I was re-reading the Ethics of Liberty and I’m starting to have second thoughts about Rothbard’s theory of contracts especially when considered in light of Kinsella’s view of intellectual property.
Rothbard argues that contracts are only enforceable when breaking them amounts to implicit theft (p. 172, chapter 19, Ethics of Liberty) and so mere promises are not enforceable because they involve no transfer or property titles.
What about free services like Gmail? There were terms of agreement when I signed on, but no transfers of property titles. If Google decided to break the agreement, and used my email account and private information in ways that harmed me (for instance, using my email address to impersonate me and sending objectionable emails to clients or customers of mine), would I have no legal recourse in the Rothbardian system?
One might argue that Google wouldn’t do this in a Rothbardian system because it wouldn’t be profitable for them to engage in such actions. Okay, but that’s a separate question from whether or not it would be legal. Such violations of terms would be obviously illegal if the market price for email service was anything but zero - even one cent. But it seems pretty arbitrary to say that the identical breaking of agreements is completely enforceable for a once cent contract, but not at all for a contract where market forces have driven the cost of the service to zero.
im not sure i dig rothbards position here, on first reading it amounts to saying that, you pay me 100£today and i’ll pay you 110£tomorrow is an enforceble contract, because it involves transfer of some £. but that a contract i’ll scratch your back if you scratch mine is not. because property titles arent transferred.
i wonder what a half way / mixed contract would look like, labour for wage for example.
Understanding Rothbard’s theories on contracts is tantamount to understanding and fulfilling Rothbardian Libertarianism. The Idea of property backed contracts is based on the idea of non-aggression. It cannot be considered an act of aggression to lie as lying does not deprive someone of their property.
So? Don’t use free services you suspect might have negative consequences or damage you. People who need a secure reliable email will pay for one, or create their own server. If people understood non-property based contracts to be non-enforcable, they wouldn’t be so quick to put themselves in vulnerable positions to companies like Google.
i’ve thought about it some more, and i think i agree with ole Roth after all.the quibbles i came up with earlier are pretty lame and im kind of embarrassed i said them. i think it mighy be because im a little ill today. [+o(]
hi banned, i hope that because you are fluent with Rothbardian theory you can help me out with this question i have.
what is rothbard saying here? is it that written contracts are enforceable when verbal promises arent? or that there is a definite difference between such a written contract, and say .. a written mere naked promise ? how does Rothbard, here, tell between his two hands?
I’m not very well educated in law, but it seems to be an established principle that promises are not fully binding if they are one-sided and haven’t been delivered. Sweden, where I live, has as a requirement that the promise of the gift becomes invalid if the situation changes in some “relevant” way, for example that the receiver offends the promised giver. Still, that is a far cry from “breaking an agreement”. Promising a gift is not a full contract between two parties. I think that maybe this is the cause why some stuff, from mobile phones to companies threatened by bankruptcy, are sometimes sold at the symbolic price of one dollar. Then it isn’t a gift, or a promise of a gift, but an actual contract.
And of course it isn’t illegal (in any country?) to lie! A lie could be one of the actions needed to commit fraud, but lying in itself isn’t illegal. Not even lying to the police, or for the prosecuted to lie in court. Only witnesses in court are prohibited by law not to lie.
I think that the basic laws about crimes and court proceedings have evolved very well during centuries. I very much trust the court proceedings and crime laws of the western world of today.
But, I’m no authority on this. I’ve rather only heard people say so.
What Rothbard is saying is that in the case of the written title-transfer, an actual transfer of property has taken place. The grandfather has, more or less, written an IOU to his grandson and incurred a debt to him. Defaulting on payment towards the debt would necessarily mean that the grandson is being deprived of property that is rightfully his at the specified date.
Think of the note as being the physical representation of the money the grandfather intends to give to his grandson, which indicates that an exchange of property has taken place. But In the case of a verbal promise, no property has actually been exchanged.
but Rothbard has failed to convince me that there is a difference between ‘transferring title’/‘writing an IOU’ and’transferring title’/‘saying IOU’
people transfer titles all the time just by sayings and doings, without written contracts. elsewhere rothbard is fine with these being contracts, and if one party fails their part of the bargain after the other has transferred ttitle, then implicit theft etc.etc. so what is up with this granfather example?
or is the difference only semantic and revolving around a time aspect, i.e. the grandpa ‘promises to transfer title later, if grandson continues to report’ is different from 'grandpa has transferred title now (or various particular dates) on condition of ocntinued reports.
if its the latter, i think Rothbard could have written his passage to have been a little clearer on the point. [*-)]
I think you are correct, and I think Rothbard was clear on the difference. I remember that he explicitly stated that the difference is not merely semantics, but whether a transfer of title was happening or a promise to transfer title was happening. It seems like a small difference, but its not.
Rothbard’s ‘promise’ is simply a deferring of deciding whether a title transfer under some-conditions will happen. i.e. title not transferred yet.
whereas a contract is a title transfer under some-conditions which is already ‘embraced’. both parties agree/commit
the confusion comes from how in day to day use ‘promise’ is often thought of as a statement whereby one declares his agreement to abide by the terms of whatever title-transfer contract is under discussion. but this is likely simply due to correlation.
i.e. we find it used simultaneously with the act of agreeing to a contract: so we have a statement that the terms of a title transfer contract is agreed to in the present (in the time of making the promise (the contract), and a statement to the effect that one will trustfully abide by the terms, i.e. its a fairly empty psychological statement encouraging the other party to put stock in ones word that one wont renege on the already decided title transfer.(the promise)
but if the empty psychological phrase of ‘promise’ is used and not co-incident with a ‘contract making’ then of course there is no contract made.