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Source link: http://archive.mises.org/18557/controls-breed-controls-monopolies-breed-monopolies/

Controls breed controls, Monopolies breed monopolies

September 28, 2011 by

As Mises explained, controls breed controls. ((“interventionism cannot work as a permanent system of society’s economic organization. The various measures recommended must necessarily bring about results which—from the point of view of their own advocates and the governments resorting to them—are more unsatisfactory than the previous state of affairs which they were designed to alter. If the government neither acquiesces in this outcome nor derives from it the conclusion that it is advisable to abstain from all such measures, it is forced to supplement its first steps by more and more interference until it has abolished private control of the means of production entirely and thus established socialism. The conduct of economic affairs, i.e., the determination of the purposes for which the factors of production should be employed, can ultimately be directed either by buying and abstention from buying on the part of consumers, or by government decrees. There is no middle way. Control is indivisible.” Mises, Economic Freedom and Interventionism, ch. 10.)) But monopolies also breed monopolies.

First the state is granted arrogates to itself a monopoly in dispensing justice. ((Hoppe defines the state as: “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. 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 The Nature of the State and Why Libertarians Hate It.)) Then, it uses this position to grant monopolies, such as patent and copyright, to favored recipients. These recipients are thus able to charge monopoly prices, and to establish oligopolized industries relatively immune from competition. This allows them to afford the purchase of more state monopolies (such as expensive patents) that smaller upstarts, newcomers, and competitors cannot, further entrenching their monopoly position. ((See, e.g., my posts The Schizo Feds: Patent Monopolies and the FTC.)) Barriers to entry are maintained, allowing the entrenched, established firms to reap monopoly profits. A portion of these profits are returned to the state in the form of legal bribes (campaign contributions) which keep the legislators from rocking the boat. And so the cycle continues.

This is not too surprising to libertarians used to seeing state corruption. What is surprising is the spectacle of some libertarians bending over backward to try to justify this, in the name of intellectual “property.”

{ 2 comments }

Wildberry September 28, 2011 at 12:54 pm

As is all too often the case, Kinsella contradicts his own arguments.

He begins with the assertion that:

“First the state is granted a monopoly in dispensing justice.2”

But the “state” he opposes here does not even fit the definition offered by Hoppe in his reference. I’m sure he means to rely on the idea that all “states” involve a monopoly on “ultimate decision-making” especially those issues involving the state itself. But this completely ignores and negates any distinctions concerning personal or subject matter jurisdiction, or a form of “state” that at least in theory is designed to have judicial and constitutional oversight authority over legislative and executive acts enacted by legally elected representatives.

Fundamentally, one must wonder who, how and why the initial “grants” of such a power would occur?

None of this matters to Kinsella, because the desired premise is “first comes monopoly power”, with such ludicrous equivocation that it matters not at all whether this power arises from self-government free-will, or military coup.

Taxation, the second element of Hoppe’s definition is likewise ambiguous to the point of being meaningless. Is the imposition of a tax by royal decree and enforced by an occupying military force equivalent to a constitutionally legal tax as means for attaining publically chosen ends?

Next, the state

…uses this position to grant monopolies, such as patent and copyright, to favored recipients.

Is Kinsella speaking of “Letters of Marque” as if they are contemporaneous and equivalent to modern or even historical U.S. copyright and patent laws? That is dramatic imagery and rhetoric, but has little if any resemblance to reality.

If laws can be passed to extend the term of copyrights, laws can also be passed to shorten them, or abolish copyright entirely. And just who are these powerbrokers who have the means to do these things? As far as I know, we do not fall under the jurisdiction of a King or other Great Dictator, and as far as I know there has not been a military coup in the U.S. I think he must mean citizens “grant” power to its government by legal and constitutional means.

It would be at least somewhat accurate to say that the (U.S.) government grants limited monopoly rights to authors and inventors of subject matter falling under the jurisdiction of constitutionally and legally enacted legislation.

Next Kinsella says:

These recipients are thus able to charge monopoly prices..

Does he mean monopoly market prices, for which there is some disagreement among his favorite scholars as to whether they can even exist, or private property monopoly, which is a feature of any and all private property, in which the owner has the right by virtue of his right to exclusive use, to act from his monopoly of that use? Mises warns against equivocating on these two connotations of monopoly, for in one use Kinsella is clearly wrong (no one owns “all books” for example) but in the other use, he is certainly right.

Finally, he describes mercantilism, or neo-mercantilism (encompassing collusion between business and government beyond trade tariffs) which is mostly true. The very reason that the system of copyrights and patents is broken can largely be explained by these conditions of bought-and-paid-for legislative bias. One need not be an anarchist to be opposed to these investment in political means to destroy the public right to the original and legitimate ends that IP laws are designed to achieve.

And so the cycle continues.

Yes it does. The cycle to which I am referring is that of distorting the issues of IP for the purpose of furthering an agenda that holds that the “state”, an ultimate equivocation in itself, must be abolished in the name of freedom and liberty, which naturally includes freedom from IP. The primary objective here is the elimination of the state, and eliminating IP is just one so-called benefit of that objective.

This entire position has been effectively reduced to a protest slogan: “Hate the State. We have IP because we have the State. Hate IP.”

What is surprising is the spectacle of some libertarians bending over backward to try to justify this…”

Exactly.

Stephan Kinsella September 28, 2011 at 2:06 pm

Once again, you have me wondering whether you are dishonest, or just stupid.

But the “state” he opposes here does not even fit the definition offered by Hoppe in his reference.

Sure it does. Ask Hans. He agrees with me.

Fundamentally, one must wonder who, how and why the initial “grants” of such a power would occur?

I should have said it seizes the monopoly, not that it is granted it. In fact I’ll fix that. thanks.

None of this matters to Kinsella, because the desired premise is “first comes monopoly power”, with such ludicrous equivocation that it matters not at all whether this power arises from self-government free-will, or military coup.

you may have heard of us, Wildberry–we are called “libertarians.” We hate the state. Unlike state-lovers like you.

Next, the state

…uses this position to grant monopolies, such as patent and copyright, to favored recipients.

Is Kinsella speaking of “Letters of Marque” as if they are contemporaneous and equivalent to modern or even historical U.S. copyright and patent laws? That is dramatic imagery and rhetoric, but has little if any resemblance to reality.

No, dude, patent and copyright. They are, you know, granted, you know, by the state, you know, to favored recipients.

If laws can be passed to extend the term of copyrights, laws can also be passed to shorten them, or abolish copyright entirely.

Yes, and someone is rotting in jail for smoking marijuana, the state could have abolished drug laws. I’m sure that hypothetical alternative universe idea comforts the guys kidnapped by your state.

These recipients are thus able to charge monopoly prices..

Does he mean monopoly market prices, for which there is some disagreement among his favorite scholars as to whether they can even exist

Rothbard and Hoppe are correct that there is no objective definition of a monopoly price on the market. ONly when the state imposes one. You konw, by granting patent or copyright monopolies.

The very reason that the system of copyrights and patents is broken can largely be explained by these conditions of bought-and-paid-for legislative bias. One need not be an anarchist to be opposed to these investment in political means to destroy the public right to the original and legitimate ends that IP laws are designed to achieve.

No, but it sure helps!

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