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Fraud in Libertarianism

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Jargon Posted: Wed, Oct 19 2011 3:01 PM

I know I already asked this in another (locked) thread and John James answered but I still have some questions.

The original question was: What exactly constitutes fraud in a libertarian society?

John James answered: The appropriation of individual A's property by another individual (B) without A's consent. Essentially 'implicit theft'

But couldn't one argue that say if Ford Motors advertised their car as having a Five star crash rating despite having only a two star crash rating and a person purchased this car, that would be an implicit theft? Since the person, to their knowledge, was paying for a five-star rated vehicle but recieved a two-star rated vehicle, which definitely would have different values.

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Yes.

Also, that thread doesn't seem to be locked...?

 

:EDIT:

Nevermind.  It is, but not in a regular way.  Usually it shows it's locked, but when I originally checked, it didn't.  It has to do with a spammer who messed up some threads.  Should be opened back up again in a while.

 

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cporter replied on Wed, Oct 19 2011 3:22 PM

Yes, false advertising is fraud.

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Jargon replied on Wed, Oct 19 2011 3:46 PM

Thanks. Also, granting that a news organization's product is the content/information that they present to viewers, would lying about certain events (that is, speaking directly contrary to the facts) constitute fraud?

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cporter replied on Wed, Oct 19 2011 3:50 PM

Not necessarily. Fraud is usually defined as deceiving someone for personal gain.

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No, the "not necessarily" answer is correct, but it has nothing to do with the person lying gaining anything by it.  It has to do with the person being lied to losing something by it...i.e. property.

....fraud "involves the appropriation of someone else's property without his consent, and is therefore 'implicit theft.'"

 

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cporter replied on Wed, Oct 19 2011 4:01 PM

I agree, that's a better answer.

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Jargon replied on Wed, Oct 19 2011 4:02 PM

OK. Hopefully last hypothetical here: Is it possible for product advocacy to constitute fraud if the advocate could be proven to be financially connected to the product-seller?

 

Say a financial advisor tells you to buy one of JPM's funds, and JPM is a majority shareholder in that advisory's stocks. The next day that fund crashes (and JPM bet against it like they did a few years ago). Could that be considered fraud? I ask because the advisor is not selling his own products and theoretically doesn't have complete knowledge of the fund's reliability, so it could easily be bad business (incompetence) on the advisors part. i realize that it would be more direct to sue JPM for betting against its own products, but still. I guess is this is the kind of thing that could go either way depending on the evidence...

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Jargon:
I guess is this is the kind of thing that could go either way depending on the evidence...

That's basically it.  It would have to be determined (in a free society, probably in a private court) that you were deprived of property without your concent.  If it were blatant that the financial advisor (who had a fiduciary duty to give you the best possible advice for you and your situation) deprived you of vital information needed to make your investment decision, and therefore sold you something that you didn't think you were buying, you wouldn't have a problem proving your case that you were robbed.

This would be even more evident if you flat out asked him if he benefitted in any way from you buying one investment over another.  Obviously if he lied then, it would be a pretty easy case.  Which is why common sense questions like that are very important.  Plenty of people will mislead you, and take advantage of your assumptions...but I doubt many people would take the risk of lying outright...even in today's society/legal system.

 

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Wheylous replied on Wed, Oct 19 2011 6:41 PM

Can't you lie as much as you want in advertising? There's no contract involved... If you lie in a contract and that leads to lost property, then yes, it's fraud. But false advertising isn't fraud. Just like counterfeiting isn't fraud unless a contract explicitly specifies the validity of the money.

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I actually haven't done a great amount of research or thinking about this, but If you subscribe to a title transfer theory of contracts, then, when you transfer title to property you own (say, 50 lbs of apples) in exchange for a transfer of title to property from someone else (say, 5 grams of gold), then you are owed 5 grams of gold.  If you were given a diluted coin that only contained 1 gram of gold, you are still owed the other 4, as title for 5 grams was transferred to you.  So there is at least a matter of you getting what you paid for....which a private court could rule on.

Obviously there's no real way to predict, but one guess is, in a free society, venders might have something like a free-standing performance bond, valid for each transaction...a contract that basically says "If I do not meet condition X at such and such a date, I hereby transfer as of the date the following sum _____, to ____."  That would make customers feel more confident in patronizing that vendor.  Again, I haven't given it much thought, but there's no telling what the market would come up with...what would make customers feel safe, and what would be profitable for merchants.  That's the amazing part...if left to their own devices, people are nothing if not innovative.

A good start to thinking in these terms would be Rothbard's chapter.... 

"Property Rights and the Theory of Contracts"

 

:EDIT:

Another option might be "consumer insurance", which might be sold by private firms, or even by the merchant himself.  There's a myriad of "if, then" terms that could be set up in that kind of arrangement.  And that's the great part...everyone would be constantly competing to offer the best deal.  And then on top of that, you've got their inherent interest in having a good repuation.  Brand loyalty is so huge, yet people don't even think about it.  They themselves make decisions every single day determined (many times entirely) by their feelings/confidence about a certain institution.  But the minute you start talking about a free market, it all becomes "oh yeah, and what about when the big guy drops his prices and then jacks them up again after all the competitors are gone?"

 

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Wheylous replied on Wed, Oct 19 2011 7:38 PM

I completely agree with you on this, JJ. If there is a contract, then there is a title. And the transfer idea is one I've had as well (as well as probably many others).

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John James answered: The appropriation of individual A's property by another individual (B) without A's consent. Essentially 'implicit theft'

There is a delimma for individual-B born into a world where individual-A has claim to all of the property.

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Autolykos replied on Thu, Oct 20 2011 9:02 AM

A does not have claim to B's body - or anyone else's body, for that matter.

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Even though individual-A has no claim to individual-B's body, individual-B requires property outside of their own body as a means of survival: the means of life.  This is a delimma for individual-B when individual-A has claim to the property which is necessary for the means of living.

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Wheylous replied on Thu, Oct 20 2011 11:03 AM

There is a delimma for individual-B born into a world where individual-A has claim to all of the property.

Only if 99% of the people are retarded and don't prevent this from happening in the free market.

Hey, if an evil Walmart in 100 years owns 100% of the world, then I think it would say a lot about the stupidity of the consumer and the devolution of humanity.

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Autolykos replied on Thu, Oct 20 2011 11:47 AM

GavinPalmer1984:
Even though individual-A has no claim to individual-B's body, individual-B requires property outside of their own body as a means of survival: the means of life.  This is a delimma for individual-B when individual-A has claim to the property which is necessary for the means of living.

This all, of course, presupposes that everyone else in the world considers A's claims of ownership to all be legitimate.

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What is the most fair way to handle the reality of the situation where some people are born into more advantageous environments than others?  I think this is a primary question that people should ask themselves when they consider various economic systems.

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Autolykos replied on Thu, Oct 20 2011 12:28 PM

There is no fair way. Fairness doesn't exist out in the world for us to discover. It's entirely subjective. And the same is true for (dis)advantageousness.

On the other hand, why are you suddenly changing the context?

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John James replied on Thu, Oct 20 2011 12:38 PM

GavinPalmer1984:
What is the most fair way to handle the reality of the situation where some people are born into more advantageous environments than others?  I think this is a primary question that people should ask themselves when they consider various economic systems.

 

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The inheritance of talents is different than the inheritance of property because property can help a talent to be recognized.  A talented problem solver may discover agricultural technologies.  But if that same problem solver had been in a different environment - that person might discover technologies that have never been seen.  The talent of the person is only able to express itself in a way that is inherently limited by the property available.

I recognize that concepts of fairness differ from one person to the next.  So don't let Friedman cause you to stereotype all socialist.  I think it would be most fair to have an environment where all children are able to express their talents so that those talents can be identified and allowed to flourish.  I think a fair system attempts to minimize the property disadvantages that harm the entire society.

Friedman really creates a strawman here by stating that inheritance of talents and property are the same.

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GavinPalmer1984:
I think a fair system attempts to minimize the property disadvantages that harm the entire society.

...by taking stuff from some people, by force, and giving it to other people.

 

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John James:

GavinPalmer1984:
I think a fair system attempts to minimize the property disadvantages that harm the entire society.

...by taking stuff from some people, by force, and giving it to other people.

I never said that.  We really need a new tax system:
 

http://occupywallst.org/forum/how-to/

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gotlucky replied on Thu, Oct 20 2011 1:38 PM

JUSTICE, n. A commodity which is a more or less adulterated condition the State sells to the citizen as a reward for his allegiance, taxes and personal service.

The Devil's Dictionary

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GavinPalmer1984:
I think a fair system attempts to minimize the property disadvantages that harm the entire society.
John James:
...by taking stuff from some people, by force, and giving it to other people.
GavinPalmer1984:
I never said that.  We really need a new tax system

 

Please tell me what a "tax" is if not exactly what I described.

 

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Autolykos replied on Thu, Oct 20 2011 2:09 PM

GavinPalmer1984:
The inheritance of talents is different than the inheritance of property because property can help a talent to be recognized.  A talented problem solver may discover agricultural technologies.  But if that same problem solver had been in a different environment - that person might discover technologies that have never been seen.  The talent of the person is only able to express itself in a way that is inherently limited by the property available.

Look into the ludic fallacy and the fallacy of the single cause. The point is, you have no idea what the probability is that this hypothetical talented problem-solver "might discover technologies that have never been seen" if he had been in a different environment. You can't (logically speaking) take for granted that there must exist some environment from which the outcome will result.

Furthermore, it seems like you're ignoring the dynamic nature of property and markets. The distribution of property in the present does not guarantee the same distribution of property in the future.

GavinPalmer1984:
I recognize that concepts of fairness differ from one person to the next.  So don't let Friedman cause you to stereotype all socialist.  I think it would be most fair to have an environment where all children are able to express their talents so that those talents can be identified and allowed to flourish.  I think a fair system attempts to minimize the property disadvantages that harm the entire society. [Emphasis added.]

I have no idea what the emphasized part above is supposed to mean. So all I can say for now is... that's nice? Thanks for sharing?

Actually hang on a minute. You mention "the property disadvantages that harm the entire society". Can you explain just what harm this is? I think I see a subtle example of the nirvana fallacy in action here.

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John James:

Please tell me what a "tax" is if not exactly what I described.

Ideally - a tax is collections used to pay for the cost of government and its purpose.  And ideally - we have consented to that government and its purposes.

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Autolykos replied on Thu, Oct 20 2011 2:19 PM

If you want to assume that for "ideal" purposes, go right ahead. Just don't expect anyone (let alone everyone) else to necessarily go along with it.

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GavinPalmer1984:
Ideally - a tax is collections used to pay for the cost of government and its purpose.  And ideally - we have consented to that government and its purposes.

So basically you're saying people should be able to opt out of paying for a government (or being subject to its force) if they do not consent to it, yes?

 

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John James:

GavinPalmer1984:
Ideally - a tax is collections used to pay for the cost of government and its purpose.  And ideally - we have consented to that government and its purposes.

So basically you're saying people should be able to opt out of paying for a government (or being subject to its force) if they do not consent to it, yes?

Ideally - yes.  And ideally - governments are self-organizing unions of intelligent and respectful individuals.  But we all know this is not an ideal world.  So I do attempt to propose ideas that move in the general direction of my ideals.

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GavinPalmer1984:
But we all know this is not an ideal world.  So I do attempt to propose ideas that move in the general direction of my ideals.

...like taking stuff from some people, by force, and giving it to other people.

 

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MaikU replied on Thu, Oct 20 2011 2:47 PM

John James:

GavinPalmer1984:
But we all know this is not an ideal world.  So I do attempt to propose ideas that move in the general direction of my ideals.

...like taking stuff from some people, by force, and giving it to other people.

 

 

 

lol'd, but you're right.

"Dude... Roderick Long is the most anarchisty anarchist that has ever anarchisted!" - Evilsceptic

(english is not my native language, sorry for grammar.)

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You are right John.

But consider this claim... capitalism requires government to protect property rights.  And there will be people who do not agree with capitalism - and therefore they will not be consenting to that government.

It is a delimma that can't be ignored... I think it is the essential delimma which requires intelligent compromise... the tax system I propose being a form of compromise where corruption is reduced "by design".

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Autolykos replied on Thu, Oct 20 2011 2:53 PM

Explain how capitalism requires government to protect property rights. How are you defining "government"? Do you distinguish it from "law" and "order"?

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GavinPalmer1984:
You are right John.

I know.  I'm just sorry we had to go on that 6-post merry-go-round for you to see that.

 

But consider this claim... capitalism requires government to protect property rights.

I considered that long before I ever even joined this forum.  It's a false claim.

 

And there will be people who do not agree with capitalism

There are also people who "do not agree" with gravity.  That doesn't mean they aren't proven to be foolish.  Capitalism (and gravity) are not opinions.

 

It is a delimma that can't be ignored...

No it is a false dilemma which has been created, and which you are perpetuating.

 

the tax system I propose being a form of compromise where corruption is reduced "by design".

Reduce corruption through coercion.  Great prescription.  Never heard that one before.

 

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Government is management - whether it is the management of my fingers as they type or the management of relationships with other people.

Laws are a policy.  Order, predictability, and security are among the intentions of people who govern and manage.

Capitalists stake claim to land.  An individual capitalist is susceptible to other individuals who may or may not agree with the property claims or might not be aware of them.  So the capitalist is forced to manage/govern relationships with others.  If the capitalist fails to engage in relationships with other people - then the property is not protected.

The United States government is the evolution of a creation based in capitalist ideology.  It intrinsically ignores the consent of people yet to be born because the unborn had no say in its initial creation.  The government was created with the intent of allowing future generations to make changes.  But it was already a capitalist government based upon unfair concepts of inheritance where property owners legitimately have more power than those people without property.

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John James:

Reduce corruption through coercion.  Great prescription.  Never heard that one before.

How do you combat coercion without coercion?

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Wheylous replied on Thu, Oct 20 2011 3:39 PM

What is the most fair way to handle the reality of the situation where some people are born into more advantageous environments than others

Your solution: take guns and steal property.

My solution: voluntary giving.

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Wheylous:

What is the most fair way to handle the reality of the situation where some people are born into more advantageous environments than others

Your solution: take guns and steal property.

My solution: voluntary giving.

Your solution: undo the federal government... unrealistic.

My solution: use the system in place and reduce corruption through intelligent designs... more realistic.

What will actually happen: nothing? - reality?

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Autolykos replied on Thu, Oct 20 2011 3:47 PM

Shifting the goalposts again, I see. First you started out with a moral argument, now you're trying a pragmatic argument. Make up your mind.

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