Coase v. Rand

Jordan,

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Ed, I want you to study up on a view before casting dispersions upon it.
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I know you do. Everybody does. This is a fact of human nature. To cast dispersions on views without 'studying up' on them smacks of arrogance, not intelligence -- but with a single exception: categorical certainties. Here is an example: You are in a fire and someone calls on you to jump into the frying pan (because it's so hot in the fire). Someone else calls on you to jump out of the hearth stove altogether. The reason that you can be certain of the absolute superiority of the latter choice (without 'studying up' on frying pans) is because of the initial reason to get out of the heat. It's teleological. That initial reason for action prescribes the appropriate choice and proscribes the alternative.

Viewing all human action in the same manner, whether it is the "initial reason" to form governments, or the appropriate principle (homestead principle) for property acquisition, the means are always prescribed by the ends -- but this sometimes requires effortful categorical analysis, not constructivist, meta-categorical, pragmato-utilitarian, Deweyian brainstorming.

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judges and legislatures -- will make law and that conflicting parties will avail themselves of it when they cannot efficiently settle their conflict through bargaining.
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They'll make law for conflicting parties who cannot efficiently settle conflict through bargaining. To use your own reasoning on you Jordan, this is an instance of big-time question begging. Here are some questions begged:

1. Judges etc. are able to know enough about the individual bargaining going on within their whole district (in order to ascertain the 'benchmark of inefficiency')

2. Any laws thereby made will achieve "justice" (equals treated equally, unequals treated unequally)

3. Folks are creatures stuck in necessary, inefficiently-resolvable conflict (efficiently-irresolvable)

Jordan, you started the thread with a quote that I did justice to. Now you say I should (if I am to continue reasoning on this subject) 'study up' more on it. The very reasoning you're defending is guilty of the same defect (begging the question) that you claimed for my response to it. 2 wrongs don't make a right, but 2 wrongs are more right than one (letting Coase coast would've been less productive of value).

The question is now one of burden of proof (now that we've both been charged with begging the question). Is it I, who must go back and check my premises, decisively prove each of my points, or study up on my opposition? Or is it you -- the one laying down a contextually new and positive claim -- that this burden weighs most heavily on?

Ed

Post 21

Friday, September 30, 2005 - 10:17am

Jordan, a professional, philosophical justification for my reasoning (to discharge your charge of question begging) is found here

Will you now discharge my charge of question begging; directed at you and Coase (the 3 begged questions which I listed and numbered)?

Ed

Post 22

Friday, September 30, 2005 - 11:25am

Ed,

Question begging is not the same as merely assuming. Question begging occurs when you assume your conclusion in making your argument. Coase is neither concluding nor even arguing that judges know their whole district or that judicial justice is assured. (Sidenote: It's my understanding that assumptions are implicit premises in arguments, and because he's not arguing it, he's not assuming it.) If anything, your criticism of judges and their ability to administer justice is just a gap in his view that should be (and, FYI, has been) addressed. That said, he does argue that some conflicts would be more efficiently resolved through allocating rights than through bargaining, but he demonstrates this; he doesn't merely assume it.

Anyway, I want you to study up on Coase before squashing him because your squashing attempt almost completely missed him. This might've been my fault for giving you such a small excerpt, and I tried to correct this by linking you to the entire essay once I found it. Anyway, you might think Coase's faults are royally obvious and that homesteading is categorically certainly true, but even these obviousnesses (word?) and truths require justification.

Importantly, the burden of proof is on he who asserts the positive. I've not asserted anything, save peripheral clarifications about Coase's view! I'm, asking why Rand's formula is better than Coase's. If you want to answer, the burden of proof is on you to support your answer. Now you punted and sent me to read an essay by Jude Chua Soo Meng, rather than telling me in your own words what you think. I accept this and will take Meng as your mouthpiece. I wonder whether you've read his essay. :-)

Interestingly, he rejects Locke's labor theory of property acquisition (i.e., homesteading) on pg 3. He goes on to defend an "original appropriation" position that he claims comes from Thomas Acquinas and Hans-Hermann Hoppe, which is really just a narrow version of homesteading, and horribly weak. The argument boils down to this: We can't have a good life if we can't originally appropriate stuff needed to sustain a good life, namely those scarcities immediately surrounding us. Therefore, we need private property as a method by which to secure these scarcities. The weakness here is that the author expects this argument to justify why all property should be private, while his argument extends only to why the immediate scarcities around us should be private. If he thinks we can't lead a good life without everything being private, he's clearly wrong because no where is there a completely privatized system of property rights, yet at least somewhere there're people who lead good lives.

Jordan

Post 23

Friday, September 30, 2005 - 2:38pm

Jordan, I'll get around to reading that crazy Coase case. In the meantime, here's the clincher of my view:

Staying alive as a human is about producing value from raw material (animals merely live off the land in a "kill or be killed, take or take more or take until it kills you" manner). No human can exist without this productive process (ie. in the jungle with no tools, no modified shelter, etc.). It's about producing value -- there is no choice in the matter.

Raw materials don't usually come in a valuable form, they need to be made valuable via modification. The source of the modification is, was, and always will be, the necessarily intelligent effort of individuals. I'll call it the principle of NIEI. Because of NIEI, we couldn't live without homestead, for the same reason that we can't live without food, water, or, on a tangent, sleep.

Imagine if someone said that you didn't have the right to, periodically, fall asleep. You'd argue that sleep is necessary to support your life, they'd argue that there are no necessaries regarding human rights, only a judicial value judgment. In other words, if there is ever a societal need that judges have deemed of greater value than your sleep, then you're f#$%-ed. Individual rights, by exemplifying that which is necessary for life as a human being, prevent this potential atrocity from being legislated.

The Meng article serves the purpose of introducing the performatory self-contradiction (anyone arguing against homesteading -- is, contradictorily, homesteading). The page 3 argument is an error on Meng's part. He makes a strawman of Rothbard's acceptance of Locke (by calling it an appeal to authority), and then offers a strawman as a solution (the idiotic example of burning a forest = owning it, with not even a word about value production!) in order to trash Locke.

This specific point is hashed over well in the chapter on privately owning the airwaves (in CUI). It's about producing value -- there is no choice in the matter. Only the intelligent effort of individuals produces the value is necessary to human life on earth.

Ed

Post 24

Friday, September 30, 2005 - 3:00pm

"Ed, I want you to study up on a view before casting dispersions upon it."

You mean "before casting ~aspersions~ upon it." Of course, after you cast your aspersions, you may want to disperse them. :)

- Bill

Post 25

Friday, September 30, 2005 - 3:03pm

Hi Ed,

I look forward to your response after you read Coase's "crazy" essay because you're still not on the mark. Coase doesn't deny the importance of value production. He implicitly accepts its importance throughout the essay. What Coase is doing is questioning who should get to produce some scarcity when the right to production is in conflict. There're some cases -- e.g., whether you have the right to sleep periodically -- that are pretty cut and dry. They will be decided the same regardless of whether we choose Rand's or Coase's approach. Good theory doesn't rest with those simple cases. Consider his cattle versus crops or doctor versus confentioner cases. I can offer a few more if those are insufficient.

In other news, I think now that this thread was a bit premature. I should probably have posted a thread examining Rand's (or Locke's, Hoppe's, or Rothbard's) theory of property rights allocation, then posted a seperate thread on Coase's bit, then called for a comparative analysis. After all, it's difficult to compare apples and lulavs when you don't know what a lulav is.

Jordan

Post 26

Friday, September 30, 2005 - 3:05pm

Bill,

How right you are. The malapropism is mine.

Jordan

Post 27

Friday, September 30, 2005 - 5:17pm

In debates like these I often sense a tendency to deny that a genuine conflict can occur. As well as denial that not all ‘violations’ are equal. The deniers will declare, ‘The initiator of force is wrong, the victim is right, end of story.’

Consider the fish. It’s not a question of what value the industrial concern puts on fish, for they are *my* fish. I am the property owner downstream who bought the property so I could fish there. I don’t want compensation for dead, $5 fish, I demand that the destruction of my property stop now. What if we cannot resolve it? In ruling the disagreement will you not be compelled to compare the relative importance, irrespective of my and their assessment of importance, of fishing versus making cars or whatever it is they make?

Or my favorite topic: Eminent domain. Imagine a railroad that is transitioning to 500 mph passenger business against the airlines. They own a one thousand-mile corridor through North America. They need to widen it from 50 ft to 65 ft. in order to make the changes. They go about buying-up the 15 ft sections of private farmland. Trouble emerges when one farmers contacts the rail company and names his price. They respond that they don’t need any of his land; they are already over 65 ft wide through his parcel. The farmer insists that’s not true. The dispute is complicated by deeds that were written over one hundred years ago and use a creek in their definition. One party says the creek channel has moved, the other say it has not moved. There are other complications. Assume the evidence is about 51/49 for the farmer. They cannot resolve it, so it goes to court. The farmer is now so pissed that he says he will never sell his land, not even for “one hundred million billion dollars!”

In deciding this dispute, could you rationally ignore the fact that ruling for the farmer has the consequence of dramatically destroying the value of the other 999 miles of the rail company’s property, hundreds of millions of dollars, perhaps even billions, (it’s value is related to it’s unbroken length at a certain width), while ruling for the rail company has the consequence of taking (per the farmer’s claim) a few feet out of thousands of acres of corn-dirt?

Jon

Post 28

Friday, September 30, 2005 - 6:16pm

Jon wrote:
>In deciding this dispute, could you rationally ignore the fact that ruling for the farmer has the consequence of dramatically destroying the value of the other 999 miles of the rail company’s property, hundreds of millions of dollars, perhaps even billions, (it’s value is related to it’s unbroken length at a certain width), while ruling for the rail company has the consequence of taking (per the farmer’s claim) a few feet out of thousands of acres of corn-dirt?

Why Letendre, you utilitiarian immoralist, how dare you suggest such a shocking heresy!

;-)

- Daniel

Post 29

Friday, September 30, 2005 - 7:01pm

Jon writes, "In debates like these I often sense a tendency to deny that a genuine conflict can occur. As well as denial that not all ‘violations’ are equal. The deniers will declare, ‘The initiator of force is wrong, the victim is right, end of story.’

"Consider the fish. It’s not a question of what value the industrial concern puts on fish, for they are *my* fish. I am the property owner downstream who bought the property so I could fish there. I don’t want compensation for dead, $5 fish, I demand that the destruction of my property stop now. What if we cannot resolve it?"

What do you mean - what if we cannot resolve it?? There is nothing to resolve. The industrial concern stops violating my rights. Period. End of story. You might as well argue that if a robber wants my money but I don't want to give it to him, we have a problem. So, what do we do if we cannot resolve it? Obviously, we "resolve" it in favor of the property owner. It is the principle of rights that provides the resolution.

Jon continues, "In ruling the disagreement will you not be compelled to compare the relative importance, irrespective of my and their assessment of importance, of fishing versus making cars or whatever it is they make?"

Relative importance to whom? Suppose I happen to think that your life is of less relative importance (to me) than mine is. Does that give me the right to steal your property and use it to serve my values? Suppose a majority considers their lives of greater relative importance (to them) than the lives of a minority. Does that give them the right to sacrifice the rights of the minority to their interests? I don't think so.

Jon continues, "Or my favorite topic: Eminent domain. Imagine a railroad that is transitioning to 500 mph passenger business against the airlines. They own a one thousand-mile corridor through North America. They need to widen it from 50 ft to 65 ft. in order to make the changes. They go about buying-up the 15 ft sections of private farmland. Trouble emerges when one farmers contacts the rail company and names his price. They respond that they don’t need any of his land; they are already over 65 ft wide through his parcel. The farmer insists that’s not true. The dispute is complicated by deeds that were written over one hundred years ago and use a creek in their definition. One party says the creek channel has moved, the other say it has not moved. There are other complications. Assume the evidence is about 51/49 for the farmer. They cannot resolve it, so it goes to court. The farmer is now so pissed that he says he will never sell his land, not even for “one hundred million billion dollars!”

Look, either he already made the deal, in which case, he is bound to it, and the court must decide what the deal amounts to and enforce its decision irrespective of the farmer's wishes, or the farmer didn't make the deal, in which case, the railroad should not have gone ahead with the project until it had secured title to all of the land that it needed.

Besides, without property rights, no "deals" are required, because in that case they don't need to be respected or adhered to. Deals, by their very nature, presuppose an understanding of and a respect for property rights. Without property rights, the railroad wouldn't need to buy up the farmland in the first place; it could just take it by force. If it is conceded that it must secure the voluntary cooperation of the individual property owners adjacent to its corridor, then on what basis can it arbitrarily suspend that principle, if one or more of the farmers refuse to cooperate?

Jon adds, "In deciding this dispute, could you rationally ignore the fact that ruling for the farmer has the consequence of dramatically destroying the value of the other 999 miles of the rail company’s property, hundreds of millions of dollars, perhaps even billions, (it’s value is related to it’s unbroken length at a certain width), while ruling for the rail company has the consequence of taking (per the farmer’s claim) a few feet out of thousands of acres of corn-dirt?"

Value to whom? Not to the farmer, if he doesn't want to sell. Nor is there any basis for arguing that the values of others (the railroad and its prospective passengers) are objectively superior to those of the farmer, if he prefers to keep title to his property. If the farmer doesn't want to sell his property, what right does the railroad have to take it by force just because the railroad would be better able to compete with the airlines if it did? Eminent domain obliterates the very concept of rights and substitutes for it the principle of statist intervention according to which every individual is subject to the arbitrary will of the government on behalf of special interests.

- Bill

Post 30

Friday, September 30, 2005 - 7:57pm

Bill,

The pollution from the industrial concern is killing 3 in 1,000 of my fish.

Jon

Post 31

Friday, September 30, 2005 - 8:17pm

Bill,

Regarding the rail example. There was never any deal. Read my post again. The farmer stated his price, only to be surprised that the rail company didn’t think there was any deal to make. The disagreement is over *who* owns the land in question. Regarding securing title to all the other land from all the other farmers—all those are pending the resolution of this dispute. This is the last one.

Jon

Post 32

Friday, September 30, 2005 - 8:52pm

Jordan,

You keep using the word "allocation" with respect to rights.

I am working on an article on the nature of rights as social conventions (shock again! - here come the savage hordes!) - using the term "convention" in the sense of social agreement like the the Magna Carta or Constitution.

Rights are not allocated by a government or government employee. They are defined and agreed upon by those who constitute a government (ideally "the people"), with the government being constituted as the agent to protect such rights. When "the people" constitute a government, this act is based on ethics (even Communism was based on ethics - altruistic ones). Ethics are the true foundation of human rights.

A government does not allocate rights. Not even property rights. Not even when it appears to be more reasonable for it to do so.

When it does insist on "allocating" rights, it transcends its functions and totalitarianism starts seeping in.

Michael

Post 33

Friday, September 30, 2005 - 9:21pm

Jordan, I'm sorry. I couldn't finish reading Coase's crazy case. After a few pages, I got sick to my stomach. I mean, this was even worse than that ridiculous Stanford article (on existence) that you coaxed me to read 2 years ago.

Let me just say a couple of things. Here's a quote:

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The nature of the choice is clear: meat or crops. What answer should be given is, of course, not clear unless we know the value of what is obtained as well as the value of what is sacrificed to obtain it.
================

The choice is not ours (legislators, judges) to make -- the market, and only the market, will decide on the value of anything, anywhere, at any time.

And about the doctor and the confectioner:
This dumb doctor built an examining room adjacent to the confectioner's kitchen, and he won the court case (and got the courts to close down the confectioner's use of his kitchen!). In other words, the confectioner is made to pay for the doctor's mistake! Coase tries to make an economic equivalence -- the costs to everyone are the same, even when courts intervene -- but this is Kelo, Kelo, Kelo (and I can't take it).

Jordan, I do not presently have the constitution to deal with this.

[running to vomit]

Ed
(Edited by Ed Thompson
on 9/30, 9:22pm)

Post 34

Friday, September 30, 2005 - 11:10pm

Ed, I'll give you ten to one odds that Jordan makes another post claiming that you have "missed the mark."

Post 35

Friday, September 30, 2005 - 11:19pm

Jordan, Post 9:

Coase proposes rights in part to avoid the inefficiencies of bargaining, and he would have a lawmaker allocate rights in such as a way as to maximize wealth. I think that according to Coase how wealth is maximized is largely a matter of economic calculation based on market values, not mob vote.

Jordan, Post 19:

Andrew, like I said to Ed, Coase's theory doesn't depend on central planning.

Hmmm, wasn't it just the other day that I was arguing on another thread that there really are people out there with the gumption to assert "A is not A?"

More question begging in Jordan's Post 19 also. The very idea that it would be "unclear who has or should have a property right" (used to bolster Coase's thesis) presupposes a Coasean view of such rights, in a wonderful bit of circular-logic merry-go-round reasoning that has made Ed and me sick to our stomachs.

Post 36

Saturday, October 1, 2005 - 12:34am

Jon wrote, "The pollution from the industrial concern is killing 3 in 1,000 of my fish."

Jon, do you understand the nature of principles? A thief took only 3 in 1,000 of my dollars. Therefore, we can excuse his behavior?

Bill

Post 37

Saturday, October 1, 2005 - 7:31am

Ed,

Glenn questioned Coase's use of "choice" as well. In my post 3, I explained what I think Coase meant by that. Go read it. It's short. As for the doctor and confectioner, it's not clear to me why the confectioner has the right to make noise that travels outside his kitchen. I mean, has he homesteaded all the air through which his noise travels? What if he just used his machine once? Does that count as homesteading? What if his machine was quieter a week ago, thus audible to but okay for the doctor, but louder now? Does the confectioner have the right to turn it up? Or maybe he can just wait because how the hell can the doctor homestead air? How can he be first to mix his labor with it when he doesn't do anything to it; he just needs it quiet? And I don't know what you mean by Coase making an "economic equivalence." He certainly doesn't think the costs to everyone are the same. Quite the opposite in fact. The only "economic equivalence" I can detect here is that Coase is using the same economic measure -- i.e., market value -- to determine who is harmed more.

But how to determine homesteading is a side issue. What I want to explore is why the doc and confectioner should engage in this "who was on first" line of inquiry anyway. Okay. Enjoy your vomit.

And Andrew, your insults and hostility are uncalled for. And you are incorrect that I'm begging the question. I don't assume Coase's view just because I accept that who has a right is sometimes unclear. In Coase's view, people will settle who has the right by bargaining, unless bargaining is inefficient; then they will avail themselves of law, which will allocate the right in the more efficient manner. In Rand's view, I would guess that conflicting parties will race to homestead the disputed scarcity and will then scrutinize who was there first. If they can't figure it out, they'll go to the law to settle the dispute. Okay. Enjoy your vomit, too.

MSK,

"Allocate" is commonly used in the Law & Economics School to contrast "distribute." When I say, "government allocates rights," I mean, "government chooses who initially will have a hitherto unrecognized or disputed legal right." And when I speak of "rights" here, I'm talking only about legal rights. Objectivism can be ambiguous because it appears to deal with two types of rights -- (a) natural/moral and (b) legal/government-recognized -- so I should've made that clear in the beginning. Let me know if this makes sense to you. In any case, I look forward to your blasphemous article.

Jordan

Post 38

Saturday, October 1, 2005 - 8:22am

Bill,

…per ten years. Their pollution is killing 3 in 1,000 of my fish per ten years. My portion of the stream contains about 50,000 fish. So their pollution is killing 150 of my fish per ten years, or 15 fish per year.

Yes, I do understand the nature of principles. And now I understand your understanding of them: You take them for absolutes that apply always, no-matter-what. So you would force an enterprise to shut down, or force them to change their techniques, even if it meant making it uncompetitive and bankrupting them—over one dead fish per month in a stream containing 50,000 fish.

Jon

Post 39

Saturday, October 1, 2005 - 9:21am