01/07/26
The libertarian theory of property appears to rest on the concept of scarcity. The argument goes that (a) only physical property can be scarce, so only it can be property; and (b) digital things can be duplicated easily, so they can't be property.
Isn't scarcity, however, an invalid concept to obscure the concept of marketable (value)? Scarcity seems to assume a world in which there is a fixed pie, and the program is to divide the pie into equal parts, so that it's "fair." But a businessman's view is that there is a market demand for something, and so he decides to make more of it. The concept of scarcity turns into a struggle that which is supposed to be joy. It is fun to make stuff; it's not fun to measure and conserve.
Land is always given as a scarce-resource example. But there is plenty of land that is dirt cheap, and nobody wants to buy it because it is too far from developed regions. There is market demand for land equipped with civilization, and so a businessman makes more of it by converting undesirable land into desirable.
I have only heard persistently of scarcity in USSR. It was said that certain things, like black caviar, were in "in deficit." The deficit encompassed sugar, toilet paper, soap, kielbasa, and it was a source of jokes for standup comedians. (Toilet paper was a luxury; instead everyone used newspaper precut into a stack of rectangular pieces.) For black caviar's case, the fish that has these eggs is a rare and a protected species, and it seemed that it's an unchangeable fact of nature that it would be always in deficit. However, years later I learned that a kibbutz in Israel created a fish farm that breeds this fish and exports black caviar to a great success.
More recently, with the popularity of Bitcoin and other cryptocurrencies, I have heard of "scarcity" in the context that it makes Bitcoin valuable. Namely, that there's a maximum cap on total Bitcoin that can exist, because there's a limit to the number of mathematical solutions to the hashing problem that is at the foundation of the system. But that is not how people use Bitcoin. In the way that it's actually used (that is, transferring or storing value), there is no scarcity. There is no difficulty in obtaining enough Bitcoin to match a cash value to store or transfer. The hashing problem has been integrated to prevent someone getting free Bitcoin (thereby inflating and devaluing it). No person can expect to use Bitcoin in that way. Therefore, while technically (mathematically) it can be argued that Bitcoin is scarce or limited, in practice it's not.
Scarcity is an alternative form in which Marxist ideas are presented. Yet, it's a flagship concept of libertarians. Objectivists have extensively voiced disagreement on the anarchist element in libertarianism, but I think that it's also important to push back on the more general libertarian theory.
01/09/26
Anything that is significant historically is expensive, and that includes paintings by famous painters like Rembrandt. But in many cases, paintings are expensive because they are a vehicle for tax avoidance. Besides the obvious buy-and-resell method, I have read in How to Invest Your Money and Profit from Inflation by Morton Shulman of a technique by which donating art and historical artifacts to a museum can be used as a tax deduction.
More recently, the technique of slapping an artistic cover on a financial transaction got an upgrade via CryptoKitties and other NFTs. The "Dragon" CryptoKitty was sold for $170,000 in 2018.
The art scene is "the emperor with no clothes" in which, much like with Bitcoin, the supposed value is set through exaltation of the object. If a painting is worthy enough to be in a museum, it must be valuable. Any price can be set on it, and then that price is stubbornly maintained, to keep value in the investment.
Reproductions and photographs of paintings are only as valuable as the cost of the frame they come in. That's because it is never about the art, but about tax avoidance, in which the large value is attached to the original.
01/09/26
In my original post I present the idea that the scarcity is an invalid concept and in particular there is plenty of land. Aquinas Hobor argues against this view:
So while it's true that land qua land is cheap and plentiful, it's not really true that usable land is cheap. As one might expect in a capitalist country, the vast majority of usable land is being used and sells for real money. It is, in that sense, relatively scarce.
Land closer to civilization is more valuable hence more expensive. In a downtown, ten thousand square feet lots are expensive (tens of millions of dollars), but that's because they are for building skyscrapers. Is it reasonable to say that this land is "scarce" because John Doe doesn't have this kind of money, but he wants to have a single family home smack in the center of downtown? If so, then "scarce" is not a useful epistemological concept, because in reality there is no such thing as a free lunch.
Has there been cases in which a person could not achieve his goals because there was no available land? I don't think so. If a person has money to build a house, he will find affordable enough land to do so.
01/11/26
I wrote:
Have there been cases in which a person could not achieve his goals because there was no available land? I don't think so. If a person has money to build a house, he will find affordable enough land to do so.
To which Aquinas Hobor replied:
Throughout human history there have been multitudes of people who have not achieved their goals because there was no land compatible with said goals at a price they could afford to pay. That's not necessarily anyone else's fault, but it certainly is true!
Let's take this in context, to make sure we are talking about the same thing. There are many immigrants who come penniless to a country, but they usually end up with an owned apartment or a house after 20 years. This is true about all immigrants I know in Vancouver, who immigrated here about the same time as me. None of them could afford a meal in a diner when they immigrated, and they struggled to find jobs due to the lack of English. So how could they all end up owning real estate? By using what the market had to offer. They bought real estate on a loan, or in a non-central area, found cosigners on mortgage etc. Then they sold or flipped as necessary until they ended up with something better.
In my case, I realized in my 40s that I need to buy a house, but because dramatic increase in prices and because I couldn't qualify for mortgage I couldn't buy where I lived (Vancouver, Canada). I started looking across the border, in United States, in places that would allow me fast commute to downtown Vancouver. I began looking at Sumas, WA from which a Canadian railroad stop was only 20 min drive. On the train I could get to Vancouver downtown in one hour. Friends reported that the train ride is so comfortable that you don't notice the passage of time. (The train's seating has tables, electrical power, and onboard Internet). The houses were affordable and in good condition, however I couldn't find anything I liked. I expanded my search to other places on the US side, and eventually bought the house in Point Roberts, WA. The drive from my Canadian apartment to my American house is 45 min.
Another reason for my interest in a house on the American side was access to cheap flights within US. I could have boarded a plane at 7:30am in Bellingham, WA, and be in San Francisco or Las Vegas by noon, all for under $100. However, because Point Roberts is disconnected from the mainland, I had no access to the American airport. So, I kept searching for real estate on the mainland, near the Bellingham airport. I thought of buying an apartment which I could AirBnb and use myself sometimes. Or, I could buy a lot of land, but that cost more cash than I had. In the end, I found an affordable land lot facing a lake, only 20 min. ride by Uber from the airport. A week later it was mine. So in a seemingly impossible situation, I have a good arrangement and have satisfied my goals.
The market offers a way, if not this way, then that way, for a person to satisfy qualitative goals. And the only time that it doesn't, is when there is state interference. There is no scarcity, only opportunity.
01/12/26
I argue above that art is expensive because it is a vehicle for tax avoidance, but in general I mean large financial transactions that look innocuous. A Saudi prince doesn't need to avoid taxes, but he does need to gift airplanes to the Trumps of this world. He could as well gift a painting instead of a plane.
Art and antiques are also a good protection against inflation. Unlike houses, they don't require paying property taxes. They do require storage fees, but for this there is a free market. The high face value of an art piece is assigned to the original only, not because it's pretty, but because the world agreed that it's valuable and unique.
I agree that original art does provide pleasure. However, if it were true that people bought art primarily for pleasure, they would prefer to buy reproductions or beautiful original paintings by unknown painters. They are cheaper and can come in variety of sizes and formats to fit one's wall. Mona Lisa was color corrected and looks much better that way than the original. There are very pleasing paintings that one can buy for under $100.
01/26/26
Aquinas Hobor writes:
But still, not many immigrants end up with a penthouse in Central Park West, regardless of how much it might be their goal to do so when they first move to America. That's because a huge number of people would like to do so (not me, as it happens), far more than available units.
I disagree. It is expensive to live there and many people choose to live elsewhere. Even those who do have $2,000,000 to buy an apartment by Central Park (let's say it's available), simply choose to live elsewhere since their money goes further there. For this amount, you can get a waterfront view apartment in Jersey City.
If there were indeed a sufficient number of people who wanted to live by Central Park specifically, then the supply would be provided by the means of new construction. More stories would be built on top of current buildings, or a building will get demolished and rebuilt taller (or with smaller apartments), while possibly keeping only the facade wall to preserve the look.
Because the free market is dynamic, it doesn't grow linearly. The growth might look random, but there is logic in this randomness.