13. Enforcement Against Invasion of Property
This work is largely the analysis of a market society unhampered by the use of violence or theft against any man's person or property.
The question of the means by which this condition is best established is not at present under consideration.
For the present purpose, it makes no difference whether this condition is established by every man's deciding to refrain from invasive action against others, or whether some agency is established to enforce the abandonment of such action by every individual.
Invasive action may be defined as any action, violence, theft or fraud, taking away another's
personal freedom or property without his consent.
Whether the enforcement is undertaken by each person or by some sort of agency, we assume
here that such a condition, the existence of an unhampered market, is maintained in
some way.
One of the problems in maintaining the conditions of a free market is the role of the enforcing
agency, whether individual or organizational, in exchange contracts.
What type of contracts are to be enforced to maintain the conditions of an unhampered
market?
We have already seen that contracts assigning away the will of an individual cannot be enforced
in such a market, because the will of each person is by its nature inalienable.
On the other hand, if the individual made such a contract and received another's property
in exchange, he must forfeit part or all of the property when he decides to terminate
the agreement.
We shall see that fraud may be considered as theft, because one individual receives
is the other's property but does not fulfill his part of the exchange bargain, thereby
taking the other's property without his consent.
This case provides the clue to the role of contract and its enforcement in the free society.
Contract must be considered as an agreed-upon exchange between two persons of two goods,
present or future.
Customers would be free to make any and all property contracts that they wished, and for
a free society to exist, all contracts, where the good is naturally alienable, must be enforced.
Failure to fulfill contracts must be considered as theft of the other's property.
Thus, when a debtor purchases a good in exchange for a promise of future payment, the good
It cannot be considered his property until the agreed contract has been fulfilled and
payment made.
Until then, it remains the creditor's property, and non-payment would be equivalent to theft
of the creditor's property.
An important consideration here is that contract not be enforced because a promise has been
made that is not kept.
It is not the business of the enforcing agency or agencies in the free market to enforce
promises merely because they are promises.
Its business is to enforce against theft of property, and contracts are enforced because
of the implicit theft involved.
Evidence of a promise to pay property is an enforceable claim, because the possessor of
This claim is, in effect, the owner of the property involved, and failure to redeem the
claim is equivalent to theft of the property.
On the other hand, take the case of a promise to contribute personal services without an
advance exchange of property.
Thus, suppose that a movie actor agrees to act in three pictures for a certain studio
for a year.
Before receiving any goods in exchange, salary, he breaks the contract and decides not to
perform the work. Since his personal will is inalienable, he cannot, on the free market,
be forced to perform the work there. Further, since he has received none of the movie company
property in exchange, he has committed no theft, and thus the contract cannot be enforced
on the Free Market.
Any suit for damages could not be entertained on an unhampered market.
The fact that the movie company may have made considerable plans and investments on the
expectation that the actor would keep the agreement may be unfortunate for the company,
but it could not expect the actor to pay for its lack of foresight and poor entrepreneurship.
It pays the penalty for placing too much confidence in the man.
The movie actor has not received and kept any of the company's property, and therefore
cannot be held accountable in the form of payment of goods as damages.
This is true even if the actor had previously agreed in a contract that he would pay damages,
for this is still merely a promise.
He has not implicitly seized someone else's property.
The object of an enforcing agency in a free society is not to uphold promise-keeping by
force, but to redress any invasions of person and property.
Any such enforced payment in the present case would be an invasion of the movie actor's
property rights on the free market, rather than an attack upon invasion.
It may be considered more moral to keep promises than to break them, but the condition of
a free market is that each individual's rights of person and property be maintained, and
not that some further standard of morals be coercively imposed on all.
Any coercive enforcement of such a moral code, going beyond the abolition of invasive acts,
would in itself constitute an invasion of individual rights of person and property and be an interference in the free market.
Sir Frederick Pollock thus describes original English contract law.
Money debts, it is true, were recoverable from an early time.
But this was not because the debtor had promised to repay the loan.
It was because the money was deemed still to belong to the creditor
As if the identical coins were merely in the debtor's custody, the creditor sued to recover money in exactly the same form which he would have used to demand possession of land.
And down to Blackstone's time, the creditor was said to have a property in the debt, property which the debtor had granted him.
Giving credit, in this way of thinking, is not reliance on the right to call thereafter for an act to be performed by the debtor,
but merely suspension of the immediate right to possess one's own particular money,
as the owner of a house lot suspends his right to occupy it.
The foundation of the plaintiff's right was not bargain or promise,
It certainly would be consonant with the free market, however, for the movie company to ask the actor to pay a certain sum in consideration of his breaking the contract, and if he refuses, to refuse to hire him again, and to notify other prospective contracting parties, such as movie companies, of the person's action.
It seems likely that his prospect of making exchanges in the future will suffer because of his action.
Thus, the blacklist is permissible on the free market.
Another legitimate action on the free market is the boycott, by which A urges B not to make an exchange with C for whatever reason.
Since A's and B's actions are purely voluntary and non-invasive, there is no reason for a
boycott not to be permitted on the unhampered market.
On the contrary, any coercive action against a boycott is an invasion against the rights
of free persons.
If default on contracted debts is to be considered as equivalent to theft, then on the unhampered
In the third market, its treatment by the enforcing agency will be similar to that of theft.
It is clear, for example, in the case of burglary, that the recovery of the stolen property to its owner would be the fundamental consideration for the enforcing agency.
Punishment of the wrongdoer would be a consideration subsidiary to the former.
Suppose A has stolen 100 ounces of gold from B. By the time A has been apprehended by
the enforcing agency, he has dissipated the 100 ounces, and has no assets by which the
100 ounces can be obtained. The main goal of the enforcement agency should be to force
A to return the 100 ounces. Thus, instead of simply idle imprisonment, the agency could
would force the thief to labor and to attach his earnings to make up the amount of the
theft, plus a compensation for the delay in time.
Whether this forced labor is done in or out of prison is immaterial here.
The main point is that the invader of another's rights on the free market gives up his rights
to the same extent.
The first consideration in the punishment of the aggressor against property in the free
is the forced return of the equivalent property.
As Wordsworth Donisthorpe reminds us,
in Rome one could recover stolen goods or damages for their loss
by what we should call a civil process,
without in the least affecting the relation between the thief and the public by reason of the theft.
Restitution first and punishment afterwards was the rule.
On the other hand, suppose that B voluntarily decides to forgive A and grant the latter a gift of the property.
He refuses to press charges against the thief.
In that case, the enforcement agency would take no action against the robber,
since he is now in the position of the receiver of a gift of property.
This analysis provides the clue to the treatment of defaulting debtors on the free market.
If a creditor decides to forget about the debt and not press charges, he, in effect, grants a gift of his property to the debtor, and there is no further room for enforcement of contract.
What if the creditor insists on keeping his property?
It is clear that if the debtor can pay the required amount but refuses to do so, he is guilty of pure fraud, and the enforcing agency would treat his act as such.
Its prime move would be to make sure that the debtor's assets are transferred to their rightful owner, the creditor.
But suppose that the debtor has not got the property, and would be willing to pay if he had it.
Does this entitle him to special privilege or coerced elimination of the debt, as in the case of bankruptcy laws?
Clearly not.
The prime consideration in the treatment of the debtor would be his continuing and primary
responsibility to redeem the property of the creditor.
The only way by which this treatment could be eliminated would be for the debtor and
the creditor to agree, as part of the original contract, that if the debtor makes certain
investments and fails to have the property at the date due, the creditor will forgive
the debt.
In short, he grants the debtor the rights of a partial co-owner of the property.
There could be no room in a free society such as we have outlined for negotiable instruments.
Where the government designates a good as negotiable if A steals it from B and then
sells it to C without the latter's knowledge of the theft, B cannot take the good back
from C. Despite the fact that A was a thief and had no proper title to the good, C is
decreed to be the legitimate owner, and B has no way of regaining his property.
The law of negotiability is evidently a clear infringement of property right.
Where property rights are fully defended, theft cannot be compounded in this manner.
The buyer would have to purchase at his own risk and make sure that the good is not stolen.
If he nonetheless does buy stolen goods, he must try to obtain restitution from the thief
and not at the expense of the rightful owner.
What of a cartel agreement?
Would that be enforceable in a free society?
If there has been no exchange of property and A, B, C firms agree among themselves to
To set quotas on their production of a good, this agreement would surely not be illegal,
but neither would it be enforceable.
It could be only a simple promise, and not an enforceable case of implicit theft.
This reason for the unenforceability of a cartel agreement in a free society has no
relation to any common law hostility to agreements allegedly in restraint of trade.
One difficulty often raised against a free society of individual property rights is that
it ignores the problem of external diseconomies or external costs.
But cases of external diseconomy all turn out to be instances of failure of government,
the enforcing agency, adequately to enforce individual property rights.
The blame, therefore, rests not on the institution of private property, but on the failure of
the government to enforce this property right against various subtle forms of invasion,
the failure, for example, to maintain a free society.
One instance of this failure is the case of smoke, as well as air pollution generally.
Insofar as the outpouring of smoke by factories pollutes the air and damages the person's
In a free society, as we have stated, every man is a self-owner.
No man is allowed to own the body or mind of another, that being the essence of slavery.
This condition completely overthrows the basis for a law of defamation, that is, libel, written
defamation, or slander, oral defamation.
For the basis of outlawing defamation is that every man has a property in his own reputation,
And that therefore any malicious or untruthful attack on him or his character, or even more,
a truthful attack, injures his reputation and therefore should be punished.
However, a man has no such objective property as reputation.
His reputation is simply what others think of him.
That is, it is purely a function of the subjective thoughts of others.
But a man cannot own the minds or thoughts of others.
Therefore I cannot invade a man's property right by criticizing him publicly.
Further, since I do not own others' minds either, I cannot force anyone else to think
less of the man because of my criticism.
Similarly, blackmail would not be illegal in the free society, for blackmail is the
The Foregoing Observations should firmly remind us that what the enforcing agency combats
in a free society is invasion of the physical person and property, not injury to the values
of property.
For physical property is what the person owns.
He does not have any ownership in monetary values, which are a function of what others
will pay for his property.
Thus someone's vandalism against or robbery of a factory is an invasion of physical property
and is outlawed.
On the other hand, someone's shift from the purchase of this factory's product to the
The purchase of a competing factory's product may lower the monetary value of the former's
property, but this is certainly not a punishable act.
It is precisely the condition of a free society that a property owner have no unearned claim
on the property of anyone else.
Therefore he has no vested right in the value of his property, only in its physical existence.
As for the value, this must take its chance on the free market.
This is the answer, for example, to those who believe that undesirable businesses or
people must be legally prevented from moving into a certain neighborhood because this may
or will lower the existing property value.
One method of acquiring property that we have not discussed yet is fraud.
Lud involves cases where one party to an agreed-upon exchange deliberately refuses to fulfill his
part of the contract.
He thus acquires the property of the other person, but he sacrifices either none of the
agreed-upon goods or less than he had agreed.
We have seen that a debtor's deliberate failure to pay his creditor is equivalent to an outright
theft of the creditor's property.
Another example of fraudulent action is the following exchange.
Smith agrees to give up 15 ounces of gold to Jones in exchange for a package of certain
specified Chinaware.
When he receives the package, after having given up the gold, Smith finds that he has
received an empty crate instead of the goods that the two had agreed to exchange.
Jones has falsely represented the goods that he would exchange.
And here again, this is equivalent to outright theft of Smith's property.
Since the exchange has been made falsely, the actual form of which might not have been contracted
had the other party not been deceived.
This is not an example of voluntary exchange, but of one-sided theft.
We therefore exclude both explicit violence and the implicit violence of fraud from our
definition of the market.
and the pattern of voluntary interpersonal exchanges.
At this point we are dealing only with an analysis of the market unhampered by fraud or violence.
We have not here been discussing what type of enforcing agency will be set up or the
means it will use, but what type of actions the agency will combat and what type will
be permissible.
In a free market, all invasive acts by one person against another's property, either
against his person or his material goods, will be combated by the enforcing agency or
agencies.
We are assuming here that there are no invasive acts in the society, either because no individuals
commit them, or because they are successfully combated and prevented by some sort of enforcing
agency.
The problem then becomes one of defining invasive as distinguished from non-invasive acts.
And this is what has been done here in various typical examples.
Each man would be entitled to ownership over his own person and over any property that
he has acquired by production, by appropriation of unowned factors, by receiving gifts or
by voluntary exchange.
However has the basis of the free, non-invasive, or voluntarist society been described more
clearly in a brief space than by the British political philosopher Auberon Herbert?
1.
The great natural fact of each person being born in possession of a separate mind and
separate body implies the ownership of such mind and body by each person, and rites of
of Direction over Such Mind and Body.
It will be found on examination
that no other deduction is reasonable.
Two, such self-ownership implies the restraint
of violent or fraudulent aggressions made upon it.
Three, individuals therefore have the right
to protect themselves by force against such aggressions
made forcibly or fraudulently,
and they may delegate such acts of self-defense
to a special body called a government.
Condensed into a few words,
our voluntariest formula would run,
the sovereignty of the individual must remain intact
except where the individual coerced has aggressed
upon the sovereignty of another unaggressive individual.
Elaborating on the first point, Herbert continued,
if there is one thing on which we can safely build,
It is the great natural fact that each human being forms with his or her body and mind a separate entity from which we must conclude that the entities belong to themselves and not to each other.
As I have said, no other deduction is possible.
If the entities do not belong to themselves, then we are reduced to the most absurd conclusion.
A or B cannot own himself, but he can own or part-own C or D.