Presentation © 2005 by Barry Brownstein




The market economy is a ‘vast network’ of voluntary exchanges of property titles
 voluntary transactions insure win-win trades property rights facilitate the spontaneous order
 spontaneous orders facilitate discovery, help correct errors, fulfil expectations and generate new knowledge because knowledge is imperfect and decentralized, errors are frequent and pervasive; thus coercion is unwise.



“each man should be free to make full use of his knowledge and skill, that he must be allowed to be guided by his concern for the particular things of which he knows and cares.” without ownership a ‘tragedy of the commons’ develops

 without roles and responsibilities in the firm things fail to get done with “property rights” employees are free to “utilize local knowledge, make judgements and bear the consequences.”

“ When a nation has a legal system based on these bedrock laws, the people can be free and they can organize themselves and accumulate wealth to move forward.”
– Richard Maybury

© 1991-2005 by Henry Madison Research, Inc. All rights reserved. www.chaostan.com
Richard Maybury




More than half of Kyrgyzstan's married women were snatched from the street by their husbands in a custom known as "ala kachuu," which translates roughly as "grab and run."
Kyrgyz men say they snatch women because it is easier than courtship and cheaper than paying the standard "bride price," which can be as much as $800 plus a cow.
The custom is, it is widely perceived as practical. "Every good marriage begins in tears," a Kyrgyz saying goes.

• Supremacy of tribe or clan as overarching organizing principle
• “Outsiders” are seen as not worthy of same rights or respect
• Hatreds, ancient superstitions and powers of tribal leaders are maintained by policies of discouraging relations with other tribes
• Supremacy of “Rule of Law” as overarching organizing principle
• Rights are guaranteed for all
• Commercial transactions bring people from different countries together causing superstitions to break down
• Principles above
“personality” for leaders.
• Internet etc. make communications cheap, speed change
• Personality cults arise among some leaders – loyalty to the clan above all
• Oral traditions and family/clan beliefs dominate
• Closed societies
• Open societies -Immigrants are free to maintain superficial differences such as culture, religion etc. as long as they are united in the
“melting pot” by their belief in the principles of liberty.




The U.S. is the most diverse melting pot in the history of the world.

Various ethnic groups are free to maintain culture while uniting around shared principles.
"An organization's success has more to do with clarity of shared purpose, common principles and strength of belief in them than to assets, expertise, operating ability or management competence, important as they may be.“ – Dee Hock
E Pluribus Unum – Out of Many, One


Built on the ideas of Sophocles, Cicero and
 many others.
People have rights before the existence of
 government (natural rights).
The purpose of government is to protect
 their rights.
People are justified in dissolving governments that do not protect their rights.





Law established by governmental authority
All rights are man-made can be granted or taken away by man
‘rights’ can advance ‘common good’ at the expense of individuals


“(Freedom is) that condition in which the agents in a social system are unrestrained in their ability to act except by rules or principles that apply to the organization of a system as a whole- including those responsible for the rules.”- Michael
McMaster




“Organizations are not the legal code expounded by the corporate office and memorialized in 20-page memos…
Instead they are the day-to-day actions of the members of the networkemployers customers, suppliers, partners...”
“In an organization, you don’t have to
“incentivize” anybody. You have to create the conditions under which they can thrive.”
“Underspecified guiding principles like
“work hard” are useless.
Overspecification, like “if…then…” makes guiding principles equally useless.”







WELCOME TO NORDSTROM
We're glad to have you with our Company.
Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high.
e have great confidence in your ability to achieve them.
Nordstrom Rules:
Rule# 1: Use your good judgment in all situations.
There will be no additional rules.
Please feel free to ask your department manager, store manager or division general manager any question at any time.






Few rules. A core rule is “follow the golden rule.”
One pilot applicant was rude to a
Southwest gate agent and his interview cancelled.
Distributes “They” with a red slash buttons to employees.
Everyone on a Southwest flight crew, even captains, pitch in to get planes turned around quickly.
Surrender self-importance.






Around 200 stores and growing
“Anything not expressly prohibited by the language of this agreement is allowed”
Simple rules (clean, fresh, quality etc.) allow for faster adaptation, innovation and collaboration.
“Owners do it their way but within the context of a community of like-minded and like-talented and like-spirited owners.
In contrast with ‘Roman Law’ organizations
(McDonalds etc.) which prohibit everything that they don’t permit.


John Locke (1632-1704)

Two Treatises on Civil Government

Thomas Jefferson (1743-1826)

3rd President-author of Declaration of
Independence

James Madison (1751-1836)

4th President-"master builder" of the
Constitution

US. Constitution- 1787
 amended with the Bill of Rights 1791

“We hold these truths to be self evident : that all men are created equal; that they are endowed by their Creator with inherent and inalienable rights; that among these are life, liberty and the pursuit of happiness; that to secure these rights , governments are instituted among men, deriving their just powers from the consent of the governed…”

o “The revolutionary basis (of this country) is recognition of the fact that human rights are natural rights, born in every human being with his life, and inseparable from his life; not rights and freedoms that can be granted
by any power on earth.”- Rose Wilder Lane

Rose was the daughter of Laura Ingalls Wilder and ghost writer of her Mother’s Little House
on the Prairie books.

Rose’s book the Discovery of Freedom is highly recommended.


All power is originally vested in, and consequently derived from, the people.”-
Madison
 “The powers delegated by the proposed
Constitution to the Federal Government, are few and defined.”- James Madison
 The real source of the power of the U.S.
Constitution is the transcendent notion that man has “inherent and inalienable” rights.



A debate raged over whether a specific enumeration of rights would jeopardize rights because it would disparage unnamed rights.

“By enumerating particular exceptions to the grant of power, it would disparage those rights which were not placed in the enumeration…; - Madison
Others believed it was not necessary since the people had vested limited and enumerated powers in government.

“Because the powers are enumerated, and it follows, that all that are not granted by the constitution are retained” – Madison



“The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

Rarely used by Supreme Court
Griswold vs. Connecticut 1965




Use of contraception was against a 1958 state law
“The Framers did not intend that the first eight amendments be construed to exhaust the basic and fundamental rights which the Constitution guaranteed to the people.” – Justice Goldberg
“In reaching the conclusion that the right of marital privacy is protected, as being within the protected penumbra of specific guarantees of the
Bill of Rights, the Court refers to the Ninth
Amendment.” –Justice Goldberg
After a very short tenure on the court Goldberg was persuaded to resign and serve as UN
Ambassador


Three Possibilities
 absolute right to own one's body
 certain person or persons own other
 people
Everyone has an equal share in everyone else

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”


Three Possibilities
 transformer or creator has the property right, (homesteading principle) including the right to pass on property to one's
 heirs another man or group of men have the right to appropriate the property by coercion
 everyone has equal quotal share in all property ("property is theft")



...Nor shall private property be taken for public use without just compensation.
“ Eminent domain. Originally, that power could only be exercised to take property
“for public use”—to build bridges or make roads; things the public at large uses. It was not intended to let government transfer property from one private party to another whenever it becomes politically expedient.”



Supreme Court held that the city of New
London, Connecticut had the right to place private economic development over the property rights of individual homeowners.
In a free-market the value of a property for commercial use is to be determined by voluntary negotiated contract between the developer and the homeowner.

The Court decision relieves the developer of this obligation.