The Myth of Common Property

An Observation by L.A. Repucci

It has been proposed that there exists a state in which property — whether defined in the physical sense such as objects, products, buildings, roads, etc, or financial instruments such as monetary instruments, corporate title, or deed to land ownership — may be owned or possessed in common; that is to say, that property may be possessed of multiple rightful claimants simultaneously.  This suggestion, when examined rationally and exhaustively, is untenable from the perspective of any logical school of economic, social, and indeed physical school of thought, and balks at simple scrutiny.

In law, Property may be defined as the tangible product of enterprise and resources, or the gain of capital wealth which it may create.  To ‘hold’ Property, a Party, or private, sentient entity, must have rightful claim to it and be capable of using it freely as they see fit, in keeping with natural law.

Natural resources, including land, are said to be owned either jurisdictionally by State, privately by party, or in common to the natural world.  If property may be legally defined only as a product, then natural resources may be excluded from all laws pertaining to legal property.  If property also may be further defined by the ability of it’s owner to use it as they see fit, in keeping with Ius Naturale, then any property claimed jurisdictionally by the State and said to be held in common amongst the citizenry must meet the article of usage to be legally owned.  Consider Hardin’s tragedy of the commons as an argument for the conservation of private property over a state of nature, rather than an appeal to the economic law of scarcity or an appeal to the second law of thermodynamics ,

In Physics:  Property may be defined as either an observable state of physical being.  The universe of Einstein, Kepler, and Newton rests soundly on the tenet that physical bodies cannot occupy multiple physical locations simultaneously.  The laws that govern the macro-physical world do not operate in the same way on the quantum level.  At that comparatively tiny level, the rules of our known universe break down, and matter may exhibit the observed property of being at multiple locations simultaneously — bully and chalk 1 point for common property on the theoretically-quantum scale.

Currency:  The attempt to simultaneously possess and use currency as defined above would result in praxeologic market-hilarity in the best case, and imprisonment or physical injury in the worst.  Observe: Two friends in common possession of 1$ walk into a corner shop to buy a pack of chewing gum, which costs 1$.  They each place a pack on the counter, and present the cashier with their single dollar bill.  “It’s both of ours!  We earned it in business together!” they beam as the cashier calls the cops and racks a shotgun under the register…

The two friends above may not use the paper currency simultaneously — while the concept of a dollar representing two, exclusively owned fifty-percent equity shares may be widely and innately understood — the single bill is represented in specie among the parties would still be 2 pairs of quarters.  While they could pool their resources and ‘both’ purchase a single pack of gum, they would continue to own a 50% equity share in the pack — resulting in a division yet again of title equally between the dozen-or-so sticks of gum contained therein.  This reduction and division of ownership can proceed ad quantum.

This simple reason is applicable within and demonstrated by current and universal economic realities, including all claims of joint title, common property law, jurisdictional issues, corporate law, and financial liability.  A joint bank account is simply the sum of the parties’ individual interest in that account — claims to hold legal property in common are bunk.

The human condition is marked by the sovereignty, independence and isolation of one’s own thought.  Praxeological thought-experiments like John Searle’s Chinese Room Argument and Alan Turing’s Test would not be possible to pose in a human reality that was other than a state of individual mental separation.  As we are alone in our thoughts, our experience of reality can only be communicated to one another.  It is therefore not possible to ever ‘share’ an experience with any other sentient being, because it is not possible to perceive reality as another person…even if the technology should develop such that multiple individuals can network and share the information within their minds, that information must still filter through another individual consciousness in order to be experienced simultaneously.  The physical separation of two minds is reinforced by the rationally-necessary separation of distinct individuals.  There may exist a potential hive-mind collectivist state, but it would require such a radical change to that which constitutes the human condition, that it would violate the tenets of what it is to be human.

In conclusion, logically, the most plausible circumstance in which property could exist in common would be on the quantum level within a hive-minded non-human collective, and the laws that govern men are and should be an accurate extension of the laws that govern nature — not through Social Darwinism, but rather anthropology.  Humans, as an adaptation, work interdependently to thrive, which often includes the voluntary sharing and trading of resources and property…none of which are held in common.

Ad Quantum,

L.A. Repucci

Pope Francis: Does An Anti-Capitalist = A Socialist?

The Pope has made his opposition to capitalism clear and his words were scathing…

“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills… A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. To all this we can add widespread corruption and self-serving tax evasion, which has taken on worldwide dimensions. The thirst for power and possessions knows no limits.”

This has led to praise and criticism from the right and the left. People have naturally views this within the right vs left dichotomy. I think it worth pointing out that libertarians of all varieties do not fit anywhere, comfortably, in this one dimensional paradigm, nor aught the Pope be expected to. He has been called a Marxist and had the economic failing of state socialism in Latin America and around the world flagged up, the assumption seems to be that if he is against the present model of capitalism he must be a socialist. The problem is the Pope may have made clear that he is in opposition to our present economic model he has not made clear what else he is against, (socialism) or what he supports.

What he has said on the matter and the clues to what he supports are as follows “I repeat: I did not talk as a specialist but according to the social doctrine of the church. And this does not mean being a Marxist.” The Pope indicates here that his stance on economics is only that which the Church has long-held. That he is simply re-iterating it’s doctrine, the only economic ideology based upon catholic social doctrine is Distributism… It is based on the teachings of Pope Leo XIII in his encyclical Rerum Novarum and Pope Pius XI in Quadragesimo Anno, and it is emphatically opposed to socialism. In the words one who inspired it:

“No one can be at the same time a sincere Catholic and a true Socialist” and “it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community” – Pius XI.

The Popes Francis’s words on capitalism were no less scathing than his predecessor’s in Rerum Novarum. Pope Leo XIII spoke of “misery and wretchedness pressing so unjustly on the majority of the working class” and how “a small number of very rich men” had been able to “lay upon the teeming masses of the labouring poor a yoke little better than that of slavery itself.” And Pope Francis’s use of the term “exclusion” I’d argue meaning exclusion from personal access to property, and the means to produce are a further clue to his distributist leanings.

So what do these distributists profess if they oppose both socialism and capitalism?

According to distributists, property ownership is a fundamental right and the means of production should be spread as widely as possible rather than being centralized under the control of the state (state socialism) or of accomplished individuals (laissez-faire capitalism). Distributism therefore advocates a society marked by widespread property ownership and, according to co-operative economist Race Mathews, maintains that such a system is key to bringing about a just social order. – Wikipedia

In truth we cannot know where the Pope stands on socialism other than what he has said. Until he say’s otherwise I think it’s safe to say there is no reason to suspect he is a socialist, or that his position is anything other than that which the church has long-held.

– Samuel Allen

Pope Francis on Economics

by Fred E. Foldvary

Any statements which deplore “trickle down” economics reveal that the author has not quite yet grasped the heart of economics.

On November 26, 2013, The Vatican press published the apostolic exhortation, “The Joy of the Gospel.” The text was written in Spanish, and its full title in the English translation (converted here from upper case to initial capitals) is “Evangelii Gaudium of the Holy Father Francis to the Bishops, Clergy, Consecrated Persons and the Lay Faithful on the Proclamation of the Gospel in Today’s World.” Besides its religious calls, Pope Francis makes statements about today’s economic problems, and calls for greater economic justice.

One of the aims of this proclamation is to point out “new paths for the Church’s journey in years to come.” One of the questions the Pope seeks to discuss is “the inclusion of the poor in society.” Chapter Two is entitled, “Amid the Crisis of Communal Commitment.” In paragraph 52, Francis writes that “today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills… Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless.”

The Pope is wise and correct in seeing the harm done by inequality, but I urge him to see past the appearances to study the underlying reality. What provides the powerful with their might? The state has the ultimate power of force, and by its power to tax, to restrict, to mandate, and to subsidize, the state endows the powerful with the means to feed on the powerless. Market competition as such cannot impose force, and it does not create poverty. In a free society, each person has the power to be employed and pursue happiness. In a truly free market, all are fit to survive, because workers have access to natural opportunities. It is government intervention that stops this access.

Paragraph 54 is the key, widely cited, economic passage. We need to be sure that the English version is true to the original Spanish. In Spanish, Francis wrote, “algunos todavía defienden las teorías del « derrame », que suponen que todo crecimiento económico, favorecido por la libertad de mercado, logra provocar por sí mismo mayor equidad e inclusión social en el mundo.”

The Vatican’s English translation says, “some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.”

The English-edition term “trickle-down theories” is translated from the Spanish, “teoria del derrame.” “Derrame” means a slow leak, hence a trickle, and so the English translation is accurate. The translated term “free market” is more literally “the liberty of the market” in the original Spanish, but the meaning is the same.

As noted by Harvard professor Greg Mankiw in his blog, critics of markets often use the term “trickle down” as a pejorative for the effects of a market economy. There is indeed a trickle down effect, for example, when a tourist resort is built in a location with many poor people, where a few get hired to work to clean rooms and wash dishes. A bit of the wealth of the resort trickles to the local population. But this situation does not confront the issue of why the poverty exists in the first place.

The theory of the free market is not one of “trickle down.” A truly free market is a fountain that gushes up wealth for all. Moreover, economic growth in market economies has indeed raised millions of persons up from poverty. However, the theory of market-driven growth does not claim that growth brings justice. The causation is the opposite: economic justice promotes growth. Moreover, justice and liberty are two faces of the same coin, so if a market has liberty, it must also provide justice.

The Pope continues: “This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”

But the proposition that free markets provide growth that benefits all is not a mere opinion. The proposition is a theory of growth that was first analyzed by the French economists of the 1700s, who concluded that the unhampered market, with free trade, would provide the greatest prosperity for all.

The prescription of the French economists was to abolish taxes on labor and trade, and instead use the surplus of the economy, which is land rent, for public revenue. Adam Smith in his Wealth of Nations brought this theory into classical economics. The American economist Henry George a century later explained in detail how land rent captures the gains from economic progress, and how growth generates inequality and poverty if that rent is not equally shared.

Markets have had various degrees of freedom, but there is no truly free market in the world today. Those who advocate a pure free market do not defend the “prevailing economic system,” but rather, they seek to stop the state’s subsidy of economic powers. The greatest subsidy and economic power is the land rent generated by the public goods provided by government.

The Pope is correct in decrying “the denial of the primacy of the human person” (paragraph 55) and that “Behind this attitude lurks a rejection of ethics” (57). Ethics and the primacy of the human person requires the equal right of each person to pursue happiness without harming others and to keep the earnings of his labor, as recognized by the commandment, “Thou shalt not steal.” Ethics must also respect the equal sharing of the benefits of nature and community, as stated in Ecclesiastes 5:9, “the profit of the earth is for all.”

The heart of economics is the understanding of the root cause of poverty: the forced redistribution of wealth from the working poor to the landed rich. This is caused not by markets but from state policy. It is good that Pope Francis seeks to remedy poverty. His “new path” should be to go more deeply into the economics and politics of maldistribution.

Liberty & Productivity

Statists routinely suggest their distrust of human initiative. This is why they keep advocating government stimuli instead of free markets.

In a free market, one which prohibits government intrusions, regulations and regimentation, it is understood that when men and women are free of such intrusions, they will most likely – though never certainly – engage in entrepreneurial initiative, the main result of which is productivity. No guarantee exists that free men and women will innovate and produce but that is most likely. Indeed, while slaves can be scared into work, free men and women will usually see the point of work and engage in it with gusto.

Statists, of course, deny this and claim that only if government creates artificial incentives or issues threats will citizens become productive. That is the basic theory behind stimulus packages, tax breaks, subsidies and so on.

But notice that all this omits the issue of why bureaucrats and politicians would be motivated to work. Why are they exceptions to the rule that statists assume, namely, a lethargic citizenry? How can we trust government agents to go to work, to produce, to innovate, etc., but not free men and women? Statists never address this as they advocate pushing citizens around, nudging them, stimulating them, etc. Who will nudge the nudgers?

At the heart of this issue lies a basic philosophical dispute: Are free men and women capable of initiative, of getting to think and work on their own or must they be dealt with like barnyard beasts that need to be driven to work by masters? Statists see people as such animals, incapable of innovation, of initiative, of creativity, so they need to be pushed around by bureaucrats and politicians. Yet this is completely inconsistent with the powers they grant to themselves. Why would only those running government possess the power to undertake productive, creative projects while the citizenry is deemed too passive?

Actually, a better way of understanding this is to realize that statists want to reserve to themselves the prerogative of spending resources on various projects – public works, they like to call them – and rob the rest of the citizenry of their resources to do as they judge sensible, prudent and wise.

In short, the statist wants to be in charge of what projects get to be undertaken, use everyone’s labor or property for these and not permit the rest of us to allocate our resources, including our labor, to projects of our own.

Is the Free Market Ethical?

Free-market economists have amply demonstrated and documented the fact that free enterprise is the most efficient and productive way to provide for people’s economic needs and desires. The simple but powerful logic of supply and demand is irrefutable, and even the critics of the free market acknowledge that the “invisible hand” of self-interest can produce and distribute goods and services without any need for central planning and control.

Yet, the pervasive critics and opponents have succeeded in convincing much of the world that there is something sinister or immoral about the free market and private enterprise. Even when they acknowledge its efficiency, they claim that free enterprise is somehow unfair or inherently exploitive. Even when they agree that the free market is productive, they argue that it produces the “wrong” goods, too much advertising, for instance, or too many luxury goods, and not enough “public goods” such as education.

The opposition to free markets, then, is often not so much an economic claim as a moral one. Marxists, for example, claim that profit is the taking away from the workers part of the value which they put into their products, a value that, in their view, rightfully belongs to the workers. Less radical advocates of government planning claim that though the free market may be efficient, it does not produce the goods that people “really need,” such as health care, or that the inequalities of wealth resulting from free market forces are for some reason wrong.

When one speaks of what people should consume, or what a worker should earn, these “shoulds” are moral considerations. These are moral attacks on the free market, which must be answered by moral arguments, since they are based on goals and values rather than facts about how an economy works. So let us examine the question, is the free market ethical? In order to answer that question, we must first ask, what exactly is a free market? Continue reading