Next Door in Nodrumia

[Content note: attempt to consider real people’s real problems using angel-on-pinhead impractical reasoning and ideas]

I.

Imagine the state of nature, except for some reason there are cities. Some people in these cities play the drums all night and keep everyone else awake. The sleep-deprived people get together and agree this is unacceptable. They embark on a long journey to the wilderness where they found their own community of Nodrumia.

They form a company, the Nodrumia Corporation, which owns all the property in the area. The corporation distributes usage rights via a legal instrument that looks suspiciously like private property: people who own usage rights keep them forever, can do whatever they want with the land, and can freely transfer and sell them to others. The only difference is that the usage rights have a big asterisk on them saying “contract is null and void if you break the rules of the Nodrumia Corporation”. These rules are set by a board chosen democratically by the inhabitants, and are all things like “You can’t play drums at night”, and “You can’t sell property to people who will play the drums at night”, and “Anyone who plays the drums at night shall be exiled”.

One day a Nodrumian wants to move out, so he puts his house up for sale. The highest bidder is a drummer who wants to use the property as a studio so he can play the drums at night. The Corporation steps in and bans the sale. The property owner protests, saying that he is being oppressed.

According to libertarian philosophy, who is in the right?

The argument against the drummer: the land is basically the private property of the Nodrumia Corporation, and libertarians believe that private landowners should be able to determine what happens on their property. And more fundamentally, the people there have a strong preference against living near drummers, and that preference seems fundamentally satisfiable if their property rights are respected, and it seems stupid to legislate a world where people are forever forbidden from satisfying a fundamentally satisfiable preference and have to be unhappy all the time.