[eugenekop]

From historical reasons states are tightly connected to lands. But imagine for instance a state for all Jews that is disconnected from the land of Israel. Such state would include American Jews, French Jews, Israeli Jews, Russian Jews, and other Jews or non Jews who wish to join it. After it all it makes a lot more sense for people who share common culture and goals to have a state of their own. A geographical location is quite irrelevant. How will then conflicts between members of "international Israel" and let's say members of "International France" be resolved? Quite simply, as matters today are resolved between France and Israel, either through compromise or common agreements, or with the help of a third party arbitrator such as an international court.

Now let's move further. What if some Jews want to break up from that state and create their own state "International religious Jews" or "International secular Jews"? There is no reason why this shouldn't happen. But what if a person who belongs to "International religious Jews" became secular? Well, he can leave his membership in the former state and join the latter. Now what if a religious Jew wants to have the health care provided in the state of secular Jews? To accommodate this you could have separate health care services like "International premium health care" and "International ultimate health care" that are independent of the state. I think it makes more sense now to see these services as companies, whether these are health services or "state" services. So for instance a religious Jew who is interested in premium health care and would like to be defended by the company "International religious Jews", can pay for these service providers. At any moment that person can switch to other providers.

Here are the possible types of the different service providers:

Health care company. Examples: Coventry Health Care, Group Health Cooperative.
Defense company. Examples: Blackwater USA, Titan Corp.
Police company. Examples: Naratoone Security Corporation
Justice company. Examples: The Association for International Arbitration, War Labor Board.

So what did we achieve here? Full privatization of everything in society, which should result in a lot more variety, a lot more competition and thus efficiency, and most importantly there is no coercion involved. You only pay for what you personally want to pay for, nothing else.

You probably ask yourself, how can all these different companies work together? What if two security firms started to battle each other? But, why would they? In Europe there are 50 states and no wars in the last 60 years. Why should private security companies fight each other? After all its very bad for business, since wars are very expensive. In fact there is less chance that private companies will fight each other than states will as states can externalize their costs to the entire population, but private companies will simply lose all customers and go bankrupt. Now what if a private security firm will just destroy all other firms, rob all resources and start to wreck havoc? Well, why doesn't that happen in Europe? Why doesn't Italy for instance try to conquer all Europe? Why would a private firm do this? A private firm usually has a lot more to lose than a state.

Now what about private courts? Why would anyone listen to a court ruling when its not in his favor? After all there is no single police organization that can bring the person to justice. Well what happens when an Israeli criminal manages to escape to France? France extradites him back to Israel. In the same way a criminal who was found guilty in some respected court, and then found again guilty in a private appeal court, would be considered criminal not only by the security firm to which the victim of the crime is subscribed, but by most other security firms. Such criminal will have nowhere to run, as some security firm will catch him.

Now what's the benefit of this system? As I already said, no monopoly on police, army, and justice, and therefore an increased variety, competition and efficiency. In addition, no coercion at all, complete freedom. An absolute implementation of the "live and let live" philosophy.

All in favor say "aye"!

[lucky]

Nay.

So you've transformed into an anarcho-capitalist now, eugenekop?

I will just tackle national defense. Who will pay Blackwater to set up a defense system for a territory? Is it just voluntary contributions? If so, the benefits of national defense are almost 100% in the form of a positive externality: if you voluntarily choose to chip in $10000 annually for national defense, you don't reap the full benefit of that $10000. You don't reap almost any benefit, the benefit is spread among the n people in the area under defense. So, simplistically, if a million people live there, your $10000 contribution only buys you $0.01 worth of defense per person. In game theory terms, paying for that is a losing strategy for the individual, and the game outcome is not Pareto optimal (nobody contributes, no national defense).

A similar argument can be made against a voluntarily-funded justice system, but that's even more complicated, so defense is good enough.

[eugenekop]

So you've transformed into an anarcho-capitalist now, eugenekop?

I am considering this.

will just tackle national defense.

You can read about a possible solution here: http://en.wikipedia.org/wiki/Assurance_contract
Second of all, forget the economics for a minute. If there is a real chance a foreign invader will destroy your country, will you not pay for defense? Optimal or not, I can guarantee you that if Israel will have to fight another war, everyone will chip in, almost with no exceptions. Besides, even if less money will be retrieved, it might be very possible that the efficiency of competing security firms will compensate for that loss.

[lucky]

You can read about a possible solution here: http://en.wikipedia.org/wiki/Assurance_contract

This won't work. The optimal strategy is still not to pay, unless somehow you know that your contribution is very likely to tip the balance. So perhaps it has a chance to work if the contribution threshold is everybody: if anybody bails, the project fails. But that won't work for more than 10 people, for pragmatic reasons (somebody is bound to make an irrational decision). Setting the threshold at say 90% of population doesn't work: then the optimal strategy is not to play, since the probability of your money tipping the balance is a lot smaller than the probability of it not tipping the balance.

Second of all, forget the economics for a minute. If there is a real chance a foreign invader will destroy your country, will you not pay for defense?

I can't forget economics.

No, I would not donate, unless I was feeling exceptionally patriotic. Perhaps I would donate a little if I felt "my" country is the good side and the invader is evil, but this would be the same kind of charitable contribution as I might make to another war effort in some other place in the world not involving me. Probably not enough.

Definitely not for my own safety considerations, as that would be irrational. My tiny contribution (in relation to overall expenses) would change virtually nothing regarding my personal safety. I would rather consider running away from the country or protecting myself personally somehow, or perhaps participating in a local militia or underground resistance, rather than donating to the national army effort for that purpose.

Optimal or not, I can guarantee you that if Israel will have to fight another war, everyone will chip in, almost with no exceptions.

No, they wouldn't. Do you have some empirical evidence? Countries have high taxes for war expenses for a reason: people don't generally just donate to the army, even during wars. If they do, it's far from enough. Regardless, a large fraction of the military expenses have to be spent before a war, not during a war.

[eugenekop]

I would rather consider running away from the country or protecting myself personally somehow, or perhaps participating in a local militia or underground resistance, rather than donating to the national army effort for that purpose.

Really? I'm sure that the vast majority of people would rather pay for defense. You have to remember that most people are very socially driven. They will be ashamed to say that they did not donate money to the war effort, and they will be proud to say that they did donate, and a lot. Most people will also be simply afraid for their life. I don't see how it is optimal not to pay, after all each payment increases the chance that the war will be won rather than lost. If an additional 1000$ will increase that chance, then why wouldn't you pay? I really don't see myself seeing my country losing a war and not paying, that just doesn't make sense. Most people actually volunteer to go to battle, in WW2 few men wanted to stay home when they friends went to fight for their country. If most people are willing to risk their lives for their community, how can you think that they wouldn't risk some of their money?

In the same way you could say that charity is not optimal, yet people donate quite a lot of money to charity. An average American pays more to charity than the average Israeli pays to welfare. Optimality has very little to do with this.

Countries have high taxes for war expenses for a reason

Do countries have a tax code of 13,000 pages long for a reason? Do countries own health care, education and social security for a reason? No, countries do a lot of stupid things.

[lucky]

First, let me try to point out a contradiction here. You said:

So for instance a religious Jew who is interested in premium health care and would like to be defended by the company "International religious Jews", can pay for these service providers. At any moment that person can switch to other providers.

And you also said:

http://en.wikipedia.org/wiki/Assurance_contract

These two seem completely contradictory. Either everybody can pick and choose and switch at any time, or you have everybody (or a majority) in the nation contracting to pay for one national defense system together. So which is it?

I don't see how it is optimal not to pay, after all each payment increases the chance that the war will be won rather than lost. If an additional 1000$ will increase that chance, then why wouldn't you pay?

Well, depends on by how much it increases that chance. If the probability of winning the war increases by 0.00001% due to that $1000 (if that seems low, consider that $1000 is about 0.00001% of Israel's annual military budget), then I'd rather keep the $1000 and do something else with it instead.

[eugenekop]

Well, depends on by how it increases that chance. If the probability of winning the war increases by 0.00001% due to that $1000, then I'd rather keep the $1000 and do something else with it instead.

Then why do people go to vote? Their vote is completely insignificant, especially in a 300 million country such as the United States, and the outcome, unlike the outcome of a war, is not that important, its rarely a matter of life and death.

Either everybody can pick and choose and switch at any time, or you have everybody (or a majority) in the nation contracting to pay for one national defense system together. So which is it?

Everyone can pick and choose and switch. Nothing is ever done with coercion. So when I mentioned the assurance contract I didn't mean some kind of official process. There is no state and no army. There are however private defense companies that wish to collect funds for their operation. They might use an assurance contract.

[lucky]

Then why do people go to vote? Their vote is completely insignificant, especially in a 300 million country such as the United States, and the outcome, unlike the outcome of a war, is not that important, its rarely a matter of life and death.

That's true, but voting costs a lot less than military expenses. It's either a walk to a nearby polling place (people like walking) or sending in a letter (cost of a stamp). They mostly do it for the fun of participating. If you were to charge people a significant amount to vote, a lot fewer would vote, even if the money collected were to be used to implement the policies voted on.

Everyone can pick and choose and switch. Nothing is ever done with coercion. So when I mentioned the assurance contract I didn't mean some kind of official process. There is no state and no army. There are however private defense companies that wish to collect funds for their operation. They might use an assurance contract.

Well, but then, if the mechanism used is the assurance contract, even if it were to succeed somehow, for practical purposes nobody can pick and choose any more than they can through a democratic process, since there is going to be only one "provider" that the majority has to agree on.

[eugenekop]

Well, but then, if the mechanism used is the assurance contract, even if it were to succeed somehow, for practical purposes nobody can pick and choose any more than they can through a democratic process, since there is going to be only one "provider" that the majority has to agree on.

Why? 5 different defense companies can each create an assurance contract for different sums of money. There will be a monetary threshold, not a participation threshold. Although I am not versed in the theory of this, so I'm not sure.

[lucky]

If there are 5 armies being built, and only 20% people in a territory participate to build your choice of national defense army, then you already have 80% free-riders benefiting from your army for free. Looked at from the other side: why build another army with your own money if the other 80% people are already building 4 other armies defending the same territory and you don't have to pay. So, this has no chance to work.

[Eran]

eugenekop,
Well done. I often think of the insurance companies that play such a major role in my vision of an orderly anarchy as voluntary, non-geographical states.

lucky,
How do you explain people participating in costly demonstrations in Libya, Egypt and elsewhere? After all, the benefits of removing a dictator are fully external - they will be equally reaped by those who do and those who do not participate in those demonstrations. Why are people not staying at home?

The same sentiments that cause people to demonstrate against domestic dictators caused them to rally against foreign occupations, whether in British India, French Algeria, or Colonial America. In none of those cases was there a government on the side of those resisting occupation. Yet they organized and operated sufficiently well to expel an entrenched foreign power. The goal of defending against foreign invasion is, if anything, easier than that of expelling an existing foreign force.

A second point is that "national defence" is not an all-or-nothing proposition. After all, national borders are arbitrary. Why can Switzerland defend itself independent of Belgium, but Maine cannot defend itself independent of Alaska? Why assume that the natural limits of defence correlate with current arbitrary national borders?

A third point is to consider what targets are likely to be chosen by an external threat. What reason would a foreign aggressor have, to attack a random house or a residential neighbourhood? In today's society, terrorists (with or without a state at their disposal) bomb civilians to exert pressure on their governments. But in an anarchy, there is no government.

More likely, external aggressors will try to occupy or neutralize centres of wealth or power. For example, banks with large deposits of gold, or major industrial installations. But such large installations will naturally purchase insurance to cover potential war damages. And the insurance company will naturally have an interest to defend its clients through either point defence or through deterrence.


Finally, let's keep in mind that no system is perfect. The relative ease with which government can organize an army is not just a feature. It is also a bug. To justify anarchy on consequentialist grounds one need not show it to be perfect - only better than the alternative. Governments have (and continue) to abuse their ability to recruit people and resources for war making, to the tune of hundreds of millions of victims in the 20th century, and hundreds of thousands if not millions in the 21st. Even democracies (US, UK) are not exempt from mass murder.

[eugenekop]

Well, after listening to this: http://mises.org/media/1789/12-The-Publ ... the-Courts
I think I've been completely converted to Anarcho-Capitalism, at least for the mean time. Very convincing.

[Eran]

Rothbard is very good. Probably the best in terms of combining the ethical and the practical roads.

Have you looked at The Market for Liberty and The Machinery of Freedom? Other excellent sources include Chaos Theory and The Obviousness of Anarchy. All available on Mises.

[eugenekop]

Yeah, I'll try them, as long as they are free :-)

My doubt about such system is focused on the successful cooperation between private police firms. Without such cooperation a chaos and constant war will ensue. Now I know such police firms did not cooperate well in Somalia, but I assume this is because the Somalian population does not hold individual rights as sacred as libertarians.

[Eran]

All of those are. The one highly recommended source I couldn't find for free is Randy Barnett's "The Structure of Liberty", and in particular chapter 14, "Imagining a Polycentric Constitutional Order: A Short Fable". I have just purchased the book a few weeks ago, and working my way through it.

[eugenekop]

Okay, a question:

Let's say a person left no will and died. He left a son and a wife. Now the son goes to reputable court A which is known for ruling in such cases in favor of the heir, while the wife goes to a reputable court B which is known for ruling in inheritance cases in favor of the wife. So we have two reputable courts each producing a completely different solution. What can be done now?

[Eran]

This is an example of competing jurisdictions. We are facing it in our current society all the time. In Israel, famously, both Rabbinical Courts and Family Courts have jurisdiction over divorce issues.

Imagine the same situation, with the man having assets in several countries, and the wife and son going to different courts in different countries, again, reaching different conclusions.

This is a long way of saying - I am not sure. Legal systems have ways of finding solutions to such problems. In Israel, for example, whichever court was filed in first takes precedent, and the other court respects the decision.

I imagine in an anarchy, the two courts (or the enforcement companies chosen by the wife and son to enforce their respective courts) would have to reach a compromise, probably identifying a mutually-agreeable third court to make a decision.

[eugenekop]

Yeah, I assume it will be in the interest of all parties, whether courts or enforcement agencies to refrain from violent clashes, as this will surely lead to a loss of clients and a significant financial loss. The question is whether the constant compromises will be based on the sense of justice and not just on a temporary utilitarian need to avoid violence.

[Eran]

This same question can be applied much more broadly. How do we know, for example, that Anarchic courts will not tend to discriminate against red-heads? After all, they are a small minority. Sure, they could try to select only courts which don't discriminate against them, but ultimately, if they want to live within a broad society that exhibits very strong anti-redhead biases, they will have to compromise.

The answer is that eliminating the state, while a great step forward, is not enough to create a just society. Rather, it is also essential that the people broadly share libertarian ideas of justice. It is those broadly-shared ideals, and not the specific legal system, that ultimately guarantees a just society.

I tried to explain that to Objectivists who insist that the legal system must be based on Objective justice. That is fine in theory. In practice, the legal system will always reflect the attitudes of the population in general.

[eugenekop]

What about the notion that in democracy theoretically everyone has an equal say in the setting of the law, while in anarchy, those who are richer have more power in the setting of law?