Oleg Tarakanov (Laxy Catal) is a fairly well-known libertarian theorist in Russia, whom I have already referred to repeatedly in my channel, until I finally managed to get in touch personally. The interview was conducted over several evenings via Facebook correspondence, so it later had to be quite thoroughly cleaned of incidental off-topic tangents and some repetitions of theses inevitable in such a prolonged correspondence. I present for your attention the final result.

As far as I know, in the Russian-speaking internet, you were the first to start promoting the idea of contractual jurisdictions, albeit under a different name. Conventionally, Paul Émile de Puydt is considered the first to mark himself in this field. How did you come to this concept?

Yes, I am probably the first in modern Russia to have thought it through completely in my head, but Alexei Shustov did beat me to writing a text where, in my view, a strange and not fully thought-out hybrid of an ordinary territorial state with contractual jurisdictions inside it is described. Shustov’s text slightly accelerated the writing of my own text, which is more consistent in getting rid of the traditional state and, most importantly, has an “insurance paradigm” of the state within itself. Shustov lacks insurance. Furthermore, I am much harsher in my terms; I am not shy about calling a racket a racket and I leave the classical idea that “the state is the result of the institutionalization of racket” untouched, simply adding insurance and nuclear weapons to it, which make territorial entities large, stationary targets (by the way, this phrase is from Heinlein’s “Friday”).

I first encountered the term “contractual jurisdictions” in a short article by Anatoly Levenchuk, “Providers of Cellular Statehood,” in Computerra magazine. I was also familiar with the views of Gustave de Molinari through a short article in Libertarium titled “The Production of Security.” I also knew a bit about how the racket was organized in the nineties, and that often the tribute to the “roof” (protection racket) was less than taxes, while the roof provided protection from the tax authorities and actually protected those under its wing. So the idea of contractual jurisdictions is not only as old as the idea itself but has been implemented in practice many times. My contribution was in conceptualizing it as an insurance service and interpreting “roofs” as states competing on a shared territory.

Could you describe in more detail the intellectual community you interacted with back then? What ideas were prevalent, how was your idea perceived, what were the objections and alternative concepts?

Back in the early 2000s, I was an ordinary demo-liberal in the spirit of Gaidar-Chubais. But generally, I wasn’t very interested in politics, having stepped away from it after the victory over the communists in 1991. A turning point was the failure of the SPS (Union of Right Forces) in the Duma elections in the autumn of 2003 (I think). Then, over the winter, I swung toward pure ancap, and after turning it over in my head, I couldn’t make all the gears mesh. You could say that’s when I started thinking about contractual jurisdictions, although I didn’t know that’s what they were called. Essentially, I wanted to construct a political world-order in my head that fits together without contradiction. This was simmering in my head for about five or six years, probably, before it clicked. Over those five years, much was adopted and much was discarded. Contractual jurisdictions, insurance, racket protection, nuclear weapons—these are the main points, of course. My subconscious sorted and combined everything on its own; eventually, it all fit together (though I don’t remember the exact moment), and it only remained to put it into words. I rushed to write my text, “Insurance States,” for the Lebedev Readings, which took place in May 2009; there I presented the text without retelling it in detail, as it is quite long. The people at the readings are knowledgeable—the “libertarian crowd,” the older generation of Russian libertarians. I published the ideas I discovered in my LiveJournal as I found them. The “insurance paradigm of the state” that I found greatly impressed Anatoly Levenchuk, and he wrote a note about it, and almost everyone read him. A year earlier, Shustov had presented the idea of contractual jurisdictions at the readings, so I didn’t cause any sensation at the readings themselves, except that my prediction—that seven to fifteen years remained until the implementation of the idea—impressed the people.

By the way, I stand by this prediction; although ten years have passed, I think in a few years everything will start to crumble.

Do you observe any intellectual continuity between those old libertarians of the 2000s and the current activists who are joining the libertarian movement en masse? Which of the opinion leaders from a decade ago remains relevant for the new generation, in your view?

I’m afraid I’m not the one who can competently answer this question. I am not well acquainted with the younger generation coming into libertarianism. I consider myself part of the middle “generation” that came to libertarianism in the 2000s. The older generation came in the 90s, the younger in the 2010s. Now, while I know the older generation well, I know the young ones poorly. I am slightly disappointed in the older generation, though not deeply. Those who are not minarchists (there are few minarchists in the older generation anyway), in private conversations or separate comments on FB and LJ, almost always explicit themselves (coming out :)) as supporters of ECU, extraterritorial states. But! None of them has ever said this publicly, not even in a separate post. I see a kind of duplicity in this, hypocrisy perhaps, as if being a supporter of CJ (contractual jurisdictions) is something shameful or something not customary to talk about. In essence, libertarians have no constructive ideas about what needs to be built (rather than what needs to be destroyed), except for ECU. Of course, if they don’t want to be hamsters in the wheel of history. That is, I see an almost complete victory of the ECU idea, but a kind of semi-secret one.

You mentioned that there are few minarchists in the older generation, however, around the same time you described, a libertarian party appeared in Russia with a purely minarchist program. So it seems there were plenty of ideas about what they wanted to build; they were clearly inspired by the Georgian reforms and other liberal concepts. Did you have contact with the LPR (Libertarian Party of Russia) at any stages of its formation and development, or did your circle of intellectuals shun politics?

As a member of the middle generation of libertarians, I communicate with both the old and the young. I know the founders of the LPR—they aren’t the ones running things there now; they are people from St. Petersburg. They are not in the LPR now; Muscovites took the party from them, which was predictable. The St. Petersburg people are quite sympathetic to ECU, and the Muscovites are too. BUT! Again, no one says this openly. A paradox!))

LPR was created by Oleg Khrienko and several other people from St. Petersburg; they later created RLN radio, where Alexander Kitchenko is now the head. Oleg initially led the LPR and, it seems, funded it, but later focused on business and left politics. All these people are sympathetic to ECU, which I know from personal conversations. In the current LPR, I know Boyko, Shalnev, Svetov, and a couple of other people. Shalnev is too much of a practitioner; he burns with the desire to do something, regardless of what, without thinking about the futility of the hustle; thinkers like me are alien to him. Sergey Boyko is more balanced in this regard. Boyko and Svetov are supporters of ECU. Last autumn at the Adam Smith readings, I asked Svetov if he knew about the insoluble problems of minarchism and ancap, to which he, not knowing who he was talking to, immediately referred to ECU as a reasonable alternative, sending me to my own text. That was funny. That’s how we met in person. It seems like a clean victory for ECU, but people online, like hamsters in a wheel, continue to obsess over minarchism and ancap, as if my “terminal texts” about their fundamental problems don’t exist.

In the case of a world of contractual jurisdictions, how do you see the position of a person who does not wish to enter into such contracts and, consequently, does not have a “roof”?

The position of such a person is like that of an animal in the forest. An animal is free, of course, but it can be shot. Such people will have no rights, but “right” and the general concept are dubious, cut away by Occam’s razor. As Svetov likes to say, “where there is no law, there is no crime.” Since people without a roof have not bound themselves by any contracts imposing obligations to behave decently, one can behave however one likes with them. However, I think roofs will forbid their clients from offending the roofless, in order to minimize the number of insurance cases, but the roofless will be able to have shootouts and other things among themselves without consequences for the winner. Moreover, Barr shot Hamilton in a duel without consequences when there was still freedom in the States. It is exactly these people, being in the Lockean “natural state of freedom,” who can build pure ancap without extraterritorial states. I hope there will be many such people, just as there are many small countries that could be conquered by large neighbors but live on because they are of no interest to anyone.

Thus, it turns out that insurance roofs may be market-demanded if people in society are aggressive enough (for example, experiencing a serious lack of resources)—or not particularly demanded under conditions of relatively peaceful practices (this usually correlates with material abundance). Could it be that increasing abundance will simply make insurance roofs unnecessary, and a pure ancap will become the sustainable model of relations?

Insurance roofs, also known as extraterritorial states, can become an intermediate stage on the way to quasi-pure ancap, but I find it hard to imagine how one could somehow bypass this stage. This is due to the inevitability of the painful collapse of the current world order, during which hell and chaos will be no joke, and roofs in this chaos will be centers for the emergence of a new order.

That is, the problem is not that ancap is completely impossible (a domestic situation can look very much like ancap, and an ordinary person may think they live under ancap)—but that somewhere behind the scenes, which few think about, somewhere at the level of reinsurance or even re-reinsurance, there will always be power players with nuclear weapons, aircraft carriers, and satellite groups, and it is hard not to consider them extraterritorial states. It is exactly they who will make large conflicts unlikely, threatening to inflict unacceptable damage on the aggressor. Such players will break away from traditional states and be independent, like pirate fleets or merchant guilds once were. Racket protection on such a scale is a good business; private individuals will master it.

One can imagine at least two more paths to quasi-pure ancap.
1. Through minarchism, that is, the gradual privatization of state functions through reforms from above, but without abandoning the territorial sovereignty of the state until the point where only the name of the state remains, and nothing stands behind it.
2. Through agorism, where ancap grows through the state until it dies from banal lack of demand—and again, bypassing the stage of multiple extraterritorial roofs, which impose more or less permanent relationships on people through the carrot or the stick.
Minarchism is the path of the conventional LPR; agorism is the path of the conventional Zolotorev and Sherstnev.

Ha, don’t make me laugh. This has never happened, and here we go again—as Chernomyrdin used to say. I am no great expert in history, but at least in the 20th century, there has been no large-scale decline in the role of the state without an accompanying catastrophe. Losing a war or the collapse of an empire led to the reduction of the state. And that’s probably all. To imagine that one can de-statize quietly and without catastrophe—no, that’s some kind of utopianism; that’s not for me, I don’t believe in fairy tales.

Regarding the movement toward minarchism, even from a purely cybernetic point of view, it is impossible to go far on a path where, as one moves forward, the incentives for further progress fall and the incentives to move backward grow. It is impossible to reach minarchism through reforms, only through catastrophe.

In a sated society of abundance, people are more loyal to various projects of helping their neighbors and plundering for these purposes. Abundance is excellent soil for building a social state, and certainly not ancap.

I believe a bit more in agorism as a tactic for moving toward ancap, since history knows examples of the victories of informal practices over state prohibitions. The impossibility of defeating drugs eventually led to their gradual legalization in many countries, and the same happened earlier with prohibition. But these were all problems that were not critical to the existence of the state, and prohibition was actually harmful to state finances, diverting huge sums of money from the budget. I would not underestimate the state’s ability to fight threats that are critical to it. Officials of different countries easily find a common language when it comes to money: they defeated offshore zones that were beyond the control of large states, and even forced Switzerland to liquidate bank secrecy, as improbable as it seemed. If Bitcoin becomes seriously dangerous, states will physically destroy the infrastructure that supports it, up to rocket attacks on mining farms or cutting communication lines. And they won’t care that this is the case in many countries—they will agree on joint actions. And you cannot go entirely into the network: as long as you are even slightly in reality, you are vulnerable to the state, especially regarding the possession of weapons. Here, the “deterrence doctrine” gives me optimism, although it is not part of agorism. But imagine that the successes of agorism led to the total bankruptcy of the state: eight million Russian “siloviki” (security forces) are left with nothing. What will they do? Peacefully go home? No, not all, but some of them will create hell in reality, they will simply engage in looting, we will have to buy them off, and again we come back to the roofs.

You indicate that not much time is left to wait. Can you outline in broad strokes how the transition to the ECU system will occur?

Yes, alright. In my text “Insurance States,” this section exists, but it is unfinished and has probably become outdated over 10 years; now, in short, my thoughts on this are as follows:

1. Traditional territorial states have many beneficiaries: intelligence services, the army, the police, the entire military-industrial complex, politicians, civil servants, budget employees, pensioners—it is impossible to imagine that they will “surrender without a fight.” Therefore, all realistic scenarios look catastrophic, meaning they are accompanied by chaos—from which a new order will emerge. How roofs appear, how “natural selection” occurs among them, how their scale grows, and how a hierarchy of roofs emerges is absolutely clear. The top-level roofs will likely be nuclear aircraft carriers, managing satellite groups from on board in continuous motion. These will be “roofs of roofs,” operating through Lloyd’s; private individuals will not deal with them and often will not even know they exist. It remains for us to find out how and why the “slide into chaos” will occur.

2. At the most general level, the reasons for the slide into chaos are not difficult to describe. In all times, elites try to “rake in all the material values they can reach, then fold the space, cocoon themselves and stop time” (Strugatsky brothers). That is, being satisfied with their position, they try to freeze the situation in which they achieved success, i.e., to stop progress. Progress, however, does not wish to stop, since it is a side effect of entrepreneurial activity—the eternal and indestructible desire to get rich. Plus the desire to become part of the elite, plus the unwillingness to give up assets. That’s it.

3. The devil is in the details. Life-extension technologies and medical successes in general will destroy state pension systems, which are already cracking under the retirement of baby boomers. Alternative energy sources, especially renewables, thermonuclear fusion, but also new designs of nuclear power plants (currently stalled by regulators) and shale—they drop the prices of oil and gas, bringing down the countries that produce them (especially important for the Middle East, which is potentially very conflict-prone). New (non-centrifuge) technologies for uranium enrichment (laser isotope separation, nanotechnology).

4. Not just technology. Territorial states presume a certain uniformity of the subject population, ideally: one language, one nationality, one culture, one religion. Almost none of this remains. National diasporas, landsmanshafts, ethnic districts, and even cities. Leftists, by encouraging “otherness,” abolished the “melting pot” concept. Diversity is growing in the world, and traditional states are not designed for it. Riots in Britain and Germany showed that authorities can already barely cope with Muslims, and sometimes they simply surrender (recall the mass rape of German women by migrants in Cologne and Merkel’s appeal not to provoke the “guests”). In other words, the state has already discredited itself as a protector of law and order; it only remains to discredit itself as a “source of benefits” (pensions, subsidies, etc.), and it will become useless to everyone except politicians and soldiers.

5. In summary, the softest realistic scenario: Muslims in the West, through mass riots and with the support of the left, achieve the abolition of local state jurisdiction over them, create their own courts and police, and stop paying taxes to the state, after which the local whites, under the slogan “why are we any worse?”, begin to fight for something similar for themselves, and from there everything spirals out of control. A precursor to this was the Archbishop of Canterbury, who proposed giving Muslims the opportunity to litigate in their own courts—he was forced to resign; he was ahead of his time.

6. Slightly more likely is that certain non-state Middle Eastern groups (state borders there are completely arbitrary, all groups there are transborder), using new technologies and disregarding the “non-proliferation regime,” acquire nuclear weapons and begin to demand their own “piece of power” (most likely a revision of borders, but not necessarily). Everyone is against everyone there: Shiites against Sunnis, everyone against Jews and the USA—something will inevitably explode somewhere, especially against the backdrop of declining revenues from oil and gas exports. Then, millions of refugees in Europe, and see paragraphs 4 and 5.

7. It is slightly different in the USA. Of course, there are many Latinos and Blacks there just waiting for an excuse for mass riots (recall the flood in New Orleans). But the main conflict is brewing between Democrats and Republicans. Social networks stimulate the clustering of people by beliefs; everyone seeks support for their point of view and finds an echo chamber—a place where a crowd echoes them, reinforcing the confidence in their own rightness, which leads to the polarization of society. On any controversial issue, everyone is divided into camps; people are like they are in trenches, dialogue is practically impossible, everyone is sure of their own rightness and considers the opponent either an idiot or a malicious scoundrel. And these people pay taxes to one government. Can this continue for long? Either it’s a civil war or they go under different “roofs”—I won’t venture to predict the details, but chaos is inevitable. For now, the situation is saved by a certain abundance; everyone has enough of everything. If disruptions in pensions and benefits begin, each side will blame the other, and it’ll be off. Chaos in the USA would instantly lead to the collapse of the “non-proliferation regime.” The States are currently the main keeper of the Westphalian peace; any serious weakening of them will lead to the collapse of the current world order. But their aircraft carriers are also ready top-level “roofs.” Deprived of funding during a crisis, I hope they will go freelance and become the backbone of a new world order.

Can I say something optimistic? Yes. Current territorial states are disgusting; they enslave people in the territories under their control and domesticate them like cattle—shearing them, and sometimes slaughtering them. The widespread proliferation of WMDs will make territorial entities impossible, because no one wants to be a large, stationary target. Exterritorial states, at the very least, will not enslave, and they have no reason to exterminate anyone en masse; it is costly and scares away clients. The future world will not be as disgusting as the current one. Not everyone will survive, but they will cease to be slaves. That is good.

That was powerful)

In their time, Marxists were faced with a complaint: if history is driven by objective economic laws, why do you fuss and try to outrun your time and arrange a revolution where society is not yet ripe for it? A similar question arises for libertarians, who assume that the radical restructuring of society will happen on its own, under the influence of objective contradictions embedded in the construction of the territorial state, which does not correspond to modern realities. So why conduct any propaganda of libertarian values and develop the theory at all, if it is enough to follow in the wake of changes and adapt to them?

Bravo! You have answered the question yourself as to why I hardly write new texts and hardly discuss anything with anyone. I see no point in it. One would have to be an utterly enthusiastic romantic optimist to believe that the few thousand smart, active libertarians in the world (there are far more passive ones, but they are of no use) can seriously change such powerful and fundamental historical processes. On the other hand, Russia is the armpit of the world; one cannot rule out that something special is possible on the periphery. After all, there is Somalia. That is, I do not rule out the possibility that somewhere apart from the rest of the world, libertarians might achieve something. The Bolsheviks are not an analogy here, because back then Russia was among the top three world powers and was not the armpit of the world.

Another reason why theoretical and practical developments may make sense is that when a new order begins to form from the chaos, the costs will be lower if the players know what they are striving for, what should eventually result, and do not make unnecessary movements.

If one is to be a complete optimist, one could assume that the experience of the periphery will show the world a path by which catastrophe can be avoided. I don’t believe it, but I don’t rule it out; there is still a one-in-a-thousand chance.

So isn’t that the secret of why people prefer not to publicly acknowledge your theory? Once you acknowledge it—that’s it, intellectual honesty forces you to stop fussing and start calmly waiting for the nuclear aircraft carriers to arrive and take your “roof” under their “roof.” But if you don’t acknowledge it, you retain an incentive for active action and the propaganda of your views. Minarchists need this to conduct louder political campaigns, agorists to build a trust network and arrange life around themselves according to ancap principles—and panarchists have to hope for a deus ex machina…

Now, whether the “deus ex machina” will happen on its own, or whether one must fight for it, is not part of the theory. Part of the theory is the analysis of stability, the analysis of incentives acting on actors, the analysis of evolution. This is a theoretical-sociological study of a possible world. Minarchism, however, does not include a theory of its achievement. Neither does ancap. Agorism, by the way, is not a separate branch of libertarianism, but a tactic for achieving ancap. So the hypothesis about the link between public non-recognition and the supposedly resulting inaction is incorrect. Moreover, one can simply disagree with me that the “deus ex machina” will fall upon us on its own and that we don’t need to fight for it. The doctrine of deterrence is quite appealing in itself; I even think it is implementable somewhere on the periphery. I repeat, Somalia exists; there is quite a territorial “roofing” system there—Zolotorev describes it roughly in my terms.

In recent years, you have become much less active. Perhaps this is because you have already formulated and published most of what you had to say. Unfortunately, it turns out that you conveyed your thoughts to your own generation, but with those who became interested in libertarianism recently, old libertarians find a certain communication gap.

Perhaps there is a gap; I don’t really know what the youth are thinking. But my sizable circle of communication does not show any gap. Well, I don’t know, the admins of a ten-thousand-member public page Freedom Pride know who I am, the leaders of the LPR know that I’m the “main man,” Svetov sometimes quotes me almost verbatim, although he doesn’t mention me. My “Insurance States” (I post a compiled single-file collection of all texts on this topic from the author’s LiveJournal – Ancap-tyan) is the most detailed Russian text on the “deus ex machina,” and everyone interested in the topic finds it. Or so it seems to me. To be honest, I don’t care; I am indifferent to fame, and the “deus ex machina” is not the only thing I deal with. I am probably the main Russian critic of democracy from the right. I wrote “terminal” texts about the problems of minarchism and ancap, after which it is difficult to take them seriously. I have a dozen other favorite topics. I am interested in truth, not fame or the number of readers.

As for the decrease in activity… Do you know who Leonid Nikonov is?

I just found him on Facebook; there is nothing interesting on his wall.

About seven years ago, he was a bright libertarian from Barnaul who swept through our circles like a meteor. He organized the first Adam Smith readings in St. Petersburg, dragged me there, held events in Moscow, wrote texts, and then somehow burnt out, I guess, in a couple of years, stopped his activity, and pursued an academic career. And I’ve been writing for fifteen years—even if it’s just a couple of texts a year, I write; I haven’t burnt out. No one can write like I do: briefly, point by point, closing the topic. The main character of “The Bison” said that books are written about incomprehensible things, but when everything becomes clear, a short article is enough. I think so too. Some topics spin in my head for five to seven years until they become clear. Perhaps I’m just slow.

I don’t understand why one should write texts without novelty, long ones that don’t close the topic. Propaganda of ideas? That’s not for me. It must be boring to engage in propaganda for many years; you’d get tired, your spirits would sink, you can’t outperform the state system of indoctrination (schools and media). In Russia, it’s generally impossible to convince anyone of anything because everyone is sure they have discovered the truth themselves. A country of people who have grabbed God by the balls. Although Russia is not the only one; this is a consequence of egalitarian ideology and democracy, where the opinion of Joe Blow is no less important than the opinion of Einstein. I look at many overly active people and doubt that they won’t burn out in a couple of years, like Leonid.

As for burnout, it’s easier for me; I’m anonymous. Having lost taste for the project, I’ll simply hand it over to someone else.

Many value panarchy (more in the Shustov version than in yours) because it allows for a peaceful separation based on values, instead of trying to ensure the dominance of one’s own group and subjugating the opposition. In connection with this, a rapprochement with left-wing anarchists has even begun to emerge (yes, I’m leaning towards the commies)—specifically around the idea of protocols for horizontal interaction, without attempting to eat each other. In your idea of insurance “roofs,” the possibility of ideological diversity is not indicated at all; they look like homogeneous objects, a simple set of firms in the market. Is the absence of this layer in the description a simplification, or a postulate that only one type of jurisdiction will survive?

I touched upon this question somewhere. Of course, there will be competition between the “roofs,” as a result of which they will begin to diverge into niches, that is, specialize in clients of different religious and other convictions.

I will quote my “Insurance States”: To speculate on what “tariff plans” the roofs will have and what “service packages” will be included—I won’t undertake that; I think they will be very diverse and will be determined by the imagination of producers, consumer preferences, and the level of competition. Currently, in countries with developed insurance, up to a quarter of family income goes toward buying insurance, plus taxes to the state, so there will be considerable money in this business. Which “niches” insurance companies will drift into—I don’t know either; I don’t even rule out religious or “ideological” ones, and we may observe the construction of, say, communism not in a separate country, but in a separate contractual jurisdiction. (My feeling is that the differences will not be that strong, but I cannot deny the existence of extremes, which will probably be as marginal as kibbutzim in Israel or punk communes in the USA).

The Libertarian band team, with whom I collaborate, released a series of videos on YouTube as an introduction to libertarianism. Could you take a look at five short clips, about five minutes each?

In the scripts for them, I tried to show that there are three different paths to ancap, and there is no need to limit oneself to only one while rejecting the others. I would like your review of this concept, which, it seems to me, develops both your ideas and those of many others.

Gorgeous videos, I watched all five. But I’m already in the loop; I’m not the target audience, and I don’t know how people far removed from the topic will perceive them. I think for marketing purposes it’s worth mentioning the terms “exterritorial state” and “contractual jurisdictions” more often, so that people get used to them and Google them. And insurance companies capable of protecting against Vova P. are not just companies. Nuclear weapons are not mentioned once. There is no comparison with the Churches, which also once lost their territorial monopoly, and nothing happened—the world didn’t collapse. But overall, everything is good there; you can’t fit everything important into four minutes.

In your old posts, you write that Hoppe deals with the critique of democracy in the book “Democracy: The God That Failed,” but the book was not translated, and you had not read it. Since then, the book has been translated. Have you had a chance to read it, and if so, what could you say about it?

And as it happens, during our conversations, after reading the introduction to my “Insurance States,” I remembered that Hoppe was translated and decided to read him, so I’m reading him now, but slowly—10 pages a day. So far it’s fine, but I’ll review it later.

This autumn Hoppe is coming to Moscow. What would you like to ask him?

I’ll think about what to ask Hoppe; is it similar to the Smith Readings, will he come for that?

No, Mikhail Svetov is organizing a solo lecture for him on October 6th.

Good, we’ll both go read Hoppe, maybe there will be a reason to discuss him in more detail later. Thank you for the interview!