no third solution

Blogging about liberty, anarchy, economics and politics

Leasing and Renting in a Free Economy: Dealing With Scarcity

July 8th, 2009

As long as resource scarcity is a fact of reality, there will be some conflict between the limitless spectrum of human desires, and the limited resources at our disposal. Among these conflicts is that fact that not all resources will at all times be immediately available, especially within our own community, and that sometimes our desires conflict with others’.  Exchanging, or offering to exchange by sale of goods with one another on these terms, is one manner by which market participants simultaneously mitigate conflict, and allocate scarce resources.

To differentiate from an agreement to purchase an item permanently, we might consider agreements to lease or rent the item in question.  One would purchase a car from another, if he believed he had a great and continued need for transportation.  One might rent or lease a car from another, if he believes he only needs temporary transportation.

Deep in the comments to Profit IS Justified by Entrepreneurial Risk, I posed a question to db0, inquiring why:

  1. One should not be allowed to offer some of his belongings for temporary use, to another individual
  2. No other individual would be allowed to offer some of his belongings in exchange for temporary use of anothers’

In his response, db0 says both of these things are to be allowed, but qualifies the former by excluding “rent, wage-labor, interest” as “usury”, and further:

[T]his is not about preventing individuals from participating in such a transanction but to convince them not to. If we are to reach a libertarian society, then this kind of mentality will be built up as we progress towards it

I don’t understand why it is desirable to convince people not to participate in voluntary transactions, all parties to which believe said transaction is to their benefit. Consider: if I have an item, which I am using, and someone else says to me, “I would like to use that item for a few days, mind if I borrow it?” how should I respond?

On one hand, I might simply say, “No, I’m using it and therefore you can’t use it.” On the other hand, there is most likely some exchange he could effect, which would induce me to surrender (temporarily) the use of the item, and would offset the discomfort[1] I would otherwise experience if I were to loan it to him for “free”.

I do not mean to argue that “free” transactions won’t take place in a liberated economy.  Even in our current society, free transactions take place all the time. You borrow a compound mitre saw from your father, or an extension ladder from someone at work. Perhaps you loan a book or a CD or a video game to a friend[2]. And transactions of these sorts are wonderful.

They are wonderful because they are indicative of qualities inherent to true community: friendship, trust, neighborliness; all qualities inherent to true community.  I think in a free society, we would see more transactions like these (several orders of magnitude more, hopefully!), but I am by no means convinced that value-based exchange, especially the renting or leasing of items, would simply cease to exist.


1. Even considering an item that I am not immediately using, we might surmise that I am saving it for some anticipated future need, therefore anyone who wishes to use it now should pay (at the very least) for the depreciation of the item, and perhaps a small risk premium to account for the possibility that the item might be irreparably broken while in his possession.


2. But the people receiving these “free” loans are never under any illusion that they own the item which you’ve let them borrow, and for the most part, we understand that if the item is broken or stolen, the right thing to do is to offer to replace it.

Saving the Economy: Agorism to the Rescue

June 27th, 2009

Perhaps the most striking paradox of modern economics is the existence of near-record levels of involuntary unemployment.

Consider: there are millions of people who have bills and obligations to pay, for things that they want to keep (but are in danger of losing to their creditors). Among these millions (and their creditors, perhaps), to dig up an antiquated term, you’d think there would be some double-coincidence of wants. That is, couldn’t they help themselves by helping each other?

In Michigan, something like 14% of the work-force is currently unemployed. These people are losing their homes, their cars, their families — their lives. Nationally, I believe the figure is currently around 9% which is a 25-year high. But few, if any of these people want to be unemployed. They didn’t quit their jobs. They didn’t stop paying their obligations because they are deadbeats, scofflaws, or criminals. They were essentially forced out of work, into their current condition, by a grossly perverted economic system.

Couldn’t they help themselves? Yes. And no.

I’ve been pondering this paradox for a while now:

As long as needs and wants remain unsatisfied, it doesn’t make sense that people are losing jobs left and right.

Yes, we could help ourselves by helping each other. But no, unfortunately, there are decades and decades of interference contributing to unsustainable growth, unsustainable structures of production, and unsustainable levels of debt, which all need to be undone. Undoing it will be painful. The political choice is to slap a band-aid on it, grant everyone a reprieve of uncertain duration, and attempt to restore faith in the zombieconomy, which as John Robb succinctly states,

When authorities resort to propaganda confidence building instead of substantive action in response to an actual crisis, you know you are in real trouble

This band-aid, “confidence building” course of action may appear to “fix” the economy. Until the next crisis, crises of course being endemic to the system. In reality, restoring faith in a system which deserves none, only serves to perpetuate a system which will only continue to suck the life out of humanity until it is slain, or until it takes us all down with it.

What we need is a sustainable economy, and the degree to which we can wrest ourselves free of the crushing and now insatiable debt burdens, foist upon us by the zombieconomy is extremely limited. The zombieconomy is unsustainable, because it thrives on the perpetuation of debt, which itself thrives upon mere faith. I submit that no viable system can survive on faith alone. I sustainable economy must (in accordance with Say’s Law) be erected upon a foundation of production and free exchange.

All that needs to be done is nothing! Let people produce wealth unimpeded, let them be free in order that they may propser.

The zombieconomy needs to be broken. Some good old-fashioned, well-timed revolts won’t hurt. Revolts against the status quo. Revolts against a broken monetary system which is the foundation of our shell-game, rat-race economy.

Agorism is the weapon of choice.

Agorism is the non-violent, free-market-based means by which individuals, acting in their own best interests (in order to satisfy the interests of other individuals), may achieve lasting prosperity. When the white market refuses to employ you (and one-in-seven of your neighbors) for wage or salary, you and your neighbors need to ask yourselves, “What can we do for one another, which previously required our dependence upon the zombieconomy that utterly failed to provide for us? What can we do to reduce our reliance on this system?”

Here we are, one-in-ten or one-in-seven unemployed but with needs yet unmet. Isn’t there a way for us to meet one another’s needs?

Answer those questions, and break the chains that bind.

Homesteading Detroit: On Urban Farming

April 2nd, 2009

Driving through Detroit, past burnt-down buildings, crumbling concrete and peeling paint, testaments to decades of neglect and decay at nearly every intersection, one might be surprised to learn that much of its 138 square miles was once farmland.

urban farming in DetroitYes, the city that put the world on wheels was once, like many others, dotted with family farms. If you were to visit the Wayne County Register of Deeds, and look through the old plat maps, and the subdivision descriptions, the microfilm images of a surveyor’s drawings from a century ago evidence farms of all sizes, from ribbons to quarter sections. To this day, many of the city’s streets still bear the names of the families who once owned farms on these locations: Brush, Beaubien, Campau, Cass, Meldrum, Riopelle… But instead of farms, or even tenements, tens of thousands of abandoned or otherwise vacant homes, lots, commercial, and industrial properties dot the landscape of Detroit.

At what point does this pattern of failure become evidence of neglect or, more importantly, of abandonment? And what should be done about it?

Could it be farmland again, one day?

The Bloomberg article where I found the image above suggests that “mini-farms are a stopgap measure at best,” noting that one Real Estate Broker “wouldn’t put [his] money in Detroit.” I wouldn’t put my money there, either. But there are thousands of people who are already stuck in Detroit. They don’t have any money at all, and they don’t have anywhere to go. How can they make the most of their situation?

Some people think that the city can be brought back to life through urban farming, a grass-roots sort of movement taking roots across the country, is usually small- or micro-scale farming operations, where individuals (or groups of friends/activists acting in concert) till vacant lots in inner cities, either for produce or for aesthetics.

I think the urban farming movement is a ripe opportunity (ok, no more horticultural puns!) for people to become involved in their communities, however I think the approach is fundamentally flawed: working with the cities that have neglected to be good stewards sends the wrong message. This “compromise” rewards the city’s prior failures. The biggest impediment to urban farming of course, is the City, which sat idly by as land fell into disrepair, neglect, disuse, etc.

The City and its bureaucracies are the last people anyone should have to ask for permission to do anything. Instead, urban farmers should be saying “screw you, City!” and should contest the City’s claim to “ownership,” asserting the principles of abandonment and homesteading, at every possible opportunity.  Although these claims would likely be challenged in court, the City should not contest these adverse possessions. Since, as evidenced by the aforementioned “decades of neglect”, the City has no real interest in seeing urban farms (or anything, for that matter!) thrive, it could simply offer these lots to residents on a “homesteading” basis: “If you maintain it, improve it, live on it, etc., it’s yours; free and clear.”

That last condition is crucial, because it practically guarantees that someone will make use of the land. Artificially high barriers to entry preclude most but the most politically well-connected from putting vacant city lands to any viable use. The city clings to properties that are worth less and less each year (indeed some of these parcels probably have a negative value), hoping that someday they can leverage these properties, but in the meantime forcing the burdens of their ineptitude to be borne exclusively by those unfortunate enough to still live within the city limits.

One local businessman wants to make supersized Urban Farms, which, while a hell of a grand idea, is mere economic rent-seeking, and deserves all the scorn worthy of such tactics. Essentially, he wants a bunch of handouts in the form of free or greatly discounted property, in order to profit from a large Factory Farm (or Farms).

John Hantz of Detroit tells the Detroit Free Press for a Thursday story that his plans for Hantz Farms call for converting hundreds or even thousands of vacant parcels in the city for agricultural use.

The Free Press noted that,

Land assemblage remains a key question. Hantz owns several parcels in the city, but the vast majority of the acreage he needs for his project is still either owned by private parties or is tax-foreclosed land owned by the city, county and state.

Hantz envisions the city, county and state donating the land to his project or selling it at a nominal cost. The payback would come in increased tax revenues once the farm is up and running.

-Farm could make Detroit hot spot for fresh food, April 2, 2009

Detroit hasn’t done a god damned thing in three or four decades, deserving of even one thin dime. If the City gives or “sells” parcels to Hantz, it’s only because he promised to pay the city (taxes) a tribute she did nothing to deserve. So many years of neglect, of documented corruption and abject failure should nullify whatever claim to these properties that the city ever had (legitimate, or nay) in the first place. Because the City abandoned these properties, abandoned its constituents, the City should be the very last organization which has any say, any power whatsoever about what becomes of these places.

The city only wants to keep its power, keep or increase its tax base, etc. To promote the development of urban farms (or anything, really), it merely had to allow them.  So, if anyone deserves to pick Hantz’s pocket, it’s the disenfranchised masses who still call Detroit “home.” Why should they, having weathered decades of neglect be pushed aside and cast off, in favor of someone looking to make a quick buck?

As Absentee Landlord writ large, the City still “owns” these parcels in the legal sense, and accordingly, exercises a great deal of control over what would-be improvers might otherwise do, although n most important regards, the city has already effectively abandoned these parcels. Understandably, unable to raise enough taxes to pay for the demolition of these nuisances, (why should those few remaining in the city provide, through taxes, a subsidy to those who might be willing to relocate there?) they crumble further.  Some of these lots have been vacant for decades. It’s funny, but in a very short amount of time, really, near-vacant lots bearing the footprints, or charred skeletons of once majestic victorian houses, have been reclaimed by the elements. Nature will do what she does, if left alone. (There are several fascinating photo-essays at DetroitBlog, here and here.)

I suggest a radical experiment: try something new for a change. For once, let the solution to “government failure” be anything but “more government.”  Let anyone have these lots who wants to improve them for personal use: housing, farming, business, etc. Let them attempt to succeed where generations of government have failed, allow them to provide for their own, and most of all, keep the City’s leperous hands far away from their pursuits of happiness.

Update: Retta Fontana responds at the Strike-the-Root Blog.

The City of Detroit did far more than sit idly by. Decades ago it implemented ordinances that prevented any home from being sold without being inspected and approved by the City.

…To think that the City should be in any way compensated for these abandoned properties is atrocious. The City of Detroit should be paying damages to the previous owners to compensate for the loss of previous value…

I’ve not argued that the City should be compensated; quite the contrary.  The fact of the matter is that “the City of Detroit” lacks the financial wherewithal to pay even a modicum of damages to any of its many, many victims.  As a corporate/municipal legal entity, there is practically nobody who is (or could be held) personally liable for these damages.  Wholesale liquidation of the City’s holdings, and distribution to its remaining victims; well, I could certainly get behind that.

no third solution

Blogging about liberty, anarchy, economics and politics