I’m not arguing with the Mengerian school of economics. I am arguing that the so-called ‘neutral’ protection of property rights by states throughout history, including the era of classical ‘capitalism’, were artificial, exploitative and not the product of the free market. They artificially distorted property claims, gave inequitable force to the property claims of concentrated capital and made possible the ‘big industries’ we are familiar with. State-enforced property rights, quite simply, have nothing to do with laissez-faire.
IC. My history isn’t so fantastic. Could you give an example of “exploitative” property rights that were enforced?
Tom Woods gives the example of how private suits against polluters were made much less viable in the industrial revolution, which seems already an example of the state distorting the market (and moving further from “libertarian” law). I think the reason we think of late 19th century as very free market is that it was - relatively, and that’s the operative word. There were still significant state interventions that distorted enterprise in probably very substantial ways.
Austrians say there is nothing wrong with keeping down wages to whatever the market will bear. If you decrease wages you can hire more people. During the 19th century the prices of goods fell consistently - just like computer prices do today. Personally I’d be happy to see my wages go down 25% if I could buy a proper house for $10,000 like you could in the old days.
I agree that State intervention in strikes was probably not a good idea.
It must be pointed out that strikers are also intervening violently. They’re refusing to allow the owners use their property and violently would attack ‘scabs’ who were happy to work for the wages offered.
Rothbard has lots to say on unions.
There is something to the idea that the state was breaking up mob rule by breaking up strikes. Personally I’m not entirely sure using violence is a good tactic. Closing up shop and moving is probably a better tactic. Of course this is what ultimately happened where unions were too successful.
Let me answer that with a theoretical question: Do you think that the boundries set and titles granted by the State even as a purely ‘neutral’ protector of property actually reflect the legitimit claims, in justice and right, to property that individuals had? In other words, do you think Gosplan ever gets its numbers right? Why should property claims, however ‘neutral’, be any different from the ‘neutral’ attempt to provide shoes by the State? Title-claim arbitration and protection is a market service like any other, and one that can not logically be carried out by the state any more than the setting of interest rates. Even if we could never point to an empirical example where prices are set too low, or where the ‘wrong’ color of shoe was manufactured, we would certainly be justified in presuming that many such incidents occured. It is my contention that the ‘big industries’ of history were in large part a result of the ‘neutral’ propertarianism of the American, French and English states.
Completely agreed. Though just because provision of property rights would be undesirable to have the state control, it does not follow it will lead to accumulations of wealth. It is conceivable that a state could implement disastrous property rights that would lead no one to accumulate much of any wealth. Or other silly examples. I agree it’s obvious that there is a big double-win mechanism at work when you get the state involved, because people who “win” the first rounds of capitalism have a better chance to gain control of the state to keep winning.
What I meant to ask for was an actual example of the state enforcing property rights to the benefit of big businesses. I can think of a few, such as the state’s not recognizing easement rights.
I guess it also sort of depends what you think a legitimate claim to property is. I’m inclined to say that the market decides what counts as legitimate, but a lot of people on this site adhere to the lockean homesteading proviso and “first use” theory. I think some of what you’re getting at is that you can accumulate lots and lots of capital if you don’t have to pay to defend it; contrasted with the free market where whether or not you appropriate something is a function of its value and cost to maintain.
follow they will lead to accumulations of wealth
Due to the monopolistic and legalistic nature of state propetarian ‘justice’, those with greater accumulations of capital will have a greater capacity to expand and protect their control of capital even when such claims are unjustified either in extent or en toto. This is just a specific case of the well known tendency of wealthy claimants to win out in state juridical systems.
Did you get this idea from reading Hasnas? If not, you may be interested in that. Anyway, very good insight. You’re really taking much of what we talk about here to its logical conclusion, which many here have not been able to yet.
I haven’t read that, but I will now. Thanks 
So whats your take on how justice plays out in the market? Many opponents of market justice think the rich will be able to pay their way through as they do in (bad) states.
I do not think such arguments make sense in laissez-faire. It is akin to saying that producers of Bentleys will always make more money than producers of cheap porrige.
But rich people buy nice clothes poor people buy cheap clothes… it is conceivable that when a conflict arises between two that the richer might be able to pay his way through even if they are in the wrong.
My strategy has been to concede that even if this does become the case that it is preferable to the status quo where elites do not bear the full cost of enforcement. At least in laissez-faire one must pay all of the expenses.
Wealthier, more active and more intelligent people will have the edge over their less wealthy, less active and less intelligent brethren whether or not they are in the right. But this is not a ‘problem’ of the market, it is a fact of reality.
I would like to throw in the time component into this. You may be wealthier than most people now, but later you may dirt poor because you didn’t adapt to the market. You may more intelligent than everyone else, but some one else may come along at a later time and take your spot. In other words, there will always (theoretically and realistically) a wealthier class, but over time, the individuals who compose that class will not always be the same.
Agreed. In fact, it is important to remember they do not compose some unified ‘class’ at all, but are in fact distinct and heterogenous individuals.
Only the market can make the poor man rich and the rich man poor.
Also, to acquire wealth is always the result of supplying others with the things they want. Bill Gates is very rich because he made billions of people better off then they were before. The wealth is simply a reflection of success in making others better off. It is false to believe that there is ever some trade off between Laisez-faire and something else. The only “trade off” is that people are envious of the success of others, so they are inclined to accept the myths about “one man’s wealth is the cause for another man’s poverty”.
Bill Gates was excellent at what he did, yet most of his wealth comes through state enforcement of IP claims and the income of the cartelized industries who won’t even try to avoid IP laws due to their being bound up with the entire system themselves.
DD5:
I agree on Bill Gates, but strictly speaking he may not be as rich as he is if not for patents, corporate personhood, etc. Or he might be richer. But we cannot really know for sure. We cannot know for absolute sure (although in his case we can be pretty sure) that he is not primarily just the benefactor of state wealth redistribution.
So I think we can add a measure to precision to what you said: “One man’s wealth is another man’s poverty” is a myth in a fully free market, but it ceases to be a myth to the degree that there is a monopoly state, and becomes less and less of a myth the larger that state grows.
Are you suggesting that for the wealthy/elite, enforcement would be MORE expensive without a state than within? Who would you say bears the implied remainder of the “full cost of enforcement” for the elite in the status quo?
Z.
Yes I am saying that the elite take advantage of the current legal system. I think that we all bear the full cost of enforcement through taxes/regulations/other institutional gems.