Thursday, June 14, 2012

How Not to Defend Private Property: A Critique of the Frontier Centre's Views


How Not to Defend Private Property

Introduction:

The purpose of this paper is to critically analyze an article written by the Frontier Centre, an independent Western Canadian public policy think tank, from a market anarchist perspective in order to challenge its claim that it has defended private property rights in Alberta.  The article to be analyzed is called Property Report Should Generate Wider Property Debate, dated March 23, 2012.

The link to the article is as follows:  http://www.fcpp.org/publication.php/4137

To briefly summarize the Frontier Centre's article, the government of Alberta engages in some relatively large public consultations regarding land expropriation as a reaction to the concerns raised by some Albertans over their fears of arbitrary and unjustified private property expropriations by that government.  The Frontier Centre downplays the threat to private property throughout the article, and it even go so far as to explicitly claim that "credible legal authorities who care about property rights argue that these concerns are 'overblown.'"  Therefore, there is no need for anybody to panic with regard to the behavior of the government of Alberta.  "There's nothing wrong with the province's stated intentions," the article tells the readers in order to placate their fears.  The government is full of great intentions including the following:

  • More public consultation
  • Clear compensation for the victims of expropriation by the state
  • Access to dispute resolution mechanisms, including the courts
  • A property rights advocate
  • Alberta's democratic government will be called in to protect private property
  • Compensation rights will be enshrined in the Canadian Charter of Rights and Freedoms
  • The constitutional amendment guaranteeing compensation will protect property because the Alberta amendment will contain clear and non-vague language unlike the American Constitution

On the surface, it appears as though the Frontier Centre has provided a well-rounded and balanced solution to the expropriation problem in Alberta implying, of course, that Albertans can stop worrying about their property and can therefore go on with their lives. 

I will argue that the Frontier Centre has provided Albertans with a false sense of security mainly because the proposed solutions will not protect private property at all.  In some cases, such as those of calling for democracy to protect private property and of demanding that taxpayers fund compensation for expropriation victims, the proposed solutions will undermine private property rights in Alberta, thus negating the article's intention to protect private property.  The major gap in the article is that the Frontier Centre's proposals fail to address the inherently exploitative nature of the state caused by the state's unique ability to acquire property non-productively and/or non-contractually; consequently, the article cannot possibly achieve its stated objective of protecting private property.  What the article actually accomplishes is to offer a laundry list of "legitimizing" procedures and "justifications" that are meant to justify the state's inherent exploitative behavior.  By legitimizing and justifying the state, i.e., the right for the hypostatization of society to seizure property non-contractually and/or non-productively, the Frontier Centre has taken a position that is closer to conservative socialism and social democracy than to laissez-faire capitalism.  Therefore, I conclude that the Frontier Centre not only completely fails to achieve its stated objective, which is to protect private property from the state, but also aggravates the problem by actually making further private property rights violations more likely to occur because of its interminable justifying and legitimizing of the state.  Contrary to its claim that "there's nothing wrong with the province's stated intentions" (emphasis mine), I conclude that the Frontier Centre's proposals are inherently unjust when I subject its proposals to the Kantian categorical imperative.    

The Self-Refuting Nature of the Proposed Compensation Solution:

The Frontier Centre's article refers on numerous occasions to government compensation as an integral part of a feasible solution for protecting private property owners from the actions of their government.  The author seems to take it for granted that the government can atone for its sin of expropriating private property by simply paying compensation "that reflects current values and impacts."  The author's position is captured nicely when he writes:  "government is empowered to confiscate private property for 'public use' if it is compensated."

The author's argument neglects to ask the pertinent question, namely, how does the government get the resources in the first place to pay for these subsequent compensation claims?  In his book The Ethics of Liberty, Murray Rothbard demonstrates that governments, unlike ordinary citizens or subjects, receive their income through extortion, i.e., through an organized process of private property rights violations:

For there is one crucially important power inherent in the nature of the State apparatus.  All other persons and groups in society (except for acknowledged and sporadic criminals such as thieves and bank robbers) obtain their income voluntarily:  either by selling goods and services to the consuming public, or by voluntary gift...Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming.  That coercion is known as "taxation"...Taxation is theft...even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match.  It [Taxation] is a compulsory seizure of the property of the State's inhabitants, or subjects.  (162, italics in the original, underlined emphasis mine)

To further illustrate why taxation, the means of paying for the compensation, is theft of private property, consider Lysander Spooner's No Treason:  The Constitution of No Authority.  Spooner writes that

the government, like a highwayman, says to a man:  "Your money, or your life."  And many, if not most, taxes are paid under the compulsion of that threat.

Spooner adds,

as taxation is made compulsory on all, whether they vote or not, a large proportion of those who vote, no doubt do so to prevent their own money being used against themselves.

The self-refuting nature of the compensation scheme is that it tries to rectify the injustice of one private property rights violation (the initial expropriation) by engaging in another private property rights violation (the compulsory taxation of the people who are forced against their will to pay for the initial compensation).   

The Discrimination Problems in the Proposed Compensation Plan:

Moreover, this proposed compensation arrangement by the Frontier Centre is inconsistent with the classical liberal idea of the Rule of Law because this compensation scheme implies legalized discrimination.  To begin, consider the discussion of F. A. Hayek, in his classic work The Road to Serfdom in which he compares the legal theory of liberalism to that of National Socialism (Italics in the original, underlined emphasis mine):

It is therefore not altogether false when the legal theorist of National Socialism, Carl Schmitt, opposes to the liberal Rechststaat (i.e., the Rule of Law) the National Socialist ideal of the gerechte Staat ("the just state")--only that the sort of justice which is opposed to formal justice necessarily implies discrimination between persons. (117, footnote 5)

The Frontier Centre's proposal to enshrine compensation rights in the constitution, which will then be paid from taxpayers' coercively seized property creates a legalized discrimination problem by favoring the group of tax consumers (the receivers of the compensation) at the expense of the group of taxpayers (those who are forced to pay for the compensation).  This discrimination problem, highlighted by John C. Calhoun in his important 1851 work entitled A Disquisition on Government and a Discourse on the Constitution and Government of the United States, necessarily produces conflict between these two groups over which group is the victim and which is the beneficiary of the state.  A strong incentive has been created to seize control of the state in order to protect one group's interests from the invasions of all other interests.  The tax consumers want to maintain their privileged relationship with the state, and the tax producers want to seize the state in order to defend themselves from the tax consumers or maybe even make themselves into tax consumers too.  Calhoun writes that

the right of suffrage, by placing the control of the government in the community must, from the same constitution of our nature which makes government necessary to preserve society, lead to conflict among its different interests,--each striving to obtain possession of its powers, as the means of protecting itself against the others;--or of advancing its respective interests, regardless of the interests of others.  (16, emphasis mine) 

In other words, the Frontier Centre's proposal sounds as if it wants to advance the interests of the tax consumers, i.e., the compensation receivers, at the expense of the taxpayers.  Assume that there are some taxpayers who do not own land and so never fear the threat of land expropriation, and note that land expropriation seems to be the biggest worry in the article.  Maybe these taxpayers earn all of their income from labor.  If the government now engages in a land expropriation, then the constitutional compensation plan will transfer wealth from labor income (taxpayers) to land income (tax consumers) thus establishing a form of legalized discrimination against one group in order to favor the other.  Since the article specifically mentions that it is addressing "a series of 'land bills' that many said erode property rights," one has to wonder whether the Frontier Centre's proposal for enshrined compensation will result in nothing but permanent conflict between land income on the one hand and labor and capital incomes on the other. 

The first point to make is that what the Frontier Centre is proposing to do cannot be classified as a cooperative social philosophy.  Ludwig von Mises, in a 1945 paper entitled Economics as a Bridge for Interhuman Understanding, calls this discriminatory process of benefiting the initial expropriation victims at the expense of the others taxpayers the Montaigne fallacy:

The Leitmotiv of social philosophy up to the emergence of economics was:  The profit of one man is the damage of another; no man profits but by the loss of others.  This is not a philosophy of social cooperation, but of dissociation and social disintegration.... In the light of this Montaigne fallacy, human intercourse cannot consist in anything but the spoliation of the weaker by the stronger.  (italics in the original, underlined emphasis mine)

The second point to make is that what the Frontier Centre is proposing to do should be classified as unjust because the proposed solution violates the Kantian categorical imperative.  In A Theory of Socialism and Capitalism, Hans-Hermann Hoppe explains that just rules must never be "particularistic" in nature:

the Kantian categorical imperative, requires that in order to be just, a rule must be a general one applicable to every single person in the same way.  The rule cannot specify different rights or obligations for different categories of people (one for the red-headed, and one for others, or one for women and a different one for men), as such a "particularistic" rule, naturally, could never, not even in principle, be accepted as a fair rule by everyone.  (14, italics in the original; underlined emphasis mine)

When the Kantian categorical imperative is applied to the Frontier Centre's proposal, the unjust nature of this proposal becomes self-evident.  On the one hand, the land owners, the victims of the land expropriation, are to be made whole through compensation provided by the state.  On the other hand, the non-land owners are not compensated for the taxes they have to pay to the state so that the state can pay for the compensation claims.  The land owners are made whole; the non-land owners are not made whole (since taxpayers do not receive compensation payments for the taxes they pay!)  Therefore, the "making  people whole rule" or the "compensate the victim rule" is NOT APPLIED to everybody in the same way; consequently, the proposed solution is "particularistic" in nature thus rendering it unjust.

The Faulty Assumption Underlying the Claim that Compensation Discourages Expropriation:

The article's repetitive discussion of the value of government compensation to the victims of property expropriate is probably because the author makes a spurious assumption concerning the punitive properties of compensation.  The author claims that

one major way to force governments...to think twice about property seizure is the reality they will have to compensate private citizens.

This argument assumes that the government legitimately owns property; consequently, forcing the government to pay compensation will be painful for it because it will have to part with some of its property.  The "cost" of expropriation to the government will be the compensation that it will have to pay the victim.  The problem is that this assumption is false; the government does not and cannot legitimately own property.  Therefore, the government does not suffer any pain from having to pay out compensation claims to expropriation victims.  As Murray N Rothbard trenchantly observed in his book The Ethics of Liberty, the state owns no legitimate property; hence, compensation imposes no cost on the state since the state as a non-producing is not losing anything that it had to earn in the first place:

If the State, then, is a vast engine of institutionalized crime and aggression, the "organization of the political means" to wealth, then this means that the State is a criminal organization, and that therefore its moral status is radically different from any of the just property-owners that we have been discussing in this volume. ... For, as a criminal organization with all of its income and assets derived from a crime of taxation, the State cannot possess any just property.  (183, emphasis in the original)

Therefore, the author of the article is naive when he thinks that government will feel pain by having to pay compensation.  What the author is actually doing is proposing in the name of property rights the implementation of a constitutionally enshrined social democratic principle, i.e., the complete opposite of property rights. 

Social democracy, at least the social democracy practiced in West Germany, has, I think, some parallels with what the Frontier Centre is doing here in this article.  Notice how in both cases, i.e., in the West German social democracy case study and in the think tank's article, they both pay lip service to private ownership and to the possibility of socialization, while permitting and even favoring redistribution of property titles (the compensation scheme, which redistributes property titles from the taxpayers to the victims of the government's initial expropriation).  As Hans-Hermann Hoppe explains in A Theory of Socialism and Capitalism,

Here [i.e., in West Germany], in 1959, the social democrats adopted (or rather were forced by public opinion to adopt) a new party program in which all obvious traces of a Marxist past were conspicuously absent, that rather explicitly mentioned the importance of private ownership and markets, that talked about socialization only as a mere possibility, and that instead heavily stressed the importance of redistributive measures.  (59)

The Frontier Centre is following the West German social democratic model in its article in all regards.  First, the article mentions repeatedly the importance of private ownership.  For example, the article states: "They want governments to make it harder, not easier, to seize their property."  Notice that the recommendation still permits socialization as a possibility because the recommendation did not say "ban" seizure property unequivocally but rather just said "make it harder to do."  Finally, the article proposes a guaranteed income redistribution scheme under the name of "compensation" when it mentions that "they want compensation that reflects current values and impacts."

Why then is the Frontier Centre advocating social democracy, i.e., what Hoppe refers to as Type II Socialism (See A Theory of Socialism and Capitalism, 12)?  Notice that the policy recommendation made by the Frontier Centre is to utilize a written constitution in order to protect private property.  The article is rather explicit on this point:  "The answer may be to take the issue out of the hands of provincial legislatures by enshrining rights to compensation in our Charter."  This, of course, is consistent with classical liberal thought.  To cite one of the great classical liberal minds, Ludwig von Mises, writing in his 1927 book:

All these disadvantages [of being a member of a national minority] are felt to be very oppressive even in a state with a liberal constitution in which the activity of the government is restricted to the protection of the life and property of the citizens.  (89)

The problem is that classical liberal thought is a dead end philosophically.  Not only does classical liberalism have an implementation problem, but it also is unsustainable because it will naturally degrade into social democracy.  The liberal philosopher Ludwig von Mises understands that an implementation problem exists in classical liberal thought.  These ideas sound good on paper, but they just cannot be implemented even by those who subscribe to liberal ideas in the first place:

Even liberal politicians, on gaining power, have usually relegated their liberal principles more or less to the background.  The tendency to impose oppressive restraints on private property, to abuse political power, and to refuse to respect or recognize any free sphere outside or beyond the dominion of the state is too deeply ingrained in the mentality of those who control the governmental apparatus of compulsion and coercion for them ever to be able to resist it voluntarily.  (44)

Even more menacing is how classical liberalism has a built-in self-destruct mechanism in the sense that liberalism will naturally fall apart and will be supplanted by social democracy.  Hans-Hermann Hoppe, in Democracy:  The God that Failed, summarizes this self-destruct mechanism of liberalism by emphasizing that the fundamental error committed by liberals is assigning a moral status to the state:

Because of its own fundamental error regarding the moral status of government, liberalism actually contributed to the destruction of everything it had originally set out to preserve and protect:  liberty and property.  Once the principle of government had been incorrectly accepted, it was only a matter of time until the ultimate triumph of socialism over liberalism....liberalism in its present form has no future.  Rather, its future is social democracy, and the future has already arrived (and we know that it does not work).

Therefore, despite the use of classically liberal ideas by the Frontier Centre--especially the idea of chaining a government down with a written constitution so that the government is solely a life and property protector, they are ultimately, in the final analysis, advocating for social democracy whether or not they decide to do so.  This explains why the article from the Frontier Centre is the same as the policy proposals of the social democratic West Germany.   

The Impossibility of Protecting Private Property through a Written Constitution:

The article references the Canadian Charter with a new compensation amendment as an integral part of the Frontier Centre's solution to the property expropriation problem in Alberta.  The author seems to think that his constitutional mandatory compensation proposal is feasible because, unlike the Americans, his constitutional amendment will avoid the pitfall of "vague" language.  For example, the author of the article states (all emphasis mine):

  • The answer may be to take the issue out of the hands of provincial legislatures by enshrining rights to compensation in our Charter, but also avoiding the situation in the U.S. where vague wording in their Constitution leaves property vulnerable.
  • At the same time they could clearly define "public use" to avoid the problems U.S. landowners discovered.

The most obvious objection to raise against the Frontier Centre's proposed solution is to look at the case study of the German reunification and conclude that what the Frontier Centre is proposing to do in Alberta has been tried before and it failed lamentably.  As Hans-Hermann Hoppe explains in Democracy:  The God that Failed, the German reunification explicitly guaranteed private property rights, thereby satisfying the Frontier Centre's demand for non-vague language.  Moreover, as Hoppe observes, there was a specific constitutional requirement to provide compensation in (the now former) East Germany.  Despite the non-vague and literal constitutional requirements for compensation to be paid to the victims of expropriation, i.e., despite fulfilling all of the Frontier Centre's requirements, the German experiment demonstrates that neither of these provisions work in the real world (emphasis mine):

Despite the constitutional guarantee of private property by the (West) German constitution, for instance, the German supreme court, after the German reunification in 1990, declared all communist expropriations prior to the founding of the East German state in 1949 "valid."  Thus, more than 50 percent of former East Germany's land used for agriculture were appropriated by the (West) German state (rather than being returned to the original private owners, as required by a literal interpretation of the constitution).  (110-111, footnote 7)

So even a "literal interpretation" of the constitutional "guarantee" does not ensure anything because the Supreme Court can simply follow the German example and "declare" arbitrarily that expropriations are "valid."  Consequently, one must ask, if "explicit constitutional guarantees" and "literal interpretations of the constitution" are of tenuous value because of the credible threat of court tyranny (i.e., arbitrary actions, see Democracy:  The God that Failed, page 42, footnote 46), then has the Frontier Centre merely offered us a paper tiger solution to the problem of property expropriation in Alberta?  

What is going on here is simply the fact that the Frontier Centre is using the wrong means to achieve its desired end.  To achieve the desired end of justice (i.e., compensation for the victims), the Frontier Centre proposes to use the means of the court system.  The problem is that for this proposal to work, the court system must make decisions objectively not subjectively.  The German case study suggests that the courts can very well behave subjectively by "declaring" expropriations "valid" despite what a literal interpretation of the constitution requires.  The means of appealing to the court system in order to enforce a constitutional protection of property will result not in justice but rather in injustice because of the danger of subjectivity with regard to property titles.  Notice in Hans-Hermann Hoppe's discussion of this subjective-objective problem in A Theory of Socialism and Capitalism that the German Supreme Court behaves exactly in the manner of someone holding a subjective view toward property.  Just as the German Supreme Court "declared" the communist expropriations in East Germany as "valid," so too the subjective allocation of property "declares" what should be (italics emphasis in the original; underlining emphasis is mine):

[Claims to property] would be based exclusively on subjective opinion, i.e., on a merely verbal declaration  that things should be this or that way.  Of course, such verbal claims could (and very likely always will) point to certain facts, too ("I am bigger, I am smarter, I am poorer or I am very special, etc.!"), and could thereby try to legitimize themselves.  But facts such as these do not (and cannot) establish any objective link between a given scarce resource and any particular person(s).  Everyone's ownership of every particular resource can equally well be established or excluded on such grounds.  It is such property claims, derived from thin air, with purely verbal links between owners and things owned, which, according to the natural theory of property, are called aggressive.  (24)

In summary, the Frontier Centre's proposal fails because it contradicts the underlying theory of the above discussion, namely, the natural theory of property.

The Failure to Address the Natural Theory of Property:

To further illustrate how the Frontier Centre has totally ignored the natural theory of property, consider how they permit the government to expropriate property as long as... and they give certain qualifications such as mandatory compensation and non-vague language for "public use" and so on.  Notice that they never question the legitimacy of expropriation in the first place; the legitimacy of "forced sales" of private property to government is never questioned. 

The concept of property includes the important fact that property owners have exclusive jurisdiction over how to dispose of their property.  "Every individual has the right to dispose of his property as he sees fit," argues Benjamin Tucker (see David Osterfeld, Freedom, Society, and the State, Article 33 in Anarchy and the Law, 515).  Or as Murray Rothbard states in Man, Economy, and State with Power and Market that "'Economic power,' then, is simply the right under freedom to refuse to make an exchange" (1,327). Consequently, a property owner can sell his or her property or not; a property owner can agree to transfer his property or not to someone else.  As Hans-Hermann Hoppe writes in A Theory of Socialism and Capitalism, property is something that is transferred non-aggressively; there is no such concept in the natural theory of property that permits aggressive seizure followed by compensation:

This system [of pure capitalism and of pure private property] is based on the idea that to be nonaggressive, claims to property must be backed by the "objective" fact of an act of original appropriation, of previous ownership, or by a mutually beneficial contractual relationship.  This relationship can either be a deliberate cooperation between property owners or the deliberate transfer of property titles from one owner to another. (29)

This "forced sale" of private property, which the government supposedly "thinks twice about," (which of course is also impossible because a "government" cannot "think"),  is a non-cooperative transfer of private property titles.  This is certainly not an "exchange" since it is not only involuntary in its nature but also, as mentioned earlier, the state does not own any just property and hence owns nothing that could be used to facilitate an exchange.  But as Hoppe said above, the relationship must be a "transfer of property titles from one owner to another."  This definition, then, precludes the state from engaging in exchanges because the state is, also by definition, a non-owner of property. 

(it says:  deliberate transfer of property titles from one owner to another--but as Rothbard says:  governments don't own anything--so an "exchange" with the government doesn't exist)

The Fallacy of Hypostatization:

The article engages in confused epistemology as demonstrated by its reliance on the public good or common good type language.  The article repeatedly makes this epistemological error (emphasis is mine):

  • Albertans want a more rigorous consultation process...[and a list of all the other things that Albertans apparently want]
  • The provincial government should not feel it can now shut down debate
  • The power is inescapably necessary in the interests of government
  • The government said they will review
  • Government is empowered to confiscate private property for "public use" purposes

In all of these examples, the author has erroneous assigned real existence to or has personified government and society, i.e., the collective.  "In the sciences of human action," writes Ludwig von Mises in The Ultimate Foundation of Economic Science, "the most conspicuous instance of this fallacy is the way in which the term society is employed by various schools of pseudo science" (71).  In direct contradistinction to the claim made by the Frontier Centre, Mises stresses that society "does not have 'interests' and does not aim at anything" (71).  The reason why Mises denies the claims of the Frontier Centre, i.e., the claims about the "interests" of government and the "actions" of government is because these claims violate the fundamental axiom of action.  As Murray Rothbard explains in his magnum opus Man, Economy, and State with Power and Market,

The first truth to be discovered about human action is that it can be undertaken only by individual "actors."  Only individuals have ends and can act to attain them.  There are no such things as ends of or actions by "groups," "collectives," or "States," which do not take place as actions by various specific individuals. (2, emphasis in the original)

The epistemological inconsistency in the Frontier Centre article is that the author seems to take collectivism as a given with his multiple references to the "acting" collective and to the "interests" of the collective and hence falls into the epistemological fallacy of hypostatization, but then he also claims to support individuals and hence methodological individualism when he writes, "the power of government to expropriate at any level may be a scary exercise of power over individuals."  But if he takes the first position, the collectivist one, then he necessarily cannot take the second one as well since they are mutually exclusive positions:

In the so-called social sciences it more often than not serves definite political aspirations in claiming for the collective as such a higher dignity than for the individual or even ascribing real existence only to the collective and denying the existence of the individual, calling it a mere abstraction.  (Mises 2006, 71)

So this creates an insoluble problem for the author of the Frontier Centre article.  How does he expect to resolve disputes between the "collective," which supposedly is represented by the government, the plenipotentiary of the "common good," and the individual, the victim of the state's aggressive act of property expropriation?  How is the dispute between the hypostatization of the collectivists and the methodological individualism of the victim individual to be resolved?  The author of the article claims that the solution is to take the dispute to a monopoly government court.  As well shall see next, this is no solution at all to the problem of the "collective" versus the individual.   

The Meaninglessness of Offering Victims of Expropriation Access to the Courts:

The article seems to take it for granted that offering victims of expropriation access to the courts will somehow make this entire process of property expropriation legitimate.  The most obvious problem with this recommendation is that the victim of expropriation has only one choice, namely, to go to the government's approved dispute resolution mechanism or court system.  The victim has no choice here due to the monopoly nature of the judicial system. 

This solution might very well lead to an injustice because the government might end up functioning as both the defendant in the expropriation case and the adjudicator over its own trial.  As Murray N Rothbard points out in The Anatomy of the State, such an arrangement in which the government serves as both defendant and judge is inherently unjust: 

Black admits that this means that the State has set itself up as a judge in its own cause, thus violating a basic juridical principle for aiming at just decisions.  (34)

In addition, the logical inconsistency problem raised by Gustave de Molinari most likely exists in the Frontier Centre's proposals.  They claim that private property ought to be protected by a written constitution, which implies a classical liberal view with regard to property.  This strongly implies that their position will tend to be consistent with that of liberal economists.  But now when discussing the court system, the Frontier Centre is most likely falling into the logical inconsistency problem that French liberals also fell into by assuming that the public's demand for "access to courts" means access to government monopoly courts.  Nobody is going to assume that when they write "access to courts" they really mean access to private and competing courts as existed, for example, in English history (see footnote 3 of The Production of Security with de Molinari's reference to Adam Smith's The Wealth of Nations) especially given their website's consistently statist comments such as "strengthening democracy," "popularizing public choices, and "high performance government."  The logical inconsistency problem de Molinari observes in his book entitled The Production of Security is that economists tend to favor free markets i.e., a non-monopoly world in most areas but then contradict themselves by supporting a state-monopoly over the justice system:

True economists are generally agreed, on the one hand, that the government should restrict itself to guaranteeing the security of its citizens, and on the other, that the freedom of labor and of trade should otherwise be whole and absolute.  But why should there be an exception relative to security?  What special reason is there that the production of security cannot be relegated to free competition?...On this point, the masters of the science are silent, and [Charles] Dunoyer, who has clearly noted this exception, does not investigate the grounds on which it is based (Chapter 3 of The Production of Security). 

The inconsistency in liberal thought was put starkly by Hans-Hermann Hoppe in Democracy:  The God that Failed when he writes that

the liberal solution to the eternal human problem of security--a constitutionally limited government--is a contradictory, praxeologically impossible ideal.  Contrary to the original liberal intent of safeguarding liberty and property, every minimal government has the inherent tendency to become a maximal government.  (229)

Conclusion:

The Frontier Centre's article appears to be a well-reasoned defense of private property rights in Alberta.  The fundamental error that the author makes, which then causes him to make all of his other errors, is that the author assumes that the existence of government is compatible with private property.  It appears as if the purpose for writing this paper was not so much to defend private property rights as to legitimize the State's expropriation of property.  Probably the best quotation from the Frontier Centre's article that clearly demonstrates this fact is this unbelievably sycophantic statement, a statement no true defender of private property would ever utter because it effectively justifies exploitation, at least in the pre-Marxian sense of the term:

More public consultation, clear compensation, and access to dispute resolution mechanisms, and access to dispute resolution mechanisms, including courts, are all important, so on the surface there's nothing wrong with the province's stated intentions.  Once we figure out exactly how a real-life property rights advocate works that could be positive.

From this quotation in particular and from the article in general, the author reveals that he has fallen into the "naive mainstream economist" trap, thus rendering his entire paper rather useless for the defense of property because the underlying views are starry-eyed and utopian.  Hans-Hermann Hoppe, in his paper entitled Marxist and Austrian Class Analysis (Journal of Libertarian Studies, Fall 1990)  puts it best when he observes that

Marxism, because it correctly interprets the state as exploitative (unlike, for example, the public choice school, which sees it as normal firm among others), is onto some important insights regarding the logic of state operations.  (86)

However, the "naive mainstream economist" problem is the least of our concern.  The article is ultimately a defense of exploitation in the pre-Marxian French radical laissez-faire sense of the term "exploitation."  (This qualification is necessary because the term "exploitation" has been misconstrued by socialist and Marxian authors ever since).  In The Economics and Ethics of Private Property,  Hoppe writes that

the traditional, correct pre-Marxist view on exploitation was that...antagonistic interests do not exist between capitalists as owners of factors of production and laborers, but between, on the one hand, the producers in society, i.e., homesteaders, producers and contractors, including businessmen as well as workers, and on the other hand, those who acquire wealth nonproductively and/or noncontractually, i.e., the state and state-privileged groups, such as feudal lords.  (96, footnote 18, italics in the original; underlined emphasis mine)

Or to put this point more starkly, Hans-Hermann Hoppe writes in his paper Marxist and Austrian Class Analysis (Journal of Libertarian Studies, Fall 1990) that the state is exploitative precisely because it can acquire property through expropriation:

The state is not exploitative because it protects the capitalists' property rights, but because it itself is exempt from the restriction of having to acquire property productively and contractually.  (86, emphasis mine)

The Frontier Centre fails completely to address the exploitation problem.  In fact, their entire article seems to pre-suppose that the inherent exploitative nature of the state is acceptable as long as certain "legitimizing factors" are added into the equation after the fact.  In my paper, I have tried to demonstrate, again and again, how this is the essence of their paper.  To recapitulate some of the pertinent examples:

  • The tax and compensate discussion was an attempt to justify the state's right to involuntarily tax citizens by claiming that taxation is acceptable because it is doing something good, i.e., providing compensation.
  • The claim that compensation is "punitive" to the state is meant to legitimize the state's claim of being a just owner of property in the first place.  This allegedly "legitimate" property owner is then "punished" by being forced to pay compensation. 
  • The appeal to the written constitution as the means for protecting private property is meant to legitimize the idea that a contract has been entered into by the population.  As Hans-Hermann Hoppe mentions in Democracy:  The God that Failed, "since Locke, liberals have tried to solve this internal contradiction through the makeshift of 'tacit,' 'implicit' or 'conceptual' agreements, contracts, or constitutions" (228).
  • The article goes to great length to stress that the government's process is "legitimate" by almost obsessively mentioning phrases such as:  "public consultation," "democratically-elected legislature," and "don't shut down debate."  The language implies that the government's behavior is legitimate because it has procured the consent of the governed.  Notice further how the Frontier Centre bends over backwards to imply that the government has gone out of its way in order to ensure the consent of the governed.  As an example of this point, they write that "the Alberta Government has completed a landmark consultation with almost 1,500 Albertans." 
  • The reason why the Frontier Centre has to establish the legitimacy of the government's behavior through such means as "public consultation," "democratically-elected legislation," "written constitutions with enshrined rights," "access to the courts," "hypostatization of the state," and "public debates," is because it has to convince people first that the government has legitimate consent so that it can then justify the subjective (not objective) transfers of property by the Alberta government. Carl Watner writes in his paper "Oh, Ye Are For Anarchy!":  Consent Theory in the Radical Libertarian Tradition," that there exists a strong link between the government's perceived consent and private property rights.  Watner writes that "[William] Molyneux clearly understood the relationship between property rights and consent.  'Consent is a necessary condition for the transfer of title.  To use or dispose of another person's property without his consent is the fundamental act of injustice.'" 

In summary, what the Frontier Centre has done in this article is it has legitimized the State by implying that Albertans have given their consent to the government's expropriation of property and to its aggressive transfers of property titles.  The Frontier Centre has not succeeded at all in defending private property because it has defended the State, the biggest and most dangerous threat to property.  Therefore, the Frontier Centre's article is self-refuting because one does not defend property by first defending its opposite, i.e., the state.  The entire article boiled down to its most fundamental essence is simply, as Murray Rothbard put it in his book Classical Economics:  An Austrian Perspective on the History of Economic Thought, a textbook example of "the preposterous necromancy of the 'dialectic'" (334).

Neil Matthew Tokar
Niagara-on-the-Lake, Ontario
May 5, 2012


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