Rothbard and Hoppe on Desocialization

[Truth_and_Liberty]

I’m trying to understand the difference (if there is one) between Rothbard’s and Hoppe’s views on how to achieve private free market ownership of capital in currently nationalized industries. I’m thinking in particular about ownership of schools and hospitals in the UK.

Rothbard states the following in How and How Not to Desocialize :

@Murray Rothbard

The dimensions of the proffered Rothbard Plan for desocialization should now be clear:
…
(2) Complete privatization of government assets: where possible to return them to the original expropriated owners or their heirs; failing that, granting shares to productive workers and peasants who had worked on these assets.
…

Rothbard is talking here about Eastern European and ex-Soviet nations, but makes no indication in this paper (possibly he has elsewhere?) that he would use a different means in the West.

Hoppe agrees with Rothbard’s recommendation for the East, but he says that it is a different issue in the West under social democracy. Where taxpayer money has been used to improve the land (with a school or a hospital), Hoppe says that ownership should be given to taxpayers.

Hoppe explicitly says that the government employees (teachers, doctors, managers, etc), as tax consumers, have far less of a claim for rightful ownership than do (net) tax payers. See Democracy: The God That Failed, p134.

Rothbard rejects returning the capital to citizens in the form of shares:

@Murray Rothbard

That this system would be impossibly unwieldy is evident. The number of people would be too much and shares too few to allow every person to have a share, and there would be shares of innumerably large numbers and varieties that would quickly descend upon the heads of the average citizen. Much of this chaos would be eliminated in the suggestion of Czech finance minister Vaclav Klaus, who proposes that each citizen receive basic certificates, which could be exchanged for a certain number or variety of shares of ownership of various companies on the market.

But even under the Klaus plan, there are grave philosophical problems with this solution. It would enshrine the principle of government handouts, and egalitarian handouts at that, to undeserving citizens. Thus would an unfortunate principle form the very base of a brand new system of libertarian property rights.

My question to you all is firstly, have I understood Rothbard’s and Hoppe’s positions correctly, and, if I have, whether or not you support…

• Returning “public” capital to the productive workers in those industries: i.e. government employees. (Rothbard)
• Or returning “public” capital to taxpayers: i.e. not to tax consumers so no government employees. (Hoppe)

… and why.

[Truth_and_Liberty]

BUMP.

No one got any thoughts on which of these two routes is preferable?

[Stranger]

Talking about desocialization is like trying to come up with plans to save GM and Chrysler. Ultimately that should be decided by the bankruptcy judge that the different stakeholders have chosen.

[Truth_and_Liberty]

@Stranger

Talking about desocialization is like trying to come up with plans to save GM and Chrysler. Ultimately that should be decided by the bankruptcy judge that the different stakeholders have chosen.

I don’t understand how it’s similar. Please can you elaborate? GM and Chrysler are private companies, so the stakeholders are the shareholders. With “public” capital, it is not clear who the rightful stakeholders are.

[liberty_student]

I think Hoppe’s position is the only rational one. I know some egalitarians want to give the working class capital goods, so they have a leg up when competing in the post state world, but I reject that for a # of reasons.

First, as a course of justice, the taxpayers are the ones who have lost property to the state. Not the non-taxpayers. It is unreasonable to allocate property to people who were not stolen from and call that justice.

Second, giving people capital who have not earned that capital, or do not have the intimate understanding of how to maintain, or the capacity to maintain that capital is a recipe for disaster. Running a machine, does not mean you know how to build, or repair, or have the capacity to purchase (through capital accumulation) that machine.

Third, Rothbard is engaged clearly in class envy.

Fourth, most state infrastructure is in the hands of state parasites. These are people who work for the state, or receive re-distribution via the state. Even private contractors that work for the state, receive 100% of their income in stolen money, and refund a portion back to the state in the form of taxes, as that is really just a game of three card Monty.

Fifth, Rothbard makes a major break from market principles, by suggesting that the landless labourer class receive capital goods without a market competition process. Clearly state property should go to the highest bidder in the event that the specific ownership cannot be determined for taxpayers.

Wombatron and I had this discussion a few weeks ago, and then it went to private message. A sticking point was that I couldn’t explain how to allocate state goods where ownership by taxpayers was obfuscated by the pooling of state revenue.

But by conducting an auction process, as we know how much taxes were paid in (from receipts and such) it would be possible to divide the auction receipts amongst the taxpayer victims.

In other words, it would be hard to give a state road to 10,000 taxpayers. But it would be easy to sell the state road for $25,000 and give each taxpayer a portion of that money based upon their “investment” into the state.

Sixth, the best thing for the landless labourer class is to break with the capital goods of old, and start fresh. This is my own value laden opinion, but I truly believe that the fastest path to prosperity for the landless labourer class is to get a fresh start and push their creative and entrepreneurial skills through extremis. Giving them a missile silo or aircraft carrier is worthless to their more immediate needs. The post state world needs those capital goods of state, many of which serve only absurd purpose, given to those with the established capital and acumen to alter their purpose for profit and utility as quickly as possible.

I wrote this without drinking any coffee yet. There are probably all sorts of errors I will correct as I re-read it later.

[Stranger]

@Truth and Liberty

@Stranger

Talking about desocialization is like trying to come up with plans to save GM and Chrysler. Ultimately that should be decided by the bankruptcy judge that the different stakeholders have chosen.

I don’t understand how it’s similar. Please can you elaborate? GM and Chrysler are private companies, so the stakeholders are the shareholders. With “public” capital, it is not clear who the rightful stakeholders are.

When you got bankrupt it is because the shareholders have been wiped out. Then it becomes a matter of settling all the conflicting liabilities with different parties, like bondholders, union pension funds, and so on.

[Truth_and_Liberty]

@ Liberty Student

I am inclined to agree with you that Hoppe’s is the correct method from an ethical point of view. I don’t lightly dismiss Rothbard though, so I am glad you feel the same way.

@liberty student

In other words, it would be hard to give a state road to 10,000 taxpayers. But it would be easy to sell the state road for $25,000 and give each taxpayer a portion of that money based upon their “investment” into the state.

I think here you are going further than Hoppe. I don’t see how it’s any harder to distribute 10,000 shares based on investment into the state than it is to distribute $25,000 on the same basis. If people want cash rather than a share, they can always sell it. Control over the capital will still end up with those who are most capable of handling it (those with already large capital accumulation) by virtue of the fact that they will buy up shares to gain a controlling interest.

I don’t trust the state to get a good price for the capital, and I worry that they will sell it to favored companies, if they make the sale.

[liberty_student]

@Truth and Liberty

I think here you are going further than Hoppe.

Ha!

@Truth and Liberty

I don’t see how it’s any harder to distribute 10,000 shares based on investment into the state than it is to distribute $25,000 on the same basis.

Because you have to organize an ownership structure to manage that capital item. People should not be compelled to opt out of a group, but rather always be positioned to opt in voluntarily. You’re offering restitution with strings attached (ownership stake).

@Truth and Liberty

Control over the capital will still end up with those who are most capable of handling it (those with already large capital accumulation) by virtue of the fact that they will buy up shares to gain a controlling interest.

Seems like an unnecessary extra step to me.

@Truth and Liberty

I don’t trust the state to get a good price for the capital, and I worry that they will sell it to favored companies, if they make the sale.

I’m not talking about the state handling the auction. I believe that it is libertarian fantasy that the state will choose to desocialize.