"Talks a good game about freedom when out of power, but once he’s in – bam! Everyone's enslaved in the human-flourishing mines."

Book Review: The Machinery Of Freedom

[conflict of interest: David Friedman is an amazing person who has been very nice to me and among other things hosted the San Jose SSC meetup earlier this month]

David Friedman’s The Machinery of Freedom is half Libertarianism 101: Introduction To Libertarianism, and half Libertarianism 501: Technical Diagrams For Constructing An Anarcho-Capitalist State.

And aside from either of these, it’s interesting as a historical artifact. The first edition was published in 1973; the Third Edition copy I read is from last year, but the updates are minor and the book keeps its 1973 feel – including a discussion of health care economics which puts the price of a doctor’s visit at $10.

One of my takeaways was how new libertarianism was in 1973. The introduction says:

These peculiar views of mine are not peculiar to me. If they were, I would be paying Harper and Row to publish this book instead of Harper and Row paying me. My views are typical of the ideas of a small but growing group of people, a ‘movement’ that has begun to attract the attention of the national media. We call ourselves libertarians.

This book is concerned with libertarian ideas, not with a history of the libertarian movement or a description of its present condition. It is fashionable to measure the importance of ideas by the number and violence of their adherents. That is a fashion I shall not follow. If, when you finish this book, you have come to share many of my views, you will know the most important thing about the number of libertarians – that it is larger by one than when you started reading.

There is something very innocent about expecting someone to become a libertarian after reading a book arguing for libertarianism, something very much a product of the time when the movement was new and anything was possible. Friedman discusses and debates the views of Ayn Rand not as some sort of ascended cultural archetype, but as a fellow theorist who happens to be writing around the same time. It makes the book somehow fresher than one that starts from the perspective of “Okay, you’ve heard all of these arguments before, so let me preach to the choir and see what happens.”

But sometimes the book is dated in ways less innocuous than ten-dollar doctor visits. For example, in Chapter 5, “The Rich Get Richer And The Poor Get Richer,” Friedman argues against excessive concern with inequality, saying:

In absolute terms, the rich have gotten richer, but the gap between rich and poor seems, so far as very imperfect statistics make it possible to judge, to have ben slowly closing…we can note that both the rise in the general standard of living and the decreasing inequality appear to have been occurring fairly steadily over a long period of time, in a variety of different more or less capitalist societies…in the previous chapter I argued that liberal measures tend to injure the poor, not benefit them, and to increase, not decrease inequality. If that has been true in the past, then the increasing equality we have experienced is in spite of, not because of, such measures…

Even if the capitalist invests all the income from his capital and consumes none of it, his wealth will only grow at the rate of return on capital. If the interest rate is less than the rate at which the total wages of workers increase, the relative wealth of the capitalists will decline. Historically, the rate of increase in total wages has run about 5 to 10 percent a year, roughly comparable to the interest rate earned by capital. Furthermore, capitalists consume part of their income; if they did not, there would be little point in being a capitalist. The share of the national income going to capital in this country has varied over time but not consistently increased, as shown in Appendix III.

The heartbreaking thing is that every word of this was true in 1973. In fact, 1973 is frequently given as the inflection point, when for some reason middle-class wages stopped rising at the same rate as the wealth of the top 1% and capital’s share of income started a steady climb (this is frequently blamed on Reagan, but started almost a decade before his presidency).

There are enough issues like this that they make the book’s arguments less compelling, or at least cry out to be addressed. Likewise, the book’s statistics are fascinating and in many cases very counterintuitive and convincing, but I have a lot of trouble double-checking them because they’re mostly 1970s statistics.

I can’t do justice to the Libertarian 101 arguments in this review because there are too many of them on too many different topics. This is too bad because they are excellent and fascinating and you should really read them. Aside from recommending you get the book, I’ll shove those into a separate Highlights post later this week. But for now I want to focus on the claim that I found most interesting: Government claims legitimacy partly from its role in helping the poor, but the costs fall disproportionately on the poor and it screws them over more than any other group:

Suppose that one hundred years ago someone tried to persuade me that democratic institutions could be used to transfer money from the bulk of the population to the poor. I could have made the following reply: “The poor, whom you wish to help, are many times outnumbered by the rest of the population, from whom you intend to take the money to help them. If the non-poor are not generous enough to give money to the poor voluntarily through private charity, what makes you think they will be such fools as to vote to force themselves to take it?

I think I have a good answer to this question. Nobody’s vote makes very much difference, so people are happy to vote for signaling/psychological reasons rather than financial ones. If casting my vote to help the poor makes me feel like a good person, but losing money in redistribution schemes makes me poorer, well, my vote 100% determines whether I feel good or not, but only 1/300-million determines whether I get poorer. This might also be profitably mapped onto construal level theory, ie Robin Hanson’s Near Mode vs. Far Mode.

Anyway, having determined that democracy should not be expected to help the poor, he gets on to demonstrating that in fact it doesn’t:

There are some programs that give money to the poor – Aid to Families With Dependent Children, for instance. But such programs are vastly outweighed by those having the opposite effect – programs that injure the poor for the benefit of the not-poor. Almost surely, the poor would be better off if both the benefits that they now receive and the taxes, direct and indirect, that they now pay were abolished.

He then goes on to list examples, including Social Security, food subsidies (which increase food prices and go to rich farmers), state universities (since they cost tax money and mostly rich people go to university), and urban renewal projects (which bulldoze low-quality housing that the poor can afford to create high-quality housing that they can’t, thus pushing up their housing prices).

I don’t know much about the 1973 situation, but a lot of these don’t seem very convincing nowadays. Social Security no longer appears regressive: as per Wikipedia, “for people in the bottom fifth of the earnings distribution, the ratio of [Social Security] benefits to taxes is almost three times as high as it is for those in the top fifth.” And by my understanding, people who earn less than about $20,000 don’t pay federal income taxes at all, meaning the burden of universities, etc don’t fall upon them. A Cato Institute study finds that poor people on welfare can get benefits packages worth up to about $20,000. It seems really unlikely that whatever they have to pay because of farm subsidies or whatever compensates for that.

But Friedman also makes the stronger point that when government programs fail, it’s the poor who are most affected and who have the fewest other options. For example, he notes that the cost per capita of law enforcement/police/courts is $40 (remember, this is 1973!) and estimates that minus government waste and corruption, the free market could provide extremely competent policing for $20. He says:

There are many inhabitants of the ghetto who would be delighted to pay twenty dollars a year if in exchange they actually got protection; many of them have more than that stolen every year as a result of the poor protection they get from our government-run protection system. They would be even happier if at the same time they were relieved of the taxes that pay for the protection that the government police does not give them. In spite of popular myths about capitalism oppressing the poor, the poor are worst off in those things provided by government, such as schooling, police protection, and justice. There are more good cars in the ghetto than good schools.

I somewhat agree with the spirit of this quote, but certainly some of the problem is that poor people live in poor areas that collect little tax revenue and underfund their social services. Bigger government could solve this problem – just have school district funding set at the state or federal level. It’s less obvious that smaller government could – poor people would still have X dollars to spend on schools, for low values of X. But here we get into complicated proposals like vouchers and private policing that I’ll leave for later.


Let’s get to what we’re really here for – the crazy anarcho-capitalist utopia.

This quote is very long, but it’s worth it:

How, without government, could we settle the disputes that are now settled in courts of law? How could we protect ourselves from criminals?

Consider first the easiest case, the resolution of disputes involving contracts between well-established firms. A large fraction of such disputes are now settled not by government courts but by private arbitration of the sort described in Chapter 18. The firms, when they draw up a contract, specify a procedure for arbitrating any dispute that may arise. Thus they avoid the expense and delay of the courts.

The arbitrator has no police force. His function is to render decisions, not to enforce them. Currently, arbitrated decisions are usually enforceable in the government courts, but that is a recent development; historically, enforcement came from a firm’s desire to maintain its reputation. After refusing to accept an arbitrator’s judgment, it is hard to persuade anyone else to sign a contract that specifies arbitration; no one wants to play a game of ‘heads you win, tails I lose’.

Arbitration arrangements are already widespread. As the courts continue to deteriorate, arbitration will continue to grow. But it only provides for the resolution of disputes over pre-existing contracts. Arbitration, by itself, provides no solution for the man whose car is dented by a careless driver, still less for the victim of theft; in both cases the plaintiff and defendant, having different interests and no prior agreement, are unlikely to find a mutually satisfactory arbitrator. Indeed, the defendant has no reason to accept any arbitration at all; he can only lose–which brings us to the problem of preventing coercion.

Protection from coercion is an economic good. It is presently sold in a variety of forms–Brinks guards, locks, burglar alarms. As the effectiveness of government police declines, these market substitutes for the police, like market substitutes for the courts, become more popular.

Suppose, then, that at some future time there are no government police, but instead private protection agencies. These agencies sell the service of protecting their clients against crime. Perhaps they also guarantee performance by insuring their clients against losses resulting from criminal acts.

How might such protection agencies protect? That would be an economic decision, depending on the’-costs and effectiveness of different alternatives. On the one extreme, they might limit themselves to passive defenses, installing elaborate locks and alarms. Or they might take no preventive action at all, but make great efforts to hunt down criminals guilty of crimes against their clients. They might maintain foot patrols or squad cars, like our present government police, or they might rely on electronic substitutes. In any case, they would be selling a service to their customers and would have a strong incentive to provide as high a quality of service as possible, at the lowest possible cost. It is reasonable to suppose that the quality of service would be higher and the cost lower than with the present governmental system.

Inevitably, conflicts would arise between one protective agency and another. How might they be resolved?

I come home one night and find my television set missing. I immediately call my protection agency, Tannahelp Inc., to report the theft. They send an agent. He checks the automatic camera which Tannahelp, as part of their service, installed in my living room and discovers a picture of one Joe Bock lugging the television set out the door. The Tannahelp agent contacts Joe, informs him that Tannahelp has reason to believe he is in possession of my television set, and suggests he return it, along with an extra ten dollars to pay for Tannahelp’s time and trouble in locating Joe. Joe replies that he has never seen my television set in his life and tells the Tannahelp agent to go to hell.

The agent points out that until Tannahelp is convinced there has been a mistake, he must proceed on the assumption that the television set is my property. Six Tannahelp employees, all large and energetic, will be at Joe’s door next morning to collect the set. Joe, in response, informs the agent that he also has a protection agency, Dawn Defense, and that his contract with them undoubtedly requires them to protect him if six goons try to break into his house and steal his television set.

The stage seems set for a nice little war between Tannahelp and Dawn Defense. It is precisely such a possibility that has led some libertarians who are not anarchists, most notably Ayn Rand, to reject the possibility of competing free-market protection agencies.

But wars are very expensive, and Tannahelp and Dawn Defense are both profit-making corporations, more interested in saving money than face. I think the rest of the story would be less violent than Miss Rand supposed.

The Tannahelp agent calls up his opposite number at Dawn Defense. ‘We’ve got a problem. . . .’ After explaining the situation, he points out that if Tannahelp sends six men and Dawn eight, there will be a fight. Someone might even get hurt. Whoever wins, by the time the conflict is over it will be expensive for both sides. They might even have to start paying their employees higher wages to make up for the risk. Then both firms will be forced to raise their rates. If they do, Murbard Ltd., an aggressive new firm which has been trying to get established in the area, will undercut their prices and steal their customers. There must be a better solution.

The man from Tannahelp suggests that the better solution is arbitration. They will take the dispute over my television set to a reputable local arbitration firm. If the arbitrator decides that Joe is innocent, Tannahelp agrees to pay Joe and Dawn Defense an indemnity to make up for their time and trouble. If he is found guilty, Dawn Defense will accept the verdict; since the television set is not Joe’s, they have no obligation to protect him when the men from Tannahelp come to seize it.

What I have described is a very makeshift arrangement. In practice, once anarcho-capitalist institutions were well established, protection agencies would anticipate such difficulties and arrange contracts in advance, before specific conflicts occurred, specifying the arbitrator who would settle them.

In such an anarchist society, who would make the laws? On what basis would the private arbitrator decide what acts were criminal and what their punishments should be? The answer is that systems of law would be produced for profit on the open market, just as books and bras are produced today. There could be competition among different brands of law, just as there is competition among different brands of cars.

In such a society there might be many courts and even many legal systems. Each pair of protection agencies agree in advance on which court they will use in case of conflict. Thus the laws under which a particular case is decided are determined implicitly by advance agreement between the protection agencies whose customers are involved. In principle, there could be a different court and a different set of laws for every pair of protection agencies. In practice, many agencies would probably find it convenient to patronize the same courts, and many courts might find it convenient to adopt identical, or nearly identical, systems of law in order to simplify matters for their customers.

Before labelling a society in which different people are under different laws chaotic and unjust, remember that in our society the law under which you are judged depends on the country, state, and even city in which you happen to be. Under the arrangements I am describing, it depends instead on your protective agency and the agency of the person you accuse of a crime or who accuses you of a crime.

In such a society law is produced on the market. A court supports itself by charging for the service of arbitrating disputes. Its success depends on its reputation for honesty, reliability, and promptness and on the desirability to potential customers of the particular set of laws it judges by. The immediate customers are protection agencies. But the protection agency is itself selling a product to its customers. Part of that product is the legal system, or systems, of the courts it patronizes and under which its customers will consequently be judged. Each protection agency will try to patronize those courts under whose legal system its customers would like to live.

The idea is that these protection agencies are companies like any other, and so will try to provide a good product at a low cost that satisfies their customers. People can choose their favorite, and so in some sense decide which laws to be bound by. Although they will not have complete flexibility in choosing their laws, lawmaking bodies will be sort of subject to consumer demand.

He correctly points out that contrary to what you might expect this system does not by definition exclude victimless crimes. If you want to hire a police agency that things being gay is a crime, you can pay them money to go find gay people and throw them out of town. Then the gay people will hire their own police agency to defend themselves. I think Friedman believes that opposing homosexuality has a major free rider problem, and that most people like to signal virtue by complaining about them but very few people would be willing to pay money for it. By comparison, gay people would be willing to pay a lot of money to be protected from this sort of thing, so their protection agencies would be stronger than the agencies of whoever wants to kick them out, and they’d stay.

This seems to me overly optimistic. After all, back when only a tiny percent of the country was tolerant of homosexuality, it might be that church groups could raise a lot of money to enforce anti-gay laws, and gay people were mostly poor and couldn’t raise very much money to defend themselves. I think I know what Friedman’s response would be, which is “Yes, and during that time in your real-world statist society, homosexuality was also illegal. Yes, you would have to wait for cultural norms to change before homosexuality would be legalized, but it would very likely be easier to do my way than yours.” I think he’s possibly right.

My overall conclusion is that I am delighted by this fascinating and elegant system and would very much like to see it tried somewhere very far away from me.

I am sure Friedman has to listen to so many objections that he can recite most of them by memory and is sick to death of them. Indeed, he admits this and devotes no small amount of space to rebutting many of them. Will we get taken over by one giant protection racket? Probably not, monopolies are rare in practice. Will criminals get their own protection and arbitration agencies that say crime is okay? Probably not; no other protection agency would agree to arbitrate on their terms, and without arbitration they would be in a war with all the other agencies, which the other agencies would win since legitimate business can mobilize more money than crime can. Would there be constant bloody battles? Probably not; profit-seeking corporations would be too smart to lose money that way when better options like arbitration are available. Would the heads of protection agencies form a pact, then use their combined might to take over the country and become kings? Probably not; right now police chiefs and military generals don’t do this, even though they are in a good position to.

Here are some objections of mine I didn’t see rebutted:

1. People who don’t purchase protection are pretty much fair game for anyone to rob or murder or torture or whatever. This seems harsh, especially since this society is likely to have a sizable underclass. I don’t know if “$20 for a year of police protection” was a reasonable estimate for the 70s, but I expect this would be much costlier now. Compare the percent of people who, pre-Obamacare, still didn’t have health insurance, and how much higher it would have been if there weren’t government programs that kind of got health insurance bundled in with employment.

2. Protection agencies are going to be engaged in constant brinksmanship for the same reason nation-states are engaged in constant brinksmanship. If Agency 1 wanted concessions from Agency 2, it has an incentive to seem kind of crazy and like it might actually declare real war, however unprofitable, in order to bluff Agency 2 into complying. Remember, countries have the same economic incentives to avoid war that companies do, but they still occasionally get involved in them. Even when they don’t, the threat of such leads many resources to be wasted in military buildup.

3. Security companies and their clients are very unlikely to want to pay for the cost of incarcerations. There’s no incentive to pay extra for criminal rights, so convicted criminals are likely to end up facing something like corporal punishment Never mind, this went an unexpected direction and is probably a good thing.

4. If I am the church-funded protection agency charged with flogging gay people, and you are the gay-person funded protection agency charged with protecting them, it’s hard to see what kind of arbitration we would agree on. I…uh…guess this might be another one that isn’t so bad, since that might mean the agencies are forced to actually fight, which raises the cost of being anti-gay to a potentially prohibitive level.

5. There are some things which might decrease crime in an area in general instead of just involving crime against a specific person. For example, adding streetlights, fighting drug abuse, putting troubled youth in after-school programs, fighting the broken window effect. If these are public goods, nobody will be incentivized to pay extra for them.

6. In fact, protection agencies have a strong incentive to make everybody as scared of crime as possible, and in fact to raise the actual crime rate if they can, in order to get people to buy their Premium plan. Given that this is anarcho-capitalism and there are no laws against crime, this can’t possibly end well.

7. It would be hard to have large-scale public laws. Right now Saudi Arabia can have laws about how no woman can go outside unveiled, America can have laws that nobody can go outside unclothed, and some European beaches can have laws saying go ahead and be naked. Likewise, some small villages can have zoning laws saying not to build non-scenic skyscrapers, but Dubai can say to build as high as you want and then some. This seems harder under anarcho-capitalism until people start coordinating the formation of intentional communities, at which point it becomes less anarcho-capitalism and more Patchwork.

8. Gang leaders and barbarian warlords had the chance to become protection agencies like this, but never did. This suggests that this system is unstable or unnatural. It’s possible that once the equilibrium of protection and arbitration agencies is established it will be stable, but of all of the various lawless societies to exist throughout history, none of them coalesced upon this system. Suspicious.

9. An extension of this: it’s unclear that we’re not already living in this society. It’s just that one protection and arbitration agency has completely taken over from all of the others and instituted a policy of using force against those who don’t pay for its services. That’s allowed under anarcho-capitalism because everything is allowed under anarcho-capitalism. So expecting anarcho-capitalism to be stable is expecting the thing that has already happened to not happen again a second time.

10. There seems to be a lot of opportunities for rich people to purchase greater privileges not available to the masses. After all, negotiation results are often determined by a party’s BATNA. Rich people may have access to very strong security companies (or premium plans from regular companies) that could win most fights; they can use this to insist on better arbitration terms. A rich person’s company might only accept basic arbitration (eg punish the rich person for murder) if other companies agree to lopsided deals (like don’t go after the rich person for less dramatic things like sexual harassment. On the other hand, a poorer person’s company might have to accept the worse side of the deal, where the poor person can be prosecuted for a very wide range of crimes against the rich person, including giving offense and not being respectful enough. Yes, it’s easy to see how a company could arise that charges extra in exchange for not accepting these compromises, but this still suggests you’re going to have more rights if you’re able to pay more money.

But the main reason I want this tried far away from me is none of these. It’s just a general expectation that something will go wrong when we try a social system we’ve never tried before. I was very impressed to learn that very few people predicted, before the fact, that Communist countries would have terrible economies. Even the American 1950s opponents of Communism argued that okay, fine, Communist countries will probably outperform capitalist countries economically, but freedom is more important than mere wealth.

If people can’t figure out that Communism might sink the economy, I don’t trust them to figure out all of the things that might go wrong with anarcho-capitalism. Even if David Friedman replies with utterly convincing rebuttals to all of my ten points above, it’s going to be the eleventh point I didn’t think of that makes the system explode.


And this leads me into one of my deepest problems with libertarianism and anarcho-capitalism: why should it work?

I don’t mean the sort of “why should it work” where you answer with specific reasons why no, monopolies won’t form, and no, people won’t routinely sell themselves into slavery, and no, protection agencies won’t form a new feudal ruling class, and no, people won’t bash their heads against public goods problems and externalities forever without any market solutions appearing, and no, the poor won’t starve to death. I mean the very Outside View question of “why is it that, by coincidence, not using force is an effective way to solve all problems?”

Good governance is a really really hard problem. The idea that the solution to this problem contains zero bits of information, that it just solves itself if you leave people alone, seems astonishing. Even if we agree that capitalism works very well by incentivizing companies to do what the consumers wants, there are still a lot of peripheral issues which that just doesn’t cover. Friedman for example is a strong supporter of child rights, because children should mostly be free from coercion from their parents, and that children treated this way turn out better. Now in addition to solving governance with zero bits of information, you have solved optimal child-rearing with zero bits of information. That is implausibly impressive.

Given that the universe is allowed to throw whatever problems it wants at us, and that it has so far gleefully taken advantage of that right to come up with a whole host of very diverse and interesting ones, why is it that none of these problems are best addressed by a centralized entity with a monopoly on force? That seems like a pretty basic structure from a game-theoretic perspective, and you’re telling me it just never works in the real world? Shouldn’t there be at least one or two things where a government, or any form of coercive structure at all, is just the right answer? And can’t we just have a small government that does that?

The closest thing I’ve found to a response here is on page 142, where Friedman makes the following very witty observation:

The internal dynamic of limited government is something with which we, to our sorrow, have a good deal of practical experience. It took about 150 years, starting with a Bill of Rights that reserved to the states and the people all powers not explicitly delegated to the federal government, to produce a Supreme Court willing to rule that growing corn to feed your own hogs is interstate commerce and can therefore be regulated by Congress.

So if we have any kind of government at all, it will eventually metastasize into the sort of thing that makes laws about whether we’re allowed to grow corn to feed our own animals, or bans us from drinking raw milk, or whatever else it feels like doing.

So which is better: moving to full anarcho-capitalism, or trying to move towards a system that can provide more of the benefits of government with fewer of the costs?

I don’t know, so it’s a good thing I don’t have to choose. The obvious next step seems to be setting up anarcho-capitalist experiments somewhere and seeing how they do, as well as continuing to experiment with new and better forms of government. Trying to predict anything from theory runs into the same problem where everyone assumed Communism would be an economic powerhouse – we’re just not that smart. Instead we need to figure out ways to produce experimentation with and competition among different governments and government-like-entities – a goal I know David Friedman agrees with.

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604 Responses to Book Review: The Machinery Of Freedom

  1. DanielLC says:

    The part about capitalism that I find most important is its stability. It happens on its own if the government doesn’t bother. If the government tries to be helpful but misses some stuff, capitalism can take care of the details.

    Anarchy isn’t stable. Almost everyone is under some sort of government. When a government falls, it might have anarchy for a short time, but a new government will quickly arise. Even with governments, its common for organized crime to start demanding protection money, and stopping competing criminals from stealing their money from you. This is essentially what a government does. Governments are so natural that they happen recursively.

    • Cinter says:

      It occurs to me that if this is true then libertarians are not cynical enough about government.

    • Chris H says:

      Anarchy was stable for very long stretches of human history in the form of various “barbarian” or hill tribes throughout the world. Indeed some places still have them. Occasionally such groups could even do some pretty impressive development (the potentially artificial soil that covers much of the Amazon rain forest would be the best example if it is definitely artificial). Anarchism in these areas rarely follows the theories of anarcho-capitalism, but it seems capable of maintaining itself for centuries, so stability doesn’t really seem to be the problem.

      • Daniel Kendrick says:

        Right, the problem is that it’s not the kind of anarchy people want. Glamorizing of medieval Iceland aside, (almost) no one wants to live in some sort of tribal-primitivist future. If anarchy can’t deliver us global capitalism, it fails.

        • Chris H says:

          Of course. But to be fair, the clear superiority of living in states is a fairly recent phenomenon . Unless you happened to be one of the elite of a state-having society, the living standard gap between yourself and a hill tribe member was not that big and in many cases was better for the average anarchist. Anarchism so far has failed to develop into modern global capitalism, but most states throughout history and a large number of them even in the present have failed to do so too. This to me weakens (but does not dismiss) the point of anarchism’ current failure to match life in states. Rather than the whole of human history testifying to anarchism’s failures, it’s more like the past 200 years doing so, and in a period where states got the first mover advantage on industrialization and were actively conquering all other areas with or without states that failed to keep up. That somewhat mitigates the critique. I’m not an anarchist and I think anarcho-tribalism (which is a bit different though more closely related to anarcho-communism than capitalism) is a far more likely result from no government than Friedman’s anarcho-capitalism, but the superiority of governments seems like a fairly recent circumstance, and I wouldn’t discount the idea that it might also be temporary.

          • Anarchy may have been a close second to authority in terms of quality of life, but lagged far behind in other areas, many of which were necessary precursors to industrialization, such as having large societies, having a division of labour into specializations, and having a fairly high standard of education.

      • Charlie says:

        Yeah, that’s more on the anarcho-communism side, a quite different beast.

      • Kiya says:

        Anarcho-not-having-invented-currency-ism, perhaps.

      • HeelBearCub says:

        In what way is a “Chieftain” model of government related to anarchy, especially if the the role of head man was hereditary?

        • Nornagest says:

          Chiefdoms are actually quite a different thing from band societies. The standard theory is that you get a chiefdom when the social and physical environment becomes stable enough for a single family or group of families (roughly; kinship arrangements don’t always map well to what we think of as families) to centralize political power; that generally implies sedentary or semi-sedentary living habits, agricultural or pastoral food sources, and hereditary rank. Pre-contact Polynesia would be one example.

          Band societies are older, smaller, and generally don’t have chiefs or social strata, though various forms of informal authority may exist. They’re what people are talking about when they discuss primitive anarchy, although there’s debate over how anarchic they are; while it’s fairly well-documented that formalized authority is rare in these kinds of societies, informal influence can go very far in groups smaller than Dunbar’s number.

          A variety of intermediate forms also exist.

      • pacifist says:

        That kind of anarchy was only possible because a combination of poverty and nomadic elusiveness made those societies not worth conquering.

        If a society is worth conquering, then anarchy is impossible.

      • Small egalitarian/anarchist societies can last a long time, but they don’t scale up . The steelmanned point would be that all large societies are under form of government,

      • I’m not certain tribal communities, good or bad, could really be called anarchist, and I don’t think pre-nation city-states (common until modernity) could either. It seems to me that the difference was just the size of the entity and its government. So in the tribe it’s often a chief or council, and in a city-state or nation its an oligarchy, elected rulers, dictator or whoever happens to hold power. If the scale of anarchy/totality is measured as the amount of restriction on human action imposed by other humans, I don’t think tribes would be all that different from nations. I think you’d have to look at the individual tribe or nation in a more detailed way to come to a judgment on that axis.

        • You are assuming that what you call tribal societies had some central authority, a chief or council. There are lots of examples of ones that didn’t. Consider the Commanche, as described in Hoebel’s The Law of Primitive Man. A war chief was someone who proposed a war party and got others to follow him. While in the party they were subject to his orders, but could leave at any time. There were no chiefs in any stronger sense. Or consider saga period Iceland, where all rights enforcement was private. Or the traditional institutions of Somaliland (northern Somalia). Or …

          You can find a good deal of this in the webbed draft of my current book project:


          • szopeno says:

            David, or consider 16th century Poland, where every noble could go to the court and then he would have to enforce the ruling on his own. The effects were nto desirable, with most famous guys havnig several legal orders of infamy, and yet continuing to live happy lives are neighbourhood pestilence until their death or until they finally step on toe of someone who was far more powerful. Sometimes it involved an actual private war (as in case of devil of Łańcut against Opaliński). The effect was clearly not-optimal, as people probably had to invest more in weapons, armed servants and so on, instaed of concentrating on cooperation and economy.

            And this was, IIRC, already pointed out to you almost two decades ago (you probably don’t remember this, this was on soc.history.what-if, a discussion which started with me asking to explain to me “as to a cow on a mead” what a libertarianism is)

      • vV_Vv says:

        That wasn’t anarchy, each tribe had its own government. These governments weren’t tied to any particular piece of land but to the people, which makes perfectly sense in a nomadic culture.

        When different tribes came into contact, it could result in warfare or peaceful interactions, tribes could merge or split. Essentially this was much like international relations between modern nation states, except occurring at a very much smaller scale.

    • onyomi says:

      There’s a big difference between a majority of the people in an area deciding in an orderly fashion they don’t need a centralized authority and a central authority collapsing on people who assume that one is necessary.

      In order for anarcho-capitalism to work, I predict you’d need a large percentage of the population in such an area to basically be familiar with and subscribe to the sorts of principles Michael Huemer describes in “The Problem of Political Authority”–that is, to accept that, on common sense morality, government is illegitimate.

      Does needing a particular ethos amongst the populous to function disqualify a form of governance? If it did, I don’t think any form would work. Witness the failed attempts to establish democratic nation states in areas which are tribalistic and/or theocratic in their thinking. The Schelling fence has to move for anarcho-capitalism to work, but then, it had to move for democracy as well.

      • Forms of governance may require ethoi, but ethoi need the support of systems, even if not governmental ones. Missing that point is one of Rand’s failings….she thinks that the citizens libertopia will refrain from prudently predating because it’s ethically a bad thing, in her view. But moral exhortation isnt a very effective sharper of behaviour.

        • onyomi says:

          I don’t think that’s an accurate representation of Rand’s view. Rand was not an anarchist, but a minarchist. She thought government was necessary to provide basically police, courts, and military, due to what she saw as the problem of private defense agencies being in perpetual war with each other.

          In anarcho-capitalism world as most ancaps see it, I don’t think we naively rely on everyone being non-violent, though the overall ethos of such a society would, we expect, be strongly against coercion and violence of all kinds. Rather, we expect such a society will be low on crime and violence because crime and violence will not pay, not only because most people with anything worth stealing will probably be protected by very efficient insurance and security firms, but also because there will probably be more opportunities for legitimate jobs, and the most lucrative forms of crime, like drugs, prostitution, and gambling, will all likely be legal.

          • But, again, what us to stop private security firms doing the profitable thing, and Idirectly eotorting money? Ethos?

          • @TheAncientGeek: I have to admit I don’t think that would be profitable in a society where people probably would rather pay your competitors to keep you out. Basically, what’s to stop people from getting other private security firms that are not pulling that trick to protect themselves from you?

            On the flip side, if you’ll forgive me the tangent… what’s stopping leaders of non-dictatorially governed countries from taking over the country?

            ‘That’s easy,’ you might be thinking, ‘that’s what political checks and balances are for.’

            Meanwhile, I feel the answer to the dystopian scenario of both cases is actually much the same. The rules that keep the existing political systems in line (to some degree) also simply boil down to that some people with similar degrees of authority (/ power) need to object to what you’re trying to do.

            I don’t think a decentralised society would be necessarily worse at this (whether it’s called ‘ethos’ or not).

            (In summary, I guess I feel onyomi already answered your question. I don’t think I’m adding much. :c)

      • onyomi says:

        Another way of putting it:

        Having the local church burn down does not turn the community into atheists.

    • Quite Likely says:

      What do you mean by that? While we can theorize about anarcho-capitalism, in reality capitalism has always and everywhere been very much a state project. And of course there are tons of problems that the private sector is just not equipped to solve, no matter how ineffective the government is.

      • Tracy W says:

        I know a fair bit of British history and I never heard of capitalism being a state project there but the industrial revolution happened anyway. Adam Smith made quite a case that the British government was quite mercentalist.

    • “This is essentially what a government does. ”

      I sse your point, but having a vote, statutes of limitations, etc, shouldn’t be sneezed at.
      That may be the best plausible world.

  2. dinofs says:

    Interesting fact: gang leaders did in fact play the community policing role in low-income, inner-city neighborhoods in towns like Los Angeles and Chicago. These started out as small, almost block-by-block affairs, but they were slowly drawn into the kind of inter-protection-agency conflict that Friedman describes, and we all know what happened to LA and Chicago from there. You could argue that the gang warfare of the 70’s on wasn’t inevitable, and that it wouldn’t happen if it hadn’t been for the sudden influx of drugs after the 1960’s, or the fact that poorly-policed neighborhoods that needed local protection had under-educated people who were never trained in arbitration, or that the whole thing was a result of bad government policy in the first place (public housing, the drug war, whatever) — but in any case the fact is that the descent which all libertarians promise could never happen has happened, simultaneously, all across America. And it’s not as though it’s just the low-income groups who turn dangerous — when the middle classes decide to go private security it often turns into things like the White Citizen’s Council and it’s slightly rougher cousin, the Ku Klux Klan.

    • moridinamael says:

      Unfortunately I don’t think the problem is that gang leaders weren’t trained in arbitration. The gang leaders were almost perfectly obeying the relevant incentives. Projecting power and ruthlessness is critical when the other gangs have the ability and incentive to murder your gang. The other gangs follow the same incentives as you do, so you all compete to display power and ruthlessness. The local optimum ends up being somewhere between 100% constant warfare and quiet armistice. Any group or groups attempting polite arbitration would be crushed in this environment.

      There were other times and places where the incentives were different, and in those times and places the gangs were referred to as “organized crime,” they wore suits and had lawyers and did conduct arbitration.

      • vV_Vv says:

        The local optimum ends up being somewhere between 100% constant warfare and quiet armistice. Any group or groups attempting polite arbitration would be crushed in this environment.

        I think that if the formal government is truly absent or ineffective then the equilibrium is for one of the warring gangs to eventually raise to dominance, at least over a given territory, effectively becoming its new government.

        If the formal government is present but lax and/or corrupt, it will cull any gang that becomes powerful enough to threaten its sovereignty but it will let the minor gangs operate, resulting in an equilibrium where multiple gangs perpetually compete over a single territory.

    • Northern Irish paramilitarys explicitly sold themselves as community police, and their methods were not at all pretty


    • Susebron says:

      The Taliban started as effectively a protection agency after the Soviets withdrew from Afghanistan. They had a defined code of arbitration, and people trained in arbitration, and the military force to back it up. And look what happened.

  3. Princess Stargirl says:

    “And can’t we just have a small government that does that?”

    David’s Friedman’s explicit position (based on his blog, comments on SSc , etc) is that no we cannot.

    I am not sure if DF agrees with this example. But a common Ancap rebuttal is the United States. The US constitution was pretty clearly intended to secure a very limited government. But government over-each occurred almost immediately (alien and sedition laws for example). And of course the current US government bares little resemblance to what was intended at the founding.*

    *I am not saying its bad the US constitution failed to prevent government growth. This is a hard problem.

    • The US constitution was pretty clearly intended to secure a very limited government. But government over-each occurred almost immediately (alien and sedition laws for example). And of course the current US government bares little resemblance to what was intended at the founding.

      There’s a libertarian tendency to romanticize the US Constitution as a plan for a sharply limited government over individuals, but that was not the intent. Rather, it set up a limited central government over more than a dozen pre-existing governments.

      The Constitutional limits were designed, in most cases, to preserve the powers of state governments, not to create liberty for individuals vis-a-vis government in general.

      The Bill of Rights is a wonderful thing, but it wasn’t interpreted to apply to actions of the states and local governments until after the post-Civil-War 14th Amendment.

      “States’ rights” are not human, individual rights.

      • sourcreamus says:

        This is true, but the Constitution also failed in preserving a small federal government and strong state governments. The federal government collects more revenue and has more power than any state government which is what the Constitution was designed in part to prevent.

        • The original conception was inherently fragile, a creaky collection of compromises, mostly because of the tension between North and South over slavery. It very nearly collapsed in 1833, and finally did in 1861.

          The Civil War, the 14th Amendment, and Lincoln’s reinterpretation of the original ideals, led to a much more centralized and nationalist arrangement from then on.

          These new arrangements reinforced, and were reinforced by, growing physical and economic mobility in the 19th century and forward. People came to see themselves as Americans rather than Pennsylvanians or Virginians. Cultural and political changes went hand in hand.

          • Andy says:

            People came to see themselves as Americans rather than Pennsylvanians or Virginians. Cultural and political changes went hand in hand.

            Fun bit of trivia: over the course of the war, Lincoln’s syntax changed. He went from saying “The United States are” to “The United States is“. Source: James MacPherson, Battle Cry of Freedom

        • wysinwyg says:

          Yes, but it failed because of conflict between the state governments. Another way of looking at it is that there was a crisis caused by conflict between state governments, and that the solution involved empowering the federal government to suppress conflicts between state governments.

          This is essentially the argument SSC is making, I think: that the monopoly on force may actually be a solution to a problem created by ancap-like conditions.

          • Yes, that is a fair statement.

            The conflict between the US state governments was not something which could easily have been avoided, but admittedly that may be the specific circumstances.

            I don’t know much about Switzerland’s history, but they do have relatively autonomous cantons, and didn’t erupt into civil war.

          • fubarobfusco says:

            More specifically, the Constitution required the Northern states to enforce slavery on behalf of the Southern states. The South expected (correctly) that unless the Northern states would return fugitive slaves to captivity, there would be no feasible way to prevent slaves from escaping into freedom.

            This broke down when Northern states started refusing to uphold their end of the bargain — because, you know, slavery is evil and unjust, and they decided that they should not be compelled to enforce evil injustice even if their grandparents’ leaders agreed to do so.

            The Federal government repeatedly intervened on behalf of the South to compel the Northern states to return escaped slaves — sending U.S. Marshals into New York and Pennsylvania to do so. But with the election of Lincoln, who was known to be anti-slavery, the South could no longer count on this intervention.

            If you read the Southern states’ declarations of secession, this is all spelled out very clearly. The “states’ rights” that they were concerned about were not local rights of autonomy, but rather the Constitutional right of the Southern states to receive the help of the Northern and Federal governments in maintaining slavery.

          • John Schilling says:

            I don’t think you can really characterize the ACW as being a conflict between state governments. Yes, disagreement regarding what to do about fugitive slaves, but that’s not enough to drive secession, much less war. Seriously, how does secession get the Confederates any of their runaway slaves back? The overriding issue was that a majority of the American electorate wanted slavery to be done away with, and through the democratic process was increasingly using the Federal government as a tool to that end. Northern state governments were bit players in the game, and if we assume that there never was a US Federal government but just a bunch of sovereign states, I don’t see either side gearing up for an actual invasion of the other.

            So, in that specific case, I think it does come to a strong central government throwing its weight around (in accordance with the will of most of the people), leading to a war that would not have happened had the Federal government been weaker.

            In the general case, I leave it as an excuse for the student to figure out how many other stupid little wars fifty-odd sovereign American states would have managed to fight with each other over the past two and a quarter centuries, if they had been left to their own devices. And yes, I am inclined to suspect that fifty-odd private protection companies would do about the same.

          • The overriding issue was that a majority of the American electorate wanted slavery to be done away with, and through the democratic process was increasingly using the Federal government as a tool to that end.

            That’s not true. Before the Civil War, no more than about 1% of the North advocated immediate abolition of slavery in the slave states.

            The overwhelming mainstream view was that the federal government had no power to interfere with slavery in the South.

            All of the pre-Civil-War arguments were about edge issues: fugitive slaves in the North, slave ships on the high seas, slavery in federal territories, etc.

            So-called “anti-slavery” politicians, such as Lincoln, distanced themselves from the radical abolitionists.

            Many people, North and South, assumed that if slavery couldn’t expand into the western territories, it would eventually die out.

          • Holgar says:

            I don’t think you can really characterize the ACW as being a conflict between state governments. Yes, disagreement regarding what to do about fugitive slaves, but that’s not enough to drive secession, much less war.

            Interestingly, South Carolina thought differently:

            “The Constitution of the United States, in its fourth Article, provides as follows:
            “No person held to service or labor in one State, under the laws thereof, escaping into another, shall, in consequence of any law or regulation therein, be discharged from such service or labor, but shall be delivered up, on claim of the party to whom such service or labor may be due.”
            This stipulation was so material to the compact, that without it that compact would not have been made. The greater number of the contracting parties held slaves, and they had previously evinced their estimate of the value of such a stipulation by making it a condition in the Ordinance for the government of the territory ceded by Virginia, which now composes the States north of the Ohio River.

            The same article of the Constitution stipulates also for rendition by the several States of fugitives from justice from the other States.
            The General Government, as the common agent, passed laws to carry into effect these stipulations of the States. For many years these laws were executed. But an increasing hostility on the part of the non-slaveholding States to the institution of slavery, has led to a disregard of their obligations, and the laws of the General Government have ceased to effect the objects of the Constitution. The States of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, Pennsylvania, Illinois, Indiana, Michigan, Wisconsin and Iowa, have enacted laws which either nullify the Acts of Congress or render useless any attempt to execute them. In many of these States the fugitive is discharged from service or labor claimed, and in none of them has the State Government complied with the stipulation made in the Constitution. The State of New Jersey, at an early day, passed a law in conformity with her constitutional obligation; but the current of anti-slavery feeling has led her more recently to enact laws which render inoperative the remedies provided by her own law and by the laws of Congress. In the State of New York even the right of transit for a slave has been denied by her tribunals; and the States of Ohio and Iowa have refused to surrender to justice fugitives charged with murder, and with inciting servile insurrection in the State of Virginia. Thus the constituted compact has been deliberately broken and disregarded by the non-slaveholding States, and the consequence follows that South Carolina is released from her obligation.”


          • With the thoughts you'd be thinkin says:

            Larry, the Swiss did fight a civil about the strength of federal authorities in their government, the Sonderbund war.

          • wysinwyg says:

            The overriding issue was that a majority of the American electorate wanted slavery to be done away with, and through the democratic process was increasingly using the Federal government as a tool to that end.

            I also disagree with this, though I’m not sure the obligations of northern states to enforce slavery was the biggest factor either.

            My opinion on this is that the ACW was almost purely about whether new states would be slave states or free states and the effect that would have on the balance of power in Congress. The slave and free states had already spent several decades making uneasy compromises to keep the balance of power roughly even.

            My interpretation is that legislators from the northern states wanted to ensure that new territories would be free territories so that as they became states, the balance of power would swing towards the northern agenda (protectionism, mostly). The southern legislators saw what they were doing and, once it became clear that they couldn’t do anything about it legislatively, decided secession was the best option.

            Obviously a drastic oversimplification.

          • Andy says:

            In the general case, I leave it as an excuse for the student to figure out how many other stupid little wars fifty-odd sovereign American states would have managed to fight with each other over the past two and a quarter centuries, if they had been left to their own devices. And yes, I am inclined to suspect that fifty-odd private protection companies would do about the same.

            Out here in the West, our water conflicts are certainly vociferous enough, and affect enough people, that a war over water is not out of the question. We’ve actually had “Water Wars” here in California, though they were largely legal rather than physical.

          • Mr Breakfast says:

            ” Out here in the West, our water conflicts are certainly vociferous enough, and affect enough people, that a war over water is not out of the question… ”

            At the same time though, aren’t the large population centers and vast irrigation infrastructure in the drier parts of the west exactly the kind of fragile, pharaonic folly that only continental/imperial states have the combined resources and hubris to create?

            If the west had been developed with the type of settlements and industries that could be sustained from local resources, would there still be cause for water wars?

  4. blacktrance says:

    It’s just a general expectation that something will go wrong when we try a social system we’ve never tried before.

    That’s a fully general counterargument against ever trying any new social systems, even if the arguments in favor of it are good. But everything we now consider good was new and untried at some point – if we had followed this rule of thumb, we’d still have feudalism, if not something older.
    You say you want it tried away from you. Who will be the lucky (?) people who try anarcho-capitalism? If they followed your rule, they, too, would want it tried far away from them.

    • Scott Alexander says:

      1. Incremental progress is better than sudden revolution
      2. Any very large changes should be done in a small area first before they’re done in the entire country.
      3. …preferably among consenting people, which shouldn’t be hard given that there is a lot of geographic ideological diversity.

      • “…preferably among consenting people, which shouldn’t be hard given that there is a lot of geographic ideological diversity.”

        The antinatalist in me wants to know how you’re going to get babies to consent to being born in this society, particularly given that there are no laws against pederasty and children don’t have money to pay for their protection.

        • Izaak Weiss says:

          No babies consent to be born in any society. That argument proves too much.

          • urpriest says:

            You missed the word “antinatalist”.

          • In the absence of consent, you shouldn’t forcibly throw people into social experiments with a non-neglibible likelihood of placing them into sexual slavery. Birthin children into mainstream society is less morally dubious, since we have a much better idea how it will turn out, even if we can’t get consent.

      • Tibor says:

        Do you know about the seasteaders, Scott? They are basically trying to do just that – i.e. provide a platform to try untried political arrangements on a small/medium scale. One reason I would hesitate to send money to a libertarian political organization is that even though I am more optimistic about anarcho-capitalism than you are (I think it would probably work in most areas, my biggest concern is with the national defense which seems to me could work in some situations, would work worse in others), I don’t want to be proven wrong on a large scale. If anarcho-capitalism does not work, it will stabilize in a new government…one that is likely worse than the one that was benevolent enough to let itself dissolve into anarcho-capitalism in the first place. Also, there is something weird about objecting against government and the fact that it imposes its will on you whether you like it or not while at the same time trying to use exactly the same mechanism to change the society.

        And seasteading is much more than just libertarians anyway. Even crazier ideas can be tried out, and maybe some of them will work out. Since all land is occupied by governments (all inhabitable land anyway), the ocean seems to be the only place where you could try the different ideas out. And hopefully, then they can spread to the land (although, I would say that, say, spectacular performance of Switzerland does not seem to encourage the EU to go in a similar direction, so maybe I am too optimistic there). It might be a long shot, but still I find this a more likely (and safer) scenario than somehow a libertarian anarcho-capitalist party convincing a constitutional majority of the country to dissolve itself…and a violent revolution is an even worse idea (not only very un-libertarian, but more importantly, the track record of violent revolutions seems to be very poor and well, violent).

        Look up the seasteading institute if you’re interested.

        • Robbbbbb says:

          And we come full circle. While discussing a book by David Friedman, someone in the crowd points to the pet project of his son, Patri Friedman*.

          I find this amusing.

          *Full disclosure: Patri is a personal friend of mine; we went to college together.

          • Tibor says:

            I am aware of that, but I don’t think it is particualrly important (which is why I did not feel like it needed to be mentioned). There are many more people interested in the idea than just Patri Friedman (and more people directly involved in the seasteading institute…also, not just libertarians) and even if that were not true, it does not make the idea any less (or more for that matter) interesting or relevant just because Patri is a son of David.

        • Dain says:

          The reaction to seasteading in the press while minimal hasn’t been encouraging. Scott’s position as tolerant of experiments on the small-scale is actually radical when you consider that most people immediately roll their eyes at or are hostile to the seasteading idea. It’s been described as a rich man’s fancy. So even when the rich don’t want to rule over you, or have anything do with you in fact, that’s mean too (presumably because they’re taking their ball [money] and going home, which upsets the tribal norms).

          • Tibor says:

            Also, I think it is a mistake to see the seasteading idea as a “rich kids only” club. Based on the projections by DeltaSync (the Dutch company that deals with the technical side of the Seasteading Institute’s ideas), a price of an appartement a floating city (if it is going to eventually going to be built according to their design) should not exceed the price in cities like London or NYC. Sure, you can find mindboggingly expensive flats there, but also ones that are ok if you are a middle class person from the EU (although maybe not Bulgaria or Romania), Switzerland, Norway, Northern America (or parts of East Asia) and really want to live on a seastead.

            So far, I have seen only left-wing newspapers to really openly mock the idea or even somehow consider it evil (which is completely beyond my understanding)

          • Jiro says:

            Moving to a seastead is risky activity. People who engage in risky activity are assumed to either be stupid, or to be able to absorb the losses (i.e. be rich).

          • RCF says:

            “a price of an appartement a floating city (if it is going to eventually going to be built according to their design) should not exceed the price in cities like London or NYC. ”

            And a cabin in remote Alaska is even cheaper. An apartment in NYC is expensive because it provides the benefit of being in NYC. Poor people can pay for expensive things, but only when they really need them. Expensive things that are purchased for less pressing reasons are the province of the rich.

          • Tibor says:

            RCF: I don’t see how is a not-so-rich person who believes that by moving to a seastead he can have a much better life (in whatever sense) different from the same person who believes the same about moving to NYC?

            But it could be that the critics of seasteading simply don’t even entertain the possibility that someone might actually take the idea seriously and then they see is as a frivolous whim of the super rich who just want a new toy to play with when they could use the money for helping the poor or something. Except that possibly the only super-rich guy involved in seasteading is Peter Thiel and he would be way better off buying a small island somewhere if a playground were what he wanted 🙂

            But then this is the same mistake most people (including many libertarians) do – assume that others think exactly the same as you do and if they then reach different conclusions then they have to be either stupid or evil, or both.

          • cypher says:

            Not just tribal norms. The wealthy have a history of jumping through hoops not to share their resources with society. A lot of people look at a seastead, where there are no worker protection laws or taxes, and see it as a way for the wealthy to not only dodge taxes, but potentially abuse and exploit people for their own benefit/pleasure.

          • Devilbunny says:

            cypher, I am in no way familiar with the nuts and bolts of seasteading, but the fundamental difficulty of asserting that you are outside of government control when on the ocean seems to me to be that there are just too many ways in which governments can quite easily exert a lot of control over a ship – refueling and restocking, internet access (you have to buy it from someone, and governments can and will lean on them), even simple things like carrying on productive economic activity to keep the thing afloat.

            Being very wealthy is not particularly valuable if you are subject to arrest whenever you show up on land.

          • RCF says:

            “RCF: I don’t see how is a not-so-rich person who believes that by moving to a seastead he can have a much better life (in whatever sense) different from the same person who believes the same about moving to NYC?”

            Are we discussing actual reality, or some hypothetical future? A poor person who moves to NYC is moving to a place with a proven record of providing people with the means to make a living. A seastead is a purely theoretical concept with no track record. What job would someone have on a seastead? If something happens to the job, is there another job they can find?

          • Tibor says:

            RCF: I might expect a seastead to be a better place for living for me even though it is not there yet. The same happened with the colonies at first. People were moving there because they thought those were perhaps better places to live for them, while the trip over the ocean was risky, expensive and full of the unknown. As for getting jobs, it is again the same as with the colonies.

            Also, there are people who have signed on a one-way Mars mission. Their media image is that they are perhaps a bit crazy, but I have yet to see an opinion that they are “evil rich people”…despite the fact that this probably would get way more expensive seasteading.

          • Jiro says:

            Doing things that are risky makes you look stupid or rich. One way Mars missions lean towards the stupid side because they suggest that you prefer something else to not just the wealth it costs for the mission, but to a lifetime of wealth, and that’s inconsistent with being rich. Seasteading makes you look rich for the same reasoning that investing in the stock market a lot makes you look rich–it implies that you have a lot of disposable resources to use to try to make more money.

            The idea isn’t “they’re rich because they couldn’t possibly really mean it seriously”. People think that investors in the stock market are serious about it, but it’s still seen as a rich person’s activity, because only rich people can afford to invest lots of money in the stock market. And the minimum expenditure to seastead is a heck of a lot, regardless of the chance of getting a return.

          • Tibor says:

            Jiro: That is a good explanation for the difference between Mars and Seasteading, but not between pioneer settlers of America and wouldbe seasteaders. Those settlers engaged in a very risky and costly activity as well in hopes of finding a better life. I have not seen anyone arguing that they were evil rich people who, instead of using their money to improve the Old World, frivolously spent their money on something to make themselves even richer (although I would love to see someone argue something as delightfuly crazy as that 🙂 )…I wonder what was the general attitude in, say UK, towards the early settlers of America at the time.

          • Jiro says:

            I don’t think that colonizing the New World is the same kind of risky. There is a significant chance of failure, but the initial expenditure is rather low. It’s still high by the standards of a poor person who can’t easily afford the trip or a new set of farming tools, but the expenditure needed to seastead is large even by the standards of a middle-class person; that kind of expenditure makes it look much more like a rich person’s activity. If you seastead, you have to sell any house you might have, you lose your job, you lose contact with your connections (and your children lose their social environment), you lose the benefits of being near an established city, plus just the up-front cost of moving is a lot greater than for immigrants who just have the possessions on their back. Also, a big part of seasteading is that you’ll lose a lot of your choices–if you don’t like the neighborhood you’re in, you can move, but if you seastead, you probably can’t do so without abandoning seasteading. Immigrants to the new world never had many choices to begin with.

        • There’s a bunch of things about Switzerland that are hard to scale/reproduce.

          • Tibor says:

            Hmm, if the problem is the size of the country then perhaps it would be a good idea to break the countries into more smaller ones or at least turn them into federations (or more federative federations) or confederations. I think it would be great if Germany had the same level of federalization as Switzerland. It would surely help the country a lot (even while keeping the current relatively big Bundesländer). It is not very hard to copy that from Switzerland (the federal system is already in place, one just needs to shift more power from the federal government to the local ones), still it does not happen.

            Generally transfering government power from the centralized to the localized seems like a good idea. And something that is not difficult to emulate…unless you have to deal with annoying details of the Realpolitik 🙂

          • I was thinking specifically of the banking based economy, and the physical geography, which makes it hard to invade.

          • Johannes says:

            Switzerland became rich as a parasite draining other countries as a haven for tax evaders (not to speak of hosting really evil people’s (slave traders, mass murdering dictators, drug lords) money).
            And tourism.
            About 100 years ago parts of it were so piss-poor that parents rented their children for menial farm labour in slightly less poor southern Germany because they had trouble feeding them.

            Obviously not everyone can live as a parasite even if some of the most “prosperous” countries nowadays do.

        • ” Also, there is something weird about objecting against government and the fact that it imposes its will on you whether you like it or not while at the same time trying to use exactly the same mechanism to change the society.”

          I noticed,

      • chaosmage says:

        You’d need the consent of neighboring areas, too, and that’ll be much harder to get than the consent of prospective members. Without that, your neighboring systems won’t punish their members for stealing your stuff. And that’s how seasteading dies.

        So these experiments have to be done in virtual worlds. EVE Online already goes much of the way, but does retain a thin quasi-governmental administrative layer – not that I know much about it.

        (Fun fact from that article: The economics professor who recently became Greece’s minister of finance was previously employed at Valve to help them deal with virtual economies.)

        • fubarobfusco says:

          So these experiments have to be done in virtual worlds.

          Which have the convenience that people can always exit the world completely without, you know, dying.

        • anon says:

          Financial system aside, the “open warfare for territory” section of Eve was eventually replaced by a bunch of very large clans under no-aggression pacts with each other, letting them focus their efforts on obtaining players more interested in crafting than fighting, getting even richer, and crushing anyone who comes in their turf. A lot of game mechanics changes have been made by the developers to make it possible for small groups of players to annoy said large clans and hopefully somehow break the stalemate.

          The megacorps only control half of eve because the mechanics don’t let them take over the other half.

      • onyomi says:

        This is why I think the best and also most feasible way to attempt something like anarcho-capitalism in an already-populated area is not by getting Ron Paul elected and having him suddenly declare all governments invalid, but by a kind of Nozickian process of successive layers of secession.

        Maybe it begins with Texas seceding because they just can’t stand a second Hillary term. When they see Texas doesn’t become any more of an apocalyptic landscape than it already is, and is actually gaining population, maybe Alaska and a few other places follow suit. Then maybe Austin gets sick of all the ultra-free market policies of the Republic of Texas and secedes from Texas, etc. etc.

        In my view then, the most libertarian thing a libertarian can do is not try to get Rand Paul elected president (though I will do that too), but to encourage secession for any reason whatsoever (I was really hoping Scotland would succeed, even though they were doing so to create what would have likely been a less libertarian polity. That said, it was also very encouraging to see that there was no question of violently compelling Scotland to remain had the vote been a success, showing we’ve come a long way in our thinking since the US Civil War).

        • Luke Somers says:

          I suspect that if Scotland had been seceding so as to be able to continue to hold chattel slaves, the continued absence of threats of force could not be counted on.

          In other words, yes, we HAVE come along way since then, though not necessarily in the way you referred to.

          • onyomi says:

            But that was not the reason Lincoln and the Republicans initially opposed secession. They would have opposed it anyway. The south was right about their right to secede (as the slaves would have been right to rebel or secede from the polities that enslaved them), but they were doing it to maintain a corrupt system.

            I think we’ve come a long way not only in respect to our views on the specific issue of slavery, but also in our view of the right of self-determination more generally.

            If Texas were to secede today I predict there would be a lot of hand-wringing and threats about dire consequences, the loss of federal money for social security and highways, etc. etc., but if push came to shove, tanks would never roll.

            And this isn’t just because it would be for a better reason. I think there’s been a broader shift in consciousness.

          • AFC says:


            The secession of the Southern states did not, in itself, lead to any military response by the Federal government. Rather, that happened only after South Carolina started lobbing artillery at a Federal fort (Fort Sumter, that is) resulting in them capturing it.

            If Texas seceded today, they would have the same problem: what of the property owned by the Federal government in that state? What of the on-going arrangements between that state and the Federal government? Is all of that going to be re-negotiated? Why would the Federal government agree to re-negotiate with a rebel group other than their demonstrating control of an independent military power that has a chance of winning?

            Also, if Texas seceded, it would be over the right to reject the Federal government’s forcing them to pay social benefits to its poor through New Deal programs. (That’s the major conflict, you know: that and the Civil Rights Acts.)

            There are many in this country who think those to be sufficient grounds to justify secession, but second term Hillary won’t exactly be attuned to their way of thinking. There will be every theoretic reason to intervene to protect the entitlements of the individual, which have been established Federally, and are currently imposed on each State — just as the Federal government intervenes today (through the Federal appeals court) when an individual State would abridge such rights.

            Note well that the “dire consequences” resulting from a loss of Federal funding would not be born equally by the population of Texas; and they would not be born primarily (directly, at least) by the people who would dream of secession. So, “threats” of such losses could not be direct. The real threat, if Texas did secede (and the Federal government recognized the secession) would be the loss of legitimacy of its government over the poor, for whom the social contract would have been altered, without negotiation or compensation, quite against their favor.

            (The legitimacy which Federally-imposed individual rights and Federally-imposed limitations on State government provide to State governments is a very important factor, if you start to consider the question seriously. It was not individual States that negotiated the relative social peace resulting from the New Deal (nor Civil Rights Acts) and there is no reason to think that a given individual State, seeking to repeal that “deal,” could internally negotiate a new one with the same ability to keep the poor aligned with the system. Especially Texas.)

          • onyomi says:

            Because if they hadn’t taken the bait and fired on Fort Sumter Lincoln TOTALLY would have just let the Southern states go in peace. While on that topic, even calling it “the civil war” is a misnomer. A civil war is battle for control of a polity, not a battle to leave a polity. The South was trying to form a new, splinter nation, not gain military control over the whole nation.

          • AFC says:

            Because … TOTALLY.

      • DanielLC says:

        Do you mean mostly consenting people? As in there was a vote and most of the people were for it? Getting everyone to consent is not going to happen.

      • “incremental progress is better than sudden revolution.”

        My position as well, as I think I make clear in the book, one chapter of which is entitled “Revolution is the Hell of It”.

    • Psmith_in_the_city says:

      That’s a fully general counterargument against ever trying any new social systems, even if the arguments in favor of it are good.

      It certainly is. One man’s modus tollens, and all that.

  5. Toggle says:

    Does Rome count as an example?

    As the influence of Rome waned, and as trade between cities broke down and the technological level effectively dropped, most of the newly isolated townships dully collapsed from republican governments to local autocracies. Usually somebody with a lot of money or a lot of friends would suddenly find themselves a big fish in a small pond, and with literally no effective opposition. So they just, sort of, started making choices. Wait a couple hundred years, and almost everybody is bowing to their Duke.

    It seems to me that the fall of Rome is exactly the dream scenario for anarcho-anythingists. It’s a huge leviathan that gradually draws back its influence, abandoning law enforcement duties and taxes, with no equivalent leviathan competing for the space, and it’s even kind enough to leave roads intact. But the very first thing that happened is that the roads became unsafe, civilization became a local phenomenon, technology collapsed along with trade, and people became terminally beholden to local warlords.

    • Scott Alexander says:

      To be fair, I think the ancient world lacked enough economic infrastructure to do anything-capitalism, let alone anarcho-capitalism.

      • Toggle says:



        Depending on what counts as ‘enough’ infrastructure, I suspect you’re grossly underestimating the amount of international trade that went on in 200 BC.

        • Scott Alexander says:

          Did the Romans have insurance? Easily accessible loans at varying interest rates depending on your credibility? A stock market? Angel investors? Joint-stock corporations?

          I’m not saying the Romans weren’t rich and good at trade. But I don’t think there was the same spirit of “Here is an unmet need, let me grow rich by creating a company to fill it”.

          (Crassus’ fire department aside)

        • Tibor says:

          As much as I like the Roman empire/republic (would not want to live there, but enjoy reading about it), I have to admit that a good deal of their economy was driven by foreing conquest, enslavement and so on. Not very capitalist, really.

          I think your point actually may be a good rebuttal to the “warlords did not become protection agencies ergo probably something wrong with the idea”. In the ancient world, it was actually still profitable to plunder and conquer. Land was worth more than the people, because the technology of the time did not use people efficiently enough. Today, war is almost never profitable (for the society as a whole, it can be very profitable for some particular interests, such as the army suppliers), trade is a better option. But warlords of the past could gain more from war than from peaceful trade, and so they did.

          The pattern can perhaps even be seen today, in a different context. In countries that are not yet firmly established, but have a huge deposit of natural resources, which are a great source of riches if you control it, and require minimal input and coordination, you often end up with a small group taking over and focusing primarily on keeping others out of this source (I think that modern Russia and some African countries are the best examples of this). These resources again make land worth more than the people, so to speak, and seems to encourage “winner takes all” scenarios. However, it is possible one can find good counterexamples (I’d be interested in hearing them by the way).

          • michael vassar says:

            I would argue that in modern times, war and trade are rarely profitable, and that regulatory capture of abstract turf in an existing industrial structure, pyramid schemes and scientific marketing that takes a statistical rather than an agentic view of its target audience are where almost all profit is derived.

      • Yes. Also, don’t miss the effects of the dominant weapons technology. When specialists in violence can train to be much more combat-effective than average, and must train nearly full time to maintain that, feudalism is the natural result.

        Anarchocapitalism needs gunpowder weapons, or a functional equivalent that makes someone with relatively few hours of training combat-effective.

        It also needs the printing press and, in general, fast & cheap communications. Without these markets won’t clear rapidly enough for the serious Coase’s-theorem effects to kick in – that is, they won’t be able to price in externalities well enough to stablize the system.

        It is poossible there are other technological preconditions we won’t fully undestand until we can see them behnd us.

        • Toggle says:

          I am fairly sympathetic to the idea that there are technological innovations that are a necessary precursor to the viability of anarchy. But why should we believe that all the necessary innovations have already been made?

        • PGD says:

          Do you not notice that the rise of ‘gunpowder weapons’ lines up pretty well with the rise of the absolutist state? Not to mention the rise of the drilled, disciplined, centralized army?

          Despite survivalist fantasies, specialists in violence are *always* much more effective than non-specialists.

          • Lupis42 says:

            There’s a big difference in order of magnitude effects though. One armored and mounted knight would be almost impossible for 100 villagers to bring down without setting up an ambush.

            One fire-team, with hummvee, is more than a match for 10 guys with hunting rifles and a pickup truck, but probably not for 50, let alone 100.

          • If you haven’t noticed that the absolutist state long predates gunpowder you need to be reading a lot more history. Imperial China is only the best-known example; the late Roman and Byzantine empires, tsarist Russia (aptly described as “despotism tempered by assassination”) and there have been many others.

            Of course specialists in violence are always more effective than nonspeialists. The question is the size of the increment – it makes a lot of difference whether you’re talking peasant levies facing armored horsemen or a musketman who can relatively easily take out an elite warrior without having to be a full-time specialist himself.

            The point about gunpowder weapons is that they equalize political power. Thiis has been well understood since the early British republican theorists and is the reason the U.S. Consitution has a Second Amendment.

          • thirqual says:

            It would be really great if the Paris Commune, or maybe better the Revolutions of 1848 (more palatable for the target demographic) were not ignored when discussing the odds of armed revolts success.

          • Lupis42 says:

            The probability of success depends on a lot more than weapons – not least the motivation of the government. I tend to think of the Warsaw Ghetto uprising as the go-to counterexample.
            The thing is, it’s not exactly about the odds. It’s about the costs and benefits. A population can always be crushed by a larger and better trained force. But that population can make it much more expensive for the defeating force than they could before gunpowder, and it’s much much more expensive to maintain that rule against a resistant population.
            Even if the odds still favor the oppressor, the economics no longer do.

          • vV_Vv says:

            There existed nation states outside Europe or during classical antiquity in Europe, but the transition from the Medieval feudal system to nation states was largely precipitated by the availability of mass-produced reliable guns.

            If you can mass produce guns, then you can rise massive armies by conscripting peasants, giving them a few months of training and putting a rifle in their hands. Whoever could rise the largest army got to be king and nobody could really question his power.

            In medieval warfare, instead, a skilled knight required years of training and expensive specialized equipment (horse, sword, chainmail armor, etc.). Warriors formed an elite class which claimed noble status and the king had to share his power and land with them in the complex and recursive system of allegiance which is known as feudalism.

            Once rifles were common, a peasant could kill a noble knight.

          • social justice warlock says:

            There’s hardly any contradiction in saying that both two mutually contradictory systems or states of affairs share a necessary condition.

        • PGD says:

          Eric — I am talking about Europe obviously. The proximate effect of gunpowder in Europe was to centralize the state even more because walled cities and castles cannot resist gunpowder artillery. So this helped the consolidation of the nation-state relative to local power centers. It did not decentralize the state because disorganized local militias cannot resist centralized states except under very special circumstances. In the case of the revolution, for example, the British were fighting resistance in a distant colony not essential to the empire in which the local army (and the continental army was organized at a national not a local or even state level mind you) gets crucial assistance from another absolutist state (France).

          Also, gunpowder weapons at their inception were hard to manufacture and obtain, particularly artillery, but also guns and ammunition on the scale needed for mass organized battle. This took investment (thus state resources were beneficial). That factor has changed somewhat. But it’s still the case that individual citizenry do not have the technological capacity to resist an organized state determined to break them, the technologies of violence and surveillance available to the state are massive. Yes, the Afghans sort of did it, but again the guerilla resistance in a distant colonial-type affair can exhaust the imperial power’s desire to invest in repression.

          • Well, it’s good that you have abandoned your initial false claim. Your analysis is still deficient, however, because you have failed to notice a very important category of confrontations in which civilian arms are not only adequate but decisive.

            I refer to conditions following on the collapse of state legitimacy. We saw several examples of this in the 1990s, most notably during the attempted Communist coup against the first post-Soviet government of Russia.

            It doesn’t do you a lot of good to have heavy weapons to use against your own people if armed civilians are willing to make the price of using them higher than a claimant to power can afford to pay.

            Not only can they do this, there are numerous 20th-century examples. One even the U.S.: study the “Battle of Athens” in 1946.

            If you remain in any doubt about this, ask anyone who lived in Estonia during the decade after the Soviet collapse. He or she will almost certainly know what you are talking about better than you do, and give you an extremely vivid education in some things you do not presenrtly understand.

          • Nita says:

            @ Eric S. Raymond

            Estonia? The collapse of the Soviet Union in the Baltic States was peaceful. There’s a reason they call it the “Singing Revolution”, not the “Threatening the Army with Civilian Guns Revolution”.

            And later, in the nineties, the rule of law was weak, and there were quite a few “protection agencies”. The overwhelming majority of decent citizens did not enjoy this anarchism-lite aspect of the transition period. I think the terrifying lawlessness, injustice and disorder is probably the reason why Russians cling to Putin even now.

          • Mr Breakfast says:

            Gunpowder weapons allowed for larger states because they distributed power downwards:

            If a knight can defeat dozens of unarmed peasants, then a fully staffed regime only has to politically enfranchise a tiny fraction of the population (knights) in order to hold a given territory. The knights are few enough to managed effectively through a reasonable number of personal relationships.

            If the comparable modern regime needs four police/soldiers to suppress the same level of insurrection, then they first of all have to enfranchise four times as many fighters. Further, the modern regime incurs more administrative costs, spiraling complexity, and as the edifice of control grows will need to enfranchise more and more specialist professionals and support staff.

            The end result is what we see today: Democracies which cannot permit any sector of society to fall outside of the scope of state administration.

    • Daniel Kendrick says:

      I think this is precisely right, and it just goes to show that no kind of libertarian society can exist without a reasonably broad basis of support for the ideas behind liberty. For that reason, the mechanism questions are really secondary.

      No system of government (or quasi-government) is foolproof or statism-proof. There are better and worse ones, of course. Potentially, we could have a libertarian absolute hereditary monarchy. But the ease of failure is much greater than, say, republican democracy.

      Some kind of quasi-anarcho-capitalism might also work, if conditions were just right. But I think the ease of failure is also pretty high.

      If everybody is 100% libertarian all the time, any system of government can be libertarian. The problems arise when they aren’t. How many people need to be corrupted in order for abuses to occur? How much temptation to corruption does the system encourage among those people, and are there any checks? Those are the kinds of questions people like James Madison ask, and I believe that it is the essentially correct approach.

      • HeelBearCub says:

        “libertarian absolute hereditary monarchy”

        How is that remotely possible? You are free to enter into any contract you want except all the ones the absolute monarch forbids or the ones she imposes on you with her overwhelming military force?

        I don’t think you are using the same definition of absolute monarchy that most people use.

        • wysinwyg says:

          The term “laissez faire” originated under the French (absolute) monarchy sometime between the late 1600’s and 1750’s. All you need is an absolute monarch who doesn’t interfere in the economy.

          • HeelBearCub says:

            But that wouldn’t allow for a private security force.

            Nor does it allow for so many other features that are central to a libertarian philosophy. Laisez-faire capitalism and libertarianism aren’t the same thing. At all.

            Laissez-faire is everything bad about liberterianism, but without much of what is to be admired.

          • wysinwyg says:

            But that wouldn’t allow for a private security force.

            I think that’s arguable. An awful lot of libertarians seem to still believe a minimal state with a monopoly on violence is desirable, so precluding a private security force isn’t necessarily non-libertarian. Also, it’s not clear why simply having an absolute monarch would prevent private security forces — presumably the monarch could outlaw them, but we’re talking about an absolute monarch who, by assumption, is already sympathetic to libertarianism.

            Laisez-faire capitalism and libertarianism aren’t the same thing. At all.

            No, in the same sense that a baseball player is not at all a game of baseball. Nonetheless, there is clearly a close connection between baseball players and games of baseball. Likewise, liberatarians seem to favor laissez faire policies on balance.

            Laissez-faire is everything bad about liberterianism, but without much of what is to be admired.

            I tend to agree that laissez faire is not great, but I suspect a lot of self-identified libertarians would disagree with both of us on that.

          • HeelBearCub says:

            Also, it’s not clear why simply having an absolute monarch would prevent private security forces

            I think this is the crux of the matter. In my view, an absolute monarch who lacks a monopoly on the power to use force (through his/her designated agents) ceases to be absolute.

            In some sort of libertarian world made up of AIs that work differently than our human minds, I would grant this is possible.

            But an absolute monarch who made a decree that isn’t backed by the ability to overwhelm with force isn’t absolute, not in our world, with our brains. We don’t have the ability to create a society where everyone says “well, the King said “use of mercury by hatters is outlawed” so I won’t use it”. If the king has to negotiate with The Hatters Protection Society to bring in those hatters still using mercury, he isn’t absolute.

            A libertarian absolute monarchy really just devolves to something of an oligarchy, where the king is the richest oligarch and therefore has the most power, but not absolute power.

            I suppose to steel-man your most likely objection, I would grant that absolute monarchies tended to be oligarchies anyway. Certainly money/goods were the central salient resource that a monarch had.

            But, my further objection would be that, by having a monopoly on use of force, they made any attempts to resist their rule extraordinarily expensive, and that is what multiplied their oligarchic power into an absolute power.

          • Mr Breakfast says:

            ” But that wouldn’t allow for a private security force.
            Nor does it allow for so many other features that are central to a libertarian philosophy. “

            Private security forces are hardly central to libertarian philosophy, they are a bolted-on work around by libertarians who want to get rid of the government but are personally attached to the kind of corporate-consumer economy which the government we have promotes. For liberty people who are willing to see the basic shape of everyday life change, there is no need to stipulate “cops, only private”.

      • anodognosic says:

        “Give absolute power to someone who shares my ideology” seems like a particularly primitive failure mode of political philosophy.

    • Mary says:

      “most of the newly isolated townships dully collapsed from republican governments to local autocracies.”

      In what sense were those townships republican in any form we would recognize?

      • Toggle says:

        Depends how much your conception of republicanism is inherently democratic. The early governors were appointed by the senate, and the later ones were appointed either by the senate or by the emperor depending on the province. The senate itself was never democratically elected.

        Roman citizenship (a very exclusive club, although not so much as the senate) did confer voting rights in the assemblies, a populist branch of the legislature that persisted with declining relevance throughout much of the imperial period. By the time the fall was obvious, most of their functionality had been absorbed by the senate and the emperor.

        Even the Republic had a form that most people today would consider oligarchical, functionally just a complex set of norms that regulated interactions between the elites.

    • MichaelM says:

      The primary (not even libertarian) objection to this is that this isn’t how the actual fall of the Roman Empire played out in reality. Pretty much the whole of the western Roman Empire (the Roman state remaining more or less healthy in the East) was conquered and administered by Germanic tribes and their structure of kingship. Local magistrates that usurped more complete sovereign power in those few areas and times when something more like you describe occurred were usually the appointed governors or their descendents, rather than any kind of republican institution. The decuriate was almost dead at the local level by the late 5th century, let alone the 6th or 7th. Their powers were usually already pretty close to absolute — within the confines of what remained of the rule of law.

      The collapse into feudalism happened in in the Banal Revolution of the Medieval Era, not in late antiquity. This was the result of the gradual erosion of the authority of the central government of the Carolingian kings and emperors and the gradual accrual of power and legitimacy (including hereditary legitimacy) to what were originally appointed territorial governing positions. Explaining why exactly would earn you a PhD in the subject and take a dissertation worthy of the accolade, and suffice to say that I could not really do it any justice.

    • Bill Murdock says:

      Statism 101: Some government seeks to control as much of life and economy as possible. Price controls, executions, wars, debasement of the currency (in modern parlance: inflation)… Then, when it collapses under its own weight… [wait for it…] LOOK AT YOUR LIBERTARIAN PARADISE!!!!! [mic drop]

  6. Keshav Kini (@ffee_machine) says:

    Nobody’s vote makes very much difference, so people are happy to vote for signaling/psychological reasons rather than financial ones. If casting my vote to help the poor makes me feel like a good person, but losing money in redistribution schemes makes me poorer, well, my vote 100% determines whether I feel good or not, but only 1/300-million determines whether I get poorer.

    I think another explanation might be less psychological and more game-theoretic. If I vote on a proposal to take money from some people (including me) and use it to solve some societal problem, that means that either a) the proposal fails, the problem is not solved, and I don’t get poorer, or b) the proposal succeeds, the problem is solved, and I get poorer. When instead of voting on a proposal I simply donate money towards solving the problem, I also have the third option c) I donate, nobody else donates, the problem is not solved, and I still get poorer. To me, this option looks worse than both a) and b).

    So that’s a reason why I might choose to vote to force myself to do something I normally wouldn’t do of my own accord, as long as that vote would also force others to do the same.

    • Scott Alexander says:

      I’ve thought about this before, and the model works for something like fighting global warming where either you prevent it or you don’t, but I find it less convincing regarding helping the poor. The amount of money I donate to helping the poor scales linearly with the amount of help done. If a hundred million people donate to help the poor, there isn’t any synergy, it just helps a hundred million times as many poor people as one person.

      This might work if there were a psychological block, where people don’t feel very good about helping one poor person, but feel very good about having contributed to Solving All Poverty.

      • Keshav Kini (@ffee_machine) says:

        I don’t see why the amount of money I donate to helping the poor necessarily scales linearly with the amount of help done. Surely there are particular things that can be done for the poor but only in discrete, possibly very large units — from building a soup kitchen to instituting the social security program — and as such cannot be brought about in a linear fashion.

        • Is there a problem you had in mind that wouldn’t be solved by basic income or giving directly?

          • HeelBearCub says:

            If I give a homeless guy on the road enough money to a) buy one six-pack or b) pay for rent in an apartment for 1/4 of a day I have not, in fact, contributed to solving his homeless problem at all.

            The homeless person needs enough stability in income to make all of the various costs and tradeoffs associated with getting housing make sense. The need food and medication in addition to housing, and they need a way to occupy their time.

            All of that is a coordinated giving problem.

          • Desertopa says:

            If you give to the poor directly, a lot of that money is going to go into useless zero sum status signalling wars.

            You might suppose that if they were *all* given money simultaneously, it wouldn’t result in this status signalling war, because everyone would know where the money came from and there’s no meaning in flaunting it. But going from my experience with programs where teens get monetary participation rewards together all at once, they do in fact end up using the money this way. People who try to refrain from the signalling wars are mocked or shunned by those who don’t.

      • Daniel Speyer says:

        It sure *feels* like what’s going on with regard to the poor.

        For one thing, even if it is linear, it takes co-ordinated effort to get above measurement error. So my independent contribution will round to zero.

        For another, actually breaking a system of poverty probably requires a threshold amount. OTOH, nobody seems to be trying this.

        There’s also an effect where I feel bad about being one of a small fraction contributing. I feel used. Maybe my subconscious is worrying about positional goods, or maybe it’s a completely stale heuristic, but it doesn’t feel good.

        • michael vassar says:

          It’s not so measurement errror-prone if you actually talk with the people you’re helping. If you don’t, you you probably don’t actually care, which is fine, and you should hire private protection agencies to protect you from being guilt-tripped about their problems.

          • Desertopa says:

            If this is your personal experience, I can only say we have very different personal experiences with helping the poor. I donate my labor rather than money, I talk with the people I’m helping the entire time I’m helping them.

            (Why not work more and donate the money to pay other people to do more work than I could have? Well, I don’t actually make very much money, and I don’t have the liberty to add hours at my own discretion, but I can pick up a part time job at a nonprofit where I also get paid. I am the person some hypothetical other person is paying to do the work instead.)

            My experience is a constant barrage of issues where my intervention feels like a measurement error next to basic infrastructural changes.

      • JB says:

        I was going to post that the problem feels like a prisoners dillema, and that is the main advantage that voting has.

        If my feeling is that my own charitable donation won’t solve the problem, I will want everyone else (especially everyone richer than me) to contribute too. Otherwise, I’m giving money, it’s not enough, nobody else is, and I’m surrounded by wealthy socialites who spend money on themselves and make me feel like a moron for being so selfless. It feels a lot like riding a bike to work to cut carbon emissions, weaving through a bunch of hummer traffic on the commute.

        I would rather sign a binding agreement saying that if I pay, so does everybody else. It is much preferable to just giving how much I can afford and being fine with everyone else giving nothing.

        This is true regardless of linear scaling. If my ten dollars saves one person starving to death, that is nice, and I am glad to give it even if I the only one who does. But if I am bothered by the one million other starving people who I can’t save even if I donate everything I own, then taxes start to look like a more appealing solution.

      • JB says:

        “If the non-poor are not generous enough to give money to the poor voluntarily through private charity, what makes you think they will be such fools as to vote to force themselves to take it?”

        Actually, the more I think about it, the more this objection looks ridiculous.

        I offer you the following deals:
        1. You may donate $10 to charity. One person gets fed/clothed/educated.
        2. You may vote to increase taxes by $10. Everybody gets fet/clothed/educated.

        The cost to you in both cases is the same, but the benefits of deal 2 are way better! Who wouldn’t take it over the first option? Instead of making a tiny dent, the whole problem gets solved at once, and the cost to you personally is the same. It’s the fool who chooses to waste their money on charity when they could have paid it as tax.

        I think the only cases someone would choose to donate to charity over voting for higher taxes are:
        a) If you don’t trust the government to spend your money as well as the charity would — which some readers may feel is obvious, but I encourage you to look beyond your prejudices and also to consider governments more effective than your own before leaping to the conslusion that this is always true.
        b) If the cause you care about is so specific that a bill to increase taxes for its sake would never pass
        c) If you think the higher taxes would do more economic damage (to society at large, not to you personally) than the issue is worth

        • John Schilling says:

          I offer you the following deals:
          1. You may donate $10 to charity. One person gets fed/clothed/educated.
          2. You may vote to increase taxes by $10. Everybody gets fet/clothed/educated.

          That choice isn’t offered in the real world, outside of dictatorships. The real deal is either:

          1. You may donate $10 to charity on top of the $10 in extra taxes. Everybody gets fed/clothed/educated.
          2. You may vote to increase taxes by $10, or not, but the taxes are going up anyhow. Everybody gets fet/clothed/educated.

          1. You may donate $10 to charity. One person gets fed/clothed/educated.
          2. You may vote to increase taxes by $10, or not, but the taxes won’t actually be raised. Nobody gets fed/clothed/educated.

          You don’t know which deal is actually on the table until election day, but in either case it isn’t your ten-dollar charitable contribution or your vote that determines whether taxes will be raised and the poor cared for on a grand scale.

          With the second deal, choice 2 is obviously the “best” option: You get to know you did the right thing and are a champion of the poor, and it doesn’t cost you anything, and you get to feel smugly superior to all the people who didn’t vote to help the poor. When this leads to society stumbling into the first deal instead, there is likely to be some second-guessing and buyers’ remorse.

        • Furslid says:

          Sadly that isn’t the deal. The deal seems to be instead.

          1. You give 10$ to charity, one person gets some food/clothing/housing.
          2. You vote to increase taxes by 10$. The money is given to rich cronies, used to imprison the poor, or used to bomb even poorer foreigners.

          In democratic systems, there isn’t enough linkage between voter’s desires and government policy to offer that deal.

          • JB says:

            That much is often clear (at least in the case of certain countries). But that’s not the question being discussed. The question David Friedman posted is why anyone would vote to have money forcibly taken from them for charitable causes when they wouldn’t have freely given it to charity to begin with.

      • Desertopa says:

        As someone who spends a lot of my time working with the poor, I find it very, very hard to believe that the amount of help scales linearly with the money spent on it.

        Most of these kids don’t have school textbooks, because their schools can’t afford to buy them and distribute them to students (as crappy as school textbooks can be, it’s harder to teach kids at this level without them.) With enough money, you could buy them all textbooks. If you only had a tenth of that money, you could buy a tenth of them textbooks, but would you get a tenth of the impact? Probably not, because the school wouldn’t be synchronizing the curriculum with the textbooks, and the kids who had them would mostly end up not using them.

        That’s just the example that happened to be on my mind at the moment, but a lot of measures are more strictly infrastructural than that. If you want to set up effective public transit infrastructure for a community where most of the residents can’t afford cars, you’re not going to get half the benefit with half the money you need to set up the infrastructure.

        Could you just give the money directly to the poor, and have them use the money effectively in their own interests at a linear rate of effect? Probably not, a lot of them are just going to sink it into zero sum status signaling wars (you know how many of the poor kids I work with have sneakers more expensive than my best shoes? Practically all of them.) That essay about how poor people need expensive clothes in order to signal status for interacting with institutions which otherwise won’t afford them respect makes a useful point, but doesn’t get us to the point where the expensive clothes start to look like useful, non-zero-sum resource use, because most of them aren’t doing this kind of networking in the first place.

        • sourcreamus says:

          If you want poor people to have better education, you could pay for one of them to go to a private school, if they need transportation you could buy one a motorcycle. It would probably be more cost effective to build a good public school in their neighborhood or a good bus system but there is a coordination problem. Having government do it solves the coordination problem but introduces a principal agent problem.
          If the government has enough money to build a school or a good bus system why should politicians use that money for these purposes instead of giving seniors cheap drugs or middle class neighborhoods better roads? After all seniors and middle class drivers vote more than the poor.
          Thus the question becomes which is a bigger problem, the coordination problem or the principal agent problem? Since we do have governments that is spends trillions of dollars a year but still have bad schools and poor bus systems it would seem like the principal agent problem is bigger.

          • Desertopa says:

            >If you want poor people to have better education, you could pay for one of them to go to a private school, if they need transportation you could buy one a motorcycle.

            Unfortunately, the former doesn’t scale, as on a large scale it results in the private schools being swamped, and in any case the advantage of private schools comes largely from student filtering rather than superior instruction relative to similarly funded public schools.

            With the latter, kids can’t get motorcycle licenses before a certain age, need to put in the time and effort to get them once they’re eligible, motorcycles aren’t very safe so you could be looking at a significant death and injury toll when aggregated over the population level, and to top it off a lot of the motorcycles will probably just get stolen anyway.

            Of course, your points about the conflict between coordination problems and the principal agent problem still apply, but when we’re considering which is bigger, keep in mind that while we have bad schools and bad bus systems, some governments may be more efficient (certainly some get better result to money ratios, although it’s not necessarily easy to extract the extent to which this is due to demographic factors and such,) and we don’t have industrialized countries which don’t provide these public works as a basis of comparison. It could be that our admittedly lousy attempts at solving the issues through coordination are buying us much better results than we’d get if we gave up on them. As high as crime rates are in some areas, there’s historical precedent for much higher levels, and for much, much lower literacy and general education levels, and while we’ve got a lot of technology separating us from the societies in which they occurred, as far as I know we don’t have even a proof of concept that you can eliminate the public assistance from a community that’s not subject to strict population selection, while keeping the technology, and not have your results nosedive.

        • Deiseach says:

          Status signalling of that kind (the latest fancy brand sneakers) gives the poor kids esteem and respect; as you point out, the ones who don’t engage in the games get mocked and picked on. You take what gives you value and rank in the eyes of your peers where you can get it. If education and work are not going to be avenues that you can see meaning anything, then wearing Sports Star Is Spokesmodel for Brand shoes is the next best thing (that’s the whole point of advertising: our product is for cool, sexy, attractive, successful people! Buy/use our product and the magic transfer of mana to make you cool etc. will happen!)

          I think buying fancy sneakers is silly, but I think people in good jobs who can afford it buying fancy shoes is also silly (I don’t mean decent shoes as good as you can afford, that will last, for work, I mean fashionable frippery). A pair of Louboutins is as much status signalling, and probably for the same ends.

          That’s why I was amused about the sniffiness about Burberry now being associated with chavs: when you want to grow your business by flogging an image of wealth and sophistication (buy our product and you will be identified as classy), the classy or old money rich aren’t the target market; they already know they’re the top of the heap. You sell to those who aspire to such status. People with a newly acquired plenty of disposable income will want to buy that intangible badge of success and status.

          What else did they expect to happen? The idea of the nouveau riche buying status goes back a lot longer than Le Bourgeois Gentilhomme.

        • RomeoStevens says:

          This argument always makes me incredulous. US education spending per pupil is already 50% higher than Finland, who tops educational achievement. Why do we already pay so much and yet not even have textbooks? My first guess is our administrator to teacher ratio of 1-to-1*, but there’s probably more atrocious things as well.


          • Desertopa says:

            The United States may spend 50% more per student than Finland on average, but the United States’ per-student spending is probably a lot more heterogeneous. No doubt there’s a lot of waste in there, but the students whose schools can’t afford textbooks aren’t being educated at the cost of the average US student, they’re getting a much cheaper package.

          • AFC says:

            It’s because Finland has mostly gotten rid of child poverty, and the USA hasn’t. It has nothing to do with the insides of schools. Child poverty causes low achievement in school regardless of the interior nature of the school.

            Matt Bruenig has written extensively (and convincingly) on this point; I’ll just share a couple links:




            (The last link explicitly addresses Finland, although that isn’t its main point.)

            And quote:

            Poor children simply lead different lives than rich children due to their differential access to economic resources. Poor children have worse health and are more likely to experience negative neighborhood effects like exposure to drugs, violence, and crime. Further, their parents are more likely to work multiple jobs or irregular hours which reduces the amount of time they are able to spend with them. Poverty also increases stress both on the parents and the children. These are just a few of the consequences of economic inequality, all of which plausibly impact student success at school.

            Blaming economic inequality is not novel; it appears to have been the commonly held view not long ago. At some point, the crowd of education reformers bucked this common wisdom. Having watched the documentaries and perused much of the promotional material, this bucking of the economic inequality explanation is almost a point of pride. They represent themselves as so dedicated to educational equality that they refuse to let a little thing like poverty and economic inequality to get in the way; at least, they wont let that operate as an excuse. Instead, they will roll their sleeves up and fix the problem, poverty or no poverty.

            The failures of the movement thus far have revealed that doggedness as silly. Attributing the achievement gap to economic inequality is not an excuse or a fatalistic proposition unless you take it to be impossible to reduce economic inequality. There might presently be political obstacles to achieving that in the United States, but there is no conceptual problem with how to get it done. Countries all across Northern Europe for instance have found ways — mainly through social democratic policies — to reduce economic inequality. Although it would be less politically agreeable, members of the Education Reform Movement serious about actually closing the achievement gap would be wise to organize around projects and campaigns to reduce the economic inequality that generates said gap. Doing so wont win them $100 million endowments, but it at least has a chance at success, something the current movement does not.

      • Mary says:

        Huh? I can tell you now that you can’t prevent global warming; the carbon dioxide that was pumped out in Victorian era was the big problem.

        At most you can mitigate it. Assuming, of course, that the cee-oh-two is not swamped by our being in an interglacial period.

        • Samuel Skinner says:


          The amount of CO2 produced prior to 1950 is utterly inconsequential compared to the amount produced afterwards.

          • Mary says:

            But the effects are exponential. You get a given increase from doubling the amount of cee-oh-two. Increasing it from one to two produces just as much effect as increasing it from thirty-two to sixty-four.

          • James Picone says:

            pre-industrial-revolution concentration was ~280 ppm. Circa 1900, concentration was about 300 ppm. ln(300/280) ~= 0.068

            Present day CO2 content is ~400 ppm. ln(400/300) ~= 0.287, some four times larger.

            So our emissions since 1900 have added about four times as much forcing as our emissions in the range preindustrial->1900.

            Atmospheric CO2 is growing superexponentially.

          • RCF says:

            If what you say is true, then the effect is logarithmic, not exponential.

          • James Picone says:

            RCF: CO2 forcing is indeed logarithmic in CO2 concentration. See the table here, or this section on Wikipedia.

            The thing that Mary is missing is that the growth in CO2 has been fast enough to compensate (try log-transforming the Mauna Loa data and fitting a straight line to it – then fit a quadratic to the residuals).

        • James Picone says:

          What do you mean by ‘being swamped by our being in an interglacial period’? Milankovitch cycles have a range of about 100 W/m**2, divide by 4 because Earth is a sphere, multiply by 0.7 for albedo, 17.5 W/m**2 of forcing.

          Commonly accepted figure is 3.7 W/m**2 of forcing for a doubling of CO2. Nearly 5 doublings of CO2 to get as much forcing.

          So yeah, interglacials peak to ice age trough is a much larger difference than we’re likely to get even under the most ridiculous worst-case scenarios. Plus, with five doublings of CO2 we’re probably well out of the range where forcing is linearly proportional to ln(co2), and it likely takes more. There’s some evidence of CO2 being as high as 3000 to 6000 ppm a long, long time ago, so it’s at least physically possible for CO2 forcing to be in the same range as Milankovitch forcing, but somehow I don’t think we’ll be burning literally all the coal.

          But the current interglacial shouldn’t be ending for on the order 50,000 years, and that’s /without/ extra CO2 requiring lower TSI to get to the transition where ice sheets expand and albedo decreases.

          Basically, I don’t see what the relevance is.

      • onyomi says:

        A bit of a quibble, but I don’t understand why you either do or do not prevent global warming. Assuming it’s as simple as “more emissions=more warming,” then why doesn’t every reduction in emissions help a little bit, like every penny given to the poor helps a little bit? And why isn’t it possible that we don’t totally prevent bad consequences from global warming, yet still prevent the consequences from being as bad as they would have been had no one made any effort whatsoever, just as some effort to eliminate poverty might alleviate it to a certain degree without eliminating it?

    • Bill Murdock says:

      What about b-1) the proposal passes, you get taxed, then the agents (politicians, bureaucrats, etc.) don’t fulfill their promises, or the proposed solution doesn’t work?
      This is the utopian naivety of the masses. It’s like the State is half parent, half god. It loves you, always has your interests at heart, would NEVER lie to you, and is omnipotent. Consider what the world would look like if that weren’t true, and adjust your political philosophy accordingly.

  7. Daniel Kendrick says:

    Very interesting post!

    I think that Friedman’s book is very interesting, but I agree with your criticism #9, which is essentially Ayn Rand’s criticism: we’re already living in “anarcho-capitalism”. There is “competition” among governments in the global scene, and it leads to certain groups gaining a lot of power and maintaining their rule through force. You can’t have a “free market” in governance, because the “free” there means “free from force”, and we get that by already having a government which (mostly) protects us from the use of force.

    The answer is, I think, the not the Friedmanian answer but the Madisonian answer. There is going to be a government, like it or not. We need a government, like it or not. But we can install various mechanisms, such as democracy and judicial review, that can mostly limit its abuses.

    Now, of course, the obvious objection is the one Friedman relates in one passage you quoted: we tried it, but it didn’t work—we got the government we have now, which is very abusive. But why didn’t it work? Because it couldn’t work, or because no one wanted it to work?

    How many people in the 1790s were arguing systematically for hardcore libertarianism? Not too many, since the theory didn’t exist in fully developed form. Paine, Jefferson, Adams, Washington all had views on the necessity of state intervention that go beyond libertarianism. It’s pretty easy to see how things like the American System, protective tariffs, and government road building (not to mention slavery and the whole fugitive-slave-catching apparatus) were the seed for Progressivism and other ideologies that gradually expanded the role of government.

    No constitution can be self-enforcing. If people don’t want to enforce it; if they don’t want to keep the powers of the government strictly limited, then those powers will grow. All the constitution can do is hold them off and slow things down so that things don’t go off the rails too quickly. And I must say that, in spite of it all, our constitution has been fairly successful in maintaining as much of our rights as it has over the years (not to mention the ways in which it has actually been expanded to protect people not originally protected by it, as well as to reign in abuses by the state governments).

    Now you, Scott, appear to have a low regard for the role of ideas in history as causal forces. That’s a point I disagree with, but I don’t want to get into it here. I just want to point out that through education, we can change the dominant cultural ideology (especially that of the elites) from one generally supporting interventionism and “big government” to one (more consistently) supporting small government.

    The Madisonian mechanisms to limit government can work. There just has to be some kind of non-negligible support for truly minarchist government, which there currently isn’t. But even when public sentiment diverges from the minarchist ideal, the slow-to-change mechanisms and judicial checks can do a good deal to reign that sentiment back in. In any case, I think it has a lot better chance to work than anarcho-capitalism, which really would devolve right back into statism in my view (although of course, if public opinion was very supportive of libertarian ideals, it could be a benevolent state system).

    I really recommend Timothy Sandefur’s various works like The Conscience of the Constitution for an Objectivist/libertarian perspective on the Madisonian path to liberty.

    • Steve Johnson says:

      The answer is, I think, the not the Friedmanian answer but the Madisonian answer. There is going to be a government, like it or not. We need a government, like it or not. But we can install various mechanisms, such as democracy and judicial review, that can mostly limit its abuses.

      The Madisonian mechanisms to limit government can work.

      Madison is far more correct than Friedman. Governments will and do exist. Anarcho-capitalism with a single protection agency is indistinguishable from government.

      The important question is making sure that that government works correctly.

      The part where Madison is amazingly, stunningly wrong is suggesting that democracy will curb abuse.

      Democracy guarantees abuse and disorder.

      Democratic government is unworkable – on this basically everyone agrees. No one thinks that the DOT should make their decisions based on majority vote (“the structural engineers examined the bridge and found that it was unsound but the voters disagreed”). Bureaucracy will exist and operate the day to day functioning of governance. Unfortunately this leaves the whole problem that government needs a source of legitimacy and once you go down the road of saying you rule in the name of the people that you have to have elections.

      Now the bureaucracy needs to win the elections – it’s an unimaginable disaster if some group incapable of governing and actually determined to root out the bureaucracy were to win. As Chris Rock put it:

      So, we got a big election coming up. Who’s gonna win – Bill or Bob? Does it really matter? Is there anything you can’t do on Wednesday ’cause your guy didn’t win? “The A Train ain’t running – Dole won.” No!

      How does the bureaucracy solve this problem?

      Short answer – it fucks up the whole country to the point that it can be sure that it controls a large enough river of meat to make sure that elections are won either by the progressive inner party or that if the anti-progressive outer party wins it doesn’t ever challenge the bureaucracy.

      • James Picone says:

        So you’re saying democracy guarantees competent autocrats in the form of the bureaucracy, and that’s why we should prefer incompetent autocrats in the form of hereditary monarchs?

        Never change, neoreaction. Never change.

        • Steve Johnson says:

          So you’re saying democracy guarantees competent autocrats in the form of the bureaucracy, and that’s why we should prefer incompetent autocrats in the form of hereditary monarchs?

          Not even close.

          “Democracy” first guarantees that the state won’t be meaningfully democratic and that at best it will be run by minimally competent bureaucrats – but only if your population is pretty high quality – plenty of places have had “democracy” collapse because they didn’t have a competent bureaucracy.

          Then the whole thing spins up and starts doing insane things to isolate the bureaucracy from the voters – like in present day Chicago where actual criminal gangs serve as a vote bank.

          Sure, the water is drinkable and the sewage is disposed of – so it’s better than actual democracy – but you’d better not step into gang territory after dark.

          That’s not incompetence. It’s bad but it’s not incompetence.

          • HeelBearCub says:

            Are using the word democracy here in the ancient Greek way? One person/one vote on every issue? As distinguished from a Republic of representatives?

          • Dude Man says:

            This may be getting off topic, but how do you ensure competent bureaucracy?

          • Harald K says:

            HeelBearCub: The ancient Greek way isn’t one person one vote on every issue. They used sortition – political positions filled by lottery and rotated regularly.

            I trust a randomly allotted assembly to not go around overruling structural engineers very often. They can hire a competent bureaucracy when they need one.

            Although there may be rare occasions where they should be foolish and listen to the wrong experts (e.g. climate deniers), I trust that those situations will happen more rarely than with any non-representative assembly that we could put together.

          • HeelBearCub says:

            Harald K:

            I understand what you are saying. I have the sense that one man/one vote democracy was rejected by The Greeks as a “bad thing” akin to mob rule. It is my understanding that there is a certain cohort today, more prevalent in libertarian circles, that will use “democratic” as pejorative and pounce on folks who say things like “The US is a democracy” and insist that it be referred to as a republic, etc.

            I was trying to understand what he meant when said:

            “Democracy” first guarantees that the state won’t be meaningfully democratic

          • Highly Effective People says:

            We have randomly selected assemblies already, they’re called juries. Now maybe you’re more optimistic than I am but I’d rather not trust the governance of my locality to twelve people with nothing better to do than sleep through testimony for a few weeks.

            Personally I like the Venetian or Lubische way of running a republic: make a council of people who have genuinely distinguished themselves, have them choose a leader or two from their own ranks, and put the fear of God in him if he messes things up. The incentives aren’t as good as in hereditary rule but the rulers themselves are higher quality at least.

          • Harald K says:

            HEP, juries are not remotely randomly selected in any country that I know of – the haggling/filtering over jurors in the US destroys the benefits of random sampling. There is, as far as I know no mechanism to even ensure that the initial pool is random.

            (In my country they just straight skip that pretense and just hand-pick jurors. I suppose you could say they pick people who have “genuinely distinguished themselves”, but in practice, that is people who distinguished themselves by being politically active. I doubt your Venetian/Lubische model would do any better.)

            Jurors are rarely well compensated, which is a bad idea. In the US, there is also a demand of unanimity in jury verdicts, which effectively reduces the jury size by a lot. In my country we don’t do that, but since juries are pathetically small and stacked by professional jurors (as if the party-list filtering wasn’t enough), it doesn’t matter much.

            Allotted representatives need to be given sufficient compensation, they need to be selected from an opt-out pool (not opt-in!), and they must be given real power and responsibility, not just a toothless advisory role.

            I’d trust the rule of my locality far more to such people, than to busybodies who desire to rule.

          • Highly Effective People says:

            The jury pools here are randomly selected (from registered voter rolls usually) and then everyone with any sense invents a reason they can’t serve and the lawyers sort through the remaining idiots. I’d call that sortition with an opt out, since the adversarial ststem mostly prevents stacked juries, though obviously better designed systems are possible.

            Increasing monetary compensation and power seems unlikely to prevent professionals or busybodies gaining control though: after all those are their goals to begin with. And that doesn’t even touch the fact that even in a Western country the average person is not even smart or consciencious enough to manage an Arby’s much less a small town.

          • Steve Johnson says:

            HeelBearCub –

            I was trying to understand what he meant when said:

            “Democracy” first guarantees that the state won’t be meaningfully democratic

            Ok, all of the following are “democratic”

            1) Assembly of representatives chosen by election among qualified citizens – this assembly forms committees and does all the day to day governing
            2) Assembly of representatives chosen by lottery among qualified citizens – this assembly forms committees and does all the day to day governing
            3) Assembly of representatives and executives who oversee a civil service of some kind – the elected executives hire and fire civil servants at will
            4) Assembly of representatives and executives who oversee a civil service of some kind – the elected executives cannot hire and fire civil servants

            1 and 2 are impossibly unworkable – people would be voting on bridge inspectors or would be randomly chosen for the office of bridge inspector. Crazy. Can’t happen in a modern society.

            3 is the American system before the 1930s. Political machines were much more like shadow governments. They get voted in, they bring what could be called their cronies if you’re being pejorative or they bring in the shadow ministers. Shadow minsters of road construction, etc. The feedback loop for good governance still somewhat exists – if something doesn’t work – go see your ward boss and he’s actually got the responsibility for solving the problem.

            4 is the present American system. Voters vote in executives who are either clowned by their underlings (like when the outer party wins) or push the agenda of the inner party – which, as implemented, is indistinguishable from the agenda of permanent government. This is the “Yes Minister” system.

            1 and 2 are fundamentally democratic (and awful). 3 is democratic-ish also and – although not without problems – is probably somewhat effectual. The incentives aren’t perfect though because a party in danger of losing has no incentive to not loot the whole thing – to go from acting like a stationary bandit to a mobile bandit.

            4 is completely sham democratic. It’s a farce.

            Objections anticipated:

            “No one says important jobs like bridge inspectors have to be elected / patronage jobs / assigned by lottery for a government to be democratic”

            Well, who does the distinguishing between essential jobs that need experts and non-essential jobs that are being done anyway for some reason? Who controls the accreditation process for expertise? What are the incentives – after all if you spend all your bridge inspection time campaigning to convince people that bridge inspection should be done by an expert (you) and no time inspecting bridges then who’s going to stop you? Who actually has responsibility? If it’s the voters then maybe that campaign convinced people.

            That’s why the bureaucracy first isolates itself from feedback of any but the most radical kind.

      • Daniel Kendrick says:

        As you should know, the Madisonian approach to “democracy” is more than simplistic majoritarianism. I certainly think the U.S. institutions can be improved, but the basic idea is sound: we don’t just let “the people” do whatever they want and rule by mob. There are separate branches and limited powers and bills of rights, etc. that limit what “the people” can do.

        The democratic element is not primary. The primary element is liberty (at least, that is what the Sandefur book argues). The democratic element is a safety valve against the worst abuses. A democratic vote does not ensure that we get a perfect leader or even a good leader. It ensures that we don’t get someone as unpopular as George III.

        How to actually have a good leader and good policies is the role of the all the rest of the institutions, which have nothing directly to do with democracy.

        • Wrong Species says:

          Instead of trying to reduce the size of the government, maybe we try to reduce the amount of democracy in a country(without eliminating it). I’m not sure which is more unrealistic.

          • Steve Johnson says:

            The problem with trying to reduce the amount of democracy is that there’s always a faction that will benefit from increasing the amount of democracy.

            When the actual government (the non-democratic part) looks for an ally they’ll pick that faction because that faction can supply the votes more cheaply (high time preference voters are easier to bribe for a whole host of reasons). They’ll also do what they can to increase the time preference of the existing voters – making them cheaper to bribe.

            When they run out of high time preference voters to expand the franchise to they’ll start importing higher time preference people.

            In other words – the United States started with less democracy but the structure of democracy pushed it towards more democracy. Pushing it towards less democracy is unrealistic and counterproductive. Moving to no democracy is a much better plan.

      • You mean direct democratic control of everything doesn’t work.

        Real world democracy doesn’t work that way, and doesn’t have urge problems you mentioned. The bureaucracy isnt elected, 99% survives a change of government, with only the titular department heads changing. Governments can’t get of bureaucracies wholesale, because they need them to do anything…it even takes a bureaucrat to fire a bureacrat.

        You need to watch Yes Minister,

      • wysinwyg says:

        Democratic government is unworkable – on this basically everyone agrees. No one thinks that the DOT should make their decisions based on majority vote (“the structural engineers examined the bridge and found that it was unsound but the voters disagreed”).

        Can you name even one place where democracy works like this?

        (I’ve never gotten to vote on whether or not a particular bridge is unsound, so obviously American democracy doesn’t work this way.)

        • He has this thing of using scare quotes to indicate the kind of democracy that actually exists. The un scare quoted democracy is a pure theoretical ideal.

          • Steve Johnson says:

            It would be useful to have two different words for the two concepts but we’re stuck with what we’ve got.

            To me, the two concepts are pretty clearly different but lots of propaganda energy goes into conflating them.

            “Democracy is great because the people can check the rulers” – well except that the voters are basically powerless because if they had power it would be a disaster. Oh, you meant the type of democracy where the voters get to vote for one of two parties neither of which opposes the permanent government is great? Then the whole “voting as a check” doesn’t really apply, does it?

            Having two different definitions of democracy leads to confusion.

          • Of course government bureaucracies grow over time. Governments grow.

            The question is whether they grow disproportionately, or pathologically. Bureaucracies aren’t unique to government: large enough corporations, charities and religions have them too.

            In modern democracies,
            Bureaucracies tend not to change when governments change, but that doesn’t mean they are stifling change. Bureaucrats are supposed to implement policy, not make it. The fact that the same people in place does not mean they are enacting the same policies. Moreover, if there is a lack of perceived change, that can be explained by major parties tending towards the middle…and by people with minority views perceiving more stasis, because they don’t notice their favoured policies being implemented. Finally, it not necessarily a bad thing if bureaucrats block changes. It is part of the job technical experts to point out hidden drawbacks in an attractive scheme

    • Desertopa says:

      When making the judgment that the goverment we got “doesn’t work,” keep in mind that this issue is relative, and the government we have now works a lot better in a lot of ways than most other governments that have been tried. Friedman’s ideas haven’t been attempted, and he’s at risk of comparing his awesome ideal to our gritty reality. So far, all systems that work perfectly without reservation are purely theoretical.

        • Whatever happened to Anonymous says:

          More commonly known as “But Real Communism has never been tried!”.

        • onyomi says:

          But Friedman not only never claims anarcho-capitalism will produce a perfect system, he even explicitly admits it will produce sub-optimal results in certain areas, such as, perhaps, environmental protection and intellectual property. The point is just that most things governments now do can be done much better and cheaper privately, and even if there are a few things a big, centralized monopoly government does do better, like, say, space exploration, they are not enough to justify its existence, given the historical failure of attempts to make government limit itself (bill of rights, separation of powers, etc.).

          • Desertopa says:

            On the other hand, we’ve had some pretty dramatic failures of the market to moderate and regulate itself, and we haven’t even tried letting it take over running a country. Government has “failed,” but that doesn’t mean there isn’t room for the market to fail worse.

    • onyomi says:

      So we need a lot more governmental competition (more, smaller states). For this to happen, people have to stop viewing states as transcendental embodiments of the spirit of a people and start viewing them as just one more service provider. The dispelling of the special aura of special authority currently surrounding governments in most minds is the key, imo.

  8. darxan says:

    In a world with competing protection agencies there would be a Pig War every Tuesday.

    • Desertopa says:

      I think Friedman relies too much on the “war is unprofitable” angle considering that war can be very profitable. If you have the capacity to completely conquer and exploit new territories, that can be worth far more than the losses you get from fighting.

      If Tannahelp and Dawn Defense have clients with conflicting interests, they could go into arbitration to resolve things amicably. But if Dawn Defense really thinks they can kick Tannahelp’s ass, they can just say “hey, we’re not backing down here, either you give up on your client, or we fight it out.” And then if they fight and Dawn Defense kicks Tannahelp’s ass, then next time around, nobody wants to hire Tannahelp, lots of people want to hire Dawn Defense, and Dawn Defense ends up conquering Tannahelp’s entire market share. So maybe instead of a private defense version of the EU, you end up with a private defense version of the Mongol Empire.

      • Steve Johnson says:

        But if Dawn Defense really thinks they can kick Tannahelp’s ass, they can just say “hey, we’re not backing down here, either you give up on your client, or we fight it out.” And then if they fight and Dawn Defense kicks Tannahelp’s ass, then next time around, nobody wants to hire Tannahelp, lots of people want to hire Dawn Defense, and Dawn Defense ends up conquering Tannahelp’s entire market share.

        Friedman (should) anticipates this objection. Dawn Defense doesn’t need to have a chance of winning – they merely need to have the ability to make it expensive for Tannahelp to win. If Dawn doesn’t do that then they get a reputation for getting pushed around and in time lose all their clients.

        The closely related objection that Friedman glosses over is this: a monopoly on force is worth infinitely more than a share of the protection market. If that’s the case everyone will fight for the monopoly based on rational calculations of payoffs. The hypothesis will predict that there will never be a situation where there is a stable balance of competing governments governing the same people in the same area – which is actually what we see.

        In your specific example the members of Dawn will gladly sell out to Tannahelp in exchange for positions in Tannahelp – completely disregarding the interests of shareholders in Dawn.

        If Dawn and Tannahelp are incompatable to the point where a Dawn official could never be an official in Tannahelp then they will either fight to annihilation or (more likely) give up and accept Tannahelp’s dominion.

        • Desertopa says:

          Right, it’s not really enough for one company to merely make it expensive for another to overwhelm them, because in the slightly longer term the conquering company will come out ahead by taking the resources of the defeated company’s market share. Besides which, it’s in their interests to show that they can champion clients’ interests even against competing defense contractors.

          Friedman is more or less treating war in a modern context here, where the winner receives some concessions, but still loses a lot of resources in the process. But we’re dealing with something more like old style conquest where the winner can recoup their losses by taking the conquered for everything they have. But the incentives for the defense contractors stack more heavily in favor of conflict, because their workers and client bases are probably going to be more fungible than a warlord’s population and territories.

          • Deiseach says:

            And the wars needn’t be what we think of as wars (that is, two large bodies of armed professional soldiers shooting at one another in occupied territory with concomitant property damage and civilian casualties). They could revert to a model of individual champions fighting duels, or the mediaeval condottieri:

            The earlier, medieval condottieri developed the art of war (strategy and tactics) into military science more than any of their historical military predecessors —fighting indirectly, not directly— thus, only reluctantly endangering themselves and their enlisted men, avoiding battle when possible, also avoiding hard work and winter campaigns, as these all reduced the total number of trained soldiers available, and was detrimental to their political and economic interest.

            Indeed, if the aim is to win over public opinion and attract customers who think your “burly and energetic men” are more burly and energetic than those of your business rival, and better able to go round and put the frighteners on a professional thief who has stolen your goods, big flashy but carefully calculated to minimise damage and injury encounters as photo-ops might be just the thing!

            Sell the television rights like the rights to broadcast sporting events, and you could make a handy sum of money on the side as people tune in to watch Tannahelp versus Dawn Defence in the latest skirmish of their economic war, complete with all the sales of fan-paraphernalia (replica uniforms, personally endorsed products by the respective champions or leading ‘soldiers’ of either side, etc.)

          • vV_Vv says:

            It doesn’t seem to me that this problem is isomorphic to iterated prisoner’s dilemma. This is just a zero-sum or negative-sum game, the gain of one customer, and therefore of one agency representing their interests, is the loss of the other party. There is no incentive to cooperate.

          • Tibor says:

            vV_Vv: I would be surprised if people were keen to become customers of an agency that does not care that the arbiters that judge the disputes between their customers and customers of other agencies can be bought. That one time it was beneficial for the customer of that agency, but who says that next time the other guy buys the judge? The only person who would actually benefit from keeping such an arrangement in the long term would be the arbiter himself.

          • vV_Vv says:


            The customers will flock to the agency with the biggest pocket/stick which is more likely than the others to buy/intimidate the arbiters.

            Of course the end result will be that nobody trusts the private arbitration/enforcement system.
            But this is exactly the point: private arbitration/enforcement is not a Nash equilibrium, and if it happened somehow, it would quickly revert to a monopolistic agency which does all the enforcement and internal arbitration between its (obligate) customers, in other words, a government which collects taxes, settles disputes and enforces the rule of law.

        • Ano says:

          But we have no guarantee that in this brave new world, it will actually be very hard to take over rival protection forces. If anything it should be quite easy; if you take, for example, the US and Canada, the US could almost certainly win a war against Canada without an awful lot of trouble. However it could never actually take over Canada because the citizens of Canada are loyal to their own government. In Libertarian World, the clients of Tannahelp don’t have any kind of special loyalty to Tannahelp, they’re with Tannahelp because they think their prices are good. So if Tannahelp HQ gets blown up in a devastating preemptive strike and their territory claimed in the name of Dawn, there’s unlikely to be any kind of insurgency of the kind that actually makes occupations very expensive. Any remaining employees would likely just move on to a new company. And the former clients don’t really care.

          So it’s not clear that it would be very hard for rival protection agencies to take each other out. In fact, it might be quite easy.

      • Deiseach says:

        What I find quaint in the example is that Joe the professional criminal tamely goes along with arbitration. If Joe is a professional criminal, he need not have a contract with Dawn Defense – he already is part of a gang that provides him with backup. Unless Tannahelp’s six guys show up with guns, Joe’s eight gangmembers are going to bust their heads (at the very least). Why go to court, even a voluntary arbitration court, when you can threaten the client to drop it or else you will send your pals round to burn down his house?

        If Joe is an amateur criminal, that’s no reason to say he’ll go along either. Some of our clients in social housing are on the wrong side of the kind of people that stab other people in the stomach at parties where they get into a quarrel. If Joe is one of those types, he’s as likely to show up on the client’s doorstep and threaten violence. Again, unless Tannahelp is going to send three burly men round to Joe to say “Hand back the TV and leave our client alone, or we break your legs” – Joe is not likely to have (a) signed up with a private civil protection agency (b) respond to reason (c) do anything unless it’s backed up with the threat of force or sanctions.

        If Tannahelp can’t get Joe locked up in jail, or have an order that his bank accounts are frozen, or send the bailiffs in to seize and sell property to compensate their clients, then “The arbitrator will tell everyone you are unreliable and break contracts” is not going to sway Joe. That’s why either private or public systems of jail will be needed, and eventually you end up with government and police forces and a court system and a legislature to make and pass laws.

        • Ano says:

          I think the idea is that there are always more law-abiding citizens than non-law-abiding citizens, and the more crime there is, the more resources the law-abiding citizens are willing to put into their protection forces.

          In addition, if Joe and his eight gang members are more powerful than the other protection forces, it would be to his economic advantage to simply set up his own protection force. Which is fine if it prevents him from stealing TVs.

          This is the theory, anyway.

          • wysinwyg says:

            …or maybe the private security forces realize they have found a profitable sideline in used television sales…

          • vV_Vv says:

            In addition, if Joe and his eight gang members are more powerful than the other protection forces, it would be to his economic advantage to simply set up his own protection force. Which is fine if it prevents him from stealing TVs.

            They can steal TVs from anybody who doesn’t pay them protection money.

            There is a reason why “protection” is an euphemism for “extortion” in criminal parlance.

          • Deiseach says:

            Sure, but if the private protection agency can use force against Joe, why can’t it use force against the private citizens as well?

            Who, if they were able to defend themselves in the first place, wouldn’t need to employ the services of a private protection agency! Or else all the private citizens band together in a citizen’s militia to take on the private contractors, and then they don’t need a private agency after all, they have something like Neighbourhood Watch.

            If they don’t have the sanction of force, then all they can do is turn up on Joe’s doorstep and serve him with a summons to attend arbitration. He tears up the summons, because the arbitration court has no means of forcing him to attend (unless they have private guards who will arrest him and drag him there, and then you’re once more getting into pseudo-government powers if you can be forced into arbitration contrary to your wishes).

            They say “Our employees will enter your domicile by force to take away the stolen goods”. He says “My gang can kick your asses” and again, unless the Tannahelp boys turn up with tasers and baseball bats, what can they do? And then it’s one group fighting another, and hey, looks like we’ve got a private little war on our hands!

        • vV_Vv says:

          If Tannahelp can’t get Joe locked up in jail, or have an order that his bank accounts are frozen, or send the bailiffs in to seize and sell property to compensate their clients, then “The arbitrator will tell everyone you are unreliable and break contracts” is not going to sway Joe.

          Even if it is a case of white-collar crime where Joe wants to maintain a clean reputation, what stops him from bribing the arbitrator?
          Without a government to punish corruption, wouldn’t arbitration essentially be an auction?

          • Tibor says:

            He can that, but he should be prepared to pay a really big paycheck. For an arbiter, his reputation is everything. Nobody would be willing to cooperate with one that has a reputation of being prone to bribery. So the arbiter risks losing his whole livelihood in the case someone finds out.

            If this still were a problem, agencies could set up back-up arbiters between themselves, who would examine the accusations of bribery and if that arbiter concluded that the first one was bribed, his ruling would be repealed. So you’d have to bribe that one as well…since he is meant to deal with corruption, he is probably very high profile and therefore very expensive to bribe.

          • vV_Vv says:

            Corruption isn’t necessarily immediately apparent, especially if there is no external agency that could appeal the arbitration process or somehow oversee the actions of the arbiter.

            And in current societies, judges typically make much less than businessmen. If the arbiter must normally make much more than a government judge to be trusted not to be corruptible, then arbitration process would be extremely expensive, which means that only very well off people or large firms would be able to afford it.

          • Tibor says:


            But there is such an agency. The one you are customer of. If it lets the arbiter get bribed to rule against its customers, it will also bear the costs of that corruption…therefore it is in its best interest to make sure it does not happen.

            By the way, there exist private arbiters today, although they are mostly used by companies between each other when they want a quicker decision than the one made by the state courts. Some of them even operate online. You send them your case, they send you their verdict after you pay.

          • Deiseach says:

            Well, if we’re talking about Joe the TV thief that’s not really on the level of white-collar crime (but is on the level of the type of person whose first recourse will not be to arbitration but to physical violence).

            Jack the swindler is a different kettle of fish. Is he allowed to declare bankruptcy, so sorry creditors, can’t pay you back? Then discharge bankruptcy within one year and start up another new company and fleece more investors? Or put all his assets in his wife’s name so they can’t be used to pay his debts when his business fails?

            There are already plenty of dodges, and plenty of scammers out there, and guys who don’t think of themselves as criminals but as bold entrepreneurs who were unlucky in business and are only using the laws in place to recover and start up again.

            Re: arbitrators and bribery, you’re asking them to self-regulate, and that can work, but can also have problems. There are claims that doctors and lawyers, for instance, don’t like rocking the boat when it comes to accusations against fellow members, so they tend to find in their favour or otherwise mitigate the severity of punishment when it’s “one of their own” versus an outsider.

          • Tibor says:

            Dieseach: I would guess this intra-occupation solidarity would get far weaker without a more or less guild system in those professions.

            As for some con artists cheating and swindling their way through life, this would most certainly happen as well. But while the state apparatus with its many bureaucrats who often have incentives far from those of serving the society, they have more opportunities than without them. Sure, people working for private companies are probably on average in no way better. But if my employees in my company get bribed and cheat, I bear the cost…which gives me a strong incentive to try to eliminated that. If the same happens in a state bureau, I as the head of the bureau have much weaker incentives to stop that, because I do not really bear the cost of that myself (and in fact one of the perks of the position is that I can accept those bribes, or some less obivous shady deals from others while having the society as a whole pay the costs). The same applies to courts.

          • vV_Vv says:


            But there is such an agency. The one you are customer of. If it lets the arbiter get bribed to rule against its customers, it will also bear the costs of that corruption…therefore it is in its best interest to make sure it does not happen.

            So thugs for hire should make sure that the arbiters are corruption-free…
            What could possibly go wrong?

          • Tibor says:

            Calling someone “thugs for hire” does not make them so. I gave you some arguments for why they should try to make sure the arbitrator does an honest job, since it is in their own interest (I should say that their incentives to do so are probably much higher than those of the part of the justice system responsible for dealing with bribery at courts today). You responded by making a sarcastic remark. Arguments would be better.

          • vV_Vv says:


            They are people who are able and willing to use intimidation and violence on behalf of paying customers, therefore they are “thugs for hire” by definition.

            Their interest is not that arbitration is fair, their interest is that their paying customers get their way.

            If they are going to use violence or the threat of violence on the arbiter and get away with it, why should they use it to make the arbitration fair, instead of securing a favorable verdict?

            If the arbiter is protected by more powerful thugs and can’t be coerced, then what stops the arbiter from accepting/extracting bribes?

          • Tibor says:


            First of all, if they feel like the arbiter does a bad job (not necessarily because he is bribed), i.e. makes verdicts that go against their customers, they don’t have to use any threat of violence. They can go to the other agency (i.e. the one with which they agreed on this arbiter to judge disputes between their respective customers) and say “We don’t like this guy any more, let’s renegotiate our deal and choose a different arbiter”. Both have the incentive to agree on one. If they don’t then the disputes between customers of those two agencies are not going to be settled which is going to cause exactly the kind of “I have these goons behind me which I paid to protect me” problems. That is going to make those two agencie rather uninteresting for people to sign up with and both of them are going to lose customers. If one of the agenies finds out that the arbiter is easily bribed, it is likely that the other agency won’t like him either. Their customer succeeded in bribing him this time, it could be your customer next time and generally our customers (theirs and yours) would not be happy about that. Nobody wants to have his trials judged by someone who has a reputation of being easily bribed because it does not just mean I can bribe him, it means the others can bribe him too. Whether my objection to an arbiter is reasonable or not is also important. Your disputes are not isolated, the competition is also watching and your reputation is important. If there is a company today that routinely breaks contracts, it not only puts itself in danger of costly ligitation, also it throws its reputation out of the window. If you have a record of not keeping your word, other people are not going to be willing to cooperate with you either. If you can’t get others to cooperate with you (under conditions as favourable as possible), then you will quickly go bankrupt. Reputation is an amazingly efficient mechanism for keeping people straight in a competitive environment. I traded bitcoins for a while (not by any means full-time) and I noticed how important reputation is on the trading house there and how strictly it is enforced (by no regulatory entity, just by its members). If you don’t play entirely straight, you are quickly going to lose it. I almost lost some reputation for canceling a trade about 5 minutes after it went into escrow…because I clicked on it by mistake. The other guy voted me down with a comment that I probably tried to profit on price fluctuations (it was a time where the price fluctuated really wildly). I convinced him that it was not the case and he changed his vote to neutral. But with not entirely perfect reputation (it only counted for people with high reputation themselves, or at least more so) you’d find it much harder to find other people willing to deal with you. And yet you don’t need any regulatory body to enforce good behaviour, clear reputation system is enough. Aside from making some money, this was the most interesting thing about trading – observing how you can make people behave well just by them wanting to keep a good name (there were also escrows, but those too in a sense depend on reputation, because the escrow goes to the auction house and they could just keep blocking it…while legislation about bitcoin was either nonexistant or inadequate at the time, probably still is in most places). An obvious caveat is that if you can make a one time heist that is worth more than your reputation and start under a different name somewhere where nobody knows you, then nobody can stop you. But then that is why people are more careful when dealing with people who have not yet built their reputation up (also, as David noted in Machinery, I think, why banks have HQs build with marble…it is a sunk cost which tells you that they mean the business seriously and are not going to jump on the next plane to Bahamas the moment you give them your money).

          • James Picone says:

            I might want an arbiter that is easily bribed if I think I can bribe them better than the other guy.

          • vV_Vv says:

            First of all, if they feel like the arbiter does a bad job (not necessarily because he is bribed), i.e. makes verdicts that go against their customers, they don’t have to use any threat of violence. They can go to the other agency (i.e. the one with which they agreed on this arbiter to judge disputes between their respective customers) and say “We don’t like this guy any more, let’s renegotiate our deal and choose a different arbiter”. Both have the incentive to agree on one.

            Uh? No. Why would the agency that got a favourable verdict agree to choose a different arbiter?

            In current societies isn’t not like law firms cooperarate to guarantee trial fairness, and they aren’t even allowed to use bribes or threats of violence.
            What would happen if you lift these restrictions?

            By the way, you mention Bitcoin, where MtGox, the most reputable exchange, ran with the money.
            Intrade, the prediction market, did the same, and just now on /r/changemyview there are allegations of Yelp extorting money for good ratings.
            Not to mention the infamous credit rating agencies that shamelessly colluded with investment banks to give top ratings to junk securities.
            Even with modern anti-fraud laws, private reputation is a very weak deterrent to dishonest behavior.

          • Tibor says:

            If its deal on who is the arbiter with the other agency was a one time thing, then yes, they should be happy. But since they agreed on that guy for the long term, it is not in their interest that the guy is easily bribed. Next time, he could be bribed against their customer. In time, people would realize that you can always buy the verdict of this judge and they would not like it. It is like the difference between prisoner’s dilemma and the iterated version of that. In the single round version, it pays to cheat. In the iterated version it pays to play straight, because cheating once means the other guy is not going to work with you again and you are going to lose more than you gain.

            If the two companies insisted on keeping the guy, the customers would switch to other companies which can keep their arbiters straight.

            Law firms today work in a different way. They do not choose a judge among themselves, the judge is appointed by the state and the law firms don’t always have the same judge between them, neither can they directly decide who the judge is going to be. They also have no reason to cooperate with the other law firm, they do not set up a legal framework between their customers (that is done by the state and for everyone), they do not have any long term cooperation between them (or any cooperation at all) and so no reason to “play nice”. They are a very different company that a protection agency.

            The bitcoin market I was refering to is Localbitcoins.com. They seem to operate without problems. I never said that reputation prevents all fraud from happening. You will always have a couple of skilled con artists here and there, especially in an emerging market. But reputation is the reason that con artists eventually tend to be an exception rather then the norm in a mature market.

  9. Ludwig von Mises predicted that the Communist economies wouldn’t work in 1920, and did so with a detailed arguments of exactly why this would be, and a few predictions of how things would play out. His position was spectacularly (and tragically) vindicated by subsequent events; whether or not you agree with the Austrian position on anything else, this is impressive. It took 70 years, but it happened.


    I don’t think that anarcho-capitalism is likely to be stable if implemented today, for exactly the same reason that democracy would almost certainly not have been stable if implemented throughout most of recorded history – the culture doesn’t support it. Democracy works because everyone, including his own party members and governmental staff, treat a president who tries to retain power after losing an election as insane, and nobody listens to him. Where this isn’t the case (which it isn’t, in many countries around the world), democracy often devolves into military or populist dictatorship, or something similar. I think that anarcho-capitalism is possible, and in its mature form much more desirable than our current system, but it may take a long time to get to a point where it’s stable, and it’s also possible that such a point may never arrive.

    I do think that anarcho-capitalism can and will work today if you very, very carefully select the initial population.

    • Tibor says:

      I kind of agree with you on this and I think this is the reason why (almost none) warlords in the past started a protection agency. In a society that works on a tribal level, people simply think differently. This is also why I think that colonialism and subsequent efforts in setting up western-style states (or states at all) in Africa and some other colonies, are such spectacular failures. I have a colleague from Uganda and even though he is a smart educated guy, he comes from a country where you don’t think of individuals and state, but individuals ->family->clan->tribe … and mostly because of the interventions -> state. He is a smart guy, but most people are not smart and they will simply support their tribe almost by default. Democracy then works even poorer than in our society.

    • Steve Johnson says:

      Just because you can make accurate predictions about communism doesn’t mean you’re an expert.

      After all, all the best people support communism therefore Mises was a crank.

  10. Thursday says:

    My guess is that such a system would privilege groups, like religious groups, who were able to form more cohesive communities. Those groups that stood by their members/principles would have an advantage. While I doubt that, for example, a religious group could force gay people off the streets, I could see such groups making it more expensive to be gay or part of a gay positive group.

  11. William Eden says:

    Scott, have you read David Friedman’s work on Medieval Iceland? He believes this was effectively an anarcho-capitalist society, and cites it as an example elsewhere: http://www.daviddfriedman.com/Academic/Iceland/Iceland.html

    • Not quite an anarcho-capitalist society, but a society with some of the features of anarcho-capitalism. There was a single legal system, legislature, and court system, but court verdicts were privately enforced—no executive arm of government.

      In the new edition of Machinery and in the webbed draft chapters of the book on legal systems very different from ours that I’m currently working on I mention some other societies in which rights enforcement was private and decentralized. My current view is that many, perhaps most, modern legal systems were built on top of systems of that sort. The evidence is clear for Anglo-American common law, Jewish law and Islamic law, a little less clear for Roman law.

      • I find private enforcement underwhelmimg….elements of it exist in a number of places, and it doesn’t answer the hard questions about polylegality.

      • vV_Vv says:

        There was a single legal system, legislature, and court system, but court verdicts were privately enforced—no executive arm of government.

        If I understand correctly, many primitive societies go through this stage during the transition from hunter-gatherer to agrarian economies.

  12. 27chaos says:

    > Probably not, monopolies are rare in practice.

    Uhh. Not all that rare. Pure monopolies, maybe. But partial monopolies, where one person can have significant influence on prices even if they don’t have total control, are all too common. This despite the fact that we have lots of legislation that’s supposed to make monopolies difficult/impossible. Things were even worse before antitrust laws.

    > I…uh…guess this might be another one that isn’t so bad, since that might mean the agencies are forced to actually fight, which raises the cost of being anti-gay to a potentially prohibitive level.

    It raises the costs of being pro-gay to a potentially prohibitive level as well.

    • Tibor says:

      a) Most monopolies and monopoly like structures either come from controling a majority of a world natural resource of something, but that is a rare case and does not have much to do with protection agencies, or from government intervention in favour of those molochs. GM would perhaps not exist today were it not for government intervention and it pays to be big (even when it is not economically efficient) for political leverage (“sure, you can let us go bankrupt, but those 20 thousand employees of ours that will likely not find a new job before the next election, are not going to be happy about that…”).

      b) If the majority is anti-gay (in the sense willing to punish gays for being gays), they can use the government to push their views today…and cheaper, since they can force others to pay for that too. If not, they won’t make the costs of being pro-gay (in the sence of not punishing gays for being gay) prohibitive. Also, generally global (in the sense applying to everyone in the area) laws seem to be hard to be enforced in anarcho-capitalism because of the public good problems. That can be both good and bad. National defense seems to be the biggest problem of AC because of this…but it does not mean there cannot be different solutions to the same problem and the fact that something is a public good does not make it completely unenforceable….which is why say hard and not impossible. In any case, observation of how it works in practice would help a lot here.

      • Deiseach says:

        If the market is the be-all and end-all of how decision-making is implemented, why shouldn’t anti-gay groups be able to get laws and social sanctions in place if they can get the money and influence to do so? Morality? That’s not the place of the market to decide; it’s cash (or equivalent medium of value) transactions where you follow where the money goes. Enough people are willing to pay to implement anti-gay policies, you implement anti-gay policies (and vice versa; enough people are willing to pay to implement pro-gay policies, you implement pro-gay policies).

        Nobody gets to tell anybody what’s right or wrong, it’s down to how many people are willing to, or want to, put resources into your proposal.

        • Tibor says:

          Sure, enough money and influence and willingness to spend them buys you almost anything. If you have a influential and rich enough group, they can “enforce” their laws. But our current system is not different in this respect…and it makes it easier for those people to do so. In a anarcho-capitalist system, the anti-gay agency (according to the wishes of its anti-gay customers) has to strike deal with all other agencies to make their anti-gay laws apply to everyone. Most importantly, they have to be able to pay any would-be gay-rights agency not to become one, or alternatively, pay enough of the “neutral” agencies so that they do not strike a gay-is-ok deal with that gay-rights agency. This is of course possible, but not likely unless most of the society is not anti-gay or unless there is an anti-gay minority which for some reason is both extremely rich and extremely dedicated to bannig homosexuality (they have to bear the costs of the whole show). Now, in the first case, in a democracy, the gays are screwed up anyway…and more easily so, since the anti-gay people don’t have to bear all the costs of this…actually they don’t have to bear any costs (except of law enforcement dedicating part of its resources to hunting down gays instead of doing something useful…but that cost is very spread out over the population). The same people may as well turn out to be a lot less anti-gay if they have to put their money where their mouth is.

          In the second case of a small group of very very rich very very anti-gay fanatics (and most of the society not caring about gays enough, so that they rather let the anti-gay people have their way in exchange of something from them), democracy seems to be doing better. But it may as well not be. First of all, the minority that is extremely rich, is also likely to be extremely influential. In fact, their best way may as well be to pay for campaigns that will eventually turn the society their way…it could come off cheaper and more satisfying. They can do that in a democracy as well. Still, maybe it would be a bit more difficult for them to do so, hard to say. But this scenario seems rather strange. You have a group of rather unreasonable people who somehow became extremely rich even though they are willing to spend their riches on forcing others to live the life their way. Unless you believe conspiracy theories, this does not seem to be the pattern that actually ever happens in the real world.

          The bottom line is that most people tend to be more willing to spend their own money to protect themselves than to harm others and unless you have a society with really extreme income differences and the upper class consisting more or less solely of people who want to spend their own money on harming others, anarcho-capitalist society seems to naturally protect freedom better than a democratic one. While the scenario where it works worse seems to me to be very unlikely (whereas the scenario with a lot of mildly homophobic people who are willing to vote for persecution of gays, but not willing to pay for it seems rather common)

      • wysinwyg says:

        OK, let’s suppose this is correct and that most monopolies that form do so by heavily lobbying the government to put barriers to entry in place to prevent competition.

        Would it be impossible to do this under anarcho-capitalism? Instead of having to get together enough money to impress the federal government, you just need to get enough money together to impress the smaller firms that are doing the work the government used to do. Time was you had to buy a senate subcommittee on agriculture and bribe a bunch of people in the Department of Agriculture, but now you just have to pay a small fee to Food Inspectors, Inc. to have your competitors’ business practices outlawed determined to be unsafe.

        We can’t conclude that monopolies wouldn’t occur with a weaker state or without a state at all just because they do occur with a strong state.

        • Tibor says:

          The state bureaucrat who decides what is “unsafe” has very different incentives than the protection agency. The bureaucrat is either completely anonymous and not even subject to democratic election, or (although I am not aware of any country where the antitrust office is run by directly elected people and I doubt it would improve its performace much or perhaps at all) voted in for a couple of years based on a vote, good deal of which is rather uniformed as in a large population your vote is better for signalling others what “you stand for” than actually having a chance at changing anything. Consequentially, his best interest is to use his position to his own advantage with very little concern about how that is good for his “customers” (i.e. citizens of the country as a whole)

          The company works a bit differently. It can outlaw a company and ban its products form being sold (but even that is difficult, it can only prohibit its own customers from buying or selling them, and try to make deals that have the same effects with other protective agencies) or start licencing (again only for its customers) and thus prevent new ones to pop out. But this licencing costs something and that means it has to be paid by its customers. They are not likely to be happy to pay extra $5 a month to be forbidden to buy something or restricted from starting a business (they may want some agency that rates businesses and says what is “unsafe” and “safe” without enforcing the choice, in fact those services exist today and I use some of them myself…and if those get bribed and people find out, they go bankrupt because nobody listens to them anymore). So if you are a CEO of the Devious Limited, you need to pay the company more than it loses from giving its customers a worse deal (quite a bit more, because they run the risk of the whole thing coming up to light and them losing a lot of valuable reputation)…and you have to do it with enough protection agencies to hope to get anything close to a monopoly. Those agencies then reimburse their customers for not being able to set up companies competing with you and buying the products of the competition. Those who do not feel reimbursed enough change the agency. Let’s say you have enough money to pay off everyone for long enough to make all your competition go bankrupt, because their products are labeled “unsafe” by agencies covering 99% of the population and therefore not allowed to be sold to their customers. This is however the same as trying to become a monopoly by price wars. If your market share is 80% and your competition’s market share is 20% then by price dumping you lose money 4 times as fast as they are. They can simply close down for a while and then reopen once you either drop that strategy down od go bankrupt. The same they can go when you are trying to do it via “safety” regulations. The only reason you are able to push them through is that you are exercising a bit more complex version of price dumping…and the effects are the same.

          Why does this work with the state bureaucrat? Because the citizens of the state cannot really change the state (that easily) and the bureaucrat does not run the risk of losing citizens by accepting a bribe from you and banning the competition’s products on the grounds that they are “unsafe”.

          In a nutshell, monopoly through licencing only works because there is a legal monopoly on legislature…but if there is a market competition in that also, then it is not feasible (or at the very least it is much harder and much less stable).

    • “Things were even worse before antitrust laws.”

      I think you have it backwards. The major source of monopoly in the U.S. in the 20th century, as in England in the 16th and early 17th, was government. Consider railroads and airlines, cartelized by the ICC and CAB, professions with restrictions on entry via licensing requirements, and government monopolies such as the USPS, protected by the Private Express Statutes.

      • I think that is misleadingly phrased. Governments permit or create somemmonopolies, and quash others. It does follow that the surviving monopolies

      • I think that is misleadingly phrased. Governments permit or create some monopolies, and quash others. It does follow that the surviving monopolies have government blessing, but it doesn’t follow that there would be no monopolies without governments, as they have broken up many putative private sector monopolies,

    • Loweeel says:

      What is “a partial monopoly”? Definitionally, it seems like being half-pregnant.

      You’re either a monopoly — as defined within a particular market — or you’re not.

      • RCF says:

        Have you taken basic economics? A perfect monopoly has total control over the market price. A partial monopoly has partial control.

        • Tracy W says:

          Nope. In basic economics, even in econ 101 economics, price is formed by the interaction of supply and demand. A monopoly doesn’t have total control over price because people can stop buying something if the price is too high. Even if the thing is truly a necessity of life and there are no alternatives, eg oxygen on a hypothetical free-market space station, people can die instead if they can’t pay the charge.

      • Tracy W says:

        So what’s a particular market?
        If there was only one maker of mustard in the world, does that mustard maker a monopolist or do they merely have a share of the condiments’ market?
        Does J K Rowling have a monopoly? She’s the only one who can write official Harry Potter books. She has an authority that even a really good fan fiction author lacks. But she’s only one author and books are only one form of entertainment.
        If I own a railway franchise but people can drive, bike or take the bus, do I have a monopoly?

    • Bill Murdock says:

      I like when people say things like “partial” monopoly. Yes, when something is “partially” only one.
      Anti-trust law is there to enforce monopoly. Anyone who has studied the issue knows this. The history of anti-trust prosecution is a history of political influence used to suppress competition. The companies that are “busted” typically are the ones driving prices down and taking market share from the previous, and politically connected, market share dominators.

  13. Steve Johnson says:

    9. An extension of this: it’s unclear that we’re not already living in this society. It’s just that one protection and arbitration agency has completely taken over from all of the others and instituted a policy of using force against those who don’t pay for its services. That’s allowed under anarcho-capitalism because everything is allowed under anarcho-capitalism. So expecting anarcho-capitalism to be stable is expecting the thing that has already happened to not happen again a second time.

    I don’t mean the sort of “why should it work” where you answer with specific reasons why no, monopolies won’t form, and no, people won’t routinely sell themselves into slavery, and no, protection agencies won’t form a new feudal ruling class, and no, people won’t bash their heads against public goods problems and externalities forever without any market solutions appearing, and no, the poor won’t starve to death. I mean the very Outside View question of “why is it that, by coincidence, not using force is an effective way to solve all problems?”

    Good governance is a really really hard problem.

    Bingo. Good governance is indeed a really really hard problem. Good governance is also immensely valuable and should be very profitable for the men who produce it.

    What we have now is exactly indistinguishable from anarcho-capitalism but with a single protection agency – one that is structured in a very strange way; subject to plebiscite but owned and controlled by its employees – including those who are officially members of other organizations that are not part of the protection agency.

    The structure of the agency is not set up to produce good governance even though good governance would be more profitable – all the losses that this agency inflicts on itself (the housing stock of Ferguson, MO is worth $25 million less now than it was a year ago due to the protection agency whipping up a mob to burn the town down because of bad incentives – all over an incident that the protection agency’s Justice Department concluded was justified) don’t matter a bit as long as the incentives are wrong.

  14. Noah Siegel says:

    6. In fact, protection agencies have a strong incentive to make everybody as scared of crime as possible, and in fact to raise the actual crime rate if they can, in order to get people to buy their Premium plan. Given that this is anarcho-capitalism and there are no laws against crime, this can’t possibly end well.

    This creates a huge incentive for protection agencies B and C to undercut the agency trying to sell a Premium plan.

    The only way I see the premium plan scenario working is if protection agencies collude. And I think there’s a much stronger incentive for them not to collude, but instead undercut the other’s prices by not charging a premium. He covers the failure of collusion between firms in Chapter 6, “Monopoly I: How to Lose Your Shirt” when discussing “chiseling,” or the incentive of cartel members to defect from price-fixing arrangements.

    EDIT: I hope that if you do a highlights post you get a little bit into the “Expanded Postscript for Libertarians,” especially the parts where he weighs different moral philosophies and presents “the economic way of thinking” as an alternative.

    • HeelBearCub says:

      The incentive is for protection Agency A to kill all members of protection agency B and C, and then any prospective members of agency D, E, F and so on.

      And then they DEMAND that you employ them.

      That’s how protection agencies that don’t have to follow laws imposed by the biggest protection agency possible (The State) work. See The Pinkertons, The Mob, Gangs in any under-governed territory, etc.

      Use of force is essentially guaranteed to devolve to a monopoly with territorial borders.

      • Highly Effective People says:

        The Pinkerton Detective Agency never ran a protection racket, and was in fact more often than not a tool of the government both in it’s origins as bodyguards of President Lincoln and it’s subsequent frequent use to supplement American military / law enforcement.

        The Sicilian Mafia, on the other hand, does roughly follow your model. Private citizens formed vigilante courts to adjudicate disputes, and over the course of time those became criminal guilds. But the Mafia families could hardly be called monopolistic even in Sicily itself: if anything the fact that protection rackets were so valuable stoked competition.

        And of course there plenty of counterexamples of private security / military which didn’t show that trajectory such as the Shoftim in Israel, the Hird / Fyrd in England and Scandinavia, the Vehmic Courts in Germany, the Hermanidad in Spain, the Hanse in the North Sea, etc.

        I’m not sure what the factors are which determines whether vigilantes will become bandits or not but it’s hardly clear how that differs from the unknown factors which determine whether statesmen will become tyrants. That’s not much of an argument for private law enforcement mind you but hardly a strike against it either.

        • HeelBearCub says:

          I think you are ignoring the caveat “that don’t have to follow laws imposed by the biggest protection agency possible (The State)”

          The Pinkertons were widely regarded as brutal enforcers. They were created by businesses to break labor organization. They certainly didn’t make there money by being prepared to submit to arbitration.

          I think some other examples you give are operating alongside the machinery of the state, rather than operating without the state. Although I am not intimately familiar with them and have only looked at them in a cursory manner.

          The Hanseatic League, as an example, was essentially an agglomeration of city-states, each with their own territorial integrity, and operated by swearing fealty to The Holy Roman Emperor.

          • Highly Effective People says:

            I wouldn’t say I ignored it since the caveat is the point of contention. Is that in fact how organizations without a larger government to supervise them behave? I say “not necessarily” since it seems that many did in fact behave differently.

            On the topic of the Hanse it’s useful to remember that at the time the King of England was nominally a vassal of the Holy Roman Emperor as well. The point I was making is that the guilds in Lübeck and elsewhere which founded and ruled the Hanse were closer to business corporations or unions than to state actors in the Westphalian sense despite their providing services currently reserved to the State and engaging in international politics.

            (Incidentally every one of the institutions I mentioned was at some point after their formation sponsored by a ruler, usually leading to their downfall as they were eventually seen as a threat to royal power. Although some did leave behind substantial legal legacies such as Biblical Law, English Common Law and Lübisches Recht)

            As for the Pinkertons, this was an organization which was hired to protect the President of the United States during the Civil War and which Congress needed to pass a specific Anti-Pinkerton Act against to stop the government from continuing to hire them. They broke strikes on behalf of corporate clients… just like the regular Army and police did at the time. It’s hard to see them as distinct from state power.

            (I don’t claim to be an expert on history btw. I know more than the average person but a real scholar has much more depth to their knowledge.)

          • Eric Rall says:

            Pinkerton vs Union violence was an example of conflict between rival protective organizations.

            The unions in that era were often willing to use violent tactics (seizing factories by force, assaulting replacement workers, etc), which they believed to be justified by the conduct of management.

            Managements generally had a different understanding of what was fair and just, and they either appealed to governments to recapture the factories and defend the replacement workers, or they hired private firms like the Pinkertons to do it.

            I’ve also heard claims that the Pinkertons were also employed to initiate violence preemptively or incite violence from the unions as a pretext for crackdowns; I consider these claims plausible but haven’t seen convincing confirmation.

            Violence by strikebreakers is remembered much more strongly than violence by the strikers, which I suspect is due to history-book writers generally being more sympathetic to the union movement than to 19th century robber barons.

          • PGD says:

            Eric, the state intervened (frequently!) on the side of the Pinkertons/management but never on the side of the unions. A model of violent conflict between lower and upper classes with the government on the side of the upper classes works better than ‘competing protection agencies’ for that. The Pinkertons were the repressive force you could hire early in the process and if things got serious they would be backed up by the state militia or Federal troops.

          • Eric Rall says:

            “Never” is a little too strong. Governments did usually intervene in favor of management when they intervened at all, but there were incidents where governments intervened in favor of the unions (for example, the events leading up to the Battle of Matewan).

            I was thinking in terms of the subset of situations where the government did not intervene on either side or only intervened after several rounds of escalating violence. This was a pretty common pattern, and to the best of my understanding is the main reasons the Pinkertons and other private security firms were employed rather than companies relying on police and the militia to deal with violent strikes.

          • vV_Vv says:

            On the topic of the Hanse it’s useful to remember that at the time the King of England was nominally a vassal of the Holy Roman Emperor as well. The point I was making is that the guilds in Lübeck and elsewhere which founded and ruled the Hanse were closer to business corporations or unions than to state actors in the Westphalian sense despite their providing services currently reserved to the State and engaging in international politics.

            The Hansa may have been more of a business-oriented organization than a nation state in the modern sense, but it wasn’t anything like a free-market actor.

            On the contrary, it was a cartel, the most powerful of its time in Europe, which resorted to any means, including open warfare, to undermine its competitors.

        • Paul Brinkley says:

          The impression I get from these examples is that private LEOs may become monopolies for short periods, without staying that way indefinitely. The forces pushing for short-term monopolies seem to include things like loyalty, to either a person or an institution. (What other forces?) Personal loyalty expires when the person does. Institutional loyalty may persist over generations (cf. family traditions lasting 100 years or more).

          If this is all legit, then the question is whether the pressure from loyalty to an over-oppressive LEO will indefinitely dominate the pressure from financial incentives to break up that LEO cartel, plus the pressure from the people dissatisfied with that LEO seeking to establish a viable competitor. (Any other forces I missed will also need to be considered.) The anarcap will want to prove that it won’t; opponents will want to prove that it could.

          Personal loyalty is only a problem as long as that person is in power (so a longevity breakthrough would raise a concern here). So the opponent would currently have to show that institutional loyalty could be dominant in certain cases.

        • vV_Vv says:

          The Sicilian Mafia, on the other hand, does roughly follow your model. Private citizens formed vigilante courts to adjudicate disputes, and over the course of time those became criminal guilds. But the Mafia families could hardly be called monopolistic even in Sicily itself: if anything the fact that protection rackets were so valuable stoked competition.

          AFAIK the Sicilian Mafia is composed by clans with strictly territorial “jurisdictions”, and violent conflict between clans is rare.
          The clans may be in a federation relationship between each other rather than a strict hierarchy, but the system is certainly not a free market: if you want to operate a business in a certain area you have to buy protection from the local clan, or they’ll burn it down.

      • shemtealeaf says:

        I see two main possibilities for how this could go:

        1) Agency A is defeated by the combined forces of Agencies B and C, with the likely assistance of Agencies J and K from down the road, who don’t want a monopolistic aggressor on their doorstep.

        2) Agency A is powerful enough to defeat everyone who might want to oppose them. In this case, Agency A can probably do whatever it wants already. There’s no system I can think of that can protect against an organization that is powerful enough to simply destroy all of its rivals.

        • Paul Brinkley says:

          I think Friedman would address both cases here as follows:

          1) This is a win for A-C, with the additional note that J and K are similarly keeping an eye on B and C, and if either of them starts to get the upper hand, they promptly turn on them. (Friedman refers to this principle specifically in his chapter about Iceland, noting an epic in which one Icelander (a proxy for all of them) declares that his strategy will be to attack whoever appears strongest, switching every moment if necessary, until fighting ceases.)

          2) Agency A is itself subject to fracture. Any one member of A is unlikely to break away and go it alone, true, but there’s nothing stopping half of A from deciding it can overpower the other half and secure even more power per capita. (Which is why institutional loyalty is a concern I mention in a previous comment.)

        • HeelBearCub says:

          Agency A is defeated by the combined forces of Agencies B and C

          B & C will have formed an alliance and assumed joint control of the territory.

          Will B&C willing allow competitor C to now (after they have spilled blood to prevent A from defeating them) to simply undercut them on price? Or will they now view the territory as theirs?

          They have already shown that are capable of and willing to kill to keep their territory.

          Will J&K extract a concession of non competition from B&C in order to defeat A?

          And, now that B&C have gone through a bloody battle, robbing them of much needed resources, how will the re-stock? Will they allow customers to switch to competitor D right now? If they do allow them to switch to D (who was managed to sit out the battle) why won’t D now crush the weakened B&C?

          In short, why shouldn’t this look like every other territory battle between forces willing to use violence?

          As rationalists, shouldn’t we, in essence, look at the priors?

          • shemtealeaf says:

            The real answer is that A never attacks in the first place unless they are pretty much assured of victory. If they decide to stupidly pursue a costly war, it screws up the situation in the short term, as you noted. However, even though everyone loses, Agency A loses the most. Any other agency that wants to pursue a similar course of action in the future has another reason to reconsider.

          • HeelBearCub says:


            You are assuming that the organization acts perfectly rationally, but in practice that is almost never the case.

            For one, the organizations don’t have perfect information about each other, and all organizations have the incentive to over-signal their strength, thus signals of power can’t really trusted. Mistakes will be made when estimating the relative power of competing organizations.

            And second, even if all sides have perfect estimation of the other organizations power, eventually an A will eventually emerge who can dominate a territory and will want to. And then they will.

            Territorial control through force by multiple organizations is not stable. The overwhelming historical evidence supports this conclusion.

  15. Daniel Speyer says:

    The differing laws problem seems like a really big one. Suppose there’s some moderately scary group with unusual values. They form a protection agency and write a legal code based on those values. Their protection agency will arbitrate *only* under that legal code. Either the other agencies accept this, in which case the code becomes the law of the land, or one of them has to reject it first and take on an expensive war. I expect it takes nowhere near 51% of the force to compel the entire populace this way, so long as you’re plausibly fanatical.

    The other failure mode that occurs to me is a protection agency abusing its own customers. Sure, they can complain to the arbitration firm, but it knows who it really needs to please. They can try to blacken either reputation, but that’s probably a crime, so now they’re defenceless. True, we have problems like this as it is, but they’re somewhat mitigated by many people swearing oaths to uphold the law (and sometimes meaning them).

    • Assuming that there are multiple effective protection agencies, you would presumably go to a different one and then they’d go to the arbitration agency.

      • Deiseach says:

        What sanction does an arbitration agency have? “We find against LegBreakers Inc in favour of Joe Bloggs and order oops, can’t impose any rule on them, okay, we strongly recommend no? too proscriptive? fine, we ask them really nicely that they consider refunding his policy premiums plus the interest on the amount they overcharged him.

        Otherwise, we’re going to tell everyone who asks us that LegBreakers Inc aren’t one bit nice at all“.

        • HeelBearCub says:

          We find for LegBreakers, Inc. because the convinced us they were in the right by breaking the legs of all previous arbitrators who ruled against them in any matter.

          Further, we find that Joe Bloggs Protection Agency has folded up shop in this town and withdrawn their claim, moving back across the river where they are now known as Joe Bloggs Arm Breakers, Inc.

          Jim Webzine Protection Agency is no longer operating in Joe Blogg’s territory, or any other territory. Because the only turf Jim controls is a plot of land in the cemetery.

        • Paul Brinkley says:

          We find nothing at all, because no one in their right mind forms a security company called Legbreakers after the previous one failed to get any subscribers willing to go with such an obviously belligerent agency.

          (meanwhile, in another AC universe) We find in favour of EstaSecure, MainStreetProtective, and SafeHouse over Fanatan Security (founded by someone with the unfortunate last name of “Legbreaker”), and inject the biased commentary (which we may do, as arbitrators in an anarchist society) that the former parties were shrewd in foreseeing what Fanatan was up to and forming their temporary alliance. (Seriously, I think this had already been addressed.)

          (meanwhile, in yet another AC universe) We find in favor of Fanatan Security, and meanwhile applaud their ability to secure the subscribership of the overwhelming majority of the populace for their willingness to advertise protection regardless of the gender of the customer, in the face of the alternate policy held by no less than three other major LEOs.

          • Deiseach says:

            one in their right mind forms a security company called Legbreakers after the previous one failed to get any subscribers willing to go with such an obviously belligerent agency

            Sure, just like nobody would purchase products in a personal grooming range named “Axe” because what kind of associations does such a violent name conjure up?

            Or a cologne named “Brut” which, for French speakers, may conjure up images of very dry champagne but for the English-speaking invokes “brute, brutal” 🙂

            Funnily enough, over here “Axe” is marketed under the “Lynx” brand name, so presumably “Axe” is indeed too violent a name for us Euroweenies 🙂

          • Deiseach says:

            Meanwhile, LegBreakers Inc lodges a copyright infringement claim against Legbreakers for impersonation of markholder 🙂

      • Daniel Speyer says:

        “Your honor, the client Disrespected an Officer of a Protection Racket, violating section 22 of the Uniform Protection Code. As a lawbreaker, he is not to be protected from the consequences of his actions.”

        OK, you try to find a protection firm that doesn’t honor arbitration under that code. But *most* of the protection firms will regard that as a perfectly reasonable code, so now you’re looking to hire someone who’s in a permanent state of war with the majority of the armed populace.

        • Deiseach says:

          “M’lud, my client resides in Market Street, which is part of the electoral area of Northshire South. This electoral area is not under the aegis of ProtectionRacket and does not licence them to operate within their territory, and so when their officer crossed the road from Smith Street into Market Street, he was acting in the role of a private citizen with no authority when he accosted my client outside his own front door.

          My client did not, therefore, disrepect an officer of a protection racket when he punched him in the snoot (to use the technical term of art for the alleged offence) and so no violation of Section 22 occurred.

          We counter-sue for defamation of character, emotional distress, loss of earnings and repute caused by their false and malicious allegations that my client was a violator of the Uniform Protection Code, and for the costs of professional drycleaning for getting blood out of our client’s jumper which was just clean on that morning.”

  16. BillWallace says:

    Very enjoyable post. Machinery of Freedom is imo one of the most important books ever written and it should be read by everyone.

    I already considered myself libertarian when I read it, and after reading it I was 100% for a-c.

    I don’t now believe that a-c would work. My primary reasons for believing this were touched on throughout your post. Most of the logic used by David in the various arguments and descriptions detailing why things would be stable rely on humans being rational actors. For example it is in the protection companies’ best interests not to war, so they won’t. Or at least they won’t if they are run rationally. But they will be run by humans so they won’t always be.

    In addition to the point that you brought up about countries warring against their own interests, there is also a human tendency shared by many but not all of us, to desire a hierarchical structure and a central authority; a desire to give up personal freedom for the feeling of belonging to this hierarchical group, even when doing this is clearly inferior for the person from any rational accounting.

    Thus I conclude that the most beautiful existence possible is in fact the one described by ddf, but it can never happen. Take 10,000 rationalists, put them on a seastead with access to all of the resources that they need. Seed them with as perfect a society as ddf can dream of. In 3 generations there will be a government… this is my prediction.

    • Rebecca Friedman says:

      I come from the Shire of Crosston, in the Principality of the Mists, in the Kingdom of the West. I also owe loyalty to the Barony of Carolingia, mythic and wonderful land that it is, for though I have never lived there “Carolingia status mentus est”, and if Carolingia is a state of mind I am a Carolingian. I owe loyalty to my Prince and Princess, my King and Queen (assuming they rule wisely and well), and all the members and officers of my local group.*

      I come from Feathermoon Server, and still feel a regretful loyalty to my Guildwatch, which I left when I quit WoW, and a considerable amount of personal loyalty to its heroic leader, who forged together disparate groups for the protection of the weak against the attacks of the ruthless raiders. Were I still playing that game this would be rather more relevant, but…**

      … Humans do feel a desire for a hierarchical society, to owe loyalty to someone. I do, intensely. But that someone does not have to be a government, and certainly doesn’t have to have a monopoly on loyalty-receiving; if someone exploits your loyalty, you can look elsewhere. I happen to live in the United States of America, but I feel only a limited degree of loyalty to it – I would be much happier to do a favor for the Princess of the Mists than, say, the Governor of California.

      *All groups described are part of the Society for Creative Anachronism, a nonprofit medieval reenactment group with branches all over the world. Kings are chosen by tournament twice a year in most kingdoms, three times a year in the West, Princes twice a year. Local officers it varies, but they tend to be more permanent.

      **Feathermoon Server, World of Warcraft, now you know what I spent most of my time on as a teenager.

      • Hate Follows says:

        Hey! I met you at the SSC meet up in San Jose! we started to talk about universal basic income and then post scarcity societies (and then Star Trek)?

        So… a question, I see what you’re saying, in that someone doesn’t need “legal” authority over you for you to feel loyalty to them but is there a difference between loyalty and patriotism?

        What I mean is, I think we all feel loyalty to people who are involved in the same subcultures we are but would we crawl over barbed wire on a lonely beach, only to die in a hole, for that?

        • Rebecca Friedman says:

          Oh, yeah, I remember that.

          Well, I was actually arguing that that kind of structure meant a psychological need for loyalty didn’t have to translate to a psychological need for a government, but since you ask… yeah, probably, if it got strong enough. Religious groups have been evoking the kind of loyalty you talk about for millennia (at least two). If religious groups can do it I’m guessing subcultures could, if they were the primary loyalty (or one of the primary loyalties) in someone’s life. It’s a much more minor thing, but I know that I personally have invested a lot of hours in doing something fairly boring/frustrating because it was my duty to Mixler and the ‘Watch and I wasn’t going to let them down. I know my inclination to do that kind of thing scales with how invested I am in the particular subculture, so…

          (Scott actually discusses patriotism to subcultures – hang on, lemme see if I can find it – not right now, and I have to rush off, I’ll look when I get back. It was a very interesting article and I think relevant to your question though.)

    • Deiseach says:

      And of course, what prevents non-warring private companies from forming a cabal and price-fixing? Monopolies or “cosy cartels” are a real world problem, where competing firms or businesses don’t compete but instead come to agreements for their mutual benefit (and not that of the customer). Sure, Watson’s Widgets and Tunney’s Thingamajigs can enter into a price war where they undercut each other to attract customers, but that can only last so long and may end up in one or both of them going bust.

      Much better for Watson and Tunney to agree that they’ll charge a certain price and not undercut one another, so if customers go shopping around, Watson quotes ten bob a gross and if they go to Tunney for a better price, it’s still ten bob a gross (and vice versa) and unless the customer can absorb the inconvenience of shipping in goods from Shaw’s Stuff (price: eight bob a gross) on the other side of the country, they can either like it or lump it.

      • shemtealeaf says:

        Or maybe Shaw’s Stuff sees an opportunity to set up shop in your town and sell for nine bob a gross.

        Alternatively, maybe the people in your town start to spend more money on substitute goods, and less on the item being sold by Watson and Tunney.

        In order to have a successful cartel, you have to have a business where consumers can’t easily switch to a substitute good, and where the entry costs are high enough to discourage newcomers from breaking into the market. It can happen, but I don’t think it’s a particularly common occurrence.

        • Deiseach says:

          Sure, Shaw’s Stuff could do that, and lure away customers. After all, that’s the incentive for utility companies, mobile phone networks and the likes to run advertising campaigns – “Switch to us and reduce your yearly bill by €€€€€€!”

          Except when you read the fine print, the reduction or discount only applies for a limited period, then you pay much the same rates as you would if you stuck with your old provider.

          Shaw’s Stuff might sell for nine bob a gross, but when it had enough of the customer base, the charges would go up to ten bob.

          See Ryanair, the ‘no frills’ airline, which (on the face of it) charges very low costs for a ticket – but provides absolutely basic service, plus bumps up costs for add-ons (e.g. turn up late? need a wheelchair? your granny died and you need to switch to an earlier/later flight than the one you booked? baggage excess?)

    • Tibor says:

      I think that the argument is that the war is costly and therefore those agencies not behaving rationally will simply be outperformed by those who do. They will have to charge higher prices and lose their customers. Unless they themselves prefer war…and paying for it themselves. This is maybe possible, but at least makes war less likely than nowadays since in todays wars it is not just those who support the war who have to bear the costs.

      • Deiseach says:

        So the argument rests on the fact that, failing to compete economically, the only alternative for the private agencies is to start a shooting war?

        Or is war being used metaphorically, as in “a price war”? I can see undercutting prices and driving your competitors out of business (if you have the resources to soak up losses) being a strategy, or taking over smaller agencies – there is no reason BigBoyz plc can’t make a very attractive offer to Bijou Security and take over the business; the founder of Bijou goes away a very rich person, BigBoyz absorbs employees and more importantly customers and increases its market share and positioning as one of the big beasts in the field, and the only reason to object is “But you’re restricting customer choice!”

        To which the founder of Bijou Security retorts: “Can’t hear you, too busy counting my money”.

        • Tibor says:

          No. The argument is that waging a war makes it much harder for you to compete economically, because it is expensive for you. This in turn makes your customers go away, makes you poorer and leaves you with fewer means to wage the war.

          As for the big companies buying the small companies, this can happen, sure. But it does not prevent new small companies to start if the big one works bad. The big one stays big only as long as it can attract customers (there is no government bailout in this world) and since eventually the economies of scale are outhweighted by the diseconomies, it will be difficult for it to do so. It could be, that the most efficient size of a protective agency is so large, that you end up with 2 or 3 big companies on the whole market since then it is easy for them to just reinstate the state (create a cartel which forbids its customers to change the agency and backs it up by force), making themselves its rulers. But this seems unlikely. You don’t see bigger (this time in number of citizens, not in scope) governments to outperform the small ones, actually it seems to me that the opposite is true if anything. If you have hundreds of companies this strategy does not seem to work so well. The big one trying to eliminate the competition by buying them out will soon find out it is losing customers, because its services are worse than that of the competition and it won’t be able to afford buying out the small companies that come to the market.

          • disciplinaryarbitrage says:

            What about standard terms and conditions restricting market entry? One viable pathway: the owner of the biggest private protection agency, A+ Security, introduces a non-compete clause into its security agreements. Since 99.x% of its customers have no interest in getting into the private protection industry and no one reads the fine print anyway, it’s adopted without much fanfare. Then, when it comes time for re-negotiating inter-agency arbitration terms, they press every smaller firm to introduce the same clause into their agreements, and to agree not to institute new arbitration agreements with new entrants. (Since the smaller firms are even more vulnerable to new entrants to the market, they probably welcome this opportunity to pull up the ladder behind them.)

            Pretty soon anyone considering breaking into the market realizes that, upon doing so, no other protection firms will enter into agreements with them, that they’ll be personally disqualifying themselves from future protection by any existing firm in perpetuity, and that A+ Security will be sending their goon squad to politely ask you to cease and desist. The rest of the journey to a monopoly on force is, as they say, left as an exercise for the reader.

            Am I missing anything?

          • Tibor says:

            I don’t know why I cannot reply to disciplinaryarbitrage’s comment directly (thread too nested perhaps?), the reply button is missing though, so I will do it here.

            First of all, the non-competition clause does not seem to be very relevant, if I set up my own protection company, then I am no longer protected by yours and what matters is only what kind of conditions we negotiate. So basically, your A+ company just does not accept any new companies and treats them as outlaws.

            The thing that I am suspicious about in your scenario is the “and forces every smaller company to do the same”. Protection companies are not like, say, breweries, they are more like banks….in the sense that a bank that does not cooperate with other banks is a pretty useless bank. Now, let’s say I set up a new protection agency and initially get a few customers. You own the A+ and you now want everyone not to recognize me as an agency. If they do recognize and cooperate with me, they will profit from that cooperation. So you have to give them something in exchange. The something you suggested was force. If A+ has enough power to force all the others, then it already was a monopoly anyway. Otherwise, it will be outnumbered all the other agencies. If you want to try a nonviolent approach and bribe them instead, you have to do that with all of them and bribe them constantly. That costs you something and makes their running of their business cheaper (they get extra money from you), and yours more expensive. Therefore, they can probably offer a better deal to their customers and you are very soon not quite the largest protection agency.

            So you are either already big enough to be able to take out everyone in a war, but then you have to have a lot of money, not just customers, because those will soon start leaving unless you can wage a war AND still provide the best service…that is unlikely on a competitive market, your best competition is unlikely to be that much worse at providing services than you are…also a lot of people might realize your plans on starting a dictatorship and unless you can convince them that it is going to be good for you, you are going to have to fight more than just your competition…probably even some of your own former employees will go against you. Or your scheme involves bribing (more or less all) others which gives them an advantage over you.

          • HeelBearCub says:

            Protection companies are not like, say, breweries, they are more like banks….in the sense that a bank that does not cooperate with other banks is a pretty useless bank.

            Why does this history of protection companies always involve non-cooperation then?

            Whether those protection companies are the mafia, fire brigades, or police/state forces, they always devolve to single entity control of a territory, or warfare.

            Assuming inter-mingled customers/members of different protection organizations, peace can be kept if those protection orgs have been forced into non-operation by another, more powerful single-entity. Remove that single entity, and watch internecine warfare break out. See the Iraq war, for just one of man example.

            Even just looking at it from a simple business incentive perspective, it devolves. I want “protection” from Jimmy, meaning I want Jimmy dead. I will keep looking for a protection organization until I find one that does this. Jimmy also wants protection from me. This will lead to a protection war until the protection organizations that are left come to an agreement about how differences are to be settled. And that agreement will not allow for competing versions of justice inside the territory of conglomerate/federation/monopoly, and it will offer very limited protection outside of the territory.

            In addition, everyone will get protection, whether they like it or not. And everyone will pay, whether they like it or not. Because the conglomeration does not allow you not to be protected or pay.

            In other words, you will have a state.

          • disciplinaryarbitrage says:

            Tibor–there’s a limit on how many levels the thread can nest, as you guessed.

            To take your banking analogy and run with it, I’ll grant that ‘compatibility with other vendors’ is an important aspect of the service here. But it’s important in a somewhat asymmetric way: if I’m Bank of America, I’m going to lose business fast if I won’t make transfers to Wells Fargo. But the losses to me from blacklisting a brand-new credit union in Bismark, SD will be a rounding error, whereas the credit union will be in deep trouble.

            (Knowing basically nothing about retail banking, I assume that BOA isn’t legally allowed to do this. If they can and have not, I’d be quite surprised!)

            Just as this lets A+ Security blacklist new firms, it also gives them some bargaining leverage in dealing with smaller existing firms. Even if, as you say, the diseconomies of scale eventually outweigh the economies, I’m skeptical that this point reliably occurs before a single firm can get big enough to throw its weight around to tilt the playing field. Perhaps at this point the smaller security providers band together to oppose A+… but then we’re basically at an duopoly or oligopoly, and all major players now face the same incentive to block entry.

            Backing this up a level or two of abstraction, I think there are lots of ways that competitive markets can become uncompetitive, and that this is in fact a pretty natural direction for markets to move in, unless there are particularly insurmountable barriers to scaling up. A market in which being well-equipped to do violence to your competition is probably particularly fertile ground for consolidation to occur.

          • Grrath says:


            The main problem with all A-C arguments is a complete lack of consideration for time scales. Small companies may be able to undercut bigger ones but how long will it take for them to get started up and start making any profit? How long before they even get the initial investment? How long before they even get wind that there is a market for them to undercut? What happens to the customers in the meantime?

            Not to mention that the bigger company has a lot more power to influence their market than the smaller one, especially before it’s established. What if the big company sends somebody to destroy the smaller one’s construction site? What if they pay off the contractor to stop the work?

            The market and it’s incentives are not magic. They take a very long time to exert effects, much longer than a rational person can observe and react to. Your assumption that people are not going to engage in warfare because it is unprofitable doesn’t work if they are unaware that that is the case. Genghis Khan didn’t have economists balancing his conquests against his manpower losses. He just saw a bunch of shiny stuff entering his coffers.

        • Tibor says:


          The examples you mention are not examples of protection agencies. A fire brigade does not need to cooperate with it’s competition, its job is to help its customers in fire. I don’t know enough about mafia to say whether they ever had some sort of arbitration going on. I think there are some systems of arbitration between the mafia families, but their “customers” are threated in a feudal fashion…I believe this would be the case if you had 2 or 3 agencies on the market…for which it would actually be profitable to form a cartel á la Cammora or Cosa Nostra…not if you had say 50 of them.

          It is valuable for a protection agency to cooperate with other protection agencies, so that I can have legal interaction with you, a customer of a different protection agency. I won’t subscribe to someone who is in isolation, because such an agency is useless…quite literally outlaws.

          You say
          Even if, as you say, the diseconomies of scale eventually outweigh the economies, I’m skeptical that this point reliably occurs before a single firm can get big enough to throw its weight around to tilt the playing field.

          I think that this is where the disagreement comes from. Provided that you start with a big enough market, one company should not dominate it…if you start on a level of a single city, you may as well end up with exactly the Cosa Nostra scenario, because the market is simply too small). What is the sufficient size? I don’t know. One would have to try that. Why do you think there are big economies of scale so that let’s say on a market with 300 million customers one or two protection agencies dominate?

      • Mark Z. says:

        I think that the argument is that the war is costly and therefore those agencies not behaving rationally will simply be outperformed by those who do.

        This is a stunningly naive argument.

        War is costly, but businesses do costly things all the time. Total war against another protection agency would be expensive as fuck, but if you’ve got more money than them, you pay the cost, kill their soldiers, capture their management and crucify them by the side of the road, and now you’ve eliminated one of your competitors. (Their customers are now undefended; your choice whether to sell them your “protection” or just plunder them.) Then you turn to the next protection agency and offer to buy them out. So begins the monopoly.

        This is not an irrational strategy. It worked great for the Mongols. As a 20th-century academic, Friedman was trained to ignore all of history until about 1780, but that’s pretty embarrassing now.

        • Tibor says:

          Companies do costly things all the time, but not if doing a costly thing means that your customers move to the competition. Also what prevents the customers of the company you destroyed to find a different protection agency (i.e. not yours). The most you can achieve is that you destroy a competing company, spend a lot of money in the process, seriously damage your reputation and transfer most of the customers of that agency to the rest of your competition (would you sign up with someone who threatens you by force if you have alternatives?). Next time, your competition is going to be better prepared, it might even get some sort of an insurance scheme against you (so that I pay insurance money to 2 or 3 other agencies so that in the case of your attack, they will fight on my side). So unless you can actually outgun more or less everyone at the same time, you are going to go down. If you can, well, then nobody can stop you. But that is true today as well. You will still run into problems with even a lot of your people not being very keen on the idea of your dictatorship and defecting to the opposition (same as would be the case today if the president as the supreme commander of the US army ordered it to set up a military dictatorship in his name…very few would actually comply and it would not be because the constitution is magically preventing their tanks from working).

    • HeelBearCub says:

      Most of the logic used by David in the various arguments and descriptions detailing why things would be stable rely on humans being rational actors.

      Rational in service of what end? It’s completely rational to sell under cost now in order to obtain a monopoly, thereby enjoying monopoly pricing privilege later. It’s also perfectly rational to engage in other “illegal” behaviors, such as killing members of the competition, in order to obtain or maintain my monopoly.

      And of course, under anarcho-capitalism, it wouldn’t be illegal to kill the competition.

      • Paul Brinkley says:

        It would be legal to kill the competition, but it would still be expensive, and therefore irrational. At least, so the argument goes.

        There’s a little tautology going on here, since, if the decision to start killing competitors was justified by the best data on the players’ relative physical strengths, the responses of the remaining players, and any other perceptible factors, then it is rational by definition.

        Just to head off the whole “rational actors” argument in a hopefully universal way: I take TMoF’s grand argument to be that rational action – especially when considering the probable reactions to other players in the market to anything you do – happens to coincide with what most of us consider to be moral, pleasant behavior. (You don’t kill the competition, because everyone else would naturally turn on you. You don’t jack prices as high as you like, because others would naturally stop buying your stuff, and if your stuff is that critical to existence, then they’ll just band together and steal it.)

        Moreover, from an epistemological standpoint, the rationalists will tend to win in the sufficiently long term. (I.e., even if you don’t think far enough ahead to recognize how your own monopoly will hurt you, there’s enough incentive to know this that it will result in someone else coming along and undercutting your monopoly, either with a competing firm, or a Robin Hood Inc. that specializes in raiding your stores, or something else.)

      • Deiseach says:

        The underlying assumptions appear to be that the protection agencies will co-operate, on the grounds that it is too expensive to wage war.

        But I don’t see that you need to start a shooting war or co-operate as the only choices. You can refuse to co-operate with competitors; if you’re the biggest fish in the pond, you won’t suffer much; if you’re all of a similar size, what harms you will harm them as much. If you’re very small, then you may suffer – or you may win if you’re a new entrant looking to break into the market and differentiate yourself from all the rest.

        If Protect-A-Home Ltd. employees act on the basis of “You scratch my back and I’ll scratch yours” for doing favours and co-operating with SafeGuardians plc employees (e.g. if we see a criminal running away from your guys, we’ll help them out if they do the same for us; we’ll swap lists of names and photos of the Top Twenty Catburglars so everyone is informed; I can ring up Dave and informally talk to him about this case between my client and his before we go all the way to arbitration), then really they’re not acting as competing firms.

        The assumption there is that (a) there will be some degree of co-operation and co-ordination in the self-interest of all the protection firms (b) there will be a recognised impartial outside authority (c) the decisions of this authority will be recognised even if there are no threats of force or sanctions to back them up (d) everyone will agree that this is not a centralised government but they equally agree on some method to make and pass laws – how else are you going to have the idea of contract law, and the conditions that bind parties to a contract, and courts of arbitration that can make decisions on precedent and common practice rather than ‘did the arbitrator have a good breakfast this morning or is he feeling hungry, bloated and tetchy?’

        In other words, the structures and even principles of central democratic government are assumed to be in operation even when such a body is dissolved and everything – in theory – runs on private capitalist businesses providing services for consumption by citizens.

        And what does “citizen” even mean in such a scenario? Person who lives in City X? Employed person who sells their labour/time for hire and lives in City X? Person who lives in Geographical Entity Y? Human being with inalienable rights and perogatives?

        • HeelBearCub says:

          In other words, the structures and even principles of central democratic government are assumed to be in operation even when such a body is dissolved and everything – in theory – runs on private capitalist businesses providing services for consumption by citizens.

          I think this is quite correct, but I think the counter-argument is that “the market” will re-invent these mechanisms. That if it does not then some better, more efficient market actors will come along an invent them, and then “out-compete” those that don’t.

          I happen to think that it is very hard to compete when you are dead and that rational protection organizations will realize this. But they won’t draw the conclusions from that realization that Friedman thinks they will.

      • ” It’s completely rational to sell under cost now in order to obtain a monopoly, thereby enjoying monopoly pricing privilege later. ”

        You might want to read “Predatory Price Cutting: The Standard Oil (N.J.) Case” by John S. McGee, The Journal of Law & Economics October 1958. The author went through the very lengthy record of the Standard Oil case and concluded that, at least judged by that case, predatory pricing was mythical. He also explained why.

        • It didn’t happen once, so it was never rational?

          • Without reading an article, one cannot reliably reconstruct its argument in order to rebut it.

            The standard example of its happening is mythical. That isn’t surprising, because the standard explanation of why it would work doesn’t make sense if you think it through.

  17. Drethelin says:

    It might work for similar reasons to why farming now works better for even independent tiny farms than for large scale farms hundreds of years ago: we simply have better information than we ever did and it’s more available than it ever was.

  18. David Friedman is really great and I’m glad to see his highly reasonable work getting attention.

    I was very impressed to learn that very few people predicted, before the fact, that Communist countries would have terrible economies. Even the American 1950s opponents of Communism argued that okay, fine, Communist countries will probably outperform capitalist countries economically, but freedom is more important than mere wealth.

    Mmm I think economists who actually talked about the institutional structure (like the patterns of incentives, information generation, information signalling, and so on) of communism / socialism pretty widely and accurately predicted its brutal, pathetic endgame. Hayek would be the most prominent of these. But there were hundreds if not thousands more throughout the 19th and 20th centuries. Some big names like Samuelson were very wrong, kind of, but even they were mostly making predictions about a few raw aggregate economic indicators through the lens of particularly stylised macro models rather than anything like predicting real-world social welfare or economic well-being.

    • Paul Brinkley says:

      I keep being reminded of the Keynes / Hayek rap videos where Keynes always gives his name and is ushered right in, then Hayek gives his and the gatekeeper is always “…who?”.

  19. JM says:

    The underlying problem is that security services are a natural monopoly. Protecting the first house in a neighborhood is expensive; protecting the second is practically free. And once your security firm has a permanent presence in the neighborhood, it’s very easy to make clear to non-customers that, oh, your store might burn down or you might get hit by a car if you don’t sign up. Are they really going to appeal to another security firm if their life or livelihood might be forfeit — particularly if there’s a goon patrolling their block every few hours to mete out punishment quickly? And if another firm does show up, you kill or intimidate their representative or work out deals for who gets which territory. And so on.

    We’ve tried this before, and the result is the mafia and warlords.

    • Deiseach says:

      We’ve had private fire fighting brigades; you bought a policy with such-and-such an insurance agency, put their badge on your wall, and if your house went on fire their brigade would put it out.

      It worked okay, but there were problems. First, rival companies. So even if a fire brigade rolled up, if you had the wrong badge on the wall, tough – your house burned down with you in it. Second, rival brigades fighting over who would put out the fire, and your house burned down with you in it while they were fighting it out.

      Allegedly Crassus built his fortune on sharp practice in private provision of firefighting services:

      One of his most lucrative schemes took advantage of the fact that Rome had no fire department. Crassus filled this void by creating his own brigade—500 men strong—which rushed to burning buildings at the first cry of alarm. Upon arriving at the scene, however, the fire fighters did nothing while their employer bargained over the price of their services with the distressed property owner. If Crassus could not negotiate a satisfactory price, his men simply let the structure burn to the ground, after which he offered to purchase it for a fraction of its value.

      There’s a reason police forces, fire brigades, hospitals and ambulance services, etc. came under local government as standardised public services, and it wasn’t necessarily because the tentacles of centralised power encroached more and more on the liberties of the private citizen 🙂

      I mean, it’s not like these things have never been tried before. I get the sense that American libertarianism depends very strongly on your myth of the “frontier pioneer” foundation of the nation; rugged individuals struggling with nature in the raw and doing it all for themselves. You don’t need no government man round here poking his nose into your business; so long as you have your own rifle, you can shoot your own bears for yourself and no government assistance needed or wanted!

      Claiming acres of wild land and bending it to their will. But that depends on having vast acreages of unused land for everyone to stake a claim, build a cabin on, and set up their own little farm/business where they can provide for their own needs and buy and sell the surplus (heavily developed countries where the remaining common land has been scooped up by the improving landlords are a different matter). And the Native Americans may have an opinion or two on that, as well.

      • HeelBearCub says:

        You don’t have to go back to Crassus.

        “Boss” Tweed (of Tammany Hall, NYC fame) started as a private fire-fighter in NYC. Rival fire-fighting gangs would fight each other rather than put out the fire, in some cases they started the fires, in other cases they let the structure burn because the were employed by the insurance company who had under-insured the property, but would own it once they paid the claim, etc.

    • John Schilling says:

      We’ve tried this before, and the result is the mafia and warlords.

      Except when it’s gated communities and private security services. I’d expect that to be the end state for any successful anarcho-capitalist society. Security, like e.g. running water and cable television, is a natural monopoly at the local, geographic level, but it can scale up as a patchwork rather than a monoculture. The successful communities will be the ones that dispense with the locally intractable transaction costs by saying, “look, everyone in Pleasantville has agreed to contract with ACME security, and you don’t get past the gate until you sign at least a temporary contract”. The community down the road a ways has a different contractor, and there are probably gangs and warlords on the margins.

      This is probably how the gay-rights issue sorts out as well: gays are flogged in Utah, protected in San Francisco, tolerated in Denver, and in Nevada it depends on how the local warlord feels.

      • JM says:

        Gated communities only work because the real police protect you from abuse by your gated community’s security force.

        And the rest of what you describe is sort of the medieval city model, where you get away from feudal warlords by taking refuge in a (slightly) more advanced urban area with a wall around it. But those cities had a single authority with a monopoly on violence. What made them preferable was that they had a more egalitarian way of distributing political influence.

        • John Schilling says:

          Gated-community security forces tend to be more abusive to outsiders than to their own residents. Which I think is part of the appeal to some residents…

          The rest of it being a variant on the historic path from feudalism to late-medieval urbanism, yes, that’s it exactly. We’ve been through something like this before, and we know where it tends to lead. Which is not to say that, knowing what we know now, we couldn’t do a much better job of it the second time around. Maybe one way to put it is that libertarians want a do-over of everything since the early 19th century, and ancaps want a do-over of everything since the 15th…

          Oh, OK, maybe David Friedman wants to run the clock all the way back to 10th-century Iceland and build from there in the proper fashion. If he can get the Icelanders to go for it, I’d be interested to see what happens 🙂

      • Deiseach says:

        Yes, I can see the gated community with its own private security service model.

        And if you’re unfortunate enough to be a visitor who doesn’t know the area, is reported by one of the neighbours as “acting suspiciously” and the private service turn up and shoot you dead, there will be even less recourse about this than we already have because look, it’s in the contract: Pleasantville Security Services have the right to use appropriate levels of force as they judge the incident to need against suspicious persons in defence of the community and where a complaint by a community member in good standing who is a paid-up policy holder has been made.

        • John Schilling says:

          If the security service thought the guy looked suspicious, why did they even let him past the gate?

          • Deiseach says:

            You might be visiting your son.

          • John Schilling says:

            I’m missing the part where there was a gated community or a private security service in that sob story. Had there been such a thing, it seems likely that either Mr. Patel would have been turned away at the gates, or the guards would have understood that Mr. Patel was the father of one of their clients and that roughing him up would lead to trouble for them.

            If you can’t keep suspicious characters out of the neighborhood, but are nonetheless charged with preventing crimes, that’s when you get ths sort of problem on the fuzzy border between “suspicious” and “criminal”. There are of course problems with the gated-community model, but I don’t think this is one of them.

          • Jaskologist says:

            This is another case of saying “look what your libertarian dystopia might do!” and pointing to a government action as proof.

  20. James Picone says:

    I find the most striking part of libertarian philosophy is that all of the reasons usually brought up for why it won’t work – public goods, it degrades to feudalism, tragedy of the commons, etc. – have neat theoretical answers that are approximately 100% at odds with the actual world we live in.

    Two protection agencies won’t go to war, because that’s expensive! And that’s why no countries ever go to war with each other. Arbitrators have reputation to protect, so they’ll arbitrate honestly! And that’s why consumers love EULAs that force binding arbitration instead of litigation. Monopolies don’t exist, and there definitely wouldn’t be any problems with having one company controlling ~90% of the market, and one competitor controlling ~10%, like we do with desktop operating systems (actually the pattern of two large competitors and infinity tiny competitors that will go nowhere is pretty common in a lot of industries, and probably just as bad for the conventional economic position that if they’re not great some tiny startup will steal their lunch). Companies want to make money, so they’ll make good products for cheap, and that’s why your local telecoms company is amazing and their network covers all the places and is reliable.

    • EULAs seem like a poor example of arbitration, since they’re not negotiated between multiple parties who are actually taking it seriously; they’re an ultimatum game rather than a prisoner’s dilemma. You’d have to point to evidence of how well arbitration works with respect to agreements negotiated between large companies.

      • HeelBearCub says:

        Except that powerful companies and tiny nobody consumers will still exist in anarcho-capitalism. They will exist even more, because there will be no state to impose even minimal consumer protection.

        The large companies will work together to maximize their own profits. They will have no rational reason to protect the consumer. The company that does try and protect the consumer will be run out of business, by force if necessary.

    • Friedmanite protection agencies and nation-state governments operate in quite significantly different incentive environments. There are good reasons why the latter would go to war when the former wouldn’t. (It may be that agencies would tend to become governments but that’s a somewhat different point.)

      Same goes for all the other things you mention. Like, industries with systemic problems seem to be moreso those that have had heavier government intervention. Sober economising types who’ve come to libertarian conclusions often have done so because of what they see as approximations to the world we live in. I don’t think it’s so unreasonable.

    • Brandon Berg says:

      The claim that libertarianism degenerates into feudalism is based on a complete misunderstanding of why feudalism was bad. The biggest two problems were that 1) It was the Middle Ages and we simply didn’t have the technology to make the average person not dirt-poor, and 2) Serfs were literally slaves. Not “wage slaves,” but actual slaves who were bound to the land and not legally allowed to work for anyone but the vassal who controlled the land.

      • Murphy says:

        Land owner:”Well, it looks like you’re trespassing on my property, that’ll be a 100 dollar fine, since you have no assets you’ll have to work that off that debt in my plantation”

        Serf:”But I don’t own land and all the other land owners on all sides are threatening to murder any trespassers who haven’t paid for a permit to travel across their land and I can’t leave”

        Land owner:”Just take the public highway out”

        Serf:”But there isn’t one”

        Land owner:”*Ho Ho* Just my little joke. Now into the slave pen with you, it sounds like you’ll be incurring another 100 dollar fine for continuing to trespass as soon as you’ve worked off this one”

        • Winfried says:

          If society is at that point, what would stop your serf from refusing to take part in this sham negotiation and just using force to cross (or attack the would be slaver)?

      • Mary says:

        Serfs were not free. However, there are a number of legal distinctions between serfdom and slavery. Serfs could legally own property, marry, and many other things, and if they could not leave, they also could not be evicted.

    • Tibor says:

      My agency declares war on someone. I don’t want to waste my money on them doing that instead of actually protecting me. I change my subscription to a more reasonable agency. My former agency loses money, either changes its policy or eventually loses most of its customers and is then unable to effectively wage a war anyway. Government wage wars (more precisely wage wars much more often that protective agencies probably would) because you cannot do this as a “customer” of your government. Voting the idiots out helps, but you can do that only once every 4 years or so and also you have to be in the majority to even change anything at all. The government feels the costs of waging a war much less than a private company would, because it runs on the voter and not the customer system and is not subject to competiton (moving to other coutries is way costlier than changing your subscription).

      • Grrath says:

        I don’t want to waste my money on them doing that instead of actually protecting me.

        Or you don’t care and keep paying them anyway. Your agency doesn’t lose customers and whoops the other’s ass. Monopoly forms and we’re right back where we started.

        • Tibor says:

          I don’t know about you, but I usually care about whether I get a good service for my money and change the provider of that service if I can get it better for the same amount or cheaper and equally good elsewhere.

      • Tom says:

        Or a few men show up at your door and convince you that sticking with the warring agency is a better choice than living without kneecaps.

    • shemtealeaf says:

      1) Countries are not profit-generating entities like companies. The incentive structures are totally different. For instance, countries don’t really have to worry about losing customers.

      2) The near duopoly in the desktop operating system business is actually a pretty good thing for consumers. I like the fact that I don’t have to choose between 10 different operating systems and worry about whether my software is compatible. Also, if the dominant product is bad enough (Internet Explorer), someone will come up with an alternative (Firefox) that will quickly gain popularity. If Windows was a bad enough OS, you’d probably see more mainstream use of Linux.

      • Mary says:

        ” For instance, countries don’t really have to worry about losing customers.”

        So what was that Berlin Wall thing about?

        • Tibor says:

          A more accurate is to say that the costs of changing a country are way higher than changing a protective agency. So while changing a country might not really be worth it, even though there is a different country that is run better, changing to a better agency (which costs me almost nothing) is. As you noted, some countries are run so badly, that they need to raise the costs of changing the country even further…also, some countries are not interested in new customers for political reasons (and some of the would be “customers” to big welfare states are also rather rent-seekers than customers…imo not a reason for immigration barriers, but for reduction of the welfare state).

        • shemtealeaf says:

          I agree with Tibor. There are some exceptions, but you have to really screw up a country before people start fleeing.

      • James Picone says:

        1) Countries are not profit-generating entities like companies. The incentive structures are totally different. For instance, countries don’t really have to worry about losing customers.

        Protection rackets don’t really have to worry about losing customers either.

        Also, y’know, companies are not going to all make rational decisions. The market makes collectively rational decisions by trying lots of different decisions and letting the companies making poor decisions fail. SCO was not making a rational decision when they sued everyone over the belief that they owned UNIX and that Linux infringed on the UNIX copyright. They were committing suicide. It still happened. The same thing will happen here – companies will go to war, and either win or go out of business, and they’ll do it all the time.

        he near duopoly in the desktop operating system business is actually a pretty good thing for consumers. I like the fact that I don’t have to choose between 10 different operating systems and worry about whether my software is compatible.

        That is, there are network effects and markets with extremely high entry costs, and when those effects dominate markets will generate near-monopoly situations, usually duopolies.

        (This is clouded, of course, by nongovernmental entities building large telecomms networks, rail networks, road networks, power networks, etc. approximately never, at least if they have to run cables. Governments are /way/ better at that, and the result is usually the dominant telecomms company being a public provider that was tax-funded, or an ex-public-provider that’s been incompetently privatised).

  21. Brandon Berg says:

    Are you saying that the share of national income going to capital has steadily increased because you know that to be the case, or are you assuming so based on rising intranational income inequality? I can’t look it up right now, but I looked up the national income accounts recently and IIRC found very little secular increase in share of income going to capital.

    Two widely misunderstood aspects of the increase in income inequality are that it is 1) an intranational phenomenon, with the global middle class (poor, as we call them in the US) seeing large increase in real income over the past thirty years, and 2) almost entirely due to increases in inequality in employee compensation rather than to an increase in the share of income going to capital.

  22. pjmaybe says:

    The Free Commonwealth of Old Iceland had a ibertarian system, where chieftans were in open competition and people could freely chose (without needing to move territory) which chief to pay alleigance to / receive justice / protection from. It lasted about 300 years. Here’s a great essay on why the system collapsed. (tl,dr; external pressures produced a flaw in the system that allowed the aggregation of power.)

    This example of Iceland is why I think libertarian / anarchist states are at best precariously metastable – altho’ 300 years is not a bad run for any political system, the context of Iceland at the time was peculiarly favourable to it…
    (I disagree with the essay writer’s conclusion on this point).


    • Harald K says:

      Iceland in that period may have functioned with little government, but it’s hardly a model for emulation. Their arbitration institutions didn’t always work. They succeeded in limiting intergenerational blood feuds compared to many other places I guess, but there were still a lot of honor killings.

      It was also a highly unequal society. Basically, the only way for poor people to have effective legal protection was through feudalism, going into bondage to someone whose voice actually mattered. They also had slaves for a large part of the Commonwealth period.

    • Mark Z. says:

      Didn’t the economy of medieval Iceland also run largely on, you know, plundering other countries?

  23. Dagon says:

    Your aside about democracy and construal level theory (vote has large influence on self-perception and small influence on government behavior) deserves a post of it’s own.

    The idea that democracy allows a populace to commit itself to it’s far-mode self-conception has a lot of explanatory power, and has some serious implications on optimal size/distance of voting unit. My perception is that small, very local democratic choices tend to be more short-term and effects-based, while the larger ones (especially mediated by people-electing as opposed to issue-deciding) are more general and values-based.

    • disciplinaryarbitrage says:

      I would also like to see more on this, although I’m skeptical that larger-scale voting is actually as values based/far-mode as we might think or want. In brief (and drawing from my amateurish understanding of US political history), political machines managed to wrap up at least state level politics in effects-based choices (through cronyism) until progressivism unraveled this model; labor unions (until conservative/market-oriented reforms unraveled the model) and defense/other major government employment bases (still going strong) echo this as major axes for mobilizing voters around concrete gains from state and federal legislative politics. I suspect that politics-as-value/identity-expression is a somewhat recent phenomenon (in the US, anyway) correlated with a shrinking set of economic policy options at the federal level.

  24. aretae says:


    I’ve been reading your blog for quite a while now, and have been generally impressed with the quality of your thinking…and astounded by the quantity and quality of your writing. You’re one of the few bloggers that I consider required reading.

    At the same time, I had some hesitancy to my full endorsement of you as a thinker… because of lingering hubris from the Sili Valley Rationalists. You’ve seemed to shed it far far better than they have, but I’d been uncertain until now:

    From the last paragraph of section 2, you seem to have graduated to a new level of humility, (the humility underlying the serious libertarian position)…and it’s magnificent. If you’re ever in south Texas…I’ll buy you a beverage…or cook you dinner.

    • Scott Alexander says:

      Thank you for the kind words.

      On the other hand, I don’t really agree with your assessment that some of the other rationalists are hubristic. I think “be wary and try things before you make big changes” is pretty universally understood, but that not everybody thinks it necessary to mention it every time they say something.

      I’ve said before that I support universal basic income, but of course what I mean is that I support large-scale careful trials of universal basic income to see what happens, with a suspicion that they will turn out well.

      I think many rationalists (sometimes including myself) work in this tradition, which makes sense from the inside but is not always the best tradition if people don’t expect you to be following it and so are likely to misinterpret you.

  25. Craig Gidney says:

    And this leads me into one of my deepest problems with libertarianism and anarcho-capitalism: why should it work?

    This is also the failure mechanism that I worry about. I can’t read “Well, what if strategy S appealed to incentives X and thereby achieved desiderata Y?” without my mind screaming DANGER! MOTIVATED STOPPING! OTHER SOLUTIONS MAY BE MORE OPTIMAL! DO NOT MESS WITH TIME!

    Because obviously the beetles will follow incentives and restrain their breeding when we apply selection pressure that favors that. Right?

  26. Eric Rall says:

    Related to items 8 and 9:

    I’ve long been of the opinion that neoreaction (or at least Moldbug’s strain thereof) is most properly classified as an offshoot of anarchocapitalism. Specifically, Moldbug is an anarchocapitalist who has decided to bite the bullet and accept a lack of meaningful distinction between a protection firm and a sovereign government.

  27. It is late at night and I have not read through much of the comment thread, but I had a few comments:

    1. I am glad you enjoyed the book.

    2. You write “And by my understanding, people who earn less than about $20,000 don’t pay federal income taxes at all, meaning the burden of universities, etc don’t fall upon them.”

    Universities are primarily subsidized by state governments, which get a good deal of their revenue from sales taxes.

    Also, a much more complicated issue, it is not clear who really bears the burden of any tax. Knowing who hands over the money doesn’t tell you, because the existence of the tax shifts the pattern of prices. The classic example is the Social Security tax, which is nominally paid half by employee and half by employer. I expect you can work out for yourself why that structure is purely cosmetic. The effect would be the same if it were all paid by employee or all by employer. If I am buying something from you and the government takes some of what I pay you, it doesn’t matter if the tax is taken out just before or just after I hand over the money.

    3. “In fact, protection agencies have a strong incentive to make everybody as scared of crime as possible, and in fact to raise the actual crime rate if they can, in order to get people to buy their Premium plan.”

    Surely more true of police departments at present. What’s relevant in choosing a rights enforcement agency is the crime rate suffered by its customers, and the lower that is, the more attractive the agency.

    4. “I was very impressed to learn that very few people predicted, before the fact, that Communist countries would have terrible economies.”

    I don’t know if you are familiar with the calculation controversy early in the century. A number of good economists showed why it was not possible to run a centrally planned economy efficiently. Some smart socialist economists responded by trying to design decentralized socialist economies which played at being market economies, with commissars instructed to pretend to be capitalists maximizing profits—which is not how the actual communist economies were structured.

    The reasons to believe that the communist economies wouldn’t work had been worked out in considerable detail. The problem was that western intellectuals, from at least the New Deal on, had a strong political bias. Take a look at Orwell’s comments on the unwillingness of his contemporaries to face the truth about Stalin or the behavior of the Communists during the Spanish Civil War.

    Paul Samuelson’s textbook, for more than twenty years, said in each edition that the Soviet economy was growing two to three times as fast as the U.S. economy, and in the earlier editions projected, on varying assumptions, how soon it would catch up. That despite the fact that, edition after edition, it reported just about the same ratio of GNP between the two economies.

    “why is it that none of these problems are best addressed by a centralized entity with a monopoly on force?”

    Some of them are. The question is whether the benefit from having such an entity to address such problems outweighs the costs of having such an entity do other things it ought not to, given that we have no mechanism for making sure that a government does only good things. As I tried to make clear in the earlier of the two chapters on national defense, under some possible circumstances it does.

    One final point. You write, reasonably enough, that you “want this tried far away from me.” Consider that, given our relative ages, you are more likely to experience it than I am.

    • Roger says:

      Interesting timing. I stumbled upon my copy of your book (which I agree is excellent) a few weeks ago and reread all the highlighted portions. Then, just yesterday I read Scott’s FAQ critique on extreme libertarianism (which I also thought was awesome).

      In the end, I agree with Scott’s take-away. Someone should try more extreme forms of libertarianism. We should start small, experiment, revise and build upon the ideas which work while tossing out the parts that fail. Whether this is a small island, or a chartered city, or a sovereign cruise ship or something else are details of the experiment themselves.

      History reveals most new ideas fail and that even the small minority that work have both pros and cons, strengths and weaknesses which are often unanticipated. There is something to be learned, and those individuals mutually agreeing to take the risk should quit hypothesizing about it and put the ideas to an actual test.

      I will note that the modern breakthrough in human prosperity starting in the Netherlands, jumping to Britain and then the US occurred in a rare time of centuries of constant social experimentation. We had 500 years of exit options, where those dissatisfied with current institutions could migrate west and form new social organizations (and the existing states had to worry about the exit and vompetition).

      I suspect the great advance and the possibility of exit and experimentation and constructive competition between states are strongly linked.

    • Hate Follows says:

      Mr. Friedman, I want to thank you for hosting the SSC meetup. I had a wonderful time, met some very interesting people and had some really good arguments : )

    • J Scott says:

      “Surely more true of police departments at present. What’s relevant in choosing a rights enforcement agency is the crime rate suffered by its customers, and the lower that is, the more attractive the agency.”

      I…don’t think that that describes the incentive structure of a police department at all. In fact we seem to have the opposite problem; police departments sometimes spend considerable effort to under-report the actual crime rate to make themselves look better, or fail to investigate crimes that they don’t think that they can solve easily. Not that this is necessarily better, but it’s certainly the opposite of trying to scare potential customers. What police departments do do is make use of fines and traffic violations to shake down the population.

      I’m not sure how well that maps to an anarchocapitalist protection agency – but I think the broader point here is that the incentives for each of these actors is non-obvious in a lot of ways. The police department’s incentives come from either winning elections or from someone who needs to win elections, who are in turn incentivized by the preferences of voters (complicated and irrational) among a thousand other things (promises to cut taxes for favored interests?). I’m not sure how an anarchocapitalist protection agency’s incentives would shake out, but they’d probably be just as indirect or filtered through bias or caused by irrationality (customers can be more rational than voters…but especially on something like ‘protection’, I wouldn’t bet on it). Maybe the protection agency will be hired by local businesses association to increase the value of their property by decreasing crime (or harassing poor people). Or maybe the protection agency is a subdivision of the arbitration agency, and the incentives of the protection agency chief is to do things that make their boss look fair and just (this may or may not approximate being fair and just).

      Lots of ways to go right, but lots of ways to go wrong as well. Perverse incentives don’t go away when you add profit motive.

  28. “And by my understanding, people who earn less than about $20,000 don’t pay federal income taxes at all, meaning the burden of universities, etc don’t fall upon them”

    Why single out one tax as “the burden”?

    They pay state sales taxes, they pay cigarette+alcohol taxes (often thousands a year! and highly regressive), they pay their share of corporate taxes (most estimates of incidence argue that >60% fall on employees—even if you don’t accept those, you’ll accept that some of it falls on them), they pay (either directly or through rent) property taxes, they pay government fees…

    Even accepting that the balance may be positive, it’s not that they are paying zero.

    (I’d also add on the other side of the plate increases in costs that are introduced by wacky regulation like occupational licensing, which say “to work as X, you need to spend 20kUSD getting this piece of paper”—not taxes per se, but also not too hard to figure out how this is regressive.)

  29. David Allen says:

    Amongst the many other criticisms, the one that has always stood out to me is that An-Cap Libertarianism is by definition reactionary. There is no mechanism for preventing or mitigating damage, only for redressing once it’s already been done. Damages are a small comfort to the dead.

    • Jon Gunnarsson says:

      In the real world, police rarely stop crimes as they are happening. They usually arrive on the scene after the crime was commited and then try to apprehend the offender.

      The major way police reduce the number of crimes committed is through deterence and through being present at a particular location. I don’t see why this would be any different for protection agencies in an ancap society.

    • Alex Welk says:

      To be fair, the current system is far more reactionary by that definition. The current system only punishes people after the fact as well, but criminal courts don’t even compensate people for damages, they only punish the perpetrator. A separate civil case is required to get any sort of redress for the victims damages, and most don’t go to a civil case.

    • Paul Brinkley says:

      I can only see AC Lib being reactionary if you declare that AC Libs are forbidden from insuring against future bad events. I don’t see anything in the philosophy that forbids this. Any group of them can infer, erroneously or correctly, that the chance of some costly event involving one of them is high enough to justify the expense of organizing an insurance program addressing it, and commit to paying into it.

      I may be reaching in your case, but I’ve seen a tendency in critics of libertarianism to assume that libertarians (and ACs) will never cooperate. I wonder if the labeling is too confusing. They tend to be individualists, yes, but they’re perfectly likely to undertake collective action as well; they just abhor involuntary collective action, and treat individualist action as the default state, while recognizing that exceptions to that default exist.

  30. Shenpen says:

    The problem with Libertarianism is that it is two-dimensional: market vs. government.

    To put it differently, a Libertarian considers small and big property the same way.

    Since I realized it is a grave mistake, I became a Distributist:

    To put it differently, the mistake of Libertarians is that they too narrowly think the purpose of political philosophy is merely to influence political decision making: What Shall The Government Do?

    What Distributists realize – and everybody on the Radical Left, but Distributists are the only ones who realize it on the Moderate-Right – is that you also need to think about shape and structure of society you want, not simply what shall government do or what the rules of the game need be.

    The main reason is that people DO IT ANYWAY so better do it right. You will never, ever convince a person who works as an employee because he cannot afford to open his own shop, or who rents forever because he cannot afford buying a house without going neck deep into debt that he is being free. In his case, private property is binding him. If he would own the stuff he works with, and the house he live in, then private property would make him free.

    Thus, it is a better political philosophy if you have a triangle, not just one dimensions. One corner of the triangle is What Shall Government Do / What Are The Rules Of The Game, and the other two corner is society structured, shaped towards widely distributed property – frontier homesteaders – or concentrated property: corporations.

    Understand this. If you own a patch of land, you are something like a government on it. If this patch of land is used by you for farming or living, owning it makes you more free, as it is a step towards having your own tiny independent state. If this land is so big that you hire other people to work it, and they cannot claim land for themselves because it is all taken for example, then you are exercising something like a governmental power over them, and make them less free.

    A lot of people on the Left understand this, but they just simply want to balance out the power of Big Property with Big Government because for some reason many modern people cannot think politics beyond “I have an idea! Government should do X!” What you need to do is distribute Big Property into Small Property and that way reduce the demand for Big Government.

    • Roger says:

      Interesting ideas, Shenpen.

    • Paul Brinkley says:

      Hmm. While I’ve read Shenpen over on ESR’s blog enough to respect his ideas by default, I do see a flaw here: I think there’s too little emphasis paid to the value of perennial employees / renters. (Maybe too many libertarians do this, too.) What good is a landlord’s apartment building if he can’t find enough people to rent it, and it just sits there accruing maintenance costs? What good is an agricultural conglomerate’s millions of acres, if they lie fallow because the conglomerate cannot find anyone willing to work them for the price they currently offer? In other words: why aren’t we holding Big Property owners’ feet to the fire in that respect? American liberals (and, I suppose, Distributists) hold them, but not the same fashion; American liberals attempt to shame them into feeling that owning that much property is morally wrong. To me, the fashion that speaks more to a typical BP owner’s concerns is to argue in terms of the lost revenue due to not being able to work that property to capacity, because the BP owner is being too stingy spending money to get that return.

      At which point I see two factors governing BP owners. Both are usual arguments brought up by free marketeers: onerous regulation results in lowering the BP owner’s expected return to the point that it’s often cheaper to leave that property unworked or unrented than to go through the effort of filling capacity; and a surplus of labor or tenants driving the labor wages down and rent up. The latter one is the one I find most concerning, because it’s the least under regulation’s control. No matter how hard a government tries, it can’t make there be less people (unless it suffers exceptionally brutal externalities…).

      Shenpen’s later point suggests to me that this undervaluing of line laborers and renters is coupled with an undervaluing of managers – managers effectively being your Small Property owners. Not truly owners, of course, but a BP owner obviously delegates a lot of the decision making by definition to a manager. The only difference is that the BP owner is siphoning off a portion of the value the manager produces.

      As before, regulation may cause it to be cheaper to the BP owner to let property go unworked or unrented. The supply problem is probably less exacerbated for managers, meanwhile, than it is for line workers / renters. It does raise, for me, an interesting question: to what extent could the manager successfully negotiate full ownership. This would depend on the value the BP owner is providing (there could be Bigger Decisions to make). And if the BP owner decides to be a dog in the manger, what are the manager’s options?

  31. Eli says:

    Trying to predict anything from theory runs into the same problem where everyone assumed Communism would be an economic powerhouse

    You mean like during the 1930s, when Communism was an economic powerhouse, growing like mad to industrialize Russia while the Americans languished in the Great Depression?

    And this isn’t even an argument for Soviet central planning. I don’t even like the Soviet Union. I’m pointing out that, just as 1973!statistics made it look like capitalism brought equality, 1930s-1960s!statistics made it look like Communism was a powerhouse of growth.

    I also wish to offer a counterpoint that details why we on the Left object to “libertarian” capitalism and what we are trying to do.

    There is a deeper, more substantive, case to be made for a left approach to the economy. In the neoliberal utopia, all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives. That, in fact, is the openly declared goal: once we are made more cognizant of our money, where it comes from and where it goes, neoliberals believe we’ll be more responsible in spending and investing it. Of course, rich people have accountants, lawyers, personal assistants, and others to do this for them, so the argument doesn’t apply to them, but that’s another story for another day.

    The dream is that we’d all have our gazillion individual accounts — one for retirement, one for sickness, one for unemployment, one for the kids, and so on, each connected to our employment, so that we understand that everything good in life depends upon our boss (and not the government) — and every day we’d check in to see how they’re doing, what needs attending to, what can be better invested elsewhere. It’s as if, in the neoliberal dream, we’re all retirees in Boca, with nothing better to do than to check in with our broker, except of course that we’re not.

    I think that while “libertarianism” and other forms of capitalism sound great for the theory of unbounded calculatively-rational agents on which most of economics was originally constructed, socialism, or at least a very worker- and citizen-centered social democracy, is the right economics for the boundedly-rational agents people really are.

    • michael vassar says:

      In the short term, yes. In the long term, build the system for some mix of what you are and what you want to be, lest you select for behaviors that are a caricature of yourself. If you want boundedly but increasingly rational agents, be libertarian on the margin.

      Too late for that now though.

    • Robbbbbb says:

      You should be very skeptical of statistics produced in a country where it is a death sentence to produce statistics that contradict the official line. Anything taken from 1930s-1960s Soviet statistics has so many lies embedded in it that you can’t meaningfully pull any truth from it.

      • The Soviet Union was a hotbed of lies — even its cartography was completely and pointlessly dishonest, to an extent that wasn’t fully understood in the West until after Glasnost.

        But in the 1930s, Stalin’s Russia and Hitler’s Germany really DID grow and industrialize in ways that made Depression-era Americans envious and defensive.

        Part of the lesson here is that it’s dangerous to find long-term meaning in short-term economic news. But I see commentators and pundits do that all the time.

        • Robbbbbb says:

          As to Hitler’s Germany, I highly recommend The Wages of Destruction for a counterpoint. It’s an analysis of the Nazi economy from the time they took power in ’33 through the end of the war in ’45. It does a very good job of showing the Nazi economy function and dysfunction. And there was a whole lot of dysfunction.

          The claims of the productivity of the socialist economies (particularly Germany and Russia) in the 30s are artifacts of two things:

          (1) They started from a lower baseline and

          (2) Serious lies embedded in the official statistics to make them look stronger than they were.

        • Nita says:

          even its cartography was completely and pointlessly dishonest

          Yes, completely pointlessly. It’s not like maps are tools that can be used against you.

          • Tibor says:

            I think that Soviet false maps were not so much a way to confuse possible foreign invaders (those had the proper maps anyway, even the Russian colonies of the time, such as Czechoslovakia, had accurate maps of the USSR…but those were illegal in the USSR itself), but rather a way to make it harder for internal opposition to start a civil war. Essentially something to be used against its own citizens.

          • Nita says:

            @ Tibor

            According to Larry’s comment, “the West” didn’t even realize how dishonest the Soviet maps were. If they had correct maps, presumably a simple comparison would make them aware of this fact.

            Hell, even if the bad maps didn’t fool anyone, including the opposition, it would be a failed tactic, not an example of the pointless antics of those wacky lie-loving Soviets.

          • Tibor says:

            Nita: I agree with you that it was a purposeful stragety. I disagree with Larry’s comment about the maps. Or really it depends. What the ordinary citizens of the west knew differed from what the government did. But from what I heard, accurate maps were available in most countries except of USSR, and it was illegal to take those maps to the USSR. That suggests that the wrong maps were aimed against its own citizens rather than anybody else.

          • Okay, perhaps “pointless” was the wrong word. What I really meant was “over-the-top”, since I doubt it would occur to most regimes to allow only wrong and confusing maps.

            Also, I’m sure that intelligence agencies in the West had been aware of the cartographic situation for years. I was really referring to the public and media. I remember Gorbachev-era newspaper articles comparing official Soviet and accurate maps side by side, and expressions of astonishment at how thoroughgoing the deception was.

      • PGD says:

        I think WWII proves pretty clearly that the Soviets were to a large degree successful in forced industrialization — they ended up outproducing the Germans and with relatively high-quality weapons too. The 1950s-70s, while stagnant economically, also seem to have been much more wealthy eras than the first half of the century in Russia — at least the era of mass famines ended and basic necessities like food/shelter seem to have been readily available. But the Soviets were not successful at building a flexible consumer economy or competitive production economy oriented suitable for continued growth.

        If you want to look at a Communist country that *was* successful in building a thriving growing economy, see China. People always write off China by claiming that they magically ‘become capitalist’ in the late 70s. But the government never switched over, the same establishment was in power even though individuals changed. They just shifted to using market-based tools and methods within the framework of an absolutist state. They would not have been successful in doing that if not for the consolidation of centralized power and national unity from the 40s to the 70s. See the century before, which was marked by endless brutal civil wars and victimization by foreign powers.

  32. Deiseach says:

    state universities (since they cost tax money and mostly rich people go to university)

    On the one hand, fair enough: despite all the attempts to balance out intake, generally it’s the better-off who do go to university. On the other hand, back in the mid-70s a high school/secondary school education was plenty to permit you to get a factory or manufacturing industry or assembly line job that paid well enough to let you have one of those improved standards of living (and a lot of that was thanks to unions, not the disinterested benevolence of employers; there’s a reason the 80s, particularly in Britain, were the decade of ‘taking on the unions’ by governments). Even leaving formal education at 15 would let you get a start in a manual labour job and work your way up from the factory floor to be foreman if you had the ability.

    You can’t do that anymore. Manufactuing and heavy industry is in decline, or has been shifted overseas (world’s largest steel maker is under Indian management; largest steelmaking industry is China; largest steel mill is in South Korea) and are being rapidly automated so that you have one or two humans overseeing the machines. The growth is in service industries and they are being regarded more and more as ‘jobs for teenagers’ so that you don’t need to (say) increase minimum wage; working in a fast-food restaurant in the 70s was a respectable enough job for an adult, nowadays it’s a teenage burger-flipper doing an after-school job, and anyone in their 20s is a loser to be stuck in that dead-end and deserves to be poor and miserable for being stupid/unambitious/unwilling or unable to get a real job.

    Education is the only way to get a decent job, and you need more and more education (even if the degree/post-grad degree/masters/doctorate is a signalling device). The world of 2015 is a very different place from 1973; a hugely overhauled new edition would be interesting to see what changes recommend themselves to the author in the philosophy and/or ideal social structures.

    I’m old enough to remember forecasts in the 70s of how there would be so much efficiency and automation, people would only need to work 2-3 days a week and they’d have oodles of free time for leisure and cultural/educational pursuits. I think we can agree that it didn’t turn out like that 🙂

  33. Jack V says:

    This is fascinating. In some ways it makes me a lot more sympathetic to libertarianism, in that it’s being suggested by someone who genuinely DOES think it will run society better, rather than people who have money and want to keep it, or intelligent people who want to find a single “clever answer”.

    In other ways I’ve got more sympathetic too. Like, a friend was make an argument to me that regulations basically always suffer regulatory capture and come to support the industry they were supposed to regulate. And I reject the idea that they ALWAYS do, but they certainly SOMETIMES do, so dismantling those would be an improvement everyone could agree on.

    But there’s definitely ways I’m suspicious no-central-planning can work. Like, random disasters like “a hurricane destroyed everything” or “this bank went bust and everyone lost all their money”. Ideally there’d be insurance for that, but there’s not in a way most people can get (since the government only partly ameliorates those problems). And in order to cover such a large disaster, the insurer would have to be nearly the size of a government anyway, and maybe need to raise taxes forcibly to pay for some of the things. If we didn’t have a government at all, people suffering those things would all be shit out of luck.

    And America has significant problems with police forces, but the ones that get to do whatever they like seem to do things even worse than the big institutionalised ones…

    • anonymous says:

      “in that it’s being suggested by someone who genuinely DOES think it will run society better, rather than people who have money and want to keep it, or intelligent people who want to find a single “clever answer”.”

      This describes the vast majority of libertarians/anarcho-capitalists. There are impressively few monocled fat-cats out there discussing libertarian theory.

      • Peter says:

        The less complimentary take I heard on this is from zompist… where was it… ah yes, about halfway down this page, who was saying that libertarians weren’t so much fat cats as people who thought they could be doing a lot better than they are, and resented the government for holding them back.

        I’m not really in a position to comment either way…

        • Speaking as one of those libertarians, I don’t actually care that much about the additional personal wealth I think I would gain.

          My resentment at being coerced so my earnings can be wasted, used in actively destructive ways, and fed to parasites is far more motivating than my hope of gain.

          I do not think I am at all atypical in this respect.

          • Lambert says:

            I feel like I have a visceral like for libertarianism for the same reason I run linux and generally make use of advanced options with software: I hate it when people try to limit my options ‘for my own good’.

    • blacktrance says:

      Arguably, the lack of bailouts for random disasters isn’t a bug, it’s a feature. Under the status quo, hurricane-prone areas is subsidized, and when something goes wrong, taxpayers who don’t live in those areas are stuck with part of the bill.

    • Paul Brinkley says:

      Insurance for a coast would be expensive to organize, true. But if people like living on the coast badly enough, then it may by definition justify the cost of such insurance.

      The logistical problem of insuring the coast against disasters such as hurricanes is due to the fact that hurricanes are large, and tend to hit a large part of coast; so you have to insure an even larger coastline to get the probability curve manageable. Basically: if you’re a small hurricane insurer, your claims levels range from zero one year to every single person the next. Or you insure multiple coastlines in different areas.

      Another way is noted by Thomas Sowell in at least one of his many books: reinsurance. This is basically insurance for insurers encountering a run on claims. Turns out this is much bigger business than I thought before reading about it.

  34. BD Sixsmith says:

    It is ironic that the complaints you make about protection agencies are complaints that libertarians make about the state (exacerbating problems to justify existence! biased towards privileged classes! brutal! unaccountable!). There are challenges that are ever-present when humans form and maintain societies and they would not disappear along with governments any more than conflict would disappear along with nations, fanaticism along with religions or food poisoning along with chefs.

    A small note: to look after oneself in a society of private firms would be exhausting. One has to think about who is going to save one’s house if it happens to catch fire; who is going to get one’s TV back if someone steals it; who is going to keep one’s street clean; who is going to fix one’s road…I suspect anarcho-capitalists would respond that it is naive to expect the state to do a good job of addressing these problems but their solution doesn’t scream “freedom” so much as “work”.

    • mb says:

      many of the things in your small note are provided by private entities already in the US. More of the country is protected by volunteer and private fire companies than municipal fire departments. don’t be so afraid.

      • BD Sixsmith says:

        Are you sure? More of the country by land, perhaps, but not by people.

        • mb says:

          by land yes, that is why I phrased it the way I did.

          • BD Sixsmith says:

            Fair enough. But I can’t see people queuing up in droves to be volunteer firefighters in New York, London or Paris so we are still obliged to choose between InferNo, Firecorps et cetera, and keep up to date with our payments and paperwork, while replacing all the other services that the state would provide. I admire people who have enough independence that they want to shoulder this burden themselves. It is creditable. All I am saying is that it is a burden.

            “This person disagrees with me because they are scared” is not as irritating as “this person disagrees with me because they are evil” but it remains unwarranted.

          • mb says:

            At a certain population level division of labor takes over. You see people in the country doing all sorts of things people in cities pay private and public entities that specialize in that task to perform.

          • mb says:

            One of the things I always find interesting in these types of debates, are the people that cling to government provision of the services, often argue that a private entity could not be held responsible – but then I look at Eric Garner, Mike Brown, Tamir Rice,… and I wonder what world those people inhabit. Having worked in state government, I can assure you one of the things you learn quickly if you want to advance is how to avoid responsibility.
            I think scared of uncertainty is fully applicable.

          • BD Sixsmith says:

            You see people in the country…

            Indeed. But I fear that a lot of different and interesting ideologies extrapolate from “this works for a particular group of people” to “this works for people”.

            If you mean “indisposed to uncertainty” you are right but “scared” imputes another level of emotion.

      • houseboatonstyx says:

        More of the country is protected by volunteer and private fire companies than municipal fire departments

        In the places I’ve lived, mostly ‘unincorporated areas’ in the US, the local volunteer fire/emergency service is pretty indistinguishable from a municipal one. No competition or customer choice, as there’s only one in each area, or where they overlap, the choice is made by the (centralized) 911 dispatcher. Their buildings and equipment are tax funded. They serve without charging the user.* The people on the trucks may be volunteers, but many of the full-time office staff and managers are paid normal wages.

        *The local fire/ambulance service bills for ambulance mileage, usually paid by the patient’s insurance company, Medicare, etc. (Charging a subscription fee for fire services is very rare.)

    • Zakharov says:

      Compared to a communist system, we already have to do a lot of work to look after ourselves when it comes to employment and consumption, and I think it’s worth the cost.

      • BD Sixsmith says:

        Heh. Fair point. If I could be convinced that private services would be superior to public services by as many orders of magnitude in the case of, say, fire fighting, as in, say, putting food on shelves I would be interested. But I think there were good reasons for governments to centralise on some things and not others.

      • cypher says:

        That doesn’t hold equally for all sectors. Or rather, some sectors fare better under public control than others, so it could make sense to eliminate the decision fatigue for some sectors by adopting public control, while leaving others in private control.

        I am not particularly pumped about searching for Health Insurance, for example, and since I’m not a lawyer or a doctor, I’m not sure I can even make a properly educated decision about it.

        • Tracy W says:

          But why would that be any more taxing than working out who to vote for based on all that? Indeed, isn’t voting even more taxing as you can’t consider these questions one by one, you have to tackle questions like “Candidate A is great in these areas but lousy in those, do I vote for her?”

    • Scott Alexander says:

      If dealing with multiple firms is compliicated, I would expect a reputable firm to exist that profits by managing all of it for you. Compare travel agents / packaged tour industries, who charge a premium over the individual hotels/flights/etc they get you for the convenience of taking the search and negotiation aspect out of it.

      • Jon Miller says:


        Many criticisms of anarcho-capitalism make this kind of mistake–they underestimate the flexibility of markets, and are overly pessimistic about the strength of firms’ incentives to meet the needs of their customers.

        The more thoughtful criticisms of anarcho-capitalism include worries about the provision of public goods and common pool resources (goods for which it is too costly to effectively exclude people who don’t contribute to their production), and empirical critiques based on the dearth of stable non-state societies (with developed economies) and the pervasiveness of states or gangs with a monopoly (or quasi-monopoly) on the use of force in their territory.

        But the end of your original blog post already suggests an alternative to anarcho-capitalism which deals with both of these more thoughtful criticisms, while retaining the desirable features of anarcho-capitalism (namely, improved quality and lower price of government through competition).

        If governments maintained their territorial monopoly on the provision of protection, but were transformed into for-profit firms, then there would presumably be more competition among governments to attract customers (residents), but the governments would retain the incentive to provide public goods in their territory. The increased competition would hopefully lead to governments gradually improving the quality and lowering the price of the services they offered. Such a system of Competitive Governance would perhaps lead to the improvements in protection services hoped for by anarcho-capitalists, while avoiding the criticisms of anarcho-capitalism that it would lead to under-provision of public goods and CPRs on the one hand, and to gang warfare on the other.

      • cypher says:

        That only works when one can reliably judge the effectiveness of that firm as well. Not only is the process lossy, but it wouldn’t necessarily help as much to choose things in complex domains such as finance or health insurance, since the customer will have trouble evaluating the selector corp’s effectiveness.

      • PGD says:

        Our world is already marked by a lot of complexity in dealing with multiple firms and people get ripped off all the time. But how many people can afford to hire a personal assistant or lawyer to handle it all? Only the very rich.

  35. mb says:

    One of the things that you seem to forget with social security, is that you have to be alive to collect it. The poor die younger (something many progressives are fond of pointing out in health care debates). It was not until this century (2000 something) that the average black man lived long enough to collect. I will grant that SS is probably a good deal for the poor that never work, but the poor that work and die young it sucks. They can’t even pass it on to their heirs – it subsidizes a rich guys retirement. Farm subsidies taken alone probably don’t add much to inequality, but as a program emblematic of diffuse costs with concentrated benefits going to the rich – it is still relevant – and still very much a problem.

    • houseboatonstyx says:

      I will grant that SS is probably a good deal for the poor that never work

      Do you mean SSI?

  36. Svejk says:

    Using homosexuals as an example of a minority that would be severely disadvantaged by a protection agency racket may actually understate the problem. Gay people’s familial and social networks by necessity include many straight ‘allies’ that could even the balance somewhat – for example, Dick Cheney might be willing to spend millions to make sure his daughter is not subject to ostracization or flogging. However, more insular ethnic minorities such as blacks in the US or Jews in Europe would be even worse off; history has demonstrated that people will pay extraordinary premia to harm or expel these groups.
    I am also reminded of those behavioural economics studies that demonstrate that once you attach a price to a behaviour, it becomes governed by a different set of norms, market v ethical/moral/cultural (the canonical example is picking children up late from Kindergarten when a late fee is introduced). Once it is acceptable to pay to enforce your prejudices, we may find that many people would find it an attractive use for their discretionary income, potentially ossifying societal biases.

    • Jon Gunnarsson says:

      Blacks in the US and Jews in Europe were harmed or expelled through government precisely because private discrimination tends to be costly, while public discrimination is cheap. If you’re an antisemite in Germany in 1930, you can try boycotting Jewish shops and refuse to do business with Jewish bankers, etc. but it will limit the range of your choices while not harming Jews very much. Doing something more extreme like physically attacking Jews in the street is very costly since they might fight back and you might be thrown in jail. But voting for the NSDAP is very cheap. It’s an easy way of expressing your hatred of Jews and solving the “public goods problem” of ostracising Jews.

      Of course an anarcho-capitalist society would not get rid of bigotry altogether, but it would probably make it more costly, and hence rarer.

      • Ano says:

        “Doing something more extreme like physically attacking Jews in the street is very costly since they might fight back and you might be thrown in jail. But voting for the NSDAP is very cheap.”

        The Nazi Party did not seize power by winning a fair election. They seized power by forming a private army and intimidating rival parties, eventually managing to outlaw the Communist Party entirely. Their twelve year reign was not the result of winning multiple elections or by keeping elections fair, and indeed, once in power they quickly moved to ban competing political parties. You claim that it’s easier to vote for the NSDAP than it is to beat people up in the streets. But that’s literally what Nazi paramilitary organizations did. Their purpose was to suppress and intimidate voters and prevent the proper functioning of democracy.

        • Jon Gunnarsson says:

          Actually, the Nazis did come to power through winning a fair election. (They also used all sorts of violence and terror, but those were not what actually got them to power.) The NSDAP was the strongest party in both elections in 1932. President Hindenburg did not trust Hitler, but after the governments of Franz von Papen and Kurt von Schleicher had failed, Hindenburg reluctantly appointed Hitler as Chancellor.

          Now after Hitler was Chancellor, he used various illegal means to consolidate power and to transform Germany into a dictatorship. But he got to power through democratic means.

  37. Justin says:

    Who protects the children? What if there is child abuse? Will a protection company lock up their own client? What happens when the child of destitute drug addicts reaches adulthood without education or skills? And what’s to stop a pedophile from from buying a child slave?

    • Murphy says:

      You know, I’ve asked similar questions on anarcho-capitalist forums and never got an answer other than insults since asking is viewed as an attack.

    • Their parents. Or anyone willing to stand in loco parentis.

      In other words, just the same way it works now. State-run child protecticve services are notorious hellholes even in wealthy, advanced countries.

      • Justin91 says:

        My questions are all cases where the parent/guardian is the one who is causing harm to the children. So your response boils down to “legalized child slavery/child abuse is better than the current mess of child services we currently have”. Not compelling.

        • Not all problems have solutions that are as neat as we’d like.

          I judge the problem of changing the incentives around state-run child protective services so they’re not notorious hellholes to be intractable. Are you proposing that I should support them anyway?

          If not, what is the problem with accepting that they don’t work, and therefore ceasing to regard the child-welfare problem as a pro-statist argument?

          I think this is a very common error – judging statism vs. anarchisnm not by what the state actually does but by what an ideal, perfected, and nonexistent state might do, and then rejecting anarchist arguments because anarchists are more realistic about what would actually be ppossible in their system.

          • Dude Man says:

            Hellhole or not, that only works if we assume letting abuse continue unabated is worse than the status-quo. Do you think that state-run child protective services, as bad as they are, are worse than just letting the parent abuse or rape the child?

          • John Schilling says:

            I am surprisingly sympathetic to the view that, in the aggregate, nothing can be done to help the children of abusive/neglectful/absent parents, that the institutions created to try will inevitably wind up making things worse.

            But pointing to obviously abused or starving children and saying, “my movement will at least try to help them”, is in the real world going to be a devastatingly effective way of mobilizing popular support for any alternative to the movement that proposes non-intervention on the abused-child front. Whatever it is that you think might be the best way to run society, it really needs to at least look like it is trying to help abused children.

          • lupis42 says:

            Often, especially since the state run hellholes often also involve abuse, and occasionally pick up kids who were not in significant danger of anything more severe than walking home.

      • Murphy says:

        Peoples experience of being taken away from abusive parents can vary. Some people end up with good carers, some with awful ones but if your preferred form of government involves leaving such children to be abused indefinitely then it *would* make it a vastly easier position if you convinced yourself that the existing system never ever ever works.

        • Mike H says:

          There’s nothing stopping you from saving them from their parents. I can’t see why there wouldn’t be charities that do just this.

          AnCap should have highly optimized laws. The vast majority of people are sympathetic to helping abused children. The laws that exist are very unlikely to disallow children to be taken from their parents in obvious abuse cases.

          • John Schilling says:

            AnCap won’t have laws of any sort; that’s part of the definition.

            It is presumed to have private security services that meet market demands, and I’m pretty sure there will be a demand for the “will keep busybody liberal nogoodniks from abducting your children just because you discipline them the way any God-fearing parent would” brand of security service. And likely these security services will have, in addition to their professional mercenaries, rather well-armed and motivated militias.

            Abandoned children you can take in and adopt or foster without and burdensome paperwork. And the absence of a fugitive slave act should help deal with economically-motivated child slavery. But actively, deliberately abusive parents with a positive interest in continuing their abuse, are a Hard Problem.

            In all societies, not just AnCap utopias.

    • Jaskologist says:

      What happens now when the child of destitute drug addicts reaches adulthood without education or skills?

      When I read stuff by anarcho-*, my brain always ends up spending most of the time screaming, “but that’s what we had, and it collapsed right into government! Why would it be any more stable this time?”

      On the other hand, when I read objections to libertarian schemes, it ends up screaming, “but that’s what we have now!”

      CPS is awful, child abuse still occurs lots, and kids of bad parents are still pretty much screwed, regardless of our many present governmental interventions.

    • Scott Alexander says:

      If you’re worried about child abuse, you can pay a company to rescue children from abusive parents and place them in a nice home (which you will also pay for). The abusive parents may pay a company to protect their presumed right to their children, but if many people are upset at their abuse, you will be able to muster more force (either real or hypothetical). I imagine most decent people would also prefer to patronize arbitration agencies that rule in favor of people who rescued children from abusive parents, so if the case goes to arbitration you will win.

  38. Fantastic analysis that raises some oft-overlooked points. I had two questions, though:

    that might mean the agencies are forced to actually fight, which raises the cost of being anti-gay to a potentially prohibitive level.

    Since when is fighting a prohibitive cost? People do it for free all the time.

    Gang leaders and barbarian warlords had the chance to become protection agencies like this, but never did.

    I can’t speak for the Visigoths, but one of the most well-documented traits of American gangs in the 20th century has been the provision of services to the neighborhoods they “control.” The reasons they do it can be described as a mix of canny self-interest, genuine attachment to their peers, and filling a market vacuum. I think this lends itself to your point #9, so I think you’ve hit on it anyway.

    • FJ says:

      “Since when is fighting a prohibitive cost? People do it for free all the time.”

      This is an underrated point. A very large fraction of violence is committed for reasons other than profit-maximization. If you are a reasonably good or law-abiding person, most of your experience with violence is likely to be on the receiving end, and you naturally will view it as unpleasant. But hurting someone whom you do not like is actually quite fun. Schoolyard bullies might take your lunch money, but the cash is a minor factor in their decision-making. The same is true of people who volunteer to become cops, soldiers, and politicians: even though their desire to use violence is presumably noble (i.e., to protect the innocent or punish the wicked), it’s clear that few people go into any violence-related career for the money. If the world were run by ancap protection companies, who is going to apply for jobs (including executive jobs) with them and be willing to accept relatively lower pay? Their employees will turn out to derive personal utility from the proper (however defined) use of violence.

      It’s also not clear to me why we assume that the arbitrators will somehow be immune to the same threats of violence that they are supposed to adjudicate. In real life, judges are often targeted for violence by “protection companies.” Maybe you could argue that any protection company that threatened an arbitrator would then find all its bilateral arbitration agreements rescinded, but that seems to assume that everyone can detect intimidation and violence against arbitrators and ascribe those acts to the perpetrator with a high degree of accuracy. In other words, you have to assume that ancap protection companies will be very, very good at figuring out who they want to use violence on, way better than actual governments usually are. And if there’s anything that real governments care passionately about, it’s figuring out who they want to bring to a sticky end.

    • Scott Alexander says:

      If your employees die, you have to get new employees and possibly pay their families. If your employees die often, you’re going to need very high rates of hazard pay. If your employees get injured, you have to pay medical bills, which aren’t cheap these days. None of this is counting the costs of weapon, ammunition, etc.

      And if your opponent is smart, they’ll avoid shootouts among employees by just hiring an assassin to kill you, the CEO, after which your employees will stand down or defect. If nothing else, that’s something I think most businessmen will try to avoid.

      • FJ says:

        I’m not sure why you assume that assassinating a CEO would necessarily end an ancap war: assassinations don’t usually end wars with an ideological component, and therefore a CEO has a pretty strong incentive to gin up an ideological component to any war she wages.

        I guess I just don’t understand why an ancap protection company would choose to forego any of the powers that governments currently exercise. The whole point of ancap is that protectees (“customers”) can choose to fire their protection company and hire a competitor, right? Well, if I’m the CEO, why would I allow a customer to cancel his contract? Or to put it another way, why don’t people in North Korea just leave? If you think cancelling your cable service is tough, imagine if Comcast had its own armored divisions.

        • Held In Escrow says:

          “We’ve got a 4 hour timeblock in three weeks to roll by and oppress you. Please have someone at home to receive our cannon at that time.”

          Really, I just go with the Nozickian answer to all this; government is a natural fail state for a society. Once one actor has established a monopoly, which one will given enough chances, you’re stuck with it. Sure the government might change, but there’s not going to be a real consumer choice outside of what the government grants you.

          Sure, there’s revolution and coups, but it isn’t like a consumer gets a real choice at the end of those either. New boss, same as the old boss

          • Lambert says:

            “Don’t put your trust in revolutions. They always come around again. That’s why they’re called revolutions. People die, and nothing changes.”

            — (Terry Pratchett, Night Watch)

        • Paul Brinkley says:

          If I take as stipulated that assassinations don’t end wars with an ideological component, then all this suggests to me is that ideologies trend toward prohibitive expense. 🙂

          The one exception is where the ideology holds out long enough to be the last one standing. But in that case, the ideology is redefined as “normal”. This has happened numerous times in history.

        • Montfort says:

          My guess would be that protection companies would offer “rescues” from that kind of thing. Find a way to send the competitor your first month’s payment and you’re protected, in theory.

          Of course, it might take a few actual wars before corporations take those things seriously and go to arbitration instead. I’m not totally sure the incentive would be large enough for the rescuer to sustain the practice. Maybe a new entrant to the market (who’s abnormally well-prepared for war, or expects one anyway) would be willing?

          • FJ says:

            “We will be greeted as liberators!” Which actually did happen, for a subset of the population. But it wasn’t exactly a universal sentiment, either among former regime elements or other groups (including unrelated groups that had their own beefs with the supposed “liberators”). So we got the Iraq War.

            The funny thing about this example is that I’m not really sure which way it cuts. Is the US actually less likely to intervene abroad after the Iraq War? Empirically, it’s a mixed bag. I genuinely don’t know whether a neoconservative ancap protection company would have the stomach for a permanent policy of intervention, but it’s plausible that many protection companies would vacillate between something like interventionism and isolationism over time.

      • If your employees die, you have to get new employees and possibly pay their families. If your employees die often, you’re going to need very high rates of hazard pay. If your employees get injured, you have to pay medical bills, which aren’t cheap these days.

        None of these strike me as prohibitive, especially considering that protection companies would be a growth industry in an anarcho-capitalist order. To your first point: every industry deals with turnover. To your second and third points: those are only costs if labor has strong bargaining power in an anarcho-capitalist society. Who’s to say a protection company has to offer its employees hazard pay? “You knew what you were getting into when you signed up, kid. This is a great opportunity for a go-getter to make his mark in this company, and I’d hate to see you waste it by griping about shrapnel.”

        And if your opponent is smart, they’ll avoid shootouts among employees by just hiring an assassin to kill you, the CEO, after which your employees will stand down or defect.

        A commenter downstream noted that assassinations don’t usually end wars. To that I’ll add that the departure of a CEO rarely gets employees to quit en masse, and that the hired assassin is largely a Hollywood / paperback fiction. If you look at historical assassinations, and you limit your focus to major world leaders, most of those assassins are either ideologically driven or highly trained, carefully deployed state agents.

  39. Jon Gunnarsson says:

    Remember, countries have the same economic incentives to avoid war that companies do, but they still occasionally get involved in them.

    I agree with your argument about some protection agencies being likely to engage in brinksmanship, but the statement above is wrong, or at least misleading since it treats companies and countries as holistic entities. Engaging in a war is typically bad for the majority of the people in the country, but is often beneficial to its ruler(s).

    Having an actual foreign enemy typically unites the country behind the rulers and makes it more acceptable for rulers to extend their power and to limit the freedom of their subjects in ways that would be fiercely resisted in peace time. If you’re a ruler, fighting a successful war is also the best way to be remembered by history as great. For example, if you look at rankings of US Presidents by either historians or the general public, you consistently see Washington, Lincoln, and FDR in the top spots, all of which fought major wars. And in general in these lists, you’ll find a strong correlation between fighting a major war and being ranked highly.

    In private firms, the relevant analogy to ruler(s) and subjects is CEO/board of directors and owner(s)/stockholders. The distinction between what is best for the leadership and between what is best for the stockholders still exists to a certain degree, but is far less of a problem than with a country.

  40. Jordan D. says:

    ‘Actual monopolies are rare in practice’

    Yes- but.

    I agree that monopolies don’t regularly form in the commercial sectors for most products. If you develop a new snorkel of surpassing quality,* you can probably start up a business and be outcompeting established snorkelmongers in no time. On the other hand, *natural* monopolies happen all the time.

    There’s an important objection which could be raised with respect to traditionally heavily-regulated entities like power companies, water companies, etc, which have incredible barriers to entry.** For some services which are dependant on infrastructure, a company would have to have ridiculously bad practices before it became viable even for other large entities to establish a competing service.

    This also makes me worried about arbitration services. People have complaints with public utilities all the time; in many states (maybe all states?) there are special administrative tribunals which exist just to hear all of those complaints. If your power company says to you ‘If you purchase electricity from us, you agree to arbitrate any dispute before the Electro Nation Arbitration Station. If you don’t want to do that, enjoy not having electricity’, you’re sort of sunk. No doubt that company wrote all the standards for arbitration itself, after all.

    So, coming around to protection agencies. In urban and dense suburban areas, no doubt there’ll be plenty of competing protection agencies. (I’m not convinced that there’d be enough demand to support healthy competition in far-flung rural areas, but I don’t know enough about the economics of those areas anyway.) Possibly some of them will be large and sophisticated!

    But what happens when a nessicarily large entity, like a huge gas company, or a mining conglomerate or a power company, starts to violate its own best-practices agreements? Let’s say a power company promises that its going to do line replacements every 20 years, but the CEO can report better profits by putting that off and foisting the growing structural deficit onto his successor. Sixy years later, a big storm destroys a lot of the infrastructure, and the company has to raise prices to cover repairs (I guarantee you that’d be in the contract) at the same time that everyone is experiencing a prolonged blackout.

    The first problem here is that no entity necessarily had the right and incentive to audit the company and discover the line problems. This seems privately solvable, at least in theory. The second problem is that the arbitration is going to favor the company heavily, since they exclusively determined who would get to do it and you had limited power to reject it. I don’t think this problem is very responsive to private action. The final problem is that even if you get an arbitration in your favor, how are you gonna enforce it? You think you’ve got a better security contract than the electric company? Or is it more likely that the electric company has a contract with the biggest security company in town and have the Ultra Premium Members First Plus Plan?

    *Which can be produced at a reasonable price, etc, etc.
    **Even ‘deregulated’ states which try to promote competition have to do so by seperating distribution and generation and then requiring the distribution companies to service multiple companies. Otherwise you just get big conglomerates and multi-billion dollar costs to start-up a company to compete with them.

    • Tibor says:

      This is a problem if there is only a single electricity company that brings you the power. It seems to be a lot smaller problem if there are more of them who can compete (this seems to be more often the case). The Evil Electrical Power may want you to sign a deal with them under which all complaints you have go through their own arbitrator. You can do that…or you can choose the Standard Electricity company, which uses an arbitrator that was negotiated with your protection agency and who has a neutral reputation. The second company may charge a bit higher price, since they offer a better deal. And it is up to you what you will choose.

      • Jordan D. says:

        That’s all certainly obvious if, as you say, there are a lot of competing supply companies. I know that in deregulated states there are competing distribution utilties which buy from the generation companies, but my understanding is that such splits did not, for the most part, naturally arise. After all, the natural model is that whichever company builds the transmission and distribution lines controls the market unless and until someone else is willing to make a commensurate investment to enter.

        So unless that’s wrong (and I’m not an expert, so perhaps it is), it’s not obvious to me that there’s a default to a competitive state which would resolve restrictive arbitration arrangements.

        • Tibor says:

          Well if the First And Only Electricity Company does a bad enough job, someone else will build their own power plant and electricity network and you will either have your house connected to the first or the second. Also, some poeple may start using small generators, solar power and so on. It is true that the initial costs in this particular market are pretty high. But there are usually some other rich people around (other than FAOEC) and if they see that they can profit from making their own competing networks, they will eventually do so. It is true that you probably cannot have 100 separate physical networks around, since there would be room for nothing else then. But you can also have a single network owned collectively by the owners of the properties the network goes through, each of them charging the others for the usage of his part of the network (I charge the next guy on the line for what went through, i.e. for what was not my own consumption, he does the same further down the line and so on).

          With roads and transport infrastructure, the competition seems even higher, as roads also compete with the railroads and with the airplaines (and ships or underground trains somewhere).

    • Paul Brinkley says:

      DDF specifically addresses the question of natural monopolies in the book. I could give the Cliff Notes version here, but it would probably save time to just redirect you to the chapters, and cheerfully encourage you to give them a look. (Just skim the contents until you see “Monopoly” in the title.)

  41. Johannes says:

    What first struck was not the fate of poor people suffering as victims of crimes because they cannot afford “protection” but a poor person being accused of a crime s/he did not commit. He will probably be dependent on some charity paying a lawyer (or whatever the analogue would be in such a system).
    (And one must really believe in crazy wastefulness of governments if one thinks that natural monopolies like law enforcement etc. would really work better and cheaper if instead provided by lots of private companies. The utter failures of privatization of trains, water supply etc. in Britain and elsewhere have completely falsified such ideas.)

    But overall the main point to me seems that almost every crazy idea, be it anarchism or utopian communism might work with an ideal handpicked population of mild rationalists or whatever. But statecraft has to work with real people. Kant famously remarked that real laws should be robust enough to govern a population of devils. With angels it’s easy and almost everything would probably work.

    • Jon Gunnarsson says:

      Why do you believe that law enforcement is a natural monopoly? There don’t seem to be very large economies of scale in law enforcement. Or do you think that police departments in large cities work much more efficiently than those in small towns?

    • Tibor says:

      Poor people: Poor people today get a lawyer that is assigned to them by the state. The lawyer has a little incentive to do a good job and the outcome may be very poor too. I don’t think it is unreasonable to assume that a private charity can do at least as good/bad at providing lawyers for such people. In fact, even today, there are similar charities (which buy better lawyers for people who cannot afford them). I would expect them to be more supported in a society where what is now payed by taxes costs you much less (and you have more money to spend on other things). The same goes for protection agencies. Today, the police don’t seem to do the best job of protecting the poorest people. If we could do at least as good/bad for them under an anarcho-capitalist system (also, I would expect the number of these really poor people to be lower do to a much more efficiently working economy…very free market countries tend to have very low unemployment rates even today), then it’s at least as good in that respect as what we have now (and the aim is not to create a perfect society, that project is doomed to failure…what counts is just what is the better alternative).

      Of course, there may be a lot of wishful thinking. Maybe people are way less willing to give money to charity that I think. Maybe that society would outperform ours economically by as much as I would expect and so on…but the answers for that are best found empirically…which is why these ideas are at least worth trying…perhaps through seasteading, perhaps in a different way. But definitely it is not something that obviously would not work.

      Privatization: I think it is very important to differentiate between privatization in the sense of letting the (more or less) free market deal with providing some kind of a service and privatization in the sense of privatizing the legal monopoly rights. I don’t know the details in Britain, but if you just say “from now on company XY is by law the sole supplier of this or that in this town”, you cannot blame capitalism or free market for its failure. The same goes for a situation where you sort of allow for competition, but keep the number of companies down to very few by licencing etc.

      • Andrew says:

        I don’t think it is unreasonable to assume that a private charity can do at least as good/bad at providing lawyers for such people.

        Well, it is.

        In the US, the government funds defense attorneys because in 1963, the SCOTUS threw out a case when an indigent defendant requested, but was not assigned, a free lawyer. The courts are similarly willing to throw out cases where the specific legal representation provided in the individual case is incompetent. So the executive must provide quality legal representation to indigent defendants in order to obtain convictions that won’t be overturned: their hands are tied by an entity external to them, the judiciary.

        Before 1963, did we see private charity stepping up to fund public defense? No.

    • lupis42 says:

      What first struck was not the fate of poor people suffering as victims of crimes because they cannot afford “protection” but a poor person being accused of a crime s/he did not commit. He will probably be dependent on some charity paying a lawyer (or whatever the analogue would be in such a system).
      (And one must really believe in crazy wastefulness of governments if one thinks that natural monopolies like law enforcement etc. would really work better and cheaper if instead provided by lots of private companies.

      As a failure mode, it sounds like Ferguson now.


    • Scott Alexander says:

      If by “poor person accused of a crime they did not commit” you mean someone being very competently framed by a rich person, I’m not sure why normal police would be more likely to be able to see through that ruse than a protection agency.

      If you mean I’m a jerk so I just say “That poor person there! He stole my money! Get him!” then I imagine the protection agency would treat that the same way a modern health insurance treats a false claim – as an abuse of their resources they’ll get angry about if they find out.

      • Johannes says:

        My point was that currently law enforcement is neutral in principle. That there is and always will be some corruption and that the lawyer provided for the poor defendant will not be as good or as motivated may be so but there are measures to be taken against those things. And it ist far better than nothing.

        In the anarchist system the poor person probably will have no lawyer (we simply do not know if there will be a charity providing lawyers or not). There is no (in principle) neutral court of appeal. Everyone is (openly) biased. There will be far more people with literally nothing left to lose. To assume that those will be less violent societies seems extremely naive.

        The historical record shows that e.g. Iceland certainly was not peaceful. And the establishment of something like “the King’s peace” or the “pax iudicata”, namely a kind of stately monopoly on jurisdiction and retribution were apparently huge factors in the reduction of violence in Europe in the high/late middle ages.

        I am loth to ascribe such a simply fallacy to the obviously smart (although they often seem “hedgehog types” with ONE BIG IDEA) people who are into AnaCap and the like. But it seems they are extrapolating from a society with a very strong level of government and a populace having been educated or bred to be “rational”, “businesslike” for generations etc. to a utopian society where you can just take away the judge/lender/etc. of last resort (namely the goverment) that made the whole thing stable in the first place and end up in a society that is as stable and peaceful as ours but without the little inefficiencies current governments show. This seems a huge leap of faith.

        One insight of some of the TradCons (distasteful and hypocritical they might be) seems to be that minimalist state does only work with strong traditional mores or institutions (like churches). There will be no anarchy because they are other strong bonds (of tradition, family, church…). But the loose bonds of voluntary contracts seem far too loose by themselves.

  42. For all its flaws, the system we have is pretty good, and why else are so many other countries emulating us, whether it’s Europe copying or QE program or Communist nations transitioning to capitalism?

  43. My overall conclusion is that I am delighted by this fascinating and elegant system and would very much like to see it tried somewhere very far away from me.

    Yeah, that’s always been my reaction too.

    I expect that how well it would actually work would be intensely dependant on contingent social factors and the particular way the society evolved, with lots of stable configurations available. I expect that people underestimate how well it would work for the exact same reason they overestimated how well Communism would work but that’s a very low bar.

  44. Zakharov says:

    Let’s say that the strongest protection agency in a given region decides to refuse all arbitration. Would it not be cheaper for each of its competitors to accept this situation, and let the customers of the strongest agency get away with murder, then to fight a war they cannot win? Tragedy of the commons should stop the competitors from banding together to take down the bully.

    • Mary says:

      Assassination of their offending customers would present a third, more effective route.

    • Scott Alexander says:

      If this were known, nobody would ever hire the weaker agencies, since their customers can be murdered without penalty. Everyone would switch to the stronger agency. Knowing this, the weaker agencies might band together or try brinksmanship in order to restrain the strongest agency.

      If they fail, then I guess the strongest agency now can do whatever it wants, everyone signs up for the strongest agency, they’re forced to adjudicate all disputes themselves, and they turn into a government.

  45. Jon Gunnarsson says:

    Regarding the idea that anarcho-capitalism has zero bits of governance:

    I don’t think that idea is accurate. Anarcho-capitalism does not have government, but it does have governance—decentralised governance in the form of protection agencies and private courts. Anarcho-capitalism is not simply anything goes, but rather a loosely defined set of institutions. The prediction that David Friedman and other anarcho-capitalists such as myself make, is that such institutions, once established, would probably be reasonably stable and would probably overall work better than the statist alternatives.

    This does not mean that they will always work better for every conceivable problem. I freely admit that there are many problems for which centralised power can give better results than a free market of the anarcho-capitalist variety. But that does not mean that actual governments will implement these policies for all sorts of public choice reasons. There probably even are problem where a reasonably functional state is likely give better results.

    But we should be concerned with which kind of system offers the better overall deal. And seeing how much more efficient than government private institutions are at producing potatoes, cars, and shoes, it is certainly worth a try to see if they can also be better at providing services like law and law enforcement. Now if only existing governments weren’t so set against allowing any such kind of experimentation.

    • Ano says:

      They might be better at producing potatoes, cars, and shoes, but there’s no doubt that some members of society have significantly nicer shoes than other people and can afford to buy many, many more potatoes.

      • Jon Gunnarsson says:

        You seem to be implying that that’s a bad thing. Why?

        And how is that different from government provision of goods and services? After all, the quality of public schools, roads, and police services also differs greatly.

  46. Highly Effective People says:

    The biggest concern I have about AnCap is that (in an odd turn) it doesn’t seem to be very good at privatization.

    If there’s a water quality problem in Neo-Akranes who decides to go and clean it up? If its fish stocks are being depleted who makes sure that fishing will still be a profitable enterprise twenty years down the line? The obvious answer to both is “whoever owns the water.” He has the best incentive given that its value is by definition the value of his property and his children’s property, not to mention that he is presumably the best situated to control how that property is used (otherwise it’s hard to call it ‘his’ in the first place).

    But AnCaps seem to hate this answer. If you ask them you’ll get complex networks of insurance companies fishing cooperatives and futures markets haggling and organizing coalitions like they were trying to put a man on the moon instead of just using the property rights their society is nominally based on in a straightforward way. Why shouldn’t Karl Wassermann or whoever just own the damn water (and attendant responsibilities) himself and charge people for the right to use it?

    It doesn’t matter if the Wassermanns own it because their lineage has the foamy blood of Neptune or because they were the first ones to put up a sign on the waterfront saying “Private Property: No Trespassing.” Because the point is that through that firm claim of ownership the (formerly) public good has been transmuted into a private good and thus is integrated into the market without making a huge fuss over it.

    Why take a circuitous mess of a route like this rather than a simple and obvious one?

    [Incidentally this is also why AnCap discussions of private law enforcement sound like Venusian Lizardmen speculating about hu-man society. Very nearly every community in human history has managed to work out its own private militias / courts when left to its own devices: the Shoftim, the Hermandad, Vehmic Courts, English Common Law, the Hanse, hell even the damn Klan and the JDL count. They might offend our sensibilities but the locals (AKA their customers) are generally quite pleased with their performances.]

    • Jon Gunnarsson says:

      This ancap is quite happy with using private property in bodies of water to solve problems like over-fishing. This just seems like the obvious answer. I can’t quite wrap my head around why the ancaps you talked to hated that concept.

      • Highly Effective People says:

        Glad to hear it. My memory of the typical ‘solutions’ in this kind of discussion is something like voluntarily agreed on tradable fishing quotas or groups of insurers paying polluters to stop based on projected actuarial gains in life expectancy rather than anything logical. Although that might be me conflating the absurd / memorable with the commonplace which is unfair to reasonable people like you.

      • Paul Brinkley says:

        Speaking to your specific head-wrapping problem, the following comes to mind: the label “an-cap” draws people who mistake the philosophy for something else, such as, say, “smash the system” style anarchy, or freedom from government without noticing the caveats (freedom from whatever government programs they happen to like). So maybe there are people who call themselves an-caps but are really just kneejerk anarchists who didn’t think about the possibility of removing every fish from a given body of water.

        Every political philosophy has the same problem, really. Over the years I learned to be really cagey about what specific beliefs I could actually hold a self-styled “-ist” to.

    • Alex Welk says:

      As an AnCap, I know I’ve shied away from giving that straight forward answer because usually when we give it, the other side of any debate or argument immediately turns it into evidence that I am an evil, Scrooge McDuck, monopoly-man, cigar-chewing toady who just wants to let big corporations pollute everything they feel like. Side note, feel free to message me if you want my not-so-flattering opinions on corporations.

      I personally believe that if governments hadn’t set up environmental regulations and ruled in courts (at the behest of big companies of the time) to specifically deny land owners their rights against pollution, we’d have much strong pollution controls. Feel free to look into the history of governments siding with businesses or factories against private individuals in favor of taxes/campaign contributions the businesses offer.

  47. Jon Gunnarsson says:

    If people can’t figure out that Communism might sink the economy, I don’t trust them to figure out all of the things that might go wrong with anarcho-capitalism.

    It’s worth pointing out that the people advocating for anarcho-capitalism were always among those who firmly believed that communism is much worse at promoting economic prosperity than capitalism. So this is a rather strange example to use if you want to demonstrate the unreliability of the predictions made by anarcho-capitalists.

    • A Communist would surely make dire predictions about what would happen under a hypothetical anarcho-capitalist system. If any of those predictions came true, would that prove Communism was a better alternative? I think not.

      • Alex Welk says:

        A fair point, but the claim made here is that AnCaps and free market type people have better priors for making good predictions for economic systems.

        I agree that it would be illogical to claim that having predicted one thing correctly makes their economic system the correct one, but it is unfair to question their theory based on the poor predictions others made. By all means, continue to question it on other fronts, it will only make us AnCaps stronger (or lead us away from it, should it be incorrect =D ).

      • Jon Gunnarsson says:

        No. But in a hypothetical world where anarcho-capitalism used to be really popular with intellectuals (except for communists, who were always opposed to it) and was tried several times and failed miserably, it wouldn’t be very convincing to point at that failure as an argument against communism.

  48. Pingback: Scott Alexander (Slate Star Codex) reviews and critiques The Machinery of Freedom. I’m interested in what you all think about it. | Official site of DJ Michael Heath

  49. Mike H says:

    I mean the very Outside View question of “why is it that, by coincidence, not using force is an effective way to solve all problems?

    Because it follows from intuition and our intuitions are evidence about objective morality. I recommend reading Michael Huemer’s “The Problem of Political Authority” as a follow up of Friedman’s work.

    Why is anything convincing? Because it appeals to our “common sense.” When a new argument beats an old argument it is because the new argument is more intuitively obvious than the old one. Huemer’s book shows how our uncontroversial moral intuitions, applied consistently, show that the state is immoral. The only way an immoral entity can be allowed to exist is if there is no better alternative.

    So, if anarcho capitalism can work, it is more morally correct.

    The reason it hasn’t happened yet is the same reason democracy didn’t occur everywhere throughout time and still is dysfunctional many places. We improve our moral intuitions over time. Democracy is an improvement over totalitarianism. We should see greater moral improvements lead to a more libertarian, and eventually anarcho-capitalist, society.

    So critics are right when they say it wouldn’t work yet, and it’s because people expect it not to work. A new government would replace the old tomorrow. But expectations change over time. There was a time it would be considered crazy for a leader of a country to give up power peacefully, once obtained. Now it would be crazy for, say, a US president not to give up power.

    Even though it likely wouldn’t work now doesn’t mean it’s not right to hold the views of anarcho-capitalism. One holds and first argues for the correct answer, then one can move on to more “utilitarian” solutions and compromise in the meantime. All we can do is push the ball towards the ultimate moral goal as best we can since people take a long time to be convinced.

    • Scott Alexander says:

      I read Friedman’s chapters on this, and they and the theory seem very silly, for reasons Friedman explains and then backs away from at the last second.

      We know why we have our moral intuitions. It’s because they’re evolutionarily useful. We support something like reciprocal altruism because that helped our ancestors survive; we support something vaguely like monogamy because pair-bonding is useful for raising children. To deny this is not only to go against a growing amount of evo psych evidence, but to lapse into a mysticism where our thought processes are somehow implanted in us by some transcendent power totally separate from the evolution that formed everything else about us. It’s like saying that the reason there are twelve cranial nerves is because twelve is an even divisor of 72 which is the kabbalistic holy number with which God created the Universe and our anatomy reveals God’s grandeur. Okay. Or maybe having twelve cranial nerves was just an effective design decision.

      If you accept that our moral intuitions are evolved and don’t point to anything except what helped monkeys make more monkeys, then you can start coming up with less-than-completely-objective moralities, which look a lot less silly and mostly work okay.

      • “but to lapse into a mysticism where our thought processes are somehow implanted in us by some transcendent power ”

        Huemer does not so lapse.

        Where did you get the idea that it was wrong to harm gays? Probably not so much because that idea helped monkeys make monkeys. Yet it does *seem* wrong to you, largely because of moral arguments you’ve been exposed to which seem right. Exposure to arguments modifies our intuitions. That’s how our moral knowledge progresses. http://www.owl232.net/5.htm

      • Troy says:

        We know why we have our moral intuitions. It’s because they’re evolutionarily useful. We support something like reciprocal altruism because that helped our ancestors survive; we support something vaguely like monogamy because pair-bonding is useful for raising children. To deny this is not only to go against a growing amount of evo psych evidence, but to lapse into a mysticism where our thought processes are somehow implanted in us by some transcendent power totally separate from the evolution that formed everything else about us.

        You can run this same argument, with as much plausibility, about our intuitions about pragmatic norms (what we have pragmatic reason to pursue), and epistemic norms (what we have evidential reason to believe — including about what was, say, evolutionarily useful). That way lies a fairly extensive skepticism.

  50. John Schilling says:

    Shouldn’t there be at least one or two things where a government, or any form of coercive structure at all, is just the right answer? And can’t we just have a small government that does that?

    It should be noted that the official position of he Libertarian Party and the actual position of most libertarians not named David Friedman, is “Yes, there should and we can”. Libertarianism is to anarcho-capitalism as e.g. socialism is to communism. And looking away from the theoretical towards the practical, “an actual government which does that” is something we can realistically hope to have here on Earth without a bloody revolution.

    Straight-up Anarcho-Capitalism as an experiment worth trying, I agree, would be extremely valuable but too dangerous to risk the future of e.g. the United States of America on. Doesn’t necessarily mean it has to be done far, far away, though. A charter city would seem to be an ideal laboratory for this sort of thing, with a proper national government taking care of problems like external defense, preventing any damage from spreading too far, and standing by to clean up the mess if the whole thing comes crashing down.

    The typical concept of a charter city would favor monopolistic capitalism at least in the security/protection services; e.g. Omni Consumer Products taking over a bankrupt Detroit, but the charter could be constructed to favor competition in that arena.

  51. BPGnarls says:

    At a first pass I sit with Scott in the “go ahead and try it out, but over there” camp. This particular an-cap design seems to demand an “all or nothing” environment. Either the system is adopted globally (“all”), or the current set of systems devolves to such a state where independent groups build new systems starting again at the local level (“nothing”). Partial adoption seems particularly weak to clever entryists (any single an-cap state would likely be devoured by external interests).

    As an aside, I think the (strong) opposition to an “arbitration-above-all” system will likely be cultural. Arbitration, while attractively efficient, lacks the “justice narrative”. In my opinion this narrative is too far rooted in common traditions to just ignore. (Would the markets produce an accessible, modified process eventually? Probably. Does the proposed an-cap system have enough time to wait around and see?)

    Interesting stuff, and I have added the book to my reading list.

    • Tibor says:

      I think the idea does not prohibit, say, all except army being run privately through the market and the army being paid by a say 5% military tax over that now extremely minimal state. One could even have a sort of a government which just decides on the questions of what the military does next and the size of the military tax. Or the tax decided by some referendum and a supreme commander of the army voted in elections or something like that. Essentially, you can keep reducing the state until you either reach complete anarcho-capitalism or something like this, so it is not an all or nothing idea. It just says that the minimal state, as it is usually envisioned, is not necessarily the optimal limit.

      • Paul Brinkley says:

        Not to discourage you, but I do see at least one obstacle to gradual transition to national defense-only minarchy, and that has to do with the need for classified information. In both theory and practice, defense is afforded noticeable leverage by hiding certain facts, both about what Our Side’s defense is capable of, and its plans, and about what we know about Their Side’s capabilities and plans. (Current encryption and camouflage technology affords this ability even in the presence of current surveillance technology, and I see no reason to believe these two lines will grow out of balance in the foreseeable future.)

        And since defense (and anyone, really) has the ability to hide information about its abilities and plans, it also has the ability to hide information about how badly that defense is needed – its customers are forced to make uninformed decisions. So a defense agency could present an argument for higher and higher expenditures, and it’s unclear to me that the usual capitalist checks on prices could be brought into play.

        (I should note that a pure A-C society would have the same problem.)

        • Tibor says:

          Hmm, ok, so people would decide on what the military government (in the sense of government of the military) does based on incomplete information…how is that different from today?

          I agree that the result means suboptimal management of the military and perhaps more or less (probably more) expenses than necessary. But if it turns out that you just cannot provide the defense on the market (or that it is even worse than the minimal military government), then too bad, but there are probably no better alternatives and this is the best one can get, better than what we have now, better than no state at all.

          • Paul Brinkley says:

            It doesn’t differ from today, indeed. I should not only have said that pure A-Cs have this problem; every economic system does.

            I suppose my main point here then would be that that fog of defense would stand out more starkly in a minarch transition than it does today. If we went through with a transition, we would have to be honest about this problem being innate to defense, rather than innate to minarchy or anarchy.

            In some sense, though, this is likely one of the main concerns with free markets, once you brush away all the false pretenders like crony capitalism and focus on how an ideal free market ought to work. To wit: factor in the human capacity for violence, and I see various weaknesses in the system.

            Which, after all, is a common point of discussion in this thread. Some of us, including me, argue that fighting is expensive even to the initiator, and yet we all recognize that some people start fights anyway. Sometimes it can be justified (the alternative was even worse); sometimes the justification isn’t perceptible, or the most likely justification is that the initiator simply wasn’t thinking ahead (i.e. irrational).

            This all suggests to me a workable method for making defense decisions in an anarchic system in light of imperfect information about abilities and plans: sort motivations to initiate violence by “degree of rationality” (“I felt like it” vs. “that person is making menacing gestures” vs. “that guy has resources I want, and I could probably take them by force, and mitigate any likely responses”) and organize defensive services by which level of rationality they’re equipped to handle, and simplify the situation by recognizing that rationality correlates roughly with scale of violence, or at least is gradually getting there. (A war requires much more planning than a mugging.)

            Which, given what I know from work experience, is in fact a large part of how US national security is managed. So there’s that. Nothing stopping a privatized defense agency from using the same system, though again, with the classified information factor, it gets complicated for me to estimate how it would play out. I really wish I could get David Friedman’s attention here to see if he’s done or seen any work on this. (I don’t recall seeing anything about it in TMoF.)

            …mulling it for a minute, it’s at least clear that competing defense agencies would have (or be accompanied by) competing intelligence agencies. Each would be incentivized in a free market to report the information that they think would move customers to purchase their product. Would this make the products more accurate? Suppose Perceptis, Inc. says “the Wrongul Hordes are getting pretty good at bioweapons; you should buy Defensor contracts to protect yourself!”. Would Cybervis want to say “well, Wrongul isn’t actually that good at it” if Cybervis is partnering with PanAntigen, who specializes in biodefense? This is one of a lot of scenarios I think I would want to consider.

          • Paul: You have my attention.

            I think most of what I have had to say on the specific problem of national defense is in the two chapters on that subject in the current edition of Machinery. I expect that an A-C system for national defense will be very imperfect, but that may be sufficient—most countries, after all, most of the time are not being invaded, even though their governmental systems are surely also very imperfect.

            You might think about how your problems would or would not appear in the context of the system I sketch in the new material in the third edition. There would be a small number of professionals, supported in part by charitable contributions, in part by selling their services to the large number of amateurs. The professionals might try to increase contributions by exaggerating threats—charities do the equivalent today. Donors might or might not believe them.

          • Paul Brinkley says:

            Thank you for the note, David!

            To elaborate: I read the second edition of TMoF, and didn’t notice this specific point addressed. I think that if it were covered, it would have been under the chapter “National Defense: The Hard Problem”, and I saw much useful discussion of public good economics there, and options for breaking the defense problem into simpler ones, but nothing about the problem of customers attempting to derive an accurate view of the threat in order to inform their purchasing priorities.

            I’m gratified that the defense problem has been more developed in the third edition, in the sense of a market between professionals and amateurs. The whole edition is on my reading list now, since as I see it, this is partly not a problem specific to defense… but only partly. Defense is one of the few domains I see with that market-wide incentive to withhold information from the consumer. (To some extent, even consumers themselves see value in keeping threat information secret!) I mean to watch for this point assiduously throughout the edition.

  52. Tiago says:

    Friedman says: “Suppose that one hundred years ago someone tried to persuade me that democratic institutions could be used to transfer money from the bulk of the population to the poor. I could have made the following reply: ‘The poor, whom you wish to help, are many times outnumbered by the rest of the population, from whom you intend to take the money to help them. If the non-poor are not generous enough to give money to the poor voluntarily through private charity, what makes you think they will be such fools as to vote to force themselves to take it?'”
    I think I have a simpler reply, and I have a really hard time trying to understand why so many libertarians miss this point. Fighting poverty is a public good, a classic one: non-rival, non-excludable. If Bill Gates or Warren Buffett or the UN ends world poverty, I’ll enjoy it just as much as if I was responsible for doing it. But I’ll will like it that I was not the one who had to decrease my consumption. Which is the exact thing that happens with national defense, lighthouses, police, scientific research and every other form of public goods. So we tax people and fund that public good through government actions. Maybe you’re (by which I mean “one is”) an anarcho-capitalist and think that government is always bad. OK. I disagree with you on different grounds then. But it seems weird to single out anti-poverty and anti-inequality initiatives and not national defense, which takes so much more of the budget.

    • Alex Welk says:

      AnCaps have very unkind words for militarism, imperialism, corporatism, and other things of that nature. I don’t speak for David Friedman, but I imagine he tackles this problem instead of others is exactly because of what you say. It is such a common goal for societies that it is often the first rebuttal or question offered by those interested in the ideas of any proposed system. If you get the time and inclination to read the whole book, he roasts the military system and lots of other aspects of government too.

      AnCaps care very much about the poor, we’re not the moustachio’d villains often portrayed. =D I’d be happy to chat about this stuff if you want to message me (or right here on this thread if you prefer).

      • Tiago says:

        Thanks for the reply. I definitely don’t think anarcho-capitalists are villains – “some of my best friends are AnCaps”:). I think David Friedman is being consistent with his beliefs, which I applaud.
        What I do think, however, is that his argument misses the point. If you are already an AnCap, it is not that argument which has turned you. For one reason or the other, you became convinced that society can exist without a State, even in the face of the problem of public goods. But then don’t rely on such a simplistic argument for the fight against poverty – use the same arguments you use for national defense. I doubt that he says: “if people don’t want to pay for national defense with their own pockets, why would they support a tax to pay for it?”.
        When he uses that argument, a vast majority of mainstream conservatives cherrypick that and say: “see, we should let charity care for the poor”. But almost anyone is ready to say we should let charity take care of national defense.

        • Alex Welk says:

          Actually, public good problems used to be my last stumbling blocks (along with definitions of private property) that held back from being a full-fledged anarchist. It wasn’t until I realized that governance is itself a public goods problem. Government is just replacing one public goods problem with a separate, and larger, public goods problem. Governance requires a large number of people to get informed, vote, and do things to influence policy towards solving these problems. Everyone gets the benefits of governance for these public goods problems, but only those who do the work pay for it (so to speak). Thus, the rational voter is uninformed, and we get bad government which solves smaller public goods problems clumsily while creating larger ones in its wake.

          Mainstream gonna mainstream. The only way to stop the mainstream from quoting out of context is to say nothing at all. >.<

          As to the “if people don’t want to pay for national defense with their own pockets, why would they support a tax to pay for it?”
          He does say that but not in so many words. He describes defense and security as things people want that we can find a way to accomplish without coercion. It is a rebuttal to the response, 'You just don't care about the poor/our safety/[insert cause here]', and usually isn't meant to be a launching argument to convince new people to our philosophical camp. So, in that way, you are totally right on.

          • Tiago says:

            I think the issue of whether government creates larger problems than the ones it solves is an empirical one, right? Don’t you think that the evidence shows that stateless societies fare far worse than state societies, for all the problems that government can create? Have you read “The Better Angels of our Nature”? How do you interpret that kind of evidence?

          • Mike H says:

            “Better Angels of our Nature” is the reason AnCap will work… someday.

            Or morality improves over time. Eventually enough people will accept objective morality enough that AnCap will just be the obvious way to do things.

            That’s why you haven’t seen it work yet. Conservatives (and Liberals?) are right that people aren’t “good” enough for “Anarchist utopia” to work, but they are wrong when they assume that “human nature” is so powerful that we will never overcome it. “Better Angels…” has shown we’re doing just that.

    • I agree that the argument I made forty some years ago was far from rigorous. It’s point was not to prove that redistribution to the poor was impossible but to introduce the possibility that it might not, on net, be happening. I can see several different possible versions of a rebuttal, none entirely convincing:

      1. What I want is not that I help a poor person but that poor people be helped. I get the same utility from your helping a poor person as from my doing so. As a result, I prefer an outcome where everyone gives ten dollars to the poor to an outcome where nobody does, but prefer an outcome where I don’t to one where I do. That’s your public good argument.

      The problem, as I think others have pointed out, is that your solution also faces a public good problem—the problem of getting governments to behave as the voters would wish, given that controlling a government is also a public good. I sketch some examples in the relevant chapter of ways in which governments pretend to redistribute to the poor while actually buying the votes of the not poor.

      This is related to my general argument about market failure, which is the subject of one chapter in the new edition.

      2. The economy of scale problem. What I want is for my money to help poor people. I am willing to spend a hundred dollars to do so. But locating a suitably needy person and figuring out how to help him will take more than a hundred dollars worth of my time and money, so I don’t.

      The obvious solution to that is private charitable organizations, each pooling the money of many donors. They face some of the same problem as the governmental solution, but less, both because the public they serve (the donors) is much smaller and because the existence of multiple competing charities makes it easier to evaluate each of them.

  53. “why is it that none of these problems are best addressed by a centralized entity with a monopoly on force?”

    Because the coercive monopoly isn’t an ethical means to use to achieve ends we want. Most people aren’t pure consequentialists.

    If I steal $10 from you without you realizing and give it to GiveWell thereby achieving more good than would probably have been achieved if you spent it the way you would have spent it if I hadn’t stolen it, would you say this is moral? No, because there’s something you don’t like about action of stealing independent of its consequences.

    Similarly, there are things that all governments do by definition which are bad by nature (like theft) (qualification: they’re bad *assuming governments lack political authority*) independent of their consequences: All governments (1) engage in taxation and (2) prohibit competing rights-enforcement-agencies in the geographic region they control.

    The first thing, taxation, would be regarded as extortion/theft if you didn’t believe in political authority (see anarcho-capitalist Prof. Michael Huemer’s book “The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey” for more on this). The second thing, outlawing others from providing the law services that the government monopolizes, would similarly be regarded as an unjust rights-violation under normal circumstances if you didn’t believe that governments have political authority.

    As I commented on /r/Anarcho_Capitalism (see my “Website” link / click on my name) in reply to an earlier quotation from your review, *even if* (from a consequentialist perspective) having a centralized authority with a monopoly on force leads to a better outcome than any other option (such as Friedman’s anarcho-capitalist system), this still doesn’t make it so that that monopoly-on-force system is better. This is true for the same reason that it’s not better for me to steal your money and give it to GiveWell even if doing so leads to a better outcome than letting you spend $10 how you want to spend it.

    With this in mind, one can see that there are two ways to show that having a government is better than having an anarcho-capitalist system.

    The first way is to show that governments have political authority. Roughly, this means showing why it is that governments have the right to rule and citizens have an obligation to obey. Why is it okay for governments to issue and enforce a wide range of commands that it would not be okay for any other person or organization in society to issue and enforce (such as commands to pay taxes)? Many people have attempted to account for political authority, but I don’t think anyone has provided an adequate explanation. Michael Huemer spends the first half of his book “The Problem of Political Authority” charitably interpreting all of the most popular attempted explanations for why governments should be granted this special moral status to issue such commands, and then proceeds to explain why they are not satisfactory.

    The second way to show that having a government is better than having an anarcho-capitalist system is to acknowledge that governments lack political authority, but instead try to argue that a minarchist government is justified due to consequentialist considerations. To use an analogy to help explain this, imagine the following scenario: a hiker is lost in the woods and is on the verge of starving. He stumbles upon a cabin and decides to break in to see if he can find some food to avoid starving to death. He does so, finds the food, and eats it. Now, clearly this is trespass and theft (rights-violations), yet due to the fact that the outcome (him surviving as opposed to starving to death) is much better when he committed the rights-violation than it was expected to be if he didn’t commit the rights-violation, most of us would say that it’s permissible for him to break into the cabin and steal the food. Similarly, one might say that a minarchist government engaging in extortion (taxation) to fund the provision of certain essential services might be justified for the same reason. To show that the minarchist government is justified / a better system than the alternatives, all you have to do is show that the outcome under the minarchist government system (with a political-authority-less government that collects taxes / commits extortion) is *much* better than outcomes that are expected under the alternative systems (e.g. anarcho-capitalism). Note that showing that the political-authority-less government system produces a better outcome than the anarcho-capitalist system is not sufficient for the same reason that in the hiker-in-the-woods scenario, showing that the hiker is better off stealing the food is not sufficient. You must show that the government system leads to *much* better results for the same reason that the hiker is only justified in stealing the food if doing so makes him *much* better off, i.e. if it avoids a significant disaster to his health. He can’t ethically steal it merely because his stomach is growling and he doesn’t like the taste of the food he brought with him. Michael Huemer spends the second half of his book “The Problem of Political Authority” arguing that an anarcho-capitalist society would not be sufficiently bad to justify a minarchist government.

    And that’s the outline of Huemer’s argument for anarcho-capitalism–the same two-part argument that brought me first to minarchist libertarianism and then to anarchist libertarianism two years before Huemer’s book was published.

    • Objectivists and Libertarians believe in something called the “non-initiation
      of force principle”. You are not allowed to attack someone, but can respond
      if attacked. That seems fair enough at first glance, but it has a very
      incovenient consequence. If someone makes off with your property, you cannot
      grab them, because that would be initiating force! Libertarians could
      respond to this by modifying the NOIF principle to it is OK to
      use force in repsonse to theft as well as force. (That would
      be like the “reasonable force” prinicple of most legal systems).
      But that would scupper another of their much-loved principles,
      that Taxation Is Theft. The argument is that it is the government
      that initiates force against non-payers of taxes by sending them to prison.
      But if it is acceptable to initiate force if you have been defrauded,
      it alright for governments to arrest tax evaders, because they
      are attempting to use public services without providing payment,
      which is just as illegitimate as walking out of a restaurant without

      1. Assume theft is force. Then people who have used public services
      without paying have committed theft, therefore they have initiated
      force, therefore the government can legitimately respond under NOIF.

      2. Assume theft is not force. Therefore fraudsters and other
      non-violent criminals have not initiated force, therefore
      no one can use force to catch them, under NOIF.

      Thus there is no *one* interpretation that allows you
      to catch non-violent criminals whilst leaving taxation illegitimate.

      Some libertarians define force as absence of consent. But most
      people consent to the system through choosing to remain in the country,
      voting for parties which levey taxes int he normal ways, and using
      public sevices provided for by taxes.

      • Highly Effective People says:

        You seem to be relying on a definition of tax evasion which assumes your conclusion.

        If you accept that nonpayment of taxes is fraud, AKA that the portion of your property subject to tax does in fact rightly belong to the government as payment for public services, then yes the government is responding to theft with force in a reasonable manner.

        But if you do not accept that assertion then the argument falls rather flat. After all, how would you characterize a transaction where I provide you with services which you cannot refuse and then charge a non-negotiable fee on pain of imprisonment? That’s the anti-tax perspective in a nutshell.

        Now personally I think that taxes can be good and appropriate but this isn’t much of an argument for them.

        • “”After all, how would you characterize a transaction where I provide you with services which you cannot refuse and then charge a non-negotiable fee on pain of imprisonment?”

          I’d characterised it as not alien to Libertopia.

          Assuming they have decided that IoF is acceptable enough for effective law enforcement to exist, and assuming there are private enforcement agencies,….where a private law enforcement agency has a local monopoly, someone who doesn’t like them has a choice between leaving, or staying, refusing to subscribe, and facing the threat of force … from criminals, if not from the agency itself.

          My argument was an argument against a typical claim that states are not legitimate, because their monopoly on force contravenes some absolute principle of NIoF . But no one really wants that kind of principle, because it is too inconvenient. A NIoF that is flexible enough to allow you catch wrongdoers is justifiable by its consequences, so the state monopoly on force is justifiable by its consequences…and often is.

          it isnt considered wrong for people form vigilante groups and take the law into their own hands because of an unconditional prohibition on force, it is wrong because it isnt their job…where there is a police force. The police have the right to initiate force because they have a set of responsibilities to go with it. Where a society has no such specialists, because it hasn’t evolved them, or because of breakdown, it makes sense for ordinary citizens to do their own crime prevention. That is a clue that the exercise of force by state agencies is exercised on behalf of citizens, that their right to use force is the citizens right which they have handed on to professionals.

          • Highly Effective People says:

            Well I’m not quite a libertarian or an AnCap but very much in favor of vigilantes / common law compared to the police / courts we currently have. Government monopolies of force don’t apply to criminals in practice so it’s more accurate to call them prohibitions of self defense.

            And getting back to the original point, whether or not that sort of coercive protection racket is likely to form is again part of the question here. You can’t assume it as a premise. Besides the undesirabiliy of that state of affairs should be a clue that changing “the mob” to “the state” doesn’t actually justify the extortion.

            Once again, I do in fact think there are good pro-tax arguments as evidenced by me supporting some taxes. But this really isn’t one of them.

          • HEP

            “Well I’m not quite a libertarian or an AnCap but very much in favor of vigilantes / common law compared to the police / courts we currently have. Government monopolies of force don’t apply to criminals in practice so it’s more accurate to call them prohibitions of self defense.”

            Yes, it would be more accurate. And is been argued about 27 times on this thread that multiple competing militias or security companies would be problematical. Rather than condemning the monopoly approach for not being 100% effective, something that would surely apply to any alternative, it might be nice to have an objective argument as to why vigilantes would be better … so far we have only had testimony that some people find the idea subjectively appealing.

            “And getting back to the original point, whether or not that sort of coercive protection racket is likely to form is again part of the question here.”

            It doesn’t need much support than pointing out that it would be profitable, which has been done multiple times. What it hasn’t received is much response, other than handwaving about ethos.

            “Besides the undesirabiliy of that state of affairs should be a clue that changing “the mob” to “the state” doesn’t actually justify the extortion.”

            Calling it extortion rather than payment, doesn’t condemn it, likewise.

            If Ancap is justified, and if AnCap leads to the mob, and If fixing the mob turns it into the state, then the state is justified by whatever justified the AnCap, plus a bunch of other stuff. If your militias can’t use IoF, what good are they? If they can, why shouldn’t the state that evolves from them?

            BT “I In either case, it doesn’t succeed because it assumes what it sets out to prove.”

            In what way is it begging the question to say that statism has a consequentialist justification?

            “Libertarians are using the normal definition of consent, the same one we use when we’re talking about consenting to buy something or have sex.”

            If you take the vote away from someone, they believe they have lost something, and if you give it to them, they believe they have gained something. The point of No Taxation without Representation, is that there is no consent to taxation without representation.

            “By that definition of consent any group of two people can consentually enslave a third person by putting the issue to a show of hands.”

            Not if they have already voted to ban slavery.

            I am not suggesting an alternative, I am suggesting a supplement.

            Individual explicit consent is a good model for some things, but not everything.

            It doesn’t work too well for public goods, where there are externalities. or where the parties involved aren’t competent adults. Group consent and tacit consent are needed for those. Group consent can be abused outside the appropriate contexts, but you can have meta level principles that define where it’s applicable. And you could write them into your, what I call, constitution.

            People who reject absolute NIoF aren’t seeking a free for all, they are seeking a set of carefully constrained and justified exceptions. Likewise group decision making.

      • blacktrance says:

        But most people consent to the system through choosing to remain in the country, voting for parties which levey taxes int he normal ways, and using public sevices provided for by taxes.

        If I consent to the system by staying in the country, that assumes that the government’s authority over it is legitimate, and you can’t assume that if that’s what you’re trying to prove. For example, compare to territory that’s claimed by the mob – do you consent to paying protection money to them by not moving away?
        Something similar applies to consent through voting. If a mugger gives me a choice between giving him my wallet or my phone, that doesn’t mean it’s not a mugging. Also, I’m bound to the results of the election regardless of how I vote, or even whether I vote. If I’m in the majority, there’s no problem, but if I’m in the minority, then is what I consent to determined by other people? If so, in what sense is it my consent?
        As for public goods, if I mug you and buy you a donut, and you eat the donut, that doesn’t retroactively make the mugging consensual. If the government steals your stuff and you use some of what it gives you in return, that’s still not a voluntary exchange.

        • “If I consent to the system by staying in the country, that assumes that the government’s authority over it is legitimate, and you can’t assume that if that’s what you’re trying to prove. ”

          I’ve argrgued against NIoF deontology , and I can argue for statism consequentially.

          ” I’m in the majority, there’s no problem, but if I’m in the minority, then is what I consent to determined by other people? If so, in what sense is it my consent?”

          In the sense that you got a vote. That’s not what Libertarians mean consent, but Libertarians don’t get to beg the question by defining consent as Libertarian consent.

          • blacktrance says:

            I’ve argrgued against NIoF deontology , and I can argue for statism consequentially.

            You can, but was that intended to be a consequentialist or deontological argument? In either case, it doesn’t succeed because it assumes what it sets out to prove.

            In the sense that you got a vote. That’s not what Libertarians mean consent

            Libertarians are using the normal definition of consent, the same one we use when we’re talking about consenting to buy something or have sex. Would you say that voting to force someone to have sex is consensual if they also get a vote?

          • Highly Effective People says:

            By that definition of consent any group of two people can consentually enslave a third person by putting the issue to a show of hands. That seems rather not in keeping with our normal intuitions about consent.

            Edit: that was fast.

  54. Kolbex says:

    Would the heads of protection agencies form a pact, then use their combined might to take over the country and become kings? Probably not; right now police chiefs and military generals don’t do this, even though they are in a good position to.

    Well, some of them do do this; coups and juntas are not unknown even in this age, and for most of human history rule by the head of the military was the norm. The real question is, why don’t they all do this right now, and does your anarcho-capitalist utopia preserve this preventative quality? Whatever the answer as to why, I would guess the answer to the latter question is “no,” because the anarcho-capitalist utopia doesn’t preserve any quality except for the utterly impersonal relationship of cash, which I am guessing is not the thing that keeps military men from taking over.

  55. Dennis says:

    “Good governance is a really really hard problem. The idea that the solution to this problem contains zero bits of information, that it just solves itself if you leave people alone, seems astonishing.”

    I’m not convinced that this solution really contains zero bits. Seems to me there may be a wide variety of noncoercive social structures, some of which work better than others. Friedman’s ideas are not the only possible ones.

    I could turn this around: “The idea that the solution to this problem contains zero bits of information, that it just solves itself if you designate someone to coerce everyone else, seems astonishing.” You might reasonably reply that there are all sorts of different ways to do that, some better than others.

    One of my anthropology professors used to say there are two ways to govern society: either by ideology and culture, or by force, and the first is by far the cheaper. Perhaps “ideology” is another word for a Nash equilibrium…not the only possible one, but some stable system that everyone is incentivized to play along with, without having to be coerced. I don’t think we’ve entirely figured out how to do that at large scale, but I can’t help thinking that we won’t have matured as a civilization until we do.

    (If it turns out to be impossible, a backup plan would be an equilibrium that reliably keeps a government from becoming corrupt and abusive. Unfortunately we don’t appear to have figured that one out either.)

  56. Mark says:

    To your objection 1:

    1. People who don’t purchase protection are pretty much fair game for anyone to rob or murder or torture or whatever. This seems harsh, especially since this society is likely to have a sizable underclass. I don’t know if “$20 for a year of police protection” was a reasonable estimate for the 70s, but I expect this would be much costlier now. Compare the percent of people who, pre-Obamacare, still didn’t have health insurance, and how much higher it would have been if there weren’t government programs that kind of got health insurance bundled in with employment.

    – There already is such a sizeable underclass in many cities in the west that functionally has very little protection.
    – In the U.S. police don’t even have the obligation to protect you: http://www.nytimes.com/2005/06/28/politics/28scotus.html?_r=0 so arguably the only way to pay for protection in the U.S. is to pay for it even right now in the present non-anarcho-capitalist society.
    This police force in Southhampton costs residents £3.15 a week per person which is about $20 per person per month.
    – More recently a smaller group is providing service for £1 per week per household.
    – Foot soldiers in drug dealing gangs earn $3.30 and 10% of security guards earn less than $8.54/hour as of May 2013 according to the BLS in the US.

    According to governing.com the number of police officer per 10k people in the US varies between 9 and 65 with the median being 19.2. Let’s double it to 40 to be generous. Let’s say you had a poor neighbourhood 10,000 residents so you want 40 officers. If its poor they are going to pay a lower wage so lets say $6 dollars/hour. 40*6/10000*24*30 = $17.28 per capita/month. That is significantly less than the monthly premiums of most health insurance plans and also less than what most people will pay (even after subsidies) under Obamacare. So it may well be that people would pay this price if it were available to them. We can’t infer much about people’s behaviour from health insurance due to the complexity and cost of health insurance (and low labour-force participation rates that significantly add to the complexity of buying insurance).

    Many people have an image that under anarcho-capitalism only the wealthy would have protection. I don’t think this is certain at all. Obviously a poorly-managed ancap society may fail in this regard, but hopefully people would have enough information to avoid those ones (unless of course the failure is less severe than under their current living arrangement). Note, that I only mean to address the argument in objection 1, there are many more concerns about private security forces that have to be addressed.

    • Highly Effective People says:

      On the issue of poor people not being able to afford private law enforcement / courts there’s an even more obvious solution:

      In Ancapistan if there is no private security company offering law enforcement in your price range nothing whatsoever stops you from getting a group of family and friends together and enforcing the law yourselves. Vigilance committees might turn into gangs of thugs like the Sicilian Mafia… or they might emulate the Fyrds which formed the basis of English Common Law and the Shoftim who laid down the laws of the Bible.

      It’s a gamble sure but no less of a gamble than whether any given government will turn out to be benevolent or not.

    • Montfort says:

      You neglect the cost of equipment, facilities, medical care, etc. in the later calculation. These costs might be minimal, but might also skyrocket if your security firm has to deal with such things as armor divisions, advertising, or massive surveillance systems. I expect the security sector to be very brutally competitive, especially during any transitional periods.

      That said, a poorly-equipped amateur force is better than no force, but probably won’t be winning many arbitration agreements more expensive than just shelling their neighborhood.

  57. Quite Likely says:

    Really when you get into the private protection aspect of it, anarcho-capitalism is less like not having a government, and more like deciding to be governed by gangsters. Why would a private protection firm not gather more customers by simply threatening people who don’t have a protection company to back them up? Why wouldn’t they crush smaller and weaker protection companies?

    In this scenario your rights extend only as far as you can pay someone to protect them for you using physical force. The chaos would eventually settle down as a rough equilibrium was formed between the surviving protection companies – most likely in the form of their dividing up ‘turf’ where they have the exclusive right to ‘protect’ people. And then you’re back to governments, just undemocratic ones that don’t provide as many services.

    • Highly Effective People says:

      Or you could protect yourself. Most peoples throughout history have in fact been quite good at organizing militias for self-defense against criminals and outsiders. If anything we’re better situated now than at most people ever have been since Americans are so well armed to begin with.

      Just because they’re not trading on the NY Stock Exchange doesn’t mean community vigilante groups are any less ‘private’ than Omni Consumer Products.

      • Desertopa says:

        The American military is well armed compared to other militaries, and the American public is well armed compared to other populations, but the American public is not well armed compared to other countries’ armies, and it would be quite difficult to organize a militia that was armed on that level.

        • Actually, that’s not true. If you look at the actual numbers and weapons loadout, the annual hunting population in the U.S. turns out to dwarf most of the world’s infantry armies in both numbers and firepower.

          (No, I don’t know whether this was true before American hunters started routiely acarrying AR-15s.)

          • Tibor says:

            What I find most concerning is that military technology seems to
            a) getting more and more expensive
            b) getting better and better than the contemporary civilian arms technology.

            While military drill and proficiency always played a huge role, in terms of weapons a 19th century civilian and a 19th century soldier were more or less on the same level. In the 20th century with the introduction of heavy machines into the war much less so and today with lightning fast software operating a lot of military technology and drones possibly soon to become 100% autonomous, not even a trained soldier with non-military grade equipment has even the slightest chance against that…even more worryingly, simply nobody (i.e. no human) has a chance against autonomous drones some 20 years into the future. And there are strong incentives for a military to start making them fully autonomous if they can then be more efficient at shooting down those that are controlled partly directly by humans….uh, got a litle sidetracked. The point is that against present (and likely future) military technology, one cannot hope to fight with civilian AR-15 rifles. You need the same kind of military technology and that is very expensive and the question is whether you can raise that amount by purely voluntary means. In Switzerland, if you go to a military training, the company you work for has to pay 75% of your salary in the meantime. However, almost all of them actually pay 100%. That seems strange, since they could save money by not doing that. But it seems that the sense of “patriotic duty” is high enough in that population that a scrooge company would actually lose more by damaging its reputation that way than the 25% it pays atop of what it has to. Maybe an anarcho-capitalst country could be defended in a similar way (also while there is a mandatory conscription in Switzerland, although a bit different one than in other countries with conscription, the Swiss also seem to enjoy sharpshooting as a hobby and the country is the second most civilian-armed in the world after the US…plus a military rifle in every household). So if you can start your AC country with a Swiss-like society, then it can probably defend itself, since the people and companies will just give money to defence voluntarily. If you start it with a pacifist society and surrounded by military dictarorships, then it does not stand much of a chance.

            However state-run countries do not seem to fare better in such situations…a good example is the pre-WW2 Czechoslovakia, which also illustrates that relying almost entirely on allies does not seem to be a very secure national defense strategy…the Swiss strategy of making it very costly to invade the country (a strategy that can work even for a small country) while not relying on allies (or even being neutral like they are) seems to work better.

          • Desertopa says:

            Yes, but sheer number of armaments isn’t really the issue. Given the current state of military technology we can neither effectively defend nor assault a country simply with a large infantry equipped with hunting rifles. We don’t have the equipment for a viable militia air force or navy.

          • John Schilling says:

            ISIS doesn’t have an air force or a navy; they have conquered a big chunk of two countries that have both, and held it against adversaries that have both.

            I don’t actually think much of the long-term prospects of that bunch specifically, but there are still a lot of unanswered questions as to what really happens when a bunch of highly motivated people with rifles and IEDs face off against a professional army. A lot of which depend on the actual motivations and sympathies of the professional army in question, which itself is usually a more complex question than most people imagine.

          • Paul Brinkley says:

            @Tibor: I believe your point (a) is what makes (b) ultimately superable. Yes, a typical civilian with an AR-15 stands very little chance against a UAV, except that that UAV costs $12k per hour in the air (according to the OIG), while that civilian costs as much as maybe 1/4th of the last dinner he had to run around. If each of them fires, the UAV uses a $110,000 Hellfire; the civilian fires a 5.56 round for about 50 cents. And the civilian can hide much more cheaply than the UAV launch site can.

            And therefore, the civilian doesn’t even have to assault the UAV base itself to undermine it; the civilian can just infiltrate the economic base. If about 10000 civilians can be sent on a raid for the price of one UAV sortie, then that UAV can fire one Hellfire and hope to neutralize maybe 0.2% with a single lucky Hellfire shot costing $110k, while the remaining civilians could neutralize 9980 other civilians if for some reason they only fired one round apiece, costing $5k, and neutralizing – well, not enough info here to calculate exactly, but I’m sure it’s much more than 0.2% of the UAV’s supply.

      • “Or you could protect yourself”

        That doesn’t fix A.C. in a way that makes it obviously better than what we have.

        • Highly Effective People says:

          That sounds quite a bit better than what we have now, though probably not half as good as what our grandparents had. If nothing else eliminating long term incarceration as an option while taking the reins off self defense and community policing would move a long way towards solving the problem.

          My intuition, not being an AnCap myself, is that if you believe that anarcho-capitalism will deliver the economic / social gains it promises (which I highly doubt) then the crime argument shouldn’t dissuade you. Communities don’t need a formal government to keep public order: if anything it typically interferes in the provision of justice.

  58. Trevor says:

    At risk of generalizing from fictional evidence …

    The past is a foreign country: they do things differently there.

    L.P. Hartley, The Go-Between

    I see that Crassus’ Roman fire brigade has been brought up already. Re: this point

    Would the heads of protection agencies form a pact, then use their combined might to take over the country and become kings? Probably not; right now police chiefs and military generals don’t do this, even though they are in a good position to.

    I think Marius’ Roman military reforms are worth noting, specifically how they changed the incentives of the soldiery.

    Thus the soldiers had a very strong personal interest in supporting their general against the Senate (i.e., the oligarchy) and the “public interest” that was often equated with the Senate. Marius did not avail himself of this potential source of support, but in less than two decades Marius’ ex-quaestor Sulla would use it against the Senate and Marius.


    And we all know what happened after that …

  59. Nathan C says:

    If casting my vote to help the poor makes me feel like a good person, but losing money in redistribution schemes makes me poorer, well, my vote 100% determines whether I feel good or not, but only 1/300-million determines whether I get poorer.

    This strikes me as astoundingly stupid, so it’s probably exactly what happens. Come to think of it, Quirrell argues much the same in HPMOR. Just substitute ‘get sent to Azkaban’ for ‘get poorer’ and ‘feel like I’m on the winning side’ for ‘feel like a good person’.

  60. Wrong Species says:

    Instead of trying to turn everything in to a market, why not advocate more extensive use of other voluntary means? Instead of paying for a fire department as insurance, there could be non-profit fire departments. This would have the advantage of not being funded through theft while avoiding coordination problems. Libertarians are always arguing whether they should try to use voting as a means to limit government or find other ways. Here’s a suggestion: fund non-profits for infrastructure, arts, science and the poor. You would be doing a good thing while also being able to point toward alternatives to government.

    • Libertarians regard such non-profits as part of the market. Not all market exchanges are monetized.

      • Wrong Species says:

        In theory, you’re right but when it comes to coordination problems, ancap always assume that it won’t be a big deal instead of saying something about how a non-profit would be able to deal with it. Fire departments for example.

        • Paul Brinkley says:

          There’s nothing stopping an AnCap system from taking what it knows about the current fire department system and adapting it to a privatized alternative. Given how satisfied people seem to be with the current FD system, it’s very unlikely that a conscientious AnCapper would scrap the whole thing and risk the consequent lack of subscribers.

          To some extent, the same goes for roads, education, and police – except in these cases, there *is* dissatisfaction (arguably increasingly so, in the order I listed them). So even if we held up FD as the triumph of a centralized system, we’re not just getting FD – we’re really getting all the other systems, too, which decreases the allure.

  61. Furslid says:

    I think there are reasonable solutions to what happens if someone without a protection agency is a victim of a crime. If they are due compensation for being a victim, they can hire an agency on contingency. For stolen property it would likely be very similar to what the police do now. We’ll put a flag on that stolen car, and if it shows up we’ll return it to you. We’ll then charge the thief our costs. We’ll give the serial number of your TV to the pawn shops. If it shows up, we’ll give it back and charge costs to the thief. For money, they might offer a lesser portion to investigate, you might get a full investigation, but only recover 50 cents on the dollar.

    Another thing to remember is almost all crimes would award compensation. A victim of battery may demand medical costs plus X$, and there would be a general consensus as to what an appropriate value of X was. This may be in addition to other things like having the perpetrator flagged as a criminal, community service, etc.

    • Scott Alexander says:

      I worry we’re insufficiently able to break out of our own mentality here. “Due compensation for being a victim”? There’s no such thing as “due” because there are no laws and crime isn’t a natural category in this society. If I can hire an agency on contingency to get back a car my neighbor stole from me, why can’t I hire the same agency on the same contingency to get the car my neighbor earned fair and square? If an agency can take back the car and charge the thief for expenses, why don’t they just take random people’s cars and charge them random amounts of money?

      I think the hope is that the laws we have now (or some idealized “don’t use force against anyone else” laws) are such a Schelling Point that this entire mess of protection agencies and arbitration agencies will derive it from first principles, so that the thief’s protection agency (if he has one!) will agree to defer to contingency agencies on this basis, but that’s a huge assumption and I worry people are creative enough to think of ways around this.

      • Furslid says:

        I worry our discussion is looking like.
        A: “If X then what about Y?.”
        B: “What about Z as a solution to Y given X.”
        A: “No, because not X. Now argue for X.”

        Your objection was that given protection agencies respecting property, the poor who did not subscribe to a protection agency would have no protection or redress if they were victimized. My answer was one proposal by which they could get redress.

        It does not answer the question of why protection agencies would generally respect property rights, because your objection was assuming that. I don’t want to switch arguments from what about the poor to why respect property.

  62. onyomi says:

    This is really not meant to be a reductio ad Hitlerum, but the line of argumentation which says: “some can try anarcho-capitalism way out in the middle of the ocean while others work to create a more responsive, effective government here at home” can’t help but remind me of the notion of “perfecting” the institution of slavery espoused by Southerners in the ante-bellum period. I am not trying to draw a moral equivalency (though I do think taxation effectively constitutes a much milder form of slavery), but I am pointing out that when faced with the idea of radically changing an obviously problematic but long-standing system the abolition of which may or may not have catastrophic consequences, the immediate reaction is to say “yes, there are abuses, but let’s not throw the baby out with the bath water! We can make it better.”

    Now I myself am leery of just abolishing all government in one day due to Scott’s last objection (though I think the government is morally unjustified, I can’t be sure the suffering wrought by abolishing it too suddenly wouldn’t constitute an even greater evil), but I think morality demands we at least move in that direction, with the most viable option imo, being the successive waves of secession as described above.

    In my opinion, the only thing that can effectively incentivize governments to do better is competition among governments, and that can only be achieved with a larger number of smaller sovereign units.

    • Jon Gunnarsson says:

      I don’t think the abolition of slavery in the US can be compared to the abolition of the state. When slavery was abolished in the US, most European countries had already got rid of slavery, without any disastrous effects. There are no examples of anything like anarcho-capitalism in the modern world, so the uncertainty here is much greater.

      • onyomi says:

        There were never nearly as many black slaves in Europe as in the antebellum south, so the possibility of some sort of violent uprising was never plausible. Contrast this to places like Mississippi with a strong majority black population, and consider also that during the Haitian revolution, relatively fresh in memory, nearly all white people on the island had been killed or forced to leave, and it isn’t so far-fetched for an antebellum white southerner to think that, if freed, the slaves might simply rampage and kill or expel all the white people. Seems crazy in hindsight, but I don’t think it would have then.

    • Scott Alexander says:

      Are you sure this is wrong? I can say ending slavery immediately is a good idea, but if at the time people were honestly uncertain about whether it would be a giant disaster in some way (say, ex-slaves all getting guns, then killing everybody to get revenge) then it probably would have been correct to try it in a small area first.

      In fact, if they’d done that, they might have noticed that all of the freedmen ended up right back on the plantation as starving sharecroppers terrorized by the KKK and they might have figured out some way to do it better.

      I think as a utilitarian I reject the idea that we’re morally obligated to jump into things without knowing what’s going to happen if we have reasonable worry that jumping into things that way is going to make them worse or lose an opportunity to make things better.

      • onyomi says:

        I would agree with you that gradualism is the sensible approach in both cases, though conservative forces in society (such as the Democratic Party in the US) tend to oppose radical proposals of any kind so strongly it can be very difficult to enact them even at a tiny scale. Even in retrospect, ending slavery piecemeal and in small trials might have been the right thing to do if it could have prevented the Civil War, which was not only tremendously costly in terms of life and money, but also, imo, in terms of what it did to federalism.

        The problem is, none of the Southerners were saying “okay, let’s TRY your idea of ending slavery just in this one small area.” They were saying “you say we should end slavery, but WE say we can *perfect* slavery.” That is, they were arguing there was nothing fundamentally wrong with slavery, it just basically needed to be tweaked and improved upon to eliminate abuses.

        This is the part that reminds me of apologists for liberal democracy today. They don’t say “okay, how about we try your libertarian anarchy in this one tiny, uninhabited corner of Montana.” Even that is unthinkable in the current political discourse. What is perfectly acceptable to say over and over is that our system is fundamentally strong, we just need to “reform” it by electing better people who will make government accountable, less wasteful, more responsive, etc.

        It’s not gradualism I have a problem with, but defending the status quo by saying it is basically fine but just needs tweaking. This somehow also leads to “and no, we can’t try your radical proposal even in a tiny uninhabited part of our land because reasons,” which is the part I especially hate–I guess I don’t even have a problem with the idea of tweaking and reforming an existing but deeply flawed system, it’s just the deployment of that idea as justification for never trying more radical ideas, even at a very conservative scale.

        If pushed, I think the people against say, the idea of a libertarian island in Detroit (a real idea, not sure how it’s going: http://www.commonwealthofbelleisle.com/), will say basically that it will function as a tax haven, undermine local regulation, etc. but to my mind, there is little more loathsome than the pro-government argument which says “no, you can’t do your own thing way over there without bothering us because your very presence as an alternative undermines our crappy regime.” This also happened with a lot of the push-back on charter cities–calling them “neo-colonialist,” etc.

  63. Illuminati Initiate says:

    Reading this I was mentally yelling “This is already the system we have, this is just a description of how an inaccurate model of humans behave, we already do this and the single protection rackets have already formed and taken over and we call them states, the only difference between this and reality is that in real life people and organizations act on motives other than pure self interest way more often!” before I got to objections 8 and 9 and Scott saw this too.

    Of course the intention here seems to be that we could alter the start conditions, or that the start conditions have already been altered such, that a society could be created to be stable without large monopolies on force forming. Which I am very skeptical of, though concerns of stability are certainly not my main objection to this (if anything I’d rather it be as unstable as possible and form states faster).

    Edit: the “inaccurate model” part might be a bit of a strawman actually.

  64. A few more comments:

    1. With regard to the poor, I think you are missing the fact that the overall wealth of the society is a much bigger factor than the amount of redistribution, even if the latter sometimes goes towards the poor. Two relevant factoids:

    Deirdre McClosky in one of her books quotes estimates that the average per capita real income of the world at present, including the poor parts, is about ten times what it was through most of history. For the developed world make that twenty to thirty times.

    From the death of Mao to the present, per capita real income in China has gone up about twenty fold.

    If you look at poverty rates in the U.S., definition held constant, the pattern is interesting. From the end of WWII until sometime in the sixties, they are falling pretty steeply. That decline stopped at about the point when the War on Poverty got fully staffed and funded. Since then the rate has gone up and down with economic conditions, but trended roughly flat. That suggests, but of course does not prove, that part of the reason for increasing inequality is the rise of the welfare state.

    2. I agree with you that one cannot confidently predict how a system of institutions that has not been tried will work. That’s one reason I am a conservative anarchist. Murray Rothbard said somewhere that if there was a button that would abolish the state, he would push it. I wouldn’t. As I tried to make clear in Machinery, I am in favor of getting to A-C by a continuous series of changes, not by a revolution.

    On the other hand, we do have quite a lot of examples of legal systems where rights enforcement was private and decentralized, some of which I discuss in the draft chapters for my next book up on my web page. What we don’t have is a modern, developed society, version of such a system. None worked perfectly, but then, I’ve never suggested that A-C would. But such systems have maintained themselves for centuries and provided outcomes not obviously worse, arguably better, than were provided by contemporary systems closer to what we are used to.

    3. A number of commenters are concerned about public good problems and the like—more generally, market failure. I spend one chapter of the book arguing that while market failure is indeed an argument against laissez-faire, it’s a stronger argument against the alternative, because the conditions that create it are the exception on the private market, the norm on the political market.

    • Dude Man says:

      If you look at poverty rates in the U.S., definition held constant, the pattern is interesting. From the end of WWII until sometime in the sixties, they are falling pretty steeply. That decline stopped at about the point when the War on Poverty got fully staffed and funded. Since then the rate has gone up and down with economic conditions, but trended roughly flat. That suggests, but of course does not prove, that part of the reason for increasing inequality is the rise of the welfare state.

      Correct me if I’m wrong, but I was under the impression that income inequality was fueled by income stagnation among the bottom 60% of households. A lot of the people in this group do not qualify for the types of programs created by the War on Poverty. Isn’t it more likely that the poverty rate has been held constant by whatever was causing the income inequality than the War on Poverty causing the inequality itself?

      (Of course, the poverty level does show a decline when you take transfer payments into account, but then inequality doesn’t rise so drastically)

    • zoink says:

      I thought I would provide my mistake ridden transcript from 17:27 – 20:03 of one of your talks where you expounds on the public good issue so others can get an idea.

      “You can easily enough have a public good that is worth more than it costs to produce and it doesn’t get produced. And that’s one of the standard arguments that everyone but anarchists uses for why you need government and it’s a correct argument, it’s just that government isn’t the solution because if you think it through you see that the mechanisms that are supposed to make government behave themselves are shot through with public good problems. That for example if you make yourself a well educated voter in order to vote for politicians who pass good laws you have just spent a lot of time and energy producing a public good shared with everybody else in the United States. That’s a public good with a public of 300 million people. It’s not going to get produced and that is why voters are rationally ignorant.”

      If you run through the way political mechanisms work, the problem economists call market failure; which is a situation where individual rationality doesn’t produce group rationality, such as public goods not getting produced occurs because individuals are not bearing the the costs of the actions they take or getting the benefits. That’s a exception in the private market and the normal situation in the public market. If you think about how political institutions work it is very rarely the case that a political actor either receives the benefits of correct decisions or pays the costs of wrong decisions.

      I guess my favorite example of this is actually in the judicial system; there is a particular court decision, I could discuss if people are curious in the question part, in which a federal appeals court made a decision which hinged on a mathematical mistake that a smart high school student should have been ashamed of. And that decision almost certainly killed some thousands of people. It had to do with liability for vaccines, for the live polio vaccine. It held a company liable under circumstances which under the court’s own argument should not have been liable. It was a mistake by about factor of 40 in comparing costs and benefits, the result was for a couple of years to slow the development of vaccines and that surely killed some thousands of people. The judges who made that decision never owed a penny to anybody. For what was clearly – I think – culpable negligence in their decision. So what’s wrong with the standard argument that says that market failure is a reason for government is not that the free market works perfectly but only that the alternative works worse. That we don’t have a good way to make governments act in our interest, unfortunately.

      The court case: Davis v. Wyeth Laboratories, Inc., 399 F.2d 121 (9th Cir.(Idaho) Jan 22, 1968)

    • Scott Alexander says:

      >> With regard to the poor, I think you are missing the fact that the overall wealth of the society is a much bigger factor than the amount of redistribution, even if the latter sometimes goes towards the poor.

      I’m familiar with this tradition of thought, but I’m starting to disagree with it. Right now the poor have incomes that are pretty high on paper, but a lot of them are really, really miserable. Is the condition of the modern underclass better or worse than that of the average medieval peasant? I am constantly seeing people who are working two full-time jobs, getting robbed from, living in disgusting bug-infested decaying houses on streets filled with graffiti and bare concrete, eating processed food they get from the gas station and without any real friends because they don’t have a car or a computer or any free time. Probably dollar by dollar these people have a hundred times the wealth of a medieval peasant who’s going and dancing at the harvest festival, but somehow it hasn’t carried over. I don’t have a really solid theory of exactly what’s going on, but I think that as society’s average wealth level goes up, the amount you need to have in order to get your basic needs met in a non-horrible way increases proportionally? I’m not sure. But I’m very unwilling to say “Well, that poor guy has a wealth level a hundred times that of the peasant, problem solved.”

      • Jaskologist says:


        It’s not money/wealth that the modern poor are lacking. They lack the other things that make life worthwhile, like the various institutions which used to bind communities together, and most especially a stable family. Go to the lowest classes and they are pretty much guaranteed not to find somebody they will marry and grow old with. This basic human experience and source of security is no longer in reach, and if you can’t have that, why bother with all the other strivings? We paper over this with money and then wonder why they aren’t whole.

        See also: 80% of Douthat’s recent columns.

      • Highly Effective People says:

        It sounds like your missing non-monetary variable might be “community” or maybe even “purpose.”

        Since you have a high Catholicism-tolerance in general and like Chesterton specifically it might be worth looking into Distributism. It’s a minimalist and very human economic philosophy which does a good job of explaining this sort of problem.

      • jaimeastorga2000 says:

        Some relevant quotes:

        “Manna” by Marshall Brain

        “Post-scarcity economy” is an impossible concept even in principle (assuming a human society, at any rate). Beyond a certain minimal standard of living, which is in fact quite low by today’s standards, most of the things people really care about are zero-sum. They will struggle just as mightily and eagerly to wrest those for themselves no matter how cheap, plentiful, and high-quality non-zero-sum stuff gets. Moreover, habitable land is always zero-sum, which further complicates things.

        For those with less ambition and/or ability, this has a twofold effect. On the one side, it benefits them because in a decently functioning polity, people’s efforts to get ahead in life in the hope of zero-sum gains will result in a growing economy making non-zero-sum stuff increasingly cheap, plentiful, and high-quality. On the other hand, it is bad because some things are zero-sum but nevertheless essential for life, most notably habitable land, and people’s struggle to get ahead in zero-sum efforts drives the price of these way up. This makes it necessary to work almost as hard as the most ambitious and prosperous folk to be able to afford the increasing price of lodging and other essential access to zero-sum things.

        Thus in the contemporary developed world we have a situation where nobody is in danger of starving or not having warm enough clothes, but homelessness is a very realistic threat for poorer people. (As an even more striking illustration of the same phenomenon, in recent years even cell phones and computers have become affordable to many of the homeless folk.)

        On the unpopularity of cryonics: life sucks, but at least then you die

        Technological advances can’t shorten the work hours because even in a society wealthy and technologically advanced enough that basic subsistence is available for free, people still struggle for zero-sum things, most notably land and status. Once a society is wealthy enough that basic subsistence is a non-issue, people probably won’t work as much as they would in a Malthusian trap where constant toil is required just to avoid starvation, but they will still work a lot because they’re locked in these zero-sum competitions.

        What additionally complicates things is that habitable land is close to a zero-sum resource for all practical purposes, since to be useful, it must be near other people. Thus, however wealthy a society gets, for a typical person it always requires a whole lot of work to be able to afford decent lodging, and even though starvation is no longer a realistic danger for those less prudent and industrious in developed countries, homelessness remains so.

        There is also the problem of the locked signaling equilibrium. Your work habits have a very strong signaling component, and refusing to work the usual expected hours strongly signals laziness, weirdness, and issues with authority, making you seem completely useless, or worse.

        Michael Vassar had (has?) a theory that the three things which keep people trapped and which keep getting more expensive– housing, credentialed education, and medical care– are monopolized.

        Swiss to vote on 2,500 franc basic income for every adult

        It seems unlikely that the Swiss will pass this (huge) basic income guarantee, but I’ll go on record as making a very startling prediction: That even if it passes and is implemented, it will not very much affect poverty and people will have to go on working awful jobs.

        The forces restoring the poverty equilibrium are tremendous. Compared to hunter-gathering, agriculture can sustain 100 times as many people per unit area of land… and there were still poor people, indeed more of them. Then agricultural employment dropped from 95% to 2%, implying a rather large increase in productivity of each farmer… and there were still poor people. They were, in many ways, better off, but they still existed in an environment of constant fear, scarcity, desperation, living hand-to-mouth, sometimes going hungry. Yes, they do outright die a lot less often nowadays, I am not denying progress. But there’s still experienced poverty, even after one farmer became capable of producing 100 times as much food. There must be extremely powerful forces which enforce the existence of poverty. This basic income guarantee is not going to surpass them.

        I don’t quite understand what forces underlie the Poverty Equilibrium. My guess is that there are many forces like rent and taxation which continue to extract value from people until they are so desperate that nothing more can be obtained from them. I also suspect that the temporary emergence of a middle class was an anomaly (I don’t know why it happened) and that we are now watching the Poverty Equilibrium come back into force as rents rise, the cost of school rise, many people have to borrow for basic living expenses and have to spend more of their income on credit servicing – the systematic extraction of all but a tiny amount of value seems to be coming back into play.

        If productivity increasing by a factor of 100 didn’t destroy poverty, then neither will this. All that will happen will be that Swiss rents will rise and their schools and healthcare will get more expensive… or something, I’m not sure what. I don’t quite understand where the Poverty Equilibrium comes from. I do strongly suspect that after 10,000 years this will not be the final change that defeats it, especially when there doesn’t seem to be any consensus on what forces underlie the Poverty Equilibrium in the first place.

        How much better off modern poorfolk are will depend greatly on whether you try to measure an “absolute standard” of desperation, debt, pain, creditors hounding you, ragged clothes, bosses treating you as nonpeople, etc., or just assume that their “absolute standard” of welfare is linearly given by their apparent income as adjusted for purchasing power. We have improved on former metrics too, yes, but much less than on the latter metrics. The entire puzzle here is exactly how we can still have people with $15,000/year incomes instead of $500/year incomes who are, to all appearances, poor, living in small squalid homes, worried about how they can eat, with their horseless carriages falling apart, unable to pay for dental work, etc. Yes this is much better off than a poor person would have been in the 15th century, they aren’t dead. But you might naively think that if you could increase agricultural productivity by a factor of 100 then you shouldn’t have poor, desperate people at all – that everyone would feel at least as secure as the top 5% did in the 17th century. Why is the naive answer not correct? Claiming that poorfolk only feel deprived because their neighbors have more cable channels seems wildly wildly wrong. And saying, “Hey, they’ve got a horseless carriage” also seems very wrong because they’re mainly using it to get to awful jobs in more distant places.

        I don’t think this is a conspiracy by goverments, big corporations, or rich people. We would have heard about the conspiracy by now. It seems to me far more probable that there are many different agencies who would all independently and with no vast global evil agenda, prefer to extract one more dollar from poor people or further restrict access to some resource, and at any given point in history, one or another of them has the power to do so, until all the money is gone. Furthermore you can’t refuse to play the game because there are resources like land or rent where if you don’t pay what other poor people are willing to pay, you’re out of the game. But there is no vast evil conspiracy, at least not anymore. Just student loans, finance charges, college tuition, health insurance, doctors’ bills, income taxes, payroll taxes, sales taxes, licenses required to drive taxis…

        Book Review: A Future For Socialism

        There is a class of goods, such as food, clothes, beds, refrigerators, computers, radios, and televisions, whose prices seem to be largely independent of the amount of wealth people earn, and thus poor people in capitalistic countries can easily purchase them. Indeed, even the homeless are quite likely to own laptops and cellphones these days, which they recharge in libraries and other public spaces.

        And then there is another class of expenses, whose prices for whatever reason seem to creep up and take large fractions of your income no matter how much you make, until you are inevitably treading water with little savings and utterly dependent on a receiving a steady paycheck from a job you hate. These include housing, credentialed education, taxes, medical care, and status signals. So there is a class of people in capitalistic countries which can be reasonably called poor because of their problems with the second class of expenses, even if the first causes them little trouble.

        What would a lottery look like if run by a government that was more compassionate toward its lowest-income citizens?

        The non-lottery-buying poor might benefit from reduced competition to rent their homes. It’s not clear to me that the economic situation within poverty shouldn’t be seen as completely zero sum, as powerless people are effectively subject to a large number of competing monopolists charging them monopoly prices.

      • I’m not sure you appreciate just how poor most people were in the past.

        The medieval peasant could expect a famine about every ten years. Not as in “children go to bed hungry” but as in “people are dying of starvation.”

        He had essentially no medical care.

        His unprocessed food consisted largely of bread.

        Fresh vegetables were unavailable for part of the year.

        His home was heated by a fire, might or might not consist of more than one room.

        No books, because even if he could read, prior to the invention of the printing press books were very expensive.

        He might be able to dance at the harvest festival, but for a large part of the time he had no entertainment available other than what he made himself. There’s a repeated pattern, across a lot of different societies, of people moving from countryside to the city when doing so became possible, even on terms that seem unattractive to us. I suspect a large part of the reason is that being a peasant is really boring.

        We don’t have very good data on medieval crime rates, but the murder rate seems to have been at least an order of magnitude higher than at present.

        I find it hard to think of any material respect in which the modern poor are not better off than the mass of the medieval population. They may be worse off in terms of status, prospect of marital stability (as another commenter suggests), and other such variables.

        But the context of the argument is the relative importance of economic progress vs the welfare state, and I would think the welfare state has had a negative effect on at least some of those variables. Along with other governmental activities, such as the War on Drugs.

        • jaimeastorga2000 says:

          I agree with you that Scott has overstated his case by comparing the modern poor to medieval peasants, whom they are better off than. But there are some good points to be made.

          First, that the modern poor are not nearly as better off than medieval peasants as you would naively expect them to be based on the difference between world GDP per capita in medieval times and world GDP per capita now. Based on those figures alone, you would expect the modern poor to have better lives than medieval monarchs, but I feel pretty confident in stating that such is not the case.

          Second, this is not solely an issue with income distribution, which leftists like to blame the culprit. The on-paper incomes of the modern poor are also much, much higher than those of medieval peasants, but again this does not translate into quite the improvement in quality of life that you would naively expect. It seems like zero-sum competitions eat any surplus of income no matter how much real income the world’s poor have. Therefore, an income increase only helps you insofar as it is an increase relative to other people, and a society-wide income redistribution scheme such as basic income is unlikely to significantly help the poor. The money will simply be captured by rent-seekers, landowners, governments, monopolies, etc… if not immediately, then within a few years as the situation returns to equilibrium.

          Third, while the comparison of quality of life between the modern poor to medieval peasants is an open-and-shut-case, there are other time periods where the difference is more debatable. The most popular is probably the hunting-gathering prehistory of humanity. See Scott Alexander and Jared Diamond. While I think we passed the point where our quality of life became better than that of hunter-gatherers a while ago, I definitely agree that for thousand of years civilization provided a much worse quality of life for the poor than hunting and gathering, for all the economic growth that came with it. Other people might point at the 50s or 90s, and I think they have an even stronger case. It really does seem like the poor of the 50s and the 90s had a better quality of life than the poor of 2015 do, never mind how the economy has grown since then. Compare the ease with which Dean Moriarty could find work at a factory or farm with what people go through today. When you can’t get a job, you don’t even get to say “well, the zero-sum competitions are eating most of the income increase between me and the historical poor, but I can afford to buy much neater stuff with the meager leftovers so at least my quality of life has improved somewhat,” you just end up homeless and uneducated and unmarried and super-duper low status.

          Fourth, it doesn’t look like things are going to get better as the economy keeps on growing. It’s just going to be more automation eating jobs whole, more automation letting one person do the job of several people, ever more complex and fragile manufacturing operations to whom most most potential workers are a liability, ever more intelligence demanding professions such as programming and management, ever more efficient businesses which simply cannot slow down to accommodate Keisha, and ever more immigration and offshoring taking the last few unskilled income sources available to .

          My tentative conclusion is that enforcing a 20-hour workweek and establishing some sort of guaranteed income (whether unconditional basic income or some sort of WPA-style job/busywork guarantee) will probably not end poverty, but are among the most promising proposals for improving the lives of the poor.

          • jaimeastorga2000 says:

            Forgot to mention that it is also of the utmost importance that wives be banned from working. Societies in which both husband and wife are allowed to work are societies which fall prey to the two-income trap.

          • Lupis42 says:

            Based on those figures alone, you would expect the modern poor to have better lives than medieval monarchs, but I feel pretty confident in stating that such is not the case.

            I would argue with that, and I wouldn’t be alone. I would argue that the median Americans of today are better off than the robber barons of the 1800s on the majority of absolute measures.

            It seems like zero-sum competitions eat any surplus of income
            I suspect that the main consumer of surplus income is actually pleasure-seeking. The size of the industries in areas that are otherwise wasteful (sports, literature, music, art, games, movies, theater, comedy, pornography), minimally beneficial (news, continuing education, hobbyist pursuits, cuisine) or actively destructive (gambling, drugs, most alcohol) relative to the rest of the economy suggest that most of the surplus resources of humanity are spent keeping humans entertained.
            On that front, it will more or less always be good to be modern.

          • Chevalier Mal Fet says:

            Jaime: Why wives? Why not just bar a single, undesignated spouse from working?

            Ie in say 80 – 90% of families the wife would indeed by the non-working spouse, but in families where the husband cannot or will not work, the wife may still seek employment. Also, it accounts for same-sex couples, though I admit neo-reaction could reject such things entirely.

          • onyomi says:

            The thing about proposals like the 20-hour work week is that they seem to me to approach the problem from the wrong end. The problem is all the forces described above, from credit card companies, to health care mandates, to taxes, working together (but not conspiring) to extract every bit left over after people have bought the necessities.

            The 20 hour work week says to the vampire: “no more! I shall turn myself into a turnip!” when what we need to say is either “stop taking so much!” or else “allow me to do more of the things that produce the blood.”

            I think this sense of always having not quite enough has lessened during those rare moments in history when, often due to technology, but also sometimes due to social changes, like the entry of women to the workforce, the pace of growth of the host outpaces the growth of the parasite.

            Problem is, the parasite quickly compensates and suddenly women go from having the option to work to needing to work, since it is no longer possible for most people to support a family on one income.

            It’s like how one never seems to have a powerful enough computer to run the programs you really care about super fast. Though there is an overall trend towards getting faster, certainly, there is also the impulse for software (and virus) designers to take advantage of the extra power to add features most people don’t really want.

            I’ll be frank and say that I think the biggest parasite is the government: I don’t think it’s a coincidence that health care, housing, education, and finance are the most perennially messed up sectors and also the sectors most heavily regulated and subsidized. The sad irony is that these are the sectors which are “too important” to be left up to the whims of the free market, and so they are always unaffordable. Things which are not important enough to be regulated, like plasma screen tvs are always getting better and cheaper. So we are a society with cheap, amazing frivolities and expensive, deteriorating necessities.

            We have to remember that the cost of the government isn’t just in taxes: it’s also when, for example, the government tells your employer he must provide a health plan that covers gynecological exams even if you’re a man. All these little things keep piling on almost to the breaking point but usually not quite there.

            Land is certainly a problem, regardless, but I think technology is solving that a lot recently: I live in a very rural area right now where land is super cheap, but I can get most things I want delivered in 2 days by Amazon prime, I have fast internet, I can drive to a big city in 40 mins, etc.

            For the other stuff get rid of the subsidized student loans, get rid of the medicare and medicaid and tax incentives for employer-provided plans, de-socialize money (legalize competition), etc. and I think you’d see a lot of these problems go away.

          • jaimeastorga2000 says:

            @Lupis42: And I would argue with your argument. Just the fact that the king does not have a soul-killing job with a long commute that he is always worried about losing does wonders for his quality of life.

            @Chevalier: That’s just me not giving the progressives an inch. There is little difference in practice between a system where 100% of wives are banned from working and a system where 90% of wives just happen not to work.

            @onyomi: Well, yes, if you can figure out a way to let people keep more of the blood they produce, that would be great. But I’m not so sure that if you manage to restain the government the private vampires won’t simply take up the slack and consume everything above the essentials by themselves. Restraining government is a hard problem, anyway; America started out as a libertarian paradise by modern standards, and look at the way it turned out.

            On the other hand, turning people into stones seems to have had some historical success. Child labor is banned, and all of a sudden nobody needs their children’s income to get by. A 40-hour workweek is established, and lots of people really do work 40-hours (or at least they did before the recession). An entire culture somehow manages to spontaneously coordinate an agreement whereby women will not try to earn an income but will instead endeavor to be nurturing wives and mothers, and things worked great until Moloch reared his ugly head in the form of feminism.

          • Lupis42 says:

            And I would argue with your argument. Just the fact that the king does not have a soul-killing job with a long commute that he is always worried about losing does wonders for his quality of life.

            But the King will watch half his children die before they reach adulthood, and still must constantly worry about losing his job through murder, coup, or invasion. Advantage modern.

            An entire culture somehow manages to spontaneously coordinate an agreement whereby women will not try to earn an income but will instead endeavor to be nurturing wives and mothers, and things worked great until Moloch reared his ugly head in the form of feminism.

            I’d lay long odds that had little to do with femenism, and more to do with technology turning the keeping and running of a household from 80+ hours of work/week to ~10 hours of work/week.
            Remember that just because it wasn’t monetized doesn’t mean that women didn’t work. Now that that work is either made more automated or outsourced, and so the people who previously were employed as ‘home-maker’ can specialize in other trades.

      • Matt C says:

        > I am constantly seeing people who are working two full-time jobs, getting robbed from, living in disgusting bug-infested decaying houses on streets filled with graffiti and bare concrete, eating processed food they get from the gas station and without any real friends because they don’t have a car or a computer or any free time.

        You’re also in a position that filters for miserable, dysfunctional people.

        You can be poor and happy and living a basically decent life. I was fairly happy when I worked for minimum wage back in my early 20s. I know a guy who supported a family of 4 or 5 on a fast food cook’s wages, and they were happy. (I can’t remember which kid he got the better job on).

        The squalor you’re talking about isn’t a necessary consequence of being poor in the U.S. Yes, it’s a lot more common if you’re poor, and it can’t help to be in Detroit either. But you can be poor and live a stable, sane life.

        (Also, having a middle class income doesn’t insure you won’t have a cockroach ridden falling apart house and a convenience food diet, I’ve seen that up close too.)

  65. Albatross says:

    The elephant in the room is this: a growing economy that isn’t yet a superpower, for example Brazil, builds ships, tanks and fighter planes and invades.

    What does the anarchist society do about an invasion? See Ukraine.

    • I spend two chapters on that question, one in the first edition, a second in the third. I do not claim to prove that an A-C society can successfully defend against any possible foreign threat, but I sketch ways in which it might defend against some.

  66. Paul says:

    Bravo for the post. That’s why I read your blog. You actually entertain different viewpoints (and you really write well). Full disclosure, I am an anarcho-capitalist. I think a fundamental tenant of AC is – No one (or group) should have a monopoly on retaliatory force. Once that monopoly is granted, rent seeking takes over and any competition is stifled. I find it strange the people who advocate ”government” spend surprisingly little time discussing institutional changes to prevent this rent seeking. Every solution to a problem is to pass another law. The other point I’d make is on a worldwide level we have always had competing protection agencies.

  67. briancpotter says:

    Steven Pinker argues that, historically, the lions share of violence came from tribes having small (in terms of numbers but large in terms of percentages) disputes with each other, and that most of the subsequent reduction in violence came as a result of large states enforcing a monopoly on violence.

    Predicting that protection groups would self-interestedly resolve disputes peacefully seems like saying people will self-interestedly cooperate in the prisoners dilemma – in practice, people defect all the dang time. It seems like in the absence of any enforcement mechanism, even if you can get people to cooperate, even slightly askew incentives or deviations from reason (or how much reason you think other people will use) are enough to make the whole thing collapse.

    • Tibor says:

      I think that he presents many possible arguments for the reduction in violence only one of which is the rise of “the leviathan”. Which one (or a combination of) you find the most plausible is up to you.

    • Paul says:

      I think you’ll find that in repeated plays of PD, cooperation is the norm. In real life one time plays of PD are rare. See Vernon Smith.

      • briancpotter says:

        Thanks for the pointer to Vernon Smith.

        I can believe (in the right circumstances), people will tend to cooperate with other people. I’m much less optimistic about groups cooperating with other groups.

    • Jon Gunnarsson says:

      By calling it a prisoner’s dilemma, you’re begging the question. Of course people don’t normally cooperate in prisoner’s dilemma situations because defecting is the dominant strategy. The relevant question here is whether the relationship of rights enforcement agencies can be modelled as a prisoner’s dilemma and you haven’t provided any support for that.

  68. Cole says:

    The obvious next step seems to be setting up anarcho-capitalist experiments somewhere and seeing how they do, as well as continuing to experiment with new and better forms of government

    I think its funny that you basically came to the same conclusion as David Friedman’s son Patri Friedman. Patri has been working on Seasteading and charter cities. Both of which have an explicit goal of being testing grounds for different governing systems, with acknowledgements by their creators that they do not know which system of governance is best.

  69. blacktrance says:

    countries have the same economic incentives to avoid war that companies do, but they still occasionally get involved in them.

    As long as the protection agencies aren’t forcing their customers to pay them, the incentives are different. Within certain limits, a government can force the taxpayers to pay for the costs of war, since they can’t opt out. If a protection agency fights a war that its customers don’t want, and raises prices to pay for it, they can go to a different agency, change to a cheaper plan, or refuse to purchase protection at all, so the protection agency risks losing money in a way that the government doesn’t.

    • A protection agency without oversight can force people to pay up, and prevent them from leaving. That is to say, a protection racket. And the only way to stop being in one protection racket us to get protection elsewhere.

  70. People default to government .Get rid of the agencies and rules and an elite (smartest, richest, etc) will convene to recreate them.


    people are wired to govern and to be governed. Market libertarianism is the closest thing to liberatrianism we can reasonably achieve. That’s why Thomas Friedman seldom spoke about getting rid of the military, all taxes, fire dept, etc. He spoke about the choices people have when markets are regulated as little as possible.

    • Universal claims are fragile.

      I am not wired to “govern and to be governed”. I know other people who aren’t, either.

      • hmm..Virtually all humans conform to some form of internal ethics (whether these ethics are genetic or environmental is up to debate), these ethics allow individuals to cooperate, along with communication, which could lead to the formation of groups, tribes, cities, etc. Does communication ultimately lead to some form of government? I think it does..

        • blacktrance says:

          There’s quite a leap from internal ethics, cooperation, and communication to government. I’m not saying there’s no connection, but if there is, there are also a lot of steps in between.

        • Carinthium says:

          Strictly speaking, don’t humans have a status structure not a system of government on an instinctual level?

          I’m pretty sure there have been primitive tribes which have nothing like a Government in the modern sense of the term, after all. They have societal organisation yes, but not a government.

      • Deiseach says:

        I am not wired to ‘govern and be governed’

        At the very basic level, it’s “Mom! Danny is touching me!” “Mom, that’s because Billy is making faces at me!” and Mom acts as the arbitration agency. Billy and Danny don’t settle things for themselves*, there is always the appeal to a supreme authority to decide in my favour and punish the offender.

        *Or if they do, e.g. start hitting one another, the governing body (i.e. Mom or Dad) swoop in and part the warring parties, and sanctions are imposed on everyone 🙂

        • I am not a child, either. Nursery analogies not only fail to apply here, they actively mislead.

          • Deiseach says:

            No, I wasn’t saying you’re a child. I’m saying we start off with learning to behave reasonably, and with learning to appeal to outside authorities, and with enforcement of sanctions and granting of rewards largely outside our own powers to provide.

            We don’t automatically come with the rules “Share your toys with Tommy” and “Everyone gets a go on the swings” and “If Mary and Sally are fighting over who gets the crayons, there is a third party they can appeal to for a decision”; we learn these things. So the idea of an atomised society of individuals who manage to come together to agree on law, and on the binding power of that law, and to take their disputes to arbitration – we need to learn that, we don’t come with it built in, and saying “I’m not wired to govern and be governed” is saying that you’re in the basic state of human nature – which means grabbing all the toys for yourself and biting the kid who wants to take one and play with it themselves.

            We have to learn to live together, and that applies even to anarchist-capitalist (or any other variety of anarachist) societies. Law and the market are going to be the guiding rules? Who makes the laws? Who sets up the market? Who ensures that when Tannahelp charges its clients, the money or whatever other medium of exchange is used has a value recognised by everyone, instead of ‘you might as well have a printing press in your cellar and make your own’?

      • BillWallace says:

        “I am not wired to “govern and to be governed””

        Neither am I.

        But it is a fact that very many are. I would argue a vast majority. It’s interesting to philosophically dream about what the best theoretical form of government is, given our own personalities. But we still have to live in this world, with our freedom-ambivalent neighbors.

        • Paul Brinkley says:

          I believe it is not wise to take “people are wired to govern and be governed” as a given. Especially with the veiled implication that it’s mostly the latter, and even if it’s out of an attempt to call the world as it is, rather than as it ought to be. Take it as a given, and the default treatment of anyone is as someone to be told what to do – including you.

          (Make me a sammich!)

    • “people are wired to govern and to be governed. Market libertarianism is the closest thing to liberatrianism we can reasonably achieve.”

      If people are wired to govern and to be governed, it’s hard to understand why there are so many examples of relatively primitive stateless societies—one would think the wiring would have more effect on them, not less.

      “That’s why Thomas Friedman seldom spoke about getting rid of the military, all taxes, fire dept, etc. He spoke about the choices people have when markets are regulated as little as possible.”

      I’m not very familiar with Thomas Friedman, but I thought he wrote mainly on foreign policy issues. Is it possible that you are confusing him with Milton Friedman?

  71. stubydoo says:

    If we did adopt the anarcho-capitalist approach today, then over something like a thousand years or so we’d just evolve back to exactly where we are now.

    How do I know this? Because that is exactly what has happened in the past. OK, it took more than a thousand years, but now that we’ve learned a few lessons we’d be faster.

    It wasn’t that long ago that we really did have a separate “private security company” for every village across most of the globe. Yes they did tend to be monopolies at the local level, but that’s only because having separate choices household by household would’ve massively increased the implementation cost (which is still the case today).

    Having every household choose would soon devolve into a monopoly on your block, then a monopoly on your neighborhood, then your town, then etc. etc. though it doesn’t really matter how much further it develops because there’d already be no truly local competition, and the non-local competition that remains (i.e. voting with your feet) will be balancing against economy of scale concerns.

    What you want is to have a decision making agent (e.g. courts) and an enforcement agent (e.g. police/military), and you want them both to (a) actually do their jobs; (b) cooperate with each other; and (c) not collect rents on their own behalf. From a perspective of improving matters on these three dimensions, trying to inject true localized competition is a puzzling distraction at best, and more realistically should be regarded as just plain old fashioned sabotage.

    • stubydoo says:

      I forgot a fourth dimension: (d) not go around causing collateral damage

    • Jon Gunnarsson says:

      If anarcho-capitalist institutions could last for a thousand years, that would be an amazing achievement. None of our current democratic governments have been around for even a quarter as long.

      As for states winning out in the past, that does not necessarily mean that this will hold in the future. The technological, cultural, and economic conditions are vastly different from what they were a thousand years ago.

      • stubydoo says:

        I guess you misinterpret me a little. The thousand year path back to our present position would not involve being anarcho-capitalist throughout. There would be true anarcho-capitalism for, oh, about ten minutes, then various levels of gang thuggery, then after a while there would mediaeval style statelets with class based distinctions of legal status (echoing concerns that Scott mentioned), in between a few other institutional setups which all reflect some level of historical precedent, then eventually the status quo ante (until some other dude like David Friedman throws us off the rails again).

        • Paul Brinkley says:

          Jon’s point about technological, cultural, and economic differences between today and thousands of years ago strikes me as the key, though. He’s saying that thousands of years ago, people weren’t predicting that we’d be in a world of centralized governments. Today, if we went to anarchy, we would know that we could, and we would know many of its warts, as well as the warts of the transition states. For example, we know we don’t like roving warlords, so we have a good chance of consciously avoiding regimes like the Mongol Hordes. We know we don’t like slavery, so we would bypass that entire peculiar institution. Remembering the World Wars would cause us to think more carefully about our alliance decisions. And so on.

          (It might be that over time, probably less than 1000 years, we’d end up with something functionally resembling nation states, but perhaps with various alterations we today would perceive as features, and maybe still some warts. And then one of David Friedman’s descendants would say we should try anarchy again, and maybe we would, and end up with a third regime resembling states, with yet more alterations.)

          • stubydoo says:

            Our current eschewing of slavery and of world wars are pretty recent developments. Yes there was plenty of intellectual ferment against slavery for a period of time prior to the banning of slavery, but that too was concentrated over a fairly brief timeframe. This may indicate these developments are contingencies based on our current situation rather than fundamental aspects of a now enlightened human race – thus throwing us back into anarchy would just bring those barbarous relics right back.

  72. ADifferentAnonymous says:

    http://www.dartmouth.edu/~mkohn/orgins.html this professor argues that preindustrial European commerce actually has some pretty ancap institutions that more or less functioned. For instance, merchants joined associations; if a member of a different association stole from you you were licensed to steal from the next member of that association you ran into. As a result, associations kicked out dishonest members, and you were pretty screwed without an association so you had a strong incentive to be honest. Citation: the chapter on merchant associations, look for ‘reprisal’

    It’s a long read, but full of some really neat stuff.
    It’s not a full modern ancap society, but it definitely has me updating towards the feasibility of such, and generally shows that there are possible effective institutions outside our modern box.

    • For a rather similar pattern, take a look at David Skarbek’s recent book on prison gangs. By his account, a large part of what they do is to make members of their group keep their contracts, in order that members of other groups within the prison will be willing to deal with them.

      Quite a fascinating story of a system of multiple enforcing organizations arising spontaneously in what looks to be a very unfavorable environment.

  73. Munro says:

    This concept builds on the assumption of perfectly rational people with specific goals in their life which do not collide with at least some kind of basic idea of a good human life. It is quite the same problem as with a free market economy: Of course someone other could do the work as good as the manager does for 1/100th of the salary, but that is not relevant for the company. Sure, there are reasons for them to keep the current one. But they are to find outside of classic economics. So as long as the premisses are right, everything works fine. But with real people the assumption that more money is better then less is by far not always true. Thus the manager for 100 millions which could otherwise be invested or distributed to the owners.

    You can see what happens if there is no enforcible law today on an international level. Basically, Kant hoped for war eventually becoming to expensive to happen. Then, no state could afford it and so would not go to war. Maybe even the opposite is true: The less a state can afford to go to war, the more it is likely to do so. In the 1930s Germany could not afford basic well-being for their citizens, but spent huge amounts for armament. Maybe just because it could not afford to go to war in the first place, in the second place it could no longer afford not to go to war. So the basis idea was and is until today not true. I mean, look at the cost of war for the USA the last 15 years and what it get for these costs: nothing but future costs (for NSA & CIA). Money is nowhere near the way humans make decisions in most cases.

    Why should it be any “better” with private police and private law?

    To the reason for people to vote for higher taxes to feed the poor: That can be also understood as a purely rational act. They know they could not force themselves directly to spend it, so they order a higher institution to force them. It is like telling your girlfriend to slap you hard in the face if you don’t do the work you wanted to do.

    The other reason is that you don’t want to be the only idiot to spend their money. You want to force the rest of the people to do so. Libertarians think this is repression, and it certainly is some kind of. It is the kind of repression that is democracy, thus with that libertarians have a problem. Thus this is my problem with libertarians.

    What could be learned from it, however, is the idea that 51 percent making the rules against the will of 49 percent is a bad situation. Maybe we lost track of this problem, so good to have it back. And it is not a matter of numbers, but more of qualitative consensus. Differing in the height of taxes in a negligible way is irrelevant, but the one half wanting to go to war and the other than also being forced to suffer the consequences of that democratic decision is tyranny.

    The other half would be better of with their own police or military company. So the 51 percent go to war alone. This is the moment you realize that the idea only works if the whole world takes part. Why should the enemy take their time sorting out the 51 percent and not target the police stations of other groups? The infrastructure etc. Maybe this would lead to a civil war prior to that, maybe in seeing this would happen, there would be no war at all. But here again is the assumption of rational thinking and deciding.

    Basically, every constitution builds on the opposite assumption: That people do not always decide in a rational way. So the choices people can make at a state level are artificially limited: e.g. no nuclear weapons are to build (Germany). This kind of realistic sense I miss with the libertarians.

  74. Conspirator says:

    If this idea were to be tried it might be best to do it in Russia or another country where the government is already abysmal. (The US would be a terrible place to start; people like Warren Buffett have argued that our legal and economic environment is among the best in the world, and from a specieswide perspective jeopardizing it seems like a terrible idea.) In Russia, my understanding is that things already function a bit like Friedman describes; previously there were competing mafias (“protection agencies”), but Putin convinced them to stop fighting one another and start working together to oppress/“govern” the people of Russia. It’d be interesting if some wealthy Russian were to organize a big security firm to offer services protect people from the thugs/mobsters who are indirectly under Putin’s employ; I would be very impressed if this worked without leading to a large scale bloody civil war. Most likely the existing mob would “compete” through violent means rather than improving its services. The denigration of police forces in Detroit could be another interesting testing ground.

    The best case might look something like this: a wealthy Russian who is fed up with the state of the country digs a huge underground fortress, finds a few good men, buys a bunch of drones, and offers protection against the mob (missiles from the sky if you fuck over our clients), with services payable via Bitcoin. This could make a good science fiction novel if nothing else; you’d need to work out lots of details to prevent infiltration, grow food in the bunker, etc.

    (Libya is also full of warring factions and it’s in terrible shape. Actually, Mexico is probably an even better place… they don’t have nukes, and the government is already weaker than the drug cartels. So this would take the form of a powerful security firm that provides security against the government and drug cartels.)

    • Jon Miller says:

      “In Russia, my understanding is that things already function a bit like Friedman describes; previously there were competing mafias (“protection agencies”)…”

      You (and many of the other commenters) seem to be conflating two kinds of competition: violent competition and competition on a free market. Anarcho-capitalists defend a society in which protection agencies compete for customers, such that the customers have the power to switch protection agencies. Mafias use violent competition to compete for territory. People living in the territory of a mafia don’t have the power to switch mafias at their choosing. A protection agency is not the same as a mafia, at least ex hypothesi.

      Of course, it’s conceivable that free market competition between protection agencies would indeed decay into violent competition, but this needs to be proven with an argument, not just assumed.

      Friedman and other anarcho-capitalists do have arguments which address this issue; indeed, it has been one of the key issues in the debate between statist and anarchist libertarians. Since Friedman has already contributed to this comment thread, perhaps he would be willing to summarize his arguments himself. The main argument seems to be the one mentioned by Scott in the original post, that war is costly and so protection agencies would have an incentive to avoid violent conflict when possible.

      • Stuart Armstrong says:

        War might be costly, but protection agencies (or mafias) have strong incentives to stake out their “turf” (a geographical location or an ethnic group, for instance). There are great efficiencies to protecting a homogeneous group with similar values, or a single defensible area.

        Then the agreement between protection agencies, to avoid war, reduces to “you do what you want with your clients/citizens/victims, we do what we want with ours, we don’t tread on each other’s turf, and we have agreements how to deal with violations.”

      • Conspirator says:

        “Of course, it’s conceivable that free market competition between protection agencies would indeed decay into violent competition, but this needs to be proven with an argument, not just assumed.”

        We have many historical examples of violent groups competing through violent means and zero examples of them competing in a fair honest way for customers. This suggests to me that the former is a far more stable attractor than the latter. My simple test for anarcho capitalist proponents is: can they provide a plausible story about how a dysfunctional mob society like Mexico or Russia can be turned in to a functional anarcho capitalist one? Is there some kind of game theoretical trick that a group of fair honest toughs could use to subvert the citizens of a corrupt government from right under its nose? If there are such stories, they both (a) constitute evidence that the anarcho capitalist equilibrium is stronger than it looks and (b) could be vastly useful to people living in Mexico, etc.

        (It’s very easy to come up with stories for how the anarcho capitalist equilibrium could denigrate in to mob violence; for example, Firm A kills every member of Firm B in a surprise attack and informs Firm B’s customers that they are now customers of Firm A. Or Firm A goes to the customers of smaller upstart Firm B and informs them they are now customers of both firms. Being an upstart, Firm B is in little position to destroy Firm A, who is extorting money from all of their customers. These strategies seem like they’d work much better for customer acquisition than traditional marketing. Or the largest protection firm starts engaging in criminal activities the same way mafias do: robbery, forced prostitution, etc. Smaller protection firms would find they had bitten off more then they could chew in defending against these attacks. In general the problem of protecting against other protection firms seems to be the key one, especially whichever protection firm is the very largest.)

        “war is costly and so protection agencies would have an incentive to avoid violent conflict when possible.”

        This would also explain why there is no violent competition between gangs, but there is.

        Also, where do nuclear weapons come in to this discussion? (Please no one propose any solutions to my “game theoretical trick” challenge without thinking through this issue!)

        • Jon Miller says:

          “We have many historical examples of violent groups competing through violent means and zero examples of them competing in a fair honest way for customers. This suggests to me that the former is a far more stable attractor than the latter.”

          I agree that this is a good argument, or at least part of a good argument, against the an-cap claim that there can be a nonviolent competition equilibrium. On the other hand, if nothing else, the an-cap proposal may induce us to ask questions about why violent competition for protection services is the equilibrium.

          “My simple test for anarcho capitalist proponents is: can they provide a plausible story about how a dysfunctional mob society like Mexico or Russia can be turned in to a functional anarcho capitalist one? Is there some kind of game theoretical trick that a group of fair honest toughs could use to subvert the citizens of a corrupt government from right under its nose?”

          I’m not sure this is the right “simple test” for an-cap; it seems that a dysfunctional mob society is at least as far away from an-cap as a functional nation state. The dysfunctional mob society has a dysfunctional state and at least semi-functional mobs, each of which has a turf over which they have a de facto monopoly (or at least a quasi-monopoly–significant market power) over the use of force. In other words, the dysfunctional mob society has a larger number of monopolies on the use of force than the nation state, but increasing the number of groups with territorial monopolies on force does not take us closer towards the an-cap proposal. So it doesn’t seem to be an interesting or useful test for an-cap, anymore than the fact that states can’t easily move to an an-cap equilibrium provides a useful test for an-cap.

          On the other hand, there’s a sense in which I’m just quibbling with the points you raise. I think the important fact that you’re onto is that, empirically, whenever there are multiple groups competing in the provision of force in the same territory, they seem to form a monopoly or a cartel, rather than engaging in market competition. The defender of an-cap probably can come up with a semi-plausible game theoretic trick to get the desired outcome, but because we rarely if ever observe this outcome in human society, it would just focus our scrutiny on the plausibility of the assumptions that the an-cap defender needs to make to get to his conclusion. (In a sense, game theoretic arguments are cheap; what is dear is empirical evidence which supports the assumptions built into a game theoretic model.)

          On the other hand, I think the defender of an-cap is onto something important, too; they have identified inefficiencies in government which stem from a lack of competition in the provision of services of the kind which governments typically render, especially protection. Scott Alexander even seems to suggest an alternative way forward which builds upon this insight: figuring out ways to increase competition and consumer choice in the provision of protection and other government services.

          You could say that in a sense there already _is_ competition in government services, because people have the ability to emigrate to another country. And this is true to an extent, but the problem is that there are all sorts of barriers to entry (and exit), and the costs of emigration tend to be very high. States are monopolists who can collect monopoly rents at the margins when the costs of exit for the consumer are high.

          In order to create greater competition in the provision of government services, we would have to decrease the costs of exit on the one hand, and increase the incentives facing governments to provide the residents of their territory with good value for their money (taxes).

      • Deiseach says:

        Competition between protection agencies need not be violent; the options could be something like trying to choose between, say, health insurance policies nowadays.

        Or private ambulance services?

        The thing is, this seems like something that will work very well for high-density population urban areas, where there is a high enough volume of customers to support several agencies and there can be economies of scale when supplying them.

        Rural areas, small towns and the like may not fare so well. I see this with the bus service in Ireland; there is a social component where the government provides a certain subsidy for the national service to run routes that are not commercially profitable, and which private companies would not be interested in supplying (while they do cherrypick the profitable routes when putting in bids).

        Same way with things like social housing – someone with (using an example from our own client list) MS who is getting progressively worse, can’t work, needs housing of a certain standard, and is told to be reliant on private charity to supply that.

        Now, of course, there are private housing associations which are charitable foundations/non-profits. But suppose you go looking for donations, and all your potential contributors say “Sorry, I’m signed up to Ethical Altruism and all my donations go to buying mosquito nets because they have higher utiity rating for lives saved than getting you into bungalow accommodation”? 🙂

    • Deiseach says:

      Given that Putin does not seem to go to arbitration when he’s in dispute with his opponents, but they find themselves in prison, exile, or somehow managing to get themselves poisoned by polonium – the idea of two opposing private agencies sticking to a gentleman’s agreement about a court of honour’s decision is looking very quaint in our 21st century society.

  75. Who wouldn't want to be Anonymous says:

    My intuitive sense is that stable social systems are always propped up by cultural norms. Every system can be broken by anyone that doesn’t play by the rules. It really doesn’t matter what exactly the system is–Democracy in America, the Sicilian mob, pseudo-Anarcho-Capitalism in Iceland, hunter-gatherer tribes, feudal contracts, military juntas–so long enough of the right people support the system instead of breaking it at the first opportunity. The only way to get people to reliably do so is with cultural norms.

    The fundamental problem with Anarcho-Capitalism is that every possible form of coercion for any purpose whatsoever (including enculturation) in anathema to the system. Without enculturation the system cannot be maintained.

    • “My intuitive sense is that stable social systems are always propped up by cultural norms.”

      You might want to look at Chapters 51 and (especially) 52 of the third edition, or at the older piece of mine webbed at:


      I see the structure of a society, the reason societies are not all Hobbes’ war of each against all, as reflecting a network of mutually recognized commitment strategies. It’s a slightly different version of your approach to seeing what gives the structure of any particular society.

  76. Yehoshua K says:

    I’m not sure how the Scott’s sixth point distinguishes between traditional governments and Mr. friedman’s proposal. Doesn’t a traditional government also have an incentive to allow all kinds of problems to get as bad as possible so that society will turn over lots and lots of power and wealth to the government to solve it? The fact that you can vote the incumbents out of power seems to me to be, if anything, less of a brake on their tendency to engage in this abuse than the fact that you could switch protection agencies in Mr. friedman’s proposed society. After all, to get rid of the incumbent politicians, I need to convince lots and lots of potential voters and then win (at least) the next election. To switch protection agencies, I just need to make a couple of phone calls.

    It’s the eleventh problem–the one that we haven’t thought of–that gets me. How about small scale gradual experimentation–societal evolution rather than revolution?