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If for some reason you want every line i highlighted and exported on kindle (which is the raw material for the above "in my own words" notes), here's that enormous dump: sourceType:: book author:: christopher chase rachels sourcePublication:: book ref:: noteTitle:: a spontaneous order; christopher chase rachels. (book) # a spontaneous order; christopher chase rachels. (book) #refs [[_TOC_]] # Kindle Notes Export [[2024-05-03]] The problem of social order, then, stems from mutually exclusive desires for how to employ such scarce goods. Being scarce, there are a limited number of these goods, and the desire for them exceeds their availability Thus, over time, there have been innumerable attempts to solve this dilemma through the formulation of various property norms and the erection of various States to create, interpret, and enforce them The thesis put forth regards the Private Property norm as the one best suited for such conflict avoidance and, hence, the optimal production of wealth. This norm will be extended to its fullest to show how it may also be applied towards those functions traditionally assumed by the State. Simultaneously, it will be revealed how the State owes its very existence to the continued violation of the Private Property norm, and must therefore be dissolved for both practical and ethical reasons only Joe has the exclusive right to employ his body as he sees fit, so long as such employment does not involve uninvited physical interference with the bodies or external property of others. The Private Property norm permits one to acquire ownership over external economic goods through original appropriation or voluntary exchange. To acquire property via original appropriation, one simply need be the first to mix his labor with an unowned good To clarify, aggression in this context and for the remainder of the book will entail the initiation of uninvited physical interference with the persons or property of others, or threats made thereof Finally, what the Free Market refers to is simply the social arrangements that develop in the absence of coerced exchanges, Hoppe expounds on the nature of the Private Property norm: it insinuates that a Private Property or Free Market Anarchist society is absent a governing presence in a more general sense. In a Free Market Anarchist society (aka Anarcho-Capitalist or Voluntaryist society), the market is the governing presence and enforceable rules and norms still exist, e.g. the NAP. In the Free Market, no one may rightfully or legally commit aggression against the persons or property of others. In distinct contrast, however, the State is that institution which has the exclusive legal right to commit aggression against others in a geographical area. More specifically, the State is that institution which confers upon itself the status of ultimate arbiter in all conflicts, as well as the exclusive privilege to create, interpret, and enforce law This is what separates the so called "social contract" of the State from a restaurant owner who expects a customer to pay after he has enjoyed a meal. In the first place, the restaurant owner offers the good upon the customer’s specific request, and only then asks for payment. In distinct contrast, the State first expropriates or steals wealth from its citizenry in the form of taxes, and we are told this is payment for its services. In the second place, the restaurant owner would have acquired his establishment and the food that he serves through original appropriation or voluntary exchange, and would thus have the legitimate authority to dictate how it is to be run and to expect payment from his customers for services rendered. The State, on the other hand, cannot claim to own the land of an entire country, as it never homesteaded or purchased it from prior owners (at least not with funds generated through original appropriation or voluntary exchange) the primary role the State is charged with is to serve as the authoritative institution in the creation, interpretation, and enforcement of law and to protect the property of its citizens. However, as noted earlier, before it can embark on any task it must first confiscate a portion of its citizens' property without their genuine consent so that it may have the means to perform the aforementioned services. Thus, the means the State uses to achieve the ends of conflict mitigation and property protection themselves generate conflict and violate the property rights of its citizens from the outset One's productivity in the Free Market is reflected by his degree of profits or losses. Profits and losses are only able to measure productivity because they reflect the purchasing preferences of consumers. If one is profitable, this means he is generally satisfying consumer preferences; if he is, on the other hand, making losses, this means he is transforming the goods at his disposal in such a way that their resulting configuration is worth less to the consumer than the sum value of the individual goods used in the process. Thus, profits equate to a production of wealth, and losses equate to a destruction of wealth However, no such regulating mechanism exists for the State. Because the revenue the State generates comes from violent confiscation, its resulting profits or losses do not necessarily correspond with the creation or destruction of wealth Praxeology studies the logical implications of human action, but it also provides more general insights into the nature of science itself. The role that knowledge plays in human action is vital for the Misesian understanding of epistemology and, more particularly, economics The fact that water runs downhill, or that oranges contain vitamin C, can only be affirmed by some particular experience. Without the data attained during observation, there is no way to verify or refute an a posteriori truth-claim Is this for sure? Couldn't you determine everything a priori with a thorough enough underdstanding of the underlying sciences? A priori knowledge, once established, holds true at all times and in all places, like the propositions of logic and arithmetic Knowledge acquired from observational data is, in other words, always theoretically falsifiable, or potentially disprovable by new findings Austrian economist and rationalist philosopher Hans-Hermann Hoppe provides another example of a necessary, a priori truth:   Whenever two people A and B engage in a voluntary exchange, they must both expect to profit from it. And they must have reverse preference orders for the goods and services' exchanged the method of the natural sciences is induction – otherwise known as “causal inference” – where general laws are inferred from a series of tests and observations of the phenomenon in question.3 With the a priori/a posteriori division in mind, another important distinction is commonly made in regard to “analytic” and “synthetic” propositions. An analytic claim is one that refers purely to definitions, such as the claim “All bachelors are unmarried.” In contrast, a synthetic truth is one that reveals something beyond what may be inferred from the individual definitions of the words used in a claim. For instance, the claim that “Children prefer candy to vegetables” Finally, and most importantly, knowledge can be synthetic (non-tautologous), and, at the same time, a priori any change in observable reality can be described as either a “natural” phenomenon, or as a teleological one, brought about by an actor who deliberately interferes in the natural course of the world’s events.7 Choice, then, implies purpose, and since action always involves a choice, it is deemed a purposeful phenomenon. Thus, social science, because it seeks to understand the teleological type of event, must study the acts of purposeful beings – it must study the behavior of actors If an actor’s environment did not operate on reliable, causal laws, action would be impossible The statement “Man acts” must reside in the realm of synthetic a priori knowledge: it is true by logical necessity, yet it also offers something beyond mere definitions. If one attempts to deny this claim – known as the “action axiom” – he must inevitably affirm it in the course of his denial, because a denial is itself a kind of action Hoppe elaborates further on how these synthetic a priori categories are axiomatic and inherently contained in the action axiom:   For any attempt to disprove the validity of what Mises has reconstructed as implied in the very concept of action [the categories] would have to be aimed at a goal, requiring means, excluding other courses of action, incurring costs, subjecting the actor to the possibility of achieving or not achieving the desired goal and so leading to a profit or a loss. Thus, it is manifestly impossible to ever dispute or falsify the validity of Mises' insights. In fact, a situation in which the categories of action would cease to have a real existence could itself never be observed or spoken of, since to make an observation and to speak are themselves actions.12 To verify the truths of praxeology, one need not go further than the conclusions generated by his own thoughts, rendering empirical data utterly extraneous. Due to the vantage-point of an actor, he is in a unique position to observe, or reflect on, the concept of action – a position he can never be in while observing any external, natural phenomena. (The existence and specific traits of natural phenomena can only be known through the inductive scientific method.) Thus, it is confirmed that action is conceptually distinct from all other phenomena. Unlike any other type of event, one can derive logical insights concerning action prior to any specific experiences, while still revealing new, non-tautologous information. This is the fundamental distinction upon which the entire edifice of praxeology is built, and it has serious implications for scientific inquiry in general, and for social science in particular If one tried to deny that language had meaning, he would find himself in a performative contradiction In other words, one cannot reasonably argue that one cannot argue It therefore becomes equally impossible for one to deny that he knows the meaning of truth-validity, since in his very act of denial he demonstrates his possession of such knowledge. To dispute any claim whatever, the speaker must appeal to some standard of truth – otherwise, on what grounds could he possibly dispute anything Thus, implied in the meaning of truth-validity are, at least, the logical laws of existence (“Something exists”), identity (“Things have distinguishing properties that separate them from all other existing things”), and contradiction (“Because things have particular identities, they cannot exhibit mutually exclusive properties simultaneously” or, more simply, “A cannot be both A and not A at the same time”).  When one says something is true, he means most fundamentally that it is in accord with these basic logical laws Knowledge is only useful insofar as it can provide actors with causally-effective means to achieve their ends. When one acts on incorrect knowledge about the effectiveness of a means, the likelihood that he will actually achieve his end is severely diminished Along with causality, Kant deemed “time” and “space” as categories of thought as well, In other words, a conceptual being does not merely utilize sensory data alone; it is organized by, and integrated with, a priori presuppositions (in Kant’s terms, the categories of thought). This insight strikes at the very meaning of human rationality, a faculty of conceptual understanding which goes beyond mere sensuous stimulation Kant’s free-floating categories of time, space, and causality are, instead, directly contained in the action-categories of means and ends. Thus, an end is accomplished only after some means is employed; time necessarily elapses between the two. Furthermore, all action must take place in some physical environment, unavoidably understood by any actor as spatially-structured. Even if reaching one’s end did not involve much bodily movement, all action must take place somewhere in space. At the very least, all action involves the utilization of standing room and the time consumed by the action itself. Causality, finally, is also integral to action, as ends are only reached as the effect of some means; actors deliberately inflict causes into the world in order to reap their effects Let us now explicitly demonstrate each category’s inextricable role in action, by way of a hypothetical objection The positivist objects to this; he maintains that the only two possible kinds of truth are analytic definitions (tautologies) and tentative empirical hypotheses. This perspective essentially states that certainty cannot be claimed about anything unless it is definitional, which can only involve linguistic conventions Although the positivists accepted that there is indeed a dichotomy between the realms of a priori and a posteriori knowledge, they postulated that nothing from the former realm could give us any new or meaningful information. To them, a priori truths were virtually free of content in regard to the reality of the world as it exists. Concerning this claim itself, however, one must ask: what kind of truth is that? According to positivist epistemology, the claim that “A priori knowledge can only be tautologous” is either a tautological definition that tells us nothing new, or only a hypothesis, in which case, such a claim may well be falsified in an experiment The central claim of positivism, then, cannot survive its own distinction. The only way they could ever hope to salvage it would be to concede that it indeed is a synthetic a priori claim, at which point they would have conceded the entire argument, as that is precisely what they were trying to dispute in the first place Why is it true that T2’s results could “falsify” or “confirm” the results from T1? Without the use of any a priori knowledge regarding causality, this question could not be coherently answered > This understanding provides a rock-solid edifice from which an entire science of market exchange can be derived – known as economics, or, as Mises terms it, “catallactics." It is the concept of purposeful behavior which ultimately grounds our theory of knowledge, and, proceeding into science, it is this action-based epistemological framework which grounds economic theory ## Why property rights? peace-keeping norm re scarce resources] Because the desire for many resources exceeds their availability, there exists potential for interpersonal conflict to emerge over how they are to be employed. To address this issue, property norms are established to provide an objective basis for reconciliation. Without such norms, the alternative would be destructive interpersonal conflict where presumably "might makes right" would reign as a social paradigm It is the function of property rights to avoid such possible clashes over the use of scarce resources by assigning rights of exclusive ownership. **Property is thus a normative concept: a concept designed to make a conflict-free interaction possible by stipulating mutually binding rules of conduct (norms) regarding scarce resources.** To own something, especially one's body, means to have final say over the employment or use of whatever is “owned”, provided that such employment does not entail the initiation of uninvited physical interference with another person's body or their justly-acquired property if one mixes his labor with an unowned good and claims it as his own, then he would become this good’s rightful owner.   It is critical that this “mixing of labor” criterion is met. Asserting that a mere verbal declaration would suffice in obtaining property rights over any good would yield a host of logical and practical problems ### Justification of force Rights provide a framework for the justification of force. To say one has a right against being coerced unjustly or being murdered implies that the right is defensible by one's own use of force ### Rights vs morals It is important to note the greater specificity of a discussion on “rights” as compared to “morals.” All too often the topics are confused and this confusion has been used to justify assaulting others for a great many “victimless crimes.” In other words, the Libertarian Ethic applies to beings capable of argumentation or of propositional exchange (discourse) For rights to exist between two or more beings, there needs to exist a certain degree of reciprocity. This must entail the ability to both recognize and deliberately respect the other’s right to his own body and property for something to be a valid or justified ethic, it must apply to all moral agents at all times and in all places A second and more obvious criterion for an ethic or right to be justified is that it must be practically achievable Third and finally, for an ethic to be justified, it cannot come into conflict with other norms which must be presupposed in the act of discourse or argumentation ## Action, will, ends, goals Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego’s meaningful response to stimuli and to the conditions of its environment, is a person’s conscious adjustment to the state of the universe that determines his life.5 **That is to say, if he is acting, he necessarily must view such actions as bringing him closer to a more preferable state of affairs. This is not to say his actions will accomplish this, but rather that he believes they will. This is true necessarily, for if he felt a given action would take him further from his preferred state of affairs, then he would either refrain from acting or act differently.** ## Subjective value An additional insight made by Austrian economists is that all value is necessarily subjective. The mere fact that voluntary trades occur is indicative of this truth ## Argumentation ethic; fundamentally non-coercive **This fact is logically incontestable. There is no way anyone can assert something to be true without making an argument – for the very act of asserting something to be true is itself an argument. Furthermore, one cannot coherently claim not to know what truth is, for in so doing he is claiming that it is true that he does not know what it means for something to be true Argumentation ethics are a logical extension of the a priori of argumentation. The purpose of any argument is to establish a proposition as being true and/or justified, or conversely to show a given proposition to be false/unjustified. Argumentation, then, is by its very nature persuasive and non-coercive. If one were to attempt to use physical coercion in the course of an argument, this would undermine the intent of discovering truth or falsehood, thereby precluding such an act from being compatible with argumentation. As such, for someone to engage in argumentation with another would require an implicit acceptance that the other party has the right to exclusive control over his own body let us assume that one of our interlocutors does not hit the other, but rather threatens to assault him if he does not concede. Again, this act of coercion falls outside the realm of argumentation as it undermines the goal of discovering a truth or a falsehood by substituting conflict for resolution By establishing as a precondition of argumentation the mutual recognition and acceptance of each party's agency, the principle of self-ownership has been justified a priori. Thus, it may be concluded that any proposition(s) which conflict(s) with the principle of self-ownership cannot be coherently justified Next, I will provide a justification for the private ownership of external economic goods A practical precondition for argumentation is that the actors involved are alive. To be alive, and to even argue, requires the right to exclusively control and consume external resources. Naturally, one must also have the right to occupy a given amount of physical space with his body before he may be able to argue at all This argument should not be misconstrued as saying that people are entitled to having a particular set of scarce resources, but rather that it is within their right to own them provided that they are acquired via just means if one is entitled to a particular resource, this would mean that he would have a right to it and that if this right is not fulfilled, then physical force or the threat thereof would be justified in either fulfilling it or seeking retribution for its violation.   This is what is known as a positive right. For a positive right to be fulfilled, someone is required to take an action in order to fulfill it. For example, if I had a right to healthcare, this would oblige someone else to provide this service to me or to at least provide me with the funds necessary to purchase it. Thus, “positive rights” necessarily conflict with private property rights, as they limit to some degree a person’s right to exclusive control over his own body or external property In contrast, having the right to own something simply entails that others may not commit aggression against this owned good or make threats thereof. For that to be fulfilled requires no action taken on the part of anyone else. These types of rights are known as “negative rights.” In contrast to positive rights, negative rights simply preclude others from taking certain actions, whereas positive rights oblige others to act ## NAP validity In light of the above proofs for the principle of self-ownership and the right to own external property, one may deduce that the Non-Aggression Principle (NAP) must also be valid ## Homesteading Original appropriation (aka homesteading) and voluntary exchange are the only two legitimate means of acquiring property For if one could indeed appropriate property by decree, this would imply that it would also be possible for one to simply declare another person’s body to be one’s own Moreover, unlike the “first user” homesteading rule, such a declarative alternative creates the possibility for multiple people to lay claim to a given scarce resource at the same time. With homesteading, however, the laws of physics do not permit two bodies (human) to occupy the same space at the same time so only one person has the capacity to mix his labor with a given resource first. It is this mutually exclusive characteristic of space occupation that permits the homesteading theory to avoid any possible violent conflict where two or more claimants have equally valid claims to a given good or area of land ## ethics and norms are for conflict avoidance The very purpose of ethics and norms is to help avoid otherwise unavoidable conflict. To say a latecomer or a “possible-future-comer” is the rightful owner of a given good would only serve to generate conflict between the first and late comer(s), and would therefore be completely contrary to the very purpose of a norm. Thus, the only ethic or norm which would serve to avoid conflict would be to grant a given scarce good to its first user. This would be inherently conflict-free, because by definition there would be no valid competing claims Rather, insofar as a person finds himself alone, he must be able to act, to use, produce, consume goods straightaway, prior to any agreement with people who are simply not around yet (and perhaps never will be). And insofar as a person finds himself in the company of others and there is conflict over how to use a given scarce resource, he must be able to resolve the problem at a definite point in time with a definite number of people instead of having to wait unspecified periods of time for unspecified numbers of people. Simply in order to survive, then, which is a prerequisite to arguing in favor of or against anything, property rights cannot be conceived of as being timeless and nonspecific regarding the number of people concerned. Rather, they must necessarily be thought of as originating through acting at definite points in time for definite acting individuals In the second case of universal co-ownership, the requirement of equal rights for everyone is obviously fulfilled. Yet this alternative suffers from another fatal flaw, for each activity of a person requires the employment of scarce goods (at least his body and its standing room). Yet if all goods were the collective property of everyone, then no one, at any time and in any place, could ever do anything with anything unless he had every other co-owner’s prior permission to do what he wanted to do. And how can one give such a permission if one is not even the sole owner of one’s very own body (and vocal chords)? If one were to follow the rule of total collective ownership, mankind would die out instantly. Whatever this is, it is not a human ethic either Now that the alternatives have been shown to fail the justification schema, let us see if the acts of acquiring property via original appropriation and voluntary exchange suffer the same or a different fate:   1.      Are they universalizable? Yes, the requirement for one to use either original appropriation or voluntary exchange to justly acquire property applies to all moral agents. 2.      Are they practically achievable? Yes, everyone has the capacity to acquire property over scarce goods through original appropriation or voluntary exchange. 3.      Are they compatible with the necessary presuppositions of argumentation? Yes, in fact they are corollaries of such presuppositions Common Objections to Argumentation Ethics Hoppe's proposal, as he does not claim to derive an “ought” from any “is.” Argumentation ethics merely identifies which ethical propositions are logically sound or justifiable, and which ones are not even if the libertarian ethic and argumentative reasoning must be regarded as ultimately justified, this still does not preclude that people will act on the basis of unjustified beliefs either because they don't know, they don't care, or they prefer not to know. I fail to see why this would be surprising or make the proof somehow defective. More than this cannot be done by propositional argument ## State incompatible with Libertarian Ethic The Implications of the Libertarian Ethic One of the shocking implications of the Libertarian/Private Property ethic is that it is not logically compatible with the State the State’s status as “ultimate arbiter,” and the means by which it is enforced, are illegitimate and unjustified because [[taxation]] amounts to taking one's property against his will via aggressive means, it must be considered theft. To illustrate, one's refusal to pay taxes ultimately leads to arrest and imprisonment. If one decides to resist such an arrest, the agents of the State will not hesitate to assault or murder this person Finally, the State exercises jurisdiction over a given territory despite the fact that its agents have not acquired property rights over it through legitimate means, i.e., via original appropriation or voluntary exchange > “Go to [A citizen], and say to him that “the government” has need of money to meet the expenses of protecting him and his property. If he presumes to say that he has never contracted with us to protect him, and that he wants none of our protection, say to him that that is our business, and not his; that we choose to protect him, whether he desires us to do so or not; and that we demand pay, too, for protecting him. If he dares to inquire who the individuals are, who have thus taken upon themselves the title of “the government,” and who assume to protect him, and demand payment of him, without his having ever made any contract with them, say to him that that, too, is our business, and not his; that we do not choose to make ourselves individually known to him; that we have secretly (by secret ballot) appointed you our agent to give him notice of our demands, and, if he complies with them, to give him, in our name, a receipt that will protect him against any similar demand for the present year. If he refuses to comply, seize and sell enough of his property to pay not only our demands, but all your own expenses and trouble beside. If he resists the seizure of his property, call upon the bystanders to help you (doubtless some of them will prove to be members of our band.) If, in defending his property, he should kill any of our band who are assisting you, capture him at all hazards; charge him (in one of our courts) with murder; convict him, and hang him. If he should call upon his neighbors, or any others who, like him, may be disposed to resist our demands, and they should come in large numbers to his assistance, cry out that they are all rebels and traitors; that “our country” is in danger; call upon the commander of our hired murderers; tell him to quell the rebellion and “save the country,” cost what it may. Tell him to kill all who resist, though they should be hundreds of thousands; and thus strike terror into all others similarly disposed. See that the work of murder is thoroughly done; that we may have no further trouble of this kind hereafter. When these traitors shall have thus been taught our strength and our determination, they will be good loyal citizens for many years, and pay their taxes without a why or a wherefore... It is under such compulsion as this that taxes, so called, are paid.” in order to determine the aggressor and victim in any violent interpersonal conflict, one requires some theoretical basis for determining who owns the good in contention (this good in contention may include one's very own body) the characterization made above is contingent upon accepting the libertarian theory of property. If one used a more collectivist theory of property, then it may very well be the case that the role of victim and aggressor would be the reverse violence used as a response to that which is merely distasteful but not aggressive, is, and must always be, unjustified “how do we distinguish between ethics and aesthetics?” The answer is by formulating a rational theory of property ## Scarcity, rivalrousness, copies Only because scarcity exists is there even a problem of formulating moral laws; insofar as goods are superabundant (“free” goods), no conflict over the use of goods is possible and no action-coordination is needed. Hence, it follows that any ethic, correctly conceived, must be formulated as a theory of property, i.e., a theory of the assignment of rights of exclusive control over scarce means. Because only then does it become possible to avoid otherwise inescapable and unresolvable conflict.1 As only those goods which are scarce can be the objects of violent conflict, non-rivalrous goods are not subject to ownership claims. Therefore, we may conclude that the concept of “property” may only be applicable to that which is scarce and rivalrous Nor does scarcity necessarily refer to whether a good is in shortage or surplus, nor to whether there are only a few or whether there are many Nor does scarcity necessarily refer to tangibility only, to the ability to physically manipulate the thing, or to the ability to perceive something with the senses; if my use of something X precludes any other use of that same something X, then X is rivalrous. Conversely, if my use of something X does not preclude any other use of X, and if my use of X does not subtract from any future use of X, then X is not rivalrous, and could therefore never achieve the status of “property.” non-scarce status might apply to many things but it always applies to non-finite things, that is, goods that can be copied without limit, with no additional copy having displaced the previous copy and with no degradation in the quality of the copied good from the original good.. Property, necessarily being comprised of scarce, rivalrous goods, requires acquisition. The concept of property is only coherent or relevant with the acquisition and use of scarce resources [What about software?] A common objection to the practicality of the "original appropriation" means of acquiring property is that hardly any person is able to trace the ownership of land to the time when it was originally appropriated In short, if Jones owns a piece of land at the present time, and we don’t know what crimes were committed to arrive at the current title, then Jones, as the current owner, becomes as fully legitimate a property owner of this land as he does over his own person Finally, to own something means to have the exclusive right to employ this good in any way one sees fit, so long as such employment does not entail aggression against the property of another ## Intellectual Property Copyrights protect only the form or expression of ideas, not the underlying ideas themselves.5 Herein lies the logical issue with upholding IP: that the enforcement of such rights necessarily results in the delimiting of someone's rights over his legitimate (scarce) property Moreover, the goods to which intellectual property rights are asserted fail to meet the criteria for property because a structure of IP rights attempts to grant ownership over patterns of information which are themselves neither rivalrous nor scarce ### Labor I own my labor and that which I create, including intellectual products, therefore IP is valid!   This is a point that is brought up quite often, and has proven to be very misleading. In the first place, one does not “own” his labor, for labor is just something you do and not a thing to be owned. It is true you do own your body, and you can use your body for labor if you wish, but it is the body that is owned, not the labor. Thus, what grants one the right to sell his services is the ownership he has over his body not his labor In the second place, creation itself is not sufficient in establishing property rights. For example, if I go to your house and use your ingredients to create a cake, I do not thereby own the resulting cake Whether or not something may be stolen is contingent upon whether or not it can be owned, as stealing is the unjustified taking of someone’s owned goods. It has already been established that patterns of information are not “ownable” since they are neither rivalrous nor scarce. What cannot be owned cannot be stolen Beyond this, stealing requires the legitimate owner to no longer have access to that which has been stolen. If I take your car, you no longer have access to your car. However, if I copy your recipe, your access to your recipe has in no way been impeded by my copying If someone profits from my idea without my permission, then the money he made is essentially money he has stolen from me! This addition to supply thus renders him unable to sell his music or invention for as much as he would have otherwise been able. His belief that this unauthorized reproduction and sale is tantamount to theft would suggest that he owns the buyers’ money before they hand it over to him. This is, of course, fallacious reasoning For example, if my neighbor refuses to mow his lawn, the value of my property may be reduced in the eyes of most people, but this in no way means that my neighbor has infringed on my property rights. Again, no one has legitimate claim over the value of anything, because value is simply a subjective determination and we certainly do not own the subjective determinations or evaluations of others If there is no IP system, people won’t be as incentivized to create and innovate! the suppression of innovation would take the form of all the information whose use and access would be safeguarded under the auspices of copyright, patents, trademarks, etc There are thousands upon thousands, if not millions, of patents and other IP certifications of which one may never be apprised and yet will still be subject to a forfeiture of his liberties if he is found to be in violation of any one of them This tactic is tantamount to a “mutually assured destruction” defense, where one company will refrain from suing the other on the grounds of IP infringement for fear that this other company may sue them in return and on similar grounds.   Smaller businesses, however, do not have the capital to build up such a defense or gain such leverage, To enforce IP is to limit, at least to some degree, an innocent person's peaceful use of his property. Those who advocate for IP on purely utilitarian grounds would do well to recognize these costs and rethink their position. The burden of proof that IP increases innovation falls upon the advocates for such a system Some of the costs are concrete, and ironically include factors which hinder innovation itself in essence, free markets promote win-win outcomes, whereas the State can only produce win-lose or zero-sum games Book authors or musical artists still have the advantage of being first to market and can rely upon tours, book signings or readings, and other live performances or merchandising as a way to reap profits. The truth is there are countless numbers of ways in which one can protect himself from free riders without resorting to aggression It is commonly accepted that we live in a world where the desires for various resources exceed their availability. Unavoidable conflict would ensue were everyone to engage in a perpetual free-for-all for these scarce goods. This is not to say the adoption of property norms would immediately eradicate all conflict. Rather, it would serve as the logically justified foundation from which to arbitrate inevitable disputes over the control of scarce goods. Therefore, it is important to formulate a theory of property, such that if followed, all violent interpersonal conflict would be avoided from the beginning of its adoption onward and, at the same time, allows for justified action prior to any agreement. Man must have justifiable actions to take – which imply the use of scarce goods – prior to any contact or arrangement with anyone else The libertarian theory of property, otherwise known as the “private-property ethic,” accomplishes this task. This theory also demonstrates that any other theory of property which comes into conflict with it, such as the Marxian principle “from each according to his ability, to each according to his need,” only serves to generate conflict, not diminish it. Thus, such competing theories fail the very purpose of a norm ## contract There exist two general categories of contract: “to do” and “to give.” It is important to understand what distinguishes a legitimately enforceable arrangement (contract) from a non-enforceable arrangement Thus, the only arrangements which are legitimately enforceable (i.e., are considered "contracts") are those which, if breached, would entail an NAP violation the only arrangements which may be enforceable are those which involve the transfer of title to property. This is what is known as the “Title Transfer Theory of Contract.” However, before we apply our theory to some real world examples, take note of one final implication of any contractual arrangement: the title to any good in a contract must be in the possession of the obliged party (promisor) at the time of specified completion, if it is to be enforceable In such future-oriented conditional transfer of title arrangements, it is the buyer of future goods that implicitly bears the risk of default A loan is simply one more example of a future oriented, conditional transfer of title, whereby the creditor (the promisee) grants title to the debtor (the promisor) over a specified amount of money now (the loan), on the condition that the debtor pays back the principal of this loan, plus interest, at some specified time in the future Introducing default terms in the contract stipulates what is to follow should a promisor be unable to fulfill his agreed to conditions if the debtor simply does not have enough money to cover the loan in full, then he cannot be justifiably punished via violent means or threats thereof. Put differently, the debtor is not causing a rights violation as the creditor voluntarily exchanged titled property for a promise of future goods Fraud is, quite simply, another form of theft. For example, let’s imagine that I decide to enter into a trade with a friend whereby I agree to transfer title of my five dollars to her on the condition that she transfer title to a basket of edible apples to me. If I proceed to give her the five dollars and she hands over to me a basket of wooden apples, then she has stolen from me One final and perhaps obvious component to any just contract is that the titles to whatever is being transferred must legitimately be owned by the parties engaged in the contract Lessons from the Title Transfer Theory of Contract can also be applied to the “social contract.” For the same reasons my exchange with Debra was illegitimate because it involved Johnny’s stolen property, so too can the State’s “social contract” be deemed illegitimate The State must acquire funds before it can provide services. Thus, the State's act of providing "public services" on social contract grounds cannot be supported as it begins in naked robbery. Because all of the State’s services and functions are only made possible by first committing mass theft against its “citizenry,” we can readily judge “social contract” justifications for the State to be invalid # Economics ## Money Money allows us to protect ourselves against unpredictable contingencies. Holding cash balances is an attempt to mitigate an uncertain future by commanding purchasing power in the maximum number of possible situations. This is the purpose of liquidity: to provide immediately salable goods to trade for anything else one might want Money prices serve as an indispensable guide in our daily economic decisions, money facilitates cooperation with our fellow man through the harmonization of each of our unique self-interests however, this term has not been explicitly defined. Economic goods are simply any scarce means that a person sees as having the capacity to achieve a certain desired end. Thus, undiscovered or ubiquitous resources are not considered economic goods Value is subjective; even in similar situations, opportunity costs may vary from person to person “Economizing” goods simply refers to the act of treating them with the understanding that they are scarce and can only satisfy a limited number of desires Consumer goods are those which directly satisfy desires Producer goods, on the other hand, are those goods used to indirectly satisfy desires Producer goods – otherwise known as means of production – may be further subdivided into the following three categories: land/natural resources, labor, and capital goods created by the use of land and labor Labor refers to activity emanating from a person’s body that contributes to the production of goods or services If one directs his efforts toward the indirect satisfaction of desire, then he is engaging in "labor." Conversely, using his efforts to directly satisfy his desires would be considered "leisure." “disutility of labor,” which refers to the fact that people prefer leisure to labor and will only commence in labor if they believe it will produce more satisfaction in the future than the leisure foregone in order to produce Capital goods refer to man-made means of production In modern society, many capital goods are produced by other capital goods, thus compounding their productive utility (e.g. factories producing screwdrivers) Money is any good that serves as a universal or prevalent medium of exchange ## Supply and demand Supply is a relationship between the number of goods held, and at what price sellers are willing to trade them “law of supply” which states “...as the market price of a good or service rises, producers offer the same or greater number of units.”3 a “reduction in supply” refers to “a situation in which a change other than the price of a good or service causes producers to reduce the number of units they want to sell, at various possible prices.” Demand is a relationship between how many goods consumers desire, and at what price they are willing to trade for them “law of demand,” which states “if other influences stay the same, then a lower price will lead consumers to buy more [or the same number of] units of a good (or service), while a higher price will lead them to buy fewer [or the same number of] units.”5 For instance, imagine a card with a typical baseball player on it, and then imagine if this same card were to become a collector’s item in the future. Though the physical properties of the card did not change, its perceived status did, thus it went from being a common card to a “collectors card” – an entirely new good a “reduction in demand” refers to “a situation in which a change other than the price of a good or service causes consumers to reduce the number of units they want to purchase, at various possible prices.” A surplus occurs when producers attempt to sell more units of a good or service than consumers are willing to purchase at a given price A shortage occurs when consumers want to buy more units of a good or service than producers are willing to sell at a given price Finally, the equilibrium price (or market clearing price) is “the price at which producers want to sell exactly the number of units that consumers want to purchase On a graph, the equilibrium price occurs at the intersection of the supply and demand curves.” ## money's emergence Money spontaneously rose out of the barter economy, due to its trade facilitating properties Users will tend to gravitate towards salable objects as they allow each person the maximum degree of control over future uncertainties The natural process by which money emerges is one in which one good is set up against all others so as to enable simple and accurate economic calculation by means of exchange ratios. “Heterogeneous money” (money units that differed from each other) would undermine the process of economic calculation by requiring multiple exchange ratios Ease of transport is highly regarded among monetary units Divisibility Durability is another important consideration, The ability to verify the integrity of a money unit is paramount Scarcity is one of the most important factors, for if a money had an infinite supply, then it would be unable to yield comprehensible prices.  Money prices are simply the exchange ratios set up between monetary units and all other goods/services in the economy.  Thus, if one side of this ratio was infinite, then it would be impossible to compare and contrast the values of individual goods and services liquidity. This is perhaps the most important characteristic of money, as the overall utility of money is primarily measured by how widely it is accepted as payment Liquidity is a state of acceptance Commodity money is a scarce money unit, such as gold or silver, or its redemption is promised in terms of such a good Fiat money is commonly referred to as “paper money” as it is not “backed by” – or redeemable for – any particular good or commodity tender laws. This requires that all creditors under its jurisdiction accept it as payment of debt under threat of legal action for non-compliance One of the advantages the use of money has over direct barter is that its users are not constrained by the “double coincidence of wants.” This is a situation in which both trading partners must desire precisely what the other offers This significantly reduces Bob’s otherwise high transaction costs involved with executing many exchanges in order to procure one desired good Prior to the advent of money, Bob had to keep track of a myriad of exchange ratios between various goods A gallon of milk itself would be priced in terms of horseshoes, sheep, leather, strawberries, etc, and every other good likewise would be priced in terms of every other good Thanks to money, Bob now only has to keep track of the exchange ratios between units of money and all other goods offered on the market ## Rational Economic Decisions by producers Bob is also able to make more rational economic decisions in regards to production and consumption, because he is now able to quantify his opportunity costs in terms of monetary units. Bob can compare how much money it would cost to purchase Strawberry producing equipment with how much income he expects to receive from the greater production of strawberries this equipment will yield It may not be profitable to use the "best" or "highest quality" materials as such materials may be valued more for use in other productive processes than in the furniture entrepreneur's plans It is only through the private ownership of economic goods that the market is able to produce prices which accurately reflect the relative demand for and supply of the world’s scarce resources negotiate with each other in the presence of competition. If the seller offers a good for “too high” of a price, the buyer may decide to go to his competitor offering the same or similar good at a lower price. If the buyer insists on making offers which are “too low,” he may lose out on the opportunity to acquire the given good or service to the next potential customer who is willing to pay a higher price. Thus, opposing desires, in the context of a competitive economy, drive a tendency towards a meeting in the middle (this is also known as the market clearing price). There is always a tendency for such a harmony to be achieved in the free market where economic goods are privately owned ## Socialism and Economic Calculation Those who employ the means of production in a socialist economy are not as able or incentivized to experiment in novel ways to make profit – that is, to continually search for new ways to reorient or modify their employment so as to increase productivity as all means of production would be collectively owned, no counterpart providing competitive disruption may exist. Without competition, wasteful and/or undesirable enterprise abounds because its survival is shielded from market pressures without prices amongst the means of production, it is virtually impossible to determine the way in which they may be economized competitive pressures continually exert on the entrepreneur to provide the most valuable products and services while using those resources which have the least relative demand for alternative applications. However, if such factors of production are collectively owned, it is comparatively much more difficult, if not impossible, to determine their opportunity costs (as no money prices can emerge for them), thus rendering the productive infrastructure in such a socialist paradigm comparatively less efficient than its counterpart in a free market economy to the extent market prices are perverted through measures which infringe on the private ownership of any scarce good, entrepreneurs are hindered in discovering efficient means by which to produce goods, resulting in the economy’s departure from its optimum productive potential Values are not directly "imputed"; the imputation process works only indirectly, by means of money prices on the market. Therefore socialism, necessarily devoid of a market in land and capital goods, must lack the ability to calculate and compare goods and services, and therefore any rational allocation of productive resources under socialism is indeed impossible.11 Contrary to the popular demonization of profits as extraction of surplus value, profits in freed markets actually represent the adding of value to society. Making a profit in free markets requires one to combine or transform some good(s) in such a way that its resulting configuration is valued more by the consumer than the cost of labor and original materials, including time, used to produce it through his entrepreneurial insight, Joe was able to combine all these resources in such a way to create a product that was worth more than the sum of its individual components. Moreover, the trade is mutually beneficial. Joe benefits because he gets to pocket twenty more dollars than he originally possessed, and the consumer benefits by receiving a product that he/she must necessarily value more than one hundred dollars. All parties to any voluntary trade must necessarily expect to be better off after conducting the trade, otherwise the trade would never have occurred. In unhampered economies, profits are always and necessarily a win-win. Thus, the quest for profits by way of voluntary exchange – and not political entrepreneurship – is surely a humanitarian one ## Money/value ### Psychic Value if one were to decide to give a homeless man on the street five dollars, this would not yield the benefactor a monetary profit, however, the psychic pleasure he receives from the gesture is more valuable to him than the five dollars he surrendered ### Saving Because money can be employed for the instant satisfaction of the widest range of possible needs, it provides its owner with the best economically possible protection against uncertainty The investment in cash balances is an investment contra the (subjectively felt) aversion to uncertainty In order to retain cash holdings, however, one must have earned some prior income. One cannot have exhausted all his possible consumptive options if he still carries cash. Cash's consumption power is a potential. While assets remain, there is as of yet unconsumed income. The cash-holding actor has invested this retained savings in the form of cash the proportion between our cash holdings and other saved assets is determined by our subjective valuations regarding the uncertainty of the future ## Division of Labor Under the division of labor, one may be able to focus on one task or a limited set of tasks geared towards producing a particular good/service as opposed to the entire spectrum of tasks required to fulfill all his needs people are able to focus on a more limited set of tasks allows them to increase their proficiency at these tasks and thus become more productive, ## Banking, interest, inflation Tampering with the money supply only serves to redistribute wealth. In the case of inflation or monetary expansion, wealth is transferred from later users to earlier users, as the first users of this “newly created money” will be able to enjoy spending it in an economy where the prices have yet to adjust to the new increase in money supply. By the time this money makes its way down to the last recipients, market prices will have adjusted to this larger money supply in the form of higher prices. Thus, the last users may have the same nominal amount of money, but would have comparatively less wealth than they did before the additional monetary units were injected into the economy. This redistributive effect of inflation is known as the Cantillon effect However, unlike banking in societies dominated by fiat money and ubiquitous State intervention, a free market banking system will be segregated into two distinct roles: deposit banking and loan banking This division of labor benefits the saver by delegating to the bank the task of successful forecasting – in which the saver may have no skill or desire to perform. Delegating the lending to the bank would in most cases provide the customer with a more secure investment than if he were to lend the money out himself on the basis of his own judgments of entrepreneurial success Interest payments primarily are paid for the service of acquiring access to capital sooner rather than later ### Banking Joe has responsibly paid the bank the principal of his loan (one hundred dollars) along with the ten percent interest (ten dollars). The following month, Bob arrives to collect his investment, at which point in time, the bank may return to Bob his principal and interest or offer to keep the funds and renew the lending agreement. Even if Bob refuses the offer to continue and decides to collect his funds, both parties benefit as both parties become five dollars richer. Even Joe the borrower benefited by gaining access to capital needed to start his small business sooner as opposed to his waiting later. Perhaps starting the business at that current point of time was crucial to its success Money in a free market system represents real resources. In order for Joe to borrow money (claims to resources) now, Bob had to refrain from claiming said resources until later. Thus, the monetary supply remained unchanged during the course of this lending/borrowing process defaults would be more limited and predictable in a free banking system, where banks are separate, competitive enterprises and not shackled to each other by central bank operations. Thus, the risk for systematic economic distress would be virtually nil when compared to its fractional reserve banking system counterpart. Hoppe A sophisticated critic may retort that banking cartels may form to help circumvent this limitation. However, Hoppe addresses this as well: ### Currency, inflation Before the state can reach its ultimate goal as stated by Professor Hoppe, it must first gain public support for its actions. The first step in the process of the State gaining ultimate control over money and banking is to establish legal tender laws which demand tax debts and private payments to be settled in units of a specified medium of exchange Initially, the currency begins with promises of redemption into certain portions of gold or silver. However, the State and central bank will inevitably begin issuing extra, unbacked notes. The bank notes in such a scenario are identified by Mises as "fiduciary media." The consequence of producing fiduciary media is inflation, which favors the earlier receivers of this newly-printed, fiat money at the expense of the later receivers, triggering Cantillon effects. The early receivers tend to be government agencies themselves, government contractors, large commercial banks, and major industrial leaders thus giving this class of society the incentive to support such fractional reserve practices. The government engages in these banking practices because doing so makes it far easier to finance its operations. In contrast to taxing or borrowing, inflating the currency achieves a far more covert pattern of wealth redistribution in the State’s favor Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose ### Central banking The central bank’s true purposes are to finance government operations, cartelize the banking system, and win over support from the financial elite by allowing them access to newly created money before the rest of society, thus concentrating ever more wealth into the hands of a select privileged few at the artificial expense of the many. Wealth accrued in this way is destructive of the market process as it is achieved through expropriation and not the production and voluntary exchange of genuine goods and services. In order to mask its true purposes, the central bank will generally employ obscure and clandestine means to counterfeit money and expand credit. Of these means, the three most common are: Purchasing Government Securities Because the central bank buys government debt with newly created money, all those holding the fiat money must tolerate a reduction in their purchasing power to finance the principal of this loan Setting Reserve Requirements Setting the Discount Rate is another tool by which central banks use to expand the money supply in order to acquire loanable funds, the central bank simply creates them from nothing. However, this fact in no way lessens the obligations for the borrowing banks to repay the loan in full with real wealth and savings plus interest In a competitive economy, banks harmonize the profit motive of these entrepreneurs with prevailing consumer time preference (as indicated by the supply of available savings) When there are higher savings, this means there are more actual resources available to be employed in productive investment channels, Conversely, when there are lower savings, this implies there are fewer available unemployed resources present, and thus the higher interest rates ensure that these relatively scarcer resources will only be used by those entrepreneurs who project the return on their investments to be high enough to warrant paying such rates Placed at a lowered interest rate, the newly granted credit causes increased investments and initially creates a boom that cannot be distinguished from an economic expansion; however, this boom must turn bust because the credit that stimulated it does not represent real savings but instead was created out of thin air. Hence, with the entire new and expanded investment structure under way, a lack of capital must arise that makes the successful completion of all investment projects systematically impossible and instead requires a contraction with a liquidation of previous malinvestments "Austrian Theory of Money" in The Foundations of Modern Austrian Economics, Hoppe, "Banking, Nation States, and International Politics" in The Economics and Ethics of Private Property, Without occupational licensing or securities regulations or taxes by which to abide, even small discrepancies in customer satisfaction can allow newcomers to instantly topple an established giant Surprisingly, the most powerful and destructive perpetrator of systemic aggression is the State itself. To mask this ugly truth, the State has cleverly disguised itself as the protector of the weak, poor, indigent, and disenfranchised. Moreover, it claims to be a necessary, if not sufficient, institution to carry out this purported role. To complete this deception, the State and its sympathizers have taken great strides to indict the unfettered market as the primary culprit of the commoner's tribulations, though the truth is quite the contrary ## competition and monopoly and cartels one who sells ice cream competes not only with Ben and Jerry’s, but also with movie theaters, as one can always choose not to purchase ice cream and instead attend the movies A common definition of monopoly is “a firm that is the single provider of a particular good or service.” This definition, however, is useless for a number of reasons. Defining a monopoly as a single provider implies the smallest differentiation of a product or service could, in turn, bestow upon the creator a monopoly over its provision Monopoly is a grant of special privilege by the State, reserving a certain area of production to one particular individual or group. Entry into the field is prohibited to others and this prohibition is enforced by the gendarmes of the State.1 let us assume that a single provider of a given good or service does arise. As the absence of aggressive barriers to entry into any industry is inherent in free markets, the threat of a potential competitor will be much stronger relative to the case in which the State imposes artificial barriers, and sometimes even prohibitions, on competition in various industries A water company decides to triple its rates without a corresponding increase in the cost of production, how do market participants respond? In the first place, future, potential customers would be deterred from moving to this town due to these exorbitant rates, and current residents are incentivized to move elsewhere Moreover, the consumer will be incentivized to act more conservatively with his water However, if the water company maintains these exorbitant prices despite the preceding events, then a competing water company from the next town over may decide to move in and start operations Finally, for a water or electric company to have achieved a “monopoly” status in the first place, it would have first been required to gain the trust of their customers and to have provided a more satisfying service than their actual or potential competitors. The likelihood of this company fundamentally changing business practices that made it successful in the first place is relatively low ### cartels A cartel is a group of individual firms in like-industries which decide to coordinate their practices as a means to maximize profits. These coordinating efforts can take the form of setting production quotas or “fixing” prices The first and most obvious complication in any cartel is determining unanimously amongst the individual members the more efficient members are likely to be the most uneasy about such an arrangement as they would likely resist any restrictions on their own production for the sake of the less efficient member firms Finally, even assuming a cartel is able to successfully coordinate the actions of its members and to reconcile all of their disparate interests, there would still be the issue of potential outside competition The difficulties of coordinating efforts among independent firms, combined with the potential for outside competition, renders the consumer-unfriendly cartel an unlikely market arrangement Only through the application of State-mandated price ceilings, price floors, regulations, occupational licensure, [[minimum wage]] laws, taxes, and even explicit grants of monopoly over certain industries, can a given firm or cartel exploit the consumer The common claim is that a large firm will take advantage of its economies of scale and lower its prices to a level that its smaller competitors cannot afford to maintain, thereby running them out of business. This “cutthroat” firm will then proceed to raise its own prices to exorbitant levels that were previously tempered by the presence of competitive forces. Without State support of monopoly privileges, however, there is always competition, whether between firms in other industries or from potential future competition. It is never possible to price one’s goods or services without taking into consideration, at the very least, the potential of future competing producers being attracted by higher selling prices Moreover, even if the firm is able to offer these prices without suffering any losses then so much the better. The other businesses which fail and liquidate will free up resources to be used by more efficient firms, in either the same or a different industry. Once again, the result of this would be an overall increase in the standard of living for all consumers # Insurance Some of the insured will receive more than they paid in premiums and some will pay more into the system than they ever get back. This is a form of income redistribution from the healthy to the sick, but the characteristic mark of insurance is that no one knows in advance who the winners and losers will be for a risk to be "insurable" at all, one must be unable to predict with relative certainty those clients who will be "winners" or "losers" as defined above Naturally, those companies that attain more accurate data on such risks will be at a relative advantage to their competitors as such information will reveal more precisely the potential risk and frequency of its payouts to clients. This information will allow an insurance agency to ascertain the “lower limit” of what it is willing to charge its clients with greater precision Risk and uncertainty are categorically different phenomena. Risk refers to a chance occurrence in a knowable long-run probability distribution. Uncertainty refers to a chance occurrence in which no information regarding probability is known. Mises introduces the terms “class probability” and “case probability” to refer to measuring the probability of repeatable events and unique events, respectively. Those events whose approximate likelihood can be known from repeated testing, such as the odds of a coin flip, can be mitigated by the use of insurance It is only possible to determine risks for classes of people or events, but not for singular events or people If it were possible to determine or predict the occurrence of a particular event with a high degree of certainty, then insurance would be unnecessary. Insurance is only valuable insofar as the various particular occurrences of events are unable to be predicted with relative certainty If an insurance company were to attempt to cover a highly predictable occurrence, then the presence of competition in the insurance market would render coverage for the event unprofitable. In such a situation, it would be cheaper for one to save up money oneself, if one is able to affect the risk of an event transpiring through his deliberate behavior, then this event is not one for which insurance can be taken out An example of something that is undeniably uninsurable is committing aggression. Any given person is fully in control of whether or not he/she decides to initiate uninvited physical force against another and, as such, no insurance can be taken out for this action Unfortunately, in today’s environment, the utility and cost of insurance is greatly skewed against the consumer’s favor by State interference taking the form of regulations, taxes, minimum coverage requirements, and prohibitions against various types of discrimination – up to and including pre-existing conditions in the health insurance markets. Regulations and licenses serve as aggressive barriers to entry into various industries, resulting in decreased competition, higher prices, and less availability. Mandated coverage requirements force many to buy more than what they need, neglecting what those resources could have serviced if they were tailored to one's personal situation Remember, profits earned without aggression or legal favoritism represent value added to society, as they require an entrepreneur to combine certain inputs in such a way that they are worth more together than they are separately. We may rely upon such businessmen to work in pursuit of providing value to society as a whole, for achieving this end results in their greatest personal gain. The market place reveals the illusion of the personal gain/social gain dichotomy and instead serves to align the two, the only assumption being that man acts towards his own interests. As for those who do not add such value, their command over resources will be diminished in the form of losses and be increasingly transferred to those who use them in such a way that values society the most (as measured by profits) Many individuals cite the paramount importance of health care as the reason that its provision should be generously supported or completely provided by the State. However, this reasoning seems peculiar, because the more fundamental human needs for food, water, and shelter are largely provided by free market forces. If the occurrence of a particular event may be systematically predicted, then any attempt to cover this would undermine the purpose of insurance. That is to say, insurance is intended to act as a sort of lottery in the sense that each of its individual clients are largely uncertain in advance regarding the degree to which they will have insurable damages to claim. However, they realize if such an insured event occurred, they may not have the funds available to pay for the resulting damage. Thus, they may choose to purchase coverage as a means to protect them from this risk preventing covered medical risks from occurring at all will be the greatest contributing factor to the profitability of a given insurance agency's services In today’s State managed environment, minimum mandated coverage requires many clients to pay for unwanted or unneeded coverage, thus driving up the cost of such insurance provision altogether much of this mandated coverage includes risks which should not be insurable such as alcoholism, drug addiction, and the subsidization of predictable, routine checkups. These ailments are often self-inflicted or, in the case of pre-existing conditions, are clearly foreseeable However, only those risks which are both unpredictable and largely beyond the client's control may be viably insured laws prohibiting discrimination amongst clientèle regarding preexisting conditions cause insurance agencies to inevitably pool higher-risk clients with lower-risks ones, thereby perverting the function of premiums, and causing the lower-risk to subsidize the higher-risk clients as more risks are mandated to be covered, health insurance will have a lesser capacity for customization) # TODO Finally, the absence of licensure requirements, patents, and other forms of intellectual property will result in a far greater supply of health care providers and medicine. Consequently, the cost for these services and products will be far cheaper in comparison any quality health care firms would be more than happy to submit themselves and their staff to third-party evaluations as a means of distinguishing themselves from the competition and to assure any prospective patrons that their services will be performed safely and efficiently For a ratings agency to accept a bribe or engage in any foul play would be to put its reputation and, therefore, its future profitability at great risk. Their competitors would be eager to investigate any claims of foul play and to make public any damning evidence that may be discovered Quality diversity is valuable, because most people who are unwilling or unable to afford the highest-quality healthcare prefer to purchase the quality of service they can afford LASIK exemplifies the incentives to which medical providers adjust in the face of unadulterated demand from consumers. This practice is unique in that it is not covered by most standard insurance, causing the majority of consumers to pay for it directly out of pocket. This incentivizes them to discriminate more thoroughly among the various levels of price and quality With these incentives in place, the LASIK procedure has been reported to have fallen in cost by over 30 percent during the last decade. Even more importantly, the quality of the procedure has improved dramatically in that period as providers competed to deliver the most efficacious treatment one of the greatest expenses associated with ongoing research is the cost of complying with mandated tests and trials conducted by the FDA, which can last decades! Not only are these mandatory testing requirements incredibly expensive, thereby creating huge barriers to entry in the industry, but they also keep otherwise life-saving drugs off the market for long periods of time Competing pharmaceutical firms will have to find the optimal balance between testing and release times for their drugs. If they release them with too little testing, their customers may suffer unduly from harmful side effects. However, should they take too long to test, they may be losing market share to competitors who are in a better position to release their own, safe versions of the drugs sooner One innovative option would be to release their drugs throughout all testing stages and label them according to their respective stages of testing, thus allowing the consumer to express their own risk profiles individually Health care providers competing in free markets would have to rely upon voluntary consumer patronage to maintain economic viability, and any such providers who offer poor quality or undesirable services will continually stumble and fall in light of more satisfying and more efficient products and techniques The solution to social order may be summed up in two words: private property. Private property is a norm and, as such, works towards facilitating the avoidance of interpersonal conflict # law and order monetary or material restitution permits someone a wider range of options to satisfy his desires, whereas using physical force against a perpetrator constitutes only one fleeting means of satisfaction There is an important distinction between defense and punishment. The former has to do with what is justified in the defense of one’s person or property as it is being violated, while the latter has to do with applying punishment after the fact when the perpetrator is no longer actively violating property rights Though, technically, the owner would be justified in killing this trespasser, this does not mean that doing so would be without consequence. The consequences may include an increase in the owner's defense/insurance premiums, and he may face some degree of social ostracism for the perceived excessive use of force Thus, harsh behavior may be tempered by social/economic pressures In short, we may punish one who has initiated force, in a manner proportionate to his initiation of force and to the consequences thereof, exactly because he cannot coherently object to such punishment. It makes no sense for him to object to punishment, because this requires that he maintain that the infliction of force is wrong, which is contradictory because he intentionally initiated force himself.4 One is only bound to respect the rights of another so long as this person reciprocates. The right of self-defense allows those under attack to respond with violence. As one is not required to suffer abuses to his body or property, but can justifiably defend himself from such abuses, it follows that he must regard an aggressor as having lost or relinquished some claim of peace and non-invasion. By his own conduct, such an attacker demonstrates a desire for aggression over agreement, and, as such, tarnishes his status as an innocent party. The concept of property rights itself entails that physical force may be used against those who violate one's just possessory claims. This is the very characteristic that separates rights from non-rights It is because person B initiated this force upon person A that person A would be justified in taking more from person B than the identical pack of gum he stole, for this would only restore person A to the position he was in before the incident, however, it would not compensate him for the subsequent inconvenience and violation he had to endure in the interim we may determine that executing person B for this petty theft would be excessive, because this would involve the absolute destruction of person B’s rights (for life is a necessary prerequisite of rights) as punishment for an act which violated only a portion of person A's rights increased uncertainty, which is brought about by a legislation-based system, causes an increase in time-preference rates because if the future is less certain, it is relatively less valuable compared to the present.7 This general increase in time preference makes crime more appealing as it serves to satisfy more immediate desires the prospect of potential punishment will be less of a tempering factor for one with a higher-time preference – i.e., one who places a high premium on current consumption versus future consumption Not only does the pricing mechanism serve as an indicator for what type of law is favored, but also how much it is favored over alternative attempts to produce law. Moreover, in edict-based legislative environments there is bound to be an over/under production of law in various fields as there is no rational feedback that provides data comparable to a profit and loss system One consequence of this ever-expanding legal code is that it creates more de jure criminals As more and more people are said to be engaging in criminal behavior, credibility will continue to be lost by the legal system, especially if such outlawed behavior does not constitute aggression against other people or their property [T]he position of common-law or decentralized judges is fundamentally different from that of legislators in three respects. First, judges can only make decisions when asked to do so by the parties concerned. Second, the judge's decision is less far-reaching than legislation because it primarily affects the parties to the dispute, and only occasionally affects third parties or others with no connection to the parties involved. Third, a judge's discretion is limited by the necessity of referring to similar precedents. Legal certainty is thus more attainable in a relatively decentralized law-finding system Put more simply, the State is that institution which enjoys a monopoly over the production, interpretation, and enforcement of law. In addition to this, the State also has the sole right to force its citizens to pay for its services, the price and scope of which are also dictated by the State and are subject to change at its discretion Such a monopoly is "bad" for consumers, because, shielded from potential new entrants into a given area of production, the price of the product will be higher and its quality lower than otherwise, under free competition The production of law and order, i.e., of security, is the primary function of the state Both propositions are apparently incompatible with each other The exercise of a State monopoly over the provision of any service will lead to the same inefficiencies and destruction of wealth as any other monopolistic operation The state, as ultimate decision maker and judge, operates in a contract-less legal vacuum. There exists no contract between the state and its citizens. It is not contractually fixed, what is actually owned by whom, and what, accordingly, is to be protected. It is not fixed, what service the state is to provide, what is to happen if the state fails in its duty, nor what the price is that the "customer" of such "service" must pay Just imagine a security provider, whether police, insurer, or arbitrator, whose offer consisted of something like this: ‘I will not contractually guarantee you anything Finally, under a Statist legal system, citizens are much less incentivized to take an active role in shaping the rules which govern them. The reason for this is simple: one’s vote has relatively little impact on determining the laws that will govern him, and the cost of maintaining an informed vote is high The following scenario will be used to illustrate some of the general characteristics of such a system.   Bob desires two things: As inter-agency disputes may occur frequently, there will tend to emerge a habit of multiple DIAs agreeing in advance, by contract, who will mediate or arbitrate which disputes The simpler situation to observe would be if Bob and Terry were each clients of the same DIA. Prior to gaining coverage, each client would likely agree to abide by the ruling(s) of a given arbitration agency(s) to be used in the case a criminal dispute arises between himself and another person covered by the same agency In a society populated by competing insurance and arbitration agencies, the “laws” to which any given person is subject will essentially be the standards used by the reviewing arbitration agency when rendering a verdict. For this reason, it is in the DIA’s best interest to choose agencies whose standards are desirable to its clients Of course, such individuals may not be able to live under the exact set of laws he would like because DIAs would still have to come to agreeable terms with each other in order to remain viable. However, the customer would undoubtedly have a much larger influence on choosing the governing principles he prefers than under a legislative system A society flourishing in peace and productivity will encourage two profitable effects: 1) Higher productivity implies there is simply more value for insurance and defense agencies to defend, growing their coverage, 2) Peace and prosperity implies fewer people are resorting to criminal and aggressive behavior. As such, any arbitration agency which frequently rules counter to the norm of private property would likely run out of business Those norms which contradict that of private property only serve to generate conflict. Thus, the market’s pursuit for an efficient and equitable legal system will likely produce one which is consistent with private property and the non-aggression principle. It is no coincidence, then, that the most efficient legal system will be the one that is most just clients who can demonstrate that they have the means and ability to defend themselves – perhaps through some form of certification process – will likely be able to secure lower premiums from their DIAs in a comparatively better armed society, there would be far less crime as the cost of engaging in criminal behavior would be relatively higher than in our current environment where weapon ownership is significantly abridged Because these services will be privately provided on the marketplace, a pricing mechanism will manifest that enables entrepreneurs to rationally calculate ever-more optimal allocations of resources. Losses imply that resources are being combined in value-destroying ways, and vice versa with profits private institutions are not able to externalize the high costs of aggression onto its customers in the same way the State can. Private businesses are typical economic actors; they and consumers alike are governed by the law of demand. Higher prices for security services – to finance increased aggression – translates into fewer sales as consumers begin to purchase said services elsewhere. In contrast, no matter how high the cost of law and security becomes under State rule, its corner on the marketplace is largely unaffected since it has the legal authority to force its citizens to pay, while at the same time artificially suppressing competition with threats of brutality and imprisonment insurers will tend to require that their clients abstain from all forms of vigilante justice (except perhaps under quite extraordinary circumstances), for vigilante justice, even if justified, invariably causes uncertainty and provokes possible third-party intervention. By obliging their clients instead to submit to regular publicized procedures whenever they think they have been victimized, these disturbances and associated costs can be largely avoided the premiums offered may also be largely affected by the geographical area in which the client may wish to be covered. If this client is violated outside of these covered areas, then the insurance company would not be obligated to reimburse him for his injuries. Thus many commercial or residential areas will attempt to meet DIA approved standards of safety and civility, so as to encourage tourism and the immigration of high-net worth individuals It is clear that wealthier individuals convicted of the same crime tend to be dealt less severe punishments than their less wealthy counterparts in contemporary State-run legal systems. Worse yet, the State holds a monopoly on the provision of law and order. It has no competitors and does not fear extinction It is a lawless institution as it ultimately never submits itself to the decision of a neutral, third party It is the preservation of reputation and legal status that deters DIA agents from acquiescing to bribes or any other form of foul play in the execution of their services Next, if foul play has been indicated by the investigation of these disinterested third parties, then the competitors of this dubious firm would see to it that such behavior was widely marketed A firm’s credibility in the private law industry is paramount to its viability in a truly free market With alternative, competitive markets in defense and judicial services, prohibitions on all types of “victimless crimes” will disappear. Today, many billions of dollars are spent on the drug war, which is responsible for untold levels of violence. However, the ownership, production, distribution, or consumption of drugs does not entail a violation against property or persons – likewise for gambling and prostitution victimless crimes such as "illegal-drug" use, prostitution, or gambling, these "crimes" would tend to be of little or no concern within a system of freely funded protection agencies. "Protection" against such "crimes" would require higher insurance premiums, but since these "crimes" — unlike genuine crimes against persons and property — do not create victims, very few people would be willing to spend money on such "protection ## on not backsliding into politics / state-ness The fear that (under free market anarchy) private individuals would replace politicians overlooks the true causes of state mischief. Unlike feudal monarchs, democratic rulers don't actually own the resources (including human) that they control. Furthermore, the duration of their rule (and hence control of these resources) is very uncertain. For these reasons, politicians and other government employees do not exercise much care in maintaining the (market) value of the property in their jurisdiction All the horrors of the state — onerous taxation, police brutality, total war — are not only monstrous, but they're also grossly inefficient. It would never be profitable for anarchist insurance and legal firms to mimic the policies set by governments As a result of the constant cooperation of various insurers and arbitrators, then, a tendency toward the unification of property and contract law and the harmonization of the rules of procedure, evidence, and conflict resolution would be set in motion. Thus, in buying protection insurance, every insurer and insured becomes a participant in an integrated system of conflict avoidance and peacekeeping. Every single conflict and damage claim, regardless of where and by or against whom, would fall under the jurisdiction of one or more specific insurance agencies and would be handled either by an individual insurer's "domestic" law or by the "international" or "universal" law provisions and procedures agreed upon by everyone in advance This argument for a private law system only takes for granted that mankind is inherently self-interested. That people prefer to get the most amount of gain for the least amount of effort, and it takes these seemingly negative characteristics and aligns them with the welfare of society.  This, of course, does not mean one must not have charitable inclinations for free market anarchy to function properly or even that the profits sought must be of a monetary nature. It simply means this: given that human beings purposively use means to achieve ends, a free and open market in law will be the most conducive in satisfying the greatest number of desires to the greatest degree. The beauty of the free market is that this practical end is achieved precisely by adhering to the libertarian principles of justice Bryan D. Caplan, "Rational Irrationality" in The Myth of the Rational Voter: Why Democracies Choose Bad Policies (Princeton: Princeton University Press, 2007), 132. Caplan writes: “Since delusional political beliefs are free, the voter consumes until he reaches his “satiation point,” believing whatever makes him feel best. When a person puts on his voting hat, he does not have to give up practical efficacy in exchange for self-image, because he has no practical efficacy to give up in the first place.” It is important not to confuse the term “government” with the State. The State is a type of government; however, it is a coercive or aggressive variant. Free markets also wield governing forces, however, such forces are not artificially imposed by decree The State essentially says “We are going to take your property under the threat of violent reprimand, so that we may protect your property and your person.” Hoppe summarizes this ridiculous and self-refuting notion by referring to States as expropriating property protectors A monopoly on the legal right to initiate force does not decrease the danger peaceful people face from aggressive people; in fact, an institution such as this serves to attract those who desire power and coercive control over others to its own positions of authority. This has only exacerbated the very premise for which State advocacy is based: that we require a State to protect the innocent from the criminal The Economic Calculation Problem     The State has no access to an accurate pricing mechanism with which to evaluate the profitability of its operations, so waste will necessarily abound. This is because its revenue is derived from taxes as opposed to voluntary contributions The State does not operate in a profit or loss system, so it has neither the proper incentive nor the capacity to be economically efficient. However, the State is not lacking of incentives altogether. The prospect for re-election and, thus, campaign funding from various special interest groups and lobbyists will have a profound influence on the policy decisions of any given representative # Defense and security Because the State acts as a unit, all the actions executed by its representatives are reflected on the people, for they must be funding these acts via taxes. Due to this financial connection, all of a given State’s citizens become potential targets of retaliation for disgruntled foreign actors. If all property in a given geographic area is seen as generating revenue for the State, then it naturally represents a potential enemy target. It is this very set up that has brought about the modern form of total warfare A heavily armed civilian populace constitutes a dangerous and unpredictable wild card that serves as an effective deterrent against invasion The State’s ability to externalize the costs of aggression onto taxpayers creates a moral hazard that enables it to implement more aggressive and costly policies than it otherwise could A democratic State has less deference still for long term defense or foreign policy impacts, as its ruling agents are only given temporary access to positions of authority. These temporary office holders are incentivized to exploit their positions of power and the resources they command as much as possible with no regard to maintaining their capital value. This is because the costs their policies generate may be deferred to their successors, the tax payers, and future generations through debt financing and inflation Due to the conflicts represented in the tragedy of the commons, public ownership of property will usually be less preferable when compared to the incentives associated with private property. When all property is privately owned, the personal interests of the individual to accrue wealth will be harmonized with the incentive to maintain the value or integrity of his property all insurance companies are connected through a network of contractual agreements of mutual assistance and arbitration as well as a system of international reinsurance agencies, representing a combined economic power which dwarfs that of most if not all existing governments.3 They have the financial incentive to prevent vandalism, violence, and intrusion by any party (whether it be a foreign nation-state or domestic criminal) for this is the outcome that yields them the greatest amount of profit. Finally, an infrastructure for reciprocity and cooperation between insurance agencies already exists it is in the DIA's financial interest to investigate, detect, and apprehend aggressors to hold them accountable for their crimes, as opposed to having to cover damages out of its own pocket. Contrast this with the agents of State-provided security who will laugh if asked to track down a stolen radio, or to compensate one for it Banks, insurance agencies, law firms, and others could share this data so that they may be able to enjoy reciprocal relationships, allowing them to better determine the security risks in various environments. This “discipline of constant dealings” is what also incentivizes these various agencies to honor their agreements with one another. That is to say, many of them will realize that the long run benefits of their cooperative relations in this capacity will likely outweigh the short term benefits of reneging on a current undesired arrangement (such as an unfavorable arbitration ruling) Many residential or commercial areas may implement exclusionary policies prohibiting the entrance of uncovered persons. A lack of DIA coverage may indicate two things: they are either unable to afford or are ineligible for coverage owing to a history of recurring aggressive behavior. These areas would be disinclined to invite persons lacking coverage as they would be unable to prove civilized behavior Just as no one invests in a safe before being assured of the integrity of the lock, so too will scrutiny be placed upon the capacity of these organizations to effectively neuter and bind their own use of force. The threat of an agency using its resources to hire mercenary soldiers against its own customers will be felt by all, and that consideration will play a serious role in one's patronage Additionally, it would be very difficult for such an army to be assembled, as the costs of amassing such a force would necessarily cause a rise in premiums for this DIA’s customers. However, such a rise in premiums would drive them away to competitors and cause a major disruption in revenue. Finally, it will be difficult for this DIA to find suppliers willing to fulfill massive orders for materials relating to such an endeavor, as they too are concerned with their reputation, and do not wish to abet murderers and robbers Protection could take the form of martial arts, shooting practice, a gang or clique, professional security agencies, and any number of as-of-yet undiscovered means. In order for a State to (re)assert itself onto a public, it would need to defeat every competitor that could defend itself among any number of these lines. If a powerful army bent on domination did somehow manifest, most, if not all, of the remaining DIAs would be compelled to band together to counter the State's aim of conquest in the interest of their own personal and financial survival, along with the increased attention from having acted heroically Potential invaders would recognize a very different structure than they are used to seeing. Instead of a single organization acting to defend a complex society, they would see a plurality of firms offering various levels of coverage and physical protection, big and small, for the individual, family, or business. Furthermore, the goal for the invader is itself not clear. As there is no State to defeat, there is no existing tax machine to acquire. There is no easily-accessible mechanism with which to rob one's recently-conquered subjects. The terrain of an anarchist society further implies guerrilla tactics and insurgency, counter-economies, encryption tools, large-scale gun ownership, and further barriers to State encroachment As individuals in such a society are not “citizens” of any nation, but are free and independent people, the only potential for retaliation or calls for retribution would be against specific individuals Most of the defensive agencies would likely band together to ward off any foreign aggressor for the sake of retaining the capital value of their overlapping covered territories. Furthermore, these free territories may have the technological advantage over any opposing outside force since free markets tend to produce more advanced technology and attract stronger talent, all other things being equal In defense, guerrilla and/or asymmetric tactics would likely be implemented as they have proven to be highly effective against much stronger foes. Take, for example, Vietnam, the Soviet/Mujahedeen conflict, and today’s prolonged War on Terrorism. It would be far more expensive for the invader to take offensive actions than it would be for the defender to take defensive actions through unconventional means because there will be competing defense agencies, there will not be any system-wide vulnerabilities in which the invading force can exploit the inherent advantage afforded to those with previously set up defensive fortifications. Unlike in other State realms, the general populace will be much better armed due to the lack of gun prohibitions and the presence of financial incentives provided by DIAs for people to develop their own defensive capabilities any threat to these prosperous trading ties may prompt these foreigners to request their own governments to join in the defensive efforts against such an invading nation With such increases in technology and human cooperation, the time and resources previously spent towards securing basic human needs (food, shelter, clothing, etc.) would then be freed up for use towards higher pursuits and leisure. Self-actualization would take over as life’s primary objective for most, displacing mere sustenance as a focal point # Transportation networks payment would fall only on those who assume it – never on uninvolved third-parties – and use of the road would be subject to the discretion of its legitimate owner(s). This is in contradistinction to State provision where taxpayers are mandated to fund all roads, including those some will never use. It should be clear that this arrangement does not require one's prior consent; it is an imposition, not a purchase In the first place, as roads provided by States are treated as “public goods,” typical consequences related to the tragedy of the commons emerge As no individual can reap the capital value of the resource in question, the incentive emerges for each individual to consume as much and as quickly as possible. Public roads will be regarded as “free for all” and massive over-consumption in the forms of traffic jams and rush hours will be the result one may see that an individual is more likely to keep his own yard landscaped than he is to take over the landscaping duties of a public park. It is a fact of economics that people are more willing to take care of their own property than they are to take care of common property In the second place, by monopolizing the road network, the State ensures there is no authority higher than itself through which to hold its own agents accountable Moreover, the State offers itself no quantitative standard by which others may hold it accountable, such as levels of traffic congestion, road serviceability, or the number of road fatalities. Additionally, State agencies lack a profit/loss incentive due to their power to externalize costs onto the general public through taxation In the third place, the State lacks a pricing mechanism. Even supposing that the State has every intention to provide the most desired road service to the greatest number of people, without a resource-allocation mechanism like the price system, it cannot possibly hope to discover the most economical manner in which to do so The demand for a good or service is represented by how much, and at what price, people as a whole are willing to purchase it. Thus, the price system takes into account to what degree consumers desire a given good or service. It is superior to pure voting, which cannot capture the relative intensities of the desires of each individual for a given plan For the entrepreneur to optimize the allocation of his resources, he must offer them at the market clearing price. This is the price at which consumers are willing to purchase the same number of units of a given product or service as those being offered. Generally, this clearing price will yield the entrepreneur the greatest amount of profit as, by definition, there are no mutually-agreeable exchanges left to complete the revenue the State accrues is through involuntary means. Thus, it must necessarily have an inaccurate picture regarding how best to economize the resources it commands. Consequently, there will be an over production of roads in some areas and an underproduction in others Some critics may object that private roads are perfectly legal, yet rather uncommon In order to be a patron of a private road service, one is not simply purchasing it instead of supporting public roads. He is paying twice – once for a private subscription and again when he bears the taxes for public roads In the fourth place, the costs of building and maintaining roads are externalized to the taxpayers. This serves to artificially increase the demand for those industries affected by road travel, namely the oil, automobile, and rubber industries. This is why many of the special interests beckoning for the expansion of the highway system tend to come from one of the three aforementioned business sectors A preferable solution is desocialization; return the land and property to those who provided the funds for their purchase/production: the taxpayers.4 Private road providers have a vested interest in the flourishing of the businesses, cities, and residential communities they connect as their abounding value will increase the demand for the roads which connect them. Naturally, the self-interest of the road provider is aligned with those of his customers. As road providers realize that their customers desire assurances regarding safety and liability, the road providers may require all their patrons obtain insurance. The premiums the insurance agencies charge will serve to regulate their clients’ driving habits From the consumer’s perspective, many more factors than price alone may be considered in his decision. For instance, he may value the speed and responsiveness of a given road company’s towing and ambulatory services. Moreover, this prospective patron may evaluate the quantitative standards by which various road companies hold themselves accountable (e.g., the speed of rush hour traffic). Such promised standards could be supported by the road providers’ contractual obligations to compensate any individuals affected by conditions that fall outside of said standards It is, however, unlikely that this competition would result in a severe mismatching of road rules, as each road provider would understand that such awkward and tedious transitions would serve to deter and discourage customers from using their roads. Compatibility is important in protocols, principles, and rules. Take, for example, the private railroad companies of the 1800’s and the cell phone companies today. Each implemented a high degree of interoperability in their services so as to maximize their respective customer’s satisfaction, which ultimately translates into profits. Imagine owning a Sprint phone and being unable to call someone with Verizon because people have a choice of whether or not to contribute funds toward road services, cheaper and more efficient alternatives may arise such as maglev trains or flying vehicles Private road providers may also charge higher rates during peak hours as a means to increase road safety by decreasing traffic congestion or to travel through a neighborhood where their car may be stolen, or to drive on a road where dangerous road racing, daredevils, and drunkards abound. This is an obvious concern, and as such will be addressed by the owners. The owner(s) of a given road will have a great financial incentive to provide reliable measures of security, as this will directly impact the value of their services and property To finance early stages of construction, road providers may seek out venture capital. Alternatively, some expanding businesses or residential developers may offer to help finance such an operation as they have interests in areas not currently serviced by roads Different sections of a conjoined road could be managed and owned by different road companies. In this way, the costs of starting up or maintaining a vast highway can be spread out amongst many companies Any individual road provider who dramatically increased his rates would be met with desertion. A price hike encourages his customers to patronize competing road services. Additionally, such a hike in prices would encourage his customers to increase their level of carpooling, thereby cutting into his profits For instance, one may only offer to buy a given house if the road provider servicing it agrees to certain fixed payment, service, or quality conditions A study conducted by Infrastructure Report Card.org in 2008 showed that “Americans spend 4.2 billion hours a year stuck in traffic (about 40 hours a year per motorist) at a cost of $78.2 billion a year – $710 per motorist. Roadway conditions are a significant factor in about one-third of traffic fatalities. Poor road conditions cost U.S. motorists $67 billion a year in repairs and operating costs – $333 per motorist; 33% of America's major roads are in poor or mediocre condition and 36% of the nation's major urban highways are congested.” # some kind of sidebar on responses to free market critiques the State imposes rules above and beyond restricting us from using aggression against the persons or property of others. Unfortunately, exercising such powers deters others from trading, producing, and maintaining the value and integrity of their property. This deterrence manifests as a decrease in overall wealth and standard of living. Logically, this may be confirmed by reflecting on the nature of human action within the context of economic relationships. For one to contract, trade, or deliberately do anything is to indicate that he believes this action will transform his current state of affairs into one more desired. Consequently, insofar as one's non-aggressive behavior is artificially restricted, the potential value of his actions will be diminished. One need only extrapolate this fact to a market wide scale to realize State regulations prevent millions of valuable trades from coming into existence With such an institution in place, the alleged atrocities of the free market are now able to come to fruition under a Statist framework. The rich are now able to become richer at the expense of everyone else. They may accomplish this by persuading the State's agents to erect artificial barriers to entry into various industries in the form of taxes, intellectual property laws, minimum wage laws, occupational licensures, etc. These barriers are then sold to the public as protections for the consumer and the employee 1)    State intervention destroys and/or hinders the production of wealth 2)    The resulting economic woes are attributed to an "under-regulated" market 3)    The State increases the scope and degree of its interventions 4)    Steps one through three are repeated until the economy falls to ruin With all this in mind, the best solution to poverty becomes quite clear: allow the market to operate unimpeded. This entails the widespread recognition and respect for private property rights. Thus, to reach the point where this solution may be feasible, we will first demonstrate how the free market is in fact the cure for destitution, and not its cause In a truly free market, resources flow to their most value-productive ends. This occurs in a decentralized process with each individual simply doing that which he believes will yield him the greatest satisfaction. This pursuit of satisfaction/profit will motivate actors to minimize their costs and maximize their benefits. They are also able to evaluate the costs of various actions by comparing market prices which themselves are byproducts of voluntary exchange. The advent of money enables this process to be even more efficient by providing the actor with quantitative figures by which he may be able to compare the costs of heterogeneous or different types of goods/services directly. The use of money allows for a common denominator by which an actor can compare his opportunity costs more easily than he can in barter. He then compares the costs of his chosen endeavor with the gain in satisfaction he projects he will receive in its execution. If his projected gain exceeds the costs of his project, then he may conclude it to be a profitable one. However, being merely profitable is not sufficient in itself; the task must be profitable enough to warrant the time and energy he puts into it versus any other action he could have taken. Our actor determines this by evaluating other courses of action he may take, and how profitable he thinks they will be. For instance, if he makes one thousand shoes and only receives five dollars in monetary profit, he may see this as an ultimate loss as he may value the time it took to make the shoes more than he values five dollars. (Important to keep in mind is that profit or satisfaction may be of a psychic nature, instead of purely a monetary one. Subjective desires are the ultimate cause of man's actions, and it would be incorrect to presume man is guided solely by money.) This process is then repeated by himself and all other market participants until large, sustainable trading networks and markets form. As these market participants bid for various resources, their prices begin to reflect their demand in relation to their supply. The resulting prices of goods in turn influence the individuals' evaluations of these goods and the profitability of their projects, which in turn causes them to modify their behavior accordingly. Through this fluid and organic cycle, an incredibly efficient economy emerges through the mere acts of individual actors peacefully pursuing their own self-interest. Market prices serve as their guides; potential value opportunities and desire for profit serve as their motivation ## Taxation It is important to consider that before the State is able to do anything, it must first violate the property rights of its citizens through the collecting of taxes. Despite this fact, however, the State is still predominately held as the single institution capable of competently protecting private property rights. This blatant paradox may only be perpetuated through incessant propaganda As such, and insofar as this State interference extends, the capacity for prices to reflect genuine consumer demand for various economic goods will be undermined ## Working Conditions Like all other services in the free market economy, the price of labor is determined by the subjective valuations of those looking to hire labor along with its corresponding availability. Thus, contrary to the popular narrative that people are slaves to the terms on which a given employer may be willing to hire them, the employers themselves are subject to concrete economic incentives not to short change employees either on the basis of wages or working conditions. Such incentives are due to competition between employers for labor, just as there is competition between prospective employees for jobs "There are too few options available for this competitive mechanism to work!" First of all, what constitutes successful "working" in this context is completely subjective. Someone choosing to work at company A is an indication that he would rather work there than work somewhere else or not at all. Thus, this is still a mutually beneficial relationship, and in fact from the perspective of the employee and the employer, it’s the most beneficial arrangement relative to the available known alternatives. Mainstream economics promotes the fallacy that the number of firms is what demonstrates “monopoly,” but so long as entry into the field is permitted, this can create competitive results. Potential competition can act as real competition The tendency of the free market economy is to develop technology and machinery which enables each individual to produce more output with the same or similar levels of input. As workers are able to produce more with the same level of input, the employer is both able and incentivized to pay them higher wages or to provide more satisfactory working conditions, lest his competitor draw away his labor by implementing said measures at his place of business The industrial revolution and the infamous working conditions associated with it are generally cited as damning evidence against the capitalism-as-free-trade theory. However, this assessment is generally marred by mistakenly comparing those working conditions with the ones enjoyed today, as opposed to comparing them with previously existing alternatives The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless much more than these paupers could earn in any other field open to them. It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation Competition between all industries in which one can be employed, will create a lower limit to the level of wages and working conditions he will accept for his labor. The existence of sweatshops merely indicates that the surrounding market is relatively undeveloped sweatshop earnings even compared favorably to the average incomes in the countries where they were located. In six of the 17 countries, the average reported sweatshop wage exceeded the average income in the country — in Haiti, Honduras, and Nicaragua it was more than twice the national average. In another six countries, the average reported sweatshop wages were around the national average. In four of the five countries where sweatshop wages were 50 percent below the national average, the workers were immigrants (sometimes illegal) from other countries and their sweatshop wages exceeded the average wage in their native country A common Marxist critique of the employer-employee arrangement is that wage laborers are exploited by being paid less than what they produce. Such critics claim the leftover surplus is then used to line the pockets of the evil capitalist in the form of profits. However, this criticism fails to recognize the existence of choice in the matter! The employee does not have to work for the employer. If he wants, he may start his own business. If he does not have the capital or the will to do this, then he can choose to work for a cooperative. Any voluntary alternative is compatible with the free market then the employee will go unpaid as well. The difference here, however is the employer is contractually obliged to pay the employee while customers have no such contractual obligation to patronize the services offered by an entrepreneur. Thus, all other things being equal, there is more certainty regarding ones' pay in his capacity as an employee than there is in his capacity as an entrepreneur. The role of the entrepreneur is to bear uncertainty, and profits are the income he earns for executing that role. Therefore, the reaping of the “surplus profit” of the employee's labor for the entrepreneur is justified by his willingness to incur greater risks and forego consumption for a date later than what his employees are willing. The employer and employee have reverse time preference orderings, thus their dealings with one another results in mutual benefit.10 What is wrong with this [Marxist] analysis? The answer becomes obvious, once it is asked why the laborer would possibly agree to such a deal! He agrees because his wage payment represents present goods-while his own labor services represent only future goods-and he values present goods more highly. After all, he could also decide not to sell his labor services to the capitalist and then map the full value of his output himself Why does he not hire more laborers than he does, if each one of them promises an additional interest return? The answer again should be obvious: because the capitalist is a consumer, as well, and cannot help being one ## [[minimum wage]] The existence of competitive pressures, as mentioned earlier, will have already created a tendency where laborers earn nearly what they produce. Thus, a minimum wage law will tend to create unemployment in fields whose market wages are lower than what is mandated by the new law. Minimum wage laws thus amount to removing the bottom rungs of the economic ladder. One unintended consequence of minimum wage laws is that the resulting unemployment is mostly shouldered by the young, unskilled persons, and ethnic minorities ## Unions The proper riposte is to raise them one better; all right, if the minimum wage is such a wonderful anti-poverty measure, and can have no unemployment-raising effects, why are you such pikers? Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000? Organized strikes and collective bargaining does not entail any activity which is inherently at odds with the principles of private property or maintaining free markets.  Issues arise when unions embrace the utilization of State power to further their agenda One way this is done is by funding the political campaigns of various congressional or presidential candidates on the condition that, when in office, they pass legislation which furthers the given unions' cause, at the expense and against the wishes of their respective employers If some workers held monopoly power in the supply of their labor—which could be the case if they had unique skills that were especially valued by firms—then firms may very well choose to pay higher wages. In a competitive labor market, these workers’ success at earning higher wages would also sow the seeds for their eventual reduction, as the higher wages would signal other workers to obtain the skills necessary for their lines of work too absent the state, any success that organized labor might have in obtaining higher wages, and thus increasing the costs of production, would be short-lived The first point worth mentioning is that in a truly free society, one's reputation is intimately linked with his livelihood The prospect of solitude and personal autarky serves as a peaceful incentive for someone to develop himself as an asset to others whether in a social or an economic capacity ## Poverty concern for the poor is a prevailing one, and therefore in a society where there is more wealth being generated, one may conclude that there would also be a greater willingness to give towards charitable causes. In addition to becoming wealthier, people have a stronger incentive to give because they would be spared from the delusion that the government is, to some extent, already taking care of the poor Having a poor, dependent class is, in fact, beneficial to the security of State power. Insofar as people believe they cannot live without the State, its longevity will be increased. Additionally, whenever the poorer classes grow under the regime of a State, the culprit is all too often thought to be a lack of funding for welfare programs. In consequence, public support and spending for the welfare State grows in concordance with the growing parasitic class that organizes, regulates, and administers the benefits. Its growth necessarily comes at the expense of taxpayers, which means there will be crowding out of private alternatives Statistics are available which compare CEO salary, percentage of donations used effectively, etc. Competition between these various metrics drives charities to find ways to increase their impact per dollar and incentivizes them to discover new ways to minimize administrative costs so that a growing portion of their received contributions reach those in need. The incentives of the State are starkly contrasted with this, as the funds it uses for such programs are generated through compulsion, i.e., taxes in his essay "The Costs of Public Income Redistribution and Private Charity," James Edwards reveals that only about 30% of government aid reaches its intended destination, whereas the remaining 70% lines the pockets of government bureaucrats. In contrast, the inverse is true for private charities, where on average only about 30% of funds get absorbed for administrative costs, and 70% reach the people in need The very principle of capitalist entrepreneurship is to provide for the common man. In his capacity as consumer the common man is the sovereign whose buying or abstention from buying decides the fate of entrepreneurial activities. There is in the market economy no other means of acquiring and preserving wealth than by supplying the masses in the best and cheapest way with all the goods they ask for # Environment ## Pollution / commons It is thought only by superseding the property rights of others can the Earth and its species be protected from the pursuit of our myopic and petty self-interests. Contrariwise If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting Private owners of goods have a direct incentive to maintain and improve their capital value as they stand to personally and directly benefit from the value the goods retain As John was within his rights to play music when he had no neighbors, he develops an easement where he has already acquired the right to produce such noise by operating his rock band prior to Sue's moving in The same methodology may be applied with air, water, or any other form of pollution. If a factory was polluting the air of a surrounding area prior to a residential community being established in its vicinity, then the residents of said community would have no just legal grounds to force the factory owner to halt the practices of his factory If A's property was founded first, and if he had performed the questionable activities before the neighboring property of B was founded, then A may continue with his activities. A has established an easement. From the outset, B had acquired dirty or loud property, and if B wants to have his property clean and quiet he must pay A for this advantage Indeed, both nuisance and trespass cause uninvited physical interference with the property rights of others. The simple upholding of private property rights is the legal defense against much of the pollution decried by modern day environmentalists. It is indeed the State's monopolization of the legal system and its refusal to uphold private property rights that is the cause of most the environmental destruction witnessed today. A commonly cited reason for such deviations from private property protection against third parties is to favor the “greater public good which may be diminished if such private property rights were upheld absolutely” – i.e., in the case of eminent domain If A walks on or puts an object on B's land, then B cannot use the space A or his object has taken up. An invasion by a tangible mass is a per se interference with someone else's property and therefore illegal They are invisible, cannot be detected by man's senses, and do no harm. They are therefore not really invasions of property, for we must refine our concept of invasion to mean not just boundary crossing, but boundary crossings that in some way interfere with the owner's use or enjoyment of this property a crime is simply an action, and actions employ means. But the actor does not need to own the means. If I steal A’s handgun to shoot B, I am the murderer, not A. I violated A’s right to control the gun; but A’s right to the gun does not make him the murderer. We can see that the idea of strict liability as it applies to 'responsibility for owned things' is deeply flawed the common rationale for State intervention is to use its legislative powers for the purpose of restricting negative externalities, such as pollution, and promoting positive externalities via subsidies, such as public education. However, what is often overlooked are the means required to take such measures, and the externalities these means produce. The true cost (or benefit) of any given action to another individual is impossible to objectively determine; this follows from the fact that one cannot compare value interpersonally. One may determine that the actors involved in a voluntary trade must see it as mutually beneficial, but one cannot ascertain the exact degree of benefit each party gained, much less the negative or positive effects the transaction had on uninvolved third parties. Therefore, to promote aggressive State solutions to remedy negative externalities is to impose a concretely destructive and unjustified activity for the pursuit of an outcome whose net beneficial or destructive effects cannot be known.9 There was a way to force private polluters to bear the social cost of their operations': sue them, make them pay for their past transgressions, and get a court order prohibiting them from such invasions in the future.   Upholding property rights in this manner had several salutary effects If the owner believes his lake is more profitable when used for dumping, he will likely convert the lake accordingly and charge customers to dump. Conversely, if he views the most profitable use of the lake to be recreation, he will use it towards this end, charging people admission for its enjoyment. When deciding between the two uses, the owner will also likely take into account that he can switch his lake from a recreational use to a dumping one but that it would be more difficult to do the reverse. On the surface, some may find this disturbing as it would undoubtedly result in some lakes being used for dumping. However, the supply and demand forces of the market will direct lake owners away from creating too many dumping lakes by means of the profit/loss system. As more lakes would be used for dumping, there would be relatively fewer lakes for recreation If a landmass is valuable due to its lumber, then one has a natural incentive to not harvest more than he is able to replenish, so that he may maintain his future cash flow With prices derived from private ownership, it's possible to examine the economic configuration of one's resources. One can examine not simply what to produce, but how to produce it. Thus, the central error with State or public ownership remains that no such objective and accurate pricing mechanism exists to guide the actions of State actors to employ resources under their command in the most efficient manner possible, i.e., in a manner that generates the lowest opportunity costs for those resources When people are compelled by force to hand over their money, it becomes impossible to determine their actual preferences as the amount of income received is not commensurate with the level of desirability of a given good or service When politicians regulate the uses of public resources, they are more compelled to employ them in the direction of special interests and political pursuits as opposed to employing them in such a way as to maximize their capital value Because many aqueous resources are not privately owned, the tragedy of the commons plagues their use and integrity. Over-fishing, dumping, oil spills, and other forms of pollution abound as no one has a direct and exclusive means to privatize the benefits of taking measures to maintain the integrity of the water. This contrasts with the incentives private owners have to prevent others from unjustly dumping trash or otherwise polluting their water If Sarah purchases a property with a river running through it that has pollutant level X, and her neighbor upstream begins to dump in the river such that the pollutant level exceeds X, she will have legal grounds to enjoin her neighbor's polluting activities. Of course, such legal means would only be necessary if Sarah and her neighbor had not or could not work out some voluntary arrangement, such as payment for the excess dumping One other benefit of privatizing water resources is that doing so would create an incentive to implement and invent non-water polluting industrial activities and technology. Not only this, but the development of water polluting forensics would also take place to assist damaged parties in establishing proof regarding whom exactly is causing harm to whose property. These go hand in hand; as more effective forensic techniques are developed, so too are the incentives for would-be polluters to not pollute so that they may avoid any potential legal liability In regards to oil spills, people who own certain portions of shipping lanes in the ocean may charge more for the passage of single hulled oil tankers than double hulled ones, Polluting the air on another's property without invitation is considered either a trespass or harmful nuisance (provided an easement to pollute was not previously attained), and, as such, may be stopped or enjoined by court order technical limitations do not justify imposing aggressive measures to compensate for their shortfalls ## Species conservation Animals, like all other scarce goods, are subject to the destructive effects of the Tragedy of the Commons. If they are prohibited from being privately owned, then humans will invariably tend to consume them in an uneconomic manner the cow prospered, due to private property rights which could avert the tragedy of the commons, while the bison almost perished as a species due to lack of the same Perhaps universities may want to acquire certain species There is also, of course, the opportunity for strict preservationists to pool their money or resources and purchase land for the mere sake of preventing other humans from using it in a way they feel is destructive of its natural integrity ## Disposal The negative externalities associated with waste disposal may also be internalized if free people are permitted to perform these services and to own dump sites privately Likewise, consumers may be charged more to dispose of items containing Styrofoam or plastic, and they may become more inclined to purchase products packaged in less environmentally destructive materials In this way, the self-interest of the dump site owner to make as much money as possible coincides with the consumer's desire to save as much money as possible; they are harmonized with the actions requisite to maintain the environmental integrity of the Earth The cost of disposing of the plastic and the other waste is undertaken by the government, and a citizen is typically taxed without regard to the amount of trash he generates. Once the citizen pays his taxes, he has no incentive to choose environmentally sound goods because disposal costs are in effect free to him In the jargon of economists, the negative externality will disappear; the cost of trash disposal will be internalized, brought to bear on the responsible parties Nature is not the antithesis of a free market society; it is, instead, a reflection of its efficacy in the non-human realm. Nature has no opinion or volition. It must operate according to its own laws where the system that results is one which is bottom-up, not top-down, and which responds immediately and perpetually to the ever-changing variables of its inhabitants # Corporations ## State regulatory and entanglement with business when the State is able to usurp regulatory powers over the marketplace a destructive zero-sum game manifests. Whereas, before the organic regulatory functions of the market were merely reflections of various actors pursuing their own ends, they now become to an ever increasing degree the result of central direction and control. In this context, inherent human self-interest will drive many businesses or firms in the economy to appeal to the State for both defensive and offensive ends. Businesses will realize that choosing to take the noble high road of not appealing to this institution would only result in giving their less scrupulous competitors an unfair advantage. Hence, the formation of the State regulatory agency causes the entrepreneur's ultimate pursuit of profit to be entangled with two opposing ends: satisfying the consumer and satisfying the State It now becomes economic to spend millions of dollars on political campaigns to influence a particular politician to support bills harmful to one's competitors and favorable to themselves. The opportunity costs are the R&D, advertising, or reinvestment into a more robust capital goods infrastructure that may have otherwise taken place. Invariably, the larger a given firm becomes the more involved it will tend to be with matters of the State as its success increasingly comes to rely on compliance with an entrenched regulatory apparatus In a free market society, those firms which enjoy large profits will tend to be the ones who add the greatest degree of value to society. The stock market allows anyone to further empower and become, in an additional way, the beneficiaries of various productive enterprises ## Stock market Mises comments on the integral functions performed by the stock market:   A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist.9 A firm may find the development of such a reputation to be conducive to its profit margin. In this case, a firm may declare "we hereby transfer title up to X amount of dollars to any person found to be damaged by the actions of any employee acting within the boundaries of company protocol." This creates a voluntary binding contract If speculators suddenly come to market looking to heavily purchase stock, they will initially purchase shares at the prevailing market price. As they purchase more, however (technically, as they satisfy sell orders on the stock exchange), the number of people willing to sell the stock at that prevailing market rate declines, and the only ones holding more of that stock are individuals demanding more money in exchange for them. Now, in order to purchase more stock, these optimistic speculators must purchase them from individuals with greater reservation demand than prior. Thus, with the elimination of those with lower reservation demands, the “market price” the stock would fetch increases A successful corporation is ultimately never controlled by hired managers. The emergence of an omnipotent managerial class is not a phenomenon of the unhampered market economy. It was, on the contrary, an outgrowth of the interventionist policies consciously aiming at an elimination of the influence of the shareholders and at their virtual expropriation. In Germany, Italy, and Austria it was a preliminary step on the way toward the substitution of government control of business for free enterprise, as has been the case in Great Britain with regard to the Bank of England and the railroads. Similar tendencies are prevalent in the American public utilities. The marvelous achievements of corporate business were not a result of the activities of a salaried managerial oligarchy; they were accomplished by people who were connected with the corporation by means of the ownership of a considerable part or of the greater part of its stock and whom part of the public scorned as promoters and profiteers no firm can become so large that it is both the unique producer and user of an intermediate product; for then no market-based transfer prices will be available, and the firm will be unable to calculate divisional profit and loss and therefore unable to allocate resources correctly between divisions # Getting there [A private currency] normalizes the idea of using private currencies to the general public. The State's status as the sole producer of money is one of its greatest sources of legitimacy and power; thus, the proliferation and expanding use of private currencies constitute effective means by which State rule may be peacefully undermined the State is always in a precarious position, as it requires the presence of a market in order to perpetuate its parasitic existence. Conversely, the market is at the same time a threat to State legitimacy as it provides a productive contrast to the State's inner workings. In distinct contrast, the market has no such need for the State. It may exist, in fact, much more vibrantly with no State at all. Once this truth is uncovered, there will be no turning back. The State will be just another embarrassing blip in human history, similar to chattel slavery Most people are aware of the complex, social problems that persist today ranging from poverty, famine, and disease, to war, inflation, and terrorism. Although they may believe the State is not treating such issues competently, they are tragically unaware of any viable alternatives. The masses have been inundated with propaganda their entire lives from the public schools in which they were stuffed as children to the State controlled, nationalistic mass media opinions they ingest as adults. The predominate notion of Political Reform is sold to the public as their only redress of grievances, while whispers of State abolition are immediately discarded as absurd and dangerous For the spreading of anarchist ideas to be effective, one must sell them not only as rational and effective, but also humanitarian and inclusive the only things precluded are legal privileges. Such a system does not require people to work for hierarchical corporations or even to use money. If individuals prefer to voluntarily pool their resources and live in money-less communes, then there would be nothing stopping them. In fact, free market anarchy is precisely that system which permits the largest scope of opportunity for people to live their lives as they see fit The Blue Ridge Liberty Project (BRLP) was established with a twofold mission: to spread the ideas of free market anarchism and peaceful parenting, while establishing a community of people who live accordingly If one is still critical of free market anarchy, then they should be encouraged to evaluate the State with an equal level of skepticism # In my words [[spontaneous-order-my-notes]] # The Problem Resources are scarce and there are mutually exclusive desires for their employment. The desire for the goods exceeds their availability. # Private Property ## One's Body ## As a norm for conflict avoidance # Conflict Avoidance and Wealth