Posts Tagged ‘property rights’

Why modern Robin Hood outlaws should be prosecuted

January 17, 2013

Many movies have been made in praise of Robin Hood and his Merry Anglo-Saxon outlaws who raided the coffers of rich Norman barons and knights in order to dispense their loot to down-trodden fellow-Anglo-Saxons during the absence, leading Crusades, of King Richard I, when his evil brother, Prince John, ruled England with a heavy hand.

Now that period of history was one of absolute dictatorship and our instincts naturally – and most probably justly – lie on the side of the severely oppressed. After all, William the Conqueror’s Normans were foreign invaders, who had seized Anglo-Saxon wealth at the point of the sword (and arrow). Rough justice requires an eye for an eye and a tooth for a tooth.

Aaron Swartz, who died by his own hand earlier this week, represents a very different kind of outlaw, even if much of the media is reporting his thefts in terms reminiscent of those episodes in Sherwood Forest. For Aaron Swartz was stealing from the rich to give to the poor within the environment of modern democracies operating under the rule of law.

In so doing, Swartz was eroding property rights. And property rights are the fulcrum of economic progress within the capitalist sector of any economy. Without clearly articulated and protected property rights, no modern economy can function. Contracts become impracticable, and a barter economy, in the absence of property rights, descends into a state of nature that we describe as a Hobbesian jungle.

In essence, if the Aaron Swartz’s of this world are allowed to prosper and multiply, they will take the advanced economies back into the Middle Ages of King Richard I and Prince John. I assure you that that is not a pleasant environment in which to fight for survival. It is not a world in which you would choose to live.

Aaron Swartz faced a lengthy jail sentence – as much as 30 years – for deploying computer hacking skills to download illegally millions of academic papers from an electronic library. Five years ago, Swartz had elected to become an outlaw by signing a guerrilla open access manifesto. He complained that the ‘world’s entire scientific and cultural heritage’ was in the process of ‘being digitalised and locked up’ by a handful of private corporations. He advised computer hackers to ‘take information, wherever it is stored, make our copies and share them with the world’.

Well, that is communism well beyond the vision of any Marx, Lenin or Stalin. When information that is costly to produce and process is distributed without charge to anyone who wishes to gain access, then assuredly such information will no longer be produced and processed. That is the nature of any market system.

Should governments then take over the role of markets in the production and dissemination of information, history tells us two things: (1) market-relevant new information will fail to appear; and (2) government-information will be produced and disseminated in a manner designed to destroy individual liberty and to promote tyranny.

So we should not judge Aaron Swartz as a Robin Hood attempting to ease the burdens of tyranny. Rather we should judge him as a promoter of communism, attempting to take down democracy and capitalism, and to replace them by absolutist government. For that crime, 30 years is a modest penalty. The gallows might be viewed as more appropriate.

In any event, Aaron Swartz delivered himself into judgment without any cost to society. And that decision ironically conforms with his personal philosophy. Aaron Swartz surely was not a hypocrite.

Hat Tip: John Gapper, ‘Aaron Swartz suffered from an illusion over research’, Financial Times, January 17, 2013

Remedial economics for those who occupy Wall Street

October 27, 2011

” Nan Terrie learned an expensive lesson last week about the importance of property rights. ‘Stealing is our biggest problem at the moment,’ the 18-year-old protester told the New York Post. ‘I had my Mac stolen – that was like $5,500.’  Why? because she left it in a public place, amid a crowd demanding the redistribution of wealth. Imagine that.  Perverse incentives were at work at Occupy Boston, where 36-year-old Andrew Warner told the Boston Herald: ‘It’s turning into us against them.’  By ‘them’ he didn’t mean rich bankers but street vagrants:  ‘They come in here and they’re looking at it as a way of getting  a free meal and a place to crash, which is totally fine, but they don’t bring anything to the table at all.” Editorial, ‘Remedial Economics’, The Wall Street Journal, October 27, 2011

An 18-year-old girl may be excused for her abject  ignorance of economics 101; but a grown-man of 36 surely may not.  Property rights are central to the sound performance of any economy. And by property rights, I mean the property rights of individuals, the imprescriptible rights to their own human capital and to the non-human capital that they have accumulated by their own endeavors and by inheritance from their predecessors. 

Where such rights are not well-grounded, relationships between individuals quickly descend into the Hobbesian jungle, where there is no ‘mine’ and ‘thine’ and where life tends to be short and brutal, save for those who are especially well-endowed with instruments of power. Assuredly, the Hobbesian jungle is not an environment that most of the losers who join Occupy Wall Street protests would find congenial.

American schools and universities are largely responsible for this prevailing ignorance of basic economics.  They are over-populated with educators who still worship at the shrine of Josef Stalin and Mao Zedong – mass murderers both –  who destroyed their economies just as they wiped out many millions of their abject subjects. 

Teachers who are unaware of the terrible hardships experienced in the USSR during the early 1930s, as Stalin imposed collectivisation  and famine across the Ukraine, and much of the rest of his Empire,  and of the famines and mass deaths experienced in China from the mid-1960s onwards as Mao led with the Great Leap Backwards, and followed up with the  Anti-Cultural Revolution, are unfit to be in any classroom in the United States.

Those protesters who waste their time sitting in public garbage dumps rambling incoherently about ‘Occupying Wall Street’ would be well-advised to read Adam Smith’s Wealth of Nations  instead of internet -surfing on expensive laptop computers.  There would be no danger of their book being stolen – since many of their fellow-occupiers are functionally illiterate – and at least  they would end up understanding why Stalin’s USSR and Mao’s China are poster-boys for failure, and not harbingers of economic success.

Of Property II: Political Society

January 5, 2010

The constant danger of the state of nature degenerating into a state of war is the principal reason advanced by John Locke to explain why individuals may transform a state of nature into a political society:

“The great and chief end therefore, of men uniting into commonwealths, and putting themselves under government is the preservation of their property.  To which in the state of nature there are many things wanting.” (Locke II, para.124)

In Locke’s view, man is born free in the state of nature, and is not born into a political society.  Individuals are not naturally citizens but must choose explicitly so to become.  By agreeing to leave the state of nature and to enter into civil or political society, individuals necessarily sacrifice their right to judge and to punish breaches of their natural rights by others.  This is no small sacrifice, and will not be countenanced by property holders unless political society is strictly limited with respect to the powers that it is granted:

“The supream power cannot take from any man part of his property without his own consent.  For the preservation of property being the end of government, and that for which men enter into society, it necessarily supposes and requires, that the people should have property, without which they must be suppos’d to lose that by entring into society, which was the end for which they enter’d into it, too gross an absurdity for any man to own.” (Locke II, para. 138

According to Locke, governments do not possess rights naturally; only individuals have that capacity.  There is only one process through which political ‘rights’ can be secured, and that is voluntary alienation of rights by the right-holder’s consent, contract, or trust:

“Men being, as has been said, by nature, all free, equal and independent, no one can be put out of this estate, and subjected to the political power of another, without his own consent ” (Locke II, para. 95).

Locke’s political philosophy provides individuals with strong moral  claims rights within political society, empowering them to resist an illegitimate government that encroaches on their property rights.  When an aggrieved citizen defends his rights, those who oppose him wrong him by breaching their duty with respect to his rights.  In so doing, they place themselves outside political society, and into a state of war against the people:

“The reason why men enter into society, is the preservation of their property; and the end why they chuse and authorise a legislative, is that there may be laws made, and rules set as guards and fences to the properties of all the members of society, to limit the power and moderate the dominion of every part and member of society.” (Locke II, para. 222)

According to Locke, whenever the legislative  violates this limitation, it puts itself in a state of war with the people, who are then absolved from any further obedience, and who are returned to their former liberties.  The people are then free to establish a new legislative.  Those who have abused their authority forfeit all rights under the law of nature and may be dealt with at will by any other person.


The New Fascism: Rule By Consensus

December 13, 2009

“I shall begin by doing a very unpopular thing that does not fit today’s intellectual fashions and is, therefore, anti-consensus.  I shall begin by defining my terms, so that you will know what I am talking about:

Let me give you the dictionary definitions of three political terms: socialism, fascism, and statism:

Socialism – a theory or system of social organization which advocates the vesting of the ownership and control of the means of production, capital, land, etc. in the community as a whole.

Fascism – a governmental system with strong centralized power, permitting no opposition or criticism, controlling all affairs of the nation (industrial, commercial, etc.).

Statism – the principle or policy of concentrating extensive economic, political, and related controls in the state, at the cost of individual liberty.

It is obvious that ‘statism’ is the wider, generic term, of which the other two are specific variants.  It is also obvious that statism is the dominant political trend of our day.  But which of the two variants represents the specific direction of that trend?

Observe that both “socialism” and “fascism” involve the issue of property rights.  The right to property is the right of use and disposal.  Observe the difference in those two theories: socialism negates private property rights altogether, and advocates “the vesting of ownership and control” in the community as a whole, i.e. in the state: fascism leaves ownership in the hands of private individuals, but transfers control of the property to the government.

Ownership without control is a contradiction in terms: it means “property” without the right to use it or to dispose of it.  It means that the citizens retain the responsibility of holding property without any of its advantages: while the government acquires all the advantages without any of the responsibility.”

(Ayn Rand, Capitalism: The Unknown Ideal 1965).

In 1965, Ayn Rand was rightly convinced that the United States was driftng towards a form of fascism, rather than socialism, not for ideological, but for pragmatic reasons. Although Rand did not express herself  in these words, she was convinced that a desire for consensus, rather than a search for principle was edging the United States systematically away from any notion of  laissez-faire capitalism, based on the inalienable rights of the individual to life and liberty and the imprescriptible right to property.

It would take some 15 years and the election of Ronald Reagan to the Presidency for this trend to reverse itself and for economic deregulation to put in place a 16 year period of the Great Moderation (1984-2000) that provided US citizens with increased liberty and rising wealth.  It took just 8 years for President George W. Bush and Congress to change course once again, and to return the United States to the road to serfdom, identified by Friedrich von Hayek in 1944 as the inescapeable “pilgrim’s progress” under conditions of pragmatic liberal fascism.



Get every new post delivered to your Inbox.

Join 77 other followers