Why is it okay to pay an intern $0? or, liberal hypocrisy on the minimum wage

A recent Slashdot post mentions some NYTimes-style whining about how employers like Apple are “exploiting” their employees by paying them low wages:

Apple Store Employees Soak Up the Atmosphere, But Not Much Cash
raque writes

“The NYTimes is reporting on just how badly Apple Retail employees are being paid. Apple is exploiting its fan base for cheap labor. This is one reason I don’t go to Apple Stores if I can avoid it. Stores like NY’s Tekserve offer a great shopping experience without so exploiting their workers.”

Would you rather start at an Apple store for $11.91 an hour (average starting base pay, according to the linked article) and an employee discount, or at Tiffany for $15.60?

The idea that it’s wrong to offer to pay someone a low wage is rampant. For a recent example, one sage argues, in a Techdirt comment thread, that “Competing by paying your workforce less is not competing, it is cheating.” Marxian “exploitation” ideas like this are at work behind the horrible minimum wage. As Henry Hazlitt explains in Economics in One Lesson (ch. 18), a minimum wage law simply causes unemployment—and it causes it primarily among those who have the lowest valued skills, namely the poor, minorities, handicapped people, and the young. It cuts out the lower rungs of the ladder that people could use to climb to higher levels. One benefit of a job at any price is the skills and learning experience—learning to engage with customers and co-workers, to show up on time, manners, dress code, and so on.

This is, in fact, one reason some people are willing to serve as “interns” for no pay: for the work experience, contacts, resume padding. And this an absurdity in the very idea of the minimum wage: it’s legal to offer to pay someone, say, $10 per hour for a certain job, or more, and it’s legal to offer to pay them $0 per hour (internship), but it’s illegal to offer them something in-between. This is just as absurd as the idea that it’s legal to give away sex but not to charge a monetary price for it (prostitution).

I thought about this when listening to a recent Slate Political Gabfest podcast, which is one of my favorites although the three hosts are liberals. In this episode, around 50:30, host David Plotz mentions that they are looking for a new intern—and that, while it is an “unpaid” position (6-10 hours per week), it leads to “great opportunities” for the interns, who use the experience to find a (real) job elsewhere. Exactly. Even working for nothing makes employment worthwhile for people starting out. It’s a stepping stone to other things. Of course, only middle class or richer kids can afford to work for nothing. Imagine if Slate were permitted to pay, say, $3 or $5 per hour to an intern—far below the curent federal minimum wage of $7.25 per hour—more lower class or poorer kids could perhaps afford to take advantage of intern-type positions. But who cares about them, right? After all, they can always join the military, get on welfare, or sell drugs and then get a free jail cell with three hots and a cot.

As my friend and fellow TLS co-blogger Rob Wicks said to me:

Minimum wage can be a sort of welfare program for the middle class. For those at the upper end of the middle class, working for nothing but experience is a fine investment. But if you are doing it for money, it has to be enough to make it worthwhile for someone already middle class. Their support for minimum wage is not really for the poor. Middle class people with kids just want to make sure their spoiled, largely unmotivated children make enough money at the local coffee shop/burger joint to show up consistently.

 

26 comments… add one

  • “Competing by paying your workforce less is not competing, it is cheating.” Marxian “exploitation” ideas like this are at work behind the horrible minimum wage.

    Marxian exploitation ideas like what? Cheating? Because that’s not Marx. Marx’s theory of exploitation does not appeal to the idea that wages are “too low” or “unfair.”

    a minimum wage law simply causes unemployment—and it causes it primarily among those who have the lowest valued skills, namely the poor, minorities, handicapped people, and the young.

    It’s a cool story, but if it’s such a “simple” mechanism, you’d think it would show up empirically.

    For those at the upper end of the middle class, working for nothing but experience is a fine investment. But if you are doing it for money, it has to be enough to make it worthwhile for someone already middle class.

    Is experience a fine investment or isn’t it? Why should I buy the argument that $0 is attractive, $5 is unattractive, but $10 is attractive, if the experience is the same in all cases? If the experience alone is good enough for them to “show up consistently,” why does that suddenly change at $5?

    You also argue that if the pay for internships were to move up, “more lower class or poorer kids could perhaps afford to take advantage of intern-type positions.” But then you quote Rob Wicks arguing that if pay for jobs increases, it only serves the upper middle class. Something doesn’t add up here.

    I agree, however, that it’s an absurdity to support a minimum wage while also supporting no-pay internships. But then again, I think renting people for any amount is absurd.

    Reply
    • Not sure exactly what your reasoning is. Marxists think that if the employer makes a profit then there is exploitation of the workers. This is all nonsense. And you could imagine jobs with negative pay: for example someone might pay $100k a year to work as Steve Jobs’s assistant, if he would let them. Or to be President. Or to be an astronaut. http://archive.mises.org/5310/taxing-astronauts-and-the-president/

      Reply
      • Marxists think that if the employer makes a profit then there is exploitation of the workers.

        But he does not think this is the result of cheating or of paying labor less than its fair market value. Marx was explicit that his theory of exploitation takes for granted that labor is paid a fair market wage set by supply and demand. It is simply false for you to say “Marxian ‘exploitation’ ideas like this” with reference to a line about cheating.

        And you could imagine jobs with negative pay: for example someone might pay $100k a year to work as Steve Jobs’s assistant, if he would let them. Or to be President. Or to be an astronaut.

        I’m not sure what you want to to take away from this.

        Reply
        • The point is there is a range of wages that you can legally pay an “employee” from negative infinity all the way to zero; then from $7.25 to infinity. There is a gap between 0 and $7.25 which makes no sense.

          Reply
          • OK, but is that supposed to be a response to anything I said? I asked you how I should make sense of the fact that you, on the one hand, argue that the upper middle class would find it attractive to work for nothing (because experience) and, one the other hand, would only “show up consistently” if they’re paid “enough.” Either one of these is false or you’re implicitly 0arguing that there is a “doughnut hole” of sorts between $0 and $E(nough) where they wouldn’t want to work, which makes no sense. If I value experience enough to work for $0, then I would certainly take $1 and the experience.

    • It’s a cool story, but if it’s such a “simple” mechanism, you’d think it would show up empirically.

      So nice of them to cover 2000-2009, why not cover the WWII-era (which all but devastated the ranks of black teen employment)? Because it was too obvious that such factorization would fail? That aside, the UC-Irvine study is not even close to the consensus.

      You also argue that if the pay for internships were to move up, “more lower class or poorer kids could perhaps afford to take advantage of intern-type positions.” But then you quote Rob Wicks arguing that if pay for jobs increases, it only serves the upper middle class. Something doesn’t add up here.

      That tends to happen when you look at apples and oranges as if they were the same fruit.

      …I think renting people for any amount is absurd.

      I think the amount someone complains about their “rent” price is directly related to the amount of bargaining power they have over their “rent” price.

      Reply
      • So nice of them to cover 2000-2009, why not cover the WWII-era (which all but devastated the ranks of black teen employment)? Because it was too obvious that such factorization would fail? That aside, the UC-Irvine study is not even close to the consensus.

        I guess you’ll have to ask them. But since we’re asking “why not” questions, why not point out that the consensus itself is up for debate. (By the way, your study is addressed therein.)

        That tends to happen when you look at apples and oranges as if they were the same fruit.

        Do you mean internships vs. jobs? Isn’t it Kinsella who is putting them in the same continuum to make his point? What then precludes we from pointing out the tension here?

        I think the amount someone complains about their “rent” price is directly related to the amount of bargaining power they have over their “rent” price.

        Who’s complaining about rent price? Certainly not proponents of the de facto inalienability argument I linked to.

        Reply
        • “I agree, however, that it’s an absurdity to support a minimum wage while also supporting no-pay internships. But then again, I think renting people for any amount is absurd.”
          this is just not an argument. so what if it’s absurd? Libertarianism does not say that anything that seems absurd should be banned.

          The quesiton is does employment violate rights It does not. End of story. You actually do not rent humans. Rights are inalienable. An employment contract is just an employer contratually setting up a payment of money conditioned upon the worker performing certain actions. It’s up to the worker if he chooses to perform the actions desired by the employer, if he wishes to trigger the payment. It’s just a one-way conditional title transfer by the employer. Surely you believe an employer has a right to contractually transfer his money to other people, and he can set whatever conditions he likes, right?

          Reply
          • this is just not an argument.

            It wasn’t intended to be. It was intended merely to differentiate my position from the typical progressive position that is perfectly in favor of wage labor as long as there is a minimum wage.

            The quesiton is does employment violate rights It does not. End of story.

            I think you stopped reading the story at the point where you judged it to be voluntary. It’s quite voluntary, sure, but something can be voluntary and still violate rights. Voluntary slavery contracts are an obvious example of this. Employment contracts are a more subtle fraud but a fraud nonetheless.

            Rights are inalienable. An employment contract is just an employer contratually setting up a payment of money conditioned upon the worker performing certain actions. It’s up to the worker if he chooses to perform the actions desired by the employer, if he wishes to trigger the payment. It’s just a one-way conditional title transfer by the employer.

            I absolutely agree with this. So my question for you is why you don’t then apply this consistently and come to the only logical conclusion, viz. that only a private property market economy where everyone is self-employed (individually or jointly) in their workplace is compatible with all of these premises?

            Surely you believe an employer has a right to contractually transfer his money to other people, and he can set whatever conditions he likes, right?

            Well, no. You can’t believe that he can set up whatever conditions he likes either if you also believe that rights are inalienable. Whatever he likes clearly doesn’t include a condition that alienates the worker’s rights. But this is exactly what the employer-employee relationship properly so called does. By employment, I’m talking about something very specific. It is true that employment has as one of its features “contratually setting up a payment of money conditioned upon the worker performing certain actions.” But lots of relationships that have this feature aren’t employment. Independent contracting has this feature. The relationship between a customer and a service provider has this feature. But employment has another feature these don’t have, viz. “law [stateless or otherwise] pretends that the responsible co-operation of the employee with the employer “fulfills” the contract for the transfer of labor. The employer enjoys the sole de jure responsibility for the (positive and negative) results of the human actions.” The most that one of these one-way conditional title transfers can accomplish, if we believe that rights are inalienable, is to gain the cooperation of a fully responsible individual. It is a de facto one-way conditional title transfer, but de jure a two-way title transfer. If you were a consistent libertarian, you’d support a legal theory that matches the legal interpretation with the factual interpretation. Otherwise, you are factually recognizing that rights are inalienable but endorse the enforcement of alienable rights.

          • “It’s quite voluntary, sure, but something can be voluntary and still violate rights. Voluntary slavery contracts are an obvious example of this. ”

            A contract does not violate rights. Only actions violate rights. You are confused.

          • A contract does not violate rights. Only actions violate rights. You are confused.

            And what does the enforcement of a contract involve? That’s right. Actions. I’m hardly complaining about contracts that are never enforced (or never shape actions because of the threat of enforcement).

          • Neverfox: “”A contract does not violate rights. Only actions violate rights. You are confused.”

            And what does the enforcement of a contract involve? That’s right. Actions. I’m hardly complaining about contracts that are never enforced (or never shape actions because of the threat of enforcement).”

            So it is the enforcement of a voluntary slavery contract that you object to. Me too. Because it is initiating force againt the body of an innocent person. So it’s aggression. The problem is the aggression–the enforcement–not “the contract”. You said that “voluntary things can violate rights.” this is false. the enforcement is not voluntary. So you are equivocating.

          • Yes, things that involve voluntary contracts in fact involve rights violations because enforcement of invalid contracts is not justified by the intentions of the parties. Again, I never said contracts violate rights. By saying “voluntary slavery contracts are an example” I’m talking about the package deal, the entire system that gives them validity, and points to the fact that it was voluntarily entered into to claim that said enforcement is not a violation of rights (of the slave) but a restitution of them (for the slaveowner). Likewise, “voluntary employment” involves “initiating force againt the body of an innocent person” when the legal order protects the employer’s claim to the residual by virtue of that voluntary agreement.

          • Neverfox: “By saying “voluntary slavery contracts are an example” I’m talking about the package deal, the entire system that gives them validity, and points to the fact that it was voluntarily entered into to claim that said enforcement is not a violation of rights (of the slave) but a restitution of them (for the slaveowner). Likewise, “voluntary employment” involves “initiating force againt the body of an innocent person” when the legal order protects the employer’s claim to the residual by virtue of that voluntary agreement.”

            Enforcing a slavery contract is the use of force against the body of the would-be slave–this is aggression.

            Enforcing an employment agreement is not analogous in the slightest. An employment agreement just says: IF you do work, I pay you $. The contract is just about how the $ is transferred. There is no aggression at all. ARe you sure you know what employment contracts are? It has nothing to do with any “residual”. What do you mean by “residual”–the Marxian crap about surplus value of labor?

          • An employment agreement just says: IF you do work, I pay you $.

            Yes, we are in full agreement on this. But this is also the way that independent contractor agreements say. This is also what we say as customers to service providers (“if you, plumber, fix my pipes, I pay you $”). But these last two cases aren’t employer-employee relationships. We are very capable in our everyday lives of knowing the difference, but if we relied only on what the agreements said, we couldn’t tell them apart. So what is it that alerts us to the difference? We have to look downstream. And that brings us to the residual claim.

            It has nothing to do with any “residual”. What do you mean by “residual”–the Marxian crap about surplus value of labor?

            No, I’m not making any reference to Marx. I’m using basic property accounting language here. The residual claimant is no more than “the agent who receives the net income (income after deducting all costs).” In other words, it’s a question of property rights. And not only that, it is a question of new property rights that do not simply reduce to the property rights to the capital assets that were added to the firm to begin with. So when that residual claim falls to the employer (or more accurately, shareholders or the “owner of the firm”), we have a case of property being stolen from those (the employees) who have, to use your words, “the relevant objective link,” viz. “appropriation — the transformation or embordering of a previously unowned resource, Lockean homesteading, the first use or possession of the thing.” Because, see, we both agree that the agreement merely said “IF you do work, I pay you $.” It does not also say “and you will not be considered a responsible cooperating person in this productive going-concern, such that your actions cannot count as first use.” It doesn’t say that because it would be as obviously invalid as a voluntary slave contract. Instead, it’s passed off as an improvement over those barbarous relics and the contract language is shown as proof of this. Meanwhile, the actual result is the same: the actions of the employee are legally regarded as those of a non-person. This is backed up by aggressive force because if any employee ever made a claim on the residual they would be denied by the legal order that upholds these agreements. As it turns out, we’ve only moved away from the voluntary slavery contract in the sense that it’s now rental instead of sale. If this were not the case, then all employees would be seen as the default residual claimants and would be the presumed managers (jointly) of the firm. Or what amounts to the same thing, the only firms in existence would be worker-managed firms who either owned their own capital or leased capital from capital owners. The would appropriate the firm’s liabilities and the firm’s product. Only bond markets would remain and stock markets would be seen as markets of a subtle fraud unworthy of libertarian support.

          • Neverfox:

            “An employment agreement just says: IF you do work, I pay you $.”

            Yes, we are in full agreement on this. But this is also the way that independent contractor agreements say. This is also what we say as customers to service providers (“if you, plumber, fix my pipes, I pay you $”). But these last two cases aren’t employer-employee relationships.

            Yes, they are.

            We are very capable in our everyday lives of knowing the difference, but if we relied only on what the agreements said, we couldn’t tell them apart. So what is it that alerts us to the difference? We have to look downstream. And that brings us to the residual claim.

            This is all utter nonsense.

            It has nothing to do with any “residual”. What do you mean by “residual”–the Marxian crap about surplus value of labor?

            No, I’m not making any reference to Marx. I’m using basic property accounting language here. The residual claimant is no more than “the agent who receives the net income (income after deducting all costs).” In other words, it’s a question of property rights. And not only that, it is a question of new property rights that do not simply reduce to the property rights to the capital assets that were added to the firm to begin with. So when that residual claim falls to the employer (or more accurately, shareholders or the “owner of the firm”), we have a case of property being stolen from those (the employees) who have, to use your words, “the relevant objective link,” viz. “appropriation — the transformation or embordering of a previously unowned resource, Lockean homesteading, the first use or possession of the thing.” Because, see, we both agree that the agreement merely said “IF you do work, I pay you $.” It does not also say “and you will not be considered a responsible cooperating person in this productive going-concern, such that your actions cannot count as first use.” It doesn’t say that because it would be as obviously invalid as a voluntary slave contract. Instead, it’s passed off as an improvement over those barbarous relics and the contract language is shown as proof of this. Meanwhile, the actual result is the same: the actions of the employee are legally regarded as those of a non-person. This is backed up by aggressive force because if any employee ever made a claim on the residual they would be denied by the legal order that upholds these agreements. As it turns out, we’ve only moved away from the voluntary slavery contract in the sense that it’s now rental instead of sale. If this were not the case, then all employees would be seen as the default residual claimants and would be the presumed managers (jointly) of the firm. Or what amounts to the same thing, the only firms in existence would be worker-managed firms who either owned their own capital or leased capital from capital owners. The would appropriate the firm’s liabilities and the firm’s product. Only bond markets would remain and stock markets would be seen as markets of a subtle fraud unworthy of libertarian support.

            this is all such nonsense I really don’t even know where to respond. The employer agrees to turn over some of its money, if the employee performs certain actions. It’s that simple. Nothing to do with Marxian residual nonsense.

          • Yes, they are.

            So there is absolutely no difference between owning a hair salon and patronizing one? I have a hair appointment today, in fact. I’m going to greet them as my employees. I might even fire one or two of them and ask them to leave.

            this is all such nonsense I really don’t even know where to respond. The employer agrees to turn over some of its money, if the employee performs certain actions. It’s that simple.

            At any point during the performance of those certain actions, did the employee ever cease to be responsible for their actions? Did they ever stop intentionally engaging in the the production of the firm’s product? If your answer to these questions is ‘no’, how is it then that they differ from those who end up owning the product? To borrow from your article “Causation and Aggression,” this would be like finding fault only with the “fourth” bank robber who actually takes the money. There are other fully responsible people involved in bringing about a result, yet they all are absolved of that responsibility. Only this time, rather than being for a crime, it’s for the production of property, and the absolution results in theft of what is rightfully theirs as first users. These are your own theories, Stephan. I’m just applying them.

            Nothing to do with Marxian residual nonsense.

            So despite the fact that I told you explicitly that this isn’t even remotely related to Marx, you’re just going to repeat that charge? Frankly, someone who isn’t familiar with the idea of residual claimancy — a very common and standard idea in accounting science that is ideologically neutral — probably shouldn’t be trying to tell someone how employment or any other aspect of firm theory works. It also doesn’t give me much faith in your understanding of Marx if you think he said anything like this. Is that the Austro-libertarian game? When in doubt, invoke Marx?

          • Never:

            So there is absolutely no difference between owning a hair salon and patronizing one? I have a hair appointment today, in fact. I’m going to greet them as my employees. I might even fire one or two of them and ask them to leave.

            There is not a relevant difference for our purposes. The owner doesn’t control employees. He just gives them pay IF they do xYZ.

            At any point during the performance of those certain actions, did the employee ever cease to be responsible for their actions?

            Waht does even mean? No. Everyone is always responsible for their actions.

            Did they ever stop intentionally engaging in the the production of the firm’s product? If your answer to these questions is ‘no’, how is it then that they differ from those who end up owning the product?

            Because that’s part of the deal? Suppose I have a canvas and paint. I offer you $100 i you will paint a given image for me. You do it. Since you fulfill the condition for the title to the $100 to transfer, it becomes yours, and I hand it over. But of course it is my painting.

            To borrow from your article “Causation and Aggression,” this would be like finding fault only with the “fourth” bank robber who actually takes the money. There are other fully responsible people involved in bringing about a result, yet they all are absolved of that responsibility. Only this time, rather than being for a crime, it’s for the production of property,

            bad analogy. If A and B commit a crime and harm C, then C ought to be able to go after any of them because they violated his rights. But if A and B have a contractual arrangement for B to work on A’s materials, in excahnge for a payment of money from A to B, and then A will sell the improved materials to C for some other price, that doesn’t violate anyone’s rights.

            and the absolution results in theft of what is rightfully theirs as first users.

            You are very confused. None of this makes sense.

            These are your own theories, Stephan. I’m just applying them.

            No, you are misapplying them. Horribly. This is really completely off.

          • Everyone is always responsible for their actions.

            OK, glad we agree.

            bad analogy. If A and B commit a crime and harm C, then C ought to be able to go after any of them because they violated his rights. But if A and B have a contractual arrangement for B to work on A’s materials, in excahnge for a payment of money from A to B, and then A will sell the improved materials to C for some other price, that doesn’t violate anyone’s rights.

            I will return to your example about the painting in a bit because I think what I have to say about that will be more clear after I address this analogy.

            It only appears to be a bad analogy to you because you haven’t actually identified the analogy I’m drawing. I’m not drawing a parallel between the crime committed in the former case with some crime committed in the latter case. I’m drawing an analogy between a the legal necessity to identify everyone responsible in the case of the crime and the legal necessity to identify everyone responsible in the case of assigning title (before the sale to C). That one legally interesting event is criminal and the other just a boring old matter of property titling makes no difference. But both require looking at who is responsible, and in both cases the answer is “A & B.” So can you answer this simple question: is B partly responsible for producing what ever it is that C buys in the latter example?

            Returning to you painter example, you simply aren’t talking about employment. In fact, I have yet to come across someone who can object to me with an actual case of employer-employee. They’re always painters or lawn cutters or plumbers, never employees.

            In any case, I will proceed to explain why this is the case by first asking a question. Say you both agree to these terms but after creating the painting, the painter refuses to turn it over to you and just burns it. Under a pure restitution system, what would the painter need restore to the paint/canvas owner (assuming the $100 has not yet been paid)?

          • Neverfox:

            It only appears to be a bad analogy to you because you haven’t actually identified the analogy I’m drawing. I’m not drawing a parallel between the crime committed in the former case with some crime committed in the latter case. I’m drawing an analogy between a the legal necessity to identify everyone responsible in the case of the crime and the legal necessity to identify everyone responsible in the case of assigning title (before the sale to C).

            Responsibilty for a crime is not analogous to “responsibility” for title. It makes no sense to even talk about “responsibility” for title. we don’t assign title to those “responsible” but to those with the best claim to the resource in dispute.

            That one legally interesting event is criminal and the other just a boring old matter of property titling makes no difference. But both require looking at who is responsible, and in both cases the answer is “A & B.” So can you answer this simple question: is B partly responsible for producing what ever it is that C buys in the latter example?

            I am not sure what you mean by “responsible”. Do you mean did he help cause it? Sure.

            Returning to you painter example, you simply aren’t talking about employment.

            Yes, it is the same as what the state labels as employment. Just because the state uses arbitrary definitions does not mean they are relevant.

            In fact, I have yet to come across someone who can object to me with an actual case of employer-employee. They’re always painters or lawn cutters or plumbers, never employees.

            Irrelevant

            In any case, I will proceed to explain why this is the case by first asking a question. Say you both agree to these terms but after creating the painting, the painter refuses to turn it over to you and just burns it. Under a pure restitution system, what would the painter need restore to the paint/canvas owner (assuming the $100 has not yet been paid)?

            Who knows. Probably a replacement painting, or $100 as replacement value. This is not relevant.
            Update: actually, thinking more about this: if the painter gives the artist raw materials and says he’ll pay him $x to mix them in a certain way and the artist destroys it, he probably (in this simple contract) just owes the replacement of the raw materials. But then I don’t owe him the agreed upon payment either. Suppose I had promised to pay him $10 to paint the painting. I gave him $7 worth of materials. If he destroys them, then he owes me $7 back. But I don’t owe him $10 since he did not complete the action that triggered the payment.
            On the other hand, if the agreement said that title to the completed painting was mine upon completion, and the painter finished it, then at that moment, I owe him $10 and I own the painting. So if he destroys it, he owes me $100 minus the $10 I owe him, i.e. $90. Then I have my $83 profit, just as I would if I had sold the painting to my buyer for $100.

          • we don’t assign title to those “responsible” but to those with the best claim to the resource in dispute.

            A distinction without a difference. You wrote that the best claim falls to the person or persons who engaged in “the transformation or embordering of a previously unowned resource, Lockean homesteading, the first use or possession of the thing.” It’s perfectly valid to ask who performed, that is who is responsible for, these transforming and embordering actions.

            As to “previously unowned,” your answer to my question about restitution make it clear that the painting was previously unowned. If the painting were merely the same property title as the raw materials, then you’d be owed a painting in restitution. But your intuition is right; you’re only owed restoration of the title that was consumed in the making of the painting. The painting is a new title and needs new appropriation. The way we appropriate that title on the market is by determining who was responsible for using up the input (ending those titles) and producing the output.

            As for your “on the other hand” example, this is impossible to put into a contract. How do you contract for the assignment of title. That’s not up to our subjective desires. It’s up to objective facts about who was the first to “the transformation or embordering of a previously unowned resource.” No one can make an agreement with you that this will simply be ignored. That’s what I’ve been getting at here. By thinking that you can make an agreement to essentially look the other way when someone else other than you in fact is the first user, you are legally treating them as a non-person. If you were treating them legally as a person, you’d not ignore their first use. That’s the connection to fraud. By convincing someone (every worker in a system the legitimizes employment) that such contracts to overlook their first use are valid, and that they have no say over managing things as if they really were the first owner of the product, you are committing mass theft by deception.

          • Never:

            You wrote that the best claim falls to the person or persons who engaged in “the transformation or embordering of a previously unowned resource, Lockean homesteading, the first use or possession of the thing.” It’s perfectly valid to ask who performed, that is who is responsible for, these transforming and embordering actions.

            Yes, but this is when we are talking about UNOWNED resources. In the hypothetical under discussion, there were NO UNOWNED RESOURCES involved.

            As to “previously unowned,” your answer to my question about restitution make it clear that the painting was previously unowned. If the painting were merely the same property title as the raw materials, then you’d be owed a painting in restitution. But your intuition is right; you’re only owed restoration of the title that was consumed in the making of the painting. The painting is a new title and needs new appropriation.

            of course it’s not a “new title” and my previous replies to your incompletely specified hypo (b/c you didn’t specify what the contract said about what happens in the case of sabotage) do not imply this at all. You are trying hard to fit this labor crap in. If I make a statue out of a hunk of marble, I own the resulting statue not because it’s some new thing and that i “own” the labor that’s “in it”. Rather I own it b/c I already owned the marble; in fact using the marble implies I already own it.

            The way we appropriate that title on the market is by determining who was responsible for using up the input (ending those titles) and producing the output.

            You have to try to find a way to make the painting seem like some new, unowned thing, to make your cribbed argument work. But it’s not new and unowned. It’s just previously owned scarce materials–canvas and paint–rearranged in a certain way.

            As for your “on the other hand” example, this is impossible to put into a contract. How do you contract for the assignment of title. That’s not up to our subjective desires. It’s up to objective facts about who was the first to “the transformation or embordering of a previously unowned resource.” No one can make an agreement with you that this will simply be ignored. That’s what I’ve been getting at here. By thinking that you can make an agreement to essentially look the other way when someone else other than you in fact is the first user,

            This is nonsense. You are basically denying freedom of contract, which is taking away some of the property rights of the owner. You are adopting a paternalistic system that treats people like children. Of course two people are free to make a contract that specifies who owns various resoruces and how and when title to them does or does not transfer to the other. Your leftist solution requires you to abrogate the right to contract.

            you are legally treating them as a non-person. If you were treating them legally as a person, you’d not ignore their first use. That’s the connection to fraud. By convincing someone (every worker in a system the legitimizes employment) that such contracts to overlook their first use are valid, and that they have no say over managing things as if they really were the first owner of the product, you are committing mass theft by deception.

            This may be one of the worst arguments I’ve ever seen. It makes no sense at all. Sorry.

          • Yes, but this is when we are talking about UNOWNED resources. In the hypothetical under discussion, there were NO UNOWNED RESOURCES involved.

            Yes, I know that’s the premise you need to get your theory to give you the answer you want, but that’s why I made an attempt to show you that your premise is inconsistent with other things you take to be true.

            your incompletely specified hypo (b/c you didn’t specify what the contract said about what happens in the case of sabotage)

            It’s not incompletely specified; it’s quite intentional. To get at the heart of how a theory works, we need to strip away all possible complications. My very question is to ask what happens in the absence of contractual language that goes beyond “If you do work, I pay $”. Once we know that, we have a solid foundation upon which to build. And you answered that the painter would only owe back the materials or their value. You would not give that answer if you believed he owned the painting by default, absent language specifying an ex post sale.

            If I make a statue out of a hunk of marble, I own the resulting statue not because it’s some new thing and that i “own” the labor that’s “in it”. Rather I own it b/c I already owned the marble; in fact using the marble implies I already own it.

            I don’t know where you’re getting that I’m talking about owning labor that’s “in it.” My theory is that title falls to the party responsible for using up all the inputs to production. (And when outside “hired” labor is involved, that’s one input that only the laborer can possible be responsible for using). This party then owns the liability for those inputs and gains title to the output. Your theory is that the output belongs to whoever owned the inputs. Those who wish to be scientific and rational will go with the theory that ceteris parabus can explain more. So let’s see which one explains more.

            Both of our theories can explain scenarios where capital is used by the owner to create something new. But only my theory can explain why we get the outcome we expect when the capital owner rents out the capital to another. In those cases, no one would argue that the product created by default belongs to the capital owner (without an ex post sale contract). Why is that? Because, as my theory explains, the capital owner, despite owning the inputs, isn’t the one who used. And my theory also predicts that the correct legal response is that the producer owes a liability to the capital owner for those capital services but has ownership rights to all profits. This is an empirical reality for all instances of bonds in capitalism today and, I imagine, in a future Ancapistan. Your theory, on the other hand, would make leasing of capital result in the profit ownership falling to the lessor, in addition to the lease payments!! Clearly absurd. Your theory explains less and therefore must be rejected.

            By giving over your paint/canvas, you gave the use rights to the painter. So the painter used your capital and her labor, making her the sole party to use the inputs. The only thing the painter owes you (being the rightful holder of use rights and her own body/labor) is the materials. The fact that, in our society, we typically think of the painting also going to the paint/canvas owner is because it’s reasonable to think of the $100 (being so much more than you’d charge for paint/canvas) as an implicit contract for an ex post sale of the painting minus the liability for the materials. That’s not the same thing as the title just falling to the materials owner by default.

            It’s just previously owned scarce materials–canvas and paint–rearranged in a certain way.

            In this case. But try to stretch your theory to a complex, modern corporation with stock values representing “good will” and capitalized future sales etc. If you have to have a different theory to explain that, then your theory should be rejected, when one is available that explains both.

            Of course two people are free to make a contract that specifies who owns various resoruces and how and when title to them does or does not transfer to the other.

            Of course they are free to make contracts to exchange already owned resources. I said they aren’t free to contract about the appropriation of unowned resources. That’s not because I’m against freedom of contract but because contracts about such things are legally nonsensical based on your own theory of how unowned resources become owned. Now, I know you don’t agree with me that it’s unowned property we’re talking about here, but that’s because you haven’t yet come to terms with the fact that your theory of how property titles flow through production must be rejected.

          • *ceteris paribus

        • Never:

          It’s not incompletely specified; it’s quite intentional. To get at the heart of how a theory works, we need to strip away all possible complications. My very question is to ask what happens in the absence of contractual language that goes beyond “If you do work, I pay $”. Once we know that, we have a solid foundation upon which to build. And you answered that the painter would only owe back the materials or their value. You would not give that answer if you believed he owned the painting by default, absent language specifying an ex post sale.

          It was just one possible answer, depending on facts and the contract.

          The bottom line is you marxians would abrogate freedom of contract. Let me ask you: suppose I mine iron ore and use my “labor” to sculpt it into a sword. Now: I give it to you as a gift. who owns it? Me or you?

          I don’t know where you’re getting that I’m talking about owning labor that’s “in it.” My theory is that title falls to the party responsible for using up all the inputs to production.

          Which is bullshit, to be frank. What is “it”? the “statue”? A statue is just rock in a given shape. I already owned the rock. I own it after I pay someone to shape it for me. this is not hard (unlike rock).

          Reply
  • Here is a classic video of Helfeld grilling Pelosi on the minimum wage, exposing the hypocrisy. Watch her attempt to come up with some principle that allows her to draw an objective line through the positivist legal quagmire: her interns are somehow receiving valuable training, while private industry could only be exploiting workers.

    http://www.youtube.com/watch?v=8pFC3LKMIQo

    Reply

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