Stephan Kinsella C4SIF , Mises Mises Academy July 11, 2011

1. The Social Theory of Hoppe Property Foundations Stephan Kinsella C4SIF.org, Mises.org Mises Academy July 11, 2011

2. My background • It usually begins with Ayn Rand… • Law school… • The Firm

3. My background • It usually begins with Ayn Rand… • Law school… • The Firm

4. How I got here (cont.) • Rothbard • Mises • Hoppe

5. Course Overview • About 50 students from 8 countries at last count • Course will cover a number of topics over 6 lectures • Types of socialism • Marxist and Austrian class analysis • Methodology and epistemology • Argumentation ethics • The origin of the state and anarcho-capitalist theory • Democracy and Elites • Immigration • DAY: Hoppean property foundations: informs his economic, cultural, and political insights

6. Course Overview (cont.) • Email me anytime (nskinsella@gmail.com) but try to use course forum if possible • Please don’t use whiteboard/pointer if activated…. • Office Hours: if/as needed • Q&A session with Professor Hoppe in lecture 5 or 6: • submit questions to me by email over the next 4 lectures for me to review, collect, and send to Professor Hoppe for answers

7. The Exams • Mid-term and final multiple-choice (weighted) • Optional • Take both exams: Certificate of Completion • Otherwise: Certificate of Participation • Based on: • Lectures • “Suggested” reading material • Slides • NOT based on: • “Optional” reading material

9. Readings • Primarily: A Theory of Socialism and Capitalism [TSC] and The Economics and Ethics of Private Property [EEPP] (both free online in ePub and PDF formats), several other selected articles by Professor Hoppe, and articles by others commenting on Hoppe's thought • This week • TSC, chs. 1 and 2

10. Who is Hoppe? • born in the German town of Peine on September 2, 1949 • Late 1960s and early 1970s: studied history, sociology, and philosophy at the universities of Saarbrücken and Frankfurt am Main. • 1974 doctoral dissertation, published in 1976, dealt with the praxeological foundations of epistemology. • central thesis: all cognitive processes, and thus the sciences, are but special forms of human action. It followed that the laws of action were also the basic laws of epistemology. • Then discovered Mises’s and Rothbard’s works • Continued philosophical studies, developing a new epistemology and methodology of the social sciences, based on the insights he had received from Mises and Rothbard.

11. Who is Hoppe • Intellectually: Mises  Rothbard  Hoppe • in the early 1980s, he went to the United States on a prestigious Heisenberg fellowship. • Studied political philosophy, built on Austrian economics. • In 1986, he became Rothbard's colleague at the University of Nevada, Las Vegas (UNLV), where he would teach for the next 21 years. • Rothbard died 1995; Hoppe became editor of the Journal of Libertarian Studies, coeditor of the Review of Austrian Economics, and then coeditor of the Quarterly Journal of Austrian Economics.

12. Who is Hoppe • in August 2005, he founded the Property and Freedom Society • Annual meetings in Bodrum, Turkey since 2006, with libertarian intellectuals from around the world

13. Hoppe’s Influences • Jürgen Habermas • and fellow German philosopher Karl-Otto Apel • Kant and others • Mises • Rothbard

14. Hoppe’s Influences (cont) • Derived argumentation ethics from Habermas and Apel • Not the rest of Habermas’s odd philosophical views • Combined with Austrian/Misesian/Rothbardian insights to provide a libertarian argument, unlike Habermas and Apel’s socialist conclusions • Influenced by Kantian (and Misesian-Kantian) epistemology • Realist not idealistic • Randians critique idealist interpretation of Kant • There is a more realistic interpretation among some European Kantians • See my post Mises and Rand (and Rothbard) • Realism buttressed by Misesian praxeology (will explore later)

15. Hoppe’s Influences (cont) • Strongly Misesian and praxeological • But politically more radical; Mises was minarchist • Though “almost” anarchist • Was Mises an Anarchist? • Epistemological realist (like Mises) • Extended praxeological reasoning to ethics (unlike Mises) • Strongly Rothbardian, esp. politically • Economics: Rothbardian terminology more Aristotelean • But conceptually similar • Politics: both anarch

16. Hoppe’s Work • Books include Handeln und Erkennen (1976), Kritik der Kausalwissenschaftlichen Sozialforschung (1983), Eigentum, Anarchie, und Staat (1987), A Theory of Socialism and Capitalism (1989), The Economics and Ethics of Private Property (1993, enlarged 2nd edition 2006), Economic Science and the Austrian Method (1995); Democracy: The God that Failed (2001), and The Myth of National Defense (editor, 2003) • Books and articles have been translated into at least 22 languages

17. Hoppe’s Work • Grounded in Austrian property concepts, realistic epistemology, radical and Rothbardian anti-state politics and Austrian economics • work on sociology, economics, philosophy and epistemology, libertarianism and political philosophy, and history • critique of positivist methodology as applied to the social sciences • "argumentation-ethics" defense of libertarian rights • comparative analysis of socialism and capitalism • critique of democracy • economic methodology and epistemology • Other contributions: monopoly theory, the theory of public goods, the sociology of taxation, the private production of security, the nature of property and scarcity, immigration, and the evolution of monetary institutions and their impact on international relations.

18. Hoppe’s Place • See Hoppe’s comments on Menger, Bohm Bawerk, Mises, and Rothbard in his chapter on Rothbard in Holcombe, ed., The Great Austrian Economists • “Rothbard is the latest exponent of the main rationalist branch of the Austrian School, starting with the School's founder Carl Menger, and continuing with Eugen von Böhm-Bawerk, and Ludwig von Mises. Like Menger, Böhm-Bawerk, and Mises, Rothbard is an outspoken rationalist and critic of all variants of social relativism: historicism, empiricism, positivism, falsificationism, and skepticism. … • First: “Like his acknowledged predecessors, Rothbard defends the view that economic laws not only exist, but more specifically that they are "exact" (Menger) or "aprioristic” (Mises) laws. In contrast to the propositions of the (empirical) natural sciences, which must be continually tested against ever new data, and thus can never attain more than hypothetical validity, the propositions of economics concern necessary, non-hypothetical relations and assume apodictic validity.

19. Hoppe’s Place • “Second, Rothbard is the latest and most comprehensive system builder within Austrian economics. Only among rationalists does a constant desire for system and completeness exist. While they contributed much to its foundation, neither Menger nor Böhm-Bawerk accomplished this ultimate intellectual desideratum. This feat was accomplished only by Mises, with the publication of his monumental Human Action. … • “Today Mises's Human Action and Rothbard's Man, Economy, and State are the two towering and defining achievements of the Austrian School. • “Third, Rothbard is the latest and most systematically political Austrian economist. Just as rationalism implies the desire for system and completeness, so it implies political activism. To rationalists, human beings are above all rational animals. Their actions, and the course of human history, are determined by ideas (rather than by blind evolutionary forces of spontaneous evolution and natural selection).

20. Hoppe’s Place • “Proceeding systematically beyond even Mises, Rothbard accomplished—in his Ethics of Liberty—anintegration (via the concept of private property) of value-free Austrian economics and libertarian political philosophy (ethics) as two complementary branches of a grand unified social theory, thereby creating a radical-Austro-libertarian-philosophical movement.” • Hoppe follows in this line: Menger  Böhm-Bawerk  Mises  Rothbard  Hoppe • “If I have seen further it is only by standing on the shoulders of giants.” –Isaac Newton • See my post Hoppe and Intellectual Property: On Standing on the Shoulders of Giants

21. Hoppe’s Festschrift • Property, Freedom, and Society: Essays in Honor of Hans-Hermann Hoppe (Kinsella & Jörg Guido Hülsmann, eds., Mises Institute, 2009) (PDF and print versions)

22. Action and Property: fundamental concepts for ethics and economics • Fundamental concepts: • Action • Conflict • Scarcity • Choice • Cost, profit, ends, means • Causality • Property • Contract • Aggression • Capitalism • Socialism • The State • TSC, chs. 1 and 2; other sources • Here the case is descriptive only, like Rothbard’s in The Ethics of Liberty

23. Action • Misesian conception of action • Praxeology: science of human action • Mises explains in The Ultimate Foundation of Economic Science that "To act means: to strive after ends, that is, to choose a goal and to resort to means in order to attain the goal sought.” • This is a teleological analysis, as opposed to causal (action versus behavior) • Thus, Misesian dualism(more later)

24. Property: unifying theme for ethics and economics • Property • The bedrock concept • “Next to the concept of action, property is the most basic category in the social sciences. As a matter of fact, all other concepts to be introduced in this chapter—aggression, contract, capitalism and socialism—are definable in terms of property: aggression being aggression against property, contract being a nonaggressive relationship between property owners, socialism being an institutionalized policy of aggression against property, and capitalism being an institutionalized policy of the recognition of property and contractualism.”

25. Aggression • Rothbard: “The libertarian creed rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else. This may be called the "nonaggression axiom." … "Aggression" is defined as the initiation of the use or threat of physical violence against the person or property of anyone else. Aggression is therefore synonymous with invasion.” … ” [Quoted in Kinsella, What Libertarianism Is]

26. Aggression • Rothbard: “The libertarian creed rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else. This may be called the "nonaggression axiom." "Aggression" is defined as the initiation of the use or threat of physical violence against the person or property of anyone else. Aggression is therefore synonymous with invasion. … ” • "The fundamental axiom of libertarian theory is that each person must be a self-owner, and that no one has the right to interfere with such self-ownership" (p. 60), and "What … aggressive violence means is that one man invades the property of another without the victim's consent. The invasion may be against a man's property in his person (as in the case of bodily assault), or against his property in tangible goods (as in robbery or trespass)" (p. 45). [Quoted in Kinsella, What Libertarianism Is]

27. Aggression • But aggression depends on a definition of property • If I take a watch from you, it’s aggression if it’s yours, but not if it’s mine • Hoppe: “If … an action is performed that uninvitedly invades or changes the physical integrity of another person's body and puts this body to a use that is not to this very person's own liking, this action … is called aggression … Next to the concept of action, property is the most basic category in the social sciences. As a matter of fact, all other concepts to be introduced in this chapter — aggression, contract, capitalism and socialism — are definable in terms of property: aggression being aggression against property, contract being a nonaggressive relationship between property owners, socialism being an institutionalized policy of aggression against property, and capitalism being an institutionalized policy of the recognition of property and contractualism.” [Quoted in Kinsella, What Libertarianism Is]

28. Property and Scarcity • “To develop the concept of property, it is necessary for goods to be scarce, so that conflicts over the use of these goods can possibly arise. It is the function of property rights to avoid such possible clashes over the use of scarce resources by assigning rights of exclusive ownership. Property is thus a normative concept: a concept designed to make a conflict-free interaction possible by stipulating mutually binding rules of conduct (norms) regarding scarce resources.” • Garden of Eden (superabundance) hypo • Bodies, time, standing room still scarce • Conflict possible • Bodies are the prototype of property

29. Property and Scarcity • even in a paradise (Garden of Eden, sometimes called Schlaraffenland or Land of Cockaigne), with a superabundance of goods, • “every person's physical body would still be a scarce resource and thus the need for the establishment of property rules, i.e., rules regarding people's bodies, would exist. One is not used to thinking of one's own body in terms of a scarce good, but in imagining the most ideal situation one could ever hope for, the Garden of Eden, it becomes possible to realize that one's body is indeed the prototype of a scarce good for the use of which property rights, i.e., rights of exclusive ownership, somehow have to be established, in order to avoid clashes.”

30. Natural Law • As noted before, Hoppe’s initial case is descriptive only, like Rothbard’s in The Ethics of Liberty • It … seems to be best to start one’s analysis with the property norm, which would most likely be accepted by the inhabitants of Eden as the “natural position” regarding the assignment of rights of exclusive ownership in bodies. To be sure, at this stage of the argument we are not yet concerned with ethics, with the problem of the moral justification of norms. Thus, while it can well be admitted from the very outset that I am indeed going to argue later on that the natural position is the only morally defendable one, and while I am also convinced that it is the natural one because it is morally defendable, at this stage, natural does not imply any moral connotation. [Notice the honesty of this admission] It is simply meant to be a socio-psychological category used to indicate that this position would probably find the most support in public opinion.

31. Natural Law (cont) • “Indeed; its naturalness is reflected by the very fact that in talking about bodies, it is almost impossible to avoid using possessive (possession-indicating) expressions as well. A body is normally referred to as a specific person’s body: my body, yours, his, etc. (and, incidentally, the same is done whenever one speaks of actions!); and one does not have the slightest problem distinguishing what is mine, yours, etc.; clearly, in doing so, one is assigning property-titles and distinguishing between proper owners of scarce resources. • “What, then, is the natural position regarding property implicit in one’s natural way of speaking about bodies? Every person has the exclusive right of ownership of his body within the boundaries of its surface. Every person can put his body to those uses that he thinks best for his immediate or long-run interest, well-being, or satisfaction, as long as he does not interfere with another person’s rights to control the use of his/her respective body.

32. Contract • “This “ownership” of one’s own body implies one’s right to invite (agree to) another person’s doing something with (to) one’s own body: my right to do with my body whatever I want, that is, includes the right to ask and let someone else use my body, love it, examine it, inject medicines or drugs into it, change its physical appearance and even beat, damage, or kill it, if that should be what I like and agree to. Interpersonal relationships of this sort are and will be called contractual exchanges.” • Such contractual exchanges “are always, and necessarily so, mutually advantageous for every participant ex ante, otherwise the exchange simply would not take place.” • Follows the Rothbard-Evers title-transfer theory of contract • Kinsella, A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability

33. Aggression • “If, on the other hand, an action is performed that uninvitedly invades or changes the physical integrity of another person’s body and puts this body to a use that is not to this very person’s own liking, this action, according to the natural position regarding property, is called aggression…” • Socialism: “must be conceptualized as an institutionalized interference with or aggression against private property and private property claims.” • Essentialist definition • Traditional: focuses on private ownership of means of production; but this is just a type of private property, not special for political purposes • “Capitalism, on the other hand, is a social system based on the explicit recognition of private property and of nonaggressive, contractual exchanges between private property owners.”

34. Homesteading • Assigning ownership—the exclusive legal right to use or control a scarce good or resource—based “on the existence of an objective, intersubjectively ascertainable link between owner and the property owned and, mutatis mutandis, of calling all property claims that can only invoke purely subjective evidence in their favor aggressive”. • Any other assignment is based on merely verbal decree, subjective opinion. • Does not establish objective link between the resource and a person • First users however can point to a determinate natural link • To homestead is to emborder: to produce borderlines, objectively recognizable boundaries

35. Unpacking the concepts • Scarcity means rivalrous goods or means • Not merely non-abundant, but things that there can be conflict over • Conflict means physical, violent interaction, strife: two or more actors seek so employ the same means • It is actions that conflict • Actions always employ means • Means are scarce resrouces that are causally efficacious at achieving a given end

36. Unpacking the concepts • Choice: All actions imply choice • From ESAM: “… no scientific advance could ever alter the fact that one must regard one's knowledge and actions as unpredictable on the basis of constantly operating causes . One might hold this conception of freedom to be an illusion. And one might well be correct from the point of view of a scientist with cognitive powers substantially superior to any human intelligence, or from the point of view of God. But we are not God, and even if our freedom is illusory from His standpoint and our actions follow a predictable path, for us this is a necessary and unavoidable illusion. We cannot predict in advance, on the basis of our previous states, the future states of our knowledge or the actions manifesting that knowledge. We can only reconstruct them after the event.”

37. Unpacking the concepts • Choice: All actions imply choice • Compare to Mises, Human Action: "We do not assert that man is "free" in choosing and acting. We merely establish the fact that he chooses and acts … Some philosophers are prepared to explode the notion of man's will as an illusion and self-deception because man must unwittingly behave according to the inevitable laws of causality. They may be right or wrong from the point of view of the prime mover or the cause of itself. However, from the human point of view action is the ultimate thing. We do not assert that man is "free" in choosing and acting. We merely establish the fact that he chooses and acts and that we are at a loss to use the methods of the natural sciences for answering the question why he acts this way and not otherwise.” • Misesian dualism explains this perspective: viewing human purpose (teleology) and causal phenomenon as two separate realms of human understanding: apriorism for the former; scientific method and empiricism for the latter

38. Unpacking the concepts • Cost, profit, ends, means, and causality implied in action • All action has ends, which are ex ante anticipated to achieve a psychic profit • Profit not always monetary or catallactic • All action employs scarce means, which are believed to be causally efficacious at achieving the desired end

39. Fundamental Concepts: Synthesis • Homesteading creates new property titles (embordering; production); contract transfers existing property titles; production transforms already-owned goods (creates wealth and value, not property)

40. Fundamental Concepts: The State • “Let me begin with the definition of a state. What must an agent be able to do to qualify as a state? This agent must be able to insist that all conflicts among the inhabitants of a given territory be brought to him for ultimate decision-making or be subject to his final review. In particular, this agent must be able to insist that all conflicts involving himself be adjudicated by him or his agent. And implied in the power to exclude all others from acting as ultimate judge, as the second defining characteristic of a state, is the agent’s power to tax: to unilaterally determine the price that justice seekers must pay for his services.

41. Fundamental Concepts: The State • “Based on this definition of a state, it is easy to understand why a desire to control a state might exist. For whoever is a monopolist of final arbitration within a given territory can make laws. And he who can legislate can also tax. Surely, this is an enviable position.” • See Hoppe, Reflections on the Origin and the Stability of the State; Kinsella, The Nature of the State and Why Libertarians Hate It

42. Next Class • Types of Socialism • “Implied in this remark [essentialist distinction between socialism and capitalism], as will become clear in the course of this treatise, is the belief that there must then exist varying types and degrees of socialism and capitalism, i.e., varying degrees to which private property rights are respected or ignored. Societies are not simply capitalist or socialist. Indeed, all existing societies are socialist to some extent.” • De-socialization • How the state arises and the nature of the state • TSC Chs. 3-6; De-Socialization in a United Germany; and “Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order” (ch. 3 of EEPP)