Les Jones

Economics > Bizarre Thoughts on Property Rights

Tyler Cowen posted this troll at Marginal Revolutions:

It's liability per se that isn't justified by libertarian standards. Under Lockean property rights theory, you own physical things, not the values of those things. It is for this reason that if you set up shop next to a competitor, you are not infringing his property rights, even if his business ends up being worth less. So let's say I steal your painting. Yes, you do deserve your painting back. It is yours. But say I steal your painting and lose it or wreck it. That should be the end of the story. You never owned the "value of that painting." You simply owned the physical painting. You are not due compensation. If you take my money as compensation for your loss, that is simply another theft.

It's intuitively wrong, but I thought the comments at Megan McCardles blog explaining why it was wrong were interesting.

Let's say I steal your painting. I then sell it for $1,000,000 and the new owner wrecks it. You have no claim to the $1,000,000?

Cowen's "theory" is nonsensical. That's the counterargument. What is the problem with placing a monetary value on objects? That's exactly what markets do, and I don't hear libertarians argue against markets. What he's describing -- a society without consequences for actions -- is anarchy, not libertarianism.

This argument is its own counterproof. If value cannot be liquidated, then the money is valueless and taking it is not unfair.

To make the absurdity clearer, suppose that you and I each own 50 pounds of charcoal. I steal yours, thoroughly mix all the charcoal together, and burn 50 pounds of the mixture. How much charcoal do I justly owe you? According to Cowen's argument, nothing.

Given Cowen's arguemnt you could steal paper money and destroy it and not have to pay it back since you don't own the value of money. Strictly speaking, you could electronically wire money into your account and not bother to pay it back since it wasn't a physical thing.