http://www.strike-the-root.com/…

In The Ethics of Liberty, Rothbard presents selling oneself into slavery as a logical impossibility because of the “inalienability of the will.” The will may be inalienable, but a contractual obligation certainly is not “inalienable.” Rothbard would reject a contract worded thusly: “I hereby sell myself into slavery to Smith Co. in return for subsistence living and three lottery tickets per week.” However, consider this case. Joe A. Gambler is given a one million dollar line of credit at 20% interest at the casino. He gambles it all until he has one million in debt, and just the monthly interest is more than his attainable monthly income. He is bankrupt, and if Rothbardian contractual debt obligations are enforceable in a meaningful sense, then the casino has very significant rights on the control of how Joe gets to spend his income, how much leisure he gets, and how much he must work. Joe has become a de facto slave.

Rothbardians miss this essential problem. People are advertised, persuaded, brainwashed, conned, Ponzi schemed, schooled, and more to convince them to sell themselves into virtual slavery. It is not a non-issue, it is a central issue. Living by debt is walking on a wobbly fence when falling on the wrong side is slavery. Call debt slavery merely de facto slavery if you will, but if it looks like a dead fish and smells like a dead fish, then why treat it other than like a dead fish? Notice how important thrift and debt avoidance was to Thoreau in the first half of Walden. He noticed that, like today, people would sell themselves into debt for superficial luxuries in housing when one could build an acceptable structure without debt. For those who say it cannot happen, I say rather, don’t let it happen.

1. “I hereby sell myself into slavery to Smith Co. in return for subsistence living and three lottery tickets per week.” is a an invalid statement/contract. You can’t be definition be a voluntary slave. You can’t be property. You can voluntarily act like a slave which from an ignorant 3rd party perspective looked like enslavement but you can not call that situation slavery. Looking and smelling like a dead fish does not mean it’s a dead fish.
2. Rothbard clearly describes restitution proportionality and what he feels should be considered a legitimately enforcible contract. One’s inalienable right to life would override any debt described in the above article. In all but the most extreme cases, just as today, people would not end up in any sort of prison or work camp or otherwise physically restrained in order to pay off their debts. This includes wage garnishing to an extent where the debtor was unable to sustain themselves. There would more likely be a great amount of ostracism which the debtee attempts to propagate if the debtor fails to make reasonable efforts to repay the debt. That debt however is voluntary theft and therefore you are obligated to repay it… not involuntary slavery.
3. Nor is it the same as the situation of supposedly selling yourself into slavery. In that case you are agreeing to something which is continuous. Shelter and food can be stopped at any point with little or no theft. You stop working and they stop providing shelter. That’s significantly different from Joe A. Gambler taking a one million dollar loan at 20% interest. In that case you’ve taken money conditionally and upfront. Any failure to repay under those conditions is outright theft. Just because you cannot predict the future doesn’t negate the situtation you’ve agreed to. The debtor could have won money and repaid the loan too… so that act of getting the loan they possibly couldn’t afford isn’t in itself illegitimate. Besides it’s not practical. Are you really going to go to the individuals who have the money and ask for it back telling them the loan was illegitimate to begin with? If we are talking about a free society there can not be an organization with a monopoly on force, justice and law which attempts to forbid such contracts from being created in the first place.
4. “People are advertised, persuaded, brainwashed, conned, Ponzi schemed, schooled, and more to convince them to sell themselves into virtual slavery.”
   1. advertised: voluntary
   2. persuaded: voluntary
   3. brainwashed: hardly scientific IMO, can’t judge
   4. conned: fraud
   5. Ponzi schemed: possibly fraud, caveat emptor
   6. schooled:voluntary

   If you voluntarily enter into a situation that turns bad then there is little I feel someone can argue about. Lots of people make bad, ignorant decisions. That’s not fraud however nor is it something realistically preventable nor should it be prosecuted. Fraud however is a different story and would negate any contract entered into.