Sergey Ancapov: Hello, David! Your famous book “The Machinery of Freedom: Guide to a Radical Capitalism” has been published in Russia recently and there is an idea to get a cool interview about lot of issues concerning both theory and reality. How do you feel about it?
David Friedman: Happy to talk about the ideas. I’m coloring my responses to make it easier to distinguish them from the questions.
Sergey Ancapov: Most people in Russia do not know about you yet have not read your book and have rather negative or wary attitude towards capitalism, private ownership of capital, and free-market economic. David, can your book help them to understand/clarify those things?
David Friedman: Part I of the book should help them understand those things. They can find more relevant material on my web page, which includes the full test of several of my books and many of my articles and recordings of many of the talks I have given.
Sergey Ancapov: O’kay! I will remind to readers what author’s web page is daviddfriedman.com, where you find his cources, lectures, interview, academic works, libertarian stuff and more. The book “The Machinery of Freedom” in russian you can buy here. Now let’s get started.
Questions from Artem Seversky, a libertarian and member of the Libertarian Party of Russia (LPR website https://libertarian-party.ru/libertarianism):
Hello David! I would like to ask you this question:
Research since the original publication of Machinery of Freedom, such as Charles TIlly’s and recently Walter Scheidel’s, has shown that the modern state emerged in Early Modern Europe very much as a result of a profit-maximizing competition among rival “providers of security”. Even fully private armies had their role to play in this development, as outlined, for example in David Parrot’s Business of War. Of course, this result was a historical contingency — what do you see as the right conditions for a future emergence of a federated network of laissez-faire arbitration agencies, as opposed to a monopolizing regulatory Leviathan? What factors should give us hope, and what should be worried about?
David Friedman: Good question but a hard one. My most optimistic scenario at present is the emergence of something like anarcho-capitalism in cyberspace, protected by encryption. In a world where a large part of what matters happens online individuals are highly mobile, forcing states to compete against each other for taxpayers and ultimately reducing them to the status of landlords.
Questions from Boris Fedyukin, (Chairman of the Federal Committee of the Libertarian Party of Russia, LPR https://libertarian-party.ru/party):
David, in your book you are critical of the existence and functioning of the Libertarian Party USA, which was only a couple of years old at the time. After such a long time, has your attitude toward political libertarian organizations changed, and if so, how?
David Friedman: I don’t think I am critical of the existence of the LP. I haven’t been much involved in it, but I don’t object to other libertarians working through the party. It is one approach to making society freer, just not one I am a part of.
Boris Fedyukin: What conditions must a libertarian political organization meet in order for you to actively participate in its activities?
David Friedman: I believe in the division of labor. Political activity is neither something I am particularly good at nor something I much enjoy. It makes more sense for me to try to promote liberty by writing and speaking.
Boris Fedyukin: Can political activism be considered an effective way to achieve socio-economic goals?
David Friedman: Sometimes, for some people. I believe in the division of labor.
I’ve only come up with two fundamental questions so far: 1) whether storming the Capitol was a right to revolution 2) whether *private* companies had the right to ban Trump?
David Friedman: Storming the Capitol accomplished nothing useful and provided the establishment a way of demonizing the Trump movement and opposition to progressivism more generally. Its basis was a claim, I think false, that Trump had actually won the election. I think his defeat was in some ways due to unethical acts, but not to illegal ones.
Private companies had the right not to do business with Trump.
Alexander Stikhin: There is also question 3 – whether *private* companies have the right to be a contractor in elections?
David Friedman: If we have elections someone has to produce them, and I don’t see why government employees, who almost always have a stake in the outcome, would be more to be trusted than private firms.
Alexander Stikhin: There were many doubts with the counting of votes by scanning devices and the suppliers of such devices (more precisely, affiliation with one party or another).
David Friedman: That’s something to worry about, but the solution isn’t to have the same thing done by government employees but to make the process as nearly open as possible, whoever is doing it. I believe that in the USSR the votes were counted by government employees and always showed a large majority for the communist party.
David, lately we have seen massive private business interference in public policy and attempts to manipulate public opinion (Silicon Valley blocking all bad news about Joe Biden and promoting bad news about Trump; Robinhood and its behavior in the Gamestop stock situation; Twitter and Twitch blocking any opinion that does not fit their agenda). Don’t you think the rationality and competitiveness of the private actor is overrated, and that when total freedom from the state comes it will be up to the megacorporation that manages to establish its complete dominance first?
David Friedman: I don’t think so. Firms have always tried to influence public policy and public opinion in their own interest. That is not irrational from their standpoint.
Some corporations are very large, but there is no single corporation that controls a significant fraction of the total economy. Corporations cooperate in their political activity only when they have an interest in common. The situation was less competitive than usual leading up to the most recent election because Donald Trump had antagonized a lot of different people.
David Lomov: More recently, there has been a massive influx into the stock market of investors “from the people” (the Gamestop stock situation, for example). Also the price of bitcoin soared above $50,000. Is this the world we live in now, the economy of mass investing in just about anything? Or is the investing hysteria about to collapse?
David Friedman: Mass investing is not something new, and I cannot predict what will happen in the future.
David Lomov: Bitcoin is a limited cryptocurrency, out of anyone’s control. Do you think bitcoin has any impact on the economy right now? And how will the global economy change when bitcoin is recognized and accepted by the market?
David Friedman: Bitcoin is a very clever idea, but I doubt it has had much impact on the economy yet. Cryptocurrencies, not necessarily Bitcoin, have the potential in the longer run to provide a non-state currency in part replacing state currencies, especially for online transactions.
This might not be relevant to the Western researcher, but in our countries of the former Soviet Union we still have a huge amount of state entities, often even profitable, for example from the sphere of natural rents, such as the State Corporation Gazprom. The standard liberal view requires simply selling off these assets, but what if this structural weakness could be turned into an opportunity that could administratively expand the number of owners in the country and thus bring even the most marginal elements into the market economy, who would otherwise vote for populists and new taxes and regulations?
What if, instead of selling off such post-Soviet monstrosities, we distributed shares in these companies to citizens evenly and organized their direct management with elections of corporate board members via Internet voting by millions of minority shareholders pooled into management funds instead of political parties? This would, among other things, create a kind of Basic Basic Income through dividend distribution and whet the appetite for corporate self-governance of society as a whole, after which the same procedure could inevitably be applied to other state-owned enterprises, such as the army and detective agencies/special services.
How do you assess the realism of such a transition to anarcho-capitalism, and don’t you think this legacy of building socialism capable of producing public goods without taxation that is not enough to move to a post-state? But the infrastructure of joint asset management on a scale comparable to that of the state, such as Gazprom or Sberbank, kind of appeared only now, with the mass internet and the mass entry of individuals into the stock market. Obviously, there should be a moratorium on selling them first, for people to get experience of dividend income and shareholder voting, so that the practices of co-management without the state of enterprises of comparable scale, have time to take hold. The question is for very large organizations in the public interest to be able and begin to work without politicians and the state, directly. In the West, there are simply no such structures, and no one is ready for a similar voucher privatization of the army, for example.
David Friedman: Why do you think the firms in question ought to remain as single large firms? Isn’t that just the result of their having been government firms? Wouldn’t letting those parts of the economy become something closer to competitive markets produce better results?
You might consider that shareholder voting, by itself, has the same problem as political democracy: The individual voter knows his vote has almost no effect, so has no incentive to acquire the knowledge necessary to use his vote to control the organization — the problem of rational ignorance. What keeps joint-stock companies honest is the threat of takeover bids if they deviate too far from serving the interest of their stockholders. But you have made that impossible by making shares non-transferable. So you are back with the usual problems of democratic socialism.
Questions from Sergey Fediy, representative of the Left-Libertarian Movement:
Hello David. My question will be about your view on global warming. Why do you justify a phenomenon whose negative externalities cause some people to suffer when others benefit from positive externalities?
David Friedman: I don’t think it is practical to apply moral intuitions developed for actions by which A imposes a noticeable cost on B to situations where either the cost or its probability is so low that it becomes significant only when multiplied by hundreds of millions, or billions, of people. Is it unethical for me to speak at any time when there is some chance that someone within earshot wants silence? To drive a car or fly an airplane, knowing that there is a (tiny) chance of an accident that will kill someone else?
Sergey Fediy: Why do you think it is ethical to lose housing, farmland due to rising deserts and global ocean levels, and the extinction of many thousands of species, including those on private reserves, even if most people would benefit from it?
David Friedman: Turn your question around. Preventing global warming also has negative effects for some, positive effects for others. It makes little sense to do ethics on the assumption that everyone is entitled to stasis, given that stasis is not an option in our environment — with or without human activity, the climate changes. It is after all possible, although very unlikely, that preventing global warming will result in the end of the current interglacial, which has been running for long enough that it might be near its end — a mile of ice over London and Chicago, and every port in the world high and dry.
Questions from Alexander, (representative movement of Bleeding Heart Libertarians, host of the libertarian social justice channel Libertarian Social Justice https://t.me/lsj_ru; and a blog on Medium libertarian-social-justice):
Hello David! I’m not really familiar with your views, but it’s interesting to hear about your current attitude toward copyright law. In an interview in 2012, you said that there are good arguments both for and against it:
“Daily Bell: Where do you stand on copyright? Does intellectual property exist? David D. Friedman: I think there are good arguments on both sides of that question.”
I’m curious to know what good arguments you see for copyright? And are any of those arguments not based on consequentialism?
David Friedman: The consequentialist argument is obvious — to give authors an incentive to write by converting what they produce from a public good to a private good.
One non-consequentialist argument is that the creator has the right to control the use of his creation. Another is that a book could be sold with a contract by which the buyer agrees not to resell or copy without the author’s permission. The only reason that mechanism doesn’t work is that people sometimes violate contracts and get away with doing so, and copyright law is a solution to that problem. Someone with an unauthorized copy has either violated the agreement with which the book was sold or gotten it due to someone else violating it.
Sergey Ancapov: Since Alexander admitted that he was not familiar with your views and asked only one question, I will ask few more questions of my own, on the subject of libertarianism and social justice, on which you have a well-known position.
Who are the Bleeding Heart Libertarians and why do they call themselves that?
David Friedman: They are libertarians who want to make libertarian arguments for some progressive conclusions, primarily some degree of income redistribution. The arguments they offer owe more to conventional progressive philosophy, Rawls et. al., than to libertarian ideas. As best I can tell, they are themselves mostly academic philosophers.
Sergey Ancapov: What is the difference between the BHL, which stands for social justice, and the Left-Wing, which stands for social equality?
David Friedman: The BHL argue for something well short of income equality and would reject, on libertarian grounds, many violations of individual liberty that progressives would support. That, at least, is my understanding of their position — but it would be better to put the question to one of them.
I have never figured out exactly what “social justice” means.
Sergey Ancapov: Can libertarianism even be compatible with social justice? In the sense that social justice needs to be fought for and supported by methods other than the usual social advertising of voluntary aid or voluntary contributions (as organizations collecting donations for the needs of low-income families, for example).
David Friedman: That depends what you mean by social justice. As it is currently interpreted by the American left, it is incompatible with libertarianism. But libertarians would, of course, argue that it is their system that is just.
Sergey Ancapov: Can we call social justice, a type of economic evaluation? That is, I evaluate what is good or good for someone just as I evaluate what is good or good for me-it is my own personal evaluation of good and good, not someone else’s. And any dictate of good from the outside is coercive and has no moral basis whatsoever.
David Friedman: I don’t think people who describe their views in terms of social justice would say that they are deciding what is good for other people as much as how other people ought to act — in some cases not for their own good but for the good of others.
David, do you think the now popular topic of charter cities and private cities could provide the basis for your concept of decentralized law and competitive jurisdictions that you describe in your book? What do you think about your son’s the seasteading project? How has the project progress?
David Friedman: Seasteading is a clever idea and would be a very good thing if it succeeded, but I don’t think the odds are very high, unfortunately. Charter cities could give us competitive jurisdictions, but only for people or enterprises sufficiently mobile to have access to more than one of them — they are territorial jurisdictions, unlike what I described in Machinery.
Ancap-chan: Do you think about Martian colonization as a process similar to Icelandic one? Are you familiar with Elon Mask? Would he try to build an ancap society on Mars within his private cosmos project?
David Friedman: I don’t know Musk so do not know what sort of society he would want to build. I doubt that an independent colony on Mars will be viable within either my or his lifetime.
Ancap-chan: You positioned yourself as a Chicago school economist. What’s wrong with an Austrian School in your opinion?
David Friedman: The Austrian school covers a considerable range of views, and my disagreement is mainly with one extreme, the view that economics is entirely a priori. As best I can tell, there are no real world propositions that can be demonstrated with certainty on the basis of economic theory alone, since the theory does not give you either utility functions or production functions and it is possibly to get pretty nearly any result in human action by selection of those. Hence the right approach, in my view, is to form plausible conjectures on the basis of theory then test them against real world facts.
Ancap-chan: John Galt or Satoshi Nakamoto? Which character do you like better? And why?
David Friedman: The most obvious difference is that Satoshi was real, although presumably not under that name, Galt fictional. If I ignore that and compare them as if both real or both fictional, Satoshi seems more admirable as an inventor since his invention has the potential to make people more free, whereas Galt’s merely provides cheap power. On the other hand, Galt’s political strategy is intended to make people more free. But, on the third hand, I think it would be unlikely to work, because it would take the removal of many more talented people from ordinary society to bring it down than Rand assumes. Bitcoin does work.
Sergey Ancapov: I’m add information about Seasteading for our readers: Web site https://www.seasteading.org/, Wikipedia https://en.wikipedia.org/wiki/Seasteading, article from 2020 by Guardian “Seasteading – a vanity project for the rich or the future of humanity?”, article from 2020 by Lenta “Островок безопасности. Богачи захотели жить в плавучих городах. Это шанс спастись от чиновников и катастроф.”
David, what do you think of the views of your father, Milton Friedman? In particular, about the NIT and the land tax (LVT)? What was the disagreement between your ideas and those of your father? What can you tell us about the projects of your son, Petri Friedman?
David Friedman: I don’t know his views on the Land Value Tax, but I expect they are the same as mine — the argument goes back to Smith and Ricardo. If you could really measure site value it would be the ideal thing to tax, since the supply is perfectly inelastic — I remember my father pointing out that the same was true of genetic IQ. But in practice, someone has to decide what part of the market value of land is site value.
Ricardo, responding to Smith’s argument for property tax, argued that if the government supported itself off land tax land would end up owned not by those best at using it but by those with the most political influence over the tax on it.
Patri is currently running an investment fund for investing in Charter Cities and similar projects. He still has some involvement with Seasteading, but that is no longer his main interest.
Oleg: Your views on intellectual property have changed many times; at first you were a copyright advocate, but then you stopped taking any position. Have your views changed now?
David Friedman: I don’t know that I was ever a “copyright advocate,” perhaps you could point me at what I wrote on the subject that you see that way. I devoted a chapter of Law’s Order to intellectual property, arguing that there are costs as well as benefits to treating things as property and that the case for copyright is stronger than the case for patent, at least as long as copyright is applied narrowly — to actual writings not to “look and feel.” But I didn’t offer a conclusion about what should or should not be protected.
I still think there are arguments both for and against intellectual property, as I think I made clear in that chapter.
Oleg: Are you familiar with the concept of libertarianism through thick and thin? Are you a narrow libertarian (only a small set of basic principles, the rest can be anything), or a broad libertarian? And if the latter, which way are you “broad,” to the right or to the left?
David Friedman: I think “libertarian” is best defined as a conclusion, not the reason one holds it, and ought to cover various strengths of that conclusion. I define libertarianism narrowly in your sense — one could be a libertarian with any of a wide range of views on what one should do, how one should live one’s life. I define it broadly in the sense of regarding both anarchists and minarchists as libertarians. Obviously I have views on lots of things other than what rights people should have, but I don’t regard those views as part of being a libertarian.
Oleg: Which libertarians working in the last ten years can you recommend?
David Friedman: I like Michael Huemer. The GMU people, such as Bryan Caplan, Peter Leeson and Robin Hanson, do interesting work. There are probably others whose work I am less familiar with.
Hello David! Thank you for agreeing to this interview, and for everything else you do to promote libertarianism – your book “The Machinery of Freedom” and the private law enforcement agencies described there was the first clue that led us to the old article about “panarchy” by the Belgilian writer Paul Emile de Puig, which has been put in the name of our website and the Panarchy Movement. Therefore, we would like to ask you a few questions.
As you mentioned in your book, the state still exists because “most people believe it is necessary,” a large-scale institution based largely not on rational argumentation but on faith, historical inertia, and the need for a “sense of protection” from something larger than an individual or a small company. Is it possible that over time, with the spread of rational economic thinking in society, we might come to the system of small law enforcement firms you describe, but don’t you think that the intermediate stage where there are large integrated companies that include everything that modern states (not necessarily the largest, let’s take Estonia or Latvia as an example) but operating extraterritorially, providing their citizenship and law enforcement system to people (or, more logically, to individual settlements and municipalities) all over the world, is already a significant chance towards a more libertarian society where there is a competitive law market?
David Friedman: The problem is that all the land in the world, with minor exceptions, is controlled by states. So what you describe is only workable to the extent that some states are willing to permit it. That’s the approach of the current free cities movement and may provide a more libertarian society, at least for people who are sufficiently mobile to take advantage of it.
Ved Neuman: The second question follows the previous one. Since Paul Romer’s famous TED talk, his idea of charter cities seems to have taken on a life of its own, and in recent years we have been hearing more and more news on this subject. We also know that your son, Petri Friedman, is also somewhat involved in this process. Do you think there is any prospect of such cities having an autonomous government and based on projects, being run mostly by private companies, and could this be the tipping point that will trigger an avalanche of private governments as an alternative to modern public administration?
David Friedman: The present arrangements, as I understand them, leave criminal law in the hands of the host nation, with civil law mostly provided by the charter city. That is a move in the direction of private government, but not all the way. The question is whether, once such institutions become established, host nations will be willing to let them take at least de facto control over criminal law as well.
For a fictional portrayal of such a situation, it’s worth reading the sf novel Oath of Fealty. Part of its point is that the private organization providing “governmental” services will come to be the focus of the same emotions of loyalty and nationalism as a government. That might make it harder to maintain it as a free society.
Ved Neuman: This question is different from the previous one. Two Swiss economists, Rainer Eichenberger and Bruno Frey, are actively promoting another concept that is very similar to both the ideas of panarchy and your ideas of private law and order: FOCJ (Functional Overlapping Competing Jurisdictions), which seems to be the closest to implementation and the most economically sound proposal in this field at the mainstream level. Are you familiar with it? If you are not familiar with it, I will briefly describe the essence of the idea: local residents get an opportunity to create a special kind of non-profit organizations, which have the right to collect income taxes from those who subscribe to them, gradually replacing the centralized municipal and regional services. In this case, each such company can perform only one specific function.
As a result, when this principle of self-government spreads throughout society, there is a transformation of standard competitive federalism into its more flexible and functional bottom-up form, and an adjustment of all municipal services and their service boundaries to the current needs of the society.
David Friedman: I am not familiar with their proposal. One problem is that many people want government to redistribute income and so will oppose any institutional shift that makes doing so more difficult. Part of that goes back to something you included in your first question — whether beliefs and attitudes will change over time. That is very hard to predict.
Ved Neuman: I can’t help but ask your opinion about social networks and other Internet giants. It seems that this market in practice shows that such sites are some kind of natural monopolies with a very strong positive effect, where the pioneer gets almost everything. In terms of the number of users which already exceed the majority of states by multiples, at the same time it is a purely market and extraterritorial phenomenon, which does not prevent them from actively pursuing their own policies that affect people’s lives and sometimes even the policies of entire countries. We look at this as a precursor to the emergence of a kind of “virtual states” that will compete with ordinary states and possibly issue their own passports and citizenship. How do you look at this?
David Friedman: There is at least one such virtual state that has been around for nearly two thousand years — the Catholic church. In the Middle Ages it had its own law, its own courts, and jurisdiction over its people — benefit of clergy. I can see other such things developing with modern communication technology linking people geographically separate.
But they still have to function somewhere, which makes it hard to keep realspace states from exercising some control over them. I’ve discussed, in Chapter 66 of the The Machinery of Freedom and elsewhere, the possibility for large scale interaction concealed from states by the use of public key encryption. If we end up in a world where most of what matters is happening in cyberspace that could lead to a situation where non-territorial virtual states played a larger role in our lives than territorial realspace states, reducing the latter to the status of landlords.
Ved Neuman: One last thing: do you think the world today, in 2021, is closer or farther to the idea of the libertarian anarchist society which you described than it was when you wrote the bulk of your book?
David Friedman: Closer in some ways, farther in others. China is a great deal closer than it was then although not nearly close enough, some other parts of the world somewhat closer. Socialism in the old sense of a centrally planned economy is much less viable an ideology than it was then, even if the label “socialist” remains popular with many. But environmentalism has to some extent replaced socialism as an argument for government restrictions on human activity.
And finally, the biggest series of 7 questions from a representative of the Russian BHL Movement, Konstantin:
First I would like to express my deepest gratitude to David for his work and contributions to libertarian theory. The Machinery of Freedom, along with Robert Nozick’s Anarchy, State and Utopia and Milton Friedman’s Capitalism and Freedom, was one of the first books on libertarianism and classical liberalism that I read. Both then and now I admire the book’s thoroughness and original argumentation.
Although I do not share the anarcho-capitalist views expressed in the book, it is likely that on most applied issues there is no disagreement between my own position and that of The Machinery of Freedom. But in the questions below I have tried to focus more on those aspects of libertarianism on which the positions of BHL and anarcho-capitalism diverge.
This is not to say that I or any other Russian BHL does not appreciate or downplay The Machinery of Freedom’s contribution to libertarianism. There are good reasons to respect alternative viewpoints on libertarianism. Especially since Russia is a largely less free country than the United States. And so the aspirations of both moderate and radical libertarians in our country today are focused primarily on defeating an authoritarian regime.
Konstantin: What is your meta-ethical position?
The Machinery of Freedom stands out from other anarcho-libertarian books, such as Gary Chartier’s Anarchy and Legal Order, Michael Humer’s The Problem of Political Authority, or Murray Rothbard’s already classic The Ethics of Liberty. Primarily because The Machinery of Freedom relies on moral consequentialism rather than deontological ethics such as natural law or ethical intuitionism.
I wonder which meta-ethical position you hold: moral realism or some form of anti-realism? If, indeed, you have ever taken the time to address this question.
David Friedman: I think Chapter 61 of the third edition of Machinery answers that question. I am, like Michael Huemer, an intuitionist, hence a moral realist. But I am less sure than Michael that our position is correct, since I don’t think I have, and he apparently thinks he has, an adequate rebuttal to moral nihilism.
Konstantin: What do you think of the experiments with universal basic income?
Many libertarians, as you know, support the introduction of UBI as a replacement for existing Social Security. You also support an approach to libertarianism based on practical arguments for libertarian policies.
Recent experiments with the introduction of UBI, such as Finnish, Dutch, Indian, Nambian, and others, show generally satisfying results. In particular, they show no relationship between the payment of UBI and an increase in unemployment. They also show a decrease in stress levels among UBI recipients and an increase in life satisfaction. What do you think of these results?
David Friedman: I haven’t looked at the evidence of those experiments, but I would be concerned about the possible longer term effects, for reasons I discussed on my blog.
An NIT would be better than our present welfare system, but in practice it will be, to some extent has been, added to that system rather than replacing.
If you work out the numbers for a UBI, either it is too high to be viable or too low to be regarded by its supporters as a satisfactory replacement for other transfer programs.
Konstantin: What is one way to argue against the Georgeist argument for UBI?
Many libertarians, in supporting UBI, speak solely of its advantages over existing welfare. Such arguments are obviously heavily influenced by empirical data. We can compare the effect of UBI with traditional social welfare, and draw conclusions from this. And if it turns out that UBI is worse than existing welfare (or even just not better), then many libertarians will have to give up the idea of UBI.
But this is not the case for those libertarians who support UBI based on Georgism or similar ideas. Since, for Georgians, UBI is a resource dividend, the right to UBI is meaningful no matter what the economic effects of the policy may be.
For libertarian Georgians, UBI is justified on the basis that all people have equal moral status. According to this, no one can demand the appropriation of more natural resources than other people. This argument does not even necessarily presuppose that people have, by default, equal property rights over natural resources. It is enough that there is no good moral reason for some people to have more natural resources than others.
David Friedman: The problem with the moral version of the Georgist argument is that it doesn’t solve the problem of justifying property in unproduced resources. I didn’t produce the land, but we didn’t either, so how do we have the right to sell a landowner the right to exclude others from his land?
I offer my best solution to these problems in Chapter 57 of the Third Edition, now available in Russian as well as English, but it isn’t very satisfactory and doesn’t justify the pattern of redistribution that BHLs, or other people in favor of redistribution, want.
Konstantin: Will private charity suffice?
Many anarcho-capitalists say that private charity alone will suffice to provide for the poor in a stateless society. But no historical example of even the most successful private charity has ever shown that it can defeat poverty.
Charitable campaigns may help poor people and reduce their suffering, but unlike public welfare programs, private charity does not pretend to give needy people a springboard into a life of wealth.
David Friedman: I don’t know what “defeat poverty” means. Currently, per capita real income in the U.S. is about thirty times what the global average was through most of the past according to the estimates of economic historians. That means that the average in the past was equivalent to a current income of two or three thousand dollars a year. There are very few people at present with less than that in the U.S., and I doubt there would be even without government redistribution. Does that mean that we have defeated poverty?
If not, you are implicitly using “poverty” to mean “substantially below average” or “poorer than I would be happy imagining someone being,” in which sense I doubt any society will defeat it.
You might also consider how much current poverty is due to government action.
So far as government programs giving a springboard to a life of wealth, the original claim of the War on Poverty was that it would end poverty. That claim was abandoned after a few years as it became clear that it was a total failure — see Losing Ground by Charles Murray, who was involved in it, for the details — in favor of making poverty less unpleasant. Since then, the fraction of the U.S. population that is poor hasn’t changed much.
What gives people a springboard into a life of wealth is opportunity in a market society. The son of the immigrant family that we hire to clean our house once a week is currently attending a good university, one I once taught at. The descendants of the people who came to America as penniless immigrants in the early 20th century, such as my grandparents, mostly are doing pretty well for themselves now.
Konstantin: Isn’t a society in which all people have a chance to get out of need more attractive than a society in which all people can simply count on private benefactors to keep them from starving to death?
David Friedman: A market society is one in which people have a chance to get out of need, not by government charity or, mostly, private charity, but their own efforts.
Konstantin: Wouldn’t private charity be as paternalistic and demeaning as existing welfare?
David Friedman: Might be. That depends on the particular source of the charity.
Konstantin: Many libertarians criticize social welfare because it demeans, dehumanizes, and infringes on the freedom of the people it is meant to help. But it is most likely that private charity in a stateless society would treat those in need in the same way.
In fact, this is how current charities treat people in need. For example, religious organizations in Russia that assist the poor impose as many demeaning and dehumanizing restrictions on the poor as do state social services. As far as I know, the situation of religious (and many secular) charities in the United States is not much different.
One could argue that having conditions for receiving aid from charitable organizations is not a bad thing. But this objection is irrelevant if our goal is really to help the poor. And this goal is equally important to proponents of “social justice” and to consistent moral consequentialists.
But conditional aid will inevitably, as Charles Murray and Matt Zwolinski have pointed out, exclude some people who need help. The obvious example that comes to my mind is people with mental disorders. Many of them are unable to meet the job requirements even in situations where their disorder is “not serious enough” to declare them “mentally disabled.” This is a particularly acute problem in Russia, where psychiatric diagnosis is very poor.
David Friedman: One practical advantage of private charity is that the people doing it are much closer to the recipients than with state charity, making them better able to distinguish those we are in need from those who merely want to get money without working for it. Another is that it cannot as easily as government redistribution be used as an excuse for giving money to people who you want to vote for you or contribute to your campaign. A lot of what the U.S. government does is justified as helping poor people, including making food more expensive in the process of making farmers better off.
Konstantin: Do you believe that financial aid has to be earned at all?
Some anarcho-capitalists (Brian Kaplan, as far as I can tell) seem to oppose UBI on the grounds that financial aid has to be earned. Do you agree with such an objection? If so, what concept of desertism are we talking about? On what grounds are “deserving” and “undeserving” defined? Doesn’t this contradict the principle of neutrality inherent in libertarianism? As we know, many supporters of FDS lean toward this policy precisely because it is the most morally neutral form of financial support for the needy.
David Friedman: I try not to rely on moral arguments, since I have no way of showing that my moral arguments are correct. I will leave Bryan to defend his own position instead of trying to guess it from your description.
Konstantin: What do you think about the argument for UBI from robotization?
What do you think of the argument for UBI that relies on predictions about labor automation? Even leaving aside the most alarmist projections, wouldn’t UBI be the least interventionist way to make the labor market more mobile and give people who are losing jobs more freedom and prospects for new employment?
David Friedman: No. The least interventionist way would be to abolish government restrictions on the labor market, most obviously the minimum wage.
I think it unlikely that labor automation will create a world where the marginal product of most people’s labor is too low to support them. It may make us much richer, and some people more than others, but that isn’t the same thing. It is, after all, a prediction that has been made repeatedly over the past century or more, and so far has turned out to be wrong every time.
Sergey Ancapov: That concludes the interview. I am very grateful to you, David, for answering many questions that interest us. I hope it will generate even more interest in your ideas and in the book “The Machinery of Freedom”, which was recently published in Russia. I wish you, David, even more readers and supporters around the world, and especially in Russia.
David Friedman: Thank you, Sergey! Thank you to everyone involved for their questions. I also hope that my book will find worthy readers and connoisseurs of freedom in Russia. All the best!
Sergey Ancapov: Donate to the libertarian publishing project and supporting promote of freedom, BTC: