The Political Economy of Moral Hazard
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.
Comments (66)
Miss World owns the key to her chastity belt,
as advertised in the New York Times ?.
Moral Hazard indeed!
Sounds as if Hyper-inflations are a sure thing.
Published: April 18, 2008 4:18 PM
"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...".
Where's the contradiction? Market failure is what happens when the right things are not in place for a market to work, it's not a condemnation of markets that are set up correctly. Separation of ownership and control is a case of market failure, unless you are only using the term to describe the symptoms and not the disease itself.
There's a problem with "...moral hazard entails expropriation when ownership and control of a resource are separated without the consent of the owner", though; it builds in something that isn't necessarily so, "...without the consent of the owner", as though all cases are like that. Ownership and control can be separated by never having been put together correctly in the first place, then kept that way, as well as by removing control from owners who once had control. It should be reworded to make clearer what I think Hülsmann meant, that in those cases in which ownership and control were once together, separating them is expropriation. Maybe "...when ownership and control of a resource become separated..." instead of "...when ownership and control of a resource are separated..."?
Published: April 18, 2008 8:38 PM
This is one of the best articles Mises.org has run. Wonderful job, Guido! And, coincidentally, that last section that mentions bankers relying on bailouts from the gov't makes this article sound like it was written for current events even though this was written a couple years ago.
Bravo!
Published: April 18, 2008 10:48 PM
Ditto Steve Carson's remarks, though I got a bit squishy on the last paragraphs regarding currencies.
Digg it, kiddoes: LvMI's postings are the White Blood Cells for the political and other debates that go on at my blog and others. Kudos for a SUBLIME article.
Published: April 19, 2008 4:18 AM
The late Murry Rothbard was correct to be enraged by the writings of Walter Bagehot.
It is simply not true that all Victorian writers were unclear and contradictary - what it is true is that some Victorian liberals were a total mess and that Walter Bagehot was one of them (and not just on economics - for example his "classic" The English Constitution is full of nonsense such as "we must press for this [voting] scheme at every opportunity....." "but there is no space to give the details of it in this book" he was not being ironic - he just did not notice he was contradicting himself).
The line on support of the banks is an example of this - the central bank is to lend freely whenever there is a crises, but not give the impression that it will do so (as if people will not notice how it acted all the other times).
An absurd line - but a line followed into our own times by (for example) Alan Greenspan who endlessly spoke against rash lending whilst always bailing out the markets.
It was the basic policy of the Fed (the general increase in the credit money supply to support the markets, and the special bailouts each time the bubble looked like it was going to collapse) that has created the mess.
Each time "the economy is saved" what has in fact happened is that the problem has been made bigger - and the inevitable bust has been made hasher.
Published: April 19, 2008 7:25 AM
Great article! Thanks!
Published: April 19, 2008 9:44 AM
By the mechanism of overwhelming force, the state becomes owner of all property within its geographical boundaries. As owner, the state is able at any time to both set and amend the terms by which it allows tenants to occupy its property.
With the state as landlord and 'owners' as tenants, taxation rates, zoning restrictions and behavior regulations become the terms of the contract intended to act as a hedge (sometimes dubious) against moral hazard opportunities of its tenants.
Hulsmann ought to disabuse himself of his notion of co-ownership with the state -- it is nonsense. The state is proprietor of all within its boundaries. As does any property owner, it enforces its ownership rights with coercion and, where necessary, force.
V Harris
Published: April 19, 2008 9:09 PM
The article is not very good because he does not explain why moral hazard would be absent in the absence of Fiat money. Therefore we cannot accept his given alternative that the abolition of FIAT money alone would be a good outcome.
It seems perfectly obvious that the major manifestation of the moral hazard identified by the author is uncontrolled monetary expansion.
Well, this is also possible under a gold-based monetary system, because fractional-reserve banking can still take place.
Published: April 20, 2008 2:48 AM
Well, this is also possible under a gold-based monetary system, because fractional-reserve banking can still take place.
i dont think the author was intending to say that moral hazard would be absent in the absence of fiat money.
he mentions moral hazard and property rights and the 'case of fiat money.'
i suppose he could have mentioned the theft of gold from the new world by spain?
the current govts constitution says something like..."No State shall....make any Thing but gold and silver Coin a Tender in Payment of Debts." but i guess that has been forgotten or ignored.
i gues the real moral hazard is that 100 percent gold backed reserves is made nearly impossible to take place - by government.
"There is no doubt that goldsmiths in early modern times did begin to take on the function of banks. At some point, goldsmith-bankers did begin to lend receipts to gold that were not 100% backed by gold. They did begin to collect interest payments from borrowers who believed that there was enough gold in reserve to pay off receipts under normal circumstances. Banking in Spain during the sixteenth century adopted fractional reserves, and a series of banking house bankruptcies in second half of the century proved it. The Emperor, Charles V, had legalized the system. As usual, the State authorized the practice of fractional reserve banking as a means of financing itself. It wanted a ready market for its debt."
http://www.lewrockwell.com/north/north86.html
this excerpt seems to indicate that the real moral hazard of fractional reserve banking has been mostly inspired and enlarged by the state.
i dont recall any instances where the gold holding masses demanded fractional reserve banking services.
from the same article...." So, in 1933, Franklin Roosevelt unconstitutionally confiscated Americans' gold that was still outside the banks. By unilateral executive order, he made it illegal for American citizens to own any gold coins that had no numismatic value. The government paid the owners $20.67 per ounce. Once the gold was in the possession of the Treasury, Roosevelt officially hiked the price to $35 on January 31, 1934. The Fed then bought the gold from the Treasury by creating new money......So, worldwide, governments and central banks steadily removed gold coins from the economy, thereby demonetizing gold. It was the most successful systematic theft operation in human history. It was all done officially. It was all done with paper IOU's to gold that were revoked by sovereign governments, which in turn chose not to be sued by their victims. The public now is unfamiliar with gold coins as a medium of exchange. "
would the public have just decided that, 'geez, why dont we just give this gold to the government and let them manipulate the price of it."
Published: April 20, 2008 4:49 AM
Uncontrolled expansion is not possible under a gold-based monetary system, it has a built-in check for expansion. Under such a system you have the money (gold), the money substitue (e.g., bank notes) and fiduciary media (money substitutes not backed by reserves). Any time you decide your bank has overissued fiduciary media and is losing its solvency you can fall back to the real money (gold) without loosing the value of your holdings and choose some other bank, one which upholds full-reserve policy. Thus the ability to manipulate the value of gold currency is kept within very narrow limits.
In essence, with gold-based currency, you are the only owner of your money and its value, and you choose to expose your money to fractional-reserve banking only voluntary, if so. But in the case of fiat currency, you always have the government (or the FED) as the unwanted co-owner of the value of your money, with legal tender laws preventing you from opting out of using fiat currency.
I suggest you read a couple of sections from the Chapter XVII of Mises' Human Action to grasp this topic: The Money-Substitutes and The Limitation on the Issuance of Fiduciary Media, or maybe even the whole Chapter XVII (Indirect Exchange).
Published: April 20, 2008 7:49 AM
Harris, by what theory of property does it justify its ownership over a territory? Merely claiming to own something means absolutely nothing.
Published: April 20, 2008 7:51 AM
Inquisitor: The state is sovereign -- it not only claims but vigorously defends its supreme, permanent authority. As sovereign, the state need do nothing more than declare its desire to exert its 'power' over property in order to do so -- for instance, to extract rents via taxation or control usage via zoning.
Complainants may make due process or just compensation claims, but usually to little avail.
Henceforth anyone who acquires such property is on notice that it is taxed or its usage controlled by the state.
The effect is that when I purchase property today, I am buying from the previous occupant the exclusive right to occupy the property, subject to the terms and conditions of the owner -- the state.
To the victor go the spoils. So far the state is the victor.
Published: April 20, 2008 2:16 PM
So the state is sovereign, because it says so. Right, and I own the Moon. Now do explain why I should accept its claim, by way of logical justification that doesn't make recourse to 'might makes right'.
Published: April 20, 2008 4:41 PM
simik:
You don't understand the magic of fractional reserving.
A very very large bank that is spread across hundreds of different localities and countries and has "gold guarantees" with other banks in its cartel...could easily satisfy the gold demand of any single customer whilst issuing possibly tens or even hundreds of times this amount in currency.
You don't understand fractional reserving.
You cannot take down a bank by withdrawing your money. Good luck convincing 100 million people to withdraw their money at the same time. They can't be bothered.
They are too busy getting on with their lives. The bank works for them because if they ever need the gold they can get it.
People don't wanna keep $50,000 worth of gold at home because it could get stolen. It is safer at the bank.
So a bank that fractionally reserves is to the average person, no different from a 100% reserve bank except the fractionally reserving bank can pay you interest on your gold which a 100% reserve bank cannot (in fact it would probably have to charge you money to cover it's costs).
Published: April 20, 2008 6:58 PM
You really should read The Limitation on the Issuance of Fiduciary Media, it even, among other things, deals with that imaginary giant bank of yours and shows what rules it is bound to comply with if doesn't want to go bankrupt.
Published: April 21, 2008 3:53 AM
Simik:
"Giant Banks" are still able to counterfeit money and use the principles of fractional-reserve banking even when they comply with these rules of yours. That is my point.
There are too many people on here that think that a gold-based system as it is on it's own is perfect. Far from it.
There is still a need for some kind of government involvement in the medium of exchange.
Published: April 21, 2008 3:58 AM
Owen
Simik:
"Giant Banks" are still able to counterfeit money and use the principles of fractional-reserve banking even when they comply with these rules of yours. That is my point.
There are too many people on here that think that a gold-based system as it is on it's own is perfect. Far from it.
There is still a need for some kind of government involvement in the medium of exchange
Response: No there isn't. No system is perfect, and any system is subject to error. Government involvement can never reduce the degree of imperfection, while it makes it far more likely the imperfection will increase. There is no way around that fundamental limitation: While ordinary human error is distributed among millions of decisions being taken in a market context, and will hence be distributed randomly, the effect of government involvement is to synchronise the error - one side or the other. Hence it is always a destabilising influence. Very ironic, considering that most central banks loudly trumpet their role as being the opposite: stabilising the 'voilatility' of the free market.
Published: April 21, 2008 5:01 AM
This was really an outstanding article.
Regarding the debate in the comments about fractional reserve banking, I think these kinds of arguments are moot. They examine the contradictory and imaginary situation where markets are "free" and yet someone is still dictating things from above, such as fractional reserve banking is legal (or not). In a true free market, one bank will lend on fractional reserves, and another will not. Then, we will find out if it works or not. The market, as always, will punish those that make bad decisions, and reward those that make good ones.
Published: April 21, 2008 2:09 PM
David C:
I am sorry but ther is one glaringly obvious hole in your theory that every time the government intervenes it causes a destabilising error...
Ever heard of law and order? The role of the government here averts the rule of the powerful over the weak by instituting an overarching and more powerful body to regulate all kinds of human behaviour.
I agree that government intervention should cease from all or most types of economic activity but you cannot deny that the rights of the man on the street are "stabilised" by the protection of government law and order.
That being the case there is no way you can say that BLANKET government intervention does not establishe stability. It does.
I argue that in regulating monetary expansion (which governments are not doing at the moment) this creates stability in the economy.
A gold sysem does not have the ability to fully curb fractional reserve banking activities leading to monetary expansion, leading to instability.
Simple really.
Published: April 21, 2008 6:58 PM
You argue? No, you assert. And that is simple indeed.
Published: April 21, 2008 7:11 PM
Inquisitor:
You say nothing. Even more simpler.
Published: April 21, 2008 7:48 PM
Saying nothing... in response to nothing is entirely pertinent. BTW, there's no such thing as "more simpler"...
Published: April 21, 2008 8:03 PM
'Ever heard of law and order? The role of the government here averts the rule of the powerful over the weak by instituting an overarching and more powerful body to regulate all kinds of human behaviour. I agree that government intervention should cease from all or most types of economic activity but you cannot deny that the rights of the man on the street are "stabilised" by the protection of government law and order.'
Oh, dear - that again.
It is not true that without government you must get all those bad alternatives. You only get them when governments remove yet other even better alternatives that people generally work out for themselves, then suddenly stop their side of things, as in a police strike. But places where there wasn't any state presence in the first place were usually quite safe and orderly all by themselves. The only non-temporary threats to those arrangements come from outside (since people push out anybody inside who tries to take advantage). Those can be dealt with by militia arrangements, unless it's a full blown state doing the threatening. When they aren't, either somebody takes over for defence and ends up sitting on top, or someone outside claims to be a protector - protecting from everybody else but not from himself. And that's government - a cure for a disease they cause.
So, the only stuff like that that the government ever gives are the things it stopped you managing for yourself in the first place. Plus, very often the government actually helps "the rule of the powerful over the weak by instituting an overarching and more powerful body to regulate all kinds of human behaviour".
Published: April 21, 2008 8:21 PM
P.M.Lawrence:
Oh my god you are an anarchist. Sad. Someone who believes that no-body at all has any rights and that "Might should always be right".
Yes, lets all go back to your "state of nature" and see absolute tyranny by those with money upon the weak.
Obviously you have never heard of democracy and the right of people to choose their government.
"But places where there wasn't any state presence in the first place were usually quite safe and orderly all by themselves." You mean those Neanderthals with their leaves and open fires? You can go back and live with them if you like. The other 99.99% of the world prefers to live in a society where their rights are protected.
Published: April 21, 2008 9:15 PM
'Someone who believes that no-body at all has any rights and that "Might should always be right"' - Owen, you made that up.
'Yes, lets all go back to your "state of nature" and see absolute tyranny by those with money upon the weak' - and you made that up too, particularly the "state of nature" thing.
"Obviously you have never heard of democracy and the right of people to choose their government" - and you made that up. I have heard of it, but I never heard of people having any right to choose governments for other people who didn't want to play - except from the people who wanted to do that, of course. (That's "might makes right" too, by the way).
'You mean those Neanderthals with their leaves and open fires? You can go back and live with them if you like.' - and that's made up (you can find lots of better things as alternatives, right there in the historical record, only you won't look).
"The other 99.99% of the world prefers to live in a society where their rights are protected" - speak for yourself, sunshine, you certainly don't speak for other people. I also notice you didn't pay attention to the fact that governments do the opposite of protecting rights when they feel like it. People who really want their rights protected are precisely the ones who prefer to arrange that for themselves.
Published: April 21, 2008 10:53 PM
P.M.Lawrence:
Case rested mate. You are sicko anarchist. There is no talking to someone like you and your adherence to "lets all fight it out and those with the biggest guns wins" policy.
Where are the 99% of people voting for anarchist parties in elections in the free world?
Beeeeeep. Question time over. Sounds like 99.99% of those who voted freely DIDN'T choose Anarchist nutjobs and no one ever will either.
Published: April 21, 2008 11:45 PM
"Where are the 99% of people voting for anarchist parties in elections in the free world?
Beeeeeep. Question time over. Sounds like 99.99% of those who voted freely DIDN'T choose Anarchist nutjobs and no one ever will either."
Very good point Owen!
Published: April 22, 2008 12:26 AM
TLWP Sam:
Thanks Sam. I am all for reducing the role of government and libertarian Ideals but I cannot agree with anarchists that say we do not need at a very minimum a centralised law and order in order to fucntion as a state.
I for one would never like to live looking constantly over my shoulder for the guy with the bigger guns.
Published: April 22, 2008 3:51 AM
Now, Owen, with you gloriously defeating the evil anarchist and once again protecting the peace in the whole world I suggest we get back to the topic of gold standard and fractional-reserve.
First of all, counterfeiting is illegal under any monetary system. And issuing fiduciary media is not counterfeiting. It does entail the moral hazard of overissuing, but that's the risk you as a bank's client is free, but not obliged to take. Besides, you can always fall back to the gold.
The point is, noone is forced to use services of any particular bank. If your bank starts going crazy with issuing fiduciary media, change the bank. Such a crazy bank can't go for long, its clients being afraid of loosing their savings are just going to redeem their gold, in the end emptying bank's reserves. And that will be the end for the crazy bank. Do you think its shareholders are going to allow this?
And, BTW, the rules stated in the refered section are the rules of issuing fiduciary media which the bank should comply with not to go bankrupt. Seems like, you didn't even bother to read them.
Being much better in so many ways than fiat monetary system is enough reason to consider gold standard, being perfect is absolutely not necessary.
What kind of government involvement in the medium of exchange do you think is necessary?
Published: April 22, 2008 8:11 AM
Owen, did you notice that it is you who assereted 'There is no talking to someone like you and your adherence to "lets all fight it out and those with the biggest guns wins" policy', i.e., that I never, not once, pushed a policy anything like that? That your scheme of democracy comes the closest to that policy, in the historical track record? That when I point out flaws in your approach, that is not advocacy of something else?
Published: April 22, 2008 8:20 AM
Owen excels in misrepresenting the views of others and avoiding offering proof for anything he claims. That he so utterly made a mess of what you said should be no surprise at this stage.
Published: April 22, 2008 8:38 AM
Inquisitor: If a deed holder acquired his property with the understanding that he will be required to pay taxes and abide by zoning and behavior regulations then does he genuinely own the property?
Suppose, in turn, that I acquire that same property -- with knowledge that I also will be expected to pay taxes and and abide by regulations. Do I 'own' that property?
If yes, then what is the mechanism whereby I come to hold the property free of any obligation to pay taxes or abide by regulations?
Published: April 22, 2008 1:29 PM
My question is whether the State has any right to compel anyone to obey its decrees in the first place - whether there is anything it can legitimately bring to the bargain. Did it justly acquire its holdings? Or did it do so by force? If the latter, why should anyone care what deals were struck with it? It has about as much right to demand anything as a criminal.
Published: April 22, 2008 5:52 PM
V Harris:
Don't worry Inquisitor will not even attempt to answer your question he will merely waste pixels saying nothing of consequence as usual.
Simik:
Thanks, you know we gotta keep the wackjobs in their place.
I must admit that I "misspoke" using Billary Clintons words because counterfeiting is not what I meant. Counterfeiting is ostensibly what occurs now but it could not occur uner a gold-backed system. What I mean't was fractionally-reserving currency. Which is similar to counterfeiting but is not exactly illegal.
I read the section. However it is entirely possible for a large bank like Citibank because of it's size beaing able to comply with these "maxims" whilst ALSO fractionally reserving its currency. That is the danger inherent in a free gold-backed system.
I however struggle to agree that a Gold system is better than a fiat government system because we know the ills of a fiat government system but we have yet to learn the limits of the evil possible under a gold-backed system which is free of any regulation.
The Most important thing in my mind is to prevent fractional reserve practices at every possible turn. The best method of doing this is simply to prohibit fractional reserving by using legislation and enforcing this at the government level. This means that the government would set the money supply level and increases would be only minimal to cause slight inflation (hidden tax I know) to pay for needed government services like law and order and defence.
In this regard, gold backed currency systems seem to provide a natural hedge against unlimited money creation by banks but we do not know in practice whether this will actually stop a very large super- Citibank from doing so.
The reason is because once one bank can go multi-multi-national it can have the size and strength to fractionally reserve and be so big as to be immune to "attacks" from smaller banks that try to "bring it down" bay causing gold withdrawals from it's vaults.
People will not naturally gravitate towards a 100% gold bank because they would have to pay for this service where as people would gain interest at the same as current rates by using a fractionally reserving bank. If you are a small business or consumer you go for the money provided the fractionally reserving bank is big enough to give you security.
That is why it is only VERY BIG banks that are the problem...but what do we have now? It is the natural things for banks to be big because they trade an idential commodity product and there are massive economies of scale by fractionally reserving larger quantities of Gold.
This is a scary scenario and would put the worlds population under the control of a few mega rich people who could effectively do anything they wanted because they have all the money to do so and (if gold currency theorists have their way) no regulations to stop them.
I don't agree with the current system but I choose the Devil I know.
Published: April 22, 2008 5:55 PM
V Harris:
Don't worry Inquisitor will not even attempt to answer your question he will merely waste pixels saying nothing of consequence as usual.
Simik:
Thanks, you know we gotta keep the wackjobs in their place.
I must admit that I "misspoke" using Billary Clintons words because counterfeiting is not what I meant. Counterfeiting is ostensibly what occurs now but it could not occur uner a gold-backed system. What I mean't was fractionally-reserving currency. Which is similar to counterfeiting but is not exactly illegal.
I read the section. However it is entirely possible for a large bank like Citibank because of it's size beaing able to comply with these "maxims" whilst ALSO fractionally reserving its currency. That is the danger inherent in a free gold-backed system.
I however struggle to agree that a Gold system is better than a fiat government system because we know the ills of a fiat government system but we have yet to learn the limits of the evil possible under a gold-backed system which is free of any regulation.
The Most important thing in my mind is to prevent fractional reserve practices at every possible turn. The best method of doing this is simply to prohibit fractional reserving by using legislation and enforcing this at the government level. This means that the government would set the money supply level and increases would be only minimal to cause slight inflation (hidden tax I know) to pay for needed government services like law and order and defence.
In this regard, gold backed currency systems seem to provide a natural hedge against unlimited money creation by banks but we do not know in practice whether this will actually stop a very large super- Citibank from doing so.
The reason is because once one bank can go multi-multi-national it can have the size and strength to fractionally reserve and be so big as to be immune to "attacks" from smaller banks that try to "bring it down" bay causing gold withdrawals from it's vaults.
People will not naturally gravitate towards a 100% gold bank because they would have to pay for this service where as people would gain interest at the same as current rates by using a fractionally reserving bank. If you are a small business or consumer you go for the money provided the fractionally reserving bank is big enough to give you security.
That is why it is only VERY BIG banks that are the problem...but what do we have now? It is the natural things for banks to be big because they trade an idential commodity product and there are massive economies of scale by fractionally reserving larger quantities of Gold.
This is a scary scenario and would put the worlds population under the control of a few mega rich people who could effectively do anything they wanted because they have all the money to do so and (if gold currency theorists have their way) no regulations to stop them.
I don't agree with the current system but I choose the Devil I know.
Published: April 22, 2008 5:55 PM
V Harris:
Don't worry Inquisitor will not even attempt to answer your question he will merely waste pixels saying nothing of consequence as usual.
Simik:
Thanks, you know we gotta keep the wackjobs in their place.
I must admit that I "misspoke" using Billary Clintons words because counterfeiting is not what I meant. Counterfeiting is ostensibly what occurs now but it could not occur uner a gold-backed system. What I mean't was fractionally-reserving currency. Which is similar to counterfeiting but is not exactly illegal.
I read the section. However it is entirely possible for a large bank like Citibank because of it's size beaing able to comply with these "maxims" whilst ALSO fractionally reserving its currency. That is the danger inherent in a free gold-backed system.
I however struggle to agree that a Gold system is better than a fiat government system because we know the ills of a fiat government system but we have yet to learn the limits of the evil possible under a gold-backed system which is free of any regulation.
The Most important thing in my mind is to prevent fractional reserve practices at every possible turn. The best method of doing this is simply to prohibit fractional reserving by using legislation and enforcing this at the government level. This means that the government would set the money supply level and increases would be only minimal to cause slight inflation (hidden tax I know) to pay for needed government services like law and order and defence.
In this regard, gold backed currency systems seem to provide a natural hedge against unlimited money creation by banks but we do not know in practice whether this will actually stop a very large super- Citibank from doing so.
The reason is because once one bank can go multi-multi-national it can have the size and strength to fractionally reserve and be so big as to be immune to "attacks" from smaller banks that try to "bring it down" bay causing gold withdrawals from it's vaults.
People will not naturally gravitate towards a 100% gold bank because they would have to pay for this service where as people would gain interest at the same as current rates by using a fractionally reserving bank. If you are a small business or consumer you go for the money provided the fractionally reserving bank is big enough to give you security.
That is why it is only VERY BIG banks that are the problem...but what do we have now? It is the natural things for banks to be big because they trade an idential commodity product and there are massive economies of scale by fractionally reserving larger quantities of Gold.
This is a scary scenario and would put the worlds population under the control of a few mega rich people who could effectively do anything they wanted because they have all the money to do so and (if gold currency theorists have their way) no regulations to stop them.
I don't agree with the current system but I choose the Devil I know.
Published: April 22, 2008 5:55 PM
Owen, why do you lie again? You have a post record so far of lying, misrepresenting the positions of others, evading points, jumping from position to position, failing to provide much proof for anything you say, and you have the gall to call me a troll? Instead of contradicting yourself at every step, if I am a waste of time ignore me.
Published: April 22, 2008 6:08 PM
Inquisitor:
You have a post record so far of saying nothing of consequence. You make a bunch of allegations but cannot bank up any of them with any substance.
You're like a small child that cries during the movies. We all notice it for a second then we realise that it means nothing and get on with what we were doing.
Published: April 22, 2008 7:24 PM
Inquisitor:
You have a post record so far of saying nothing of consequence. You make a bunch of allegations but cannot back up any of them with any substance.
You're like a small child that cries during the movies. We all notice it for a second then we realise that it means nothing and get on with what we were doing.
Published: April 22, 2008 7:24 PM
Inquisitor:
You have a post record so far of saying nothing of consequence. You make a bunch of allegations but cannot back up any of them with any substance.
You're like a small child that cries during the movies. We all notice it for a second then we realise that it means nothing and get on with what we were doing.
Published: April 22, 2008 7:24 PM
...except for the "minor" problem that I'm disputing YOUR assertions, calling you to substantiate them. As I said, if I'm wasting your oh so precious time, feel free to ignore me. Otherwise quit your whining.
Published: April 22, 2008 7:38 PM
Inquisitor:
Except for the minor problem that your criticisms or disputes are not backedup up with any discussion, analysis or details so should not be taken seriously at all.
It is like a kid in high school who just sits ther saying "What" "How" "What" "How" ad infinitum.
It just gets old buddy. You add nothing so deserve no response.
Published: April 22, 2008 8:11 PM
Inquisitor: As you know, at one time or another most real property was taken by force from someone by another.
Suppose the hypothetical property I'm purchasing was taken by force from the King of England, who took it by force from native Americans? Now, today, the native Americans are dead. The King is dead. The American colonist-occupants are dead. The state has exercised taxation and regulatory control over the property as title has transferred dozens of times.
Even if the property came to be taxed and regulated via court misinterpretation of the US Constitution, how can my purchase today of the so encumbered title possibly grant me the unfettered right to possess the property free from taxation and able to use it any manner I choose?
Published: April 23, 2008 1:34 AM
V Harris, your purchase in that scenario does not give you exemptions from tax etc., either legally or morally. However, since nothing in all that grants the state any moral rights to tax you either, you get the moral right from never having given it up, from the things that come from being a person in your own right - unless something completely different gave the state the moral right to tax you, which is possible if you entered into some arrangement with it, possibly implicitly.
Published: April 23, 2008 3:18 AM
P.M.Lawrence: The state is not taxing ME as a person -- rather they are taxing for occupancy and use of the property. 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.
With perhaps a few exceptions, it is in this same fashion that the state owns all property within its geographical boundaries. This means we are all tenants of the state -- our occupancy subject to the terms and conditions as set forth, and changed from time to time, by the owner -- the state. We are -- at least so far -- free to leave if we disagree with those terms and conditions.
Published: April 23, 2008 3:52 AM
Owen, I am questioning your positive assertions. The burden of proof is on you, not me. You can continue acting like a pompous fool, or you can offer proof for them. The choice is yours. Thank you for again proving that I am not wasting your time, BTW.
V Harris, that's wonderful. Now I repeat my question: other than confiscating wealth and pretending to exercise just authority over land it never even homesteaded, why should anyone accept the claims of the State over the territory it pretends it legitimately commands? Why should one accept the demands of a robber holding a gun to their head to offer them over their proceeds? Simply because they consent, does this make the robber's actions just?
Published: April 23, 2008 8:11 AM
Inquisitor: The reason we accept the state's right to tax and regulate property is because its claim is stronger than is the claim of any deed holder's claim to not be taxed or regulated. We recognize the state's right over property because it is better than all others -- not because we can track the state's ownership pedigree back to the creation.
Are you asserting that deed holders have the right to not pay taxes and not abide by regulations? If so, since the deed holders also did not homestead the property, how did they come to possess these rights?
Published: April 23, 2008 12:48 PM
"We" did not agree to anything. Why is the State's claim better? Because it says so? So what? As for deed holders, which in particular? If they earned their income by producing on the market and then exchanged it for titles to land (or if they directly appropriated unowned resources), their claims are just.
Published: April 23, 2008 5:47 PM
Inquisitor:
Until you can add someting to the debate or back-up your objections you are still just a whining child.
An adult states their objection and supports this with reasons why.
Guess you are not an adult. Too used to getting things given to you I suppose...I thought you were libertarian...you must be socialist judging by your behaviour.
Published: April 23, 2008 6:42 PM
Incredible, a banking/land/safety socialist calls me one, just as someone who so far has lied, misrepresented the positions of others, offered nothing but blatant assertions calls me a troll. And then this same socialist troll expects me to do all the work for them, when the burden of proof is solely theirs.
Published: April 23, 2008 7:07 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.
Published: April 23, 2008 9:13 PM
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.
Published: April 24, 2008 10:49 AM
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.
Published: April 24, 2008 2:37 PM
Ok, well thanks for admitting you can't prove anything and have no idea how burden of proof works in arguments. Happy trolling.
Published: April 24, 2008 5:46 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!
Published: April 24, 2008 7:41 PM
Testing (my reply to V Harris yesterday seems to be stuck somewhere).
Published: April 25, 2008 1:18 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".
Published: April 25, 2008 8:25 AM
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...
Published: April 25, 2008 6:11 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.
Published: April 25, 2008 6:35 PM
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.
Published: April 26, 2008 4:32 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.
Published: April 26, 2008 6:31 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.
Published: April 26, 2008 7:12 AM
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?
Published: April 26, 2008 9:44 PM
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.
Published: May 3, 2008 10:30 AM
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.
Published: May 3, 2008 12:06 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.
Published: May 3, 2008 4:27 PM