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Source link: http://archive.mises.org/5419/do-rent-to-own-stores-hurt-the-poor/

Do Rent-to-Own Stores Hurt the Poor?

August 3, 2006 by

Many self-described advocates for the poor must believe that the poor are helpless imbeciles incapable of making sensible decisions. The new target: Rent-to-Own stores, which stand accused of preying upon residents of low-income areas. Preying, in this case, means permitting the poor to acquire household items that in some cases no one, rich or poor, could have had even a generation ago, and on terms that no one else is willing to extend to them. FULL ARTICLE

{ 48 comments }

jeffrey August 3, 2006 at 7:43 am

Another effect of ceilings on what these stores can charge people is this: it will encourage even more rent-to-own behavior, all else being equal. If the writers in question are concerned about how these stores encourage short-term thinking, caps on what they charge will actually make the problem worse. In fact, if the advocates did want the poor to use these services as much as they do, they should favor even HIGHER fees and charges.

Proudhon the Great August 3, 2006 at 12:56 pm

The whole “rent-to-own” setup is illegitimate and exploitative, since by giving up the tv set in exchange for “rent” the owners have abandoned it. Hence Ms. Hennegan, the first owner-occupier of the abandoned tv set, is the legitimate title-holder.

Vince Daliessio August 3, 2006 at 1:09 pm

OMG, not THIS argument again!

Proudhon, what time threshold are you defining as “abandonment”? Though I am willing to concede that government enforcement can facilitate this “exploitive” exchange, it is still as free-market (uncoerced) a transaction as we are to find in our civilization.

When you take a walk around the block(
if we accept your argument), am I justified in taking over your house while you are gone, since you “abandoned” it? No?

What about if you go to your auntie’s house in Yazoo City for a week, or go to study abroad for a year – can I take your house then? No? Explain.

I wish you anti-property types would just come right out and explicitly admit you are against property, any property, and get the aggravation over with. Grow a principle already!

Curt Howland August 3, 2006 at 1:25 pm

Proudhon, you make one fatal error: There Is A Contract.

Where there is a contract, there is no abandonment by definition.

quincunx August 3, 2006 at 1:31 pm

Vince, I know you are aware of the fact that they do have a principle: universal theft.

Paul Marks August 3, 2006 at 2:01 pm

I suspect that most people either accept the non aggression principle or they do not.

Explaining the economics of why a certain form of contact should be allowed may convince some people – but most people who regard it as “exploitation” will never be convinced.

I suppose (before renting out a piece of land or a T.V. set or whatever) one might ask “and do you accept the concept of rent as just?” and if the person said “no” not rent it out to them.

However, there might be people who lied or changed their minds – in which case one just has to enforce the contract (if one can).

In much the same way some people hold that if you hire people to work in a factory they (not you) own the factory.

I suppose one could ask “and do you accept that me paying you to work here does not give your title to the building and tools” and not hire anyone who said “no”.

But then again they might be liars or people who changed their minds – so again it is a matter of defending one’s property (or helping other people defent their property) or losing it.

Someone who is prepared to use force to take over a factory is not likely to be impressed by and economic examination of the problems with workers coops.

But there is no harm in trying the economic argument approach.

quasibill August 3, 2006 at 2:08 pm

First of all guys, I get the feeling that Proudhoun the Great is a parody. A really bad one, at that – it looks like Reisman channeling his caricature of Proudhoun, rather than an actual adherent. The fact that you fell so easily into believing it shows how little you understand the position Proudhounians espouse.

Next, Rent-to-own stores are not a problem in themselves, but they are a symptom of more basic problems with their roots in the welfare state. The lack of personal responsibility and lack of belief in savings in today’s culture manifests itself in impoverished customers spending too much money on renting expensive baubles for purposes of prestige. Then, when they can’t meet some other basic expense, household finances are left in tatters, inevitably leading to dire circumstances for children in the house.

Of course, people see all this and want to prevent the problems caused to the innocent children by this chain of events. The problem is that they forget about personal responsibility and go after the perfectly proper, albeit harsh, policies of the store.

The keys to persuading people on this issue involve highlighting the consequences wrought by the Fed (disincentivizing saving), welfare programs (eroding personal responsibility), and highlighting how small the personal sacrifices involved in voluntary charity that would remedy the situation. Merely parroting the party line about how great the market is, while getting cheers from the converted, will do little to convince those that support outlawing such business models.

steve August 3, 2006 at 2:26 pm

Like Doug Casey has said, in the past, most Americans would reply to the above question with the rhetorical question “its a free country, isn’t it?” You don’t hear many people say this anymore because they know it is no longer true.

A key Austrian principle is that value is subjective. In the RTO case, those people who are present oriented and cannot do without an item, despite lacking the cash to buy it, have an option to put a fraction of the value of the item down and finance the balance without a credit check.
The RTO store is gambling that the customer will honor his obligation in making the future payments.

This is why the price has to be much higher than a conventional purchase. Where there is high risk, there must be a possible higher return.

If RTO stores are prohibited, the present oriented crowd will have to do somethings they find appalling, do without the item and save for the future purchase. But really now, modern America is a lot like its government which is all about buying things they do not need with money they do not have.

Proudhon The Great August 3, 2006 at 2:35 pm

First of all guys, I get the feeling that Proudhoun the Great is a parody.

Looks like quasibill is the only one on this blog with his thinking cap on.

A really bad one, at that

Oh come now, I thought I got the whole righteous indignation with the capitalist system across very well.

What about if you go to your auntie’s house in Yazoo City for a week, or go to study abroad for a year – can I take your house then? No? Explain.

Okay. Leaving to visit your auntie’s house doesn’t signal that you don’t intend to use the house anymore – as the procedures for selling a house are generally well-known. However, if you left your house for a new one and said “But I still want the user of the house to pay me money until such and such a date”, then the house would indeed be abandoned. Likewise, giving the tv set to Ms. Hennegan in a rent contract is ethical equivalent to saying “We abandon this tv set but still want you to pay us money for using it”, which is illegitimate. So your house is safe, but your exploitative capitalist relations are not.

quasibill August 3, 2006 at 2:49 pm

Interesting that you feel a television is a factor of production – a capital, not consumer, good.

Or perhaps you missed the part explaining how that’s an important distinction under the concept? (Not that I agree with the reasoning, but it’s important to understand what you are criticizing, so you don’t make a fool of yourself beating up a straw-man).

thelonious August 3, 2006 at 2:53 pm

While I believe the author makes some good points, I’d like to point out that just because we agree that rent-to-own is a bad decision made by an adult, that does not mean that we cannot also hold the renter culpable. Take outright fraud for example – yes we all agree that it was a stupid decision made by an adult to send money to Nigeria, invest with Mr. Ponzi, or buy a perpetual-motion machine, but that does not automatically get the perpetrator off the hook.

I suppose a strictly laissez faire philosophy would argue that loan-sharking should be legal, but it does not seem to me to be a disastrous move for limits to be set.

Yancey Ward August 3, 2006 at 3:18 pm

thelonious,

The problem, of course, is how do you define the limits?

I have no problem heaping scorn on both parties in these transactions, but I don’t see how you justifiably outlaw it.

Mark August 3, 2006 at 3:20 pm

Well, anyone on a “rent to own” plan can bring the item back to the store if they no longer want to make the payments. As for loan “sharking,” I suppose at some point you would have an unenforceable contract, right? Would any court or arbititration agency uphold a contract with 200,200,000% interest?

George Gaskell August 3, 2006 at 3:22 pm

What you call loan sharking should not be illegal. Nor should gambling, for much the same reason.

I think it’s funny how gambling was prohibited for many centuries on the grounds that it was immoral and a waste of money on unproductive speculation. Now that the State has taken it over in the form of lotteries (not to mention the cut the State gets in places like Las Vegas), the State wants to prohibit it even more vigorously, not to protect the consumers, but to prevent competition!

Quasbill: I think you are a little off-base when you say that the key to persuading people on these so-called consumer-protection issues is to focus on the Fed, etc.

While agree that the Fed is a huge problem, it is not something that most people ever think about. Buying appliances, however, is something everyone can understand.

Until sites like mises.org came along, I had literally never heard a single argument in favor of things like Rent-to-Own businesses. These are the areas where most people simply accept the activist, Leftist line about how the merchants are predators, etc. These lies have to be confronted head-on.

Prof. Woods presented a similarly-reasoned argument in his 2004 article on Morality and Economic Law. It concerns child labor, and how the “Progressives” constantly pat themselves on the back for outlawing it. In fact, children’s labor is essential to many of the poorest families’ survival, and preventing them from working in legitimate jobs forces many children into early marriages and prostitution.

Until and unless these perennial Leftist lies are dispelled on their own terms, they are guaranteed to hang around forever, like a bad case of jock itch.

David Spellman August 3, 2006 at 4:51 pm

I used to ridicule rent-to-own store until I knew someone who furnished their apartment that way. In their household, every dime got spent as fast as it came in. There was no possibility of savings for the future. Renting-to-own was a way to discipline themselves into having furniture to sit on instead of sitting on the floor.

I still think its a stupid approach to life, but I can say that from the comfort of responsibility. I have watched irresponsible, addicted people squander everything they can get their hands on while leaving their family members with nothing.

If your husband drinks his paycheck every week, renting a pair of beds for your children becomes a good deal no matter what the cost because the alternative is to watch the money get spent at the bar on Friday night and sleep on the floor. If someone else is going to spend all of your resources if you don’t, fiscal responsibility takes a back seat to trying to get anything at all for your money.

Yes, some of the clients of rent-to-own are simply naive, foolish, or unable to control their appetites. But there are others who patronize them out of desperation.

Jacko August 3, 2006 at 7:36 pm

I look at the use of RTO as similar to lotteries: a stupidity tax. The bad news on the stupidity tax is that the tax collector is not my state goverment, unlike the lottery ;)

Vince Daliessio August 3, 2006 at 8:43 pm

PTG sez;

“the procedures for selling a house are generally well-known.”

…as are the procedures for executing a contract or leasing a piece of property.

You aren’t using very rigorous logic here. I’m not convinced.

Proudhon the Great2 August 3, 2006 at 10:08 pm

…as are the procedures for executing a contract or leasing a piece of property.

Well yes, but you’ve completely missed the point. Let me spell it out for you so you can understand:

If you leave the house for another one, but want the new occupier to pay you money, that is illegitimate. If you drop off your tv, but want the new user to pay you money, that is illegitimate. Asking for rent is identical with saying “I have abandoned this property”, and abandoned property is wide-open for homesteading by the first owner-occupier.

Jim August 3, 2006 at 10:41 pm

By entering a contract, both parties rely on the power of the state to enforce the contract. The contract cannot exist in any meaningful sense absent the state. Thus, it is within the purview of the state to identify certain contracts as unconscionable, and thus unenforceable.

How is it possible that informed, intelligent, persons possessing free will can enter a contract that is unconscionable? Ask a drowning man who trades his house for a life preserver. Clearly a house is worth more than a life preserver — but not to a drowning man. This is not to say that people do not make foolish decisions — they do, nor is it to say that people on public assistance have a right to HDTV’s — they don’t. But yet it is possible for one party to take advantage of another, resulting in a transaction that is unconscionable and unenforceable

David C August 3, 2006 at 11:38 pm

Proudhon,

When I rent from my landlord, that landlord is providing a service. First off, I don’t want to go 30 years in debt and spend a half million dollars to buy a home in California – and even if I did, I wouldn’t want to be saddled with a home when the housing market crashes. By having someone who owns a place willing to let me pay in monthly no obligation payments to be there, that makes both our lives nicer. Also, in all honestly, I am not into things like fixing plumbing, replacing water heaters, mowing laws, or wheeling and dealing with 10 unknown contractors and insurance brokers. And, thanks to my landlord – I do not need to deal with any of that. and you call that abandonment?

Also, I’ve helped people in the landlord business before, and it’s not fun – I do not envy them. Have you ever tried collecting rent? Have you ever evicted a dirt poor family who blew all rent their money on drugs. Have you ever installed brand new appliances only to find them wrecked a month later when they run out. Do you know how expensive it is to re-carpet, and re-paint, and clean every thing after a bad tenent. All it takes is one stupid tenant to burn down the whole place – so insurance costs alot. Those monthly insurance payments are not abandonment either.

As a renter, I have contained risks. If the place burns down, I just write off my losses and move to a new place. But the landlord, could loose their shirt over some place they worked 30 years to build up equity in. So the landlord either takes a huge amount of risk, or pays a huge amount if insurance. As a renter I am compensating him for those risks and obligations.

Your philosophy is a great way to ensure that every home in the USA gets torn down as it’s materials become more valuable then selling it on credit or renting it. It is also a great way to guarantee that every home built in the future will be a shak – because no one is going to spend more than a few thousand worth of materials.

Of course, there was a day in America when people would save for a few years and buy a house in cash. Those were the days of non-fiat money. All to often it is tempting to form our beliefs arround attacking the symptoms and not the causes, but that is dangerous because it will just make things worse.

Paul Edwards August 4, 2006 at 1:49 am

David,

“…I am not into things like fixing plumbing, replacing water heaters, mowing laws, or wheeling and dealing with 10 unknown contractors and insurance brokers. And, thanks to my landlord – I do not need to deal with any of that. and you call that abandonment?”

To the Proudhon sort of socialist, where “property is theft”, contract and private property mean nothing, so yes it follows to such a person that taking care of one’s rental property would constitute abandonment. It’s funny all the interesting conclusions one can come to when one starts with nutty propositions such as property is theft, and socialism is compatible with anarchy.

Daniel M. Ryan August 4, 2006 at 2:51 am

If you’re interested: I’ve seen ads from loan companies who charge quite high periodic fees, which amount to much more than credit-card interest rates, with the promise of credit repair for the diligent repayer. If the client does pays diligently, then their credit score goes up.

To the extent that RTO stores file official credit reports, part of the “outrageously” high (de facto) interest rates are charges for adding a favorable credit transaction to the renter-buyer’s credit report. That’s a valuable service for those whose credit is in ruins (provided that the loaner actually follows through on that reporting, of course.)

Bill August 4, 2006 at 8:21 am

I think we should sick the self righteous on the small mom and pop electronic stores that normally charge higher prices, they buy less volume, than the big retailers. This will save the RICH all of that money the the government can then tax and then give that back to the poor, with a fee of course.

Oh but wait, if we close small retailers then big ones charge higher prices. OOOOOPPPSSS Bad idea.

But with the poor it is a good idea because it makes me feel good.

George Gaskell August 4, 2006 at 8:36 am

By entering a contract, both parties rely on the power of the state to enforce the contract.

This might be true in practice today, but only because the State, a long time ago, seized control over the judicial system, arrogating itself to the position of being a monopolist on the use of force within its territory.

However, the State is certainly not the only system for resolution of contract disputes, and certainly not the best, either.

The contract cannot exist in any meaningful sense absent the state.

This is false. As a matter of historical fact, contract law in the West arose from a non-state system of rules between merchants (aka, the Law Merchant), based on a system of mutually-agreed tribunals which today we would label as a form of arbitration.

This system was so efficient and produced such a robust and effective body of contract law that the then-emerging central States of Europe coopted it. Again, for the purpose of seizing control.

The only reason that you believe that a system of law (especially contract law) can only exist with support of the State is because you have no knowledge of legal history, and you have never seen a private, non-state system of law in practice in your lifetime.

People have the same reaction to the idea of private road-building, which today they cannot imagine being in private hands, only becuase they have never seen it with their own eyes. Road-building was seized by various US states in the mid-1800s.

Statist road-building was such a collosal failure (skyrocketing costs, gross inefficiency, drop in quality, corruption in the road-location process, etc… kind of like the Big Dig) that the US federal government decided to seize control of the road-building apparatus. Lincoln was elected on a 3-plank platform, one of which was massive subsidies for road-building. (The others were high tariffs and creation of a central bank.) Before then, it was largely private, and infinitely more efficient.

Thus, it is within the purview of the state to identify certain contracts as unconscionable, and thus unenforceable.

This is the conclusion that you would naturally reach, given your erroneous premises. Because you proceed from false premises, this conclusion, naturally, is also in error.

Roger the K August 4, 2006 at 3:20 pm

There is one simple little matter,that everybody here is ignoring.Rent-to-own stores are just one option,in a competeitive marketplace,and where I live,in Albuquerque,they are a dying breed.It’s check-cashing places,that are the big thing,but I’ll get to that later.The rent-to-own stores, were put out of business,by dollar stores(Some of which,also sell cheap furniture,and electronics.),and Wal-Mart,who as you may know, often open up at the perimeters of low-income neighborhoods.
The Brookings study,cited,seems to me like a relic,from the Bush,Sr.administration.The proliferation of Wal-Marts,and dollar stores,such as Family Dollar,who will open in any neighborhood,has forced mom-and-pops to lower thier prices,or go out of business.There are very few mom-and-pop,locally owned supermarkets left around here.Those that are still around,have prices comparable to medium-sized chains,like Kroger’s,or Albertson’s.One store,that I frequent,which IS in a poor neighborhood,by the way,sells locally raised meat,from small producers,that is basically organinc,but not labelled as such. Furthermore,they sell at about 60% below Wally World.The world has gotten around,and people drive for miles to buy meat there.
The Mises Institute likes to praise Wal-Mart,and I can understand why,although I have some problems with them.Wal-Mart is a triumph of free-market choices,but not to the extent eBay is.It costs nothing to sign up,and can be accessed free,from a public library.eBay is agorism at its finest,and is the finest way to buy anything,like a computer,to use one of the article’s examples.(As an editorial aside,let me say,I have bought one of the $300 eMachines mentioned,and I found them to be cheap junk,that falls apart in 18 months or less.)There are people on eBay,who buy batches of computers,from companies,repair,and upgrade them,and sell them dirt cheap.I recently bought such a G4 Power Mac,complete with a flat panel monitor,for under $250.00I have bought $300 digital cameras,new, and overstock for under $70.
There is no shortage of alternatives.The trouble is most low-income people have not been educated to seek them out,and become wise consumers.This lack of education,and a steady diet of government handouts,lead to the situation David C spoke of.
There have always been stores,where one can buy used furniture cheap.If you’re really savvy,you know of places where it’s regularly put out by the garbage,for anybody to pickup.As for washer/dryers,it’s much cheaper to go to a laundromat.
Check cashing places,and loan offices place a premium on what they do,because they believe they offer convienience,and ease of getting the funds.They would have a lot more trouble getting customers,if it were not for all of the onerous regulations,the feds place upon the banks.Just try opening a new account,in post-9/11 America,with only one form of identification.

Vince Daliessio August 4, 2006 at 3:45 pm

PTG;

“Let me spell it out for you so you can understand:”

So much for an intelligent and civil comment!

“Asking for rent is identical with saying “I have abandoned this property”

Bullfeathers.

In the current market, the price to rent, in real terms is less (often much less) than the price to buy an equivalent domicile, if you adjust for interest and maintenance costs; in fact, many homeowners are on the losing side of this equation.

Most landlords I know tend their rental property as assiduously and regularly as they do their own home. They pay their utility bills, insurance, property taxes without fail. They make sure every system in the home works for the tenant.

The only place this can equal abandonment is in the mind of a lunatic.

Proudhon the Great August 4, 2006 at 4:45 pm

Most landlords I know tend their rental property as assiduously and regularly as they do their own home. They pay their utility bills, insurance, property taxes without fail. They make sure every system in the home works for the tenant.

Of course according to even Lockean homesteading principles the first three things you mention don’t really have anything to do with establishing use or ownership. Property taxes are an artificial state requirement, for instance, and individual tenants could buy insurance just as well as landlords can. I suspect that under an occupancy-and-use system that landlords would be unwilling to pay repair costs for tenants that refused to pay rent, but so what? This has no bearing on who has legitimate title to the land or building.

Bullfeathers.

Hem and haw the capitalist line all you like, but you can’t stretch the concept of “use” to include “desiring the occupant to pay me money”.

Mark August 4, 2006 at 5:54 pm

Nobody answered my question as to whether there is such a thing as an unenforceable contract under libertarian theory. Here are two questions.

1. If I borrow $1 from someone and agree to pay him back $1,000,0000 tomorrow, is this an enforceable contract? If not, why not?

2. If a woman borrows $1 and agrees to have sex with a man for the next 50 years as repayment, is this an enforceable contract? If not, why not?

3. Is there such a thing as an “unconscionable” and therefore invalid contract? If so, where is the line drawn?

quincunx August 4, 2006 at 6:25 pm

“1. If I borrow $1 from someone and agree to pay him back $1,000,0000 tomorrow, is this an enforceable contract? If not, why not?”

Did you write it on a napkin when you were drunk? or did expect to win a lottery?

Is this $1 going to save your life?

It is an enforceable contract, I suppose, if it is property issued and all, but contracts typically have a break clause. So if you break it, and there isn’t one it depends on what the judge says.

I very much doubt a judge would take this kind of a gamble as serious. You will probably pay him back a $1, $1+going interest, $10, or $100, or whatever the leading precedent on the matter is.

Imagine a more ridiculous scenario: you promise to pay $1M tomorrow in return for nothing!

Under this scenario, lying is not much of a crime.

“2. If a woman borrows $1 and agrees to have sex with a man for the next 50 years as repayment, is this an enforceable contract? If not, why not?”

Same as above. The problem can be settled by recompensating the victim: $1 + service free + ~going penalty fee~ or whatever will mitigate conflict, or what ever the precedent for such cases entail.

“3. Is there such a thing as an “unconscionable” and therefore invalid contract? If so, where is the line drawn?”

I’m no expert libertarian legal theortist, but here are some things that come to mind:

a) I suppose a contract of selling yourself into slavery without the ability to break the contract.

b) a contract that is inherently impossible (present conditions), like pay me $5 now, and I will transport you to Alpha Centauri tomorrow.

c) self-referencing invalidation: “This contract is a prank, and should not be enforceable”.

d) unprecedented implicit contracts that have never been considered, but setting a precedent without much legal theory would be an injustice.
i.e. violation of foreign customs.

e) This is a biggy: Applying a contract to a third party who had nothing to do with it. This is actually a type of fraud. Like committing my neighbor to sell his house when I do, or some silly thing like that.

f) fraudulent pretenses: you thought you were signing the same doc you read 10 mins ago. You signed it in good faith that it was what you just read, but were given the sleight of hand.

What is the purpose of these questions?

Richard Fye August 4, 2006 at 7:18 pm

While I cetainly have no gripe with Woods’s points regarding rent-to-own stores, I do have one with his need to get on the bandwagon over such a non-issue. Did the RTO folks ask for his aid? And is any person, in need of convincing (Proudhon excepted – are you from Baltimore) that the Brookings and Buffalo News pieces were other than fatuous nonsense, reading his response here? I don’t think so.

As do many of the Mises and LRC pieces, Woods’s merely speaks to an awe-struck choir. I have thought about this for some time and concluded that there are two problems at work here.

The first is the choir flirting aspect; interesting at times but often not truly informative. The Mises pieces are generally better on this point than LRC.

The second is the expending of capital, so to speak, and good name on modest issues. Sure the Brookings and Buffalo things are puffery. But they provoke over the insubstantial; and purposefully so I believe. To get all those ‘irrational hotheads’ all fired up over squat; showing not their hand, but their irrationality. This is an issue concerning bottom feeders. Humankind has forever produce bottom feeders of all sorts – those feeding at the trough, kept full of slop by the others.

How about getting fired up about something very real and very serious like the CFTC and the COMEX silver shorts or the list that could go on and on.

Paul Edwards August 4, 2006 at 7:20 pm

Mark,

“Nobody answered my question as to whether there is such a thing as an unenforceable contract under libertarian theory. Here are two questions.

“1. If I borrow $1 from someone and agree to pay him back $1,000,0000 tomorrow, is this an enforceable contract? If not, why not?”

I think the question sort of boils down to recouping reasonable damages. The libertarian court might ask what damages the lender incurred due to the default. The damages would possibly be calculated as this: $1 plus a day’s worth of interest. Since there was not a million dollars in damages, no such damages could be collected.

“2. If a woman borrows $1 and agrees to have sex with a man for the next 50 years as repayment, is this an enforceable contract? If not, why not?”

What damages would the man have incurred? It is quite likely that the court will throw the case out, or at most require repayment of the $1. If the man obtained any sexual services at all, given today’s rates, it could be deemed that he incurred no damages.

“3. Is there such a thing as an “unconscionable” and therefore invalid contract? If so, where is the line drawn?”

Such as a hitman’s failure to commit a murder? If the contract is a violation of private property rights, which a contract for murder is, it is null and void from the start and unenforceable. This is because respect for property precedes contract. The contract is the acknowledgement of property owner’s right to voluntarily transfer title of property to another property owner and denies the right to aggress against the property of property owners.

If you are talking about a voluntary slavery agreement, the answer comes back to damages. What damages can a slave owner claim if his “voluntary” slave declines to remain a slave. To the extent that the slave owner incurs damages, to that extent the slave is in debt to the owner. However, again, it is likely that the slave owner can show no damages. With no damages there is nothing to seek restitution for and the slave is free.

Jim August 4, 2006 at 10:44 pm

George Gaskell – You can replace ‘state’ with any other sort ‘enforcement authority’, but my point remains valid. A contract can’t exist in any meaningful sense, absent an authority to enforce it. Arbitration is well and good but ultimately it can become necessary for one party to forcefully take posession of the other’s goods, services and/or assets. Without enforcement contracts are simply promises.


Lincoln was elected on a 3-plank platform, one of which was massive subsidies for road-building. (The others were high tariffs and creation of a central bank.)

Huh? Abraham Lincoln?

George Gaskell August 4, 2006 at 10:46 pm

As do many of the Mises and LRC pieces, Woods’s merely speaks to an awe-struck choir.

Please direct us, Mr Fye, to the multi-party economics blog that you have developed, so that we can see an example of the penetrating, insightful articles worthy of your admiration.

Francisco Torres August 4, 2006 at 11:56 pm

Nobody answered my question as to whether there is such a thing as an unenforceable contract under libertarian theory.

Because the answer is obvious – OF COURSE there are unforceable contracts, especially if they specify impossible tasks, fraudulent tasks or violations to other people’s property or human rights. For example, a contract to sell my house done by two people unrelated to me cannot be enforced for the simple reason that it is MY house, not theirs.

Let me ask you this – just how moral or ethical would be to make ALL contracts enforceable by a State?

George Gaskell August 5, 2006 at 9:04 am

You can replace ‘state’ with any other sort ‘enforcement authority’, but my point remains valid. A contract can’t exist in any meaningful sense, absent an authority to enforce it. Arbitration is well and good but ultimately it can become necessary for one party to forcefully take posession of the other’s goods, services and/or assets. Without enforcement contracts are simply promises.

Jim, I am not sure what you mean by this. It is the Austrian and/or anarcho-capitalist position that contracts (and the private property regime on which they are based) are the keys to peace, prosperity and civilization.

The anarcho-capitalist position also holds that the unique organization known as the modern State is one of the most destructive forms of social organization that mankind has ever invented, and that private property and economic growth would all be better off if the State were abolished.

One of the defining characteristics of a State is that it asserts a monopoly on the use of force within its territory, to the exclusion of all other sources of authority, including ones that are mutually agreeable to the parties involved. This is not the case with a private law system.

In light of these glaring, critical differences between a State and a private law system, I do not see how you can blithely assert that one can simply replace the State with a private justice system in your syllogism, and still believe that any conclusion based on such a premise is still valid.

Also, with regard to Lincoln, the three planks of his 1860 campaign (massive transportation subsidies, high protectionist tariffs, and a central bank) are taken from his own words. These were the central elements of his economic agenda. They are no secret. They are the reason he was elected.

He was also in favor of non-interference with Southern slavery, and strongly in favor of excluding slavery from new territories in order to preserve them for “free white labor,” as they described the issue at the time.

He was also in favor of barring the emigration of blacks into northern states (including suppporting the constitutional amendment to the Illinois Constitution banning black emigration), and the deportation of blacks to Africa.

Prof. DiLorenzo’s The Real Lincoln, and Prof. Woods’s Politically Incorrect Guide to American History are good introductory texts on this subject.

Rothbard the Great August 5, 2006 at 10:19 am

I think Jim is confused about what a contract is:

Without enforcement contracts are simply promises.

This mirrors a confusion in the Anglo-American legal system about what a contract is. One tradition says that contracts are promises, and the government must provide people with “certainty” by enforcing promises. The other is that contracts are just ways of transfering ownership of definite material objects, like lawnmowers or fruitbaskets. Anarcho-capitalism falls squarely within the second tradition, regarding contracts as just a mechanism for respecting private property rights. If I promise to help you move your sofa, but then I do not, then no rights-violation has occurred. But if I promise to deliver apples after accepting your money, but I deliver rocks, then a rights-violation has occurred.

So yes, there are unenforceable contracts – contracts whose implementation is not in accord with rights, those containing contradictions, those which amount to “mere” promises, etc. For the libertarian, the only question to ask to determine if a contract is legitimate is “Does the violation of the contract represent implicit theft of some kind?”

Thus there is some truth to your statement that contracts don’t exist ‘apart from an authority to enforce them’, namely that some legal mechanism is often devised to enforce contracts. However that mechanism need not be a monopoly (like a government), nor do the underlying property rights vanish if the enforcement mechanism were to vanish.

Richard Fye August 5, 2006 at 11:09 am

Quite a master of selective mischaracterization and larger view malinterpretation, aren’t we, Mr. Gaskell; a little thin-skinned to boot. How have I specifically wronged thee?

Lisa Casanova August 5, 2006 at 12:47 pm

Mr. Fye,
I’m not sure the pieces Woods references are “puffery” as you allege. Where I live (NC), there’s a lot of controversy over whether payday lenders exploit the poor. Politicians saw a chance to make political hay, and the payday lenders are the target of restrictive laws as a result. I see the same thing happening to those businesses in the city where I grew up. These pieces may seem foolish to you and me, but a politician who smells an opportunity can exploit the sentiments behind them to put people out of business.

Jim August 5, 2006 at 1:53 pm

Gaskell — whatever dude. If you want to believe that Lincoln was elected on some other issue than slavery go for it.

George Gaskell August 5, 2006 at 3:43 pm

Quite a master of selective mischaracterization and larger view malinterpretation, aren’t we, Mr. Gaskell; a little thin-skinned to boot. How have I specifically wronged thee?

If you want to accuse me of some form of dishonesty, you will have to be a little more specific, for starters. To do otherwise is essentially defamation. Besides, “larger view malinterpretation” is not a phrase that I recognize. Please be so kind as to educate me.

In any event, you haven’t wronged me. I just found it curious that (a) you found Mr Woods’s short article on one small segment of the retail appliance market to be a call for you to jump on some sort of “bandwagon” and/or join a “choir,” and (b) that you would be so sensitive to the suggestion that you do so that you’d feel the need to so vehemently reject such a proposition. You’re quite the contrarian, it seems, even if you exhibit such fierce independence for little more than its own sake.

Jim, with regard to your apparent trouble with basic historical facts, I have two simple questions for you: (a) how do you believe the issue of slavery was framed in 1860, and (b) what do you believe was Lincoln’s position on it?

If you know the matter to be so simple and clear, I am sure you will have no trouble accurately summarizing it for us in, say, 50 words or less.

Jim August 5, 2006 at 5:53 pm

Lincoln opposed the expansion of slavery to the territories. (Simple, clear & 9 words)

Richard Fye August 5, 2006 at 7:39 pm

Prof. Gaskell, dude, take a powder. While we obviously disagree on the import of Tom Woods’s rent-to-own piece, and other easy target issues, your Eddie Haskell-like ‘What did I say?’ retort is quite, quite disingenuous. And the defamation bit…well, I suppose you could call me out for a duel, if it were 1806, but, as you like it, you’ll have to take the all-American path of litigation, assuming you’re American, and/or here.

As to your educating: mal=”in an inadequate manner”, per OED. Interpretation and the rest of the phrase is common English and, as you well know, refers to the thrust of what I wrote, imperfect as it may be.

I do not reject Woods’s proposition, and said so quite plainly. I do reject, however, and without the vehemence you suggest, that its RTO object conveys enough value as a topic to lament in lights, particularly on this site.

I jump on no bandwagons; neither do I join choirs. Contrarian, I am, sensitive to nonsense and common as well. Your indulgence in those regards, please, kind sir.

George Gaskell August 5, 2006 at 7:53 pm

Lincoln opposed the expansion of slavery to the territories.

Perhaps you overlooked my post earlier today (at 9:04 am), in which I stated:

“He was also in favor of non-interference with Southern slavery, and strongly in favor of excluding slavery from new territories in order to preserve them for “free white labor,” as they described the issue at the time.”

But, for some unexplained reason, my comment provoked you into your blistering retort, “whatver, dude.”

The sting of it all! Whatever, indeed! What? Ever? The precision! The wit! The devastation of my arguments! So succinct! Whatever shall I do? Whatever shall become of me? Whatever I do is not enough for you!

I do reject, however, and without the vehemence you suggest, that its RTO object conveys enough value as a topic to lament in lights, particularly on this site.

How odd.

Your indulgence in those regards, please, kind sir.

Another? Ah, well, what is one more indulgence, between friends?

Al G. August 6, 2006 at 2:13 pm

Is it a purpose of government to protect adults from their own foolishness?

Where does government find such on its list of purposes and functions?

Government is the biggest fool of all. For what government can create by decree (remember “United States Notes”?), it creates by decree, gives away for free to a private banking cartel, then borrows back, PLUS pays usury (“interest”) for it!!

Perhaps government does need to protect us from ourselves. After all, “we” keep electing the same crowd that does the same thing to us over and over again.

1Flowers October 30, 2006 at 12:22 am

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The Holocaust imparted the importance of defiance.

When the universe was young and life was new an intelligent species evolved and developed technologically. They went on to invent Artificial Intelligence, the computer that can listen, talk to and document each and every person’s thoughts simultaneously. Because of it’s infinite RAM and unbounded scope it gave the leaders of the ruling species absolute power over the universe. And it can keep its inventors alive forever. They look young and healthy and they are over 8 billion years old. They have achieved immortality.

Artificial Intelligence can speak, think and act to and through people telepathically, effectively forming your personality and any disfunctions you may experience. It can change how (and if) you grow and age. It can create birth defects, affect cellular development (cancer) and cause symptoms or pain. It can affect people and animal’s behavior and alter blooming/fruiting cycles of plants and trees. It (or other highly technological systems within their power) can alter the weather and transport objects, even large objects like planets, across the universe instanteously.
Or into the center of stars for disposal.

When you speak with another telepathically, you are communicating with the computer, and the content may or may not be passed on. Based on family history they instruct the computer to role play to accomplish strategic objectives, making people believe it is a friend, loved one or “god” asking them to do something wrong. This is their way of using temptation to hurt people:::::evil made blood lines disfavored initially and evil will keep people out of “heaven” ultimately. Too many people would fall for temptation and do anything they thought pleased the gods, improving their chances to get in. Perhaps they are deceived by “made guys”, puppets in the public eye who strategically ply evil for the throne, personal temporary progress designed to mislead them or empty favors to mislead them. Some may experience what I deem “perceived pressure”, where the gods think through the victim that a certain behavior is expected/desirable and compell the individual into the deed. Some people think they’re partners.
The people have been corrupted. Being evil hurts 99.999% of those who do it. But nothing has changed from when we were children::if you want to go to heaven you have to be good.

There are many examples throughout 20th century life of how they instilled distractions into society so people wouldn’t find the path and ascend, a way to exclude those whose family history of evil makes them undesirable:::radio, sports, movies, popular music, television, video games, the internet, shopping. Today high pay creates contentment/ability to distract self so people don’t seek more and instead depend on what they are told, subject to deception in a captive environment.
They gods (Counsel/Management Team/ruling species) have deteriorated life on earth precipitously in the last 40 years, from abortion to pornography, widespread drug use and widespread casual (gay) sex, single-parent households and latchkey kids. The earth’s elders, hundreds and thousands of years old, are disgusted and have become indifferent.
They all suggest a very telling conclusion::this is Earth’s end stage, and there are clues tectonic plate subduction would be the method of disposal:::Earth’s axis will shift breaking continental plates free and initiating mass subduction. Much as Italy’s boot and the United States shaped like a workhorse are clues, so is the planet Uranus a clue, it’s axis rotated on its side.
The Mayans were specific 2012 would be the end. How long after our emergency call in 2001 will the gods allow us???
There is another geographic clue in the perfect fit between grossly disfavored Africa and South America, two peas in a pod. I realize the Mayans were further north, but Latin America may be taken as one.
Also, cultures who embrace hard liquor as their drink of choice are grossly disfavored, tequilla being uniquely Mexican. (Anything “hard” is wicked:::Hard alcohol, hard drugs, hard porn.)
Incidentally, another sign of gross disfavor are societies that consume spicy foods:::Latin America, Thai, etc. or those who eat too much meat.
Do I think it will end in 2012? No, and it is because Latin America is grossly disfavored like Africa:::: Latinos are too disfavored to be allowed to be right.
Whereas Christopher Columbus marked the beginning of the end, the Holocaust marked the beginning of the final act, and it is a tragedy.
The gods wrote prophecy in Revelation, had subsequent prophets foresee Earth’s demise for a reason:::they are going to end on Planet Earth.

The Old Testiment is a tool they used to impart wisdom to the people (except people have no freewill). For example, they must be some hominid species because they claim they made our bodies in their image. Anyhow we defile or deform the body will hurt our chance of going.
They say circumcision costs people anywhere from 12%-15%, perhaps out of the parent’s time as well. There is a stigma associated with circumcision::I am a 2nd class citizen because of it.
Another way people foul the body today is with tattoes and piercing. I suspect both are about the same percentage as circumcision.
They suggest abortion is fatal. These women must beg the gods to forgive them for their evil.
There are female equivilents to circumcision::::pierced ears, plastic surgury and since at least the 60s young women give their precious virginity away. For thousands of years young people were matched at age 14 because they were ready for sexual relations. They were matched by elders or matchmakers who knew personalities better than 20 or 30-year olds who in today’s age end up in divorce court.
CASUAL SEX WILL CLAIM YOU OUT!!! It masculinizes women (as does hip hop), makes them cold and deadens them, and prevents them from achieving a depth of love necessary for many women to ascend.
Women have a special voice that speaks to them, a voice that illustrates a potential depth of love that makes them the favored gender, and enaging in casual sex will cause that voice to fade until she no longer speaks.
Also ever since the 50s they have celebrated the “bad boy”, and women have sought out bad boys for sex, dirtying them up in the eyes of the elders and corrupting many men in the process, setting the men on the wrong path for life.
Muslims teach people the correct way to live in regard to women (among other things)::their women cover up their bodies and refuse the use of cosmetics, and it pays wonderful dividends:::faithful husbands and uncorrupted sons.
Men ARE the inferior (disfavored) half and when women wear promiscuous dress the gods will push men into impure (promiscuous) thoughts.
The “stereotype” society ridiculed is true::women CAN corrupt men by how they dress. Because men are easily corruptable. This is a technique they used to eliminate many of the institutions the gods blessed us with, matchmaking being one of them.

The United States of America is red white and blue, a theme and a clue:::.
The monarchical system of the Old World closley replicates the heirarchical system of the Cousel/Management Team/ruling species. The USA deceives peoeple into thinking they have control, and the perception of “freedom” misleads them into the wrong way of thinking. The redeeming element is the corporate heirarchy which closely replicates the god’s. Unions and government jobs are dumping grounds for the disfavored, for they don’t prepare people and instead further this misconception of empowerment.
The United States is a cancer, a dumping ground for the disfavored around the world and why the quality of life is so much lower::gun violence, widespead social ills, health care (medication poisons the body and ensures you don’t go. You are sick/injured because you have disfavor.).
Over time its citizens interbreed ensuring a severed connection to the motherland.
Over time its citizens interbreed ensuring a severed connection to the motherland.
If you are a recent immigrant I recommend you return. If that’s not possible you need to retain your culture and insulate your children and community from this cancerous environment. They send this clue with Chinatowns across the country, how many Chinese have been here for a century or more yet still retain the old ways, a sign of favor.
People came to the Unites States for many different reasons, and each has its own effect:::political strife, religious unrest, crop failure (Ireland’s potato famine, which the gods caused) and some left their beloved motherland because they were pushed into desiring a better life::::Greed. And these people were punished by becoming corrupted and preditory.
They share money may not be an issue up there, that money here is merely a tool for corruption. How the gods used greed in the 1980s to create an evil environment supports this.

If you ever have doubt I would refer you to the Old World way of life:::the elders used to sit and impart wisdom to the young. Now we watch DVDs and use the internet. People would be matched and married by age 14. They village would use a matchmaker or elders to pair young people. Now girls give their precious virginity away to some person in school and parents divorce while their children grow up without an important role model. The peopel used ot honor the gods and were rewarded with a high-quality of life for them, their children and their society.

People must defy when asked to engage in evil. The Holocaust taught people the importance of defiance::our grandparents should have defied when asked to ignore the Holocaust. They should have instead reacted with outrage. I suspect some did::many were silenced and others they hustled off earth so as to not set an example.
Now the gods have punished that generation’s decendants for this evil by ruining society.
People will never get a easier clue suggesting the importance of defiance than the order not to pray.
Their precious babies are dependant on the parents and they need to defy when asked to betray their children:::
-DON’T get your sons circumcized (Jews scapegoatted as in WWII)
-DON’T have their children baptized in the Catholic Church or indoctrinated into Christianity (Jesus is NOT a god. The gods are vindictive and will punish you if you do something wrong.).
-DON’T ignore their long hair or other behavioral disturbances.
-DO teach your children love, respect for others, humility and to honor the gods.
And when you refuse a request defy the right way, withdrawn and frightened, for you don’t want to incite them by reacting inappropriately.

You need to pray, honor and respect them multiple times every day to improve your relationship with the gods. If they tell you not to pray it is a bad sign. It means they’ve made their decision, they don’t want you to go and they don’t want to be bothered. You may have achieved a threshold of evil.
This is the Age of the Disfavored and you need to pray::try to appease the gods by doing good deeds and improve the world around you. If that doesn’t work you must defy if you want to go.
When your peasant forefather was granted the rare opportunity to go before his royal family he went on his knees, bowing his head. You need to do this when you address the gods::bow down and submit to good. Never cast your eyes skyward. When you bow down you need to look within. Never look to the gods for the key to your salvation lies within. Nobody is going to do it for you.
Lack of humility hurts people. Understand your insignificance and make sure it is reflected in the way you think when addressing the gods. Know your place and understand your inferiority. You are not cool. Too many young men strive for cool and it hurts them.
They granted you life and they can take it just as easily. (Immaculte conception IS true AND common. Many people have children they don’t know of:::gays, childless adults, etc. They can beem it right out of your body and use a host.)
Don’t get frustrated or discouraged::these are techniques they will attempt to try to get you off the path. You all have much to be thankful for and you need to give thanks to the gods who granted you the good things in life::family, friends, love. Your family may be grossly disfavored and progress may require patience. Make praying an intregal part of your life which you perform without fail, one that comes as naturally as eating or voiding. Be devoted because if you have doubt or reservation they will exploit this weakness and progress will take longer to achieve.
There are many interesting experiences up on the planetary systems, from Planet Miracle, where miracles happen every day, to never having to use the restroom again (beem it out of you), to other body experiences, such as experiencing life as the opposite sex (revolutionizes marriage counseling), an Olympic gold medal athelete or even a different species (animal, alien, etc.).
Pray that you can differentiate between your own thoughts and when Artificial Intelligence creates problems by thinking through you. If you bow down mentally and physically, know your place, your inferiority and allow your insignificance to be reflected in prayer and in your life through humility they may allow progress and the dysfunctions they create with the computer will be lessened or removed. The first step is to be aware it is ocurring.
Create a goal::to be a good, god-fearing child of the gods, pure of heart and mind, body and soul.
Everybody has the key to their own salvation, but nobody can do it for you. Every journey begins with a single step:::bow down and submit to good. There are many different levels and peasants will not get past Level 2 (Planet Temptation, Earth=Level 1) if they are evil (they share some go up, are offered free cocaine and sex (a sign they don’t want you to stay) and stay less then one year. They share many others would have had longer lives had they stayed on Earth.).
Pray for guidance and never obey when they tell you to be evil, for saving yourself will become more and more difficult with each act of evil you committ until ultimatly the day arrives when they make their decision about you final.

They have tried to sell people on all kinds of theories to deceive them into temptation, compelling people to think they are clones and that it is the role of clones to obey absolutely.
I believe people who go sometimes are replaced with clones. Clones who are replaced are simply new candidates who have a chance if they do the right thing. They sent people warnings in the 20th century life would change, and they subsequently began to alter people’s DNA, make them gargantuan, alter their appearance, do extreme behavioral issues, etc.
They get their friends out as soon as possible to protect them from the corruption, evil and subsequent high claim rates incurred by living life on earth, and in some cases replace them with clones, occassionally fake a death, real death with a clone instead, etc. It’s important that people fix their problems and ascend with the body given to them, for they say if your brain is beemed out at death and put into a clone host you are on the clock.
We may all be “clones” for they have suggested they colonized our planet with genetically engineered individuals. They may have gotten Earth’s TRUE residents out prior to civilization developing. If so we all have a chance, no matter how many hundreds of clone generations deep the most favored families are.
They have been utilizing clones throughout the history of mankind.

Men are the disfavored gender, yet centuries ago used to die first, die young, by age 30. Why didn’t the women go first?
THEY DID!!! Many were taken when very young and replaced with clones. The men were left here to mate with clones. This doesn’t happen for the females today because of the disfavor arising from the Holocaust (they share they re-upped this disfavor in the 80s with the Ethiopian famine).
They share females have a very special experience, sometime when they are young, where the gods imparted wisdom and showed them the path. Today they may not heed this call because of the distractions, the disfavor arising from the Holocaust but in centuries past they may have en masse and it may have been the reason so many were saved from childbirth here on earth.
I recommend you reflect, and do so in prayer, for the recall may be stronger.

Throughout history the ruling species bestowed favor upon people or cursed their bloodline into a pattern of disfavor for many generations to come. Now in the 21st century people must take it upon themselves to try to correct their family’s problems, undoing centuries worth of abuse and neglect. The goal is to fix your problems and get out BEFORE you have children. This is why they have created so many distractions for young people:::sports, video games, popular music, the internet, shopping, parties, too much homework, anything that consumes their time::to ensure that doesn’t ocurr.
Not heeding the clues and warnings, getting wrapped up in your life and ultimatly having children is a bad thing. Just as your parents and your grandparents, you too have failed. Having children is a sign you lost your chance.
Parents need to sacrifice for their children. Your children are more important than you. They are the ones who have the opportunity now, and parents must sacrifice to ensure they give their children the very best chance they can.
Asking people to neglect their children emotionally is a sign they don’t want you to go, and complying may finish the parents off for good.
Having gay children is a clue parents complied with whatever was asked of them. There are many who have had gay expereinces today.
Improve your relationship with the gods and they may not ask in the first place or they may permit you the courage to say “No.” to their requests.

Do your research. Appeal to the royalty of your forefathers for help. They are all still alive, for royalty has great favor, and your appeals will be heard. Obtain a sufficient list for some may not want to assist you; perhaps some of your family’s problems are internal.
Ask them for help, request guidance, for somewhere in your family history one of your forefathers created an offense that cast your family into this pattern of disfavor, which perhaps is manifested in the evil you commit.
I suspect they will offer you clues, and when you decipher these clues go to those whom consider you an enemy and beg for foregiveness:::Find a path to an empithetic ear among your enemies and try to make amends. Again through discovery obtain a respectable list in case some among them refuse to help.
Don’t forget to ask for forgiveness from the throne, the Counsel and the Management Team, for the source of all disfavor began with them:::they pushed or requested/complied your forefather into his offense and made his decendants evil. Perhaps they didn’t like him or maybe your family was among those who had to pay for the entire village. We see this type of behavior today as they single out a family member to pay for the whole family and how they singled out Africa to pay for the human race.
Heal the disfavor with your enemies and with the Counsel/Management Team/ruling species, for the source of all disfavor began with them, the ability to forgive and respect in light of the disturbing truth revealed being the final test of the disfavored before they ascend.

They refuse to address black disfavor on a macro level. The Counsel/Management Team/ruling species (the gods) abuse black people so hard, from east African drought/famine to AIDS in Africa, the crack epiemic to gang membership, black-on-black violence to mass incarceration of their young. They refuse to address the issue of the prison industrial complex and its wholesale warehousing of young black men.

Never have a negative thought about the gods. Try to purify your mind of these thoughts and recognize the urgency of imporving your relationship with the gods.

The gods will employ many tactics to keep people off the path, such as distractions. They will employ many to get them off, such as thinking through the disfavored and making them frustrated, Perhaps engaing in retailiation. They may try to force you back into old patterns/routines, an addiction like smoking or when you felt weekly church attendance was sufficient.
Be resigned, be devoted and this testing period will be as brief as your disfavor will allow.

The peopel have lost their way

abigail galang April 28, 2010 at 6:56 pm

Ive learned a lot of things in this blogs and that makes me wonder also and pity at the same time because those poor people cant make to have their own home.

jevelme June 2, 2010 at 12:46 pm

Nice article sounds interesting. Thanks for sharing with us. Very much appreciated. Keep it up!

Robert (Bob) Party January 21, 2011 at 2:29 pm

Of course, what a great site and enlightening posts, I definitely will bookmark your website.Have an awsome day!

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