How free speech makes us richer
Is it too much to point out that “free speech” nominally empowers the spread of Marxism and related economic errors?
Note that the author struggles with whether speech should be restricted rather than what speech should be restricted by arguing that empowering a certain set of speech acts, e.g. scientific exchange, “makes us richer.” I have yet to see the outrage at restriction of alchemists from university chemistry faculties. One can acknowledge simultaneously that empowering certain speech acts makes us richer (advocacy of entrepreneurship) while restricting or dis-empowering other speech acts (e.g. advocacy of Marxism) prevent us from becoming poorer or murdering each other.
The majority of what is called a “loan” today has nothing to do with lending. Lending involves the giving of something and receiving that same thing back in return. I can loan my pen to my friend, but I cannot lend my sandwich qua food to him. With the previous post in mind, let’s break it down.
A loan contract involves transferring the use of something to another party while maintaining ownership. It establishes the rights of the borrower to make use of the object without providing the right to dispose of the being of the object. At the end of the contract, the borrower is obliged by the ownership of the lender to return it to the possession of the lender and consequently return the use of the thing.
A contract that is analogous to a loan but specifically different transfers the use and the thing itself to another party. In return, the receiving party gives the promise of return of the thing in kind rather than the thing itself. This transfers the ownership of the thing to the receiving party while granting the former owner the authority to demand a return in kind.
These are essentially different terms in that they establish formally different systems of rights, obligations and authority. In the loan contract, only use is transferred where the lender maintains his authority over the object as his property, relinquishing for a time authority over its use. In the second contract, the former owner transfers the ownership of thing itself, both use and being, to the recipient in reception of a promise of a return in kind. This second contract is a mutuum contract, rather than a loan.
We might consider the slightly different contract, where instead of a promise a claim against property some property is given. This property acts as collateral backing the original promise to return in kind at the end of the contract. The authority that is established is that the former owner can take the collateralized property as a return in kind if necessary. However, this again is essentially different from a loan strictly speaking, but is analogous in that it is a return in kind.
“[I]f we buy stock of XYZ, we pay cash and receive the stock. Some time later, we sell the stock and receive cash. This transaction is lending, in the sense that we pay money today and receive money back in the future.” – Robert McDonald, Introduction to Derivatives 2nd Edition, emphasis from original
Contracts are defined as agreements that bind parties by some system of rights and obligations. Materially a contract consists in rational parties. A non-rational creature or child cannot even be the subject of a contract. Formally, a contract consists in the terms of the contract which define the particular system of rights and obligations. A contract of marriage and of exchange may be materially the same, that is involving the same parties, but they formally differ in the rights and obligations that the contract establishes.
Contracts of exchange are a species of the genus of contract. They formally include the exchange of some property and thus materially involve property of some sort. Now consider a particular sort of exchange contract namely a derivative and more specifically a call option.
A call option gives the owner the right to buy the underlying asset of the contract at a certain price at a certain time. The writer of the option has the obligation to sell the underlying asset at the agreed price at the agreed time if the owner decides to exercise the option.
Now in general, if the option is exercised, the underlying asset is not actually exchanged, but rather the difference between the strike price and the actual price is paid according to the conditions of the contract. This arrangement is formally different from a call option as defined.
In a call option, the terms of the agreement allow for the property itself to be exchanged at a given price. In this analogous call option, there is a payoff of money differing from the underlying asset based on the difference between the strike and actual price. The call option formally gives right of exchange for a particular asset, whereas the second contract provides a payoff based on the current price of the asset, where the asset itself is never exchanged.
The second contract takes on the character of a type of insurance contract that is based on the contingency of differing prices at some point in time, whereas the call option provides rights for exchanging property at a particular point in time and a particular price. The second contract is an exchange of property based on some underlying asset whereas the first is an exchange of the underlying asset. This can be expanded to the consideration of most sorts of derivatives, such as puts, forwards, futures, etc.
Here is my comment over at Acton:
It seems confusing that the Rabbi at first acknowledges there is something deeply wrong in the American and French Revolutions but then endorse the deep root of American plotics. I think the good rabbi must stakes the symptom for the disease. He focuses on the product of the illness, secularisation, while supporting the illness itself, the problem of authority emphasized in the quote about the state and people and who serves who.
The problem of authority produces the secularisation of which the good rabbi is forlorn. The nominalism of medieval Europe was the seed the liberated messy human discourse from being bond to reality.
This came to fruition in Protestantism where the messy authority of the Church was rejected for the Scriptures alone. This developed further as Hume and Kant denied metaphysical knowledge and the positivist dog our day made science the sole Magesterium binding reality by human thought.
In politics, the liberation begins in part in seeing the just powers of the state proceeding from the governed rather than the common good which binds the community in friendship. The liberty, equality and fraternity are the pinnacle of this in the French Revolution in the mass murder of priests and nuns. In making political freedom the reason for political authority, it becomes incoherent at its core.
An aspect of this is freedom of religion with empowers believers equally and thus restricts all to the claim of superiority. The consequence is the freedom of religio is a cause of indifferentism and agnosticism so it is no wonder that secularism increases, but the root is an incorrect understanding of political authority.
Culture and morality follow as Christianity is restrict and indifferentism is promoted and encourage by Christians. The difference between believers and the freedom from religion crowd is they believe their faith is true and good for Society and insist that it be enforced at least public ally.
It is doubtful that the West will see a renew of faith so long as we are committed to Liberty and if there is it will be for naught as long as we confuse Liberty with our faith.