In a capitalist economy, it is known that the most productive owner of a capital good is the owner willing to big the highest to own that good. (His productivity with the good and his ability to protect capital are both expressed by his willingness to bid high.) If the good was previously privately-owned, the previous owner is rewarded for his sale of the good and production of it by receiving payment. However, when it comes to a sale of public property into private ownership, no previous owner has a claim to having produced the good. The question then is who deserves the reward.
There are several individuals and groups of individuals who will want to bid for the good. All therefore express a desire and an aptitude proportional to their bid. The old Roman road conflict can resolve the problem. Two chariots run into each other on a one-lane road, and one must yield to the other. The problem is resolved by bidding for the right to pass first. The high bidder pays the other to yield to him. The yielder is compensated for his inconvenience.
How would this solution be adapted to privatization? A third party auctionneer must take anonymous bids from individuals and groups of individuals for the public property, and the bids must be deposited before the winner is revealed to show that the bidders are willing to assume the risk of owning the property (this is to eliminate free riders). Once the auction is over the winner is revealed and the losing bids are refunded along with a proportional share of the winning bid. The winner becomes the owner of the property.
Suppose, for example, that the Postal Service goes on sale. The bids are 6 billion from Federal Express, 4 billion from Deutsche Post and 2 billion from a joint-stock company of Postal Service employees and other investors. Federal Express gets the Postal Service, DP gets its 4 billion back plus 4 billion from Federal Express, and the employees and investors get 2 billion back and 2 billion from Federal Express.
The fallacies of intellectual communism, a compilation - On the nature of power
Stranger:How would this solution be adapted to privatization? A third party auctionneer must take anonymous bids from individuals and groups of individuals for the public property, and the bids must be deposited before the winner is revealed to show that the bidders are willing to assume the risk of owning the property (this is to eliminate free riders). Once the auction is over the winner is revealed and the losing bids are refunded along with a proportional share of the winning bid. The winner becomes the owner of the property.
This might work - if there's no legitimate owner before. But you have argued previously that the government is a legitimate owner. Others have argued that the workers are entitled to the property. Others think the taxpayers are. Don't we need to answer this question first?
JAlanKatz: This might work - if there's no legitimate owner before. But you have argued previously that the government is a legitimate owner. Others have argued that the workers are entitled to the property. Others think the taxpayers are. Don't we need to answer this question first?
No, I have argued that the government is an illegitimate owner, but that is irrelevant to this subject.
I like the idea behind this, but I have one question - what about those who are wealthy due to ill-gotten gains (e.g. politicians)? Should they be allowed to bid as well? I don't see why they should have much of a role in any of this.
Freedom of markets is positively correlated with the degree of evolution in any society...
If there is no previous owner, it should be homesteaded, just like any other resource with no owner; but if you're talking about a state-owned company like the postal service, the people who work there have effectively homesteaded it already, so they already are the legitimate owners.
Paul: If there is no previous owner, it should be homesteaded, just like any other resource with no owner; but if you're talking about a state-owned company like the postal service, the people who work there have effectively homesteaded it already, so they already are the legitimate owners.
Things like parks and other property are easy. I find difficulty with such things as waste disposal systems, electric transmission systems, water treatment and distribution systems, roads and highways. As much as I hate to think this I do believe the only way to resolve this issue is to allow the State to sell "ownership" of these things to whoever would buy them. Some of you are going to say "that can't happen because the State doesn't legitimately own anything" but how else do you do it? How do you homestead water lines and sewage pipes? How do you homestead roads since you aren't going to be the only one using them?
"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds. " -- Samuel Adams.
I don't see the problem with water and sewage pipes - you can perhaps argue over what part of the pipe is owned by the homeowner and what part by the water supply/sewage disposal company, but there's not much room there (we're talking a few feet of pipe, not the majority of the network) - the company itself has already been homesteaded by its employees. Roads may be a bit different, since there's not usually a "road company" to consider; but probably initial ownership should go to those who maintain them at the moment - the guys who lay the asphalt, paint the lines, etc., on any given section of road.
I wouldn't sell the USPS as a whole entity.
You should abolish the Federal government so that federal holdings default to local(or State) control, that allows for decentralized privization. Of course, it would be impossible for all levels and types of government in every part of America to collapse at once. Privization will depend on how the market comes to replace government.
I am completely against the idea that USPS employees own the USPS. Government employees are not productive members of society, I see no reason why we should further reward Government Employees and further exploit tax payers, which is what gifting the USPS to the mailman would do.
Of course, giving the USPS to the employees is not even a solution. The USPS can not operate without tax subsidizes, so it would instantly close down. Making employees the owners is only going result in them getting a payment from the liquidation of its assets. Something they certainly do not deserve, as they have already been compmensated for their labor. The employees did nothing more than sell their labor, the people who bought that labor are the real owners.
Following this employee ownership logic, the Army's resources should be handed out to Pentagon employees. Nonsense.
Peace
Paul: I don't see the problem with water and sewage pipes . . . the company itself has already been homesteaded by its employees.
I don't see the problem with water and sewage pipes . . . the company itself has already been homesteaded by its employees.
False. Local municiples should be incorporated and all customers should be shareholders. They were the ones that built the network after all.
This is the most pratical and the most just solution.
Neighborhood roads could be owned by the neighbor hood collectively as a corporation, or each home could own the road in front of their house with an easement. Depends on what the homeowners want.
Highways should probably be sold to the highest bidder. City roads would depend on how they came into existance. Some would probably belong to however built the road, likely the landlord of a shopping center.
It seems common for anarchists' attitudes toward State property to be influenced by modern conservativism's stigma against state welfare. Modern Conservatism looks down on anyone who extracts wealth from the State.
Because the State is incapable of owning property does not mean State property is unowned. All the money that the State holds is actually still owned by the people who it was taken from. It is not aggression for a tax payer to demand the return of his wealth from the State, even if it is no longer liquid.
If a thief takes your money and uses it to buy a car, you can't get your money back but you can take the car.
Tax payers can't take back tax money that was spent on wages for government employees, but they do own anything created through that labor.
JonBostwick: The USPS can not operate without tax subsidizes, so it would instantly close down.
The USPS can not operate without tax subsidizes, so it would instantly close down.
Actually, that's very much wrong. The USPS is the ONLY part of the federal government that isn't supported by the taxpayers. For the past decade the USPS has run a surplus in revenue. It is the only agency that is completely self-funded. Now, that might not be so true in the future. The Postal Accountability and Enhancement Act of 2006 (P.L.109-435) really kind of screwed the USPS. Before the law they were looking at a $1 billion surplus but after the law was passed they saw a loss of something like $5.4 billion. We can't blame this one on the USPS though. Congress is the critter that screwed that. Congress also cut into their business by raising the rates causing people to change their mailing habits. That made business fall short of what it was in 2006. If it hadn't been for the rate change and the new law the USPS would have seen multi-billion dollar surpluses. If it weren't for Congress passing P.L.109-435 the USPS wouldn't have had an additional $6.8 billion expense thrust upon them. This is of course not a defense of the USPS or its monopoly but I am merely pointing out the fallacy of your statement.
JonBostwick: Government employees are not productive members of society,
Government employees are not productive members of society,
Which government employees? Only people who are doing something that would not be done at all under freedom are entirely "useless eaters"; many government employees - teachers, police, postal workers - only work for the government because the government has essentially monopolized that particular area. Rothbard worked for the state!
JonBostwick: The employees did nothing more than sell their labor, the people who bought that labor are the real owners.
The employees did nothing more than sell their labor, the people who bought that labor are the real owners.
Who "bought that labor"? If you mean whoever actually paid them, that's the government, in which case you're saying the government is the legitimate owner and you have no complaint with statism. If you mean the customers, that "logic" can be applied to all private businesses and you're supporting communism
JonBostwick: Following this employee ownership logic, the Army's resources should be handed out to Pentagon employees. Nonsense.
No, not to Pentagon employees - they haven't done any "homesteading" of those resources - they're just an arm of the state apparatus controlling them now; the people who actually homestead them - by actually maintaining them, etc.
Paul:Who "bought that labor"? If you mean whoever actually paid them, that's the government, in which case you're saying the government is the legitimate owner and you have no complaint with statism
JonBostwick: Because the State is incapable of owning property does not mean State property is unowned. All the money that the State holds is actually still owned by the people who it was taken from. It is not aggression for a tax payer to demand the return of his wealth from the State, even if it is no longer liquid. If a thief takes your money and uses it to buy a car, you can't get your money back but you can take the car. Tax payers can't take back tax money that was spent on wages for government employees, but they do own anything created through that labor.
Paul:If you mean the customers, that "logic" can be applied to all private businesses and you're supporting communism
Actually, your "the workers own the means of production," which is derived from the labor theory of value, is the closest thing to Marxism I've seen so far on this forum. I wasn't going to point it out until you demonstrated a lack of understanding of what really is "communism."
Paul: JonBostwick: Following this employee ownership logic, the Army's resources should be handed out to Pentagon employees. Nonsense. No, not to Pentagon employees - they haven't done any "homesteading" of those resources - they're just an arm of the state apparatus controlling them now; the people who actually homestead them - by actually maintaining them, etc.
Now being anti-manager is communism. Maintaining an item is not any more of a legitimate labor than is managing their use. Managers are not "exploiters", they are workers.
kingmonkey:. This is of course not a defense of the USPS or its monopoly but I am merely pointing out the fallacy of your statement.
I still stand by the statement that the USPS would instantly collapse.
JonBostwick: Paul:If you mean the customers, that "logic" can be applied to all private businesses and you're supporting communism Actually, your "the workers own the means of production," which is derived from the labor theory of value, is the closest thing to Marxism I've seen so far on this forum. I wasn't going to point it out until you demonstrated a lack of understanding of what really is "communism."
It's not a "workers own the means of production" thing - I wouldn't expect the ownership to stay there very long, and it's exactly the same argument Rothbard made.
JonBostwick: I still stand by the statement that the USPS would instantly collapse.
I don't think it would instantly collapse. There is nothing to suggest that it would since it does not rely on taxpayer dollars to fund it like other government entities. If anything is possible it is more than likely that it would thrive because it is now freed of government controls and regulations that place limits on its business activities. If it were not for the change in law the USPS would have seen a several billion dollar surplus. I do think, however, that over time as more competitors set up you'd see more pressure being placed on USPS. But it would have one competitive edge in that its infrastructure is already built.
I believe in time regular mail service will disappear anyway. The only mail I get is junk mail and letters from creditors. All of my bills are paid online, I correspond through email, I send packages through FedEx and if I need to get a copy of something to someone I can either fax it or scan it and email it to them. Paper letters will eventually die and go the way of telegraphs and we'd be left with an organization that focuses on delivering packages. Which is much better anyway because you don't need all of that infrastructure so you can reduce your overhead cost.
I think what this debate shows is that it is really not known who the legitimate owner of public property is, whether it is employees, customers, taxpayers, or whoever else. And the big concern is not so much finding who is the biggest victim, but who is most likely to protect the capital goods. After all, we are interested in promoting economic welfare and not settling disputes of government agents. What good is giving the Postal Service to its employees if it shuts down from bankruptcy the next day? It would be bought out by a more solid company and the employees would get a small compensation, which is exactly the same result as the auction system.
Jon Irenicus: I like the idea behind this, but I have one question - what about those who are wealthy due to ill-gotten gains (e.g. politicians)? Should they be allowed to bid as well? I don't see why they should have much of a role in any of this.
It is irrelevant how they have gotten their wealth. What matters is that they are accountable to it. If they risk their wealth on a bid, it is because they believe themselves to be competent to run the business. If they are not, they will lose their wealth.
JonBostwick: I wouldn't sell the USPS as a whole entity.
Such a decision implies your ownership of the USPS. If the USPS is more valuable as multiple companies, its new owners would break it up and spin off the divisions as independent companies.
But I am asking the moral question of why they should be entitled to use money they stole, in the first place?
So far I agree with JonBostwick's propositions.
-Jon
Jon Irenicus: But I am asking the moral question of why they should be entitled to use money they stole, in the first place? So far I agree with JonBostwick's propositions. -Jon
I am asking the material question of the desirability and feasibility of asking this moral question.
Well why assume that the consequences would be bad? There are plenty of individuals out there whose wealth was justly acquired and who no doubt possess superior judgement to politicians divorced from the market. What is the point of allowing politicians to further squander stolen wealth?
Jon Irenicus: Well why assume that the consequences would be bad? There are plenty of individuals out there whose wealth was justly acquired and who no doubt possess superior judgement to politicians divorced from the market. What is the point of allowing politicians to further squander stolen wealth? -Jon
How are you going to stop them?
Confiscating "their" wealth would be one way of doing so, as nothing they took by force would be theirs under a market order. At which point the question remains how to return this stolen wealth (and this is not 'socialism' as some might claim - it is the undoing thereof.) I realize you're approaching this from an efficiency vantage point, but I really don't see how excluding leeches from acquiring these assets will result in any losses. They'll retain any privately earned wealth they made, which if they are so brilliant they may put to use.
Jon Irenicus:Confiscating "their" wealth would be one way of doing so, as nothing they took by force would be theirs under a market order.
My question was how are you going to do that?
Hmm is your point that that could not be done without the State (and its ruling class's consent), making it a poor option? I suppose I can see how the idea would work, with the money going to the other bidders (if I understood it correctly) and thus leaving the hands of the purchaser - at which point if they're efficient in managing the acquired holdings, they will be providing a service to their consumers, and if not others more efficient in the running of the firm will acquire it. Is this the underlying rationale behind the idea?
Stranger: What good is giving the Postal Service to its employees if it shuts down from bankruptcy the next day? It would be bought out by a more solid company and the employees would get a small compensation, which is exactly the same result as the auction system
What good is giving the Postal Service to its employees if it shuts down from bankruptcy the next day? It would be bought out by a more solid company and the employees would get a small compensation, which is exactly the same result as the auction system
Exactly. So the only reason to give it to employees is if you feel they have a just claim of ownership. However, they do not.
Stranger: JonBostwick: I wouldn't sell the USPS as a whole entity. Such a decision implies your ownership of the USPS.
Such a decision implies your ownership of the USPS.
So? If the USPS exists because of capital that rightfully belongs to taxpayers, then the USPS belongs to taxpayers.
JonBostwick: So? If the USPS exists because of capital that rightfully belongs to taxpayers, then the USPS belongs to taxpayers.
Taxpayers are not anybody in particular. You do not get to speak for them as a whole class. Maybe you think the Postal Service must be broken up, and maybe another taxpayer thinks it's better to keep it in one piece. Which one of you is right?
Jon Irenicus:Hmm is your point that that could not be done without the State (and its ruling class's consent), making it a poor option?
You have made a completely independent claim to the process of privatization, which is that the property of politicians and their collaborators should be confiscated because it was unjustly acquired. In the first place, this implies a reversal of the power relationship between you and politicians. You are now the expropriator and they the subjects. In the second place, this requires a significant expenditure of resources. It is likely that the politicians will not simply submit silently. They are well organized and will defend their property violently. This means that it will be extremely costly to confiscate their property. Who will pay this price?
Stranger: JonBostwick: So? If the USPS exists because of capital that rightfully belongs to taxpayers, then the USPS belongs to taxpayers. Taxpayers are not anybody in particular. You do not get to speak for them as a whole class. Maybe you think the Postal Service must be broken up, and maybe another taxpayer thinks it's better to keep it in one piece. Which one of you is right?
Incorporate it. I sell my share, he can keeps his. Easy enough.
JonBostwick: Incorporate it. I sell my share, he can keeps his. Easy enough.
That's exactly the point I want to make. However, even incorporation has its pitfalls. Before you can sell share, you need to draw up an administration system for the company through which shareholders get to exercise control. That also implies ownership of the company.
There doesn't need to be any rules in place for shares to change hands. As shares consolidate into fewer hands it would either be into the hands of someone who wanted to administer or liquidate the USPS.
But pragmatic concerns of how to institutionalize ownership would be determined by individual market actors. Libertarian philosophy merely needs to determine who has the most just claim on the property, the market can enforce it.
JonBostwick:There doesn't need to be any rules in place for shares to change hands.
There needs to be for shares to be worth anything. If the shareholders don't actually control the directors, the shares will be worthless.
Stranger: JonBostwick:There doesn't need to be any rules in place for shares to change hands. There needs to be for shares to be worth anything. If the shareholders don't actually control the directors, the shares will be worthless.
As shares consolidate it becomes much simpler to enforce control over the directors. If it was most practical to let the USPS administer itself until the shareholders can achieve incorporation I see no reason to second guess that.
JonBostwick: I am completely against the idea that USPS employees own the USPS. Government employees are not productive members of society, I see no reason why we should further reward Government Employees and further exploit tax payers, which is what gifting the USPS to the mailman would do.
For this reason I support giving out shares of ownership to taxpayers. I would, however, allow the employees at the local and state levels keep their jobs, and as they pay taxes as well, give all but the higher echelons proportional shares of their own (if there's a balance left after figuring in subtraction of earnings from tax dollars).
Pro Christo et Libertate integre!
Presumably, given your hypothetical, we are at the stage where the state is pretty much ready to dissolve. Should the victims of theft desire their stolen wealth returned to them, then it remains for them to find the means to acquire it I guess, provided they undertake all the costs involved themselves and do not foist them on third parties. Restricting politicians from bidding in the meanwhile should be perfectly possible too. No real expropriation is taking place as the property was stolen to begin with.
Jon Irenicus: Restricting politicians from bidding in the meanwhile should be perfectly possible too. No real expropriation is taking place as the property was stolen to begin with.
Why is bidding in auctions somehow different than bidding for other private companies? You are not going to expropriate them from that.
I never intended to make such a distinction. Look, my point is simply that it is morally suspect that thieves should be allowed to profit from their misdemeanours. But ultimately it'd be up to the victims.
JonBostwick: Stranger: What good is giving the Postal Service to its employees if it shuts down from bankruptcy the next day? It would be bought out by a more solid company and the employees would get a small compensation, which is exactly the same result as the auction system Exactly. So the only reason to give it to employees is if you feel they have a just claim of ownership. However, they do not.
How do you know "they do not"? That's your opinion, not apodeictic fact; which opinion appears to be based on "they're state employees" - but it doesn't follow that just because they're state employees they're responsible for any illegal (from the libertarian viewpoint) acts of the state - postal workers are not doing anything that would be illegal under liberty. The same principle applies to them as to everyone else. See Rothbard's Confiscation and the Homestead Principle in the June 1969 Libertarian Forum, or How to and How Not to Desocialize:
M.N.R.: Genuine goods and services, then, are to be privatized. How is this to be accomplished? In the first place, private competition with previous government monopolies is to be free and unhampered. This would legalize not only the black market, but all competition with existing government operations. But what about the massive accumulation of government firms and capital assets themselves? How are they to be privatized? Several possible routes have been suggested, but they can be grouped into three basic types. One is egalitarian handouts. Every Soviet or Polish citizen receives in the mail one day an aliquot share of ownership of various previously state-owned properties. Thus, if the XYZ steel works is to be privately owned, then, if there are 300 million shares of XYZ steel company issues, and 300 million inhabitants, each citizen receives one share, which immediately becomes transferable or exchangeable at will. That this system would be impossibly unwieldy is evident. The number of people would be too much and shares too few to allow every person to have a share, and there would be shares of innumerably large numbers and varieties that would quickly descend upon the heads of the average citizen. [...] It would be far better to enshrine the venerable homesteading principle at the base of the new desocialized property system. Or, to revive the old Marxist slogan: "all land to the peasants, all factories to the workers!" This would establish the basic Lockean principle that ownership of owned property is to be acquired by "mixing one's labor with the soil" or with other unowned resources. Desocialization is a process of depriving the government of its existing "ownership" or control, and devolving it upon private individuals. In a sense, abolishing government ownership of assets puts them immediately and implicitly into an unowned status, out of which previous homesteading can quickly convert them into private ownership. The homestead principle asserts that these assets are to devolve, not upon the general abstract public as in the handout principle, but upon those who have actually worked upon these resources: that is, their respective workers, peasants, and managers. Of course, these rights are to be genuinely private; that is, land to individual peasants, while capital goods or factories go to workers in the form of private, negotiable shares.
Genuine goods and services, then, are to be privatized. How is this to be accomplished? In the first place, private competition with previous government monopolies is to be free and unhampered. This would legalize not only the black market, but all competition with existing government operations. But what about the massive accumulation of government firms and capital assets themselves? How are they to be privatized?
Several possible routes have been suggested, but they can be grouped into three basic types. One is egalitarian handouts. Every Soviet or Polish citizen receives in the mail one day an aliquot share of ownership of various previously state-owned properties. Thus, if the XYZ steel works is to be privately owned, then, if there are 300 million shares of XYZ steel company issues, and 300 million inhabitants, each citizen receives one share, which immediately becomes transferable or exchangeable at will. That this system would be impossibly unwieldy is evident. The number of people would be too much and shares too few to allow every person to have a share, and there would be shares of innumerably large numbers and varieties that would quickly descend upon the heads of the average citizen.
[...]
It would be far better to enshrine the venerable homesteading principle at the base of the new desocialized property system. Or, to revive the old Marxist slogan: "all land to the peasants, all factories to the workers!" This would establish the basic Lockean principle that ownership of owned property is to be acquired by "mixing one's labor with the soil" or with other unowned resources.
Desocialization is a process of depriving the government of its existing "ownership" or control, and devolving it upon private individuals. In a sense, abolishing government ownership of assets puts them immediately and implicitly into an unowned status, out of which previous homesteading can quickly convert them into private ownership. The homestead principle asserts that these assets are to devolve, not upon the general abstract public as in the handout principle, but upon those who have actually worked upon these resources: that is, their respective workers, peasants, and managers. Of course, these rights are to be genuinely private; that is, land to individual peasants, while capital goods or factories go to workers in the form of private, negotiable shares.
Paul, a homesteading claim requires that the appropriator produced the good in question. Employees of government enterprises did not produce the capital of the enterprise, no more than employees of any capitalist enterprise produced the capital. They only produced the specific goods they had already been paid to produce. They have no further claim. Rothbard should have been wiser than to bring up socialist principles to desocialize.
The people who do have a claim to have produced private capital out of public enterprise are its liberators, the people who acted upon or within the government to privatize the capital. They deserve to be rewarded for their efforts at protecting the public and promoting economic welfare.