[ExI] Privatization and so called public "ownership"

[Dan]

--- On Fri, 7/10/09, Stathis Papaioannou <stathisp at gmail.com> wrote:
> 2009/7/10 Dan <dan_ust at yahoo.com>:
>>> As for what type the shares will be, that
>>> should ultimately be up to the shareholders.
>>
>> And you seem to have definite ideas on just what
>> shareholders would decide and how they should decide it.  I
>> think, instead, the common law property approach would be
>> best.  Yes, in some cases, it might mean an ownership
>> arrangement that's entangled, but I doubt that'd be so in
>> every case.  And I think it would almost never be the case
>> that people wouldn't be allowed to sell shares.  In fact, I
>> would think any case where a publicly stolen property were
>> returned or turned over to a group -- say, a group of
>> taxpayers who were forced, over the years to pay for that
>> property -- with the stipulation that each shareholder (and
>> I'd expect shares to be held by the level of taxation -- not
>> equally unless all suffered equal taxation) could not sell
>> her or his shares that this was not actually turning
>> property back to its original owners was illegitimate.  If,
>> afterward, all such owners -- not the majority, but all --
>> decided no one could sell her or his
>> shares or could only do so with majority consent is
>> another matter.
> 
> I gave this as one example of what might be done if people
> are quite
> happy to continue managing a public resource as a public
> resource.

But you seem to think this is the default case.  Also, in fact, this could never be a matter of continuing things as they are -- unless all consented, including the original owners of the properties that were stolen.  (Or, in the case of property improperly taken from an unowned (or abandoned), homesteading would have to be allowed.)

> They might decide that roads should be treated differently
> to a telecommunication company or airline that is being
> privatised, for example, with a different share structure.

Whole possible, it appears to me rather that you're baking in a possible case as the only likely one.  This is not to say it's unlikely.  One could easily imagine people having little imagination -- believing roads have always been [mis]managed in one way and not being able to see any other way -- and continuing with present forms.  But then why de-nationalization or de-socialization at all?  It's almost as if you're imagining that the Soviets fell and people in, say, Hungary decided they actually prefered to be ruled by the Soviets, so they're going to keep the Red Army there, keep the secret police, and all that, but just do it through a different form.  It's not impossible, but hard to see why they'd bother changing things at all.

> If these really were
> "stolen" from an individual or corporation then there may
> be a case
> for returning them to the previous owner, but if they were
> built up on
> public land with public funds, then they should be returned
> to the
> public, or if privatised the money thus obtained returned
> to the public.

As I pointed out earlier, it's not the public per se, but taxpayers or others robbed.  These would be, in this case, the original owners.  If, e.g., the government taxes you and me to buy, say, a computer, then it's really our (your and my) property -- not the property of the whole public.  (Especially, not the property of other net tax-receiving members of the public.  In this case, net tax-receivers actually owe money or property back to the net tax-payers, all else being equal.)

I grant that in might be tough to figure out who owns what if many are taxed, it's all put into one fund and the government doles it out for this or that item.  (And most government spending is pure consumption anyhow -- and almost all of this will never be recovered.  This is little different than the guy who robs your dinner and then eats it.  Yes, he owes you dinner, but the original property has been consumed.  One can imagine an extreme case of the guy robbing your dinner every night for years and not being able to compensate you -- maybe because he just can't afford to pay you back.  This is, sadly, the case with a lot of theft by government.)  But this doesn't change the principle.

Now you might add that, in many cases, the best rule is to divide up the properties among the public.  Again, it would only be the net tax-payers and not the whole public.  And this would have to be judged according to how much on net they were stolen from.  For example, someone who, on net, was robbed of $1 million (say, over the course of decades) is owed a larger share than another person who, on net, was robbed of $100,000.  (I also grant that determining these net amounts might not be easy in practice, but assuming equal shares shouldn't be the default state.  Just as in the case of, e.g., two farmers whose grain was robbed, we shouldn't assume on finding the robbers with all the grain that both farmers get exactly one half of the grain.  It could be the case that each owns one half of it, but that would remain to be proved NOT merely assumed.)

in this vein, I am critiquing most de-socialization and de-nationalization schemes, such as those carried out in the former Soviet bloc nations.  And I'd also critique many "privatization" schemes, which, in too many cases, seem merely to transfer property from nomimal state ownership to ownership by a clique of connected political insiders.  (Granted, in some cases, this might be slightly better than state control and ownership, but that doesn't make it just.)

>> I would argue that the core libertarian principle is
>> something akin to a mathematical theorem.
> 
> That's the part that worries me. An a priori truth is not
> changed if people suffer.

I can understand that fear.  I'm not sure it applies here.  That is, on the economics side, any a priori truth would not be something that could change.  It would merely describe how things are -- not something open to choice.  So, e.g., that rent control won't work can't help you mitigate human suffering.  The choice is merely whether one is willing to trade the suffering caused by rent control over the suffering caused by lack of it.

As rent control generally takes a long time to bear its fruits -- current tenants tend to realize an immediate windfall making it look palatable and as if it has no downside save for whining landlords, but the bad effects happen over the long term as less people decide to improve or provide housing in the first place -- look at anti-gouging laws instead.  These tend to be put in place or enforce during crises or natural disasters.  For instance, during a flood, the government might decree that no one can raise prices on various goods.  This seems to have the immediate effect of these goods being available to those suffering the immediate problem -- say, of lack of hotel rooms, potable water, or various tools to rebuild, etc.  But what happens is, given a crises or disaster, more people stock up on these at the set price so the supplies run down and there's no incentive to ship more supplies in -- save for pure charity.

The case of hotel rooms is telling.  Given the same price for a hotel room, refugees from a flood region will not economize as much.  For example, they'll continue to sleep one to a room or one couple to a room.  But at a higher price, they might start to sleep, where legally allowed, more than one or one couple to a room.  Thus, where at the legally decreed price, a few people get rooms to stay in, at the market price ever more people will get rooms.  The anti-gouging law, while perhaps well-intended (though none of us can yet read people's minds to tell what the motives are here), ends up causing more suffering: some are left without a place to stay.

The same logic applies to potable water, food, and the like.

But you were also talking not about economic laws/principles (in a previous), but explicitly here about the libertarian principle.  And here I can see your fear.  (And, of course, you're not the first person to raise this fear; and I'm not the first person to address the raising of it.)  

Just a side comment here: I would say that the main way people cause suffering for others is via coercion.  So, the presumption against increasing suffering is strange to be pitted against the libertarian principle.  Add to this, if one takes a stance that a priori principles might lead to suffering because following them blindly might cause one to adhere to some rule that works in most cases (works in terms of reducing suffering), but fails miserably in others seems to be a type of a priori principle against suffering.  Don't you think this alone might make you reconsider apriorism? +


 
>> I'm not sure how this applies to either free trade or
>> to noninitiation of force.  To wit, the usual libertarian
>> take on slavery is that it's forbidden tout court.  To wit,
>> the usual libertarian take on selling air is that, under
>> most circumstances, it's a free good and people just have a
>> right to it as is.  (That said, there are special
>> circumstances where it becomes an economic good -- i.e., a
>> good one would economize and so possibly buy and sell --
>> such as at high altitudes, in space, and underwater.)  This
>> means, it's just a ground condition no one can take away
>> from someone else.  Yes, someone might be able to someday
>> buy the sky, but they wouldn't likely have the ability to
>> say, "I own the air around you, so you must pay me if you
>> plan on having any."
> 
> I can freely sell you the atmosphere above my house, and
> lease it back
> from you. If the lease expires you can freely increase the
> air rent to
> whatever you want, and I can freely agree to the price or
> else stop breathing.

Or move.

> If I continue to breathe then I am stealing your property,
> and you are within your rights to prevent me from doing so,
> using
> violent means if necessary. If I can't pay and wish to
> continue
> breathing you might agree to let me be your slave for life,
> and I can
> freely accept or reject your offer. Is there anything wrong
> with any of this?

If i understand you correct, your fear is that someone might sell away this right -- and you fear they'll basically be enslaved by their choice.  While possible, I hardly see how "public ownership" changes this.  What's to stop, e.g., the government -- er, what you believe to be the people -- deciding to charge an air tax as it might claim to need to tend this vital resource?  What democratic principle would this go against?  How is it ruled out?

>> One way to examine this issue is perhaps to look at
>> the case of water rights on a river.  Imagine a bunch of
>> people homestead property on a river.  Let's say they use
>> the river as a source of water -- say, for drinking,
>> washing, and farming.  Someone upstream from them can't
>> decide she owns the river up there and dam it without their
>> approval and then charge them for water.  That would cut
>> off their water supply.  In a sense, and this lines up with
>> common law notions of property, those people don't just have
>> a right to the land along the river, but also to the water
>> supply from it.  One could make a similar argument for air.
>> Someone couldn't homestead all the air and then cut these
>> people off and charge them for air.
> 
> But if I sell or give you my part of the river, I lose my
> right to it.

Yes, that's true.  I was merely trying to show, though, that people would not start in the state of someone claiming to have homesteaded a resource that, in fact, other people have, in fact, already homesteaded.  My meaning here is that the people living on the river, using its water, have already homesteaded the use of that water and that a latter party -- the dam builder upstream from them -- can overturn this -- at least, not without their consent.

Now, you might persist here that this can lead to someone in the desert selling their well and being forced to give all they own for a drink.  This is not ruled out.  (And one might repair to Rand's "ethics of emergencies," though my feeling is this escape hatch allows far too much for blurring the lines.  While, say, you and I might agree the man dying of thirst deserves a drink, regardless of who owns the well -- we might say this emergency case trumps all talk about rights and property -- another person might just as well argue that the man about to lose his home because he was stupid enough to buy when he had a good job and housing prices were rising is now in an emergency situation and should be allowed to keep it.  And there's also the case, all too frequent these days, of arguing this or that very large corporation should be bailed out because the whole economy is in an emergency.)
 
>>> Moral or economic principles should not be
>>> established
>>> a priori and followed to ridiculous ends, no
>>> matter what.
>>> That was the mistake of the Soviets.
>>
>> The Soviets had a completely different stand in
>> regards to both moral and economic principles.  They did
>> not hold any a priori principles in this regard -- and took
>> a firm stand against apriorism.  IIRC, their actual view
>> was the Party itself decides which principles are to hold at
>> any time -- kind of negating the notion of principles or of
>> any principle other than obedience to the Party.  Also,
>> purely in terms of economics, Marxism -- and Soviet ideology
>> followed it in this respect -- does not hold any a priori
>> economic principles.  IIRC, Marx and Engels sided with the
>> German Historicist school -- a school famous for believing
>> that there are no economic laws aside from particular
>> regularities for specific historical settings.  In other
>> words, economic laws are not eternal or immutable, but
>> determined purely by historical context.  (This view of
>> economic laws was used by socialists and nationalists (later
>> on, fascists) to argue against things like
>> the Law of Supply and Demand or any critique of their
>> specific economic policies.)
>>
>> Also, with Marxists in general, and the Soviets in
>> particular, wasn't the belief here that economic
>> regularities were, at best, merely manifestations of a given
>> stage of social development?  I.e., primitive communism had
>> its economics laws, ancient slave societies theirs,
>> feudalism its, various stages of capitalism its various
>> laws, and later stages -- socialism and eventual communism
>> -- its newer laws that would not fit the earlier stages?
> 
> Marx believed in historical progress towards communism as a
> scientific
> law, which I suppose does make it a posteriori rather than
> a priori.
> But the point I was making is that the Soviets believed
> this so
> completely that they ignored any evidence to the contrary;
> for
> example, they ignored any evidence suggesting that the
> working class
> in their capitalist neighbours were better off and their
> lot
> materially improving, because, well, you can't argue with a
> scientific
> law! I see something similar happening with those who
> worship the free market.

> Faced with evidence that people are happier and better off
> with (for example) public health or public education, they
> *know* that
> this can't be right, and their challenge is to find the
> flaw, like
> finding the flaw in a design for a perpetual motion
> machine.

While in some sense true, I thought the matter was under dispute -- that is, whether everyone is actually better off under government (i.e., coerced) provision of certain (or all?) goods and services.  And how would one measure this being happier and better off?  To know, one would have to have a clear measure of happiness and being better off.  I thought you and others were using longevity as a proxy for this -- that is, that people who living longer are, all else considered, probably happier and better off than otherwise.  And were drawing the conclusion that since Americans on average don't live as long as, say, the Dutch, that nationalized healthcare must be better and make them happier?  Is this not your view?

Weren't others, including me, not just drawing on a priori laws of economics here, but also questioning the conclusion and the data?  After all, even if one thinks economic laws are not a priori, one might still question the claim.  (The particular grounding of economic law might differ -- some might believe they are a priori, others not, but people in the latter category -- no a priori economic laws -- might still believe there are economic laws (just as there are laws of physics) and also question the data and conclusions on nationalized healthcare.)

Add to this, Rafal, others, and I have questioned the characterization of America as having almost no involvement of government in healthcare.  In fact, in terms of % of GDP -- if that's a good measure; there are reasons to question it, but it's a measure one can use for most countries today regardless -- the US government puts more money into healthcare than most Western countries with nationalized healthcare.  Thus, comparisons between, say, the US and other countries are not comparisons between nations with a voluntary system in healthcare -- i.e., no government [coerced] provision of healthcare -- and those with nationalized healthcare, but merely between different forms of mostly government provision of healthcare.  Thus what do the data say that leads one to the conclusion that freedom in this area would be worse?  Some might say that only an a priori stand against freedom would lead one to conclude that only nationalized healthcare can work
 and not only work but work much better than freedom in this area.

>> I would also distinguish between moral and economic
>> principles.  The former are normative -- telling one what
>> should be done; the latter are descriptive -- telling one
>> what happens under such and such conditions.  For instance,
>> there might be a moral principle to not to coerce, but there
>> is no such economic one.  Instead, as an economist, one
>> might ask what happens when there is coercion.  In fact,
>> many economic analyses of old were examinations of just what
>> happened under different forms of coercion.  For instance,
>> how rent control causes housing shortages.  Now, from a
>> purely economic standpoint, one can recognize that rent
>> control causes housing shortages, but economics as economics
>> does not tell one that one should be for, against, or
>> indifferent to rent control.  (Of course, one could make an
>> argument against coercion based on it having undesireable
>> unintended consequences.*  But this requires the person
>> actually disvalue the undesireable
>> unintended consequences more than she or he values
>> other aspects of coercion.  For instance, I've heard many
>> statists argue that, yes, public schooling really does suck,
>> but they still value it because they value things like
>> molding people to the national ideology or having most or
>> all have a common experience of that institution.)
>>
>> I bring up this distinction because whatever our
>> disagreements on moral principles, I think there are valid
>> economic laws and a valid economic science regardless.
> 
> Yes, although in practice economists tend to be
> prescriptive in a way that scientists generally are.

This doesn't matter.  What matters is whether economics itself need be prescriptive.  Yes, a scientist -- for example, a medical researcher -- might say, "This course is best."  But then she or he is speaking in terms of preferences and not purely as a scientist.  Ditto for economists.  There's nothing wrong with them expressing preferences as such, but then they are not specifically doing economics, but expressing their preferences for particular policies.  And such preferences might be backed by economics -- as in when an economist comes out against raising the minimum wage because it'll cause unemployment.  She is actually arguing from the expected outcome -- causing unemployment -- and expressing a preference not to raise this.  Often, too, this is in the context of policy makers and others arguing for a particular policy for specific reasons that simply don't hold.  For instance, sticking with this case, politicians and others who argue
 that raising
 the minimum wage will actually benefit everyone are either mistaken or lying because, all else being the same, unemployment will be higher.  (Aside from fitting with purely theoretical arguments, this has actually been shown to fit the data, though arguments about data often devolve into how much unemployment is caused by how much of an increase -- and then some express preferences of the type, "An X % rise in unemployment is acceptable given a greater than X% rise in the minimum wage."*)

> I also have an issue with your
> definition of "coercion". If an economic or political
> system leads to
> an impoverished underclass at the mercy of the wealthy
> capitalists,
> then you might think that's OK because they weren't
> "coerced" into this state, but I would disagree.

This is generally a myth.  The typical history is an "impoverished underclass" already exists.  Any moves in the direction of a free society are then blamed on creating such a class, when, in fact, the free society is merely inheriting the underclass and, usually, offering opportunities for people to complain about it.  Cf. the works of historians such as T. S. Ashton on this in England.

However, let's look at the abstract statement: there is a process by which an "impoverished underclass" might be created.  All else being equal, one would likely not desire this.  One would have to ask a few questions how to chuck out the process.  One would be what are the alternatives to this process?  Do they not create such an underclass?  Do they create one but it's much smaller or much less imporvished?  If one is to set as moral and justice claims and just worry about the potential for creating such an underclass, this would have to be asked.

If, as you hint elsewhere, the cure for this is to have the people (as a whole -- since you certainly don't want each person having choice here) decide, it's hard to see why, given a voluntary social order in which most people don't want an underclass, such an underclass would form.  (And were there an underclass already in existence, why the people who don't want this wouldn't just voluntarily work to overcome it.)  For instance, in any transaction, people might aim not at the most pecuniary profit, but at what they believed was equitable.  Impossible! you say.  However, people do this now by choosing to buy or not to buy from sources based on their feelings of fairness.  Think of the fair trade movement.

Now, you could bring in that people will vote for a good policy they would practice voluntarily.  But this remains to be proved.  It seems more likely to me that people will vote for policies that don't seem to cost them anything or that redistribute costs to others.  There's no reason to assume that when people vote as opposed to when they freely interact that somehow they become angels and saints aiming at the common good -- as well as they bceoming all wise in knowing just what policies will work.  If you're afraid people acting under no coercion will make bad choices -- such as creating an imporverished underclass -- I hardly see why they should be less feared when acting via the anonymity of the voting booth and when their specific choice is unlikely to cost them personally much.

> A gross maldistribution of the
> world's resources is evidence that the haves have stolen
> from the
> have-nots, even if they have done so by cleverly adhering
> to the laws
> relating to voluntary exchange. My example of selling the
> atmosphere and debt slavery is a case in point.

Actually, your examples are speculative.  In the real world, there is inequality of distribution.  And one would expect inequality, but not all inequality is just.  In the real world, we have to ask how the inequality came about.  Whatever came out coercively is not just and, hence, open to some sort of remedy.  (This doesn't mean it must be in the direction of equality, though, generally, when people coerce other people, it's to take something from the coerced for the benefit of the coercers -- and individuals or groups that're successful at this tend to repeatedly do this and tend to be a small minority.  So, they tend to concentrate wealth in a small class -- e.g., the ruling class.) Perhaps an archetypal example of this is land theft in Latin America, where a wealthy ruling class tends to "own" most of the land.  This is generally because peasants have had land stolen from them -- land they've either homesteaded or should have through some sort of
 usufruct right.  A libertarian correction of this would, in this case, be taking the land from the current legal land owners and giving it back to the peasants.  (This doesn't mean this is always simple.  Even in the Latin American case, there are complications, but the general rule is return land to the original owners where possible and allow homesteading to take place where land should be unowned.  Of course, ruling classes won't go gently into the night, so I'm not sure how to implement this -- aside from persuading as many people as possible...) 

>> As I said, "Granted, if people who justly owned these
>> decided to give me some claim to the properties, that's
>> another story."  If the people who actually justly own Nova
>> Scotia -- who actually own it and NOT who merely are members
>> of the public or citizens or whatever entity (or alternate
>> classification) you prefer to repair to -- decide on a
>> particular process (one that doesn't, of course, violate
>> rights), that's their call.
> 
> You're fixated on the idea that someone must own
> everything. What's
> wrong with the idea that some land might be held in common
> by the people who live there?

Nothing per se.  The problem is assuming the land IS held in common as a starting point.  Unowned land is unowned land.  It's not common land.  Common land, too, would have to be held in common via some just process -- that is, via either being homesteaded by a group (e.g., a group of individuals must agree to hold whatever they homestead in common) or otherwise justly transferred to a group (e.g., some gifts something to a group that the members of said group agree to hold in common or some group trades something (e.g., money) for something they agree to hold in common).  There is no presumption of common ownership.  It must arise from the unowned condition -- just as in non-common ownership.  Also, note that the group holding something common here would have to be defined.  It can't be all humanity.  It might be something like the people who live in this or that valley and their descendants.

(Let's leave aside the tragedy of the commons -- where a commonly held resource, such as land, is ill-used because the incentive to care for it is low and the concommitant incentive to overuse is high.  A classic example is a grazing pasture held in common by a village.  The benefit of overgrazing is immediate profit while the cost of it is distributed.  Of course, social customs and mores might control some of these excesses, but the larger the group, the tendency is for less care about what others think and enforcement of such customs and mores becomes harder.  Your friends and family shunning you for taking too much dessert at the dinner table is more likely to change your behavior than the prime minister scolding people who abuse the natural resources of a nation (ignoring, for the moment, that the nation owns no such resources; the government merely claims it does and that it speaks for the nation).)
 
>> Any collective is only composed of individuals. 
>> Collectives do not have any special rights apart from their
>> individuals.  Yes, a particular collective could come to
>> own property -- just like individuals.  But it has claim
>> over and above individual claims.  And a collective would
>> still have to obtain property via just means -- viz., via
>> either homesteading, trade, or gift.
> 
> If you push the definition of homesteading then you can say
> that
> public land is owned by the public by means of
> homesteading. For
> example, you can apply this to a town hall erected on
> previously unowned land using public money.

Nope.  We've already been over this.  A group of thieves who steals from you to fund their expedition to Mars cannot be said to have justly homesteaded land on Mars.  They did so with stolen funds AND by doing so they've not only unjustly acquired the land, but prevented others from justly homesteading the same land.  Groups can homestead property, but they must do it justly -- not by using stolen funds or by, say, enslaving people to erect a pyramid or whatnot.
 
>> Georgism's problems in this respect are manifold, but
>> can, I believe, be divided into two sets: moral ones and
>> economic ones.  A major economic one is how to figure out
>> rent on land and who gets it.  Elsewhere, others and I have
>> shown, I believe, this to be an insoluble problem.
>>
>> The main moral one, from a libertarian standpoint, is
>> the view that all land is held in common or collectively. 
>> This claim seems to not follow from anything -- save for
>> maybe underlying egalitarian sentiments -- and is just laid
>> out there.  Also, if one agrees with an egalitarian
>> underpinning, it's hard to see why this would and should be
>> limited to land.  Why not to labor and even to people? 
>> Georgists tend to hold views that land is special in this
>> case, but often this goes back to economic arguments or ad
>> hoc moral ones.  (Of course, I'm speaking as a critic of
>> Georgism (and its supposed libertarian variant geoism).)
> 
> There may be practical arguments against Georgism, but the
> position
> that all land is the common property of humanity is no less
> ad hoc
> than your contention that everything has to be owned by
> someone.

That's not my position.  My position is that there is property and there is the unowned according to libertarian rights theory.  I hold this theory to be basically correct -- which is not to say problem free, but less problematic than all other contenders.

Also, the Georgist contention is not that everything is not owned by someone, but that all land is owned by someone -- namely, the whole community.

> In fact, in Australian and North American aboriginal cultures
> the idea
> that land could be owned by an individual was considered
> bizarre.

Some of them did.  In terms of libertarianism, though, there's nothing per se wrong with group ownership.  There is, however, something wrong when the group (or an individual) claims to own everything -- as in the Georgist account of all land being owned by the group known as humanity.

Regards,

Dan

*  This is still expressing merely a preference.  After all, from a pareto optimality standpoint, there is no way to express values -- costs and benefits -- interpersonally.  So, harming someone by making him unemployed cannot be directly compared with increasing someone else's wages.  This is many using pareto optimality opt for policies that do no harm or do less overall harm -- rather than comparing costs and benefits and pretending than harming Peter to help Paul is scientific and we can precisely weigh the harming of Peter against the helping of Paul.

+  Of course, my views on the a priori and apriorism are actually not in line with strict Austro-libertarianism here.  I actually think the libertarian principle is not axiomatic or a priori.  I think it follows, however, in the fashion of an "intuitive induction" (epagogue) a la Aristotle -- and this applies, I believe, to other seemingly a priori principles.  In other words, I don't buy into Kant's notion of the a priori however much I might agree with the rest of his views of ethics and rights.