Тег: costs

States are not private organizations

Vitaly Tizun’s Column

When criticizing the state, it is very common to hear that if you don’t like it, you should just leave for another “pen.” The argument is that states are also private competing organizations; they survive on funds paid by their clients (meaning citizens), and every person has a choice among many states, which means we already live in a free society. In reality, this is a very inadequate explanation of what the state is and how it works. Why? Let’s find out!

What does replacing one private agent with another usually mean? You need to terminate the old contract and enter into a new one with another agent. Of course, this process can sometimes encounter some difficulties, but overall it does not carry any unacceptable burdens. In this matter, you most likely will not even have to change your place of residence. And if you do (for example, you decide to change residential complexes or find a job in a neighboring city), the environment surrounding you still will not change fundamentally.

What does changing a state mean? You need to renounce your culture, your language, your loved ones and acquaintances, your familiar living environment, incur significant monetary expenses, fulfill a series of conditions regarding the termination of your previous citizenship (sometimes difficult to fulfill; I know one person who could not renounce Russian citizenship due to the need to “pay the debt to the Motherland”), and also fulfill a series of conditions to obtain new citizenship (you cannot move to another country simply by buying housing or finding a job—meaning, while getting the approval of some local residents, you still need permission from the state), and so on.

The process of changing states faces significant costs. An ordinary person will not move to another country simply because they have a poor knowledge of the local language and lack sufficient funds. Most people will flee their country only if the government starts simply shooting everyone indiscriminately (however, such governments usually also close the borders). In any other situation, no matter how bad it is, the majority of the population remains where they were.

One might say that you simply should not belong to the majority, that you need to develop yourself, strive, learn other languages, accumulate funds for relocation by all possible means, prove your reliability and usefulness to another state, and then everything will work out—and if you don’t do this, it means you don’t really want to change anything in your life.

However, even if you strive and successfully move to the territory of another state, this still provides no guarantees regarding the policy of the new sovereign. Regardless of the circumstances, the majority of the population of any state (the very ones who will never move) will not escape paying taxes and obeying state regulations. The state has the ability to use these people and their resources to pursue its own goals. This gives it the opportunity to make mistakes in its policy, or even adopt very inadequate and irrational decisions, since it always has the means to cover the resulting costs.

A private organization needs to function as efficiently as possible because it lives entirely on the sale of its goods and services. Any manifestation of inefficiency is unacceptable for it, as this would lead to the goods it provides being either more expensive or of lower quality than those of its competitors; it would thus lose clients and its income.

The state, however, does not need to strive for maximum efficiency. A specific government only needs to conduct a policy that is efficient enough to keep citizen indignation below a certain critical level. But no more than that.

States in no way resemble private organizations; they do not compete for people, but exploit the population belonging to them. The state is always slavery. To say that states are market and competing organizations is nonsense!

Ancap-chan’s Comment

Any analogy should not be taken completely literally. Of course, states compete for people, although this does not at all negate the thesis that they strive to exploit them for the purpose of obtaining income—if there were no such goal, there would be no sense in competing. Citizenships of different states have different values, although, of course, different people value different advantages provided by one citizenship or another.

But with equal success, we could consider the preferences of slaves regarding which master it is better to be owned by. It is known that some slaves successfully changed masters according to their preferences, although the bulk of them were unable to do so, or did not even perceive it as a need.

In short, the slogan “if you don’t like it—leave” should never be dismissed. In this regard, I want to remind you of an excellent article by Savva Shanaev, Mathematics in the Service of Libertarianism, as well as my brief comment on this article.

How will private utilities work? After all, there is only one pipeline, so how can water be supplied to everyone at different prices?

анонимный вопрос

I answered a similar question in quite some detail analyzing all stages of water supply in a free market, from finding a water source to its delivery via pipes to the end consumer. But you are not so much interested in how various market actors will negotiate the coordination of geological exploration, extraction, pipe laying, and repair—but rather what mechanisms will affect the tariffs for the end consumer. And, presumably, you have a concern that without central controlling bodies, tariffs will skyrocket.

Here, I suggest you familiarize yourself with the analysis of such a mechanism for electricity supplies that I provided previously. For the water market, the hard upper limit for tariffs turns out to be the cost of water production or supply by the consumers themselves: this could be buying bottled water in a store, collecting rainwater, desalination, recycling—depending on who the consumer is. But slightly before the price hits this natural barrier, the factors of competition and demand elasticity will kick in: expensive water will be conserved, and at a certain point, the supplier will realize that it is more profitable to earn from volume rather than markups, especially if alternative water suppliers do not jack up their prices and seize the market while the miser tries to squeeze their few remaining clients dry.

At the same time, of course, I do not rule out that water will be supplied to different houses by one company at different prices, taking into account the length of the pipes, for example, or the different competitive environment in different districts. Finally, a price markup is also added by the company that manages the building, if such a company exists. For instance, in Thailand, where I vacationed in the spring, it seems that every condominium has its own water price, because in one they water the garden, in another the pool is larger, in a third it is smaller, and so on. This is normal.

Here is an example of a condominium where water will certainly be expensive

How will ancaps solve the problem with the Gypsy ECU?

анонимный вопрос

As far as I can tell, Roma have an extraterritorial jurisdiction that is not contractual. You cannot simply show up from the outside and enroll as a Romani person. This jurisdiction may enter into informal contracts with other mafia-style extraterritorial jurisdictions, or remain in a state of nature relative to other jurisdictions.

What are the characteristics of the Romani community? It is a fairly ordinary nomadic tribe that has preserved a number of archaic traits, specifically, the fact that they do not consider outsiders to have legal standing. Regarding their own, the Roma are guided by principles of respect for property that are customary and clear to any ancap, plus some quirks regarding the regulation of personal and family life, which, however, are characteristic of many other ethnicities. As for an outsider, they can be cheated, robbed, or even killed; this is not considered immoral, is not prosecuted within the Romani jurisdiction, and the only regulator is utilitarianism: if you get too arrogant, you’ll have to move camp sooner than you’d like.

However, let us transport ourselves to a bright future where ancap dominates a fairly significant territory, and the Roma appear there. To start with, under ancap, land is either no one’s or private. Therefore, for a camp to settle, they will either need to find a piece of unclaimed land, which usually means some distance from populated areas, or rent a plot.

Rent land to the Roma for living? Why not, if you take money upfront and have enough strength to evict them from the place by force. So, if the Roma want to live closer to their foraging base, they will have to deviate from their principles and shell out. This is exactly the same attitude they will mostly encounter among everyone else: only secured transactions. There is nothing terrible about this; after all, some crypto-markets work this way even now. Transactions between strangers always need mechanisms that allow them to be carried out despite the lack of trust between them. The simplest such mechanism is a trusted intermediary—a third party monitoring compliance with the terms of the deal.

Of course, if the Roma behave under ancap as they are used to, after some time the question of liability for contracts, which they tricked trusting citizens into and failed to fulfill, may arise. Since ancient times, the camp’s simple answer to such claims has been: move camp. Technical progress, however, reduces the costs of pursuing a debtor faster than the costs of moving. Nevertheless, chasing nomads and shaking debts out of them is a hassle, so I would suggest that those intending to deal with the Roma under ancap use one simple tool: a deposit.

Deposits are already actively used now, for example, when you check into a hotel. It is collected upon check-in and covers the approximate amount of your possible liability for damages in the room. Checked out without notice, stolen something—losses will be covered by the deposit. Checked out normally—received your deposit at the reception. Exactly the same thing can be practiced when renting a camping site or a building plot to a camp: you take the rent for a month in advance and a deposit equal to the annual fee. Any monetary claims against a member of the camp are either settled personally by the violator as part of an amicable agreement, or if they manage to agree with the plaintiff on an arbitrator, through court—otherwise, the claim amount is simply deducted from the deposit. Lived for a year without exhausting the deposit—well done, for the next year the deposit can be slightly reduced.

And if a particular camp manages to cause losses exceeding the deposit and immediately moves away, the deposit in the next location may turn out to be significantly higher.

The consistent instillation of a culture of honest trade will gradually lead to the morality in the Romani community becoming more universal, and cheating an outsider will become “low class.” All other culture can easily remain, as culture is a good export commodity.

Mathematics Guarding Libertarianism: Brief Conclusions from the Article

Since I have started talking about experimental confirmations of the libertarian doctrine, it is worth mentioning mathematical modeling as a way of verifying claims.

I recently read a very good article on Freedom Pride about how a model was built with fairly realistic assumptions, and depending on the input data, it demonstrated what works better: contractual jurisdictions, democracy, or ancap.

The point of modeling is to see how the costs for members of society decrease depending on what mechanisms they have for adapting to and influencing society.

The conclusions in the article are written in rather cumbersome language, so I will translate them for myself in simpler terms.

  1. Democracy is a poor mechanism for optimizing one’s costs of existing in a society. Here, I cannot help but refer to my own longread on the subject.
  2. Instead of seeking changes through democratic mechanisms, it is much more reliable to reduce costs by voting with your feet—leaving the society that does not suit you and moving to one that does.
  3. The lower the relative costs of financing public goods, the more advantageous ancap is. The higher they are, the more advantageous contractual jurisdictions are. And for this last conclusion, I am very grateful to the authors of the article: they claim this is an argument for CJ, but for me, it means that as technical progress advances, ancap will become increasingly advantageous.

How will accidents be resolved in ancap? For example, while defending myself from a bandit, I accidentally hit my neighbor and killed him with my automatic rifle.

анонимный вопрос

In such murky situations, it always makes sense to start by identifying the circle of interested parties: representatives of the deceased neighbor, representatives of the deceased bandits, surviving gang members, and perhaps other persons whose property was also at risk in this shootout. Then, the picture of what happened is reconstructed, making it clear whether you acted in collusion with the bandits, the extent of each gang member’s involvement, how the neighbor happened to end up in the line of fire, how you happened to hit him, and who ultimately suffered what property damage.

Next, the claims of the various parties in the proceedings against each other are outlined, the court issues verdicts on the validity of these claims, and then bargaining ensues until it is fixed who owes whom and how much. The court essentially becomes the moderator of this complex dispute, which, although it has the deciding vote, is interested in ensuring that, upon the conclusion of the dispute, no mutual claims remain if possible.

It is clear that in most such cases, the person who accidentally shot an innocent bystander will incur significant costs. It is clear that these costs can be partially offset by the attacker’s assets. It is clear that in a situation where the killed neighbor turned out to be of absolutely no interest to anyone, everyone will simply be very upset by such a fuck-up, and the matter may be reduced to ritual sacrifices like “lighting a candle for the repose of the soul every week and paying for commemorative prayers for ten years.” Feeling guilt for a misfortune that one inadvertently caused is normal for a human, and the market will certainly provide ways to make amends, as long as there is an obvious demand for such things.

A strange way for atheists to recover costs, even in the case where the subject to whom they are being paid is already gone.