Libertarian Papers

Abstract: In this article, Spencer Heath offers a general defense and explanation of the capitalist system and a forecast of its further evolution. After showing various ways in which its major functional elements contribute to voluntary exchange, the vital process and central creative act in the economy, Heath observes that the capitalist system is young, evolving, and incomplete. In particular, it has yet to carry the process of voluntary exchange by contract and consent into the field of public services. Heath anticipates this happening through the further development of private property in land. Noting that ground rents are paid out of the productivity of land users, and are the market payment for public services which make productive use of the land possible, Heath foresees a perfect welding of the private and particular interest of the land-owning class with the public and general interest. As landowners come to better understand their interest, he predicts they will begin to monitor public affairs and then fund, supply, and ultimately administer all public services, relieving land users of all taxation and burdensome bureaucratic regulations. Their recompense for thus liberating land usage and providing new services will be the enhanced ground rents and values from the growing demand for land.

Keywords: capitalism, creativity, land ownership, ground rent, public services

JEL Codes: B25, D73, Q15

Download Paper: “The Capitalist System”

Abstract: David Sobel has recently argued that libertarian theories that accept full and strict self-ownership as foundational confront what he calls the conflation problem: if transgressing self-ownership is strictly and stringently forbidden, it is implied that the normative protection against one infringement (say, being stabbed) is precisely as strong as against any other infringement (say, touching someone’s hand without that person’s consent). But this seems to be an absurd consequence. In defense of libertarianism, I argue that the conflation problem can be handled in a way that allows us to honor basic libertarian commitments. It is suggested libertarianism should be characterized as presumptive libertarianism, treating self-ownership as an assumption the content of which remains to be worked out when applied, rather than as a dogma ready for application: a proposal that relies on a standard market model. Since such a proposal is likely to appear to many philosophers—libertarians in particular—as inherently flawed, a considerable part of this article defends it against possible criticisms. It is argued that presumptive libertarianism is not only a coherent and theoretically elegant notion, but a version of libertarianism that honors pre-theoretical commitments to self-ownership and liberty better than some mainstream versions of libertarianism.

Keywords: David Sobel, the conflation problem, libertarianism, presumptive libertarianism, self-ownership

Download Paper: “Self-Ownership, the Conflation Problem, and Presumptive Libertarianism: Can the Market Model Support Libertarianism, Rather than the Other Way Around?”

Abstract: Although Michel Chevalier was an influential economist during the second half of the nineteenth century, and is well-known as an architect of the Cobden-Chevalier Treaty, his work in economics has been largely forgotten. In particular, Chevalier is notable for being one of the only French liberals opposed to patents. Unfortunately, his original and compelling critique of the patent system has been neglected. This paper rediscovers Chevalier’s arguments against patents, shows why they are still relevant today, and explains why they have been mostly ignored by historians of economic thought.

Keywords: Michel Chevalier, French liberal school, intellectual property, patents, innovation, Austrian school

JEL Codes: B12, O30, O31

Download Paper: “Michel Chevalier’s Forgotten Case against the Patent System”

Abstract: Ostensibly accepting Lockean property theory and some basic assumptions of Nozick’s entitlement theory, Barbara Fried (1995) argues that property owners have a right to the physical things they own, but not to their “surplus value,” which is produced not by the owner’s labour but by “scarcity conditions of one sort or another.” I argue that Fried’s interpretations of Nozick and Locke lead her to a conclusion that is not supported by those Lockean and Nozickian entitlement principles which she does accept. I also argue that Nozick’s weaker interpretation of the Lockean Proviso is closer to Locke’s originally intended meaning, and is more plausible in itself. Finally, I attempt to resolve another issue which could be raised as an objection to Nozick’s entitlement theory—that “ownership” is indeterminate—by proposing an alternative approach which rejects the endeavour to devise an account of the essential concept of ownership.

Keywords: Robert Nozick, Barbara Fried, John Locke, Lockean proviso, labor theory of value, property rights

Download Paper: “Wilt Chamberlain Revisited” Revisited: Interpretive, Practical, and Theoretical Problems for Fried’s Left-Lockeanism”

Abstract: A growing literature has explored the workability and efficacy of governance without the state. The difficulties typically raised in the context of these studies concern under which conditions cooperation or Hobbesian chaos would arise in the absence of a monopolist of coercion. This paper challenges the idea of the stateless society from another vantage point, arguing the institutions articulated by proponents of the stateless society would struggle at reconciling heterogeneous views regarding the rights of third parties. This is relevant for many of the most contentious policy debates, such as abortion and animal rights.

Keywords: Anarcho-capitalism, taboo tradeoffs, repugnancy costs

JEL Codes: D74, H11

Download Paper: “Heterogeneous Moral Views in the Stateless Society”

Abstract: This study identifies a new channel through which government provision of public goods crowds out voluntary provision.  Controlled laboratory experiments are used to identify how the possibility of government provision alters the likelihood of successful voluntary provision.  Previous experiments on voluntary provision are studied in an environment where the alternative to voluntary provision is no provision at all.  In this study, failed voluntary provision is met with backup government provision financed by mandatory taxes.  Comparisons with baseline sessions in which subjects contribute toward a public good using a provision point mechanism with full refund allow for the identification and measurement of moral hazard.  Results confirm the existence of moral hazard crowd-out of voluntary contributions due to this incentive structure.  This type of crowding out adds to rather than replaces other crowding out channels that have been studied in the economic literature.

Keywords: Crowding out, moral hazard, public finance, experimental economics

JEL Codes: H11, H41, C90, C92

Download Paper: “Crowding Out in Public Goods with a Provision Point Technology”

Abstract: Jennifer Bird-Pollan has recently argued that Nozickians are wrong to oppose the estate tax. Promising to argue from within the Nozickian framework, she presses the fundamental point that the estate tax does not violate anyone’s rights: neither the deceased nor their would-be heirs can claim a right to any holdings subject to the estate tax. This paper shows that Bird-Pollan’s discussion fails on three fronts. First, she frequently misinterprets Nozick, and thus does not defend the estate tax from a Nozickian perspective. Second, even if Bird-Pollan is correct in denying that the deceased and their potential heirs have a right to the holdings in question, it does not follow that the estate tax is licit, because Nozickians can oppose it on other grounds. For example, Nozickians may hold that the enforcement of the estate tax will violate other rights people have. The government’s preemptive claims to holdings subject to estate taxes, along with the force required to enforce those claims, are unjustified. The crucial premise motivating these conclusions is the Nozickian denial that our current state possesses the authority to enforce the estate tax. This is the third front on which Bird-Pollan’s argument fails: she must show that Nozickians ought to believe government has the moral authority to enforce the estate tax, yet she makes no effort to do so.

Keywords: Robert Nozick, estate taxes, minimal state

JEL Codes: H24, K34

Download Paper: “Death, Taxes, and Misinterpretations of Robert Nozick: Why Nozickians Can Oppose the Estate Tax”

Download Paper: “Book Review: Advanced Introduction to the Austrian School of Economics”

Abstract: In his article “Nozick’s Argument for the Legitimacy of the Welfare State,” Michael Davis seeks to establish a line of reasoning justifying an extensive state based largely on what he interprets to be Robert Nozick’s theory of entitlement. According to Davis, this argument can easily be constructed and merely depends on “seeing most so-called free-rider problems from a new angle, that of property.” If his view were defensible it would have implications far beyond questions regarding Nozick’s minimal state or even governmental authority and private enterprise. However, even if measured against Davis’ own criterion of adequacy, his argument fails. It fails because it violates the principle of liberty and builds on a misguided interpretation of compensation. This result is important not only in the context of the debate about right-libertarian restrictions on state functions, but also the free-riding debate more generally.

Download Paper: “A Free-Rider Perspective on Property Rights”

Abstract: In their 2013 Science article, “Morals and Markets,” Armin Falk and Nora Szech presented experimental evidence that markets erode moral values.  The present paper addresses problems in their experiment design, treatments, and operational definitions. Laboratory settings are ideal for uncovering certain causal connections, but fall short when market participation is a treatment and moral erosion is a measured outcome. Markets are difficult, if not impossible, to simulate and moral erosion is difficult, if not impossible, to define and measure for the purposes of an experiment. Falk and Szech’s experiment may also suffer from more mundane issues like priming effects, experimenter effects, and changing more than one variable per treatment group.

Download Paper: “Morals and Markets: A Response”

While the consumer benefits from the new products and improved production processes due to creative destruction, the major downside to creative destruction is technological unemployment.  However, policies adopted by government and by workers can increase the upside and reduce the downside.  Governments can enable entrepreneurial innovation by allowing the labor market to be flexible.  A government safety net is also considered. However, workers can become more resilient in attitude and frugal in spending in order to cope with technological unemployment, and can invest in more diversified and enduring human capital.  The family can also provide a private safety net.  The process of creative destruction is not a zero-sum game.

Download Paper: “The Creative Destruction of Labor Policy.”

Abstract: Focusing on a particular facet of entitlement theory, I criticize the view that Nozick’s version of the theory provides an adequate description of procedural justice. I agree with Nozick that justice is procedural; however, I believe his entitlement theory as it currently stands is incomplete. I show that Nozick is committed to believing that the implied content of his entitlement theory is unjust, and therefore that a certain set of market transactions ought to be judged as legally wrong according to Nozick’s own political foundations. Furthermore, I demonstrate that the Non-Aggression Principle is inconsistent with what a procedurally just entitlement theory would require, and therefore diminishes the degree to which a full-fledged account of distributive justice can properly be called libertarian. Finally, I offer a principle intended as a starting point for a discussion of what constitutes just transfer, and briefly speculate as to the legal results of implementing such a principle.

Download Paper: “Trading on Ignorance: Amending Insufficiencies in Nozick’s Entitlement Theory.”

Download Paper: “Book Review: <em>Exploring Capitalist Fiction: Business through Literature and Film</em>”

Download Paper: “Book Review: <em>Literature and Liberty: Essays in Libertarian Literary Criticism</em>”

Abstract: Raymond V. McNally was an economist at the Henry George School of Social Science in New York City. This article was written shortly after the entry of the United States into World War II, and presumably remained unpublished because of the unsettled times. It recently came to light among the papers of Spencer Heath, to be domiciled at the Universidad Francisco Marroquín. In the paper, McNally describes the important social role—both present and potential—of property in land, thus offering a broader understanding of the basic Georgian concept of rent as the natural fund for public services. To clarify the nature of public enterprise, McNally first examines private enterprise in terms of the production and distribution of services, viewed in light of the role played by owners. He then shows that the two kinds of enterprise, private and public, are alike with respect to distribution but differ with respect to production, due to incomplete development of the ownership role in the latter. He suggests that this anomaly will be resolved as owners in public enterprise develop a scientific understanding of their role and bring it into alignment with that of owners in private enterprise. Hence, the author anticipates that the evolution of normal economic, as opposed to political, provision of public services will lead to the abandonment of taxation and its ills.

Download Paper: “Some Observations on the Nature of Public Enterprise”

Abstract: The strength of many arguments for Classical Liberalism is often challenged on the grounds that these arguments appeal to controversial metaphysical structures or moral principles. To avoid these challenges, I appeal to a set of epistemic considerations to show that, in order to structure a society that affords optimal opportunity for citizens to obtain their interests, we have a rational obligation to protect individuals’ freedom to pursue those interests. In this paper, I defend the second premise of a larger argument for Classical Liberalism and, ultimately, for negative natural rights. I conclude that each individual has a prima facie reason to regard every other individual as having an epistemic advantage with respect to evidence regarding their interests and how to obtain them.

Download Paper: “Prolegomena to an Epistemic Case for Classical Liberalism”

Abstract: Some state legislatures have considered legislation that would modify laws governing the right to carry a firearm in specific areas including college campuses. Currently firearms are banned on nearly all college campuses throughout the United States. Proponents of the bans on firearms argue that allowing firearms on campuses would likely result in dramatic increases in gun violence. In this paper we investigate the relationship between right-to-carry policies and crime rates on campus using reported crime data from colleges located in five western U.S. states, two of which allow firearms on campuses, for the years 2001-2009. No evidence is found supporting the argument that the right to carry a firearm is associated with an increase in the reported crime rate in any examined category.

Download Paper: “Right-to-Carry and Campus Crime: Evidence from the Not-so-Wild-West”

Abstract: Inchoate crime consists of acts that are regarded as crimes despite the fact that they are only partial or incomplete in some respect. This includes acts that do not succeed in physically harming the victim or are only indirectly related to such a result. Examples include attempts (as in attempted murder that does not eventuate in the killing of anyone), conspiracy (in which case the crime has only been planned, not yet acted out) and incitement (where the inciter does not himself commit the crime he is urging others to undertake). The present paper attempts to analyze these inchoate crimes from a libertarian perspective, based on the non-aggression principle.

Download Paper: Inchoate Crime, Accessories, and Constructive Malice in Libertarian Law.

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.

Download Paper: Credit Default Swaps, Contract Theory, Public Debt, and Fiat Money Regimes: Comment on Polleit and Mariano.

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