What is the point of rooting for CJ if it’s obvious that the most hardworking and lucky people will choose a CJ that is more pleasant in terms of tax contributions, rather than CJUSSR2.0? Who is going to feed them?

анонимный вопрос

In the article about FCJ recently translated by our team, the approaches to how consumers choose certain jurisdictions are, in my opinion, covered quite well. I want to draw attention to the first two letters of the abbreviation: these are not just contractual jurisdictions, they are also functional and overlapping.

Indeed, a purely socialist jurisdiction providing all types of services simply will not survive in the market, especially if it is contractual, meaning one can freely exit it. A socialist jurisdiction is effective when it provides the service of delivering public goods with a strong positive economy of scale.

Examples of such spontaneously emerging jurisdictions are analyzed in detail in Elinor Ostrom’s book “Governing the Commons”. For instance, mountain pastures are extremely inconvenient to divide into small plots, and they are used for grazing by residents of several surrounding villages. To prevent the predatory exploitation of this rare common resource, they develop their own complex system of norms and enforcement, thereby forming a functional contractual jurisdiction. However, this jurisdiction is responsible for conflict resolution only regarding the pasture and does not interfere at all in matters such as school education. And in this sphere, for example, a network of public schools funded on a parity basis by all CJ members (socialism again!), a private school paid for by students’ parents, and a private school funded by an endowment fund can compete perfectly. This is exactly an example of overlapping jurisdictions.