After a very long pause, I am posting the edited version of Chapter 43 The Machinery of Freedom by David Friedman. The translation itself was done long ago by Elena Makeeva by order of the LPR. I had to bring the terminology of the early translation into alignment with the one I use in the new one. The old translation seems to have aimed to present the material as simply as possible. In doing so, a number of terms were not translated but paraphrased—much like if I were to write “words close in meaning” everywhere instead of the word “synonyms” in a linguistics article. I had to sacrifice ease for the sake of more rigorous terminology used in economic theory.
The chapter is titled Answers: The Economic Analysis of Law and is of a completely monstrous size. This is not surprising, as Friedman essentially tried to squeeze into one chapter the material from his separate work titled Law’s Order, a reference to which is provided in the appendix to the book, and which, unfortunately, is currently available only in English.
The peculiarity of Friedman’s approach is that he derives law from economics, rather than from libertarian principles, as the latter are unable to provide clear answers to many specific applied legal problems (greetings to all supporters of the opinion that any legal norms can be derived from a single simple NAP).
I received a request to organize a way to subscribe to regular donations to support the project. Unfortunately, I am not very familiar with the tools usually used for this. Therefore, to start with, I suggest that everyone interested in ensuring sufficiently broad and regular funding for the project message me privately on Telegram or Facebook. Then we will discuss how best to organize this so that it is convenient for you to pay and I do not need to reveal my identity.
There is one currently not very well-known argument as to why humanity will sooner or later have to accept the impermissibility of initiating aggression: the simple survival of our civilization. After all, with the development of technology, the conditional total harm that one person can inflict is constantly growing.
For example, now even a poorly educated fanatic in a truck can knock down a hundred people, and if they try very hard and load a mixture of fertilizer and diesel into it, they can kill a maximum of a thousand.
Now imagine the world in 30 years. Gene engineering equipment has become cheaper; biohacking has become a popular hobby for schoolchildren. Genomes of pests such as natural smallpox, plague, and influenza A/H1N1 are available on the darknet. A psychopath could trigger an epidemic, killing, say, 1 million people.
Another 50 years pass. Flying cars with compact nuclear reactors have appeared. And along with them, ways to overload such a reactor, creating a new Chernobyl in New York or Moscow. 10 million people are now at the mercy of a psychopath.
The distant future. Space ships for flights to Alpha Centauri have begun to be built. Antimatter is used as fuel. If someone doesn’t value their own life, they can take the entire population of planet Earth with them, turning it into a stream of neutrinos.
As can be seen, the population that one person is capable of destroying grows exponentially with the development of technology. Just like the trendy COVID-19 coronavirus. In such conditions, there cannot even be a thought of using violence against a person, because essentially each of us will possess not just a deterrent weapon, but a Doomsday Weapon (DDW). Humanity simply will not survive if it does not recognize the universal NAP, even toward the most unpleasant individuals like child killers.
I anticipate in advance the cries of etatists about the usefulness of the state. For example, they will say: “Look, you’ve just described the hell it will be without control by government bodies.” Only in reality, the state only increases the risks of uncontrolled use of DDWs—both by creating incentives for people to use it as a deterrent against aggressive violence from a stationary bandit (the state), and by spurring the development of such dangerous things in inappropriate conditions even without the goal of using them as DDWs.
The US government, of course, can limit biohacker experiments, but they will be gladly welcomed in some Mumbo-Jumbo, where they will work much more covertly from public control and possibly intentionally help in the creation of DDWs for the Mumbo-Jumbo government. Look at the ban on stem cell experiments in the US, which simply pushed developments to China and other countries, where they were carried out without any public notification.
I am also very surprised by the position of some libertarians who seriously consider the possibility of enforcing court decisions through physical violence. In reality, not only violence, but even harsh ostracism that puts the violator on the edge of physical survival (for example, refusing to sell food in a store) can provoke them to use a DDW (dying of hunger is no better than dying from a bullet, therefore complete ostracism can be perceived by the violator as physical violence). It is not for nothing that Kim Jong Un is not blocked from the sale of vital items, but is only forbidden from receiving luxury items like Ferraris and Swiss watches. And he doesn’t even have a DDW, but rather a fairly weak deterrent weapon.
So think about what is better for you: 1) A world with the enforcement of court decisions through reputation and soft forms of ostracism, which turn out to be sufficient in most cases. 2) A world with a slightly higher probability of enforcing court decisions through physical coercion, but with a tangible “bonus” chance of becoming one of the characters in George Stewart’s science fiction novel “Earth Without People.”
Ancap-chan’s Commentary
Morals are formed more by practice than by theoretical constructs. Trying to limit oneself now in legitimate means for the sake of possible consequences in half a century is roughly the same kind of panic-mongering as the desire to abandon carbon dioxide emissions to prevent global warming.
People indeed regularly face the question of conflict between tactical and strategic goals. The longer the planning horizon, the greater the probability that the issue will be resolved in favor of strategy. But it is unrealistic to influence someone else’s time preference with exhortations. So, either we gradually develop a stable ancap, with a habit of defending our rights and not permitting systemic violence, and then the planning horizon for people will be sufficiently distant—or we will continue to languish under the state, captive to purely short-term tasks, and watch with horror the increase in the potential for terror—both private and state—up until the collapse of humanity.
I’ve fallen ill and my head isn’t thinking clearly, so I took on work that requires minimum intellectual effort: I laid out and posted the drafts of all the chapters already translated by volunteers Practical Anarchy by Stéphane Molinier — I don’t have enough energy for editing yet. Thus, the particularly impatient can familiarize themselves with the text without waiting for me to polish everything.
The volunteers picked up such speed that they devoured all the donations previously collected for translation, and after a few chapters, I actually owe them. So I very much ask you to replenish the funds so that they don’t stop halfway. Send money to the wallet 1AFkD2bazCs5YZBBrSD7HsRMWLmRbg6QBo. A crisis is a great opportunity to buy bitcoins on the cheap, don’t miss this chance. Translate some for a good cause, keep the rest as a stash.
Bitcoin is a digital asset designed to perform the function of money, and it indeed possesses a number of properties inherent to good hard money. It is not surprising that among those who actively use Bitcoin, there has been a supposition that it is an excellent safe-haven asset, and that in the event of a financial crisis, money would flow specifically into it. As for gold, it is a safe-haven asset with a centuries-old history, and the fact that it would rise during a crisis was not subject to any doubt whatsoever.
Nevertheless, let us recall how gold behaved during the previous crisis. From March to November 2008, while the mortgage crisis was gradually turning into a financial one, the price of gold fell: everyone needed dollars specifically to plug the holes. And only when central banks began to compete in who could lower interest rates faster and buy up more junk papers did the resulting excess of dollars lead to a two-year rally in the gold market, during which its price reached an all-time high.
Gold in the last crisis: first down, then up
Currently, we are at the very beginning of the crisis. Just like last time, everyone is first running to the dollar. But, unlike in 2008, when quantitative easing was far from immediate, there was no delay in pumping the economy with fiat this time. On the other hand, it must be noted that immediately before the start of the crisis, the price of gold was close to all-time highs, as central banks had been actively buying it for several preceding years. It is possible that a number of countries will now feel the need to sell part of their reserves, and this will put pressure on the price. Thus, on one hand, many new dollars suitable for buying gold will appear in the market, and on the other, there will be a lot of gold sold from reserves. It is impossible to predict with certainty which of these opposing factors will be more significant over a horizon of up to a year. Further on, of course, the factor of the growth of the dollar mass will outweigh it, and gold will begin a new rally.
Today, Bitcoin is gold for geeks. Institutional investors have not yet had a chance to properly enter, and by their standards, the liquidity of this asset is completely negligible: the daily trading volume of Bitcoin is some measly thirty billion dollars, which is essentially nothing by the standards of stock and currency exchanges. Therefore, even a very modest sell-off of Bitcoin is capable of seriously dropping its price. But conversely, even very modest investments from the “big players” are capable of seriously heating it up.
In addition to the fact that the global economy will soon be flooded with dollars and other fiat, the reduction in supply will inevitably influence the price of Bitcoin: there are less than two months left until the halving. Therefore, if you have free fiat, now is a great time to enter Bitcoin. If there is an opportunity to take a fiat loan for about three years, investing that money in Bitcoin could also prove to be an excellent decision. Of course, one should not take microloans for this purpose.
In conclusion, I will comment on why buying US government debt may be more attractive than buying dollars. Purchased dollars sit in a bank, and a bank is an unreliable thing during a crisis. Bonds, however, are registered directly to the investor, and therefore the risk of their loss is incomparably lower. The liquidity of US government bonds is quite comparable to the liquidity of the dollar. So, there will be people willing to hold them even at a negative interest rate, although this seems counterintuitive.
The apology for the nation-state is primarily based on the idea that it is the best way to solve problems on a national scale. The problem is that there are fewer and fewer tasks for which this specific level of resolution is the most appropriate.
The coronavirus epidemic clearly demonstrated that the task of fighting epidemics cannot be solved at this level. Not a single country managed to resist the spread of the virus into its territory through quarantine measures. Not a single country proved capable of preparing enough equipped hospital beds to provide necessary aid to the sick. Conversely, there are countless examples where the measures taken by states only fueled the spread of the epidemic. I will provide just a few.
The very first case is, of course, the sanctions against the Chinese doctor who first tried to convey information about the start of the epidemic. This is exactly how the motivation system built inevitably by state bureaucracy works. A second example is the conduct of electoral events by states in the midst of the epidemic. Iran experienced a powerful surge in morbidity after parliamentary elections were held there on February 21. On April 22, something similar, though far less rational, awaits Russia. Against this backdrop, the banning of rallies in Russia looks quite inconsistent. A third example is the mass deportation of infected and suspected individuals from the countries where they were located back to their countries of permanent residence, often transiting through third countries, and not always with the observance of proper safety measures.
The nation-state is not only unable to fight epidemics, but it also hinders solving this task at both a lower and a higher level. At a lower level, it suppresses private medicine. Market demand allows for a more flexible approach to providing people with vital necessities. But the state, for example, begins to fight price markups on masks and thermometers, and thereby deprives manufacturers of incentives to invest sufficient funds into expanding production. At a higher level, the state obstructs the work of international organizations by insisting on the priority of national regulations over their recommendations.
One can also recall examples where, in the context of epidemics, the national level of management comes into conflict with the regional level. For instance, a story from 2011 recently surfaced about how the federal government in Germany insisted that the states purchase a huge amount of swine flu vaccine, and two years later, most of what was purchased had expired and had to be burned. In Russia, a significant share of healthcare spending also falls on the regional level, but it is all subject to federal regulations. Thus, any emergency will inevitably cause conflicts because some people steer, while others pay and bear the responsibility.
Thus, it can be assumed that in the coming years, the nation-state will be attacked from literally all sides, as epidemics are only one example of its inefficiency. There will be attempts to dilute its sovereignty, on one hand, in favor of global bureaucracies like the EU and other political blocs; on the other, in favor of local self-government; thirdly, in favor of international non-governmental organizations; and fourthly, in favor of TNCs. And we agorists will surely find a way to profit from these murky waters as well.
I have already answered similar questions at least twice: at the very beginning of the channel’s existence, and considerably later. The general sense of the answers came down to two considerations. First, in the absence of the state, people will have more money and room for maneuver to engage in charity. Second, the most important skill for those who need the care of others and other resources is the ability to be grateful. It is difficult to convince oneself to take care of a misanthrope who is certain that the whole world owes them, but it is very easy to do so for a sweetheart who skillfully strokes your ego in return.
There are, of course, various cringeworthy answers about the fate of the disabled under ancap, for example, Svetov’s well-known remark about the freak show, which the world was deprived of when the state banned it. Naturally, in this case, it is not so much about the state as it is about society. The mass solvent demand to go and laugh at freaks, no matter how funny they grimaced, disappeared. It became shameful, just as many are ashamed to go to a circus with trained animals. Morals changed; the old business model became unprofitable. Now, the socially vulnerable do not need to try and evoke disgust-filled pity or laughter to get money. It is much easier to evoke tenderness, respect, or some other form of empathy.
Thus, all else being equal, I would buy a product on the street from a child or a disabled person, then simply from the elderly, and only after them from those who look most capable of working. The persistence of a person who has a handicap but tries to compete on equal terms with others now evokes respect rather than irritation.
But fine, socially vulnerable groups will gain something from the abolition of the state, but surely they will lose something too? Yes.
Most likely, the urban environment under ancap will be less inclusive than under a state in a society with a comparable level of wealth—because in the market, for example, there will likely not be significant demand for equipping sidewalks with tactile paving. It is the state that can pour insane amounts of money into asphalt for the hypothetical needs of extremely small groups, neglecting the interests of far more numerous and solvent communities (why serve those who have money when you can rob them under the pretext of providing for the disabled). On the other hand, I fully admit that under ancap, the appearance of quarters specifically designed for the needs of people with limited mobility may prove justified: this is cheaper than equipping an entire city. I would, for instance, gladly rent housing in such a quarter during the period of caring for a small child, and then move to a more ordinary setting.
Also, most likely, under ancap, socially vulnerable groups will not be able to rely on some guaranteed income—but this, as I have already noted, should be compensated by the greater ease of earning. This compensation may prove insufficient. But in the same way, one can claim that a completely healthy but incompetent worker will not succeed in a free market—whereas in a social state, he would feel quite fine on benefits. From here, it is not far to reflections on universal basic income. Starting from a certain sufficiently high level of wealth in society, the idea of indiscriminately giving everyone a minimum sufficient for living, and thereby shielding oneself from the irritating petty crime caused by poverty, begins to seem quite sound and will certainly find its voluntary admirers.
Sorry, I’m focusing on current events again, which is actually not very characteristic of my channel about theory.
The year has been quite rich in events. So much so that some of them, which seemed very important when they occurred, are now almost forgotten. Who remembers that at the very beginning of the year, a war between the USA and Iran almost broke out? It didn’t happen, so that’s fine. Nevertheless, each such surprise, even if it was managed quickly, rocked the boat. Perhaps the global economy would have digested another fallout between the USA and Iran, but then the coronavirus happened. Perhaps it too would not have caused a global recession, but then the cartel agreement between OPEC and the RF collapsed. If the global economy miraculously digests this as well, tomorrow some new horror will surely happen that will break the camel’s back.
One of the business cycle theories, the so-called real business cycle theory, argues that crises occur not because of some internal reasons and accumulating contradictions in the economy, but exclusively due to external shocks that sharply change consumer behavior. I am not ready to fully adhere to this theory (essentially, it is an application of Taleb’s black swan idea to the theory of economic cycles), but it is hard to deny that external factors are quite significant. However, it is also hard to deny that external factors become quite significant precisely when enough internal contradictions have accumulated.
And as if we didn’t have enough external shocks, the Russian leadership is bustling with activity in domestic politics as well. The resignation of the government, the first wave of constitutional amendments, the second wave of amendments, the idea that the constitutional amendments reset presidential terms—all of this is a reflection of active mental churning at the top. No one knows what ideas will surface in public policy tomorrow, but it is perfectly obvious that fish are easily caught in muddy waters. This must be taken advantage of.
The notorious plebiscite on constitutional amendments is an attempt to scoop up at least a drop of legitimacy from the people. And since legitimacy is needed, populism can be expected. This means it is the perfect time to announce a public demand.
Of course, I don’t know exactly which demand will be widely supported, because even sociologists can only provide support percentages for a closed list. As for us, we have yet to toss that list out there.
I already suggested the first proposal in connection with the Litreev case: the repeal of Article 228 of the Criminal Code of the RF, at least regarding the criminalization of possession without intent to sell. The beginning collapse of the Russian economy provides additional support for this idea: by reducing the prison population by a quarter, the FSIN budget can be significantly cut.
It is unlikely that ideas for tax cuts will be pushed through—we now have a former tax official as prime minister. But it is still necessary to complain about the unbearable tax burden, so that they at least don’t try to exacerbate it. On the other hand, there is a chance to simplify regulations—if presented under the guise of budget savings. For example, trying to replace the abolition of fire supervision with mandatory fire insurance. Or pushing for the easing of control over the circulation of hunting weapons. Or canceling the licensing of various types of activities.
It is very possible that it will be possible to selectively expand the rights of local self-government and bring back mayoral elections in some places.
In short, right now, supporters of reducing the state through political methods have a good opportunity to make progress. Even if success cannot be achieved in all areas, at least they can build up competence. As for the fact that Putin intends to rule forever, it’s too early to worry. Maybe tomorrow he’ll catch the coronavirus, and in a month he’ll kick the bucket—there’s no need to predict so far ahead; Putin currently plays no role in our calculations at all.
I enjoyed listening to Ekaterina Schulmann’s lecture on Pravokon, dedicated to the fears that influence Russian society. The lecturer calls the most important category of fears the fear of some unexpected meanness on the part of the state. This could be repressions, tax increases, some new regulations, or simply a banal economic collapse, which the state illustrated in Ekaterina Mikhailovna’s lecture literally just a few days ago.
Analyzing the nature of this fear, Schulmann notes that it is not a manifestation of darkness and ignorance—on the contrary, it is a deeply justified distrust of both the motives of those in power and their competencies. Later, admittedly, she focuses on how best to coordinate in order to defend one’s political rights, but I think we should forgive the political scientist for her love of her subject of study, which prevents her, despite all her criticality toward the state, from sharing a libertarian worldview.
In such situations, one can react to the environment in different ways. Those who practice agorism will likely gloomily calculate what profit can be derived from the coming expansion of the black market, and how to facilitate this expansion. Those who put effort into regime change are considering where it is best to apply those efforts now, when the regime may be on the verge of faltering. Those looking for a country to flee to are considering whether it makes sense to try to save a little more, or if doing so here is already counterproductive. Moreover, as Bitarch recently correctly noted, relative freedom of movement between states is by no means the norm, and for Russia, it is an anomaly; it is unclear how much longer it will last, as it is already being gradually curtailed. And, of course, there are those who will run right now to buy dollars or household appliances at the old prices. Although, keeping in mind the coronavirus wandering around, perhaps a much larger percentage will actually start stocking up on canned goods: this is both an investment in a relatively hard currency and an opportunity to survive a quarantine.
This year, the Russian oil industry is unlikely to bring significant sums to the budget, which means they will squeeze money out of citizens to the fullest. This means that to minimize losses, one should not only try to earn money “under the table,” but also avoid showing money to banks whenever possible: banks are completely transparent to the state. So, those who have not yet acquired bitcoins should do so now and start practicing settling accounts with each other in this currency.
This is probably one of my most banal posts recently. I simply needed to voice all these fears, if only for myself.
I am beginning to publish the translation of the fourth part of David Friedman’s The Machinery of Freedom. This part was written for the second edition of the book, between 1973 and 1989, and was intended as an extended postscript to the book, which is exactly why it is named as such. It seems that the author did not originally intend to write two more parts after this one.
As usual, the new part opens with a poetic epigraph, in which the author states that he is bored with explaining elementary truths to those who are already convinced of the truth of the teaching, and therefore he would rather delve into the area of unresolved problems and borderline questions of libertarianism.
Chapter 41 is titled Problems. In it, David Friedman explains in detail why it is pointless to try to derive the entire libertarian teaching from a single, simply formulated basic principle that one would then only have to follow. On the contrary, he declares, following Machiavelli: there is nothing that is good or bad in itself, but everything depends on the circumstances.
Chapter 42, My Beliefs. Here, the author continues the reasoning from the previous chapter, analyzing the question of whether, if we cannot derive everything that ought to be from one basic principle of libertarianism, we should switch to utilitarianism and begin to demand the simple maximization of aggregate utility, calculating heterogeneous joys and sorrows in some mysterious way. And although he ultimately rejects this extreme as well, it is felt that economic calculation is dearer to his heart than abstract moral norms. And this brings me back to my own objections against the strategy of persuading statists to stop cooperating with the state based on moral argumentation.
We are all familiar with the specifics of how the state functions. Its foundation is compulsory and indisputable power over its citizens. This particularly concerns the ability to regulate their activities, apply violence against them, and seize their funds through taxation.
Regardless of how the government system and political mechanisms are implemented, many people are always dissatisfied with the current state of affairs to some extent. And while in a market environment dissatisfaction is resolved simply by renegotiating agreements or switching from one service provider to another, it is not so simple with the state. A person cannot change one state for another as easily, since economic, cultural, linguistic, and other barriers will stand in their way. Because of this, such a change is completely pointless, as for the majority of the population of any state, these barriers are insurmountable, which makes states organizations that compete for people only to a very small degree. This fact confirms the monopoly position of states and all the resulting negative aspects.
An individual also lacks the ability to effectively influence the policy the state pursues toward them. In a market environment, they are able to resolve many issues privately, whereas in the political sphere, their own interests mean nothing; they are obliged to submit to the interests of others. And even if a politician whose plans coincide with their wishes wins an election, or if they themselves become a politician, this only provides the opportunity to support their interests at the expense of infringing upon the interests of other people.
As we can see, the institution of statehood and political methods of management, in contrast to voluntary and market relations, are designed such that the forced and compulsory submission of some people by others is simply inevitable. In fact, the activity of the state is equivalent to the activity of a rapist and a robber. Indeed, it emerged precisely as a nomadic robber who decided to settle in a certain territory and impose his power on the local population through violent methods, as told to us by the stationary bandit theory. The essence of the state fully corresponds to its origin.
What do we get from this? We get that any person who supports the institution of statehood and political methods of management is, in fact, a rapist and a robber themselves. For how else can one call someone who justifies the use of violence and robbery, who considers them natural phenomena? Of course, whether violence and robbery are bad or good phenomena is a purely ethical question, and none of the answers to it can be defined as an objective truth. However, we do not need that; we only need to clearly define who is a supporter of peaceful and voluntary relations, and who supports forced submission and robbery.
Naturally, in current conditions, most people are passive assistants to violence and robbery, since they perceive the state as a natural social institution. It is the revelation of this fact that will allow the positions of the currently existing system to be shaken. For it is one thing when people support violence and robbery without realizing it. However, few are capable of openly admitting themselves to be rapists and robbers; this is the lot of only a minority of people who see nothing wrong in such things, while for the rest, the very concepts of violence and robbery are primarily associated with something immoral.
Using all the above arguments, we can form a psychological strategy for promoting the ideas of freedom. The first stage is the revelation of the fact that the state is a criminal organization specializing in violence and robbery. Next, it is necessary to establish a link between the state and its supporters. Since the state is a rapist and a robber, the people who support it are accomplices in the crimes it commits. Few truly want to be criminals and are capable of declaring (at least to themselves) without any remorse that they are rapists and robbers. The facts mentioned above, since they reveal the link between the criminal state and the person who is at least its passive supporter, are capable of causing psychological discomfort and perhaps even a sense of shame for one’s own complicity in anyone who considers violence and robbery immoral. Thus, in any peace-loving and benevolent person, associations of “state – bandit” and “supporter of the state – also a bandit” should develop. After this, there can be no question of such a person supporting the state; it will be, at the very least, unattractive to them, and possibly even repulsive.
Ancap-chan’s Commentary
Rhetoric addressed more to emotions than to logic does not appeal to me, and I see little value in such argumentation, but value is subjective. I fully admit that some well-meaning statist might indeed be unsettled by these arguments. However, even while sharing the belief that the state is an evil, a statist will believe that the state is the lesser evil. The logic of statists is that without the state, we would get not a peaceful market order, but a rampage of banditry, and only unpleasant types in police caps somehow restrain this very rampage. Yes, they themselves are prone to banditry, but checks, balances, public control and other blah-blah-blah.
What seems far more important to me is the ability to demonstrate the functioning of peaceful market mechanisms in those areas that are weakly subject to state influence, or where the state fails to meet the obligations it has undertaken and for which substantial budgets are spent.
In general, I would soften the premises presented in the text. Not “every accomplice of the state is a bandit,” but “one who defends the right of the state to continue spending money knowingly inefficiently in a sphere where there is a working non-state alternative — that person is truly a conscious accomplice of bandits.”
