Austro-Anarchist Libertarian Legal Theory

I recently emailed a question to the Mises email list. The subject line: “Legal foundations and presuppositions of economic analysis.” An edited version:

I am looking for economic articles or textbooks that explicitly discuss the legal assumptions that economic analysis rests on. For example economists take for granted certain legal institutional features and concepts such as property rights, enforceability of contracts, negotiability of promissory notes, fraud, trespass, corporations, firms, interest, torts, title, insurance, and so on. If you are aware of any standard treatment of this issue–say, preliminary chapters in standard economic text books, classic journal articles, and the like–please let me know. For example, is this topic explicitly addressed as a normal part of the education or curriculum of economics undergrads?

One reason I am interested in this, aside from exploring it for its own sake, is to consider doing something like this but with a particular focus on (a) the Rothbardian-libertarian conception of property and related norms; and (b) Austrian economic analysis.

The only thing that occurs to me off the top my head that is even similar to something along these lines is Bohm-Bawerk’s chapter “Whether Legal Rights and Relationships are Economic Goods” in his Shorter Classics; it’s also discussed in Gael J. Campan, “Does Justice Qualify as an Economic Good?: A Böhm-Bawerkian Perspective” The Quarterly Journal of Austrian Economics 2, no. 1 (Spring 1999) and Joseph Salerno, “Böhm-Bawerk’s Vision of the Capitalist Economic Process: Intellectual Influences and Conceptual Foundations,” New Perspectives on Political Economy, Volume 4, Number 2, 2008, pp. 87–112.).

In a discussion about this on Facebook, the always-amazing polymath Timo Virkkala told me:

Bohm-Bahwerk’s work–which really impressed John R. Commons, by the way–is what I would have recommended. The importance of institutions as the basis for human cooperation and markets has been written about extensively from a variety of points of view, Marxist, institutionalist (Veblen and Commons and others), New Institutionalists (Alchian, Coase, Demsetz, et al), and many others. A fraction of the work of the above folks looks at what you are interested in. Though this issue has long fascinated me, I’ve read little in this literature. Have you read Samuel Read? [Referencing his 1829 book Political Economy. An Inquiry into the Natural Grounds of Right to Vendible Property, or Wealth, available at Google books]

Me:

Actually I can’t find this guy Samuel Read in wikipedia or indeed any info about him at all on the web, other than this book. What do you know about him? Or do you know of any websites with further info on him?

Timo:

Samuel Read was highlighted in Rothbard’s history of econ theory. I acquired the book, and quickly lost it, back in the early 1980s. If I have him right (and I never got far in his book), he’s an early and important anti-Ricardian, and an analyst of property rights. But I’m not at all sure. I was asking the question hoping you’d know more than me!

Well, I have since obtained the PDF copy of the Read book, plus a print-on-demand version from Amazon, and have begun to read it. It is really amazing. I’ll get into that in a minute. The funny thing is Virkkala recommended it to me as being discussed in Rothbard’s Austrian Perspective on the History of Economic Thought. Yet I can find no discussion of Read in Rothbard, or in Wikipedia, or elsewhere on the web. Virkkalathen said he “Samuel Bailey, an anti-Ricardian, for Samuel Read.” And indeed, Rothbard does mention Bailey in his book. But what is fascinating is what a great find this Read book is. If you just read the introduction you’ll be amazed. Further, Read cites Bailey approvingly in the Preface, but in a bizarre and cryptic way. On page vii-viii he refers to “a very able writer on Political Economy” and “the writer I allude to” without ever using a citation or name; a google search for the text he quoted reveals the author he is quoting was in fact Bailey, in his 1825 book A critical dissertation on the nature, measures, and causes of value (available at google books here). I am not sure why he refused to name Bailey. Some bizarre custom? Was Bailey anonymous at the time? Rivalry?

In any case. Back to Read. I haven’t finished the book yet, but just a few observations from the Preface and Introduction alone: [click to continue…]

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I noted in “What Libertarianism Is” (n.1):

The term “private” property rights is sometimes used by libertarians, which I have always found odd, since property rights are necessarily public, not private, in the sense that the borders or boundaries of property must be publicly visible so that nonowners can avoid trespass. For more on this aspect of property borders, see Hans-Hermann Hoppe, A Theory of Socialism and Capitalism: Economics, Politics, and Ethics (Boston: Kluwer Academic Publishers, 1989), pp. 140–41; Stephan Kinsella, “A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability,” Journal of Libertarian Studies 17, no. 2 (Spring 2003): n. 32 and accompanying text; idem, Against Intellectual Property (Auburn, Ala.: Ludwig von Mises Institute, 2008), pp. 30–31, 49; also Randy E. Barnett, “A Consent Theory of Contract,” Columbia Law Review 86 (1986): 303.

(See also n.10 of “Intellectual Property and Libertarianism,” and text at n.11 of “Intellectual Freedom and Learning Versus Patent and Copyright.”)

I thought of this when I came across a discussion of “Wittgenstein’s Beetle“:

Another point that Wittgenstein makes against the possibility of a private language involves the beetle-in-a-box thought experiment.^[20] He asks the reader to imagine that each person has a box, inside of which is something that everyone intends to refer to with the word “beetle”. Further, suppose that no one can look inside another’s box, and each claims to know what a “beetle” is only by examining their own box. Wittgenstein suggests that, in such a situation, the word “beetle” could not be the name of a thing, because supposing that each person has something completely different in their boxes (or nothing at all) does not change the meaning of the word; the beetle as a private object “drops out of consideration as irrelevant”.^[20] Thus, Wittgenstein argues, if we can talk about something, then it is not private, in the sense considered. And, conversely, if we consider something to be indeed private, it follows that we cannot talk about it.

In the book Wittgenstein’s Beetle, Martin Cohen dismisses the experiment saying it “does not provide any support for the many different conclusions claimed by psychologists, philosophers and so many others” and suggests that it even seems to reinforce the notion that words have stable meanings.^[21]

I.e., both language and property are in a sense public. The connection is that property has to have a communicative (language) function, in that it sets up publicly observable or visible borders to communicate to third parties that a given resource is claimed by an owner and how they can avoid trespassing.

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