KOL197 | Tom Woods Show: The Central Rothbard Contribution I Overlooked, and Why It Matters: The Rothbard-Evers Title-Transfer Theory of Contract

Kinsella on Liberty Podcast, Episode 197. I discussed Rothbardian/libertarian contract theory with Tom Woods on his show today. Update: See also Łukasz Dominiak & Tate Fegley, "Contract Theory, Title Transfer, and Libertarianism," Diametros (10 Sep. 2022; doi: 10.33392/diam.180) Transcript below. Ep. 547 The Central Rothbard Contribution I Overlooked, and Why It Matters Youtube: 3rd December 2015 Stephan Kinsella explains the importance of Rothbard’s theory of contract — a point I myself did not appreciate until this episode — and contrasts it with mainstream theories, which most libertarians think are the same as their own. We need to get these fundamentals right, so listen in and learn with me! Articles Discussed “Toward a Reformulation of the Law of Contracts,” by Williamson M. Evers “A Libertarian Theory of Contract: Title Transfer, Binding Promises, Inalienability,” by Stephan Kinsella Book Discussed The Ethics of Liberty, by Murray N. Rothbard For some more related posts/resources: A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability, Journal of Libertarian Studies 17, no. 2 (Spring 2003): 11-37 [based on paper presented at Law and Economics panel, Austrian Scholars Conference, Auburn, Alabama (April 17, 1999)] Justice and Property Rights: Rothbard on Scarcity, Property, Contracts… KOL020 | “Libertarian Legal Theory: Property, Conflict, and Society: Lecture 3: Applications I: Legal Systems, Contract, Fraud” (Mises Academy, 2011)  around Slide 16: slides here The Libertarian View on Fine Print, Shrinkwrap, Clickwrap KOL146 | Interview of Williamson Evers on the Title-Transfer Theory of Contract KOL004 | Interview with Walter Block on Voluntary Slavery Transcript The Central Rothbard Contribution I Overlooked, and Why It Matters: The Rothbard-Evers Title-Transfer Theory of Contract Stephan Kinsella, interviewed by Tom Woods The Tom Woods Show, Ep. 547, Dec. 3, 2015 Transcript 00:00:00 TOM WOODS: The Tom Woods Show, episode 547. 00:00:03 INTRO: Prepare to set fire to the index card of allowable opinion.  Your daily dose of liberty education starts here, the Tom Woods Show. 00:00:14 TOM WOODS: Hey everybody.  Christmas is coming, and chances are you’re going to be doing a lot of online shopping.  Well, why not get cash back at virtually all the retailers you’re going to be using anyway?  Sign up for Ebates and you’ll get just that.  Check it out through tomwoods.com/ebates. 00:00:30 Hey everybody.  Welcome to another episode of the Tom Woods Show.  We’re joined once again by Stephan Kinsella because today we’re talking about foundational issues related to libertarianism, and I can think of no one better to help us clarify our thinking on questions like this than Stephan.  And ordinarily, as I would do in these episodes and as I’ve done in the past with Stephan, I would launch into a biographical discussion of the guest.  But instead, I’m going to turn things over to Stephan and say, Stephan, what do you think people should know about you? 00:01:02 STEPHAN KINSELLA: Well, I was born in a little town in Louisiana. 00:01:06 TOM WOODS: I knew I shouldn’t have done this. 00:01:07 STEPHAN KINSELLA: I’m a libertarian patent attorney in Houston.  How about that? 00:01:12 TOM WOODS: Oh, but you’ve done so much more.  I want to know about your writings. 00:01:16 STEPHAN KINSELLA: Okay, so I am a practicing attorney, but I’ve written a lot on libertarian legal theory for the Journal of Libertarian Studies, and then I founded sort of a successor journal called Libertarian Papers, which is still ongoing, which I’m the managing editor of.  And I’ve written some books, and I’ve written on intellectual property, both the legal side and the libertarian theory side. 00:01:42 TOM WOODS: I am going to be linking to everything that we talk about today in terms of articles that you’ve written and stuff like that.  I’ll like to it at tomwoods.com/547.  I spent last night actually reading some of your stuff that I hadn’t read before, and then all the way up to the moment I called you today I was reading your stuff.  So I am very much in a Kinsella frame of mind right now, and I have to say, I want to get to this later.  I was really struck by – I guess I hadn’t read – gosh, I hadn’t – I’ve read so much Rothbard, but it’s – I haven’t read it in the past week, and sometimes I forget what was in it. 00:02:22 And some of the insights are so interesting because they apply to current debates.  I was interested to see that Rothbard I guess deals with the question of how do we confront problems in, let’s say – well, let’s just say this.  Sometimes we don’t have a – what we might call a clean capitalism.  Sometimes property titles are not legitimate because they – when you go back into the mist of time, you might be able to say that so-and-so stole it, and you’re an inheritor of stolen goods.  But the difficulty is how can we know that today?  We can’t always, and so does that mean that everybody holds his property only precariously, or it’s all questionable? 00:03:07 These are the sorts of complaints that left libertarians have made, and Rothbard addresses this as if he’s living in 2015 debating the same people I debate just exactly right, so I want to get to that later.  But right now I want to talk about the issue of contract is so important for libertarianism, and I guess, frankly, even up until today, this very day when I read your discussion of the Evers-Rothbard title-transfer theory of contract I guess I just assumed that our view of contract was not all that different from the mainstream view, and I guess you learn something every day.  How is the main – well, first of all, what’s a contract?  And how does the mainstream try to justify the – basically forcing somebody to live up to his side of a contract? 00:03:56 STEPHAN KINSELLA: Right.  And actually I think this is one of Rothbard’s sort of seminal contributions to political theory or legal theory, and it’s relatively unappreciated.  It’s… 00:04:08 TOM WOODS: Yeah, you can say that again.  I’ve been praising the guy for decades, and I didn’t appreciate it. 00:04:13 STEPHAN KINSELLA: I think it’s in the final chapter of The Ethics of Liberty if I’m not mistaken, which is – I think ’82 it was first published. 00:04:20 TOM WOODS: Yeah. 00:04:21 STEPHAN KINSELLA: Which fascinated me when I read it.  And then it’s based upon a 1977 article by Williamson Evers in the Journal of Libertarian Studies, which Rothbard was the founder and editor of and which was the very first article.  It was Volume 1 No. 1, so this was the first article ever published in the JLS, the article by Evers, on contract theory. 00:04:42 I later discovered – after I wrote a long article about this in 2003, I later discovered that in ’74, Rothbard had sort of had the germs of this idea in one of his earlier articles, the one you were alluding to so – which is fascinating.  The standard understanding of contract, which I think most libertarians actually share in a sort of kind of crude way, is that a contract is a binding promise. 00:05:09 Now, legally speaking, if you get more precise, you can distinguish three things.  You can distinguish consent from agreement and from contract.  They’re all different things.  Consent just means the person who has the right to give permission or to deny permission gives permission.  That’s consent.  We determine who can do this by deciding what property rights there are.  So it’s really a propertarian kind of issue.  The owner of a certain – their body or something else – has the right to permit or to deny others from using that thing.  That’s just consent. 00:05:42 A contract is what we call in the law a binding agreement.  So an agreement is just when people come to an agreement they say things that they’re going to do something, and if it satisfies certain requirements in the law, then it’s called a contract, which means it’s a binding agreement or it’s a binding obligation.  So the standard view of contract is that it’s basically a promise of a certain type that is binding, and most libertarians think of this too.  They’ll say that you have to keep your contracts.  They view it as something you promise to do that has certain formalities like consideration or whatever that makes it legally enforceable.  So the standard view of contract is a legally enforceable promise or agreement, and this is not Rothbard’s understanding. 00:06:30 TOM WOODS: Well, if a promise then is not really what’s at the heart of what makes a contract binding so to speak, what is the correct way to think about it? 00:06:40 STEPHAN KINSELLA: So Rothbard’s view, which again, I think he came up with this in ’74, and he was thinking from a Misesian point of view about the nature of property and a libertarian view about the nature of property rights.  And then Evers elaborated on this, and then Rothbard built upon that, so it was really a collaboration between the two.  And by the way, I have an interview with Evers on my podcast, which I finally was able to – after trying for years to reach him, finally last year he spoke with me about this, and he… 00:07:06 TOM WOODS: Wow.  I didn’t realize that.  I figured – I really thought he basically was unreachable at this point. 00:07:11 STEPHAN KINSELLA: I tried for years and finally he consented.  I was able to do it, and it was fun to do it.  It was great.  I think it was important to do it.  He basically confirmed my understanding of the chronology of this, of the idea.  In any case, so Rothbard’s rooted in thinking of human action as the use of resources, right?  And libertarianism is the property rights in resources, and what it means to have ownership of a resource is you can grant permission to others,