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Objectivism and the Nemo Dat Principle

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Not sure if this topic has already been discussed.

I was thinking about the exceptions to the Nemo Dat principles under current property law, and whether if there might be any philosophical justifications for these exceptions under Objectivism.

For those who aren't familiar with the concept:


so for example:

if person A owns a car, B steals it and sell it to C (an innocent third party), and A finds C with the car, but B escapes and disappears with C's payment. Is it still possible for C to keep the car under Objectivist principles?

(under our current law it seems to depend on certain minor details of the relationship between A and B, and the type of transaction between B and C etc etc)

any thoughts?

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I would say that in this context the differences between the political principles implemented by a LFC country's laws (individual rights, including property rights) and those implemented by current laws (a mix between property rights and "general welfare") are irrelevant.

In this particular context, current laws aim to protect property rights, just like those of a LFC country would. So, whatever current law says is probably what should happen.

Edited by Nicky
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Nemo Dat is for property protection yes.

But the current exceptions to Nemo Dat appears to be more geared towards "consumer protection" rather than the protection of property. On what 'property protection' basis would a LFC country justify the passing of property title from the original true owner to the innocent buyer? That's my question.

Is there any Objectivist principle that says: a property owner who fails to take adequate precautions to protect his property may end up losing their claim to that property?

My hunch on this is: "no". But that would mean there would be no exceptions to the Nemo Dat rule, which appears to have some impracticalities (but those are debatable of course).

Edited by Puzzle Peddler
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Is there any Objectivist principle that says: a property owner who fails to take adequate precautions to protect his property may end up losing their claim to that property?

No, but there isn't one that says the opposite, either. Objectivism doesn't really cover this. The principle of property rights, by itself, doesn't answer your question.

Look at it from the buyer's perspective: he also had his property taken under false pretenses (his money). Why wouldn't his property rights also be considered, when the government decides which victim should be compensated to what extent?

There are several factors that should be considered, including what precautions both victims took to protect themselves and what could've been reasonably expected of them. It's not cut and dried that the theft victim should be fully compensated, and the fraud victim not at all.

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  • 2 months later...

But is consumer protection more important than property protection? I guess that is the question.

*Its not necessarily a problem if it isn't. The implications seems to be the following:

the current justifications for the exceptions seems to be efficiency arguments, if there were no exceptions then people on the market will:

1) have to check that the seller really owns what they are selling every a purchase is made (which can get ridiculous)

2) be too scared to buy anything at all

Consequently if you were to allow/enforce the exceptions by using the legal system, then what you are basically doing is forcefully making the market more 'efficient' by violating the property rights of certain true owners.

However if there were no exceptions to the nemo dat rule, things wouldn't necessarily fall apart as per the policy reasons stated earlier, because what might happen is that private insurance schemes might develop to help cover the fraud situations (which would fill the consumer confidence gap).

My personal opinion at this point is: there are no justifications for the exceptions under Objectivism, and the courts should really just drop the exceptions where they can.

Edited by Puzzle Peddler
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  • 6 months later...

Give the car back.

Theft is a more extreme degree of crime than fraud.  When someone defrauds you, you have some chance of protecting yourself; there are questions you can ask and information you can look into in order to find out what's really going on.  With theft, not so much.  You could guard your property better but that's about it.


So while they're the same principle and the buyer's money was also taken involuntarily, the car should be returned to its original owner.  The buyer is entitled to damages against the thief, who the government should be in the process of tracking down anyway.


Or maybe it could be split 50-50?

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