Voluntary Stateless Association – A potential Anarchic Society – Part 1

What is Anarchy? According to dictionary.com, Anarchy is:

1. a state of society without government or law.

2. political and social disorder due to the absence of governmental control: The death of the king was followed by a year of anarchy.

3. a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society.

4. confusion;chaos; disorder: Intellectual and moral anarchy followed his loss of faith.

 

So let’s look first at what anarchy is not, or more specifically what parts of that definition are not exclusive to anarchy.

Political and social disorder due to the absence of government – Although I agree that anarchy is political disorder, since politics, namely a political body cannot exist under anarchy, social disorder is not a unique descriptive characteristic of anarchy. There are numerous examples of societal disorder that occurred with a political or governmental presence and many were caused by the existence of government. From wars to natural disasters, many societal upheavals are possible even in the presence of the State. Saying that lack of government control causes social disorder is like saying that obesity is caused by a lack of vegetables on your diet. Yes there can be a circumstantial relation but it is not a causational relation. Obesity is caused by excessive caloric intake in relationship with the amount of energy expenditures. Social disorder is not caused by lack of governmental control but by lack of social order. Specifically a lack of order within the individuals that compose such society and the cultural norms accepted by the individuals in the society.

Confusion; chaos; disorder – I don’t think so. All those are present in Statist societies, see Chicago, Illinois or Juarez, Mexico, as well as stateless societies, see Somalia.

So what is Anarchy? The lack of a State. Notice I did not say the lack of society, culture or rules, I said the lack of a State.

So what is a State?

At its core, a State is a small group of people that retain a monopoly on the legal use of violence in order to control a larger group within a geographical area.

So, and I can hear you asking already, how can you have a society, culture or rules without the State? You have this now! It exists today. Where? Look at the mirror. You are in essence the best example I can give you of a Stateless society. From when you wake in the morning to the moment you fall asleep at night, your whole life is lived based on societal rules that you voluntarily adhere to. You get dressed in the morning because the weather makes it impossible to walk around naked. And even if you lived in a tropical paradise, your local community would shame you into dressing appropriately. No need for the State or the threat of violence, just the mere rejection of your local community is enough to convince you to behave a certain way. You go to work and follow dozens of rules and dictates from your superiors. No State force here. You can choose to not follow the conditions of your employments but, your employers are free to not pay you and ask you to leave. You buy lunch or dinner and you have a myriad of choices to what and where you eat. No one has dictated what you will eat, you chose freely from what was available. Even the value, to you, of the available products dictate the availability of such products. If a local lunch place charges too much, you go elsewhere. If enough consumers do so, the lunch place either lowers its prices or goes out of business. You drive home in a car you chose into a house you bought filled with furniture you chose. At no point in your day did you need to interact with the State. True, you might have been bothered by the State, and very likely were. From traffic lights to speed traps to workplace rules to a myriad other annoying little things and large freedom robbing events, your interaction with the State was not one that was needed by you but one that was initiated by the State. And for all this, what did it cost you to support the State?

Lets ignore for now the loss of freedom, entrepreneurial power or wealth that was destroyed by the State or the loss of potential wealth. Let’s focus for now on actual visible costs. I will use my case for this conversation and you are free to adjust your costs accordingly. I pay and effective 17% annual income tax rate to the federal government. Add to that a 7% or so Social Security/Medicare. Plus 8.5% sales tax and about 2.5% of my after tax salary in Property Taxes. I will not even try to count the additional hidden taxes included in the price of all consumer goods since it would take a much larger tome to calculate it. So let’s say, to keep the math easy, that I pay about 25% of my income in taxes to the State. That means that for 3 months of the year I worked for the State. One fourth of my productive life was plundered by a small group of people that claim I must provide them with my money. For what?

Well, let’s see. About half of that money goes to provide money to those who refuse to work. Whether they are retirees or welfare dependents, they are receiving money, my money, for not producing anything and for not providing any value to my life. I know, I know, they paid into the system and I will get to steal from my kids and grand kids when it’s my turn. Really? You accept this concept? You see nothing wrong with grandma and grandpa sending a State agent to steal money from their grandkids?

About another fourth goes to support military bases and ships in about 122 countries. To provide for the common defense. Who’s common defense? The Germans? The Japanese? The Afghans? When did we sign up for this? And please do not insult your own intelligence by claiming that guarding a border crossing in Afghanistan protects the security of a waitress in Peoria. Such stretch of thinking defies the most basic laws of logic.

About another fourth goes to pay for interest on the debt. So let me get this straight. The State decided to spend more money that they could tax and made me liable to pay interest on their debt? Wait, since when did I become liable for someone else’s debt? When did I sign a contract becoming liable for that?

And this is not the whole budget. About twice again is going to be spent by the State in your name for numerous vote buying and favor creating slush funds.

What else do you get? Well you get roads to drive on and schools to send your kids to and police and firefighters to protect your property. Fair enough but, is there not a better way to buy those same services without the coercive force of the State? Without having to fear the IRS or having no say on what services I choose to pay for? Why can I choose my lunch but not my kids school? Why can I choose my car but not the roads I am paying for? Is there a better way? Yes.

Anarchy.

In an Anarchic system the same services will be provided but on a voluntary market based basis. Let’s look at some examples. Let’s assume that you did not have to pay any taxes whatsoever. None.

Schools: Public Schools are relatively modern invention. Before public schools were instituted by the State, parents hired a teacher to teach their children. The modern version would be private schools. But it goes beyond just a simple cost analysis. Let us say that you could send your kids to a school that creates custom classes that fit their interests and personality. Furthermore, let’s say that this school could provide your child with life skills and when they graduate they will do so with marketable skills that fit their intelligence and personality. And let’s say that it will cost you about the same that what it costs you today in property taxes. Would you not like that school? Do you believe that if the demand for such a school existed that it would not exist? Of course it would. Anything that you can imagine and that there is a market demand for the market will fill the need. Why are your schools not operating that way? Because the purpose of public education is not to educate but to indoctrinate and to add insult to injury, private schools are required, by law, to follow the same curriculum and standards that the public schools follow. So you pay for failure twice; once thru property taxes and once directly to the private school.

Firefighters: In the Roman Empire, firefighters were actually insurance company employees. Why can’t it be so again? You insure your home against fire. Your insurance company pays an annual fee to a firefighting company to keep your house from burning down. It is, after all, in their best interest to make sure your house does not burn down. Furthermore, do you doubt that your insurance company would not spend the money and resources in preventing the fire instead of fighting it after it starts?

Law and order: This is a long and complicated subject that is going to take a few articles to cover but, I can attempt to at least start the conversation here.

First, we must divide crimes, or what we currently consider crimes into victimless and victim crimes. Victimless crimes are those actions that the State, in all their wisdom, (heavy sarcasm) has decided to criminalize; gambling, drugs, prostitution, etc. Any action that consenting adults choose to undertake would not be considered a crime under an Anarchic system. If you choose to smoke some vegetation, you go to a distributor, pay a few dollar notes and go home. Please explain who is the injured party here? How is this different than walking into a liquor store and purchasing beer or liquor? The only injured party is the State. They do not get to charge taxes on the transaction.

Those crimes that do have a victim can be further categorized as property crimes and violent crimes.

Let’s look at property crimes first. Let’s say your car gets stolen. We will look at the Statist solution first and then the Stateless solution.

Statist solution: Your car gets stolen. You call 911 and a police officer shows up, takes a report and files it. If enough cars are stolen, the police may begin investigating the car thefts. There is a 2 :10 chance that your car will be found and an even smaller chance that the perpetrators will be caught and punished. And if the car is found and the thief caught? In the astronomically unlikely possibility that someone is found guilty, he is sent to jail where he now lives in constant fear of battery, rape or murder. He learns additional criminal skills from his fellow inmates and then he is released into society with no marketable skills and no chance to start over. And you get stuck with the bill, both the bill to incarcerate him and the bill to repair your car.

Stateless solution: Your car is equipped with a theft prevention device that you bought in order to reduce your insurance rates. Your car is also equipped with a retina or voice recognition software that prevents anyone but you or any other designated drivers to operate your car. The car gets stolen. You call an 800 number and your insurance company, after verifying your identity, locates your car via GPS and disables it. The insurance company calls a car rental company and sends over a rental car to pick you up while an independent stolen car retrieval company who is under retainer by the insurance company, goes to the GPS location to retrieve your car. Once your car is retrieved, it is taken to a repair shop were any damage is assessed and repaired. You are notified that your car is ready and you drive to pick it up, a rental car company representative is waiting for you at the repair shop and collects the rental car. All this exists today. It is the way the market has addressed the shortcomings of the Statist solution yet, you are still paying for the police force that did not retrieve your car, provide you with a rental car or repaired any damage. Why are you paying for them again?

But what about the thieves, what happens to them? Well, first of all, stealing cars would be a very low profit enterprise if the cars are almost always retrieved. If you steal a car and within 10 minutes the car is remotely disabled and a retrieval team shows up to pick it up, the chances that you can make a profit from it would be fairly minimal. Remember, a thief is not looking for a violent confrontation; he is looking for an easy profit. But let’s say the car is stolen by a complete moron anyway. The retrieval team shows up. They may or may not encounter the thieves. At this point there may or there may not be a confrontation. Ask most police officers and they will tell you that a thief will run. The team either identifies the thieves on site, via retinal scan or via fingerprints or other means left on site (DNA from skin follicles or hair). The retrieval team has no interest in detaining the suspects, their job is to retrieve the car. An investigation ensues and the insurance company, who is now liable for the cost of the rental, the retrieval and the repairs, determines who stole the car. Your insurance company contacts the thieves insurance company and presents the evidence. Since it is in both of their financial interests to cooperate, they agree on a third party arbiter and present the evidence. The arbiter notifies the thief of the review date and invites him to attend. If the thief is found guilty, the insurance company recovers the money from the thief’s insurance company.

I know, you are thinking, why would a thief have insurance? He would have little choice. You see, without a State, businesses would buy insurance, just as they do today but, they would refuse to do business with anyone who is uninsured. Remember, under Anarchy, there is no public property. Roads, houses, food, parks, everything is private. No insurance, you can’t rent a house. Not because the State would compel it but because no landlord would risk his insurance coverage by renting to an uninsured person. This partially exists today. If you rent a car, you have to either show an insurance card or purchase coverage from the rental company. If you want to rent a hotel room, you have to provide ID and a credit card (financial liability). Under Anarchy, you could not participate in the free market system without insurance. You may choose to do so and some will. But the degree of difficulty that would come from not having coverage would make life close to unbearable. You could not buy anything or sell anything. You could not hold a job or rent a room or buy food. Notice that no force has been used at any point. The thief may choose to not show up for the hearing. He may refuse to pay for the damage, at which point, his insurance company would drop his coverage and he would become untouchable. No rent, no buying or selling of anything, no driving (roads are private). He would become a prisoner dependent on the good will of others who would risk their coverage for helping him.

So, to continue our scenario. The thief is found guilty and he is offered the opportunity for an appeal, by the way, if he is found not guilty, the insurance company accusing him would have to pay a fine to him and his insurance company for false claims, he receives a visit from a friendly insurance agent, probably his own friendly insurance agent. He would be notified of the options. If he goes for an appeal, the insurance companies select a different arbiter and present the case again. If he is found guilty, he is now liable for the second proceeding along with the original costs. He is now given two options. He can pay the bill, by either selling property or paying directly or, more likely, if he cannot pay, he is given the option of going to work at a designated work facility. This would be a regular job but, if he has no marketable skills, he would be trained first. A portion of his salary would be kept by the insurance company until the bill is paid, then he would be given the choice to continue working there, if the factory owner wants him, or find a different job. Either way his slate is clean. What if he chooses to run? His coverage is dropped and the insurance company would notify all other insurance companies of the case. He is now a rogue. No work, no money (money is private), no food or roads or any other commercial good.

But, I can hear you screaming, wouldn’t insurance companies become the new totalitarian State? No. Just like State Farm, Geico and Progressive cannot become the State now, they could not become the State absent a government. The Free market is the best regulator. If an insurance company does something you dislike, you are free to find a new one. If the State does something you dislike, you have to find enough people that agree with you, spend months of time and thousands of dollars organizing to try to unseat an incumbent politician and then, hope the new one keeps his promises.

An example. About ten years ago I had all my insurance coverage thru Allstate. I had my home owner’s policy, and a couple of cars with them. That year a rash of floods in my State caused Allstate to lose money. They notified me that they were raising my home owner’s policy cost by 25% even though I do not live in a flood prone area. I promptly dropped them, found insurance with the same coverage at a lower price (even lower than the original) and moved my cars to GEICO. Now, if this would have been a government agency they would have raised my rates without telling me and I would have had no other option but to pay or have an IRS agent confiscate my salary or send me to jail.

In the next installment I will discuss violent crime.

10 comments to Voluntary Stateless Association – A potential Anarchic Society – Part 1

  • Upside-down V-shaped recovery

    >> political and social disorder due to the absence of governmental control

    This definition angers me no end. Whenever I drive up to a crossroads where the traffic lights are out of order, I make a note of how nicely and easily and peacefully 4 busy streams of vehicles resolve this situation. THEMSELVES. Without anyone’s supervision.

    Whenever on a mountain hike I come close to an unfenced precipice I never think “Oh, if only there were some government regulations nearby to tell me how dangerous this may be!”

    Arrrrrrgh.

  • James

    To V first. Busy streams of vehicles resolve a four way stop? I am not sure where you live but I can not possibly see that working well for long. I would expect at the very least a decrease in efficiency and at worst a dangerous situation. If it is in fact more efficient and safer why is it not being done? Simply because the government is trying to control everything? As I see it the lightless intersect predates the current system. I can’t see how the evolution of traffic control is a hundred year old international conspiracy designed to solely increase government control (BTW that should be read as sarcasm meant for humor, not insult)

    For GS:
    The state sets standards.

    Money. Free range capitalism > Monopoly.

    The entire paragraph on the sad state of the US tax code does not prove the inefficacy of “the state” any more than the crusades prove the evil of all religions.

    The common defense is much more than simply keeping the Chinese from annexing California. It includes protection of our national interest…. That whole politics by other means aspect of enabling the world economy. The state can not act but by the will of the people…. Which includes willfully voting poorly as well as not at all. So there is little point it blaming the state for affording an efficient medium for evil men to operate. There are just as many ways to exploit anarchy for someone seeking power at any cost. I assume you will address how we would provide for the common defense soon, as I can not imagine you will claim we don’t need any military.
    Firefighters run by insurance company alone. I’ll buy that.

    On schools paid for by other than property taxes: First off a little disclaimer, I am the product of a private education up to high school, Public till college and then mostly scholarship through my masters. I have nothing against private education and hope to be able to afford to put my children through it. But are you advocating that schooling at all levels be entirely private? My math, to make it easy, assumes a teacher makes 50k a year, and I want to operate under a standard 25 student class so each student would cost at least $2K a year, would it not be fair to assume another $0.5k cost in administration and then $1k for facilities/ utilities and consumables? So each kids is gonna cost $3.5k a year in the best case? I mostly made that up based on seeing numbers from $7-$11K for public schools and 2.5-3.5 for private ones on a quick internet search. So are we going to accept that the bottom 30% or so of society are going to go back to being illiterate? Or are you assuming these parents will simply home school?

    Victimless crimes: methamphetamine use- how could a user be insured – anyone want to end up submitting to universally required pee tests by an insurance company? Inevitably the insurance company would certainly make it an exorbitantly expensive habit effectively making it “illegal” in your system… so it still ends up a crime in spite of its “victimless” stature. What about the age of consent- this refers to lots of acts other than sex, its not a violent crime nor property crime so now we have to accept the insurance company deciding when I can do as many of the things as the current government regulates.

    Police- your “statist solution” is pulling from current US statistics (I assume it is national and not a single city, that would be really dirty). So you are comparing an idealist anarchic system to what is almost universally accepted as a broken single example of statism. Kinda sounds just as unfair as comparing the Utopic State society to a pie in the sky Anarchy.

    The car scenario – “all this exists today…” and yet how many people can afford it? There is no less incentive for insurance companies to provide these services considering the statistics you quoted. So I must assume they just can’t do it for a reasonable price, and must wonder how, under your improved crime rates they could offer it affordably?

    DNA- who the heck is going to have a DNA database let alone fingerprints without a government ? I guess you are going to trust it to the insurance companies whose power you are seeming to increase far about that of our currently intrusive system. I would have to assume they will run healthcare as well… there is a scary thought I bet they will come up with some sort of Organization to Maintain our Health….
    Roads are private- how do you enforce that? Toll booths at the end of the driveway? You go on about unenforceable victimiless crime laws as a bad idea. How could you enforce this?
    Your prison is a capitalist system which has no incentive to deal humanely with the person going to prison. But you worry that people need more than just punishment, they need to have a chance to thrive after release. But the only incentive you provide these private prison wardens is to get repayment for their property crimes. The only incentive is to squeeze labor out of said “criminal” in the least time, that sounds like a bad incentive. I would expect you have thought of this
    Additionally, the only way to influence the insurance company (and through them the arbitrators) is through money. So instead of voting with equal power of my fellow citizens I am relegated to having as much or little impact as my wallet. While many complain about the inordinate influence big business and moneyed men have on our current political system, this insuranceocracy would at least be open and legal about allowing rich men and women to run it. If under anarchy I can not buy or sell ANYTHING without the blessing of an insurance company how is my life better than paying a small tax to a state in order to do one or the other?

    Furthermore, it is in the nature of any private company to attempt to increase its market share. Without anti-monopoly laws or anti-trust protection how would these insurance companies not move towards a totalitarian state by sheer natural progression? That is precisely the concern our Founding Fathers had when setting up the three part system we live under. Not to hope competition will work and maintain equilibrium but to try and design it into the system.
    “Under Anarchy you could not participate in the free market system without insurance….” So again you seem to show that insurance company is a direct replacement for “the state” with all the functions of a state which you like the state to have. But you believe that these insurance companies will not grow to include the evils of the state. What happens when 51% of the share holders decide to start covering something like “unemployment insurance” which you seem to not support in its current guise. The best I can see from this system is an oligarchy that does not even have a protected press corps to hopefully expose its evils.
    I am still interested in your concepts but as of yet I am still highly unconvinced. You give us much thought and historical reference to effective anarchy (with this and other writings) but in small groups and for short times. I see Anarchy as existing in the same realm as socialism or collectivism where it can only work with perfected people. Your desire for a minimalist government that provides differing options among the several insurance companies to ensure alternative taxation levels (or insurance premiums) simply describes the original intent of our Federalist-State system. Just because we citizens have not done a terribly good job of preserving that system does not mean it is less viable than trusting your corporatocracy.

    It would appear I need to do some more reading up on your mr. molyneuax et al. while I look forward to your next installment.

  • James

    I think before you set out Anarchy as the next step to solving our problems you have to define the set of problems you feel are appropriate to solve. What are your set goals for governance which your insurance company would fulfill and how would it be limited to only having those powers. I will then frame my argument to remain within the bounds of only adressing why I think a state is atleast as effective to those ends as is your anarchic association.

  • Goldsaver I enjoyed your article but disagree over the income tax.

    The Federal Reserve and the Income tax were both instituted in 1913. The only reason for the income tax was to insure that the interest on the money the globalist bankers printed would be paid. 1913 was a very bad year as we also got rid of States appointing Senators, and Colonel Mandel House brought us the Council on Foreign Relations about that time.

    As things now stand the income tax barely pays for the operation of the IRS and interest on the debt. Various other taxes pay about half of the money we spend each year and the balance is made up by borrowing counterfeited money. If we got rid of the Federal Reserve tomorrow we could get rid of the income tax and the government would have the same amount of money coming in. I recommend repudiating the debt just as Iceland has done with the Banksters.

    I recommend the Money Masters and the secret of OZ at youtube.

    http://www.youtube.com/watch?v=JXt1cayx0hs

    http://www.youtube.com/watch?v=swkq2E8mswI

  • Goldsaver I also disagree with you 25% going to the state. It is more like 50% for even the poorest of us. I define “tax” as any money the government causes us to spend.
    Add up the following.

    Federal Income tax
    Social security tax
    State income tax
    sales tax gasoline tax alcohol tax

    The built in corporate sales tax you pay in every item you purchase.(This is huge)
    Other government mandated business expenses that are built into everything you buy.

    The interest in your home loan because the states building codes prevented you from building as you could afford to.

    Interest on your car because of government regulations killing competition in the automotive field that would produce not only cheaper cars but cars that would last 60 years.

    The money you pay a mechanic because the government mandated complexity has made it impossible for your average guy to work on their car any longer.

    Your cell phone bill because the FCC sold the “public” airwaves for billions which we must now pay back to the big cell phone companies. Also the FCC killing digital spread spectrum which would make the FCC unnecessary and allow you to talk for next to nothing.

    How about government mandated auto insurance as a tax?

    The high cost of your medical insurance because it is a monopoly of good old boy companies that set the prices.

    The absurd price of pharmaceuticals because of required government red tape and patent laws.

    The price of medical care, dental care, and legal advice because all 3 are government sanctioned monopolies.

    I could go on for a week or two but I think you will have to agree these things easily fit under the concept of taxes. I also left out dozens of conventional taxes.

    I think that a 50% tax rate for the poorest in society is on the low side.

    Thanks for listening.

  • James, thank you for taking the time to read the piece. I will try to briefly address most of your points:
    “The state sets standards.” – Yes, but to who’s benefit? And if you dislike the standard,can you change government companies like you can insurance companies? If you decide that your tax dollars should not support abortion or a particular war or bank bail outs, are you free to opt out? What if you find the standards to be ridiculous,can you find a different government within your area?

    “Money. Free range capitalism > Monopoly.” – No. Monopolies are impossible without the State. Only with State compulsion can a company eliminate all competition and choice. I recommend reading some Rand or Molenyuax on this subject. Let say that a company became so powerful, like Microsoft, that they could eliminate all competition. How? If they are providing a better product at a lower cost, like Wal-Mart, they can reduce the competition but, if there are any profits to be made at whatever service or product they offer, other entrepreneurs will jump on the scene and compete. Also, monopolies become stagnant causing up and coming competitors to arise.
    Lets return to Microsoft. During the early days of the Internet, Microsoft was the king of the Hill. Macs and Linux based PCs were mainly geek ware. What happened? They fell behind to other up and coming companies like Netscape and were forced to catch up on the Internet Browser arena. Then they fell behind in the portable entertainment arena. This birthed the Ipod. Their refusal to enter the cell phone market resulted in Apples entry with the Iphone. The Ipad is another example of were Microsoft is falling behind. Within 20 years, Microsoft’s dominance has been curtailed by Apple. What would happen if both Apple and Microsoft became lazy? Well, I truly love my Amazon Kindle Fire. You see, the free market is truly dynamic in a way that the State can not allow.

    “The entire paragraph on the sad state of the US tax code does not prove the inefficacy of “the state” any more than the crusades prove the evil of all religions.” – My intent, and you obviously missed it, was to address the common question to what the State provides and the financial costs involved and to show how the Free Market can do it easier and cheaper without the gun pointed at your head.

    “The common defense is much more than simply keeping the Chinese from annexing California. It includes protection of our national interest…” protection of who’s interest? Why should American soldiers fight and die in order to allow access to resources elsewhere? Why should American tax payers spend blood and treasure keeping Korea from being invaded by the north (as if they could actually pull it off). So we have access to “inexpensive” dvd players and cars? Do you not understand that providing security for another country only subsidizes the price of the product and allows the State to make stupid decisions? Let me give you an example:
    For the last 20 years we have been engaged in warfare in the Middle East. Form Iraq (one and two), to Afghanistan, the basing of troops in the Saud kingdom and the naval fleets in the Strait of Hormuz, we have spent billions pf dollars protecting the free flow of oil to US markets. But, do you not see the two clear errors in this policy? First, by spending billions of wealth and thousands of US lives (not even counting the ten’s of thousands of Iraqui and Afghani lives) all the State has done is subsidize the price of oil. If the US would have been denied access to middle east oil, an impossibility since oil is a fungible asset, as in middle east oil sold to Europe displaces Mexican oil that ends up in the US anyway, the only result would have been higher oil prices. Even at $200 a barrel, another impossibility based on the natural tapering of the demand once the price reaches certain levels, it would still had been cheaper. The second effect is to allow the US to shut down domestic drilling for political purposes since warfare overseas allows the pipes to remain open.

    Would a business have done it this way? NO. Too expensive. It is far more cost effective to negotiate than to dominate. Without the State, additional oil demand would have spurred new domestic sources. This has the effect of retaining US wealth in our shores instead of lining the pockets of the Royal Family of Saud.

    “There are just as many ways to exploit anarchy for someone seeking power at any cost.” – Please name three ways that an evil man could gain absolute control and establish tyranny in the Free Market.

    “On schools paid for by other than property taxes….Or are you assuming these parents will simply home school?” – Let me address this in two parts. First, the cost. Do you remember the hype back in the early nineties about who would be the first manufacturer to offer a sub -$1K PC? Even after 30% inflation PCs are now available for less than $500. Hell my laptop cost me $300 and my dear wife bought me a Kindle Fire for $199. Both of them ten times better than any PC in the nineties. The free market forces efficiency and economy. The reason why it can not happen in education today is that the State dictates the curriculum and the class composition. Let me give you a scenario. Your enroll your child in a private school. The school provides you with an online account and a personal tutor for your child. Your child uses her laptop to log in and follow a teaching program designed to fill her personality and future skill needs. She is a year around student so can finish the school year by the age of fifteen instead of eighteen. She learns things such as budgeting, math, reading and writing, etc. The tutor is available, as your 24 hour support line from geek squad to review and assist as needed. This is incredibly less expensive than having a life teacher for every 25 students, plus support staff, infrastructure, etc. Imagine how expensive it would be if Microsoft had to send a technician home with you every time you needed to install a program. Instead they write programs to be simple to install and provide as needed support. Of course, since this is the free market, you could choose a more traditional school if you wished. Its all about market choice. You get to choose how your child is educated and get to save money in the process.

    Second, about poor children. The American people are the most generous in the planet. We give money to save wombats, fer crying out loud. Do you not think that there would be extensive scholarships and grants for poor kids? In addition, private industries depend on an educated workforce. What makes you think that the Ford foundation or that Microsoft’s Linda and Bill Gates foundation would not establish block grants or work study programs for promising kids? My point is that all this could be available without the State guns.

    “Victimless crimes: methamphetamine use…” First, both you and I submit voluntarily to random urinalysis testing as part as our conditions for employment. We are free to not take them and find a job that does not requires it. Secondly, just as there are car insurance companies that provide coverage to poor drivers, there will be insurance companies that provide coverage to drug users. Smokers (tobacco that is), obese people, and those involved in very dangerous hobbies are all able to get insurance. In addition, the cost of insurance would be an actual incentive to not engage in those activities. You choose, pay more for health insurance or use narcotics.

    Additionally, are you arguing that establishing a police force, jails and the potential of incarceration (with the additional dangers of assault, rape or murder once incarcerated) are superior to the potential of very expensive insurance? If you choose to be a drug user, would you prefer expensive insurance or jail?

    “Roads are private- how do you enforce that? ” In north Austin there are toll roads. These roads have an RF antenna that reads the RF tag in my windshield. I get monthly reports as to when I used those roads and how much I paid. Since I pre-pay to an account, I get a discount and have it to automatically refill once it goes under $10 dollar balance. Why can all roads operate this way? Even better, in down town areas, the businesses that depend on roads for customer access, could get together and pay to a common fund that maintains their section of the road at no cost to their customers. Sort of like validated parking. If you don’t believe this is possible. Please research who owns and maintains a mall’s parking lot.

    “Your prison is a capitalist system which has no incentive to deal humanely with the person…” – Are you claiming that Statist prisons are humane? Also, lets not forget that we are not talking about prisons here. A person that is found liable of a property crime can either pay for it out of packet or allow the Insurance company to withhold a portion of their pay every month. Only in cases where the person is not employed would they be found a job by the insurance company. Remember that the insurance company needs to recover their costs. They have to keep the liable party healthy and happy enough to be productive. They are also subject to market reviews. Would you buy insurance from a company that is known to send customers to a slave plantation? Neither would I. If they send people to a hell on earth, the rest of their customers would drop them in favor of a more humane company. Can you drop the State if they are running inhumane prisons?

    “Additionally, the only way to influence the insurance company (and through them the arbitrators) is through money. So instead of voting with equal power of my fellow citizens I am relegated to having as much or little impact as my wallet…” There are dozens of books that deal with this fallacy. Let me ask you James, would you like to End the Fed?. If so let me challenge you to do so. Go ahead, gather the voting power of your fellow citizens and end it. In the mean time I will point out that if I don’t like to Bank with bank of America, I just close my account there and open it with a different bank. Problem solved. I don’t have to wait for a group of “voters” to agree with me, I just drop them. That is the power of my wallet. I don’t have to change the one insurance company, I just change which insurance company I choose to deal with.

    “The car scenario – “all this exists today…” and yet how many people can afford it?…” On Star only costs $19 bucks a month. Hell I spend more than that on a business lunch.

    “Under Anarchy you could not participate in the free market system without insurance….” So again you seem to show that insurance company is a direct replacement for “the state” with all the functions of a state which you like the state to have.”- There are three distinct differences:

    1. Choice. You get to choose what coverage or company you want. Choice provides competition and efficiency.
    2. Cost. Since you are only paying for the package that you want, you would not be paying for everything else. The Federal budget includes things that you would never voluntarily agree to pay for, why should you?
    3. No GUN. The insurance company can not compel you to pay them and no one else. They can not take your home, send armed goons to your house to extract protection money from you. You voluntarily buy coverage. If you do not pay for it, they drop your coverage and you need to choose a different one. What if you choose to have no coverage at all? You could and some people will. But them you accept the consequences of living outside the system. I don’t get to choose if I want to pay mt Federal Masters, they ill put me in jail and take my property if I don’t.

    “Your desire for a minimalist…” The founding fathers intended a minimalist government, how did that work out? Why did it fail? Many reasons. First, absolute power corrupts absolutely. By having a monopoly on force, the State attracts the worst, most power hungry in any society. Second, the State has morphed the original limited government into a leviathan. All governments morph into Oligarchies. That is their nature. The system of check and balances can not work when all sides desire the same power over the people.

    In the Free Market system, competition insures a balance of power by denying power. Without your active choice, they can not do anything. Jack in the Box gets to choose their menu, but I get to choose if I eat there or not.

    And I promise to address Common Defense extensively.

  • Joe, very familiar with both videos. I agree that the Income Tax does not pay for services, I was just trying to establish a compare and contrast with services provided and how they can be available from the Free Market.

    I was been very generous when I said 25%….

  • James

    “Monopolies are impossible without the State. Only with State compulsion can a company eliminate all competition and choice”
    So then are you claiming the Teddy Roosevelt’s trust busting was all a sham or some vast conspiracy? Standard oil vs. Walmart.
    Standard oil 1870-1911, ended up worth 90% market share in 1890 and cut kerosene prices in half in 5 years. Sounds great right! Half price gas woo hoo. They got so big they started looking to new markets… including China with 55% of the Standard Oil Kerosene going overseas. So was that not a bad thing?
    Walmart –incorporated 1969 and still going strong in 2011. Worlds largest public corporation by revenue. It has almost half its stores overseas now though only 25% of its revenue. It makes up 2% of the US GDP with 50% more sales than Target and Sears combined… so maybe not a perfect comparison but about as close as I can see, better than Microsoft because it has branched out more as did Standard Oil.
    Standard Oil was one of the eye opening events to the possible peril of unregulated commerce. Sure by the time the Sherman anti-trust came into play their market share was declining, but how can you be sure of that happening in all cases? Some will say that big and fast growing companies force the older ones to ship up or ship out. I agree, to a point. When the big company gains a large enough market share their advantages can exceed the ability of a start up to get anywhere though. Without laws why would a large enough corporation not resort to sending Vinny to bust some kneecaps in order to maintain their dominance? You can’t say insurance because companies that big don’t need it and I don’t think boycott is a viable option either considering how many people would literally starve to death in a week if oil stopped flowing in this country.
    De Beers did just fine creating a monopoly without state sponsorship and rather in spite of fighting some of the smaller ones on the issue. Heck two brother’s almost cornered the market on silver and I don’t just mean the Parker Brother’s monopoly… (sorry could not help myself to a little humor there) What I was really thinking of was the Hunt brother’s near success in monopoly. How would that play out in your scenario? Who would bail out the banks to avoid that monopoly?… your insurance companies again? This monopoly would be even more dire now considering the many industrial uses of silver these days.
    ‘There are just as many ways to exploit anarchy for someone seeking power at any cost.’ – Please name three ways that an evil man could gain absolute control and establish tyranny in the Free Market.
    In addition to the above the East India Company is another example to consider because they got into foreign relations and really even foreign military campaigns. They worked hand in hand with the government to get charters for colonies to enable them to exploit at will. Just because a state has the monopoly on violent force does not mean companies have not already been at the helm of the warship. So why then would they stop doing it when directly in charge of their own destiny? What about the De Beers company which in the last decade they got hit for price fixing with their 90% market share. Corporations that simply hide their less moral dealings can acquire enough control of any finite item to negate the ability of competition to right the problem.
    I have read Atlas shrugged. It is interesting, though unnecessarily long. I also think Ayn shines over some pretty obvious and serious issues for the likelihood of success of her perfected society. But that is for a different blog.
    “Why should American soldiers fight and die in order to allow access to resources elsewhere? Why should American tax payers spend blood and treasure keeping Korea from being invaded by the north”
    The same reason we give out all charity. Because we are nice. Why would companies that take a profit loss to appear more green and thus ensure customer loyalty (Walmart) not grow into your insurance conglomerates who use their troops to right the wrongs of the world?
    “It is far more cost effective to negotiate than to dominate.”
    Not always. When you are a store owner and the mob comes I agree (weak vs. Strong). When you are rival gangs then possibly (similar strength) but when you have the ability to destroy your competition, in the long run is it not easier to simply destroy your opponent? If there were no international or environmental concerns would it not have been easier to empty a few silos in North Dakota and end the threat from Afghanistan for the next few decades? Cheaper than what we pay out in foreign aid to try and garner support from the countries we are currently trying to get in good with. Nearly 1 billion to Pakistan alone this year 50 ICBM’s at about $10 million each, though we threw that many away in 2008 ish, would be half that much money and more than sufficient to make the entire place one giant mirror.

    Schools— I think I got distracted in writing that section by… or look shiny… I mean .. sorry about that. I actually had intended to word that section as supportive to removing the government from education.

    both you and I submit voluntarily to random urinalysis testing as part as our conditions for employment
    To me this is evidence that you expect or even desire government intrusion, er rather insurance company intrusion. Private roads – RFID chips in the car? Do you not see how 1984 your anarchistic society is?
    I gladly give up many rights to serve my country, but your governance would take away my hopes to be left alone when I retire from this life. How is it that under anarchy there is greater intrusion in my life than the current government?
    What happens when an insurance company fails or commits fraud? What about those who are big enough to opt out? I am not sure on the details but at some point if I have 50 million in the bank I don’t need car insurance. So in that case rich people would reeeeallly be without the same rules as the rest of society. You would literally have to hire an army to arrest a rich guy’s date raping son, or atleast your insurance company would.

  • James, I am enjoying our conversations. Thank you.

    Teddy Roosevelt and trust busting – You do understand that a trust is a GOVERNMENT established monopoly, right? So Teddy Roosevelt, as much as I dislike him and his cousin, did engage in the dissolution of government formed monopolies that went overboard. The modern equivalent would be Fannie and Freddy Mac. A better example of railroad monopolies can be found on the west coast. Northern Pacific and Southern Pacific held a government enforced monopoly on all shipments coming in and out of the west coast. They became so pervasive at one point that no shipping was legally allowed to enter or exit a West Coast port if not carried by one of those two railroads. It was not until they lost their trust status that competition was able to penetrate those markets.

    Here we have to separate monopolies into two kinds:

    Market driven monopolies: Companies that are able to gain and maintain, thru innovation and efficiency, a dominant share in their markets. Examples are Standard Oil, Wal-Mart, Microsoft, Blockbusters, Netflix, Amazon.com, etc.

    Coercive monopolies: Companies that are able to gain and maintain a dominant position in their markets thru government privilege. Examples: Federal Reserve Banks, Fanny and Freddie, Post Office.

    A market driven monopoly can achieve a dominant and in some cases absolute market position because they can offer a better product to their consumers. Companies like Wal-Mart, with their bulk purchasing power, sophisticated distribution network and superior marketing have become so efficient that they can offer much more value to their customers than competitors such as Target and Sears. This is a good thing for several reasons. First, Wal-Mart has done more to raise the standard of living of the poor internationally than the U.N. (OK that is not fair. Anyone can do better than the UN). When you count the value, based on cost vs. benefit, of their products, the jobs that they bring in and the market opportunities that are opened by their distribution networks, you can not deny that they are a force for good. There are a million or more Chinese peasants whose living standards have been increased many fold by Wal-Mart’s distribution network.
    Microsoft has created more wealth and labor efficiency that any other company in history. I would venture to say that without Bill Gates, the information revolution would have taken 10-15 years longer. Bill Gates and Steve Jobs created a market that was then followed, improved upon and exploited by millions. Although Xerox invented the concept of the PC and DARPA the concept of the internet, without those two men, they would both be were the space program is today, in its infancy.

    Market driven monopolies can be lost or destroyed by the market naturally in several ways:
    1. Complacency. When a company becomes the dominant force in their markets they can be a leader of innovation and efficiency (Fedex, Wal-Mart, etc) or they can become complacent and loose their market position to up and coming companies. Look at Sears. They held the absolute market dominance from the 1950’s thru the 1980’s. But Sears became stagnant and did not innovate their business model. This destroyed their market position. They lost out to Wal-Mart, Target, and others.
    2. Disruptive Technologies. A great example of this is Blockbusters and Netflix. Blockbusters gained market dominance over the Mom and Pop video rental stores by consolidating costs and increasing their foot print thru the U.S. But, their revenue was dependent upon the on store hard copy model and late fee revenues. When Netflix came on the scene, they were able to destroy Blockbuster’s because they further consolidated their markets to regional distribution centers, created a flat fee model that eliminated late fees and by using the mail to home model, they became more convenient to the customer than Blockbusters. Then the streaming model, which they were at the forefront of, allowed additional companies such as Apple’s Itunes, Hulu, Vudu, and Amazon video to take a huge bite of their market share. Eventually, all these companies will be destroyed either by new market models, technology or the inherent weakness of their model, dependency on the telecommunication companies for distribution.

    So, as you can see, market driven monopolies are self regulated. The consumer decides which are dominant based on the value offered.

    But what about the evil’s of monopolies? All the traditional evils that we are taught are based on the robber baron models. All of them were based on government privilege.

    Coercive Monopolies: Coercive monopolies gain and maintain market dominance thru government privilege. They lobby for (buy congressmen) subsidies, bailouts, exclusive licenses and in the most extreme cases outright outlawing of their competition. Lets look at a few modern coercive monopolies:

    1. The Federal Reserve System. These corporations are given, by law, a monopoly on currency, interest on debt and government debt. It is illegal for anyone to reject their product, Federal Reserve Notes, and to compete against them (counterfeiting).
    2. Fannie and Freddy. I don’t think I need to a long speech about the evils of these two companies. Suffice it to say that they are both massive slush funds for the privileged to steal wealth from everyone else. Their profits are paid as bonuses to their management, all of whom are from the political class, and their losses are covered by the tax payer. Fannie and Freddy own about 85% of all mortgages in the US.
    3. AT&T and later the Baby Bells. AT&T was setup, similarly to the railroads, based on government trusts and a legal monopoly that gave the exclusive access to telegraph poles and later telephone poles and a licensing scheme that gave them exclusive control of all telephone service in the US. When the company was broken off into regional companies by congress, they did not really loose their monopoly, just the appearance of a monopoly. It was not until three disruptive technologies, cellular phones, data over cable lines and VoIP phones appeared that they were destroyed. You see, they maintain their legal monopoly on phone lines but people stopped using landlines and in the cases were landlines remain, they use a less expensive VoIP solution.

    The East India Company was a government protected monopoly.

    DeBeers is an interesting example. Yes, they hold a monopoly on diamonds by owning both the distribution channels and the diamond mines. But no one is forced to buy diamonds. You can choose to not buy them. You can not choose to not use or accept Federal Reserve Notes or pay Income Taxes. Although DeBeers uses market coercion to force their retailers to stay in line, there is no force or threat of imprisonment possible. You can not be thrown in jail for selling diamonds that are not controlled by DeBeers.

    So, you are now calling National Defense charity? Really? Charity is when people choose to donate wealth to an organization for an agreed upon purpose. The US military is not a charitable institution and their funding comes from plundered wealth. Being nice with other people’s money is not charity it is plunder. I will respond more thoroughly in the Common Defense article.

    “To me this is evidence that you expect or even desire government intrusion, er rather insurance company intrusion. Private roads – RFID chips in the car? Do you not see how 1984 your anarchistic society is?”

    Do you use a debit card?, Do you have health insurance? there are many instances where you voluntarily provide information to a company in order to gain a benefit. But the key here is voluntary. I do not volunteer my financial records to the IRS, they will put my in jail if I fail to file. I would be kidnapped and jailed by the State if I smoke some herbs or put non-sanctioned chemicals in my blood stream. Under anarchy, you are free to do so or not. Is anarchy free of consequences? No. But you get to choose such consequences as they make sense to you. Under anarchy I might choose a health insurance company that conducts no drug testing or I may choose one that does. I might choose a company that offers a discount to clients that do not carry a firearm daily, or one who offers a discount to those who do. It is about market driven choice. The State is about violent compulsion.

    “Not always. When you are a store owner and the mob…more than sufficient to make the entire place one giant mirror.” – The only reason violence seems less expensive here is that you do not consider the actual costs, just the subsidized costs. If I decide to destroy my competition by using violence, first, I have to pay Vinny, then I have to pay Vinny’s replacement when you kill him. Then I have to pay a large security force to keep you from sending Guido to do the same to me. War is expensive. In addition, when my customers find out that I sent Vinny to break your kneecaps, they will stop doing business with me. I am clearly too unstable and dangerous to deal with. Hell, if people boycott companies over child labor or environmental issues, how hard would it be to boycott my products over my overt use of violence?

    What about rich people? – Great question. In Texas, for example, you are not required to have liability insurance, just “proof of financial responsibility” If you are rich, you can set up a bond that would cover any liability for accidents. Similarly in Anarchy, no one would be required to have insurance but, most will. If you hit my car and have no insurance, my multimillion dollar insurance company will pay me as usual and send you a bill. You could choose not to pay. The insurance company will have reciprocity agreements with all other insurance companies. You, as rich as you are, still need to buy food, buy a car and participate in the free market. You could buy a car with cash but, who is going to sell you gas knowing that their insurance premiums may go up for doing business with a dead beat or that they are not protected at all from your actions? What about hotel rooms? Would you rent a room to a millionaire knowing that if he chooses to burn down your room you would have no recourse? When you go rent a room, you have to provide a credit card for incidentals. When the hotel swipes your car, they will be notified that their insurance provider will not cover any damage that you cause. How much more would they demand for the risk? When you rent a car, you must show an insurance card or pay an exorbitant amount for insurance thru them. Banking, currency transactions, large contracts would all require some sort of liability insurance.

    No matter how wealthy you are, you still have to participate in the economy. As a matter of fact, you are even more likely to need insurance. If you own several rental properties or massive stores or any other income producing asset, you will need to insure it. The possibility that the wealthy would try to screw over an insurance company and be exposed to either very high premiums in their other insurance dealings or an actual denial of coverage would be too expensive in the long run.

    “You would literally have to hire an army to arrest a rich guy’s date raping son, or atleast your insurance company would…” – What do you call a police department today? You are OK with maintaining a police force with a monopoly of force over you in order to not have your insurance company hire a security firm? In any event, violence is expensive. It would cost much less to send the bill to the rich guy than to send a security force to go to war over the rich guy’s date raping son.

    And you are forgetting the most powerful force in society, ostracism. If your son becomes known as a date raping playboy, only the terminally stupid will date him. And been rich does not makes him bullet proof.

  • Oh, incredibly I forgot this comment. Atlas Shrugged, although the best known Rand book, is not the one I was referring to. I recommend “Capitalism: The unknown Ideal”
    http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/0451147952/ref=sr_1_9?s=books&ie=UTF8&qid=1322593424&sr=1-9

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