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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Wednesday, February 02, 2005

Artificial Scarcities

Stephen Kinsella argues that the "point" of intellectual property rights is "exactly to artificially create scarcity"; Kinsella also applies the artificial scarcity argument to protectionist "fair trade" rules. He developed the same theme in regard to "intellectual property" [sic], at greater length, in an earlier article.

We mutualists apply this principle much more broadly. Tariffs and "intellectual property" were only two of Benjamin Tucker's four monopolies. The state's enforcement of the money monopoly and absentee landlordism, he pointed out, also created artificial scarcities. Through its banking laws that created market entry barriers for suppliers of credit, the state created an artificial scarcity of capital and enabled capitalist banks to charge a monopoly rent on the supply of credit (i.e., usury). By enforcing titles to land not founded on occupancy and use, the state enabled landlords to charge monopoly rents as well.

Of course, Tucker under-emphasized the role of scarcity rents that were not enforced by the state. Such scarcity rents might accrue, over the long run, to providers of goods in inelastic suppply (like producers occupying land with superior fertility and location, or dealers in rare works of art). And they might accrue, temporarily, to those favorably situated within the margin of production (what the Austrians call "entrepreneurial profit").

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