WEBVTT NOTE 7. Interpersonal Relations: Voluntary Exchange 1 00:00:00.000 --> 00:00:09.100 Chapter 7 Interpersonal Relations, Voluntary Exchange 2 00:00:09.100 --> 00:00:15.980 It is now time to bring other men into our Robinsonian idol, to extend our analysis to 3 00:00:15.980 --> 00:00:18.620 interpersonal relations. 4 00:00:18.620 --> 00:00:22.580 The problem for our analysis is not simply more people. 5 00:00:22.580 --> 00:00:27.460 After all, we could simply postulate a world of a million crusos on a million isolated 6 00:00:27.460 --> 00:00:33.060 Islands and our analysis would not need to be expanded by one iota. 7 00:00:33.060 --> 00:00:37.500 The problem is to analyze the interaction of these people. 8 00:00:37.500 --> 00:00:44.220 Friday, for example, might land in another part of the island and make contact with Crusoe. 9 00:00:44.220 --> 00:00:48.800 Or he might land on a separate island and then later construct a boat that could reach 10 00:00:48.800 --> 00:00:51.900 the other island. 11 00:00:51.900 --> 00:00:57.140 Economics has revealed a great truth about the natural law of human interaction, that 12 00:00:57.140 --> 00:01:05.820 But not only is production essential to man's prosperity and survival, but so also is exchange. 13 00:01:05.820 --> 00:01:13.140 In short, Crusoe, on his island or part thereof, might produce fish, while Friday, on his part, 14 00:01:13.140 --> 00:01:18.420 might grow wheat, instead of both trying to produce both commodities. 15 00:01:18.420 --> 00:01:24.380 By exchanging part of Crusoe's fish for some of Friday's wheat, the two men can greatly 16 00:01:24.380 --> 00:01:29.900 The Theory improved the amount of both fish and bread that both can enjoy. 17 00:01:29.900 --> 00:01:36.260 This great gain for both men is made possible by two primordial facts of nature, natural 18 00:01:36.260 --> 00:01:40.180 laws, on which all of economic theory is based. 19 00:01:40.180 --> 00:01:47.700 A. The great variety of skills and interests among individual persons, and B. The variety 20 00:01:47.700 --> 00:01:52.140 of natural resources in geographic land areas. 21 00:01:52.140 --> 00:01:58.220 If all people were equally skilled and equally interested in all matters, and if all areas 22 00:01:58.220 --> 00:02:04.140 of land were homogeneous with all others, there would be no room for exchanges. 23 00:02:04.140 --> 00:02:09.780 But in the world as it is, the opportunity for specialization in the best uses for land 24 00:02:09.780 --> 00:02:17.180 and people enables exchanges to multiply vastly and immensely to raise the productivity and 25 00:02:17.180 --> 00:02:25.220 and the standard of living, the satisfaction of wants, of all those participating in exchange. 26 00:02:25.220 --> 00:02:30.980 If anyone wishes to grasp how much we owe to the processes of exchange, let him consider 27 00:02:30.980 --> 00:02:36.740 what would happen in the modern world if every man were suddenly prohibited from exchanging 28 00:02:36.740 --> 00:02:39.760 anything with anyone else. 29 00:02:39.760 --> 00:02:45.460 Each person would be forced to produce all of his own goods and services himself. 30 00:02:45.460 --> 00:02:51.140 The utter chaos, the total starvation of the great bulk of the human race and the reversion 31 00:02:51.140 --> 00:02:58.340 to primitive subsistence by the remaining handful of people can readily be imagined. 32 00:02:58.340 --> 00:03:04.100 Another remarkable fact of human action is that A and B can specialize and exchange for 33 00:03:04.100 --> 00:03:12.740 their mutual benefit even if one of them is superior to the other in both lines of production. 34 00:03:12.740 --> 00:03:19.060 Let's suppose that Crusoe is superior to Friday in fish and wheat production. 35 00:03:19.060 --> 00:03:25.300 It still benefits Crusoe to concentrate on what he is relatively best at. 36 00:03:25.300 --> 00:03:31.300 If, for example, he is a far better fisherman than Friday but only a moderately better farmer, 37 00:03:31.300 --> 00:03:37.900 he can gain more of both products by concentrating on fishing and then exchanging his produce 38 00:03:37.900 --> 00:03:40.220 for Friday's wheat. 39 00:03:40.220 --> 00:03:45.180 Remember to use an example from an advanced exchange economy, it will pay a physician 40 00:03:45.180 --> 00:03:52.740 to hire a secretary for typing, filing, etc., even if he is better at the latter jobs, in 41 00:03:52.740 --> 00:03:57.900 order to free his time for far more productive work. 42 00:03:57.900 --> 00:04:03.780 This insight into the advantages of exchange, discovered by David Ricardo in his Law of 43 00:04:03.780 --> 00:04:10.260 of Comparative Advantage means that in the free market of voluntary exchanges, the strong 44 00:04:10.260 --> 00:04:15.940 do not devour or crush the weak, contrary to common assumptions about the nature of 45 00:04:15.940 --> 00:04:18.200 the free market economy. 46 00:04:18.200 --> 00:04:23.840 On the contrary, it is precisely on the free market where the weak reap the advantages 47 00:04:23.840 --> 00:04:30.500 of productivity because it benefits the strong to exchange with them. 48 00:04:30.500 --> 00:04:37.060 The process of exchange enables man to ascend from primitive isolation to civilization. 49 00:04:37.060 --> 00:04:41.740 It enormously widens his opportunities and the market for his wares. 50 00:04:41.740 --> 00:04:46.500 It enables him to invest in machines and other high-order capital goods. 51 00:04:46.500 --> 00:04:52.380 It forms a pattern of exchanges, the free market, which enables him to calculate economically 52 00:04:52.380 --> 00:04:59.580 the benefits and the costs of highly complex methods and aggregates of production. 53 00:04:59.580 --> 00:05:05.180 But economists too often forget, in contemplating the critical importance and the glories of 54 00:05:05.180 --> 00:05:10.580 the free market, what, precisely, is being exchanged. 55 00:05:10.580 --> 00:05:16.620 For apples are not simply being exchanged for butter or gold for horses. 56 00:05:16.620 --> 00:05:21.940 What is really being exchanged is not the commodities themselves, but the rights to 57 00:05:21.940 --> 00:05:24.300 ownership of them. 58 00:05:24.300 --> 00:05:30.400 When Smith exchanges a bag of apples for Jones' pound of butter, he is actually transferring 59 00:05:30.400 --> 00:05:36.760 his ownership rights in the apples in exchange for the ownership rights to the butter, and 60 00:05:36.760 --> 00:05:38.760 vice versa. 61 00:05:38.760 --> 00:05:44.560 Now that Smith, rather than Jones, is the absolute controller of the butter, it is Smith 62 00:05:44.560 --> 00:05:47.920 who may eat it or not at his will. 63 00:05:47.920 --> 00:05:56.400 This now has nothing to say in its disposition and is instead absolute owner of the apples. 64 00:05:56.400 --> 00:06:04.080 Returning now to Crusoe and Friday, suppose that more people, C, D, E, join Crusoe and 65 00:06:04.080 --> 00:06:11.040 Friday on the island. Each specializes in different products. Gradually one particular 66 00:06:11.040 --> 00:06:18.560 Product emerges because of such qualities as high value, steady demand, ready divisibility, 67 00:06:18.560 --> 00:06:21.640 as a medium of exchange. 68 00:06:21.640 --> 00:06:27.240 For it is discovered that the use of a medium enormously expands the scope of exchanges 69 00:06:27.240 --> 00:06:30.280 and the wants that can be satisfied on the market. 70 00:06:30.280 --> 00:06:36.320 Thus a writer or an economics teacher would be hard put to exchange his teaching or writing 71 00:06:36.320 --> 00:06:42.840 Banking Services for loaves of bread, parts of a radio, a piece of a suit, etc. 72 00:06:42.840 --> 00:06:49.160 A generally acceptable medium is indispensable for any extensive network of exchange and 73 00:06:49.160 --> 00:06:53.120 hence for any civilized economy. 74 00:06:53.120 --> 00:06:59.080 Such a generally acceptable medium of exchange is defined as a money. 75 00:06:59.080 --> 00:07:04.120 It has generally been found on the free market that the best commodities for use as money 76 00:07:04.120 --> 00:07:11.160 have been the precious metals, gold and silver. The exchange sequence now appears as follows. 77 00:07:11.160 --> 00:07:18.440 A. Owning his body and his labor, finds land, transforms it, produces fish, which he then 78 00:07:18.440 --> 00:07:27.240 owns. B. Uses his labor similarly to produce wheat, which he then owns. C. Finds land containing 79 00:07:27.240 --> 00:07:49.680 In short, the gold enters circulation, that is, its ownership is transferred from person 80 00:07:49.680 --> 00:07:55.000 to person as it is used as a general medium of exchange. 81 00:07:55.000 --> 00:08:01.460 In each case, the exchangers transfer ownership rights, and in each case, ownership rights 82 00:08:01.460 --> 00:08:09.960 are acquired in two ways and two ways only, A, by finding and transforming resources, 83 00:08:09.960 --> 00:08:16.940 producing, and B, by exchanging one's produce for someone else's product, including the 84 00:08:16.940 --> 00:08:21.260 medium of exchange, or money, commodity. 85 00:08:21.260 --> 00:08:28.380 And it is clear that Method B reduces logically to A, for the only way a person can obtain 86 00:08:28.380 --> 00:08:33.100 something in exchange is by giving up his own product. 87 00:08:33.100 --> 00:08:40.180 In short, there is only one route to ownership of goods, production and exchange. 88 00:08:40.180 --> 00:08:46.060 If Smith gives up a product in exchange for Jones's, which Jones also acquired in a previous 89 00:08:46.060 --> 00:08:52.420 Exchange, then someone, whether the person from whom Jones bought the product, or someone 90 00:08:52.420 --> 00:08:59.860 else down the line, must have been the original finder and transformer of the resource. 91 00:08:59.860 --> 00:09:06.460 A man then can acquire wealth, a stock of useful capital or consumer goods, either by 92 00:09:06.460 --> 00:09:13.520 producing it himself, or by selling to its producer some other product in exchange. 93 00:09:13.520 --> 00:09:19.040 The exchange process reduces logically back to original production. 94 00:09:19.040 --> 00:09:25.080 Such production is a process by which a man mixes his labor with the soil, finding and 95 00:09:25.080 --> 00:09:32.440 transforming land resources, or, in such cases as a teacher or writer, by producing and selling 96 00:09:32.440 --> 00:09:36.120 one's own labor services directly. 97 00:09:36.120 --> 00:09:42.000 Put another way, since all production of capital goods reduces ultimately back to the original 98 00:09:42.000 --> 00:09:55.000 All production reduces back either to labor services or to finding new and virgin land and putting it into production by means of labor energy. 99 00:09:55.000 --> 00:10:01.000 A man may also obtain wealth voluntarily in another way, through gifts. 100 00:10:01.000 --> 00:10:08.000 Thus Crusoe, upon stumbling on Friday at another end of the island, may give him some sustenance. 101 00:10:08.000 --> 00:10:15.480 In such a case, the giver receives not another alienable good or service from the other party, 102 00:10:15.480 --> 00:10:20.560 but the psychic satisfaction of having done something for the receiver. 103 00:10:20.560 --> 00:10:26.040 In the case of a gift, also, the process of acquisition reduces back to production and 104 00:10:26.040 --> 00:10:34.720 exchange, and again, ultimately, to production itself, since a gift must be preceded by production, 105 00:10:34.720 --> 00:10:40.320 If not directly, as in this case, then somewhere back down the line. 106 00:10:40.320 --> 00:10:47.080 We have so far analyzed the exchange process for a multitude of exchanges of consumer goods. 107 00:10:47.080 --> 00:10:52.680 We must now complete our picture of the real world by analyzing exchanges along the structure 108 00:10:52.680 --> 00:10:54.920 of production. 109 00:10:54.920 --> 00:11:01.200 For exchanges in an advanced economy are not only horizontal of consumer goods, but also 110 00:11:01.200 --> 00:11:02.740 vertical. 111 00:11:02.740 --> 00:11:08.540 They proceed downward from the original transformation of land, down through the various types of 112 00:11:08.540 --> 00:11:14.300 capital goods, and finally to the ultimate state of consumption. 113 00:11:14.300 --> 00:11:20.260 Let us consider a simple vertical pattern as it occurs in the exchange economy. 114 00:11:20.260 --> 00:11:24.860 Smith transforms land resources and constructs an axe. 115 00:11:24.860 --> 00:11:30.380 Instead of using the axe to make another product, Smith, as a specialist in a vast exchange 116 00:11:30.380 --> 00:11:38.020 John's economy sells his axe for gold, money. Smith, producer of the axe, transfers his 117 00:11:38.020 --> 00:11:44.240 right of ownership to Jones in exchange for a certain amount of Jones's gold, the precise 118 00:11:44.240 --> 00:11:51.040 amount of gold being agreed upon voluntarily by the two parties. Jones now takes the axe 119 00:11:51.040 --> 00:11:57.640 and fells lumber, then sells the lumber to Johnson for gold. Johnson in turn sells the 120 00:11:57.640 --> 00:12:03.800 The Lumber to Robbins, a contractor for gold, and Robbins in his turn constructs a house 121 00:12:03.800 --> 00:12:08.080 in exchange for the gold of his client, Fenton. 122 00:12:08.080 --> 00:12:13.400 It should be evident that this vertical network of exchange could not take place without the 123 00:12:13.400 --> 00:12:18.480 use of a monetary medium for the exchanges. 124 00:12:18.480 --> 00:12:23.640 To complete our picture of a market economy, let us suppose that Jones has cut down his 125 00:12:23.640 --> 00:12:30.140 is lumber but has to ship it down river to transfer it to Johnson. Jones then sells the 126 00:12:30.140 --> 00:12:37.360 lumber to another intermediary, Polk, who hires the labor services of X, Y and Z to 127 00:12:37.360 --> 00:12:44.400 transport the logs to Johnson. What has happened here, and why doesn't the use of X, Y and 128 00:12:44.400 --> 00:12:51.000 Z's labor in transforming and transporting the logs to a more useful place give them 129 00:12:51.000 --> 00:12:58.300 Rights to Ownership of the Logs What has happened is this. Polk transfers some 130 00:12:58.300 --> 00:13:04.900 gold to X and to Y and to Z in return for their selling to him their labor services 131 00:13:04.900 --> 00:13:12.860 of transporting the logs. Polk did not sell the logs to these men for money. Instead, 132 00:13:12.860 --> 00:13:20.420 he sold them money in exchange for employing their labor services on his logs. In short, 133 00:13:20.420 --> 00:13:27.340 Polk may have bought the logs from Jones for 40 gold ounces, and then paid X, Y, and Z 134 00:13:27.340 --> 00:13:34.660 20 gold ounces each to transport the logs, and then sold the logs to Johnson for 110 135 00:13:34.660 --> 00:13:41.940 ounces of gold. Hence, Polk netted a gain of 10 gold ounces on the entire transaction. 136 00:13:41.940 --> 00:13:49.180 X, Y, and Z, if they had so desired, could have purchased the logs from Jones themselves 137 00:13:49.180 --> 00:13:55.580 for the 40 ounces, and then shipped the logs themselves, sold them to Johnson for 110, 138 00:13:55.580 --> 00:13:58.400 and pocketed the 10 extra ounces. 139 00:13:58.400 --> 00:14:00.060 Why didn't they? 140 00:14:00.060 --> 00:14:03.200 Because A. they didn't have the capital. 141 00:14:03.200 --> 00:14:08.860 In short, they hadn't saved up the requisite money by reducing their previous consumption 142 00:14:08.860 --> 00:14:13.900 sufficiently below their income to accumulate the 40 ounces. 143 00:14:13.900 --> 00:14:20.140 And or B. They wanted money payment while they worked, and were not willing to wait 144 00:14:20.140 --> 00:14:25.220 for the number of months it took for the logs to be shipped and sold. 145 00:14:25.220 --> 00:14:31.420 And or C. They were unwilling to be saddled with the risk that the logs might indeed not 146 00:14:31.420 --> 00:14:35.100 be saleable for 110 ounces. 147 00:14:35.100 --> 00:14:41.660 Thus the indispensable and enormously important function of Polk, the capitalist in our example 148 00:14:41.660 --> 00:14:48.020 of the Market Economy is to save the laborers from the necessity of restricting their consumption 149 00:14:48.020 --> 00:14:54.260 and thus saving up the capital themselves, and from waiting for their pay until the product 150 00:14:54.260 --> 00:15:00.140 would, hopefully, be sold at a profit further down the chain of production. 151 00:15:00.140 --> 00:15:06.260 Hence the capitalist, far from somehow depriving the laborer of his rightful ownership of the 152 00:15:06.260 --> 00:15:27.260 makes possible a payment to the laborer considerably in advance of the sale of the product. Furthermore, the capitalist, in his capacity as forecaster or entrepreneur, saves the laborer from the risk that the product might not be sold at a profit, or that he might even suffer losses. 153 00:15:27.260 --> 00:15:54.260 The capitalist, then, is a man who has labored, saved out of his labor, that is, has restricted his consumption, and, in a series of voluntary contracts, has a. purchased ownership rights in capital goods, and b. paid the laborers for their labor services in transforming those capital goods into goods nearer the final stage of being consumed. 154 00:15:54.260 --> 00:16:00.360 Note, again, that no one is preventing the laborers themselves from saving, purchasing 155 00:16:00.360 --> 00:16:05.780 capital goods from their owners, and then working on their own capital goods, finally 156 00:16:05.780 --> 00:16:09.180 selling the product and reaping the profits. 157 00:16:09.180 --> 00:16:15.020 In fact, the capitalists are conferring a great benefit on these laborers, making possible 158 00:16:15.020 --> 00:16:22.140 the entire complex vertical network of exchanges in the modern economy, for they saved the 159 00:16:22.140 --> 00:16:28.100 The money needed to buy the capital goods and to pay the laborers in advance of sale 160 00:16:28.100 --> 00:16:30.620 for producing them further. 161 00:16:30.620 --> 00:16:38.060 At each step of the way, then, a man produces, by exerting his labor upon tangible goods. 162 00:16:38.060 --> 00:16:44.220 If this good was previously unused and unowned, then his labor automatically brings the good 163 00:16:44.220 --> 00:16:48.060 under his control, his ownership. 164 00:16:48.060 --> 00:16:53.420 If the good was already owned by someone else, then the owner may either sell this capital 165 00:16:53.420 --> 00:17:00.400 good to our laborer for money, after which his labor is exerted on the good, or the previous 166 00:17:00.400 --> 00:17:05.940 owner may purchase the labor service for money, in order to produce the good further and then 167 00:17:05.940 --> 00:17:08.760 sell it to the next buyer. 168 00:17:08.760 --> 00:17:16.180 This process too reduces back to the original production of unused resources and to labor, 169 00:17:16.180 --> 00:17:21.660 Since the capitalist, the previous owner, in our example, ultimately derived his own 170 00:17:21.660 --> 00:17:30.060 ownership from original production, voluntary exchange, and the saving of money, thus all 171 00:17:30.060 --> 00:17:36.940 ownership on the free market reduces ultimately back to A. Ownership by each man of his own 172 00:17:36.940 --> 00:17:44.420 person and his own labor, B. Ownership by each man of land which he finds unused and 173 00:17:44.420 --> 00:17:51.140 and Transforms by His Own Labor, and c. the exchange of the products of this mixture of 174 00:17:51.140 --> 00:17:57.700 A and B with the similarly produced output of other persons on the market. 175 00:17:57.700 --> 00:18:03.460 The same law holds true for all ownership on the market of the money commodity. 176 00:18:03.460 --> 00:18:09.540 As we have seen, money is either 1. produced by one's own labor transforming original 177 00:18:39.540 --> 00:18:43.000 Logically Back to One. 178 00:18:43.000 --> 00:18:48.420 In the free society we have been describing then, all ownership reduces ultimately back 179 00:18:48.420 --> 00:18:54.980 to each man's naturally given ownership over himself, and of the land resources that man 180 00:18:54.980 --> 00:18:58.800 transforms and brings into production. 181 00:18:58.800 --> 00:19:05.080 The free market is a society of voluntary and consequently mutually beneficial exchanges 182 00:19:05.080 --> 00:19:09.960 of Ownership Titles Between Specialized Producers. 183 00:19:09.960 --> 00:19:15.000 It has often been charged that this market economy rests on the wicked doctrine that 184 00:19:15.000 --> 00:19:18.240 labor is treated as a commodity. 185 00:19:18.240 --> 00:19:24.520 But the natural fact is that labor service is indeed a commodity, for as in the case 186 00:19:24.520 --> 00:19:31.400 of tangible property, one's own labor service can be alienated and exchanged for other goods 187 00:19:31.400 --> 00:19:33.320 and services. 188 00:19:33.320 --> 00:19:38.760 A person's labor service is alienable, but his will is not. 189 00:19:38.760 --> 00:19:43.560 It is most fortunate, moreover, for mankind that this is so. 190 00:19:43.560 --> 00:19:49.760 For this alienability means, one, that a teacher or physician or whatever can sell his labor 191 00:19:49.760 --> 00:19:56.280 services for money, and, two, that workers can sell their labor services in transforming 192 00:19:56.280 --> 00:19:59.360 goods to capitalists for money. 193 00:19:59.360 --> 00:20:04.380 If this could not be done, the structure of capital required for civilization could not 194 00:20:04.380 --> 00:20:11.720 be developed, and no one's vital labor services could be purchased by his fellow men. 195 00:20:11.720 --> 00:20:17.440 The distinction between a man's alienable labor service and his inalienable will may 196 00:20:17.440 --> 00:20:19.440 be further explained. 197 00:20:19.440 --> 00:20:25.720 A man can alienate his labor service, but he cannot sell the capitalized future value 198 00:20:25.720 --> 00:20:27.720 of that service. 199 00:20:27.720 --> 00:20:34.480 In short, he cannot in nature sell himself into slavery and have this sale enforced, 200 00:20:34.480 --> 00:20:40.960 for this would mean that his future will over his own person was being surrendered in advance. 201 00:20:40.960 --> 00:20:47.640 In short, a man can naturally expend his labor currently for someone else's benefit, but 202 00:20:47.640 --> 00:20:54.920 he cannot transfer himself, even if he wished, into another man's permanent capital good, 203 00:20:54.920 --> 00:21:01.320 For he cannot rid himself of his own will, which may change in future years and repudiate 204 00:21:01.320 --> 00:21:03.660 the current arrangement. 205 00:21:03.660 --> 00:21:09.000 The concept of voluntary slavery is indeed a contradictory one. 206 00:21:09.000 --> 00:21:15.780 For so long as a laborer remains totally subservient to his master's will voluntarily, he is not 207 00:21:15.780 --> 00:21:19.680 yet a slave, since his submission is voluntary. 208 00:21:19.680 --> 00:21:26.080 Whereas, if he later changed his mind and the master enforced his slavery by violence, 209 00:21:26.080 --> 00:21:33.120 the slavery would not then be voluntary, but more of coercion later on. 210 00:21:33.120 --> 00:21:38.880 The society that we have been describing in this section, the society of free and voluntary 211 00:21:38.880 --> 00:21:46.200 exchanges, may be called the free society or the society of pure liberty. 212 00:21:46.200 --> 00:21:52.040 The bulk of this work will be devoted to spelling out the implications of such a system. 213 00:21:52.040 --> 00:21:57.960 The term free market, while properly signifying the critically important network of free and 214 00:21:57.960 --> 00:22:04.600 voluntary exchanges, is insufficient when going at all beyond the narrowly economic or 215 00:22:04.600 --> 00:22:11.200 praxeologic, for it is vital to realize that the free market is exchanges of titles to 216 00:22:11.200 --> 00:22:18.360 to Property and that therefore the free market is necessarily embedded in a larger free society 217 00:22:18.360 --> 00:22:23.240 with a certain pattern of property rights and ownership titles. 218 00:22:23.240 --> 00:22:28.440 We have been describing the free society as one where property titles are founded on the 219 00:22:28.440 --> 00:22:35.640 basic natural facts of man, each individual's ownership by his ego over his own person and 220 00:22:35.640 --> 00:22:42.360 and his own labor, and his ownership over the land resources which he finds and transforms. 221 00:22:42.360 --> 00:22:48.560 The natural alien ability of tangible property, as well as man's labor service, makes possible 222 00:22:48.560 --> 00:22:53.500 the network of free exchanges of ownership titles. 223 00:22:53.500 --> 00:22:59.700 The regime of pure liberty, the libertarian society, may be described as a society where 224 00:22:59.700 --> 00:23:06.660 no ownership titles are distributed, where in short, no man's property in his person 225 00:23:06.660 --> 00:23:13.420 or intangibles is molested, violated or interfered with by anyone else. 226 00:23:13.420 --> 00:23:19.820 But this means that absolute freedom in the social sense can be enjoyed not only by an 227 00:23:19.820 --> 00:23:27.860 isolated crusoe, but by every man in any society, no matter how complex or advanced. 228 00:23:27.860 --> 00:23:35.140 For every man enjoys absolute freedom, pure liberty, if, like Crusoe, his naturally owned 229 00:23:35.140 --> 00:23:41.580 property, in his person and intangibles, is free from invasion or molestation by other 230 00:23:41.580 --> 00:23:43.340 men. 231 00:23:43.340 --> 00:23:49.640 And of course, being in a society of voluntary exchanges, each man can enjoy absolute liberty 232 00:23:49.640 --> 00:23:56.740 not in Crusoe-like isolation, but in a milieu of civilization, harmony, sociability, and 233 00:23:56.740 --> 00:24:03.620 and enormously greater productivity through exchanges of property with his fellow men. 234 00:24:03.620 --> 00:24:10.580 Absolute freedom, then, need not be lost as the price we must pay for the advent of civilization. 235 00:24:10.580 --> 00:24:15.720 Men are born free and need never be in chains. 236 00:24:15.720 --> 00:24:22.900 Man may achieve liberty and abundance, freedom and civilization. 237 00:24:22.900 --> 00:24:30.020 This truth will be obscured if we persist in confusing freedom or liberty with power. 238 00:24:30.020 --> 00:24:34.760 We have seen the absurdity of saying that man does not have free will because he has 239 00:24:34.760 --> 00:24:40.240 not the power to violate the laws of his nature, because he cannot leap oceans at a single 240 00:24:40.240 --> 00:24:41.740 bound. 241 00:24:41.740 --> 00:24:47.860 It is similarly absurd to say that a man is not truly free in the free society because 242 00:24:47.860 --> 00:24:55.140 In that society, no man is free to aggress against another man or to invade his property. 243 00:24:55.140 --> 00:25:00.980 Here again, the critic is not really dealing with freedom, but with power. 244 00:25:00.980 --> 00:25:06.820 In a free society, no man would be permitted, or none would permit himself, to invade the 245 00:25:06.820 --> 00:25:08.980 property of another. 246 00:25:08.980 --> 00:25:14.940 This would mean that his power of action would be limited, as man's power is always 247 00:25:14.940 --> 00:25:17.300 limited by his nature. 248 00:25:17.300 --> 00:25:21.300 It would not mean any curtailment of his freedom. 249 00:25:21.300 --> 00:25:28.280 For if we define freedom, again, as the absence of invasion by another man of any man's person 250 00:25:28.280 --> 00:25:35.180 or property, the fatal confusion of freedom and power is at last laid to rest. 251 00:25:35.180 --> 00:25:40.980 We shall see later that this definition of freedom or liberty must be clarified to read 252 00:25:40.980 --> 00:25:48.560 Absence of molestation of a man's just property, with justice implying, once again, ownership 253 00:25:48.560 --> 00:25:56.020 title to one's own self, to one's own transformed property, and to the fruits of voluntary exchanges 254 00:25:56.020 --> 00:25:58.540 built upon them. 255 00:25:58.540 --> 00:26:05.780 We then see clearly that a supposed freedom to steal or assault, in short, to aggress, 256 00:26:05.780 --> 00:26:10.860 would not be a state of freedom at all, because it would permit someone, the victim of an 257 00:26:10.860 --> 00:26:16.740 and Assault, to be deprived of his right to person and property, in short, to have his 258 00:26:16.740 --> 00:26:19.300 liberty violated. 259 00:26:19.300 --> 00:26:25.620 Each man's power, then, is always necessarily limited by the facts of the human condition, 260 00:26:25.620 --> 00:26:28.500 by the nature of man and his world. 261 00:26:28.500 --> 00:26:35.180 But it is one of the glories of man's condition that each person can be absolutely free, even 262 00:26:35.180 --> 00:26:39.700 in a world of complex interaction and exchange. 263 00:26:39.700 --> 00:26:46.200 It is still true, moreover, that any man's power to act and do and consume is enormously 264 00:26:46.200 --> 00:26:54.300 greater in such a world of complex interaction than it could be in a primitive or cruso-society. 265 00:26:54.300 --> 00:26:56.100 A vital point. 266 00:26:56.100 --> 00:27:01.740 If we are trying to set up an ethic for man, in our case, the subset of ethics dealing 267 00:27:01.740 --> 00:27:08.740 with violence, then to be a valid ethic, the theory must hold true for all men, whatever 268 00:27:08.740 --> 00:27:12.460 for their location in time or place. 269 00:27:12.460 --> 00:27:19.340 This is one of the notable attributes of natural law, its applicability to all men regardless 270 00:27:19.340 --> 00:27:21.980 of time or place. 271 00:27:21.980 --> 00:27:29.400 Thus ethical natural law takes its place alongside physical or scientific natural laws. 272 00:27:29.400 --> 00:27:35.900 But the society of liberty is the only society that can apply the same basic rule to every 273 00:27:35.900 --> 00:27:42.040 for Every Man, Regardless of Time or Place. Here is one of the ways in which reason can 274 00:27:42.040 --> 00:27:48.920 select one theory of natural law over a rival theory, just as reason can choose between 275 00:27:48.920 --> 00:27:55.680 many economic or other competing theories. Thus, if someone claims that the Hohenzollern 276 00:27:55.680 --> 00:28:02.180 or Bourbon families have the natural right to rule everyone else, this kind of doctrine 277 00:28:02.180 --> 00:28:07.860 Man is easily refutable by simply pointing to the fact that there is here no uniform 278 00:28:07.860 --> 00:28:14.140 ethic for every person, one's rank in the ethical order being dependent on the accident 279 00:28:14.140 --> 00:28:17.700 of being or not being a Hohenzollern. 280 00:28:17.700 --> 00:28:23.420 Similarly, if someone says that every man has a natural right to three square meals 281 00:28:23.420 --> 00:28:29.620 a day, it is glaringly obvious that this is a fallacious natural law or natural rights 282 00:28:29.620 --> 00:28:35.420 This Theory, for there are innumerable times and places where it is physically impossible 283 00:28:35.420 --> 00:28:41.340 to provide three square meals for all or even for the majority of the population. 284 00:28:41.340 --> 00:28:47.120 Hence, this cannot be set forth as some kind of natural right. 285 00:28:47.120 --> 00:28:51.860 On the other hand, consider the universal status of the ethic of liberty and of the 286 00:28:51.860 --> 00:28:57.380 natural right of person and property that obtains under such an ethic. 287 00:28:57.380 --> 00:29:03.860 For every person, at any time or place, can be covered by the basic rules. 288 00:29:03.860 --> 00:29:09.220 Ownership of one's own self, ownership of the previously unused resources which one 289 00:29:09.220 --> 00:29:16.380 has occupied and transformed, and ownership of all titles derived from that basic ownership, 290 00:29:16.380 --> 00:29:21.180 either through voluntary exchanges or voluntary gifts. 291 00:29:21.180 --> 00:29:27.140 These rules, which we might call the rules of natural ownership, can clearly be applied, 292 00:29:27.140 --> 00:29:33.560 and such ownership defended, regardless of the time or place and regardless of the economic 293 00:29:33.560 --> 00:29:36.360 attainments of the society. 294 00:29:36.360 --> 00:29:42.920 It is impossible for any other social system to qualify as universal natural law, for if 295 00:29:42.920 --> 00:29:50.220 there is any coercive rule by one person or group over another, and all rule partakes 296 00:29:50.220 --> 00:29:56.500 of Such Hegemony, then it is impossible to apply the same rule for all. 297 00:29:56.500 --> 00:30:02.300 Only a rulerless, purely libertarian world can fulfill the qualifications of natural 298 00:30:02.300 --> 00:30:09.020 rights and natural law, or, more important, can fulfill the conditions of a universal 299 00:30:09.020 --> 00:30:11.020 Ethic for All Mankind.