Orientation and Framework

In the investigation we find that the Bible clearly indicates that human beings are created party to at least two Covenants.[note] In other words, being party to at least two Covenants is built in to being human, and transcends human choice. The most obvious Covenant to which all humans are party is the covenant of works, also known as the Edenic Covenant. Like all Covenants and contracts, the covenant of works has terms, and the terms are laws to those party to the Covenant or contract. In the case of the covenant of works, the terms that pertain to human parties are natural laws. The natural law is the moral law that applies to all human beings, which human beings are not able to adequately keep, evidenced by the fact that all humans sin and die.[note] When humans violated the covenant of works in the garden of Eden, God divinely imposed another Covenant, the covenant of grace, also known as the Adamic Covenant. The Adamic Covenant allowed for the continued existence of the human race, even though in a fallen condition. All subsequent Biblical Covenants, all subsequent human existence, and all subsequent human activities –– including the making of contracts as part of everyday human life –– all exist within the context established by these two global Covenants, the covenant of works and the covenant of grace. These two Covenants are divinely imposed. They apply to the entire human race, and that's why we call them global. Although they certainly contain moral law, they contain no biblically prescribed human law. In the biblical chronology, after these two Covenants appear, there is only one subsequent Covenant to which all subsequent human beings are party, the Noachian Covenant. After the Noachian Covenant, the Bible's historical narrative tells of three other major Covenants, the Abrahamic, Mosaic, and Messianic Covenants. These latter three Covenants certainly have profound implications for humanity as a whole, but all people are not automatically party to these latter three Covenants. In contrast, all people are automatically party to the Noachian Covenant, just as they are to the covenant of works and the covenant of grace. This arrangement has huge implications, because the Noachian Covenant has the only prescription of human law in Scripture that exists as a term of a Covenant that has global in personam jurisdiction, i.e., to which all people are automatically and inevitably party. The term in the Noachian Covenant that prescribes human law is the Genesis 9:6 mandate against bloodshed. In the investigation we find that the Genesis 9:6 bloodshed is metaphorical, and should be understood to be a mandate against delicts. Since delicts are defined as perpetration of death, damage, or injury to primary or secondary property, the Bible's only global prescription of human law is the negative mandate against humans perpetrating death, damage, or injury against the persons or property of other humans, and the positive mandate to prosecute those who do. Even though the Bible exposes numerous other moral laws (i.e., natural laws) that have a global in personam jurisdiction, this positive-negative mandate against delicts is the only human law that the Bible prescribes for the entire human race. So according to the hermeneutics used in the investigation, no biblical authority is given for the enforcement of non-delictual moral law by human against human, because such enforcement converts such moral law into human law without biblical authorization, unless the parties are party to a Covenant that has local in personam jurisdiction, or unless the parties have given prior consent for such enforcement.[note]

Only with this context established is it possible to operate as a reliable apologist in the examination of claims by people who don't work within this framework. Because this framework posits that all human beings are inevitably party to certain Covenants, it shows that covenant-participation is built in to human nature. It follows that the social contract theory of government is a crucial ingredient in any political philosophy or jurisprudence that is consistent with this framework. It also follows that natural law, also known as universal moral law, is also a necessary ingredient in such philosophy and jurisprudence. Since natural rights are a rationally necessary subset of natural law, it follows that natural rights are also a necessary ingredient in such philosophy and jurisprudence.

This Bible-based framework continues besieged by numerous other schools and religions. It's imperative to fight for the truth. Even though this nation has been built with many admitted flaws, we believe that it was built with this framework at its foundation. So our need to confront these other schools and systems is compelling, because the deterioration of this nation profoundly impacts the visible Church.

One school of Christian theology, theonomic reconstructionism (also known as Christian reconstructionism), posits a political philosophy and jurisprudence that rejects both social contract theory and natural law.[note] We believe that rejection of both the social contract and the natural law is equivalent to rejection of the framework just sketched. We believe that rejection of both of these is essentially laying the foundation for fiat law, fascism, collectivism, socialism, and even totalitarianism. —— We believe that the prevailing schools in the legal profession –– legal positivism, legal realism, etc. –– show so little regard for social contract, natural law, and natural rights, that they are essentially doing the same thing, laying the foundations for fiat law, fascism, collectivism, socialism, and even totalitarianism. Since the investigation and the attached inventory combine to answer the rejection of both social contract and natural law, we'll not say anything more here about either this Christian theology or these prevailing secular legal schools. But another important ideological system rejects the social contract while holding fervently to natural law and natural rights. It's important for us to examine this school.

While Christian reconstructionism, legal positivism, legal realism, etc., tend to replace our historic foundation in social contract theory, natural law, and natural rights, with fiat law, etc., anarcho-capitalism tends to replace it with anarchy. This school does this by rejecting the social contract theory of government while simultaneously adhering to natural law and natural rights. By rejecting the social contract, this system rejects the principle in the framework just outlined, that human beings are inherently and inevitably participants in certain Covenants. A social contract theory of government grows out of the above framework, and is inherently related to the human need to satisfy the global mandate against bloodshed, i.e., against damaging primary and secondary property. Social contract theories developed by humanistic philosophers may deviate significantly from the framework discovered by the investigation, but they and this framework all have in common the belief that governments are based upon contracts. Anarcho-capitalism rejects this belief.

The primary exponent of the anarcho-capitalist school is Murray Rothbard (1926-1995). Rothbard rejects the social contract based primarily on his theory of contracts, which he calls the "title-transfer" theory of contracts. Because this is an axe laid to the root of Bible-based jurisprudence, we need to give the title-transfer model of contracts special attention. So we will spend some time here examining Rothbard's book, The Ethics of Liberty, and Williamson Evers's two articles, "Toward a Reformulation of the Law of Contracts" and "Social Contract: A Critique".[note] To whatever extent the title-transfer model is true, it will have a bearing on the existence of lawful government, and the existence of lawful taxing, taking, and spending.

Before proceeding, in order to make sure that we keep context, we need to remind ourselves of several other features of the biblical framework expounded in the investigation: A contract that people form specifically for the purpose of prosecuting perpetrators of delicts we call a jural compact. A contract that people form specifically for the purpose of adjudicating (i.e., rendering equity in) contract disputes, we call an ecclesiastical compact. A contract that incorporates and encompasses both the jural compact and the ecclesiastical compact, and also encompasses the customs, usages, rules, and all the other contracts by which people live from day-to-day, we call a social compact. A contract that is intended to encompass a plurality of religions we call a secular social compact. A contract that is intended to encompass only a single religion we call a religious social compact. —— Each of these various kinds of compacts has a very specific in personam jurisdiction and a very specific subject matter jurisdiction. If such a compact is fully functional, then it will also have a very specific geographical jurisdiction. —— In the process of examining the title-transfer model of contracts, we believe it's safe to assume that whatever is valid about it will fit rationally into the Bible-based framework that we've been sketching.

In the inventory we assumed that contracts should always be enforced as written, as long as they conform to the jurisdictional boundaries just outlined and unless there is something unconscionable about them.[note] What is always unconscionable in every geographical jurisdiction is the intentional or unintentional perpetration of a delict. This is because the mandate against delicts is global, and no one can escape it by entering into a contract. So under a secular social compact, if a contract invokes the perpetration of a delict, the contract is unenforceable and is automatically void. So all contracts that invoke delicts are unconscionable. But on the other hand, some contracts are unconscionable even if they do not invoke delicts. Under a religious social compact, a contract might be unconscionable, void, and unenforceable even if it does not invoke the perpetration of a delict if the contract violates the religion's moral code. Under the jurisdiction of a religious social compact that prohibits fornication, a contract to fornicate would be unconscionable, void ab initio, and unenforceable, even though fornication is not a delict under strict construction of the bloodshed mandate. So the issue of what is conscionable and what is unconscionable within a given jurisdiction is crucial to determining whether a contract can be enforced within that jurisdiction.

Apparently, people who advocate the title-transfer theory of contracts do not take jurisdiction as being absolutely crucial to the enforcement of positive law. We therefore believe they've made a huge mistake from the very beginning. Nevertheless, in essence, the title-transfer model tries to draw a clear distinction between what is an enforceable contract and what is not, and it does so by differentiating what is conscionable and what is not. Its authors deserve our thanks for that. While insuring that the investigation's jurisdictional framework is maintained, the essential issue that we need to determine in this memorandum is this: Do Rothbard and company draw the line between conscionability and unconscionability in the right place?[note] If a court does not correctly draw the line between a conscionable contract and an unconscionable contract, then the court will inevitably err on one of two sides: (i)If the court enforces what is in fact an unconscionable contract because it construes the contract to not be unconscionable, then the court is lending its power to inflict undeserved harm on the contract's vulnerable party. (ii)If the court refuses to enforce a contract because the court believes the contract is unconscionable, when in fact it is not unconscionable, then the court fails to do its job, and fails to render equity where equity is demanded and needed. —— In the final analysis, we find that the title-transfer model fails not because it fails in regard to conscionability, but because it fails in regard to jurisdiction, and that failure leads it to reject the social contract. Even so, we recognize the title-transfer model as a worthy effort at protecting the individual's natural rights against government that has in many respects gone absolutely out of control.

Rothbard begins Chapter 19 of The Ethics of Liberty by saying, "The right of property implies the right to make contracts about that property: to give it away or to exchange titles of ownership for the property of another person." We agree with this statement entirely. He goes on to speak of "libertarians" who ostensibly believe in this initial statement, but who fail to properly construe it. Then he says, "[T]he only enforceable contracts (i.e., those backed by the sanction of legal coercion) should be those where the failure of one party to abide by the contract implies the theft of property from the other party." We can agree with this latter statement only by using definitions of "property" and "theft" that he would probably not accept. We believe that Rothbard is attempting to solve a legitimate problem. But we believe his solution is deficient. In fact, the logic associated with this latter premise leads Rothbard to reject the social contract entirely.

Based on the fact that the title-transfer model uses definitions of "property" and "theft" that are appropriate within the scope of jural societies and secular social compacts, we'll start by giving the benefit of the doubt, assuming that their model may be perfectly valid within this jural and secular context. We'll spend the remainder of this memorandum (i)describing the problem that Rothbard and his colleagues are trying to solve; (ii)describing Rothbard and company's solution; and (iii)presenting our alternative solution.

Promise-Expectation vs. Contract-Enforcement

"[I]n the early 1720s, the libertarian English writers John Trenchard and Thomas Gordon, in their Cato's Letters-widely influential in forming the attitudes of the American colonies-wrote as follows:

All men are born free; liberty is a gift which they receive from God himself; nor can they alienate the same by consent, though possibly they may forfeit it by crimes. No man. . . can . . . give away the lives and liberties, religion or acquired property of his posterity, who will be born as free as he himself was born, and can never be bound by his wicked and ridiculous bargain."[note]

In recognition of the fact that Cato's Letters had an important influence on the thinking of the founding generation, and also because this issue of the alienability[note] of natural rights via consent goes to the core of the title-transfer model, we need to ask two questions: (i)Can people consent to their partial or total enslavement, i.e., to the alienation of their natural rights? (ii)Can people arrange to have their "posterity" partially or totally enslaved, i.e., to alienate their posterity's natural rights? We believe the answer to the second question is an emphatic "No!". We address this issue by allowing for the existence of denizens.[note] But the first question is more difficult and is the core subject of this memorandum. —— The Declaration of Independence says that such rights are unalienable Rights. But what does this mean in regards to consensual agreements and contracts? In essence, we'll spend the remainder of this memorandum trying to answer these questions about consensual alienation.

Rothbard ends Chapter 19, "Property Rights and the Theory of Contracts", with the following paragraph:

The current law of contracts is an inchoate mixture of the title-transfer and the promise-expectations approaches, with the expectations model predominating under the influence of nineteenth- and twentieth-century legal positivism and pragmatism. A libertarian, natural-rights, property-rights theory must therefore reconstitute contract law on the proper title-transfer basis.[note]

Given the debased status of the American legal system, it's difficult to argue with Rothbard's characterization of the "law of contracts" as "inchoate". He's saying that it's a half-baked conglomeration of two different concepts of what a contract is. He believes that these two conceptions are competing for dominance in the arena of contract adjudication. According to Rothbard and Evers, the two conceptions are the "title-transfer" approach and the "promise-expectations" approach. Rothbard is clearly saying that he believes the promise-expectations model is dominating this competition. In the first paragraph in Chapter 19, he bemoans the fact that many "libertarians" default into believing in the promise-expectations model. He says,

Unfortunately, many libertarians, devoted to the right to make contracts, hold the contract itself to be an absolute, and therefore maintain that any voluntary contract whatever must be legally enforceable in the free society. Their error is a failure to realize that the right to contract is strictly derivable from the right of private property.[note]

We believe he's right to bemoan the "absolute" belief in the promise-expectations model. Translating his vernacular into ours, we would say, Their error is a failure to realize that the right to contract is strictly derivable from the existence of primary and secondary property.

Contract-Formation vs. Contract-Enforcement

We believe that every contract, by definition, contains promises. Promises are necessary ingredients in the creation of every contract. If there are no promises, then there is no contract, because where there is no promise, there is no promise to perform; and where there is no promise to perform, no obligations are placed on any of the parties; and where there are no obligations, there are no benefits accruing to the other party by way of the obligations; and where there are no benefits, there is no consideration; and where there is no consideration, there is no incentive to enter the contract in the first place. Where there is no promise, there is no contract. Implicitly, Rothbard admits this by using the verb "agree" as a euphemism for "promise" in the illustrative cases he presents in Chapter 19. But he never admits explicitly in The Ethics of Liberty that a promise is an inevitable component of every contract. Both he and Evers choose instead to maintain an assault on the "promise-expectations" model of contracts.

Wherever a promise exists, whoever believes in the promise is expecting that it will be fulfilled. If A promises B that A will do X, why would B ever enter the contract if B did not have some reasonable expectation that A would deliver on A's promise? Without B's expectation, B would never enter the contract. —— This line of reasoning shows that both promise and expectation are necessary, inevitable, and defining components to the creation of every contract. But the fact that Rothbard, Evers, and company appear to completely overlook this fact is not sufficient reason to dismiss their arguments with incredulity. This is because they have a legitimate grievance.

Williamson Evers sees the same lack of cohesion in the adjudication of contracts that Rothbard sees. He says,

Many of the problem areas in the law of contracts stem from the historical fact that the law of contracts has been fashioned out of material that does not fit together logically. Some jurists view contracts as conventions serving to secure people's expectations. … On the other hand, other jurists, particularly those who base their legal theory upon the natural rights philosophical tradition, view contracts as instruments by which rights to things (both present and future alienable goods) are assigned, delineated, transferred or exchanged.[note]

So according to Evers, the "problem areas in the law of contracts" are problem areas because "promise-expectations" jurists are wrong while the "natural rights" jurists are right, and all these problems would go away if the promise-expectations jurists would follow their smarter colleagues. —— We suspect that Rothbard and company have a legitimate grievance against the status quo in contract law. But we suspect that in their efforts at resolving their grievance, they have exceeded legitimate boundaries. They have a legitimate complaint against "promise-expectations" jurists because the latter do not adequately honor private property rights, i.e., natural rights. In their efforts at correcting the problem, Rothbard and Evers discard the nexus between promise/expectation and lawful contracts, and they also discard the social contract as a foundation for lawful government. We believe that the prerequisites to ridding contract adjudication of its "inchoate" inclinations are three: (i)making a clear distinction between the promise-expectations theory of contract-formation and the promise-expectation theory of contract-enforcement; (ii)clearly defining what constitutes an unconscionable contract by determining what property is alienable and what property is not; and (iii)clearly defining the lawful jurisdictions of ecclesiastical courts so that they do not exceed or neglect such jurisdiction.[note]

Sample Case

In his criticism of the promise-expectation theory of contracts, Rothbard presents the following case:

Suppose that a celebrated movie actor agrees to appear at a certain theater at a certain date. For whatever reason, he fails to appear. Should he be forced to appear at that or at some future date? Certainly not, for that would be compulsory slavery. Should he be forced, at least, to recompense the theater owners for the publicity and other expenses incurred by the theater owners in anticipation of his appearance? No again, for his agreement was a mere promise concerning his inalienable will, which he has the right to change at any time. Put another way, since the movie actor has not yet received any of the theater owners' property, he has committed no theft against the owners (or against anyone else), and therefore he cannot be forced to pay damages.[note]

He says the "movie actor agrees". This is a euphemism for the movie actor and the theater owners made promises to each other, which shows that Rothbard implicitly agrees that promises are a necessary ingredient in contract-formation. Then the actor "fails to appear", meaning that the actor broke his promise. Under the current "inchoate" state of contract adjudication, the actor would probably not be "forced to appear"; although the court might force the actor "to recompense the theater owners". Under a pure promise-expectations model, the actor would be forced to appear, or at least to recompense the owners. But under Rothbard's title-transfer model, the court would neither force the actor to appear nor force the actor to compensate the owners. This is because the actor's "agreement was a mere promise concerning his inalienable will, which he has the right to change at any time". When Rothbard says that the presumed contract was a "mere promise", he means that the actor had not "received any of the theater owners' property". The actor could therefore not be accused of "theft".

This case displays the basic assumptions of the title-transfer model: (i)Rothbard presumes the non-existence or irrelevance of religious ecclesiastical courts. (ii)Rothbard presumes that both promises and expectations "are only subjective states of mind, which do not involve transfer of title". (iii)Rothbard assumes that even if penalties for non-performance were written into the contract, the contract is unenforceable if there is no title transfer. (iv)Rothbard believes that any promise concerning alienable labor is unenforceable because it is a promise with respect to the "inalienable will". In other words, Rothbard assumes that the will, the human ability to choose, is inalienable, and that this inalienability extends to promises about one's labor.

Importance of Penalties

Based on the idea that penalty should be proportional to offense, we agree that the actor should not be forced to appear. After all, how does anyone force anyone else to do anything? In the words of the godfather, by giving them an offer they can't refuse. In other words, with threats. By giving them a choice between something bad and something absolutely horrible. Use of such force to persuade must always be measured against the original offense. The actor's failure to appear certainly didn't deserve threats of having his children wiped out, or his legs broken, or his home looted. In fact, in a secular jurisdiction that is concerned only with the protection of property, it's very difficult to determine what threat is deserved. Since Rothbard mentions no penalties or remedies written into the original contract, we assume that there are none in the original contract. So even if there is real ex contractu damage to the owners for which the actor is responsible, the lack of pre-defined penalties for non-performance make it difficult to conclude that the actor should be forced to appear.

Rothbard also asks, "Should he be forced … to recompense … for … expenses incurred …?". The issue again is this: How can the theater owners force the actor to recompense? If we assume that they will use a secular ecclesiastical court, rather than seeking to find equity through a vigilance committee or through mafiosi, then the same question goes to the court: How, Judge, are you going to force the actor to recompense? The judge's methods are the same as the mafiosi's: by giving the actor an offer he can't refuse. The only difference between the judge and the mafia is that the judge has the backing of a monolithic police force, and the judge is backed by the awesome mythology of statism. Force and myth are hardly substitutes for equity. So we conclude again that if there is no penalty for non-appearance written into the original contract, then in a secular jurisdiction, the actor should not be forced to recompense.

Even though we agree with his conclusions, our reasons for eschewing forced appearance and forced compensation are different from Rothbard's. Rothbard says that the actor's "agreement was a mere promise concerning his inalienable will, which he has the right to change at any time". According to this view, the human will, i.e., the human ability to choose, is so exalted that no human being can ever burden another human being's choices. The exception to this that Rothbard and company acknowledge, is indicated by the above quote of Cato's Letters: "All men are born free; liberty is a gift which … possibly they may forfeit … by crimes." If this criminal forfeiture of liberty is lawful, it is necessarily ex delicto. In addition to this ex delicto class of justifiably alienated wills, we also acknowledge another class of exceptions that arise ex contractu, relations like these: parent-child, guardian-ward, and mentor-dependent contracts. Even if Rothbard doesn't acknowledge these latter exceptions to his will-inalienability rule, the fact that he acknowledges the ex delicto breed of will alienation proves that the will is not inalienable in an absolute sense.

Regarding ex delicto alienation of the will, if A damages B's primary property, then A's liberty is forfeit proportional to the damage to B's primary property. Such damage to primary property generally deserves an action ex delicto and not an action ex contractu. Evidence shows that Rothbard and Evers agree that such a public or private delict deserves retribution or recompense or some penalty or remedy ex delicto.[note] But damages that arise ex contractu arise by way of non-performance of contractual obligations. Damages that happen in any way other than through a contract are damages that may give rise to an action ex delicto (assuming human culpability), but not to an action ex contractu. Clearly Rothbard is not acknowledging that an action ex contractu is justified in this case. The damage in this contract between the actor and the theater-owners, brought on by the possibility that the theater owners spent a lot of money for advertising and preparing for the event, according to Rothbard, is simply part of the risk of doing business. The issue that is crucial to Rothbard is that the actor "committed no theft against the owners". "Theft" is crucial to the title-transfer model. As indicated above, the first paragraph of Chapter 19 says, "[T]he only enforceable contracts … should be those where the failure of one party to abide by the contract implies the theft of property from the other.". To Rothbard and company, since "the actor has not received any of the theater owners' property", the actor could not possibly have stolen anything from the theater owners. Therefore the contract is unenforceable. Or so the analysis goes thus far.

If the owners lost a lot of money via the actor's non-appearance, it's obvious that they are damaged by way of the actor's non-performance. The damage is obviously ex contractu. Theft is usually assumed to be a crime, and therefore assumed to give rise to actions ex delicto. But the kind of theft that Rothbard is talking about in his theory of contracts is theft that happens by way of non-performance. His use of the word, "theft" is essentially a hyperbolic reference to transfer of title, ownership, possession, etc., in violation of a contract's performance requirements. He says that even if the owners were damaged by the actor's non-performance, there was never any transfer of title, ownership, possession, etc., and therefore no grounds for executing contractual penalties against the actor, even if such penalties were written into the original contract. Under such circumstances, Rothbard claims the contract is unenforceable.

We agree that it's unenforceable, but we're suspicious of Rothbard's claim that there is no theft, and we're also suspicious of his analysis of this case on other grounds. We believe that in the agreement between the actor and the theater owners, when the two parties made promises to each other, it's possible that they surrendered property-interests to one-another. The actor may have given the theater owners an interest in his labor as an actor. Likewise, the theater-owners may have given the actor an interest in their land and labor as sponsors of the event. When the actor failed to show, and the theater owners wanted compensation and therefore took the case to a secular ecclesiastical court, and the theater owners submitted their copy of the contract to the court as exhibit A, then the three issues to the court were these: (i)Does the contract give the court in personam jurisdiction over the parties to the contract? (ii)Does the court have subject-matter jurisdiction over the contract? (iii)Does the court have geographical jurisdiction over the contract? If the court determined that it probably had jurisdiction on all three counts, it would proceed to hear evidence. The core issue the court would then need to decide is to what degree the contract is enforceable. Is the contract unenforceable because it's unconscionable? In this case, there's nothing unconscionable about this contract. On the other hand, is the contract unenforceable because it offers no remedies or penalties for non-performance on either side? Rothbard mentions no remedies or penalties written into the contract, so we'll assume none exist. So the court finds itself needing to create remedies and penalties for these parties who neglected to insert such remedies and penalties into the original contract. Is the court obligated to modify the contract by creating such terms out of nothing?

If parties to a secular contract fail to write penalties into their contract, then the court should consider something essential about human law. A moral proscription that is not accompanied by a prescribed penalty does not suffice as human law. If the court wants to avoid putting itself into the position of being a perpetrator of a delict against one of the litigants, then it's important for the court to assume that the parties did not intend for the contract to be enforced as positive law, because human law by definition demands the existence of human-executed penalties. If the parties did not intend for the terms of the contract to be positive law, then it would be gross presumption for the court to find otherwise. If the parties intend for it to be positive law, then they should provide evidence of that intent by showing the penalties in the original contract.

This is where we find agreement with Rothbard. We believe that Rothbard may be wrong in saying that there is no "theft". In fact, it's possible that the actor has stolen (in Rothbard's hyperbolic sense) the theater owners' interest in his labor, an interest that he offered to the owners at the initiation of the contract. If the court could reliably put a monetary value on the property-interest that the actor gave, then perhaps the court could resolve the dispute in the owners' favor by giving the actor an offer he could not refuse, namely, compensate the owners or else. But given that this is a secular ecclesiastical court, and given that the property-interest that the actor gave is difficult to monetize, it would be more appropriate for the court to treat the case like this: "If you, Actor, and you, Owners, care so little about your property that you enter contracts that have no penalties or remedies for non-performance, then you can suffer the consequences. I, the judge, recognize that this is a conscionable contract, but I am offered insufficient evidence to render a conscionable decision. I find this contract outside my limited subject-matter jurisdiction because you have offered insufficient evidence that you were serious about transferring title to your respective property-interests. I therefore lack evidence for conscionable enforcement."

Even though Rothbard believes that there is no transfer of property while we believe that there may be, the property-interest is so difficult to define in rigorous monetary terms that we believe it would be imprudent for the judge to demand compensation from the actor. Because of insufficient evidence, such a demand would probably create a delict perpetrated by the court. So we agree with Rothbard's final solution to this case, but we reach this conclusion by a different means. The theater owners should have gotten a performance bond, or they should have written penalties and remedies into the contract with sufficient specificity to allow lawful enforcement.

Summary of this case: Since this is a secular contract, and since there is no evidence to the contrary, we conclude that the actor's agreement with the theater owner was unenforceable. The actor's will is probably inalienable in law, but whether it's inalienable in fact is a different issue. His labor is not inalienable because labor is necessarily alienable in a free market because such alienation is inherent in earning wages. But the actor's promise of future labor may be inalienable, but perhaps it's not. Even though the actor may have surrendered a property-interest in his labor to the theater owners, there is insufficient evidence to enforce the contract in any way. The court essentially lacks subject-matter jurisdiction.

Title-Transfer & Promise

Proof of contractually prescribed penalty is important. Proof of property transfer is also important. Pertinent to both of these points is this quote by Evers of Lysander Spooner:

A man may make as many naked promises to pay money, as he pleases, and they are of no obligation in law. On the other hand, if a man have received value from another, with the understanding that it is not a gift, or that an equivalent is to be paid for it, the debt is obligatory - that is, the obligation to deliver the equivalent is binding -whether there be any formal promise to pay or not.[note]

If possession or title has been clearly transferred, and it's clear that such transfer is not a gift, then the default status of the transfer is that it's a debt that must be repaid, or a bailment that the bailee must return to the bailor. The default obligatory remedy/penalty is repayment or redelivery of the entrusted property. So under such circumstances, the penalty need not be spelled out in black and white. This is because the purpose of a secular ecclesiastical court is to resolve cases equitably (meaning with minimal damage to just claims to property), and doing so in such cases doesn't require the penalty to be spelled out, because it's obvious. But of course the transfer of property in the actor-owners case was not obvious.

Because of different priorities in secular versus religious ecclesiastical courts, they inevitably have different default remedies and penalties. As we saw in the actor-owners case, secular ecclesiastical courts that follow the property-interest model might presume that property-interest does not automatically transfer the instant a promise regarding such property is made. This allowance has to be made because the primary function of a secular social compact is to protect primary and secondary property rights, where protection of such rights is a function of the global covenant. This means that the primary function of a secular ecclesiastical court is to resolve contract disputes with minimal damage to just claims to such primary and secondary property.

In a religious social compact, the presumption of the religious ecclesiastical court may be that property-interest transfers simultaneously with the making of the promises. If such an assumption is not made, the promises that create the religious social compact may carry no weight. For example, suppose a new member joins a religious community, and at the time of joining enters into a contract with the rest of the community. The new member promises to abide by the community's moral code, which he knows includes a high regard for sexual purity. He knows that no penalties have been established by this religious social compact for fornication. But he also knows that the maximum penalty for non-delictual violation of the moral code is expulsion from the community and forfeiture of land in the community that's owned by the violator. He also knows at the time of joining that violations of the moral code are tried by the religious social compact's ecclesiastical court, which consists of a board of elders. After promising to abide by the moral code, this new member fornicates with his sheep while, unbeknownst to him, his neighbor watches. He goes before the board of elders and the case is treated as a non-performance claim under a bilateral contract, the plaintiff being the people of this religious community and the defendant being this new member. The court finds in favor of the plaintiff and determines that the penalty is the maximum under their social compact.

This case begs the question: Under the title-transfer model, how could this community ever enforce their moral code when the title-transfer model requires more than a mere promise, and requires instead an actual transfer of title? The most obvious answer to this question is that the new member would transfer absolute title to his land to the religious community at the same time he promises to abide by the community's moral code. The most obvious objection to this arrangement is that it sounds a lot like Jim Jones/Jonestown-style communism –– people handing over everything they own to the proletariat's dictator for the sake of participating in the community.

The title-transfer model may work fine in a secular ecclesiastical court. But it is deeply flawed in a religious ecclesiastical court. Here's a reasonable solution to this problem: Secular ecclesiastical courts exist to resolve contract disputes with minimal damage to just claims to property, under the global covenant's definition of property. Because of this, the presumption in secular ecclesiastical courts must be that property-interests are transferred only when it's clear and obvious that they are transferred. In contrast to this, religious ecclesiastical courts exist primarily to enforce the religious community's moral code on parties to the religious social compact. The parties are people who by definition have promised to abide by such moral code. Because of this totally different orientation under the religious social compact, the presumption in religious ecclesiastical courts must be that property-interests transfer simultaneously with promises, and are limited by the substance of the promise. —— In the case of this fornicator, the property-interest that he would transfer to the religious community at the time of his initial promise would look like this: "The land that I'm hereby purchasing in this community will remain mine as long as I choose to remain a member in good standing of this community, and as long as I do not violate this community's moral code so extremely that I am expelled from the community. I acknowledge that under the latter condition, I forfeit all claim to ownership of the land, and the land will be sold to other members of the community."

Clearly promises must carry radically different weight under religious versus secular social compacts.

Focusing again on secular contracts: We assume that the contract between the actor and the theater owners was secular, meaning that by default under such contract, non-performance disputes are meant to be settled in a secular ecclesiastical court. We may assume further that when the actor and the theater owners signed their contract, each party may have given property-interests to the other party in exchange for the other's property-interest. More specifically, the actor may have given the owners an interest in his labor as an actor. Likewise, the owners may have given the actor an interest in their land and labor. When the actor didn't show up to perform, and the owners filed suit against him in a secular court to recover damages caused by the actor's non-performance, the court was presented with a problem: Does the court recognize the exchange of property-interests or not? It may be difficult for a court to translate either of these property-interests into a reliable pecuniary value, but that doesn't negate the possibility that the property-interests have real, physical, economic value, unlike a promise of something intangible. The actor's promise to perform was not a promise of something intangible because such a performance carries real economic value. Because of this, the actor's reneging on his obligation is in fact "theft", in Rothbard's hyperbolic sense of the word. It's theft of the interest that the owners had in the actor's labor. But the actor simultaneously surrendered his interest in the owners' land and labor, but did so in violation of the agreement. The court's duty is not merely enforcement of a moral code, because there is