Mechanics of Freedom, Chapter 45

After a considerable break, I am posting a single chapter from David Friedman’s The Machinery of Freedom, but I hope to speed up in the near future. As usual, I remind you that you can support the translation project with your donations to the wallet 1AFkD2bazCs5YZBBrSD7HsRMWLmRbg6QBo

Chapter 45, Is There a Libertarian Foreign Policy, is devoted to reflections on the moral dilemma facing a potential libertarian government of the United States. On one hand, significant efforts are needed to protect against such a serious adversary as the Soviet Union, which suggests a network of international alliances. On the other hand, every alliance implies the possibility of having to fight for others’ interests in wars that have nothing to do with libertarian values. Ultimately, Friedman concludes that a policy of non-intervention is still preferable for libertarians.

Since then, the Soviet Union has ended, and thus the arguments in favor of a policy of non-intervention have only strengthened.

Persuading Statists

Vitaly Tizun, whose brochure Theory of a Free Society I recently reviewed, has released a short video in which he discusses how to promote ancap. I am also working in a similar direction and hope to please you soon with a fresh video from Libertarian band, but Vitaly beat me to it.

https://youtu.be/pnpCDuMVaUE

If the video caught your interest, you can download the leaflet for independent distribution — it briefly summarizes the main message of the video. Of course, this is for the future — who needs leaflets now, while people are staying at home. For security reasons, the leaflet should not be ordered from a professional printing house — print in small quantities, on a printer, and pay in cash.

Principles of Agorism

My channel has a VK mirror run by one of the readers. I don’t monitor it myself, so if anything interesting appears in the comments, let me know in private messages. In particular, the description of a business idea for an agorist prompted Alexander Tatarkov, whose YouTube channel I have already recommended here once, to provide a detailed supplement, which I decided to put into a separate post.

I will allow myself to generalize a bit and formulate the main principles of agorism.

1. Work with a private client, not an organization. A private individual doesn’t care whether you paid taxes or not.
2. Work for cash. Only cash can be “black.” (a reminder from Ancap-chan: Bitcoin is cash)
3. Do not underestimate barter. On paper, no money passes through at all, yet each party gets what they wanted.
4. Corruption is not bad, but good. You have an agent in the enemy’s camp (the state). You are not giving money to the enemy (the state). You reduce the official’s dependence on the state by providing them with an alternative income. He is your accomplice. He will cover for you because you are the compromising material on him. And he is more interested than you are in ensuring your scheme is not exposed.
5. Sell things that are impossible to account for or count. For example, portions of lunches, or booklets, or business cards (printing).
6. The purchase of materials should also be in “black” cash.
7. Avoid cashless payments, even to a personal card. Let the client transfer money to someone you owe. My clients even paid for my daughter’s music school! This way, it’s as if you did nothing. Your creditor doesn’t care who paid your debts. And the state only collects taxes from one transaction.
8. A wonderful scheme involving the gifts of nature. No purchasing needed. The money is “clean,” completely black and untraceable. For example, in the 90s, we harvested cedar nuts. Sold them under the table for cash. It’s impossible to prove how much was sold.
9. Working with things that cannot be touched. For example, design. You create a design, you receive money. From whom, for what—try and figure it out. You might not have even seen this person! They sent you the order via WhatsApp, received the sketch by email. They topped up your phone balance for payment.
10. And various on-site or at-home services. Like computer repair, manicures, apartment renovations, dog training/walking. Even if the tax office comes to you via an advertisement, you say that there have been no clients yet. When the first one appears, I’ll get a patent. Proving that half the city is served by you can only be done through an informant. Well, you just have to work properly so that no one informs on you…

Something like that. This is the first thing that came to mind. Much of it is from personal experience in the 90s. I consciously discarded criminal schemes. Perhaps I missed a lot. The main thing here is to outline the direction of thought.

How would juvenile justice work under libertarianism?

For example, Vasya Pupkin from grade 3 “b”, as a joke, reported a bomb planted in the school, which was later not found during the inspection. Or he beat up a classmate until they ended up in intensive care. Or he stole and then broke someone else’s bicycle.
Suppose he was detained. What happens next? If parents, according to libertarianism, are not responsible for their children’s actions, then how will the young hooligan be punished? Suppose neither he nor his parents have the money to compensate for the damage. Will he be put in prison or forced to work and pay for the damages?

Vopros999 (question accompanied by a donation of 0.00008510 BTC)

The claim that a child possesses self-ownership means that other people recognize their right to dispose of themselves to a greater extent than they could achieve by force. Nevertheless, just as the right of private property over things rarely means the freedom to use them to harm others, a child’s self-ownership does not mean complete freedom to cause harm to those around them.

In addition to the child’s self-ownership, people usually recognize someone’s right of guardianship over them. This right typically includes priority in instilling moral norms, but it is inevitably offset by the right of others to recover damages caused by the child from the guardian. It does not matter who provides the guardianship—parents, the school, just random people contracted for the job—or if all of them distribute these rights among themselves in some way. Either way, the right of guardianship is followed by responsibility for the damage caused to others by the actions of the ward.

Parents take the child for a walk, the child breaks someone else’s toy—the parents are responsible. A grandmother is left with the child—the grandmother is responsible for the broken toy. The child goes to school—the school bears responsibility for the damage they cause to others during school hours. The child goes to school and from there sends an email from a phone reporting a bomb threat—this is the school’s problem, as the child was within its zone of responsibility at that time.

Perhaps the risk of damage from a child’s actions could be insured, similar to how the civil liability of car owners is insured. Now, as we know, car owners are reluctant to insure their liability, which often prompts states to make such contracts mandatory. So I am not sure that in a stateless society, guardianship liability will always be insured. Most likely, schools—especially those in the medium and high price segments—will insure their guardianship liability; firstly, they will have more funds for this, and secondly, it can be assumed that students of expensive schools will, on average, cause damage in smaller amounts (not a fact, I don’t dare to predict exactly).

Another factor that is unlikely to allow guardianship liability insurance to become a panacea for parents is that with every wrongful act committed by the child, the insurance premium will increase; that is, damage from the least socialized children will likely be too expensive to insure.

Further, the imagination of AnCap critics paints all sorts of Dickensian scenarios, with workhouses and the like. I strongly doubt that such things would be in demand in a humane and wealthy society, however, it is obvious that the rights of guardians who find themselves unable to bear responsibility for the actions of their wards will be rejected or, at least, severely restricted. In whose favor? I believe, in favor of charitable organizations whose statutory goal would be precisely the socialization of such children. As an option—in favor of wealthier citizens who agree to cover the debts from lawsuits against the child’s previous guardians, after which they themselves assume further responsibility for this child. I do not dare predict which model will be more in demand in the market, but both are ethically permissible.

Socialization of difficult children two centuries ago—the dark past of AnCap

Learned helplessness, the illusion of control, and agorism

Mikhail Pozharsky has released a very good video about the illusion of control. Be sure to watch it in full if you haven’t already, and I, as usual, will provide the key points as I understand them.

  1. The experience of falling into a hopeless situation (one in which the subject’s position does not depend on their efforts) triggers the development of learned helplessness.
  2. Learned helplessness sharply reduces the subject’s competitive potential in situations where their actions actually do make a difference.
  3. An important psychological defense against learned helplessness is the illusion of control. In a hopeless situation, one can believe that something still depends on them, and thus learned helplessness will not arise.
  4. However, the rituals of psychological defense designed to create an illusion of control can themselves worsen the hopeless situation.
  5. Therefore, the skill of reflection is more effective, where the subject analyzes what they can actually control and what they cannot, and does not waste strength on the illusion of control, accepting force majeure as it is.
  6. Such a skill is formed through the experience of independently finding a way out of difficult situations, and in no other way.
  7. Therefore, creating cumbersome centralized structures and shifting the responsibility for everything onto them is an illusion of control, whereas a real fight against difficulties implies a decentralized approach based on personal responsibility. Period.

This is why, having outlined three main paths toward ancap — minarchism, panarchism, and agorism — I pay special attention specifically to agorism.

One can start a political party, like the big shots do, hold rallies, like the big shots do, and believe that through political pressure you are somehow influencing the policies pursued by the authorities — and when asked why life isn’t getting better, answer that the efforts undertaken are insufficient, and not a hundred thousand, but a million people must take to the streets.

One can propose reforms to create functional competing jurisdictions, dream of Facebook citizenship or the Bitnation project, and when asked why none of this is being implemented, answer that everything is heading that way anyway, but it would be good to double the propaganda efforts.

Or one can simply make a deal and not pay a tax. Or bypass an inconvenient ban. Or invent a service that is useful to people but invisible to the state’s servants. This is no longer an illusion of control. This is control itself. Through such things, a person learns to independently find a way out of difficult situations. And if they find themselves in conditions where they cannot control the possibility of getting out of the situation, they will already be resistant to learned helplessness, and will not fall back on rituals for the sake of an illusion of control.

One can remain an atheist in the trenches under fire. While one is shitting their pants and another is praying, the agorist digs the trench deeper.

https://youtu.be/pJuUbGwYH1Q

How to be an agorist and engage in ordinary business with the minimum possible payment of taxes?

For example, I want to open a cafe. Opening a cafe in the city center, I run a high risk of losing money to the state. How can I avoid this, and is it even worth risking opening an illegal business in modern Russia with a physical space and people inside? It feels like agorism right now is only about selling substances, but I don’t want to sell substances on Tor; I want to run, for example, a cafe, and there is absolutely not that kind of anonymity—you need people to know about it, and it needs to be out in the open. That is completely different from the substances market, for instance, where you can do business via Tor. Furthermore, if some problems with the authorities arise, the courts and law enforcement are monopolized, and no one will protect me from the arbitrary actions of tax officials. What should I do? Wait until avoiding taxes becomes the norm? Grease palms with bribes? Then the money will go to government officials and increase their interest in creating problems (so there would be more bribes). It’s some kind of vicious circle.

The question is accompanied by a donation in the amount of 0.0001985 btc

Agorist practices always imply a certain solidarity between counterparties against the state; this is what you should focus on when figuring out how to build your shadow business. For instance, if you set up a tax-free establishment in an open square in the city center, you have only one chance to avoid repressive pressure from the state: if, in response to such attempts, your customers immediately shoot the state representatives to hell, and the state knows this in advance. Outside the Chechen Republic, you cannot count on this, so let’s move on.

Since we are talking about the catering sector, I would suggest a different business model. Find a business center that isn’t too posh, with a lax access regime, visit every office, and present your simple commercial proposal—that every working day during the lunch break, you are ready to deliver a hot set meal at a fixed low price, with payment in cash. Here is a link to a Telegram bot; every morning until 11:00, an order can be placed by choosing one of three set meals, and from 13:45 to 14:15, the order will be delivered to the office. That, essentially, is the whole model. You will need to rent a kitchen space as a private individual, hire staff under the table—and get to work. You don’t even have to introduce yourself by any name; your name is the Telegram bot. Oh, and you’ll also need to spend some money on writing the bot. Alternatively, the bot can be replaced by a website, but that depends only on how widespread Telegram is in your city.

By the way, to avoid walking around with your advertisements in vain, when you promote your hot lunch service, bring some tasty pastries with you; they’ll go down great in offices whether it’s closer to lunch or closer to five o’clock. Then you won’t just be “some guy who came by with brochures,” but “those people with the buns who can also bring hot lunches.”

Of course, this model works better when there is some life in the offices, so the period of total self-isolation is not the best time to start such a business. On the other hand, right now you can organize free meals for doctors in hospitals, funded by donations. Some NGOs are already doing this; nothing stops you from starting to hone your organizational skills right now. Any charitable organization spends part of the collected funds on its own needs, so, as long as you aren’t greedy, you will at least be able to provide a minimal income for yourself and your employees, plus earn a reputation and visibility, and the object of charity will be grateful to you and, if necessary, will provide a ventilator out of turn.

Of course, this idea is not new, but there will be space for agorism in this sphere for a long time, especially outside the capitals

Strategies in a crisis

Vladimir Milov has started a “on quarantine” section in his video blog and has released two videos in it so far. In the first, he gives a rough outline for employees, and in the second, he offers some tips for small businesses. It is better, of course, to watch them in full, but I will point out the moments that I consider important.

  1. This is for the long haul. If you are already suffering losses right now, you should not expect to simply wait out the absolute clusterfuck; you need to work on reducing them immediately.
  2. The state will not help. You should demand as much as possible from it and as loudly as possible, but you should not seriously base your plans on state support.
  3. Being assholes is unprofitable. The state has not declared force majeure, it does not compensate for losses, and it does not curb its appetites. If we start eating each other now, it is a path to nowhere. It is important to reach amicable agreements among yourselves, since this has hit everyone. As for the assholes, they can be shown the full power of the institution of reputation.

I will stop separately at the third point. Milov advises adjusting your consumption model so as to buy only from those who meet ethical criteria: feeding doctors free lunches, caring for animals, paying employees’ salaries instead of sending them on unpaid leave – and so on.

Indeed, the role of every consumer has significantly increased now, and it largely depends on them which business survives and which does not. But I would recommend adding one more, and very important, selection criterion to all the others: how much this business kicks back to the state. Feeding the state with one’s taxes has always been a burdensome moral compromise, but now it is becoming almost a crime. Previously, one could work under the table and be indifferent to the fact that the state takes VAT from your purchases. Now it is important. In conditions of people’s impoverishment, the growing tax collections of the Russian government are a demonstration of sheer madness on the part of the citizens.

Therefore, when choosing whom to buy, say, food from, orient yourself primarily on this. Pickles or potatoes at the bazaar are an excellent placement of money. Buying from a farm kiosk is great, but it’s even better if it’s from a car and without a cash register. Buying at a local store – only if it is not a chain and is on a simplified tax system (the absence of VAT can be seen on the receipt).

The best moral choice for any small business today is to go underground. Closing officially and continuing to serve clients by personal agreement is a measure that will allow not only to plug the hole through which your money leaks to the state, but also to accelerate the development of horizontal ties. It is time to expand contact lists, acquire personal plumbers, hairdressers, doctors – and clients, of course.

In order to refuse service to the security forces, the atmosphere in society has not yet heated up enough, but it already makes sense to have soul-saving conversations with them. Like, you are state employees, you’ll survive on your salary, it’s harder for the private sector. So don’t get in the way, don’t interfere with work – don’t tempt fate.

The next stage of rejecting the regime after going underground is usually sabotage, diversion, and guerrilla warfare: destroying surveillance cameras, smashing FNS offices, setting fire to police cars and other cute trifles, but one should not bother with nonsense. If it is possible to achieve total non-compliance with state orders without violent excesses – then all the better for all of us.

And when Putin leaves, and some Navalny takes his place, then it is important to immediately put him before the fact: things will not be as they were. An efficient state is a cheap state. The cheaper it is for the citizens, the more grounds it has to expect that its polite requests will be fulfilled. As for any demands from the state in the beautiful Russia of the future, citizens should have a simple and quick answer: fuck off – that way. And point in the direction where today’s dictator was sent.

Speculation during an emergency

A few days ago, the New York police arrested Baruch Feldheim, who had pre-emptively bought up 192,000 masks and 600,000 gloves (and many other goodies) to later sell them to medical professionals and ordinary citizens with a massive markup (around 700%).
How would anarcho-capitalism deal with such speculation during emergencies?
On one hand, he acted exclusively through market methods and sought to maximize profit; on the other, his actions could very well have cost someone their life.

Slava Mahorkin

So, imagine it is the era of ancap; everything is calm in New York, while there is some local epidemic in China. No one cares about it, no one is panic-buying masks and gloves, no one is closing borders, and at the hour destined by fate, the epidemic breaks out in New York. Suddenly, everyone rushes for PPE, instantly clearing out the small warehouse stocks, and collapse ensues. Later, of course, everything will resolve itself—supplies will be brought in from where there is no epidemic, production will be expanded, and so on. But at first, there will be chaos.

Now let’s consider another scenario. There is some local epidemic in China, no one cares about it, but the vigilant Baruch Feldheim is already buying up masks and gloves. Pharmacies face increased demand, order more, and just in case, raise prices by about ten percent. Blogs write about the price hikes, linking them to the distant Chinese epidemic, and now other anxious people start flocking to pharmacies, just in case. As a result of the increased demand, PPE production begins to increase long before the epidemic reaches the USA. Consequently, when it does happen, it is met fully prepared: output has increased, warehouses are full, and everyone who wanted to protect themselves can do so. Riding the wave of hype even before the arrival of the epidemic, Baruch Feldheim sells most of his stocks at double the price, making a good profit, and keeps the rest for personal use or to sell even higher if the occasion arises.

And finally, let’s consider a third scenario. There is some local epidemic in China, no one cares about it, but the vigilant Baruch Feldheim is already buying up masks and gloves. Pharmacies face increased demand, order more, and just in case, raise prices by about ten percent. Blogs write about the price hikes, linking them to the distant Chinese epidemic, and now other anxious people start flocking to pharmacies, just in case. Meanwhile, the epidemic in China is localized and fizzles out. The vigilant citizens find themselves sitting on a pile of junk, pharmacies are overstocked, PPE prices drop, and gradually the unlucky entrepreneurs sell off their illiquid remains, recording small losses or even breaking even if they manage to maneuver skillfully.

Speculation is an attempt to earn money by predicting the future. If the speculation succeeds, the future turns out better for both the speculator and those who bought from him. If it fails, it is the speculator’s problem. But if a society develops a habit of punishing the speculator for his success, then the second and third scenarios described above will be closed off to him. No one looks to the future; everyone looks warily at their neighbors, fearing they might provoke envy and get punched in the face.

Yesterday I wrote about Somalia and mentioned a lecture by Vladimir Zolotorev, where he talks about Somali law. Capitalism did not happen there precisely because any personal success is considered accidental luck, and its fruits must be shared with the clan. The same nonsense reigned in Melanesia and among North American Indians with their potlatch culture; the same thing happens in today’s USA, although, it would seem, Indians have long since stopped living on Manhattan.

Raider carrying away the loot

Fall of the Black Hawk

Yesterday, after I finished editing the article on the inefficiency of violence, I sat down to watch the movie “Black Hawk Down,” which I came across while following links related to the article. The film focuses on the episode mentioned in the article: how the US was forced to leave Somalia after the failure of what they considered a peacekeeping operation—losing nearly two dozen special forces operators in a single day and killing around a thousand locals in a dense urban environment, without much regard for who was a combatant and who was not.

In 2001, when Black Hawk Down was released, I was more interested in things like The Lord of the Rings or Harry Potter, which came out around the same time, but I’m glad I finally got to it; the movie is excellent. However, I want to talk not about the plot in general or the visual quality, but about literally two moments that were key for me personally, and to which all other narrative serves, in my view, merely as illustration.

The first moment is around the eighteenth minute. The Rangers are discussing a fact from a thin brochure they were given titled “All About Somalia”: if one local kills another, his clan must pay the clan of the deceased a hundred camels. To this, one of the soldiers notes that he couldn’t even afford one camel, and the locals must all be in debt now. And now, let’s listen to a lecture by Vladimir Zolotorev:

I am providing a link exactly to the moment where he explains how the civil war in Somalia was effectively stopped by a court decision: the combatants were quieted by their own clans because the relatives of the killers were tired of paying giant sums for other people’s debts.

Thus, the film brilliantly shows how expensive and pointlessly cruel the UN intervention was, and how little importance the self-proclaimed peacekeepers attached to the mechanism that actually stopped the war.

The second important moment is closer to the end of the movie, around 1:45. A Somali man is talking to a captured American pilot and explains: you took our hostages, we took you. The pilot replies: my government will not negotiate. OK, the Somali replies, then let’s negotiate between you and me, soldier to soldier. To this, the American replies that he has no decision-making power. The Somali huffs in response: you, apparently, are granted the right to kill, but not to negotiate, while for us, war is just another form of negotiation. Therefore, you have nothing to gain here.

Many thanks to Ridley Scott, who didn’t film a propaganda piece, but truly managed to show the difference between a dull and meaningless state military machine and an anarchic society. I especially recommend the film to those who repeatedly ask the same questions about how “Ancapistan” would defend itself from a state invasion.

Of course, Somalia is not Ancapistan—things are doing well with anarchy there, but significantly worse with capitalism, especially at the time shown in the movie. Nevertheless, even a pre-capitalist stateless society managed to teach a good lesson to the strongest superpower on the planet. States risk a lot when they try to impose their rules on anarchic orders, and if these orders are backed by a truly strong economy, then the outcome of a direct military confrontation between a state and Ancapistan can be considered predetermined.

The best scene in the movie

They didn’t ask for some promo for nothing

I finished listening to Yuneman’s stream, which was announced recently. Impressions of the speakers:

  • Vatoadmin. The most energetic of the four; as a humanities person, his stories are, of course, closer and more understandable to me. He believes the world will emerge from the crisis renewed, having discarded some of today’s inefficient practices.
  • Bazhenov. The most high-brow economist among the four interlocutors, and is perceived as a bit of a snob because of it. He believes that nothing will change much; we will recover and carry on as before.
  • Zubov. Had the most terrible connection, due to which I couldn’t make out everything he was saying. Being more of a financier than an economist, he is skeptical about the post-crisis future, because massive government interventions will, naturally, significantly worsen the structure of the global economy.
  • Yuneman. The least of an economist among those gathered, but he conducted the conversation quite sensibly and structurally. He believes that the pandemic should have a long-term impact on our social practices, and this will likely be its main consequence.

A considerable and least interesting part of the discussion was devoted to the analysis of current support measures for citizens being implemented in various countries. It was full of banalites already worn out a thousand times elsewhere. Well, except that they didn’t stoop to reciting the plight of the Pechenegs.

To hell with the Pechenegs, but the word “bitcoin” was also not mentioned once, which, in my view, indicates too narrow a perspective on the situation. Bitcoin emerged as a reaction to the pumping of the economy with fiat in 2008, and in the years since, it has developed and strengthened significantly. Now, that pumping looks like playing in a sandbox, and I would be truly interested to hear an economic analysis of how the coexistence of a printing press going “brrrr” and ready-to-use deflationary money will affect the global economy. If economists believe that this influence will be negligible, again, I would like to understand why.

The prospects of some regimes simply not surviving the crisis were mentioned at the very end and only briefly, but they can be understood here: let political scientists discuss such topics.

I don’t watch streams very often, but I don’t feel that this specific one was a waste of time; the material was dense and the delivery was of decent quality.