Тег: Enforcement

When the forest is cut, chips fly

Why is it that in many ancient narratives, ostracism/exile was mentioned as the only punishment, even for the most terrible criminals—murderers and rapists?

A truly interesting observation, for which even I could not find an answer for a long time. After all, no one was running a campaign for the humanization of punishments back then. Nor were there opportunities for a criminal to threaten significant damage to the entire society in the event of their arrest (the first mention of such a deterrence model was described by John von Neumann as “M.A.D.” after World War II, and even then it was realistic only for large group subjects—states, but not for individual actors).

So, the most plausible version is the extremely high value of human life in the described societies. For if people tried to arrest a criminal who was not initiating violence at that moment, he would likely be able to kill several people who came for him. In those societies, such a risk was considered unacceptable, so people simply motivated the villain to leave the community, ceasing all interaction with him. In mathematical terms, this solution was optimal in the game-theory matrix.

A different matter is strictly hierarchical etatist societies, where the phrase “The death of one person is a tragedy, the death of millions is statistics” is a norm of life. There, sacrificing even a hundred security officers to arrest one person is a good way to demonstrate the power of the stationary bandit (the state), so that others fear to contradict it. As for the fact that the mothers of the fallen security officers will cry at their graves, that is nothing terrible; “when the forest is cut, chips fly.” You can provide a survivor’s benefit in the amount of two minimum wages, and they will even kiss the portrait of the “radiant leader.”

What conclusion can be drawn from this? If you support physical punishments, including the use of violence for the confiscation of property, and justify this by a “court decision,” then you are not a libertarian! You are a vile authoritarian bastard like Hitler and Pol Pot, for whom “the death of one person is a tragedy, the death of millions is statistics.”

Bitarch

NAP and contract enforcement, a discussion

Yesterday’s post about whether violent actions to enforce payment for a completed contract violate the NAP, sparked a discussion, so I am returning to the topic.

As Ekaterina Schulmann loves to point out in her lectures, the world is extremely unfair, and societies where there is little trust, bear additional costs due to this, which exacerbates their poverty and further reduces trust—while trust cannot be restored by simple preaching. This observation applies not only to the citizens of a particular state in general, but also to other groups. In the context of the transition to ancap, we are most interested in the agorist society, those engaged in counter-economics, and therefore voluntarily or forcedly cut off from state services for ensuring contract compliance.

For example, any shadow entrepreneur can easily encounter a situation where they have incurred costs while fulfilling the contract terms, after which they are refused payment. In such a situation, you cannot not only file a lawsuit, but you cannot even bring the situation to public attention, because the activity is shadow, and publicity is even more disadvantageous than the losses from unpaid work. Without publicity, the institution of reputation does not work.

Take sex work in modern Russian society as an example. It is illegal, so in case of non-payment under a contract, these funds cannot be recovered through the court, and you cannot even draft a written contract with specified sanctions for non-payment, as it would be evidence. Therefore, even an individual entrepreneur usually has to cooperate with someone to whom she can turn for protection in such cases, so that they can achieve payment through force or the threat of its application. These are additional costs that society bears due to a lack of trust, suivante which allow such a business to remain stably profitable; without the purchase of contract enforcement, sex workers quickly become sex slaves.

In legal business, this manifests itself less often, but it is quite easy to imagine, for example, how a drunk debauchee is kicked out of a bar where he is unable to pay for the damage he caused (see also my old article on vigilantism). Here, a conditional mutual offset of damages is far more common, and not an invoice for payment post-factum, although variants are possible.

Nevertheless, it must be clearly understood that all cases where direct violence is practiced instead of civilized proceedings with installments, penalties, and seizure of property, etc., are precisely excesseses, and the more trust there is between people in society, the fewer such excesses.

In the post Libertarianism ex machina, I referred to Alexander Auzaan’s lecture, where the conditions necessary for the stable existence of a stateless society are discussed. He calls the balance of the potential for violence as the key condition. When a sex worker or a bar owner hires security, they level the balance of the potential for violence, countering the potential aggression of customers with the potential aggression of security. The second condition mentioned in the lecture is a stable community composition. This factor allows the transition from a classic prisoner’s dilemma to a repeated one, launches the institution of reputation, makes it possible to predict others’ actions—and gradually develops trust in society, even if the various additional measures proposed by Ekaterina Schulmann are not used—namely, joining various social organizations to build experience in peaceful, creative interaction (though with them the process is significantly accelerated).

The Internet allows such stable communities to form even without being tied to a specific compact territory: the transmission of information is extraterritorial, and communities are based precisely on the exchange of information. Transaction guarantees, through mechanisms of collateral, escrow, insurance, and other non-violent instruments—these are services that appear on modern markets at fairly early stages of their development, and immediately radically reduce both the level of costs from contract violations, and the level of potential violence necessary to operate in such a market.

So do not violate the NAP—it is not only unsightly, but also unprofitable, there are better tools.

Contract Enforcement

Bitarch’s Column

The question of permissible methods of contract enforcement was touched upon during Mikhail Svetov’s lecture in Novosibirsk. Svetov once again unequivocally expressed his position—physical violence (coercion) must not be used. The maximum that can be done against a violator is ostracism.

Unfortunately, not everyone accepts this moral position, so I will try to explain it, relying on utilitarianism and game theory. The example described below is an original illustration for the summary of the RAND Corporation study On the Doctrine of Deterrence, chapter “Local Balance of Power: An Important, but Not Always Decisive Factor.”

“Suppose I entered into a contract with you and decided to break it on my own. You dug in your heels and began to threaten me with ‘special forces’ who would forcibly seize my property. Assume you can send ten fighters, but I can guaranteedly destroy one of them. I make it clear that I am prepared to go to the end. For the fighters to agree to such a risk, you would have to offer each of them $10M. Suppose the contract amount is $100K, and I possess assets that can be liquidated for only $1000. You evaluate the ratio of benefits to costs—and tell me something like: ‘Get out, I don’t want to have anything to do with you anymore; people are right, it’s better not to touch shit!’. After that, we part ways, and you no longer enter into any deals with me. Under certain circumstances, you can retaliate by placing information about my behavior in the public domain, thereby prompting other people to join the ostracism.”

As seen from the example above, contract enforcement through physical coercion becomes impossible in a society where there is at least some balance of violence potential (different from the conditional ‘zero’ for citizens and ‘infinity’ for the state, as is usually the case in etatist societies).

In his book “For a New Liberty,” Murray Rothbard provides historical examples confirming the described theory and shows his affinity for it.

“The fact is that in the Middle Ages and up until 1920, merchants relied exclusively on the power of ostracism and boycotts by other local merchants. In other words, if someone refused to obey the decision of an arbitrator or ignored his decision, other merchants brought this fact to everyone’s attention and everyone refused to deal with the rebel, which quickly brought them to their knees. Woolridge provides a characteristic example of this:

‘Merchant courts were effective because merchants agreed that their decisions would be enforced. One who refused to obey was not sent to prison, but he did not remain a merchant for long after that. The influence of his colleagues and partners proved more effective than physical coercion. Take John of Homing, who made his living in the wholesale fish trade. John sold a batch of herring, all of which was supposed to be the same as in the three barrels presented to the buyer, but it soon turned out that it was actually rotten, and even mixed with sprat. He had to quickly reimburse the buyer in full under threat of ostracism from other merchants.’

Over time, ostracism became an even more effective means, since a situation arose where one who had once disobeyed an arbitrator’s decision could no longer expect any other intermediary to deal with them. Industrialist Owen D. Young, head of General Electric, concluded that moral censorship carried out by other businessmen operates far more effectively than the official judicial system. Modern technologies, computers, and credit ratings make the threat of nationwide ostracism more effective than ever before in the past.”