Let's imagine I have extremely troublesome neighbors living next door to me. And they're not just troublesome, they are downright rotten and they violate my private property with nuisances like noise, smells, occasional vandalism, and verbal threats.
If there was no government solution to everything, there would pretty much always be a voluntary market solution. Government gives you one-size-fits-all, so that's why they can only think of these dumb ideas. They also have no incentive to avoid waste since they take their resources by force.
The above simple answer is usually not enough for people, so a more detailed solution is as follows:
Protection (Insurance) Agency Example
In my scenario, since there is no government solution, I would hire a private insurance agency to deal with the problem neighbor matter. I would agree to pay a monthly premium to the agency that they decide on after observing my situation. They would have an interest in setting the premium to the right level depending on how the neighbors act when they do their inspection(s) before we sign the contract.
I may have a high premium because my neighbors are unusually difficult. If I have a high premium, I might tolerate my neighbors until I feel I have evidence that they have sufficiently transgressed against my property. When my neighbor transgresses against my property, I will make a claim and let my agency will decide how to handle it in the most effective manner.
So I don't have to personally think of ways of dealing with the problem because I have paid experts who have a financial incentive to get it done for my particular situation.
If my agency cannot deal with the problem, my contract stipulates that my agency will pay to move me to a new location, lock, stock, and barrel. So they have a huge incentive to figure out a creative solution. Either way, problem solved.
Arbitration Agency
I outlined that the contract was between me and my insurance agency. Let's assume this would be a reputable, well know insurance agency. If I have any disputes with them, we both agree to take our dispute to an arbitrator. If either of us are unhappy with the decision, we can appeal the first arbitrator to a second. If the first arbitrator is overturned, the first arbitrator pays, so they have an incentive to do it right the first time. In fact, it would always be "loser pays" for any dispute.
If the loser cannot appeal and does not make the winner whole, they are financially ostracized, which can ruin a business and an individuals who want to make future contracts. So civilized people would want to avoid it at all costs; they will abide by the arbitrators decision.
This is called a "voluntary society." As opposed to a society that operates on coercive violence.
You may wonder if police still exist in this scenario, and I think they certainly could, as long as they keep to themselves when there is no calls out for them and when people have other arrangements.
The less we look to government solutions, the better off we'll be.
In this scenario I describe, it would be highly unusual to look to any kind of government judges after already agreeing to a private solution. Someone who appeals to government after a getting a private arbitrator would also be ostracized. They don't mix well unless all parties agree to mix them. It's like using baseball rules in a game of cricket.
Take the SMS ban while driving. That should most certainly be an insurance arrangement. Your insurance company should ask if you intend to SMS while driving. If you say yes, you should pay more.
The Altruistic Body
It might be hard to believe that it is never necessary to look to government for any reason. Maybe you are looking for a wise, altruistic, disinterested body with unlimited resources that knows the likely outcomes of the great many schemes of man?
This person knows if you've been bad or good, right? I think I have heard of him. He wears a red coat and has a white beard, right? Rides a slay, I think.
Yeah, I stopped believing in Father Christmas a long time ago.
I joke. But I don't. I'm sorry if that seemed glib or condescending, but that's what I think of the "all seeing eye" of government. It's fiction. It's Santa Claus.
Yet I do believe there is a set of overarching laws that all market actors must follow without exception. They can be boiled down to:
- All parties do what they agree to do.
- Non-aggression Principle is in play (which means do not initiate force).
- Failure to follow 1 or 2 will result in ostracization.
You may wonder if the above rules I set out require a governing authority. I do not believe they do. That's the point. Enforcement turns completely on the idea of ostracization.
P.J. O'Rourke said, “When the legislature controls what is bought and sold the first thing that is bought and sold is legislators.”
Therefore it follows that if ostracization controls what is bought and sold the first thing that is bought and sold is ostracization. Meaning you will do everything to protect against, and buy protection from, whatever limits you in the market place. It becomes a commodity.
At Least Repeal Regulation
In America, Vice Presidente Dan Quayle once talked about how something like 100 or 100,000 regulations being eliminated in a particular government agency. I can't remember the details. But it resulted in a net savings of $20 or $25 billion for the businesses being deregulated. How much do you think would have been saved if they just got rid of the whole ball of wax?
Regulations cost money to implement and enforce. Obviously someone has to benefit or else why would regulations come about? Government is one body that benefits. But market competitors also benefit. So they lobby to regulate their own industry.
Regulation is really just government backed "cartelization" (as in "to make a cartel"). A private cartel that has no government privileged to back it cannot last very long. Someone in the cartel will lower their prices to take advantage of the other cartel members who made a pact to keep their prices high. Once one member lowers his prices, the whole thing falls apart.
Government regulations have the same effect, but they are harder to bust than cartels because government regulation carry the "color of law."
For example, in Virgina, there's a town that requires professional photographers need get a special license. Illegal photographers cannot advertise their business in the paper or the phone book. Regulation was supposed to improve the industry but all it did was increase the capital required to start.
Another example, in 1934, the last taxi license was issued in New York City for $10. A fixed number of licenses traded back and forth from then on. Now, those licenses trade for around $100,000. So taxi drivers cannot start their own business without very heavy capital.The little guy has been excluded and the big guy likes this arrangement.
That's all regulation does. It makes people feel good (a false sense of security) and gives the big guy a huge advantage.
I think private (for profit) certification is a better option instead. We have the Better Business Bureaus and Consumer Reports, but their role is undermined by government regulations that overlap with them. Ever hear of the UL? That's the private body that tests and certifies electrical equipment. The UL is successful *because* the government never really got into that field. Many people think the UL *is* a government agency, but it's nothing of the sort.
The certification companies position their business so that they profit by their expert opinions. They spend limited funds judiciously to test and certify. If it turns out they fudged something, they are putting their name and business on the line. Without regulation, someone is always ready to compete with them, just waiting for the smallest slip-up.
Child Molesters
You might ask, "Do I really think a voluntary society can deal with things like child molesters?"
I think the incentive to fix problems is there if you look and are free to innovate. Remember, if I knew exactly how the free market would handle each opportunity, I could be dictator. There are innovative solutions we could never dream of. The way it might work is thusly:
Imagine there exists a child with only one parent and that parent is pretty much the only one who knows the child exists. So for the most part, nobody cares if the child exists or not. Then assume the child is abused by his or her parent.
Let's suppose a private protection agency is formed to seek out evidence to suggest children like this could exist. Let's further suppose that this protection agency could put together evidence by using investigative technique like interviewing neighbors and going through people's garbage, etc. These techniques are not aggressive techniques and therefore do not violate the non-initiation of force principle. And *if* they are perceived by anyone as a violation, they can go to arbitration.
The protection agency has to take risks, but they have to also weigh the risk against losing settlements in arbitration.
The protection agency weighs the evidence and the risk against the incentive to put their reputation and livelihood on the line to break into the suspected house of a child abuser to rescue the child. They then go to arbitration with hard evidence and an actual perpetrator in their custody.
For the initial incentive, we need to assume there is a standing bounty for child abusers in this voluntary society. Voluntary charities can put up money and resources to give incentive to protection agencies.
The child will grow up and might eventually need protection agencies for him or herself.
This protection agency could be thinking of the long term goals of saving children in order to build a well known and successful brand, thereby offering service back to the children it saves.
This is just one isolated line of reasoning. I think this line of reasoning can be adapted to a lot of different scenarios or even ignored and approached in a completely different, voluntary way.
No Utopia
I make no claim that any voluntary society would be utopia. But wild-cards like serial killers would have to deal with an armed society. And an armed society is a polite society, which would certainly be an improvement. Neighbors would know each-other and look out for one another because they know they only have each-other and any mutual protection pacts they've developed.
I don't see how charity is Utopian. Charity is something conservatives point to whenever they make arguments against high taxes.
I don't see how voluntaryism is Utopian. Voluntary interaction is a very fundamental form of free association. The notion of "unlimited contract" is just another way of talking about voluntary interaction.
There may in fact be situations where it's not lucrative to participate in a particular market. That is called a wasteful enterprise. Unfortunately, our current system keeps us in the dark about exactly which situations are lucrative and which ones aren't. It's not a conspiracy, it's just how socialism works.
So if there's no money in belly-button-lint-removal, nobody should be trying to make a living doing it. But if there's a government paying people to do it, they'll do it, even if it's wasteful, to the detriment of other tasks. That's basically socialism.
Socialism distorts market signals. Like right now, the cash-for-clunkers program is distorting market signals. Car companies think there's demand for certain models, so they will move capital* to produce those models in order to meet the "demand." But the demand is artificial. If the distortion stops, the demand will fall. It has nothing to do with real resources being traded. It's all artificial.
* (Moving capital is a HUGE SERIOUS BIG deal. Over time, it is where financial bubbles come from. Moving capital, by definition, makes it hard to "go back" to another capital position.)
In a free society, it might not be lucrative to start a daisy-picking agency. So if it's not lucrative, or if it's not mildly rewarding, it won't be pursued as a profession. To suggest it should be perused by force for *any* reason, and force funds to be allocated to that pursue, is the very definition socialism.
So if catching a really smart serial killer is a wasteful enterprise, it shouldn't be anyone's profession. Maybe it can be someone's hobby.
By the way, may I ask how police in our society, who are paid by force, can catch really smart serial killers who can not be caught in a voluntary society?
Posted via email from Anthony Martin's Weblog
Tags: Best Of, Economic, History, Insurance, Liberty, Political, Rule of Law
