August 21, 2017 at 12:46 pm #537
AnCom & Entrepreneurship
Below is an offshoot of a conversation with @jacob and @empifur (both representing AnCom). I think a specific economic ‘blindspot’ for AnCom is the lack of a theory of entrepreneurship. This post is looking to explore this… There are just two AnCap questions below, one at the end of each section (for anyone interested in responding).
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AnCom Claim: ‘Usury’ is the activity of ‘charging’ for using a ‘capital investment’ (or ‘capital good’ such as a bread machine) that the person who ‘owns’ (at least in their own eyes) the capital good charges another person for using that capital good. The reason usury is ‘wrong’ is that the person who brings a bread machine into existence makes money without putting in any work.
AnCap: Isn’t there work involved in bringing a bread machine into existence?
AnCom: Yes, of course.
AnCap: Isn’t this worthy of compensation in the eyes of AnCom?
AnCom: Yes, of course.
AnCap Question #1: In bringing the bread machine into existence, what part of it’s creation is worthy of compensation? Is it just the hours spent working on it, or is there anything else they contributed in the process of bringing the bread machine into existence that is deserving of compensation?
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AnCom Claim: AnCom believes that an absentee landlord steals from tenants who live on (and/or work) land which the landlord holds title to because the landlord does nothing in exchange for rent other than refraining from ejecting the tenant from the land they hold title to.
AnCap: I just want to double check that the word ‘nothing’ is correct in the above? (AnCom does not believe a landlord does anything in exchange for that rent?)
AnCom: No landlord (or anyone, for that matter) ‘can’ do anything in exchange for ‘rent’ because ‘rent’ is/are the fees paid in exchange for being loaned the use of capital that one has already accumulated in the form of land or a house or a bread machine.
Now, of course, a lot of landlords today charge not only this ‘rent’ described above, but also for ‘the effort to maintain the property’. Colloquially, we call both of these fees together ‘rent’.
AnCom asserts that charging ‘rent’ in the former sense is not okay, but providing a service in exchange for capital is acceptable (i.e., ‘rent’ in the latter sense).
The relationship between an absentee landlord and a tenant can’t conceivably be a ‘free’ exchange because the landlord has only ‘profit’ on the line, and the tenant has their ‘housing security’ on the line.
AnCap: What does the landlord use to pay for the landlord’s own ‘housing security’ if not the ‘profit’ from renting the resources? (Aren’t they both putting their ‘housing security’ on the line, thereby making it plausibly voluntary, or no? Why/why not?)
AnCom: Well, presumably, if the landlord is able to rent out a property, if their lack of profits actually got to the point of endangering their ability to keep a roof over their head, they could kick the tenants out and live in their property. The landlord undeniably has more options than the tenant. Beyond that, if nothing else, the landlord/tenant relationship is one engendered definitionally by virtue of the landlord having capital and the tenant having at least less if not none, and, by virtue of nothing but that inequality, the landlord extracts money from the tenant.
Where AnCom and AnCap part ways is in the belief that landlords deserve compensation specifically for allowing people to live on land that the landlord claims to ‘own’ (or allowing people to use a bread machine they ‘own’). It is this ‘appeal to property ownership’ to defend compensation that AnCap accepts while AnCom rejects it. However, both accept the ‘appeal to useful labor’.
I know of no way of disentangling the two sources of income (the part given as payment for labor and the part given as fee for using property).
In today’s world the income property owners gain from ‘entrepreneurship’ is only a fraction of their total income, while most of their income is a result of their claim of ownership over various resources.
AnComs believe that without legal and social recognition of private property, people could only gain an income by trading useful labor (or the product of their labor) for the same.
AnCap: What exactly is ‘entrepreneurship’?
AnCom: ‘Entrepreneurship’ is ‘People who are willing to take a risk on something new that might not pan out but which, if it did, would help the community’. Furthermore, in AnCom, there would be a ‘safety net’ that ‘people who are willing to take a risk’ could fall back on — they wouldn’t have to worry as much about whether a good idea is also capable of allowing them to make a living.
AnCap: If the ‘safety net’ of AnCom eliminates the ‘risk’ to an individual of trying something new, would it be accurate to say that there isn’t really ‘entrepreneurship’ in AnCom since ‘willingness to take a risk’ is a defining characteristic of ‘entrepreneurship’?
AnCom: AnCom might dampen entrepreneurship, but it certainly does not eliminate it. While some ‘risk’ is inherent in entrepreneurship, ‘risking your ability to continue living’ is not inherent in entrepreneurship. Simply because the specific risk of losing the ability to continue living isn’t present, it does not follow that there is no risk in AnCom.
AnCap: What, then, is the ‘risk’ that the community enables one to take?
AnCom: One risks burning ‘social capital’ – one would ‘lose face’ (or reputation) if one’s venture failed, and the community would be less likely to allow one to engage in new ventures in the future.
AnCap Question #2: So the risk inherent in entrepreneurship is dampened (but still exists) in AnCom. What is the incentive to be entrepreneurial (and/or innovative) in AnCom?
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