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Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory: Transcript

This is a transcription of my speech Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory. I have cleaned up a few things and added a few links and notes.


0:01:12.9Johnathan Hubbard: Our next speaker is a patent attorney from Houston and a very long time defender of liberty.  He has written lots and lots of articles and a very fantastic book, a very important book, I think, called Against Intellectual Property.  You can just Google it and find the book because that is part of the premise of the book is that ideas should be free.  And so, I really don’t have anything else to say.  The guy’s credentials are so long it would take forever to explain them to everybody, or whatever, and say….so I hope you guys can, you know, stay awake and enjoy Mr. Stephan Kinsella.
Stephan Kinsella: Thanks.  I’ll do my best.  I thought that the best thing to keep people awake after a long lunch on a Saturday would be a talk about John Locke, 17th century philosopher!  The title is (well, I have slightly changed it) Locke’s Big Mistake – How the Labor Theory of Property Ruined Political Theory.  I’ll try to explain why I think this is interesting and very relevant to our fight for liberty.Let me start with a question.  Who was the most evil man of all history?  Any guesses?  There are no wrong answers.  (Well, there are some wrong answers.)
Audience Member: Mao!
Kinsella: Who did Ayn Rand think was the most evil man in all history?
Audience Member: Kant!





































































































































































































































































































































































































































































































































































































Yeah.  She said “Kant is the most evil man in mankind’s history.”  I mean you might not agree with his idealism [i.e. non-realism], some of his philosophy, but he was a pretty good classical liberal. So I don’t know if I can agree with that.Ayn Rand was known for rhetorical excesses.  She also said “patents are the heart and core of property rights.”  Even if you believe in intellectual property, that one is hard to swallow.But I will give her some credit too.  She also has a rhetorical line that I love in her Money Speech which was: “Run for your life from any man who tells you that money is evil.  That sentence is the leper’s bell of the approaching looter”.Love that line.  I feel that way with people who say they disagree with the idea of self-ownership.  I’m like, “Well, I’m going to keep an eye on you”.Well, I don’t think Kant was the most evil man in all of history.  And I don’t think Locke was either, but I do want to have a similar thesis to Ayn Rand, and that is identifying one big mistake in political theory and philosophy.  I don’t think Locke did this on purpose.  I think he did a lot of good.  And I’m going to try and identify what I think is good in Locke and what mistake he made.  I won’t even say he is evil, although he was sort of a racist defender of the slave trade [see The Contradictions of Racism: Locke, Slavery, and the Two Treatises. Robert Bernasconi & Anika Maaza Mann; google books].  But that is an ad hominem and we never do that here.

But parts of his argument have caused a lot of serious problems in political theory in the meantime.


Now why is this?  Before I get into the details, in my view, I have been thinking about libertarianism for over twenty-five years and I’ve come to the conclusion that one problem we face is overuse of metaphors and imprecise use of language and clear thinking.  We can’t abolish it completely, but we have to be wary of the dangers of using metaphors and imprecise language and unclear thinking.  One of America’s  most famous Supreme Court justices, [Cardozo,] before he was a justice, when he was a judge, said, in 1926, “Metaphors in law are to be narrowly watched for starting as devices to liberate thought, they often end up enslaving it”.


He is right.  You can ask what is a metaphor?  In Louisiana, we might say, “It’s for to explain things better”.  But sometimes there’s problems.  Austrians like Böhm-Bawerk, Mises, Guido Hülsmann, they have all written on all the dangers of using metaphorical language. [See On the Danger of Metaphors in Scientific DiscourseCreation and Labor as Sources of Property Rights and the Danger of Metaphors.] For example, all these scientistic metaphors are used to explain the economy, like friction or momentum.  The economy has “green shoots” right now or maybe it doesn’t have “green shoots”.   We talk about prices communicating knowledge or coordinating behavior.  And also mixing of labor which I’m going to talk of a little bit about here.


Let me ask a question, just a show of hands of the audience.  Who here believes that you own your body?  Who knows pretty much what your body is?  It’s hard to say you own your body if you don’t know what it is.  Now there is a difference though between whether you do own your body or whether you should own your body.  Who thinks here that you own yourself?  Now who knows what their self really is?  I don’t know what my self really is.  I mean it is not as concrete of an idea as body ownership, right?


So when we talk about self-ownership and libertarianism, really I think we are talking about body ownership.  So the question is always who owns your body?  Me or someone else?  Do you believe in your own control of yourself, or your body I should say, or slavery?  That is the fundamental choice.  If you talk in clear language, these things become clearer.


We also have to distinguish between factual questions, or legal questions, and normative questions.  If I say, “Do you own yourself?”, you are really thinking,  “Should I own myself”?


So the questions “Should you own yourself?” and “Do you own yourself?” are separate questions.  I would say you don’t own yourself completely, under today’s legal system, because the government maintains the right to draft you, throw you in jail for doing drugs, to take your money if you don’t pay taxes or to put you in jail if you don’t pay taxes.  So I think we are only partly self-owners in today’s society.  As Stefan Molyneux mentioned earlier, “A slave is someone who is a 100% tax victim”.  So we have to distinguish between should and facts.



So there are some ideas, words, and terms which I think we ought to try to avoid or at least be very careful of when we use them.  Let me go through a few of those.


One is conflating government with society and state.  Or conflating society with state or conflating government with state.  Or conflating country with state.  The problem is if you say you are against the government, people think you are against law and order because they think you are against the governing institutions of society, when really we are against the state.  So what libertarians are against is the state.


The state currently  monopolizes and runs the government, the governing organizations of society: law, justice, order.  The state also runs the roads, but we don’t say we are against roads, do we?  We say we are against government roads or state roads, we should say.   Just like we say we are against state education.   So we have to be careful when we say we are against government because you’ll have minarchists or regular people think that you are for chaos and lawlessness, the idea of the anarchist with the bomb.  We have to say we’re against the state if you want to be clear and precise.


Another one is people say, “Well, I’m against coercion.  I’m a libertarian”.


“I’m against violence”.


Well, no, we’re not against violence.  We’re not even against coercion.  We’re against aggression.  Aggression is the initiated use of force or the initiated violence or the initiated coercion.  Coercion is just a type of force.  It means to use force to compel someone to do something.  If someone is breaking into my house, I’m going to coerce the guy and it is rightful.  So we’re not against coercion.  We’re not against force. We’re not against violence.  We’re against initiated force, coercion and violence or aggression. [See The Problem with “Coercion”What Libertarianism Is.]


Another one, which I’ll deal with in a few minutes, is labor versus action.  People always talk about owning the fruits of your labor.  People have a right to sell their labor.  These kinds of things.  They act like labor is some special thing.  Now, I don’t know about you, but to me labor is just a type of action.  Humans own their bodies.  We act in certain ways.  That is human action.  Labor is just a type of action, maybe a subset of action.  What kind of action is it?  It is action that has disutilities, some people say.  It’s not leisure.  It’s not fun.  You do it to get some end.  But it is just one type of action.


And then, of course, there is intellectual property which begs the question just by saying it that way.  Some of us don’t think it should be property.  So don’t call it property to prove that it should be treated as property.  It is better to call it an intellectual privilege or just call it patent and copyright, what the government calls it.



Finally, another one, which Jeff Tucker and I were talking about on the way up here this morning is the idea of limited government.  This one always bugs me because, you know, every government that has ever existed is limited.  There has never been an unlimited government – I mean, maybe the Nazis, maybe the Russians at a certain point in time.  But every government has limits, or every state, I should say, has limits on what it can do.  And almost everyone believes in some limits.  The welfare liberals believe in a limited government.  They just want the limits to be a lot less than we would like.


So what defines an ultra-minimalist conservative or a classical liberal or a libertarian is not that we believe in limited government. It is what limits we believe should be on the state.  And the most consistent, most radical libertarians think the limits should be complete, meaning the state should have nothing it can do whatsoever.  In other words, the state should die and not exist.  But even a minarchist believes that the limits should be completely so tight that the state can only do a few minimal functions: defense, police, and courts.  So when you say limited government, that doesn’t really distinguish us from others.


So in thinking about how to define the essence of libertarianism over the years, I think the best way to think of it is that we recognize that we are all people who live in society with each other. We all, at least the civilized people among us, we generally want our own lives to be good, but we also favor peace and prosperity.  We want our neighbors to be good.  And we like living in society with each other.


And we all realize the following – this is Mises I’m going to go into here a little bit – Mises  was, in my mind, the greatest Austrian economist .  He developed a theory called praxeology.  That is the logic or the science of human action.


It sounds funny.  It is a weird word.  It took me a long time to understand.  Like epistemology took seventeen years before I finally started using the word.  I’m still not there with ontology, but with epistemology and praxeology I am.  Mises says, look, it is common sense.  Look at human action.  What do human beings do in their lives?  Every moment of their lives they’re taking an action.


Now an action means you’re an intelligent, rational person.  You understand something about the world and you know that the future is coming.  And you envision something about the future you think is going to happen that you are not satisfied with or that you want to change.  This is what human action is.  We don’t think of it like this, but this is what we do in every moment of our lives.


And we also realize that we have the ability to affect that future.  How?  By using what Mises called scarce means.  These are things in the world that you can use to change the course of the future, including your body and including things that we find, tools basically.   And we have some understanding, or some knowledge, in our mind that we have accumulated from human civilization and from society in the past, from others, from learning, from emulation.  We have some knowledge about what we think is coming, what we think might satisfy us better than what would come if we don’t take an action, and what means are available and how they will causally  change things.


So that is what human action is.  It’s understanding, making a choice, grabbing some kind of means and employing that means to change the future.  This is how we have to understand human action.  And within that framework we can understand libertarianism is the idea that we understand that these means are scarce.  Scarce means rivalarous.  It means only one person can use this thing at a time.  Otherwise, you have two or more people fighting over this thing, clashing over it, having conflict, violent disagreement.


So an example would be baking a cake.  You need a recipe, which is the knowledge of how to make the cake and you need the tools, the capital equipment, the ingredients, the raw materials.  Only one person can use this egg at a time to make the cake or this wooden spoon or this bowl or this oven.  But any number of people can use their own eggs and their own ingredients, all using the same recipe, or the same knowledge, at the same time.


This is exactly why the intellectual property idea is so fallacious.  Intellectual property seeks to grant property rights in the ideas as well as we do in the scarce means.  It makes no sense because you don’t need to put property rights on the ideas because they are not scarce.  The entire purpose of property rights is to permit conflicts to be avoided in the use of the scarce means of action.  So we


can all go about our daily business and our plans cooperating with each other, trading with each other, helping each other, selling to each other, using our own scarce resources with the legally recognized exclusive right to control it.  That is what property rights are and that is what ownership is.  It makes no sense to grant these rights on ideas.  I’m not going to go into that in detail here.  That is the entire intellectual property argument I have been making for a few years now.  But I just want to put it in a framework.  This is what the libertarian idea is.


Now, what does this have to do with Locke?  Okay.  The way to reformulate this is to think that the essence of libertarianism is a very simple set of rules.  As I mentioned earlier, we can’t say we’re for limited government because that doesn’t distinguish us from other schools of thought.  And you can’t say we’re for property rights because that doesn’t distinguish us either.  Why not?  Because property rights are inherent in every human society and every political system that has ever existed.  Communists believe in property rights.  Socialists believe in property rights.  Fascists believe in property rights.  Environmentalists believe in property rights.  Welfare Liberals believe in property rights. We believe in property rights.  What’s the difference?


How they are assigned.  That is the difference.  So we look at the world and we see scarce resources that need to be controlled by someone, by the legal system, so that they can be used peacefully, productively.  And our rule is simple.  It’s the Lockean Rule.  The Lockean Rule basically says whoever can show the better claim to a resource gets it.  And the better claim is defined as either the first person who transformed it.  Yes, with his labor, in a sense.  Or if you acquired it by contract from someone else.  It is very simple: contract plus first appropriation.


Now what is the reason for the first appropriation rule?   Locke spelled this out in his argument.  If no one had the right to be the first one to use a resource, it could never be used.  Someone has got to be the first one to use this unknown thing out there.  And if he has got the right to use it, then he has a right to keep it because otherwise the second guy can take it from him which is not a property right system.  That is a system of violent clashing.  So it is almost like the Misesian Monetary Regression Theorem when you trace back the origin or the value of gold type money to its pure commodity, non-monetary use.  It’s like that.  You can see who has got a resource now, trace the title back to the first active appropriation.  This is what we say.


Now you can add one more rule.  You could say if someone commits an act of aggression, some kind of tort, you harm someone else, you violate their rights, because you performed that action, you have incurred an obligation to compensate them.  So they might get a claim to your property because of that.  So we could modify the rules.  The person who owns the resources is either the person who acquired it by contract from an owner or who first appropriated it or who acquired it because of some act of crime by the original owner.  Other than that, there are no other ways to own property.


What did Locke say?  What Locke said, he basically said this, but he had some extra stuff in his argument.  Locke said God created the universe.  God owns the universe.  God created Adam and Eve.  He owned them, but God in his benevolence (he apparently is a libertarian) granted dominion of all the unowned resources that he created to man.  So within the human sphere, whether there is a God or not, whether you care that God is a slave-owner or how you look at that, the point is there is a system set up where the rule is if each man is a self-owner, that is Locke called it, and remember the danger of saying self-owner – it is better to say he is a body owner because that is the resource in dispute.  I care if someone stabs my body, not if they stab my “self.”  So every person is a body-owner.

Then here is what Locke said and here is the problem, I think, with Locke’s argument.  Locke said if you own yourself, then you own the labor you perform with your body or your self.   First off, thinking right now as a critical libertarian legal theorist who wonders what words mean, the nagging feeling is what does that really mean, to own your labor?  But I’ll go with that.


Then Locke says, so you own this labor.  Now I’m thinking like a substance emanating from myself.  And so if it mixes with something unowned, well, I own the labor, so the only way I can keep ownership of that labor is to own the thing it’s mixed with.  Otherwise, you are taking my labor away from me.  So this is his argument for why we can appropriate unowned resources.


Now, David Hume, writing later, Locke was in the 1600s, Hume was a little bit later, pointed out, and I agree with Hume, Hume pointed out that this argument of Locke is overly figurative or metaphorical.  We don’t really own our labor.  We own our bodies.  If you own your body, that means you have the right to perform whatever actions you want with it.  You can use those to sell your services to someone.


Think about it.  If someone pays me to sing a song, they give me a dollar after I sing a song for them, the song pleased them, but do they own the song now?  Are they in possession of a song?  No, they are in possession of a memory.  Can I say that I gave them a memory?  I suppose, but I really didn’t own a memory that I transferred to them.  This is all completely imprecise, metaphorical stuff.  And you don’t need it.  It is unnecessary.  As Hume pointed out, Locke’s argument works if you simplify it and you take out the stuff.  Locke’s argument works for the reasons I mentioned earlier, the libertarian reason.  When you have an object that is disputed or contested, a scarce resource, then there really can be no other answer than that the person has a better claim to it that was the first one who appropriated it.  Because if you don’t give him that right then, as I said,  no one could ever appropriate anything in the first place or they would appropriate it with violence and people squabbling over it which, again, defeats the purpose of having a legal system that permits resources to be used in a conflict free way.  So this is the problem.


Now, you might say, well, he could have worded it better, but what is the problem with this?  The problem is this entire mentality, this entire approach, has led to a deep, vast confusion that has contaminated and infected political theory ever since his day.   Arguably, it also, at least partially, contributed to the rise of a related doctrine, called the Labor Theory of Value which is more of an economic idea which is what contaminated Ricardo’s and Adam Smith’s and then Marx’s thought.  The Labor Theory of Value has this mystical idea that the value of a product is based upon the labor that went into it.


Now, there are several mistakes here.  Number one, value is subjective.  There is no value in things.  So right away he is thinking in intrinsic value terms.  It makes no senses whatsoever as Menger and the Austrians have shown.

And furthermore, you don’t own labor.  Labor is not a substance.  And, of course, the idea that you have two laborers that mix their labor with two objects, one is high quality and one is low quality.  If this guy put 100 hours into it and this guy did it in 10, they’re not going to have the same value.  So then you have to reverse engineer your theory and say, well, now we have to have a multiplier coefficient on this guy’s labor.  So then you have a contorted theory.

Anyway, that is the Labor Theory of Value which resulted in Communism and hundreds of millions of deaths.  If Locke is to blame for that, I guess we could say he is a little bit negligent.

But I won’t blame Locke for that because you can trace these ideas back to Muslim thinkers back in the 1300s, I mean a long time ago.  But there is some evidence that this idea of labor as this thing  people can own, this metaphorical approach, did lead to the Marxian Labor Theory of Value.

But the problem with Locke is the Labor Theory of Property.  Again, the idea that you own things that you mix your labor with.  This, obviously, is not true.  For example, if I am an employee of a company, which Marx would abolish I guess, and I’m paid to mix my labor to build a chair out of the employer’s wood and nails, well, I mixed my labor with it, why don’t I own it?  Well, because there is a contract and I never owned it in the first place.


So the problem with the Labor Theory of Property is that it has led to this idea…libertarians will say this all the time, sort of casual thinking, not very precise, they’ll say there are three sources of property ownership.  Number one, if you find something, original appropriation or homesteading, Locke’s idea, a libertarian idea.  Number two, by contract, by contractual acquisition.  They’re right about that.  If you want to mention a third, it should be some kind of aggression which I mentioned can trigger a property title transfer, but that is a way of transferring title that exists already, so let’s say finding something or by contract from a previous owner.


And then they’ll say the third way you can own something is by creation.  See, what they doing is they’re going back to this labor idea.  They’re mixing things together.  They’re thinking humans are productive.  We labor.  Our labor, our intellect, our intellectual creativity helps create things of value.  And just as I labor in a field and make a valuable firm out it, I must own that because I labored on it which means I own anything that I create with my labor.  You see how they go from one argument to the next?  They never stop and ask the question, well, what is an ownable thing in the first place?


And then sometimes they’ll argue by possessives, the most maddening thing.  Like if I don’t own my labor, who does?  Like the word “my” means I have to own it.  I have a wife, my wife, my girlfriend, my job, my customers.  Do I own those because there is a possessive?  No. Sloppy thinking.


So another dangerous word that I wanted to get to is the word “property”.  We have this tendency to refer to things that we own as property.  This iPad is my property.  Now, I think it would be better to say this scarce resource, I have a property right in this scarce resource or I own this scarce resource.  Because when you start staying, “That’s my property” – think about why the word property was used in the first place. Locke said you have a propriety in your things.  What he is talking about is that when a human being acts in the world, we don’t just use our bodies, we have standing room, we have other scarce resources that we employ to affect change, as I mentioned.  All these things are sort of in the orbit of your control.  They are a property of yourself in the sense that they are a feature of yourself.  They’re a characteristic of yourself.  They are a way of describing part of your nature or your identity.  So what they’re talking about is what is proper to man?  What is proper for a man to be able to rightfully control?


So that is why the words property and property rights is used – now it is like a type of metonymy, if you know what that is, to refer to the thing itself.  But if we think clearly, we never arrive at the question most intellectual property advocates do, for example, which is, well, the question is what is property?  No, that is not the question.  The question is who owns this resource always because nothing else can be fought over because resources are necessarily things that can be fought over or contested.   So the question in all of political philosophy is always, always if you can point to a given resource, something that more than one person desires to use and there is potentially conflict over, who should rightfully be able to control it or own it or have a property right in?  But don’t call it property unless you are really careful about it.  If you call it property, then you are going to end up with intellectual property and things like this.


The problem with the argument, that there are three sources of ownership for property, is that it conflates the source of wealth with the source of property rights.  It is completely true that if I own some raw materials, let’s say some paper or let’s say some wood and some metal, and I fashion these things into a chair, I have made an object that is more valuable.  More valuable to who?  To me or maybe to a potential customer.  Remember, there is no value in the chair.  Value is not intrinsic.  It is not objective.  Value is the subjective relationship between valuing, acting human beings.


So, anyway, I transform resources into a more valuable shape or we can say, in economic terms, I have created wealth.  Why have I created wealth?  Because I have made something more valuable to me or someone else.  In fact, if two people just trade their objects, two people trade an apple for an orange, they have created wealth by that transaction.  It is not, as classical economists say, a horizontal trade where the values are equal.  In fact, the guy who buys the apple with his orange values the apple more than the orange and vice versa.  That is why they engaged in the trade.  Each one is better off after the trade.  So wealth is created just by pure trade.


Wealth is also created by humans laboring on their property.  Wealth can also be destroyed.  If you make a mistake and you ruin your property in an attempt to make a machine or something, then you can lose wealth.  But the property rights don’t change.  In fact, for me to make a chair presupposes that I own the raw materials.  I already own these raw materials.  How did I get them?  One of the first two ways.  I either bought them from contract from a previous owner or I homesteaded them from the state of nature.  That’s it.  So this ownership starts already, before the act of creation or the act of production.  The act of production is an act of laboring, using your labor, sure, on materials that you already own or it can be on someone else’s materials, if you are an employee working on someone else’s  materials and then you don’t own it.  So they key is always who own the raw materials that go into productive labor.


So creation, labor, is a source of wealth, but it is not a source of property rights.  [See: Hoppe on Property Rights in Physical Integrity vs ValueObjectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation MetaphorsLocke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’Creation and Labor as Sources of Property Rights and the Danger of Metaphors.] And if you realize that, you will never fall into the trap of wondering, well, who owns that labor?  Who owns that poem?  Well, naturally, a poem doesn’t spring out of nowhere.  If you believe a poem is an ownable thing, or a movie or a song or a pattern of information or a discovery or a fact or a database, well, I agree with Tibor Machan.  The best candidate for owning that is the guy who created it. [See New Working Paper: Machan on IP; also see the criticism and discussion in the comments (e.g., those of Carl Johan Petrus Ridenfeldt at November 30, 2006 4:59 PM); see also Owning Thoughts and Labor and related comment thread; and the comments in The Copyright/Baseball Analogy.]


But this presupposes that these things are ownable.  Not everything is ownable.  My memories are not ownable.  My love is not ownable.  My past is not ownnable.  The earth’s rotation is not ownable.  These are characteristics, ways of describing the universe.  You could say, as a practical matter, that I own my actions or I own my memory because I can control them.  But if you say it like that, you make the mistake of double counting because you are saying, well, I own my body and I own my actions.  Well, no.  You have the ability to control what actions you perform because you own your body.  It is a consequence.  It is derivative.  It is not a separate independent thing.  If we clear up these confusions then a lot of confusions in thinking arise.  So, as I said, property, limited government, state.


Let me talk a little bit about one thing I touched on which is an objection I hear a lot.  This is about contracts.  Now, I hear this all the time, about this labor argument. They say, well, if you don’t own your labor how can you sell it?  I hear this all the time.  This is because people don’t usually have a sophisticated or deep understanding of contract law in general, much less what I think is the libertarian view which is the Rothbard/Evers view which he calls the Title Transfer Theory of Contract.  I don’t want to get too much into legal theory, but let me just tell you what I think is a simple way to look at, the right way, to look at contract.


First of all, in today’s legal system, the way contracts are viewed as binding obligations….and that is how most libertarians look at it.  If I make a promise to you with a certain formality, in a certain way, then the law, even in private law in an anarchist society should enforce that promise.  Your promises should be binding.


However, even in today’s legal system, which characterizes the contractual realm that way, it doesn’t operate that way.  So, for example, if I promise to sing a  song for you at your son’s birthday party and I decide not to show up, then you can’t go get the cops to drag me there and make me sing, for several reasons.  Number one, it wouldn’t be a very good song.  I’m being compelled.  And that is a practical consideration the courts use.  Courts generally don’t enforce what is called specific performance which means they don’t actually treat contracts as binding promises.  What they do is they make me pay $1,000 damages to the guy, in a contract law suit, which means really what the contract is is just a transfer of title to property.  It’s as if I had said, “I’m predicting that I will sing at your son’s birthday party tomorrow.  I’m just making a prediction because I know myself pretty well and I don’t think I’ll change very much between now and then.  I can’t bind myself because I might change my mind.  But I tell you what, to give my future self an inducement to sing, I will hereby transfer to you $1,000 in damage payments, conditioned upon my not singing”.


That’s fine.  So that is what the contract is.  It is really a transfer of property.  And that is what Rothbard said.  Rothbard said contracts should not be viewed as obligations or promises.  They should only be viewed as transfers of title to owned resources.  I just said property.   See, I made the mistake, too.


And if you think about it, this is perfectly consistent with and an outcome of the two sources of property rights, the Lockean idea that I mentioned earlier which is the idea that you own things because of first appropriation or by contract.  So contract here means the owner of a resource has the ability to give up his ownership of it in favor of someone else, to transfer it to them.  That is what contracts are.   That’s how they need to be viewed.


So how do we reconcile this with the idea that you can sell your labor like in an employment contract or a service contract?  The problem here is the person making the objection to my argument, the person arguing for IP in effect, the person trying to argue that labor is an ownable thing because you can have a contract regarding it, what they are doing is they’re thinking in terms of a standard simple contract like the apple versus the orange.  A typical contract would be two people exchanging titles, apple for orange.  It is an exchange.  It is a contract.


But remember the definition of contract I mentioned doesn’t talk about exchange.  It just talks about transfer.  So if I give my niece $1,000 gift to go to college, that’s a contract.  It is a transfer of title. It is not an exchange, not really.  I mean you could say I get pleasure out of it, but it is definitely not a bilateral exchange.  It is a one way exchange.  This is how we have to think of employment contracts or service contracts.  The sale of labor is another dangerous, confusing metaphor. The sale of labor is not really a metaphor.  It is really not what happens.  It is not literally true.


What is happening here is people are analogizing this labor contract to a regular exchange and they’re thinking, well, if there is something being sold there must be an exchange of title of what is being sold, title to the labor.  No.  It is like the example I gave earlier about the singing.  What is being done is the buyer of my services, you could say, knows that I own my body.  He knows I have the power to decide not to sing or to sing or to paint his fence or not paint his fence.  He knows he’s got to motivate me to do what he wants me to do.  Just because this  guy wants something and is willing to pay for it, doesn’t mean that thing is an ownable good.  He might want it to rain tomorrow.  He might want there to be peace in the world tomorrow.  These are the ends of action, but they are not ownable things.


Scarce means are what we use to accomplish ends.  They are ownable things.  The ends of actions are often intangible.  I mean, I might pursue a girl and buy her roses because I want her to go out with me.  I want her to marry me and be my wife.  But that end is getting a wife.  It has got nothing to do with an ownable thing.  We have to give up the idea that just because you pursue something and you pay money for it, means that the thing you paid for is an ownable thing.


It is the same thing with a service contract.  I want this guy to sing a song.  So I know he is going to refuse to sing unless I compensate him.  So I make a deal with him.  I say, if you sing, I will transfer $1,000 to you.  In other words, I hereby transfer $1,000 to you, conditioned upon you singing this song.  If he sings it, he triggers a condition.  The money transfers.


Did he buy the song?  No.


Did he buy the singing?  I guess, in a metaphorical sense.  As long as you keep in mind that no title was transferred back.  It was an outcome that I wanted.



So the argument goes, well, you have to own something to sell it.  I think I just showed why that is incorrect.  So the fact that there are labor contracts doesn’t show that labor is ownable.  Now the opposite would be what Walter Block has argued with me before.  He says, well, if you own something, you have to be able to sell it, which goes towards voluntary slavery.  He says, “Stephan, if you own your body, then surely you can sell it in a slavery contract and it should be enforceable”.


His argument is that, if you own something, you have to sell it.  What is the assumption here?  The assumption is that ownership implies the right to sell, but it doesn’t.  Ownership means the exclusive right to control something.  You have to have something else to make something sellable.  In my view, this is a little bit of a tangent, but my view is there are ways of acquiring two types of property.  One is your body.  We own our bodies, not because we homestead the bodies.   We don’t acquire our bodies.  We can’t exist without our bodies.  That is part of our identity, our essence, our existence.


There is another reason we own our bodies.  That is because close connection to our bodies.  We have a unique direct control over those resources.  So it is not homesteading.  Locke alludes to this a little bit with the idea that God gives everyone the propriety of himself.  He doesn’t talk about homesteading there really.



For things that were previously unowned, out in the world, we own those because we have first appropriation or some contract after that.  So for all these things the first idea is that ownership means you have the exclusive right to control it.  Nothing in that implies the right to sell, not immediately, not directly.  But then we recognize, well, this thing was unowned before.  I’m the one who acquired it.  I have the right to abandon this thing.  I can “unown” it, so to speak.  I can return it to the state of nature.  And because of that power, which is an implication of the nature of these scarce resources and an implication of how we come to own these things, that gives you the practical ability to abandon it in favor of someone else.  You know, I could take this apple and instead of throwing it into the woods, I can hand it to you and instead of loaning to you I could say I now release my claims.  Now I have given up my ownership.  Now you are holding this unowned thing.  You would instantly be homesteading.


This is why things that have been homesteaded can be sold.  It’s not because you own them.  It’s because of the way they were acquired.  Things that can be acquired can be de-acquired.  But we don’t acquire our bodies and our bodies were never unowned.  From the moment you were a legal person or a philosophical person, you were identified and tightly bound up with a body. [See How We Come To Own Ourselves.] I’m not going to get into the metaphysical or religious idea of whether you have  a soul and whether you are just your body or whether there is….I don’t care.  It makes no difference.  If you’re just a body, then your body owns your body.  Fine.  Don’t give me nonsense about, well, that makes no sense because what I hear is you don’t think I’m a self-owner.  That means you think you’re my owner or someone else is.  So I’m going to keep my eye on you. [See What Libertarianism Is.]


Let me mention one thing for two more minutes.  There are some libertarians, like Adam Mossoff, others, they’re trying to rehabilitate Locke.  They’re trying to show that Locke did believe that intellectual property was a natural right, which he didn’t.  It’s wrong.  Locke did believe in intellectual property, but just for prudential reasons, the same reasons the Founders did.  Locke, in fact, did not believe that his homesteading theory implied that intellectual property is a type of right which means, I think, he realized that he was using an overly metaphorical description.  So I think he would have taken my side on this.


And number two, so what?  I don’t care what Locke believed.  If Locke believed in intellectual property, he was dead wrong, just like he was wrong about slavery.  So I’ll stop here.


Thank you very much.

Gooch: Okay.  We are going to start with questions. I’m going to start off with a question because I have a question.  Let’s imagine a world without intellectual property rights as recognized by law.  Is this a world where drug companies  and companies invest millions and millions of dollars in research and development for lifesaving drugs?


























































Okay.  If we live in a communist dictatorship with no private property rights, there is no intellectual property law, then, no, I don’t think drug companies would exist at all.So the question has to be imagine some kind of world where intellectual property rights somehow disappear and we have some kind of free market still.  And I am imaging that the reason we don’t have IP laws is people realize what private property rights are and so we have a more stateless society in the first place, a freer market.  We’re going to have much more wealth and riches.  And so, yes, I think of course.If you imagine taking the tax burden and the regulatory burden and the FDA process and the tariffs and all the government regulations on drug companies, it would remove immense burdens from them.  They would have tons more customers, tons more money to invest.  And, as an empirical matter….I mean my argument is more principled and moral, just like Ayn Rand said about anti-trust law.  We think it is unlikely businessmen would be able to collude or cartelize successfully on the free market.  But even if they did, they have the right to do it. There is freedom of contract.I would say the same thing about IP.  Even if we have less overall innovation, I’m for property rights in principle.  I don’t think anyone else should have a property right in my resources to tell me what I can’t do with them unless I’m committing some type of tort or I have agreed by contract with them.But, as an empirical matter, if you look at Chapter 9 of Boldrin & Levine’s book, Against  Intellectual Monopoly, which is a more utilitarian, empirical look at the IP thing, they show there is a whole host of myths about the pharmaceutical industry.There is just a myth that the patent system is really a big contributor to their profit margins.  And, in fact, if you took away the FDA process, the “need” for patents would reduce.  The drug approval process takes so long because of the FDA and they have to disclose it to the public.  And so, in a free market, you could keep things secret for a while.  You would have a first mover advantage.  But in today’s society, these drug companies have to pull down their knickers and show the world everything they’ve got. So by the time 15 years later this drug is approved, now everyone is ready to compete with them if they wanted.  So they say, “Oh, I need a patent to stop them from competing”.  So the government screws me and I want the government to screw my competitors now to level the playing field.


I prefer to free up on both sides and I think we would have a lot more creative artistic achievement.  People could make documentaries without being worried about being sued for having a statue of some building in the background.  You wouldn’t have large companies bullying small companies and individuals with trademark suits, defamation suits, commercial liable  patent suits.  I mean there are people dying right now.  Tens of millions of people have died in Africa because they can’t get AIDS drugs because the drug companies here insist on


keeping the patent caused monopoly prices up.  There are people in New England with  Fabry’s Disease who cannot get this drug, which is patented, because there is a limited supply and no one can compete with them and make additional supplies.  And what they have is being sold to Europeans for some arcane reason.  There are people dying right now because of patents.


Patents cause censorship.  Not just copyright, trademark  and patents cause censorship as well.  Copyright is causing people to go to federal prison.  I’ve seen one study that the average internet user is potentially guilty of $4.5 billion worth of copyright infringement liability every year, just for emailing people things and copying a few things for a report.  It’s insane.  And, as you mentioned at lunch, we all probably commit four or five felonies a day.  We can’t help it. [We are all copyright criminals: John Tehranian’s “Infringement Nation”.]


I think an IP free world would be more innovative, freer, richer, more competitive.  Look, the advocates  of IP, even free market ones, say we have to have patent and copyright to slow down the diffusion of ideas.  We don’t want unbridled competition.  They say this. [Intellectual Property Advocates Hate Competition.]


Well, I want unbridled competition because I don’t want anyone bridling it.  So that is my opinion.

Audience Member:0:43:25.3 I was wondering if our idea of property itself maybe needs to be clarified.  Because there are two parts of it.  There is an empirical component of property as in who is actually exercising and who is in control of it.  And then there is a normative component of who should exercise control.  I wonder if those two have to be combined into one concept of property or can you split them?











Well, the institution of property is inherently normative.  What you are talking about more legally should be classified as possession.  Even that has a normative component.  There’s legal possession in the law.  And, of course, they blend together.  They affect each other.So, for example, you have heard the expression, “Possession is nine-tenths of the law”.  There is a reason for that.  Because you have to have a presumption about who owns something.  But the question is always who has the legal right to control something?  And when two or more claimants come into some kind of court, even a private court and they are reasonable people, they both want this thing, but they want to settle the dispute in a reasonable way, then the question has to be who has the right to control it or who should get it?  The guy that is currently in possession of it may be presumed to be the owner unless the other guy can show that he shouldn’t be.  So the burden of proof might be on the claimant.  Possession might be what is used to determine who the claimant is, but I do think we should distinguish them.But if you do what I said earlier and you keep property as a right idea, and we talk about ownership or property rights and scarce resources, then the question is always who ought to have the right to control that scarce resource?For pure human action, as I mentioned, human action means using your ideas to decide and choose what scarce means to actually employ.  That is a pure possessive or non-normative concept.  But for the humans that are civilized and that want to live in a civilized society, where we are not fighting with each other with violence, then we seek for normative rules.  We seek to say, well, who should have that thing, not just who is using it.
Audience Member: If Locke was wrong on labor, how do we originally appropriate resources?  Or how do I know what I need to do appropriate resources?



















































Right.  So…I didn’t mention this, but another fallacious sort of concept that leads to confusion is the very idea of private property.  In a way, property is public.It is not “private” because the very function of property rights is that we recognize there is scarce resources and we want these resources to be used by someone productively.  And because we are moral normative people we are trying to come up with an agreement with each other as to the fair way of doing it.  There is an ethical concept there.  So we’re searching for some kind of property assignment rule.  Who is the best one to get….we think someone should have it.  Otherwise, we are going to have fighting over it and they’re not going to be used productively.So the very idea of property rights is to set up boundaries or borders that are publically visible.  If you don’t have some kind of public border, publically visible…Kantians would say intersubjectively ascertainable.  It just means an objective border, something everyone can see.  Tall fences make good neighbors. The Robert Frost thing.  I think it’s Robert Frost.Property, inherently, has to have some visible manifestation, not only of its borders, but of a tie between the resource and the owner.  Other people can know where the borders are so they can avoid infringing it or trespassing if they want to be cooperative and they know who owns it so they know who to get permission from.  So for something to be a property right, the act of appropriation has to somehow set up these borders.So that is why mixing labor comes into it.  Basically, you have to transform it or do something with it.  You might put a fence around a field.  You might take a limb from a tree and carve it into a staff or a club.  When you do these things people can recognize them as artifacts.  Some human has done something and they have done it in a way to set up a border that signifies their claiming of proprietary interest in it.Now, that is part of language, right?  In other words, we can’t have society without language.  Language means we have the ability to communicate with each other somehow.  And communication requires default or presumed rules.  So it is not always expressed or explicit.


So if a custom arises in a given area that having a house in a neighborhood with normal neighbors means that the homeowner is kind of okay with little neighborhood children going on their lawn to retrieve a lost baseball, which means you don’t put landmines on your lawn to kill those kids.  It would be murder if you did that, not because you don’t have the right to keep people from trespassing, but because by the language of the community, you have basically communicated to everyone, I’m like the regular guy.  People can walk up to my door and knock on it for a cup of sugar.


If I want to change the default presumption, I have to put a post it sign up and say “Trespassers will be shot” or something.  So you change the default presumption.  If you lived in a neighborhood where the presumption was the opposite, then you might have to put up a sign saying, “You’re welcome to come knock on my door for Trick and Treat.  I won’t shoot you”.  And then you are inviting someone.


But the question is always…so labor and labor is one way that you can transform and therefore connect yourself to the property and send up a sign to the community using communicative norms.  You’re telling people this is mine.  It is no longer unowned.  I have transformed it with my labor.  The reason you have a better claim to it is not because you own your labor.  It is because you connect yourself to it.  You’re the first one to own it, to use it.  And, again, if the first person to use property doesn’t have the right to do it, then we don’t have a property right system at all.  We’re back to the war of all against all and violence.

0:48:43.0Hubbard: We have one last question.  If you didn’t get your question in, we are going to have a panel discussion….
Audience Member: ….To better understand I would like to put up a scenario.  Let’s say that during the discussion right now, I recorded it and then I burned it on some DVDs and I put it on the market and I sold them and I made a million dollars.  Who owns that?
Kinsella: No one.  It is not an ownable thing.  Who owns the money?  You own the money.  People gave it to you.  People that own the money gave it to you voluntarily in exchange for you doing something that they liked.
Audience Member: But do you have any claim on that money?






No, absolutely not.  Unless, unless, you agreed to a contract by entering this private arena which has certain rules of the road, so to speak, or you and I….I said I’m not going to speak unless I get everyone that wants to come hear me sign an agreement saying if they profit in any way, if they learn from what I said, if they have the audacity to walk out of here knowing anything more than they knew before, if it affects their actions at all, then they have to pay me a million dollars.  Okay, I think I would have an empty stadium.So unless there is a contract or an implicit contract because of the rules of the private venue, then, no absolutely not.  You have the right to do whatever you want.  Because you didn’t trespass against my body and I didn’t have a contract with you.  Basically, Libertarianism says you can do whatever you want.  We  don’t need to seek permission for our actions.  This is not supposed to be Soviet Russia.  This is what the IP mentality does.  It makes people wonder what permission do I have to do that?  No.  The question is you can do anything you want in your life as long as you don’t invade my property borders.  That’s it. And you didn’t do that, did you?  You gave people information.  And if I don’t want people to see my face I should stay in my house all day.
Hubbard: Thank you Stephan.


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