Curt Doolittle

Theme: Property

  • FAMILY MEMBERSHIP IS NOT A PRIVILEGE – A PRIVILEGE IS A GRANT BY THE STATE A pri

    http://www.angrybearblog.com/2012/05/web-of-privilege-supports-this-so.htmlA FAMILY MEMBERSHIP IS NOT A PRIVILEGE – A PRIVILEGE IS A GRANT BY THE STATE

    A privilege is something granted by the state. He has no such privilege. Instead, it is indeed lucky that one would possess genes and membership in a family with enough credibility to convey trust to investors, so that they would risk giving you money versus risk giving it to the millions of other unknowns that try to obtain it from them. There is no better form of insurance that an investor can buy than familial trust. And there is no inheritance more valuable to protect than that trust. Because, as you say, there may be no value added by his presence, but then there is no value risked by it either. Since all candidates may in fact provide marginal increase in value, the investor selects a candidate due to loss aversion.

    You [Angry Bear] are not following through to the logical conclusion of your statements (and neither is DeLong, but then he’s a hack). A family demonstrates the trustworthiness of its members. But that isn’t the conclusion you would like us to take from this question. Because that would be an indictment of the lower classes. 🙂

    Source date (UTC): 2012-05-16 10:44:00 UTC

  • Cain And Able On An Island: Justifying Redistribution?

    Interesting posts on Modeled Behavior in response to this post by Bryan Caplan on Econlog

    Suppose there are ten people on a desert island. One, named Able Abel, is extremely able. With a hard day’s work, Able can produce enough to feed all ten people on the island. Eight islanders are marginally able. With a hard day’s work, each can produce enough to feed one person. The last person, Hapless Harry, is extremely unable. Harry can’t produce any food at all. Questions: 1. Do the bottom nine have a right to tax Abel’s surplus to support Harry? 2. Suppose Abel only produces enough food to support himself, and relaxes the rest of the day. Do the bottom nine have a right to force Abel to work more to support Harry? 3. Do the bottom nine have a right to tax Abel’s surplus to raise everyone’s standard of living above subsistence? 4. Suppose Abel only produces enough food to support himself, and relaxes the rest of the day. Do the bottom nine have a right to force Abel to work more to raise everyone’s standard of living above subsistence? How would most people answer these questions? It’s hard to say. It’s easy to feel sorry for the bottom nine. But #1 and #3 arguably turn Abel into a slave. And #2 and #4 clearly turn Abel into a slave. I suspect that plenty of non-libertarians would share these libertarian moral intuitions. At minimum, many would be conflicted. Yet bleeding-heart libertarian Jason Brennan doesn’t seem conflicted. At all. He begins by quoting one of his earlier posts:

    Imagine that your empirical beliefs about economics have been disconfirmed. Imagine that a bunch of economists provide compelling evidence that life in a strictly libertarian polity would go badly. Imagine that they showed conclusively that if people everywhere were to live in a Nozickian minimal state or a Rothbardian anarcho-capitalist civil society, with everyone strictly observing property right rules, that 10% of people would starve (through no fault of their own), 80% would be near subsistence (through no fault of their own), and only 10% would prosper. However, imagine that they also show that in a liberal social democracy with significant redistribution or social insurance, most people would prosper, just as many people living in such welfare states are doing pretty well right now.

    In a followup, Brennan adds:

    If you are a hard libertarian, you respond to this thought experiment by saying, “Well, that’s too bad things turned out that way. But, still, everyone did the right thing by observing property rights, and they should continue to do so.”… If you have at least some concern for social justice, you respond by saying, “If that happened, that would be strong grounds to change the economic regime. In that kind of society, it’s unreasonable to ask people to observe the basic institutions and rules. They have a legitimate complaint that the rules works as if they were rigged against them. Perhaps we’d need to tweak property rights conventions. Perhaps we’d even need some sort of redistribution, if that’s what it took.”

    This is a good example of what puzzles me most about bleeding-heart libertarians: At times, they sound less libertarian than the typical non-libertarian.* I’m not claiming that the “hard libertarian” intuition is certainly true. But in a thought experiment with ten people, the hard libertarian intuition is at least somewhat plausible. And once you start questioning the justice of the islanders’ treatment of Able Abel, questions about the justice of the modern welfare state can’t be far behind. Needless to say, bleeding-heart libertarians usually sound a lot more libertarian than the typical non-libertarian. Yet this just amplifies the puzzle. Unjust treatment of the able may not be the greatest moral issue of our time. (Then again…) But unjust treatment of the able is a serious moral issue. And it’s a serious moral issue that mainstream moral and political philosophy utterly ignores. My question for bleeding-heart libertarians everywhere: Why don’t your hearts bleed for the able slave? * The most egregious example is Andrew Cohen’s musings on parental licensing.

    Lets extend the Parable a bit: If Able needs to wear a shirt to get into a store, that’s an exchange. Cause and effect. It is a cost of entry. If Able needs to respect property rights to participate in the local market. That is a price of entry into the market. If Able needs to respect manners, ethics and morals, then that is a price of entry into the group that cooperates — even if their only cooperation is negative: to respect life and property by avoiding theft, fraud and violence. If able wants something that he canot produce, he must exchange something for it. These are all voluntary exchanges. If Able works harder than others, and they take from him, that’s involuntary taking. It’s a theft. If Able works harder than others and others exchange something with him for it, It’s not a theft. It’s voluntary exchange. If others are materially unproductive, and have nothing to trade with Able, then what else do they have? They have status. Status signals increase Able’s opportunity to be even more productive by assisting him in concentrating human capital. With that human capital he can exercise his mind, his abilities and his knowledge further. He can eventually control 80% of the resources simply because he knows best how. And others have voluntarily given that control to him. Status also improves his access to desirable mates. Desirable mates further increase his status. And with that status people who are not productive like Able, will attempt to imitate him. Since, that is the purpose of status in our evolutionary system: to inform others who to imitate. Status is our natural compensation. Status has been our compensation since before we had money, and a division of knowledge and labor. Very likely before we had speech. Perhaps before we were sentient. But wait. Now, what happens in the Parable of the island? Instead, one of the other nine people specializes not in being productive, but in preaching. In preaching redistribution. His name is Cain. Cain makes the argument that it is a moral duty to support the less productive people. Cain offers Job and Lot jobs if they forcibly take from Able in order to fulfill the moral demands of the non productive that Cain has been preaching. Cain then redistributes half of what he takes from Able, and demonizes Able for his reticence. Able is deprived of the status, the future productivity he could create with control of his assets, his influence on the others in making them more productive through imitation, and deprived of the mates he could enjoy. And his genetic legacy is even deprived of the better genes he might capture. Not only is he deprived of these things, but Cain has now stolen that status. Job and Lot have stolen his productivity, and status. This has all been involuntarily transferred (stolen) from Able, in order to profit Cain, for the benefit largely of Job and Lot, and for some symbolic benefit of everyone else. On the horizon are nine other islands. Eight of those islands succumb to the proces of involuntary transfers. One does not. On that one Island Erik is ten times as productive as all the others, and they herald Erik at the quarterly festivals. Erik organizes the other people on his island in exchange for the product of his efforts. Over time, the people on Erik’s island become increasingly more productive, and genetically more competitive. On the other islands, the opposite happens. Because it’s dysgenic. Humans object to involuntary transfers and are highly agitated by them. If the taxes are used for purposes that the productive agree with, then this objection usually disappears. But status is the human currency and money and ‘objects’ are just means of obtaining it. Because in the end, we are just gene factories algorithmically searching by trial and error for better solutions than those we have today. And we cannot alter that behavior. We will simply create black markets. This is the insight of the Propertarians. That human nature is little more than emotions attached to changes in property. On another much bigger island, the Crusoe tribe develops respect for property, but then, afterward Kevin discovers a hoard of coal that can be used for cooking fires on his property. And simply sells buckets of it at high prices to everyone on the island. The Friday tribe wants it very badly and so the Crusoe tribe must defend it. Furthermore, the Crusoe tribe already pays the cost of respecting property by forgoing opportunities for theft fraud and violence. These are a high cost for any society to develop. So, since they pay to defend the territory, and pay for property rights, they see his high prices as an involuntary transfer. The locals object because the resource is part of the island, the product of Kevin’s labors. They are comfortable paying a high price for his labor, but not for the resource, in which by any and all accounts they are shareholders. He’s not actually adding anything of value. He’s just created a toll booth, and an expensive tool booth, in order to gain access to a precious resource. He’s no different from an extortionist. This parable can be extended to answer all moral and ethical questions of politics. The reason for that explanatory power, is that human nature is propertarian in origin. We are property calculators, and our emotions reflect changes in the state of our perceived property. THe primary difference between individuals is just which property we categorize as shareholder, and what we see as individual. But emotions are descriptions in changes in state of individuals’ perceptions of property. We could not have evolved as sentient beings otherwise. It would be impossible. The change in politics over the past century and a half, has been driven largely by the inclusion of women into the work force and the voting system. They have expanded government. They have done so by using the government not to resolve conflicts in priorities, and not to concentrate productive capital, but to redistribute from the productive to the non productive using the artificie of government. The classical liberal model of institutions was designed for farmers heading nuclear families: business owners who participated in the market. But very few people actually participate in the market as business owners today. Most sell effort or skill for wages, or join bureaucracies to seek rents rather than participate in the market and its risk. And the productive class who participates in that market cannot defend itself from the unproductive classes using the institutional model built for egalitarian farmers. So the society polarizes as the factions compete over futures that are diametrically opposed to one another: one which appropriates money without status compensation, and one wich desires status compensation, and control over norms, in exchange for money. Mediterranean, Russian and Slavic men have abandoned their societies because of endemic corruption. i.e., because of Involuntary transfers. The black market won and the society is not impossible to fix. Status signals in southern italy, spain and greed are anti-social. In ireland they’re anti-productive Luddic signals. In the states, vast numbers of hispanic and african american males have developed alternative masculine signals outside of the market and outside of the nuclear family. These signals are spreading to other males who are disenfranchised. Males over 50 are dropping out of the work force (and not voting over 50 and under 34) out of hopelessness. The wealthy abandoned society in the sixties, and have been out of sight since then. We do not even know their names. Many people do not know that they even exist. Their status has been totally appropriated. And they are only members of society in sense that they reside here. You can redistribute money, but not status. Status, not money is our motivator. Society is constructed of a web of signals. otherwise it’s just a mechanical process that we each exploit for our individual benefit.

  • By Dennet’s criteria, property, prices, and the state itself require faith. Any

    http://richarddawkins.net/articles/280FAITH?

    By Dennet’s criteria, property, prices, and the state itself require faith. Any time more than a few hundred people need to take independent action on a collective good, then need to have faith in each other. That faith comes from shared values. The mythical artifice that we wrap around that ‘faith’ is immaterial. Only that we share the myth. Even if that myth is the benevolence of the secular state.

    Source date (UTC): 2012-04-16 14:30:00 UTC

  • LIBERTARIAN, LIBERTARIANISM, BLEEDING HEART LIBERTARIANISM, CONSERVATISM, AND PR

    LIBERTARIAN, LIBERTARIANISM, BLEEDING HEART LIBERTARIANISM, CONSERVATISM, AND PROPERTARIANISM DEFINED

    “Libertarian” refers to sentiment that is expressed as a value judgement which in any political question favors individual liberty, but where the sentiment cannot be articulated in analytical terms, and only articulated as metaphor or analogy.

    “Libertarianism” is a philosophical framework which at the minimum, reduces all political questions to those of property rights and voluntary transfer, but which different factions also include the scope of property definitions, the limits of those rights, the cause of those rights, the justification of those rights as moral or utilitarian, the inclusion of warrantee, the necessity of symmetric ethics, the use of normative or procedural institutions.

    “libertarian’ (small-l- libertarian) is the self-identifying label for the faction of Libertarianism that restricts all questions of politics to a the narrower criteria of several-property and voluntary exchange. (This term has become synonymous with anarchism.)

    “Classical Liberalism” is advocacy for a certain set of procedural institutions that assist in libertarian value judgements: participatory republicanism, a division of powers, a hard constitution, and the rule of law, and restriction on the concentration of power.

    “Bleeding Heart Libertarianism” is an *as yet unarticulated* sentiment that some sort of egalitarian allocation of resources is necessary, utilitarian, or desirable.

    “Conservative” refers to a value judgement which favors organic meritocratic change rather than intentional and planned legislative change, as a defense against the dangers of hubris and corruption.

    “Conservatism” refers to an historic philosophy which favors the priority of procedural institutions over normative institutions.

    “Social Conservative” refers to a bias that favors the priority of normative institutions over procedural institutions.

    “Democratic Socialist” refers to the collective ownership of all resources, and hte lending of those resources to individuals for the purpose of producing collective ends, and income as the reward for service, and the amount of the award to be determined by representatives of the collective. (Democratic Socialist Secular Humanism.)

    “Socialist” refers to the collective ownership of all resources and all means of production, and all human beings, and the organization of production, and allocation of rewards by representatives of the collective.

    PROPERTARIANISM is an articulated set of arguments using an expanded concept of property, and which recommend different sets of procedural institutions that both allow us to explain and compare different political preferences as descriptions of property and transfers. It makes political strategies possible to articulate. In so it justifies bleeding heart libertarianism, and allow conservatives to articulate their political sentiments, which are expressions of the non-procedural normative economy, in rational propertarian terms. This ability to articulate ideas can improve general political discourse by making conservatism, which includes libertarianism, at least int he west, finally arguable in rational terms.

    A PROPERTARIAN is unconcerned with the preference for any institutional combination, only which combination of institutions are possible and which outcomes they can and cannot produce.

    (NOTE: The term “Libertarian” evolved out of Classical Liberalism when the term “Liberal” was successfully appropriated by the socialists, and Classical Liberals sought a new self identifying term that was less victim to appropriation. This term was then appropriated by the anarchist movement despite their narrowing of the scope of the properties of classical liberalism.)

    Source date (UTC): 2012-04-05 13:52:00 UTC

  • Defending Hans Hermann Hoppe On Immigration

    I have to defend Hoppe a lot less frequently these days from passionate critics who don’t understand him, but here is another one. I don’t think I do a very good job really. But I get the discussion started.

    By Garry Ladouceur:

     THIS IS WHAT THIS ACADEMIC HAS TO SAY ABOUT IMMIGRATION-HE IS OF COURSE A MADMAN.

    First, with the establishment of a state and territorially defined state borders, “immigration” takes on an entirely new meaning. In a natural order, immigration is a person’s migration from one neighborhood-community into a different one (micro-migration).

    Is Garry saying that neighborhoods consisting of parcels of private property, or which consist of domicilies that are collectively ‘owned’ by shareholders (a defined community) as a ‘commons’ are a natural order without the existence of a “state”, or without the tribal equivalent that consists of a headman and a few warriors who have been arguably as defensive of resources and norms or more so than states? Where does Gary get his concept of ‘natural order” Is he making the fallacy of primitivism? The noble savage fallacy?

    In contrast, under statist conditions immigration is immigration by “foreigners” from across state borders, and the decision whom to exclude or include, and under what conditions, rests not with a multitude of independent private property owners or neighborhoods of owners but with a single central (and centralizing) state-government as the ultimate sovereign of all domestic residents and their properties (macro-migration).

    Is Gary saying that the state behaves differently than do the tribesman? Because we don’t have much evidence of that. Another mouth to feed is another mouth to feed, and an immigrant’s mouth to feed is not a member of our gene pool to which we have filial instincts.

    If a domestic resident-owner invites a person and arranges for his access onto the resident-owner’s property but the government ex- cludes this person from the state territory,it is a case of forced exclusion (a phenomenon that does not exist in a natural order). On the other hand, if the government admits a person while there is no domestic resident-owner who has invited this person onto his property, it is a case of forced integration (also non-existent in a natural order, where all movement is invited).

    This argument limits the determination of just action to the act of movement, not to involuntary transfers, or their effects on supposed commons. So it’s just false on it’s premise. Groups encourage transport and trade. They always have, regardless of political construct. What they discourage is appropriation of the ‘commons’, and most importantly the disruption of the commons that we call ‘norms’. Norms are highly expensive. More so than property. And we protect them voraciously by instinct.

    Firstly, Hoppe has migrated endlessly.  This means that he is not honest.  I find him a liar.  That is not a good start to developing a teacher taught relationship.  

    Secondly, He is German of the Austrian school.  He speaks of natural order.  He is of course a fascist as well.  He does not speak to the favourite form of immigration in Europe and Europe to elsewhere which is at the point of a bayonet. So in other words he is dishonest.  

    You simply do not understand what Hoppe is saying.

    Hoppe atttempts (and some of us think he has succeeded) in deducing a means of making political judgments by relying upon the single principle of property rights. Property rights are dependent on the principles of avoiding fraud and theft, and prohibiting involuntary transfers. All that’s going on here, like most people who criticize Hoppe, is that you don’t know all the types of involuntary transfer (theft) you advocate with your beliefs. Hoppe has tried make all those ‘thefts’ and acts of violence visible. A Few Definitions:

    Order : any system of human cooperation (avoiding theft fraud and violence) that avoids chaos (pervasive theft fraud and violence).

    Natural Order = natural rotation of elites by voluntary exchange in the market, rather than by military force or political force. (Oversimplified).

    Immigration vs Migration. migration is what occurs whenever a person transfers geographic location without fraud, theft or violence. Immigration is what happens when they PAY for migration. When people immigrate without PAYING for that immigration they are committing an act of theft, fraud or violence.

    Citizenship mens you have obtained membership in an ORDER by avoiding theft fraud and violence, and that you maintain your membership in that order by forgoing theft, fraud and violence.

    Any forcible transfer by a government from ont or more people to one or more people is an involuntary transfer under the treat of violence. Any contractual transfer between people in mutual exchange is a voluntary transfer, and therefore not an act of theft, fraud or violence.

    Hoppe is arguing that open immigration is incompatible with a welfare state because it causes theft from the existing tax payers to the immigrant. This argument is pretty hard to defeat.

    Your only defense is that you have the right, by some divine authority, to determine who can be solen from under the threat of violence in order to give to someone else — which is an act in which you profit by not having to satisfy your wants with your own resources.

    Hoppe would argue that we can have as many voluntary little ‘countries’ that we want, and that rednecks and racists, and homophobes, and every feminist, separatist anad whatever advocacy one has should exist voluntarily without conducting transfers from people who disagree with that.

    In other words, there is no moral argument for stealing from people to give to other people.

    I suspect from your emotionally loaded posting that analytical philosophy is not something you have exposure to. It requires that we make a long series of testable statements. Hoppe uses that language. It is not the simple moralistic language of the public intellectual or the common person. Which is why he is poorly understood.

    One of the reasons people dislike him is that he has put forth arguments that are very difficult to dismiss. Both he and rothbard may START from different positions ( evolutionary necessity and natural law respectively.) Since they produced their works, we have improved our understanding of economics, psychology (jonathan haidt), political history (Fukuyama on one end and North on the other). And people like me have attempted to reduce their original premises to something more scientifically mandated.

    You might not understand that Hoppe started out as a marxist and through his work adopted his current position. His first major work was written on socialism and in that work he shows how it is logically impossible. (As does mises on one end, and hayek on another — although hoppe opposes hayek.)

    Hopefully I’ve helped you with Hoppe. (Although I kind of doubt you care.)

    Also, please define “facist”. One cannot be a ‘fascist’ without a state. So how, if he rejects the state can he be a fascist?

    I will happily debate you on Hoppe to your heart’s content. And I know him quite well and he does not mitigate. Ever.

    Curt

  • Institutions That Allow Different Groups To Exchange, Not Pursue Shared Beliefs.

    The Golden Rule is quite simple. But what complexity emerges from it? Property rights are very simple. But what complexity emerges from them? The problem of cooperative politics does not seem simple until we reduce it to these first principles: 1) the dependence by humans on instinct in the face of complexity, and 2) the instinctual and irresolvable conflict in mating strategies between the genders — and the complexity that emerges in society because of that irresolvable conflict. 3) The instinctual, pervasive, and necessary differences in signals between the classes, tribes and races, because of the differences in distribution of ability, exacerbated by a market economy. Yet there is a solution provided by the libertarians: exchange is cooperative, encourages mutual understanding, and produces win-win rather than win-lose outcomes. The English class-based political model was superior to the democratic model for that reason: we now have a winner-take-all society in permanent conflict rather than a system of cooperation between classes with different strategies and no means of resolving that conflict except for class warfare, constant polarization and social disintegration. The solution is to create institutions where classes with different evolutionary strategies can cooperate despite those differences through a process of exchange. Since exchange must be calculable, which in this case means reducible to something so that it can be measured, then we can improve our existing institutions by requiring voluntary exchange between the classes that is reducible to calculative formulae. ie: contracts rather than laws. Data rather than moralistic rationalism. Interest and ownership rather than taxation. It is the process of democratic government as we have constructed it as a winner take all proposition that is the source of both our conflict and social disintegration. And if one is to argue against this strategy, one makes two mistakes. First, that you simply want to win regardless of the wants of others. And as such you expose yourself as impolitic and using the government as a proxy for theft fraud and violence. Second, that the miracle of the west has been its ability to produce of a balace of powers that requires competition and exchange in favor of the masses. And universalism, which the left seeks to embrace, is just the most recent version of the error of simplicity that all other civilizations have fallen into, and has resulted in their impoverishment and suffering. Besides being a vanity, it is a demonstration of a false consensus bias, and ignores the value that comes from competition, and the problems that arise with bureaucracy. The rest of my arguments, which expose and articulate our different strategies, are irrelevant once we create a set of institutions that makes that our differences in strategies something that is to our advantage. We do not need to engage in perpetuating and exacerbating the problem of politics by attempting to get a democratic majority to agree on universal goals. Something which is imposible because of those differences in biological strategies. We need only advocate institutions that allow each group to achieve its goals. Markets are useful in that they produce aggregate beneficial ends for all parties despite differences in preferences, knowledge and ability. And by creating a market for class cooperation we can produce beneficial ends for the aggregate by serving each other rather than destroying each other.

  • Institutions That Allow Different Groups To Exchange, Not Pursue Shared Beliefs.

    The Golden Rule is quite simple. But what complexity emerges from it? Property rights are very simple. But what complexity emerges from them? The problem of cooperative politics does not seem simple until we reduce it to these first principles: 1) the dependence by humans on instinct in the face of complexity, and 2) the instinctual and irresolvable conflict in mating strategies between the genders — and the complexity that emerges in society because of that irresolvable conflict. 3) The instinctual, pervasive, and necessary differences in signals between the classes, tribes and races, because of the differences in distribution of ability, exacerbated by a market economy. Yet there is a solution provided by the libertarians: exchange is cooperative, encourages mutual understanding, and produces win-win rather than win-lose outcomes. The English class-based political model was superior to the democratic model for that reason: we now have a winner-take-all society in permanent conflict rather than a system of cooperation between classes with different strategies and no means of resolving that conflict except for class warfare, constant polarization and social disintegration. The solution is to create institutions where classes with different evolutionary strategies can cooperate despite those differences through a process of exchange. Since exchange must be calculable, which in this case means reducible to something so that it can be measured, then we can improve our existing institutions by requiring voluntary exchange between the classes that is reducible to calculative formulae. ie: contracts rather than laws. Data rather than moralistic rationalism. Interest and ownership rather than taxation. It is the process of democratic government as we have constructed it as a winner take all proposition that is the source of both our conflict and social disintegration. And if one is to argue against this strategy, one makes two mistakes. First, that you simply want to win regardless of the wants of others. And as such you expose yourself as impolitic and using the government as a proxy for theft fraud and violence. Second, that the miracle of the west has been its ability to produce of a balace of powers that requires competition and exchange in favor of the masses. And universalism, which the left seeks to embrace, is just the most recent version of the error of simplicity that all other civilizations have fallen into, and has resulted in their impoverishment and suffering. Besides being a vanity, it is a demonstration of a false consensus bias, and ignores the value that comes from competition, and the problems that arise with bureaucracy. The rest of my arguments, which expose and articulate our different strategies, are irrelevant once we create a set of institutions that makes that our differences in strategies something that is to our advantage. We do not need to engage in perpetuating and exacerbating the problem of politics by attempting to get a democratic majority to agree on universal goals. Something which is imposible because of those differences in biological strategies. We need only advocate institutions that allow each group to achieve its goals. Markets are useful in that they produce aggregate beneficial ends for all parties despite differences in preferences, knowledge and ability. And by creating a market for class cooperation we can produce beneficial ends for the aggregate by serving each other rather than destroying each other.

  • Executive Compensation: How Much Should A Founder Receive As Salary During An Earn-out Period?

    His market salary is a fair salary. There is no other concept of ‘fair’. If he does not get a market salary, then the cash value of his earnout is decreased by the difference between his current salary and his market salary. 

    If this was not covered in the agreement whatsoever, then there might be an argument to be made that he is due market compensation or they are artificially reducing his earnout by depriving him of income he could make elsewhere. If it was covered and he agreed to it then that’s likely to be a problem.

    However, these things are very difficult to negotiate unless you have some sort of leverage. If he can lose the earnout by not performing, or the business will not perform well enough to capture the earnout without him there, then he may have a very difficult time with it.

    As an acquirer I have generally benefited from underperformance of retained executives. There are a lot of people like me out there.  For that reason it’s best to have someone with investment banking experience work on M&A deals and not business lawyers.

    https://www.quora.com/Executive-Compensation-How-much-should-a-founder-receive-as-salary-during-an-earn-out-period

  • Executive Compensation: How Much Should A Founder Receive As Salary During An Earn-out Period?

    His market salary is a fair salary. There is no other concept of ‘fair’. If he does not get a market salary, then the cash value of his earnout is decreased by the difference between his current salary and his market salary. 

    If this was not covered in the agreement whatsoever, then there might be an argument to be made that he is due market compensation or they are artificially reducing his earnout by depriving him of income he could make elsewhere. If it was covered and he agreed to it then that’s likely to be a problem.

    However, these things are very difficult to negotiate unless you have some sort of leverage. If he can lose the earnout by not performing, or the business will not perform well enough to capture the earnout without him there, then he may have a very difficult time with it.

    As an acquirer I have generally benefited from underperformance of retained executives. There are a lot of people like me out there.  For that reason it’s best to have someone with investment banking experience work on M&A deals and not business lawyers.

    https://www.quora.com/Executive-Compensation-How-much-should-a-founder-receive-as-salary-during-an-earn-out-period

  • A Propertarian Definition of Tolerance

    Every society contains a population which together, as shareholders, possess a portfolio of norms, a portfolio of opportunities, and a portfolio of capital. When we tolerate something, it means that we are willing to bear the knowing theft, involuntary transfer, or privatization of some small part of those portfolios that we would expect other members of the society to avoid. We can bear these costs for both positive and negative reasons: Positive: as an investment in the future, in the hope that these people will learn the norms, increase the portfolio of opportunities, or increase the portfolio of assets. Negative: as a matter of convenience, resulting in our privatization of public assets ourselves, we can refrain from paying the cost of policing the portfolios by forgoing opportunities with the individual, or bearing the costs of protecting those assets from involuntary transfer. The only way to know the difference between the positive and negative use of Tolerance, is to know whether the actions of the individual or group in question will result in the accumulation of assets or not. But it should be clear that it is impossible to perform neutral tolerance. All tolerance is either good or bad. Claiming ignorance is just convenience: privatization. Theft of public assets for one’s personal consumption. The complexity arises when multiple portfolios are involve and outcomes are speculative. Unless ‘Tolerance’ is an economic strategy whose impact is fully understood by the population, it is not investment but convenience. The example in the western countries is that they pay for their social programs by a) letting the USA pay for their international trade and defense costs, and b) using immigrants to create consumption not possible for the people to create by productivity. In canada, we add c) which is that we export resources. So the cost to canada is one of a pair of risk propositions: that immigrants can be assimilated sufficiently that a ‘canada’ and its portfolio can be maintained, OR that the future is irrelevant, and there is no responsibility we hold toward the future. In the States, one population holds to its heritage – attempting to retain its portfolio in the belief that it is something unique in human history. Another seeks to consume that portfolio in an attempt to build a more utopian society. And that is the source of conflict.