Additional Definitions and Distinctions

See also Robert Anton Wilson and Robert Shea’s Definitions and Distinctions.

1. State-enforced artificial scarcity

Scarcity created or exacerbated by the state. Scarcity raises prices. Natural scarcity results from genuine material costs of production (affecting both effort and raw materials) and from natural, material limits on the replicability of goods. Natural scarcity is unavoidable. Artificial scarcity obtains when access is constrained even when a good is naturally abundant. It can only be created by actual or threatened aggression—the state’s métier. When the state engrosses land and thus keeps it from being homesteaded, when it limits access to health care by enforcing licensing requirements, when it limits access to land by enforcing zoning rules, or when it enforces “intellectual property” rights, it makes things more scarce than they would otherwise be, and thus more expensive.

2. (Artificial) property rights

Putative property rights created by fiat. There are good reasons, on multiple theories of property, for people to control their own bodies and the physical objects they acquire through voluntary transfer from others or which they homestead. The rights they exercise in these cases can be regarded as “natural” (even if there’s an important sense in which someone might see them as rooted to some extent in convention). Natural property rights result from natural scarcity: they flow directly from the actual, material possession of finite, rival goods. Defense of these rights is entailed in the very act of possession. By contrast, artificial property rights are rights established, not by homesteading or transfer, but by actual or threatened violence—by theft (as in the case of the enclosures) or engrossment, for instance, or through the creation of “intellectual property” claims which give one person or group claims on the justly acquired property of others. Artificial property rights require the creation of artificial scarcity, and require the invasion of others’ natural property to enforce.

3. Entry barrier

An institutional factor that limits access to a given market by imposes capital outlay requirements or raising overhead costs over and above the material requirements inherent in the production process, thereby artificially lowering the number of competitors, rendering the production process artificially less efficient, and raising the returns to those allowed to participate in it. An occupational licensing rule, for instance, is a barrier to entry into a given occupational market. Entry barriers not only lower the intensity of competition within an industry and enable oligopoly pricing, but also artificially increase the ratio of factor inputs to output, and thereby inhibit the natural deflationary effects of technical progress.

4. Cartel

A group of firms seeking to cooperate to boost profits by minimizing price competition among themselves and excluding potentially competitive new entrants from the market or markets in which they function. Realistically speaking, it will consistently be tempting for a firm participating in a cartel to defect from the cartel by underselling other cartel members, thus boosting its profits and reducing theirs; it will also be tempting for outsiders to challenge cartel arrangements—as, for instance, in virtue of the opportunities competing with cartelists with high profit margins might present. Thus, in the absence of a monopoly maintained by force or substantial social pressure, a cartel arrangement is likely to be unstable.

5. Monopoly price

A price charged in virtue of monopoly status. A monopoly occurs when a firm or a group of firms operating in a given market forcibly exclude other entrants from the market. While forcible exclusion is itself unjust to those excluded, a monopoly is also problematic for at least one other reason (there are doubtless more): a monopoly enables the seller to target price to the buyer’s ability to pay, and thereby distribute just enough of the benefit of technological progress to the buyer to make it worth her while to buy a new good or improved variant of an old good. The seller is able to appropriate the rest of the advantages of progress—as opposed to the natural state of affairs in which equilibrium price reflects the cost of production rather than the buyer’s ability to pay, and market competition quickly distributes all the fruits of progress to society at large. The maintenance of a monopoly is thus persistently disadvantageous to consumers.

6. State-enforced monopoly price

A price resulting from a monopoly maintained by the state. A private firm can, in principle, maintain a monopoly by forcibly excluding competition itself. But the maintenance of a monopoly by the state is advantageous for a monopolistic firm for several reasons. Most importantly, while a firm forcibly excluding competitors from a given market is easy to identify as a nakedly self-interested aggressor likely to be resisted by force and publicly shamed, the perceived legitimacy of state action makes it possible for the state’s maintenance of a monopoly to seem like a way of serving the public welfare, whether the maintenance of the monopoly is driven primarily by ignorance on the part of state actors or by their active collusion with firms in search of monopoly profits. In addition, because the state’s activities are funded by taxes, a firm can externalize the cost of maintaining its monopoly status on to taxpayers.

7. Corporate welfare

Direct or indirect supports for businesses’ incomes offered by the state. Direct subsidies are the most obvious example, but anti-competitive measures like tariffs and other import restrictions, licensing and accreditation requirements, and “intellectual property” privileges might also be thought to qualify as instances of corporate welfare in a more extended sense.

8. (Genuine) free market

A market freed—liberated—from systematic forcible interference with just acquisition and free exchange. The most obvious such interference is the network of taxes, regulations, and privileges maintained by the state; widespread interference by non-state actors—organized crime families, for instance—could also render a market unfree.

9. Absentee landlordism

A set of social arrangements featuring continued ownership of land by someone who does not personally occupy and use it for the purpose of renting it to others; regarded as illegitimate in at least some cases by proponents of personal-occupancy-and-use standards for determining when justly acquired land has been abandoned. Even in a society in which occupancy-and-use standards weren’t enforced, there might well be significantly less absentee landlordism absent various impediments to becoming an owner are removed as state-secured privilege is eliminated.

10. Full product (of labor)

The full amount to which a worker is entitled for her work—likely to be denied to her if forcibly secured privileges require her, in effect, to pay tribute to the holders of monopoly privileges.