From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: How would free market anarchism work?
Organization: Massachusetts Institute of Technology
Date: Sat, 9 Jan 1993 04:44:37 GMT

thanks for the *very* detailed explanation. more than i can probably
process effectively in the amount of time available to me... but
here goes.

In article <1993Jan8.223721.29219@shearson.com> pmetzger@snark.shearson.com (Perry E. Metzger) writes:
>cmk@athena.mit.edu (Charles M Kozierok) writes:
>>i don't know if being an anarchist and an objectivist at the same
>>time is possible. even a small-o objectivist. because i believe
>>that having an objective, neutral government to guarantee rights
>>which objectivism considers fundamental, is an inherent part of
>>objectivism. i don't think a lack of government is consistent
>>with all the implications of the non-coercion principle, for example.
>
>Well, lets consider. The non-coercion principle says, more or less,
>that initiating force against persons or their property is wrong. In
>order to enforce the existance of a monopoly government and prevent
>people from setting up competitive courts and police forces, won't you
>have to use force? Assuming these competing organs only use
>retaliatory force and never initiate force, it would seem that they
>are acting within their rights, so in order to enforce a state
>monopoly you would need to prevent people, by violence if necessary,
>from entering buisnesses like arbitration.

*very* interesting point, maybe a paradox...

to set up a system that protects individual rights, one has to
violate individual rights... the answer is that if the government
is responsible for defending rights, then competing police forces
are the ones who are initiating force, because they have no basis
in law.

actually, that is pretty lame. any Objectivists out there who
can do better? i'd like to hear it.

>>so how can you have competing courts of law? who enforces the laws
>>controlling those who enforce the laws? please explain how this would work.
>>i'll keep my mind open, even if i need a crowbar... :^)
>
>Well, there is no law saying who enforces the laws. Anyone can try to
>go into the law enforcement business or the law creation business.

hmmm....

>Prehaps it would be clearer if we went into an example. This doesn't
>reflect the ONLY mechanism that might arise in the market -- it is
>just a plausible one I use for pedagogical purposes.
>
>First, lets assume that we abolish the notion of the criminal law.
>With the abolition of government, there is no longer any sense in
>refering to something as a crime against the state, as there is no
>state -- there are only torts against people, for which we must
>compensate them. This is how most traditional anarchist legal
>frameworks like the one in Iceland functioned -- in Iceland, for
>instance, if you killed a man, you owed his family wergeld, literally
>"man gold". We can argue about whether replacing jail time with
>restitution makes sense at another time -- for clarity, lets just
>concentrate on how the market handles this particular form of
>compensation. Remember, this is just one plausible mechanism I'm
>walking through -- there are many.

i would have to admit that in most cases jail time is a waste
of resources which accomplishes nothing. but the problem with
your suggestion is what you do with willful or insane criminals,
who aren't rational, don't want to be, and don't care.

>Lets say that I patronize security company A, and you patronize
>company B, and you steal an object from me.

murder would be a better example -- because compensation is much
more difficult. but fine.

>I then go to company A and complain that my object has been stolen.
>They go out, and lets assume that after some investigation they
>determine that you apparently are in possession of the object.

"they're not getting into my house, no sir. who the hell are
they? i've never heard of them. probably a bunch of criminals
just *calling* themselves a security company. yeah. Joe told
me about those ones."

>You, of
>course, patronize company B, and if company A's people just came in
>and forceably extracted compensation from you you would likely call in
>company B's people to protect you.

never mind compensation -- they're not getting into my house to look.

>This is the difficulty Ayn Rand
>couldn't see further than. Anyway, getting on with the example,
>company A will now call up company B and inform them that there is a
>potential conflict arising here. In all likelyhood, if this happens
>with any degree of regularity, and it doubtless would, the companies
>would have made an agreement between each other on how to deal with
>such matters.

so to answer my own question, *my* company would ask to search my house.
i'd fire them. i was accused falsely!

>Lets assume there is an agreement, and that it is that
>representatives of company A will present evidence for the crime in
>front of an arbitrator selected by representatives of both company A
>and company B, and that you (the criminal) will have a chance to
>defend yourself in this proceeding.

if company B even *tries* to search my house, they're fired. end
of problem. i'll hire someone more interested in serving my needs.

>This is much like what would
>doubtless happen in the single company case, except that then there is
>no need for any intercompany agreements. (Prehaps in that case the
>arbitrator is selected from a preagreed pool or by representatives of
>the prosecution and accused -- it really doesn't matter). Assuming all
>works out, the arbitrator will decide that you owe me compensation for
>the object you stole (likely the object plus the costs of my doing
>without it and the cost of apprehending and prosecuting you), and you
>will then be asked to cough up the money.

who are these arbitrators? how do we know they can be trusted?
who is *their* security company? sounds like you are replacing the
potential corruption of one government for the potential corruption
of an "old boys network" of mini-governments.

>If you don't cough up the
>money, presumably company B has preagreed that in case of an
>adjudication against you that you refuse to comply with they will no
>longer defend you against force, and company A will then extract the
>money for me.

this puts me at the mercy of this company for *any reason*.
how does that protect my right to life, freedom and property?
i don't like that -- it is no better than totalitarianism.
what if they just say "pay ten times what you did before or
we'll let company X come after you"?

how do you deal with bad people getting in control of these companies?
and before you say "that's how it is with the government now", i don't
believe that. i think one can still get a *reasonably* fair trial.
and the government is not banging down my door.
i see *much* more room for abuse with private companies.
in fact, it sounds a lot like those protection rackets.

>There are a number of issues you might validly ask at this juncture.
>
>1) Why should Company A and Company B agree to settle this matter so
>   peaceably?
>
>Because it is in their interest to do so.

i have no doubt that the companies will protect their interests just
fine. i am concerned about the people.

>If they did not have an
>agreement for handling such matters and just went to war, it would
>cost them lots of money, and personel. Indeed, as their officers are
>paid and not under compulsion to serve, they might not want to risk
>their lives very lightly and the companies would be under considerable
>internal pressure not to get their people killed too often. You might
>argue that a large company could simply ignore smaller companies
>because of the threat that they pose -- but I would argue that this
>can't happen in practice. The equivalent of reinsurance agreements
>between companies would almost certainly arise, in which a large
>company attempting to attack a small one would likely draw in lots of
>third parties into the conflict, thus making an attack of this sort
>non-cost effective. Also, a large company engaging in such behavior
>would likely frighten its customers, who would be scared that they
>might be next -- they would then switch to other companies, which
>would mean that the large company would no longer have a revenue base
>with which to pay its mercenaries who it is presumably using to
>terrify people.

this sounds fine as long as everyone gets along. you really think
that companies won't get into situations where they don't agree?
i really don't think this makes as much sense as i did a few
paragraphs ago. try to defend a worst-case scenario. to me
it ends up in complete chaos. and people are generally *not* very
good at getting along.

>2) Why would everyone agree to more or less the same legal system? How
>   would the legal system arise and get standardized? How could people
>   possibly make contracts in peace not knowing the commercial code?
>
>When one goes into a court arguing that in a corporate annual meeting
>one was unfairly prevented from taking some action that the
>parliamentary law would permit, the court will likely note that the
>corporate charter mentions in it a little book called "Roberts Rules
>of Order~. "Roberts" is published by Scott Foresman and Company, not
>by the government. None the less, it has somehow aquired sufficient
>force that people treat it as if it were the law, and in fact it is.
>The need to standardize parliamentary law and proceedure lead people
>to pick parliamentary guides in the free market and this is the one
>that was standardized apon, purely by free market forces. This is an
>example of "customary law" in action.
>
>It turns out that people very rapidly standardize on agreed social and
>legal norms in a society. The developement of the Lex Mercatoria in
>the medieval merchant courts produced a standard for how merchants
>were expected to behave, even though no central authority existed. For
>many centuries, judges of all sorts have looked to prior decisions and
>to custom to guide them when deciding on matters that are not
>codified. this is the so-called common law, which is another example
>of customary law at work.

i don't like this much. it just sounds like you are stating
examples of two cases where people did agree, not providing any
reasons why that should always happen.

your example about Robert's rules of order don't pacify me much.
the book could have just as easily been "Mein Kampf". over-dramatic?
perhaps. but what do you do about the people who can't get any
company to protect them? what if 99% of the people decide they
want to take out the 1%?

>Presumably, common reference works, the common law, and custom will
>form a fairly commonly understood legal base in a system such as the
>one I am refering to. 

i don't want my life protected by "custom".

>Companies COULD try to force people to accept strange new legal codes
>that required them to, say, kill all the homosexuals that they met,
>but its unlikely that they would get customers or that other companies
>would treat them as "legitimate" and form cross agreements for
>settling disputes with such companies.

not so. it is quite likely that they could do this without losing
any customers. persecution of the minority is a popular sport on
this planet. and you also ignore the brainwashing potential of companies
this big and powerful.

the defense of the minority is a major weakness of anarchism i have
not yet seen defensed properly. perhaps you will do better.
you certainly have done far better so far than anyone else i have seen.

>People making contracts would likely depend largely on custom and the
>common law as well. If this made them uncomfortable too often, the
>market would likely provide works like "Roberts", only in this case
>containing commercial codes, and contracts might specify "this
>contract is to be held to function under the rules of commercial
>contract set out in "Joe's Handy Standard Commercial Code"".

this i don't have as much of a problem with.

>In any case, law would likely be a much simpler thing. Its easy, when
>the central custom is "don't initiate force", to see that things like
>rape and murder and theft are not things that any company will smile
>on and that people should assume will not be loved.

you kidding? depends on who gets victimized. after all, don't
certain groups "deserve it"? this is not far-fetched; this is
reality.

>Much of the
>customary law will simply be devoted to handling tricky questions like
>"what exactly is force? Is playing music too loud a right, or a tort
>against your neighbor", and the like. Even having to deal with such
>questions, however, 99% of the codes, which are devoted to questions
>like how many years you get for trying to sell someone unregistered
>securities, would likely vanish.
>
>3) What do you do if company A says playing your radio too loud is all
>   right and company B holds it to be a tort?
>
>There are several ways such disputes will be settled. In all
>likelyhood, the majority of them will be settled by custom -- i.e.,
>most adjudicators will hold one way or another and after a while it
>will have the force of law.

but on what basis is this law created? just the whim of these
companies and arbitrators. frankly, i'd rather have the government
in power -- at least i know what i'm dealing with, and i get a vote.

this stuff is *dangerous*.

>I'll point out, however, as an intriguing
>aside, that market forces can also be used to settle such questions.
>Some hold that it could be possible for you to be insulated from the
>question by having your company pretend to you that you are living
>under the code that you choose. If you play your radio too loud, they
>will have to pay heavy damages to your neighbors, which will result in
>your having to pay them heavy premiums (a disincentive), but that
>other than absorbing such costs you might otherwise be able to
>"pretend" that you lived in any legal code you chose. Some legal codes
>might be prohibitively expensive, with others being less expensive --
>this would lead to a natural evolutionary pressure towards people
>picking codes that caused minimum practical interference with their
>neighbors.

this sounds a little too optimistic to me.
what if the companies can't agree on what's too loud?

>4) What happens if you can't afford a security company?

better -- what happens if all the security companies don't like you?

>There are many possibilities. You can join a co-op, in which you would
>have to exchange part time labor and the like as part of the company
>in exchange for protection.

these companies have to "co-operate", right?
there is *nothing* preventing them from setting their rates as high
as they want, or extorting their members. they could just form a cartel.
that *would* be in the interests of those who run the companies. and
it would leave *everyone* at the wrong end of the gun.

>You could appeal to charity. You could do
>without and suffer the consequences -- maybe you feel that all you
>need is your six-gun, and if you live atop a mountain in the middle of
>nowhere its very possible you are right.

or rather, you would have no choice, in many cases.

>5) What happens if you are very rich and decide to flout the law.
>
>Ah, as it turns out, the rich have far more to lose than the poor and
>have a far greater incentive to follow it. Here is one possible
>scenario that assumes that we ressurect the old notion of outlawry --
>its only one of many scenarios, mind you, but it should be
>illustrative of the sort of checks and balances such a system provides.
>
>Lets say that you are Bill Gates and decide not to pay for that dog
>you ran over last week. (Prehaps you hate poodles anyway). After the
>judgement comes in against you, and you flout it, in all likelyhood
>you will be declared an outlaw -- that is, no one will be punished by
>your security company (which disowns you) for committing a tort
>against you. Lets say you say "fuck that, who cares! I have billions!
>I can affort to hire security". Well, first of all, your security
>people can't be everywhere at all times, and you have lots of product
>out there, warehouses, bank balances, etc, that people might take from
>you -- and your folks can't be everywhere watching everything at all
>times. More than that, if they try to get stuff back, that will likely
>be considered a tort which the pseudothief's security company would
>defend against -- with force if necessary. Also, your security people
>might be declared outlaws for dealing with/defending the assets of an
>outlaw. In short, you would want to scrupulously pay your court fines.

i am more concerned about Gates being the abusee than the abuser.
people don't like the rich. so there would be a "market incentive"
for a security company which advertises "we screw the rich".
etc., etc.

***

this is not holding much water for me. too many holes. too many
special cases. too many optimistic assumptions. i know you are just
starting, but even after looking at your explanations, all i see
is *chaos* when i think about this system in operation.

also -- we haven't talked about the police. having ten police
forces roaming around armed to the teeth is pretty scary too.
if they don't co-operate enough to nullify the competitive
nature you want, then the aren't co-operating enough to
prevent chaos. even accidents would be a big problem.
i think it would take about 1 week before a major war broke out.

please try to fill in some of them. i'm still listening, but
i'm discouraged.

>Now, you can see that although these scenarios aren't perfectly
>rounded out, and although there are lots of possible ways to run them
>(and lots of flaws we haven't even begun to discuss), its possible to
>consider free market security apparatuses in the place of monopoly
>government security systems. There is a lot more on this topic
>discussed in Bruce Benson's brilliant (and extremely scholarly) book,
>"The Enterprise of Law".

i wish i had time to read it.

>I look forward to continuing this discussion.

me too.

>Laissez faire, laissez passer. Le monde va de lui meme.

alas, if only this were true....

--
charles
Newsgroups: alt.philosophy.objectivism