Comments on: Why is it okay to pay an intern $0? or, liberal hypocrisy on the minimum wage http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/ Property - Prosperity - Peace Sat, 09 May 2015 08:06:55 +0000 hourly 1 https://wordpress.org/?v=4.5.3 By: Stephan Kinsella http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2735 Mon, 02 Jul 2012 22:24:16 +0000 http://libertarianstandard.com/?p=11294#comment-2735 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).

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By: Neverfox http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2734 Mon, 02 Jul 2012 21:59:29 +0000 http://libertarianstandard.com/?p=11294#comment-2734 *ceteris paribus

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By: Neverfox http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2733 Mon, 02 Jul 2012 21:57:34 +0000 http://libertarianstandard.com/?p=11294#comment-2733

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.

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By: Stephan Kinsella http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2732 Mon, 02 Jul 2012 04:33:59 +0000 http://libertarianstandard.com/?p=11294#comment-2732 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.

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By: Neverfox http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2731 Sun, 01 Jul 2012 21:33:28 +0000 http://libertarianstandard.com/?p=11294#comment-2731

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.

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By: Stephan Kinsella http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2729 Sun, 01 Jul 2012 01:50:48 +0000 http://libertarianstandard.com/?p=11294#comment-2729 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.

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By: Neverfox http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2728 Sun, 01 Jul 2012 01:33:54 +0000 http://libertarianstandard.com/?p=11294#comment-2728

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)?

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By: Stephan Kinsella http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2727 Sat, 30 Jun 2012 20:22:10 +0000 http://libertarianstandard.com/?p=11294#comment-2727 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.

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By: Neverfox http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2726 Sat, 30 Jun 2012 17:53:53 +0000 http://libertarianstandard.com/?p=11294#comment-2726

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?

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By: Stephan Kinsella http://libertarianstandard.com/2012/06/25/why-is-it-okay-to-pay-an-intern-0-or-liberal-hypocrisy-on-the-minimum-wage/#comment-2725 Sat, 30 Jun 2012 16:16:37 +0000 http://libertarianstandard.com/?p=11294#comment-2725 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.

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