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Source link: http://blog.mises.org/8036/the-political-economy-of-moral-hazard/

The Political Economy of Moral Hazard

April 18, 2008 by

Moral hazard is the incentive of person A to use more resources than he otherwise would have used, because he knows, or believes he knows, that person B will provide some or all of these resources. Many economists have concluded that moral hazard entails market failures.

Jörg Guido Hülsmann shows, however, that moral hazard arises anywhere there is a separation of ownership and control — and further, that moral hazard entails expropriation when ownership and control of a resource are separated without the consent of the owner. This is, in fact, the essence of government interventionism: institutionalized uninvited co-ownership.

FULL ARTICLE

{ 66 comments }

Owen April 23, 2008 at 9:13 pm

Inquisitor:

There is no burden of proof to a Troll, only to someone who contributes and participates in a debate.

So far all you have done is snipe around the edges asking for freebees in a debate in which you have contributed nothing.

Add something and you might get something back. Until then no-one is obliged to humor a socialist-troll by feeding him for free.

Inquisitor April 24, 2008 at 10:49 am

Ah, I see… now the burden of proof depends on who is demanding proof of the assertions (the positing of which without proof is much closer to trolling than anything else.) What nonsense.

I’m done with you, troll.

Owen April 24, 2008 at 2:37 pm

Inquisitor:

There is no burden of proof to a troll who adds nothing to a debate. Just as one does not have any obligation to explain ones opinions to every single person in the world.

There is only an obligation to share reasoning and give explanations to those who respond in kind.

If you are sad because you demand explanation and proof whilst providing none yourself.

Wanting something for nothing is a distinctly socialist trait. I don’t know what you are doing on a libertarian board. Find another one where your sponging is accepted.

Self reliance is appreciated here not sponging.

Inquisitor April 24, 2008 at 5:46 pm

Ok, well thanks for admitting you can’t prove anything and have no idea how burden of proof works in arguments. Happy trolling.

Owen April 24, 2008 at 7:41 pm

Inquisitor:

Burden of proof works for those IN the argument. No-one has a burden of proof to any and every person in the world. Only to those WITHIN the argument. You weren’t in it because you just sniped around the edges with nothing to contribute.

Not those who snipe around the edges looking for freebees.

Your posts are getting smaller. Running out of useless things to say?

BTW/ Your fallicious argument in another thread was uncovered. Might wanna tidy that one up!

P.M.Lawrence April 25, 2008 at 1:18 am

Testing (my reply to V Harris yesterday seems to be stuck somewhere).

Inquisitor April 25, 2008 at 8:25 am

Oh that is rich – now one has to be “within” the argument, as if asking you for proof directly puts me out of it. Get real, troll boy. How about you show me where you got this notion of burden of proof from, then? BTW, it’s spelled “fallacious”.

Owen April 25, 2008 at 6:11 pm

Inquisitor:

No, you’re socialist “get something for nothing” Trolling and “contribute nothing” sniping never brought you into the argument.

Contribute! Now is that so hard?…I guess it is for you…

Inquisitor April 25, 2008 at 6:35 pm

You’re not even entertaining quarry – I asked you, directly, within the argument, to provide proof for your assertions. You evade. I bore of this.

P.M.Lawrence April 26, 2008 at 4:32 am

V Harris, this is an answer to your points, replacing an earlier attempt that got lost in the works somewhere.

The state is not taxing ME as a person — rather they are taxing for occupancy and use of the property – so what? You are still paying directly or indirectly, and the state has nothing to do with your occupancy and use unless it qualifies under the exceptions noted above, i.e. unless the state had a just claim to it in the first place and reserved the right to interfere in that way when it released the property – basically, the sort of right that makes a rent.

The same goes for “As the taxing authority, the state is the functional owner of the property. As owner, the state also has the right to dictate the ways I may use its property and the ways I may behave while occupying its property.” You can’t infer its ownership from its taxing, you can only infer a just right to tax if it qualifies as described above – which includes being an owner earlier. And so on for the rest of your assertions.

Let’s look at a particular case, the USA (much the same applies for other countries). Most of it was acquired by conquest like the eastern states and the parts that were Spanish or Mexican. Some was acquired by coerced purchase. Some was purchased from people who only had it themselves under dubious circumstances, like Napoleon or the Czar of Russia, so the purchase only amounted to a quitclaim against them, not a moral title against all others.

That really only leaves the Jackson Purchase. But land there was released by the USA under a more final arrangement, not reserving any right to revisit things and tax on that basis. In fact, the USA later conquered the two states involved, showing that it was applying force.

Basically, the USA has no moral claim of the sort you describe over any of its territory, unless you believe threat, force or conquest give it the right.

As for “We are — at least so far — free to leave if we disagree with those terms and conditions“, well, only if you mean free to go somewhere else with similar arrangements. States have set themselves up everywhere these days. Even groups that tried it in earlier times, like the Boers and the Mormons, found that the authorities they fled came after them and resubjugated them in due time. Individuals fared even worse.

Owen April 26, 2008 at 6:31 am

Inquisitor:

You can’t be in the argument by saying “I am in the argument”. You have sponged all the way so far and contributed nothing. No views, analysis or discussion.

So go to a socialist Troll board where they will give you something for free.

Inquisitor April 26, 2008 at 7:12 am

Pathetic. Directly asking you for proof means I’m “out of the argument”, somehow. You’re the one who wants something for free – for others to offer substantive rebuttals to mere assertions. Forget it. I’m done with this.

Owen April 26, 2008 at 9:44 pm

Inquisitor:

No, never having contributed to the discussion in any constructive way means you are not entitled to ask for any proof.

Why can’t you contribute or back up your claims or queries? Is there something wrong with you?

V Harris May 3, 2008 at 10:30 am

P.M.Lawrence: As we agreed in my hypothetical, when I ‘purchase’ that property I do not acquire any right that it be free from taxation or use regulation.

Payment of taxes to the state (in USA typically a local municipality) is a financial obligation superseding all others. Zoning, code and behavior regulations are occupancy and use restrictions superseding all others. These render the state’s power over ‘my’ property as indistinguishable from ownership and so my deed as indistinguishable from a lease agreement.

The only unusual aspect of the state’s ownership of ‘my’ property is that the state fails to tax the property at it’s full market value. This allowed the previous deed holder to exact a payment from me to transfer the ‘lease’ to me — the amount of the payment being the marginal difference between the tax burden and my perceived value of the ‘lease.’ As the tax and regulatory burden changes, the amount that I am able to exact to transfer the title to someone else may change — possibly even go to zero or negative value (where tax rate plus regulatory obligation is equal to or greater than market value).

I don’t dispute your point that the state may have no original just claim to tax and regulate the property. However, in my hypothetical — as well as most other instances, the state asserted a right and exercised its power to tax and regulate the property — long before the current deed holder acquired it. Further, the current deed holder acquired the property on condition of the payment of taxes and obedience to regulations. Thus, the state’s right to tax and regulate (which is indistinguishable from owning) is created and legitimated.

These practical realities illustrate the argument that the state is the functional owner of all property within its geographical boundaries.

Inquisitor May 3, 2008 at 12:06 pm

Are you done justifying “your” government? Because you still haven’t shown why anyone should abide with this contract with an outright robber, anymore than one should abide by contracts with the mafia. Why time should make the theft any more justifiable is beyond me. Asserting a right to steal means nothing in the grand scheme of things, and the passage of time will not change that it was unjust from the very day it began. So your arguments show nothing other than that a thief may try justify their theft by indicating the passage of time. Rebuking and overthrowing this glorified thief is perfectly justified.

V Harris May 3, 2008 at 4:27 pm

Inquisitor: I cede your point that originally the state implemented property taxation and regulation on ‘my’ hypothetical property via coercion backed by threat of violence.

Since then, however, the state’s exercise of those powers has been actual, open, notorious, exclusive, hostile, under cover of claim or right, and continuous and uninterrupted. At the very least this gives the state adverse possession rights for this property.

When selling me the property, the previous owner made no claim that the title was free and clear of state taxation or regulation. When I executed the purchase documents, I agreed, explicitly and implicitly, to abide by tax obligations and regulatory schemes.

To whatever extent you believe the state does not possess legitimate tax and regulation powers, I, as new ‘owner’ possess even less right to be free from the state’s taxes and regulations.

Agreed that with sufficient public sentiment — that is, via coercion backed by the threat of violence — the current owner (the state) may be dispossessed of its right to tax and regulate ‘my’ property (just as it was taken from the King).

However, such coercive dispossession can not provide me with just claim to the property free and clear of tax or regulatory burden. Indeed, such violent overthrow would serve only to perpetuate the chain of violation of property rights.

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