The Telegram channel BITCOIN TRANSLATED has published a translation of Philipp Bagus’s book The Defense of Deflation (as usual, I have moved the text to my own site to avoid broken links). The translator is Sergey Soltys. I haven’t read the book yet; once I do, I will post a review. But I shouldn’t delay your access to the reading just because I haven’t formed an opinion on the text yet. Usually, if libertarians translate something on their own and put it in the public domain, it means they consider the work to be worth it.
What to do with digital data under ancap? What will the privacy policy be in minarchism?
In our new world, data has turned into a very profitable commodity traded by states, companies, hackers, and anyone else who feels like it! Could they all possibly give up this resource at once, even if you were to cut the state out by the roots? Moreover, people mostly don’t care about their personal data when visiting websites, downloading games, apps, or TikToks. In other words, it’s a kind of exchange of one’s data for convenience/benefits. I don’t think anyone’s property rights are being violated in this case. What do you think?
P.S. This question occurred to me while I was downloading a certain hyped-up Chinese game (those who know, know what I’m talking about). They wrote it right there: that you agree to let them use your account info for their own purposes. In other words, in simple language understandable to a human, and not like in other apps where everything is blurred and vague, explained as if saying, “we aren’t stealing from you, but we’ll take it somehow, and it’s better if you don’t think about it at all, ciao!”
Anal Magician
I would like to take this question as an opportunity to recommend to the reader an article in a channel with the immodest name without compromises, but with a surprisingly modest number of subscribers. However, the text of the article itself is posted on VKontakte, where the author has an order of magnitude more subscribers. There, a particular take interested me.
If one blindly honors the text of a contract with all its squiggles, reservations, and footnotes in tiny print, then the service provider has an economic incentive to cushion their own fall in the text of the agreement: the consumer will not look into the details, but the text of the agreement will significantly restrict them. However, the details of the agreement that are in plain sight must be made more attractive to the client because of competition.
But if we consider only that which was explicitly stated during the conclusion of the agreement as the contract, and treat all implicit nuances that were not discussed as merely unilateral good wishes—then an economic incentive appears to make contracts short and clear, so that the process of concluding the agreement is not burdensome for the buyer, otherwise they will go to another provider.
As we can see from the example you provided, when there is no need for legal hair-splitting, lawyers quickly switch to human language and state directly what rights they reserve. And, as we see from your reaction, the client tends to approve of such honesty. Meanwhile, it is unlikely that you would be so lenient toward a stated intention in a contract by the game developers, for example, to withdraw money from all your bank accounts or bitcoin wallets that the company manages to access. Even though, it would seem, this is also just a matter of access to data.
We live in an increasingly transparent world, which, moreover, will soon be filled with a large number of fakes indistinguishable from reality. Legal protection of personal data, privacy protection of personal life, private keys and passwords—all these are rearguard actions before full capitulation. What to do after capitulation? I wrote about this in one of my old posts titled Digital Identity.
The future is shaky, but I have a feeling that our generation has already accepted the new rules of the game in advance and isn’t particularly worried about it. As for those who, out of habit, will want to hide something, they are doomed to occasionally find themselves in an embarrassing position. Let’s wish them not to get too nervous over such blunders.
I apologize for not answering the direct question about what color underwear we will wear under ancap, and what style under minarchism. What can be done, if we will be going without underwear.
David Friedman. Legal Systems Strongly Differing from Ours. The Amish.
After a long break, Vladimir Zolotorev has published another chapter of the translation of David Friedman’s book Legal Systems Very Different from Our Own. In total, four chapters have been translated out of order as of today. Today’s is dedicated to the legal system of the Amish, who are beloved by Mikhail Svetov.
From the text, it is evident that these downshifters are sympathetic not only to many Americans, but also to Friedman himself. I wonder if they are currently facing problems because of their support for Trump…
The English original was posted on my website around the end of August. The same fate awaits the translation as it is published on mises.in.ua. Usually, corrections of minor flaws are made to the translation, but overall there is not much difference whether to read it on my site or Vladimir’s.
Concentration of Capital in a Free Market
At first glance, free capitalism, unrestricted by the state, has one fundamental characteristic — the inevitable concentration of all capital in a few hands. This leads to a situation that is no better than “state capitalism” in the USSR (roughly speaking, if 1% owns 99% of the capital now, it is clear that over time 0.1% will own 99.9%, and so on). In other words, the absence of state intervention in the market leads to the emergence of such an omnipotent monopoly capitalist that the state would seem like the lesser evil.
Where can I read, if available,
1) A refutation (preferably empirical) of the thesis on the concentration of capital.
2) What can stop concentration, other than non-economic (read: state) intervention?
The question is accompanied by a donation in the amount of 0.00080000 BTC
Unfortunately, any attempts at empirical confirmation or refutation of the thesis on the inevitable concentration of capital under capitalism run into the distorting influence of the state. One can provide examples of how capital concentrates because large capitalists successfully lobby for their interests, and as a result, regulations are adopted by the state that benefit large businesses and disadvantage small ones. Meanwhile, the market reasons for capital concentration remain behind the scenes. One can demonstrate how state antitrust services hinder the notorious concentration of capital, while the purely market mechanisms that also oppose it remain behind the scenes. Therefore, I would like to focus specifically on the market mechanisms working in one direction or another.
Concentration of Capital
The main market reason for the concentration of capital is the positive effect of scale. A large company can afford to use a greater amount of capital goods that increase labor productivity, which allows it to generate more profit and reinvest it, again, into increasingly capital-intensive factors of production.
It is also worth noting that consumer goods are becoming more complex, and the production of many of them inevitably requires the involvement of significant capital. For example, a small shipyard cannot build a cruise liner, and a small studio cannot film a blockbuster.
Diffusion of Capital
Now let’s look at the reasons that contribute to the decrease in the concentration of capital.
First, besides the positive effect of scale, there is also a negative one. The larger the structure, the more costs are attributed to parasitic processes. Orders move through the chain of command more slowly than they would in its absence. An order in a chain of command is more likely to be distorted than in conditions where an individual entrepreneur sets tasks for themselves or directly for the executors. Employees in large structures are no longer motivated by the company’s profit, which they influence only very indirectly, but by artificial KPIs. As a result, they are more focused on achieving KPIs rather than on the interests of the business. All this reduces margins. At a certain size of the structure, the negative effect of scale becomes stronger than the positive one. A business that has grown beyond its optimal size begins to eat away at its capital, yielding market share to smaller competitors.
Second, it is small businesses that implement the lion’s share of innovations. Even in a large company, pilot production is relatively small in size and relies on a small number of scarce specialists. Sensing excess profit as a result of implementing their idea, such a specialist can quite easily leave the company and open their own startup, which then skims the cream off the market. Successful startups grow, and the share of old capital decreases.
Third, for the sake of reducing risks, a large entrepreneur will prefer not to put all their eggs in one basket and will invest money in several companies. This dilutes the ownership structure of companies; the owner can no longer closely monitor the development of their business, responsibility is shifted to management, and it is the top managers who become the primary beneficiaries of the process, while the relative income of investors falls.
Finally, the factor of capital dilution upon inheritance does not disappear. The larger the company, the greater the chances that a bunch of people, as well as various funds, will be mentioned in the will, whereas a small enterprise is more likely to go to a single heir.
And what does this tell us?
Nothing. The optimal size of a business for each industry, and often for each region, is different and constantly changing; it is determined by the level of technological development, which can contribute both to increasing the returns from centralization (for example, auto repair shops were quickly displaced by auto plants after the introduction of the assembly line) and to increasing the returns from decentralization (for instance, broadband internet sharply increased the number of content producers and decreased the average size of a newsroom).
The concentration of capital in the hands of a few may increase or decrease; in essence, this is not important. What is important is that in a free market, the welfare of the poorest grows even when the welfare of the richest grows even faster. And there are indeed many empirical studies on this topic (although, of course, one must remember here as well that empirics will inevitably be distorted by state intervention). You can read more about this in one of the chapters of David Friedman’s *Machinery of Freedom*, which I am translating, titled “The Rich Get Richer, and the Poor Get Richer”. The desired empirics are also present there.
Do you think it is worth lending to the state in the form of purchasing government bonds? And corporate bonds of state corporations?
A few thoughts from the author of the question:
The state’s primary source of income is taxes, and it is likely that to pay interest on bonds, the state will resort to increasing its debt burden. Unsuccessful bond placements from the state’s perspective are a signal that it is not trusted enough to attract funds as cheaply as it wants, and this could lead to a reduction in government spending.
At the same time, the inability to borrow may lead to reaching into pockets through taxes.
I am inclined to believe that it is better not to lend to states, but from a selfish position, such a decision does not always seem optimal—rates can be attractive, and risks low compared to other offers on the market.
But if one does not want to deal with the state for ethical reasons, then things are somehow more complicated with state corporations.
Private Banker™
I hesitated for a long time to answer this question because I am not very well-versed in finance. Similarly, for example, in his recent interview with Alexey Markov, Grigory Bazhenov says that this is not his field, so he is not accountable to anyone here, but is asking questions himself. Of course, it is easier for me, because the question concerns not the profitability and reliability of certain investments, but the ethical side of the matter, and anyone is capable of formulating an ethical judgment.
But even to answer from an ethical standpoint, I want to be sure I’m not just talking nonsense. Essentially, what are my doubts? Suppose I say that lending to the state is bad, and one should put money in a bank. And this turns out to be stupid amateur advice, because banks not only pay lower interest but also use the money received from citizens to buy those very same state company bonds. Or I name some private company whose bonds are not shameful to buy, and it turns out that its controlling stake belongs to some ghoul who actively cooperates with the state, including to squeeze out their competitors.
But if one stubbornly tries to keep their hands clean, where should one invest? In Bitcoin? If the goal is to save for old age, then—definitely in Bitcoin. But if one wants to live even partially on passive income, then one wants to choose from instruments that provide cash flow. In real estate, as Kiyosaki preached? One might think that developers in Russia are less of a ghoul than the top management of state corporations. Yes, actually, it’s not always clear where the coins come from with Bitcoin either. Maybe you are helping an official wash a bribe? Of course, the most ethically flawless investments are agorist businesses. But what reliability can we talk about here?
Therefore, let me answer this way. The very desire to reflect on which investments are more ethical and which are less is wonderful. The desire to punish companies or governments for unethical actions by dumping their papers is a powerful reputational tool; it should be used. But in conditions where it is difficult to find completely clean assets, one can, at least, practice smart voting: buy those who are relatively decent, at the expense of those who are complete psychos. All other things being equal—prefer private entities over state corporations. If there is access to global stock markets, then look at the papers of governments and companies from countries that behave more decently. But, of course, without forgetting about risks and profits.
And still, buy some Bitcoin for old age.
Mechanics of Freedom, Chapter 65
I am posting the penultimate chapter of The Machinery of Freedom, Extracurricular Education: A Libertarian Approach to Children. Friedman describes in detail how he threw books at his children to see which ones would stick, and other antics dear to the heart of every ancap. While in the first chapters of the book, written before the author had children of his own, he campaigned for the quite vegetarian idea of implementing school vouchers, later he became a much greater extremist and began to challenge schools as such.
Evolution of democracies in two case studies
The elections for the Electoral College in the USA were quite dirty, and whatever decision the electors eventually make regarding the presidential candidacy, its legitimacy will be highly questionable.
In the LPR, the division into two independent parties has finally taken shape. Both held their conventions, elected governing bodies, adjusted their charter documents—and intend to compete for people wishing to join a libertarian party.
The LPR is a benchmark for the US governance system. Just as it was in the LPR until very recently, the USA is split roughly in half, which means that each side is forced to spend disproportionate effort imposing its agenda on the other side, while the latter merely waits for the right moment to undo it all after the next elections. Several billion dollars were spent on the US elections; this would have been enough to reorganize a single dysfunctional government into a system of two contractual jurisdictions, each of which could freely compete for taxpayers.
In the LPR, there are regional branches that have almost entirely moved to one of the party forks, and there are swing states where two fully functional branches eventually formed. A similar outcome should occur in the USA: large cities will almost entirely move toward the dem-fork, the heartland toward the rep-fork, and in some places, there will be enough of a checkerboard pattern that changing jurisdiction won’t even require moving to the next block, because representatives of both are located in the same block.
I want to wish the USA not to stop at the achieved division but to continue deepening it without descending into civil war. I want to wish the LPR rapid development spurred by competition. I want to wish the readers to see the seeds of a beautiful future in what is happening, rather than the sunset of civilization.
Adam Smith Readings 2020
It is no secret that Mikhail Svetov dismantled the LPR with a single goal: to rid himself of the burdensome obligation to participate in organizing the Adam Smith readings and to conduct his stream dedicated to the US elections without interference. Therefore, the 2020 readings will take place in a strange format, where lecturers will speak before a giant audience of as many as thirty people, and the main emphasis will be shifted to the online broadcast.
Historically, there have always been some problems with the broadcast of the readings. And even now, although they start tomorrow, the links to the stream are still nowhere to be seen. They promise to provide it an hour before the broadcast begins to those who perform an additional pointless action—registering on the event’s Timepad. Of course, this is not required— here is the link. However, we love the readings not for their strange streaming policy, but for their interesting program. Let’s see what they have prepared for us this time.
Economic Section “The Wealth of Nations”
12:05 — 12:45 Grigory Bazhenov, economist, Friedrich von Hayek’s Sensory Order. He previously spoke at the IX readings with a report on whether an ethically neutral economic science is possible. He currently runs the YouTube channel Furydrops.
12:45 — 13:30 Valery Kizilov, economist, The Economics of the Corona-crisis: Old and New. I don’t know if he has spoken at the Adam Smith readings before, but here is an example of his lecture at last year’s “Constitution of Freedom” conference.
13:30 — 14:10 Farid Khusainov, economist, The Railway Industry and the Invisible Hand of the Market. Here is an example of his previous presentation: How the State Took Over the Railways – IX readings.
Ethical Section “The Theory of Moral Sentiments”
14:30 — 15:10 Lyudmila Petranovskaya, psychologist, Ethical Aspects of Discussions Around COVID-19. She doesn’t seem to have spoken at the readings before; the web mostly contains videos about child psychology.
15:10 — 15:50 Alexey Raksha, demographer, Truth and Mortality in the Age of Covid. Here is an example of his yesterday’s presentation on Echo of Moscow. I suspect it will strongly echo the theme of the lecture.
15:50 — 16:30 Anton Kuznetsov, philosopher, Free Will and Science. His presentations regarding the problem of consciousness are mostly available online. Here, for example, is last year’s.
Political Section “Political Rhetoric”
16:50 — 17:30 Alexander Filippov, sociologist, The Revival of Leviathan as a Challenge and a Problem. Here is an example of his presentation within the Open University project on the meaning of the state.
17:30 — 18:10 Daniil Tsygankov, sociologist, author of the telegram channel Commission on Regulatorics, The Russian Frontier: The Birth of the Political Field from the Regulatory Oppression of the State? As an example of his presentations, I can suggest an interview with Tsygankov on the SVTV channel— from those times when Mikhail Svetov knew how to cooperate with Sergey Boyko.
18:10 — 18:50 Evgeny Varshaver, sociologist, Integration of Migrants in Russia: Theory and Practice. Here is an example of his presentation on PostNauka—specifically about the integration of migrants.
In general, if you get a bit bored during the election night on Svetov’s stream (or on the competing stream from Leonid Volkov), you will have the opportunity to get acquainted in advance with the lecturers of the upcoming Adam Smith readings. As for me, I will be commenting on the readings in text format in my telegram channel (remarks in twitter are possible along the way, although I don’t really know how to use Twitter).
A driverless car has arrived for you. Who will get in?
I listened with great pleasure on Ekaterina Schulmann’s channel to a recording of a discussion about the results of the digital revolution, in which she participated, apparently invited to correct the gender imbalance among a group of three representatives from the digital industry.
I especially liked the moment when Andrey Sebrant, answering a question about who would be responsible for a driverless car accident, stated that to answer, one simply needs to wait for a hundred such accidents. He argued that at the dawn of automotive engineering, completely surprising regulatory measures were preemptively proposed, such as boys with flags running in front of cars, but in the end, we got traffic rules, road markings, and so on, which no one could have imagined in advance. The same applies to courts under ancap, which will, of course, answer the question of how they will work. After they start working.
Be sure to watch it; the format of the discussion itself is quite interesting, the experts for once are not overshadowed by Ekaterina Mikhailovna, and the host is simply lovely—I wish I had such charm.
Animal rights
What is the situation with animal rights under ancap? Unlike humans, they have no means of self-defense
Hate-monger against moskalyaks
I have nothing to add to this issue beyond all my earlier texts on the subject, so I will take this opportunity to simply refer to them.
- Libertarianism and environmental protection. Here I recommend a video by Svetovsky about how, if we want more animals, let’s eat them and benefit from them in every way. Plus, I mention Ostrom, who shows what to do with the tragedy of the commons as applied to wildlife.
- Zoophilia. This discusses the legal status of animals, morality as the main regulator of the relationship with animals, and unexpectedly, a cat named Stubbs pops up.
- Animal Rights. Here is one of my first clumsy formulations stating that a right is a claim that is tolerated, and advice is given for fans of ancient Rome.
- Circuses, animal cruelty, sanctions for stray dogs. Again, a bit about the legal status of animals, but more about morality and Jack London.
- On the killing of animals in the zoo. I start with mosquitoes, go through the case of one unlucky monkey, and end with a bright prediction of how the Earth will be swallowed by virgin nature.
- On the rights of sentient non-humans. I demonstrate approaches to establishing legal relations with non-human intelligence—using a parrot as an example.
Generally, when composing another question, I highly recommend first checking the navigation page and using the search for the likely keywords of your question. It is quite possible that you will get a fairly comprehensive answer to your question from already published materials.
