As long as resource scarcity is a fact of reality, there will be some conflict between the limitless spectrum of human desires, and the limited resources at our disposal. Among these conflicts is that fact that not all resources will at all times be immediately available, especially within our own community, and that sometimes our desires conflict with others’. Exchanging, or offering to exchange by sale of goods with one another on these terms, is one manner by which market participants simultaneously mitigate conflict, and allocate scarce resources.
To differentiate from an agreement to purchase an item permanently, we might consider agreements to lease or rent the item in question. One would purchase a car from another, if he believed he had a great and continued need for transportation. One might rent or lease a car from another, if he believes he only needs temporary transportation.
Deep in the comments to Profit IS Justified by Entrepreneurial Risk, I posed a question to db0, inquiring why:
- One should not be allowed to offer some of his belongings for temporary use, to another individual
- No other individual would be allowed to offer some of his belongings in exchange for temporary use of anothers’
In his response, db0 says both of these things are to be allowed, but qualifies the former by excluding “rent, wage-labor, interest” as “usury”, and further:
[T]his is not about preventing individuals from participating in such a transanction but to convince them not to. If we are to reach a libertarian society, then this kind of mentality will be built up as we progress towards it
I don’t understand why it is desirable to convince people not to participate in voluntary transactions, all parties to which believe said transaction is to their benefit. Consider: if I have an item, which I am using, and someone else says to me, “I would like to use that item for a few days, mind if I borrow it?” how should I respond?
On one hand, I might simply say, “No, I’m using it and therefore you can’t use it.” On the other hand, there is most likely some exchange he could effect, which would induce me to surrender (temporarily) the use of the item, and would offset the discomfort[1] I would otherwise experience if I were to loan it to him for “free”.
I do not mean to argue that “free” transactions won’t take place in a liberated economy. Even in our current society, free transactions take place all the time. You borrow a compound mitre saw from your father, or an extension ladder from someone at work. Perhaps you loan a book or a CD or a video game to a friend[2]. And transactions of these sorts are wonderful.
They are wonderful because they are indicative of qualities inherent to true community: friendship, trust, neighborliness; all qualities inherent to true community. I think in a free society, we would see more transactions like these (several orders of magnitude more, hopefully!), but I am by no means convinced that value-based exchange, especially the renting or leasing of items, would simply cease to exist.
1. Even considering an item that I am not immediately using, we might surmise that I am saving it for some anticipated future need, therefore anyone who wishes to use it now should pay (at the very least) for the depreciation of the item, and perhaps a small risk premium to account for the possibility that the item might be irreparably broken while in his possession.
2. But the people receiving these “free” loans are never under any illusion that they own the item which you’ve let them borrow, and for the most part, we understand that if the item is broken or stolen, the right thing to do is to offer to replace it.
Nice considerations. However, to the man or woman in the street, the everyday person who doesn't have time to look into economics, the only way liberty can be sold is to appeal to their innermost nature. Our spirit is free. Anything else is unnatural. See:
http://spirituallibertarian.blogspot.com/
It's because voluntary transactions between unequal individuals lead to more inequality and inequality is incompatible with liberty. In an inequal society, passive coercion will lead people to do "voluntary transactions" they'd rather not.
Furthermore, what most people believe to be beneficial is not always right as we cannot take externalities into account.
Do you ask your friends for money when you lend them a DVD or a Lawnmower? Probably not. Just extend the same type of exchange to the rest of society to see what I mean.
It's not going to happen by itself. We'll make it happen by giving incentives to make all exchanges preferrably free (as in, without exchanging power, ie money). If we can't make it happen, then we can't have a free society.
Inequality is a fact of nature as much so as "the sun rises in the East and sets in the West." I remain unconvinced that voluntary exchange – of value, for value, necessarily widens some inequality gap.
Of course I don't. The difference, however, is that the rest of society are not my friends, which is exactly what I was aiming at when I wrote in the introductory paragraphy, "not all resources will at all times be immediately available, especially within our own community, and that sometimes our desires conflict with others’. "
Payment for the use of something that is already in use by another is a way to avoid conflict. I don't see how you get around the fact of scarcity, such that if I'm using something, nobody else can use it at that time. What if they want to? What if they want to and are willing to pay for it, in money or in-kind, or barter, whatever?
In fact, inequality is not a fact of nature. There have been egalitarian societies in the past, especially in pre-civilization times. The only thing that is part of human nature is our ability to reason and through that we can figure out ways to achieve egalitarianism.
You do not accept that exchanges between unequal individuals will end up benefiting the most powerful?
You do not have to be, you simply have to enforce the same rules that work within a friendship to the social life as well. You say that sometimes desires will conflict. So they will, but again, this is not an unworkable issue without monetary exchange. We have many other tools at our disposal to work out disputes.
It is, but first of all avoiding conflict is not always the best solution, especially if through discussion the conflict could be settled in another way that satisfied people's needs. When you simply turn it into a monetary exchange, you simply ensure that it's always the rich that get what they want and "avoid conflict".
Again, if you want to reach an agreement for such an arrangement, nobody will stop you. The only thing that people should not do is doing agreements which rely in power difference, such as money. What I'm seeing you say is that you want to be able to have something without needing to be social (or the possibility that people can be like that), without having to interact beyond showing your wallet.
I think I read somewhere that you do code for a living. I am pretty handy with VBA, but limited to Excel – probably as close as I'll ever get to writing code. There is a natural degree of inequality between us, in that regard at the very least – even if we are absolute equals in all other aspects of our lives (which I misdoubt as a mathematical impossibility).
There is a natural inequality between myself, and the handyman who hung my front door last summer – but this inequality alone didn't lead to any exploitation, whatsoever, nor did it benefit the one of us greater than the other, nor did it concentrate power or wealth his way or mine.
I'm talking here about a conflict of wants: when two or more people want to use the same thing, at the same time – especially if one is already using it. Now you've said yourself that nobody else has a stronger claim than the one who is in-fact using it. If under such circumstances, the parties may come to an exchange-based agreement, you've utterly failed to explain why this is a practice worthy of scorn or ostracism.
I understand that "money" in a free society can take many forms, but ultimately money is the product of one's labor: a useful good for exchange (or otherwise).
Not at all! What I'm saying is that I want to be able to exchange the product of my labor for the product of others' labors.
Actually it isn't. You seem to be doing Rothbard's mistake of conflating equality with identicality. When I say we are equal, I do not mean we are identical, I mean we have the same amount of power over each other.
Because this practice can lead to inequality, something which will destabilize a society and start separating people into classes again, leading a state-like apparatus (ie private defence complex) to be conceived in order to protect the haves from the have-nots.
Money is also an archival of economic power and the hoarding of it, especially when combined with scarce resources can lead to its increase through renting, wage-labour and interest. Furthermore, even as such a tool, money is flawed as it is not granted as reward to all labour jobs, no matter how critical. For example childraising or housekeeping. In fact it's major flaw is that it rewards labour that may be about creating luxuries rather than labour that is about creating necessities for humans.
In fact, money has many shortcomings.
You can do that just fine without money. In fact, you can probably do it better and less stressful within a communist society as you do not have to worry about someone gaining more than you simply because he's in a better economic position that you.
So you seem to be saying that I can exchange voluntarily without money, but that even without money, such exchange-based transactions are worthy of scorn since they lead to some power imbalance, and thus ought to be avoided. Which is it?
I do not say that exchange-based transactions are worthy of scorn. I am saying that only those that can leave to power imbalances are worthy of scorn.
For example, you allowing me to borrow your car for a day and then making it up to you by making you a good meal would be just dandy.
But doesn't my ownership of said car put me in a position of economic power over those who don't have a car, but would like to use one?
It is exactly because it might lead you to such a position, where we to allow trading in economic power (ie money) that I claim that it shouldn't be happening. As such, if people wanted to borrow your car, they would use some trading which would not allow you to accumulate more power through it. Trading such as making you a meal or somesuch.
The idea is that some kind of scarcity will always exist, but we should find ways to avoid turning this scarcity into a way for people to have power over others.
an interesting proposition, to say the least.