How could a free market without state regulation of security issues have prevented 9/11?

anonymous question

I currently remind me a bit of Yulia Latynina, because I want to respond in the spirit of “you know, it’s like in that joke: first of all, there were no bullets…”.

Terrorist attacks such as 9/11, Beslan, Nord-Ost, the Boston Marathon, and so on, are directed against state policy. No state – no policy – no political terrorist attacks. Voila, the free market prevented them. Now let’s dig a little deeper.
Who ensures the safety of people in a free market? The people themselves. For the most part – directly. But the least troublesome and most obvious way, given that the market always tends to settle things through the division of labor, is to use market offers.

What does the market offer in terms of security? First, one can purchase a security service, for example, by installing an alarm system in the house and signing a contract with a security firm. Second, one can buy an insurance policy and simply know that, should something happen to you, either you or a designated circle of heirs will receive an insurance payout, so now it is the insurance company’s headache to figure out how to ensure people’s safety regarding insurance events.

Aha. So, if a terrorist attack occurs, the insurance company will suffer huge losses. There you have your potential beneficiary of terrorist attacks – competing insurance companies. The plan of action: blow up a plane, the company that insured the flight goes bankrupt, and we enter the vacated flight insurance market. There is, however, a problem: the plane is insured by one company, but each passenger is insured by any other; after all, they choose whose policy to take when insuring themselves against an accident or attack during a flight. Thus, decentralization makes commercial terrorist attacks aimed at seizing the insurance market ineffective. This applies not only to flights, but to all spheres of life in general.

But what about ideological terrorist attacks? For example, conservative fanatics might carry out mass shootings in gay clubs, exactly as they do now. To a certain extent, decentralization rules here too: when even the last gay man has a gun, a mass shooting becomes a problem. But a gun doesn’t save you from an explosion.
How does the free market prevent the spread of destructive ideologies? In the only way available to it: by making people richer and happier. This works slowly and does not provide a hundred percent effect, but it completely outperforms any state alternatives.

The only thing the market hasn’t learned to prevent yet is the appearance of insane maniacs. Economic incentives work poorly on someone who has lost their mind, just as they do on meteorites and tsunamis.

But once the market settles the raiders and Islamists, it will be the turn of the maniacs and natural disasters. Just laissez faire, laissez passer.

September 9 Protest

You have run out of questions for now, so I will just talk about yesterday’s protests.

It is clear that pensions, in particular, concern very few people. Those who are about to retire suffer from the increase in the retirement age to a minimal extent, because the age is increasing gradually. And for those who won’t retire for a long time, it is such a distant future that in our fast-paced and unstable world, it is completely pointless to make plans for such a period.

But it is the youth who are protesting. What is their motive?

They are simply tired of this state, and here it has set itself up perfectly. You can go out to protest against the government as such, but in the eyes of parents and grandmothers, have an ironclad justification: we were robbed, you were robbed, the state has gone crazy, it needs to be reined in, otherwise it won’t stop.

Right now is such a wonderful period when there is absolutely no point in promoting any legal constructive politicians at the federal level. Duma elections in 2021. Presidential elections in 2024. So, it will be a very long time before people are receptive to the thesis that “the opposition only brings negativity, why not participate in elections with a constructive agenda,” and for now, questions about what the hell is going on with the government’s agenda will land much better. Now is the time to obstruct it, force it to make mistakes, shake its authority, and make any attempts to negotiate with it about anything other than surrender look ridiculous. Time for the thesis “you present us with a fait accompli, and we present you with a fait accompli.” A time when the state can not only be called a bandit, but one can behave toward it exactly as such: place it outside the law and organize a defense. A time when, in response to the words “I am against the state,” people stop pointing to their temples and start wondering what can be done.

From the thesis “the state cannot be trusted with our pension savings,” it is not far to the thesis “the state cannot be trusted with anything at all.” And that means people are ripening for ancap.

Among our libertarians, there is much talk and many jokes about contract slavery. However, how is this possible from the point of view of libertarianism? After all, I cannot transfer my will, body, and mind to anyone—they belong only to me, and regardless of my desire, I will not be able to conclude a slave contract. Or can I?

anonymous question

I dislike lapsing into academicism, which is why I try to attract experts who aren’t prone to it. Regarding contract slavery, I recommend reading LJ-user Artyom Zheleznov under the tags slavery, slave ownership, and slave trade.

The guy positions himself not only as a theorist but also as a practitioner in this industry, which gives his delivery an additional freshness.

I’ll provide a mix of his points and my own thoughts.

Let’s define a slave as a subject coerced into a particular activity, and a slave owner as the person or organization that is the ultimate beneficiary of the slave’s forced activity. I should note that coercion to labor specifically is not the defining characteristic of slavery—it is enough, for example, that a slave is forced to live where specified, eat what is given, and follow a routine imposed by the slave owner. Similarly, whether the slave owner derives profit from the slave is not fundamental. A slave can be loss-making and yet still be in slavery.

In the modern world, private slave ownership seems to be permitted only in Morocco, while state slavery, conversely, is legalized everywhere. A person becomes a slave by entering prison, a conscript army, or an orphanage. Whether an Australian citizen, obliged to come and vote in elections, is considered a slave is a debatable question. I would rather define this as a labor obligation that can be bought off.

What is the difference between slavery and wage labor? A slave, by default, has no right to negotiate the amount of their remuneration with the slave owner, nor do they have the right to unilaterally terminate the relationship.

Now, let’s move on to contract slavery. This is a type of slavery that arises as a result of concluding a contract, that is, voluntarily. Thus, at the moment the deal is struck, each party believes they are gaining more than they are losing.

For example, Irish people fleeing famine to the United States in the 19th century could not afford the trip, so they sold themselves into slavery. In the States, they were bought by some private individual, and under the contract, the slaves were obliged to work for them for an agreed term. You will agree that such a model was beneficial for all participants of the deal. The emigrant bought their life and a ticket at the cost of a temporary limitation of freedom. The captain received money only if he delivered the indentured slave to the other shore. The slave owner received cheap labor, which would pay off only if the slave remained capable of working for the entire term specified in the contract.

I will note that voluntary slavery does not mean the sale of the body, mind, and will, even if the contract is lifelong rather than term-limited; this is precisely why it does not contradict libertarian principles. Contract slavery simply means coercion to perform activities at the request of the slave owner, in accordance with the contract. Retaining freedom of will, a slave can always deem further existence in slavery unacceptable and begin to sabotage the master’s instructions and take actions toward their own liberation. If they can convince the master to enter into a new deal—where, on one hand, the condition is liberation, and on the other, some benefit unattainable under the current slave contract—then obtaining freedom is entirely realistic.

The most innocent variety of slavery is erotic games between a dominant and a submissive. By contract, the submissive may be coerced by the dominant into anything, but the contract can be terminated or suspended at the will of either party.

The most disgusting variety of slavery is, of course, state slavery. Slaves come to the state for free; the state does not care about profit and is not interested in the preservation of the slaves—and therefore there is no cruelty that it could not easily exhibit toward them while remaining completely unpunished.

Will the current generation of Soviet—ugh, Russian—people live under ancap?

@WildTurkey

I would say that even the phrase “under ancap” is not entirely correct. Rather, one should say “by ancap,” just as people say, for example, “by conscience” or “by the rules,” although it sounds a bit clumsy.

The further we go, the more opportunities people have to live by ancap in a wide variety of things. Just ten years ago, people had practically no opportunity to conduct international trade without contacting the state. Now—no problem at all: there are bitcoins, there is the internet, trade away; the only issue is that problems may arise at customs. But once inexpensive long-range drones go into mass production, the issue of cross-border delivery of small parcels will cease to be acute.
And it will be this way everywhere there is solvent demand for bypassing state barriers. And the more positive examples of living by ancap there are, the greater the demand for such a life, and the less the demand for the state as such.

I have just drunk an elixir of optimism and predict that among the current generation of Russians around twenty years old, significantly more will live to see a life fully by ancap than will live to see retirement)))

This is a completely baseless prediction based on blind faith in the “market.” Mind you, economic theory does deny the possibility of precise quantitative predictions.

spherical ancap in a vacuum

Vladimir Popov’s Lecture in Piter

Recently, I answered questions regarding weapons: about the consequences of legalization and about psychos. In those answers, I consistently pointed to the logical premises for why arming citizens would reduce crime, and also noted that this is confirmed by practice in the post-Soviet space.

Right now in St. Petersburg, there is a lecture by the well-known libertarian weapons expert Vladimir Popov, host of the channel Don’t tread on me. There, he warns against engaging in propaganda games with statistics, because crime is influenced by many far more significant factors, and no correlation between the murder rate and the level of citizen armament is observed worldwide.

Not that this is a direct refutation of my thesis, but the addition is quite substantial.

Anyway, I won’t distract you; just watch the broadcast with me.

https://youtu.be/RNkWArqmfQQ
Recording of the lecture broadcast

Psychos and Guns

Following up on the last post about the legalization of weapons. A topical issue: what about mentally unstable people who own weapons? Won’t legalization trigger mass shootings and such? What about road rage, when firearms instead of fists will be used?

anonymous question

As the practice of mass shootings in the States shows, they are often committed by mentally unstable people for whom this fact was recorded long ago, but it did not prevent them from acquiring a gun, despite the fact that a background check is supposedly required.

So, after the deregulation of weapon acquisition, the situation with mentally unstable people will not get worse. However, law-abiding citizens focused strictly on self-defense will have noticeably more guns in percentage terms. And the more criminogenic the situation was before deregulation, the greater the incentives will be to acquire self-defense weapons. Accordingly, the curve of armed crime will decline more sharply.

As for road rage, practice shows that the best prevention is liability insurance. There is no point in being rude to someone who doesn’t owe you money when you know that the money won’t come out of your own pocket.

A pistol and a glue gun are simply two different tools

Tyan, how do you feel about Ronald Reagan and Margaret Thatcher?

anonymous question

Both of these figures entered history by initiating a long trend toward strengthening economic interventionism worldwide, which began at the end of the 19th century. To these two, I would add a third person who was at the helm of the state around the same time: Deng Xiaoping.

Each of these three more or less consistently implemented liberal reforms in their country and served as a prominent benchmark for the governments of other nations.

The most consistently liberal of this trio was certainly Margaret Thatcher. The most significant economic results for their country were achieved by Deng Xiaoping. Ronald Reagan received the most decent country and achieved the most modest results—but he excelled in foreign policy and became the one who practically finished off the Empire of Evil.

Reagan and especially Thatcher get an additional plus from libertarians for popularizing Friedrich Hayek, who received his Nobel Prize shortly before they came to power and prepared the ideological foundation for their reforms.

And as for my personal attitude toward them?

I don’t order Thatcher statues in Georgia, I don’t watch movies with Reagan; my attitude is calm and quite respectful.

Deng Xiaoping and Friedrich Hayek)))

Hi. And how, under ancap, can the harmony of the urban environment be ensured? What would stop one guy from building houses in the Baroque style, while another builds right next to him in the Constructivist style (let’s say)? Or is this not a problem worth thinking about at all?

anonymous question

Strictly speaking, even under a state, in most cases, nothing prevents two developers from building houses in completely different styles next to each other. There is a set of formal criteria regarding something like insolation, number of floors, and parking area; once those are met, it’s done. If the verdict of the chief city architect or some other expert bigwig is required, then corrupting them is simply a matter of time.

At the same time, there are many cases of self-organization in condominiums, where the purchase of land for development or a finished real estate object is accompanied by a set of restrictions common to the entire condominium—on fence height, number of floors, roof color, or even damn curtains on the windows. As long as such easements allow for increasing the value of the property in the condominium, the market supports them. As soon as a restriction leads to a decrease in the price of the properties, the market sets in motion the forces to abolish them, and suddenly the condominium board decides to lift the ban on building a second garage on a plot, or the requirement that roofs must necessarily be red. In the described mechanism of restricting property disposal rights, there is nothing that could not be implemented under ancap.

Here you go, an addition to baroque under state regulation

Memo for Arguing with Schoolchildren

In yesterday’s post, I mentioned a cheat sheet for arguing with schoolchildren, and readers were interested in what kind of cheat sheet it was.

The cheat sheet was developed in the “Austrian School of Economics” community and consists of just five topics. In fact, such things highlight exactly how unique our project is. Any FAQ is a product of collecting, averaging, and generalizing many questions, after which a polished text covering the topic is prepared. In our case, every day we end up with a text answering a specific, rather than a generalized, question. And if any answer seems superficial or inaccurate to one of the readers, they can always send their clarifications and additions.

I recently came to the conclusion that antitrust services are not very effective in handling their task (one can use the recent situation with the collusion of memory chip manufacturers or with video cards as an example). And how can the free market resolve a monopoly?

anonymous question

This question is so common that when a memo for arguing with schoolchildren was being compiled, it was listed as number one.

Indeed, antitrust services are not needed. Monopolies are either formed where the optimal business size turns out to be comparable to the total market size, or where government regulations have created the monopoly artificially (for example, through licensing of activities, exclusive procurement from a single supplier, issuance of patents — in other words, by prohibiting anyone but the monopolist from entering the market).

In the first case, the monopolist successfully meets the demand, the market grows, and over time it turns out that there is now room for several more companies; any attempt by the monopolist to fight them using market methods leads to such a loss of profit that it becomes more profitable for the monopolist to invest in other industries rather than cling to a market share where they are still a monopolist.

In the second case, the monopolist becomes arrogant, raising prices and degrading the quality of services, while the state has to deal with consumer dissatisfaction. Sooner or later, either lobbyists for potential competitors will push through the deregulation of the industry (this is how Novatek secured the right to export liquefied natural gas, which previously belonged exclusively to Gazprom), or a black market will develop, which, without doing anything about the de jure monopoly, will undermine its de facto monopoly. Despairing of fighting the black market through state power, the monopolist will be forced to make concessions — and finally start lowering prices and improving quality.