Economics Questions

Re: A method for resolving conflicts over privatization

Paul — Fri, 25 Apr 2008 10:43:03 GMT

The situations are not really comparable, though; the argument wrt universities (where is that quoted from? The only reference Google finds is this thread!) isn't about "the customer" (and in any case, many/most of the students probably haven't paid a dime: either their parents paid, or someone else did through scholarships, etc., or, esp. for earlier education, it's "free")

Re: A method for resolving conflicts over privatization

Bostwick — Fri, 25 Apr 2008 07:52:58 GMT

Paul:

In your quote Rothbard was discussing privatization of a Communist economy. That is different from the USA because there are no obvious tax payers and tax receivers, everyone is a state employee.

Paul:

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.

I did not suggest that they were responsible for the state's crimes. If they were one would have to advocate confiscating all their property, which I certainly do not.

People are responsible for the crimes they committed on behalf of the state, police officers chief among them, but the mailman committed no crime. However, he did not pay taxes, he received them, so he has not been robbed by the state.

Paul:

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.

In his blog Brainpolice provided this excerpt in which Rothbard addresses American privatization.

Murray Rothbard:

In the case of the State, furthermore, the victim is not readily identifiable as B, the horse-owner. All taxpayers, all draftees, all victims of the State have been mulcted. How to go about returning all this property to the taxpayers? What proportions should be used in this terrific tangle of robbery and injustice that we have all suffered at the hands of the State? Often, the most practical method of de-statizing is simply to grant the moral right of ownership on the person or group who seizes the property from the State. Of this group, the most morally deserving are the ones who are already using the property but who have no moral complicity in the State’s act of aggression. These people then become the homesteaders of the stolen property and hence the rightful owners.

Take, for example, the State universities. This is property built on funds stolen from the taxpayers. Since the State has not found or put into effect a way of returning ownership of this property to the taxpaying public, the proper owners of this university are the "homesteaders", those who have already been using and therefore "mixing their labor" with the facilities. The prime consideration is to deprive the thief, in this case the State, as quickly as possible of the ownership and control of its ill-gotten gains, to return the property to the innocent, private sector. This means student and/or faculty ownership of the universities. As between the two groups, the students have a prior claim, for the students have been paying at least some amount to support the university whereas the faculty suffer from the moral taint of living off State funds and thereby becoming to some extent a part of the State apparatus.

JonBostwick:

Local municiples should be incorporated and all customers should be shareholders. They were the ones that built the network after all.

It seems that Rothbard and I came to the same conclusion; that it is the customers, not the workers, who have homesteaded.

Oh well, not forging new ground in libertarian theory just yet.

Re: A method for resolving conflicts over privatization

Stranger — Thu, 24 Apr 2008 15:15:57 GMT

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.

Re: A method for resolving conflicts over privatization

Paul — Thu, 24 Apr 2008 02:48:46 GMT

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.

Re: A method for resolving conflicts over privatization

Jon Irenicus — Thu, 24 Apr 2008 00:24:27 GMT

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.

Re: A method for resolving conflicts over privatization

Stranger — Wed, 23 Apr 2008 23:36:38 GMT

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.

Re: A method for resolving conflicts over privatization

Jon Irenicus — Wed, 23 Apr 2008 23:29:20 GMT

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?

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.

Re: A method for resolving conflicts over privatization

MacFall — Wed, 23 Apr 2008 23:01:12 GMT

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).

Re: A method for resolving conflicts over privatization

Bostwick — Wed, 23 Apr 2008 21:54:09 GMT

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.

Re: A method for resolving conflicts over privatization

Stranger — Wed, 23 Apr 2008 21:50:49 GMT

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.

Re: A method for resolving conflicts over privatization

Bostwick — Wed, 23 Apr 2008 21:46:52 GMT

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.

Re: A method for resolving conflicts over privatization

Stranger — Wed, 23 Apr 2008 21:37:35 GMT

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.

Re: A method for resolving conflicts over privatization

Bostwick — Wed, 23 Apr 2008 21:32:58 GMT

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.

Re: A method for resolving conflicts over privatization

Stranger — Wed, 23 Apr 2008 21:32:16 GMT

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?

Re: A method for resolving conflicts over privatization

Stranger — Wed, 23 Apr 2008 21:28:28 GMT

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?