The Disposition of Property Under Market Anarch

The Disposition of Property Under Market Anarchy

I have heard a lot of opining about how property is to be handled under market anarchy. Most of this discussion centers on how one acquires property legitimately in a free society, how to protect such property, how intrusions on ones property should be addressed, etc. Scarcely have I heard, dare I say never, any mention of how property should be conveyed at death. That is, when a property owner dies, what should happen to his property?

The most straightforward answer is that, well, clearly, the decedent (dead property owner) should convey all of his assets through testamentary disposition, e.g. a will. This answer is crystal clear, but the issue gets somewhat foggy if one asks a very obvious question: what if the decedent is intestate, i.e. he has no will?

At common law, the emphasis has always been placed on the biological relations of people when conveying property at death. It was a legal philosophy obsessed with blood: it wanted a decedent's property to end up in the hands of his blood relatives. Love it or hate it, this clear line of distinction about where your property went resolved a lot of problems. The state simply declared that upon your death all of your assets would be conveyed to your sons, daughters, brothers, sisters, nieces, nephews, etc. If the state could not find anyone to give your property to within your bloodline, the state would grant itself your property.

Today, most, if not all, states in the United States still have such a system in place. If you die intestate, your property passes through your state's law of intestacy, which generally means it goes to your spouse and your blood relatives. If the state has trouble finding the decedent's heirs, it will go up the ancestral line, and locate a consanguineous heir. If all else fails, the state does what it does best: it claims the property for itself.

The problem facing market anarchists concerns how property should pass in the absence of a will. Simply, if a man dies with property and has devised no document dealing with its disposition at his death, what is to be done with said property? Surely the answer is not to adopt the government's current practice and convey it to blood relatives. After all, what makes blood relatives so bloody (excuse the pun) special under property rights properly understood? Well, nothing. There is no reason to assert that property rights demand the conveyance of ones assets to blood relatives at death.

There are a few possibilities to remedy this situation in the absence of the state.

It could be that each business would form a contractual relationship with its customers, especially in the purchase of large products like a car or refrigerator, wherein each particular product would have its own method of conveyance if the decedent is intestate. The forces of economic law would engage to serve consumers as well. If consumers desired for their property to be conveyed a certain way, they could very well alter their purchasing decisions to reflect their preference for a certain method of property disposition. Thus, if Company A is competing against Company B and their products are similar in every way except the method in which property is conveyed at death, the company with the more preferred method would tend to draw consumers away from its competitor and to it. The result being that either the rival company adopts a different method (perhaps the same one as the other company) or the rival company eventually goes out of business.

The most obvious and economically sensible approach for a company to take is to make it clear when the customer purchases a product that the item will revert to the company should the customer die intestate. This option gives the various companies an incentive to collect their property (if it's profitable to do so): the property could be resold, scrapped for parts, etc.

Another method under a truly free market could be through the use of insurance. In the insurance contract, the insurance company could have a clause that says how property is conveyed at death if the insured dies intestate. The contract could be narrow and cover only the property which is directly insured, or it could be broad and cover much more than that. For example, if you have insurance on land, the insurance policy could have a broad clause that conveys all property on that land should the insured die intestate.

If all else fails, there is also the possibility that entrepreneurs will spring forth in the free market to resolve the unforeseen. At worst, the decedent's property could be treated as unused and unowned, opening an opportunity for it to be homesteaded once more. At first glance, this may seem chaotic, as it could encourage a run on the decedent's property: first come, first serve. However, businesses specializing in the disposition of a decedent's assets could arise to make the process much more smooth. If Tom dies intestate and has land, a house, a car, and other personal items, the Intestate Disposition Firm, for example, could handle the allocation of those assets to buyers by hosting an auction.

What if these firms fight over who gets to auction off the property? Well, consumers would tend not to reward such activity. If firms fight over the now unhomesteaded property, it could damage the property (destroying value) and scare away potential buyers. The firms that want to maximize their profit will have an incentive to auction off the property peacefully, as those who do so violently would be at a comparative disadvantage: the violent firm would get less for damaged property in a sale and would perhaps even need to discount further to entice frightened consumers into purchasing from them. So, in the aggregate, the peaceful firms will tend to push the violent firms out of business as consumers patronize them more relative to the violent firms, and the violent firms will tend to destroy value in the process of aggressing against one another. It could also be assumed that the peaceful firms would set up some customary business arrangement that helps determine which firm proceeds with the auction. The case may be that the geographic location of the decedent's property helps in this instance.

One final issue worth mentioning is conflicting conveyance schemes. For instance, if Tom has an insurance policy that conveys the same piece of property that another, independent contract also conveys, how is it resolved? Well, the method that is flexible enough to cover the strangest situations is to allow dispute resolution authorities to resolve it and formulate a solution for each individual case. If there are conflicting claims to the property, an arbitrator would have to be called in to resolve the dispute. The conflicting claims would have to be analyzed, and the arbitrator would operate in much the same fashion as he would resolving more ordinary disputes between people on the free market.

In sum, freedom works, like always, in resolving even the most mindbogglingly complicated situations.

Posted by Nathan at 2:42 AM Labels: Anarchism, disposition, free market, Libertarianism, Property Rights, testate, will