We introduced The Master Contract (or Master Contract for short) in a previous post. The Master Contract for the Absolute Austro-Libertarian theory is a small set of rules that forms the basis of the Absolute Austro-Libertarian way of life.
We must now expand on its concepts and shed light on its principles.
The fifth Condition of the Master Contract states:
A person or organization of any kind infringing any MC rule waives all its Master Contract contracted rights with the infringed party with the exception of 2a).
This condition addresses the case where an infringing party (for example, a person in debt) refuses to pay. If this is the case, then this party automatically loses all protections afforded by the Master Contract. This is possible because the Master Contract is not a declaration of universal rights nor does it claim divine origin. The rights afforded by the Master Contract are contracted rights, an agreement between people. This means that those rights are only valid within the context of the contract and for as long as the contract is valid. If the contract is breached, then these rights become invalid.
This is necessary because otherwise it would be impossible to seize property from infringing parties because of Condition #2, stating that property rights are absolute. If this rule would not exist the Master Contract would lead to a scenario where an infringing party would simply refuse to pay without any consequence. In this scenario, since property rights are absolute, the infringer has no way to recover its debt by force nor can it do it by voluntary agreement. In other words, there is no economic incentive to pay off debt, or worst: there is a gigantic economic incentive to defraud people. Therefore we need this rule.
However, there is one exception that must be made. If Master Contract Conditions are invalidated by debt, then the condition about slavery would also be invalidated. This would mean that although under normal conditions slavery would be forbidden, under debt conditions it would be allowed. Think of it in this manner: Joe owes Estela money. Joe has no other property than his body. As Master Contract Conditions no longer apply, Estela simply sizes Joe’s property, his body. This is slavery and cannot be allowed; hence an exception is made to prevent this scenario.
Note: please see the Glossary if you are unfamiliar with certain words.
Continue to The Master Contract Explained - Condition #6