The Defense of Intangible Property

I recieved this comment from someone named "RSD" on my column at WORLDmag.com, "Liberty, Justice, and Shopping." The political preconditions and consequences of specifically intangible property is an interesting topic for reflection.

Like you, I’m thankful for Amazon, and join you in viewing it as something of a model for how a market can function effectively. Part of its effectiveness is based on the fact that the traded entity is tangible. Tangibility lends to transparency, as reasonable people can generally assess whether or not a seller’s description is accurate. Further, it is difficult to exercise monopoly power over tangible property because the costs of maintaining the monopoly will eventually outstrip any monopoly-derived profits. (Consider, for example, Judge Hand’s analysis in the Alcoa case.)

Our financial markets, in contrast, revolve around intangible property, i.e., forms of property that have no intrinsic value outside of a legal/institutional framework that vests rights in them. Thus, transparency is not as straightforward. Further, monopoly is more readily achieved, as there is generally no added cost to maintain the monopoly.

It’s worth noting, therefore, that there is no such thing as intangible property, in general, without the willingness of the government to intervene for the benefit of those who possess rights in intangible property under the law. Thus, it’s not unreasonable also to expect government to ask, in exchange for such protections, that submit themselves to regulations that attempt to force intangible-property markets to mimic, as closely as possible, the features of tangible-property markets. ...

RSD goes on to distinguish between "the lazy rich" who reap rewards disproportionate to any "superior skill, foresight, and industry" they once may have exercised, if at all, and those who do exercise these. Laws that favor these "lazy rich" introduce economic injustice and distortions in the economy, and discourage innovation by those with "superior skill, foresight, and industry."

While wealth may be a better indicator of such than poverty, the ideal market, like the one on Amazon, should be no respecter of one’s current economic status. If the market is working effectively, the wealthy should lose much of their wealth as soon as they stop exercising superior skill, foresight, and industry.

The entire comment, #5 on the thread, is worth a read.

I responded, "I like your oft repeated phrase, “skill, foresight, and industry.” Francis Bacon, my chief research interest, exalts people with these qualities, and deprecates “the lazy rich” in the aristocracy. Bacon was one of the great architects of modernity, and prepared significant foundations for modern economic thinking in his Essays."

Fifty Six Percent Free

As if to justify my irritation and concern over our dwindling rights in my previous post "No Reasonable Expectation of Privacy", CNN reports that

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government's become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.

How about this for an immediate threat: a brilliant piece of legislation by our good friend Senator Russ Feingold, he of the recently neutered (God be praised!) McCain-Feingold assault on political speech. There apparently just aren't enough hours in the day to restrict, impinge, curtail, infringe, and otherwise assault the basic freedoms we until recently thought defined American citizens under the Constitution. Under the anodyne title Clean Water Restoration Act, comes Act II of the original Clean Water Act, which authorized the Environmental Protection Agency to regulate all "navigable waterways". The radical environmentalists at the time of passage wanted the language to be "all waterways", simplicter, and, knowing they would get another swing at it later, bargained the phrase away to get the landmark legislation passed. Later is now, and Feingold the instrument. His "reform" moves precisely to strike the modifying "navigable" from navigable waterways in order to hugely expand the ability of the federal government to interfere with private property rights.

Quoting from a piece by Shannon Bream of Fox News,

Aside from striking "navigable," the bill defines U.S. water as "all waters subject to the ebb and flow of the tide, the territorial seas and all interstate and intrastate waters and their tributaries, including lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, natural ponds and all impoundments of the foregoing, to the fullest extent that these waters."

"Right now, the law says that the Environmental Protection Agency is in charge of all navigable water," said Sen. John Barrasso, R-Wyo., chairman of the Senate Western Caucus and an opponent of the bill.
"Well, this bill removes the word 'navigable,' so for ranchers and farmers who have mud puddles, prairie potholes -- anything from snow melting on their land -- all of that water will now come under the regulation of the Army Corps of Engineers and the Environmental Protection Agency," he said.
Barrasso said the federal government's one-size-fits-all approach doesn't work in the west where the Rocky Mountain states have gone even further than Washington to protect land, water and the environment.
"The government wants control of all water -- that also means that they want control over all of our land including the private property rights of people from the Rocky Mountain west, the western caucus and the entire United States," he said.

Barrasso is right of course; property is the cardinal right to be protected under the Lockean schema our constitution is adumbrated under. No other rights are securable without private property in land, protected under law. Americans ought to be highly sensitive to any incursions here; unfortunately, almost he whole of government is arrayed against the actual public and in favor of what they abstractly term the public interest.

But listen to how the government mouthpiece and environmental whacko Jan Goldman-Carter of the National Wildlife Foundation, argues the harmlessness of the bill:

That amended language is very clear that it preserves long standing exemptions for ongoing agricultural practices, forest roads. There are a number of very generous exemptions in there particularly for ranchers and farmers that I know have been worried about the effect of this legislation, but in fact those worries are largely unfounded," she said...I can't imagine anyone wanting to walk down to the stream and dump their oil or paint," she said. "Even if they did they're not going to be enforced against now and they never were, there simply isn't the ability to do that."

Note first, how gracious it is of the federal government to grant us these "very generous exceptions"! King John I'm sure also thought himself very generous in allowing his barons what little game his hunting parties left on their estates after exercising his oppressive kingly prerogative to simply take what he wanted. But those noblemen rose up and forced him to sign the Magna Carta, the great charter of rights that forever changed the political dynamic in the West, a dynamic now challenged again by an oppressive executive bent on destroying the property rights of pesky subjects. The operative assumption in both cases is that private property is neither private, nor property; it is really more of a lease hold, held at the discretion of the king or the federal government.

But secondly, and if possible more offensive, is her attempt to minimize the actual attack on property rights. "We've granted, in our mercy and good will, many good and gracious exemptions from our power grab. But really--even though the language in the legislation establishes the power to regulate and control all property whatsoever, we would never actually do it! Never have; couldn't happen, not possible; just not enough personnel, don't you see. Nothing to worry about. Now please step aside so we can establish in law this absolute assault on your property rights, which of course we will never pursue."

Now, given just this one instance of government intrusion into the fundamental rights they are charged constitutionally to protect, is it any wonder a full fifty-six percent of people polled see their own government as a threat to their rights?. This is a serious problem (for the government) in a nation the founding and constitution of which is centrally about the securing of the rights of the people against their government. The founding generation were famously suspicious of a strong central government and sought to keep it on a short leash through various political and constitutional devices. The main thing they counted on for the establishment and maintenance of the people's liberty however was not their dazzling new political technology or the institutional arrangement of offices, but importantly, the character of the people themselves to vigilantly guard their liberties.

Any people who would allow their government finally to take their property and rights are not worthy heirs of the signers of Magna Carta, and are not worthy to be free. That fifty six percent is a wholesome indicator that Americans are ready to take the leash back, and are going to shorten it considerably.

The Simplistic Notion of Liberty

It is interesting when people on the political left in American politics say explicitly the deplorably unjust things they actually believe. We saw this during the campaign when Michelle Obama said that the popular support for her husband made her proud of her country for the first time in her adult life. Or when Barack Obama told Joe the Plumber that the government needs to use the tax system to spread the wealth around.

Here is Rep. Jim Moran (D-VA) sharing what is a common notion among the Democrats:

Now in the last seven years we have had the highest corporate profit ever in American history. Highest corporate profit! We’ve had the highest productivity! The American worker has produced more per person at any time, but it hasn’t been shared, and that’s the problem because we have been guided by a Republican administration who believes in this simplistic notion that people who have wealth are entitled to keep it and they have an antipathy towards the means of redistributing wealth.

Is it a "simplistic" notion that people should be secure in their property, and that one of the fundamental purposes of government is to provide that security? To state it more pointedly, is it a simplistic notion that government should protect us against robbers, and not become itself a robber? What is government-enforced redistribution of wealth but the less wealthy majority pillaging the more wealthy minority through the coercive power of the state?

Take it to the next level. Is it a simplistic notion that people who have lives should be able to keep them? Given President-elect Barack Obama's and the Democratic Party's stand and record on abortion, infanticide, the "harvesting" of prenatal human life for medical research--and who knows what else?--it is obvious that the Democrats see that as a "simplistic notion" as well. (This post only begins to summarize Obama's radical commitment to killing the unborn under every imaginable circumstance.)

Consider also the enthusiasm among Democrats for the so-called Fairness Doctrine by which private broadcasters exercising their political free speech in the public square would have to balance conservative expressions with liberal ones. (For background, read this 1993 summary of the issue from the Heritage Foundation.) Is it "simplistic" to think that people who have opinions are entitled to express them? To the Democrats, apparently not. (Hear it from the very powerful New York Senator, Charles Schumer, in The Hill, Nov. 4, 2008.)

It appears that in the ruling Democratic view, it is a simplistic notion that those who have liberty should be entitled to exercise it and live securely in it.