Abstract: In this paper, I show that Polleit and Mariano (2011) are right in concluding that Credit Default Swaps (CDS) are per se unobjectionable from Rothbard’s libertarian perspective on property rights and contract theory, but that they fail to derive this conclusion properly. I therefore outline the proper explanation. In addition, though Polleit and Mariano are correct in pointing out that speculation with CDS can conceivably hurt the borrowers’ interests, they fail to grasp that this can be the case only in some peculiar circumstances that I identify. In other words, they miss the bigger picture, the one outside special circumstances, in which CDS trading has the opposite effect. That is, CDS facilitate debt accumulation, including government debt accumulation. Finally, I point out how this can precipitate the collapse of fiat money regimes. An incidental goal of the analysis is to provide a better account than Polleit and Mariano of recent government interventions in and around CDS markets.
Abstract: Brettschneider argues that the granting of property rights to all entails a right of exclusion by acquirer/owners against all others, that this exclusionary right entails a loss on their part, and that to make up for this, property owners owe any nonowners welfare rights. Against this, I argue that exclusion is not in fact a cost. Everyone is to have liberty rights, which are negative: what people are excluded from is the liberty to attack and despoil others. Everyone, whether an owner of external property or not, benefits from this and thus rationally exchanges that liberty in exchange for a like abandonment of it by others. The proper social contract trade is thus liberty for liberty—not liberty for owners and positive welfare rights for nonowners (though the latter in fact benefit greatly from the property rights of owners).
Download Paper: Liberty, Property, and Welfare Rights: Brettschneider’s Argument
Abstract: The necessity for a government “lender of last resort” has been advanced as a justification for central banking. In this paper, I compare lending practices under central banking with those that would be likely to exist under a system of fractional-reserve free banking (FRFB). To do this I examine the underlying nature of banks as warehousing and credit-granting institutions and consider how redemption runs can arise as a consequence of fractional reserves in this system. Following the work of Thornton and Bagehot, I describe principles of prudent lending that can be used to stem a redemption run when it arises. I examine the market incentives that apply under FRFB and how these incentives are perverted under a system of central banking. I find that a government central bank is not well-placed to lend according to prudent standards, and in fact is likely to use its power to pursue political goals that are at odds with prudent lending. I examine the US financial crisis and the actions of the Federal Reserve System to illustrate this view.
Abstract: This paper is my last word, in the present journal, in the debate I have been having with Walter Block on the subject of evictionism as an alleged libertarian “third way,” capable of transcending the familiar “pro-life” and “pro-choice” dichotomy. In this debate, I myself defended what might be regarded as a qualified “pro-life” position, while Block consistently argued that the mother is morally allowed to expel the fetus from her womb provided that no non-lethal methods of its eviction are available. While my position articulated in this paper contains an element of what Block might consider a concession on my part—i.e., an explicit declaration that abstaining from lethal evictions of fetuses conceived as a result of rape is a libertarian duty, but only an imperfect one—I continue to regard the unqualified support of evictionism as indefensible on libertarian grounds.
Download Paper: “Abortion, Libertarianism, and Evictionism: A Last Word.”
Abstract: In Chinese history the periods known as Spring and Autumn (770-476 BC) and the Warring States (475-221 BC) were times of conflict and political instability caused by the increasing power of centralized and competing states. During this time of crisis many schools of thought appeared to offer different philosophical doctrines. This paper describes and studies ideas about the limitation of power defended by these different schools of ancient Chinese thought, and suggests some reasons why they failed to prevent the emergence of an authoritarian imperial government in early China.
Abstract: Klein and Clark (2010) initiated a debate about libertarian theory to which this paper hopes to add. Starting with the old libertarian principle of “direct liberty” (adherence to the non-aggression principle) Klein and Clark introduced two new concepts to complete it: “indirect liberty,” and also direct liberty plus indirect liberty, which sums to “overall liberty.” In my critique of this article of theirs (Block, 2011A), I congratulated them for their creativity, but rejected these innovations. In Klein and Clark (2012), these authors responded to my initial criticism. The present essay hopes to fruitfully continue the discussion of these new concepts of liberty.
Abstract: In his book, Defending the Undefendable, Walter Block (1976) makes the case that an individual counterfeiter of fiat notes does not commit a natural law crime, because money issued by the government is itself counterfeit. Several authors, including Murphy (2006), Machaj (2007), and Davidson (2010), have taken issue with Block’s argument. In Davidson (2010), I maintain that while the issuance and use of fiat currency by the state violates the natural law, fiat notes are not counterfeit, and their use by ordinary people is legitimate. The private counterfeiter is a thief when he exchanges his notes with these innocents, because they are rightful owners of both the fiat currency and the goods for which it is exchanged. Block (2010), in a rejoinder, disputes this on both ethical and utilitarian grounds. The present paper is a response to Block, and an elaboration of my original article. From a natural law perspective, I explore the ethical violations surrounding counterfeiting, and the legitimacy of producing and using fiat money by both the state and the individual.
Abstract: In Escape from Leviathan, Jan Lester sets out a conception of liberty as absence of imposed cost which, he says, advances no moral claim and does not premise an assignment of property rights. He argues that, so conceived, liberty implies libertarian property rules, free-market anarchy, and the maximisation of welfare. However, analysis of Lester’s conception of liberty shows it to be inconsistent with liberty as ordinarily conceived, and further reveals that maximising liberty, as Lester conceives it, would run counter to self-ownership, private property, open markets, and improving welfare. Lester seems to arrive at his conclusions only because, in his arguments, he abandons his own account of liberty and derives his conclusions instead from familiar libertarian assumptions about property rights.
Download Paper: A Critique of Lester’s Account of Liberty.
Abstract: An ethic of self-ownership combined with Lockean homesteading of external resources provides a plausible grounding both for anarchist opposition to the state and for an attractive anarchist legal order. Such an ethic can be understood as specifying that each person prima facie has the right to control his or her own body; and that Lockean homesteading, under which the owner of any scarce resource is its first user (or his contractual transferee), should provide the basis for property rights in such previously unowned goods. Given these rules, monopoly privileges like patent and copyright (intellectual property, or IP) cannot be justified, as they infringe on self-ownership-based body-rights and/or property rights in external resources. In this article, I explain why IP rights are inconsistent with the moral grounds for a stateless society’s legal order, and speculate about the practices or laws that might prevail in the absence of IP in such a system.
Download Paper: “Law and Intellectual Property in a Stateless Society”
Abstract: There is a need to develop libertarian responses to writings on race, gender, and sexual orientation. Offering such responses not only demonstrates to potential opponents of libertarian reform that libertarianism can seriously address these issues: libertarian responses can also help us confront forms of “private” oppression that are not per se un-libertarian, but which support state oppression. Drawing on thinkers such as Murray Rothbard, Roderick Long, Charles Johnson, Gene Sharp, Wendy McElroy, and bell hooks, this paper establishes historical links between the intellectual traditions of feminism, nonviolent action, and libertarianism, and explores what a nonviolent, libertarian resistance to patriarchy might look like. By demonstrating the analogies between Sharp’s and Rothbard’s theories of political power and hooks’ theory of patriarchy, this paper shows that Sharp’s techniques for resistance to state tyranny can be adapted for use against patriarchal oppression.
Download Paper: “Libertarianism, Feminism, and Nonviolent Action: A Synthesis“
Abstract: James P. Sterba postulates a conflict situation between ‘poor’ and ‘rich’ persons in order to establish the legitimacy of a welfare right superior to unlimited private property rights. Sterba does not recognize the moral options available to the non-poor in his conflict scenario, nor the generally voluntary character of enduring unemployment, or how few people would satisfy his own restrictive criteria for poverty. His definition mischaracterizes the general state of the poor as one of imminent decline when in fact, for most of human history it was one of stasis, and since comparatively free societies emerged, it has been one of general improvement. He fails to grasp that the processes by which others become non-poor in a libertarian society also make most of the poor better off. Consequently, consideration of future generations also turns out to weigh heavily against justification of a welfare right, contrary to Sterba’s claim.
Abstract: In his book The Economic Laws of Scientific Research, Terence Kealey deconstructs major misconceptions about scientific research and its relation to the state. He shows, through revisionist history and economic data, that the premises behind common defenses of government funding of science are fallacious. Even though science is related to economic growth, the state cannot boost the economy by injecting funds into scientific research. Also, the state cannot discover which scientific projects are most important because it cannot rely on market signals from the price system. Finally, the state cannot determine the right level of funding for scientific research, because it has no way of knowing which projects will have positive economic impact. Not surprisingly, after showing how the market produces science in a rational way, Kealey recommends a laissez-faire approach to scientific research.
Abstract: Kukathas’s proposed libertarian dilemma is introduced and two key criticisms of it stated. The following critical commentary then makes several main points. Kukathas’s account of libertarianism offers no theory of liberty at all, nor a coherent account of aggression. Consequently, he cannot see that his “Federation of Liberty” is not libertarian by a basic understanding of morals and non-invasive liberty, still less by a more precise theory of liberty. In trying to explain his “Union of Liberty,” Kukathas evinces considerable confusion about the nature of libertarianism. His argument that a monopoly legal system is inevitable is also neither plausible nor libertarian. He has apparently overlooked the cogent arguments against Nozickian minarchy, and in favor of anarchy. It is concluded that the neglect of libertarian theories of liberty and anarchy is the underlying problem.
Abstract: In this article, two separate aspects of Mises’ famous economic calculation argument are identified. The first concerns the fact that the profit-and-loss calculations that drive economic decisions regarding factors of production under capitalism cannot, by definition, take place under socialism since there cannot be any prices on which to base such calculations. The second concerns that idea that, owing to the nature of value, there is no alternative means of allocation, such as a calculus in terms of value. Although both of these points are well-known and frequently invoked to pass a decisive judgment against socialism, they are in fact separate arguments which have thus far been inadequately distinguished in the Austrian literature. The objective of this paper is to highlight this distinction. I further illustrate the point by emphasizing the role of monetary calculation, which nonetheless plays a real role in capitalist economies.
Download Paper: “Mises’ Calculation Argument: A Clarification”
Abstract: This essay examines several sections in Will Kymlicka’s Contemporary Political Philosophy: An Introduction (2nd ed.) that are relevant to libertarianism, making and explaining the following criticisms. First, Kymlicka’s “preface” misconstrues political philosophy’s progress, purpose, and its relation to libertarianism. Second, in his “introduction,” his “project” mistakes libertarianism as “right-wing,” justice as compromise among “existing theories,” and equality as the “ultimate value.” Third, his “a note on method” in effect takes as axioms, beyond philosophical examination, various alleged desiderata and the necessary moral role of the state. Moreover, his “ultimate test” being “our considered convictions” amounts to a conservative and illogical justificationism at odds with radical and coherent critical rationalism. Finally, Kymlicka’s chapter on “libertarianism” mistakes it as, inherently and unavoidably, free-market, anti-consequentialist, deontological, and Nozickian, and requiring “a foundational moral premiss,” without objective content, unmaximizable, indistinguishable from license, equality-based, anti-anarchist, “self-defeating,” indefensibly “unfair,” impractically “philosophical,” and without influence. A different version of libertarianism easily withstands all Kymlicka’s antipathetic criticisms.
Download Paper: “Kymlicka on Libertarianism: A Response”
Abstract: During his first decade on the national political stage (1935-1944), Robert A. Taft (R-Ohio) contributed to a lively “Old Right” conservative critique of the New Deal’s efforts to achieve economic recovery, promote sustainable growth, and convert to a postwar peacetime economy. This paper examines the senator’s market rhetoric—the ideas on the market, entrepreneurship, and the role of the state that he employed in political arguments after 1935—to understand the foundation of his libertarian brand of conservatism. The following article argues that Taft fused Gilded Age evolutionary naturalism with the Republican Party’s tradition of economic nationalism in order to refute Franklin Roosevelt’s statist liberalism. In particular, he asserted that extra-human natural laws governed the market; that, in the absence of federal interference, it operated flawlessly; that small-business entrepreneurs, not corporations or public enterprise, were the agents of progress; and that the federal government should facilitate, not hinder, entrepreneurial enterprise.
Abstract: In previous publications on probability, I have followed I.J. Good in arguing that probability must be defined subjectively if we accept that the world is causally deterministic. In this article I go significantly beyond this position, arguing that we are forced to accept a subjective definition of probability if we use any probabilistic methods at all. In other words, all probabilistic methods tacitly assume a subjective definition of probability.
Abstract: I build on Christoyannopoulous’s (2011) compendium of Christian anarchist thought to shed light on the divergence between Christian anarcho-communitarians and Christian anarcho-capitalists. The anarcho-communitarians believe the institution of private property is contrary to the Word of Christ, while the anarcho-capitalists hold it is justifiable. I show that the anarcho-communitarians misunderstand the nature of property, rendering them unable to reconcile an apparent contradiction between Christ’s command to renounce violence and His violent cleansing of the temple. The Christian anarcho-capitalists, drawing upon the philosophy of natural law, face no such difficulty. Although their position is far from unassailable, the Christian anarcho-capitalist paradigm is currently the only theoretically consistent interpretation, and will remain so unless the Christian anarcho-communitarians can discover and advance a new theoretical framework.
Download Paper: “Christian Anarchism: Communitarian or Capitalist?”