Тег: Marketplace

Dating apps – the market crash we were so afraid of?

It is clear that incentives in commercial dating apps do not always align with the expectations of clients and society as a whole (to quickly find a spouse and never use the app again). They have to keep the business afloat somehow. What else is there to hope for if not some government uncle, a state-approved dating site, and standing in an electronic queue for a “wife voucher”? Perhaps philanthropy, as a stopgap for awkward moments in a market economy—that Musk will create a less mindless dating app for us that will get family formation and birth rates back on their feet?

Saddam Hussein’s rotating aluminum pipes

Let’s go through the problem you’ve outlined. People want to meet, and the market monetizes the fulfillment of this desire. People want to meet for different purposes and in different manners, so the market is naturally segmented.

Online dating services theoretically allow a user to quickly obtain information about people with complementary needs and to meet more purposefully. After going through enough options, a spherical client in a vacuum finds a suitable partner, after which they move to communicating via less specialized tools, leaving the dating service. This is unprofitable for the service creators; they are interested in the client returning again and again, and, of course, purchasing a premium subscription. As long as dating apps have not gone out of style, this model works quite well; people really do return. Furthermore, since the market is already quite saturated, the success of dating apps cannot be linked to simply attracting new clients; it is precisely that the use of these apps has managed to become a lifestyle for a fairly broad segment of people. I am not one of them, so I do not claim to provide a deep analysis—I am simply noting their existence.

Of course, there are those who have not succeeded in using dating apps. The reasons can vary. The most banal is that the process of meeting itself can be perceived by some people as a source of intense stress. They are not opposed to finding a partner in life, and would even settle for a fading interest after a year, after which they would need to find a new one, but they will do this as rarely as possible, and are certainly not ready for a queue of candidates from which they must choose, say, one and reject the rest. And they are even less ready for a series of rejections or being ignored. If every failed encounter becomes a reason for serious distress, then an app capable of providing dozens of such experiences a day turns out to be a hellish invention that drives a person into the depths of depression and from which one should stay far away.

Of course, psychological difficulties are not the only reason for not using fast-dating services. A person may have certain preferences regarding a prospective partner and the method of meeting them that simply do not fit into the typical application scenario of an app.

So, does it turn out that there are tons of people in the world who wish to meet, but this desire cannot be monetized through specialized mass-market apps? Yes. There are tons of people who happily buy fast food, and tons of people who do not consider this option at all because for them it is: too shabby, too expensive, too unhealthy, too anything else—in short, it doesn’t fit. But these bastards eat something! Yes, and these bastards meet somewhere, even if they don’t have a Pure account.

But the author of the question is not concerned with getting everyone hooked on fast-dating. On the contrary, they likely believe that fast-dating kills marriages, childbirth, and the replenishment of the taxpayer ranks. I find this concern baseless. Mises once wrote that it is foolish to blame an entrepreneur for producing guns instead of butter; this only means that investments in guns are more profitable. However, he will gladly switch to butter when the conjuncture changes, so it is foolish to blame him for starting wars just to sell more guns—that is the prerogative of politicians, who are, of course, always happy to blame entrepreneurs for their own ignoble dealings. And while many may wish to dispute this thesis regarding guns, claiming that dating app creators are to blame for the decline in birth rates is a bit too much. At the very least, the dates don’t match; the second demographic transition began much earlier. So this is merely a symptom: people want fast encounters—here is a service for fast encounters. People have always wanted fast encounters; they just used to pick each other up in bars or even hit on each other in the streets, and now apps have not only greatly simplified their lives but also saved a lot of people from random harassment.

OK, but people also need strong, exclusive relationships, not just fast and disposable ones, so where is the app for finding them? Why is this need not being monetized?

Fine, let me imagine how I would monetize the need for people to establish strong family relationships in the IT sphere if I had access to serious capital. I would create a service that provides a person with a personal AI advisor, which can be configured to support a certain type of relationship. To start, you simply communicate with it, send it your favorite books and movies, discuss them, tell it what you value in relationships and what you cannot stand—and this in itself is a consumer benefit, allowing one to better realize their needs and learn how to communicate them. But the assistant also communicates with other clients. At some point, it might ask, “Are you acquainted with so-and-so? Great guy, and it seems he might suit you.” You ask the assistant questions about the proposed candidate, the assistant asks questions about you, and at some point the AI confidant reports: “You know, when he read about you, he became interested, and it seems he’s not opposed to meeting. Maybe we should start a three-way chat?”

And now, you are communicating directly, but the confidant is invisibly with you, and you can still privately discuss the details of your communication with it. Then you meet, grow closer, and at some point decide to join your destinies. And here you receive an offer: why remain in the general database, wouldn’t it be better to take care of privacy? And you rent a personal server where your confidant moves with all the knowledge about you. It continues to care for the well-being of your marriage, and you continue to pay for the service. At this stage, the company no longer receives your data and limits itself to model updates and technical support.

Such a monetization model is anything but fast food. For lovers of fast dating, all this is too troublesome, expensive, and excessive. Therefore, there is no danger that you will be pushed toward people looking for a one-time hookup; on the contrary, only virtuous husband candidates. Right at this stage, one could hit their forehead and shout: “Aha, I have an excellent candidate to implement all this magnificence,” and push him toward Dobroum. But I am a libertarian, not some conservative, so let’s think further.

It may very well turn out that you prefer open relationships, or even polyamorous ones. At this point, we lose Dobroum as a potential founder of our startup, as well as the possibility of government grants. Nevertheless, I see no reason why an AI confidant could not serve cute polyamorous kittens, same-sex couples, and all others: as long as they have a need for long-term, stable, ecological relationships based on love and trust in each other, this need can be monetized using the proposed tool. But, of course, the more exotic the kitten, the harder it will be for them to find that very partner or group of partners. However, as the service grows, simply by the theory of probability, options will appear for them as well.

Thus, the market will once again make the world more beautiful.

The Problem of Cartel Collusion in the Sphere of Protection under Ancap

Mancur Olson, in “The Logic of Collective Action,” proved that small groups with concentrated interests always win the coordination game against a diffuse majority due to the free-rider problem. Three CEOs will agree over dinner; a million customers never will, because each rationally waits for others to take the risk first.

What specific mechanism in ancap prevents a cartel agreement between two or three of the largest protection agencies to divide territories?

Konweni

This is a question that also concerned David Friedman. In the chapter “The Mechanics of Freedom,” concerning economies of scale, he reasons that in the law enforcement market, there seems to be a more pronounced positive economy of scale than he initially thought, which in turn increases the likelihood of a cartel agreement.

It seems to me that the cause of this excessive pessimism is the overestimation of the importance of direct armed protection in the security market. Literary descriptions of the security market under ancap are filled with some kind of universal protection agencies that are responsible for security in general across the most diverse aspects and scale easily. Of course, such an initial monopoly, already given in the problem statement, leads an honest analyst to conclude that such agencies will tend to grow significantly and enter into cartels, and their impact on people will be completely total, making the sale of such security services terribly dangerous for clients, as it is only one step away from total enslavement.

But where will these protection agencies come from? Who will be their clients, and what services will they buy from them?

Suppose I don’t live in peaceful Montenegro, where every house has a legal shotgun plus a couple of black guns left over from the war, but, say, in some place like Brazil. I have reasons to fear street attacks, car theft, and break-ins at my home. And then, a startup opens in the city that is ready to serve me, even if I wander into the favelas. What does such a startup need, within the technologies relevant at the time of writing this post? To reach an agreement with the company that owns the lamp posts to place cameras on them, as well as landing pads for drones with a charging function. Then, AI tracks suspicious actions, such as breaking into a house door or a car; a drone takes off from the nearest pole and demands a justification for the legality of the actions. In the case of an aggressive response, it applies measures of influence to the suspect, for example, firing a taser, after which it calls a live squad to process the detention. Similarly, in the case of an attack on a person: it flies in, demands they stop, reasons with those who ignore the instruction, waits for the squad, and returns to the nest. And then comes the court proceeding regarding how much to recover from the aggressor.

After working in this market for six months, the startup is surprised to find that its services are becoming less in demand because the city has become noticeably safer. And what, should they now start harassing me clandestinely so that I renew my subscription? No, of course not; they will simply make the subscription cheaper, and the drones that spend most of their time idle will be used, for example, for delivering pizza.

And what about peaceful Montenegro—do I not need protection agency services there at all? Of course I do. I need it so that when I break my leg while hiking in the mountains, brave rescuers in a helicopter fly to me and pull me out of that hole. Or pull me out of a car that flew off a cliff. Or find me in the sea when a storm carries me far from shore on a SUP board. Or get a cat down from a tree.

You realize that a Brazilian security startup won’t be able to enter the Montenegrin market because that market is completely different? Protection agencies are doomed to locality due to the local nature of threats, and are also doomed to a small size because the nature of threats also tends to change. It is harder for a large company to change, which means inefficiency, and inefficiency means saying goodbye to market share.

But surely there are functions for protection agencies that would be in demand globally? Of course there are, but these are specialized functions. For example, to find someone anywhere on planet Earth who owes me a vast amount of money and refuses to return it. Or a person who killed my mother and knows that I would like to burn him on her funeral pyre because she will need a servant there. Such agencies will not sell a subscription for service; they will have to take on rare one-off orders, as this market is too specific. It is impossible to build global dominance with the prospect of bending anyone to your will and subjecting them to your sinister market power based on this.

And what about the prospect of an external armed invasion? Shouldn’t private military companies be the backbone of any respectable social order if it wishes to call itself ancap? Shouldn’t such companies unite into a mega-cartel dictating its will to all of humanity? To the great regret of the adepts of this branch of human development, in peacetime, the peaceful average citizen is not inclined to finance the military. He doesn’t need war; he doesn’t buy it. An invasion army can only be equipped if you establish taxation on your territory. However, a militia for protection against an invasion army organizes itself in the presence of a free market—quickly, efficiently, and not too expensively, as shown by the experience of at least the Ukrainian war.

A little bit more about taxes and death

Sperry’s article about why there is no point in opposing taxes was actively discussed in the comments of the telegram channel, which was largely the goal of the publication. In short, the text is about how, one way or another, even in a free market, a sum comparable to government taxes will be squeezed out of you anyway and spent on roughly the same things the state would have spent it on; and since there is no difference, why be outraged?

The article shows two extremes. One extreme is the organization of an enterprise requiring a vast amount of unskilled labor in conditions where manpower is in huge abundance. Appealing to historical examples, Sperry reminds us that in such cases it is usually more profitable to pay workers mere pittance, and preferably not in money, but in food tokens, while suppressing discontent through organized violence. The other extreme is the organization of an enterprise requiring a handful of highly qualified specialists who are exhausting to find, and who must be kept from being poached by competitors. Here, the employer not only pays them a hefty salary but also provides substantial bonuses, from a simple coffee machine in the break room to fitness gyms, expensive health insurance for the employee’s entire family, flexible work schedules, and company stock options.

In both extreme cases, Sperry makes it clear that the worker is not free and is forced to eat whatever they are given. In one case, tokens for miserable food at the plantation store instead of a simple human wage. In the other, an unwanted fitness gym instead of a simple salary increase. But why, exactly, does this happen?

For it to be profitable to coerce labor through violence, that labor must be very monotonous, concentrated in space, and not involve active movement. Only in this case can one get by with mobile armed overseers, who must be very few in number relative to the workers; otherwise, the cost of the thug no longer pays off. Thus, tending bushes or mining raw materials are perfectly optimized for mass slave labor, but grazing livestock is not particularly so. But, one way or another, in a free market, if you put together a gang of thugs to organize forced labor, you will have to be the leader of those thugs. Relax for a moment, and tomorrow you will find that your foreman has taken your place, and you are already being driven to pick bananas.

Naturally, the planter is not interested in such an outcome; he wants his property rights protected and the workers, even if armed, to know their place. And here, the state comes to his aid. The state becomes the guarantor that the security foreman will moderately and diligently perform his job for hard cash rather than seizing the plantation for himself. In exchange, the state takes taxes, and with them maintains an army and police. From this moment on, the planter is doomed. Tomorrow the state will raise land taxes, introduce inheritance taxes, nationalize latifundia, or otherwise optimize the privileged class because it consumes too much, and its “dekulakization” will inevitably be popular among the people. It turns out that for a share of his profit, the planter receives the same tokens for protection, just as his workers receive tokens for food. And the quality of the tokens’ provision will arbitrarily decrease as the issuer’s appetite grows.

So, either you are a stern Spartan who personally arranges krypteia with colleagues so that the helots know their place and do not think of rebellion, or you degenerate into an effeminate sybarite who has outsourced his functions of coercion, and the question of your abolition becomes effectively decided.

And what about the second extreme case? Generally speaking, in a free market, mega-qualified specialists will not eat whatever they are given. The employer sets up a fitness gym in the office because the specialist specifically wants that. He is too lazy to go lift weights after work; he wants to have the option when the urge hits, and if the employer is not ready for that, there are competitors. And if the worker grows tired of the fitness gym, they will have no problem putting a bar next to it—just keep working, sweetheart. You don’t want anything extra, just more money? Here is more money, and work from home if you like. Of course, all these measures to increase loyalty benefit the employer only if the specialist genuinely enjoys their work, but it cannot be otherwise; otherwise, they would not have acquired their outstanding qualification.

However, even if a corporation’s main engine consists of a few mega-professionals, it still cannot do without a team of mid-level employees; someone must handle the routine. And these people are the ones who don’t get to choose between fitness, a bar, or cash in hand. Firstly, it is above their rank. Secondly, a benefits package reduces profit and therefore reduces the profit tax. Salary, on the other hand, requires payment of payroll tax. Therefore, it is often more profitable for a corporation to pay its rank-and-file employees less in cash, and instead provide benefits in kind, which, of course, evokes associations with food tokens in the plantation cafeteria.

Well, why does the corporation need the state? For the same reason the planter does: to protect the corporation’s interests through brute force (mainly by limiting market entry for competitors, plus government contracts). Naturally, as a result, the corporation also ends up vulnerable if a certain high-ranking state official decides to “dekulakize” it. What could replace the state regulator? As in the case of the union of planters, it would have to be some situational alliance of industry representatives agreeing on voluntarily observed norms and standards. If the corporation’s business itself is not based on coercion, then living without a state is still somewhat easier for it than for latifundists.

Thus, the state, by its very existence, exerts a corrosive effect on large business: it reduces the costs of violence against workers or competitors, and as a result, business acquires state-like characteristics. It is much harder for small business to latch onto this mechanism, so even within an existing state, it remains a purer market agent and therefore will survive the abolition of the state with much greater ease. This leaves the ancaps with only one question: can a society without a state maintain a high level of structural complexity and a deep division of labor in the absence of large business? Or can large business remain so in the absence of a state? I will leave this question hanging for now.

How to make a good economy without taxes so that the whole economy is from the market?

Zxcutehikka

This is an interesting question. I suspect the author of the question wants a statist answer: how to build a good economy from scratch, having come to power in some state. There are several quite decent examples in recent history, such as Kakha Bendukidze’s reform of the Georgian economy or Argentina’s economy – under Javier Milei. What unites these cases, and more classical examples of economic miracles – Western German, Japanese, South Korean, Singaporean and so on?

Primarily, it’s that the economies in these countries were completely wrecked before the reforms began. Only when the horse was dead would the bureaucratic horde graciously agree to dismount and say, “Well, alright, reform us, don’t interfere with me, but only weakly, and as soon as the horse gallops again, of course, my time will come, and I’ll push you aside.” And then the reformer more or less carefully dismantled regulatory blockages, allowing the economy to breathe.

Perhaps the only example of an economic miracle that didn’t involve any reforms comes to mind: Hong Kong. There, according to reports, the governor simply sabotaged metropolitan policy and didn’t interfere much with what was happening in the local economy for a long time. And then the metropolis simply handed over Hong Kong to the Chinese socialists.

The path of Hong Kong is just what anyone can use, not only the chosen or unchosen politicians. The business is simple – you just need to ignore government directives and deal with your private affairs. If no one will pay taxes, we’ll get a tax-free economy, which, incidentally, is what the questioner is interested in. Of course, the modern state knows how to cope without taxes. For example, it could simply print money and finance its needs from this source. So it would be good to ignore government funds too.

The problem, however, is that mass ignoring of official wishes doesn’t begin until people realize that the state has botched things. And therefore, at the start of the economy, we have ruins. Worse than that, the level of economic literacy among people at the start is probably shockingly low – otherwise how did our economy end up in ruins? Why “presumably”? Because there’s a more favorable alternative: people are generally more or less literate, and the economy is ruined, for example, by war and economic sanctions. And this is why Russia has a better chance of achieving economic prosperity after forcibly displacing the current government than Cuba or Venezuela.

And the fact is, even if the Venezuelan government is now crushed by the US Army, there’s probably not much good that will come of it – because the local socialists will be convinced they were right all along, it was just a force majeure situation, and now let’s fix our wonderful Bolivarian socialism. Where do I get this certainty? Well, there’s the precedent of Iraq: an external overthrow of a socialist government doesn’t allow the people to become smarter; instead, the people become enraged.

The answer came out sprawling – more like rambling thoughts than a coherent lecture – and political studies isn’t really my forte. But somehow I managed to look at the topic from several angles, and that’s enough bread.

Discussion on whether to pay for security

A subscriber sent me the text of their article with a suggestion to refine and publish it. This seemed like a bad idea to me, as I find AI-generated creations uncomfortable to read, and editing them is not enjoyable at all. So I simply posted the article on Teletype so that those interested could read it, and I will reflect on the topic addressed in it.

Briefly, the article explains why someone in need of security should not buy this security, but should ensure it for themselves. As justifications, fairly standard protectionist arguments are provided, stating that the division of labor is not always a benefit because the provider of necessary services will inevitably want to dominate the market, which in the case of security services will inevitably place the consumer of these services under the complete control of the provider.

Firstly, it seems to me not entirely correct to suggest that the reader act on the assumption as if there are currently no enforcers claiming a monopoly, but rather a free market, and one only needs to try not to spoil the current blissful ancap. In fact, we already have a situation of forced collection of arbitrary sums from everyone the state can reach under fraudulent pretexts, including the argument that the state supposedly provides protection. In other words, the article essentially suggests to people who have already fallen into the crocodile’s teeth to be more careful and not walk around Africa.

Secondly, the same arguments used against the division of labor in the sphere of security can be transferred unchanged to other spheres. Wouldn’t a food supplier want to be a monopoly supplier, with complete power over your death by starvation? Let’s engage in subsistence farming to avoid this terrible danger.

In fact, in the case of state security, we have not an excessive, but an insufficient division of labor. The state tends to involve itself in any aspect of security that occurs to a bureaucrat drafting new regulations. Meanwhile, it is precisely the practice of turning to various narrow specialists for every specific issue that counteracts the potential forced merger of these specialists into a single center for providing everything. As soon as the state gets a market competitor in any sphere, the state’s position in it becomes more shaky. Of course, many initially prefer the option already paid for by taxes and therefore requiring no additional expense, rather than paying a private provider for a higher-quality solution. However, private solutions still gradually carve out their way, first in the premium segment, and then in the mass market.

Therefore, I will instead formulate the opposite call: pay for security. Buy all goods and services that are sold to you cheaper and/or of higher quality than if you were to tinker with it yourself. And only if the market choice does not satisfy you, does it make sense to combine efforts with partners and produce the missing product yourself.

The question of the monopoly on violence

Recently, I came across an interesting criticism of ancap. The gist is: you believe that the market will solve everything, and that monopolies shouldn’t be touched because they are inefficient and always eventually collapse. So why are you picking on the monopoly on violence? It will collapse on its own too. Either admit that monopolies aren’t collapsed by the market themselves, or that violence is a special, separate type of service that should only be managed by the state.

Is there any answer to this argument?

Querens

Monopoly in conditions of free market entry is a rather conventional concept; everyone tries to establish their own arbitrary criterion for what percentage of the market should be considered a monopoly. Again, the boundaries of the market are also taken from thin air. For instance, on the scale of Montenegro, if you try hard enough, you can see a monopoly on violence held by the Montenegrin state. But on a planetary scale, you can’t see one even with superpowers.

Therefore, it seems more convenient to me to speak not of monopolies, but of the optimal size of an organization. In given conditions, there is always a certain size of organization (determined by the technologies it uses and those used by others, population density and characteristics, landscape, history, and a host of other factors), beyond which the organization is forced to spend disproportionately large resources to maintain its own structure and activity; conversely, if the organization is smaller than the optimal size, growth proves beneficial because the organization’s activity brings a greater effect with relatively lower resource expenditures.

A hairdressing business has its own optimal size, as does a business producing microchips or airliners. Similarly, in these specific conditions, the business of organizing coercion will have its own optimal size. God is on the side of the larger battalions, but the technology of assembling large battalions is a very non-trivial thing.

The Neolithic agricultural revolution made it possible to coerce the inhabitants of fertile lands to grow grain, deliver it to state granaries, and then assemble into large battalions that could eat this grain on the march and crush small barbarian tribes by sheer mass, turning them into slaves or subjects who became new farmers. But on barren lands where grain does not grow, the state did not take root, and various highlanders are still considered less civilized—that is, less shaped for state needs (this was a brief summary of James C. Scott’s book “The Art of Not Being Governed“).

Nowadays, the financial system plays the role of grain. Whoever’s economy allows for the extraction of more resources for state needs can afford more expensive military toys, as well as fashionable soft-power tools—and that party secures that very monopoly on violence in a more complete volume and over a larger area.

Libertarians are a modern remake of those same barbarians described by James Scott, who sought to retreat to areas where grain doesn’t grow and where the hand of the state—in the form of censors, tax collectors, recruiters, and other unpleasant types—hardly reaches. Only now, instead of potatoes and other yams, they grow their bitcoins, which are useless for state needs, cook up their tokenomics, which are useless for the state, corrupt the tax collectors, refuse to work in the army or police, remain indifferent to patriotic slogans, but are keenly interested in all sorts of technological innovations useful to them, even if for some reason they are being banned.

Now, I will answer the question itself. Monopolies (including the monopoly on violence) do not collapse on their own; they are helped by the invisible hand of the market. But this hand consists of many elementary actions of all those for whom this monopoly is an inconvenience. And the invisible boot of the state consists of many elementary actions of those who profit from the monopoly on violence. The only thing that large battalions handle very poorly is guerrilla warfare, plus sabotage. This is a complex technology of decentralized resistance, and that is exactly what we are developing.

See the monopolist of violence? Can you hit them in the eye?

Ancap-paternalism

Something peculiar happened in Montelibero recently. Someone appeared who wanted to enter our tokenomics with a large sum. Most likely, he read the instructions and began to follow them. He obtained dollar stablecoins from some external exchange and went to exchange them for our euro ones. Meanwhile, the order book usually looks something like this:

What do we see here? There is a certain number of tokens trading in both directions with a more or less reasonable spread, and then orders begin at completely absurd prices; for example, 5 EURMTL are offered for sale at a price of 1000 USDC each. For such an order to be triggered, someone would first have to buy more than four thousand EURMTL at a price of around 1.12, and under normal conditions, this of course never happens. But when someone, without looking and with a broad gesture, throws, for example, 40,000 USDC into the market, they will buy up all the cheap euros, and with the remaining amount, they will stock up on overpriced ones. That is exactly what happened.

According to libertarian principles, this deal, like any other voluntary transaction, is completely legitimate. A person has every right to sell a glass of water for a diamond in the heart of a desert or a kilogram of flour for an antique icon in besieged Leningrad. Likewise in our case—there were no more favorable offers on the market, and the buyer agreed to what was available.

What is the difference between our case and the aforementioned cases of buying under conditions of extreme scarcity? In our case, there was no real scarcity in the market. It would have been enough to buy as many tokens as were listed for sale at an acceptable price, then wait a bit and make sure that other traders arrived and placed new orders at prices not much worse. One could also have written in the chat: “I want to buy euros for forty kilobucks, but there aren’t that many on the exchange, who is ready to sell more?” Finally, one could have contacted the MTL fund directly, saying, “Guys, you’re emitting a stablecoin here, how about you issue more coins against my dollars.”

But to do this, one must understand the specifics of the acquired asset and the specifics of the trading tools. And this leads us to a discussion of paternalism under ancap.

What is paternalism? It is a demand for a social arrangement that reduces the cost of a mistake. Is there such a demand under ancap? Of course, yes. Even looking only at tokenomics, it exists, firstly, from the side of beginners who do not yet fully understand the principles of how it works and therefore risk losing a lot through carelessness. Secondly, there is a demand from the developers of tokenomics tools: if a tool is dangerous to use, people will use alternative solutions. Thirdly, there is a demand from community activists: it is important to them that people come and stay, rather than fleeing in horror after hitting such pitfalls.

How was the case described above handled?

Firstly, additional checks were added to the MTL-Wallet. If a user wants to exchange a large amount at market price, the bot compares the effective exchange rate for the proposed amount and for an amount a hundred times smaller. If they differ by more than 10%, the bot issues a warning.

Secondly, the trader who made a fortune on their order was found and persuaded to return the earnings (I am not aware of the details; perhaps they kept some for themselves, but the victim, nevertheless, remained completely delighted). This was the hardest part, as the ancap community has no tools for forced coercion to return funds, nor should it have any.

Thirdly, the fund plans to place protective orders for all main trading pairs so that it would be extremely difficult for a careless buyer to break through them.

What conclusions can I draw from what happened?

Firstly, paternalism is natural, and there is no need to fight it.

Secondly, under ancap, paternalism is limited by libertarian principles, namely self-ownership and the non-aggression principle.

Thirdly, even with such limitations, fully functioning paternalistic tools can be created in society.

So here is another argument for your collection of debates with statists, proving that ancap is not cannibalism, and that private paternalism is more effective than state paternalism.

What is the libertarian response to a claim along the lines of: “In a free market, you will be sold into slavery?”

Mr. Coupon

That’s correct, they can indeed be sold. For this to happen, slaves must be perceived as a commodity:

  • by the seller
  • by the buyer
  • by those around them.

If you are enslaved, but all potential buyers do not perceive slaves as a commodity, then congratulations, you will not be sold; you will remain a slave to whoever enslaved you. For example, the state.

If you are enslaved, but the enslaver themselves does not perceive slaves as a commodity — congratulations, you won’t be sold either; you will remain a slave to whoever enslaved you, meaning, for example, the state.

If you are enslaved, they want to sell you, a potential buyer is ready to buy, but all those around do not consider slaves to be a commodity — congratulations, a free market for slaves will not emerge, the transaction is unlikely to take place because it will be considered illegitimate, and you, again, will remain in slavery to whoever enslaved you, for example, the state.

But if everyone around considers not only the purchase and sale of slaves to be illegitimate, but the very acts of enslavement themselves — well, then — alas for you — you will not only not be sold, but you are unlikely to be enslaved at all; you will somehow survive without a master.

There is no one to enslave the poor fellow: feed him, give him a bunk, provide him with work. Even Navalny was given a bunk! And free housing!

How do libertarian institutions regulate advertising?

Will market regulation of advertising be more effective than state regulation? For example, advertising for psychoactive substances, child pornography, or gambling.

Anonymous question

The question of how libertarian institutions regulate something is, in essence, a question of how market institutions regulate something.

The person placing the advertisement does so to increase the return on their activity. In the limit, they would like to force everyone and anyone to buy their product for any amount of money by a simple act of will. In other words, they would like to take the position of a regulator of consumption.

The person consuming the advertisement wants to receive information as a result about which goods are available on the market, how they satisfy their particular current or potential needs, and where these goods can be found. In the limit, they would like to force the producer by a simple act of will to do exactly what the consumer needs, right at the moment of the order, and deliver it right to where the consumer indicates. In other words, they would like to take the position of a regulator of production.

Finally, there are those who produce the advertising and show it to the consumer. In the limit, they would like to force product manufacturers by a simple act of will to pay them the lion’s share of the product’s value for the right to sell this product to the consumer. In other words, they would like to take the position of a regulator of sales.

How do market institutions regulate the relations between these listed groups? Through a multitude of spontaneously emerging feedback loops. Advertising is too expensive — producers try to minimize their purchases, and the consumer is forced to spend a huge amount of effort to find anything outside of their daily basket. There is too much advertising — the consumer develops banner blindness, and it becomes ineffective. As a result, the advertiser stops paying for impressions, preferring to pay for results — and the advertising market is forced to restructure in favor of more targeted advertising tools. This leaves both the advertisers satisfied — their ads give the maximum return per unit of funds invested — and the consumers — they receive information exactly about what they want, and unnecessary things do not clutter their eyes. For each of the stakeholder groups, the situation ultimately turns out to be imperfect, but it is a kind of dynamic compromise that more or less satisfies everyone. And as soon as it stops being satisfactory, a fairly rapid restructuring of the market occurs.

And what about state regulation? The state is a regulator of production, consumption, and sales. In the limit, it would like to determine every aspect of the life of each of its subjects by a simple act of will (by “desires of the state” I here mean a somewhat simplified reflection on the activities of its individual functionaries, as well as the persons who make up its support group — “statists”). The extent to which the state is successful in this pursuit is also determined by spontaneously emerging feedback loops. If it succeeded in selling the consumer the necessity of fighting child pornography, the consumer will tolerate difficulties in receiving the corresponding advertising, and the increasing cost of the corresponding services. If it failed to sell the necessity of fighting alcohol consumption, the consumer enjoys the fact that they are at least not imprisoned for consumption, even though advertising, for example, is restricted.

Now, your question essentially concerned whether market institutions can allow third parties to restrict the advertising of certain products in which both the producers of the product and its consumers are interested. How effectively these third parties can perform the role of the state in this case, without being the state and without resorting to direct violence.

Answer: they can, but not as effectively as state institutions. The task of an influence group is to make a certain consumer behavior reprehensible, to make the person feel ashamed of it and, conversely, proud of avoiding it. If your advertising campaign proves successful — congratulations, your opponent is marginalized. If it proves unsuccessful — well, then you yourself end up as the marginals. Everything is fair.

And tell us about the mercantilists in plain language

And why do many believe that such state economic policy leads to an increase in citizens’ welfare? And why are they actually mistaken?

Top Kripto

I’m being nudged here to speak out on the Ukrainian issue, but I’d rather answer this one instead.

Mercantilism is any policy based on the idea that free trade is unacceptable and should be regulated. In the past, one of the justifications for such a policy was the notion that trade is a war where one party loses and the other profits, and if the profiteering trader is not kept in check, he will rot everyone else while gorging himself on the people’s blood. This strange view of trade was accompanied by a belief in the harm of competition: supposedly, under competition, a merchant or craftsman cannot concentrate on one assigned area of activity, and due to meaningless fighting among themselves, there will be complete chaos in production and trade. Finally, this was accompanied by the idea that low prices for goods are harmful, just as high prices for labor are harmful—because there are “fair prices,” and every producer or trader is obliged to observe them.

It is no surprise that where such notions were strictly followed, humanity had little chance of becoming wealthy or developing technology. But this was also accompanied by the postulate of the benefit of poverty for the salvation of the soul, so no problem was seen in this.

Finally, mercantilism implied that it was extremely foolish for a ruler to allow people to buy foreign goods with money, because it was far more useful to accumulate money in the treasury—it would always come in handy for buying luxury items, but most importantly, for paying for wars. And this meant that trade should be subject to the highest possible tariffs.

A more or less systematic explanation of the errors of mercantilist views was provided by Adam Smith in his Wealth of Nations, which Pushkin reported to us when describing education in the early 19th century: he scolded Homer and Theocritus, but read Adam Smith and was a deep economist, that is, he knew how to judge how a state becomes wealthy, and what it lives by, and why it does not need gold when it has simple products. The ground was finally pulled from under mercantilism during the marginalist revolution (a conference honoring the 150th anniversary of this event was recently held in Moscow), when the pricing mechanism was explained through subjective preferences rather than cost, which finally made it clear why a voluntary transaction improves the position of both parties involved.

https://youtu.be/Z59nPehJBSE

Why then, 246 years after the publication of The Wealth of Nations and 150 years after the marginalist revolution, is mercantilism still alive in people’s heads and actively applied in politics?

Because politics is war. It is a zero-sum game where those who gain power diminish the power of others. But fighting hot wars has become a faux pas, and instead, trade wars are actively used. Want to tell another regime “to hell with you”—introduce trade sanctions against it.

Politics is not only external but also internal. Fighting hot internal wars is even more of a faux pas, but representatives of certain industries can lobby for trade preferences for themselves and restrictions for their competitors, both inside the country and abroad. The slogan of protecting the domestic producer is as effective as the slogan of protecting the homeland, and it leads to the same consequences: the domestic consumer becomes poorer.

Moreover, take even the quite libertarian Montelibero project. We also primarily try to hire project participants rather than freelancers for the project’s work. Mercantilism is psychologically comfortable: you give up a bit of personal gain, but you do a good deed for a neighbor from whom you buy a more expensive product, ignoring cheaper analogues from those you dislike. Similarly, agorists may fundamentally trade only with those who do not pay taxes, even if the effect of scale and the cost of security measures would make it cheaper to deal with taxpayers. But then the state won’t get a single agorist penny.

So what is the difference? Why do libertarians consider their own behavior moral, but state regulations criminal? Of course, it’s a matter of voluntariness. You personally have every right to sacrifice profit for the sake of moral superiority. But to demand the same from others by force—that’s a no-no!