Kinsella on Liberty Podcast, Episode 029.
This is my appearance on Episode 18 of First Degree Liberty: Ethics with Stephan Kinsella, with hosts Chase Rachels and Michael Martelli. We discussed argumentation ethics and the title-transfer theory of contract, and other issues (originally recorded Mar. 4, 2013; released Mar. 5, 2013).
For background on some of the issues discussed, see my articles and posts:
Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:00:12 — 55.1MB)
Update: See KOL037 | Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory.
Stephen F. Austin State University‘s Young Americans for Liberty chapter and the Charles Koch Foundation will be hosting a conference called “Liberty in the Pines” (facebook event) later this month at Stephen F. Austin University in Nacogdoches, Texas (about 2 hours N of Houston). I will be speaking on “Locke’s Big Mistake: How the Labor Theory of Property Ruined Economics and Political Theory.” Stefan Molyneux will also be speaking, and Jeff Tucker will deliver the keynote. Walter Block will conduct an “Ask a Libertarian” Q&A session (remotely), and other speakers will appear as well. I’m looking forward to it.
Details:
When is your Event?:
Saturday, March 23, 2013 – 10:00am- 6:00pm local timeLocation:
1936 North Street
Nacogdoches, TX, 75962
United States
For some background on some of the issues I’ll touch on, see:
Kinsella on Liberty Podcast, Episode 028.
My old friend Jack Criss (ProBizMS [now Delta Business Journal], Ready, Aim, Right! (2)) and I had a discussion reminiscing about how we became friends 25 years ago, our early Objectivist phases, how communication and the movement has changed over the years, his 1980s libertarian radio talk show in Jackson, MS. We touched on many issues including where the liberty movement stands today, optimism vs. cynicism, entrepreneurs and government interference, Ayn Rand’s best novel, why politics is futile and much more…
Transcript and Shownotes below.
Related:
Date: February 28, 2013
Host: Stephan Kinsella
Guest: Jack Criss
Source: YouTube, Stephan Kinsella’s Website
Stephan Kinsella introduces the podcast, noting its personal theme, and welcomes his longtime friend Jack Criss, a radio professional and business publisher from Jackson, Mississippi. They met in 1988 through shared interests in libertarianism and Objectivism, facilitated by David Kelly after Kinsella sought Southern Objectivists. Criss, aged 47 like Kinsella, is a publisher of print and online media, author of Ready, Aim, Right! (2004), and is working on Aristotle for Children, illustrated by his daughter Dagny. Their 25-year friendship began with mailed letters in a pre-digital era, highlighting the isolation they felt in the South where libertarian ideas were rare.
In 1988, Criss hosted a talk radio show on WJNT, Mississippi’s first talk station, where he interviewed libertarian figures like Ron Paul and Murray Rothbard as the resident libertarian. Kinsella recalls visiting Criss in Jackson and being interviewed on his show, which featured luminaries like Lew Rockwell and Bob Schaffer. The pre-internet era relied on faxes and phone calls to connect with thinkers like Tibor Machan. Criss shares a memory of his 1988 “pilgrimage” to Auburn to meet Mises Institute scholars, an experience he compares to a youthful adventure, underscoring the radical nature of libertarian ideas in the South at the time.
Kinsella and Criss reflect on their evolving views, moving from Objectivism to anarchism by 1988–89. They attended the 1988 “Meeting of the Minds” conference in Dallas, hosted by Donald Heath, featuring Objectivist speakers like David Kelly and Allan Gotthelf. A notable incident involved young Objectivists debating burning Barbara Branden’s The Passion of Ayn Rand due to its controversial revelations, with David Kelly facing backlash for a neutral review. This experience, coupled with the cult-like atmosphere, led Kinsella to distance himself from Objectivism, though he still admires Atlas Shrugged while criticizing The Fountainhead for its questionable individualism.
The discussion turns to the libertarian movement’s alliances. Criss notes that Objectivists, once insular, are now engaging with conservatives and libertarians through figures like Yaron Brook. Kinsella argues that libertarians have more in common with left-libertarians or civil libertarians (e.g., Cory Doctorow) on issues like anti-war and intellectual property than with conservatives. Both express skepticism about political change through the system, citing its corruption and the anomaly of figures like Ron Paul. They suggest cultural change must come from shifting public sentiment, not politicians, who follow prevailing ethos.
Kinsella sees growing mainstream acceptance of libertarian ideas and Austrian economics, driven by events like the Soviet Union’s collapse and decentralized technologies like Bitcoin. However, Criss highlights contradictions, such as a collectivist State of the Union address and inconsistent businesspeople who oppose some regulations but support others. Kinsella remains hopeful that technology and civil society can outpace the “lumbering beast” of the state, though both acknowledge increasing authoritarianism, like a hostile police-civilian dynamic, alongside progress in internet freedom and entrepreneurial opportunities.
The conversation explores the tension between libertarian principles and practical living. Kinsella recounts being mocked at the 1989 conference for studying law, seen as compromising with the state. He argues against martyrdom or obligatory activism, suggesting one’s duty is to live ethically without violating others’ rights. Criss shares an encounter with a young Rand enthusiast aiming to work for a senator, sparking discussion about misplaced faith in politics, exemplified by the disappointment over Alan Greenspan’s Fed tenure. They note the regulatory burden on Mississippi businesses, pushing some to accept government grants, complicating the entrepreneurial ethic.
Criss promotes his website, probizms.com, which is being revamped with a YouTube channel, and his upcoming book, Aristotle for Children. He praises Kinsella’s original thinking and contributions to libertarianism. Kinsella thanks Criss, wishes him luck, and expresses hope for future meetups, closing the nostalgic and reflective conversation about their journey in the liberty movement.
Date: February 28, 2013
Host: Stephan Kinsella
Guest: Jack Criss
Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 49:52 — 45.6MB)
Kinsella on Liberty Podcast, Episode 027.
I was invited to be a guest on The Peter Mac Show in late 2009 and ended up staying on for both hours. It was a pretty in-depth interview. The host asked impressively intelligent questions for someone who had just started coming around to the anti-IP position (after reading my Intellectual Property and Libertarianism just the day before—impressive).
See also: Kinsella IP Interview on The Peter Mac Show;
Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 1:27:21 — 40.0MB)
Kinsella on Liberty Podcast, Episode 026.
This is FreeDomain Radio episode 2336, in which host Stefan Molyneux and I discussed libertarian aspects of corporations and limited liability law. (Originally recorded Feb. 22, 2013, released by FDR on Feb. 26.)
For more on this issue see my Libertarian Standard post Corporate Personhood, Limited Liability, and Double Taxation; and KOL100 | The Role of the Corporation and Limited Liability In a Free Society (PFS 2013).
Podcast (kinsella-on-liberty): Play in new window | Download (Duration: 50:10 — 45.8MB)
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:
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.
Rothbard’s distinct contribution to the natural-rights tradition is his reconstruction of the principles of self-ownership and original appropriation as the praxeological precondition —Bedingung der Moeglichkeit — of argumentation, and his recognition that whatever must be presupposed as valid in order to make argumentation possible in the first place cannot in turn be argumentatively disputed without thereby falling into a practical self-contradiction.[29]
As Rothbard explains in an unfortunately brief but centrally important passage of The Ethics of Liberty:
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. 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 (pp. 32–33).
(See also my Argumentation Ethics and Liberty: A Concise Guide.)
See also Rothbard in Ch. 20 of Ethics: Rothbard here conceives of the possibility that it is moral to violate someone’s rights. That implies that the obligation not to commit aggression may not be a moral obligation. It is a legally enforceable obligation. That is what in the law is the correlative of rights: duties, or obligations. Legally enforceable rights imply legally enforceable obligations, and vice-versa.
Rothbard:
We are not herewith concerned whether it is moral or immoral for someone to lie, to be a good person, to develop his faculties, or be kind or mean to his neighbors. We are concerned, in this sort of discussion, solely with such “political ethical” questions as the proper role of violence, the sphere of rights, or the definitions of criminality and aggression. Whether or not it is moral or immoral for “Smith”—the fellow excluded by the owner from the plank or the lifeboat—to force someone else out of the lifeboat, or whether he should die heroically instead, is not our concern, and not the proper concern of a theory of political ethics.5 The crucial point is that even if the contextualist libertarian may say that, given the tragic context, Smith should throw someone else out of the lifeboat to save his own life, he is still committing, at the very least, invasion of property rights, and probably also murder of the person thrown out. So that even if one says that he should try to save his life by forcibly grabbing a seat in the lifeboat, he is still, in our view, liable to prosecution as a criminal invader of property right, and perhaps as a murderer as well. ”
“To sum up the application of our theory to extreme situations: if a man aggresses against another’s person or property to save his own life, he may or may not be acting morally in so doing. That is none of our particular concern in this work. Regardless of whether his action is moral or immoral, by any criterion, he is still a criminal aggressor against the property of another, and the victim is within his right to repel that aggression by force, and to prosecute the aggressor afterward for his crime.
[TLS]
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:
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:
Video:
Slides:
The videos of all six lectures are also available on this playlist.
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.
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.
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.
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.
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.
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 20th century, this status actually was introduced in the 12th 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:
Video:
The videos of all six lectures plus this Q&A are also available on this playlist.
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.
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.
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.
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.
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.
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:
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:
Video:
Slides:
The videos of all six lectures are also available on this playlist.
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.
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.
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.
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.
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.
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:
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:
Video:
Slides:
The videos of all six lectures are also available on this playlist.
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.
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.
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.
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.
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.
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
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Stephan Kinsella is a libertarian writer and retired patent attorney in Houston, Texas. He has published widely on various areas of libertarian legal theory and on legal topics such as intellectual property law and international law. His publications include Legal Foundations of a Free Society (Papinian Press, 2023), Against Intellectual Property (Mises Institute, 2008), International Investment, Political Risk, and Dispute Resolution: A Practitioner’s Guide (Oxford, 2020), and The Universal Principles of Liberty (2025).
My Failed Libertarian Speaking Hiatus; Memories of Mises Institute and Other Events, 1988–20192025
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