Chapter 38, The Economics of Theft, or the Absence of a Ruling Class, provides an economic analysis of the theft industry, showing that competition in this sphere leads to the impoverishment of society, and that this industry is essentially unprofitable even for the thieves themselves. A similar system of arguments shows that the state, as a variety of theft, is unprofitable even for top politicians, as their costs turn out to be higher than the profits. Of course, this argument seems paradoxical, since it is easy to oppose it with many counterexamples; however, the main conclusion of the chapter does not relate to the denial of the possibilities of individual profit through the state, but to the indication that no single class interest can be seen behind the actions of the state.
Chapter 39, The Right Side of the Public Goods Trap, tells of a very interesting paradox related to the fact that public goods are always underproduced relative to the demand for them, due to difficulties with their monetization. Under a state, such a public good turns out to be good laws that make life simple, convenient, and unburdened, as opposed to bad ones that distribute costs among all while bringing profit to a few. However, under anarchy, it is exactly the opposite: since laws are, in a sense, purchased on the market, good laws turn out to be a private good and are produced until demand is fully satisfied, while bad laws turn out to be a public evil: few are willing to spend on their production for their own profit, and everyone will be able to sabotage their implementation, and cheaply at that. Thus, if it is possible to transition somehow from the state to an anarcho-capitalist order, it will prove quite stable against attempts to bring back the state.
In Chapter 40, How to Get from Here to There, Friedman tells me that I am doing well and correctly understand the strategy of building ancap, and suggests that Mikhail Svetov tone down his zeal in building a vertical of power in the libertarian party and focus on personal educational projects. Thank you, David!
In the Postscript for Perfectionists, Friedman explains which subjects he did not touch upon in the book and why.
This concludes the first edition of The Machinery of Freedom. Subsequent parts were written for the second and third editions of the book.
