Con Artists and Libertarian Ethics

I was looking over the list of "confidence tricks" on Wikipedia. According to Rothbard, fraud is a crime against property because it involves a violation of contract. If I promise to give you a cow for $20, you give me the $20, and I don't give you the cow, that's fraud. (The Ethics of Liberty, Chapter 12)

Well, some thoughts about some alleged "confidence tricks." Allow me to put on my Libertarian hat, for a moment, and launch into a wave of sarcasm:

 Get-rich-quick schemes: If I strongly suggest to a person that buying my pamphlets or videos will probably help make them rich, and I offer to sell them to them, I have not violated their property rights. I promised the pamphlets or videos, they gave me the money, and I took them. Their money, I mean. There is risk in every business opportunity. Get-rich-quick schemes are no different. It is actually possible to get rich with some of the schemes out there, like buying and selling real estate, or doing internet advertising.

Romance tricks: This is a voluntary transaction. People make foolish mistakes all the time. If a person falls in love with me and wants to give me tons of money, I don't see how that ought to be a crime. What if someone is legitimately in love with me, should I be afraid to take money from them, for sake of facing legal penalties later? This basically states that romantic couples cannot give money to eachother.

Gold brick scams: When they say "gold brick", what do they mean? A lead-brick coated with gold is just as much a "gold brick" as about as much gold as a 10k gold ring. Few items referred to as "gold" are actually 100% pure.

Coin collecting scam: There's no objective definition of "rare" or "valuable". If I say coins I'm selling are rare and valuable from my subjective point-of-view, no one can claim I'm lying.

Extortion or false-injury tricks: Slander and libel are not violations of property rights. If someone is not forced into having an affair, I don't see how charging them a fee for not disclosing the information is a violation of property rights. What should the opposite be? Should GOVERNNMENT control what I can and cannot say?

etc... The list goes on. Basically, I can't see how most confidence tricks ought to be considered fraud. They don't involve violations of contracts or false promises, hence they are neither aggressive nor coercive.

If a person outright lies to gain a contract, that is fraud. But many forms of confidence tricks do not involve directly lying, but simply being subtly misleading.

As one blogger on Mises.org writes:

Identity theft is usually a form of fraud. But the concept of fraud, like that of IP (as well as "labor" and "creation" etc.) is bandied about imprecisely. To my mind, "fraud" is a type of crime not if it's merely "being dishonest," but if it's one way to gain unconsented-to use of another's property.

The fact that the government goes after conmen is tyrannical.

 In general, the ultimate proof that confidence tricks are not violation of property rights is in the name: "confidence trick." You trick someone into gaining a false sense of confidence in you. Why should I be responsible for somebody else's stupidity, because they were naive enough to have false confidence in a stranger? As said before, there are risks in every economic activity. People should not be protected from risks -- whether they be as small as losing $20 or as large as having your genitalia sliced off by an armed militia.

Surely, there's a free market solution? In Anarchy, if you find out you're defrauded, it's true arbitration committees will probably not do anything, because there's no actual violation of contract, so there's no basis for civil suit.

However, if you feel you've truly been wronged by a conman in anarchy you always have the right to engage in vigilante justice. The government doesn't allow you that liberty.

Sure, confidence tricks -- just like subsistence wages and child neglect -- they're immoral. But should they be illegal? No.

The behavior could be discouraged by reporting the behavior to some sort of reputation rating industry - like a souped-up version of e-bay. Most of the scams you mentioned don't violate current US law, and even in the cases that are, there is little the government can do aside from occasionally punishing the sleaze.

An interesting example of how private institutions deal with these scams are massive multiplayer online games. Some operators choose not to punish the activity at all, even in the case of outright theft and fraud, despite that just about every currency is actively traded online for real cash.Others go after it aggressively, banning scammers from the service after an investigation, and making common tricks impossible within the framework of the game system. They have a strong incentive to crack down on scammers, because scammed customers become unhappy and quit. Governments have no such direct incentives.

 As more transactions become electronic, scams become easier to trace. 

 One might also make the argument that a person's reputation is part of their personal property. If someone libels another person, perhaps the aggrieved party would be entitled to sue for damages.

>>>Surely, there's a free market solution? In Anarchy, if you find out you're defrauded, it's true arbitration committees will probably not do anything, because there's no actual violation of contract, so there's no basis for civil suit.

However, if you feel you've truly been wronged by a conman in anarchy you always have the right to engage in vigilante justice. The government doesn't allow you that liberty.<<<

 i think its worth interjecting here that if you engage in vigilante justice, the next meeting of an arbitration committee would likely find against you ! (so you have to calculate with that in mind)

>>>  One might also make the argument that a person's reputation is part of their personal property. If someone libels another person, perhaps the aggrieved party would be entitled to sue for damages.<<<

 i dont think a person 'owns' their reputation. where you suggesting it as a mere possibility or do you yourself think people own their reputations?. i ask as, we could debate it if you choose

 I don't think I really know enough to take a firm stand on the issue. I'm just pointing it out as a potential argument. On the other hand, libel laws can be used to squelch valuable free speech. They're probably unnecessary in a free society, but the idea of reputation as intellectual property is an interesting one. I should probably read more Kinsella!

J.C. Hewitt:

The behavior could be discouraged by reporting the behavior to some sort of reputation rating industry - like a souped-up version of e-bay.

Would reputation industries be staffed by completely unbiased individuals?

For instance, for them to be effective, we would have to assume that all religions, ideologies, political parties, bigotries, and cultural biases are totally eliminated.

Imagine having such a "reputation agency" in an Islamic country. Even in a Christian country like America, it wouldn't work.

Also, given the unpredictability of human behavior, can you really actually assume that such agencies would be widespread? Isn't it entirely possible that conmen would run rampant?

J.C. Hewitt:

Most of the scams you mentioned don't violate current US law, and even in the cases that are, there is little the government can do aside from occasionally punishing the sleaze.

All confidence tricks are against the law. Often, they're subtle, so they can skirt the law, but the government actively investigates fraud, especially online fraud, whenever a person reports a case of it.

J.C. Hewitt:

An interesting example of how private institutions deal with these scams are massive multiplayer online games. Some operators choose not to punish the activity at all, even in the case of outright theft and fraud, despite that just about every currency is actively traded online for real cash.Others go after it aggressively, banning scammers from the service after an investigation, and making common tricks impossible within the framework of the game system. They have a strong incentive to crack down on scammers, because scammed customers become unhappy and quit. Governments have no such direct incentives.

 As more transactions become electronic, scams become easier to trace.

 One might also make the argument that a person's reputation is part of their personal property. If someone libels another person, perhaps the aggrieved party would be entitled to sue for damages.

I think how MMOs work is a pretty poor analogy for the real world, given the fact that MMOs have a central authority which sets rules and can ban users (effectively a government) and users themselves can't engage in real violence against eachother. Also, technology has made theft easier to initiate just as it's made it easier to defend against. That's the nature of how technology works: it makes it easier to do good or evil. It has no regard for the ethnical nature of the act. Technology is simply power.

nirgrahamUK:

>>>Surely, there's a free market solution? In Anarchy, if you find out you're defrauded, it's true arbitration committees will probably not do anything, because there's no actual violation of contract, so there's no basis for civil suit.

However, if you feel you've truly been wronged by a conman in anarchy you always have the right to engage in vigilante justice. The government doesn't allow you that liberty.<<<

 i think its worth interjecting here that if you engage in vigilante justice, the next meeting of an arbitration committee would likely find against you ! (so you have to calculate with that in mind)

And that arbitration committee would be wrong, in which case I would enact vigilante justice against them and my friends, and neighbors, would rise up and aid me.

That's how Anarchy works. If a court screws me over and I'm right, and I know I'm right, as an individual, it's within my right to use force to defend my property. Right?

Or do you believe that such committees would have infallible justice that could never be wrong?

J.C. Hewitt:

 I don't think I really know enough to take a firm stand on the issue. I'm just pointing it out as a potential argument. On the other hand, libel laws can be used to squelch valuable free speech. They're probably unnecessary in a free society, but the idea of reputation as intellectual property is an interesting one. I should probably read more Kinsella!

I think it's rather important to take some kind of stand. I mean, we're not talking about something obscure like Walter Block's slave-contracts... This is about conmen.

 

Nathyn:

Would reputation industries be staffed by completely unbiased individuals?

For instance, for them to be effective, we would have to assume that all religions, ideologies, political parties, bigotries, and cultural biases are totally eliminated.

Imagine having such a "reputation agency" in an Islamic country. Even in a Christian country like America, it wouldn't work.

Also, given the unpredictability of human behavior, can you really actually assume that such agencies would be widespread? Isn't it entirely possible that conmen would run rampant?

 Why should they be more common than they are now? Private individuals and companies will react to being defrauded. Dispute Resolution Organizations as outlined by articles like this one would have strong market incentives to strive for impartiality. Just saying "it wouldn't work" isn't a very good argument, particularly when comparing it to the terminally broken US criminal justice system.

All confidence tricks are against the law. Often, they're subtle, so they can skirt the law, but the government actively investigates fraud, especially online fraud, whenever a person reports a case of it.

Faddish "get-rich-quick" books are illegal? Should the guy who wrote "Rich Dad, Poor Dad" or whatever be rotting in a cell? What about homeopathic quacks? Priests? No, "all" confidence tricks are not against the law. As for the government actively and efficiently prosecuting internet fraudsters... perhaps you watch too many movies.

I think how MMOs work is a pretty poor analogy for the real world, given the fact that MMOs have a central authority which sets rules and can ban users (effectively a government) and users themselves can't engage in real violence against eachother.

 They're an example of how private institutions can perform the same functions as a government, but more efficiently and without resorting to coercion.

Also, technology has made theft easier to initiate just as it's made it easier to defend against. That's the nature of how technology works: it makes it easier to do good or evil. It has no regard for the ethnical nature of the act. Technology is simply power.

Certain kinds of fraud become obsolete, while new ones arise, as technology advances. The free market is simply better at adapting to changing circumstances. 

And that arbitration committee would be wrong, in which case I would enact vigilante justice against them and my friends, and neighbors, would rise up and aid me.

That's how Anarchy works. If a court screws me over and I'm right, and I know I'm right, as an individual, it's within my right to use force to defend my property. Right?

Or do you believe that such committees would have infallible justice that could never be wrong?

...And? Statist courts always make the right decisions? Why would you resort to violence when you might perhaps appeal to a competing DRO to investigate your case? That's really quite an absurd hypothetical. Free market anarchism doesn't purport to be utopian.

I think it's rather important to take some kind of stand. I mean, we're not talking about something obscure like Walter Block's slave-contracts... This is about conmen.

I've already explained my views. Libel laws are hardly enforced at all in the US, particularly on the internet, and yet society has managed to keep itself intact. I freely admitted to feeling ambigous about a particular issue; I'm not obligated to take a stand on it merely to please you.

And that arbitration committee would be wrong, in which case I would enact vigilante justice against them and my friends, and neighbors, would rise up and aid me.

That's how Anarchy works. If a court screws me over and I'm right, and I know I'm right, as an individual, it's within my right to use force to defend my property. Right?

Or do you believe that such committees would have infallible justice that could never be wrong?

Of course the arbitration committee would be wrong, if you felt your position wasn't the strongest case you wouldn't go through all the time and expense to seek (or defend against) arbitration in the first place. Most likely you would just come to an agreement that satisfied both parties and get on with your life.

That being said, the society would soon run out of impartial arbiters because 50% of the people would have a valid claim to engage in violence against them because they didn't side with their 'stronger' case in your world view. Nobody would chose to fill this job unless they had an army to protect them and then you just created 'government' into existence by enacting 'vigilante justice' instead of resolving your problems like civilized people.

See what I was saying about purposefully misrepresenting an issue to show how anarchy/libertarianism is morally corrupt?

Now if the arbiter made an honest mistake you could appeal and if they willfully chose to disregard their duties then you would have a legal case against them. That's in the arbitration contract both parties and the arbitration agency agreed to prior to hearing the case right?

You've obviously never had a conversation with a real, in the flesh lawyer or, in my case, a retired city prosecutor. You want to talk about having all your ducks in a row... 

Nathyn:

Would reputation industries be staffed by completely unbiased individuals?

For instance, for them to be effective, we would have to assume that all religions, ideologies, political parties, bigotries, and cultural biases are totally eliminated.

Imagine having such a "reputation agency" in an Islamic country. Even in a Christian country like America, it wouldn't work.

If they wanted to stay in business they would be as unbiased as possible.  Would there be companies that were biased.  Sure they would.  Would word get out that they were biased.  Sure it would.  Would they go out of business.  Sure they would.  A free market is the most democratic institution.  Everyone votes with their dollars.  If people are being unfair, biased, not keeping the best interests of their consumers in mind, then they go out of business.  How is this bad?

Nathyn:

All confidence tricks are against the law. Often, they're subtle, so they can skirt the law, but the government actively investigates fraud, especially online fraud, whenever a person reports a case of it.

Most con tricks work because people try to get something for nothing.  There are only two ways to get true wealth.  One is captial accumulation, otherwise known as saving.  The other is producing a service or good, otherwise known as running a business.  Personally I have no sympathy for someone who falls for a confidence scam.  People are responsible for due dilligence.  They have nobody to blame but themselves if they get taken.

Nathyn:

I think how MMOs work is a pretty poor analogy for the real world, given the fact that MMOs have a central authority which sets rules and can ban users (effectively a government) and users themselves can't engage in real violence against eachother. Also, technology has made theft easier to initiate just as it's made it easier to defend against. That's the nature of how technology works: it makes it easier to do good or evil. It has no regard for the ethnical nature of the act. Technology is simply power.

Why?  Participation in an MMO is voluntary.  You don't have to play.  If they have rules that you don't agree with, don't reward them by parting with your money.  The difference between the MMO and a government is that you can choose not to become a member.  Try doing that with a government.  Technology is a tool.  They way the tool is used determined if that use is for good or for evil.  If it's used for the accumulation of power, it's evil.  If it's used to reduce the concentration of power, it's good.

Nathyn:

>>>Surely, there's a free market solution? In Anarchy, if you find out you're defrauded, it's true arbitration committees will probably not do anything, because there's no actual violation of contract, so there's no basis for civil suit.

However, if you feel you've truly been wronged by a conman in anarchy you always have the right to engage in vigilante justice. The government doesn't allow you that liberty.<<<

 i think its worth interjecting here that if you engage in vigilante justice, the next meeting of an arbitration committee would likely find against you ! (so you have to calculate with that in mind)

I think in modern times we tend to forget that people used to believe in the notion that their word was their bond.  In fact, in a free market things can't work otherwise.  Between two people in a partnership, there has to be trust in the partners' words and deeds, otherwise the partnership dissolves.  Again all of this is predicated on a voluntary agreement.  Prudence would suggest that as a part of crafting that agreement, reasons and methods of dissolution would be included.  That would probably be what an arbitration panel would look at when deciding on the validity of a charge of fraud.

People seem to forget that if you act in a rational rather than an emotional way, solutions to most any problems can be found.  That also supposes that people have self-control and are able to make rational decisions, something I'm not sure exists in most "advanced" contries.