no third solution

Blogging about liberty, anarchy, economics and politics

Conisdering the Distribution of Property

February 20th, 2007

A big hurdle, intellectually, is what to do about the distribution of property as it currently is. Any astute reader will point out that the very distribution of a great deal of the property upon which our society is erected, basically rests upon an initial conquest, theft, or murder – very un-libertarian principles. How can we remain intellectually consistent when the very distribution we’re trying to defend rests historically upon the principles we’re rallying against?

Admittedly, my response is less-than-satisfactory. At some point in history (Last week? Last year? A hundred years ago?) the crimes of the past cease being relevant at present, as it becomes increasingly difficult to correctly identify the legitimate interests to a property, and there is nothing we can do objectively to rectify the centuries of compound wrongs committed on both sides of the equation – even the have nots are the beneficiaries of prior injustices to some extent.

All property has clouded title, if we look back far enough, and consider “right of conquest” an illegitimate usurpation of property rights. And unless we can positively identify the parties on both sides – the usurpers and the sufferers, we can’t really do anything about it. All we know is that everything was stolen from somebody, by someone else, at some point in history – we do not know what we need to know: precisely what was stolen, by whom, and from whom, and who are the recipients of such properties as opposed to those who would be the natural heirs in the absence of the historical thefts.

Mere absence of legitimate title to a property does not create ex nihilo a legitimate claim in favor of someone else. The person claiming the property must demonstrate a legitimate interest to that property preceding your acquisition. In short, a proper claim must identify the party from whom the property was taken, and positively identify the property in question as being that same property – not merely one of like kind or substance. If my car had been stolen last week, and I know that you are in possession of a car that was stolen from somebody, somewhere, your theft does not give me any legitimate claim to that particular car. I would be just as wrong as you are, if I were to steal the car from you – despite the fact that it’s not really yours. Nor does the car belong to all of us. It belongs to someone. Clearly, it should be taken from you – but what to do with it thereafter is the missing link that I can’t seem to find.

In order to try and maintain some degree of logical consistency, we could aim to completely equalize everyone’s interest in all property. All property would be divided evenly among all claimants, and distributed accordingly. This is just a shade short of full-blown communism – because we’re not talking about permanent, collective ownership of property. We’re talking about a momentary collective ownership, immediately thereafter divided evenly among all men and held forever after absolutely and privately.

But this only achieves a fleeting moment of equal distribution of property, for reasons I will discuss further, another time. Suffice it to say that, the only way to achieve equalization of property distribution is full-blown communism. Nobody gets anything, and we’re all equal in our misery.

A Question, followed by some rambling.

January 9th, 2007

In light of a recent discussion:

Under what circumstances can a loan be open-ended and “callable,” meaning that its term is of no fixed-length, and that the lender may ask for redemption at any time?

In practice, banks are extremely reluctant to refuse demands on open-ended lines of credit, as a result of treble damages awarded, if it can be shown that failure to honor a demand was proximate cause of financial distress to the debtor. Does the same doctrine hold true insofar as “calling” these individuals loans is concerned?

The best I can come up with, in theory, is that a “callable” loan would have a call-option penalty; which would discourage the lender from maliciously bankrupting his debtor – AND – that the call-option would require the passage of some amount of time (a week? a month?) during which the debtor might arrange alternative funding. But the penalty only mitigates, it does not eliminate, the very real possibility that debtors could be bankrupted by a unilateral decision to essentially alter the terms of the contract. The agreement is that the loan is for an indefinite period of time – except insofar as the lender may decide, at any time, that it is no longer for an indefinite period of time, but instead due immediately or perhaps at best, after the passage of a brief period of time. A contract, a provision of which allows for the unilateral cancellation or fundamental alteration of its other terms, cannot possibly be considered valid or binding.

Much like a mortgage with a balloon payment due, such a loan would likely come with a provision explicitly dismissing the lender of any obligation to refinance the loan in the event that he decides to “call” it in. And that’s what this loan is – it’s akin to a mortgage with a balloon payment due; only neither party (especially the borrower) can know with any degree of certainty when this payment will be due, and no security is given to the borrower in the event that he becomes obligated to make the balloon payment. No borrower would ever agree to these terms without an implicit agreement that the loan would never be called.

The additional requirement, that the call option could not be immediately excercised, bastardizes the indefinite term of the agreement, effectively converting it from a demand-line to a short-term note payable. This seems to be a pretty significant contradiction, and leads me to believe that such “loan” agreements are metaphysically impossible.

Accepting Entitlements

January 5th, 2007

A few months ago, I found myself in the unfortunate position of being unemployed. I’d like to attribute it to a steep decline in real estate transactions, as I was previously working in the real estate industry. I was reminded of this today, because I had lunch with a few of my old co-workers. For the record, I had a scrumptulescent sirloin steak salad, and a bowl of lobster bisque. The bisque was so-so, the salad was phenomenal. In any event, I saw the layoff as a blessing in disguise, I had been in a malaise for quite some time, unsatisfied with my job, the potential, etc. I dearly miss a few of my co-workers, but that’s where it stops. Unfortunately, being underemployed full-time has serious disadvantages, the most notable of which is the inability to search for new jobs, and more importantly, to interview for new jobs.

Interviewing, is like a sales job. And with most sales positions, it’s a numbers game: the more you pitch your sale, the more you make – you just play the odds. But when you’re employed full-time, it becomes exceedingly difficult to schedule interviews without drawing the ire of your employer – you can only have so many doctor’s appointments and long lunch breaks. So I was opting out of interviews I should’ve taken, and I wasn’t looking very hard for a job. Basically, I was waiting until I finish my Master’s degree, at which point I would begin to commit myself to the job-search.

Being unemployed allowed me to focus 100% of my efforts on finding opportunities, and I had no impediment to interviews. I was no longer declining interviews because I couldn’t reasonably make it there & back on my lunch break. As a side note, I learned in my FIN 575 class, that the long-run historical average term of unemployment is 5 weeks. It took me 5 weeks to secure another job which paid as well (with better bennies) than my previous dead-end job. But it wasn’t what I was expecting, for alot of reasons. Fortunately, two weeks in to that job, I got a call back from a company with which I’d interviewed for an internship position. The HR contact told me that the interviewers were very impressed, and wanted to recommend me for a full-time position that had since become available. A week or so (and three interviews) later, I had another – better – offer on the table, in a growth-oriented division of an international, diversified firm. The position was in Market Research. I was extremely impressed with the 5 or 6 individuals with whom I interviewed, and so I accepted their offer.

Which brings me, roundabout, to the topic of this post. During the initial month or so which I was unemployed, I was taking full advantage of unemployment “insurance.” I was receiving a paycheck, from the State of Michigan, for not having a job. A classmate of mine, having unjustly lost his job in the health-care industry, is now in the same position. Our mutual academic advisor and department chair, also an unabashed libertarian, has expressed his concerns with “taking advantage” of this “insurance.” He looks at from a doctrinaire position: We don’t believe that unemployment insurance is a legitimate function of the state; therefore, we should decline the benefits.

But this is a point on which I disagree with my advisor, and I think my position is principled enough. The long-and-short of it is; insofar as UI is unjust, every dollar appropriated from our paychecks and used to fund the program is inherently illegitimate. But once that money is in the State coffers, it’s gone to the workers who earned it.

Now, only two sorts of people ever collect those “benefits”: People who accept it as an entitlement – as something deserved to themselves, people who believe the money is rightfully theirs, and people like myself and my classmate, who believe that such benefits shouldn’t exist to begin with, but accept them anyways. Is this a contradiction? Our advisor says “yes,” and to remain consisten in our beliefs, we should deny the benefits.

Our position is pretty simple: The only people who can justifiably receive UI benefits, are those who know that such benefits are wrong per se. Otherwise, if we don’t take them, it just permits the state to dole out more undeserved money to people who believe they’re legitimately entitled – i.e., communists of varying shades. So from a pragmatic point of view, given that the benefits exist, we should do what we can to make sure that they fall in to the “right” hands, lest they otherwise reinforce the idea that such policies are legitimate. If we libertarians find ourselves in the position to benefit from money which was taken from us to begin with, we should reclaim it to the maximum extent possible.

no third solution

Blogging about liberty, anarchy, economics and politics