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Comment by chiaro | Hacker News Reader

This sure seems to be HN's flavor of the month (and possibly for good reason). One thing I haven't seen mentioned is the fact that markets are created, not discovered. LLC's and Delaware C-Corps didn't materialise out of the aether, nor did the property rights regarding their shares. I dislike the concept of "deserving" at the best of times, but under this light, those that are the most successful reap their rewards largely in relation to how this system is established. Taxing large profits is no more "unnatural" than protecting the right to these profits in the first place.

That said, with regards to the article, appealing to businesses as moral actors is only so effective. A business acting unethically but legally is most rectifiably a problem with the law, rather than the business.

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>One thing I haven't seen mentioned is the fact that markets are created, not discovered.

Probably because most capitalists don't believe this?

>nor did the property rights regarding their shares.

Debatable. Most capitalists would say that property rights naturally exist and that "shares" are simply an agreed upon way of dividing property rights over a complexity of assets and agreements (i.e. a business).

>Taxing large profits is no more "unnatural" than protecting the right to these profits in the first place.

True. Obviously a laissez-faire capitalists would say they're both unnatural- as they would say most, if not all, concepts created via legislative action are also "unnatural." Of course, people don't typically expend effort fighting "unnatural" injustice that benefits them- especially when money is on the line, and even more so state protected stock holder money.

>A business acting unethically but legally is most rectifiably a problem with the law,

Since when is it the legislature's job to enforce morality?

> Since when is it the legislature's job to enforce morality

Our laws are a constantly shifting mirror of our ethics (through the prism of "everyone" and "political reality")

Look at divorce, abortion, women's property rights, environmental obligations etc etc

The GP is well placed to say if a company is acting legally but unethically changing the law is often fastest and simpler fix -most eapecially for whole industries (hello banking)

That’s what legislatures do all day. (And economists are generally theologians masquerading as scientists.) For instance, capitalism requires enormous legislation and bureaucracy. Starting with a property regime (so I can "own" natural resources), police to beat those who disobey, throw people off their land so nearly everyone has to obey capitalists/managers all day, and so on. All backed by a bizarre morality.

(And the more you get closer to so-called pure free markets, the more bureaucracy there is. Take Graeber's "Iron law of liberalism": "Any market reform, government initiative intended to reduce red tape and promote market forces will have the ultimate effect of increasing the total number of regulations, the total amount of paperwork, and the total number of bureaucrats the government employs.")

This is a cartoonish view of things. On top of that, most of history speaks of the contrary.

"Most capitalists would say that property rights naturally exist ..."

I would like those capitalists to show me the "property rights" molecule.

Ignoring the obvious that it's a 'when did you stop beating your wife?' statement, one might ask to see the 'your wealth is mine while I can bully you into handing over a sizable portion of it' molecule.

The concept of "property rights without responsibility" is a Roman invention. There are alternatives. US law takes property rights more seriously than most other countries, because the US never had to get rid of feudalism. Also, one of the few lawbooks available in the early days of the US was Blackstone, who was a property rights absolutist.

In feudalism, land ownership implies the obligation to protect the inhabitants and gives them certain rights. One remnant of this is that, in Britain, you have the right to walk on the undeveloped private property of others. Also, most European countries afford renters much stronger rights than the US does.

Many nomadic societies, from the Mongols to native Americans, don't recognize the right to own real estate you're not currently using. Sharia law has the concept that land can be unowned by anyone, and can revert to that state if unused, although many Islamic countries do not do that in practice.

So no, property rights do not stem from "natural law".

The comment you are replying to isn't disagreeing with you.

The people who believe property rights are "natural" aren't saying they aren't a human creation at all. Just that they are a human right, like other rights that are also human creations.

The justification for this is something like you own your labor and slavery is wrong, and if you use your labor to produce something, it's unfair for anyone to take it from you. Likewise it's your right to trade it for something someone else made, or do whatever. And from that you get capitalism and property rights as we know them.

However this argument doesn't cover property rights over natural resources or land. There are some arguments for that like the homesteading principle. But in general there is an argument to be made that natural resources should be publicly owned, or at least rented with the profits going to the public.

Also this argument is deontological. A consequentialist would say if violating someone's rights helps more people than it hurts, you should do it anyway. And an economist would point out that pure property rights don't work in the first place, because of market failures like public goods, common goods, information asymmetry, natural monopolies, etc. So everyone is better off if we violate them at least a little.

> But in general there is an argument to be made that natural resources should be publicly owned, or at least rented with the profits going to the public.

First made famous by Henry George, if anyone is interested.

An interesting use-case for cryptocurrencies/blockchain-like technology.

Also see https://en.wikipedia.org/wiki/Geolibertarianism

The people who believe property rights are "natural" aren't saying they aren't a human creation at all. Just that they are a human right, like other rights that are also human creations.

I don't think this is true; why would it need the "natural" moniker in such case? Natural rights proponents claim that such rights are not invented, but an universal truth, either endowed by a god (like in the US Declaration of Independence) or derived from some natural property, such as human reason.

This is contrast with people who claim that all rights are subjective creations, not an innate property of nature nor a consequence of such, and therefore are not universal.

It's not a "natural law", but pretty close to it. It's a social convention (behavioral equilibrium) that guarantees peace and cooperation. The greatest philosopher of property rights was David Hume and the best continuator of Hume is Anthony de Jasay: http://oll.libertyfund.org/titles/2455/231884

I would like you to show me the "sarcasm" molecule

> Probably because most capitalists don't believe this?

That's what they may say. But the primary job of salesmen and the advertising industry is to create markets where none existed before. I.e. convince people to buy stuff they otherwise wouldn't even think about.

Markets are basically people buying and selling stuff. If some people sell their houses there hence exists a property market and so on. If I sell houses and sell you a share in my business then shares exist. If you and similar people offer your shares for sale then a stock market exists. So these things come about fairly organically if people buy and sell stuff. The LLCs and similar are embellishments to make things more efficient.

That said governments can change the rules and regulations.

This is an idealisation. Useful for demonstration and abstraction but rarely a total picture.

To take an extreme example, the idea that the house belongs to someone until they sell it is constructed.

For a more real world example, what does "own" fully mean? Can you start a business there? Build a skyscraper? Oil refinery? Do you own minerals? Flight paths? Can you demolish it or is it listed? When selling a house, you are transferring rights that are pretty variable and ethereal. These rules are elastic in practice and affect wealth.

Most large markets depart from the idealisation, many much more than real estate. Financial markets, minerals telecommunications... What does Disney gain from tweaking copyright laws? How does tax law play in?

I am pro markets, but I think we need to acknowledge that they are dynamic and emergent within constructs, not natural or inherent.

That house has value because it is connected to a road, power plant, sewer system, running water, etc. in a municipality that provides schools, EMS, firefighting, police, etc. Its future value is protected by zoning which ensures loud/ugly/polluting/busy buildings will not be located nearby. It is reasonable for the mortgage lender to make the loan because such contracts are enforceable in court, and it can count on the state to seize the house from a delinquent borrower even if the bank itself owns fewer guns than the occupant. The house is guaranteed to meet certain minimum workmanship quality and safety standards set by the state, verified by inspection, to minimize buyers' exposure to lemons.

Very little about the real estate market is emergent. This is an excellent example of a market created by society.

"Very little about the real estate market is emergent. This is an excellent example of a market created by society."

What is the difference between the market being "emergent" and being created by society?

Isn't "created by society" just code for a process that's happened without any one person planning it, over a long time, adding more and more rules to make the world like it is? That's sounds pretty "emergent" to me.

In this context I'd argue emergent is the opposite of "designed as public policy" - more like "naturally happens." Though I suppose you could say public policy is itself emergent.

That's true, the state prevents an unplanned market from arising by taking monopolist control of a bunch of infrastructure and natural resources.

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