Income from Capital

Seldom seen a post from you that wasn't a hyperventilating, hyperbolic rant. Calm down.

Inability to repay loaned capital does not equate to theft. Can we agree on that? My business as a maker of widgets may have folded despite my best intentions. I'm now broke and you're not going to get your loan back anytime soon despite my best intentions when I took it out.

Here's my proposition.

In any aspect of the free market there are "risks". For me, it's the risk that someone might invent something which means people no longer need my service. For you, it's the risk that economic circumstances may deteriorate resulting in loans defaulting.

We have to live with that risk.

Or do the providers of capital get a pass with that?

This is all well settled law of which you simply show yourself completely ignorant. Both prescription and adverse possession convey full legal title to real property. The reason for both is the legal need for titles to property to be clear, and the complete inability of your moral silliness to provide that, without which the institution of property itself is defeated and pointless.

"PRESCRIPTION. The manner of acquiring property by a long, honest, and uninterrupted possession or use during the time required by law. The possession must have been possessio longa, continua, et pacifica, nec sit ligitima interruptio, long, continued, peaceable, and without lawful interruption".

Adverse possession may legalize even clearly "taken" property, if at the time it was taken their was color of title in favor of the new possessor, and he has held it since with similar stipulations as with prescription. Again the reason being to prevent pettifogging over ancient titles in a manner that destroys all property. If you knew the first thing about actual law relating to property, as opposed to your ideology and your pretence that is rules such things, this would all be clear to you, and you'd see who is the "nut" here, for denying it.

And yes some modern witch hunts have clearly violated these settled laws. So have any number of other modern practices of robbery that proceed by the exact same mechanism - slander the just possessor, defile his name, then rob him before a poisoned jury. Which hasn't changed since the days of Nero and Caligula and is every bit as notorious and wrong when men do it today, as it was then.

No, we cannot agree on that. There is failure, yes, but it is not a right. A failure to repay what is owed to a creditor is theft of the creditor's property from said creditor. And the robber's property is forfeit to meet the creditor's just claim. "Whoops, I lost it, so I don't owe you anything", is not a claim you should try to make before any real court.

Limitation of liability, corporations not being the same as their owners, the protection of bankruptcy if all assets fail, these are all defenses against other items of value being conveyed to a just creditor in payment of the deadbeat robber's just debts. But his just debts they are, and he owes them, in equity and economically. A contract may specify collateral to be pledged in place of repayment; but that is not taken it is owed, and sometimes more to spare as well, when it is not sufficient to actually defray the debt.

There is no right to rob other men of their capital. If you lose it, you still owe it back to them, and honest men move heaven and earth to repay what they owe, and so remain honest men. Deadbeats run to the mercy of the law and the protection it affords to the despondent and ruined. That is mercy rather than justice, and it is exercised at the expense of the just rights of the creditor. And endlessly indulged by populist ambulance chasers and demagoguing politicians.

The economics and the morals of the matter are clear. Right is with the creditor, and if the debtor gets off the hook by hook and by crook, well that is what crooks do for a living. But right is exactly what it isn't.

It may be a teaching of prudence that all the creditor can expect to get is his collateral; it isn't equity or economics or morals. Those all dictate performance as contracted, no less. And falling short of that performance is not the birthright of all deadbeats, and paying for all deadbeats is not the birthright of all creditors, who are not your ATM.

You keep shifting the basis of your argument. I thought you wanted to discuss the morality of wealth, capital and the income derived from it.

Now all of a sudden we’re talking about the common law and equity. I’m well aware there exists established law on these issues. But law, as no doubt you are aware, does not necessarily coincide with morality. Law should grow out of morality, but it doesn’t always happen.

Other societies have had law quite different on these issues, without necessarily infringing on the natural laws of morality and ethics.

It is the height of cultural arrogance to assume that one’s own culture has expressed for all time the natural law, such that any differing from it must be immoral.

Typical muddying of the waters. I never said failure to pay back was a right. Behave yourself and stop messing with words.

I said it was not theft.

Do I have to cut and paste the dictionary definition of "theft" for you?

Let's say I decide to make widgets and I come to you for a loan. We both agree it's a great idea and you give me the money in the usual financial contract format. Things go well for a while and the money flows. Then somebody invents a device which renders widgets obsolete. Nobody wants them, and I go broke. Bankrupt!

You take whatever collateral was agreed upon in the terms of the loan agreement but you've still taken a haircut.

That's theft?

It is culture since Roman times, and its is the bedrock principle of conservatism, as every reader of Edmund Burke knows. The principle that ideology and politics trump prescription is the characteristic doctrine of the radical looters of "the dark place", as everyone who has ever attended a meeting of the Ancient and Honorable Edmund Burke Society could tell you. In short you wouldn't know conservatism if it bit you - which, guess what, it has.

Obsolete product is not "broke", broke is not "bankrupt", and yes it is theft.

When a man becomes a partner with another and ventures his capital alongside the other man in the same business, then he is an owner, and if the business fails he is out of luck along with said partner. That is emphatically not the position of a creditor who merely lent his own property on the promise of the venturer. He is owed his property back, by every means the venturer can devise, to the detriment of said venturer's own interests.

Bankruptcy is the act of seeking the coercive protection of the state against the just right of creditors to collect what is legally owed to them. Nowhere is it written that to go broke is to declare bankruptcy, and prudent businessmen conduct themselves in a manner that can repay their creditors, if not themselves, even if their business does not turn out as they had hoped. If capital is at risk of loss in the ordinary course of operations, it ought to be equity capital and not debt owed to a creditor.

You continue to pretend that creditors losing their shirts is somehow right and proper when it simply isn't. Sometimes what they are owed and deserve, cannot be paid to them, btu not because they are not owed it or do not deserve it. They do. The power to do right by them may fail one or another party; their right does not.

As for definitions, how's this one - "theft is the illegal taking of another person's property without that person's freely-given consent. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting, fraud and sometimes criminal conversion."

When a man takes property from another on his word that he will return it, and then fails to return it so that is passes to him against the prior agreement of his counterparty, that fits the definition given. One may quibble that an evil intent is part of the crime in usual cases, and this is true in law. For the man despoiled, it makes little difference. Moreover, there is a world of difference between such things occasionally happening as violations of right beyond the power of the parties to remedy, and defending it as normal and expected and even desirable.

Which, if you look around you, other men are doing right here and right now, even if you are not. And that is tantamount to denying the proposition I thought we had agreed to (on their part not yours), and to defending theft. Why are men claiming to be conservatives defending theft? I claim, because they see precious little right to income from property in the first place, and their attitude toward all lending is, if it pays OK, if it doesn't tough toenails and serves the creditor right.

Which way, lies sorrow. There is a reason the expression "as poor as thieves" is a proverb, and there is no prosperity in wholesale defense of the destruction of creditors for the sake of endless reams of self righteous deadbeats.

Indeed, I'd go so far as to say, the political hatred of the rich and endless excuses for despoiling them, are the root of all political evil in the modern west for about the last century and a half. Would that American conservatism were free of it! That is what I am trying to get established here.

Men have the right to their property, to having it returned to them paid in full as contracted when it is borrowed from them, and to the income from their property. And everyone trying to argue by a thousand twists of sophistry that they do not, in principle, is a deadbeat conniving with thieves.

I claim this is a core principle of conservatism in the modern era (since Burke at least). If you deny it, you are going to need a more cogent argument than "hey, if someone can't help it, so what, let property be taken without compensation of any kind, or any moral qualms". I can tell you what a pack of scoundrels stand ready to drive their trucks through that statement, and what little will remain of the stated initial principle above.

They will say, "any man has a right to only that income from property that he actually gets from it after we are done robbing him, and not a penny more. Therefore all our robberies are right and proper and expedient, and violate no right of anyone to anything that matters. If some rich people are despoiled in the process, well then, that's just a bonus". That I assure you is their doctrine. Please assure me it isn't yours...

You didn't answer my questions in 12. I also notice you duck engagement on any of the actual economic principles. You can do better.

What about income derived from labor? Is that any the less “legitimate?”

No, it is quite as legitimate. The laborer is entitled to the value he actually contributes to products by his work. Which does not include the value capital imparts to them. As an economic fact, in theory and seen in all history, capital produces huge positive "externalities" in the form of higher productivity of labor, that falls to labor income. Which is fine.

The old socialist doctrine, on the other hand, taught that all income from capital was "originally" due to labor and was "exploited" away from laborers by legal systems. And this is known to be false as a matter of economics, and unworkable as well. (Even a socialist economy must impute income to capital to allocate it efficiently, etc). Social democracy believed this socialist charge, and used it to justify expropriating from "the rich" by progressive taxation, as much as they believed the whole income of capital came to in their societies, then redistributing that amount as "social spending". This was buying the central economic fallacy of socialism and merely disagreeing about what means of addressing it was most efficient.

The same denial of the right to income from property, and the pretence that all of it "should" go to workers instead, runs through all modern radical ideologies. It exists on the modern populist right as the claim that income from finance is theft (through money doctrines), among anarchists and syndicalists, among Nazis, communists, socialists, social democrats, the modern liberal left with its goal of equality of outcomes. Many of these doctrines are more human or moderate than others, but at bottom all of them deny the legitimacy of income from property.

It is in fact the characteristic mark of conservatism that is recognizes and defends that right. This includes all the stripes of economic thought on the right with the exception of the finance-hating populist position mentioned above, and also of the moderate pro capitalist liberal left, say mid century Democrats, from Truman about to a Sam Nunn, say.

How's about we focus on what you've said, unpack that, and respond to actual replies instead of going after strawmen?

With all due respect, your original statement necessarily implies that you are privileging income derived from capital over that derived from labor, in particular since, if one were to treat income from capital as ipso facto sacrosanct, that leaves, as a general matter, only the income from labor as a potential source of revenues for even the most bare of bare-bones, nightwatchman governments.

Perhaps we should simply agree on the common-sensical: that income is income, regardless of the source from whence derived.

I'm not sure you're actually talking to me. You seem to be having an imaginary argument and attributing to me positions which I do not hold and have not enunciated. Isn't that the definition of a rant? I've also noticed that there's an inverse correlation between the length of your posts and their coherence. Verbosity is no help to you, I'm afraid.

I guess it's a good thing for all concerned that you don't write the bankruptcy laws. If I understand your shtick correctly, all those who seek to discharge debts by virtue of bankruptcy are therefore to be considered thieves.

Theft is the deliberate taking of that which does not belong to you.

The fact that you repeatedly and deliberately apply this definition to material loss incurred as a result of economic circumstances foreseen by neither lender nor borrower forfeits your little remaining gravitas.

Nobody has "despoiled" you, you whining, entitlement-fixated drama queen. The guy who won't pay you, in turn may have debtors who won't pay him and so on down the chain. Is there some law that says that you are exempt from all of this? Debtor-creditor law provides ways in which debts may be recovered but there is no cast iron guarantee which is what you appear to want.

Are you completely bereft of basic common sense or are you just venting because you got stiffed when the housing bubble blew up?