27 December 2011

Eyesores vs. Property Rights in a Libertarian Society

Non-libertarians love to come up with ideas about how, in a libertarian society, some ill would occur which (in their mind(s)) cannot be corrected without the violent force of government. Eyesores -- the kind of blight upon a neighborhood that lowers property values -- were recently considered at Libertarian News:
The way [an eyesore] would be dealt with, in the absence of home owners associations, state regulations, zoning restrictions, etc…, is through the homesteading principle. Private law courts would basically look at who was there first and decide based on the homesteading principle. 
Consider this example: 
If a person owns a home in a nice neighborhood and a pig farmer decides he’s going to setup shop across the street from them, private law courts would uphold any eyesore/smell complaints brought by that homeowner as being legitimate.  However, if a person buys a home across the street from a pig farm, then comes to the courts to complain about the eyesore/smell of the farm, the courts would not recognize that complaint as being legitimate.  The homeowner bought the home in full knowledge of the condition of the environment around it and agreed to purchase the home at that price, which would surely be at a bargain because of the pig farm.
This homesteading principle applies to all businesses and homes. If a person moves in next door and starts destroying their lawn and putting junkers up on blocks in the front yard, their neighbors have a legitimate right to sue for property value damages if the previous condition of the lot was in good upkeep.
I don't think this is right at all. The first (and probably least costly) mistake, in my mind, is lumping homeowners associations in with state regulations and zoning restrictions. The latter are imposed by the state; the former is usually structured as a private corporation owned and run by the homeowners themselves -- one which would fall completely within the homesteading principle as the author describes it. It is very rare for someone to buy a home and have an association imposed on the property at some later date. Rather, the homeowners association is, almost without exception, the prior existing entity. In this situation, the prospective owner chooses to enter an agreement with the association upon buying a the property, or he selects a different property. The source and legitimacy of homeowners associations' power are of course muddied by state interference; however, for the purpose of this discussion, they can be considered to be completely private, voluntary entities relying solely on contract enforcement to achieve their ends. Inasmuch as this is the case, it is clear that there is at least one means by which eyesores can be dealt with in the absence of state regulation.

The more egregious mistake in the original article is in declaring that property owners have a right or ownership in the value of their property. One of the commenters to the original article jumped on this point:
Nobody has a right to the _value_ of their property, since value is subjective and exists in people's heads. Consider the entrepreneur who creates a brilliant new mode of transport, he hasn't infringed on the rights of car manufacturers, even though his invention has harmed the market price of the cars they're trying to sell. The same is true of the person who decorates his property in a way his neighbor disapproves of--absent a contractual breach, he hasn't infringed on anyone's rights.
And the author conceded the point:
Yeah, you are right that pollution needs to be some kind of physical violation of their property's integrity.
I'm actually not surprised by this mistake. It took me a day of thinking to figure out exactly where the fallacy was. What tipped me off to it, though, was the authors use of the homesteading principle to solve the problem. For those unfamiliar with the homesteading principle, it is the idea that one becomes the rightful owner of some previously unowned property (land) by "mixing his labor" with it. In the author's example, the prior landowner had some amount of veto authority over the latecomer. Using the idea of homesteading, this implies that the prior landowner/homesteader gains not only an interest in the land with which he actually mixes his labor but also in the surrounding land. Not only that, but his interest in the surrounding areas would have to be superior to the latecomer(s) by virtue of the fact that he (apparently) has veto authority over what the latecomer would do with his property. If we follow this line of reasoning further, we'd eventually find that the prior owner could restrict the latecomers free speech rights by declaring that political placards/signs were offensive, freedom of expression by vetoing his choice of color to paint his house, and possibly even his choice of Ford vs. Chevy.

Property rights must be (nearly) absolute as they are the basis for the idea that one owns his own body, the only restriction being that one does not use his property rights to violate another's. And, as I've often heard Stephen Kinsella say, "genuine rights cannot conflict". Therefore, either the latecomer doesn't really own his property -- and, by extension, the first owner owns not only his own land but also has controlling interest in all of the surrounding land -- or the first owner does not really have a right/ownership in the value of his property. I reject the first proposition simply on the basis of the homesteading principle. This owner has not "mixed his labor" with his neighbor's property. Furthermore, assuming the implications of the original author's description of homesteading, there is no logical end to the amount of land to which the first owner could lay claim. This solution is simply unworkable.

We are then left, as the quoted commenter points out, with the idea that there is no ownership in the value of property. This, in my opinion is the correct view. Values are subjective and therefore exist individually only in the minds of the people attempting to appraise the value of an object. As such, attempting to fix or determine a value by law or decree is essentially a form of (attempted) thought control. For more on this subject, Rothbard gives the ownership of "ideas" a thorough treatment in chapter 16 of The Ethics of Liberty.

02 December 2011

Where's the beef (with capitalism)?

Over at Arm Your Mind for Liberty, a recent article takes issue with capitalism. I read this article with great interest because (I assume) it grew out of a discussion between myself and the author as well as some others regarding capitalism. When I read it, though, I couldn't find that the "beef" is really with capitalism at all. Before going too much further, we should probably start with a (common) definition of capitalism, but I'm not going to attempt to define capitalism in great detail. It seems that if you ask ten different people, you'll get ten different answers about what capitalism means to them as the linked article states:
‘Capitalism’ is a funny word. It means so many different things to so many different people, that it’s become entirely useless as a basis for any kind of rational or constructive communication. [...] Some will mention wage labor, others exploitation and yet others will talk of free trade. But I think the defining feature is the ability to accumulate lots and lots and lots of stuff (capital).
Fair enough. The ability to accumulate lots (and lots and lots) of stuff, or capital, is most assuredly a characteristic of capitalism and, as we will see, the article's main problem with it, so let's focus our attention there. Before we do so, the original article takes a slight detour:
And then, most importantly, [a characteristic of capitalism is] to have a third party protect your ability to control that stuff even when you’re not using it. That third party, of course, is the state (the government). [...] Without this ability to accumulate and have your title to said stuff protected at little to no cost to yourself, things like wage labor, exploitation and managed trade could not happen. These all depend on the power imbalances that stem from the state protecting capitalists’ control of their property.
Whoa, wait just a minute! Now, we're not talking about capitalism any more. We're talking about a state-directed ("managed trade") and state-enforced ("stuff protected at little or no cost to yourself", presumably via taxation on the whole population and "power imbalances" in the form of state-chartered police and enforcement mechanisms) economic system, our current system, what many call crony-capitalism. So, we can already see that the author's problem is not with capitalism, per se, but with crony-capitalism and the state enforcement of it. The author continues by stating that he doesn't "think capitalism would survive without the state".

But we're not talking about capitalism any more. We're talking about the state. The author offers no evidence or theories as to why capitalism cannot or will not exist without a state other than to say, "I don’t think a non-aggressive organization will go to the same lengths as the state to protect property". This is demonstrably false, however:
Just think for a moment about the following:
  • Who is responsible for protecting you at most major shopping centers? Ever see a private mall cop? I bet you have.
  • How about casinos? Almost all casinos have private armed security.
  • What about at the dance club? Ever see a bouncer throw out a belligerent drunk?
  • What about at the university? You’d be hard pressed to tell the difference between a public safety officer and a cop. Many universities have private police forces.
  • How about warehouses, ports and apartment complexes? It is not uncommon to have private security guards protecting all of those. My apartment complex has its own security.
  • Airports used to be entirely protected by private security – and guess what? No one was complaining about being molested. Further, after 9/11, it was the airlines who made real improvements to security by putting in steel cockpit doors and arming the pilots.
  • Banks? - Almost all bank cash transfers are dealt with by way of private armored car, and many banks have private armed security as well.
Now I've been drawn into a digression about capitalism on a larger scale. Let's return to the accumulation of stuff in the original article and look at an example provided by the author describing his issue with it: "if someone fences off 1,000 acres of land but consistently uses only 2, I don’t consider that legitimate". This situation draws its basis from the Lockean idea of homesteading, that one becomes an owner of land by "mixing" his labor with it. I'm not going to argue whether fencing 1,000 acres constitutes a mixing of labor. A debate on such a matter is not likely easily resolved.

Instead, what if we arrived at this situation differently, voluntarily? Let's assume two people and call them A and B. Each of them own 501 acres (via legal means, homesteading or otherwise) and farm the entirety of their respective plots. A and B both consume only what they need to survive and sell the rest of their produce into the marketplace. A saves the proceeds from his sales under his mattress while B spends his money on vacations and house keepers and other consumable goods and services. (One has to wonder, at this point, if B has a claim to A's money since storage under A's mattress is not "productive" use in B's mind.) At some point, bad weather conditions befall A and B. A, having saved his money, is able to buy what he needs from the marketplace, but B has nothing. Seeing B's plight, A offers to use some of the rest of his savings to buy 499 acres of B's land. B, needing to feed himself and his family, reluctantly agrees. Now A owns 1,000 acres, and B owns 2. We've arrived at the evil capitalist situation described by the author in the original article, but we've arrived by completely legal and voluntary means.

Let's assume that A, having just bought the land and exhausting much of his savings, does not have the capacity to expand his farming operations into his newly acquired 499 acres. When the weather improves, does B have a legal right to reacquire the land, via homesteading? What if B had kept the land but sold his farming equipment to A to pay for his food? Now that B is incapable of farming his land (and has no reasonable prospects for doing so since he has no farming equipment and no savings with which to buy any), can A also freely acquire B's land under the homesteading principle?

The author of the original article seems to think so: "If someone needed land and had a solid intention to use it to sustain his life, I would support that person in any attempt to homestead a reasonable parcel out of the 1,000 acres". B, in our example, has every "intention to use [the land] to sustain his life" as well as others'. The author goes so far as to suggest that force is an appropriate means to affect this outcome:
In a stateless society, people would be freer to rise up against people who attempt to control more property than they actually use. Acting in concert, great numbers of people could, in the worst case, purchase arms, form a defense force and fight capitalists on a more level playing field. Squatters, worker-owned cooperatives and similar direct actors would take control of more of the capitalists’ property. In the process, their power would be eaten away.
In fact, A has saved B's life as well as his family's, and in return B should have the right to use violent force to take back from A what was voluntarily given/traded (by B himself!) to A? What the author is suggesting is either a clear violation of the non-aggression principle or will require a state, with a legal monopoly on the use of violence, to forcibly give A's land to B.

The only other argument in favor of what the original author is suggesting hinges on the word "reasonable". Perhaps 1,000 acres is an "unreasonable" amount. Much like the hypothetical debate about homesteading to which I alluded earlier, a common definition of what is "reasonable" is not easily resolved. As an example, here are a bunch of pro-gun people on a pro-gun forum disagreeing about what "reasonable" gun laws would look like. At any rate, the example I gave above works with any sized parcel of land. In fact it becomes even more difficult to reason out on a smaller scale. Consider if A and B each owned two acres and A bought 1 acre from B. A is in a much better position to farm an additional 1 acre than he is an additional 499. What if A incrementally continues the process, voluntarily acquiring parcels from C, D, E, etc. in a similar manner? When does the amount of land that A owns become "unreasonable"? Does the situation change if A rents the land back to B, C, D, E, etc.? Who makes that decision and who enforces it? What authority does this entity have when A can show that his property was acquired legally? None, according to the author of the original article: "If a person prospers legitimately, I have no basis to challenge any accumulation of wealth." Wait, what? Does B have a claim to A's legitimate accumulation of wealth (in the form land) or not?

In short, capitalism, true capitalism, is not an economic system that is imposed on anyone. It is an economic system that arises from, or rather is the result of, voluntary interactions in a truly free society. In fact, the economic system proposed in the original article is not only incoherent but, in the author's own words, requires violent enforcement. I suggest that the author's "beef" is not with capitalism but with a free and voluntary society.