Even if you assume that it’s moral to pass anti-trust legislation (which it isn’t), the LL nationalisation took place after the privatisation. You can’t argue that is equivalent to LLC legislation, which is in place at the time the transactions take place between the LLC and the creditors.

MCMC,

“A ‘right’ is a moral principle defining and sanctioning a man’s freedom of action in a social context” according to Rand – and the only way your argument is valid is if you concede that morality is subjective, & determined by social convention.

“Loss of assets on terms you didn’t agree” is theft.

…just isn’t true. Duncan tries to argue from a first principle that in reality isn’t a first principle at all. Property regimes are a social relation that reflect the culture of the society in question, the historical contingencies that led to particular regulatory outcomes, and the political interests of the present population.

Bingo. So therefore the ability that directors have to liquidate a company (resulting in the loss of assets to creditors on terms they didn’t specifically agree to) is theft and therefore immoral in your book.

Neither that situation or the Telecom situation sees the injured party actually sitting down and signing or agreeing verbally to any such terms. They just happen to be a reality of the market if you get into a particular situation. If you don’t rely too heavily on that situation not occuring for your income it probably won’t hurt you much, if at all. If you do then that’s essentially poor risk-management on your own part, considering such risks are clearly there if you care to look.

Either way, you’ve essentially stood up and said that both anti-trust laws and and limited liability companies are amoral in their current form and should be got rid of in the search for Marketopia. I think that leaves our positions sufficiently distinct and people can choose between them as they see fit.

“Loss of assets on terms you didn’t agree” is theft. Theft is immoral. Telecom lost assets on terms to which it did *not* agree when the Government nationalised the LL. The Government *stole* the LL from Telecom.

We are most certainly *not* in agreement on point one.

Again, I don’t see the point of difference.

Essentially what you’re saying here is “LLCs are different because you should know you’re taking a risk by trading with one”. The fact that monopolies attract regulation is hardly an arcane or mysterious fact to anybody in business, Duncan, and anybody in the telecoms business doubly so. Again, we’re going in circles. There are two possible positions here:

* Loss of assets on terms you didn’t agree is acceptable if you took a calculated and easily forseen risk by trading in a certain area of the market which attracts that particular risk.

* Loss of assets on terms you didn’t agree to is not acceptable in any circumstance.

We’re either in agreement on the first position or you’re going to have to shift your position on LLCs.

Saying that Telecom should have been prepared for the possibility of nationalisation, knowing it was buying an ex-State monopoly is a little like saying that I should be prepared for the possibility of being mugged when I leave the bank with cash.

Sure, I am aware of & prepare for that possibility – but that doesn’t excuse immoral behaviour on the part of the mugger.

This is an entirely different state of affairs to dealing with an LLC company: the rules are laid out clearly beforehand, and both parties agree to the transaction.

Right, and there’s the rub. You extend credit to an LLC you should do it knowing that you run the risk of losing money should the company be liquidated. You buy a telecoms monopoly at a knock-down price and with the offer of “good faith” in dealings with potential competitors and you take a risk that you are going to be judged a monopolist that is not acting in good faith unless you’re very careful. It’s not like the Bell breakup hadn’t already happened when Telecom was sold off, any buyer should have been well aware of the potential consequences of abusing a vital monopoly – particularly a telecoms one – in the long term.

Essentially what we’re discussing here is risk. Telecom took a clear and visible risk throughout the 90s and 00s with its strategy towards its monopoly position and the spectre of regulation. Even as telecoms monopolies overseas were having their local loops opened up to competitors, Telecom took the gamble that this would not happen to it. This has not been the case everywhere – other telcos have opened up voluntarily, or decided to split their separate functions into separate organisations with no tightly-knit relationsips.

If they were overly concerned about the impact on their asset then they could have sold it at the time, monopoly intact, to somebody willing to take that risk. They didn’t, because they were making a shitload of money by rorting the country.

In both circumstances we’re talking about a sustained, voluntary policy of taking risks – you extend credit to an LLC you do it on the assumption that you’re going to get something that makes the risk worthwhile. Telecom took their risks in a similar manner – they believed that they were going to get away with it, and that they could continue charging prices well in excess of those seen in truly competitive markets.

Essentially what I’m saying here is this:

* There are certain legal circumstances (trading with an LLC is one of them, operating in a monopoly position is another) where you run the potential risk of having your assets taken from you without the ability to choose the level of remuneration.

* In these situations the individuals in question have the ability to choose whether or not they wish to operate in this position. Their investors have the choice as to whether they want to invest in a business with this risk profile – if you invest in a business that has extremely larged debts to a single unstable LLC then you should probably be worried. Likewise if you invest in a telecoms monopoly that is one of the last in the OECD to escape LLU then you should factor this into your investment decision.

* If they get burned by betting on the wrong horse then that’s neither a world-shaking event nor the collapse of civilisation. It’s just one of the many ways in which property rights get toned down slightly to ensure we can enjoy a more favourable marketplace to trade in.

Here’s the thing – property rights start to become somewhat meaningless once you start allowing nebulous concepts to own property, and for those rights to be destroyed in an ad-hoc manner rather than transferred. By treating an LLC like a person in terms of its asset ownership you start to undermine property rights, because you create an environment where property rights can be destroyed without a person dying – it therefore becomes a considerably more everyday and deliberate option. The problem is that the LLC is like a person who can re-incarnate at will – essentially it’s possible to “commit suicide”, shed your negative asset position and walk back into society clean while other people are forced to pick up your debt. If that’s not a violation of your concept of universal property rights then I don’t know what is.

Debts are owed by the LLC, *not* by the owners, so in the case of liquidation only assets owned by the LLC can be used to repay creditors.

Those interacting with an LLC do so voluntarily, knowing that they cannot attempt to recoup any losses from the assets of the owners of the LLC.

I don’t see how this is in any way equivalent to the nationalisation of property? Or have I totally misunderstood your argument?

Telecom tried to game the system. They lost. Now we have you and the Libs rabbiting on about property rights while ignoring the fact that the exact same result occurs on a daily basis in LLC liquidations – individuals and companies lose their right to set the rate at which they dispose of their property. You either need to stand up and say that property rights are inviolable by any act of government or not, but you can’t have it both ways. This is a very reasonable and necessary piece of regulatory action well in line with what has been done overseas in the telecommunications sector.

I think the reason you’re hand-waving over this one is that the LLC is clearly necessary in modern business and that a goodly portion of our business activity would not happen without the protection it affords. You’re therefore standing in line to look like quite the wingnut if you actually take a consistent position on this point.

Telecom owned the local loop – the LL was its property.

In buying the LL it was no more choosing to gamble with the possibility of future nationalisation than I, in buying a car, am risking the former owner coming back & siezing the car by force. Sure, it’s a possibility, but one that is a violation of my rights.

Telecom *has* had its property nationalised – in the same fashion that private property is nationalised through legislation like the RMA. Simply put: if you don’t have the right to dispose of your property in the way you see fit, then it isn’t (solely) your property any more.

Finally, losing money due to nationalisation has nothing do to with the free market; it is a consequence of Government interference, specifically, of Government theft. If a storekeeper lost money through shoplifting, would you blame the market for that?

In both circumstances you have a voluntary choice whether or not to do business in that particular area of the market – whether by trading with a particular LLC in the role of a creditor or by trading as a monopoly telecommunications provider. Some LLCs fall over with very little warning to their creditors. Telecommunications regulation is an existing fact of the market and has been for decades.

Both situations are a gamble. When you extend credit to an LLC you risk losing your property should that LLC go into receivership. When you play chicken with government regulation over a dominant position in the marketplace you similarly take a significant risk should you turn out to have miscalculated.

Property rights are not, as you seem to be suggesting, legally inviolable in other circumstances – the everyday process of LLC liquidation quite specifically strips people of their rights to particular property, and has been used considerably more maliciously in the past than the regulation there is so much squealing about here today.

Now, as it stands, Telecom has *not* had its property nationalised in any way. The local loop remains the property of Telecom, but regulation is being imposed that controls the access other companies have to that property. Telecom will still be receiving fair compensation for this access, but they’ve just put themselves in a position where they no longer get to choose what that compensation is.

As for the damage to their share price, Telecom gambled by operating on the assumption that they could continue rorting New Zealand and clearly owning shares in the company conducting this rort is a favourable position to be in. Once it became clear that competition was going to return to the market naturally some investors took the opportunity to assess the actual competitive ability of Telecom to serve its customers and put their money elsewhere. That’s just the free market for you, the previous inflated price was merely a function of an existing monopoly position, not a demonstration of confidence in Telecom.

Yes. And once they bought it, it became their property. Nationalisation, however, is involuntary – it was forced upon Telecom by the Government.

There is a fundamental difference between nationalisation of property, and loss of property through the failure of a LLC.

Interaction with an LLC (and especially investment in an LLC) is voluntary.

E.G

(1) Get a list of the top n New Zealand companies required to make up a total value of ~ 50 billion dollars.
(2) Dissolve the current ownership and turn those companies into SOEs. Appoint skilled public sector managers to competantly manage the new SOEs (they do exist).
(2) Take that capital in the form of shares, and redistribute it to each person in NZ over the age of 18 (or another age). 20 billion / 3 million people =~ $17,000 each.

Outcome:

(a) The capital is still managed well (by the competant public sector managers) and hence the performance of those companies is at or around what it is with private ownership.
(b) You only really hurt a few of the richest people in and outside of the country. Who cares? Besides, it’s not really “hurting” them anyway because they’ve all got so much money.
(b) We all get $17,000 each. Hell yeah.

How is $17,000 each not beneficial for society?

The financial benefits of LLU are ridiculously small in comparison. That’s why I’m against LLU – not because it doesn’t make sense, but because we could do so much better!

One that an old lecturer of mine used to use was SCUM (society for cutting up men) which existed in the 70’s or an hypothetical Pro-rape movement.

Better get up there quick, chop chop!

I’d be rather surprised if they did. I’d wager that a more common day-to-day occurance in terms of the loss of private property is having it consumed in liquidations of limited liability companies, a circumstance where your normal market exchanges of value become rather moot – if you don’t get your dosh back from the liquidators you’re fucked, and any goods or services you delivered to said company have effectively been seized without payment.

It’s quite possible as a director of a company to run up enormous debts in your day-to-day transactions with other people, come out of it with a big pile of assets and a bigger pile of debts and then get the company liquidated. Some of the dodgy buggers even set other companies they control up as secured creditors and transfer all the valuable assets out, leaving the shell of the company and the debts remaining for the real creditors.

The individuals who owned these assets then get back little to nothing of the fair and free exchange they had agreed to.

This happens every day, and I’m sure has historically resulted in a considerably larger loss to individuals and businesses than this rather unique Telecom decision has done.

How many of you would be willing to argue that limited liability companies are an attack on a free and fair marketplace? They certainly have their role and they help promote risk-taking which in turn assists economic growth in New Zealand. But they certainly do regularly result in individuals effectively having their property or works taken away from them without payment, or any ability to pursue said payment in future. It strikes me as a rather similar situation – we sacrafice some of our rights to control our property in return for having a more prosperous and successful country and economy.

See Hate Speech Is Free Speech for a thorough treatment of hate speech – “… we must recognize that the attempt to criminalize hate is not only immoral, it is also impractical. For freedom will always include hate; progress thrives in a crucible of intellectual pluralism; and democracy is not for shrinking violets.”