The Aristocratic Ethic Of Voluntary Exchange. (BHL Part 2)

(Draft: I have almost got this worked out. Not quite. But almost)

If you believe that voluntary exchange is the test of moral action, then it’s only logical that you follow that reasoning through to its logical consequence: that property rights are obtained by exchanging them with one another; and that in order to exchange those rights, voluntarily, one must possess an incentive to do so – or at least, no disincentive not to.

Since property rights describe prohibitions on involuntary transfer of property on a scale from the very basic forms of: murder, violence, destruction and theft, to the more complex forms of theft by fraud, omission, obscurantism, impediment, externalization, free riding, rent seeking, corruption, conspiracy, and conquest – each of us can grant different people different rights as we choose. And we do. We generally grant friends, family and associates greater rights, and others lesser rights, and foes none at all.

The more dependent we are on members outside of the family and close relationships for our economic survival and prosperity, the more valuable is the extension of property rights to others, because those rights reduce transaction costs.

In a world of shop keepers and craftsmen producing complex goods for one another, everyone has equal incentives.

In a world of 50% unemployed poor 40% labor and clerical, 9% professional and executive, and 1% financial, it is very hard to see why the unemployed poor are not wiser to form some means of extraction from those with more. Trade is merely the best form of obtaining what we desire, but it is not the only.

I don’t see much difference between Walter Block’s ghetto ethic justification of blackmail and the Danegeld. None at all. I don’t see any difference between profiting from the tragedy of others, and organizing an extractive state.

That’s because there isn’t any difference.

To demand property rights from someone without compensation is in itself, an act of attempted theft. This is not because the demand violates some abstract concept of the common good. The only common good we know of is increasing cooperation in a division of knowledge and labor while constantly suppressing free riding on others.

Instead, it’s because (a) while in exchange, higher respect for property rights decreases transaction costs because it decreases risk, but also (b) the more divergent are our interests the higher the compensation each party must offer for the observation of property rights by the other. Conversely, the more identical are our interests, the lower the compensation each party must offer for the observation of property rights by the other.

That is, in practice, what we humans do. In every society we know of. Ever.

If I grant you respect for property rights, don’t know why I would do that if all I was buying was protection from violence fraud and theft, and not buying trust and therefore protection from blackmail, fraud by omission, fraud by obscurantism, free riding, rent seeking, because corruption, because only the very WEAK would do that, and only out of desperation. (People of the Ghetto) I don’t really understand why I would give up the opportunity to kill, steal, enslave, or otherwise entertain myself with you if I still had to worry about your behavior. Or inversely, why would it be rational for me to grant you property rights if that meant that you could lie, cheat, deceive, engage in corruption and engage in blackmail?

The assumption of humility necessary for us to abandon violence and enter into debate; or the necessary grace we must display in our homogenous polity most of which is an extended family, is, as Hoppe shows in Argumentation, based upon the prior assumption of the grant of property rights.

However, we should not assume that the consequence is the cause: we only grant each other the grace and humility because we have already agreed to put away our violence, deception and coercion.

But for what reason have we all, given our different talents, numbers, and tribal abilities, chosen to grant one another those rights in the first place?


Trust reduces transaction costs and the velocity of production. The division of labor saves time an increases velocity. Trust saves time and therefore increases velocity. It is possible to possess a division of labor in a low trust society, but it’s velocity (wealth) will be limited. Whereas, if one increases trust and reduces transaction costs and that group will outcompete all other groups with less trust. We have freed up man from physical labor.


The problem of politics, is providing an institutional means by which to accomplish this goal while preserving the low transaction costs of the high trust society. The problem for human’s evolutionary psychology was the balance between free riding and cooperation. The problem we face in our institutions is conducting that balance between free riding and cooperation.

ALL our advances in cooperation: morality, the division of labor, law, money, prices, contracts, interest, accounting – all of them – are extensions of our ability to cooperate in larger numbers while sensing and perceiving free riding.

So if we no longer have common interests in the preservation of property rights against the monopoly state, we must purchase that common interest in the preservation of property rights and diminishing the monopoly state, by paying those who have LESS interest in preserving those rights to police those rights. Depriving those who do not respect or police property of that payment. And forcing restitution, punishing, ostracizing, and if necessary, exterminating those people who persist in violating property rights.

That payment is moral, because it is a voluntary exchange. Asking those with no rational interest in liberty to choose self deprivation rather than engaging in statism is not only irrational, and immoral, but it’s a use of obscurant language to conduct theft by fraud.

We can either break into a multitude of small communities with heterogenous sets of property rights, or we can pay large communities (large markets) to participate in the formation and preservation of property rights. But we must abandon the obscurantist, fraudulent, parasitic lie of Rothbardian ghetto ethics to do it.

The source of liberty is the organized application of violence by a minority willing to pay the high price of suppressing all free riding in all its forms from a population in exchange for property rights. What remains at the end of that suppression is some system of property rights. The highest form of suppression eliminates the need for the state entirely. But it requires we suppress every single means of involuntary extraction from others.

In a heterogeneous polity that makes use of natural sources of energy to replace labor, and that uses technology to replace clerical work, the vast majority of people serve only three functions:
1) as consumers;
2) as police of property in all its forms;
3) to provide care of the commons;
4) to provide care and service for others.

The work of production has increasingly fallen to a minority. But the organization of voluntary and dynamic production, and the constitution of liberty, cannot be obtained without paying them for their services, since they no longer have the opportunity to engage in worthwhile production as compensation for their policing of property, care of the commons, and service of others.

If any member of the population chooses to police, care, and serve then they are due dividends from production. Otherwise they are merely slaves.

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