that can achieve your end of killing the other person or whatever.

00:57:08

But you can also have joint action.  You can use other people as means.  This is why we have the division of labor.  And this is why, in my view, there is no reason to rule out joint responsibility for collective action of a crime.  Look, I have, on the optional readings for today’s course, a great article by Adolf Reinock.  He was a brilliant German phenomenologist and legal theorist, quasi-Austrian who died in World War I, I believe, but who wrote some brilliant stuff before then.  And I published one of his unpublished articles in my journal a year and a half ago.  Look in the course notes for that.

00:57:55

He gives some great examples.  We had a whole symposium about his thought at the Mises Institute about seven or eight years ago, and that’s where my causation article stemmed from actually.  But let’s – and he has lots of great examples.  I may get to some of these later if I have time tonight, but let’s go through some of the examples we talked about earlier.  As I mentioned, saying that the only exceptions to this incitement rule, saying incitement is okay and is not a crime, but there are some exceptions like if you coerce someone or others, there’s problems with that.

00:58:35

Number one, it’s ad hoc, as I mentioned.  The other problem is, I mean we cannot assume that a general or a president or a chief commander is always necessarily coercing the bomber.  I mean maybe they do it because they want to.  I mean if you basically say – if Hitler had said – or if Truman had said I hereby absolve that I will not punish anyone who disobeys my orders and then carry it on, you could still have a military structure.  And he still might have been able to bomb Hiroshima or Nagasaki.  So would he be off the hook because he wasn’t coercing these guys?  I don’t think so.

00:59:17

The other problem is, if you say a contract is an exception, well, the Austrian view of contract is that it’s just a transfer of title to property, so it’s not really a binding obligation.  And furthermore, the only thing that matters about that is that the person receiving the title transfer values it, but value is subjective.  So I – a hitman or let’s take a lover of a wife.  He may value getting sexual services from her or even just pleasing her as much as he values getting a dollar bill or a $100 contract.

00:59:56

What’s the difference from a libertarian point of view?  If she can use the promise of sexual favors or just her influence over him in general, to be pleased, just to be pleased by his actions, or to pay someone $100 or $1000 to bump her husband off.  What’s the difference?  She basically used him as a means to achieve her goal, which is to kill her husband.  So she’s responsible in either case in my perspective.

01:00:23

Now, Patrick asks about a newspaper and say someone should kill him.  See, I think this gets into the gray area, and so does the case about the – that Danny mentioned about, will no one rid me of this turbulent priest?  Now, in the newspaper, I think that’s in the gray area.  I don’t know how to answer this.  This gets back to our armchair issue about how much can we say from our armchairs.  I think that we have to look at the context.  I think in some cases maybe publishing an article saying Muslims should be killed or whatever, maybe that’s incitement that should be responsible.  Maybe it’s just free speech, but we have to figure it out.  It depends upon the intent, the means, and the structural nature of human action, but that’s the question we put to the jury.  That’s the point.  And the fatwa – exactly.

01:01:11

My view as a libertarian is you always, if possible, take the side of the victim.  So if Salman Rushdie is killed, I am going to take his side as much as possible.  And I’m going to blame the guy that kills him plus the people that induced him to do it.  Now, there’s going to be limits to this of course, but the point is if you see a mob rushing towards a guy and you know he’s innocent and you say kill him, and you stir the mob into action and they kill this guy, of course you’re causally responsible.

01:01:42

If you get on the witness stand and you say that guy robbed my store – excuse me – and you are lying and you get this guy convicted and he gets put in jail, yeah, maybe the judge is guilty too.  Maybe the jurors are guilty.  Maybe the prison guards are guilty.  That’s a different question.  But are you guilty for playing a causal role in having him incarcerated unjustly?  I think obviously yes.

01:02:12

Now, let’s take another example.  Let’s say I put a bomb in a FedEx package, and I have it shipped to my victim, and he receives it, and he gets killed when he opens it.  I’m liable, but is the FedEx delivery man liable?  He had nothing to do with it.  He didn’t know what he was doing.  He didn’t intend to do it.  So you see, the structure of human action is intent to achieve an end using a means.  So I intended to kill my victim using the means of a bomb and a willing courier agent.  But the courier didn’t intend to kill anyone, so he’s innocent.  Maybe he’s negligent, but he’s not innocent.  Maybe he violated a contract, but he’s not a murderer like I am.

01:02:57

Okay, so now, some people say, well, mere speech acts should – if you remember, we talked last time or the time before about Rothbard’s view that there are – all rights are property rights.  So, for example, this right to free speech is not an independent right.  The right to free speech is just a consequence of the right to own property.  So you don’t have the right to speak on your neighbor’s property, which you would have if you had a right to free speech.  So obviously there’s only property rights.  Not only that, as this example shows, some types of speech are not free at all because, if they play a role in the commission of aggression, they’re not permissible.

01:03:37

If you tell a mob, lynch that guy, that is a type of aggression.  If you’re the head of a firing squad and you say ready, aim, fire, and they fire, or if you’re President Truman and you say drop the bomb now, these speech acts play a role in aggression.  So the question is not whether it’s speech or not.  The question is whether you perform an action that is causally efficacious at causing other people’s property or bodies to be harmed when they’re innocent.  So this is the basic idea, and I think it’s a very powerful idea.  How it can be explored and applied is a different question, but I think this is the way to approach it.

01:04:22

Okay, let’s go to slide 16.   Before I go to this, Jock says recent death row case in Texas about a driver who never left the car during the robbery in which someone was killed.  Well, so this is a question of someone who’s an accessory to a joint crime, the getaway car driver.  Now, my kind of simplistic approach to this would be first to choose between the victim and the people that are committing the crime.  So if I have to choose between the getaway car driver and someone who was harmed during the murder – during the robbery or are murdered or are the victims of the theft, I’m going to choose the victim.  And I’m going to look at this group of people that joined together to commit the action as all guilty, and then it’s up to them to come up with arguments for why some of them are less liable than others.

01:05:25

Now, there’s a rule in the common law called the felony murder rule, which I think is basically justified on libertarian grounds.  That is the rule that, if you are a co-conspirator of a criminal – of a crime, like a bank robbery, and one of your fellow conspirators commits an intentional action like murder, let’s say, then that is transferred to you.  You’re liable for that as well because you’re part of the felony that commits it.  And I think that’s actually justified, and I think that would apply to getaway car drivers and the guy sitting at home who planned the whole thing who’s directing it.

01:06:04

Of course, they’re all responsible for this, but you could not implicate them using this sort of ad hoc theory of – hold on a second, Jock.  You couldn’t use this if you had an ad hoc theory like Block does where you say, well, you’re not responsible for mere incitement.  You’re only responsible if you have a contract or if you coerce someone.  I mean that’s just too narrow.  It needs to be more general.

01:06:30

Now, as for first degree, that’s the common law breakdown of crimes.  First degree is premeditated, say, murder.  Now, there’s a doctrine, say, in common law called transferred intent.  So if I’m – let’s say I’m trying to kill Jock—Jock is the victim tonight.  So I’m pointing a gun at Jock, and I’m trying to kill Jock.  Now, if I succeed, that’s first-degree murder.  But let’s say I miss, and the bullet hits Amanda who’s right behind Jock.  So what the common law will say is, well, that will still count as a first-degree murder of Mary because the intent to kill Jock is transferred, transferred intent.  I think that approach is basically justified too as it is in the conspiracy we talked about before.

01:07:21

Okay, now, Mary Surratt’s culpability during – regarding – this sounds familiar, but Danny, I don’t remember the details of this.  Didn’t – not Oswald.  Who’s the guy that killed Lincoln?  Yeah, John Wilkes Booth.  So what’s the thing with Mary Surratt?  I can’t remember the details there.  Anyway, if someone wants to type it, we can talk about that.  But let me go into this slide here.

01:08:02

01:08:10

We’re actually almost out of time, so I want to use the remaining eight minutes to – I think we’re actually doing pretty good.  We always go over here, but we have enough time to cover the remaining slides.  What I want to talk about is one final topic, and this is related to what we’ve been talking about tonight and in other lectures.  You will often hear people, including libertarians, say that, well, property rights are limited because you don’t have the right to use your property to commit a crime.

01:08:41

Now, this idea is used by Oliver Wendell Holmes.  Look at the bottom here.  He’ll say that, well, free speech is not open-ended because you can’t shout fire in a crowded theater.  Well, of course you can shout fire in a crowded theater if there’s a fire, so there’s nothing wrong with that.  But as Rothbard pointed out, the problem with shouting fire in a crowded theater when there’s not a fire is if – is because it violates the implicit rules set down by the owner of the property.  In other words, the property rights are paramount.  So that’s another mean – another false idea there that’s used to limit property rights. ¹

01:09:19

Similarly, you’ll have non-libertarians say, well, you libertarians believe in unlimited or absolute property rights, but that makes no sense because we all believe in limitations on property rights.  After all, you can’t use your gun or your fist to punch me in the nose.  The problem with this idea is that it assumes that it’s because of a limitation on property rights that you can’t shoot someone or punch them in the nose.  Rather, the truth is the reason that you should not or may not punch someone in the nose or shoot them is precisely because they have property rights in their body.

01:10:00

In other words, the prohibition against performing this action is based upon the assumption of property rights.  And in fact, it’s a limitation on action, not on property rights.  So, for example, according to libertarianism, I am not permitted to shoot you with my gun or with anyone’s gun, even if I stole it.  It has nothing to do with who owns the gun.  So the prohibition on me shooting you is not a limitation on property rights at all or whatsoever.  That’s an important thing to remember because this canard is trodded out time and time and time again.  Erika – yes, Jock.  He says that, and that’s a common formulation, but the thing to remember is it’s really a talking about what actions you can perform.  The basic idea is you can perform any action you want, except you cannot commit aggression.   It’s not a limitation on property.  It’s a limitation on your actions.

01:11:05

01:11:11

Okay, now, let’s get quickly to this topic.  This is not that important of a topic, but let’s just go into it and see how far we can go.  I want to get corporations really quickly.  You know what?  I don’t think we’re going to have time.  I tell you what.  Let’s stop here because I want to get to corporations, and it takes more than five minutes.  And since we’re almost at the end, I’d be happy to stay longer and talk – answer questions, but I don’t want the main lecture to go more than 90 minutes.  We’re at 85 minutes right now.  So I will stop here on slide 17, and we’ll pick this up next time in the next few minutes, and then we’ll talk about IP.  So I’ll be happy to talk for several minutes to answer any questions anyone has.

01:11:53

01:12:00

So feel free to type some questions here, and I think I’ve answered every question to date in the question – in the course materials.  So if I missed any, please call them to my attention.  Otherwise, I will just wait for any questions to be typed here or any links.  Any?  No questions?  Everything clear?  We have time.  Come on, Jock.  You have one question I know.

01:12:42

01:12:48

A mental illness – would they be liable?  Again, I think this is a gray area-type question.  I mean the basic idea is that if you intend to use a means to use someone’s property without their consent, that’s a crime.  If it’s partially intentional, we call that negligence, right?  And again, we can address this next question because strict liability has to do with this issue of mens rea, which Atchafalaya asked about, mens rea.  Mens rea is evil mind.  Did you intend to commit harm?

01:13:22

Karl: Do we have property right in our actions?  I think we do not.  I think your actions are just what you do with your body.  I think it’s better to say you have a property right in your body.  You have the right to control your body, to use your body in general.  You can’t use it to invade someone else’s rights, but you can use your body however you want.

01:13:47

And that gives you the practical ability to act as you like, but to say you have a property right in your actions is like saying you have a property right in free speech, which is sort of redundant with or double counting or treating the right to free speech as independent right when it’s really a consequence of the right to property.  I mean Jock is right.  I would say basically if you’re a mental – if you have a mental problem that there’s reduced culpability.  Jock, I agree.  It’s just like that.  It’s about – it’s like labor too.  And the problem is this metaphor of labor is very powerful, but I think you have to realize labor is just an action, something you do with your body.  So do you own your actions?  What does that even mean to own your actions?  I mean we know you own your body, so you can do what you want.  So what would it mean to own your actions?  Can you put it in a jar and sell it?  I mean I don’t know what that means.

01:14:44

Trey: We talked about Truman’s action of ordering the bombing of Nagasaki.  Where do the taxpayers that voted for him and paid for the bomb, and how does this work in the total war?  Well, that’s a good question.  I mean I don’t know the answer.  I mean I have my own personal views.  I think there’s a spectrum of liability in society.  So let’s take a more concrete example.  Let’s say that you, Trey, are convicted in court of smoking marijuana, and you are put in jail.

01:15:13

Now, you could blame any different numbers of layers of society for this.  You could blame the judge.  You could blame the jailer.  You could blame the employees of the prison system.  You could blame the guards in the courthouse.  You could blame the jurors.  You could blame the citizens who voted for people who enacted the drug laws.  I mean I think responsibility is spread among all of them in different ways.  How you figure it out I don’t know.

01:15:41

But my personal view is this.  The juror, at least in the common law system, when the jury has the right to vote to acquit with almost no consequence and no liability if they vote to acquit, and there’s double jeopardy so that, if you vote to acquit, the guy can’t be tried again, I think that the final line of responsibility lies with the jury.  So if you’re on a jury and you actually vote to convict someone of an immoral or un-libertarian crime, you are the one person with the most discretion that could just say no because voters are one of millions.

01:16:24

Prison guards are hired.  They’re going to do what they’re told to do.  Judges don’t have much discretion.  If they don’t obey the rules, they’re going to be forced out.  The one person in our system is the jury – and the voter.  I think voters – excuse me – are responsible too.  So I think they’re responsible, but they’re not like – there are so many of them that it’s hard to hold them all responsible.  But I think it’s basically a crime to vote to convict someone of committing a non-libertarian offense.  True, the jurors are slave labor, but they are not punished depending upon how their verdict is.  So at the point in time when they can vote guilty or innocent, they should say innocent in my opinion.

01:17:11

01:17:16

Now, Matthew, your question regards strict liability actually, which is what our next topic will result in, and we’ll have to talk about that next time.  Spooner might say that, Jock, but I don’t think that it’s a contractual issue.  I think it’s a causal issue.  I think that the juror helps to – if you vote to convict, then you’re causally responsible for the incarceration of an innocent person, which is why I think you basically have a duty as a human being to refuse to participate in that kind of situation or to vote innocent.  That’s the FIJA.  The Fully Informed Jury Association or Amendment, F-I-J-A, is the idea that jurors should be informed of their right to acquit, at least in the common law systems, the American and common law systems.

01:18:07

01:18:20

They do tell you that.  I agree with that.  So if you don’t understand – right.  If you’re a juror who doesn’t understand that you have the option to vote to acquit, then that might be an ameliorating factor.  But I’m just saying the system is that you do have the right.  You just don’t know it.  This is the consequence of having double jeopardy in the common law system, which means that you cannot try – the court system cannot try the defendant twice for the same crime, and the idea that the jury is not liable for how they vote.  The combination of these two legal rules means that you do have the practical ability to judge the law.

01:19:12

Oh yeah, I know.  That’s what’s going on right now.  If you tell them you’re a libertarian or whatever, you don’t get on the jury.  I’ve had that happen before.  I’ve been excused in a cocaine case because I said I could not vote to convict this poor woman for selling cocaine.  But then she was probably convicted because they select out everyone who is opposed to the system.  But I would say those people committed a crime against this woman.  Why would you vote to authorize the state to incarcerate an innocent person?  Maybe they’re innocent to some degree.  Maybe they should have – they’ve been duped.  I think – I agree, Jock.  I think that as a practical matter it’s going to be harder to find juries for certain types of cases.

01:20:06

01:20:12

You talked about limiting liability to 100%.  Doesn’t there have to be at least 100%?  If I understand your question, I would say yes.  It has to be 100% if it’s a crime, if it’s an actual crime.  Someone is liable.  But let’s say that someone is 100% liable and someone is 10% liable, and the main guy is gone, and we can only find the 10% person.  Well, then that’s all you can pursue for that person.  Jock said the pilot still would have dropped it.  Of course he would, and he didn’t drop it because he was coerced.  I think Walter is wrong about that.  Walter Block is wrong in assuming that these guys do this because they’re coerced.  I mean, sure, maybe if he disobeyed orders he would have gone to military prison, but that’s not why they follow orders.  They follow orders because they basically agree with the mission of the institution.

01:21:14

01:21:23

Well, it depends on – Jim, it depends on what you mean by 100%.  I mean I’m assuming 100% is whatever is the proportionate result.  So by definition it’s got to be 100%, but I’m not saying it’s got to be equal to the damage that was done to the victim.  I’m just assuming a certain type of damage or a certain type of award that should be granted.

01:21:49

01:21:57

Well, look.  I think we should go.  There’s no more substantive questions, but I enjoyed the class tonight, and I will see you guys on Wednesday.  And I’ll see you again on Wednesday, so I’ll see you on Wednesday.  Good night, everybody.

01:22:15

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:22:16 — 75.3MB)

1. For more on the Holmes metaphor, see The Non-Aggression Principle as a Limit on Action, Not on Property Rights. [↩]

Kinsella on Liberty Podcast: Episode 020.

This is lecture 3 (of 6) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.” The remaining lectures follow in subsequent podcast episodes.

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes:

[00:00–15:00] In the third lecture of the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” delivered on February 14, 2011, Stephan Kinsella shifts from foundational principles to practical applications, focusing on legal systems, contracts, and fraud. He recaps the prior lectures’ emphasis on property rights, self-ownership, and the non-aggression principle, which form the basis for libertarian legal theory. Kinsella outlines the lecture’s objectives: exploring how libertarian principles shape private legal systems, analyzing the Rothbard-Evers title-transfer theory of contracts, and addressing fraud as a violation of property rights.

[15:01–1:29:15] Kinsella delves into the structure of libertarian legal systems, advocating for decentralized, private courts that prioritize restitution over punishment, contrasting this with statist systems. He elaborates on the title-transfer theory, explaining how contracts function as voluntary property title transfers, and discusses fraud as a form of theft through misrepresentation. The lecture concludes with a Q&A session, where Kinsella addresses audience questions on topics like the enforcement of contracts, the role of reputation in private legal systems, and the challenges of applying libertarian principles to complex legal disputes.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

This lecture’s topic is “Applications I: Legal Systems, Contract, Fraud,” and discusses:

• Legislation and Law
• The significance of Roman Law
• Contract Theory
  • “written” agreements
  • Inalienability
  • Breach of contract
  • Debtor’s Prison

For slides for all six lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

Slides:

The videos of all six lectures are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Recap

• Time Markers: [00:00–12:00]

• Description and Summary:

  • Kinsella opens the third lecture, welcoming students to the Mises Academy course and briefly reviewing the platform’s features, such as access to recordings and slides.

  • He recaps the first two lectures, which covered libertarian basics: justice as the protection of property rights, self-ownership, homesteading, and the non-aggression principle.

  • The focus of Lecture 3 is introduced as applying these principles to practical legal issues, specifically legal systems, contracts, and fraud.

  • Kinsella emphasizes that libertarian legal theory seeks to resolve conflicts over scarce resources through clear property assignments, distinct from statist legal frameworks.

  • He encourages students to review previous materials and engage with the suggested readings available on the course website.

Segment 2: Libertarian Legal Systems

• Time Markers: [12:01–27:30]

• Description and Summary:

  • Kinsella discusses the structure of legal systems in a libertarian society, advocating for private, decentralized courts over state monopolies.

  • He explains that private legal systems would focus on restitution (compensating victims) rather than punishment, aligning with the non-aggression principle.

  • Reputation and market incentives are highlighted as mechanisms to ensure fairness and accountability in private courts, reducing reliance on coercive state enforcement.

  • Kinsella contrasts this with statist legal systems, which often prioritize state power and punitive measures over individual rights.

  • He references historical examples, like medieval merchant guilds, to illustrate how private legal systems have functioned effectively in the past.

Segment 3: Contracts and the Title-Transfer Theory

• Time Markers: [27:31–42:00]

• Description and Summary:

  • Kinsella revisits the Rothbard-Evers title-transfer theory of contracts, emphasizing that contracts are agreements to transfer property titles, not binding promises.

  • He explains how this theory differs from traditional contract law, which often enforces obligations regardless of property considerations, a statist approach.

  • Examples are provided, such as a sale where the contract specifies the transfer of ownership of goods or services at a designated time.

  • Kinsella discusses breach of contract, noting that in a libertarian framework, remedies focus on restoring property rights rather than punishing non-performance.

  • He addresses the role of mutual consent in contracts, ensuring that all parties voluntarily agree to the title transfer.

Segment 4: Fraud as a Property Violation

• Time Markers: [42:01–57:00]

• Description and Summary:

  • Kinsella analyzes fraud within the libertarian framework, defining it as a form of theft where misrepresentation induces an invalid property transfer.

  • He explains that fraud violates the title-transfer principle, as the victim’s consent is based on false information, undermining the voluntary nature of the contract.

  • Examples include selling counterfeit goods or misrepresenting the quality of a product, which result in the transfer of property under false pretenses.

  • Kinsella discusses remedies for fraud, suggesting that restitution (returning the stolen property or its equivalent) is the primary solution in libertarian law.

  • He cautions against conflating fraud with mere breaches of promise, emphasizing the need for a property-based analysis.

Segment 5: Q&A and Closing Remarks

• Time Markers: [57:01–1:29:15]

• Description and Summary:

  • Kinsella opens the Q&A session, addressing audience questions on the practical application of libertarian legal principles.

  • He responds to queries about enforcing contracts in a stateless society, suggesting that reputation and arbitration would play key roles.

  • Questions about the transition from statist to libertarian legal systems are discussed, with Kinsella acknowledging the challenges of dismantling state monopolies.

  • He clarifies the libertarian stance on complex issues, such as disputes involving multiple parties or ambiguous property claims, advocating for case-by-case analysis grounded in property rights.

  • The lecture concludes with Kinsella encouraging students to review the slides and readings, prepare for the next session on applications like inheritance and intellectual property, and continue engaging with the course material.

TRANSCRIPT

Libertarian Legal Theory: Property, Conflict, and Society, Lecture 3: Applications I: Legal Systems, Contract, Fraud

Stephan Kinsella

Mises Academy, Feb. 14, 2011

00:00:01

STEPHAN KINSELLA: Yeah, Hoppe’s t-shirt is good.  I have Hazlitt and two or three others.  They’re really great.  So happy Valentine’s Day, everybody for whom it’s still that day.  We have 26 people online, about, I think, one-third or maybe one-fourth of the course actually.  I guess 27 now.  I guess a lot of people are going to catch this after.  Okay, so we’re about to start.  So tonight we’re going to have some applications of the principles we’ve developed so far, and we’re going to focus on legal systems and contract and fraud.  And just a quick point.  So this is week three, so later this week we will post the mid-term exam, and the weighting will be 40% of the total score.  That’s right.  Everyone else is married.

00:00:53

So 40% of the score will be this test and 60% the final, and as I mentioned in the first class, the course is based upon what I say here in the course and the office hours, so you should listen to the office hours and the suggested reading material, not the optional, and all these slides here because the slides have some reading material that I do not read everything in them.  But the optional reading material, I will not test for the main credit based on those.  Well, it depends on when we put it up, Trina.  We’ll put the exam later this week, and we’ll probably give you seven days to complete it, so we’ll let you know when we post it.

00:01:43

Okay, now where did we leave off?  We left off last time on – we talked about property rights and scarcity and then punishment and restitution and various sort of applications to that like threats and stalking and Rothbard on air pollution and torts and restitution versus punishment, etc.  We also talked regarding legal theory about legal positivism and logical positivism.  And I will say that I think that part of the talk is particularly interesting because you will almost never hear anyone discuss those two things together, although, as we discussed last time, you can definitely see some connections.  And I think pretty much only an Austrian can appreciate those connections, and I don’t claim to flesh them all out, but something really worth thinking about and to explore.

00:02:33

And we also talked about some of the ways in which anarcho-capitalism or anarcho-libertarianism could work, whether we can punish outlaws who are not members of any agency, how restitution would work, punishment and ostracism and things like that, so that’s where we left off.  So now let’s continue.  Now, I will say that the first two lectures were very crammed.  I really think this is more of a seven or eight-lecture course, so the first two had a lot of stuff crammed in.

00:03:04

But luckily, I could spill over some of the questions to the office hours because I’m holding this, this time for the first time, and that’s working out well.  I do think for the next four courses – four lectures, they probably won’t last as long.  So hopefully tonight we can finish in about one hour with the main lecture, maybe a little bit over, and then have time for Q&A.  But let’s just wait and see.  If we have to go 90 minutes, we can.  It won’t be a problem because we are covering about three separate topics tonight, each of which will take a different amount of time.  Let me close this door here so the noise is down.  Excuse me.

00:03:40

00:04:09

Did everyone lose me?  Am I back now?  I’m not sure what happened there.  So we’re going to discuss different aspects of the legal system of a libertarian world, contract theory, and then why fraud is aggression.  Contract theory is a pretty big topic.  The first topic is pretty big.  Fraud is a more narrow area, so hopefully we can fit all three of these in.

00:04:32

Okay, so for the first topic, let’s talk about law.  I’m just going to do a little bit of background.  This may be somewhat basic for some of you, although I suspect not for many of you except for maybe some historians, even law students.  I studied a lot of this in law school only because I went to a civil law law school, but I forgot most of it, or didn’t appreciate the importance of it at the time.  So I sort of relearned this in the meantime on my own, and it’s pretty fascinating to just think about the overall structure of the world’s major legal systems just to get an idea of the context of where we are, what we can draw on, and what our system is being contrasted to.

00:05:11

So I would say the oldest and most advanced and the most important body of law in a way is the Roman law, about 1000-year, well-developed period of law from about 439 B.C. to about 535 A.D.  It culminated in what’s called the Corpus Juris Civilis.  This is the body of the civil law in Rome, which was done under the orders of the emperor, Justinian.  So in a way, I know he was an emperor and not very libertarian, but he’s one of the most important figures of all history in a sense because he preserved – the Roman law would have been lost without his codifying it and preserving it.

00:05:54

So the Corpus Juris Civilis consisted of three major parts.  Number one was the code, which was like a collection of the imperial enactments, decrees over the centuries of the emperors.  The two main parts that were most important for our purposes is the digest, the Digest of Justinian.  This was sort of an encyclopedia and a collection of the writings of the Roman jurists including Papinian whose picture adorns the advertisement for this course, and Ulpian, another very famous Roman jurist.

00:06:30

I mean these guys were just brilliant.  And then there was the institutes, which is sort of like a textbook, which sort of summarized the digest and the code’s teachings, and it’s good that that was preserved because it helps fill in the gaps for where the others have gaps.  And all three of these together had the force of law in Rome.  So the Roman law is basically this thousand-year period of very developed law.  It was a decentralized legal system, much like the common law in England.  That is [no audio_00:07:02].

00:07:03

00:07:24

Am I back?  I’m sorry.  Don’t know what happened here.  Okay, what I – let me ask a question.  When this happens, do I – does the audio drop out or just the video?  Okay.  All right, I’m not sure.  So what I was saying was – let me just recap then.  So the Roman law major system has three main parts: the code, the digest, and the institutes.  Right, okay.  So it was a decentralized system of law in that the collection – the legal rules developed as the result of actual cases like in the common law in England, or sometimes they would – legal scholars would take up a hypothetical case.  Like they would say if someone has a dispute with the following parameters, what would the right result be?  So they would take up these hypothetical disputes, and these also added to the body of law, quite an interesting thing. ¹

00:08:31

Now, sort of a – the modern descendent of the Roman law is the modern civil law or continental law it’s sometimes called.  This is the law in place in almost all of the world that’s the western world outside of the common law and the commonwealth countries.  So England, the US, most of Canada, Australia are common law countries, but other than that, European countries and the west typically have one type of civil law or another.  These are code-based systems.  Modern civil codes they’re called, which are basically modern codifications of the ancient Roman law principles and other principles too.

00:09:17

Anyway, I’ll get to that in a minute.  However, let me give an example.  One of the most famous – actually, I’m not sure what they have in China.  I think it’s a weird hybrid of this communist stuff and Asian law, but I’m actually not sure.  I think it’s a mess, same thing in Russia, I think.  I think it’s a mess.  But there’s one thing to note about these things.  The Code Napoleon or the Napoleonic Code, the French civil code is one of the most famous of the early codifications.  So that was another great thing another sort of emperor did.  Napoleon codified the existing European law, which was largely based on Roman law in 1804.

00:10:03

Now, France and Spain were trading Louisiana, which is one of the 50 United States, back and forth at that time.  Louisiana enacted its own civil code in 1808, largely modeled after the French civil code.  Now, these codes are very elegant if you read them, very elegant restatements of very elegant bodies of law developed in Rome – excuse me – and in Europe.  But one thing about them is, unlike the early Roman law, they enshrine legal positivism.  Like the first or second or third articles of these codes say that the primary source of law is the legislature and the code itself.  So it sort of gets this attitude among the legal profession and the people.  When you want to know what the law is, you look at the code first.

00:10:50

And whatever the code is, whatever the legislature says, is the law.  Now, it so happens that the substantive principles in these codes were modeled after principles developed in a decentralized legal system, so they’re actually pretty good, at least at first.  The same thing is true to an extent of the American Constitution, which is – in a way, it’s a general code.  But it’s based upon a lot of principles developed over time in England and – England primarily.

00:11:20

Now, the other major system would be the common law. So that was in England, let’s say, around 1154 or so to the present, and that’s another decentralized legal system.  So in a way, the common law and Roman law are similar.  They are both ancient, old, well-developed, and decentralized legal systems.  When I say decentralized, they were not primarily legislation-based.  They primarily developed their legal principles gradually over time as a result of actual disputes between parties, although, as I said, in the Roman law, sometimes you would have hypothetical disputes.

00:11:57

Now, other major legal systems that are very important, which we can learn from, would be the Lex Mercatoria, or the Law Merchant, which was prevalent in European countries in the Middle Ages, say, from around the 5^th to the 15^th century, which is actually based a lot on Roman law.  Canon law, which is the Roman Catholic law – it’s a very advanced legal system, which was also based in part on Roman law not surprisingly.  And finally, Jewish law, which is a very – another ancient legal system from – I think it started developing.  There’s lots of phases of Jewish law.  It’s very complicated and scattered.  But there’s a lot – Maimonides is a famous Jewish scholar, jurist, I think around 11 or 1200.

00:12:50

Anyway, someone asked a question.  Jock: Is the difference between the common and civil thing about what is not forbidden is permitted versus only what is expressly permitted?  I wouldn’t – there’s a lot of different opinions among legal philosophers or legal scholars about what are the main differences between them.  The first difference people would say is that the civil law is more based upon the Roman law, and the common law is based upon English law.  But as I mentioned, the true difference is that the modern civil law is rooted is legislative supremacy.  That is the primary difference, and I’ll get to this in a little bit, but I might as well go to some of it now.  But I don’t think that in either system – they’re both fairly liberal systems in the sense of freedom of contract, etc.

00:13:48

I don’t think in either system there is a presumption that everything that is permitted – that is not permitted is forbidden, although that tendency can be a little bit more pronounced in the civil law systems because of legal positivism.  But it’s not so bad as in, say, Russia – Soviet or communist countries, etc.  There is a fair amount of liberalism and freedom of contract in property rights and personal autonomy in both systems.

00:14:18

Here’s what I will say about this.  The difference between the civil law and the common law has been made more murky in, say, the last century because what has happened is this.  In the common law, which used to be a system where you have judge-made law, and the difference is one of attitude among lawyers and scholars.  Like if you ask a common law lawyer what’s the law, they want to look for a case and find it, and they actually feel nervous until they find a case even when there’s a statute that covers this area.  They want to find a case that validates their interpretation, and this is because the common law is a precedent-based system or stare decisis, which means the ruling of a previous court on the same or similar factual issue is binding upon future courts unless they expressly overturn it.

00:15:15

The ruling in the civil law is not the same because the primary source of law is the code, so the civil law lawyer and the jurist, the judge, first looks at the code and tries to find the answer even if the answer – even if this case has been answered many times before by other courts in the same way.  So they first look to the code, so it’s an attitudinal-based thing.  Now, this causes a difference in the way legislation is passed in these countries.

00:15:41

So, for example, in the civil law country, they’re used to legislation, primarily in elegant code, but legislation in general, being the primary source of law.  So if the legislature wants to pass a new statute, they just pass it, and then the lawyers and the judges will look to that to find out what the law is.  Now, it might not be as elegant as the civil code.  It might be an infringement on the civil code, but it’s still a body of the primary source of law, which is a legislature’s will.

00:16:09

In the common law, the judges are – they’re said to be jealous of their jurisdiction of being the primary makers of the law.  So whenever you make a common law statute or at least originally, let’s say, 100 years ago, 200 years ago, it was sort of like an encroachment upon the primary domain of law, which was the courts.  So the legislature had to be very specific because otherwise the judges would find a way around it.  That’s one reason you see the original English statutes are much more wordy and particular.

00:16:43

And they’ll use five or six synonyms in a row to make sure they’re covering all their bases, whereas the civil law countries tend to have more elegant statutes because they’re just announcing general principles, and they expect the judges to go to the statutes first to try to figure out what the law should – what the consequence or the application should be in a particular case.  But over time what’s happened is we have become more of a legal-positivistic world, and legislation has come to dominate, as I’ll discuss in more detail later in a few slides.

00:17:19

But what that has done is it has made the systems become more similar, so for example, in the civil law countries, the civil code is still there, but even they have become a little bit corrupted.  But more importantly, outside of them, there’s a whole body of legislation that has arisen around the civil code, making it less important.  Okay, by the way, I mentioned stare decisis earlier.  That is the principle in the common law where the precedent of a previous case is binding on future courts.

00:17:51

In the civil law, as I mentioned, the primary source of law is the civil code or the statutes that are relevant.  But there’s something called jurisprudence constante, and I’ll have that spelled in a minute on a slide.  That is the idea that if there’s a long series of the same judgments issued by courts, they have a lot of persuasive weight.  Let me see if Andy sent me a note here.  Okay.  So that’s the two differences: stare decisis in the common law, jurisprudence constante in the civil law, and I’ll have that spelled out in a second.

00:18:30

Someone asks the difference – how are judges bold enough to challenge precedents in common law?  Well, so it’s basically – think of it like a threshold or a burden of proof.  So a court can be persuaded to overturn previous precedent if it’s persuaded that there was a mistake.  But usually they’ll do it explicitly, sometimes implicitly.  But the thing is, you can’t do it unless you are the same level of court or higher, so a lower court can’t overturn the precedent of a higher court.  So they do it if they think it’s bad enough.  The earlier decision has been clearly been shown to have been poorly reasoned or bad enough, and they have enough courage to change it.  So you can change stare decisis, but it’s just a really high burden.  Just think of it as a high threshold you have to cross, higher than it would be in the civil law countries.

00:19:27

In the civil law, if you could make a good argument that this code article applies in this way to this case, the judge will apply it even if another judge applied the same code article to a similar case previously.  They’re not as reluctant to apply the code article.  By the way, there’s an interesting thing in the civil law theory.  The civil code is said – the civil code articles are said to be floating in a plasma of law.  That’s an interesting expression, a plasma.  So the idea is that there’s an organic, coherent unity of this hypothetical body of legal principles and justice and that the code articles that we found so far are little data points of that that are kind of peeking out like islands peeking out, so that if we have a case that is not exactly covered by one of the code articles, it is – you can analogize in between data points things that it’s similar to.

00:20:29

You can interpolate, so to speak.  And the only reason you can do that is because you assume there’s a cohesiveness and there’s a uniformity in the law, and there’s a hidden order, a plasma, whereas in the common law, you can’t assume that as much because – or at least that’s what the civil law lawyers would say because it’s not planned.  It’s just these sort of decentralized body of legal rules that developed all over the country in different courts.  So there could be inconsistencies, so it would make no sense to interpolate between them.  You could get whatever results you want.

00:21:04

Does the civil law usually make decisions based on the letter or the spirit of the law?  Well, I would say if it’s a code case they would tend to go with – well, they would go with the letter of the law if it’s covered by a code article.  But they believe more in the spirit of the law because they assume there’s a unity of the law, which is this plasma idea.

00:21:25

Okay, let’s go head on.  I’ve jumped ahead a little bit, but that will just save time for later, so we’ll go on to slide seven now.  Okay, so I already mentioned some of this.  The civil codes of the civil law system have been gradually reduced in importance with other statutes that have risen to the fore, and not elegant code-based statutes but all these things like the Americans with Disabilities Act, although that’s an American law.  But you know what I’m talking about, all the particularistic legislation the legislatures come up with now.

00:22:02

Modern common law has been gradually codified with things like the UCC, the Uniform Commercial Code, which was the brainchild of Karl Llewellyn, a German-American legal scholar, and it’s been largely supplanted with a flood of legislation.  Patrick: Yes.  I don’t know the particular situation of Brazil, but it is true.  As I mentioned, like in the US, our Constitution is like a civil code, and it’s very much more like the civilian systems because it is very short, compact, and elegant in general and abstract statement of legal principles, more like a civil code than the modern legislation we see now or a court-based system.

00:22:45

And here’s where I mentioned under the modern common law point.  I mentioned the – let me get my laser pointer out here.  I mentioned jurisprudence constante, which is the French or the civilian idea that a long series of decisions in the civil law can be very persuasive or influential to a judge, but it’s not the same thing as precedent in the common law.  Now, as for other modern systems of law – so in the ancient systems of law, I mentioned Roman and common law and also Lex Mercatoria, Jewish law, canon law, etc.

00:23:23

In the modern systems of law, we have civil law and modern common law, both of which, as I said, are kind of converging towards each other.  They’re both very legislation-based, and they are both increasingly governed by either constitutions or by treaties, international treaties that the countries have agreed to.  And by the way, we won’t get to international law very much in this course, so let me mention an interesting – I’ll try to mention some interesting terminology every now and then that is used by lawyers in a confusing way that, if you just knew the codes, a lot of things would become clear.

00:24:00

So in law, there’s a word called municipal.  So municipal law is a term that means the national law of a given country, and the word for country in the international law is state.  So there’s 180-something states in the world, and every state has its own municipal law.  So in America, that would be our Constitution, our federal law, our federal statutes, and the state laws.  In Brazil, it would be their own.  So that’s municipal law.  It doesn’t sound like what municipal law would be, but just to let you know.

00:24:32

And then in international law, you have public international law, which is the rules that govern international relationships.  And you have international commercial law, which is sort of the more individual-based law that governs transactions and commerce between companies and people of different countries.  So the modern systems of law would include also civil law, modern common law, and of course Islamic law, which I don’t know much about, and I’m not going to go into here.

00:25:05

But international commercial law and arbitration, which is sort of a successor to the Law Merchant actually, which I mentioned earlier, and public international law, which the main organ of which is the United Nations and various networks of treaties around the world.  Okay, so that’s sort of an overview of the major legal systems of the world.

00:25:34

Now, what has happened is ever since we’ve had – say, in the last 150-200 years, we have had a rise of legislation as the dominant form of law to such an extent where even libertarians now are not always opposed to legislation as the form of making law.  Now, they might have an opinion on what it should consist of, but they think of law as what the government says the law is, what they decree, not just judges of the state’s legal system coming up with decisions, which might be actually just or more or less just because in a court-based system, you have a judge who is trying to do justice based upon two contestants before him who each have claims to a certain thing.  And he takes into account all of the facts, all of the context, and he tries to come up with a rule based upon rules he’s aware of that other judges have tried, and do justice.

00:26:39

This is why the common law and the Roman law tended to be more compatible with libertarianism because it’s the outcome of more or less an attempt to do justice.  Legislation is just a decree of a body of men who say what the law is, and of course, that’s subject to all of the whim, but even if they had the best intentions, they’re not deciding a dispute between two real people.  So you have a law like the Americans with Disabilities Act, the ADA in the United States passed 15 or 20 years ago.  So it’s got a phrase in there like every employer must make reasonable accommodation of a handicapped person, but they don’t define what that means.

00:27:18

Now, the reason is the statute is a result of a compromise between the left and the right, and they just make up these vague terms, and they assume the judges will interpret them.  And the judges will do their best, but they’re not interpreting – they’re not trying to do justice between two parties based upon the actual facts and based upon principles of justice that have been developed and known for a long time.  They’re just trying to interpret words that a committee of people wrote down on paper.  There’s no reason to believe that these words and the principles in this statute would be self-consistent or consistent with justice or even be coherent or non-ambiguous.  So what is reasonable accommodation now?  I don’t know.  It’s anybody’s guess.  Gradually, a body of case law develops, but it’s not the same as regular case law.  It’s just something the courts settle on as a compromised way to try to interpret these vague words that these legislators come out with.

00:28:17

So a famous Italian legal theorist, Bruno Leoni, who, by the way, is said to have been murdered by a client sadly in his 40s I think, he was a brilliant man.  He wrote Freedom and the Law, and I think that book is online for free, and if it’s not, you should buy it.  It’s a fantastic book.  And one of his fellow lawyers – I don’t know if I quote him here – Giovanni Sartori – he’s fantastic.  He’s also really good, Giovanni Sartori.  Anyway, so what Leoni pointed out was when you have legislation becoming the dominant form of law, number one, it reduces the amount of legal certainty in society.  So this is one problem of having a legislation-based system.  Why is there less certainty?  Because the legislature has the authority to just change the law from day to day.

00:29:12

Now, we see this right now in the current financial crisis when no one knows what the government is going to do, let’s say, in the US case about mortgages and the interest rate and the bailouts and whether banks can foreclose on mortgages and what changes they’re going to – what the tax law is going to be next year.  Whenever you have uncertainty, and you have uncertainty just because there’s a dictatorial agency that has the discretion to change their mind.

00:29:41

In a common law system, they couldn’t do that.  It evolves more slowly and gradually, and there’s no sort of single body that decides to change the law.  It’s just a response to conditions.  So whenever there’s a legislature, you can’t be sure what rules will apply tomorrow, so that increases uncertainty.  And as he points out, there are three things about judges that make them different systematically from legislators.  Number one, they can only make a decision when they’re asked to do so by the parties.  They can’t just go to court one day and make a decision.  They have to have a dispute.

00:30:19

Number two, the judge’s decision is not that far reaching.  It only affects those parties and maybe occasionally third parties.  And third, his discretion is limited because he has to refer to precedent, similar precedent, so he can’t deviate from precedents too much.  If a judge were to hear a case between [no audio_00:30:40].

00:30:41

00:31:03

Sorry, am I back now?  Okay, sorry.  What I was saying is if a judge were to try to – in a decision between two parties with a concrete dispute, let’s say they’re both claiming a sum of money because one damaged the other or they had a contract dispute.  If the judge just decreed one of these crazy statutory schemes, it would be what’s called dicta, D-I-C-T-A, dicta.  And what that means is it’s something that’s not necessary for his decision beyond his authority to make, and other judges would ignore it.  It’s not part of precedent or case law.

00:31:42

Okay, so this is why judges cannot do the same thing that legislatures can do.  Now, if you have a legislature, you have – and by the way, you might have seen this poster before or this little bumper sticker that when the legislature is session, no man’s life, liberty, or property is safe.  Well, that’s the same idea that the legislature is kind of unpredictable what they’re going to do, and they have a lot of authority.  So there is more legal certainty in a decentralized legal system like Roman law or customary law or common law.

00:32:18

Now, what are some of the effects of this?  I’ll just go through them quickly.  When you have more uncertainty in society, so for example, you can’t be as sure that your agreements will be enforced because the legislation might come in and change the law and say that these types of agreements can’t be enforced.  For example, as we have right now with mortgages, I mean the reason you give a mortgage to secure a loan is because you have collateral to back up your loan.  But if you think the government is going to come in and freeze all the mortgages because of concern for homeowners out a desire to pander to homeowners to get votes, well, then you’re going to have less loans being granted because you can’t be secure in your collateral, same idea.  So you have more costly alternatives being developed if you can’t rely on contracts as much.

00:33:10

Also, when you have increased uncertainty, time preference is increased, and time preference is a very important thing in economics and libertarian theory.  The idea is that the higher time preference is – or the lower time preference is, the better off we are because people are willing to invest more for the future.  They’re willing to wait longer to be gratified and to have longer-term projects.  When you can have longer-term projects, you can have bigger projects and more returns.  If you’re living hand to mouth because you have high time preference, you save less and you produce less, and we live a more squalid lifestyle.  So the point is that legislation leads to uncertainty, which leads to negative effects like more cost and higher time preference, which leads to lower production and impoverishment of everybody.  I’m having a little coffee, or maybe there’s bourbon in there.

00:34:11

So another negative effect of uncertainty, and if you will read one of Hoppe’s articles on – it’s on hanshoppe.com on his publications page.  It’s on time preference I believe.  He’s got a good extended discussion about – and I think I cite this in my legislation article that I have on the course page.  But there’s an extended article I think by E.D. Bonson or someone.  “The Heavenly City” I think it’s called, or it’s a book, I think.  It’s a study about how, when you have more – a higher time preference, this leads to increased time because people become more present-oriented.  And this pushes people right on the margin, people that would be criminal but they’re not quite, in a certain society, into criminality if time preference increases.  So there’s a bunch of negative effects of legislation and the uncertainty that it engenders.

00:35:10

Another one is this.  As you have more and more laws, and the idea that law is what the government says, then you have more special interest groups arising.  And then other special interest groups arise to defend themselves from the laws or to get their slice of the pie.  So this makes it more of like a war of all against all.  So then we’re all fighting and conflicting over what laws should be there and getting our slice of the pie and hurting the other groups and having laws that harm our competition, etc. instead of cooperating and just minding our own business.

00:35:44

Another problem with this is when you have so many laws, we are pretty much all law breakers.  There’s almost always some law you can find that someone has violated, especially given the perverse rule in most legal systems that ignorance of the law is no excuse.  Now, when you have a legal system like a libertarian legal system, which is based upon what we say natural law or law that’s common sense or law that’s written on our hearts, engraved on our hearts, then you can say ignorance of the law is no excuse because we all know the law.  The law is don’t hurt each other.  Respect each other’s rights.  Everyone knows this.

00:36:20

But when you have legislation coming and law can be just made arbitrarily and you have literally hundreds of thousands of laws buried in books and regulations, which amount to laws, it is literally impossible to know all these laws.  So to have a rule that ignorance of the law is no excuse is perverse, but in any case, what this does is it gives the government the authority to have discretion about who they’re going to single out.  So they can always make you a law breaker if they want to.  So what this does is it does tend to make you more like the society of, say, a communist country where everything that’s not permitted is forbidden because you’re probably breaking the law at any point in time.

00:37:06

Let’s go to slide 13.  Oh, here’s Giovanni Sartori.  So I’m on slide 13.  What I’m saying is Sartori who is sort of a colleague or a fellow Italian legal theorist of Bruno Leoni pointed out when legislation is thought of as the primary source of law, which is how everyone thinks of the law now.  In fact, even libertarians think like this way now.  They’ll say, well, that’s – they’ll say that you have these income tax nuts in America.  They’ll say, well, it’s not illegal to not pay income tax because it’s not the law.  It’s not on the lawbooks.  So they think of what’s in the law books, what’s written down in black and white is what the law is instead of justice and legal principles developed based on justice.  They start thinking of law as whatever has been decreed by the legislature.

00:37:59

So as Sartori pointed out, when everyone starts thinking that law is whatever the government says, when legislation is the primary source of law, citizens become more accustomed to following orders, so they become more docile, more servile, and less independent, and then the government can become more tyrannical.

00:38:16

Now, let me mention quickly here, the idea of a private system law is that in a common law system, you would have a role for codification, but it would not be legislated.  So there would be a role for commentators and codes, so you would have these – excuse me – decentralized bodies of law like in the Roman law. And then some legal scholars or companies or arbitration agencies or whatever would come in and try to come up with codifications of the law, clean up some messy edges, and suggest improvements.  But they would codify the law.  There would be a market for that and a need for that like what’s done in the past with Justinian’s code – I’m sorry, the digest, sorry, and as was done by, say, Coke, the English legal theorist or Blackstone, another English legal jurist, or as is done now by the American Law Institute restatements or even the uniform commercial code, which is adopted by some legislatures but is a code that was drafted by an institute. [Update: see On the Role of Commentators and Codes]

00:39:36

Okay, so let’s go to slide 14.  Am I still there?  No freezing.  Good.  So as I mentioned before, here’s where I have the municipal law thing I mentioned earlier.  In a legal system of a libertarian world, let’s think about international law versus municipal law.  So right now, we have state-based or country-based legal systems, which is a municipal law, and international law.  The municipal systems have become largely legislation based, so they’re very positivist in the legal positivism sense.  So if you’re convicted of doing drugs or accused of doing drugs, it’s not a very good defense to say it’s unjust because the only question before the court is did you violate the terms of what’s written down here in this statute whether or not it’s just?

00:40:31

Now, sometimes you can try to appeal.  If there’s wiggle room, you can appeal to the Constitution, but even the Constitution allows taxation.  The Constitution allows drug laws.  The Constitution used to allow slavery in America I’m talking about.  So even the Constitution can’t be assumed to have been just, so people are only appealing to compliance with a given written-down, arbitrary standard of law decreed by a group of government bureaucrats.  There’s no reason to think that would be just.

00:41:01

International law, by contrast, as much as some libertarians and conservatives have distrusted world government centralization and the United Nations, it doesn’t look to me like there’s any great danger that the United Nations is going to take over.  If anything, the great danger is the United States and maybe some of its main allies or co-conspirator countries would and do dominate the United Nations and use that to cover their global hegemony.  So I’m not so concerned that the United Nations – now, they are somewhat socialistic in some of their laws, but they don’t have much enforcement power.

00:41:44

So the one good thing about international law, and I’m talking public international law when states make arguments before neutral forums and tribunals when they have disputes with each other, or when countries have – when companies have arguments with another state or with each other in an international setting, there’s a little bit more wiggle room and leeway to make normative arguments and to bring in, say, libertarian principles or justice principles because the law is not legislated as much.

00:42:17

And there’s more of a general-principles-of-law-basis of international law, so it makes more sense to tell the jurist this is what the just solution would be because they’re not so bound by the straight jacket of a legislative scheme and what they can do.  So in a way, international law, I think – international law itself, and Jock says about ACTA.  Well, that’s a treaty that is sort of like private law between countries, so I think that’s just as bad, of course, as municipal and state law.  And that is corrupting international law to some degree too.  I’m talking primarily about public international law, which is governed by so-called principles of international law, which is primarily contracts should be respected, and countries should not attack each other for no reason.  So it’s roughly compatible with libertarianism.  Respect contracts, and don’t commit aggression.

00:43:22

Now, as we talked about in the last class, the legal system of the libertarian world would probably be restitution based, although it could be based theoretically upon a right to punish.  But it would probably be predominated by restitution and practice.  And then so I don’t get too far behind here, and we may not have much time for Q&A today, so we may have to kick it to next time, but anyway, there is sometimes a dispute among libertarians about, in a private legal system, in an anarchist system, would criminal law disappear, and would there only be property law?

00:44:00

Would one devolve into the other?  And the thinking is that criminal law, at least in our statist system, is not really libertarian because there’s no victim.  The state claims to be the victim.  So think of the OJ murder case.  The state prosecuted OJ and lost because they had a higher burden of proof, and then the victims sued OJ for a tort in a civil case for restitution basically and won.  Now, in a private system, you think that would be the only – there would only be one suit by the victim against OJ.

00:44:34

Now, maybe it would be criminal, but the result would still be restitution.  There is still good reason to believe that in a private legal order, even if criminal and tort and civil law devolve into each other, you would of course still have – you would have specialized types of courts, say, for contract cases, for successions like when you have a death and you have to decide who gets to inherit the property, for marital disputes, divorces, child custody, civil cases, and crimes and torts.  So you would have specialized courts, but they’re all applying the same basic property rights principles, just to different situations.

00:45:23

Now, there is something that libertarians are prone to, and that is what some of us call armchair theorizing.  And we see it here in this course.  People say if you have this kind of case, what’s the right result?  I think we need to have a little bit of humility about our ability to come up with answers.  And if you reflect about how the common law and the Roman law systems did things, which are more compatible with our ideal system, they came up with the disputes only in response to a detailed, factual accounting of a context.

00:46:00

So the person who came up with the legal decision or determination knows a lot of details about the parties, the dispute, and tries to come up with an answer.  Usually in these hypothetical questions, it’s pretty general.  If you shout fire in a crowded theater, are you guilty?  If you incite a mob to riot, are you guilty?  Well, that’s not enough of a decision to go on, so we have to sort of be careful about how much we can come up with from our armchairs.  I think libertarians have to come up with general principles, and we have to rely upon them being eked out and developed and applied in concrete ways by courts and by arbitration agencies, by insurance companies, by contractual regimes, by customs, and see how they develop.

00:46:53

Now, Randy Barnett, who is an important libertarian legal theorist, in one of his books, which I discuss in my article, which I have hyperlinked here, the “Knowledge, Calculation, Conflict, and Law” article right here.  He says we should distinguish between abstract rights and legal precepts.  By abstract rights, he means basically what our general rights are.  Legal precepts he means more concrete applications of these to given situations or areas of law.

00:47:25

So of course, Julia, I think you’re right.  I think that what you could expect would be to see arbitration agencies, insurance companies, private justice agencies gradually coming up with contracts and regimes and basically treaties.  And you would have legal precepts develop as well, and we could model a lot of these after what the civil codes and the common law and the Roman law have done, but we have to be aware that these were kind of quasi-statist systems, overly statist systems.  And we have to take everything they did with a grain of salt and at least examine them to make sure that they weren’t based upon some un-libertarian abstract principles.

00:48:11

Let’s go to slide 16 now.  Excuse me.  So I have some examples, just examples here.  I don’t want to go through them in detail because we’re running behind.  Just here are some examples that you really – it’s hard to do armchair theorizing with a lot of these whether a promise is always or is never a contractual title transfer, whether – like I said, whether incitement can be a crime or is a crime.  What counts as a threat?  When you go to your neighbor’s door to borrow a cup of sugar, are you committing trespass, or did you have an implicit invitation to use their property to knock on their door?  If you kiss a girl on a date, is it a type of sexual assault, or did you have implicit permission given the context?

00:49:06

And then there’s caveat emptor, which is the buyer beware.  Was he defrauded, or did he – should he have known better?  And then Walter Block and Murray Rothbard’s idea where they say, well, there should always be the two-teeth-for-a-teeth punishment rule.  I mean I understand the sympathy there and the reasoning, but it seems to me a little mechanical and a little bit armchair.  We can’t say it would be exactly two teeth for a tooth.

00:49:37

Okay, so we’re making good progress here.  I am going quickly here, but – that’s interesting, Patrick.  I’ve been trying to think of some more courses, so if you guys have ideas, let me know.  Okay, so we’re kind of done with libertarian legal theory.  We can take questions later.  I’d like to move on to contract theory now.  And fraud is not going to take long.  Contract theory is going to take at least 20 minutes.  Great.  I am squeezing a lot in here guys, and I know a lot of you are not legal experts, so you’re really keeping up nicely.  And I hope I’m not going too fast, but I really want to cover as much as I can.

00:50:15

Okay, contract theory.  Now, step back and think about this, and I hope I’m not being too elementary.  When I talk about these things, I’m a lawyer, practicing lawyer.  I’ve read a lot of stuff.  I’ve been thinking about this stuff for 20 years, and even I still think about it in somewhat elementary terms to just step back and sort it out.  So sometimes it seems basic to me, but I think it’s a helpful way to step back and take a fresh look at it because there’s so much baggage out there about how people approach these things.  And there’s so much lack of clarity in the legal concepts they use and in the assumptions that they have.  They just assume way too many things.

00:50:58

They assume way too many things, and it leads to erroneous assumptions or people just making crazy statements and assumptions.  So let’s step back and think for a second.  People commonly say, including libertarians, they just take for granted the ability to contractually bind yourself or to obligate yourself.  And what they think of is the modern concept of contract as a binding promise.  That is, you make a promise in a certain way that gives rise to a legal obligation to perform.

00:51:29

Now, what does that mean?  Most systems don’t have what’s called specific performance.  That is, if you refuse to do what you promised to do, the judge will almost never make you do it except maybe sell a piece of real estate, but that’s not really making you do anything.  You’re just transferring ownership of it.  He won’t tell you, if you don’t sing at that birthday party, I’m going to put you in jail.  He might issue a contempt order if you refuse to do something – if you do something you refuse not to do, like if you can just abstain from doing it.

00:52:03

But these courts don’t want to get involved in supervising whether you did the job right and all this kind of stuff.  So they almost never issue specific performance, it’s called, specific performance.  What they do is they just award damages, so they’ll say if you promise to sing at someone’s party and you don’t, well, you’ve got to pay them $5,000 of damages.  So it always comes down to a title transfer if you think about it.  It’s not put that way because people think of things as binding promises.  They call them binding promises, but they’re not really binding.  All they mean by that is that there’s a consequence if you don’t do it.  And the consequence is almost always a transfer of title to money or property in terms of damages.

00:52:47

So basically what the legal systems really are is title transfer system.  Things you do can cause title to be transferred, usually money.  So the libertarian system that is propounded by Murray Rothbard is explicitly this: a title-transfer theory of contract.  They say, look.  Let’s just go ahead and go right – let’s cut right to the chase.  Let’s call it what it is.  And by the way, one alternative theory that’s a libertarian theory of contract is Randy Barnett’s consent theory of contract.  I think it’s a little bit more like the conventional theory.  I prefer Rothbard’s theory, but you might find Randy Barnett’s theory of interest.  I have it on the optional readings section for this course, for this lecture.

00:53:36

So let’s go on.  Let’s talk about Rothbard’s and Evers’ theory.  So what happened was this.  Until recently, I actually would call it the Evers-Rothbard theory because Williamson Evers, who is a scholar, still living, published an article in 1977 in the Journal of Libertarian Studies on his contract theory.  Murray Rothbard then built on this theory and summarized it and extended it a little bit in his 1982 book, The Ethics of Liberty.

00:54:04

But I recently realized that in a 1974 article, Rothbard kind of anticipated Evers’ theory in an article he did, and David Gordon posted on the Mises blog recently about how – or actually the Mises email list, sorry.  Anyway, that he had actually asked Evers the other day where the title-transfer theory came from, and he said he got it from Rothbard.  So basically what I think happened was Rothbard got there because of his Austrian theories and his libertarian theories.  And then Evers took off from that, and then Rothbard built on that, so this is still the Rothbard-Evers theory.  Basically, the idea is that the right to contract is just a consequence of property rights.  So if you own a piece of property, then you have the right to sell it to someone else.

00:55:00

Now, I’m going to revisit this when it comes to the inalienability issue because I actually don’t think that’s an automatic assumption.  This is the mistake that’s made when it comes to your body, but it is true, I believe, when it comes to property that you own.  The reason is—I’ll go ahead and anticipate the argument—when you have property that is outside your body, something that you own, you own it because you came to own it.  You came to own it because you homesteaded it.  It used to be an unowned thing, and then you homesteaded it from the state of nature, or you acquired it from someone else who did that.

00:55:34

But the point is, this is a thing that at some point no one owned, and at some point, you didn’t own, but then you came to acquire it.  You’re now the owner of this object or this thing.  You’re the owner because you’re not merely possessing it.  You’re owning it with the intent to own it.  That’s an important part of ownership.  Ownership is the right to possess or the right to control something.  It’s not merely actual control or possession.  It’s the right.  And to own something, you have to intend to own it.  I mean if I grab a stick off the ground in the middle of the wilderness just to strike a tree with it and drop it, I never really did intend to homestead that.  Or you could say I homesteaded it, and right away I abandoned it, but the point is my intent to own is an important part of maintaining ownership of something.

00:56:24

This is why it’s possible to – we’ll have to get to that in a minute, Atchafalaya, but that’s the inalienability issue.  I’m talking about things that you homestead because think about it.  You’re homesteading it.  You are a homesteader.  You are someone with a body, having a body, so the ownership or control of your body is already presupposed as part of what a homesteader is.  So that’s sort of a given.  You don’t homestead your body in the same way that you, as a body owner you can say, homesteads other things.  By your intentional action, you acquire something and you homestead it.

00:57:01

That means that if you lose the intent to own it, you don’t own it anymore.  So that means you have the ability to abandon these things.  Now, this seems elementary, but I think it’s very important.  This is, I think, why you have the right to sell things that you own.  You just abandon them in favor of a given person basically.  You give it to someone else and say I now relinquish my title to it, and then they’re holding it so they can re-homestead it, for example.  That’s one way to think about it.

00:57:30

The reason this is important is because ownership, as I mentioned, is the right to control.  Now, the right to control does not imply automatically the right to get rid of the right to control.  It means that you’re the one who gets the right to decide who can use this.  So how would the right to control imply you have the right to sell it?  Because that means you would lose the right to control.  So I think the way – the reason you can sell it is because, when it comes to something that you acquire, you can un-acquire it.  You can abandon it.  If you can abandon it, then your ownership of it means you can evaporate that ownership.  That’s why you can sell these things.  So it’s a consequence of the combination of the right to control, the importance of intent to own, and the fact that you acquired it is the reason why you can sell an acquired external object.

00:58:21

Now, this actually does not apply to one’s body because you never did acquire your body in the same way.  It’s not like you are a disembodied spirit lurking around and you homesteaded a body.  You might have religious beliefs like that, but it’s still not the same thing.  You weren’t a homesteader.  You weren’t an agent, an actor in the world, walking around with already having a body and homesteading your body.  It makes no sense.  Anyway, Patrick, I’m not sure who you’re asking a question of or what your question is, but…

00:58:57

00:59:02

Okay, so I’ve already touched on this a little bit.  By the way, it’s 9:02 right now.  Why don’t we take a seven-minute break, and then we’ll continue?  And I think I may go most of the rest of the class with the lecture.  And we won’t have much time for Q&A, but we can go longer if you guys want, and then we can do more questions on the office hours on Wednesday.  So it’s 9:03 now.  Why don’t we come back at 10 past the hour?  Is that okay with everybody, 10 past the hour?

00:59:42

Okay.  So now let’s talk about breach of contract.  Now, in conventional theory, breach of contract, as I mentioned earlier – I touched on this already.  Can everyone hear me?  I’m back okay?  Okay, so the conventional view is that – okay, bye, Erika.  The conventional view is that if you have a contract, it’s an enforceable promise, and if you breach it, there’s damages.  So the libertarian view, according to the title-transfer theory, is that there really is no such thing as breach of contract.

01:00:24

Now, there is a theory in sort of law and economics – excuse me – and it’s called the efficient breach theory, which comes close to what our view is or what my view is or what Rothbard and Evers and my view is.  Efficient breach theory is that you should be permitted to breach a contract if you have a better opportunity to do something else with your property or your time as long as you can pay off the original party.  Of course, that’s the consequence of a title-transfer theory is that in your contract, it is viewed as a set of conditional title transfers between parties.

01:01:03

Now, I’ve already touched actually on this part here.  Oh, I’m sorry.  I thought you meant got to go, Erika.  Sorry.  Now, I’ve already touched on this issue.  Does ownership automatically include the right to sell?  In my view, it does not.  There is actually an international law issue, which is relevant here, and a state law issue.  It’s called parliamentary or legislative sovereignty.  So the question is can a legislature bind themselves now not to do something in the future?  Like could Congress pass a law saying we cannot – here’s the minimum wage.  It’s $10 an hour, and we cannot ever lower it.  They actually can’t do that because next Congress could just change their mind.  Even if they put it in the Constitution, the Constitution can still be amended because nothing requires unanimity, and even if it did, you could finally have unanimity.

01:02:10

The same thing is true with countries.  So you’ve had some of these famous international arbitrations in the ‘70s in the Middle East oil dispute cases like Aramco and Saudi Arabia and all these kind of things, Exxon and these companies.  They had concessions, which are international agreements or treaties between companies and countries, and these are given international force.  And so basically, it’s like a property right given by a country to a separate country’s national company – not national company, but a national, meaning a citizen of that country.

01:02:46

And that agreement, if you breach it, it’s like breaching a treaty.  So you had these countries like Saudi Arabia, etc.  They would nationalize the oil concessions of Exxon or whatever, and then even though they had promised they would never do that, and then they would say that, well, we have the right to change our mind because of sovereignty.  And basically the international arbitration tribunals had to make a decision.  When a country makes a solemn promise that’s binding under international law – and there’s a way to do this.  It’s called internationalizing the contract.

01:03:24

This is not really relevant for our course.  I’m making an analogy to the personal situation, but the point is, the question before the court is, is it an exercise of sovereignty to bind themselves in the future, or can they always change their mind later?  And basically the idea is that, at least for countries, they can bind themselves.  At least that means there’s consequences if they breach the agreement.  Just like if America – like Congress can change the law.  Say Congress can change the copyright law tomorrow because there’s nothing to stop them from doing that inside the American legal system.  But if they change the copyright, it could violate the Berne Convention, which is a treaty they entered into, and then they would be in breach of international law, and there would be consequences for that.  What they might be is a different question, but there could be consequences, and that’s what law is.  Law is a rule, the breach of which gives rise to certain serious consequences.

01:04:24

So the question is, if you own property, that means you have the right to control it.  If you have the right to control something, you can see why that doesn’t automatically mean you have the right not to control it.  I mean the right to control it – so let’s say I have the right to control this ink pen here.  That means I can loan it to you, or I can refuse to loan it to you.  Now, let’s say I agree to loan it to you.  I say yes, I promise I’ll let you have this pen.  I’m going to give this pen to you.  Now, you take the pen.

01:05:00

Now, if I’m the owner, I have the right to say give me the pen back.  The right to control by itself doesn’t automatically imply you can get rid of the right to control.  That takes an extra assumption, and as I mentioned earlier, I think that assumption is the nature of the good as being something that was acquired by a homesteading agent.  Now, if you acquire – if I acquire this pen, there was a point in time when the pen didn’t exist or I didn’t own it and I come to own it.  I can abandon that ownership, and if I abandon it, someone else can re-acquire it.  That’s why I can sell it.

01:05:40

Okay, so – but that doesn’t apply, in my view, to the body.  Now, the question about inalienability rises.  Can you make a contract to sell your body?  Now, if you have the promise view of contract, then in a way you could.  You could obligate yourself to perform a certain service like be an apprentice or even a slave.  But if you didn’t perform it because there’s no specific performance, then there’s just a consequence, like you have to pay damages.

01:06:04

So in the promise-based theory in which there’s no specific performance, it doesn’t really matter whether you say there’s – inalienability is sort of a consequence of that because you still can’t be physically punished and prevented from leaving the plantation if you’re a voluntary slave, let’s say.  Under the title-transfer theory, the question arises: Can you transfer title to your body?  Now, I think you cannot, and the reason is because this.  As I mentioned, the right to own is the right to control and doesn’t automatically imply the right to abandon.  It does in the case of acquired things, but in your body, you never acquired it in the same way.  I’m going to mention Rothbard’s view of inalienability in a second, Jock.  I’m first going to explain where I think it makes sense, and then I’ll contrast to Rothbard.

01:06:56

With your body, you never acquired it, so you really can’t abandon it, so there’s no easy-to-understand way that you can just mouth words that get rid of title to your body.  What would that even mean?  When you say you have title to your body, a lot of people have a problem with the self-ownership idea.  They think it’s inconsistent or contrary or has a religious connotation like they think it implies that you’re saying you’re a soul and you own your body as a soul.  I don’t think it implies that.  You can have any metaphysical view about religion, and this is still the same idea.

01:07:29

Self-ownership only means for the libertarian it’s a way of describing the fact that you are the one who has the right to say, consent, or permit or not permit people to use and touch yourself, your body.  Whether you’re the same as your body or not is not really the issue.  The point is you can identify your personality and your identity and your body.  Whether they’re the same thing or not is irrelevant, but the point is we can identify these different legal sort of constructs or entities.  And we have an answer about who has the right to control your body.  It’s you.  That’s all self-ownership means.

01:08:03

That doesn’t mean you can – now, think about this.  So if contract is not binding promises – so let’s say a boy kisses a girl on a date and she consents to it.  Why is that not assault or battery?  Well, because she consented to it, even if we say the consent was implicit or contextual by the circumstances.  But what if the girl – what if a girl tells her boyfriend you may kiss me tomorrow?  Now, tomorrow arrives.  Okay, good, right.  The kiss is relevant here.  So tomorrow arrives.  Nothing is said.  They’re alone, and the boy leans over and kisses the girl.  Now, normally we would say that he believes he has her consent because she told him the day before he could do this.

01:08:54

Okay, so the reason the kiss is consensual is because think about this.  This is never emphasized in what I read.  There is consent right now.  In other words, we are using her words yesterday as evidence of what her current consent is, but it’s always her current consent that matters.  It’s not her consent yesterday that matters.  It’s her consent now.  The reason is because let’s say yesterday she says you can kiss me tomorrow.  And they’re sitting on the bed next to each other today, and he looks at her and she sees he wants to try to kiss her, and she says, listen, I’ve changed my mind.  I don’t want to do this.  Now, is he entitled to kiss her anyway?  Well, of course not because she is not consenting to it now, and all that matters is now.

01:09:44

She has the right to change her mind.  There’s nothing in libertarian theory that says you can’t change your mind.  If I agree to box someone or play a football game with someone, if I step onto the ring or step onto the field and I get hit, I’ve consented to it.  But if, at the last minute, I change my mind, then they may not hit me.  Then it’s aggression.  It’s assault.  So this is a fundamental important fact that we have to keep in mind.  It’s the consent at the moment of the interaction that matters.

01:10:14

Now, given that fact, so what if a girl promised her boyfriend could kiss her?  If he kisses her anyway later on when she says no, he’s committing aggression.  The fact that she promised before is irrelevant.  The only way he can – now, let’s take it out of the kissing example because this is getting creepy.  So let’s take a slave example or a boxing example.  Can everyone else hear me?  Am I frozen?  Okay, so let’s take a boxing example.  Well, let’s go ahead and take a slavery example to make it explicit.

01:11:04

Okay, in one week I promise to be your slave.  Now, one week comes and I refuse to do it.  Now, may the slaveowner, putative slaveowner, use force against me and treat me like a slave?  Well, only if it’s not aggression.  This is the libertarian touchstone.  Is it aggression or not?  Now, it’s not aggression if it’s in response to my aggression.  But did I commit aggression against him?  No, I only uttered words a week before.  You can’t say that that was a transfer of title to my body because that is circular reasoning because you’re trying to – in other words, it was a transfer of title to my body if he’s got the right to hit me.  That’s a consequence of his rights to hit me or not to hit me, and he doesn’t under libertarian aggression theory because I didn’t commit aggression.

01:11:59

The only reason people get confused is they may this assumption that if you own something, you have the right to sell it.  The reason they make that assumption is they are used to thinking of alienable things, and it is true that for alienable things you have the right to sell them.  But it’s not because you own them.  It’s because you have the right to abandon them because they’re alienable in the first place because you acquired them in the first place.

01:12:23

So in other words, the same concept of ownership, which is the right to control, applies to your body and to things you acquire because they’re both scarce resources, and you have a claim to both.  But the claim is different, and the reason you have the right to sell an acquired thing is you just un-acquire it.  But your body is not the same thing.  When you acquire things, you are already a body owner acquiring things.  It doesn’t make any sense to say you abandon your body by merely announcing your change of intent.

01:12:53

So this is my theory.  This is my belief.  Now, what’s Rothbard’s view?  Rothbard had a kind of confused view on this I believe.  He had the title-transfer theory of property.  Now, he did not want to say that you could sell yourself into slavery.  So his argument was that there’s an impossibility involved, that it’s impossible to sell yourself into slavery because you’re always really in control, actual control of your body.  Now, I think this argument does not work because sometimes slavery is justified by Rothbard’s and by my views and other libertarians’ views because let’s say someone murders a family member.

01:13:39

Well, you can enslave the guy at least temporarily to kidnap the guy, to punish him, or to incapacitate him or to force him to give you restitution or to defend yourself against him or something, but the point is you are using force against this person’s body against his will.  So you have the right, under Rothbardian theory, to use force against an aggressor’s body even though he has the physical control of his body.  So it’s not impossible to do that.  Impossibility does not prevent having a right to enslave someone in certain cases, so I don’t think that’s a good argument.

01:14:18

There’s another argument that you don’t have the right as a person to commit aggression, so if you’re a slave of a slaveowner, he might order you to commit aggression so he couldn’t be yours.  But to me, that’s only a limited attack on slavery.  That only says that you can’t – all that means is the slaveowner doesn’t have the right to use his slave to commit aggression, but you don’t have the right to a gun to commit aggression either, but you can own guns in general.  So I don’t think that’s an argument either.  So I think Rothbard’s argument is not a good argument.  I think it’s not impossible to own a slave, which is what Walter Block picks up on.  Walter Block says you can sell yourself into slavery because he sees this flaw in Rothbard’s reasoning.  I think Rothbard’s reasoning is flawed, but you don’t need to rest on it.  All you need to realize is that ownership of property does not automatically give you the right to sell it.  That only comes out in the case of acquired goods.

01:15:12

Now, there’s an interesting twist on this.  Rothbard has a comment.  I think it’s in his contract article about debtors’ prison.  And Block buys into this, although I’ve talked to him personally about it, and he goes back and forth on this.  The idea is this.  Let’s say you borrow money from someone.  Let’s say I borrow $1000 from you, and I’m supposed to pay you $1000 plus 5% interest back in one year, so $1050 in one year.  Now, if I don’t pay the money back to you in a year – what I was saying was – so I borrow $1000.  I’m supposed to pay you back $1050 in a year.  If I don’t pay it back because I’m broke, then Rothbard says I could theoretically go to prison because I’m stealing from you.

01:16:12

Now – and he’s right.  The only reason I can go to prison is if I’m committing a crime of aggression.  If I’m not stealing, then debtors’ prison could not be justified.  But what am I stealing?  Now, Rothbard says you’re stealing the original $1000.  Walter Block sort of goes back and forth and says you’re stealing the $1050.  Well, you can’t be stealing the – I can’t be stealing the $1050 because I don’t have it.  I don’t own it.  I’m broke.  There’s no money for me to steal.  It doesn’t exist.  You can’t steal something that doesn’t exist.  So Rothbard says, well, you’re stealing the original $1000.  Well, I’m not stealing it.  You gave it to me one year ago for me to use.  You gave me 100% title to it.  If you didn’t, I couldn’t use it for my projects or whatever I wanted to borrow the money for.

01:17:00

You can’t retroactively make something theft in the past because, at every moment in time, a libertarian theory of property has to specific who owns things so that we can know who owns it so people can know what to do with it.  For example, if you loan me $1000 – well, I’m going to get to fraud in a minute because this is another problem with this way of looking at it, Trey.  If you loan me $1000, I have to be able to spend it.  I can’t spend it if it’s not mine.  I can’t pay someone for his supplies that I need to buy.  I can’t give him the money.  He won’t take it unless I have the authority to give him the full title to it.

01:17:40

So you have to conceive of a loan, for example, as two title transfers.  Number one, it’s a present transfer of title to the $1000, 100% transfer, no conditions attached.  And there’s another title transfer made.  That is, my transfer now of $1050 of my future money, in the future, to you, but because that’s a future-oriented transfer, it’s inherently and necessarily uncertain, and we both know this.  Everyone knows this.  The future is uncertain.  So there’s no fraud.  There’s no fraud at all.  What’s fraudulent?  Someone’s got to tell me what the fraud is.

01:18:26

So here’s the idea.  There is no debtors’ prison for failure to pay a debt.  There cannot be.  And when they say implicit theft, I don’t know what implicit theft is.  There’s either theft, or there’s not theft.  Theft cannot be implicit, and theft cannot be retroactive.  Now, I disagree, Trey.  It cannot be loaned on condition of repayment.  It was loaned 100%.  Title was transferred in exchange for a future title transfer.  If you say it was loaned on condition, that means it was loaned on a condition – the question is who had title to the property right after it was handed over?  Was it the borrower, me?  Or was it the loaner?  If it’s conditional, I don’t own it, and I can’t spend it.

01:19:13

Colin says, but the authority was conditional.  Well, I don’t know if the authority was conditional.  I didn’t break any condition in the present.  See, when you loan money to someone, they presumably have some kind of project in mind that they’re going to make the money back and make a profit and be able to repay the loan out of it.  This is a risky activity.  It’s entrepreneurial.  Both sides know this.  Well, you can’t have a performance bond because that means insurance, and you cannot insure every entrepreneurial activity because that’s not the nature of insurance.  You just can’t do it.

01:19:48

I don’t know – Jock, if you can elaborate.  I don’t know what theft by finding is or how it would apply here.  You cannot insure loans, Matt, because insurance can only apply to – you have to read some of Hoppe’s and Mises’ stuff on this, but you cannot insure entrepreneurial risk.  Well, I would say all loans are bilateral exchanges of property.  One, it’s a current, present, unconditional transfer of title to money given to the borrower.  And the other is a future transfer of title to property that may or may not exist in the future, so it’s inherently risky.  Everyone knows this.  All loans are risky.  They may not go – the question is whether it’s an act of theft if you don’t repay someone.

01:20:40

Now, I agree that if I have the money on the due date, then some of my money automatically becomes owned by the creditor.  So now I’m holding $1050 of his money.  If I refuse to turn it over, I’m committing aggression, a type of trespass or theft.  But the question is if I’m penniless or bankrupt.  Now, clearly, they would have negotiated subsequent title transfers, like I hereby transfer $1050 to you in one year, and if I don’t have the money, then I transfer that amount plus interest in the future if and when I come into that money.  So you would have subsequent title, but I may be dead.  I may get killed.  I may not be able to ever pay you back.  Some loans go bad.  Just like my business adventure may have gone bad, your loan to me went bad.  These are all entrepreneurial activities.

01:21:29

Well, Trey, a mortgage is a secured loan.  A secured loan, yes, is secured by a house, but that’s because it’s a particular type of investment that you can do this with.  In other words, the bank loans me money to buy a piece of real estate, so that’s an asset that is somewhat comparable in value to the loan value, and they take out a security interest in that, which is a partial ownership interest in that property until I pay the loan off.  That’s perfectly fine, but you can’t do that with a business venture, for example.  I mean you can have some assets, but the point is, the hypothetical, if you’re totally broke – okay, by the way, let me stop for an administrative matter.

01:22:11

We are – we’re past the time.  I am happy to go further if everyone wants to.  I think what I’ll want to do is – let me see what the next slides are.  I see your slides.  Funny, guys.  I’m pretty much done with contract theory.  The next would be fraud, which you’ve already touched on.  What I’ll do is I will touch on fraud in the beginning of the next lecture.  So now that we’re done here with the main substance, let’s just talk, whatever you guys want to talk about now about what we’ve talked about tonight.  We can talk for the next, say, 15, 20, 25 minutes if you guys want, so ask away.

01:22:53

I’ll try Alex’s question here.  Can’t the creditor write into the contract that if the borrower doesn’t repay on the date his future income will be used to repay the debt plus a fine?  Yes, because that’s just another title transfer.  It’s a transfer of title to property, which is what the title-transfer theory of contract says is that all contracts have to be viewed as either unilateral or bilateral exchanges of property titles.

01:23:24

The libertarian definition of aggression – well, I would say that sort of the intuitive definition is the initiation of force against the person or property of another, that is, the invasion of their property or the borders of their property or the unconsented-to use of their property.  These are all synonymous uses, but you can see that that definition turns upon the definition of property, so in a way, I think aggression turns upon property.  Property is, in a way, a more primary concept.

01:23:55

We have to define what property is, which means we have to say who the owner is.  So, for example, if I take a football from you that you’re holding, it’s aggression if it’s your football.  If it’s my football, I’m just taking my football back, and it’s not aggression.  So the question of who owns the football determines what is aggression.  So aggression is the unconsented-to use of and/or the invasion of the borders of the property or body of another person.

01:24:31

01:24:37

Karl: Tell me about your remedies against the penniless borrower.  Well, I think in many cases there would be no remedies.  You just write the loan off.  You’d just have to write it off.  But the question from libertarians is, is one of the remedies to grab him and put him in a work camp and treat him like a slave because he committed aggression and get your money back that way?  And I say no, even if he agreed to it, because the agreement to be a slave is an unenforceable attempt to alienate something that’s inalienable.  That’s your body and your will.  But – and their failure to repay a loan is not aggression, so that doesn’t justify the use of force against his body, so there’s just no way.

01:25:23

So all you can do is just keep garnishing his wages or seizing property from him in the future.  Right, he’ll get a bad reputation, etc.  Yes, I think if the loan is taken in bad faith, it can be fraudulent, but that’s suffices the hypo.  Not every loan that is not repaid was fraudulent or taken in bad faith.  I mean loans are inherently risky because they’re future oriented.  This is an important Austrian insight.  Every future action, every action that’s aimed at the future, and the future is always uncertain to some degree, so there’s always a chance that your projects will not be – come out as expected.  That’s what the concept of loss is.  The praxeological category of loss means that you don’t succeed in your action, and you might not succeed because you’re not omnipotent, and the future is uncertain.

01:26:13

01:26:19

Well, you know, Trey, I don’t know about – I tend to doubt that contracts would turn upon your hidden intent at the time of signing it.  I think that people would prefer certainty, and they would have certain objective things that would go into contracts as they’re done now.  Colin says, it might your intent to what you’re going to use the money for, but then you could put that in the contract, like we’re going to loan you money, but we expect you’re going to use it for capital equipment purchases for a certain type of business.  And then if you use it for something else, you’re committing a type of theft of the money, let’s say, because you only have permission to use it for certain purposes.  But if you put too many strings on the use of the money, then it really can’t be used freely, and it defeats the purpose of making the loan.

01:26:58

Colins says, I’m not sure why it should matter whether you acquired your body or already – always owned it.  Well, let me just mention quickly this is my personal view.  I don’t know how many people hold it.  I don’t want to mischaracterize it as being the standard libertarian view.  I do think libertarian views on inalienability are all over the map, and they’re confused.  This is my attempt to sort it out.  I’m just giving you what my view is, and I go into this in elaborate detail in that contracts article, which is on the recommended readings for this course – for this lecture.

01:27:28

But see, you’re saying if you own it, you should be able to divide it up.  I agree that if you actually extract your kidney or chop your arm off, at that point in time, it’s no longer part of your body, but it’s something that you own as a piece of acquired property.  So you can do what you want now with this piece of property because for someone to take my severed arm or kidney, it’s not aggression against my body anymore because it’s not part of my body.  But as long as it is, then to use force against my body is – has to be consented to by me.  See, this is the fundamental question: Did I consent to it?  Now, you can say, yes, I consented when I promised to do it, but that assumes that you can’t change your mind.

01:28:14

But what libertarian says that you can’t change your mind?  In fact, if you focus on the fact that your current consent to an interaction is what matters, then you will see that that implies you can change your mind.  Yeah, you can – Robert, you can donate blood, but can you be forced to donate blood?  That’s the question.  If I promise you I will come to your blood drive tomorrow, but I don’t come, can you get some goons and grab me and stick a needle in my arm and take the blood from me?  I say no.  That’s an act of aggression against me.  It’s aggression because I’m clearly not consenting to it.

01:28:52

So why is it justified?  Normally, libertarians say that the use of force against someone’s body is justified only if they consent to it or if it’s in response to an act of aggression they committed.  I didn’t commit aggression by promising to show up for your blood drive or by failing to show up for it.  So I don’t think it’s justified.  I think it’s just clearly just – it’s still aggression.

01:29:14

01:29:20

Alexis, yes.  I think the creditor – well, if he – unless he made a stupid loan and agreed not to go after future income.  If he said you owe me $1050 of your future estate on a certain date unless you don’t have it, in which case you don’t owe me anything anymore, but they would never agree to that.  So yes, you would have a claim on the future income, but it’s still a claim on property, not on the body.  I think you can sell your organs.  You just can’t be compelled to sell your organs if you promise to, Atchafalaya.  Again, this is my personal view.  You guys are free to disagree.  I just want you to understand one libertarian perspective on this.

01:30:05

Noam: In libertarianism, can you use violence to force a borrower to repay a loan, threaten to kneecap him?  Well, this is exactly what we’ve been discussing.  The answer in my view is no because that would all be aggression against someone.  Remember, if you use force against someone’s body, it’s got to be either – under libertarianism.  This is what the non-aggression principle is about.  It has to be either consented to or it has to be in response to aggression.  That’s retaliatory.

01:30:34

Now, it’s clearly not consented to.  If you kneecap someone, they’re not going to consent to it, and it’s not in response to aggression.  He did not commit aggression.  See, that’s why Rothbard says that it’s implicit theft because he’s trying to find some act of aggression that would justify a debtor’s prison or some violence against the deadbeat.  So he’s trying to say it’s implicit theft, but that argument doesn’t work in my view because he’s not stealing the money that’s owed because it doesn’t exist, and he’s not stealing the money that was loaned to him because that was given to him unconditionally.

01:31:04

It had to be for him to spend it, so there’s no theft.  So the only other argument is that, well, you consented to be kneecapped when you made the loan, but you can change in your mind.  In other words, you can’t bind yourself to agree to some physical force, just like the girl on the date changing her mind about being kissed.  There’s no difference.

01:31:30

Okay, David says, what about when you change your mind about a contract?  What are the consequences?  Well, a contract is different.  A contract – if we assume a contract is an exchange of title to things you own, your mental state has nothing to do with it.  You have already done the deed, so on the day – let’s take the loan case.  Let’s assume I’m not a deadbeat.  Let’s assume I borrow $1000, and on the due date, I have plenty of money.  Well, a year ago, I already transferred $1050 of my estate on such and such a date, so on that date, the transfer happens automatically because I already did it.  So it doesn’t matter if I change my mind.  If I refuse to hand it over, I’m committing aggression by holding someone’s property that I’m just in temporary possession as a guardian of someone else’s property.

01:32:23

01:32:30

So Walter Block – Patrickccg: Walter Block uses a similar example.  If you receive money for selling your blood, well, it’s just like a loan.  So the money was received.  It depends on if it was – I mean if it was given to me in full ownership to spend, then that title transfer has already happened.  And it was given in exchange for the hope that I would comply with a certain promised action, a service.

01:32:58

But if I don’t perform the service, then we can assume that there was an implicit contract for me to say, if I don’t give the blood, then I owe you the million dollars you paid me or whatever it was you paid me.  But that’s just like a loan.  I’m just promising you future money that I may or may not have, and if I don’t have it, it’s not theft if I don’t give it to you because I can’t give you something I don’t own.

01:33:22

01:33:28

Well, estoppel has to do with making a claim that’s inconsistent with something that you have done, an action that you’ve performed, specifically aggression.  So if I commit a crime against you, if I commit a violent act of battery, assault and battery and I beat you up, I have acted on the principle that it’s okay for me to use your body against your consent to a certain degree.  Therefore, I cannot object if you act on me based upon the same principle that I’ve already shown that I endorse, so that’s the basic idea of estoppel.

01:34:10

I don’t see how you can apply that to the deadbeat lender case because when I borrow money, I’m taking present money that you give to me unconditionally.  And I mean what am I estopped from?  I mean I never did commit – see, you have to use actually force against my body in the future to be able to enforce this against me as an act of theft or something.  But I never did use force against your body.  I never did do anything against your property without your consent, so I don’t see how that would apply.

01:34:44

01:34:51

How do you impel a borrower to repay?  Well, you may not be able to.  I mean some loans go bad.  Loans are risky.  Fractional reserve bankers don’t like to hear this, but they are.  That’s why you get interest because you’re taking a risk.  Sometimes they go bad.  Sometimes you have to write it off.

01:35:09

If I give an engagement ring – oh, Robert, I was – oh, contemplating a marriage and she changes her mind, I cannot get the ring back.  Okay, now here’s where armchair libertarian theorizing would come in.  I mean I don’t think I can say from an armchair what the answer is.  It depends upon what the basic contract was, and that depends upon social customs and context.  Now, why does that matter?  It matters because, as the owner of a thing, you have the right to abandon it.  You abandon it by manifesting your intent in a sufficiently public or social way and let people know what your intent is.

01:35:49

What’s that?  That’s a type of communication.  So all this has to do with communication, but communication is a language thing.  A language thing is a community thing.  It’s very contextual related.  So if you have a neighbor in a certain neighborhood and it’s understood by everyone—it’s customary—that you can walk up to their door if they have a doorknocker or a doorbell and knock on it to ask for something innocuous like to borrow a cup of sugar, then we assume that that’s an implied invitation, permission, or license for your neighbors to use your property for that limited purpose.

01:36:25

Otherwise, it would be trespass because you’re clearly using their property.  So just because of the existence of certain community customs and assumptions, there’s a communicatory aspect to things you do like having a doorknob on your house or a doorknocker, sorry, or an open sidewalk, open to the street that doesn’t have a locked fence on it or something like that.  You don’t have a no posted sign out.  So these things have a communicatory function.  Likewise, if you give your fiancé a ring, it depends upon what’s understood.

01:36:58

I mean if the understanding in that culture is that you’re giving her the complete ownership of the ring or if you’re giving it to her conditionally upon – or you’re loaning it to her basically pending marriage, I mean it depends.  And if you know what the custom and the default presumption is in an area, if you want to change that, you have to make it clear.  Like you have to give your girlfriend a ring and say, listen.  I know that the presumption in our area is that this is an unconditional gift, but it’s not unconditional for me.

01:37:29

This cost me $10,000, and if you don’t go through with the wedding, I want it back, or it’s just a loan.  Actually, you don’t own it until we get married.  I mean if you want to change the situation, go ahead and do it.  That’s fine.  But it’s just a communication issue, so I can’t answer it.  But I can tell you, I think the law is that it’s – actually, I forgot what the law is.  There is an answer in the law, but I forget what the answer is.  I think the bride is supposed to give it back, to be honest, but I’m not sure.

01:38:04

This places – Jonathan: This places a responsibility on the creditor to make sure the borrower is not a deadbeat.  Of course.  Of course.  You should be careful when you make a loan to someone.  Trey – and that’s where reputation comes in.  Evaluate his project.  Trey: I think where I’m hanging up is the difference between having a claim against someone and using force to enforce the claim.  Well, see, having a claim is the language of promise.  I would say you don’t really have a claim against someone.  You only have a potential property right, so you have to think of contracts as just webs of exchanges of title to alienable things that people own.

01:38:44

So the loan is just I grant you some future property that I might have.  Look, maybe we should not make it bilateral like this.  Let’s just make it unilateral because there’s no reason you have to have consideration for this or have it be an exchange.  Let’s say I tell my grandson I will give you $1000 tomorrow if it rains.  Okay, now I have transferred title to future property to him conditionally.

01:39:23

So if it rains tomorrow and if I have money, $1000 of it transfers to his ownership.  I mean it just happens automatically because I’ve already done it, and then we have to wait and see if the condition is fulfilled.  So that’s all the other side of the loan is.  It’s just a conditional future transfer of property.  It’s conditional because I might not own the money.  In other words, the implicit condition is I hereby transfer $1050 to you in one year if I have it.  That has to be an understood condition because the future is uncertain.  Whether we say it or not, that’s a condition of the loan.  Yes, you enforce a claim by taking his money.  That’s right, Alexis, not by forcing him to do something.

01:40:10

This is a cool thing.  I mean I’m glad you guys find this adventurous because I think it’s very interesting.  I go into it in detail in my contract article, and we can only discuss it so much here, so if you’re interested in it, read that further and see what you think.

01:40:22

[no audio]

01:40:41

… if he has it in his possession.  So then [no audio_01:40:44] property in a sense.  He has to turn it over.  If he doesn’t, he’s the one that’s being an aggressor.  So taking it from him by force is not aggressive.  It’s just the new owner of the money taking what belongs to him.

01:40:59

01:41:12

David: Money is fungible.  What about a bailment of a specific object?  Well, you’d have to elaborate exactly – give me a clear example, but if it’s bailment, I would say the money is – the title is held by the owner if I understand bailment correctly.  So let’s say I put money in a safety deposit box in a bank.  I retain title to that.  The bank cannot loan it to someone else.  Same thing if it’s mixed with other people’s money in a fungible way, but it’s considered to be a loan of -Jesús Huerta de Soto goes into this in his book on banking.

01:41:52

Look, I think people are starting to leave.  We better – Jock, I don’t remember what Chosen Action is.  I’ve read that too, and I’m not sure the relevance here.  I’m glad you guys enjoyed it, but we better stop here because people are leaving now.  I don’t want to go on in an unfair way.  So why don’t we do this?  Feel free to email me questions or put them on the course page or save them for Wednesday’s class, and I’ll be happy to address them there or between now and then.  And you guys have a really good week, and I will talk [no audio_01:42:27].

01:42:28

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:42:52 — 94.2MB)

1. See Roman Law and Hypothetical Cases. [↩]

Below is my Introduction to Hans-Hermann Hoppe’s A Theory of Socialism and Capitalism (Laissez Faire Books, 2012). Earlier editions of the book may be found here.

[Update: here are the epub and mobi files]

Appended below my Introduction is the Editorial Preface by Jeffrey A. Tucker

***

Foreword to the Laissez Faire Edition by Stephan Kinsella

YOU ARE IN for a treat. Hans-Hermann Hoppe’s A Theory of Socialism and Capitalism: Economics, Politics, and Ethics (1989) utterly captivated and enlightened me when I read it over twenty years ago.

All of Professor Hoppe’s writing is insightful, including his books The Economics and Ethics of Private Property (2003), Democracy: The God That Failed (2001), Economic Science and the Austrian Method (1995), and The Great Fiction: Property, Economy, Society, and the Politics of Decline (2012), published earlier this year by Laissez Faire Books. But TSC has always been my favorite. An integrated, systematic treatise, not merely a collection of related essays, it is truly Professor Hoppe’s magnum opus—his Human Action, his Man, Economy and State.

TSC is so rich with insights that it bears careful reading, and periodic re-reading. In a book review of TSC, Professor Robert McGee noted:

When I read a book, I make marginal notations and underline the points that I think are worth reading a second time. With this book, I found that I had to restrain myself because I was making so many notations that it slowed my reading. Practically every paragraph has at least one point worth reflecting upon. ¹  [continue reading…]

1. Robert W. McGee, “Book Review” [of Hans-Hermann Hoppe, A Theory of Socialism and Capitalism], The Freeman: Ideas on Liberty (September 1989), available at thefreemanonline.org.[↩]

Kinsella on Liberty Podcast: Episode 019.

This is lecture 2 (of 6) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.” The remaining lectures follow in subsequent podcast episodes.

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes:

[00:00–15:00] In the second lecture of the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” delivered on February 7, 2011, Stephan Kinsella continues exploring libertarian principles, focusing on their application to legal theory. He recaps the first lecture’s discussion on justice, rights, and property as mechanisms to resolve conflicts over scarce resources, emphasizing self-ownership and homesteading. Kinsella introduces the lecture’s agenda, which includes a deeper dive into property rights, the non-aggression principle, and the role of contracts in a libertarian framework, while addressing common misconceptions about libertarianism.

[15:01–1:23:35] Kinsella elaborates on the foundations of libertarian legal theory, discussing how property rights emerge from first use or transformation of resources and how they facilitate peaceful cooperation. He examines the Rothbard-Evers title-transfer theory of contracts, which views contracts as transfers of property titles rather than binding promises, and contrasts this with statist legal systems. The lecture also covers the implications of libertarian principles for issues like fraud, blackmail, and defamation, followed by a Q&A session where Kinsella addresses audience questions on topics such as the practical implementation of libertarian law and its compatibility with existing legal structures.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

This lecture’s topic is “Libertarian Basics: Rights and Law-Continued,” and discusses:

• Anarcho-libertarianism (cont.)
• Justice: Punishment and Restitution
  • The Case of Threats
  • Stalking
  • Spam
  • Torts and Negligence
• Legal Positivism and Logical Positivism

For slides for all six lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

[fvplayer id=”10″]

Slides:

The videos of all six lectures are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Recap

• Time Markers: [00:00–10:45]

• Description and Summary:

  • Kinsella opens the second lecture, welcoming students and referencing the Mises Academy platform’s features, such as recorded sessions and course materials.

  • He recaps the first lecture’s focus on libertarian basics: justice as the protection of rights, property rights as a solution to scarcity-driven conflicts, and self-ownership as a core principle.

  • The agenda for Lecture 2 is outlined, including a deeper exploration of property rights, the non-aggression principle, and the libertarian approach to contracts.

  • Kinsella emphasizes the course’s goal of applying libertarian principles to legal theory, distinct from conventional legal studies rooted in state authority.

  • He encourages students to review the previous lecture’s slides and readings, available on the course website.

Segment 2: Property Rights and Non-Aggression Principle

• Time Markers: [10:46–25:30]

• Description and Summary:

  • Kinsella delves into the mechanics of property rights, explaining that they arise from homesteading (first use or transformation of unowned resources) or voluntary transfer.

  • He reiterates the role of scarcity in necessitating property rights to allocate resources peacefully and avoid conflict.

  • The non-aggression principle (NAP) is discussed as a cornerstone of libertarian ethics, prohibiting the initiation of force against others’ persons or property.

  • Kinsella clarifies that the NAP is not a positive obligation but a negative one, requiring only that individuals refrain from aggression.

  • He addresses potential oversimplifications of the NAP, urging students to consider its application in complex legal scenarios.

Segment 3: Contracts and the Title-Transfer Theory

• Time Markers: [25:31–40:00]

• Description and Summary:

  • Kinsella introduces the Rothbard-Evers title-transfer theory of contracts, which views contracts as agreements to transfer property titles at a future point, not as morally binding promises.

  • He contrasts this with traditional contract law, which often enforces promises regardless of property considerations, a statist approach.

  • Examples are provided to illustrate how title-transfer works, such as selling goods or services, where the contract specifies what property changes hands and when.

  • Kinsella discusses how this theory resolves issues like breach of contract by focusing on property rights rather than punishing unfulfilled promises.

  • He notes that this approach aligns with libertarian principles by grounding legal obligations in voluntary agreements and property.

Segment 4: Applying Libertarian Principles to Legal Issues

• Time Markers: [40:01–55:00]

• Description and Summary:

  • Kinsella explores how libertarian principles apply to specific legal issues, such as fraud, blackmail, and defamation.

  • Fraud is analyzed as a form of theft, where misrepresentation leads to an invalid transfer of property, violating the title-transfer principle.

  • Blackmail is discussed as a controversial issue, with Kinsella arguing that it may not inherently violate property rights, though it raises ethical questions.

  • Defamation is examined, with Kinsella suggesting that it does not involve aggression against property, challenging traditional legal protections against it.

  • He emphasizes the need for libertarian legal theory to remain consistent with property rights, avoiding ad hoc justifications.

Segment 5: Q&A and Closing

• Time Markers: [55:01–1:23:35]

• Description and Summary:

  • Kinsella opens the Q&A session, addressing audience questions on the practical implementation of libertarian legal systems.

  • He responds to queries about how private courts might function in a libertarian society, suggesting they would prioritize restitution over punishment.

  • Questions about the compatibility of libertarian law with existing legal frameworks are discussed, with Kinsella noting the challenges of transitioning to a stateless system.

  • He clarifies misconceptions, such as the assumption that libertarianism rejects all forms of coercion, explaining that only aggression (unconsented force) is prohibited.

  • The lecture concludes with Kinsella encouraging students to engage with the course materials and prepare for the next session, which will cover property and contract law in greater depth.

TRANSCRIPT

Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basic Rights: Rights and Law, Continued

Stephan Kinsella

Mises Academy, Feb. 7, 2011

00:00:03

STEPHAN KINSELLA: My take on this course is we have basically more than six lectures worth of material to squeeze in, which I think is good for you guys.  My last course I gave, I spoke about 60 minutes per lecture, and then we talked about – we had about 30 minutes of Q&A.  Last time, we spoke the entire 90 minutes plus some, and then I’m doing office hours this time on Wednesdays, which works well.  So if we go the whole 90 minutes, that will – we have time to do Q&A on Wednesdays, so I think that’s working fine.  So you guys are getting eight or nine weeks’ worth of lectures in this six weeks, so I think that’s fine.

00:00:47

Phil Collins, I’ve heard that.  I’ve heard Tracy Byrd.  I think he’s an American country singer, and when I was younger and had hair, I was called Alex Keaton or Michael J. Fox, but I don’t think there’s a resemblance.  But anyway, Max, I have a couple of ideas for new courses.  I’m considering doing a basic libertarian course like introduction to libertarianism, kind of following Hubert’s book a little bit.  I’m not sure.  I want to wait and see how this one goes and see how I could blend those two or separate those two.  And there’s some kind of micro courses I have in mind too like Austrian Law and Economics, things like that, so let’s wait and see how it goes.

00:01:41

So what I’m thinking is this.  Today we have more of a sane schedule to fill, and if we go the entire 90 minutes, which I don’t think we will, then as I said, I can go to Q&A on Thursdays.  By the way, I had a really interesting appearance on an American podcast, which is called This Week in Law.  If you go to T-W-I-T – excuse me – dot tv, twit.tv, it’s part of the TWiT or This Week in Tech network.  And it was last Friday, and it’s already up, and I think it went really well.  They were amazingly receptive to a lot of fairly radical libertarian ideas that I presented on the state and intellectual property and things like that.  So some of you might find that of interest.

00:02:33

Okay, just before we get into the depths of this, we have 33 online now.  That’s good.  Is the video okay, and is the audio okay?  Can you hear me?  That’s the most important thing.  And can you see the video?  Everyone okay?  It’s four past midnight for some of us, four past four in the morning for some of us, so let’s proceed.

00:02:58

Okay, so tonight’s lecture I’m calling Libertarian Basics: Rights and Law, Continued.  I’m kind of following up on what was discussed last time and adding some more things.  And I’m going to – and by the way, our last Q&A session at the office hours on last Wednesday was recorded as well, and the recording came out pretty good even though Danny wasn’t on board.  That’s right, Danny.  Thank you for the link to TWiL 97.

00:03:27

In any case, the recording came out good.  There’s no video.  There’s audio and the slides.  If you downloaded and installed the player Danny linked to in his notes, you can listen to the Q&A from Wednesday.  And you should do that because we did discuss a lot of issues in detail, and there were some very good questions from members of the class.  And some things are a little bit redundant with what I’ll discuss tonight because I want to cover all the main topics and the main lectures.  That’s the link for the podcast I was on last – on Friday.

00:04:10

So let’s just briefly summarize.  Where did we leave off?  We’re talking about basics of libertarian theory, rights, and law.  We talked about justice, rights, and the law last time and rights and duties, the relationship between rights and duties or obligations, also the relationship between economics, in particular, Austrian economics and libertarian reasoning, how they both support each other.  And we talked about how the purpose of the kind of initial lecture is to provide a framework for – and a conceptual vocabulary that we can all use to discuss the more detailed topics that we’ll start with tonight.

00:04:47

We talked about the origins of libertarianism.  I didn’t go into a lot of detail on this because we’re talking about what the truth is and what we’re interested in and what we believe and how we apply these ideas, not really about where they came from.  But we talked about it in some detail because it’s of some relevance of interest.  We talked about how modern libertarianism originated in the 1950s and different types of libertarianism such as minarchism and anarchism and the different justifications that different libertarians have for their beliefs whether it’s utilitarian or consequentialist or natural rights-based or based on a constitutional-type idea or even religious or rationalist or some combination of these.  So – oh, sorry.  Let me hit record.  Thank you.

00:05:42

… five minutes into this, so I was just talking about slides number two and three on this slide of where we left off and where we’re about to head, and we had some administrative matters.  So if anyone is using this recording and I missed it, that’s what we talked about.  So we’re on slide three, which is really slide two.  Now, what we’ll talk about today, we’ll kind of finish up where we had to truncate the discussion last time.  So we’ll kind of finish that up, and then we’re going to talk about some particular topics: punishment and restitution, and several subtopics like threats and stalking and spam and restitution, legal positivism and logical positivism, and then also anarchy.

00:06:26

So these three topics will be today.  These are actually pretty big topics.  If we do not finish, I will finish them next time, and I will – or I’ll go longer tonight, and I will take questions on Wednesday at 7 p.m. London time.  If – and we should be able to finish everything in 90 minutes, but hopefully we can finish tonight in less than 90 minutes and have time for Q&A today, unlike the first course – the first lecture.  So let’s just kind of tie up some of the loose threads.  Good night.  Let’s tie up some of the loose threads.

00:07:01

We ended up – I was just describing some of the approaches to libertarianism and to rights.  One of them is Hoppe’s argumentation ethics approach, which is sort of a rationalist-type approach.  And what’s interesting to note here for those who are not interested with it, and again, I’m not appealing to authority.  I just want to kind of point out these things.  Murray Rothbard, who is sort of the dean or the godfather of libertarianism, had a more of a natural rights or neo-natural rights approach.  And he initially had sort of an Ayn Randian, Aristotelian, natural rights approach to libertarianism.  What our nature is determines – as humans determines what our rights are.

00:07:47

Hans-Herman Hoppe – so you can think of it this way.  Rothbard was Mises’ greatest student in both political theory and in economics.  And Rothbard studied under Mises and became his greatest proponent and expanded and extended his thought and improved upon it, in my view, in both economics and political theory.  Hans-Hermann Hoppe was a Kantian-influenced theorist like Mises was.

00:08:21

Now, Rothbard was more of the Aristotelian side, but they sort of put these terminological differences to the side, and they focused on substance, and there’s a lot of similarities in their ideas and their concepts if you put the terminological differences aside.  As I mentioned last time, for example, the Aristotelians might say something is an axiomatic truth if it’s self-contradictory to deny it, whereas the Kantians would say it’s ineluctable or a priori.  It’s the same kind of idea actually, although there’s a different terminological or semantical approach to it.

00:08:57

In any case, Hoppe is a very well-known Austrian economist and libertarian from Germany who was initially a socialist but started being influenced by – he started reading Rothbard and Mises, and he basically became such an inherent of the school, he moved to Las Vegas to study under Rothbard and became his protégé for a long time.

00:09:20

So my theory – and now this is simplified, but you have Mises, Rothbard, Hoppe.  In any case, Hoppe had a new approach to argumentation ethics.  He was skeptical of a lot of the natural rights approaches to libertarianism because of problems that plagued the natural rights theory according to Kantians or to some thinkers.  One of them is the is-ought gap, that you cannot go from is to ought.  In other words, you cannot say because the way something is, is the way it ought to be.  You have to make an assumption at some point.  You have to introduce some kind of values or norms or oughts and build upon those.

00:10:01

And those have to be explicitly introduced or presupposed in some way rather than built upon facts.  In any case, Hoppe came up with what’s called his argumentation ethics, which I briefly described last time and which we discussed in the office hours from last time, and which are discussed in detail in the recommended readings for the last class and for this one.  And his argument was basically that you can recognize what norms are justified by asking which ones could be compatible with the basic norms that are implied in the activity of argumentation itself.  And the idea is that these matter because any norm that you ever would argue for has to be justifiable in argumentation, which is a special type of human activity.

00:11:03

And so Hoppe’s project, which he bases upon the work of his teacher, Jürgen Habermas and Karl-Otto Apel, two well-known German philosophers, quasi-socialist philosophers, but their idea is something called discourse ethics, the idea that the very activity of discourse, which is a human activity, presupposes certain values or norms.  And so Hoppe’s idea was to integrate this basic idea with sort of a more Rothbardian or even Misesian understanding of economics and human interaction and libertarianism and to say that Habermas was right that discourse does presuppose some things.

00:11:43

But it doesn’t presuppose – it’s not compatible with socialism like Habermas himself thinks.  Rather, the only norm that comes out that’s compatible with honesty, consistency, human nature, and human action is basically the libertarian idea.  So I’m just trying to summarize here that what happened was Hoppe burst on the scene in the late ‘80s, say, ’86, ’87, ’88 with his argumentation ethics, and Rothbard, as you can see in the quote here, which I won’t read, Rothbard was blown away by it.  Rothbard said, I have a new protégé.  He’s extending my ideas and those of Mises, and he’s right that there are some problems with the natural rights approach, which I’ve been pushing, and Hoppe’s kind of neo-Kantian approach fixes it.  So that’s yet another approach to libertarianism, which I personally adhere to, but which you don’t have to, but that’s my approach.

00:12:39

So we’re going to go to slide six now.  So this is part of what I was saying, part of one of the rationalist approaches to rights, not really empiricist, not really consequentialist, not really utilitarian, not really natural rights except in a kind of special sense, more of an approach like the Misesian approach to economics.  We have certain basic, undeniable concepts that we can justify by appealing to logic or the structure of human action, and then we build upon those.

00:13:14

We might introduce explicitly certain empirical assumptions.  So, for example, in economics, we can know the law of supply and demand.  We can know that if you introduce money, certain things will happen.  But we cannot know that there will be money.  But we can say if you have money, or let’s assume that there’s money in society, now we have indirect exchange through a medium of exchange.  That will allow certain features of the economy.  So then you have a whole analysis of a monetary economy.  This is partly a priori based upon laws of human action, and it’s partly based upon certain explicitly introduced assumptions like the assumption that there is money and the assumption, for example, that humans prefer leisure over labor.

00:14:03

Now, these contingent assumptions are not that controversial, and they happen to be true, so it’s not too controversial to assume them, and you can get more interesting results if you do that.  In any case, this is similar to this rationalist approach to rights.  Another rationalist approach to rights is my own, which I describe in some of the articles I’ve linked in the notes to the course in the lecture for number one and two, is the estoppel idea.

00:14:32

The idea of estoppel in the common law is that you’re not permitted to assert a claim in a case if it’s inconsistent with something you’ve asserted earlier in that case that the other side relied on.  The idea is that you have to be held to one sort of consistent theory.  Otherwise, your opponent doesn’t know where to go with their arguments.  And the idea is that you’re estopped or prevented or stopped from using or from asserting or from being heard to say something that is inconsistent with what you maintained earlier.

00:15:08

So this is just a basic idea of the common law, and it’s also an idea of the Roman law.  It’s got a different name, but the idea is that you cannot do something or say something that’s inconsistent with an earlier act or statement.  You’re held to be a certain standard of consistency in your arguments and in your statements.  So my argument relies upon a similar type of logic, and it is recognizing that this type of argument can apply to a unique feature of the libertarian ethic, which is our reciprocity or symmetry.

00:15:47

Unlike all of the political ethics and political theories, the libertarian idea has within it a certain symmetry, the idea that you can use force against someone but only if they use force against you.  So that’s the non-aggression principle or the non-initiation-of-force idea.  So in other words, if you think about the non-aggression principle, it says that – it doesn’t say no force is permissible.  It only says you can’t initiate fore.  But what does that mean?  That means that you can use force if it’s in response to force used first against you, so you see the symmetry there.

00:16:26

If someone just insults you, you cannot use force because there’s no symmetry between the force you want to use and the just mere words used against you.  But if someone uses force against you, you may use force in retaliation, so there’s a symmetry to libertarianism and a strict symmetry, which other theories do not hold because all other political theories at some point break down and say, well, you can use force against this guy even though he didn’t use force against you, like if you want to put someone in jail for not paying taxes, for example.  So my thinking was that this symmetry in the libertarian idea is backed up by the – excuse me – let me get some power.  I’m about to run out of power.

00:17:20

All right, sorry about that.  I forgot to plug in my computer.  Anyway, so the idea is that the idea behind estoppel could be applied to this, and so I developed an argument, which is complementary to what I just mentioned for Hoppe.  But it’s all – all of these ideas, and they’re not just mine.  There’s mine, Hoppe’s Fran Van Dun’s.

00:17:44

I don’t follow the computer lab in the kitchen comment.  Anyway, these are all – the idea behind all of these is that you have to be held to a certain type of consistency and that every time people enter into a certain debate about what our rights are or what’s wrong and right to do, all these people are civilized proponents of a certain type of norm.  They’ve assumed certain civilized norms, and we can point to those norms, and we can say, look.  You’re saying we should outlaw drugs.  But that’s the use of force against this guy, and he hasn’t done anything wrong.  And that’s incompatible with or inconsistent with the basic norms that we’re all assuming is part of this entire endeavor.  So that’s sort of that approach.  Oh, I’m not in the kitchen, Danny.  I’m in my study.  And that’s not three computers.  That’s cinema display.

00:18:42

Okay, anyway, let’s go to the next lecture.  So you’ll notice that one aspect of this approach, and the reason I mention it here is not that important to what we’re going to get to as the foundation of libertarianism.  It’s important to recognize this because it helps to understand a lot of debates among libertarians: natural law types, Kantians, categoricalists, hypotheticalists.  I basically – my personal view is that almost everyone believes in a hypothetical approach.  Even like Ayn Rand, who was sort of a natural rights-type thinker, even she said that all of our values and oughts come from the choice to live.  But she said the choice to live is not something you can say you should do because that would be a should, and you can’t have a should before you’ve chosen to live.  So even she admitted that the choice to live is sort of premoral or amoral.  It’s hypothetical.

00:19:56

Now, one of my friends whose name is Geoff Plauché, Geoffrey Allan Plauché, he is an Aristotelian, anarchist libertarian following in the lines of Douglas J. Den Uyl and Rasmussen and Roderick Long and these guys and even Ayn Rand to some extent. And I have part of his PhD thesis quoted here.  ¹ He mentions that Roderick Long mentions that he thinks that you don’t have to call it a hypothetical imperative.  It’s assertoric.  It’s not if you choose to live or if you value this.  It’s since you do.  I think these are a little bit quibbles.  I think the basic approach is this.  All of us libertarians and anyone engaging in normative discourse is choosing and demonstrating that they prefer to interact peacefully and to try to solve their problems in a civil way.

00:20:50

So you could say since you value peace, since you value discussing with me this issue and figuring it out, what follows from whatever we’re already valuing?  So you can, in other words, assume the validity of these things.  Okay, but this is some good stuff here, so if anyone is interested in this, follow up on the links I have here in and the quotes I have here.

00:21:17

I’m going to go to slide eight now.  So now I’m going to get to the meat of all this.  All of this stuff is preliminary in my view, and this is not something that Rand would agree with.  At least she wouldn’t say.  I would say this.  In this course, we want to identify and unpack what the essence of the libertarian principles are, and then we want to explore its implications and applications.

00:21:41

So I’ve talked about different ways to approach it, different ways to get here, different conceptions of it, and different justifications for it.  But I believe there’s a common core that we all identify with or that we would if we analyze it rigorously and rationally enough.

00:22:21

Am I back?  Can you hear me now?  Am I back?  Okay.  What I was saying was Ayn Rand would have opposed the big-tent approach.  She would have said the libertarians plagiarized her principle that no one may initiate the use of physical force, and they treat it as a mystically revealed or out-of-context absolute.  Now, what she meant by that was you cannot be a libertarian unless you’re an objectivist.  You have to accept all of my philosophy to be a real libertarian.

00:22:55

But I think this is contradicted by even other aspects of her own philosophy.  For example, her very intuitive and simple, plain-language definition of what was the core of the political aspect of her philosophy.  She wrote in Galt’s speech: So long as men desire to live together, no man may initiate, no man may start, the use of physical force against others.  Now, you see that she talks about very common sense, plain language concepts and terms that really don’t require a deep grounding in philosophy to understand, maybe to explicate, maybe to get the details of.

00:23:40

But the way she put it—don’t initiate force—is something that a farmer or anyone could understand.  So it’s a principle that, even according to her wording of it, if anyone agrees with these concepts, they are a libertarian, or they’re a capitalist in her terminology.  They agree with the political aspect of her philosophy.

00:24:07

Slide nine.  So now, let me say what I believe we can say that libertarianism’s main principles are according to all the definitions of it, if we just look at it closely.  The terminology might not be shared by others, but I think that this is compatible with the way they look at it.  Okay, so I think that what we are is we are the political philosophy that consistently favors social rules aimed at promoting peace, prosperity, and cooperation.

00:24:35

And basically, the two fundamental principles of our philosophy are we recognize that there are only two rules that satisfy these basic norms or grundnorms, which you could call them. That is, number one, the self-ownership principle, which only libertarians hold.  That is, we own our own bodies.  Every person has the right to control his body, which means if someone else uses your body without your permission, they’re committing aggression.  Steven, can you hear me?  Okay.

00:25:17

And number two – so there are two types of scarce resources in the world.  There is your body, and there are other things.  So the libertarian rule is that your body is owned by you.  That is, you have the right to control it.  That is, you are not a slave in any sense.  And number two, the Lockian homesteading principle.  That is, if there’s a scarce resource out there that people can fight over or have a dispute about, the owner of that resource is the person who either homesteaded it – all right, let me hit reload.  Oh, I’m sorry.  I did it anyway.  Sorry about that. Okay, Matt, you just messed me up.  Okay, I’m back.

00:26:12

So the second – so libertarianism is basically self-ownership plus Lockian homesteading.  What does that mean?  Self-ownership means no slavery and no aggression against bodies, no rape, no battery, no assault, no slavery, no murder.  And the Lockian homesteading principle is the way that we identify who owns a given resource when there’s a dispute about it.  We don’t really care what the rules are if there’s no dispute.  We only care if there’s a dispute.  If there’s a dispute, there’s a dispute between two or more people.  Between those people, we say the one of those people that has the better connection to the thing in terms of being the first one to start using it is the owner.  Now, that could be that person, or that could be the person he inherited the title from.

00:27:09

So it could be you or your ancestor in title, we’d say.  Now, by ancestor, I don’t mean a family relationship.  I mean if you think of a chain of title.  If I’m going too fast, please stop me, and please feel free to interrupt me.  Okay, so this is what I think is the essence of libertarianism.  It’s the diligent attempt to consistently apply these ideas.  It’s basically an attempt to find rules that minimize conflict and allows the peaceful use of scarce resources.

00:27:50

Okay, now, there are different ideas about why we are libertarian, why you would hold libertarian ideas.  Now, I personally think one of them is because of our nature.  I personally think it arises from empathy.  I think we have empathy for other people, and I think there are biological and sociological and evolutionary reasons for this.  Now, not everyone has empathy, and those people tend to be sociopaths or outlaws, and we have to deal with them as technical problems.

00:28:24

They’re dangers to us, but the subset of humanity, which is, I think, a major part that chooses – Colin, I’m not saying we derive it.  I’m just trying to explain why people might choose to value each other enough to enter into this civilized realm.  I mean I’m not really sure why they do.  I think this is why, but for some reason, most people do, and anyone who’s having this conversation has, for some reason, done this.  And so the question is, logically, what norms are implied by or consistent with this endeavor of getting together and trying to live peacefully among each other, trying to find fair rules?

00:29:16

I agree that non-empathetic people might have value for that.  I agree that things other than empathy might motivate other people.  I’m sort of talking empirically what I think is the predominant reason why people tend to be social and civil, and I think empathy has something to do with it, but I could be wrong.  And I don’t think it’s that relevant.  It’s just an interesting inquiry, sort of like a meta inquiry when you’re interested in all these issues.

00:29:49

Now, here’s where you start seeing the importance of Austrian economics and sound economic thinking about these matters.  We’re going to start from the beginning, and this is where you get a lot of good insight from Hoppe in his book A Theory of Socialism and Capitalism, and I have a quote here.  So if you stop and think about it, why do we even need property rules in the first place?

00:30:11

So as Hoppe points out, only if there’s scarcity would you even have a problem of conflict in the first place over goods, would you need there to be coordination and property rules that would assign who owns things.  Now, let me clarify something I had to clarify in the comments in the office hours.  By scarcity, we do not mean lack of abundance.  What we mean is rivalrousness, which is an economic term, which basically means it’s a character of a thing that basically means you can have conflict over it.  So the point is we’re talking about what scarcity means and why scarcity is relevant here.

00:31:01

So scarcity in this sense means the character of a good or a thing such that only one person can use it at a time such that one person’s use excludes the others, such that if two people try to use this thing at the same time, there will be conflict, and they’ll have to physically fight over it.  This is what we mean by scarcity.  So – funny one.  Funny one, Matt and Mr. CivLib.  So when people say, well, good ideas are scarce, they don’t mean it in the same way that we do as economists or as political theorists.

00:31:40

So we’re talking about “conflictability“—you can think [of it like that].  But the point is the purpose of property rules is to permit the peaceful use, the productive use of these resources, which serve as means of human action.  We need to use things in the world to accomplish things.  If everyone is fighting over these things, you’re going to fight over them and not be able to use them productively.  You’re going to be fighting and wasting time and hurting each other, maybe breaking or ruining the good itself.

00:32:13

So people that prefer these certain grundnorms, which I talked about earlier, they want to have peace, prosperity, cooperation, and the peaceful use of things.  They would all tend to favor some system of allocation of property rights so that we know who can use this thing.  But the point here is not how we allocate these rights.  It can be done arbitrarily and by a dictator.  The point is that you only need to do this when there is this problem with respect to the good itself.

00:32:55

So if – and Hoppe points out this thing called imagine the Garden of Eden.  You cannot imagine this completely because if you imagine a complete Garden of Eden where there’s no conflict possible at all, then we’re just sort of all ghostly essences kind of passing through each other.  And there’s sort of independent realities.  But if you imagine – let’s just analogize this to Rothbard’s idea of the evenly rotating economy.  We sort of think of an unrealistic scenario to isolate certain things.  So let’s imagine the Garden of Eden where there’s no scarcity, no conflict.  We don’t the need for production, no need for rationing, and property rights are unnecessary.

00:33:41

The reason is – like imagine you can just reach up at any moment and grab a banana or grab a house or grab a car, and you could have it.  There’s just an infinite number everywhere.  Now, in this sense, it’s sort of like the limit in calculus or in math where the distinction between scarcity in the trivial sense and scarcity in the economic sense blur together.  If you really had an infinite number of bananas out there, theoretically if you’re – let’s assume your body is unique and your standing room is scarce.  And you reach up and you grab a banana, and you’re holding a banana.  Even if there’s an infinite number of bananas out there, this particular banana you’re holding is still scarce because if someone takes it from you, you don’t have it anymore.

00:34:28

Now, I do think it’s true that in an economy, in a society where there is such plentifulness, such abundance, technically every banana you held would be scarce.  But you really wouldn’t care if someone took it because you could replace it instantly, and anyway, why would someone take it from you in the first place?  So in the limit, in a way, abundance and non-scarcity blend together, but there is a conceptual distinction in the real world between these things.  But the point is to realize that the reason we have property rights is to ration and assign the right to use a given resource that only one person can use at a time without conflict so as to avoid conflict.  So if you had perfect plentifulness, superabundance, you wouldn’t need property rights.  The reason we need them is because we have scarcity in the world.  And by the way, a lot of this will pop up later in the IP talk in lecture five.

00:35:31

So we do have scarcity.  Now, what are implications of this?  Like I mentioned earlier, you can have conflict over these resources, and there can only be exclusive use by one person of these things.  Now, let’s step back, and here’s where, especially where, the nature of – goodnight, and close that door for me.  Here’s where the nature of – here’s where Austrian economics plays a key role in my view in both Hoppe’s theory and libertarian theory.  If you think about the way Mises conceptualized human action, it’s called praxeology.

00:36:07

So he said if we look at the logic of human action, we conceive of action as the purposeful use of a scarce means to achieve a desired end or goal.  Now, if this seems trivial, I think it’s not.  If this seems arcane, it’s not that hard to understand.  We’re just describing in fairly common-sense terms what people do in every action they take.  You always conceive of some state of affairs in the future that you don’t like and you want to change it.  So you want to change it to X.  That’s your end or your goal or your purpose.

00:36:46

To achieve that, you imagine what things you can interfere with in the world, what you can change to do it, so you use means.  You use your body, and you interfere and you use means to achieve your end.  These means are necessarily scarce resources that we just talked about, as Mises explains in Human Action and other works.  Now, I don’t have time to go into this in detail, but if you study the sort of epistemology or the philosophy of this idea, as Hoppe elaborates in a lot of the works that I link to and Mises, this way of looking at it shows that we know certain things are a priori true about human action.

00:37:33

We know that there’s subjective value, that is, that value is subjective.  It’s just how you regard things.  There’s not a value in things.  We know that people choose.  We know that preference is demonstrated in action.  We know that we have to presuppose there’s causality because you couldn’t assume that your means will achieve the ends you’re trying to result in if you didn’t believe in causal physical rules in the universe.

00:37:59

There’s the category of means and ends.  That’s the distinction between what you use to achieve your end and the distinction between them.  There’s the idea of opportunity cost.  That is, if you have an end X, well, you have another end Y or Z you could have chosen as well.  But if you choose X, then that means you value it higher than Y and Z, which is demonstrated preference and choice and subjective value.  But it also shows that the cost of your action, the cost of your choosing to pursue X is Y, the next-highest thing you could have chosen.  That’s the opportunity cost, which is another economic concept.

00:38:39

And also, it presupposes the idea of profit and loss.  Now, we’re used to thinking of profit and loss in modern-day terms of money, that is, monetary profit and monetary loss.  But it’s really a more general thing of psychic profit and loss.  That is, if you achieve the end you had in mind, then you have a psychic profit if it’s as you envisioned it would be.  And if you don’t achieve it, like if you choose the wrong means, and therefore, you don’t succeed at achieving your end, you have a psychic loss, even if it’s something non-monetary like getting a girlfriend or something else.

00:39:14

Okay, so the point is that, by analyzing the nature of action, it can illuminate the very nature of why we need to use scarce means as part of action and then why we have property rights in them.  So – and again, we’ll return to some of this in the IP lecture number five, but let’s think about this.  When you act, you use scarce things in the world to achieve your ends.  Now, if we have a property rights system respected, then you can use these means without being interfered with by other people without conflict, so you can use them peacefully and productively.

00:39:58

But the role of knowledge is to guide your action, and again, I think I’m going to return to this in more detail in the IP lecture, but just think about this for a second.  This is the key mistake made by people who believe in intellectual property.  They think of knowledge or information as a factor of production, and it’s another thing that we create, and therefore, you should own it.  But if you think about the structure of human action, you see that information or knowledge and scarce things in the world serve two different roles in action.

00:40:32

We use means or scarce things to achieve our ends, but information or knowledge is what is in our head that guides our choices.  In other words, the more I know about the way the world works, the more I know about what ends I can choose.  It might not be X, Y, and Z I’m choosing between if I have more knowledge.  Now I have A, B, C, D, E, F, and G.  So it expands the universe of possible ends I know I might pursue.

00:40:58

Like if I know there’s chocolate and vanilla ice cream and I choose between them, that’s one choice.  But now if I learned about strawberry ice cream as well, now I have three things to choose between.  And if I choose strawberry, I’m enriched because if I achieve that, then I have achieved something that’s more valuable to me than my next-highest cost.  Likewise, the more I learn about the universe and causality and the way things work—recipes, techniques, ways of doing things—then I have a wider array of means I can choose from to accomplish my given ends.  So knowledge reinforces and enriches the universe of means and ends, so it’s very important in human action.

00:41:44

But unlike scarce means, it does not need to be owned to be used.  This is the key thing that is missed.  And a good example is, imagine your grandma has a good recipe for a chocolate cake, and you and your cousin know it, let’s say.  Well, to make the cake, you need eggs and a spoon and an oven and a bowl and flour and yeast.  So all these things are scarce goods, and if your cousin has your own and your spoon and your eggs, you can’t make the cake.  You would only fight over it.  If you each have your own bowl and spoon and cake, you can make it.  But you each can use the same recipe.  So you each need to have a property right in your scarce resources to make the cake successfully, to have productive action, to have prosperity.  But you don’t need to own the recipe.  You just need to have possession of it.

00:42:49

Yes, Skyler, you’re exactly right.  Non-scarce things don’t need to be owned, and in fact, if you think about it, and again, I’m jumping the gun a little bit, but this is so important because it does play into the role of how we think about rights.  The entire functioning of the free market, which is an advanced society where there is institutionalized respect for private property rights, which means what?  Because we talked about property rights, which means there is a system where most things that people would want to use to achieve things, there’s a known owner for this thing.

00:43:26

So all these things can be used by the owner productively instead of being fought over.  And when this happens, you have increasing division of labor, and you have material prosperity.  So in other words, you have more abundance coming out of it.  Think of the assembly line, Henry Ford’s making of the car, modern-day manufacture of goods that are so cheap.

00:43:53

So in other words, when you allow property rights to be assigned, which we have to assign because there’s scarcity, then it allows human ingenuity and creativity to be unleashed and to be productively used to create more.  So in other words, when you have property rights in scarce things, humans can overcome scarcity to some degree.  So in the face of a lack of superabundance, we can make things more abundant.

00:44:25

In other words, we’re doing the best we can to overcome this unfortunate fact of the world, which is that we don’t have everything we want.  But with information, the more information you have, the better we are.  The bigger the body of human knowledge, the better off that we are because we can all draw on these recipes and ideas to enrich our universe of ends and means.  So to artificially restrict information would be like imposing – destroying physical goods just because we want to raise the price.  So they’re equally insane, but I will have to discuss this more in the IP lecture.

00:45:18

And I’ll get to this later too, but if you just think about it, the basic function of the market, there’s one aspect of it that has been neglected, partly because of this neglect of intellectual property and the problems behind it, and that is emulation.  So we – the nature of property rights and the role of scarcity in the function of the market, the key aspects of the market is that we have property rights that permit competition.  They allow competition, and competition benefits the consumer.  But it requires emulation, that is, learning.

00:45:55

Some of you might have followed.  Last week there was a big dispute between Google and Bing, and Google is the search engine, which you all know about, and Bing is the Microsoft competitor.  And Google accused Bing of copying – hello?  Anyone else here?  Anyone else having a problem with the – excuse me – with the video?  Can you all hear me?  Okay, sorry Z.  I’m not sure what the problem is.

00:46:27

But the point is – so you have Google accusing Bing of cheating, but they didn’t really have a coherent claim to their argument.  I mean they said, well, it’s sort of like if you lean over the desk and you cheat off of me during a test.  Well, it’s not like that.  Bing is not lying to anyone.  I mean if you cheat off of someone in a test, you’re lying to the school or to your fellow students or whatever.  Bing is not lying to anyone.  They’re just competing.  They’re emulating what Google is doing.  They’re learning what their competitor is doing, and they’re trying to improve on it or to match them.  The point is that’s one of the key aspects of the market is to emulate what your competitors are doing.

00:47:06

Yeah, we did – Barry, we did talk about that in the podcast.  I’ll wait a second.  Why don’t you guys try to reload?  I’ll wait a second here.

00:47:15

00:47:25

Okay, let me continue on.  Let’s go to slide 15.  Now, let’s talk about some of the key aspects of libertarian rights.  Number one, as you can see from the foregoing discussion, it won’t be a big surprise to think about it the following way, but it’s not always thought about this way in casual discussion among libertarians.  But Rothbard conceives of libertarians as property rights.

00:47:52

If you look at chapter 15 of The Ethics of Liberty, he gives some really good examples of people normally talk about freedom of speech and freedom of the press as what they call human rights or what we libertarians might call individual rights or libertarian rights.  But Rothbard points out that really all rights in the end are property rights, and he’s right, of course, if you think about rights as arising from the nature of scarcity, they have to be property rights.  The only time you could have a conflict is over something that’s conflictable, which is a scarce resource.

00:48:28

And so the right is always in the end going to say who owns that resource, who gets the right to control it, which is a property right.  So he gives the example for free speech, let’s say.  I mean free speech is not an independent, free-floating right that is independent of property rights.  It’s really just a derivative or consequence of property rights because if it was an independent right you would have the right to speak on your neighbor’s property.  But you don’t.  You don’t have the right to speak on your neighbor’s property.  You have to do it with his permission.  So that’s an example why free speech is not sufficient to guarantee you the right to speak.

00:49:08

And on your own property, you have the right to speak because you own the property, and you’re not aggressing against anyone else.  So in other words, it’s just a consequence of your owning property, so that’s an example of why it’s not necessary to have a right to free speech to have free speech abilities.  You basically need to own property.  It’s the same thing with freedom of the press.  In the Soviet Union and in other countries, you cannot have true freedom of the press if there’s no freedom of – if there’s no property rights because you can’t own a factory.  You can’t own a printing press.  You can’t own the paper.  You can’t own the ink.  You can’t hire the employees.  You can’t make a profit from selling the paper, whatever.  So basically everything always resolves to property rights.

00:49:55

Rothbard does a really good job in that chapter of exploding a metaphor you guys might have heard, which is a pernicious one because it’s repeated over and over.  It was given by a famous American Supreme Court justice, Oliver Wendell Holmes, where he said, well, obviously property rights are not absolute because you can’t shout fire in a crowded theater.  So he said, well, everyone would agree that you can’t do that.  Well, of course, there’s two problems with this.

00:50:23

Number one, if there’s a fire, you should be able to shout fire.  So – but let’s assume you’re falsely shouting fire.  The point is, as Rothbard pointed out, it depends upon what rules are set by the owner of the theater, or we can assume that the owner of the theater would set certain reasonable rules.  But the point is, the reason why it’s wrong to shout fire in a crowded theater is not because there’s no freedom of speech, but it’s because there’s only property rights. ²

00:50:51

So in other words, you cannot use the fact and the consequence of there being property rights to say that property rights are not absolute.  So this is more disingenuous, uncareful reasoning by the left and by statists.  So as I mentioned before, the principle components of libertarianism is our assignment rules, how we assign property rights, that is, how we say who owns what.  For the body, what we say, and again, I’m not trying to justify it here.  If you don’t agree with it, then you’re not a libertarian or not to that extent.  But the essence of what we believe is that, for the body, the owner is the person himself unless you do something to change it like commit a crime or something like that.  For other things, it comes from the Lockian homesteading rule plus contracting.

00:51:44

I won’t go here because we’re running behind as usual, but I won’t go into the Lockian proviso.  I’ll quickly say the Lockian proviso was Locke’s idea that there’s a limit on how much you can homestead from the state of nature.  He said you can homestead things that are out there that are unused so long that there’s enough and as good left for everyone else.  So he’s imagining like an infinite sea of trees or land or water.  If you take a cupful or an acre, you’re not really hurting everyone else because there’s plenty left for them to homestead.  But his idea is that when you start eating up that resource and it starts getting really scarce in the sense that there’s not much left, then you do hurt other people by taking their opportunity to homestead it.

00:52:38

Now, Hoppe and Rothbard and de Jasay, D-E, J-A-S-A-Y, have good arguments, in my view, for why the proviso—and Block too, by the way, Walter Block—why the proviso is not justified and why full Lockian homesteading is justified.  There’s also something we don’t really need to go into in detail here about the practical applications of the details of applying Lockian homesteading.  Rothbard sort of has a good starting analysis of this, which does need more work I believe by libertarian theorists called a relevant technological unit, and you can see that link I have here at the bottom of the page.

00:53:25

You should take a look at that, but his idea is that, in society, customs and norms were developed by negotiation among people trying to find a fair rule as to exactly how much you can homestead.  You can’t plant a flag and homestead the whole continent.  You can homestead what you’ve used and what you transform by your labor.  And that would be some reasonable unit of that property given that type of use that people are using it for like a farm or something like that or like the sky over your head or the minerals underground or the spectrum if you’re having electromagnetic communications by wavelength or shipping lanes if you have boats or airways if you have airplanes flying overhead, things like this.

00:54:16

Okay, I’m going to skip this here, but this is basically Rothbard’s idea of the relevant technological unit.  Now, my idea is that we can’t have too much armchair libertarian theory.  We can’t figure this out by sitting in a room and just discussing it.  This is all heavily contextual.  It’s heavily dependent upon the propensity of civilized human beings to get together to try to find a workable way to assign fair rules, to use these resources so that they can be used peacefully and productively rather than people fighting over them.

00:54:46

And there’s going to be some need for negotiation and compromise and just having a neutral judge in some cases make an arbitrary decision to make it – to decide who’s going to get to use it.  But we do the best we can, which is why I said earlier the libertarian can be conceived of as the person who, as consistently as possible, applies and extends these ideas of peace, prosperity, cooperation.  It doesn’t mean it’s always possible in every case.  It means we try as hard as we can, and we’re serious about it.

00:55:26

It’s 9 o’clock my time.  We’ve been going for one hour.  What I would like to do is in a little bit – I’ll answer you in a second, Max.  What I’d like to do is take a break in a few minutes, and then we’ll see how much farther we need to go.  I think we’re probably going to go closer to the end of the hour for the lecture, and that’s fine, and we can have question and answers in the office hours on Wednesday at 7 p.m. London time – excuse me – London time.  So in maybe five minutes we’ll take a break, a five-minute break, and then we’ll continue.  But let’s go on for five more minutes, and we’ll stop then.  Well, I would be happy to go another hour, but I’m afraid because of the schedule of a lot people here that that would go beyond what a lot of people could do.

00:56:18

But let me quickly answer Max’s question.  Intellectual property in my view cannot be homesteaded because – well, a couple of reasons.  It’s not scarce.  It’s just patterns of information.  As I mentioned, there’s – if you think about different ways it’s used in human action, it guides human action.  It’s what you consult to make a decision.  A decision about what?  About how to use scarce resources.  Those things have to have property rights.

00:56:47

The other way to conceive of it is this.  Because when you grant a right it’s always enforced with physical force against real things, tangible or scarce things, to grant a right in intellectual property can never be enforced against that property.  It’s always enforced against real things.  So, for example, if you have a property right in an idea or a pattern or a song, well, when you sue the person who’s doing it, you’re going to get one of two things.  You’re going to get some of his money, or you’re going to get a court order to use force against him to tell him not to do certain things with his body or with his property.

00:57:30

So in effect, saying you have an intellectual property right is a disguised way of making a claim upon his scarce resources: his money or his property, like his printing press or his body.  And when you make a claim on someone’s body or property or money, then you’re saying you’re the owner.  But you’re not the first user of it, and so the libertarian rule is that the first user is the owner, not this other guy who just came up with a way to use his own property.

00:58:04

Okay, that’s a brief snippet of why you cannot homestead ideas.  Basically, homesteading ideas is a disguised way of redistributing property rights from already existing property owners to other people who did not homestead their property.  This slide, by the way—we’re on now 17—is sort of some quotes from Rothbard, which go into the way he thinks we would apply the relevant technological unit as a concept to narrow down how we would apply homesteading principles.  Slide 18 is a little bit more about that, and I think we’ve already discussed most of these ideas here.  You can read these slides later for a little bit more detail and follow these things for elaboration, but this is the basic idea we’ve discussed already.

00:59:06

Okay, I’m going to turn to a slightly different topic now to elaborate on a few more concepts we need to discuss some things further down the road.  Basically, these are prerequisite kind of ideas.  First of all, you need to understand that rights – the difference between what the purpose of rights are and what positive rights are and the relationship between rights and duties.

00:59:32

So first of all, you have to understand that rights are always correlative of obligations or duties.  Correlative means one implies the other.  It’s like two sides of a coin.  If I say I have a right to X, someone else has a duty to provide me X.  Now, the libertarian idea is that all rights are so-called negative.  Now, this is what’s commonly said.  I have a right not to be aggressed against.  That means you have the right not to aggress against me – I’m sorry – you have the obligation not to aggress against me.  So my right does impose an obligation on you, the obligation to respect my rights.

01:00:13

So the question is how are these rights to be respected, and what kind of rights are they?  What libertarians often say is that, unlike all other political theories, we only believe that there are negative rights because if there are positive rights, that would imply positive obligations.  I think there’s a little bit of confusion about this.  I think it’s actually not correct.  I think that the best way to think about it is this: Libertarians are against all unchosen positive obligations.

01:00:58

So let’s think about an example.  If you commit a crime, this gives – this action – by this action, you are choosing to incur certain obligations.  What obligations do you have?  Well, you have an obligation or a duty to stop committing the crime, to confess if you’ve done it already, and then to make amends or restitution and to turn yourself in basically.  If you’re piloting – if you’ve agreed [no audio_01:01:30].

01:01:31

01:01:42

… in a lake out of spite and they can’t swim, let’s say, and if – they’re going – they’re probably going to drown.  Now, you’ve undertaken a duty to rescue them.  So – and then arguably, and we really don’t have time to go into this in detail, if you have a child, this is the result of voluntary human action in most cases.  You could argue that you – this is analogous to the case of pushing someone into a lake.  When you push someone into a lake, you’re making them a victim.  You’re putting an innocent person in a state of need that you created where, if you don’t rescue them, they’re going to suffer harm.

01:02:27

You could argue that bringing a child into the world, and a baby is by nature a dependent being for some time, if you don’t take care of that baby, then you are violating his rights to life or something like that.  So you could make an argument that abortion, at least in the late stages or infanticide at least or failing to care for a baby also – not infanticide, excuse me.

01:02:55

But just failing to provide for your child as a normal parent should violates the positive obligations you have undertaken by your actions.  But the point here is that libertarianism is not against positive obligations.  It’s simply against unchosen ones.  Now, we can debate which ones are chosen and which ones are not.  We can debate whether having sex, which leads to procreation and reproduction and children, is that kind.   That can be debated, but the point is to make sure you understand that libertarians are generally against positive obligations because we’re against ones that are unchosen.

01:03:40

So that’s why we’re against a right to welfare – excuse me – for example, because that would imply the obligation of others to provide for your welfare rights, to provide for your free education and your house and your clothing and your job and so on.  So this is the reason libertarians oppose this because no one undertook that positive obligation.

01:04:06

Let’s take a five-minute break, and we’ll return.  And then we will discuss how long we will go.  I’ll be happy to go as long as people are willing to put up with.  And then we can do Q&A on the office hours.  So I will see you guys in five minutes at 15 past the house.

01:04:26

So someone asked this is one I read a long – I mean it’s just full.  You can see.  This is the Habermas – let me show you the – does everybody see this?  This is the Habermas book of which I devoured about, I don’t know, 15 years ago.  And it’s – I found it interesting, and it’s worth reading if you want to go there, but honestly, I don’t think you need to, to understand the argumentation ethics ideas.  I think the argumentation ethics is pretty intuitive.  Rothbard understood it.  Rothbard had read Habermas.  Rothbard was aware of all this.  He was such a widespread reader.

01:05:12

Okay, everyone back.  Let’s continue.  Before I continue, let me ask.  If I go – it’s 15 past.  If I go about 10 or 15 minutes past the ending time, does anyone strongly object to that?  I’m just afraid it’s getting really late for some people, and I guess you can catch the end of it later on the recording if you miss it.  Okay, well, what I’m going to do is I’m going to finish these lectures, and we won’t have time for Q&A today, and we can do the Q&A on Wednesday.  Everyone good with that?

01:05:53

Okay, now, I have a long article, by the way, which applies the estoppel idea but which goes through a lot of the sort of logic of punishment and restitution and retaliation in the Journal of Libertarian Studies.  And there’s a – anyway, it’s called – it’s about – I’ve got it linked in the show notes.  It’s in the course notes.  It’s on estoppel and the theory of punishment, that kind of stuff, so take a look at that if you want to look into it in more detail.

01:06:24

But let’s talk about one thing that I think is often confused by libertarians and that is threats.  So you guys will probably notice that libertarians, famous libertarians and in the classic libertarian literature often say something like libertarianism is the view that every man should be secure – everyone should be secure in their property and that the only way to violate rights is by coercion or aggression or the initiation of force or the threat thereof or force or fraud.

01:07:02

So in other words – Danny, are you referring to me or – anyway, okay, I’ll let the public chat go on.  Okay, fine.  So in other words, libertarian theorists often sneak in two things.  They basically repeat the non-aggression principle, which is that you can’t initiate the use of force.  And then they’ll say and you can’t threaten force, and you can’t commit fraud.  Now, they sort of sneak that in like it’s obvious why these are subsets or types of this basic idea.  But I have yet to see someone explain clearly why it is.  Now, here’s the way I look at it, and this flows from sort of my estoppel approach, which is in my estoppel article that I mentioned earlier.

01:07:49

So in the law, at least in the civil law in Louisiana and other states, you often hear of assault and battery.  So think about this for a second: assault and battery.  Well, assault and battery are two different things.  Battery is the physical touching of someone else, which is not consented to.  So it could even include a noxious gas, poison or something like that.  But basically, even a light touching is battery, so battery means hitting basically.

01:08:21

Assault is not hitting someone.  That’s why it’s called assault and battery.  They’re different things.  Assault in the law – now, I’m not saying whether it’s justified to be a crime or not.  I think it is, but let me explain why.  But assault is one of two things.  It’s the attempt to commit a battery, or it is doing something that puts someone in fear of receiving a battery.

01:08:46

So let me give you an example that the law uses.  Let’s say your friend is sleeping, and you want to kill him, so you grab an ax and you swing the ax at the guy’s head, but you miss.  Well, that’s an attempted battery, which is assault.  That’s one type of assault.  You attempted crime.  It’s an attempted aggression.  Now, let’s say he’s awake and you swing the ax at him, and he sees you swinging the ax at him.  Well, he gets a fright.  He thinks he’s about to be killed.  So that’s – he’s put in fear of receiving a battery.  That’s another type of assault.  That could be assault even if you really were joking, but you didn’t do a good job of making your intentions clear.

01:09:31

So you see there’s these different types of assault.  Now, the question is – and that’s what threat is basically.  A threat is when you put – is one type of these types of assault.  It’s when you put someone in fear of receiving a battery.  Now, the question is why is that a rights violation, or why should that be considered to be a type of aggression?  My view is this.  Aggression is that which gives the recipient of the aggression the right to use force in response because we always say as libertarians you can use force in response to initiated force.

01:10:07

Now, there are disagreements about what types of force you can use in response.  Some say it can be for restitution.  Some say for rehabilitation.  Some say in defense – excuse me – in defense only.  And some say for retribution or punishment or retaliation.  But my view is a general one.  All those are examples of force in response to initiated force.  So if you can identify a use of force as being in response to other force, then it is – then the force you’re responding to is initiated or aggression.

01:10:44

Now, for a threat, if someone points a gun at you and puts you in fear of receiving a battery, what have they done to you?  They’ve basically committed some action that has made you reasonably think that you’re about to be physically harmed or physically aggressed against.  Now, by the logic of estoppel or even the symmetry of non-aggression, you can do to someone what they can do to you.  This is why you can punish someone who – or use force against someone who’s trying to hurt you because they’ve escalated it to a certain point where you can – they’ve made it permissible for you to use force against them.

01:11:23

So the basic idea is that if someone threatens you, they cause you to fear that you’re about to be harmed.  That means now you’re entitled to do that to them.  Now, I go into this argument in detail in my article that I linked to in the course page.  But if you think about it, the only way to threaten an aggressor back – let’s say you catch the guy.  Now, you want to punish him.  So he threatened you, so you can threaten him.  Well, if he knows that it’s a game or a sham, he’s not going to be fearful of receiving a battery.  The only way he can really be fearful of receiving a battery is if you have the actual legal right to carry through with your threat.

01:12:12

So this is the basic argument for why you have the right to use force in response to a threat.  And if you do have a right to use force in response to it, it has to be aggression because you only have the right to use force in response to aggression.  So that’s the argument for threats.  Now, you can take this and extend it to things like stalking.  I personally think stalking is a crime, or it could be a crime.  We have to be careful not to give the law too much discretion of course, things like this, but in certain cases, these people that stalk other people and they put them in fear of being harmed physically, I think they’re committing a crime that ought to be punishable or prohibitable by libertarian law.

01:13:00

Okay, so we can talk about this later in the question-and-answer period on Wednesday, or you guys can read up on this in more detail in the blog post and the article excerpts that I linked to on the course page.  So that’s how we should handle threats.  Now, by the way, if you don’t like my analysis of this, if you know of another one, I’d like to see one.  I don’t know of any extended detailed analysis of why threats should be aggression than this.  It’s just sort of assumed.  The same thing is true with regard to fraud, which we will cover I think in the contracts lecture.

01:13:38

Spam is sort of an extension of this.  I could have held off on this until the contracts lecture because it’s a property kind of thing.  But the basic idea of libertarianism – okay, David asks.  He’s not sure about why stalking is a crime.  Well, what are you doing when you’re stalking someone?  You’re basically communicating to someone that you’re going to harm them in subtle ways sometimes, creepy ways.  But you’re basically making someone so afraid that they’re about to get harmed by you.  You’re communicating a message to someone that you’re going to harm them.  Okay, so you’re putting them in fear of receiving a battery.  That’s called assault in the common law.

01:14:21

And I think there’s a good reason to think that classifying assault in the common law as a crime as a type of aggression makes sense because the only way to retaliate in a symmetrical way against someone who has put you in fear of receiving a battery is to do the same to them.  The only way to do that in an institutional way, that is, you’re the law-abiding person.  You’ve caught them.  So how are you going to make this guy afraid of receiving a battery if you want to get even with him?  You have to have the right to carry it out.  Otherwise, he’s not going to believe it.  He’s going to think it’s a ruse or an act.  So that’s the basic idea.

01:14:57

Or another way to think about it is this.  Imagine your sister is being stalked by some creepy guy.  And her friend or her boyfriend or your other brother basically plugs the guy.  Let’s talk about spam briefly so we have time to get to these final comments.

01:15:20

I think you can regard spam as trespass.  The reason is because – and not only spam but things like hacking and things like this.  I think in another lecture we might get to this in more detail or maybe in the questions we can in another course.  The central libertarian question is property rights.  Think about it this way.  We assign property rights, which is the right to control a resource.  Now, a computer or computer system is a resource.  Just because you have it connected to the internet doesn’t mean that you’ve giving permission for people to do everything.

01:15:57

Imagine your house.  You have a house, and on occasion you have a friendly neighbor walk up to you to knock on your door to ask a question, to borrow a cup of sugar, to see if you want to buy wrapping paper for their kid’s fundraiser, whatever.  Now, when they knock on your door, they’re not committing trespass.  Why is that?  Because we presume that the owner of the door, which is you, you’ve given implied license or permission for neighbors to use your door to knock on it for certain things.

01:16:31

But if it’s an aggressor trying to break into your house and take it over and burn it down, we don’t imply that you give him permission for that.  So there is implied permission, which is a type of communicated norm in a society.  It’s a type of communication.  Same thing with your computer on the internet.  Almost everyone is opposed to spam or receiving it anyway, so it’s understood that they don’t consent to their computer being used to become a spambot or to receive spam or to be hacked into.

01:17:06

The point is this.  A hacker or a spammer is basically using your property without your permission.  Yes, they’re able to do it, and you can say, well, you connected to the internet, so you’ve consented to it.  Well, that’s not true at all.  If you leave your door unlocked one night, that doesn’t give permission to people to walk into your house and take your china.  Breaking and entering applies even if the door is not locked.  It implies to opening the door without permission.

01:17:35

So you can use this argument, and again, we’ll skip over that.  Barry, I don’t know if you’re replying to me or someone else, but no, this is not the same as the argument for stalking.  This is sort of – I’m just trying to use these basic property principles to show how a lot of difficult cases can be handled if you just think about this consistently.

01:18:03

Now, sometimes people will say, well, why are you against identity theft if you’re not against intellectual property theft or reputation rights or things like that?  Well, the answer is very simple.  Identity theft is an example of unauthorized use of private property.  So let’s say that someone finds out your secret code or your social security number or your password and they pretend like they’re you, and they access your bank account at the bank, or they access your account somewhere else.

01:18:37

Well, they are using the property of the owner of that company, say, the bank without their permission because the bank has clear rules about who can access this account.  It’s only the owner.  So the hacker is actually – or the identity theft – the identity thief is basically committing a form of trespass.  So you can see that all these things can be resolved to a type of property rights trespass.  Okay, now, all right, 9:30.  Let’s keep going.

01:19:17

Patrick, I agree that spam can be seen as a flaw of the service and that there will be natural contractual and economic incentives for these companies to improve their service.  But we’re trying to say, is it conceptually a libertarian crime to spam someone or to hack into their computer system even if the locks aren’t good enough.  There is a good case actually, one of the earlier US cases called Cubby v. CompuServe, which is one of the first, what we call, trespass to chattels case, which talked about how spam could be a type of trespass, and I think it’s primarily or basically libertarian.

01:20:02

But let’s talk now about torts and negligence.  The standard case of a regular crime—murder, rape, robbery—is pretty easy to understand.  Let’s think about what torts are.  A tort is sort of a negligent action.  So let’s think about this, and here’s how I characterize these things.  The pure case would be an intentional crime.  That’s like an extreme tort you can think of, murder for example.

01:20:40

Now, we, as libertarians and humans in general, we grade these things on some kind of spectrum of badness or seriousness.  So everyone would agree that to murder someone is worse than a slap.  Let’s say you slap someone in the face.  Now, why is this?  What is it that distinguishes these things?  Well, first of all, they’re both – they’re not negligent.  They’re both intentional.  Negligent is when you do something by accident or you’re not careful enough.  So the murder and the slap are both intentional crimes.  One is a battery.  One is an extreme battery or murder.  So what makes them different?  Well, in this case, the consequences of the murder are worse.  That’s what makes it worse, the consequences to the victim.  This doesn’t mean we’re consequentialists, but it does mean that the reason the victim cares about being harmed is because of the consequences to him of course.

01:21:39

Now, let’s also think about this distinction.  There’s a distinction, especially in Austrian economics, between behavior and action.  Behavior is what we would say part of the causal realm, just the way some physical body moves.  Action is intended action.  And this is why the law distinguishes between completely unintentional things.  I don’t even mean partially intentional like negligent action or uncareful action, and intentional things.

01:22:12

So imagine you have someone who has an epileptic fit, and every now and then they lose control of their body and you’re sitting next to someone and your arm just involuntarily slaps someone in the face.  Now, would we treat that as assault – or battery, sorry, battery?  We would not because it’s not an intentional action.  So in this case, what’s worse about the intentional slap versus the epileptic slap is the intentionality of it.  So in one case, the consequences are worse.  In the other case, the intentionality is worse.

01:22:50

Now, what we have here then is we have a combination.  We have the harm or the consequences, and the intention is what combines to make the worst crimes and which makes the elements of crimes.  This is, by the way – these are two important Latin terms that you might want to learn.  There’s something called malum in se, malum meaning bad, in se meaning in self, versus malum prohibitum, that is, things that are bad just because the law prohibits it.  So, for example, we libertarians would say it’s malum in se to commit murder, but it’s only malum prohibitum to not pay your income taxes or to smoke marijuana.  These things are not bad in themselves because they don’t have a victim because they’re not aggressive, but the law makes them illegal.

01:23:47

Okay, so true crimes have a mens rea requirement, which malum prohibitum does not, by the way, you notice.  That is, if you smoke marijuana or possess it, you’re guilty because you committed those actions that the law defined, not because you have a guilty intent to harm someone else.

01:24:07

Okay, so now, let me give this example.  This is also in my punishment and proportionality paper.  This is how I think you can use the punishment paradigm to figure out how to handle negligence, and that is take a typical case of a murder.  So if you believe in eye for an eye and retaliation, if someone – A kills B, then B’s heirs can – if they want to, they can have A killed in response.  This is symmetrical—eye for an eye, tooth for a tooth.  In a way, A has asked for it.  He’s laid down the rule.  I believe killing someone against their will is permissible because that’s what I did.  That’s why it’s okay to enslave A or do severe things to him, but the point is that.

01:25:02

But think about this.  His murder is 100% intentional and very consequential to the victim obviously.  The retaliation is also intentional.  The victims intend to hurt the aggressor.  The legal system does this knowingly if it permits it, and the consequences can be severe.  That’s why there’s a symmetry.  But in the case of negligence, let’s say you’re driving your car and you just take your eye off the road and you accidentally crash into a car and you kill someone.  Now, is that the same as an outright, premeditated murder?  Most people would say no, and I think most libertarians would too.

01:25:43

But why?  The consequence is the same.  There’s a death, an unwanted or unconsented-to death of the victim in both cases.  The only difference is the intentionality.  What we can say is that a murder would be 100% intentional.  Maybe second-degree murder is 95% intentional.  Maybe certain types of manslaughter are 80% intentional.  But negligent homicide would be 10% intentional.  You didn’t mean to do it.  You just weren’t careful enough.  It wasn’t a behavior.  It wasn’t just an epileptic fit.  You weren’t careful enough.  You should have been more careful.

01:26:30

My point is this.  You have to imagine a sliding scale.  In the case of negligence, the consequence may be the same, but the intentionality is lower.  But if you want to make it symmetrical because your retaliation against the tortfeasor we call them, because that’s intentional, you have to reduce the consequences, say, by 10%.  So instead of killing the guy, you might put him in jail for a year or something like that.  So this explains why there’s a lessor punishment deserved by negligent tortfeasors compared to outright criminals.  So using, again, the praxeological understanding of human action and viewing the action as having an intentional component and a consequence component.

01:27:21

Well, let’s talk about that.  I mean I’m not trying to lay down the law about what the libertarian view is on the right consequence for all these actions.  And as we’ll see later, probably in a later lecture at this point, I tend to think any libertarian system would have a restitution-based system instead of a punishment-based system.  But I’m trying to explain why legal systems have and why our intuitions even as libertarians tend to think you should have a different standard of punishment or consequences for someone who’s negligent as opposed to someone who is an intentional criminal.

01:28:01

And I think you can imagine a spectrum of being an intentional criminal all the way down to negligent – actually, I would go intentional, reckless, negligent, and then just mere behavior, like the epileptic is at one end, someone who didn’t choose to do it at all.  And you wouldn’t blame them at all anymore than if you’re walking by your neighbor’s property, and a tree limb from his property just falls on your head.

01:28:30

I mean no one caused it.  This is just the universe.  Or let’s imagine another crazy hypothetical.  Let’s say you and your friend are standing next to each other, and some evil alien grabs your friend’s arm and slaps you with his arm.  Now, it hurts you, but is it his fault?  No.  He didn’t choose to do it, so that’s more akin to the epileptic example I believe.

01:28:55

So we have to imagine a spectrum, and I think basically this helps to frame how we’re going to choose the right consequences to apply whether it’s punishment or restitution or whatever to these different malfeasors, we can call them, as a general term, malfeasors.  Malfeasors would include tortfeasors and criminals.  And yes, I agree, Trey, it would apply also to the lines we draw about when you become an intentional agent, an actor.  A 2-year-old would probably not qualify in almost every case.  Most systems not until you’re 5 or 7 do you start being liable for some kind of behavior, and really for serious consequences not until later, which makes sense.

01:29:45

Well, as for how intention can be determined, this is a legal question about evidence and how the legal system is going to make a decision.  Obviously if you’re concerned with justice and fairness, you’re going to try to figure it out the best you can, and you’re going to have certain rules of thumb.  You’re going to have presumptions.  The burden of proof will be on the victim, but the burden of defending his action once it’s established what he did will be on the tortfeasor.

01:30:16

But as for determining intent, think about this one thing, and I’ll turn on to the next subject next, but the Austrian concept of human action is to view action as intentional action, not behavior.  I mean you could view your neighbors and your friends’ actions as the mere caused actions of a bunch of quark clouds operating by deterministic processes.  But that wouldn’t give you the ability to understand their motivations and what they’re doing as human actors.

01:30:52

So we conceive of and understand our fellow humans not as robots but as actors, and we have this framework of commonality to understand what they’re doing.  And that implies trying to determine their intents and their ends, and I don’t think it’s impossible to have a good understanding of other people’s actions in terms of the structure, that is, understanding what means they chose and what ends they’re trying to achieve by the choice of certain means.

01:31:32

I assigned the Rothbard article on air pollution and torts.  This is a great article.  It’s full of rich insights.  I highly recommend you read it.  By the way, as for provocation, we will talk about that, Barry – excuse me – in the lecture about causality.  I don’t remember if it’s the next lecture or not.  I think it is the next lecture.  So we’ll talk about inciting and things like that next time.  Let’s go on now because we’re way behind.

01:32:00

Look, I can’t go into this in detail now, but Rothbard talks about air pollution and torts, but his basic analysis is that you have to look at someone’s property as what they own when they come to homestead it.  And then the question of air pollution and things like this is can you say that it’s a nuisance, which is a type of trespass?  And in part, this depends upon who owns the property first.  If you homestead a piece of land in the middle of nowhere and you start polluting because you have a factory, Rothbard would say you’ve homesteaded the right to use the air to pollute, which is like an easement or a partial property right.  So someone else who moves there is coming to the nuisance, and they have no right to complain.

01:32:48

On the other hand, if you have a bunch of people living together and one guy starts polluting, now he’s committing a trespass or a nuisance against the property rights of these people to have certain clean air rights that they expected when they moved into this area.  And Rothbard has a great comment about life itself homesteading a noise easement.  I think that idea is very powerful and can be expanded upon.

01:33:17

And you can say that just by living in society there’s a lot of these types of easements you can say.  I mean life is not risk-free.  Life is not noise-free.  Life is not – I mean when you move your body around your property, you’re changing the gravitational wave structure of the universe, and you’re always affecting other people.  If you broadcast electromagnetic waves, they’re passing through other people’s bodies and affecting them a little bit.  They’re not interfering with what they can do with them, but they’re affecting them a little bit.

01:33:48

So we have to assume that if we’re going to live among one another we have to allow each other to move around and to live.  So that’s the idea behind this idea that just living among each other in society we all homestead a certain amount of property rights in living in general, which is like an easement to do certain things in the world.  I’ll tell you what.  Here’s what I would like to do.  It’s 45 past the hour.  I will lecture until – for 15 more minutes.  I’m afraid if I go beyond that it will be a problem.  So let’s do that, and we’ll go as far as we can go.  I think we may be able to finish.

01:34:36

If you read some of the articles I’ve posted that I’ve written and others, there’s a big debate among libertarians about whether restitution or punishment is the right approach.  My approach is this.  There is a right to punish, and the reason is because the victim of the punishment is an aggressor and has – he has no right to object to being punished because the same rule of action is being used by his victim that he used against the victim.  However, I do believe that in a free society, there are many reasons to think that restitution would predominate and that punishment would be very rarely applied except in an ad hoc way or by – in the heat of the moment.  And in those cases, maybe they’d be forgiven, but they’d be sort of a quasi-legal thing, but it would be minimized by insurance agency rules and by the default loan to society.

01:35:40

And historical examples have taught us that this type of system works better where there’s a way for the malfeasor to find his way back into society by seeking forgiveness and making restitution.  First of all, if you punish someone and it turns out that you’re wrong, and there’s always the possibility of a mistake, this is just the way human life is.  We’re not infallible.  If you execute someone who you think is a murderer, let’s say, and it turns out later that he was wrong, well, now you’re a murderer, and what’s going to happen to you?

01:36:15

If you imprison someone for 30 years and find out that he was not really guilty of rape and you have to set him free, how much restitution would have to be paid to him or how much punishment could he impose on you?  So I think that Randy Barnett, for example, has made a good argument that the standard of proof would be different for these types of punishments.

01:36:40

Let me explain what I mean by this.  In law, you’ll hear about the burden of proof.  The burden is who has to come up with the proof to win their case.  So if I sue you for hurting me, I’m making the claim.  I’ve got to prove you hurt me for me to win some kind of damage against you.  The standard of proof is how high the burden of proof is.  So you have preponderance, which is 51%, clear and convincing evidence, which is 75%, and you have beyond the shadow of a doubt or beyond a reasonable doubt, which is, like, 98%, something like that.

01:37:22

So you have different standards of proof.  Now, there are good arguments to why, if you’re going to incarcerate someone or physically punish them or execute them, you would need to have basically 99% proof or even more beyond a shadow of a doubt, which is hard to prove.  But if you’re just arguing over who owns a piece of property, which is all it really comes down to in a case of restitution, because in restitution, you’re saying – the victim is saying I want $15,000 of your property.  And the victim – and the aggressor is saying, no, I want to keep it.  So then the question is who owns it.

01:38:04

So in a way, the burden has to be on the victim because he’s wanting to change the status quo.  The burden is on the victim, but the standard of proof can be preponderance because, if he’s got a better claim to it, he should get it.  So if he can show that it’s more likely than not that the aggressor raped her or robbed her or whatever, he should have to pay the $15,000.  And the consequences of making a mistake are not nearly as bad.  If you find out ten years later that the alleged victim was lying and you want to remedy your mistake, you can just repay the guy’s money with some damage or something.  But he’s not dead, and he’s not been in jail for ten years.  So there’s a lot of reasons why it’s much more costly to have a punitive system.

01:38:58

And also there’s reason to believe it’s not as effective at reforming human behavior and having a good system in society that works well because of historical examples we have of Iceland and Ireland, which Rothbard and David Friedman give in some of their books, which is what I mentioned here about the man-geld idea.  Man-geld means man gold.  If you murder someone, then you have to pay the amount of gold or money worth their life.  And of course it doesn’t bring them back to life, but neither does punishing the aggressor.

01:39:29

Now, that said, I don’t – because I do believe restitution is better and would predominate in a libertarian society, it does not mean that there is not a right to punishment or that it’s not useful.  And my personal view is this.  We have to conceive of the right to punish of the victim as the primary right even if we have a system where they are not as able to exercise it because of prophylactic reasons or because it’s too costly.  But we can at least tell the jury, listen.  This victim would have the right to retaliate proportionately against the aggressor.

01:40:19

So use that conceptual mentality, the conceptual device of how much force they could use to come up with some kind of monetary damages award.  So at least they have some guidance as opposed to now when they just said figure out a number.  It’s totally arbitrary.  And this, by the way, would solve the millionaire problem.  You probably heard the – some people object to the idea of restitution or the libertarian idea.  They said that, well, if you have to pay a penalty for murdering someone, then Bill Gates could murder 100 people and just pay the penalty and be scot-free.

01:40:59

Well, according to my conception, he could not because what you would tell the jury is imagine the victim has the right to use force against Bill Gates to punish him, to do what he did to her.  How much money could he extract from Bill in a hypothetical negotiation?  Okay, and of course, a billionaire would be willing to pay billions of dollars to get out of being tortured and murdered and executed.  And so basically this type of paradigm would allow you to inflict a higher punishment on a rich murderer, and there’s nothing wrong with that.

01:41:38

Now, Patrick says, can I punish him if I want to?  Look, again, we cannot armchair these things.  I think that what would happen is you would have society develop in a free society where punishment would be extremely expensive.  And I don’t think it would be institutionally supported in almost every case, maybe in rare cases, but I doubt it.  Insurance agencies and others would not support that, so you would be on your own.  And if you did it on your own, you’d be an outlaw, and you’d be breaking the law to do this.  Could you get away with it?  Probably so in some cases, but you’re going to be sort of eyed strangely from now on, and it’s going to be costly if you do it.  You might get hurt when you’re trying to do it.  So I think it would be strongly discouraged.

01:42:33

Okay, I actually don’t think I can finish because we have a lot left to cover, but let me see what ground I can make, and we’re switching to another topic now.  And this is important background for understanding the way all these things play out.  Most of you have probably heard of legal positivism, and you might have heard of logical positivism.  The reason I put them together is because there is a link, I believe, which is not widely appreciated.  It’s not widely appreciated among non-libertarians because they have confused notions of norms and what the law should be and the way things should work.

01:43:16

And like so many things, it’s not appreciated by libertarians because we are limited in numbers, and we have a limited sophistication of understanding of some of these concepts.  So like a lot of things in libertarianism, libertarians are better on the principles, but we’re kind of scattered and maybe ignorant of detailed knowledge of legal topics and other topics.  And lawyers and legal theorists are the opposite.  They’re good at these topics, but they’re uninformed by the right economic ideas.  So you rarely have a good, solid, legally informed, and yet libertarian and Austrian solid analysis of something, and this is an example of that I believe.

01:44:01

Let me just go first in the legal positivism.  Let me explain why I’m bringing this up.  So legal positivism is another thing that’s widely confused in libertarian circles.  The common formulation you’ll hear is that this is the idea of legal positivism.  Legal positivism is the idea that we can separate law and morals.  Now, I’ll be honest.  I think this is almost nonsense talk.  It’s like metaphorical talk that doesn’t make a lot of sense.  I mean I don’t know what it means to separate law and morals.  I mean you can’t – you don’t pick up a fork and separate them like you separate meatballs from spaghetti.

01:44:45

I think what they’re saying is you cannot recognize something as being a law if you don’t first ask whether it’s legitimate or not.  Now, the problem here is this.  These guys are not libertarians, so their concept of legitimacy is not what ours is.  Their concept of legitimacy is either quasi-statist, or usually it’s inherently procedural.  Because they don’t resort to a natural rights, solid, consistent framework like we do, their only concept of legitimacy is process.  How did you arrive at this law?

01:45:26

So then they start devolving into the form of the law, who authored it, is it legislation, is it blessed by the king, is it conformed to God’s law, things like that.  So they’re all over the map partly because they’re not libertarian.  Now, in a way, I think libertarians could have an opposition to legal positivism if they wanted to because we could just say anything is not law if it’s illegitimate.  And we have a clear concept of legitimacy, that is, anything in compliance with the non-aggression principle.  I mean we can say that.  The problem is, when you analyze real societies, you do have the phenomena of an institutionalized set of norms that are backed up by the force of society or the state or whatever the legal system is.  And when you don’t have a libertarian society, sometimes you have norms that are enforced that are not compatible with libertarian principles.

01:46:23

So the question is what do you call these things?  Now, most people call them laws, so there’s a law against smoking marijuana or selling cocaine in the US.  There’s a law against not paying your income taxes.  Now, the strict natural-law theorists would say, well, there’s not a law against it because that’s not a law because it’s not consistent with natural rights except they don’t really believe that because they’re not libertarians.  So all they can say is it’s not compatible with the right procedure or something like that, so they’re all over the map.

01:46:56

My personal view is that legal realism or legal positivism in that sense makes perfect sense and is perfectly compatible with libertarianism.  That is, we libertarians can look at a given society.  We can identify the legal rules that are actually enforced, that is, positively enforced in society, and we can call them laws.  And then we can evaluate them as being just or unjust.  So this is what I think is the debate over legal positivism.

01:47:34

I think it’s a debate by mainstreamers who don’t have a clear concept of what legitimacy means, and I really am very bored by their whole debate.  That’s Lon Fuller, H.L.A. Hart.  I think they’re all confused.  We libertarians have a clear concept of legitimacy.  So we can identify a given law, and then we can pronounce it as good or bad, that is, libertarian or un-libertarian.  That is how I think we should approach the legal positivism debate.

01:48:07

Now, there is an aspect of legal positivism, which I think is un-libertarian, and that is the strain of it which views law as having to be made by a sovereign, by the state or by the legislature.  And now – well, it’s 10 o’clock now.  Let me go five more minutes to go into this because this is interesting and related to what we’re talking now, and then I’ll stop at the end of the legal and logical positivism discussion, and we’ll pick this up next time where I left off.  And we can have any questions in the Q&A session.

01:48:45

Okay, so you’ll see I have here the principle claims of legal positivism is what I said.  There’s no connection between law and morals, but the other is that rules have to be made by humans.  So the problem with this, and here’s where I see – I’m going to switch to the next slide.  Here’s where I see the connection to logical positivism.  So legal positivists view – in the bad sense, they only accept as real laws those that are made by the legislature.

01:49:15

Now, as a quick aside, let me say that I do believe that there’s a strain of this even among natural rights advocates, people that are religious, for example, who believe that – oh, they’re against what the government does because it’s not compatible with God’s law.  But then what they mean by that is they think God is the one who decrees what law is, so all they do is they take – they move it back a step.

01:49:39

Instead of the legislature decreeing what law is, it should be God decreeing what law is.  But all of these people have a similar idea that there’s some authority or source out there that’s above and greater than them that can decree and make law.  It’s the idea of making law that is the problem instead of discovering law and identifying what the law is.  Okay, anyway, that was just a quick aside.  So like I say at the bottom of this slide, just be wary when you hear about people saying what’s the source of rights.  They’re sort of asking who would decree them, and the presumption is that someone has to decree it for it to be real.  I’m going to slide 28 now.

01:50:34

This is a little detour.  Let me go into this really quickly.  There’s a – this is compatible with legal positivism.  There’s an idea called legal realism.  This is the idea that the way we think of what law is, is to think of the way – what the consequences to you are if you disobey that announced rule of the government.  And this was the idea of homes, and he’s got this thing called the bad-man theory of the law.  Let me change the page and talk about this.

01:51:08

So he viewed law as you should view law as a prediction of how the courts would behave.  Now – and he said, well, bad men don’t care about ethics or justifying their actions.  All they care about is what’s the consequence of their actions.  So we need to define the law as a prediction of what will be the punishment or consequences from a court or the legal system.  And I actually think this is correct as a way of identifying what the positive law is.  See, the thing is, all these guys are mainstreamers, and they’re kind of positivists in the sense that they have no external conception of judging the existing law.

01:51:46

So they have to accept what the law is, so they sort of shrink from the consequence of their horrible views.  We libertarians don’t have that problem, so I think it’s helpful to define what the law is in a given society, and then we can fight it or comply with it or whatever.  I’m going to go on to slide 30 here.  We’re making good progress here.  We’re going to stop in just a couple minutes, guys.

01:52:11

So let me just make the connection here I was going to make.  One connection I have – I’ve struggled to find good analysis of in the writing, and I haven’t found much of it.  But what’s the connection between legal positivism and logical positivism?  Well, logical positivism is the idea that the only sort of scientific truth is something that’s scientifically verifiable, that is, only the causal realm, only things that you can test and either verify or, according to Hoppe, to falsify.

01:52:45

So it’s basically the ideal that it’s a monist idea, this idea that there’s only one type of real scientific truth, and that’s the causal realm of empiricism and experiments and natural sciences.  And so what they do is they regard everything else as what they call metaphysics.  Now, the Austrian view is that this is not correct.  There’s a – the Austrians have a dualist view of knowledge.  We can know things a priori.  That is, we can know certain things categorically by the nature of human action, by reflection on the world, and we have certain – exactly.  Bowman says, how do they empirically prove their premise?

01:53:29

I have a quote by Hoppe.  Let me go here.  Maybe I don’t have it here.  Anyway, it’s self-refuting basically because the entire empiricist paradigm rests on certain a priori assumptions about how – the way knowledge works and things like this.  But on this slide here, slide 31, you’ll see I’m trying to trace out.  There are some kind of strange connections between legal and logical positivism.

01:53:56

They both share an antipathy for metaphysics, and what they mean by that is this.  Logical positivists say that anything that is not testable by physical experiment is metaphysical by which they mean a nonsense statement or something that’s not scientific.  And the same thing is sort of true for legal positivists because they only really trust as a law what the government says is law.  So they have to find a source of law, a decreer of law.  Anything else, like we libertarians or a natural rights-type person, they might say, well, that law that you’re in favor of or that law the government passed is unjust accordance with the natural law.

01:54:45

They relegate this concept of the natural law to the realm of metaphysics or to the realm of unscientific statements.  They only trust what they can test, and so that’s why they become empiricists, and they test every law they’re in favor of by its results or consequences or these kind of quasi-scientific goals.  Anyway, you can see the kind of similar mindset of the logical positivists and the legal positivists.

01:55:13

They both focus on physical consequences.  They both focus on empiricism.  They both focus on data.  They both relegate to obscurity or to nonsense non-testable ideas like a priori ideas for logical positivists or ideas of justice and right and wrong and norm for legal positivists.  So I think that’s the connection, and I think they reinforce each other.

01:55:43

Now, we’ve gone way beyond the end, and here’s what I will do.  I don’t want to extend my welcome and stay too far, but I will stop the positivist lecture right now on slide 31.  And I will be happy to stay for another 10 or 15 minutes and answer questions for a few minutes if anyone wants to talk, but I don’t want to impose on the students who are up at 5 or 6 in the morning and about to see stars.  So let’s talk for 5 or 10 minutes if anyone wants to, and I will stop the main lecture right here.

01:56:23

Yeah, I think everyone has probably got to go.  Okay, everyone has got to go, so let’s stop now, and I will take questions and I will finish up the remaining five lectures next time.  Thanks guys.  I enjoyed it a lot, and I appreciate you putting up with the technical problems.

01:56:42

01:57:40

Alex on limited liability.  I tend to address that in the – I honestly forget which lecture, but I think it’s actually fine, and I’ll explain why later.  I’ll repeat this later, so it doesn’t hurt to mention it now quickly.  Contractual is pretty obvious.  You can contractually limit your liability.  As far as liability for torts, I think the thing that people overlook is why should someone be liable for the torts of other people?  And in a corporation, torts are committed by employees so – and they’re always liable.  Limited liability doesn’t exempt them.

01:58:24

The question is why should other people be liable for their actions?  So I think if you want to say someone is liable for the actions of someone else, which is called vicarious liability, or in the employment context sometimes called respondeat superior, you’d have to come up with an argument for why someone is liable.  And if you will look at the literature, especially the left libertarian literature, I think they have done a terrible job of understanding the situation, the way the world works, and of coming up with an argument that will give liability to shareholders I guess is what they want.

01:59:06

You have to have a reason, and I haven’t seen a good reason for why a shareholder, as a shareholder, should be liable for the actions of employees, for torts of employees of a company he owns shares in.  Sure.  I agree, Jock, and I would – of course we’re all against the state granting this, but the question is why should the free market legal system impose liability on shareholders?  And I don’t think they should.  Now, Jock, what the state does now is they give legal personality to corporations.

01:59:51

And what happens is the state uses this as an excuse to regulate the corporation.  They say, well, a corporation couldn’t exist without our granting it legal personality, so it’s a privilege.  So in exchange for that privilege we can extract taxes, double taxation, etc.  Well, the question is do you need the state-granted personality to be a corporation?  And I believe Robert Hessen has argued persuasively that you don’t.

02:00:23

You could form a firm, which had a contractual network of distributed owners or distributed property, and it runs according to this private constitution.  And then any victim of actions of people can sue anyone who’s responsible for that, and if they want to prove that someone other than the actual tortfeasor is responsible, they have to prove that.  But of course, I think we can agree, Jock, that the state should stop incorporating – granting corporations.

02:00:59

All right, guys.  I think I better stop now.  So I enjoyed it, and I know it froze again, so we’re testing the technology here.  So I will see you guys on Wednesday at 7 p.m. London time and then again next Monday, enjoyed it.  Have a good week.

02:01:16

Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 2:01:18 — 111.0MB)

1. See Geoffrey Allan Plauche, “Aristotelian liberalism: an inquiry into the foundations of a free and flourishing society” (unpublished PhD diss., Louisiana State University,  2007). [↩]
2. For more on the Holmes metaphor, see The Non-Aggression Principle as a Limit on Action, Not on Property Rights. [↩]

Kinsella on Liberty Podcast: Episode 018.

This is lecture 1 (of 6) of my 2011 Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society.” The remaining lectures follow in subsequent podcast episodes.

Note: The material in these lectures more or less tracks the contents of my later-published book Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

Grok Shownotes: [00:00–15:00] Stephan Kinsella introduces the Mises Academy course “Libertarian Legal Theory: Property, Conflict, and Society,” emphasizing that it explores how libertarian principles apply to legal theory, distinct from conventional legal studies rooted in statist and positivist frameworks. He clarifies that the course does not require a legal background and is designed for those interested in understanding justice, rights, and law through a libertarian lens. Kinsella outlines the course structure, noting that the first lecture will cover preliminary concepts like justice, rights, duties, and the interplay between Austrian economics and libertarian reasoning, setting the stage for deeper discussions in subsequent lectures.

[15:01–1:33:05] The lecture delves into the foundations of libertarian legal theory, focusing on property rights as central to resolving conflicts over scarce resources. Kinsella discusses key libertarian concepts such as self-ownership, homesteading, and the non-aggression principle, explaining how they underpin a system of justice that prioritizes individual liberty. He explores the relationship between rights and duties, the role of scarcity in defining property, and the importance of avoiding “armchair theorizing” when applying libertarian principles to real-world legal scenarios. The session concludes with a Q&A, addressing audience questions on topics like the practical application of libertarian law and its compatibility with existing legal systems.

Video, Transcript and Slides below, as well as Grok Detailed Shownotes.

For more information, see my article Introduction to Libertarian Legal Theory. For the Mid-Term Test and Final Exam given during the course, see “Libertarian Legal Theory: Property, Conflict, and Society”: Mid-Term Test and Final Exam (Mises Academy 2011).

[Update: Lecture 5b, Q&A (KOL022b), has just been added]

This lecture’s topic is “Libertarian Basics: Rights and Law,” and discusses:

• Legal Theory and Austrian Economics
• Scarcity and Property Rights
  • Rights as property rights
• The Nature of rights
  • the Is-Ought Problem
  • Argumentation Ethics and Estoppel
  • Universalizability
• Essence of Libertarianism
  • Self-ownership
  • Homesteading
    • Lockean proviso
    • Labor ownership and mixing
  • Anarcho-libertarianism

For slides for all six lectures, plus extensive hyperlinked suggested reading material, see this Libertarian Standard post. For a listing of the syllabus and topics covered in each lecture, see this Mises Academy Course Page (archived).

For more information, see my Mises Daily article “Introduction to Libertarian Legal Theory,” and Danny Sanchez’s post Study Libertarian Legal Theory Online with Stephan Kinsella.)

All six lectures:

• KOL018 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 1: Libertarian Basics: Rights and Law” (Mises Academy, 2011)
• KOL019 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 2: Libertarian Basics: Rights and Law-Continued” (Mises Academy, 2011)
• KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)
• KOL021 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 4: Causation, Aggression, Responsibility” (Mises Academy, 2011)
• KOL022 | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5: Intellectual Property and Related” (Mises Academy, 2011)
• KOL022b | “Libertarian Legal Theory: Property, Conflict, and Society, Lecture 5b: Q&A” (Mises Academy, 2011)
• KOL023 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 6: Applications Continued; Common Libertarian Mistakes (Fraud Etc.)” (Mises Academy, 2011)

Video:

Slides:

The videos of all six lectures are also available on this playlist.

Grok Detailed Shownotes

Detailed Summary by Time Segments

Segment 1: Introduction and Course Overview

• Time Markers: [00:00–12:30]

• Description and Summary:

  • Kinsella greets the audience and introduces the course, “Libertarian Legal Theory: Property, Conflict, and Society,” delivered via Mises Academy on January 31, 2011.

  • He explains that the course applies libertarian insights to what the law should be, distinct from traditional legal theory, which is often statist and positivist.

  • No legal background is required, as the course is accessible to anyone interested in libertarian principles.

  • Kinsella outlines the six-week course structure, noting that this first lecture will spend time on preliminaries like justice, rights, and duties, with less time on these in future sessions.

  • He emphasizes the course’s focus on how libertarianism informs legal systems, using Austrian economics as a complementary framework.

Segment 2: Foundations of Libertarian Legal Theory

• Time Markers: [12:31–27:00]

• Description and Summary:

  • Kinsella discusses the core of libertarian legal theory: justice as the protection of individual rights, particularly property rights.

  • He introduces the concept of scarcity, explaining that property rights arise to resolve conflicts over scarce resources, a key insight from Austrian economics.

  • Self-ownership is highlighted as a foundational principle, where individuals own their bodies and thus have the right to control them.

  • Kinsella contrasts libertarian views with statist legal systems, which often prioritize state authority over individual liberty.

  • He stresses that libertarian law seeks to minimize conflict and promote peace through clear property assignments.

Segment 3: Rights, Duties, and Property

• Time Markers: [27:01–42:00]

• Description and Summary:

  • Kinsella explores the relationship between rights and duties, noting that rights impose corresponding obligations on others to respect them.

  • He discusses homesteading as a method of acquiring property rights by first use or transformation of unowned resources.

  • The non-aggression principle is introduced as a guide for libertarian ethics, prohibiting the initiation of force against others’ persons or property.

  • Kinsella addresses the role of contracts in libertarian theory, briefly mentioning the Rothbard-Evers title-transfer theory, to be covered in later lectures.

  • He cautions against oversimplifying libertarian principles, urging a nuanced understanding of how rights apply in complex scenarios.

Segment 4: Applying Libertarian Principles

• Time Markers: [42:01–57:00]

• Description and Summary:

  • Kinsella warns against “armchair theorizing,” where libertarians speculate on legal outcomes without grounding their reasoning in property rights principles.

  • He discusses the practical application of libertarian law, suggesting that private legal systems would likely focus on restitution rather than punishment.

  • The lecture touches on specialized courts in a libertarian society, which would handle issues like contracts, inheritance, and disputes, all based on property rights.

  • Kinsella references historical examples, like Roman law, to illustrate how libertarian principles align with certain traditional legal concepts.

  • He emphasizes humility in applying libertarian theory, acknowledging the complexity of real-world legal disputes.

Segment 5: Q&A and Closing Remarks

• Time Markers: [57:01–1:33:05]

• Description and Summary:

  • Kinsella opens the floor to audience questions, addressing topics like the feasibility of private legal systems and their compatibility with existing laws.

  • He responds to queries about the role of criminal law in a libertarian framework, suggesting that it might merge with property law in a restitution-based system.

  • Kinsella clarifies misconceptions about libertarianism, such as equating all coercion with aggression, and explains the nuanced use of terms like “coercion.”

  • He discusses the influence of Austrian economics on libertarian thought, particularly in understanding scarcity and market dynamics.

  • The session concludes with Kinsella encouraging students to review the slides and suggested readings, available on the Mises Academy course page, and to prepare for the next lecture on continuing libertarian basics.

TRANSCRIPT

Libertarian Legal Theory, Lecture 1: Libertarian Basics: Rights and Law

Stephan Kinsella

Mises Academy, Jan. 31, 2011

00:00:00

STEPHAN KINSELLA: Good morning to people that it’s morning for.  Good evening to people in Europe.  And good evening and afternoon to people in America.  So the course is called Libertarian Legal Theory: Property, Conflict, and Society.  Now, tonight I will spend a little bit more in the preliminaries than I will in the other courses.  So we might spend 15 or so minutes on some things that won’t waste as much time in next class and the subsequent classes.

00:00:33

So it’s called Libertarian Legal Theory.  It’s not really what lawyers would think of as legal theory.  It’s more how to apply libertarian insights to what the law should be, so that’s why it’s legal theory.  Now, having some legal background and knowledge can help, but you certainly don’t have to be a lawyer to understand this stuff, and in fact, being a lawyer can sometimes be a hindrance because lawyers are steeped in the statist and the positivist legal system.  This – hold on just a second.  Danny left.  Let me make sure he’s okay.

00:01:12

00:01:20

Okay, so – okay, Danny is still there.  Okay, I see.  So let me just give a little background about this course.  We picked the title “Property, Conflict, and Society” because that is what I think libertarianism all boils down to.  Now, the material in this course, to be honest, we have six lectures.  I think there’s enough material here for at least seven or eight or nine or maybe ten lectures.  So I’m going to squeeze as much in as I can.  If we have to leave some out, I have some things I can cut out and give you readings for, for later.  There’s a lot of material.  It should be a lot of fun and very interesting.

00:01:57

And these classes last for about 90 minutes.  What I did last class, the IP class I did, I spoke for about 50-60 minutes, and we took questions and answers for about 30 minutes for the rest of the class.  What I’m going to do this time, if I need to, I will speak for the entire 90 minutes if I need to, to get all the material in.  And then I can stay later for more Q&A if people want me to, and I’m also going to do office hours on Wednesdays at 7 p.m. London time.  And I may do another office hours like every other week at a later or earlier time during the day, which is better for Americans, but the 7 p.m. London time is designed to be better for non-western-hemisphere-time-zone people.

00:02:40

Okay.  I’m going to slide three now.  I’m just going to give a brief overview.  This course is not about me, but I do want you to know who your professor is in case some of you are not very familiar with me or don’t know me personally, which most of you apparently don’t, although apparently one of my friends, Jeff Barr—he’s a lawyer in Las Vegas—is signed up.  I don’t know if he’s signed in right now.

00:03:03

But I am an attorney in Houston.  I’m 45 years old, been practicing about 18-20 years, and I am from Louisiana, which is the sole civil law state in America.  The rest of the states are common law.  And I’ve been a libertarian ever since college and even earlier.  June, what’s your question?  You can repeat it here.  I’ll try to address it if it’s relevant.  I was just trying to give my background about my – the approach I have to these issues that we’re going to be talking about.

00:03:42

And as you can see from the pictures, it started with Ayn Rand.  I went to law school, and then I joined a law firm.  So that’s sort of my background.  I’m a practicing lawyer now, but I also am heavily involved with the Mises Institute and Libertarian Legal Theory.  I edit a journal, a scholarly libertarian journal, and I blog on some websites, and I write, etc.  So that’s sort of my role.  I teach, and I like to lecture and write.

00:04:09

My approach to libertarianism is heavily anchored in Austrian and anarchist libertarian theory.  The Austrianism from all three of the people you see there, which is Mises on the upper right – yes, Lauren, I did enable the whiteboard.  And Danny Sanchez assured me that the students wouldn’t interfere, so let’s see if I can hold you guys to that.  I’m going to select the laser pointer so I can see how that works.  See, here we have Mises here, so there’s Mises.  Mises is a great influence of mine.  So is Rothbard, and so is Hans-Hermann Hoppe.  So I’m going to draw on their thoughts a lot in this course, as you guys will see.

00:04:57

So actually, this is out of date.  I actually prepared this, this morning, but we have about 87 or 90 students right now from 17 countries, which is very nice.  I love having an international audience.  Oh, you couldn’t see the pointer?  I’m going to try right now.  I’m pointing right now on the Papinian picture on the lower right.  Can anyone see this?   It’s a red laser pointer.  If it doesn’t work, I’ll just disable the whiteboard for the next time.  Okay, good.

00:05:22

That might be useful sometimes.  I didn’t use that last time, but I thought I would try it this time.  Some of you might have seen the little mini ad – well, it’s not up right now.  I’ve got the laser pointer right over Papinian right now, a little red laser dot, okay?  Some of you might have seen the ad for this course, and there’s a little shadowy picture of a Romanesque-looking frieze in the background or relief, and that is this guy here named Papinian.

00:05:50

And you can go on Wikipedia to find information, but this guy, Papinian, is one of my legal and even libertarian heroes.  He had a famous incident in his life.  This guy was one of the most famous—probably the most famous—of all Roman legal experts or jurists back in the Roman Empire.  And others were Ulpian and others, and he influenced, of course, the – Justinian’s code and the foundation of all Western law because Roman law influenced common law, which we’ll learn about later, and the civil law as well.

00:06:25

Anyway, Papinian – there’s a story about Papinian.  He was like a consultant, the chief legal consultant to the state.  And there was an emperor who was – there were two co-sons of the current emperor, Caracalla and Geta, and my history is weak, so I may be wrong on the details.  But basically Caracalla murdered his brother and co-emperor, Geta, and he asked Papinian to compose a justification for this, and Papinian refused to do so.

00:06:57

He said I can’t do it.  It’s easier to commit murder than to justify it.  And I think there’s some profound truths in that statement.  Plus there’s some profound courage and heroism in what he did because he was actually killed – actually put to death with an axe in a gruesome death for refusing to cooperate, so he – a little bit like Socrates.  So Papinian was chosen as the sort of symbol for this course, and we’ll discuss some of this later when we discuss Roman law and the origins of legislation and common law.

00:07:35

I’m going to page six now.  So as a brief overview of the course, what we’re going to do – okay, good.  Well, I’m not going to rely overmuch on the laser pointer.  If it doesn’t work for too many people, I just won’t rely on it at all.  Okay, well, I’m waving it around right now next to the Mises Academy sign.  You can see Papinian’s little face smiling out at us here.

00:08:01

Okay.  So this is a brief overview of what the course will cover.  We have much more detailed information on the course page, but today and the next class, we’re going to talk about basics, libertarian rights and law.  And then we’ll talk about a lot of applications, advanced applications, contract, fraud, etc.  We’re going to talk about causation, the theory of causation, which is crucial to understanding these matters.

00:08:26

We’re going to have a whole lecture on IP, which I covered in six classes in my last lecture.  I’m going to try to distill that down, and then lots of little applications: corporations, the Constitution, common mistakes libertarians make, etc.  But the purpose of today’s course, and if you know a lot of this already, don’t get too concerned because believe me; we’re going to have a lot of material to follow this.  But I’m going to provide a sort of overall framework.  I’m circling the bottom part now – an overall framework and a conceptual vocabulary that can provide a basis for a more detailed analysis and discussion of a lot of advanced applications and topics.

00:09:12

And just as sort of a housekeeping matter, anyone here is free to email me personally any time.  My email address is right there.  It’s better to try to use the course forum, so anything I answer can be seen by everyone.  And again, let’s try not to use the whiteboard here.  And my office hours right now are planned to be at 7 p.m. London time.  I think that’s 1 p.m. central time, 2 p.m. New York time on Wednesdays.  And what I may do is every other week have a second one at an earlier or later time that’s better for people that that time doesn’t work for.  So I will let you guys know shortly about that.

00:09:52

So with these preliminaries out of the way, let’s go ahead and launch into the course.  Oh, let me mention a few more things too.  I plan to give two exams.  They will be completely multiple choice.  They’ll be weighted so that the final will have more weight than the midterm.  Don’t feel compelled to take the exam, but if you want to take it, there’s no pressure because you can’t really fail this course.  If you take the exam, both exams, you will get a certificate of completion, and actually, we’ve made a deal with Center for the Stateless Society, which I’m a member of their advisory panel.

00:10:27

And if you take this course and take the exam, it will fulfill one of their course requirements for their Stateless University course.  So you can take a look at that, and these lectures will be up later, and there’s hyperlinks in all of these notes, which you can link to.  Otherwise, you’ll get a certificate of participation.  Now, the course – I’m sorry – the test, the exams will be based on the lectures, what I’m saying during these lectures, the—what I call—suggested reading material, and the reason I call it suggested instead of required is because this is a voluntary course.  And this is for your own education, and it’s up to you what you want to read.

00:11:08

I suggest some things to get more out of a lecture or for more background, and then I have optional readings for further things you want to pursue.  But the test will cover suggested reading material, the lectures, and whatever is in these slides, which have some links that may not be on the course page or in the suggested reading.  And as I have here, you will not be tested based upon the optional reading material or on common sense, which is a joke.  I’m kind of joking.  You should have common sense being a libertarian.  I’m going to take that for granted.  It’s called judicial notice in the legal system.  I’ll take judicial notice that you guys all have common sense.

00:11:54

I’m going to slide nine.  Here, by the way, is an example of the certificate that was given out for the last course, so this is what you get when you take the exam, certificate of completion.  So in this course, I’m going to go back and forth a few times.  I’m going to try to weave different layers in here.  And remember, we’re trying to establish what we’re trying to come out of this first lecture with, which is a baseline of a starting point of concepts and terminology that we can build on for the remaining lectures.

00:12:35

So I just want to make one thing clear when we start.  This course is not about me, and it’s not an attempt to push my personal libertarian view on everyone.  Now, of course, it’s going to be tinged with that and influenced by that, but I’m going to try to describe libertarianism as it exists and what it is.  And I’ll give you my opinions on some matters, but I’m going to try to make it clear to you guys where there’s controversy, where there’s debate, where other people have different opinions, etc. so you can make your own minds up or pursue your own lines of inquiry further on.

00:13:12

Let’s take a look at that certificate before.  It’s actually pretty nice.  That’s right, Barry.  It’s completely opposed to a formal university education.  I think this Mises Academy is working out fantastic, and Danny Sanchez is doing a wonderful job helping out here.  And I hope Bob Murphy doesn’t kick me off in the middle of my lecture to retaliate.  Well, I think you can.  Of course, we’re not accredited yet, but I think you can – I expect people are already listing to these things on their CVs and their resumes.

00:13:51

So let’s stop and talk in general.  What is libertarianism about?  So the first thing to say is it’s a type of political theory.  Yeah, Colin, C4SS has a stateless u.  It’s not quite as organized or as developed as this one yet, but they are developing courses, and they fit mine in to their curriculum, which is a quite amazing thing that we’re doing here because we’re not really competing with each other for money or students.  We’re trying to spread ideas.  Sure, Barry.  I agree with you completely.

00:14:21

Anyway, so libertarianism is a type of political theory.  This is what it is.  There’s other types of course: Marxism, leftism, socialism, conservativism, theocracy, liberalism, things like this.  So this is what we are.  We’re a type of political theory.  Funny line about Koch there, Gary.  Interesting note: My wife worked for Koch Industries for a year as a fuel – as a trader about 10-15 years ago.

00:14:55

In any case, what we are concerned and what all theories to some degree are concerned with – excuse me just second.  So what we’re concerned with is justice.  Now, there’s a – what we will find as I go through all this is that, although I’m presenting a lot of these ideas, which are classical ideas, I’m presenting them generally.  They have a sort of libertarian leaning or push.  Now, that’s not my fault.  That’s the way it is, and this is why I think libertarianism is correct.

00:15:30

But in any case, there is a famous maxim of what justice is.  This was formulated – actually, I’m not sure who formulated it, but it’s in the Institutes of Justinian.  Justinian was the famous emperor of Rome who helped codify the great body of Roman law that developed over about a 1000-year reich or period.  And this is one of the crowning achievements of the civilized world is the preservation of Roman law that Justinian did in his Institutes and his digest of law.  And the statement is this: Justice is the constant and perpetual wish to render everyone his due.

Now, then they elaborate the maxims of the law are these: to live honestly, to hurt no one, and to give everyone his due.

00:16:20

So this is what we think of in general.  I’m glad the laser showed up.  Actually, my company makes lasers, so they will be happy.  What you’re due is what you’re entitled to receive, and that’s what the law is expected to provide you.  They protect your rights.  They give you what you’re due.  But this is a general statement obviously.  So the question is what are you due?  Now, this is really a higher-level idea that’s dependent upon a lower-level concept of property rights.

00:16:49

You could say that whatever your property rights are determines what you’re due.  If you have a right to it, then you’re due it, a property right to it, then you’re due it.  Okay, so what distinguishes libertarianism from other philosophies, other political philosophies is not that we’re about justice, but it’s that our particular conception of what justice is, which means our particular conception of exactly what property rights and what rights are.

00:17:16

Okay, so it works like this.  You seek justice.  This informs – this particular concept of justice informs your notion of what rights there are.  And your idea of what rights there are informs your idea of what laws there should be.  So it works in that order.  You can see at the bottom of the page down here I have that mentioned here.  So that’s why this course is about legal theory because we’re talking about what laws should exist in a society, in a just society.

00:17:47

So the idea is that what actual law is, that’s what we call positive law.  That’s the law that is actually enforced by a given system in a society whether it’s a private system or a state system.  Whatever laws are actually enforced we can call them positive laws or actual laws.  Now, they don’t always conform with our ideas of justice.  Some laws are unjust.  We might criticize a law as being a bad law.  By doing that, we have to assume that there’s a standard outside the law by which we judge the law itself, so this is the natural law or the justice idea.

00:18:30

So what we could say is that the libertarian believes that actual law or positive law should conform to natural law, that is, the law that would be consistent with the rights that we have, the natural rights or the property rights that we have.  So that’s why we ask about what justice is.  That’s why we ask about what rights are.

00:18:51

Yes, I think jurisprudence, Steven, is the sort of systematic study of the nature of law and sometimes of rights and wrongs and things like this.  And as you’ll find as we go through this course, lawyers have a lot to contribute to this because they have an innate and a deep sense, or at least the good ones do, of how the law and the legal system works.  So they have a lot of sophisticated and sort of deep and nuanced understandings of practical ways laws can address problems.  But they are often without any moorings.  They’re often economically illiterate, and they’re often without any appreciation of natural or justice ideas.

00:19:31

On the other hand, a lot of libertarians are the opposite.  They have an innate sense of justice.  They have some economic literacy or a lot, but they are not familiar with a lot of practical legal solutions that have arisen over the years.  And so you have this lack of overlap.  Now, if I had to take a side, I would tend to side with the libertarians, even though they’re more – not amateur or naïve but less sort of developed and sophisticated on legal theory.  I would take a Rothbard any day over a positive lawyer who’s good but who is a statist.

00:20:14

Someone – Amanda is asking about how do we determine what a natural law is.  That’s a little bit premature.  I’m going to get to that later in this topic, so let’s just hold off.  But I just want to say right now, in this course, I’m not going to argue strongly and at length for a particular conception of why the libertarian theory of justice is correct.  I’m going to sort of show the different theories that different libertarians have.  I will tell you what mine is, and we’ll get to that shortly.  But I don’t think it’s critical.  I actually think that we can have a big tent, and so long as you agree with certain fundamental principles, and you’re committed to honesty and fairness and justice and consistency and you have some economic literacy, then the libertarian principle will just pop out unless you’re a misanthrope, in which case you’re on the other side.

00:21:09

I’m going to switch to slide 11 now.  So let’s talk about what is the concrete sort of formulation of what we are as libertarians.  It’s a political theory.  We believe in justice.  We have a certain conception of property rights, but what is it?  Well, let’s think about what are the kind of classical ways people describe what it means to be a libertarian.  And I’m going to start sort of about the 1950s with some of these quotes because this is when we can mark the beginning of libertarianism as we’ll get to in a second on the history issue.

00:21:43

But Leonard Read, who was a famous libertarian – he founded the Foundation of Economic Education.  He had a lot of books, one of them disavowing the word libertarian and then others using it.  But he had a book called Anything That’s Peaceful, 1954.  And he said: People should be free to do anything that’s peaceful.  That’s pretty general, but I think that can sum up in a general way what libertarianism is about.

00:22:09

David Boaz in a really good book called Libertarianism: A Primer—this is a Cato book—he 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.  So this is sort of a classical libertarian formulation.  Danny, I’m not sure.  That could be from Spencer.  That could be from Spencer, Herbert Spencer.  There’s also – some of you may be familiar with Walter Block.  He’s a friend of mine.  He’s a very prolific author, one of the most prolific authors I’m aware of.  And the joke is that anyone – to be a libertarian means you’ve co-authored an article with Walter Block, so just a joke, and non-American libertarians have a sense of humor, so I can get away with that one here.

00:23:06

All right, now, if we want to get a little bit more concrete – oops, sorry – slide 11 here.  If we want to get a little bit more concrete about how to define what it means to be a libertarian, a commonly used idea is the non-aggression axiom or principle.  It’s sometimes called axiom, more often nowadays a principle.  Now, this was formulated without being called that by Ayn Rand in 1957 in Atlas Shrugged by her character, Galt in Galt’s speech when he wrote: “So long as men desire to live together, no man may initiate—do you hear me? No man may start—the use of physical force against others.” So that is sort of a nice summary version of the non-aggression principle.  Now, well, I will say that I’ve read Atlas about three times.  And the first time I read Galt’s speech, but the second two times I didn’t read it, but the rest of the book I enjoyed more.

00:24:25

Okay, now, Rothbard has a more – a better sort of, more fleshed out conception of the non-aggression principle.  I’m going to quote this.  I’ll try not to do too much quoting.  “The libertarian creed rests upon one central axiom: that no man or group of men may aggress upon the person or property of anyone else.  This may be called the non-aggression axiom.  Aggression is defined as the initiation of the use or threat of physical violence against the person or property of anyone else.  It’s synonymous with invasion.”

00:24:59

Now, we’ll get to sort of some particulars of this later, but you can see the beginnings of this definition of libertarianism as having to do with the idea that everything is permissible in life, in society, by law, that is, except for the physical use of force against other people’s property or bodies.  Now, as I mentioned Rothbard – it’s sometimes called an axiom.  Now, if you would look up these terms in Wikipedia and the philosophy dictionaries, okay, well, Mr. Civil Liberties, I’m going into that right now.  I think these terms are a little bit confusing potentially.  And in math and in logic, an axiom is like an assumed starting point.  You’re welcome.  It’s also used to refer to a self-evident or universal truth, like A and B implies that A is true, or it could be an assumed starting point, like an arbitrary assumed starting point like Euclidean geometry versus others.

00:26:02

Now, Ayn Rand, who I believe strongly influenced Murray Rothbard, used the idea of axiom – excuse me a second.  I’m going to close the door.  Excuse me.  Okay, so Rand used axiom to mean something that was so self-evidently true that you actually had to presuppose it in order to deny it.  So in other words, it was a truth that was so basic that you had to commit self-contradiction to deny it.

00:26:47

Now, although Ayn Rand vehemently criticized Kantianism, which she viewed as an alternative philosophical system to her more Aristotelian vie, in a way the Randian idea of axioms is similar to the idea by Mises and Kant of concepts that are, what they call, a priori, that are undeniably true.  So because of these confusions, I think we should not say axiom because people mean many things by axioms.

00:27:25

Well, June, I really don’t have time to go into this a lot.  I think there’s a lot of reasons why Rand disliked Kant, but I actually agree.  Kant was a great liberal thinker, and if you sort of equate the terminologies between Misesian, Randian – I’m sorry – Misesian and Kantian systems and Randian, there’s a lot of similarities to their methodologies and their approaches to both liberalism and epistemology.  In any case, my opinion is the better term to use is the non-aggression principle, and that’s what I’ll use throughout this course, NAP, non-aggression principle.  And that seems to be the more widely used term nowadays.  Axiom is sort of going out of favor, which is, I think, a good thing.

00:28:10

Now, let’s talk a little bit about the nature of rights and law.  I’m going to circle back to some of these other issues in a minute, but we need to weave these things in together a little bit to build on some of these concepts.  I’ve already mentioned the link between rights and law is you can think of a right as a legally enforceable claim to some thing, object, or action, something you can enforce, you have the right to enforce, something that’s legitimately enforceable.  So the law you can think of as sort of the systematic enforcement of or embodiment of rights, so they’re related to each other.  Justice – your conception of justice determines your conception of rights, which determines your conception of law.

00:28:59

Now, some people are more empirical minded, and they go the other way around.  They just have an intuitive sense or a practical or pragmatic sense of what a law should be.  But then you can think about these laws, and you can think what rights are sort of presupposed by this law, or what conception of justice or right and wrong is presupposed by this idea of rights.  So they all go together in that way, but the fundamental thing is that laws are meant to enforce a conception of rights, and rights are enforceable things.  Okay, they’re not merely morals or oughts and shoulds and morals, which I’ll get to in just a second.

00:29:41

Now, another important thing to realize is that in any system, rights and duties or correlatives.  What that means is they’re the flipside of each other.  Every time you have a right, it implies a certain obligation or duty, and conversely, if you have a legally enforceable obligation or duty, it implies that there’s a right.  So if someone claims that there is an obligation to help your neighbor out if they’re starving and it’s a legally enforceable obligation, well, that means equivalently that your neighbor has a legally enforceable right against you or a claim against you that you do it.

00:30:23

And conversely, if someone has a right to education, free education, that means society at large or someone has the obligation to provide them with that education.  This is why granting positive rights willy nilly, which is done in a widespread way in today’s society, is not free.  You can’t just say, well, we have rights to property, and we have rights to our bodies, but we also have rights to healthcare and education and a job because what that means is everyone else in society is partially enslaved or obligated and forced by the government to provide these rights.  So nothing comes for free.  Is the video okay?  Can everyone see me okay?  Video and audio okay?

00:31:17

Okay.  So let’s look at the definition of what rights are by a couple of key thinkers.  One is Ayn Rand.  She says: “Individual rights are the means of subordinating society to moral law.  The right to property is a right to action like all others.  It is not a right to an object but the right to the action and the consequences of producing or earning that object.  It’s the right to gain, keep, or use and dispose of material values.”  Now, I’m going to discuss later what I think are some problems with Rand’s formulation.

00:32:07

Quick setting change on the video.  Hold on a second, guys.  Okay, I’ve just modified the video so it’s less choppy.  It may be a little bit less quality, resolution, but it shouldn’t be as choppy.  Give me just a second.

00:32:35

Okay, so the other problem with Rand’s definition is it has a sort of non-Austrian confuse conception of value.  You see here she’s talking about values as if they’re things or objects or at least something that exists in some objective way like inside an object or something like that.  I think that’s a little bit of a problem.  It leads her into error with regard to intellectual property and other things as we’ll see later.  One of the best definitions of rights I believe is by Father Sadowsky.  He was a – I think a Jesuit priest.  Murray Rothbard really revered this guy.  He says: “When we say that one has the right to do certain things, we mean this and only this, that it would be immoral for another person, alone or in combination, to stop him from doing this by the use of physical force or the threat thereof.  We do not mean that any use a man makes of his property within the limits set forth is necessarily a moral use.”

00:33:36

Now, what he’s emphasizing here is something that may be obvious to a lot of you and to most libertarians, but which is apparently not obvious to most non-libertarians, especially conservatives who have trouble distinguishing morals from rights.  So, for example, I remember I asked my grandma one time if she thought drugs should be illegal.  And she said yes.  I don’t think people should do drugs.  So they conflate these things, and as we’ll discuss later, I think part of the reason for that is the American – not just the American but just the sensibility of the modern man has been corrupted by the increasing dominance of the state legal apparatus over all matters.

00:34:32

In other words, the state has come to control so many aspects of our life, and legislation has become the chief means of making law instead of judge-made law that we slowly come to accept the notion that law is whatever the legislator decrees.  And we’ve come to see special interest groups fighting for control of the state to get one law passed or repealed for their own interests or the interests of their constituents.  So people start thinking of, if you want something done in society, try to get a law passed to get it done.

00:35:10

So this sort of blurs the distinction between morals and rights.  Libertarians tend to have a much sharper distinction from that.  They recognize that just because something is immoral like animal cruelty or being disrespectful to your grandmother, lots of things are immoral.  And most people would not argue that they’re immoral, but libertarians are clear that it’s only prohibitable by the force of law if it is not just immoral but if it actually violates someone’s rights.  It has to go to another level.

00:35:50

Now, this leads to another debate in libertarianism, which I will just touch on here.  It is commonly said – some of you may have heard this said before by libertarians that correctly recognize that there’s a distinction between morals and law or morals and rights.  We recognize that just become something is immoral does not mean that you can outlaw it.  Okay, we think it has to rise to a higher threshold or a higher level, but this leads some libertarians to say that rights are a subset of morals.

00:36:27

So, in other words, they picture this is morals, and there’s a little part of it that’s the subset, which is rights.  Okay, so they say, well, by that thinking, everything that’s a rights violation is necessarily immoral, but not everything that’s immoral is necessarily a rights violation.  Now, that’s a topic that – I mean I would say it’s debated in libertarianism, but it’s not always debated because people don’t really appreciate that this is not uncontroversial.  I’m sorry – that it’s not controversial.  I think it’s actually controversial because at least from the domain of a libertarian thinker, we’re talking about what the rights should be, what should be legally enforceable.

00:37:10

I’m not sure.  This is my personal opinion.  I’m not convinced that it has been established that everything that’s a rights violation is necessarily immoral.  The reason I say that is because you can imagine some situations where – in your life where you’re faced with a choice.  You might choose consciously and explicitly to violate a right for something that you value higher.  Now, to my mind, all that means is you still couldn’t deny that it’s a rights violation.  You couldn’t deny the right of the victim to use force to defend his right or whatever.

00:37:51

But in some cases, I’m not sure.  I think that’s the more the domain of ethics of ethical philosophy, and I don’t know if I’m enough of an expert on that to say that.  I’m not sure if duress would because a lot of times these duress cases might be an example where it’s actually not a rights violation either, but it could be in some cases.

00:38:14

But my point is I view morals and rights as intersecting sets.  Morals intersect rights because clearly most rights violations or many rights violations are immoral, and they’re rights violations.  But whether every rights violation is immoral I don’t know, but what is the libertarian view is that not everything that’s immoral is a rights violation.  So that is the key thing that is different about libertarianism than other political theories.

00:38:47

Okay.  I’m going to go to slide 15.  Now, let me go briefly into some of the background of what I’m going to cover in this course.  Let me ask here.  Yeah, I know I could have drawn it, Danny, but I’m already behind on my schedule.  Let me ask here on the chatroom.  How many people here have read more than one or two of the non-basic works of Austrian economics?  I’m trying to ask how many people are familiar with Austrian economics to some non-trivial degree. So just say yes if you’re somewhat familiar with Austrian economics and no if you’re not very familiar with Austrian economics.

00:39:34

Okay, this is good.  Looks like most people are, which is great.  I’ve come to the view over the years that, to have a really well-developed libertarian view, you really need to be not only economically literate, but you need to be steeped in at least the basics of Austrian economics.  First, let me just give a little bit of a talk on why I think sound economics in general, not just Austrian, but sound economics, and I say this because, for example, one of the key books that influenced me 25 or so years ago was Milton Friedman’s Capitalism and Freedom, which he’s not an Austrian and he’s got a lot of flaws in my view in some of his economic work and even some of his libertarian work.

00:40:24

But that basic stuff is just great because it just takes common sense economics, sort of on the Hazlitt level of Economics in One Lesson level, and it’s just great.  So I think sound economics, at least in a basic sense—supply and demand, that kind of stuff—Bastiat level, Hazlitt level, even Milton Friedman level is critical to being good at political and legal reasoning.  For example, I mentioned earlier Rand sort of had the idea – now, Rand actually admired Mises, so I’m a little surprised she got this one so confusing.  But she said that rights are about creating and owning values as if they’re existing things.

00:41:05

But the Austrian economic view is that of subjective value means there is no such thing as intrinsic values.  Values don’t exist in things as substances.  And the other thing is Rand sort of had inconsistencies in her thoughts.  Yes, Karl, you’re right, and I think Rand was a little bit confused on this, but she was smart enough to recommend Mises, so I give her credit for that.  Anyway, Rand in another writing said that the power to rearrange things in the world is the only creative power we really have.  She even admitted that creation really doesn’t mean we can metaphysically bring something new into existence.  All we can do is arrange things in different ways.

00:41:50

So this sort of goes against her idea that we have property rights in values that we create because what we do is we rearrange things that we own to make them more valuable to us, but valuableness is a relationship between the person and the thing.  Okay, so in my view, if she would have had a better anchor in Austrian economics, it would have probably blunted or prevented her confusion in this regard, which led to her endorsement of intellectual property and defamation or reputation rights, which we’ll talk about in lecture five in further detail.

00:42:31

And, of course, poor economic theory informs a very – a large degree of contemporary legal reasoning such as antitrust law, tort law, most legislation, and the entire utilitarian field of what’s called law and economics.  It’s all just based upon this terrible economics, which is not even compatible with, say, Milton Friedman-style economics.  The entire law and economics discipline is utilitarian.  It’s based upon the idea that we should make – we should decide what laws are going to govern society based upon what maximizes wealth.

00:43:07

Okay.  Now, you can take a look at this article I’ve hyperlinked here.  It’s by Hoppe.  It’s a really good article, and there’s a section in it called “Chicago Diversions” [in “The Ethics and Economics of Private Property,” in The Great Fiction] where he criticizes one of the key law and economics types called Ronald Coase.  And Hoppe points out that if you use this sort of law and economics, wealth maximization, Coasian idea to decide who owns what, then basically property rights are never certain, and they’re meaningless because courts could always take a first look at the case and reassign property rights to maximize things based upon their sort of – their own scales.  It’s insane.  I mean I was in law school in the ‘90s, and we were just steeped in this stuff.  This is how tort law is based upon.  It’s based upon this mentality that we should design the laws in society to maximize wealth.

00:44:07

Now, of course, if you’re an Austrian, you know that you can’t maximize wealth in the sense they mean because it’s not a quantity.  Wealth is not a quantity.  It’s subjective.  It’s not interpersonally comparable.  That means you can’t compare it from one person to the other.  By the way, if I’m going too fast or too slow or too basic or too advanced, especially if I’m going too fast or passing people by, feel free to post a question here now or later and slow me down and tell me I need to elaborate more because I’m assuming certain – I’m assuming people are keeping up and that you have certain background information.

00:44:43

Okay, so I’m just trying to go through examples of why I think economics, and in particular, Austrianism is important for sound legal and libertarian theorizing.  And I’ll just summarize here quickly, and I go into this in my Against Intellectual Property paper.  Here are some of the key problems with utilitarianism.  Number one, ethical, and I start with this because this is my primary focus.  It always has been as a libertarian.  For example, and I learned this from Rand and even Alan Greenspan writing in Ayn Rand’s Capitalism: The Unknown Ideal book.

00:45:28

The reason I’m against antitrust law is because people have a right to collude and set prices if they want to because, as long as they’re not aggressing, that is, initiating force against other people, they have a right to.  All these other arguments to me are – the economic arguments, the practical arguments, they’re secondary.  Sure, I agree that antitrust collusion is problematic and it’s difficult to – cartels are hard to enforce.  Predatory price cutting is hard to make succeed.  Monopolies are hard to maintain.  Sure.  I agree with all that.  But my primary opposition to antitrust law is that it’s immoral, and it violates the rights of people that own property.

00:46:13

I frankly don’t care if two large companies collude and set prices.  In my point of view, they have the right to.  This is the libertarian view.  So this is why is start here with the ethical point of view.  So I’m starting with what I think is the ethical problem with utilitarianism.  The ethical problem is that they assume that you can redistribute wealth in society to enhance overall utility of people.  But by that reasoning, you could – for example, you could justify a policy, which we pretty much have with aggressive taxation.  You could justify a policy of taking, let’s say, half of the wealth of the richest 1% of society and redistributing it to the poorest 10%.

00:47:04

Okay, it’s hard to argue on just common-sense terms that that is not some kind of intuitive gain for these poor people that is not felt as much by the rich.  If you’re the richest 1%, you’re billionaires.  You lose half your income.  You’re still a billionaire, yet these poor people are made immeasurably better off because now their circumstances are different.  But the point is it’s still stealing.  It just doesn’t follow that just because this happens it justifies stealing money from Bill Gates or whoever the rich people are. ¹ And the reason is we have to avoid being snookered into this mainstream conception, this technocratic conception, bureaucratic, legislative, central-planning mentality, welfare-state mentality idea of the purpose of law and the state.  We can’t think that the purpose is to come in and tinker and adjust things to maximize something.

00:48:12

The purpose of law is justice, to give everyone his due.  And that means protecting their property rights, whatever they are.  So you may have a different conception of property rights than me, but let’s talk about what property rights are, and then let’s talking about enforcing those with the law.  So in other words, this whole idea of utilitarianism is based upon the idea that the law ought to be tweaking things and being managed by the government to just maximize factors that we like.

00:48:43

Second of all, there’s methodological problems with utilitarianism.  That is the Austrian perspective.  To have utilitarianism, you have to say, well, we pass a policy.  It does harm some people, sure.  And then we add up the harm to those people harmed, and then we add up the benefit to the people benefitted, and we do a net subtraction.  And if there’s a net positive, then we do the policy because it’s the – and this is actually the idea, by the way, behind another utilitarian, Richard Epstein, who is a quasi-libertarian who argues in his brilliant but flawed book called Takings.  It’s a book about eminent domain.  It’s brilliant.  But he argues that certain government policies can increase the size of the pie.

00:49:29

And so then, even if someone is harmed a little bit by their slice being smaller, they have a smaller slice of a larger pie, something like that.  The problem is all this assumes that values are cardinal.  That is, they’re numbers.  June, I think what you’re talking about is consequentialism, which is a little bit different than utilitarianism, which I’m going to turn to in just a second, okay?  There’s nothing wrong with being focused on the consequences, but utilitarianism talks about adding and subtracting units of value.  And the problem there is you can’t do it from person to person.  You can’t even do it from time to time for one person.

00:50:13

And you can’t do it at all because it’s not a number.  It’s ordinal, not cardinal.  You guys may have heard this who know Austrian economics.  But the Austrian idea of value is that values are only ordinal, that is, orders: first, second, third, fourth.  You express your first or highest preference by acting to achieve it, which, by the way, shows that Rand’s methodology was similar to the Austrian because her concept of value is something that you act to gain or keep, act.  So she had this notion of demonstrative preference built into her ideas.  She might have got that from Mises because Mises had that built into his Austrian economics.

00:50:56

But anyway, that’s another problem with utilitarianism.  And one more: empirical.  Even if we forget the ethical problems, even if we forget the methodological problems, still who’s the burden of proof on?  At the very least – yes, Patrick.  David Friedman is also I think utilitarian, which I discuss later, although I’m not sure Milton was.  He was more of a consequentialist, but I’m not sure he was utilitarian.  Anyway, it doesn’t matter.  We’re talking about what libertarianism means and where we should go with it.  I’m not too concerned about pedigree and history, although I’m mentioning it here because it’s interesting and helps flesh these things out.

00:51:40

But the final thing is empirical, and we will discuss this in more detail in the IP lecture number five.  Yes, Danny.  I know you’re right.  I agree with you.  Mises called himself utilitarian.  I think he was more of a consequentialist in that respect.  So – but the point is, those who are utilitarians and say that – intellectual property is a great example of this.  They will say that – does everyone have video and sound right now?  Matt had a problem just now with the video and sound.  Okay.  All right, good.

00:52:25

So people will say, well, if we have patent law, for example, and copyright law, we get more innovation and creativity out of it, and even though there’s a cost to society, we’re better off.  So the implicit assumption is there that there is a net gain in terms of, I don’t know, dollars or inventions or something tangible, something measurable, something real, some quantity or some phenomena.  But they just say this, and they never prove it.  In this regard, it’s sort of like the social contract theory, which you hear a lot of leftists argue for.

00:53:01

They’ll say that, hypothetically, there’s a contract, which we would all agree to, and therefore, the state is justified, but we never agreed to it.  There’s never any contract that we really ever agreed to, so it’s the same thing here with respect to this.  The evidence is not in their favor.  They never try to gather it.  All the sort of neutral scientists out there that try to gather it pretty much come up with studies that go against the advocates of intellectual property.  And to me, this shows a secondary problem, which I call the sincerity or the hypocrisy problem.  That is this.  If your goal is really utilitarianism, then, number one, you think you would try to do a study or find a study, or if a study came out against you, you might reevaluate your position.

00:53:47

But what we find is that when evidence is produced, that the original wealth-maximization, utilitarian goal of some of these policies has been shown to be wrong, then the advocates of the policies almost never change their tune.  In fact, they just turn around and – they just change their line of argument, and they find a new argument for the policy or the law.  That’s why all these state agencies like the Tennessee Valley Authority or the Rural Electrification Administration in America, which are 100 years old by now and which have long since served their original goal still exist.

00:54:28

And good examples of this is Charles Murray’s book, Losing Ground, which showed – I think it was in the 80s.  It was a devastating attack on the effectiveness of the American welfare state, which was just ignored and pilloried by leftists in favor of the welfare state.  And Thomas Sowell I think has an interesting theory about this.  He’s a quasi-Austrian.  He’s got a book with a great subtitle, The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy.  And I think he’s right.  I think that is the motivation for a lot of these people.  They want to self-congratulate themselves instead of actually caring about the alleged beneficiaries of the policies they – and the programs they claim to favor.  So I think there’s a sincerity and a hypocrisy problem born out here.

00:55:19

Let me go on to slide 19.  Now, I’ve talked about how it’s important to have good economics for legal reasoning, but I think the converse is true as well.  You need to have a bit of sophistication about legal theories and some coherence in your theories to have good economic reasoning too.  And the reason is economic theorizing presupposes many types of property rights and legal institutions and practices and regimes.  For example, economists talk about contracts.  They assume that there’s such a thing as contracting and that they’re legally binding.  But why are they binding?

00:56:00

And we’ll discuss this in another lecture later on.  They talk about sale of service or labor, and there are some confusions there that can be cleared up by a clear, libertarian-based understanding of legal theory, which we’ll talk about in lecture three.  They talk about loans, but why are loans enforceable?  And of course, there’s intellectual property and related things like goodwill and know-how, which are assumed by many economists.

00:56:30

Money, of course, is a huge role in economics, and that has legal ramifications and presumptions and implications.  For example, there are many laws that say money is legal tender.  What does legal tender even mean?  Does it make any sense?  Is it justified by libertarian theory?  Do economists even understand this?  Not from what I’ve seen.  There’s a very bizarre doctrine, which some lawyers will have heard of called negotiability.  That’s the ability to write a check or a promissory note and have it be enforced even though there’s effects in the chain of title between the original person who creates it and the final recipient, which, to my mind, is not unproblematic at all.  It’s potentially problematic by libertarian principles, and yet, things like this are assumed by economists.

00:57:21

Also fraud—fraud is just thrown around all the time, and I think it also plays into the libertarian fractional reserve debate.  Now, don’t worry about these details right now, but my point is these are just examples of why sound libertarian and legal theorizing is also important to having a good grasp of economics.  So they reinforce and they depend upon each other, but they’re not the same thing.

00:57:47

Okay, now, we’re going to step back and we’re going to go back to libertarianism.  Let’s talk about the origin and nature of libertarianism, and by libertarianism, I mean its modern conception in the sense that most of us here would say that we’re parts of.  By the way, let me just make a psych.  I see some of the comments here in the chat and the spine.  Talk as much as you want.  I will stop on occasion if I see a question that is timely for what I’m talking about.  I can’t do that every time, especially if it’s only a tangential topic.  So if I don’t answer your question and you want it answered or talked about or discussed and I don’t do it during the class, feel free to bring it up at the Q&A session at the end or in the office hours later.

00:58:42

Okay, so I’m going to talk about the origin and nature of libertarianism now.  So this is what Rothbard says in For a New Liberty, which I highly recommend if you guys haven’t read it, for whoever hasn’t read it.  The libertarian creed emerged from the classical liberal movements of the 17^th and 18^th centuries in the western world, specifically from the English revolution in the 17^th century.  So we sort of think of the libertarianism as coming out of the enlightenment, 17^th/18^th centuries in England.  It ushered in the Industrial Revolution.  It was a revolution against the old order, the ancient regime.  It involved imposing more limits on state power like separation of church and state and separation of church and press.  I’m sorry – separation of the state and press.

00:59:32

Now, some of the earlier theoreticians of this libertarian classical liberalism were the English levelers during the English Revolution and John Locke, the philosopher in the late 17^th century.  Now, Locke set forth the natural rights of each individual to his person and property, and his view was the purpose of government was to strictly limit it to defending these rights.  So you can see germs of the libertarian – radical modern libertarian idea there.

01:00:08

Now, this led to the American founding, and the founders were inspired by Locke and the other English philosophers, and then our Declaration of Independence in 1776.  Now, Rothbard and others have a view of America as being sort of almost a proto libertarian experiment.  Of course, this is exaggerated or expressed in Rand a lot.  But I want you to keep in mind, and we’ll cover this later if I have time, in the introduction to Rothbard’s Ethics of Liberty, Hoppe, who was his greatest student, sounded a note of caution to the sort of – not gullible but to the perhaps a bit too un-critical praise of America and the Constitution and democracy itself as sort of earlier progenitors of libertarianism and progress itself.

01:01:17

So as Hoppe wrote: Although aware of the economic and ethical deficiencies of democracy, which is what the American Revolution ushered in, both Mises and Rothbard have a soft spot for democracy intended to view the transition from monarchy to democracy as progress.  Now, Hoppe is an anarchist, and to my mind, he’s the greatest libertarian theoretician in the world.  And he’s often accused of being a monarchist, but he’s not.  Hoppe just argues convincingly to my mind that there are several systematic aspects of democracy that make it inferior in many, if not most, ways to monarchy.

01:02:03

So in other words, the move from monarchy to democracy was not unalloyed progress.  It might have been progress in some ways, but it wasn’t unalloyed progress.  It’s taken nowadays as progress but not good enough progress by libertarian radicals, but Hoppe would say it was actually retrogression in some ways, and I agree.  Of course it was retrogression in many ways as Hoppe points out, and also this worship and this reverence for America and the Constitution as a proto libertarian paradise is just completely overblown.  The Constitution and the American Revolution arguably centralized and expanded state power under the cover of the Constitution and democracy.

01:02:50

Patti: Well, are we not supposed to be a republic?  Well, I think we were a democracy from the beginning.  I mean there was the right to vote built into the Constitution.  It was restricted to white landholders, sure, but it was a democracy.  It was a limited democracy, but of course it was a democracy from the beginning.  I mean I think we had a democracy even under the Articles, but the Articles were probably superior to the Constitution in almost every way.

01:03:23

So let’s talk a little bit more about the origins of modern libertarianism.  By the way, it’s 9.  We’ve been going for one hour now.  I think what I would like to do unless anyone objects.  We’re on slide 22 of 50.  I wanted to get to about 40 today, and I think we can do that in the remaining 30 minutes if I keep talking.  So what I would like to do is lecture until 9:30, and I’d be happy to stay a little bit later and take questions, but not for too long because some people have to leave at 9:30 because it’s getting really early or late for them.

01:03:55

So what I would like to do is lecture until 9:30, take questions for 10 or 15 minutes, and then we can have further questions on Wednesday in the Q&A session, or you can email them to me, and I can address them in the forum.  But I’d like to cover a lot of this material.  Aparicio, I totally understand, and you’re a trooper for getting up this early.  So probably I’m not the only one who needs a bathroom break right now.  Why don’t we take a five-minute break?  It’s 9:07 my time, so at 12 past the hour let’s come back and try to finish up as quickly as I can without skipping over too much.  So I’ll be back shortly at 12 past the hour.

01:04:39

[break]

01:08:42

Hey, I’m back.  I’m going to wait another minute for people to get back here, but if anyone has any kind of off-topic questions or comments I’d be happy to address anything here.  Also, any feedback on the course is appreciated like if you think there’s too much, too little reading material, just let me know.  It was a good deal for this course.  It wasn’t a lot of volume.  It was just a lot of smallish pieces or sections.  Okay, well, it’s past the time I said.  So someone asked – I may have missed some questions, and I’m sorry if I did.  Feel free to repeat them later or send them to Danny or put it in the forum, and we can talk about them later.

01:10:07

I just talked to Danny, by the way, and if I need to go past 9:30 my time, which is 17 minutes from now, on the lecture, I will, maybe up to 15 minutes more because people can catch this on the recording later, but I want to cover as much as I can.  The rape example was just the typical example given that, imagine some guy who just got out of jail, and he’s really desperate for sex, and he finds some prostitute who gets paid for sex.

01:10:45

And he can’t afford to pay her, so he rapes her.  I mean, arguably, he doesn’t do a lot of damage to her because it’s just her job, so he’s stealing her – he’s robbing her of $20 of service.  But he gets immense gratification out of it.  Now, it’s hard to see why that kind of action is not permissible under utilitarianism, and you can think of tons of horrible examples.  So that was part of the utilitarian – the ethical case against utilitarianism, right, right.  And so libertarians were against this on principle because it violates her rights, and it’s wrong.

01:11:25

Okay, so let’s go back to the origins of libertarianism.  By the way, a lot of this may seem basic, and I hope it’s not too basic, but it is important to establish a framework at least for what I’m communicating to you even if you don’t agree.  We don’t need to finish all 53.  I have some extra slides in here that go into next class actually.  I had planned to stop early, like around 40, and it’s okay if we stop a little early, so don’t worry about it, and hopefully we’ll go faster.

01:11:54

So origins of libertarianism.  So America was founded per the libertarian movement according to some people.  We had the Civil War.  We had centralized government because of Abraham Lincoln.  America intervenes in World War II.  This turns into a war of all against all instead of a regular European civil war, which would normally have been settled by some kind of agreement or truce.

01:12:24

And by the way, Hoppe elaborates on this in his introduction to his democracy book.  Governments caused the Great Depression.  This all leads to World War II partly because of the Treaty of Versailles in World War I caused by American’s intervention, Roosevelt, the Holocaust, the Cold War and so on.  Now, come the modern age.  In the ‘50s, people with what we call classical liberal beliefs, the sort of Jeffersonians, the somewhat limited-government types, started using the word libertarian to describes themselves.

01:13:03

There is an article in 1955 in The Freeman, which was the journal of the Foundation for Economic Education, one of the earliest and most important and still existing free-market institutions here in the US founded by Leonard Read, who I mentioned earlier.  And this article “Who Is A Libertarian?”  This was sort of one of the earliest marks I found which systematized and advocated the use of this word, libertarian, to describe these more radical type of classical liberals.  So you can see, starting in the ‘50s, ‘60s is when libertarianism in the modern form started arising, so we really have a pretty modern and a young movement.  I mean it’s 2011.  It’s, what, 60 years old really.

01:13:48

Sure, it goes back longer in certain ways, but the modern libertarian movement really took flower just in the last half a century.  The Libertarian Party was founded in 1971 in the US.  Now, Ayn Rand’s philosophy of objectivism, the sort of political wing of it, what she calls capitalism, is basically libertarian.  I mean she spearheaded this in The Fountainhead in 1943 and most fully in Atlas Shrugged in ’57, so again, the ‘50s is when this started happening.

01:14:21

Now, if you recall, in my view, how important economics, especially Austrian economics, is to sound libertarian theorizing, I would say we can date libertarianism from the publication of Rothbard’s For A New Liberty in 1973.  So it’s, what, 40-something years old because this was the first systematic integration of radical—which means anarchist—and modern libertarian principles, not just conservative and traditionalist with an Austrian sensibility.  That’s why I would say this is when we really came to flower, and that’s why Rothbard is really the father of libertarianism.

01:15:08

Now, what types of libertarianism are there?  You all know this.  I’m not going to belabor this.  I mean you could say classical liberals, sometimes called the night watchman state.  They advocate the night watchman state.  But we’re all founded, we’re all centered, around the non-aggression principle and property rights of some type.  So some people say the American founders did it.  They were proto libertarian, but I would say the two main types of libertarian are minarchist and anarchist.

01:15:39

Now – and I have a note here.  I mean every time I write the word minarchist, the spellchecker wants to change it to monarchist, so it’s obviously not that well-known of a word.  Now, I’d say Ayn Rand, objectivist, Randians are minarchist, and most utilitarians and consequentialists that I know of, at least most utilitarians, tend to be minarchists.  I mean Mises was an example.  Yeah, I think Konkin did coin the term.  I think you’re right.  Aparicio, I just can’t go into the origin of the term right here.  There’s a lot of stuff on that, but maybe later we can talk about it.

01:16:15

Now, sometimes we’re called – anarchist libertarians are called anarcho-capitalists to distinguish us from syndicalists and socialists and non-libertarian anarchists.  But I tend to prefer the term anarcho-libertarian over anarcho-capitalist because of problems with the word capitalist, which are debated hotly in libertarian circles, which leads us to the left libertarians, most of which tend to be pretty good, solid anarchist libertarians.  C4SS.org, which I’m a member of, Roderick Long, a friend of mine who is an Austrian, somewhat left libertarian, Sheldon Richman who’s great who’s affiliated with FEE and the editor of The Freeman, and the mutualists and Kevin Carson.

01:17:03

Now, my personal view is I’m not sure exactly how libertarian the mutualists are because they have strange views on homesteading and on the Marxian labor theory of value, which I think pulled them a little bit away from us.  But they tend to be pretty anti-state, and that makes them strong allies in my view at least.  Thank you, Jock.  I’d love to see that.

01:17:31

Okay, now most of you might have heard of this, the Nolan Chart.  This is, I think, fashioned by Dave Nolan, one of the founders of the Libertarian Party if I’m not mistaken.  So basically it tried to take the traditional left-right spectrum and turn it on its head, and so as you can see from this chart, the left is here, and if you go across, here’s the right.  But libertarians don’t really fit on this.  So he divided it into two axes: personal freedoms and economic freedoms.

01:18:00

So he has a series of questions, and you can debate which questions are the most representative of our libertarian views, but the point is if you believe in a lot of personal freedom and a lot of economic freedom, you’re a libertarian.  You’re up here.  You’re sort of orthogonal or at the right angle to the left-right spectrum, and a statist or utilitarian believes in very little of both.

01:18:23

Now, my personal view is this is a little bit of an exaggeration to say that the left believes in a lot of personal freedom and the right believes in a lot of economic freedom.  I actually think they’re both around here in the statist corner.  Liberals don’t believe in very much personal freedom.  They believe in abortion, big deal.  That’s about it.  Are they’re in favor of drug legalization?  No.  And conservatives say they’re in favor of economic freedom, but they support wars that require taxes, and they support putting people in jail for various non-violent crimes, so they’re both totalitarians in a way.

01:19:03

June, we’re going to talk about gay marriage later.  I do have some thoughts on that.  There was an interesting chart on the C4SS site by Tom Knapp, another friend of mine.  So he views it as a bell curve view.  I’m going to change the page right now, a bigger version.  I don’t know if you guys can see this.  It’s as big as I could get it here, but basically, as you can see, the vertical axis is the percentage of force advocated, and then the left-right is the left-right spectrum.  So he shows that, if you look at the right and left sides like people like – now, I don’t completely agree with them, but basically showing that the left liberals like left libertarians like Bakunin and these guys and Carson, and the right—Ron Paul and Rothbard and Murphy.  They all sort of come together because they believe in a smaller amount of force.

01:19:55

So I’ve actually told him I thought he should take this chart and wrap it around a cylinder so that these endpoints meet.  And I might make adjustments personally on some of these names and some of the positions, but it’s a pretty good chart.  Like I think Krugman and Locke are way too close together on the left side, and I’m not even sure Locke should be on the left side.  But anyway, it’s an interesting way to look at it.  The problem with this whole approach is that the left-right spectrum is broken, and I think the left libertarians are wrong in saying that we should be left because we’re neither right nor left, as Rothbard argues.  Libertarians reject the entire left-right spectrum, and I view leftists and rightists as both just different types of socialists or statists.

01:20:42

Okay, I’m going to go here.  Now, we talked about types of libertarianism.  Let’s talk about the justifications for it.  I’ll go back real quickly.  That chart, by the way – I have a link there.  If you click on Tom Knapp’s name in the slides, it will take you to the C4SS post, which has this chart.  It is nice.  I agree it’s nice.  Now, there are several approaches to libertarianism.  I’m going to try to briefly go over them here, and I think I might get behind.  I’m not going to spend too much time, and I might skip over them because, number one, I have a lot of articles you can read for more background on this.  And number two, it’s not really critical to the course as I’ll discuss around slide 40 or whenever we get there.

01:21:29

But we have different approaches to libertarianism.  We all come from different angles.  I agree, Matt.  I agree.  Some of their particular datapoints are problematic.  June, I agree with you too about the Constitution, but that chart was really not about that, but you might have been referring to another comment.  Anyway, back on justifications for libertarianism.  We have natural rights or natural law or deontological types.

01:21:57

We have some people that are libertarian because they’re religious.  We have consequentialists.  We have constitutionalists like Ron Paul.  We have utilitarians, and then we have something that’s sort of maybe a hybrid, rationalist, and hypotheticalist I’m calling them, which is more like me and Hans-Hermann Hoppe, for example, and Rothbard in his later years, somewhat of a hybrid.

01:22:18

So natural rights – they basically say that by our human nature there are certain things that we have a right to.  We don’t need to go much further than that.  That’s the basic idea.  This is Ayn Rand, John Locke, etc.  Even Murray Rothbard in the Ethics of Liberty has sort of a neo-natural law approach.  Now, I don’t like to use the word human rights, and you’ll notice that libertarians don’t like to use the term human rights, and the reason is that’s a term that’s used more by the left, especially with these United Nations type, internationalists, one world government socialist types because human rights has a socialistic tinge.

01:23:00

If you just look at the United Nations, just go to Wikipedia.  Search for the UN declarations on human rights.  You’ll see there all kinds of welfare rights in there: the right to a job, the right to dignity, the right to XYZ.  So they’re sort of human rights sort of as a signal that you have a leftist conception of rights, which has welfare rights built into it.  Okay, I’m going to – so that’s natural rights.

01:23:30

I agree, Cheryl.  It does have some good parts to it, but it adds on these modern positivist socialist accretions is the problem.  Now, one problem that a lot of libertarians have pointed out – I’m not going to read this quote.  You can read it later.  This is a famous quote by David Hume.  So one of the problems with the natural law or natural rights argument for rights is that there’s an unbridgeable gap between describing what things are.  That’s facts or the “is,” and what we should do or what rights are or what values are, that is, what we ought to do.

01:24:07

So the idea is that if you just have a statement of facts—this is this way; this is this way—it’s hard to come up with a normative statement or a moral statement because you have to make a leap between these “is” statements.  And then all of a sudden, you’re saying what things should do, and if you say why, you say, well, because it is this way.  It’s like there seems to be a gap between is an ought.  This is the famous is-ought gap.  So a lot of people think that’s a significant problem with natural law or natural rights theorizing.

01:24:38

And, for example, Hoppe, in his treatise said, look, we can agree that it’s – most people believe that the gulf between ought and is, is largely unbridgeable.  Well, it’s a little bit like begging the question, Mark, but I think it’s more like the Misesian, Austrian idea of dualism.  Mises views the realm of knowledge and of behavior or things in the world in two different realms, he calls it: the teleological or purpose-oriented, that is, what people do, and the causal realm.  That is, the realm of physics basically, and physical things.

01:25:18

And I think he realizes we have to conceive of these phenomena in different ways and understand them according to different types of laws.  The scientific method, empiricism, experiments, quantified variables apply to causality.  Purpose, human action, choice, ends and means apply to describing teleology or human action.  So I would say it’s a methodological or maybe even epistemological issue.  It’s recognizing there are two different realms you’re trying to describe here.  So I think that’s the key here.  Ought and is are really two different realms.  When you talking about what is, you’re talking about the factual universe.  When you’re talking about ought, you’re talking about norms or values or what people should do, and it’s hard to just go from one to the other in a deductive way.

01:26:11

Okay.  I’m going to skip this quote by Rothbard here, but Rothbard even himself later on, in admiring what Hoppe did in his argumentation ethics, which I’ll discuss in a second, admitted that the is/ought dichotomy or the fact/value dichotomy has been a big problem for philosophy for a long time.  So that’s one problem with the natural rights approach.

01:26:34

01:26:37

Now, Ayn Rand tried to defend it.  I’m just going to go to this bold part.  She said: The fact that a living entity is determines what it ought to do.  So much for the issue of the relation between “is” and “ought.”  So she just would find these problems and just dismiss them.  She did the same thing with IP and with anarchy.  She just dismisses them, but I think it’s not so easy.

01:26:59

Okay.  I’m going to skip this part here.  We don’t have time to go into his right now.  So in a way, in the Kantian framework, you could view the natural rights approach as being categorical.  Categoricals say what you categorically should do.  So that’s sort of how the natural rights approach appears.  Now, the Aristotelians who favor this natural rights approach wouldn’t agree with that because they’re opposed to Kantianism.  But Rand often argued in hypothetical ways.  She would say if you want to live, then you should do the following things to have a good life.  So that’s a hypothetical argument, which is more like the Kantian or the rationalist approaches I’m going to discuss in a minute.

01:27:58

I’m going to skip this.  This is just a criticism by Hoppe of some of the problems with natural rights and natural law.  I’m going to slide 34 now.  Now, a lot of libertarians, and I think probably most in a way, are at least partially consequentialist, which does not mean utilitarian necessarily.  Basically, the idea is that if we have certain goals or things that we, as individuals or as individuals in a society, if we value them, like peace and prosperity for example, then we should favor certain means to achieve them.

01:28:31

Now, this is how I conceive of Mises, and Randy Barnett has some explicit stuff in this regard.  If you look back on slide 32 here you’ll see this quote by Barnett, Randy Barnett: Libertarian rights are appropriate given the widely shared goal of enabling people to survive and pursue happiness, peace, and prosperity while living in society with others.  So that’s sort of a consequentialist approach, which I have no problem with, and it’s kind of my approach.  And I think that was Milton Friedman’s approach in a way and Mises’ too I think.

01:29:10

Now, I just want to briefly mention here what I think is one of the terrible arguments for libertarianism, which is Milton Friedman’s.  There’s a Liberty Magazine interview where he said that basically the reason he believes in libertarian rights is because of his ignorance or his humility because he can’t be sure that he’s right and someone else is wrong. [Milton Friedman on Intolerance, Liberty, Mises, Etc. ] So in other words, he doesn’t want to coerce someone because he can’t be sure that he’s right in his desire to coerce them.  He can’t be sure that if he thinks someone’s sinning, that they’re sinning.

01:29:47

Now, the problem with that, of course, is the presumption is if you did know someone was sinning, which means doing something immoral, then you would be justified in using force to stop them.  I don’t think Friedman would have done that.  I think he was confused on the foundations of his own good intuitive thoughts.  But that’s just an example of where Milton Friedman himself failed to keep distinct the idea between morals and rights.  So he’s sort of saying if you knew it was immoral, you could use force to stop them.  Well, the libertarian doesn’t believe that.  We’re not wishy washy like Friedman.

01:30:21

I mean most of us would say we can know that some things are wrong, but we still shouldn’t stop them, not because we’re ignorant, not because we’re possibly wrong, but because it doesn’t – the wrong thing that’s being done doesn’t violate rights, and we can only stop something that violates rights.  So that’s an interesting aside on Friedman and sort of how this pragmatic approach can lead you astray.

01:30:50

Now, I’ve already mentioned utilitarianism.  Choose a rule that maximizes overall happiness.  Now, I will say that if you’re common sensical about it, that does tend to make you more libertarian because the world is not inconsistent, I believe.  But I’m going to go on here.  I’ve already criticized some aspects of utilitarianism.

01:31:09

See, we’re on slide 37, guys.  We’re not – we’re only at 9:34.  We have ten minutes, and we can easily do five more slides.  Now, I would like to briefly mention here something that a lot of libertarians disagree with, and it’s controversial, and I want to be clear that this is, in a way, my pet theory, something I’ve been fascinated with for a long time.  And it influences a lot of my approach, which will be peppered throughout this entire course.  You don’t have to believe in this or accept this, but I do want to lay it out here because I think it’s a major approach to libertarian rights.

01:31:46

So that is Hans Hoppe’s argumentation ethics and my related approach of estoppel.  Now, Hoppe laid his out in – he started doing it in ‘86/’87 and more fully I think in ’88 in his Theory of Socialism and Capitalism, which is probably one of the single-best economic libertarian books I’ve ever read.  It’s just amazing.  It’s packed with insight.  I heavily recommend his Theory of Socialism and Capitalism.  He lays out his argument in chapter seven, and I was influenced by that and wrote something kind of similar in ’91.  And I describe my theory and his and some related theories in the second article I have here, my “New Rationalist Directions” article, which is a JLS article.

01:32:32

Let me turn the page and see if I have some notes on this here.  No, actually I don’t.  I’m going to go back for a second.  Hoppe’s approach basically is this, and I’m not going to go into it in detail because it really – you’ll see in a second, I don’t think it matters why we’re all libertarians.  I want to define what libertarianism means, show the different approaches to get there, and then we’re going to take these base principles, and we’re going to branch them out and apply them to a lot of really interesting, cool areas.

01:33:03

Hoppe’s basic argument was that natural rights has a problem.  You can’t go from “is” to “ought.”  Plus human nature is too vague and diffuse to really get concrete goals out of it.  What he said was that people are all – any time – he said that any norm that you want to discuss what the right norm should be, the right rule should be, has to be brought up in argumentation.  In other words, it necessarily has to be discussed by people in a civilized discourse.  That discourse or argument is a type of action, so it’s always an action, but it’s a special type of action.  It’s a subset of action.  An argument has certain characteristics or traits that define it, that are necessarily presupposed.

01:33:55

That means that everyone who’s part of argumentation necessarily presupposes certain base norms or values.  Like they presuppose each other’s property right in their own bodies so that you’re not threatening to coerce them or hit them over the head to make them accept your argument.  You’re trying to persuade them by the force of reason, for example.  So there’s a sort of civilized comportment or attitude each person expresses as part of what it means to argue.

01:34:25

If you don’t have that, you’re not arguing.  So because every norm that could be discussed is discussed in the context of argument, whatever these norms are that undergird argumentation as an activity could never be contradicted by one of the norms you’re advocating.  So basically, he uses this to argue that, listen, we’re all presupposing certain kind of libertarian norms: the right to use our bodies to argue with each other, the right to have homesteaded enough property to survive just to get here and argue with each other.  So what he’s trying to show really, in my view, is that whenever we come together in a civilized way, we already have chosen to value certain civilized norms.

01:35:11

Now, I call these grundnorms, which is a German term from the legal philosopher, Hans Kelsen, which means basic norms.  And I believe these basic norms like the desire for peace, for cooperation, just for civilization in general, the predisposition to settle disputes peacefully, to seek a mediator maybe, all these things underlie the entire civilized endeavor, the entire endeavor of society.  And now you see the reason for the title of this course.  It’s about property and conflict and society.

01:35:49

Okay, and I think Hoppe is just pointing out the fact that everyone who would dispute the libertarian norm is already in the process of being a disputant.  They’re part of an argument, and they’re already showing that they value the basic civilized norms that we libertarians are happy to admit that we [indiscernible_01:36:11].  So all we’re trying to do is say, listen.  If you’re being consistent, if you’re being honest, if you have a little bit of economics literacy, look.  You’re already valuing the idea of peace.  You’re already valuing the idea that I own my body, and you own yours.  We’re having a conversation.

01:36:27

So you’re trying to show them just by pointing that you’re already valuing things, and the only system of more advanced idea of rights and norms that’s compatible with this is the libertarian idea.  And there’s more advanced arguments that go into that, but that’s what this approach is.  And I have a sort of related one called estoppel, which again is not extremely relevant here.

01:36:51

Now, I have another idea here, which I’m going to have to skip over here, and it’s not that important.  But the idea is that – let me briefly mention it.  The Misesian idea of economics is that all human action—all human action—is the attempt to overcome felt uneasiness.  So you perceive a state of affairs now or in the future that you think makes you uneasy.  You want to change it.  That’s why you act: to change things.  You intervene in the state of the world to bring about a state of affairs in the future which is different than what would otherwise obtain.  So you’re always trying to do something to deal with your felt uneasiness.

01:37:41

Well, I think there’s an analogous way you can have a sort of quasi-praxeological analysis to ethical action, which is why Hans Hoppe believed that his argumentation ethics was an ethical extension of praxeology, although Mises probably wouldn’t have agreed with that.  So – but if you just think about praxeology and rights, I believe that humans have a certain nature because of our social nature, because of evolution, whatever reason.

01:38:12

We’re not all murderous psychopaths.  A large number of people have empathy for each other, and they value each other’s wellbeing to some degree.  There’s lots of reasons for this, some economic.  Some are psychological.  Some are biological.  Some are evolutionary.  But the point is we tend to have empathy for others.  That makes us identify with others, and that makes us search for justifications for our action when we seek to have violence with others because violence is no doubt useful sometimes.  But [indiscernible_01:38:49] discourse that Hoppe talks about.

01:39:00

Empathy – human nature leads to empathy, leads to certain values, leads to the search for justification, and our rational nature forces us at that point to combine our knowledge, consistency, honesty, love of logic, and economic literacy.  And out of this, in my view, results the libertarian principles.  I’m sorry.  Am I here?  Is everyone here?  Can everyone hear me?  Okay, I will go back.  I’m not sure where you lost me.  We’re getting a little late now.  I don’t mind staying later.  I’m hoping I’m not causing a problem for the students here.  We haven’t had many dropouts yet.

01:39:51

I was kind of on a roll there, but what I was saying was, in my view, here’s how it works.  And by the way, I don’t think – well, we’re on slide 38.  I think three or four more slides, and I think we can stop.  Okay, so let me just reiterate what I said.  In my view, and what I was going to say is I don’t think you have to agree with me on this.  I’m just telling you how I approach my perspective of what it means to be a libertarian.

01:40:22

But if you disagree with this, that’s fine.  I think what happens is people have a certain nature because of our evolution, our biology, economics, psychology, etc.  We have empathy for each other.  We have a social nature.  We have certain values that arise from this empathy.  This gives rise to the desire to justify interpersonal violence because we want to commit interpersonal violence sometimes.  And most of us seek to justify it.  Outlaws don’t.  Psychopaths don’t.  Criminals don’t, by and large.  But the bulk of society does.  This is where this comes from.  This is why people enter into this discourse or argumentation ring that Hoppe envisions.

01:41:13

Okay, and I just think that given our human rationality and a sufficient degree of valuing honesty, consistency, and argumentation, rationality, just a general idea of fairness, and some economic literacy, this will lead you to libertarian principles.  I mean there’s no way around it.  Everything that we oppose as libertarians violates some of these things.  And by the way, this is another reason why I think economics is important because, as I say, it’s important to having a fully fleshed-out view.

01:41:58

Argumentation ethics—I’ve already summarized it.  There’s more information here.  I’m going to skip over this now because we’re really behind.  Patrick, I think that – people are starting to leave now, so here’s what I’m going to do.  I’ve already gone over argumentation ethics.  By the way, this slide here, 41 – yeah, we’re covering a lot more advanced topics next time, June.  This is just an example of how Rothbard agreed with Hoppe’s argumentation ethics.  And then I have some stuff on my estoppel approach, which I’m going to skip here because it’s not that relevant.

01:42:42

I’ll tell you what.  There’s only about four or five more slides to get to where I wanted to stop, and I can cover them in about five minutes.  But since it’s getting late here, I’m going to stop here, and what I will do is I will pick it up here next time.  Trina, you’ll have to ask Danny Sanchez, but I think they can make it available very quickly on the site.  It’s just a file, so it should be available very quickly.  So I’m going to stop here.  I’d be happy to take some questions, although I don’t think we should go for too long because I will take further questions at the Q&A session on Wednesday at 7 p.m. London time.  So I’m here, so I’m happy to take further questions.

01:43:40

Thank you, Karl.  Well, June, I think of property as being a relationship between a person and a scarce resource.  So it’s the right to use or control.  It’s the legal right, the legally enforced or recognized right to use or control a scarce resource.  So I would think of your right to life – life is more of a metaphorical idea or more of a – bound up with your personhood.  I think to say you have a right to your life or you own your life is problematic in that it’s overly metaphorical and imprecise.  And I would think that – like Rothbard argues in the Ethics of Liberty in his chapter on rights – human rights as property rights that a lot of things that we value are more consequences of basic property rights rather than actual independent property rights.

01:44:37

For example, there’s no right to free speech.  There’s no right to freedom of press.  There’s a right to own property that you can print things with.  There’s a right to own property you can speak from or on.  Likewise, there’s no right to life.  There’s just a right to control your body and things that you homestead.  Let me go up again.  I missed – sorry.  Okay, I’m looking for the question after June’s, and the chat is passing me up here.  Okay, June, you said what should you say.  I think I’ve answered – I’ve given you my answer for that.

01:45:28

Jonathan Nebol – is it inconsistent to think that individuals ought to help others but also to claim that the obligation ought not to be legally enforced through violence?  No, I think that’s perfectly consistent.  I think, first of all, none of us are just libertarians.  Most of us live in society, and we have interests other than this and values other than this.  And if you distinguish between legally enforceable obligations and moral obligations, there’s no problem whatsoever saying that you ought to do X, Y, and Z but also say that you shouldn’t be forced to do X, Y, and Z.

01:46:06

And, in fact, I would say a lot of things you ought to do would be rendered meaningless if you could be forced to do it like giving to charity.  I mean you’re not really being a charitable person if you’re forced to give to charity.  So we’re robbed of the opportunity to be charitable by being forced to give to charity.

01:46:27

Patrick – would you consider state officials who seek to legislate force against others to be of the same lack of conscience as outlaws and criminals?  Well, I mean my view is that – I mean that’s a complicated question.  I think it depends upon the criminal.  It depends upon the state official.  I think as a general matter I’d say yeah, although I do think that most outlaws and criminals are aware that they’re criminals.  They know that they’re doing the wrong thing.  They just don’t care.

01:46:58

I do think a lot of state officials have been brainwashed and accepted the same propaganda as most people that vote in favor of the state.  And they think they’re part of a useful agency, so I think they have – some of them have a little bit more of an excuse, but maybe at the higher levels they have less of an excuse, and they do even worse damage than the criminals, than the private criminals do.

01:47:25

Jonathan – how do you delineate between legal obligations and those moral obligations between defining them as so?  Well, I would say this.  A legal obligation is an obligation that could be enforced, which means force is used.  So libertarians have a view of reciprocity or this reflexive idea that if the obligation has to have force used against it, that means that this force is not justified if it’s initiatory.  In other words, it all goes back to the non-aggression principle.  We believe that you can use force only in response to force.

01:48:02

This is how I – libertarians differ on what ways you can respond to force.  Some think you can punish, which is called retribution.  Some think you can use restitution, restitutive force.  There’s other types too: rehabilitative force or defensive force, force during the commission of the crime.  To my mind, these are all under one umbrella term.  That’s responsive force.  So the libertarian view is that force is legitimate if it is in response to initiated force.

01:48:35

Okay, so that’s the question.  And so if this obligation you want to argue for would require force to be used against the obligee – sorry, the obligor (the obligee is the person he owes it to), then the question is simply has the obligor committed initiated force?  If he did, then sure, you can enforce the obligation against him because the force is in response to it.  It’s legitimate.  If he hasn’t, then the force you want to urge is initiated force itself, which is aggression.  So that’s how you distinguish.  Basically, you ask if you want to say an obligation is enforceable, is the force required to enforce it initiated or in response to initiated force?  That’s how you do it.

01:49:29

Why is the Austrian school not mainstream?  Well, I think it’s because it’s fairly new, and I think it’s also because it has been less useful to – and there’s a lot of articles written on this by Salerno and others about how the economics profession is co-opted by the state.  These guys are sucked into the state’s orbit by being professors at state-sponsored universities and all this kind of stuff, given research grants.  And so the state basically supports and props up the economics that will support what it’s doing, which is what Coasianism and utilitarianism and Chicago-ism and Keynesianism and even Marxism, all these schools of thought support the state because they’re malleable.  They’re – and they support massive public works and these kinds of things, so the state just supports the things that support the states, so I think that’s the main reason.

01:50:20

You guys have been troopers hanging in here.  I know we stayed long, but I appreciate it.  Okay, guys, it looks like we’re winding down, so why don’t we stop?  Because everyone is starting to unsubscribe now.  I enjoyed it.  Thank you very much.  I will see some of you on Wednesday at 7 p.m. London time, and the rest of you, or some of you, next Monday at this time.  Thanks very much.  I enjoyed it.

01:50:47

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1. See Ronald M. Dworkin, “Is Wealth a Value?,” J. Legal Stud.,  Vol. 9, no. 2 (March 1980; online at https://booksc dot org/book/66503868/e33a3b), p. 197: “Consider this hypothetical example. Derek has a book Amartya wants. Derek would sell the book to Amartya for $2 and Amartya would pay $3 for it. T (the tyrant in charge) takes the book from Derek and gives it to Amartya with less waste in money or its equivalent than would be consumed in transaction costs if the two were to haggle over the distribution of the $1 surplus value. The forced transfer from Derek to Amartya produces a gain in social wealth even though Derek has lost something he values with no compensation. Let us call the situation before the forced transfer takes place “Society 1” and the situation after it takes place “Society 2.” Is Society 2 in any respect superior to Society 1? I do not mean whether the gain in wealth is overridden by the cost in justice, or in equal treatment, or in anything else, but whether the gain in wealth is, considered in itself, any gain at all. I should say, and I think most people would agree, that Society 2 is not better in any respect.” [↩]