How will the transition to ancap be carried out in general, and in Russia in particular?

анонимный вопрос

In the post about ancap and minarchism, I described two possible ways of building ancap: the political and the countercultural. The political approach boils down to reforming the state into a minarchist state, and then further reducing it through political means up to its full formal dissolution. The countercultural approach boils down to a factual refusal to use the state, and especially a refusal to provide it with any resources whatsoever, from money to brains.

In a poll on the most promising method, my readers preferred the political method, although a significant number of votes went to the view that one should first achieve the maximum possible through political means, and then use the countercultural method to finish off the weakened state mechanism.

Personally, it seems to me that there will be more and more ancap in our lives as people learn to hide their income from the state more effectively and grow wealthy faster than they are plundered. A poor person may still hope that the state will rob the rich and give it to them. A wealthy person only needs to be left alone; they will figure it out themselves.

It is very important that working for the state be humiliating and serve as a demonstration of incompetence, while working for a private individual signifies both respect and prosperity. For this, it is important that entrepreneurs and their employees realize the unity of their interests: the less the state gets in the way, the more those who work will get. And this is achieved only through the widespread penetration of ideas.

The temptation of the political path is that a politician can lead society to their desired result almost by force, whereas the method of cultural transformation assumes a broad acceptance of libertarian ideas by society. It is also important to understand that any failure of libertarian political reforms hits the image of the ideology (look what those damned liberalasts have brought the country to!), and any success is easily converted by the state into its own strengthening (you’ve grown rich—now share!). Meanwhile, public sentiment cannot be uprooted so easily, which is why the path to approximating ancap through it is much more reliable.

*This is the kind of tax collection graph we need*

You’ve started saying quite often that you’re repeating yourself. In that case, I wonder: are there any topics left for which you don’t know the answer? Or are this site and channel an attempt to find one?

анонимный вопрос

I liked this question, so I’m answering it out of turn; my apologies to everyone who had to be pushed back.

Of course, there is an entire class of questions to which I do not know the answer: predicting the future.

As long as the question is “how will such-and-such type of human relationship look under ancap,” it can be answered. When the question looks like something such as “when will ancap happen in Russia?”, I fall into a stupor, because theory does not answer this; one can only guess. Whoever predicts the future best is the most clever entrepreneur, for he derives profit specifically from the uncertainty of the future.

There is also a huge number of questions to which I do not know the answer, but can find it if the question is asked. For example, “how do you comment on economist A’s statement regarding politician B’s program?” I would need to find out who A is, what he said about B, what that program is, and only then would it become clear how I can comment on it.

The same applies to questions concerning the intricacies of theory, for example, “economist C has developed a model that refutes the law of diminishing marginal utility—checkmate, Austrians!” I would have to find out what the model is and for which specific cases it works before I can formulate how the Austrians escape the check. Or I might not be able to do it; after all, this is a science, not theology, and it cannot give guarantees of a correct explanation for absolutely everything. For instance, spears are still being broken over whether Bitcoin satisfies Mises’ regression theorem or not.

And finally: no, this site and channel are not an attempt to find unanswered questions. It is an attempt to interest the general public in the topic of libertarianism and to make them realize how simple all this is, in general.

— Bitcoin has no commodity value, defend yourself, sir!
— It is in the blockchain, sir!

Under ancap, it is unlikely that all countries will instantly become single-story, so the question is about collective property.

Specifically regarding apartment buildings: what can be done in a future libertarian Russia with lunatics who keep rabid dogs in their apartments, bring trash from the landfill, drill every day, etc.?

анонимный вопрос

I have already answered a practically identical question, but since we have returned to this topic, I will now approach it from a slightly different angle.

In a recent post on monopolies, I mentioned that in a free market there are both factors contributing to the growth of companies and factors contributing to their fragmentation. The inconveniences that individual apartment owners face when attempting to jointly manage an apartment building clearly tell us that in this area, the tendency toward the growth of companies will be stronger in a free market. And indeed, it is more convenient for one developer to build an apartment building, for one legal entity to manage it, and so on. So, as the initial non-market Russian distribution of property (where every apartment has its own owner) is smoothed out, we will more and more often arrive at a situation where apartments are owned by a landlord and rented out by them.

Thus, the boundaries of acceptable behavior when using the apartments will be determined primarily by the owner, not the tenant, and for a quiet, decent resident, this is certainly convenient: you inform the owner that the neighbor is going crazy and has filled the apartment with some stinking junk, and the owner will set things right.

Now, in the event that the neighbor bothering you is actually the owner of their apartment, we fall within the framework of the usual problem of negative externalities: filing a claim, negotiations, threats, court, compensation. Moreover, again, if you are not the owner but a tenant, the problem is solved more easily, since it is easier to determine the amount of damage. You declare your willingness to move out if your landlord does not resolve the problem with the neighbor, and the landlord then presents claims to the neighbor, based on the amount of rent they risk losing, and this is a much more reliable basis for legal proceedings than other methods of assessing damage.

The moral. Housing maintenance is also a business, and no one promised that doing business is easy. But there are ways to make your life easier; after all, it’s the market.

Libertarian Handbook

Today in the chat, I was asked to pin a post with a list of various useful links, and, naturally, this led to a discussion about possible implementations of some kind of libertarian directory, where someone just starting to familiarize themselves with the topic could dive in and immediately get a general idea of the subject, and then delve deeper in any direction that seems interesting.

So I became curious about what form such a directory would seem most convenient to you.

With a free market, there will be cheap courts too, and then will the phrase “to hell with it, it’s cheaper than suing” not work?

Clarifying question regarding the post about vigilantism under ancap

I mentioned an example where a person resorts to vigilantism: relatively small damage was caused to them, the other party refused to compensate immediately, and instead of seeking formal compensation, the person simply causes proportional damage, and the opposing party accepts this, believing it would be cheaper than going to court. You object: that in a free competitive market, it will always be possible to find a reasonably affordable court, meaning the argument that swallowing the offense is cheaper than litigating will prove invalid.

In the case of a restaurant display window that I broke, it is true that the restaurant manager requires minimal effort: one call to the insurance company. Then an insurance agent arrives, records the damage, reviews the camera footage, processes the insurance payout, and then searches for me via the video recording and files a lawsuit, while the restaurant is seemingly no longer involved.

The problem is that while I will, of course, pay the insurance claim without question, I will subsequently create such a stink about the restaurant that they will regret it. These people dared not accept the verdict of my court, meaning they still believe they were right to overcharge and be rude to me; well, that is a very compelling reason to trample their reputation. They have nowhere to run—it is a stationary establishment where visitors go to spend time comfortably, and there are countless ways to ensure the restaurant’s clients experience discomfort. And the restaurant management does not want such problems, so if they can calculate such situations even one step ahead, they would prefer to replace the glass at their own expense without contacting insurance and apply sanctions to the waiter who was rude to me.

That is how my broken windows theory turned out.

My friend has watched too many streams by some guy from California and is now rooting for antitrust authorities. How do I explain to him that antitrust authorities only do harm?

анонимный вопрос

Yeah. Here, as with discussions about socialism, it is important not to get bogged down in details. You tell a person about Venezuela, and they reply that it’s the wrong kind of socialism, and that it’s under sanctions anyway. The same goes for antitrust cases: you explain that after the forced breakup of Standard Oil, oil prices only rose, and they will cite a bunch of additional factors or simply say it was an isolated incident. You talk about the pointlessness of the Russian FAS, and they’ll say that everything in Russia is messed up, but in decent countries, it’s a different story.

It seems to me that it would be far more productive to provide a general understanding of the factors influencing a firm’s size and its operating strategy.

Let’s consider a certain company. It buys some product on the market, uses it to produce another product, and sells this new product. What the input product is doesn’t really matter. It could be raw materials, semi-finished products, human labor, technology, and so on. What the output product is also doesn’t really matter; it could even be the same product as the input, just moved to a different point in space, preserved in time, or repackaged into different containers.

A company can change in size, and this changes the efficiency of its activities (that is, income relative to investment). There are factors that lead to an increase in efficiency as a company grows larger. For example, a transportation company can afford to use higher-capacity vehicles, where the costs per unit of weight are significantly lower. And there are factors that lead to a decrease in efficiency as a company grows. For example, the expansion of a boutique chain beyond wealthy neighborhoods results in peripheral outlets bringing in less money.

As sales markets expand and progress is made in the organization of business processes, there are more and more niches in the world where large companies are most efficient. Moreover, it may turn out that a certain market simply cannot accommodate more than one or two companies, and attempting to prevent their growth or breaking up existing ones will lead to a drop in efficiency and, accordingly, a flight of capital to more profitable industries. Thus, an external regulator will only oppress the industry by increasing production costs, which may lead to price increases or savings on quality—exactly the opposite of the regulator’s goal.

At the same time, as I already detailed for the case with Microsoft specifically, even if a company dominates a certain market, under conditions of free competition, it still cannot relax and earn superprofits from monopoly rent, so nothing threatens the consumer.

At the same time, there are factors that hinder the growth of companies, so monsters formed through unsuccessful mergers and acquisitions lose efficiency and, after a while, begin to rid themselves of unnecessary parts if they do not want to go bankrupt; so here too, the presence of antitrust authorities is completely redundant.

Finally, there are state corporations for whose management the efficiency of the corporation’s operation is not important at all; what matters is the size of their personal income, which is most easily increased with substantial turnover. Therefore, state corporations will tend to expand regardless of market conditions, but this is exactly where antitrust authorities are powerless, as they are themselves precisely the same part of the state.

So, no matter how you look at it, antitrust authorities provide no benefit to either business or consumers; there is only benefit for the wallets of those who have direct influence over these bodies or access to insider information about their work.

I don’t know why the image of a fish stuck so much to this phenomenon, but now those involved in the M&A industry mock it as much as they can

Why are Russian “libertarians” for the most part blinkered youngsters who live in their imagination, without projecting their views onto modern realities?

dad

In many ways, we live in a space of realized utopias.
First, people dream of something, while others find it incredible, ridiculous, and unrealizable, and then before they know it, it is already in full bloom.

And this applies not only to science and technology, but also to the sphere of human relations. So, confidently and argumentatively asserting certain behavioral patterns as something that should be is a quite viable method of changing existence.

But as people grow up, they adopt and develop more and more heuristics for living in the real world, which quite logically conflict with the previously formed image of a dream. At any moment, a person can break and declare that they have become a realist, and now all these dreams no longer interest them at all. So, narrow-mindedness helps to preserve a dream longer, or at least to have fewer costs for its preservation.

I know only one working way to preserve faith in ideals in older people. You need to show them how much has already been traveled on the road toward it, show them that they are not walking alone, show the immediate prospects that are quite realistic to implement, and show that the distant prospects are, in general, quite attainable. A dream alone will not achieve results; one will still have to move in small steps.

And as for old libertarians, there simply aren’t enough of them yet in our Russian society.

Sorry, that turned out pretentious. But it’s okay, sometimes one can afford it.

Narrow-minded youth is an ancient phenomenon

How will private property rights to mobile communication frequencies be determined under anarcho-capitalism, and can they even be property from a libertarian perspective?

анонимный вопрос

I will start with the second part of the question. Of course, technically nothing prevents competing companies from placing a huge number of cell towers side by side that operate in the same frequency range, but this would lead to collisions, and the equipment would be unable to perform its primary purpose—providing mobile communication. Therefore, it can be confidently stated that the working frequency range for mobile communication is a scarce resource. And anything that is a scarce resource can be converted into property.

Now let’s move to the question of determining property rights for this peculiar object in the absence of an external regulator. There are only three permissible ways of acquiring property without violating libertarian principles: primary appropriation, purchase, and compensation for damages. It remains to understand the specifics of applying these methods to frequencies.

Technical characteristics of using frequencies for mobile communication (I am simplifying greatly, after all, this is a post about economics, not technology):
1. There is a specific frequency range for which equipment is manufactured. This range is optimal for mobile communication based on radio wave propagation characteristics: on the one hand, the phone antenna can be quite compact; on the other, waves do not attenuate too strongly in the environment and allow for sufficiently reliable reception indoors, shielded from the signal source by walls.
2. Using the entire frequency band within which mobile devices operate allows for the simultaneous transmission of a certain finite amount of information. The wider the frequency range used by a particular mobile operator, the wider the communication channel they can provide to their users, and consequently, the more users they can connect. More accurately, the less frequently they need to place towers to serve their users.
3. In addition to mobile operators, other companies may use the same frequency ranges for their own needs.

So, a certain mobile operator wants to enter a region. They estimate the tower density they minimally need at the start, depending on the population density in different parts of the region, infrastructure (communication is desirable along main highways, even if few people live there for some reason), and so on. Another parameter in determining tower density turns out to be the width of the frequency range the operator will use.

If there is no particular competition for frequencies, then there is no problem. The operator takes a large unused band and begins to exploit it. Gradually, competitors arrive, and this continues until the free ranges are exhausted. What should operators do now? First, they can abandon the idea of entering a region with such high competition and expand where competition is lower, but this is not always convenient, as subscribers want communication from their operator in all regions to avoid dealing with roaming. Second, they can buy a range from someone who is using it. Since the early adopters grabbed frequencies with a large margin, operators may initially agree to such offers at reasonable prices. Third, they can agree on the joint use of existing frequencies and equipment, which reduces costs for each party to the agreement. Such a precedent, by the way, occurred in Russia during the construction of fourth-generation networks: for them to work productively in densely populated areas, frequency bands must be quite wide and continuous, and so operators began to conclude agreements on the joint use of their ranges. The funniest part is that they had to obtain permission from the state for this, although, it would seem, what business is it of theirs.

Finally, a fourth possible tactic for an outsider is to ignore agreements and simply start placing their own towers and seizing frequencies on a first-come, first-served basis. As in, whether you like it or not, I am now also working on this frequency, and if you don’t like it—move. This is a declaration of war, which eventually ends in one agreement or another. War is a very ruinous enterprise that also damages one’s reputation. Judge for yourself: if subscribers of an existing operator begin to experience connection problems and the operator explains to them that this is because an outsider has arrived and is sticking in their towers, the outsider will have to offer simply revolutionary low tariffs for users to feel even a semblance of loyalty toward them. I do not rule out that occasionally such a seizure of frequencies will be economically justified, but far more often (ancap provides all the tools for this), the delusional will simply go bankrupt.

A characteristic intermediate stage of the industry’s extensive development: everyone has their own tower, but they all stand side by side. At the stage of cost reduction, we will see all these toys on one Christmas tree.

Ancap-chan and Friends

Friends, I would be glad if you joined my telegram chat. I set it up literally last night; at the time of writing this post, there are about fifty people there, and so far I really like the atmosphere.

What is the chat for? I would like to discuss fresh posts from the channel there, ask for your opinion on the project’s development, and answer any short questions about libertarianism — but if a question requires a detailed answer, then it can be asked on the website, as before. Of course, I have nothing against chat participants discussing libertarianism without my involvement; my opinion is just one voice in a general intellectual discussion.

What else would I like to see in the chat? I want to set a standard of respectful communication. We have a subject of conversation: libertarianism in all its aspects. Settling personal disputes or public declarations of personal attitudes toward third parties is not interesting. There are many wonderful platforms for arguing, but they are outside of my chat. I wouldn’t want to silence anyone, so moderation will be as unobtrusive as possible. I might entrust it to another chat participant, but only if I have strong reasons to assume that it will not disrupt the existing atmosphere of trust.

See you in the chat!

Continuation of the discussion about reputation

Bitarch replies:

You wrote a review of my reputation proposal, but it seems you didn’t understand the exact essence of the idea. You write:

As for the system you proposed, people will be willing to take its recommendations into account only if, for some reason, it becomes very important to them that a person, for the sake of increasing their reputation, be willing to contribute to charity.

The main goal of the system is not to show one’s generosity to others, but to create a mechanism for the value of a reputational entity, which will then be a pity to lose. Game theory comes into play, making deceiving other people economically disadvantageous. The original idea was proposed by the developers of the OpenBazaar project; I modified it for application in real society.

Reputation Pledges
OpenBazaar implements proof-of-burn in a different way. On the OpenBazaar network, users can choose to be pseudonymous, meaning you don’t know their true identity. As such, it can sometimes be difficult to determine if they are trustworthy or should be avoided. A reputation system is important to help inform the network of which participants have acted honestly in the past, and which haven’t. There are several facets to the OpenBazaar reputation system, which is still being built, and you can read about the overall system here. One part of this system is Reputation Pledges. This means that a user has chosen to prove their commitment to their OpenBazaar identity by burning a certain amount of bitcoin. The act of burning coins shows the network that the user is committed to their identity because they’ve now expended resources on it, and if they incur a negative reputation then those resources will have gone to waste.

https://openbazaar.org/blog/proof-of-burn-and-reputation-pledges

Indeed, that’s roughly how reputation works. “No one remembers McFlurry the bridge builder! But once I fucked a goat…”

Thank you for the clarification that charity in the proposed engine is not that important, the main thing is the willingness itself to confirm one’s reliability through the expenditure of resources. This could indeed prove important for an outsider to gain traction on a particular trading platform. They could spend money on advertising, or instead, or in addition, spend it on boosting their karma, and this would also perfectly demonstrate their willingness to play fair.

But I thought it important to note that it is pointless to try and stretch any such mechanisms to fit all cases in life. A person can be honest and respectable, like Alexei Karenin, but his wife will still throw herself under a train because in her eyes, he is an inhuman machine.