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The extent to which property rights are upheld by court enforcement is often used as an indicator for economic prosperity . This makes excellent sense, as it is hard to imagine a large division of labor wherein violations of property rights are rampant. However, this fallacious thinking ignores other methods of securing property rights. Said rights are not maintained by courts alone; as economic theory and history tell us, there is another important factor in securing safe transactions: signaling.
Signaling is when one party performs an action that is costly if they were to renege on the terms of an exchange. Often-employed store-branded signs (think of the giant McDonald’s “M”) are an excellent example of signaling; signs are often costly, and in having one, a merchant displays that they are trustworthy. If they were not trustworthy, then investing in an expensive sign would prove useless. A bank constructing a beautiful building and a food company buying ads are further possible examples of signaling. Signaling allows for the sorting of transactors without employing courts or any form of law enforcement.
While signaling sometimes ensures safer transactions, appealing to courts for remuneration after theft (or worse) could be less costly than signaling. This much is apparent; but, in a free market we would expect actors to signal and consult courts. Furthermore, we would expect individuals to invest in each until their rates of return equalize. However, we do not live in a free market, and there is one major hindrance to this analysis: the government runs the courts.
In most of the United States, affording private schooling for one’s children is more complicated than merely paying the tuition; one is also foregoing the taxes paid to public schools. If one pays $5,000 in taxes towards public schooling, then in paying $6,000 for private schooling, […]
They’re Trying to Shut Us Down
Over the last several months, I’ve lost count of how many times the powers-that-be have tried to shut us down. They’ve sent hackers at us, forcing us to take extreme measures on web security. They sent attorneys after us, but thankfully we’re not easily intimidated by baseless accusations or threats. They’ve even gone so far as to make physical threats. Those can actually be a bit worrisome but Remington has me covered.
For us to continue to deliver the truth that Americans need to read and hear, we ask you, our amazing audience, for financial assistance. We have a Giving Fuel page to help us pay the bills. It’s brand new so don’t be discouraged by the lack of donations there. It’s a funny reality that the fewer the donations that have been made, the less likely people are willing to donate to it. One would think this is counterintuitive, but sometimes people are skeptical because they think that perhaps there’s a reason others haven’t been donating. In our situation, we’re just getting started so please don’t be shy if you have the means to help.
Thank you and God bless!
JD Rucker