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We introduced The Master Contract (or MC 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 sixth Condition of the Master Contract states:

A person or organization of any kind infringing any Master Contract rule is responsible with its property to the full extent of the infringement or, as specified in a contract with the infringed party.

This condition is a simple statement of common sense. If there is an infringement on somebody’s property, the infringing party is in debt for the full extent of the infringement. There are no special rules, or limitations. There are no special conditions or eventualities. There is no grace period, statutory relief, or statute of limitations. This is so because debt is somebody's else;s property. As such, any reprieve or condition of any kind must be subject to a voluntary contract. This makes sense. The creditor must be able to gauge the extent of the change in terms of its own interests. It will enter into a voluntary contract only and only if its interests are served. An outside party can never assess the damage it will introduce or the benefits it may give to the creditor. This is so because all economic activity is, in the end, subjective. Only the actors in an economic transaction can make such determinations.

For example, let’s say that Mary owes Vasily for the cost of one car. Vasily does not have the money to repay back the debt and the car is now worth only half of the debt. In the current environment Vasily could simply declare personal bankruptcy and a Judge will define how much money (if any) and under which conditions will Vasily repay to Mary.  In an Absolute Austro-Libertarian system however, Mary and Vasily negotiate directly and may reach an agreement. Maybe Mary will be satisfied with the car and 10% of the debt over one year. Maybe Mary will not take the car and demand payment in full over 10 years. Or maybe Mary will accept a different arrangement. The point is that a Judge can never, ever, be in Mary’s shoes. Only Mary can. This is yet another example of the balanced approach the Absolute Austro-Libertarian system takes.

Note: please see the Glossary if you are unfamiliar with certain words.



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