On The Right of "Labor" to Own Improved Products
In response to a critique on another blog, I posted the reply below. The post I was replying to is a convoluted, muddled leftish, vague, confused, semi-mystical argument that "workers" have some kind of natural right to the improved things or value output by the companies they work for. My reply:
Neverfox, or whoever you are–
“By the way, I recommend that everyone read his article linked above. It is an excellent source of supporting principles for understanding how the productive activity of labor in creating the output "renders all of its participants independently and jointly responsible". But if we move from criminal examples to non-criminal ones, Kinsella seems to forget his own conclusions (or rather he plays dumb).”
No. I’ve elaborated on the problem of “Libertarian Creationism” (see also Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors; and my papers A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability and Against Intellectual Property, pp. 36-, section “Creation vs. Scarcity”)–the idea that property rights or homesteading come from creation or labor. It does not. It comes from appropriating previously unowned resources (homesteading), or acquiring such a good from a previous owner by voluntary transfer of title (gift or contractual transfer). Keep this in mind in your various comments about labor and management and “ownership” of the “output” of labor, etc.
“Yet he offers no reason why the criminal nature of a resulting action matters when determining who is responsible for the action.”
Because, there is only responsibility in the first place, when there is a crime. If there is no crime, there is no “responsibility.” Get it?
“Can non-criminal results not have intentional causation?”
Yes. I can persuade my brother-in-law to be rude to his mother. In this case, both I and my brother in law are doing something immoral. But neither he nor I violates her rights, so there is no libertarian responsibility at issue.
“Yes, there is no third-party "victim" but there is the question of who appropriates the newly produced outputs.”
There are no newly produced outputs. See the above-linked posts. There is only transformation of already-owned goods into new configurations–hopefully more valuable catallactically. But these factors were already owned–by the capitalist, say. He hires labor to perform actions, for a price–wages. He need not agree to transfer title to the raw materials he owns. He’s only hiring them to perform some services, and he pays them whatever they agree to. This is exceedingly non-difficult to comprehend. The rest of your post and the long quotation seems to be a confused way of saying that even though the businessman (factor-owner) made an agreement to pay laborers a specified wage in exchange for their performing certain actions, this agreement is invalid for some Marxoid reason and they are *really* entitled to the new property. If I agree to pay my maid $10 to polish my silver, then voila, she now owns (at least a part of) the “polished silver” since after all she mixed her labor with it. What nonsense.
People do not own “labor”–labor is just an action. People do not own the value of their property (see the post above re Mossof); nor to their reputations or ideas.
“The comparison between a bank robber and an employee may illustrate why Ellerman believes that workers' consent to give up legal responsibility for the entire product of their labor efforts in exchange for a wage is unjust. If a rich murderer uses a considerable cash payment to entice a willing poor person to bear the legal responsibility for the murder, a court would not recognize this contract by jailing the pauper for the crime, even if he agreed to the exchange.”
Actually, they *would* “recognize” the contract–it would be a critical factor in holding the rich guy vicariously liable for the actions of the poor contractor. But there is no analogy here to workers agreeing to “give up legal responsibility for the entire product of their labor efforts in exchange for a wage”. This is just nonsense-talk. It is not an argument at all. It is just an assertion, mired in ridiculous, unscientific, Marxoid conceptions of “labor”.
“Likewise, an entrepreneur's appropriation of the entire product and his receipt of profit from a productive firm employing wage-labor are based on what Ellerman regards as a fraudulent wage-for-labor-time exchange.”
It’s not “fraudulent” at all. If the entrepreneur does own the factors, he does no violate a laborer’s rights by offering to pay him a stipulated payment if he performs certain actions (that might make the property more valuable).
“This is not saying that consenting adults can't agree to whatever valid agreement they wish. Kinsella seems concerned that I'm arguing otherwise.”
You are, actually. You want to re-write the agreement labor and entrepreneur strike, under the pretense of these tossed off, vague, loosey-goosey notions of “fraud” and analogies to criminal conspiraces or in reliance on mystical and pseudo-scientific Marxoid notions of labor.
“Also clear from this passage is that in order to transfer something alienable, such as the output of a productive activity, you have to acquire it first.
Despite my perfect agreement with Kinsella on this point, he still comes to the strange conclusion that the shareholders were the first to appropriate the whole product.”
I don’t need to put it this way b/c I do not suffer from the delusion that the firm is creating “new”, previously-unowned things. Labor is relevant only to homesteading *unowned* things, and then only b/c it is one way of embordering–appropriating–the thing. Firms hire workers to work on already-owned things. The goal is to transform their configuration into a more useful or desirable shape or function that can be sold for a sufficiently high price. By the owner. The worker is not the owner. The guy who owns it is. If I own a fallen tree and offer you three of my chickens if you will make a canoe out of it, then I own the canoe since it’s my tree–and you own my three chickens. You have no claim on my canoe. The question of ownership of labor never arises. I just assume you have practical control over your body and actions, and that you can make a canoe for me out of my tree, if you want–so I make you an offer, which is essentially a unilateral, conditional title transfer: “Three of my chickens become yours IF you carve my tree into a canoe-shape.”
“Might we then just think of each employee as an independent contractor selling the product?
” One possibility is to think of employees as independent contractors, so that we interpret what workers sell to the entrepreneur to be the product of their efforts, and not control over their labor activities.”
You can think of it how you like, but these Marxoid metaphors are obviously leading you into error, so I’d advise against it.
“how does a shareholder obtain the role of residual claimant when they are neither the owner of the labor power, the responsible party for creating a liability for used-up inputs, nor the first possessor of the unowned product? That would be some magic trick.”
I don’t use these loaded terms to understand the situation. The shareholder has some ownership claims over the assets of the corporation, obviously. They have them by contract with other shareholders, the directors, and management. The initial resources (say, cash) are used to purchase various factors (say, raw materials). These are acquired from previous homesteaders (or their descendants in title). Employees are hired and the deal is: IF you do XYZ actions (transforming or re-arranging the raw materials owned by the corporation), THEN we will pay you $X. This is very simple. No mystery. No opening for the laborers to have a claim on the property of their employer.
Comments (41)
Frank
Neverfox is a looter, plain and simple. This is how looters (don't) think. He's also a poor writer, hiding his (non) arguments in administrative-ese prose. Overuse of prepositional phrases. Excessive passive voice. Weak brained.
Published: December 22, 2008 12:09 PM
Cork
I've been talking with Neverfox for some time on other forums, and never quite understood his whole "responsibility" schtick. I mean, I "understand" it in the sense that I get what he's trying to say, but I just don't find it all that compelling. His belief is that capitalists cannot contractually agree to 'take responsibility' for the profits of the firm or something. So this voluntary transfer of property between two consenting adults is unjust, and this kkkapitalist system will supposedly die out and be replaced by mutualism.
Published: December 22, 2008 1:41 PM
bob
I like the arguments against this in 'Economics in One Lesson'.
"How are we to know, however, precisely when labor does have “enough to buy back the product”? Or when it has more than enough? How are we to determine just what the right sum is? As the champions of the doctrine do not seem to have made any real effort to answer such questions, we are obliged to try to find the answers for ourselves.
Some sponsors of the theory seem to imply that the workers in each industry should receive enough to buy back the particular product they make. But they surely cannot mean that the makers of cheap dresses should get enough to buy back cheap dresses and the makers of mink coats enough to buy back mink coats; or that the men in the Ford plant should receive enough to buy Fords and the men in the Cadillac plant enough to buy Cadillacs."
Published: December 22, 2008 1:57 PM
Michael Smith
Stephan, your argument against IP is based on a false view of the meaning of the concept “creation”. Quoting from your article, “Against Intellectual Property”:
“But the distinction between creation and discovery is not clear cut or rigorous.46 Nor is it clear why such a distinction, even if clear, is ethically relevant in defining property rights. No one creates matter; they just manipulate and grapple with it according to physical laws. In this sense, no one really creates anything. They merely rearrange matter into new arrangements and patterns. An engineer who invents a new mousetrap has rearranged existing parts to provide a function not previously performed.”
The fact that we don’t create matter is irrelevant and does not alter the fact that the new design for the mousetrap did not come into existence causelessly. It came into existence as a result of the designer’s effort to bring it into reality. If generating this new arrangement is not an act of creation, then disarranging something -- like, for instance, disarranging your neighbor’s automobile by running it off a cliff -- is not an act of destruction; after all, no matter was made to disappear when the automobile is smashed to pieces and consumed in flames. Therefore, you cannot say that it has been destroyed.
But that is clearly an absurd view. Creation and destruction are concepts that refer to precisely the human action of arranging or disarranging existing matter. Your effort to rule out creation as a source of property right fails because it ignores the actual meaning of the term.
Nor do your other arguments against IP hold water. For instance, you offer this argument:
“Without Einstein’s, or the inventor’s, efforts, others would have been ignorant of certain causal laws, of ways matter can be manipulated and utilized. Both the inventor and the theoretical scientist engage in creative mental effort to produce useful, new ideas. Yet one is rewarded, and the other is not.”
Rand dealt with this objection as follows:
“It is important to note, in this connection, that a discovery cannot be patented, only an invention. A scientific or philosophical discovery, which identifies a law of nature, a principle or a fact of reality not previously known, cannot be the exclusive property of the discoverer because: (a) he did not create it, and (b) if he cares to make his discovery public, claiming it to be true, he cannot demand that men continue to pursue or practice falsehoods except by his permission………..Patents and copyrights pertain only to the practical application of knowledge, to the creation of a specific object which did not exist in nature—an object which, in the case of patents, may never have existed without its particular originator; and in the case of copyrights, would never have existed.
” Capitalism: The Unknown Ideal, pg 130
That’s the reason why the inventor can be granted patent protection, but Einstein cannot. There is nothing arbitrary about that distinction at all.
Here is another argument you offer against IP:
“Moreover, adopting a limited term for IP rights, as opposed to a perpetual right, also requires arbitrary rules………..No one can seriously maintain that nineteen years for a patent is too short, and twenty-one years too long, any more than the current price for a gallon of milk can be objectively classified as too low or too high.”
No one can seriously maintain that a prison term of 9 years for armed robbery is too short or that a term of 11 years is too long. But do we conclude from this that a prison term of 10 years, being arbitrary, is unjustified and that, as a result, we cannot outlaw armed robbery? Certainly not.
The fact that there may be an element of the arbitrary in determining the length of time an inventor’s ownership is protected is not an argument for offering no protection at all. It’s only an argument for doing more thinking about what that time limit should be.
None of these arguments against IP stand up.
And that leave us with the central issue: By what moral principle are others -- who did not cause the new design to come into existence -- entitled to claim any portion of the benefits that may proceed from the existence of this new design? On a rational view of morality -- a view based on man’s nature as a rational being that must act to produce the values needed to support his existence -- that which a man produces or creates must belong exclusively to him, with whatever value the market places on his product accruing to him and him alone.
Published: December 22, 2008 3:26 PM
Tomb Like Bomb`
Kinsella never answered for the rich murderer. There was just some weak wordplay on "recognize". The analogy is pretty clear: in each case we have someone selling part of their freedom for a period of time. Kinsella's free-lancing canoe-maker is atypical, but if he is capable of deductive reasoning, he'll conceive his contract similarly. As a clear example, that trip to Hawaii must be canceled: for one, large trees are not allowed on passenger flights.
What makes wage-confinement unique, of course, is that it is a violation of the justice system. But wage-labor, which is supposed to occur wholly within the market (or injustice system), only fulfills the latter's purpose.
Of course, we anarchists are not so naive as to consider the government the legitimate authority. No, the government is only the ultimate capitalist, and those we call "capitalists" employ subcontractors at best. The true analogy to wage-confinement would thus be the canoe-maker hiring a shoddy craftsman while the former takes his vacation. The tree-owner has specified who he wants doing the work; his subordinates have violated that contract. The rich murderer and the wage-prisoner are similarly in violation of a contract, drafted by the government(ultimate owner of all capital) and tacitly consented to by all involved.
Published: December 22, 2008 3:31 PM
Andras Ludanyi
I can't understand why we need a debate on elementary arithmetic? :) Of course I would like to made the whole thing a little more real (and complex): In a case of a corporation (which is a legal entity = legal "person") the actual owner of the business is the corporation, the shareholders are technically only an owners of the "share of the profit" or with other words they own a right to the profit made by the corporation. If you know this, the stupidity of the Marxian "thought" represented by Neverfox is even more ridiculous, because in that case you can see that there are two different action which made the whole business possible: 1. Capital providers, 2. Labor providers, and both of those groups have some part of the added value, the shareholders which are the capital providers get it in a form of profit, and the labor providers get it as salary, wage or whatever other similar form.
The only real difference is that the salary of the labor provider is an expense paid by the capital provider in every case while the capital provider earn profit only if there is actual added market value, in other words only if the final product can be sold for more than before the transformation. So ONLY the capital provider takes risk the labor provider do not. Now one more thing if the capital provider don't get a profit he will move his capital to other business, if many of them do the same, the price of a right to a profit will plummet, not the value of the corporation.
The stock market don't have any information about the value of the corporation, corporations are not on the market to sell and buy all the time only in special situations when one business want to acquire another business. So it would be interesting to hear Neverfox's "opinion" about the way labor owns a part of the corporation because goods and services are owned by the corporation and corporation is actually owned by nobody, there is only capital providers, and any of those capital providers can withdraw they very own capital whenever they want, just as labor can withdraw the action of labor if the agreement between the corporation and them are not acceptable for them anymore (they can quit).
Published: December 22, 2008 3:31 PM
Inquisitor
"What makes wage-confinement unique, of course, is that it is a violation of the justice system. But wage-labor, which is supposed to occur wholly within the market (or injustice system), only fulfills the latter's purpose."
How does market fit with "injustice system" exactly? What kind of market would that be?
Kinsella's post is great.
Published: December 22, 2008 4:11 PM
Tomb Like Bomb
The defining feature of the capitalist is not that he collects profits but that he controls capital. Should a capitalist pay the worker in preferred stock, and himself a wage, the worker will be shouldering the risk and the capitalist will be no less a capitalist. The reason such an arrangement is atypical is that greater wealth affords greater risk-taking. Any worker would take the added risk if it came with the added capital.
Published: December 22, 2008 4:40 PM
David Spellman
If we take a bigger picture view of the process of improving the value of goods, we can more easily see the absurdity of the idea that laborers have an ownership of the products they work to improve.
Let's use as an example the manufacture of shoes. An integrated shoe maker could raise the cattle, tan the leather, make the shoes, and sell the finished shoes in a store front. This could be done as a one-man operation despite the obvious inefficiencies. But this is not how shoes or any other product is generally produced.
Instead, a rancher raises cattle which provide hides that are sent to a tanner to produce leather. The leather is then sent to a shoe manufacturer who then produces shoes that are sent to a distributor and ultimately to a retailer. Each step represents two important things--specialization and transfer of title to the property.
The tanner does not pay wages to the rancher for raising cattle. The shoe manufacturer does not pay wages to the tanner for making leather. Ultimately, the consumer does not pay wages to anyone for any step of making the shoes. At each level, the next person in the chain is paying for title to the goods they receive. And at each step, the title owner of the goods is receiving money for transferring title and not for labor involved in manufacture. (This is particularly apparent in the role of the wholesaler or retailer who has done nothing directly to the shoes although they serve as facilitators of consumer acquisition.)
Thus far we have not defined any wages or wage-paying tasks. The entire manufacturing process involves taking title to intermediate factors and hopefully selling them for more than was paid. Improving the factors in some way is one route to profit, but distribution and speculation is also a route that does not invest labor directly in the factors. In the case of salvage operations, breaking down existing factors is the source of profitability.
So what does wage labor represent? Working for wages is merely the avoidance of taking title (and assuming risk). The rancher, tanner, shoemaker, wholesaler, and retailer all may hire laborers to assist them for a wage. This is likely more profitable to the owner of the goods, but it also eliminates risk, responsibility, and capital requirements for the laborer.
In theory, the laborer could buy materials himself, improve them, and sell the finished goods. His "wage" would be the difference in buying and selling price less production expenses. The wage paid to him while working for someone else represents the profit difference between buying, improving, and selling the factors of production worked on. Consequently, the laborer has no residual ownership interest in anything he has labored to create since the wage paid represents full remuneration for his improvements in lieu of having taken title and assumed the risk of the investment himself.
There are many ways to earn money for labor. Obviously, the worker can invest the capital to buy and sell herself as owner. A worker can accept an hourly wage, payment by the piece, joint stock ownership in a business, profit sharing, and commission. All of these represent methods of deriving value from labor invested with varying requirements of risk, capital, responsibility, liability, and profit potential. Labor is merely an investment of time and energy and pays whatever return is negotiated. No Marxian claim of ownership exists.
Marx is a figment of idle imaginations.
Published: December 22, 2008 4:59 PM
Pro-secessionist
Didn't Locke base his theory of property rights on the idea that individuals mixed their labour with the land, and so altered it?
I suppose a contrary argument could be that workers knew what they were getting into when they joined up, or that the landowner can extract work for wages on his land.
Published: December 22, 2008 5:37 PM
Andras Ludanyi
Although I agree with Kinsella, I think the tree-canoe-chicken example is not the best suited one. The firs distinction is that in the case of the corporation (as I explained earlier) the owner of the goods and services (produced=transformed) are the corporation and not as many believes the shareholder, and the second even more important distinction is the fact that corporations usually hire labor for continual use, so the environment and the work is only partly agreed upfront, most of the obstacles during operation are partially or completely unknown for both the corporation and for the labor provider as well.
So we must put in this picture the fact that a corporation is an entity where the capital provider, the labor provider and the corporation is looking forward to made long term contract in order to find the best possible/optimal ratio between transactional cost and operational cost. Anyway in this case neither the capital provider nor the labor provider owns any part of the produced goods/services, the labor provider owns the wage agreed previously and the capital provider owns the profit if there any. The corporation owns the goods/services. It is another interesting fact I must mention here, it is that many people believes that there is such a thing as human capital, that knowledge workers counts for capital and that the value of the corporation is higher if there is more/better knowledge workers employed by it. This is also a nonsense, knowledge workers are needed to "get the job done", just as capital and labor and they can leave the corporation any time, the only thing affected by the knowledge workers are the odds for higher profit and because of that the price of the right for the profit sharing (shares) will go up but that is NOT the value of the corporation. The market has no information about the value of the corporation because it is not for sale, only control over the corporation can be acquired (all or a majority of the right for profit/decision) not ownership so there is no such thing as corporation value, that is one big lie/fallacy.
Technically the fallacy that value is in the object and not in the eyes of an individual person is one of the worst idea ever and it causes a great half of the social and economic problems of our world, that is why we actually can't talk about value of the goods/services produced, we can talk about price only but not value so there is another fallacy called market value, and another one called added value - sorry if I used that one before :) I actually wanted to point to the fact that the goods/services a corporation produce may have better or worse supply/demand ratio so better or worse market price. It is easy (in fact much easier) to transform some goods/services to a new goods/services where supply/demand ratio would be worse so the price of the final product would be lover then the price of the needed resources included raw materials to produce that product. So a question to Neverfox: in that case do the labor own the loss of the market price from the before production product to the final production product, should the labor provider pay "his part of the loss" to the corporation? In other words do the workers of GM or Ford owns some of the lost billions back to the original owner of the material and resources (the corporation)? Think about that mr. Neverfox :)
Published: December 22, 2008 5:54 PM
Tomb Like Bomb
Markets are exchange in illegitimate authority. A true Austrian will call me purse-owner after just watching me steal a purse; a free-marketer with great historical knowledge will call for a radical redistribution of wealth; most of the people on this website fall arbitrarily between.
Published: December 22, 2008 6:11 PM
Andras Ludanyi
A "true Austrian" whatever would that mean is not concerned with the proof of ownership he is an economist and not a jurist he is concerned with economic and not with legal laws. If one hold the right of ownership and nobody can prove it was taken from him by force/without his consent then the owner is the one who hold the thing, you know the interesting part is that ANY philosophy of liberty believes that if there is no proof of the crime the accused one is an innocent man, if there is a proof the stolen thing must be returned to the rightful owner, NOT redistributed to somebody else RETURNED to the rightful owner. The other thing is that as Rothbard teaches us in a free market environment the ownership over resources would go to the people who can best use it for production, so free market will redistribute the wealth and it will stay in a continuous phase or redistribution not as in this status society where only a small part of the wealth is redistributed by market forces and a large part by political power which drives wealth the other way around from the more efficient to the less efficient, thus making our society poorer then it should be within the current framework of technological and social development. The truth is we was never richer than today but given the current technological, social and scientific development level we should and could be much richer and much better off then we currently are.
If we observe the thing from a point of view that corporation is an entity to which capital providers provide capital, labor providers provide labor etc., we must say that sometimes to some corporations government provide goods (money) and other favors ant to other corporations (mostly smaller ones) the government provide artificial obstacles by heavy over-regulation and dis provide (take) goods (money) by high taxation, so they made life easier for some corporation on the expense of some other corporation. That is the real problem, not so much who owns what, but how can they use the things they own, that is the key to decide who will own what tomorrow and who will control other people.
To quote Ayn Rand: "The creator's concern is the conquest of nature. The parasite's concern is the conquest of men." Today there is many parasites, so much actually that the productive part of the economy can't keep up with the consumption rendered by the consumption only part of the "economy", that is why we have this crisis. Of course there is many mechanisms which allows a "legal" way to be a parasite to many people/organization but the fact beneath the surface of this ugly waves is that consumption tend to rise faster than production and this is because saving is discounted against consumption and that is mainly because every day more and more unproductive consumption only parasites find a legal way to extract earnings from the productive creators.
Published: December 22, 2008 6:48 PM
Stephan Kinsella
Michael Smith:
Published: December 22, 2008 10:18 PM
Tomb Like Bomb
It's customary for "proof" to require a mere likelihood. If you want to punish capitalists as well as expropriate them, then we can talk about higher burdens of proof.
It's customary for stolen property to be returned to its original owner if the latter still exists. The thief doesn't get to keep his loot by virtue of the fact that the original owner is dead, no matter if by the thiefs hand or by natural causes. Nor does a possesser of stolen property, even if unknowingly so, get to keep the loot.
It's customary to treat the government as ultimate owner of property. Courts don't treat taxation as theft, no more than would a plantation-owner treat his taxing his share-cropper as theft. One thing that would universally be considered unjust would be giving government's accusers a lower burden of proof than those of so-called capital.
I'll give Rothbard the benefit of the doubt and assume you misread him. I'm sure Rothbard said a free market tends to distribute rationally within a given wealth distribution. But if he said anything beyond that, we're clearly dealing with a faith-based organization. Clearly, there is a conflicting tendency for wealth to concentrate toward pre-existing wealth. It would be quite irrational, for example, for a bank to give a loan to a poor would-be entrepeneur as easily as it would give one to his rich clone. The discrepency between the two will likely increase, as the poor one is forced into a less profitable enterprise, probably working for his clone. The poor one's relative lack of capital reserves, of course, will not limit his relative set of opportunities just the once, but it will do so throughout his relative life, each lack having been influenced by all the previous. Initial wealth distribution, unless disturbed by intervention, thus carries a butterfly effect. Those generations who knew least about the future, and were least interested in it, thus have the greatest power over it.
Published: December 22, 2008 10:19 PM
Andras Ludanyi
"It would be quite irrational, for example, for a bank to give a loan to a poor would-be entrepeneur as easily as it would give one to his rich clone."
This is a case in the money=debt or central banks ruled fiat money world, however in a world where free market is paramount (in money too) the Banks would be a completely different kind of animals, they would give the money to the most promising entrepreneur/corporation the one with the higher odds to make a profit, just as in every other thing the market would decide where to use the scarce resources, not politics. Of course in a status society made possible by controlling money where no actual goods/services can be trade for actual ones (fiat money made out of thin air based on 10% deposit) the banks will give the resources to the biggest to the richest to the ones which (can't fail) because in the world we live today where everything is just a bih "ponzy scheme", the best way to make profit is to keep the ball in the game, to keep rolling as fast as you can as long as you can. The main way to make profit is to sell at high and buy at low not to produce, the main way to make profit is to ride the boom and sell before it is too late. The problem this time was that the ball was to fast to keep it any longer in the game so the whole game existence not just the game quality are in jeopardy.
About misreading Rothbard you could be right, we all tend to misread many thing especially the works of great Austrians (Gordon Tullock explained how many people misreads Mises) but he was very clear on that because he explained that by using such a vast resource as a whole continent (if I remember correctly), he told us the one who owns a whole continent will sell it for $1 if he can't made more use of it himself and nobody offer him more for it for the reason that he can use the $1 better than the continent, what proof you need more than that about wealth redistribution in the free market from less efficient to more efficient. The whole concept of the sovereignty of the consumer (one of the cornerstone of Austrian economics) is based on the very fact that wealth can be and will be redistributed according to efficient use instead of according to "who's got the biggest gun" as it is today.
Published: December 23, 2008 2:55 AM
Andras Ludanyi
"Those generations who knew least about the future, and were least interested in it, thus have the greatest power over it."
How can someone know something about a future, one can guess future events, but there is no way to know the future (this is actually the very most important thing any human action can exist). Also how can someone realistically measure how much is someone interested in the future? If there is a way then isn't it obvious that the one who has more realistic chances to gain more from the future is the one who has more interest in it? Think about it. The only thing over one can have illegitimate power is another man every other "power" is OK only power over other men are crime, thus bad for mankind. I also don't know the meaning of the "power over the future" you mention? Nobody has any power nor any control over the future, one can more or less have influence over a definite part of the future (I can influence my future in part but my future is dependable on the exchange I made with other things in the universe just as the future of those people and things are influenced by me, the greater the level of exchange the greater is the influence on each others future) but there is no such thing as power over future nor control over future. You can have power or control over actions and future is not an action, not by any means.
Published: December 23, 2008 3:49 AM
Inquisitor
"Markets are exchange in illegitimate authority. "
Only if there has been injustice in acquisition or transfer somewhere along the line.
Published: December 23, 2008 5:12 AM
Inquisitor
"The poor one's relative lack of capital reserves, of course, will not limit his relative set of opportunities just the once, but it will do so throughout his relative life, each lack having been influenced by all the previous. Initial wealth distribution, unless disturbed by intervention, thus carries a butterfly effect."
Not sure why I should care, so long as there's been no injustice...
Published: December 23, 2008 5:14 AM
Michael Smith
Without responding to all of the problems I see in your response, Stephan, I will focus on the core disagreement.
Let me clarify one thing first. You wrote:
This is such Rand-bot talk. What are you talking about. People do not "produce" values. Values are not "things" that we produce.
I note that denouncing something as “Rand-bot” is not an argument.
Here is what I’m talking about. A value is that which we act to gain and/or keep. Where do the things that we act to gain and or keep come from, if we don’t produce them? Granted, what we can get for what we produce -- if we chose to exchange it for something else -- will be determined by the market place; so its market value is determined not by our labor or efforts, but by what other individuals are willing to give up for it. But the thing being valued by the market is indeed a thing we produced.
Here is the core error of your view on IP:
“They don't need to justify it. They don't need a "moral principle." The fact that they are not committing aggression is sufficient. (Emphasis added)
The non-initiation of force is not equivalent to an act of creation and, in fact and in reality, is not sufficient. Just as abstaining from destruction is not the equivalent of construction -- just as such abstention will not cause a single new structure to come into existence -- so abstaining from the initiation of force will not cause a single new invention to come into existence. Only an act of creation will achieve that.
Creation is an action that yields something new, something that did not previously exist; the non-initiation of force is an inaction that yields nothing new and adds nothing to what exists. Thus, your view of IP asserts that an inaction, a non-achievement, a lack of creation gives one a right to use another man’s invention.
This is a view which obliterates the distinction between the earned and the unearned by granting ownership to both the man who caused the invention to come into existence and the man who did not. Justice, however, demands that the earned be granted and the unearned withheld. At root, then, your view of IP demands a repudiation of justice, i.e. it demands an injustice. And nothing can justify an injustice.
Nothing will destroy property rights faster than to claim that they need not be earned, and that those who did not create something nonetheless have an equal right to it. The source of your error is the attempt to use the non-initiation of force principle out of context, as if it were an axiom that can take the place of morality. Sadly, you are actually weakening the case for property rights with this approach.
Published: December 23, 2008 10:43 AM
Alex
Once the laborer is paid for his labor, he has no further claim to his output.
After all, the laborer enters into a voluntary agreement with the employer to provide labor services in return for cash.
If the laborer were to share in the profits of the output, this would presume some sort of partnership agreement. Partner A provides capital, partner B provides labor.
Each of these arrangements (employee/partner) are valid so long as the individuals voluntarily entered into them.
All laborers can quite easily become capitalists. Save enough of their pay and invest it. In fact many capitalists are still laborers. They provide the capital and the labor, hence many small businesses.
Published: December 23, 2008 12:03 PM
Mike
"The non-initiation of force is not equivalent to an act of creation and, in fact and in reality, is not sufficient. Just as abstaining from destruction is not the equivalent of construction -- just as such abstention will not cause a single new structure to come into existence -- so abstaining from the initiation of force will not cause a single new invention to come into existence. Only an act of creation will achieve that."
What exactly do you think the act of "creation" is? You keep phrasing it in terms of "bringing a thing into existence." You realize this is physically impossible, right? That what you're talking about is magic? That there is no physical difference between the acts of "creation" and "destruction"?
To take Stephan's example from earlier, if I chop down a tree in the unowned wilderness, do I not own it? "But the tree has been destroyed!" you might say. "You can't own an act of destruction!"
I'll grant you this, if you have some supernatural ability to create matter from nothing, I won't contest your property rights to it.
Published: December 23, 2008 12:25 PM
Tomb Like Bomb
An entrepeneur with more capital has a better expected return, all else being equal. Furthermore, a rational banker will take into account the probability of the loan NOT being repaid, in which case the rich client gives the bank the collateral, which the poor client doesn't have.
The fact that the rational continent-owner will sell for $1 if
a) he knows he has no use for the continent, and
b) he knows no one will offer him more,
is useful only until we reflect that
a) a person will almost certainly have some use for a continent, and more importantly
b) another person will almost certainly offer quite a bit more than a dollar for even a continent that's useless to the owner. Presumably, our continent-owner is not known to be the world's worst negotiator.
And the continent's use-value to the owner could be simply the profit to be got from hiring a continent-manager (probably a safer bet than sale, the value which would ultimately be in the hands of the new continent-owner's pricing). The owner would certainly be worse off than if he were also a skilled continent-manager, but (depending on the availability of continent-managers) not so bad off as if he were only a skilled continent-manager (and not owner). Depending on the scarcity of continents, even the best non-owning continent-manager might have quite a bit to lose from this free-market situation (though other non-owners will likely lose more). That the owner's control might slowly wither away from competition begs the question, how long will this take? By the time a competitor bests him, it will be time for the competitor's idiot son to take the reins. Besides, if the competitors skills are purely market skills, his downfall in a post-market society is appropriate. Likewise if his market skills consist of the skills of deception, sabotage, and appropriation by dispossession, all of which fill the history of American wealth.
The continent-owner is not a bad name for what I call government as ultimate capitalist. You defend the rights of the hypothetical continent owner, but you won't defend the rights of real continent owners like the Australian government. If initial distribution is unimportant, I'll play mediator between Austrians and government: call government exactly what it acts as, exactly whose behavior people allow it to exhibit (that of owner), and we are living in a free market system right now. In fact, it is only that government is so obviously owner that it goes without saying and that the term "owner" is free for denoting sublessors. If I owned a plantation, I might do similarly, for simplicity, when referring to my sharecroppers. "That's ex-slave Tom's plot. That's ex-slave Andras' plot." Of course, the possessives refer not to ownership of property, but only rentership of property. That's the case for anyone who's taxed.
Whether we are "guessing" the future or "knowing" it, I'm happy to bet you even odds that the Philadelphia Eagles don't win the Super Bowl. I'd have been less happy to do so one week ago, and I'll be extremely happy to do so should they fail to make the playoffs. Of course, past generations' relative inability to guess/know the future is important only to the extent that they give a damn about it, which, if Austrians are correct, they don't.
The dead's power over the future is a product, most egregiously, of permanent property: most people cannot conceive that they will be personally affected by anything after they're dead; so they revert to animal behavior if they hadn't already been exhibiting it; they give to their children, who could be anybody. In a natural setting such family loyalty would be touching; in a market setting it amounts to a roll of the dice to determine the new masters of mankind. Of course, even that is being too kind if it's granted that such parental behavior is known to the offspring, who would then do well to bother improving themselves in inverse proportion to the wealth of their parents. Even if the rich old fart went against the grain and bequeathed according to his supposedly superior rationality--and his senility played no part--like all the exchanges he'd previously been party to, he'd be unconcerned with externalities, which he'd have very limited ability to predict anyway.
Published: December 23, 2008 4:35 PM
Caveman
Stephan, I don't mean to offend. But, have you considered you might be spending too much time reading and responding to obscure blogs?
Published: December 23, 2008 4:49 PM
Mike
"Stephan, I don't mean to offend. But, have you considered you might be spending too much time reading and responding to obscure blogs?"
http://xkcd.com/386/
Published: December 23, 2008 4:58 PM
Caveman
Mike, that's perfect! LOL
Published: December 23, 2008 5:02 PM
Mike
"You defend the rights of the hypothetical continent owner, but you won't defend the rights of real continent owners like the Australian government. If initial distribution is unimportant, I'll play mediator between Austrians and government: call government exactly what it acts as, exactly whose behavior people allow it to exhibit (that of owner), and we are living in a free market system right now."
I don't think any Austrian has ever claimed initial distribution "didn't matter." That's Friedmanite talk. In fact, I remember Rothbard writing a pretty stinging analysis of that very concept. Initial distribution matters. Homesteading is legitimate, proclaiming ownership over virgin land is not.
"The dead's power over the future is a product, most egregiously, of permanent property: most people cannot conceive that they will be personally affected by anything after they're dead; so they revert to animal behavior if they hadn't already been exhibiting it; they give to their children, who could be anybody. In a natural setting such family loyalty would be touching; in a market setting it amounts to a roll of the dice to determine the new masters of mankind. Of course, even that is being too kind if it's granted that such parental behavior is known to the offspring, who would then do well to bother improving themselves in inverse proportion to the wealth of their parents. Even if the rich old fart went against the grain and bequeathed according to his supposedly superior rationality--and his senility played no part--like all the exchanges he'd previously been party to, he'd be unconcerned with externalities, which he'd have very limited ability to predict anyway. "
$100 to anyone who can make heads or tails of this.
Published: December 23, 2008 5:08 PM
Pro-Secessionist
'Continent-owners like the Australian Government'? As an Australian, I was surprised to learn that the Commonwealth owned my land. I know it passed laws over it, but I am otherwise free to do what I like with it. This is not ideal, but the Federal Government doesn't own the whole land! (Not yet.)
Published: December 23, 2008 7:11 PM
Tomb Like Bomb
By "initial distribution is unimportant", I'm referring to the distribution itself, not the actions from which it results. That Rothbard rejects distribution X if brought about by A, is of little comfort to those suffering distribution X brought about by B. I do not think that the world would have turned out much different if, for example, the "virgin" land of the New World had been home to humans instead of Indians. What should those being born today care about the history of their subjugation? It's the same group of negative-authority figures, whether their number was illegitimately reduced or always as such.
Even if we disregarded Indian claims, it would be the European financiers, not the revolutionary renters, who would be proper owners of America, for example. I rent. Should I claim my house as my property on account of some perceived injustice in the landlord, even if accurately perceived? The Revolutionaries wanted representation in exchange for taxation. Ha! Imagine me asking my boss for represention in exchange for his taking even the whole of the product of my labor. I, like the colonists, should be glad to get what I'm getting or choose another kingdom (I mean employer).
Perhaps there should be a single tax for the sole purpose of second virginity for raped land; that way, the often-talked-about factor of homesteading will become available to the relevant generations, and Locke's proviso unbroken.
Published: December 23, 2008 8:11 PM
Tomb Like Bomb
Pro-Secessionist,
The Australian government has obviously been far kinder to you than you both were to the Aboriginese. Maybe it's a racial thing.
At any rate, sub-governments (called capitalists) also pass laws (called protocols). If an employee of a sub-government is allowed a degree of freedom in his work, the employee is expected to be humble enough not to conclude that he then owns the capital; nor should the sub-government regarding the government's capital.
I respect your desire to secede, but taking your employer's (the Australian government's) property along with you is akin to socialism.
Published: December 23, 2008 8:38 PM
Vanmind
Cute cartoon, but in the world of human action the knowledgeable are obligated to correct the economic fallacies that all too often lead to poverty, misery, and warmongering totalitarianism. Civilization itself is at stake.
Published: December 23, 2008 9:38 PM
stephan Kinsella
Michael Smith:
No one said it was "equivalent", whatever that means.
For what? What does it "need" to "be sufficient" for?
No, but it would permit it.
Yes, I'm all in favor of hard work, innovation, creation, love, memory, jogging, and "the-fact-that-Rand-lived." But that doesn't meant there are property rights in these identifiable concepts.
Yes, but is it something *ownable*? Not all "things" you can name with a word or concept are ownable you know. Only scarce things are.
That's okay. In libertarian land, people can fart around if they want to. They don't have an OCD compulsion to run around being masters of the universe so they can feel justified having sex with their acolyte's husbands.
Again: I do not believe we live by permission. We don't need to find a specific "right" to do every specific action: *every* action is permitted *so long as* it does not aggress against others. So the burden is on you to show that any given free action is unjustified.
Justice and rights are not concerned with your aesthetic, loosey-goosey concepts of "earned" and "unearned." If a rich man gives his nephew a million bucks, the nephew is enttitled to it, whether he "earns" it or not (no offense, Leonard Peikoff).
You statist types think in terms of us having a central "authority" who "grants" ownership rights. we do not. We do not need your little statist club. Mind your own business, please.
So, this chick "justice" "demands" that "we" "take back" the bequests of a rich person, say?
True, but you have not shown that using one's property as one sees fit is an "injustice." The burden is on you. You randroids are unable to fill it.
Really? How do you know this?
Published: December 23, 2008 9:50 PM
Michael Smith
“No one said it was "equivalent", whatever that means.”
You claim it is equivalent when you claim that the non-initiator of force has the same rights to an invention as does the man who creates it.
“For what? What does it "need" to "be sufficient" for?”
You claim it is sufficient to give the non-initiator of force has the same rights to an invention as does the man who creates it.
Here are your words:
“They don't need to justify it. They don't need a "moral principle." The fact that they are not committing aggression is sufficient.”
No, but it would permit it.
Irrelevant. Refraining from stealing permits another man to maintain possession of his property, but such refraining does not endow the refraining party with any property rights.
Only an act of creation will achieve that.
Yes, I'm all in favor of hard work, innovation, creation, love, memory, jogging, and "the-fact-that-Rand-lived." But that doesn't meant there are property rights in these identifiable concepts.
I have not claimed there are property rights stemming from love, memory, jogging or “the-fact-that-Rand-lived”. I have claimed that the creator of an invention is the person causally responsible for the existence of the invention and thus has earned the right to own it.
Creation is an action that yields something new, something that did not previously exist;
Yes, but is it something *ownable*? Not all "things" you can name with a word or concept are ownable you know. Only scarce things are.
Why are only “scarce” things ownable? Why does the number of things in existence determine whether or not any particular one of them can be property? If there are trillions of dollars in existence, does this mean I don’t own the ones in my pocket, whereas if there were merely billions of them, then I *would* own them? Is the second automobile ever produced less ownable than the first, merely because there are now twice as many as before? That notion makes no sense whatsoever.
What’s more, nothing is more scarce than something you’ve just invented. Prior to your act of creation, none of it was in existence; after your act of creation, there is now 1; what could be more scarce than that:
the non-initiation of force is an inaction that yields nothing new and adds nothing to what exists.
That's okay. In libertarian land, people can fart around if they want to. They don't have an OCD compulsion to run around being masters of the universe so they can feel justified having sex with their acolyte's husbands.
What on earth is that supposed to mean? Your intellectual bankruptcy is showing.
Thus, your view of IP asserts that an inaction, a non-achievement, a lack of creation gives one a right to use another man’s invention.
Again: I do not believe we live by permission. We don't need to find a specific "right" to do every specific action: *every* action is permitted *so long as* it does not aggress against others. So the burden is on you to show that any given free action is unjustified.
No, we don’t live by permission. But permission *is* required to use another man’s property. That’s why the non-creator does not have a right to copy the property of the creator without his permission. When the copier does so, and takes possession of a portion of the benefits made possible by the invention -- benefits that would not exist absent the creator’s original effort -- when he takes possession of any of those benefits he IS using force, in the form of physically keeping those benefits from their rightful owner, the creator.
This is a view which obliterates the distinction between the earned and the unearned
Justice and rights are not concerned with your aesthetic, loosey-goosey concepts of "earned" and "unearned." If a rich man gives his nephew a million bucks, the nephew is enttitled to it, whether he "earns" it or not (no offense, Leonard Peikoff).
Yes, the nephew is entitled to it, but only because the rich man originally earned it. Someone, somewhere had to earn it originally in order to gain the right to give it to others.
by granting ownership to both the man who caused the invention to come into existence and the man who did not.
You statist types think in terms of us having a central "authority" who "grants" ownership rights. we do not. We do not need your little statist club. Mind your own business, please.
It is obvious that I was not speaking of a central authority when I used the expression, “granting ownership”. I was speaking of your argument about IP. So quit trying to evade the issue by attempting to cast me as a “statist”. I’ve made no claim that rights originate from the state, and you know it . Pretending otherwise is intellectual dishonesty on your part.
Justice, however, demands that the earned be granted and the unearned withheld.
So, this chick "justice" "demands" that "we" "take back" the bequests of a rich person, say?
This is pure context-dropping. A property owner’s right to dispose of his money as he sees fit -- including his right to give it to those who have not earned it -- does not argue that those who have not earned it have a right to take it nonetheless. Surely you can grasp that principle.
At root, then, your view of IP demands a repudiation of justice, i.e. it demands an injustice. And nothing can justify an injustice.
True, but you have not shown that using one's property as one sees fit is an "injustice." The burden is on you. You randroids are unable to fill it.
This is the fallacy of begging the question. The whole issue here is whether or not the creator of an invention owns it -- or whether those who did not invent it have an equal right to it. You simply assume that the latter is true, and then use this assumption to argue that patent laws violate the right to “use one’s property as one sees fit” -- as if the fact that one owns all the materials one uses in copying an invention creates a right to make that copy.
But such ownership doesn’t create that right, because ownership does not confer an automatic right to “use one’s property as one sees fit”. There is no right, for example, to drive your automobile across a portion of my land without my permission -- that constitutes a use of my property without my permission, a right you do not posses even though you own the automobile in question. Likewise, when you copy an invention, the mere fact that you own the materials used in the copy doesn’t give you the right to use the inventor’s property without *his* permission.
The burden is on you to show why those who have *not* earned something have the same right to ownership as those who *have* earned it -- to show why the non-creator, the non-achiever has the same moral right to something as the creator/achiever who caused it to come into existence.
So far, all you’ve come up with are examples like the gifting of property to others who may not have earned it. But as I’ve shown, it is certainly a non-sequitur to claim that the right to give a gift of the unearned proves the non-earner’s right to something he has *not* been given.
Also, using a term like “randroids” is beneath you. Either you have an argument to offer or you don’t. Name calling proves nothing.
Nothing will destroy property rights faster than to claim that they need not be earned,
Really? How do you know this?
The world is filled with people who want the unearned and are anxious for any excuse to have the government give it to them. I can’t imagine anything worse for our property rights than to concede the premise that those who have not earned something are every bit as entitled to it as those who have.
Published: December 24, 2008 8:21 AM
Mike
Stephan,
Get with it dude. Every human action, to be legitimate, must be one of creation. In a free world, then, only wizards may act.
Published: December 24, 2008 8:35 AM
Michael Smith
“What exactly do you think the act of "creation" is? You keep phrasing it in terms of "bringing a thing into existence." You realize this is physically impossible, right? That what you're talking about is magic?”
Prior to Edison’s efforts, a functional, incandescent light bulb did not exist; after his efforts, it did. But you want to believe that he did *not* create it, and the belief that he *did* is a belief in magic?
As it happens, you’ve got it exactly backwards. The belief that the light bulb came into existence causelessly is the belief in magic.
That there is no physical difference between the acts of "creation" and "destruction"?
They are similar in that both involve a change in the arrangement of matter. But if you are unable to grasp the differing consequences the two have for human survival, I cannot help you.
Published: December 24, 2008 8:35 AM
Mike
"The whole issue here is whether or not the creator of an invention owns it -- or whether those who did not invent it have an equal right to it."
No it's not. Everyone's conceding that the creator of invention owns it (provided he owned the materials used to make it). What's contested is whether the creator of an invention also owns the right to prohibit other people from making/using a similar invention.
Published: December 24, 2008 8:41 AM
Tomb Like Bomb
As a previous commenter rightly corrected me, these are not "economic fallacies" but only juridical ones. If governments are legitimate owners, all their "interventions" are only exceptions to their characteristic hands-off approach to their estates' management.
At my job, my employer owns certain tools that both my employer and I refer to as mine (said "Tomb's", in his case). But no court would call it legal for me to unilaterally assume ultimate ownership of such tools: obviously, the "Tomb's" status of the tools is an authority existing under the ultimate authority of a higher owner. Incidentally, my employer is not highest owner, and never was. He forgoes such ownership in exchange for operating on the U.S.'s land property (to be distinguished from the sub-category "U.S.-managed land"), an entirely free market exchange that all Americans tacitly consent to.
"Owner", of course, is implied by "government", the latter differing only in the additional powers. If such additional powers are illegitimate, I agree that they should cease. But it is not juridical custom to engage in wholesale expropriation on account of unquantified transgression. To compare, I doubt any of you would think it right to automatically grant me my employer's business on account of his, say, punching me in the face, an act at least as non-non-aggressive as the typical U.S. government transgression. Even if we were to find government transgressions worthy of total expropriation, the damages would be awarded to those wronged (say, ex-conscripts), not those party to legitimate free market activity ("taxation" by legitimate owner, for example). Current capitalists would likely find such a redistribution of wealth oppressive, the same way auto-workers find out-sourcing oppressive. Perhaps these "victims" will be more careful in their next selection of employer.
I welcome everyone to try to demonstrate historically that government claims to ultimate negative authority (property) are any weaker than those of their direct subordinates the capitalists.
Published: December 24, 2008 11:03 AM
Neverfox
Below is the reply to Stephan I left on my blog.
Labor uses capital. So what does that mean? Let's look at your "A Libertarian Theory of Contract":
So here a loan is granting use but not ownership. But later you say,
Oops! Now it appears that you see loans as full blown transfers of the loaned property. Not even I was claiming that! But hey, if you want to go there, I'm game. It would be game over for you though.
So which is correct? I'll let you tell me.
But in the meantime, consider if you let me borrow your car and I stripped it down to parts, would you simply ask for the parts back? Would you say, “No problem, guy. I still have the matter that composed it. It’s only a transformation of already-owned goods into a new configuration–a less valuable one catallactically to be sure but these factors were already owned so don’t worry about it. By the way, I feel bad that you didn’t get anything for your effort. Can I give you a few bucks?” You gave me the licit use of it and didn't say I couldn't strip it down.
That is absolute nonsense. Crime is not a necessary condition of responsibility. You are making up definitions. Responsibility is simply the answer to the question “Who did it?” Whether the question has legal bearing or not is a separate matter. If you only look at negative outcomes or rights violations then you could never determine if a person fulfilled (was responsible for) a contract condition. Imagine you say, “I’ll give $X to the first person who does Y.” If you deny the full meaning of responsibility, you could never determine who to pay.
I hold the Juridical Principle of Imputation: People should have the legal responsibility for the positive and negative results of their intentional actions.
And in production, only labor (which always includes thinkers and managers) is responsible. The other factors are things and cannot be responsible. Early Austrian economists Friedrich Freiherr von Wieser explains:
But then Wieser plainly admits that he has to work around this conclusion to justify capitalism by creating something called “economic responsibility”, which became the basis of marginal productivity theory:
This is a plain admission of animism; an unfounded exception that things can be responsible in production contexts (but nowhere else it seems). Now that is mystical.
There is no legal responsibility because rudeness isn’t a legal issue in a libertarian world the way property rights are. Why don’t you use relevant examples?
That's the oldest straw man in the book. And if you bothered to understand my argument, you would know that this is addressed and in fact it's exactly the kind of contract that isn't a problem.
Is a something new produced here? I don't see it. This is not a technically-described production activity. And even if you did see it that way, you would be forgetting the liability created for the unpolished silver (and I'd argue a contemporaneous agreement to payoff that liability with the matter contained therein). Or course we could also simply use your loan-with-contemporaneous-agreement setup and make the whole thing moot.
First of all you misinterpreted the example (one of several examples that you don’t bother to read what you argue against. You just start flinging out words like “Marxoid” which is endlessly ironic). The rich man did the murdering and contracted with the poor man to “bear the legal responsibility”, i.e. “I’ll transfer title to $X to you on the condition that you bear legal responsibility”.
And second, if we do interpret it the mistaken way (that the poor man does the murdering and the rich man agrees to take the legal responsibility), then your “recognizing” would be simply as basis for proof of involvement. The quote talks about “recognizing” the contract itself, i.e. defending it as valid. So you just proved my point by saying that he would be liable.
Here is your definition of fraud:
The employer, by taking the RC role, implicitly claims to have received the laborer’s responsibility (a misrepresentation) and thus the new product. But then you say,
No one thinks this way. When you have a technically-defined production process, there is obviously something new created. For the same reason that you know exactly when something has been destroyed, you know when it has been created. When I stripped down your car, I doubt you'd be claiming that you own a "car" anymore. This view of production as “just moving some stuff around” is silly in the extreme.
Let's say the tree is Bob's and you borrow it in addition to hiring me. Does Bob now own the canoe?
This is further proof that you don’t read what you respond to. I was saying that it wouldn’t be valid to think of it this way.
It seems that “everything” is a “loaded” “term” to “you” which is “why” you put “scare” quotes on “every” word” to “avoid” actually “addressing” a “statement” you understand “perfectly” “well”.
OK, so capital owners own capital. That’s brilliant insight. I’m in awe of your observation skills. But you haven’t justified your acceptance of the myth that the residual claimant’s role is part of the property rights of the capital owner’s role. Your Marxoid worldview is simply not accurate as can be observed all the time in the real world.
That’s a fine agreement too. If you want to give money to someone on condition, knock yourself out. But it doesn’t address who appropriates the whole product, both the positive and the negative (liabilities). There is no debate if the actions are services that don’t produce any liabilities for capital services used and aren’t technically-described production processes.
Also, by making it crystal clear that the transfer is conditional on the completion of the action, then you are saying that the employee is not actually “hiring” labor. By hiring, I mean that they aren’t bearing the costs of labor. They are only, as you say, transferring title to money on a condition. If they didn’t actually bear the costs of labor, they have at the very least not accounted for both costs needed to be the residual claimant alone.
Published: December 25, 2008 3:45 PM
Neverfox
@Frank
What am I looting? To what are you responding? If you understood the argument, you'd know that the capitalist doesn't lose anything.
I’ll take your notes into account (though who knows what “administrative-ese prose” is?). And I’ll also use you as an example by integrating sentence fragments into my writing.
@bob
First of all, who said anything about “enough to buy back the product”? Those who say this are ignoring the liabilities of production. But let us, for the sake of argument, assume there aren’t any. Would it really be so difficult to answer those questions? I have a great mechanism called a “market” where people “buy” things and the “money” paid for them goes to the “residual claimant” (hat tip to Kinsella). You’d think the person that wrote that has no idea how the capital owners get paid “enough to buy back the product” which is exactly what profit with no costs would be. The RC in a mink coat company would make more than one in a cheap dress company so why isn't that seen as strange?
@Andras
Where on Earth did you get the idea that capital providers make a business possible? Labor acting on capital itself makes business possible.
George Washington taking your view would say, “I cannot tell a lie; an ax maker cooperated with me to chop down this cherry tree.” It’s simply mystical nonsense.
And it’s laughable that you classify my thought as Marxist. What I’m describing is exactly opposed to Marx. As a matter of fact, most of the defenses here that rely on “ownership of the means” are much closer to Marx than I am.
And you can’t “own” the role of residual claimant. You have a lot to learn.
Huh? Labor doesn’t need to own the corporation. Whoever said that nonsense?
Oh, gee, you got me. I never thought of that!
If I let you use my car and you wreck it, are you liable? Yes. Does that mean you have to pay? Not if you are insured or have made other conditional arrangements.
You assume no other action is taken. Have you ever heard of insurance? Also, the corporation could agree to accept a quitclaim deed as payment. There are endless ways for capital owners to make a little money on risk premiums if they and labor love the idea of capital owners taking risk. But try as they might, they can’t override the principles of property theory and the juridical principle of imputation.
@David Spellman
Great. So at least you admit there is a title to be taken. Excellent!
So if title is something that labor would otherwise take, why would anyone rationally agree to avoid title instead of simply taking on a contemporaneous agreement to transfer it immediately? They have nothing to lose and everything to gain.
It seems you don’t understand how the role of residual claimant is determined. It naturally falls to the party that in fact appropriates all liabilities for used-up inputs and labor. Labor obviously assumes the liability for itself and the juridical principle of imputation shows that labor also takes the liability for using up capital services. That doesn’t prevent labor from insuring against this risk if capital owners want to take it so badly. It’s called being an insurance provider and accepting a premium or a quitclaim deed. But insurance providers don’t gain property rights by virtue of their service now do they? You are magically conflating the rights of ownership of capital with the RC role. You are also magically conflating the assumption of risk (agreeing to transfer title to money conditional on someone else assuming a liability for that amount of money) with directly assuming liability.
So why did you bring him up? What does he have to do with any of this?
@Alex
I’m not talking about services. I’m talking about productive activities that product alienable scarce property.
Well, yes it would if the capital owner was involved in action in the business. But that would be a different “hat” than the one of capital-owner. It would be a labor hat. You seem to understand this when you say:
But I’m not sure why you, like all the others, seems to ignore the possibility of labor hiring capital, which is the only contractual direction that isn't fraud (Kinsella’s definition) into the legal overlay.
Yes, of course and as long as a legal system is not brought to bear that would apply the juridical principle of imputation. The point of fraud is not that you can’t agree to it (making it not fraud) but that you likely wouldn’t.
@Caveman
I prefer to think of it as massively underground. ;) And the xkcd bit is the best.
Published: December 25, 2008 4:25 PM
Frank
What am I looting? To what are you responding? If you understood the argument, you'd know that the capitalist doesn't lose anything.
You advocate the looting of private property. When an employee enters into a contractual agreement with an employer, he or she agrees to trade labor in exchange for money. They have no claim to whatever they produce. None. They have claim only to the money guaranteed to them by the contract. Trying to take what is not contractually awarded constitutes looting.
I’ll take your notes into account (though who knows what “administrative-ese prose” is?). And I’ll also use you as an example by integrating sentence fragments into my writing.
Writers recognize administrative-ese prose. Some label it "Engfish". This style relies on boring, vague, and ineffectual language. Rather than illuminating, it obscures. It tells rather than shows.
And please do try to incorporate virtual sentences, which you've misidentified as fragments. Vary sentence structure. Never string more than two or three prepositional phrases together. Be more succinct and less wordy.
These steps will clarify your arguments. Supporting them is another matter entirely.
Published: December 28, 2008 11:58 PM
Neverfox
This implies that the property was already owned. I'm working from the idea that the product is unowned property that is then homesteaded in the usual manner. There is no looting without first establishing the principle whereby the employer has better title to the product.
Even if the purpose of my argument was to advocate looting that is not the same thing as being a looter. You should be more precise with your language to avoid confusion.
Supposing that you mean the contract is unilateral and conditional on labor performance, sure. So what? What does that have to do with the new unowned property? Contracts pertain to currently owned property.
Of course, its not at all obvious that unilateral is what you mean because of the phrase "in exchange". So how do you "trade" or "exchange" labor exactly? Is it alienable property? Would you, could you eat it with a fork?
Now people don't have a right to what they produce? So I assume then that the entire principle of homesteading is invalid by the same argument? It appears that you are trying to draw some sort of connection between the first sentence there and the contract, but I'm not sure what that connection could be.
"Try to take what is not contractually awarded" assumes that the employer has the right to the product in the first place to award thereby award it. That is begging the question against my argument.
They are still fragments nonetheless. Overuse of "virtual sentences" and parentheticals is just as much a sign of poor writing as overuse of prepositional phrases. Three "virtual sentences" and two cheeky parentheticals in 4.5 sentences is not exactly glorious prose.
George Orwell is rolling in his grave. "Break any of these rules sooner than say anything outright barbarous."
Published: May 31, 2009 4:10 AM