Latest pretentious terms from today’s Slate Political Gabfest (feel free to email me suggestions or leave them in the comments to the main page):
In this week’s Culture Gabfest, about 3 French words were used, some more than once IIRC, and pronounced oh-so-correctly, such as “oeuvre,” “milieu,” and maybe another that I’ve forgotten.
Great post:
Dear Linux Geeks:
You drive me crazy.
Though I am being facetious, I am also being practical. Please don’t write me and tell me how great Linux is, why I should run it, and why it is libertarian, just because I published this article on PC vs Mac. Fact is, every single time I have ever mentioned something about Mac or PCs or NetBooks, in a blog post or article, because I thought it was an interesting point, Linux Heads jump right on the ‘convert-her’ bandwagon, and so I get tons of email from Linux enthusiasts/hobbyists telling me that Linux is my only means to technology heaven. [continue reading…]
Just came across this in an old file: On the Fourth Amendment, my letter to the editor to Chronicles magazine (March 1996), regarding Larry Pratt’s comments on the exclusionary rule. My letter’s text is below; Pratt’s response is in the pdf:
In his December essay, “The Mark of the Beast,” Larry Pratt implies that those who oppose unconstitutional searches and seizures by the government should be in favor of the exclusionary rule. But such a rule, whereby probative (i.e., valid) evidence may not be introduced in court if it was obtained in violation of the Fourth Amendment, is not required by the Constitution, nor was it favored by the Founders, as Pratt intimates. In fact, not until 1914, in the Supreme Court case Weeks v. United States, was an exclusionary sanction applied to evidence obtained in violation of the Fourth Amendment, and this case involved federal criminal litigation. It was not until 1952 that the Supreme Court imposed a federal constitutional exclusionary requirement on the states. The exclusionary rule is simply not required by the Constitution, nor is it implied by rules prohibiting certain types of searches and seizures.
Whether the Constitution ought to provide for the exclusion of illegally-obtained evidence is another matter. In my view it should not, because it does not violate the rights of truly guilty criminals to convict them with any probative evidence, no matter how obtained, and because there are better ways to sanction errant police than to let criminals go free. For example, any individual subject to an illegal search or seizure who is not proved guilty should have a cause of action for damages against the police and the state, and the policemen involved ought to be subject to criminal action, if warranted. Further, no advocate of federalism should support federal imposition of an exclusionary rule on states, no matter what one’s view of the merits of the exclusionary rule.
–Stephan Kinsella, Philadelphia
For more on this, see In Defense of Evidence: Against the Exclusionary Rule and Against Libertarian Centralism, with Patrick Tinsley, November 1, 2003, LewRockwell.com; Tinsley, Patrick, Stephan Kinsella and Walter Block. “In Defense of Evidence and Against the Exclusionary Rule: A Libertarian Approach,” Southern University Law Review, Vol. 32.1 (2004), pp. 63-80.
From 2005
2. September 2005
I promised I’d post any response from the previous entry, and wound up getting into an extended e-mail discussion with Mr. Kinsella. Since we both seem to sit in front of our computers all day, the responses were fairly rapid, so things wound down after just over a day.
Thinking that the results might be both entertaining and enlightening, I’ve assembled the thread into a more-or-less coherent narrative, and present it herewith (since comments were interspersed through quotes in the original, I’ve added comments in brackets for the sake of clarity): [continue reading…]
From Mises Blog; archived comments below.
See also:
Over on the LRC blog, there were some posts about the jailing of tax protestors; the following was my comment:
Yes, Irwin Schiff is–tragically, shamefully–in jail for tax evasion, “Because the judges who sit in judgment of him are paid their salaries by income taxes.” At least indirectly. But taxes are clearly not voluntary, and it is illegal to evade income tax. If the courts of a given system actually enforce a rule–provide penalties for not following the rule–this is what it means for the rule to be a law. It’s a positive law, to be sure–but a law. And it’s not only the courts–it’s the legislators, too. The tax protestors are simply wrong to say it “is” not illegal to evade income tax; it clearly is illegal, since the legal system does impose penalties for this conduct. Furthermore, the tax protestors are wrong to argue that this law is not provided for by statute. It is. And if they ever succeeded in persuading some judge that it was not, the tax statutes would simply be clarified to plug the hole.
Often the tax protestors adopt a sort of hyper-natural law stance in which they capitalize Law, in a crankish and quasi-mystical way, and refuse to even call something Law if it is not just. This has echoes of the Hart-Fuller debate where Fuller took the “natural law” view that law and morals cannot be “separated.” Hart took the “legal positivist” view that there is a difference between what law is and what it should be. I’ve always found this debate to be frustrating because the natural law side, with which I’m of course more sympathetic, seems confused and to misunderstand the positivist position. The basic idea of legal positivism–that it is possible to identify something as a law, even if it is unjust–seems to me to be obviously correct, and not even contrary to natural law thinking. It is currently illegal to sell cocaine or one’s body for sexual services or to evade income tax–but it should not be. Just law–law compatible with libertarian principles–is what positive law should be. Libertarian law, just law, is like a template or ideal by which actual, enforced law can be compared, or aspire to. (For discussion of the role of abstract libertarian principles being used to develop more concrete ethical and legal rules, see my Knowledge, Calculation, Conflict, and Law, pp. 60-63; and The Limits of Armchair Theorizing: The Case of Threats.)But to determine what the law is, one must see what rules are enforced. Oliver Wendell Holmes’s “bad man” theory of law always made a certain amount of sense to me–his view that the law is a prediction of how courts behave; it’s based on the notion that bad men “care little for ethics or lofty conceptions of natural law; instead they care simply about staying out of jail and avoiding paying damages. In Holmes’s mind, therefore, it was most useful to define ‘the law’ as a prediction of what will bring punishment or other consequences from a court.” Now we must keep in mind that identifying something as law does not mean it is just.
The tax opponents often seem to try to intentionally blur this line. When they should be arguing “the current law against tax evasion is unjust and immoral,” they say, “there ‘is’ no law against tax evasion.” They think “an unjust law is no Law at all!” (“lex iniusta non est lex“). They want their factual, descriptive “is” word to do the work that “should” ought to be used for. But such tricks cannot work. As Brian Doherty notes in a perceptive article,
The tax honesty movement’s vision of the world is fantastical in another way. It is not merely obsessed with continuity; it is magical in a traditional sense. It’s devoted to the belief that the secret forces of the universe can be bound by verbal formulas if delivered with the proper ritual.
(See Doherty’s It’s So Simple, It’s Ridiculous; also and Five Reasons You Don’t Owe Income Tax, Dammit!) See also Huebert‘s perceptive comments about the futility of thinking we can achieve liberty by just finding the right arguments to persuade federal judges: as he notes, the authors of a book he is commenting on “seem to think that restoring liberty is really only a matter of overturning a handful of bad court precedents. If we can just get in front of judges and do that — apparently through the irresistible power of our arguments and our lawyers’ outstanding legal skills — we can finally achieve liberty across the land.”
So, to sum up: the tax statutes do penalize tax evasion. The legislators want it this way. And the courts do act on this–and put people in jail. It is illegal to evade income tax. And, yes, this is monstrous–but there it is. And, unfortunately, I don’t think there’s any incantation, spell, or ritual that will persuade judges or legislators to see the light and start protecting our liberty. And given how dangerous the state is, it is prudent to recognize reality.
Update: Predictably, I’ve gotten a flurry of emails from the tax protestor types, ranging from the tired old “SHOW ME THE LAW” to “your tone is bad, it will make people think it’s hopeless,” to “I don’t care what the law is”.
As for tone comment–I think it’s prudent and not unlibertarian to be realistic and not to be self-delusional. Call me crazy. But this opposition to truthfully recognizing an unjust law is one of the reasons activism is dangerous–it makes people conflate substance and truth with tactical, strategic concerns–they start to identify truth with “what motivates or inspires or persuades people,” and conversely, if something is unpleasant, it’s “not true”–the ostrich approach to reality. I don’t think libertarianism requires one to be an ostrich or a martyr. (See my The Trouble with Libertarian Activism .)
As for SHOW ME THE LAW–Doherty discusses this:
The tax honesty folks similarly believe that their foe the IRS must also be bound by these grimoires of magic: that without the properly sanctified OMB number an IRS form holds no power, that without uttering the mystic word liable no authority to tax can truly exist.
And always, always, the ultimate incantation, The Question: Where does it say that I owe income taxes‘ Show me the law!
The tax honesty types have such trouble even imagining an unjust law that they just cannot accept that tax-evasion-criminality–which is clearly unjust–can really be illegal. For clear explanations (not that the tax honesty types care) of why federal legislation is behind tax evasion laws, see Doherty’s It’s So Simple, It’s Ridiculous and Five Reasons You Don’t Owe Income Tax, Dammit!; also Income Tax: Voluntary or Mandatory?; Tax Fool; and Why I won’t join the tax protesters.
Some have accused me of legal positivism–well, sure, if you mean the belief that it’s possible to identify and recognize a given rule as a law, even if it’s unjust; but not, of course, if you mean the belief that only commands of the sovereign count as genuine law (in fact my opposition to this type of legal positivism is one reason I am skeptical of many natural law arguments: they are also positivistic in this sense, in that they believe that while the legislature may not decree true “Law” or morals, God can; they just push it back a level. My view is that not even God can make evil good).
The legal positivism (in the pejorative sense) of the natural law types can also be seen in their repeated SHOW ME THE LAW question. They are so used to the modern, positivist system of written constitutions and law-as-legislation that they seem to have trouble thinking of law as something other than “what’s written in ‘the lawbooks’”. But a written Constitution is not the only way to have a constitution, as Britain’s centuries-old unwritten constitution shows; in fact, it’s better, I would argue, than an artificial, naive, utopian, constructivist one like the failed American one. And statute is not the only way to make law–or even a good, or legitimate, way, in my view (see my Legislation and the Discovery of Law in a Free Society). Laws are the rules that are legally enforced–as I noted above with reference to Fuller and Hart and Holmes’s realistic “bad man” theory of law–and these rules need not emanate only from “the law books” or a written Constitution. To think so is to succumb to the legal positivism that dominates our legislation-ridden age. (There are innumerable types of unwritten rules, including even unwritten “internal rules” of the state itself–see Alfred G. Cuzán‘s classic paper “Do We Ever Really Get Out of Anarchy?, and his forthcoming JLS paper Revisiting “Do We Ever Really Get Out of Anarchy”.)
And this also brings us back to Doherty’s comments about the “Protestant” nature of the tax honesty movement:
Their devotion to their beliefs is certainly religious. Indeed, tax litigation consultant Daniel Pilla, author of The IRS Problem Solver, says they’re “like programmed cult members — you can’t reason with them.” More charitably, the tax honesty people are staunch exemplars of America’s glorious Protestant heritage.
This observation is not merely a pun on their status as “tax protesters.” Their attitude toward the Constitution and the statutes and legal decisions regarding the income tax are uniquely Protestant, relying on a layman’s ability — indeed, obligation — to read and study and parse the original documents himself, to come to his own personal relationship with the law and the cases, and to prefer his understanding to that of the priesthood of lawyers, judges, and accountants.
“Case law” — the kind that proves that you can and will be arrested or fined for not filing or paying income tax — means nothing to them; they like to rely strictly on the statutes as written, or on Supreme Court cases and straight constitutional interpretation. Irwin Schiff, the godfather of the movement, is insistent that you shouldn’t just take his word for anything: You should check the statutes. He is, he declares, the biggest reseller of the published version of the U.S. tax code. He sells specially tabbed copies leading you straight to the pages in the multithousand-page behemoth you must see to understand his own interpretations.
It’s no surprise that the Protestantish “SHOW ME THE LAW” and their positivistic fixation on written documents as the only source of law mirrors the Protestant view of sola scriptura, or “Scripture alone,” and their befuddlement with the more nuanced and sophisticated Catholic view:
The true “rule of faith”–as expressed in the Bible itself–is Scripture plus apostolic tradition, as manifested in the living teaching authority of the Catholic Church, to which were entrusted the oral teachings of Jesus and the apostles, along with the authority to interpret Scripture correctly.
(See Scripture and Tradition.) The Catholic idea of a non-written, merely oral tradition or teaching befuddles Protestants. Thus, just as they say “SHOW ME THE LAW”–meaning a written statute–they ask the Catholics, “What’s Your Authority?” Think about it…
September 10, 2009 at 12:18 amOf some relevance, the seeds of a debtors revolt are playing out right now.
There are limits to what a person will take. I’ve been saying that. In this case, she said she was more than happy to pay down her debt like she had been doing, but they couldn’t leave well enough alone.
15% is bad enough, but she probably found marginal utility in it. They took that away from her without justification (according to her), while she owed them money. Who has the upper hand? I cannot find any flaw in her reasoning. They hurt her, she hurts them.
September 10, 2009 at 12:56 amI presume this is happening in the USA. I have always felt that the fault is in the slogan ‘No taxation without representation!’. That is an implicit promise to pay taxes when you have representative government.
Instead, you should put on your T-shirts a slogan like “The only good tax… is a dead tax!”
September 10, 2009 at 12:59 amStephan, would be interested to read your take on Marc Stephen’s “No State Project”.
September 10, 2009 at 2:45 amThis is a really good piece, Stephan. Sensible. Your take on the Hart/Fuller debate is very nearly my own. (I’m an admirer of both H.L.A. Hart and Lon Fuller.)
September 10, 2009 at 3:38 amDixieFlatline,
The name you’re looking for is Marc Stevens.
September 10, 2009 at 4:10 amPeter Schiff has commented on his father and the tax-fights:
http://www.youtube.com/watch?v=WpVi7zw_2oU
from 19:36 point, quite enlightening.
http://www.youtube.com/watch?v=KlL5vm9GK3A
September 10, 2009 at 8:03 amI guess posting a video by a tragically misinformed and misguided woman with a novel idea about what constitutes civil disobedience is in the ballpark of the topic here. Ackerman has been making wild, irresponsible calls to “bring down the system” with his ever attendant knee jerk and off-the-cuff plans to bring that about. Now he suggests that this woman’s “revolt” sounds like a good idea and he can’t find a flaw in her reasoning. Dollars to donuts most could find the flaw in her contract which she signed and any responsible person could find her first flaw in the decision to maintain her desired lifestyle with credit cards.
September 10, 2009 at 8:05 am..the problem with the Legal-Positivism endorsement here is that Americans can never ‘know’ what the “law” is… even under the loose definitions of that Legal-Positivist view.
Legal-Positivism asserts that ‘law’ is whatever rules ‘law-makers’ produce and enforce, independent of any other concepts of ethics, fairness, or justice.
But if the law-makers product (law) becomes so vast, complex, contradictory, and arbitrarily enforced ad hoc — then there is no way an individual can even know what the Legal-Positivist body of ‘law’ is on any given day. Without common certainty of the law’s requirements — the rule-of-law can not exist.
That is exactly the current U.S. situation … where citizens can not possibly understand tens of thousands of complex Federal/state/local laws & regulations– nor predict how those laws might be applied against them at the whim of legions of government prosecutors… in arbitrary court processes.
Muggers mug you with a gun in your face. National dictators dictate rules to you with a gun in your face. Law-makers issue rules to you with a gun in our face. It’s pragmatically unwise to directly resist, as tax-protestors discover. Might often works, but might does not make right.
Legal-Positivism is totally incompatible with the long standing principles of Anglo-American rule-of-law… but very useful to those who wish to control others.
September 10, 2009 at 8:34 amBarton,
What is the alternative to legal-positivism?
September 10, 2009 at 8:55 amBarton,
I’m reminded of the film “The Aviator” when Leonardo DiCaprio (Howard Hughes) says to Alan Alda (Sen. R.O. Brewster), “You want to go to war with me?” Alda replies with an infuriating smirk, “It’s not me, Howard. It’s the United States government. We just beat Germany and Japan. Who the hell are you?”
The type of tax protesters SK is talking about today, law books in hand, to a Federal judge: “This isn’t right.” To which I imagine an improbably candid and self aware judge responding, “We just slaughtered hundreds of thousands of Iraqis on false pretenses and without a declaration of war and then built an “embassy” the size of the Vatican in the center of all their oil. Who the hell are you?”
(PLUS, they DO have THEIR laws against not paying taxes and will remedy any loopholes, need be)
I don’t consider SK’s post to be a “Legal-Positivism endorsement”, I consider it a level headed warning from someone who really knows these bastards and the astounding power they wield due to the unfortunate misconceptions of 99% of our fellow citizens.
(I also love Doherty’s discription of the magical thinking of these tax protestors. Thanks for the reference, SK.)
September 10, 2009 at 1:13 pmThere are levels to normativity. Manners, ethics, law — each of these are normative realms, and each of these differ in scope and method. Legal positivists would say that it is always important to realize which level you are talking about. Legal naturalists too often fuzzy the distinctions.
My problem with legal naturalists is that they too often take for granted the superiority of their preferred ethical norms, and then proceed — without much argumentation — to saying that their ethical norms trump established law, whatever that may be.
This gambit does not change reality, however, where you have a diversity of people supporting a diversity of ethical philosophies, and saying that “ethics trumps law” is worse than useless . . . it actually scuttles the process of reforming law.
Nevertheless, each person does have some sort of ethical stance, and — despite the near-universality of the notion that one is supposed to obey established law, working to change it primarily or only within the system acknowledged by established politics — actual, practiced law and politics can push too far, and each person has to decide when to disobey. On moral grounds.
If you distance yourself from a rigid naturalism, and see the problem of obedience from a truly naturalistic (scientific/positivistic) perspective of both micropolitics and establishment politics, then you see the difficulties of any simple solution. Still, we can protest and even strategically disobey bad law; we just know there’s no philosopher’s stone (or, in America: “sorcerer’s stone”) that will protect us when the establishment aims to crush us.
The best thing about simplistic naturalism is that it sometimes does give boldness to simpletons, thus encouraging them to withstand tyranny when the odds prevail.
But the guy at Tiananmen Square, squaring off against the tanks, got disappeared, right?
Naturalism did nothing for him.
Oh, and yes, actual (“positive”) established law can become too complex. And that is very bad. The Grandfather of the positivist approach, Jeremy Bentham, excoriated lawmakers at length for this error.
Positivists themselves are not incapable of some good judgments about what law is good and what is bad. Bentham was a legal reformer. He may have pilloried (perhaps excessively) legal naturalism and the idea of Natural Law, he still believed, for the most part, in simple law and a huge scope for individual liberty and responsibility.
September 10, 2009 at 2:00 pmWell done, Mr. Kinsella. Thank you for your *many* excellent posts.
September 10, 2009 at 2:06 pm
September 10, 2009 at 2:31 pmUnder a government which imprisons unjustly, the true place for a just man is also a prison.… where the State places those who are not with her, but against her, – the only house in a slave State in which a free man can abide with honor.… Cast your whole vote, not a strip of paper merely, but your whole influence. A minority is powerless while it conforms to the majority; it is not even a minority then; but it is irresistible when it clogs by its whole weight. If the alternative is to keep all just men in prison, or give up war and slavery, the State will not hesitate which to choose. If a thousand men were not to pay their tax bills this year, that would not be a violent and bloody measure, as it would be to pay them, and enable the State to commit violence and shed innocent blood. This is, in fact, the definition of a peaceable revolution, if any such is possible.
September 10, 2009 at 3:37 pmThere’s no such thing as law, the one with power makes the rules, might is right.
Only the strong survives. The strongest wins, not the fairest.
September 10, 2009 at 8:55 pmUSA Today beat me to it – might makes reality. Unless you are stronger than the bully you will never escape the bully. Tax protestors and friends should look at how the Mexican Drug Lords put the fear into government agents – by physical deadly force. There is no other way other than to be stronger than your enemy.
September 11, 2009 at 4:12 pmGil’s last comment sums it well. In fact, the total U.S. population, properly organized, would have an easy upper hand. Imagine 150,000,000 armed and trained citizen-soldiers actually defending liberty. Would Congress have a chance? Could they convince their Army to fire on such millions defending actual freedom?
Such is the basis of the Committees of Safety: http://www.committeesofsafety.org.
September 11, 2009 at 9:19 pm“Imagine 150,000,000 armed and trained citizen-soldiers actually defending liberty.”
This sounds rather naive. The vast majority of the citizens do want the USA to stay as they are! Just watch what they are voting!
To count on the masses is never a good idea… especially if the result means they cannot enslave others to work for them anymore.
September 12, 2009 at 11:48 amTim,
I disagree with your assessment. I don’t believe for a moment that the “vast majority of citizens do want the U.S. to stay as they are.” Rather, most people have lost touch with liberty. They have not experienced it, yet they really do want it in their hearts. Look at all the hopefuls who voted for “hope and change” with Obama. They thought, in their hearts, that they were going to get someone who would finally set them free. Even their convoluted arguments for socialized health care systems are a striving for freedom. They simply have lost touch with how freedom is actually achieved. They think that some perfect President or Congressmen are going to finally bring it to them. They just need the fire of liberty lit under them again, and they will want it. It happened to me! I used to be one of those liberal-leaning crazies who thought government should “free” us from environmental damage and “free” us from inequality, etc. It wasn’t until someone else showed me that freedom only exists in myself that I was able to adopt the full libertarian view of government as only being an entity of force.
I now believe the ONLY way that the power usurping federal government will be stopped is when the common people once again recognize what freedom really is and take it back.
The Committees of Safety has a viable plan and format for making this happen constitutionally and by state statute. It is a far better plan than any hopes of replacing all the long-term incumbents in Congress!
September 24, 2009 at 4:34 amIn my mind, the difference between natural law and positive law doctrine is made clear by Bastiat’s simple premise:
The only proper role of law is to protect life, liberty, and property. If the “law” is used to violate life, liberty, and property it is not “law” at all, but an instrument of plunder.
Personally, I use the term “law” to describe that which protects life, liberty, and property and the term “legislation” to describe rules and dictates imposed by a ruling class bent on plunder and control.
Sarah Palin’s ghostwriter in the WSJ opines:
Instead of poll-driven “solutions,” let’s talk about real health-care reform: market-oriented, patient-centered, and result-driven. As the Cato Institute’s Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each year in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines. Rather than another top-down government plan, let’s give Americans control over their own health care.
Vouchers! How radical! And let me guess: tort reform and regulatory reform would amount to unconstitutional federal laws reaching down and changing state law.
[LRC cross-post]
From Mises Blog, Sep. 9, 2009 (archived comments below)
Great new law review article by Walter Block and Huebert, Defending Corporations, Cumberland Law Review 39:2 (2009): 363-85. They demolish the anti-corporation argument of Van Eeghen published in the Journal of Libertarian Studies in 2005 (The Corporation at Issue, Part I: The Clash of Classical Liberal Values and the Negative Consequences for Capitalist Practices and The Corporation at Issue, Part II: A Critique of Robert Hessen’s In Defense of the Corporation and Proposed Conditions for Private Incorporation).
For other discussion of this issue, see my Legitimizing the Corporation and Other Posts.
Update: See also Bill Anderson’s Economic Calculation and the Courts: A Theory of Hoaxes, in the same issue of the Cumberland Law Review (then-Cumberland law student Brad Edmonds was instrumental in helping to place these articles with the journal).
Abstract:
Government courts often are subject to hoaxes in which false crimes are reported and then pursued by prosecutors. From the Salem Witch Trials of 1692 to what was called the “Duke Rape Hoax” in Durham, North Carolina, not to mention the numerous child molestation hoaxes of the 1980s and 1990s, people were charged and sometimes convicted on what nearly everyone today realizes were false charges. In this paper, I examine two court-induced hoaxes from an Austrian point of view. I apply the economic calculation analysis as developed by Mises and Rothbard as well as more general principles of Austrian Economics to explain why hoaxes would be prevalent in government courts, and why they continue.
[Mises Blog cross-post]
Far from being the proverbial “race to the bottom”, Delaware’s success in maintaining order, legitimacy, and efficiency has great potential to be the example needed to decouple geographic monopolies from the security, justice, and governance systems: Just let people choose which State’s law they wish to incorporate themselves under.
There certainly might be far-reaching consequences of allowing such a radical departure from tying a “law-maker” to “his kingdom” – but the underlying basis for such a construct has long since disappeared from modern jurisprudence, and needs to be replaced with one respecting each human as a law-maker for his own castle.
On the other hand, the limited liability privilege cannot be contractually manufactured in situations where there are non-contractual obligations involved–the notable example being obligations arising from torts committed by a business against non-customers. If someone hasn’t chosen to do business with the owner, they obviously they haven’t waived their tort claims against the owner either. Thus, using the state to extend the limited liability shield beyond the relationships that are covered by privity of contract is manifestly unjust. In this respect, the legal fiction of a separate corporate personality has a real potential for harming individual rights.
so what if it is? Who said the state’s laws make sense?
But it’s not redundant. In fact the stat’s way of treating it (with logic that the anti-corporatists deny) is based on the idea that it needs the state to grant it legal personality, so it uses this as an excuse to seprately tax and regulate them.
“Indeed, it would be difficult to justify following the rules for forming a corporation, even in Delaware, when the alternative is a complete freedom of contract without the hassle of state fees or of compliance with complex state corporate codes.”
I have no idea what this is supposed to show.
“On the other hand, the limited liability privilege cannot be contractually manufactured in situations where there are non-contractual obligations involved–the notable example being obligations arising from torts committed by a business against non-customers.”
Read the paper.
The paper, unfortunately, attempts to address the issue by offering an overly vague analysis of vicarious liability that doesn’t really address the point I raised. What the paper fails to acknowledge is that under libertarian principles, there always has to be some person or persons responsible as principals of the business, and therefore personally liable for torts committed by the firm.
The general rule for corporate-like contractual business organizations is that liability is attributed to owners of the equitable interest–that is, the people who have a vested right to directly or indirectly hire and fire the managers and agents of the firm. In a joint-stock company, that would be the shareholders who have voting rights (the directors, in that case, functioning as their agents). In a business trust, the shareholders only have a beneficial interest, so it is the trustees (the equivalent of directors) who are the principals. While it is possible to shield shareholders, such a shield can exist only if the shareholders give up control over the directors and the directors themselves become responsible as principals; the directors acting as fiduciaries for and not as agents of the shareholders.
The basic problem with the modern corporate form is that neither the shareholders nor the directors are held personally responsible as principals–the corporate principal being a mere legal fiction, a franchise created out of thin air by the state. This tempts potential malefactors to create thinly capitalized corporate entities for the express purpose of transferring most of the risk of losses away from themselves.
Such behavior in turn tempts anti-capitalist political activists to demand intensive government regulation of businesses where there is a significant potential for torts, breaches of fiduciary duties, etc. because the owners happen to be shielded from responsibility for taking risks at other people’s expense. The solution, of course, is not more regulation; it is to make the relevant decision makers personally liable for the harm they cause.
I do recognize that the limited liability/tort exemption privilege is not an inherent part of the corporate form. At other points in history and in other countries, corporations and their equivalents have had various forms of shareholder or director liability. Likewise, I recognize that the tort system itself has many problems that are frequently unfair to business owners. Nevertheless, the elimination of personal liability for acts of the corporation (for both shareholders and directors) is the main reason why corporations are preferred over business trusts and joint stock companies today. Even granting that vicarious liability need not flow to the shareholders (as is the case with business trusts), the question remains: how can an organization without any personally-responsible principals be consistent with libertarian legal principles?
The paper, unfortunately, attempts to address the issue by offering an overly vague analysis of vicarious liability that doesn’t really address the point I raised. ”
And see the link I added too for my posts.
I’m a bit unclear as to what Vincent Cook’s complaint is all about-if true individual liability were brought about…there is no more complaint. The paper calls for just that.
You continue to dodge this point just as Block and Huebert have explicitly begged the question in their latest effort:
“As long as there is no fraud, as long as all those who deal with corporations know full well that in case of any dispute, they will only be able to sue for an amount up to the full capitalization of the corporation and not have access to the shareholders’ personal assets, there can be no problem with the libertarian legal code.”
It goes without saying that injured persons don`t choose ahead of time who will injure them, much less the whether the liability of their tortfeasors will be limited to corporate assets.
I have commented extensively myself on the consequences of this grant – which I see as fuelling risky corporate behavior and a cycle of “rent-seeking” fights with private interests seeking to use the state as a check against corporations –
in a number of blog posts.
Since too many links apparently triggers the spam filter here, I have copied this comment to a blog post, with links to earlier discussions at the Mises Blog and to my own thoughts, here:
I think a hostile takeover is not always a viable option after the damage is done.
I also think that the corporation very much behaves as though it is its own entity. The officers and management in corporations very much assume different roles than those in “real life”.
I don’t think the people who falsified the reports on Vioxx would stand to see a loved one prescribed Vioxx.
They are subject to corporate pressures that remove, to some degree, a sense of personal responsibility. It’s not limited to fraud.
Many companies sponsor an atmosphere of indoctrination. We’ve all seen the Enron emails where they talk about ripping customer’s faces off. We don’t do these things outside of work. We don’t often seek asymmetrical advantage in our personal lives. We have a natural sense of fairness that might be suppressed at work. I’m not saying all corporate jobs are like that, but plenty are. I’m not saying it’s wrong either, but let’s not pretend the actors in a company behave the same as they do when at home.
If you doubt it, go to the DMV for a reminder. If those people acted the same out of work, they would be crime statistics.
But in the field of libertarian law, what is a sound principle of causation? In the realm of purposeful human action, we don’t merely move our muscles, we also think about the future state of affairs we want to bring about and govern our voluntary muscular movements based upon these thoughts. When we act, we engage in a special form of causation that involves thinking as well as doing, which greatly multiplies the ways in which we can coordinate our actions for a common purpose.
Specifically, the intellectual dimension of human action means that, in the context of organizations, individuals who supply the intention are just as much a causal factor as the individuals who do the physical deed. Indeed, it is difficult to imagine how vicarious liability could work in the context of authorizing agents to enter into contracts, and not in the context of causing a tort. Don’t contracts also require causation, namely of an act of consent? How can it be just for another to consent on your behalf, unless in some manner you caused it to happen?
The key to understanding the proper scope of vicarious liability then, whether it involve the creation of tort obligations or the creation of contractual obligations, is to analyze who has the ultimate authority to direct or authorize others to engage in a particular action. If you are granting powers to others to act on your behalf, or giving orders that they should act in a certain way, then their actions are in part a manifestation of your intentions–you are just as much a causal factor as they are. When directors act as agents of the shareholders, the shareholders are bound by all the obligations created by these acts, not just by the acts that happen to be contractual obligations.
Stephan responded to my latest post: “And see the link I added too for my posts.” In these posts, Stephan argues, in effect, that vicarious liability shouldn’t apply in the field of torts, maintaining instead that one must show that one actually caused the tort according to “sound principles of causation.”
But in the field of libertarian law, what is a sound principle of causation? In the realm of purposeful human action, we don’t merely move our muscles, we also think about the future state of affairs we want to bring about and govern our voluntary muscular movements based upon these thoughts. When we act, we engage in a special form of causation that involves thinking as well as doing, which greatly multiplies the ways in which we can coordinate our actions for a common purpose.
Yes, I know, this is why I linked my article Causation and Aggression which goes into all this in further detail.
Yes, I know, this is why I linked my article Causation and Aggression which goes into all this in further detail.
It is an interesting article, but I don’t understand how it contradicts my argument. Since you endorse the view that one human can serve as an instrument for realizing another’s intention, then surely directors who act according to the intentions of shareholders are creating shareholder responsibility for those acts.
Interesting post by the sci-fi writer Cory Doctorow: Homemade Braille edition of Little Brother from Detroit public school teacher, in which he notes that he was sent a Braille copy of his young adult novel Little Brother, by a teacher of visually impaired students in Detroit. She had run off a Braille copies using her school’s Braille embosser to supply to her students. The teacher noted, “What I could not enclose is the gratitude from my Braille reading students. For various reasons, most books in Braille are aimed at younger children. My students are all between the ages of 12 and 15 and have no real interest in reading a Kindergarten level book. I was finally able to give them something interesting, compelling, and, most importantly at their grade level.”
What I was especially interested in was how Doctorow’s use of the Creative Commons license contributed to this:
Patricia notes that she was able to do this only because the text of the novel is available as a free, Creative Commons licensed download (though US copyright law grants her the right to prepare a Braille edition of any book, the cost of doing so from a traditional printed book is prohibitive, and converting from a DRM-crippled ebook is technically difficult).
[Against Monopoly cross-post]
Nice article by David Swanson on TomDispatch.com. As noted there, Swanson is an “Organizer” and “founder … of the website AfterDowningStreet.org, [and] was long in the forefront of those calling for the impeachment of George W. Bush and Dick Cheney — and now for bringing them to trial.” And he is the author of the new book Daybreak: Undoing the Imperial Presidency and Forming a More Perfect Union (Seven Stories Press, 2009). (And according to this post, his book due to a campaign to promote it on Amazon, caused it to reach “the #1 spot in nonfiction, knocking Glenn Beck’s bestseller briefly off its perch.”
[LRC cross-post]
By “Fastidious,” in What I’m Reading/Thinking About: The Case Against Intellectual Property Rights.
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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