Sunday, September 22, 2013

Mike Konczal — How Ronald Coase Demolished Current Libertarian Ideas About Property

Property isn’t a vertical relationship between a person and an object, but instead is a horizontal, reciprocal relationship of exclusions between people. Since the benefit of one person in regard to property comes at the expense of someone else, there’s no logical or coherent way to invoke liberty or classical liberal principles of “do no harm” when it comes to how the law determines the shape of property. All we can do is pick among competing systems that try to achieve shared social goals.
That’s not an idea normally associated with the economist Ronald Coase, who died yesterday at 102. But it’s a very important part of his landmark paper, ”The Problem of Social Cost” (1960), that goes missing when the right-wing celebrates his legacy. Let’s unpack it.
Next New Deal | Rortybomb
How Ronald Coase Demolished Current Libertarian Ideas About Property
Mike Konczal

Konczal bases much of his post on the Coase Theorem, which was a product of George Stigler, based on the work of Coase. Coase, however, rejected it as his. "Coase himself has stated that the theorem was based on perhaps four pages of his 1960 paper The Problem of Social Cost and that the "Coase theorem" is not about his work at all." (source)

I have always wondered how Libertarian Austrian economics could think that the system of enforceable property rights that Rothbard proposes could possibly work given transaction costs involved in litigating disputes over externalities. It would be litigation nation, and a lot of the judicial decisions would be based on the way judges approached issues. How lawmakers and judges would be selected would be extremely important since where there is power there is politics and class structure.


Tom Hickey said...

Right, Bob, we know that Austrians hate the work of Coase, not just Rothbard.

Tom Hickey said...


Tom Hickey said...

In Rothbardian anarcho-capitalism, there would first be the implementation of a mutually agreed-upon libertarian "legal code which would be generally accepted, and which the courts would pledge themselves to follow."[7] This legal code would recognize sovereignty of the individual and the principle of non-aggression.

Even if this were a good idea, how is practical to arrive at a mutually agreed-upon libertarian 'legal code which would be generally accepted, and which the courts would pledge themselves to follow.'" This is presumably universal agreement since individuals are sovereign and an one individual disagreeing cannot be forced into acceptance. Who is going a construct the legal code and how are the judges selected that preserves individual sovereignty? Doesn't an individual forfeit some sovereignty by accepting to live under a law that is individual? It's a contradictory idea.

Secondly, any nation that wanted to adopt this would have to rewrite its constitution. How likely is that?

This is just nonsense. Societies just work this way other than in the minds of delusional people.

Unknown said...

it's amazing how much pointless effort far-right so-called "libertarians" put into trying to justify their extreme delusional narcissism. Truly a very sick group of weirdos.

Tom Hickey said...

Bob, no problem with #2. The problem is with #1. Scalability. Intentional communities based on whatever can be quite successful with relatively small groups but they don't scale into large groups. At least they never have.

I have studied such communities for decades, both in terms of history, visiting existing groups and participating in groups myself, including libertarian ones base on maximum personal freedom. Some have been successful for a while, but few have lasted for decades and none that I know of has lasted through generational replacement, Some have been utter disasters, literally destroying people psychologically. It's a dicey game.

What I see from the Libertarian Austrian AnCap crowd is a lot of philosophy and not so much testing in the field. I'd be more impressed if I saw successful experiments and were so attractive to others that they scaled up spontaneously.

Harkening back to the Sixties and Seventies, this is what the hippie commune movement was about. It did scale up to a degree in that it spun off what is now a pretty mainstream lifestyle and a multi-billion dollar alternative economy.

There are still some enclaves out there where people are doing their own thing, too. Virtually all of them are all left libertarian, although often not so much in practice. As I've said, community depends on the level of collective consciousness and a well-functioning libertarian community requires a pretty high level.

As I have said many times, history has a liberal bias and humanity is tending toward greater freedom collectively if in fits and starts. But the general level of collective consciousness is still pretty adolescent. It's premature to look for full-on liberalism, social, political and economic, anytime soon. Societal change is incremental, the pace is plodding, and development is non-linear.

All in all, it seems to me that when liberalism is really ready to scale up, humanity will be too mature to adopt anarcho-capitalism, which is essentially narcissistic as one would expect of an adolescent stage of development.

Anonymous said...

Ahh the sex slavery apologist Walter Block is cited.

Here's what the Blockhead thinks is freedom for Children:

Quote: "Suppose that there is a starvation situation, and the parent of the four year old child (who is not an adult) does not have enough money to keep him alive. A wealthy NAMBLA man offers this parent enough money to keep him and his family alive – if he will consent to his having sex with the child. We assume, further, that this is the only way to preserve the life of this four year old boy. Would it be criminal child abuse for the parent to accept this offer?

Not on libertarian grounds. For surely it is better for the child to be a live victim of sexual abuse rather than unsullied and dead."

So freedom is being a sex slave according to AnCaps like Roddis and his Hero Walkter Block?

Any form of "property" that creates by it's nature creates such depravity is aggression.

Anyone who talks about a principle of non-aggression has never talked about real economics. Non-Aggression is apriori a nonsense. It cannot physically exist or have meaning.

For rights to exists one must take aggressive action constantly against those who wish to deny them.

Quote from Bob: "

1. Obviously, if a large plurality of people do not want to abide by the prohibition on fraud and the initiation of force, people probably will still engage in fraud and the initiation of force"

That would be the whole of humanity given the right set of circumstances and incentives.

Quote form Statist Bob:

2. It would be quite simple to "legalize" right now the purchase of let's say a square mile of land by a group of black or white Jewish or Muslim or whatever socialist anti-gun atheist lesbians who establish a subdivision on the property subject to their agreed upon rules of behavior and admission, including dispute resolution. The only issues would be pollution from outside the neighborhood, which is already a tort. Where's the problem?"

So Bob is now defending group collectivism over a terrority i.e. Statism? Congrats Bob you've reinvented the wheel.

Unknown said...

No one's fooled by your sanctimonious drivel bob.

Take your stupid beliefs and your mental problems elsewhere please.

Tom Hickey said...

There have been and continue to be such groups. Generally, they conceal what they are about unless they live in a safe environment or in the anonymity of a city. They do use the contractual relationships of the conventional society to interact with conventional society as necessary but they do so only to the degree necessary and without it influencing their own arrangements. It is highly unusual for conventional society to accept the existence of such groups in their midst if they discover them.

I personally can recall a cross being burned on the property of one such group when I was there.

Matt Franko said...


if there was ever any doubt that these people are just a bunch of psychos, I think you have dispatched with any such notion...



Unknown said...

You want to put an end to spanish conquistadors killing native american indians.

I wasn't aware that was still a problem.

Matt Franko said...


(Bob, you can refer to me as Matt if you care to...)

Read some Alexander Del Mar on his accounting for all of that chaos from our western history ...

those Europeans were all out of their mind for the "precious metals"... rather than state currency...

That is exactly where a rejection of state currency has historically led humanity... towards killing/abusing each other for possession of precious metals... perhaps agree with you that it is DARK...


Anonymous said...

And Septeus7: Are you really that stupid or dishonest to not understand that VOLUNTARY groups and arrangements are exactly what libertarians support?

Are you too stupid to understand that the idea of "voluntaryness" is subjective and dependent on point of view and thus saying you support "voluntary groups" has no no real meaning?

Democratic government is a voluntary group arrangement according to most people but Libertarians don't believe in it and therefore work to destroy such things as democratic government and Unions because Libertarians don't believe in "voluntary arrangements" they believe in imposing their subjective ideas about what is "voluntary" on everyone and attacking any institutions that disagreed with their arbituary options.

You seem to think that selling Children into sex slavery is voluntary. I do not agree with your definition of voluntary.

I believe it is a crime.

Voluntary isn't a moral catagory. It is discription of a quantitative spectrum of willful action.

It says nothing about the either the morality or economic efficiency or any other qualitative property of the action. By definition saying that an action was voluntary says contains no information about the economic, rationality, or moral soundness of the action.

The entire basis of your appeals to voluntary action is violation of fact–value distinction.

I really don't wish to continue this because you simply refuse to except the fact that other people disagree with your errors in logic and you simply repeat them no matter how many times they are pointed out.

You are beyond reason as is the entirely of Libertarianism. For this reason Libertariamism isn't to be debated it is to be smashed.

Unknown said...

"It is not that difficult to determine if an assault, tort or crime has been committed against one's body or property."

None of the things you moan and whine about all the time, i.e. taxation and inflation, are crimes, assaults, or torts.

MMT has nothing to do with Leninism. Please seek professional help to deal with your bizarre obsessions and other mental problems rather than repeatedly acting them out here.

The purpose of having the vote is to elect representatives in government. As it says in the Constitution:

"The House of Representatives shall be composed of Members chosen every second Year by the People of the several States"

You have repeatedly demonstrated that you hate those parts of the Constitution that don't fit with your horrible ideology.

"In multi-ethnic societies, social democracy means blah blah"

The paper you link to, which you think supports your idiot assertions, is about what the authors refer to as 'plural societies'. It's not about 'social democracy'. What they mean by a 'plural society' is a society in which political parties are based almost solely on ethnic or tribal identities.

"At the outset, then, we recognize cultural diversity as a necessary
condition for a plural society: if a society is plural, then it is culturally diverse. However, nearly every modern society is culturally diverse.
Thus, although the existence of well-defined ethnic groups with generally incompatible values constitutes a necessary condition of the plural society, it is not sufficient.
The hallmark of the plural society, and the feature that distinguishes
it from its pluralistic counterpart, is **the practice of politics almost exclusively along ethnic lines**. To put the emphasis differently, in the plural society — but not in the pluralistic society — the overwhelming
preponderance of political conflicts is perceived in ethnic terms".

Block is a demented idiot.

Tom Hickey said...

According to the extreme theory of action, all action that is not physically coerced in a direct way is "voluntary" action and should be permitted by the state, which should not interfere in voluntary activity that is mutual.

This is view is based on an extreme view of methodological individualism grounded in ontological individualism that goes by the name "individual sovereignty." It's a political theory subscribed to by just about no one historically because societies are cultural and institutional artifact that function on the basis of evolved patterns of behavior that manifest as cultural conventions and rituals and institutional arrangements. These rules are informal and implicit and some are formal and explicit in the form of positive law, for example.

Libertarians want to create a form of society that has never existed and never been tested and they want to do it on a national and global level. Daft. Never going to happen unless as the outcome of an evolutionary process that there is no empirical evidence that that is the trend and a lot of empirical evidence that it is not the trend.