I contend that it is not. It is not aggression, it is not coercion, it is not force. The only way to lose your property on the basis of fraud is to voluntarily surrender it. Violating a contract, while morally reprehensible, is not theft.
It is just as much as the victim's fault as it is the perp's fault. The victim should have cast better judgment and made sure he/she knew as much about the person he/she was trading with.
On a free market those who commit fraud will be punished. Even if Madoff was never arrested no one would have ever trusted him with their money again, he would have went out of business permanently regardless.
By legalizing fraud you are creating a stronger economy with a more knowledgable, prudent, and aware consumer/entreprenuer. People will have no choice but to thoroughly research products and tradesmen before making transactions and signing contracts. This will push the market into the direction of creating a more sophisticated database of intelligence that will make production much more efficient.
I imagine many of you disagree with my arguments. I invite you to discuss your perspectives.
Yes, fraud is theft. If a thief came in the night and, without violence or force, stole your valueable possessions while you were out, this is still a violation of property rights. It would be the same when, say, a fraudster offers you the winning ticket in the lottery for your prized automobile. He drives away. Later you try to cash your ticket and find that it's a fake. He definitely violated your property rights. Sure he didn't beat you up to do it but it's still theft.
Here's how Rothbard puts it
Under our proposed theory would fraud be actionable at law? Yes, because fraud is failure to fulfill a voluntarily agreed upon transfer of property, and is therefore implicit theft. If, for example, A sells to B a package which A says contains a radio, and it contains only a pile of scrap metal, then A has taken B’s money and not fulfilled the agreed upon conditions for such a transfer—the delivery of a radio. A has therefore stolen B’s property. The same applies to a failure to fulfill any product warranty. If, for example, the seller asserts that the contents of a certain package include 5 ounces of product X, and they do not do so, then the seller has taken money without fulfilling the terms of the contract; he has in effect stolen the buyer’s money. Once again, warranties of products would be legally enforceable, not because they are “promises,” but because they describe one of the entities of the agreed-upon contract. If the entity is not as the seller describes, then fraud and hence implicit theft have taken place.
http://mises.org/rothbard/ethics/nineteen.asp
I enjoyed your post because it's easy to fall into the trap of seeing coercion as the only evil. I had fallen into that trap before your post and had to refer back to Rothbard. It would seem that violation property rights precedes coercion, that violence can be seen as a violation of property rights. My understanding is that property rights derive from self-ownership. I'd love to see a really solid proof of property rights to blast the anarcho-communist types.
I've been thinking about how the anarcho-capitalists are anti-state. It sometimes seems necessary to me to say that they should only be against the coercive state or just coercion in general (Note that not all defintions of the word "state" mandate coercion or authority - that seems to require the sovereign state. Sovereignty is authority to make and enforce laws). So perhaps it would be fine to have a state that respected property rights.
Fraud and theft is coercive because it was not a voluntary exchange, but a physically forced upon exchange that was not agreed upon by the recipient. Coercion is not always losing an arm. In a fraudulent exchange if dollars were exchanged for product B, but product B was not sent through the mail, then the dollars were physically stolen, thus, property was physically coerced from the recipient.
wilderness: Fraud and theft is coercive because it was not a voluntary exchange, but a physically forced upon exchange that was not agreed upon by the recipient. Coercion is not always losing an arm. In a fraudulent exchange if dollars were exchanged for product B, but product B was not sent through the mail, then the dollars were physically stolen, thus, property was physically coerced from the recipient.
In just about any definition Austrians use, coercion implies threat, or threat is a main component. I do not see any threat in fraud (and please don't twist my words).
I'm sorry, but the part where fraud implies physical theft looks silly however you take it.
I think the OP is right in the strict sense. Fraud is a different thing from (physical) theft and I don't think we should a Block-ish position that "x is theft because it breaks a contract" (like his position on slavery contracts). It might be theft in a moral sense. Contracts aren't really 100% enforceable from a practical point of view, though there would be quite some pressure for one to submit himself to justice.
coercion is an actual physical embodiment of a denial of a property right.
i.e. if i steal 100$ from you. obviously i am physically depriving you of 100$, whether i use violence or no.
now if a fraudster sells you a 'working' tv for 100$, but when you get it home, it is a broken tv, or a few bricks stuck together, the fraudster has physically depriving you of the tv that you paid for. this cna be fixed in 2 ways. he can return the money, deal off. he can provide a working tv.
this should illustrate to you that if a given fruad is implicit theft, then it is illegitimate. (however there may be alleged frauds that are not implicit thefts, and these are not illegitimate)
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
Gabriel Munteanu,
Fraud is not only a threat. It is an event that has happened. Maybe you missed adding that part, not sure why you stuck with coercion only meaning "threat".
Fraud being not practically reversed by justice is untrue, but I have no idea what you have in mind. The other day I bought a chainsaw, but it didn't work. The chain would not move so I took it back. It wasn't a chainsaw in the truest sense. It was plastic and metal that appeared to be a chainsaw, but it did not operate as a chainsaw. In the extreme sense it was snake oil. So I took it back to the store and they gave my money back without a hint of quarreling on their part. So no fraud happened. I got my money back and now that business will undoubtedly handle the company that made the chainsaw. It probably was only that individual chainsaw that didn't work. It would really be a huge fraud if that chainsaw company was selling off something that looked like chainsaws but was in no way actual chainsaws.
I believe that the OP has failed to clarify what he meant by "fraud."
We can distinguish two kinds of fraud. The first one is false advertising. The second one is breach of contract. These two forms of fraud are different.
False advertising is the misrepresentation of information about one's own product. Breach of contract is the failure to transfer property titles.
However, this discussion only focuses on the second form of fraud. I believe that the OP wanted an answer to the first kind.
Does false advertising constitute as a form of theft? What about defamation, slander, and libel?
False advertising is the misrepresentation of one's own products, while defamation is the misrepresentation of another's product. Why does the misrepresentation of one's own products contitute theft while the misrepresentation of another's product does not?
This is inconsistent. If we allow defamation but disallow false advertising, this would result: Bob could produce of a good or service can just tell his relatives or friends to misrepresent his product. This constitutes as defamation but not as false advertising. However, Bob has performed de facto false advertising by commiting nepotism.
Life is filled with misinterpretations, misrepresentations, and prodigal folklore.
Bob could produce an imitation-chainsaw and tell others to misrepresent his product as being a real chainsaw.
This does not constitutes as defamation since defaming something is talking it down. this constitutes a lie that talks it up...
Bob has performed a crime if at point of sale he exchanges fake-chainsaws for money, when his customers are exhanging money for real-chainsaws.
if its a misunderstanding then its not fraud... and with both parties acknowledging the misunderstanding both parties can be reunited with their original goods.
of course, in your bob example there is not a mutual misunderstanding, bob understands perfectly well what is happening and the buyer does not, this is in your premise.
on the other hand, if Bob says, 'there are lots of rumours that my chainsaws are real, when i am not in that trade, rather, i sell fake chainsaws, are you sure you want to buy?"
then if i buy a fake chainsaw, i have not been stolen from.
Fraud is deception. But no, fraud and theft are two different things. You're not stealing anything when you defraud someone. Except maybe their confidence. So I guess if we count confidence as an asset, fraud might be theft.
Anarcho-Mercantilist:This is inconsistent. If we allow defamation but disallow false advertising, this would result: Bob could produce of a good or service can just tell his relatives or friends to misrepresent his product. This constitutes as defamation but not as false advertising. However, Bob has performed de facto false advertising by commiting nepotism.
If the relative or friend misrepresents his product positively, then such action is false advertising. However, if someone misrepresents his product negatively, then such action is defamation. As you said, why is the former considered theft and the latter is not considered theft? This is inconsistent. It is yet another example of the government protecting the consumer but not protecting the producer. Producers are evil, right?
If I wrote it more than a few weeks ago, I probably hate it by now.
Whether it is positive fraud or negative fraud it is still fraud. It is morally and ethically irelevant to distinguish the two. Fact: The producer does not own his reputation. A product does not own its reputation. A reputation is possessed by the consumer. If a producer says something about his product(which is his right to do, as the self-owner of his voice), and the consumer chooses to accept it and thus perceive the product in a positive/negative light, the consumer is making a conscious decision to alter his perception of the product's reputation.
Example: Producer has a brown bag. Producer says, "There is an apple in this brown bag."
There are two consumers present. One chooses to believe the producer without evidence, the other chooses not to. The reputation of the product is different for both consumers, because they own their own perceptions. The producer can't FORCE them to change their view of him and/or his product, it is physically impossible. The consumer that chose to believe the producer voluntarily chose to believe him, and thus the reputation of the product in his own mind is that of an apple. Meanwhile, the other consumer voluntarily chose NOT to believe the producer, thus the reputation of the product in his own mind is that of an empty paper bag.
The producer is free to speak whatever he pleases, as is the consumer. The consumer could easily offer to pay later, perhaps after he has consumed the apple. The consumer, too, could be lying; as is his right. Neither party is committing an act of theft if they lie, because they are voluntarily agreeing to accept the other's perception of the exchange, otherwise they would not make the trade.
Ugh, this forum needs an edit button, or I need to spell/grammar check better.
Anarcho-Mercantilist:However, Bob has performed de facto false advertising by commiting nepotism.
You're right, this is false advertising, and should be considered as fraud and punished accordingly. Bob, having spread rumors about his product, knows that the customers believe something about the product that contradicts reality. Therefore, there can be no mutual agreement and hence no valid contract or exchange.
Click on "More" in the upper right hand corner of the post and then click on "Edit."
Zavoi: Bob, having spread rumors about his product, knows that the customers believe something about the product that contradicts reality.
Bob, having spread rumors about his product, knows that the customers believe something about the product that contradicts reality.
Not true. You are assuming that the customers believe something merely because rumors were spread. The customers must consciously ACCEPT those rumors as fact. That decision, to distinguish truth from falsehood, is entirely in the consumer's power, and no one should be punished for a cognitive decision made voluntarily by the consumer.
Ah, thanks.
Violating contracts, implicit or explicit, or fraud for short, is a form of aggression, since it is not a voluntary interaction.
Political Atheists Blog
there is no positive or negative fraud distinction. there is fraud that is illegitimate, and fraud that is legitimate. fraud that is illegitimate is implicit theft, the other is not.
yes, reputations
jmlfod87: Example: Producer has a brown bag. Producer says, "There is an apple in this brown bag." There are two consumers present. One chooses to believe the producer without evidence, the other chooses not to. The reputation of the product is different for both consumers, because they own their own perceptions. The producer can't FORCE them to change their view of him and/or his product, it is physically impossible. The consumer that chose to believe the producer voluntarily chose to believe him, and thus the reputation of the product in his own mind is that of an apple. Meanwhile, the other consumer voluntarily chose NOT to believe the producer, thus the reputation of the product in his own mind is that of an empty paper bag.
when the consumer gets the bag and realises he was miss-sold an apple. not only was his apple reputation perception wrong, but also he is not presently the title-owner to an apple property, which is precisely what he exchanged his title to money for. the consumer does not seek recompense for reputational issues, but rather for a stolen apple.
true a mere lie is not theft, but a lie in conjunction with a contract/with-a-transfer-of-property-titles , is not a mere lie, it is implicit theft. its an important distinction. think about it. you have to figure out if an exchange that took place involved transfer of certain property titles, in your example you go from it did, to it didnt, and back to it did again. inconsistent.
jmlfod87:Not true. You are assuming that the customers believe something merely because rumors were spread. The customers must consciously ACCEPT those rumors as fact. That decision, to distinguish truth from falsehood, is entirely in the consumer's power, and no one should be punished for a cognitive decision made voluntarily by the consumer.
There is nothing inherently coercive or fraudulent about simply spreading false rumors; the fraud occurs when the false rumor becomes the basis of a contract. For example, if Bob starts a rumor that Bob's Snake Oil will cure cancer, and then someone comes to him saying "I want to buy this so I can cure my cancer," then the customer is entitled to be compensated by Bob when the product doesn't work. If Bob had said at the point of sale, "You know this doesn't really cure cancer, right?", then there is no fraud because the customer is not under a false impression about what the product is.
If I understand you correctly, you're saying that Bob doesn't know for sure if the customers actually believed the rumors he spread. But someone who didn't believe the rumor, but bought the product anyway, wouldn't accuse Bob of fraud because they would be satisfied with it. Thus, all we're concerned with are people who did believe the rumor.
Indeed. If the exchange does not occur on terms the two parties agreed to clearly it was not voluntary and thus is in effect theft - either way, the defrauded individual can compel the fraudster to furnish them with what was agreed to, in the event that it is not supplied.
Freedom of markets is positively correlated with the degree of evolution in any society...
Anarcho-Mercantilist:What about defamation, slander, and libel?
I'm not sure where I stand on this. On one hand, I believe in free speech, and that words can't physically harm me or my property. On the other, I recognize that if somebody makes a false claim against me, it could hurt my business. I'm learning towards the "it's not aggression" side, but I'm wondering what others think.
Fluery:On the other, I recognize that if somebody makes a false claim against me, it could hurt my business.
somebody could make a false claim against you that might help your business....
somebody could make a true claim against you that might hurt your business....
its not aggression
nirgrahamUK: somebody could make a false claim against you that might help your business.... somebody could make a true claim against you that might hurt your business.... its not aggression
Help me answer these questions:
What if a stranger makes a false claim against your product that might help your business?
What if a stranger make a true claim against your product that might hurt your business?
What if your friend makes a false claim against your product that might help your business?
What if your friend makes a true claim against your product that might hurt your business?
What if your relative makes a false claim against your product that might help your business?
What if your relative makes a true claim against your product that might hurt your business?
What if you make a false claim against your product that might help your business?
What if you make a true claim against your product that might hurt your business?
Does the last two questions constitute as false advertising, and therefore fraud?
its the difference between mere promises and actual rothbardian contracts
Is "coercion is an actual physical embodiment of a denial of a property right"? Or more simple is coercion the denial of a property right?
Coercion is force. Are you sure we can say that a fraudster is using coercion? He doesn't appear to be using any force. We could ask the question "what is force except for a violation of property rights?". What then can we say when we use legitimate force in order to retrieve property stolen from us? Perhaps we could then say that the fraudster commits illegitimate force. But how to we distinguish between legimate and illegitimate? This can only be done, I believe, by defining what we mean by property rights. This is why I say that "property rights precedes coercion". It may not be the best way to say it. I am trying to say that coercion derives from the concept of property rights or, better, that legitimate and illegimate force are defined by property rights.
I've only looked at Ethics of Liberty in this matter. I highly recommend it. I like Rothbard on the subject (though I recall quibbling on some issues). It would be good to read about the "proof" for natural rights that lead to property rights if anyone has a recommendation. Rothbard explicitly left that out of Ethics of Liberty. Property rights seem to me to be fundamental to the world view of liberarians. Otherwise, we could have a free and voluntary society in which the anarcho-communists go around putting their foot on the means of production (some of which may be legitimate and others not). I can understand why they like to call us propertarians. I don't mind that term but I'm sure they see it as derogatory.
Other posters have questioned the definition of fraud. While it broadly means deception, it is generally used only for crimes in which the fraudster gains the other's property.
Merriam's Webster has:
1 a: deceit, trickery ; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b: an act of deceiving or misrepresenting : trick
2 a: a person who is not what he or she pretends to be : impostor ; also : one who defrauds : cheat b: one that is not what it seems or is represented to be
Steven Shaw:Is "coercion an actual physical embodiment of a denial of a property right"? Or more simply, is coercion the denial of a property right?
I mean that, If i say for example 'your house now belongs to me', that statement denies your property right, but it is not physically embodied, its a mere act of speech. yet if i went further and occupied your home, i am a criminal, or if i threaten you with violence not to challenge my assertion; then i am criminal. the latter isnt strictly embodied, but if you like, its a credible threat of embodiedness.
i dont know if i've helped or hurt....
nirgrahamUK: its the difference between mere promises and actual rothbardian contracts
Well done. Your next step is to clarify which contexts constitute as a title-transfer with a contract.
What if Bob makes a false claim against his product that might help his business? In what context does that constitute fraud? If Bob lied about his product, in which context does the lie constitute as a contract, not a mere promise, on a title-transfer?
Suppose Bob made a public speech lying about his product. Does that constitute as a contract binding on his product? What if his relatives made a speech lying about his product?
If Bob has written a false product review of his product in a consumer review magazine, does that constitute as a binding contract on a title-transfer?
bob has a store selling jackets.bob's jackets.1)bob tells people that his jackets will get them laid more often.2)bob tells them his jackets are made of real leather (though they arent' they are fake leather).1)in the first case, they recieve jackets indistinguishable with jackets about which claims to increasing sexual power are false, or indeterminate. yet, they are jackets. 2)in the second case, they recieve jackets that are materially different from leather jackets.is there an important difference here, or is it mumbo-jumbo?
nirgrahamUK:is there an important difference here, or is it mumbo-jumbo?
David owns a store which sells ice cream. One day, Eric vandalizes his store by putting grafitti on the store's window. The grafitti marking has words that says "the ice cream contains poison." How much restitution should David get?
Should the restitution include the damage from the defamation markings? Or should cost the restitution equal merely the paint damage on his window? But because defamation is legal, shouldn't David merely obtain restitution for the paint markings?
Jenna is a women who gets irritated of anyone who sees her nude. One day, Kevin trespassed into Jenna's house and took a picture of Jenna without clothing in her bathroom. Assume that blackmail is legal.
Should Jenna obtain restitution merely for Kevin's trespassing? Or should Jenna obtain restitution for Kevin's trespassing in addition to her emotional distress of her blackmail? But because blackmail is legal, shouldn't Jenna merely obtain damages for Kevin's trespassing?
Assume that Jenna cannot not prove any damages caused by the trespassing, except for the blackmail. But blackmail is legal, and the victim should not be compensated. Does Kevin need to even pay any damages at all?
Lena is a girl who gets harrassed by men. Previously, a man named Matt verbally offended Lena by calling her names. This time, another man named Tom slapped her on the face. Because of free speech, Matt does not need to pay restitution for Lena. However, does Tom need to pay restitution for Lena?
Suppose that Lena gets equally offended by the name-calling and the face-slapping. Libertarians usually support restitution for the face-slapping because it physically violates her. But Lena experiences the same emotional intensity for both acts. It seems unfair that Lena cannot obtain restitution for mere name-calling.
John threw a beanie-baby at Christina. Christina became offended. Does Christina have the right to seek restitution? What if John threw a dust-particle at Christina. Does Christina have the right to seek damages?
The dust-particle and beanie-baby are title-transfers, not mere speech acts. But why should Christina be compensated for the emotional damage for the dust-particle and the beanie-baby when she does not have the right to seek compensation for mere speech acts?
Should Bob's consumers seek emotional damage for Bob's lie of "increased sexual powers" because it does not deal with title-transfers? How about "increased power to defend against beanie-babies"?
is it fair to ask a dozen questions of me when i am trying to discource in good faith. and have made a position which presumably you want to critique but fail to directly respond to or connect your questions to. are you making me guess as to which question you pose is scoring which points against what i advocated?
if you would please adopt a policy of responding in good faith i will engage you in kind.
nirgrahamUK: is it fair to ask a dozen questions of me when i am trying to discource in good faith. and have made a position which presumably you want to critique but fail to directly respond to or connect your questions to. are you making me guess as to which question you pose is scoring which points against what i advocated? if you would please adopt a policy of responding in good faith i will engage you in kind.
Sorry if I made you angry. See the last question:
I am arguing that there are certain unresolved grey-areas in fraud and compensation regarding the title-transfer theory of property.
no and possibly (if i only understood what you meant).