Foss & Klein: Organizing Entrepreneurial Judgment

Valitettavan harvoin enää löytää taloustieteen kirjaa, jolla olisi merkittävästi uusia ajatuksia annettavanaan. Onnekseni löysin Thomas Taussin vinkistä Nicolai J. Fossin ja Peter G. Kleinin teoksen Organizing Entrepreneurial Judgment - A New Approach to the Firm, koska tämä kirja avasi hyvin uusia näkökulmia sekä yrittäjyyteen että omistajuuteen. Niinpä hankin kirjahyllyyni ja on viime aikoina tullut luettua läpi lähes kokonaan Fossin ja Kleinin kirjallinen tuotanto. Tutkijaparivaljakko on uuden polven akateemikoista ehdottomasti kiinnostavimpia seurattavia, koska he pohjaavat ajatteluansa perustellusti Itävaltalaiseen koulukuntaan kyeten kuitenkin jatkojalostamaan koulukunnan keskeisiä ideoita uusissa tutkimuksissaan.

 

Foss and Klein: Organizing Entrepreneurial Judgment - A New Approach to the Firm

 

Yrittäjämäinen yritysteoria (Entrepreneurial Theory of the Firm)

 

Teos Organizing Entrepreneurial Judgment ei taatusti tarttuisi kirjakaupasta ostoskoriin, ellei sattuisi olemaan hurahtanut yrittäjyyden ja omistajuuden tieteellisiin teorioihin. Teos on tyyliltään akateeminen ja suunnattu osaksi akateemista keskustelua, joten ilman aihepiirin aiempaa syvällistä tuntemusta kirja tuskin kolahtaa. Minulle se kyllä osui ja upposi. Niin kovasti, että teos tulee olemaan monilta osin viitekehykseltään keskeisessä roolissa myös tulevassa väitöskirjassani. Teoksessaan Foss ja Klein pyrkivät ensisijaisesti kehittämään yrittäjämäistä yritysteoriaa (entrepreneurial theory of the firm). Heidän ajattelussaan ja teoriassaan yrittäjyys asettuu taloudellisen toiminnan keskiöön ja yrityksiä, markkinataloutta ja siten taloutta on mahdotonta selittää ilman ymmärrystä yrittäjyydestä.

 

Kirja esittelee kiitettävästi aiemmat yrittäjyyden teoriat. Esille nousevat erityisesti Schumpeter, Kirzner ja itävaltalaisen koulukunnan von Mises sekä Rothbard. Kirjoittajat nostavat myös esiin yrittäjyyden ymmärryksen puutteellisuuden vallitsevissa talousteorioissa. Erityisesti makrotaloustieteen malleissa yrittäjyydelle ei useinkaan jää selittävää sijaa. Kuitenkin kirjoittajat osoittavat, että markkinatalous on mahdotonta ilman yrittäjyyttä.

 

Edellyttääkö yrittäjyys omistajuutta?

 

Yrittäjyyden teorioissa minua omistajuuden tutkijana kiinnostaa erityisesti yrittäjyyden suhde omistajuuteen. Edellyttääkö yrittäjyys omistajuutta? Onko yrittäjyys omistajuuden isä? Synnyttääkö yrittäjyys omistajuuden? Onko omistajuutta olemassa ilman yrittäjyyttä? Tylsä, mutta teoreettinen vastaus näihin kysymyksiin kuuluu, että riippuu yrittäjyyden määritelmästä. Jos määrittelee yrittäjyyden kirzneriläisittäin eli "idealistiksi/näkemyksen ottajaksi", ei yrittäjyys edellytä omistajuutta. Tällöin yrittäjyys on irrallaan resurssien omistamisesta eli kapitalistin roolista. Muut sen sijaan kytkevät yrittäjyyden ja omistajuuden kiinteästi toisiinsa. Näin myös Foss ja Klein, joiden mukaan yrittäjyys on pohjimmiltaan päätöstä resurssien käyttämisestä yrittäjien näkemyksen mukaisella parhaalla yhdistelmällä. Yrittäjyys on siis sekä ideointia että resurssien yhdistämistä ja allokointia (s.21). Luonteeltaan yrittäjyys on opportunismia ja arbitraasia, koska yrittäjän on määritelmän mukaisesti aina otettava eriävä näkemys markkinoiden vallitsevasta näkemyksestä ja kuljettava oma polkunsa (s.34).

 

Pääoma on heterogeenistä

Kirjan vahva perusnäkemys on pääoman heterogeenisyys. Eri resursseilla on eri arvo ja hinta ja yrittäjyysprosessin tehtävänä on saattaa resurssit parhaaseen mahdolliseen käyttöön, jotta niiden arvo saadaan maksimoitua (s.104). Kirjassa käsitellään hyvin vallitsevia teorioita ja niiden puutteellisuuksia nimenomaan pääoman heterogeenisyyden sekä informaation epäsymmetrisyyden näkökulmasta. Täten tulee osoitetuksi, kuinka vähän moni yleinenkin teoria ymmärtää loppujen lopuksi markkinatalouden ydinoletuksista. Esimerkiksi jos sopimukset olisivat täydellisiä, ei olisi tarvetta omistajuudelle eikä myöskään yrityksille, koska kaikki omaisuuserien ominaisuudet (attribuutit) olisi hankittavissa sopimusteitse. Näin ei kuitenkaan todellisuudessa ole, eikä voi teoriassa eikä käytännössä ollakaan. Siksi omistajuutta resurssin viimeisenä vastuunkantajana tulee aina esiintymään markkinataloudessa.

 

Syvällinen akateeminen klassikko

 

Kuten sanoin, en suosittele Fossin ja Kleinin teosta kylmiltään kenelle tahansa vaan ainoastaan aihepiiriin paneutuneille akateemista kirjallisuutta harrastaville henkilöille. Vaikka kirja on kiitettävän ymmärrettävästi kirjoitettu, ei siitä keskiverto bisneskirjan lukija saa kovinkaan kummoista käsitystä, ellei satu entuudestaan tuntemaan esimerkiksi Kirznerin, Schumpeterin, Misesin ja Rothbardin keskeisiä kirjoituksia. Sen sijaan jos edellä mainitut ovat jo hallussa, on Foss ja Klein siihen sopivaa jatkoa. Modernissa yrittäjyyden tutkimuksessa tätä kaksikkoa lienee mahdoton ohittaa viittaamatta heidän ajatuksiinsa. Siksi olenkin erityisen yllättynyt, miksi en ole heihin aiemmin yliopistomaailmassa törmännyt. Peter G. Klein on erittäin aktiivinen kirjoittamaan blogitekstejä ja häntä kannattaa seurata myös Twitterissä (@petergklein). Nicolai J Foss opettaa nykyisin Kööpenhaminan kauppakorkeakoulussa.

Poiminnot

• The theory of entrepreneurship and the theory of the firm should be treated together. (1)
• An easy way to delineating different types of entrepreneurs and economic theories of entrepreneurship is to distinguish between those that define entrepreneurship as an outcome or a phenomenon (e.g. self-employment, start-ups) and those that see entrepreneurship as a way of thinking or acting (e.g. creativity, innovation, alertness, judgment, adaptation). 7
• “Entrepreneurial talent is really a portmanteau variable that includes entrepreneurial, managerial and ownership skills.” – Lucas (1978), 9
• Since Coase (1937) the fundamental issues in the economic theory of the firm have been taken as why firms exist (when non-firm, contractual means of allocating resources are available), what determinates their boundaries (i.e., the allocation of productive activities across firms), and what determines their internal organization (i.e., organization structure, reward systems, etc.) 12
• “The theoretical firm is entrepreneurless – The Prince of Denmark has been expunged from the discussion of Hamlet” – (Baumol, 1968, 68), 12
• Entrepreneurship is not simply another resource, like physical and financial capital, reputation, human capital, technical know-how, and the like, but a higher-level, coordinating factor – the source of what we call “primary or original judgment”. 14
• Entrepreneurs differ in their abilities to exercise original judgment and to delegate “derived judgment” to subordinates. 14
• The ability to organize resources is itself a capability, an ability to create and recognize strategic opportunities. – Denrell et al (2003) 15
• Schumpeter is without any doubt the best-known economics contributor to the entrepreneurship field. 16
• Kirzner’s entrepreneurs do not own capital, they need only be alert to profit opportunities. Because they own no assets, they bear no uncertainty. 18
• Opportunities for entrepreneurial gain do not exist, objectively, waiting to be discovered and exploited; rather, opportunities come into existence only as they are manifested in action. 20
• The concept of entrepreneurship as judgmental decision-making under uncertainty, a concept we trace through Cantillon (1755), Say (1803), Knight (1921) and Mises (1949). Entrepreneurs are modeled as decision-makers who invest resources based on their judgment of future market conditions, investments that may or may not yield positive return. Because markets for judgment are closed, the exercise of judgment requires starting a firm; moreover, judgment implies asset ownership. …There is no market for the judgment that entrepreneurs rely on, and therefore exercising judgment requires the person with judgment to own productive assets. …Judgment thus implies asset ownership, for judgmental decision-making is ultimately decision-making about the employment of resources. (20-21)
• Resource uses are not data, but are created as entrepreneurs envision new ways of using assets to produce goods. The entrepreneur’s decision problem is aggravated by the fact that capital assets are heterogeneous, and it is not immediately obvious how they should be combined. The entrepreneur’s role, then, is to arrange or organize the capital goods he owns. (21)
• We are living in a world of unexpected change; hence capital combinations … will be ever changing, will be dissolved and reformed. In this activity, we find the real function of entrepreneur.” – Ludwig Lachmann, (1956, 16), 21
• One way to operationalize the Austrian  notion of heterogeneity is to incorporate Barzel’s (1997) idea that capital goods are distinguished by their attributes. Attributes are characteristics, functions, or possible use of assets, as perceived by an entrepreneur. Assets are heterogeneous to the extent that they have different, and different levels of, valued attributes. Attributes may also vary over time, even for a particular asset. Given Knightian uncertainty, entrepreneurs are unlikely to know all relevant attributes of assets when production decisions are made. Nor can the future attributes of an asset, as it is used in production, be forecast with certainty. (22)
• Entrepreneurs who seek to create or discover new attributes or capital assets will want ownership titles to the relevant assets, both for speculative reasons and for reasons of economizing on transaction costs. (22)
• If any firm can do what any other firm does (Demsetz, 1991), if all firms are always on their production possibility frontier, and if firms always make their equilibrium choices of input combinations and output levels, then there is no room for entrepreneurship. 26
• Because capital is heterogeneous, the attributes of capital goods are not always known, ex ante.  27
• Entrepreneur’s primary role is to exercise judgment about the use of productive resources under uncertainty. 28
• Schumpeter carefully distinguished the entrepreneur from the capitalist (and strongly criticized the neoclassic economists for confusing the two). His entrepreneur need not own capital, or even work within the confines of a business firm at all. 32
• Schumpeterian entrepreneurship is sui generis, independent of its environment, the nature and structure of the firm does not affect the level of entrepreneurship. 33
• For Kirzner, recognition is the primary entrepreneurial act; the rest is management. Kirzner’s formulation emphasizes the nature of competition as what Hayek (1968) called a “discovery process”. The source of entrepreneurial profit is superior foresight – the discovery of something (new products, cost-saving technology) unknown to other market participants. The simplest case is that of the financial-market or commodity arbitrageur, who discovers a discrepancy in present prices that can be exploited for financial gain. In a more typical case, the entrepreneur is alert to a new product of a superior production process and steps in to fill market gap before others. Success, in this view, comes not from following a well-specified maximization problem, but from having some knowledge or insight that no one else has – that is, from something beyond the given means-end framework. 34
• Kirzner’s entrepreneurs do not own capital: they need only to be alert to profit opportunities. Because they own no assets, they bear no uncertainty. The worst that can happen to an entrepreneur is the failure to discover an existing profit opportunity. Kirzner’s entrepreneurs do not need a firm to exercise their function in the economy. 34
• According to Rothbard (1985, 283) “Entrepreneurial ideas without money are mere parlor games until the money is obtained and committed to the projects.” 34
• According to Klein (2008b) “Under uncertainty, opportunities can only be defined ex post. Action, not opportunities, should be the unit of analysis in entrepreneurship studies”. 35
• “Both the Spanish word “empresa” and the French and Latin expression “entrepreneur” derive etymologically from the Latin verb in prehendo-endi-ensum, which means to discover, to see, to perceive, to realize, to attain; and the Latin term in prehensa clearly implies action and means to take, to catch, to seize. In short, empresa is synonymous with action”. 35
• Making decisions without knowing the consequences for sure – is the entrepreneur’s raison d’être. Of course, all human action involves uncertainty, such that there is an element of entrepreneurship in all human behavior. 39
• While alertness tends to be passive, judgment is active. Alertness is the ability to react to existing opportunities while judgment refers to the creation of new opportunities. Entrepreneurs are those who seek to profit by actively promoting adjustment to change. 39
• Judgment implies asset ownership. Judgmental decision-making is ultimately decision-making about the employment of resources. An entrepreneur without capital goods is, in Knight’s sense, no entrepreneur. The firm, in this sense, is the entrepreneur and the assets he owns, and therefore ultimately controls. The theory of the firm is essentially a theory of how the entrepreneurs exercises his judgmental decision-making – what combinations of assets will he seek to acquire, what (proximate) decisions will he delegate to subordinates, how will he provide incentives and employ monitoring to see that his assets are used consistently with his judgment, and so on. 40
• In the marginal productivity theory, laborers earn wages, capitalists earn interest, and owners of specific factors earn rents. Any excess (deficit) of a firm’s realized receipts over these factor payments constitutes profit (loss). Profit and loss, therefore, are returns to entrepreneurship. In a hypothetical equilibrium without uncertainty, capitalists would still earn interest, as a reward of lending, but there would be no profit or loss. 40
• Entrepreneurship, and not labor or management or technological expertise, is the crucial element of the market economy. In the absence of entrepreneurship a complex, dynamic economy cannot allocate resources to their highest valued use. 41
• Firms are bundles of resources, and an entrepreneurial theory of the firm must be a theory about resources. 42
• The entrepreneur is described by Menger (1871, 68) as a coordinating agent who is both capitalist and a manager. Menger also makes the entrepreneur a resource owner, as does Knight (1921) 46
• “Entrepreneurs work for uncertain wages, and all others for certain wages. …Even Beggars and Robbers are Entrepreneurs of this class” –Cantillon (1755)
• Fetter’s (1905, 286-287) description of the entrepreneur identifies uncertainty-bearing as the key entrepreneurial function. The entrepreneur (1) “guarantees to the capitalist-lender a fixed return, (2) gives up the certain income to be got by lending his own capital, and becoming a borrower, offers his capital as insurance to the lender, (3) gives to other workers a definite amount for services applied to distant ends and (4) risks his own services and accepts an indefinite chance instead of a definite amount for them”. He also serves as an “organizer” and “director”, possessing unusual foresight and the ability to judge men and tact in relations with them. In short, the entrepreneur “is the economic buffer; economic forces are transmitted through him”. 49
• Wieser (1914) presents entrepreneur as owner, manager, leader, innovator, organizer and speculator. 50
• “If Kirznerian entrepreneur owns no assets, then how in the world does he earn profits? Profits, after all, are simply the other side of the coin of an increase in the value of one’s capital; losses are the reflection of a loss in capital assets. The speculator who expects a stock to rise uses money to purchase that stock; a rise or fall in the price of stock will raise or lower the value of the stock assets. If the price rises, the profits are one and the same thing as the increase in capital assets. The process is more complex but similar in the purchase or hiring of factors of production, the creating of a product and then its sale on the market. In what sense can an entrepreneur ever make profits if he owns no capital to make profits on?” – Rothbard (1985,282-3) 55
• “Ownership and entrepreneurship are to be viewed as completely separate functions. Once we have adopted the convention of concentrating all elements of entrepreneurship into the hands of pure entrepreneurs, we have automatically excluded the asset owner from an entrepreneurial role. Purely entrepreneurial decisions are by definition reserved to decision-makers who own nothing at all. – Kirzner (1973,47) 58
• Kirzner claims that entrepreneurship is a logical category. 60
• Mises’s entrepreneur is a resource allocator. 65
• Judgment is residual, controlling decision-making about resources deployed to achieve some objectives; it is manifest in the actions of individual entrepreneurs; and it cannot be bought and sold on the market, such that its exercise requires the entrepreneur who own and control a firm. 78
• Entrepreneurship can be neither taught nor learned. – Mises (1949, 585) 80
• Judgment is rooted in skills for handling uncertainty. Judgment is a function. It is based on perceptions, skills and heuristics. 81
• Profit is the reward to bearing uncertainty, specially a return that accrues to those entrepreneurs who are particularly optimistic in the face of ambiguity and who succeed with their entrepreneurial ventures. 96
• Firm is a nested hierarchy of judgment. 98
• In the market economy, there will always be entrepreneurs. As long as there is private ownership, markets, and prices, there is entrepreneurship. 99
• Opportunities for entrepreneurial gain are inherently subjective, in the sense that they do not exist until profits are realized. 102
• Modern economics does not really have a theory of capital per se. It may have various theories of investments and interest, but not a theory of capital in the sense of the classical or the Austrian economists (Lewin, 1999, Garrison, 2001) Similarly, modern management theory is not explicitly founded upon, or even related to, any particular theory of capital. 106
• Austrian Capital Theory consists of Menger (1871), Böhm-Bawerk (1884-1912), Hayek (1941), Mises (1949), Lachmann (1956), Kirzner (1967) and Lewin (1999). 106
• The shmoo capital is close to being a substitute for a zero-transaction-cost assumption. While transaction costs would not disappear entirely in such world, asset ownership would be relatively unimportant. The possibility of specifying all possible uses of an asset significantly reduces the costs of writing complete, contingent contracts between resource owners and entrepreneurs governing the uses of the relevant assets. Contracts would be largely substitute for ownership, leaving the boundary of the firm indeterminate. Similarly, in a world of shmoo capital the entrepreneur is relatively unimportant. 109
• All modern theories of the firm assume (often implicitly) that at least some capital assets are heterogenous, so that all assets are not equally valuable in all uses. 110
• Capital assets are subjective, individual production plans, plans that are formulated and continually revised by profit-seeking entrepreneurs. Capital goods should thus be characterized, not by their physical properties, but by their place in the structure of production as conceived by entrepreneurs. The actual place of any capital good in the time sequence of production is given by the market for capital goods, in which entrepreneurs bid for factors of production in anticipation of future consumer demands. This subjectivist, entrepreneurial approach to capital assets is particularly congenial to theories of the firm that focus on entrepreneurship and the ownership of assets. 115
• Understanding of capital as a complex structure. 115
• The real-world entrepreneurship consists primarily of choosing among combinations of capital assets. The entrepreneur’s function is to specify and make decisions on the concrete form the capital resources shall have. He specifies and modifies the layout of his plant. As long as we disregard the heterogeneity of capital, the true function of the entrepreneur must also remain hidden. (Lachmann, 1956,16) 117
• Property-rights theorist often highlight that most assets have multiple attributes (Coase, 1960; Cheung, 1970; Barzel, 1997; Demsetz, 1988a), including the different functionalities and services or uses (Penrose, 1959) that the resources can offer. 117
• Heterogeneity is an endogenous outcome of entrepreneurial activities. 118
• Demsetz argues that the notion of “full private ownership” over assets is “vague”, and must always remain so, because there is an infinity of potential rights of actions that can be owned. It is impossible to describe the complete set of rights that are potentially ownable (Demsetz, 1988b, 19). Thus, most assets have unspecified, not-yet-discovered attributes. An important function of entrepreneurship is to create or discover these attributes. In fact, entrepreneurship creates (contra Demsetz) a distinct role for asset ownership, that is, for holding title to a bundle of existing attributes as well as to future attributes. Specifically, ownership is a low-cost means of allocating the rights to attributes of assets that are created or discovered by the entrepreneur-owner. 119
• Ownership simplifies the process of entrepreneurial arbitrage – and hence helps to close pockets of ignorance in the market – by allowing entrepreneurs to acquire, in one transaction, a bundle of rights to attributes (i.e. a distinct asset). 120
• Austrian idea of heterogeneous capital is a natural complement to the theory of entrepreneurship and it connects naturally to ideas on heterogeneous assets in property-rights economics. Entrepreneurs who seek to create or discover new attributes of capital assets will want ownership titles to the relevant assets, both for speculative reasons and for reasons of economizing on transaction costs. 129
• To explain boundaries, one must presuppose that contracts are incomplete, for otherwise everything can be stipulated contractually and there is no need for ownership, understood as the “residual right” to make decisions that are not specified by contracts. 141
• From an entrepreneurial perspective, the firm emerges as the entrepreneur’s means of maximizing the returns from his judgment. 164
• Entrepreneurs are those individuals who undertake investments with unevaluatable risks. These risks are therefore uninsurable. The entrepreneur believes he is right, while everyone else is wrong. Thus the essence of entrepreneurship is being different because one has a different perception of the situation. Entrepreneurship reveals to the market what the market did not realize was available, or indeed, needed at all. 165
• The best time and place to use an asset depend on the specification of the uses of all other assets that are needed in production (Hayek, 1941) 171
• In a world of heterogeneous assets with attributes that are costly to measure and foresee, complete contracts cannot be drafted. 173
• The primary way to secure prospective entrepreneurial rewards, according to the new property-rights approach, is to acquire ownership rights of complementary resources. 178
• Mises claims that efficient resource allocation in a market economy requires well-functioning asset markets. To have such markets, factors of production must be privately owned. 182
• Entrepreneurial judgment is manifest in ownership. 191
• Even the most passive owners must choose someone to manage the asset. 194
• The ultimate decision concerning the use of their property and the choice of the men to manage it must therefore be made by the owners and by no one else. (Rothbard, 1962, 538) 195
• All entrepreneurial activity is socially beneficial (e.g. Mises, 1949; Kirzner, 1973; Yonekura and Lynskey, 2002; Shane 2003). Baumol (1990) points out that entrepreneurship may be socially harmful. 197
• One should own those assets that are complementary to one’s (non-contractible) human capital investments, since this increases (ex post) bargaining power and therefore the rents that may be expected from investments. (Hart, 1995) 209
• There is a general tendency for ownership of complementary assets to move to the knowledge source (rather than the other way around), because knowledge is harder to trade than most other resources. (Foss, 1993a; Casson, 1997) 210
• Ownership facilitates the use of entrepreneurial judgment in a productive venture by conferring the right to define contractual constraints may also be argued from a property-rights perspective. 210
• The allocation of ownership is not just a matter of “getting the investment incentives right”; it is also a matter of reducing the transaction costs of the experimental process, by allocating authority via allocation of ownership rights. Moreover, ownership has a speculative dimension (i.e. an entrepreneur may acquire ownership over assets because he thinks they are more valuable in combination with other assets, including his own judgment) that is missing in the established theories of economic organization, but comes into the forefront in an entrepreneurial perspective. 236
• Capital is not a factor or production per se, but an intrinsic aspect of the function of entrepreneurial ownership and control. Judgment and finance are inextricably linked. 237
• Judgment is the act of owning and controlling productive resources under conditions of uncertainty and, therefore, not a resource itself. 237
• The main function of capital markets, after all, is not to moderate the total amount of financial capital, but to allocate capital across activities. 243
• It is critically important to avoid public policies that generate malinvestment in the first place. The fastest way to economic recovery is to liquidate the bad investments as quickly as possible. 247

Arvopaperi: Miten arvosi näkyvät sijoituksissasi?

Kirjoitin jokin aika sitten Arvopaperin blogitekstin arvoista osana sijoitustoimintaa. Tässä siis teksti myös tälle palstalle, vaikka näin myöhässä. Alkuperäinen teksti löytyy täältä. Erityisesti ilahduin siitä, että Arvokeskustelijat ry halusi julkaista tekstin myös omallasivullaan. Filosofian, arvot ja talouden yhdistävät aiheet herättävät aina mielenkiintoni.

Arvot osana sijoitustoimintaa on minulle henkilökohtaisesti erityisen tärkeä teema. En nimittäin usko siihen, että sijoittaminen on vain matematiikkaa eli riski-tuottosuhteen säätämistä ilman että itse sijoituskohteilla olisi sijoituspäätöksiä tekeville tahoille merkitystä. On mielestäni selvää, että jokainen saa tehdä rahallaan mitä haluaa ja yksi hyvä tapa on sijoituksillaan äänestää sellaisten asioiden puolesta, joita haluaa maailmassa tapahtuvan. Miksi et omistaisi sellaisia asioita, jotka ovat arvojesi mukaisia, koska silloin voit olla sinut tuottojen kanssa. Ne vastaavat silloin arvomaailmaasi.

Miten arvosi näkyvät sijoituksissasi?

”Put your money where your mouth is” eli laita rahasi sinne missä on arvosi, on hyvä toimintaperiaate. Miksi et edistäisi arvomaailmaasi myös sijoituksillasi? Miten nykyinen salkkusi heijastelee omia arvojasi?

Riski/tuotto-suhde on taloustieteen ja sijoittamisen kovinta ydintä. Klassinen taloustiede joutuu kuitenkin heikoille jäille, kun se haastetaan käyttäytymistieteiden ymmärryksellä ihmisen toiminnasta. Ihminen ei olekaan rationaalinen ja laskelmoiva täydellisyys, vaan tunteellinen ja epätäydellinen yksilö. Ellet usko, suosittelen tutustumaan vaikka Ludwig von Misesin logiikkaan teoksessa Human Action.

Taloustieteilijöiden riski-tuottokaavat unohtavat arvot ja ihmisten valinnat. Kahden komponentin sijasta yksilön sijoituspäätös pohjautuu kolmeen elementtiin; riski, tuotto-odotus ja arvot. Ilman arvoja sijoittaminen olisi vain matematiikkaa. Vertailtaisiin kahden kohteen laskennallisia lukuja ja kone voisi tehdä valinnan. Kuitenkin, on aina arvovalinta, mihin sijoitat tai olet sijoittamatta. Sijoittajana sinulla on vapaus valita ja vastuu valinnoistasi.

Arvovalintoja voi tehdä esimerkiksi maakohtaisesti. Isänmaallinen ihminen voi perustellusti suosia kotimaataan ja jättää sijoittamatta esimerkiksi Venäjälle. Viisastelevalle taloustieteilijälle, joka väittää, että toimintatapa ei ole teoreettisesti oikein ja moittii liiallisesta maariskistä, voi aina todeta, ”Mitä sitten? Minä päätän mitä minä rahoillani teen.” Tällöin taloustieteilijä on aseeton.

Perinteinen eettinen sijoittaminen lähtee rajoitteiden kautta eli ei sijoiteta epäeettiseksi katsottuun toimialaan, kuten tupakkateollisuuteen. Arvovalintoja voi kuitenkin tehdä aktiivisemminkin. Pääomalla voi tehdä paljon hyvää, kun sitä käyttää oikein. Mikä on oikein, sen määrittelee ensisijaisesti omistaja itse. Parhaimmillaan pääoma mahdollistaa arvojen mukaisen toiminnan arjessa ja yhteiskunnassa. Jos kannattaa tuulivoimaa, sijoitus tuulirahastoon auttaa näiden tavoitteiden toteutumista. Yhtiötasolla pystyy pääomittamaan yrityksiä, joiden toivoo menestyvän. Sijoitus turkisyhtiö Saga Fursiin tai kaivosyhtiö Talvivaaraan on aina arvovalinta. Sijoita siihen yhtiöön, joka tekee mielestäsi arvokasta työtä.

Yksi tapa on yhdistää kulutus- ja sijoitusvalinnat. Näin voi toimia esimerkiksi Olvissa. Omista sitä mitä kulutat. Käsitteenä arvosijoittaminen on vakiintunut tarkoittamaan sijoitustyyliä, jossa pyritään ostamaan tasearvoa edulliseen hintaan. Kuitenkin todellista arvosijoittamista on sijoittaa arvojensa mukaisesti.

Onko arvopohjainen sijoittaminen ristiriidassa tuoton maksimoinnin kanssa? Ei välttämättä. Arvovalinta on sekin, jos haluaa vain maksimoida tuoton välittämättä siitä, missä ja miten tuotto syntyy. Kuitenkin nykyisessä sijoitusmahdollisuuksien rajattomassa maailmassa oma arvonäkemys on helposti toteutettavissa esimerkiksi ETF-tuotteilla, jolloin sijoittaja voi olla hyvillä mielin sinut salkkunsa kanssa.

Arvot ovat aina yksilöiden arkisia valintoja. Arvot ovat käsitys hyvästä. Jokaisella ihmisellä on henkilökohtaiset arvot eli asiat joita arvostaa. Arvot muuttuvat arkisiksi ihmisten jokapäiväisissä valinnoissa. Valintamme antavat asioille merkityksen eli arvon. Käsitetarkastelukin osoittaa yhteyden, arvot (values) ja arvo (value) ovat aina symbioosissa. Yrityksen arvo on ihmisten antama rahamuotoinen mittari arvostuksestaan yhtiötä kohtaan. Raha on vain arvon yksi mittari. Kun sijoitat, mieti millaisen arvopaperin valitset.

Tero Luoma
sijoitusjohtaja
Taaleritehtaan Pääomarahastot Oy

Rothbard: Man, Economy and State with Power and Market

No niin, rasti ruutuun, luettu on, nimittäin Murray N. Rothbardin 1639 tekstisivua sisältävä jättiläinen Man, Economy and State with Power and Market (Wiki). Ja olipa lukukokemus! Mykistävä, tyhjentävä, kattava, perusteellinen, looginen, aatteellinen. Yksi parhaista koskaan lukemistani kirjoista!

 

Rothbard: Man, Economy and State with Power and Market

Kenties paras koskaan lukemani kirja

 

Ensinnäkin kiitos Petrille siitä, että suosittelit minulle tätä kirjaa. Oli suosituksesi arvoinen, ehdottomasti. Tähän asti parhaan lukemani kirjan titteliä on kantanut Ludwig von Misesin Human Action, mutta von Misesin oppilas Murray N. Rothbard kyllä kiilaa tällä teoksellaan varsin varteenotettavaksi oppi-isänsä haastajaksi. Tämä siitä syystä, että Rothbard jatkaa montaa von Misesin aloittamaa ajatusketjua vieläkin pidemmälle ja tuo näkemykset konkreettisemmin käytäntöön. Näissä kahdessa teoksessa on niin paljon samaa, että paremmuuden vertailu on vaikeaa ja turhaakin. Kun Human Actionista totesin, että kirjaa voi pitää kapitalismin raamattuna, ehkä lienee sopivaa nyt asemoida Human Action vanhaksi testamentiksi ja Man, Economy and State uudeksi testamentiksi.

 

Man, Economy and State with Power and Market - Mistä on kyse?

 

Rothbardin kirjan tiivistäminen yhteen blogitekstiin on yksinkertainen mahdottomuus. Pelkästään sivuviitteeni tästä kirjasta olisi itsessään kirja. Mukana oli myös alkuperäisestä versiosta sensuroitu Power and Market, joka teoksena on poliittisempi ja kantaaottavampi, vaikkakin se koko ajan pysyttäytyy prakseologiassa ja välttää tekemästä arvopohjaisia valintoja. On ymmärrettävää, että se osio on ollut vaikea sulatettavaksi 60-luvulla. Osio julkaistiin lopulta 1970.

 

Mistä Man, Economy ja State sitten koostuu? Kaikki lähtee liikkeelle ihmisen toiminnasta. Kirjan alussa luodaan perusta yksinkertaisiin, luonnollisiin ja loogisiin aksioomiin eli perusoletuksiin pohjautuen ja sen päälle kehitetään loogisella päättelyllä ymmärrystä ihmisen, markkinoiden ja valtioiden toiminnasta. Logiikka on perusteluissa kaiken keskiössä. Joka hetki on tunne, että olisi mahdoton lähteä opponoimaan esitettyä totuutta vastaan. Loppuisivat vain ammukset aseesta. Ja se tunne vetää sanattomaksi. Se tunne saa myös onnelliseksi, koska asiat jäsentyvät omassa päässä loogiseksi ja ymmärrettäväksi kokonaisuudeksi. Muodostuu täyttymys siitä, että "jes, näin tämä todellakin on!" ja toisaalta tyhjyys siitä, että "onko asiat loppujen lopuksi näin yksinkertaisia!".

 

Libertaarinen merkkiteos

 

Man, Economy and State on libertaarinen teos. Jos siis et ole libertaari tai siihen suuntaan omassa maailmankuvassasi kallellaan, niin ei tämän kirjan lukeminen vain onnistu. Veikkaan, että pää hajoaisi tällä sivumäärällä ja tekstityylillä. Tämä kirja on vapaan markkinatalouden ja vapaan yhteiskunnan katekismus. Valtiolle ei jää tässä julistuksessa mitään roolia. Ei ainakaan mitään, mikä loisi arvoa paremmin kuin ihmisten vapaaehtoinen vaihdanta. Rothbardin mukaan siis yksikään vero ei ole perusteltu vaan kaikki on pahasta. Pahasta ovat myös muun muassa patentit, koska ne ovat valtiollinen kilpailurajoite. Vapaa markkinatalous hoitaisi asian tavaramerkeillä ja tekijänoikeuksilla (copyright).

 

Talouden peruskäsitteet kuten arvo, aika, vaihdanta, kilpailu, pääoma, erikoistuminen (division of labor), kysyntä, tarjonta, työ, palkka, raha, hinta, tuotanto, omistajuus, korko, marginaalihyöty, yrittäjyys, investoinnit, teknologia, muutos, riski, vakuuttaminen, monopolit, liitot, verotus, suhdanteet, interventiot, ostovoima, inflaatio, deflaatio, kasvu, luotto, taloudellinen laskenta, päätöksenteko, globalisaatio, työttömyys, markkinat, oikeudenmukaisuus, omistusoikeudet, vapaus ja yksityinen vs julkinen talous tulevat kaikki määritellyiksi ja käsitellyiksi. Ja paljon muuta. Jos nämä ymmärtää ja hallitsee, on melko vahva toimija missä tahansa taloudellisessa tai yhteiskunnallisessa roolissa. Samalla voi myös iskeä ahdistus, koska niin suuri ristiriita on kirjassa esitetyillä ajatuksilla suhteessa Suomen nykytilaan ja täällä käytävään keskusteluun. Voisi puhua puhtaasti päinvastaisesta. Siksi Ayn Randin Atlas Shruggedin ajatus poislähtemisestä nousi taas aika ajoin pintaan.

 

Kirjasuositus vain harvoille ja valituille

 

Taloustieteellisen keskustelun kannalta on sääli, että tällaisia teoksia ei oikeastaan enää tehdä. Nyt akateeminen maailma keskittyy artikkeleiden julkaisemiseen. Kenelläkään ei ole kannustinta, jos lienee kykyäkään, kirjoittaa 7 vuotta kaiken kattavaa ultimatumia. Tervetullutta kuitenkin olisi, että edes akateemisessa maailmassa tällaiset teokset tunnistettaisiin ja niillä olisi rooli teorian kehittämisessä, nyt kun tällaisia klassikoita ja niiden kirjoittajia ei liiemmin edes tunnisteta, saati sitten että oltaisiin näihin perehdytty. Ehkä se kertoo omalla tavallaan "rakkaudesta lajiin" eli intohimosta omaa alaa kohtaan. Toki itävaltalainen koulukunta, jota Rothbard ja von Mises edustavat, on nykyisessä taloustieteessä valtavirran ulkopuolista marginaalikirjallisuutta, joten on ymmärrettävää, että näihin nimiin ei opintojen aikana törmää. Ehkä kuitenkin kannattaisi.

 

Kenen kannattaisi lukea teos? Vain asiaan vihkiytyneiden. Tottakai kenelle tahansa kirja on valtava oppikokemus. Teksti on helposti luettavaa ja ymmärrettävää. Sopii siis kenelle tahansa. Jos olisin kauppatieteitä lukeva kylteri, lukisin tämän kirjan lomalukemisena. Sen jälkeen katselisi taloutta ja maailmaa aika uusin silmin. Realismia on kuitenkin, että ei tällaiseen kirjaan hetken mielijohteesta tartuta. Eikä kannatakaan. Parempi siis ensin tutustua ajattelutapaan internetissä, lukea lyhyempiä teoksia ja vasta sitten siirtyä tällaisiin järkäleisiin. Riskinä nimittäin on, että kirja muuttaa kokonaan omaa ajatteluasi. Näin minulle kävi Human Actionin kanssa ja Man, Economy and State with Power and Market vain vahvisti uskoani ismiin.

Ayn Rand: Philosophy - Who Needs It?

Ayn Randin tuotanto alkaa tämän kirjoituksen myötä olla luettuna ja yhteenvetoa lukuunottamatta käsiteltynä. Philosophy - Who Needs It on viimeisin kirja, jonka kanssa Rand työskenteli eläissään ja se koostuu useammasta novellista, jotka pääasiassa toimivat vastauksena joko jonkun esittämään kritiikkiin Randia kohtaan tai muuten kannanottoa johonkin yleisesti vallitsevaan näkemykseen. Tyyliltään se siis poikkeaa merkittävästi muista hänen teoksistaan, ennen kaikkea Atlas Shruggedista ja The Fountainheadista.

 

Ayn Rand: Philosophy- Who Needs It

Teoksena Philosophy - Who Needs It on keskinkertaista Randia, jos sitäkään. Siinä Rand asemoi oman objektivistisen filosofiansa suhteessa sekä klassisiin filosofeihin että aikansa yhteiskuntaan. Kollektiivinen ajattelu saa läpi kirjan kyytiä ja kapitalismille pyritään luomaan filosofinen viitekehys. Kirja ei saanut aikanaan kovinkaan hyvää vastaanottoa, eikä se kyllä merkkiteokseksi nousekaan, ainakaan suhteessa Randin tunnetumpiin teoksiin. Ehkä tekstiä hallitsee liikaa tarkoitus vastata muiden ajatuksiin oman ajattelun sijasta. Teoksen taustallahan on hänen USA:n Military Academyssa pitämänsä puhe.

 

Jos siis jossain kohtaa haluaa oikaista, niin tämän Randin voi hyvinkin jättää lukematta. Joitain hyviä sitaatteja, mutta kokonaisuutena jää varsin sekavaksi. Hienoa on huomata, Randin nostavan Ludwig von Misesin esille omana taloustieteen suosikkinaan. Näin tulee luoduksi yhteys itävaltalaisen koulukunnan ja randilaisyyden välillä, vaikka toki perustavaa laatua olevia eroavaisuuksia näiden ajattelusta löytyykin.

 

Poiminnot

• Tribalism is a product of fear, and fear is the dominant emotion of any person, culture or society that rejects man's power of survival: reason. (58)
• If you ask me to name the man most responsible for the present state of the world, the man whose influence has almost succeeded in destroying the achievements of the Renaissance - I will name Immanuel Kant. (87)
• Capitalism did not create poverty - it inherited it. Compared to the centuries of precapitalist starvation, the living conditions of the in the early years of capitalism were thefirst chance the poor had ever had to survive. (91)
• Capitalism and altruism cannot coexist in the same man or in the same society. Tell it to anyone who attempts to justify capitalism on the ground of the "public good" or the "general welfare" or "service to society" or the benefits it brings to the poor. All these things are true, but they are by-products, the secondary consequences of capitalism - not its goal, purpose or moral justification. The moral justification of capitalism is man's right to exist for his own sake, neiher sacrificing himself to others nor sacrificing others to himself; it is the recognition that man - every man - is an end in himself, not a means to the ends of the others, not a sacrificial animal serving anyone's need. (91)
• Philosophy is a necessity for a rational being: philosophy is the foundation of science, the organizer of man's mind, the integrator of his knowledge, the programmer of his subconscious, the selector of his values. To set philosophy against reason, i.e., against man's power of cognition, to turn philosophy into an apologist for and a protector of superstition - is such a crime against humanity that no modern atrocities can equal it; it is the cause of modern atrocities. (111)
• Concepts are the products of a mental process that integrates and organizes the evidence provided by man's senses. Man's senses are his only direct cognitive contact with reality and, therefore, his only source of information. Without sensory evidence, there can be no concepts; without concepts, there can be no language; without language, there can be no knowledge and no science. (121)
• In reality and in the Objectivist ethics, there is no such a thing as "duty". There is only choice and the full, clear recognition of a principle obscured by the notion of "duty": the Law of Causality. (133)
• Inflation is a man-made scourge, made possible by the fact that most men do not understand it. It is a crime committed on so large a scale that its size is its protection: the integrating capacity of the victims' minds breaks down before the magnitude - and the seeming complexity - of the crime, which permits it to be committed openly, in public. For centuries, inflation has been wrecking one country after another, yet men learn nothing, offer no resistance, and perish - not like animals driven to slaughter, but worse: like animals stampending in search of a butcher. If I told you that the precondition of inflation is psycho-epistemological - that inflation is hidden under perceptual illusions created by broken conceptual links - you would not understand me. (170)
• Money is the tool of men who have reached a high level of productivity and a long-range control over their lives. Money is not merely a tool of exchange: much more importantly, it is a tool of saving, which permits delayed consumption and buys time for future production. To fulfill this requirement, money has to be some material commodity which is imperishable, rare, homogenous, easily stored, not subject to wide fluctuations of value, and always in demand among those you trade with. This leads you to the decision to use gold as money. (172)
• There is only one institution that can arrogate to itself the power legally to trade by means of rubber checks: the government. And it is the only institution that can mortgage your future without your knowledge or consent: government securities (and paper money) are promissory notes on future tax receipts, i.e., on your future production. (174)
• If student minorities have succeeded in demanding that they be given courses on such subjects as Zen Buddhism, guerilla welfare, Swahili, and astrology, then an intellectual student minority can succeed in demanding courses on, for instance, Aristotle in philosophy, von Mises in economics, Montessori in education, Hugo in literature. At very least, such courses would save the student's mind; potentially, they would save the culture. (271)

The DAO Of Capital - Austrian Investing In a Distorted World

Tuli luettua The DAO of Capital – Austrian Investing in a Distorted World, jossa amerikkalainen entinen meklari ja hedge fund sijoittaja Mark Spitznagel pyrkii kertomaan, miten sijoittaa itävaltalaisen koulukunnan opein. Lähtökohtaisesti siis varsin kiinnostava aihe.

 

Mark Spitznagel: The DAO of Capital - Austrian Investing in a Distorted World

Kirja esittelee Carl Mengeria, Eugen von Böhm-Bawerkia, Ludwig von Misesia, Murray N. Rothbardia ja Friedrich A von Hayekia eli itävaltalaisia avainhenkilöitä ja heidän ajatuksiaan, mutta kyky esittää näistä teorioista pohjautuvaa sijoitusfilosofiaa jää valitettavan vajanaiseksi. Jää tunne, että itävaltalaisuus on kirjassa päälle liimattua. Kirjassa ollaan lähes koko ajan ikään kuin hukassa. Itävaltalaisuuden osalta herää epäilys siitä, kuinka syvällisesti kirjoittaja on itävaltalaiset teoksensa lukenut ja sisäistänyt. Ainakaan tätä kirjaa ei kannata käyttää välineenä aitoihin ajatuksiin tutustuessa.

 

Jos ja kun tavoitteena on kirjoittaa sijoituskirja, sorrutaan kirjassa kertomaan liiallisesti epäolennaisuuksia. Kirjan 290 tekstisivua olisi voinut käyttää paljon fiksummin. Vielä enemmän hukassa ollaan yrityksessä liittää entisajan itämaiset viisaudet (DAO) yhteen itävaltalaisen teorian kanssa ja vielä sijoittamisen viitekehyksessä. Se nyt vain ei toimi. Siis koko kirjan nimi, The DAO of Capital, ja sitä myötä sen markkinoima sijoitustyyli jää epäselväksi ja siten tylsäksi. Ihan hirveästi ei arvostusta herätä kertoa "Roundabout" metodista, eli vastakkaisuuden opista, jonka mukaan liikenneympyräkin osoittaa, että vasemmalle pääsee helpoimmin kääntymällä oikealle.

 

Kirjan lopussa esitellään kaksi sijoitustapaa, joista toinen on likimain indeksisijoittamista itse kehitetyn indeksin mukaisesti ja toinen tapa perustuu hyvien yhtiöiden ostamiseen. Tämä toinen tapa on kirjoittajankin mukaan lähellä arvosijoittamista. Ei siis mitään mullistavaa tai tieteellisesti poikkeuksellisen lahjakasta.

 

Suomalaisittain kirja menee loppusuoralla jo tragikoomisen puolelle, kun siinä yritetään selittää suomalaista sisua, talvisodan henkeä ja Sibeliusta. Sijoituskirjan kontekstissa nämä sivut veivät viimeisimmätkin uskottavuuden rippeet. Valitettavasti. En siis suosittele kirjaa lukemaan, en itävaltalaisena teoksena enkä sijoituskirjana. Heikko esitys kummassakin sarjassa. VMP voisi joku kiteyttää. Vaikka moni nimekäs kommentaattori on kirjaa kehunut, minä seison nyt oppositiossa. Pahoitteluni kirjoittajalle!

 

Huono kirja erinomaisesta aiheesta alkoi ärsyttämään minua niin paljon, että ajattelin pistää paremmaksi ja kiteyttää itävaltalaiseen teoriaan perustuvan kapitalistin mallisalkun yhdessä blogitekstissä. Sellainen on siis tulossa lähiaikoina, kunhan saan ajatukseni kootuksi ja kirjoitetuksi.

Murray N. Rothbard: The Ethics of Liberty

Ludwig von Misesin Human Action on toistaiseksi paras lukemani kirja. Kakkoseksi listalle kiilaa von Misesin oppilas ja oppien jatkokehittäjä Murray Newton Rothbard (Wikipedia) teoksellaan The Ethics of Liberty. Molemmat teokset tulevat olemaan keskeisiä kulmakiviä väitöskirjani teoreettisessa viitekehyksessä.

 

Murray N. Rothbard - The Ethics of Liberty

The Ethics of Liberty on syvällinen, perusteellinen ja looginen alusta loppuun saakka. Se on jäsenneltyä ja johdonmukaista ajattelua liberalistisesta maailmankuvasta johdettuna. Rothbardin koko tuotanto on von Misesin ohella lukemisen arvoista tavaraa. Molempien herrojen kirjat voi käydä ilmaiseksi lataamasta Mises Instituutin sivuilta. Esimerkiksi Ethics of Liberty löytyy täältä. Lataa ja lue tai laita kirja tilaukseen, koska tämä teos kuuluu luettavaksi!

The Ethics of Libertyssä on muutamia kappaleita, jotka ovat siteerauskelpoista tekstiä alusta loppuun saakka. Niinpä en ole niitä tähän blogitekstiin lähtenyt kopioimaan vaan tuon ne esille erillisinä kokonaiskirjoituksina. Alla on muista kappaleista mielestäni keskeisimmät poiminnot. Merkittävin Ethics of Libertyn tuoma lisäarvo minulle oli omistusoikeuksien ja ihmisoikeuksien kytkeminen kiinteästi toisiinsa. Ei ole toista ilman toista vaan itse asiassa ihmisoikeuksissa on kyse omistusoikeuksista. Rothbard lähtee liikkeelle ihmisen itsensä omistajuudesta (self-ownership), ja asettaa ihmisen myös omistusoikeuden määrittymisen keskiöön. Tähän samaan ajatusmalliin pohjautuu myös väitöskirjassani omistajuuden perusta. Tästä omistusoikeudesta Rothbard tarkastelee mm. vapaaehtoista vaihdantaa ja ihmisten sosiaalista kanssakäymistä sekä pohtii lapsen omistusoikeutta. Vapauden teorian (A Theory of Liberty) voi Rothbardia seuraten suurelta osin kiteyttää omistusoikeuden teoriaan. Kirjan toisessa osiossa Rothbard tarkastelee vapauden suhdetta valtioon (The State versus Liberty). Tässä osiossa Rothbard ei juurikaan jätä teoreettista roolia valtiolle vapaassa yhteiskunnassa. Lopussa Rothbard vielä tulkitsee ja analysoi muita aiemmin esitettyjä teoreettisia kirjoituksia, kuten von Misesia, Hayekia, Berlinia ja Nozickia.

 

Poiminnot

Natural Law as "Science"
 

Value in the sense of valuation or utility is purely subjective, and decided by each individual.

But justice is the product of reason, not the passions. And justice is the necessary support of the social order; and the social order is necessary to man's well-being and happiness. If this is so, the norms of justice must control and regulate the passions, and not vice versa.

Reason can be superior to the passions.

Natural Law versus Positive Law
 

In fact, the legal principles of any society can be established in three alternate ways: (a) by following the traditional custom of the tribe or community; (b) by obeying the arbitrary, ad hoc will of those who rule the State apparatus; or (c) by the use of man’s reason in discovering the natural law—in short, by slavish conformity to custom, by arbitrary whim, or by use of man’s reason. These are essentially the only possible ways for establishing positive law.

Natural Law and Natural Rights
 

"Every man has a property in his own person. This nobody has any right to but himself. The labour of his body and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature placed it in, it hath by this labour something annexed to it that excludes the common right of other men. For this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to. . . .

He that is nourished by the acorns he picked up under an oak, or the apples he gathered from the trees in the wood, has certainly appropriated them to himself. Nobody can deny but the nourishment is his. I ask then when did they begin to be his? . . . And ‘tis plain, if the first gathering made them not his, nothing else could. That labour put a distinction between them and common. That added something to them more than nature, the common mother of all, had done: and so they become his private right. And will any one say he had no right to those acorns or apples he thus appropriated, because he had not the consent of all mankind to make them his? . . . If such a consent as that was necessary, man had starved, notwithstanding the plenty God had given him. We see in commons, which remain so by compact, that ‘tis the taking part of what is common, and removing it out of the state Nature leaves it in, whichbegins the property; without which the common is of no use." - John Locke: Second Treatise on Government

"When we say that one has the right to do certain things we mean this and only this, that it would be immoral for another, alone or in combination, to stop him from doing this by the use of physical force or the threat thereof. We do not mean that any use a man makes of his property within the limits set forth is necessarily a moral use." - Professor James A Sadowsky, S.J.: Private Property and Collective Ownership.

Property and Criminality
 

WE MAY DEFINE ANYONE who aggresses against the person or other produced property of another as acriminal. A criminal is anyone who initiates violence against another man and his property: anyone who uses the coercive “political means” for the acquisition of goods and services.

We cannot simply say that the great axiomatic moral rule of the libertarian society is the protection of property rights, period. For the criminal has no natural right whatever to the retention of property that he has stolen; the aggressor has no right to claim any property that he has acquired by aggression. Therefore, we must modify or rather clarify the basic rule of the libertarian society to say that no one has the right to aggress against the legitimate or just property of another.

In the deepest sense, all property is “private.” For all property belongs to, is controlled by, some individual persons or groups of persons. If B stole a watch from A, then the watch was B’s private “property”—was under his control and de facto ownership—so long as he was allowed to possess and use it. Therefore, whether the watch was in the hands of A or B, it was in private hands—in some cases, legitimate-private, in others criminal-private, but private just the same.

The form of private property differed in the two cases, but not the essence. Thus, the crucial question in society is not, as so many believe, whether property should be private or governmental, but rather whether the necessarily “private” owners are legitimate owners or criminals. For, ultimately, there is no entity called “government”; there are only people forming themselves into groups called “governments” and acting in a “governmental” manner. All property is therefore always “private”; the only and critical question is whether it should reside in the hands of criminals or of the proper and legitimate owners. There is really only one reason for libertarians to oppose the formation of governmental property or to call for its divestment: the realization that the rulers of government are unjust and criminal owners of such property.

In short, the laissez-faire utilitarian cannot simply oppose “government” ownership and defend private; for the trouble with governmental property is not so much that it is governmental (for what of “private” criminals like our watch-stealer?) but that it is illegitimate, unjust, and criminal.

The right of every individual to own his person and the property that he has found and transformed, and therefore “created,” and the property which he has acquired either as gifts from or in voluntary exchange with other such transformers or “producers.” It is true that existing property titles must be scrutinized, but the resolution of the problem is much simpler than the question assumes. For remember always the basic principle: that all resources, all goods, in a state of no-ownership belong properly to the first person who finds and transforms them into a useful good (the “homestead” principle).

For any property currently claimed and used: (a) if we know clearly that there was no criminal origin to its current title, then obviously the current title is legitimate, just and valid; (b) if we don’t know whether the current title had any criminal origins, but can’t find out either way, then the hypothetically “unowned” property reverts instantaneously and justly to its current possessor; (c) if we do know that the title is originally criminal, but can’t find the victim or his heirs, then (cl) if the current title-holder was not the criminal aggressor against the property, then it reverts to him justly as the first owner of a hypothetically unowned property. But (c2) if the current titleholder is himself the criminal or one of the criminals who stole the property, then clearly he is properly to be deprived of it, and it then reverts to the first man who takes it out of its unowned state and appropriates it for his use. And finally, (d) if the current title is the result of crime, and the victim or his heirs can be found, then the title properly reverts immediately to the latter, without compensation to the criminal or to the other holders of the unjust title.

We thus have a theory of the rights of property: that every man has an absolute right to the control and ownership of his own body, and to unused land resources that he finds and transforms. He also has the right to give away such tangible property (though he cannot alienate control over his own person and will) and to exchange it for the similarly derived properties of others. Hence, all legitimate property-right derives from every man’s property in his own person, as well as the “homesteading” principle of unowned property rightly belonging to the first possessor.

We also have a theory of criminality: a criminal is someone who aggresses against such property. Any criminal titles to property should be invalidated and turned over to the victim or his heirs; if no such victims can be found, and if the current possessor is not himself the criminal, then the property justly reverts to the current possessor on our basic “homesteading” principle.

Let us now see how this theory of property may be applied to different categories of property. The simplest case, of course, is property in persons. 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. From this there follows immediately the total impermissibility of property in another person. One prominent example of this sort of property is the institution of slavery. Before 1865, for example, slavery was a “private property” title to many persons in the United States. The fact of such private title did not make it legitimate; on the contrary, it constituted a continuing aggression, a continuing criminality, of the masters (and of those who helped enforce their titles) against their slaves. For here the victims were immediately and clearly identifiable, and the master was every day committing aggression against his slaves. We should also point out that, as in our hypothetical case of the king of Ruritania, utilitarianism provides no firm basis for vacating the “property right” of a master in his slaves.

The Problem of Land Theft

We are not saying that, in order for property in land to be valid, it must be continually in use. The only requirement is that the land be once put into use, and thus become the property of the one who has mixed his labor with, who imprinted the stamp of his personal energy upon, the land. After that use, there is no more reason to disallow the land’s remaining idle than there is to disown someone for storing his watch in a desk drawer.

The common law of adverse possession arbitrarily sets a time span of twenty years, after which the intruder, despite his aggression against the property of another, retains absolute ownership of the land. But our libertarian theory holds that land needs only to be transformed once by man to pass into private ownership. Therefore, if Green comes upon land that in any way bears the mark of a former human use, it is his responsibility to assume that the land is owned by someone. Any intrusion upon his land, without further inquiry, must be done at the risk of the newcomer being an aggressor.

Of course, everyone should have the right to abandon any property he wishes; in a libertarian society, no one can be forced to own property which he wishes to abandon.

Punishment and Proportionality
 

Many people, when confronted with the libertarian legal system, are concerned with this problem: would somebody be allowed to “take the law into his own hands”? Would the victim, or a friend of the victim, be allowed to exact justice personally on the criminal? The answer is, of course, Yes, since allrights of punishment derive from the victim’s right of self-defense. In the libertarian, purely free-market society, however, the victim will generally find it more convenient to entrust the task to the police and court agencies.

Knowledge, True and False
 

In short, as in the case of the “human right” to free speech, there is no such thing as a right to privacy except the right to protect one’s property from invasion. The onlyright “to privacy” is the right to protect one’s property from being invaded by someone else. In brief, no one has the right to burgle someone else’s home, or to wiretap someone’s phone lines. Wiretapping is properly a crime not because of some vague and woolly “invasion of a ‘right to privacy’,” but because it is an invasion of the property right of the person being wiretapped.

No one can have a property right in the knowledge in someone else’s head.

For if a man has the absolute right to disseminate knowledge inside his head, he also has the corollary right not to disseminate that knowledge. There is no “right to know”; there is only the right of the knower to either disseminate his knowledge or to keep silent. Neither can any particular profession, be it newsmen or physicians, claim any particular right of confidentiality which is not possessed by anyone else. Rights to one’s liberty and property must be universal.

Violation of (common law) copyright is an equivalent violation of contract and theft of property. For suppose that Brown builds a better mousetrap and sells it widely, but stamps each mousetrap “copyright Mr. Brown.” What he is then doing is selling not the entire property right in each mousetrap, but the right to do anything with the mousetrap except to sell it or an identical copy to someone else. The right to sell the Brown mousetrap is retained in perpetuity by Brown. Hence, for a mousetrap buyer, Green, to go ahead and sell identical mousetraps is a violation of his contract and ofthe property right of Brown, and therefore prosecutable as theft. Hence, our theory of property rights includes the inviolability of contractual copyright.

For everyone, as we have stated, owns his own body; he has a property right in his own head and person. But since every man owns his own mind, he cannot therefore own the minds of anyone else. And yet Jones’s “reputation” is neither a physical entity nor is it something contained within or on his own person. Jones’s “reputation” is purely a function of the subjective attitudes and beliefs about him contained in the minds of other people. But since these are beliefs in the minds of others, Jones can in no way legitimately own or control them. Jones can have no property right in the beliefs and minds of other people.

Bribery
 

In the case of bribes, therefore, there is nothing illegitimate about the briber, but there is much that is illegitimate about the bribee, the taker of the bribe. Legally, there should be a property right to pay a bribe, but not to take one. It is only the taker of a bribe who should be prosecuted. In contrast, liberals tend to hold the bribe-giver as somehow more reprehensible, as in some way “corrupting” the taker. In that way they deny the free will and the responsibility of each individual for his own actions.

The Boycott
 

A BOYCOTT IS AN attempt to persuade other people to have nothing to do with some particular person or firm—either socially or in agreeing not to purchase the firm’s product. Morally a boycott may be used for absurd, reprehensible, laudatory, or neutral goals. It may be used, for example, to attempt to persuade people not to buy non-union grapes or not to buy union grapes. From our point of view, the important thing about the boycott is that it is purely voluntary, an act of attempted persuasion, and therefore that it is a perfectly legal and licit instrument of action.

Whether picketing as a form of advertising a boycott would be legitimate in a free society is a far more complex question. Obviously, mass picketing that blocked entrance or egress from a building would be criminal and invasive of the rights of property—as would be sit-ins and sit-down strikes that forcibly occupied the property of others.

Similarly, such employer devices as the blacklist—a form of boycott—would be legal in the free society.

Property Rights and the Theory of Contracts
 

THE RIGHT OF PROPERTY implies the right to make contracts about that property: to give it away or to exchange titles of ownership for the property of another person. Unfortunately, many libertarians, devoted to the right to make contracts, hold the contract itself to be an absolute, and therefore maintain that any voluntary contract whatever must be legally enforceable in the free society. Their error is a failure to realize that the right to contract is strictly derivable from the right of private property, and therefore that the only enforceable contracts (i.e., those backed by the sanction of legal coercion) should be those where the failure of one party to abide by the contract implies thetheft of property from the other party.

In short, a contract should only be enforceable when the failure to fulfill it is an implicit theft of property. But this can only be true if we hold that validly enforceable contracts only exist where title to property has already been transferred, and therefore where the failure to abide by the contract means that the other party’s property is retained by the delinquent party, without the consent of the former (implicit theft). Hence, this proper libertarian theory of enforceable contracts has been termed the “title-transfer” theory of contracts.

The basic reason is that the only valid transfer of title of ownership in the free society is the case where the property is, in fact and in the nature of man, alienable by man. All physical property owned by a person is alienable, i.e., in natural fact it can be given or transferred to the ownership and control of another party. I can give away or sell to another person my shoes, my house, my car, my money, etc. But there are certain vital things which, in natural fact and in the nature of man, are inalienable, i.e., they cannot in fact be alienated, even voluntarily. Specifically, a person cannot alienate his will, more particularly his control over his own mind and body. Each man has control over his own mind and body. Each man has control over his own will and person, and he is, if you wish, “stuck” with that inherent and inalienable ownership. Since his will and control over his own person are inalienable, then so also are his rights to control that person and will. That is the ground for the famous position of the Declaration of Independence that man’s natural rights are inalienable; that is, they cannot be surrendered, even if the person wishes to do so.

As Williamson Evers points out, the philosophical defenses of human rights

are founded upon the natural fact that each human is the proprietor of his own will. To take rights like those of property and contractual freedom that are based on a foundation of the absolute self-ownership of the will and then to use those derived rights to destroy their own foundation is philosophically invalid.

Defense of property titles—and only such defense—is the business of enforcement agencies.

Under entail, a property owner could bequeath this land to his sons and grandsons, with the proviso that no future owner could sell the land outside the family (a deed typical of feudalism). But this would mean that the living owners could not sell the property; they would be governed by the dead hand of the past. But all rights to any property must be in the hands of living, existing persons. It might be considered a moral requirement for the descendants to keep the land in the family, but it cannot properly be considered a legal obligation. Property rights must only be accorded to and can only be enjoyed by the living.

Lifeboat situations
 

In a lifeboat situation, indeed, we apparently have a war of all against all, and there seems at first to be no way to apply our theory of self-ownership or of property rights. But, in the example cited, the reason is because the property right has so far been ill-defined. For the vital question here is: who owns the lifeboat? If the owner of the boat or his representative (e.g., the captain of the ship) has died in the wreck, and if he has not laid down known rules in advance of the wreck for allocation of seats in such a crisis, then the lifeboat may be considered-at least temporarily for the emergency- abandoned and therefore unowned. At this point, our rules for unowned property come into play: namely, that unowned resources become the property of the first people possessing them. In short, the first eight people to reach the boat are, in our theory, the proper “owners” and users of the boat. Anyone who throws them out of the boat then commits an act of aggression in violating the property right of the “homesteader” he throws out of the boat. After he returns to shore, then, the aggressor becomes liable for prosecution for his act of violation of property right (as well, perhaps, for murder of the person he ejected from the boat)

The Nature of the State
 

For there is one crucially important power inherent in the nature of the State apparatus. All otherpersons and groups in society (except for acknowledged and sporadic criminals such as thieves and bank robbers) obtain their income voluntarily: either by selling goods and services to the consuming public, or by voluntary gift (e.g., membership in a club or association, bequest, or inheritance). Onlythe State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming. That coercion is known as “taxation,” although in less regularized epochs it was often known as “tribute.” Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects.

It would be an instructive exercise for the skeptical reader to try to frame a definition of taxation which does not also include theft. Like the robber, the State demands money at the equivalent of gunpoint; if the taxpayer refuses to pay his assets are seized by force, and if he should resist such depredation, he will be arrested or shot if he should continue to resist. It is true that State apologists maintain that taxation is “really” voluntary; one simple but instructive refutation of this claim is to ponder what would happen if the government were to abolish taxation, and to confine itself to simple requests for voluntary contributions. Does anyone really believe that anything comparable to the current vast revenues of the State would continue to pour into its coffers? It is likely that even those theorists who claim that punishment never deters action would balk at such a claim. The great economist Joseph Schumpeter was correct when he acidly wrote that “the theory which construes taxes on the analogy of club dues or of the purchase of the services of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of mind."

It is also contended that, in democratic governments, the act of voting makes the government and all its works and powers truly “voluntary.” Again, there are many fallacies with this popular argument. In the first place, even if the majority of the public specifically endorsed each and every particular act of the government, this would simply be majority tyranny rather than a voluntary act undergone by every person in the country. Murder is murder, theft is theft, whether undertaken by one man against another, or by a group, or even by the majority of people within a given territorial area. The fact that a majority might support or condone an act of theft does not diminish the criminal essence of the act or its grave injustice. Otherwise, we would have to say, for example, that any Jews murdered by the democratically elected Nazi government were not murdered, but only “voluntarily committed suicide”—surely, the grotesque but logical implication of the “democracy as voluntary” doctrine.

If, then, taxation is compulsory, and is therefore indistinguishable from theft, it follows that the State, which subsists on taxation, is a vast criminal organization far more formidable and successful than any “private” Mafia in history. Furthermore, it should be considered criminal not only according to the theory of crime and property rights as set forth in this book, but even according to the common apprehension of mankind, which always considers theft to be a crime. As we have seen above, the nineteenth-century German sociologist Franz Oppenheimer put the matter succinctly when he pointed out that there are two and only two ways of attaining wealth in society: (a) by production and voluntary exchange with others—the method of the free market; and (b)by violent expropriation of the wealth produced by others. The latter is the method of violence and theft. The former benefits all parties involved; the latter parasitically benefits the looting group or class at the expense of the looted. Oppenheimer trenchantly termed the former method of obtaining wealth, “the economic means,” and the latter “the political means.” Oppenheimer then went on brilliantly to define the State as “the organization of the political means.”

We have seen clearly why the State needs the intellectuals; but why do the intellectuals need the State? Put simply, it is because intellectuals, whose services are often not very intensively desired by the mass of consumers, can find a more secure “market” for their abilities in the arms of the State. The State can provide them with a power, status, and wealth which they often cannot obtain in voluntary exchange. For centuries, many (though, of course, not all) intellectuals have sought the goal of Power, the realization of the Platonic ideal of the “philosopher-king.”

The Moral Status of Relations to the State
 

IF THE STATE, THEN, is a vast engine of institutionalized crime and aggression, the “organization of the political means” to wealth, then this means that the State is a criminal organization, and that therefore its moral status is radically different from any of the just property-owners that we have been discussing in this volume. And this means that the moral status of contracts with the State, promises to it and by it, differs radically as well. It means, for example, that no one is morally required to obey the State (except insofar as the State simply affirms the right of just private property against aggression). For, as a criminal organization with all of its income and assets derived from the crime of taxation, the State cannot possess any just property.

On Relations Between States
 

In the ideal moral world, no States would exist, and hence, of course, no foreign policy could exist.