RoR: Forum

In a concrete illustration of the thesis of the chapter of "The Sovereign Individual" from which this quote is pulled, talking about the power of the internet to make commerce efficient while undermining the state's monopoly on violence and plunder, at the time I posted this you can buy that wonderfully information book, in hardcover, for one penny plus shipping (provided by a private carrier, not the U.S. Postal Service) -- and no tax.

If you want a much more reputable seller of the book, you will pay a premium of -- wait for it -- one penny. That is the wonder of the internet -- the equivalent of an informal private protection service insurance policy (which is to say, something resembling a replacement for the state's core function of protection) for this transaction, and only costing one cent.
(Edited by Jim Henshaw on 3/06, 11:15pm)

Post 1

Monday, March 7, 2011 - 6:35am

Indeed, that is a very interesting book.......

Post 2

Monday, March 7, 2011 - 6:45am

Jim your post is confusing me. Are you saying the government should not have a monopoly on "violence and plunder" rather that there should be competition for "violence and plunder"? As in we should just have a different kind of violence and plunder? I don't think that's what you meant but it sounds odd the way you worded it. Also are you saying without this monopoly on violence and plunder things would cost one penny? I don't get it. Also who in this case of the internet transaction you gave as an example has replaced government protection?

Post 3

Monday, March 7, 2011 - 8:31am

As an anarchist, Jim doesn't recognize that the degree to which we can use the Internet, have computers, engage in effective commerce on-line or off, not live in bunkers with guns to fend off gangs, etc., etc., is due to the degree we have a state monopoly of objective, jurisdictional law.

Post 4

Monday, March 7, 2011 - 9:11am

The book I linked to, "The Sovereign Individual", talks about how there are always those who will try to use violence to plunder -- and then walks you through about two thousand years worth of examples of this -- and makes the case that government is just one such gang involved in using violence to plunder its citizens.

The authors, BTW, aren't anarchists, they talk about how the modern nation-state is in fact a recent historical development that arose because of industrialization, since fixed, expensive factories made it possible for robber gangs (and, aiding and abetting this theft, labor unions) with a pretense of legitimacy to grow by scooping off much of the output of these factories.

Their point is a minarchist one -- they say every gang / government would like to confiscate everything everyone in "their" territory owns, and that communist states laid claim to everything and everyone in their totality and used that to wage war, and that the strength of democracies was that they left enough plunder unstolen to allow the populace to create more wealth to plunder, allowing democracies to build stronger militaries to resist communism.

They also make the point that democracies are "employee run" kleptocracies, with many of those "employees" being people who are bribed with entitlements and other redistributed loot and who don't have to actually show up for their informal government "job" other than to vote.

Finally, the authors make the case that the nation-state is about to very abruptly lose most of their influence, just as the medieval church very abruptly lost most of its influence, because of the logic of cyberspace and electronics making it nearly impossible for nation-states to continue their plunder, just as the medieval church foundered due to such technological advances as printing presses among other things.

So, they posit that defending against marauders requires some sort of government-like entity, but with those governments almost inevitably descending into looting, and gaining a monopoly of violence because of the instability of competing gangs in a given area leading to incentives to morph from protection rackets to outright theft.

Yet, they project something resembling an anarchist society almost inevitably taking hold due to the internet and microcomputers, while going to great pains to call that society non-anarchist. =)

Post 5

Monday, March 7, 2011 - 11:50am

John: "Jim your post is confusing me. Are you saying the government should not have a monopoly on "violence and plunder" rather that there should be competition for "violence and plunder"?"

Let me rephrase to make my meaning clearer: Governments everywhere try to brainwash their subjects into thinking that the government protects the citizens against violence and plunder. But, as outlined in the book I was referring to, "The Sovereign Individual", governments have a strong incentive to act like gangs and use violence, or the threat of it, to steal as much as practical from the subjects, and use that money to subjugate them and prevent resistence. Sometimes, but not always, to preserve the illusion of legitimacy, a government actually spends some of the plunder on those protective services that are supposed to be their sole job.

"As in we should just have a different kind of violence and plunder?"

As in, it is human nature to use violence to steal anything that isn't nailed down, and the central problem facing people throughout the ages is how to keep that violence and theft to a minimum, and how to prevent those who purport to be providing that protection from turning that force upon the subjects. That is, if you are not personally able to wield enough force to stop thieves and other governments from stealing or harming you, and you hire a government or protective service that is forceful enough to stop those others from doing harm to you, then it follows that that government or protective service is also going to be forceful enough to steal from or harm you if they so choose, and will face perverse incentives to do just that.

"I don't think that's what you meant but it sounds odd the way you worded it. Also are you saying without this monopoly on violence and plunder things would cost one penny? I don't get it."

No, I was saying that in the case before us of purchasing the book, Amazon.com's software, by collating user feedback about which providers are reliable in fulfilling their promises, in effect provides a protective service against providers ripping you off. That is, instead of using government to prevent such ripoffs, Amazon.com is using software and user feedbacks to prevent ripoffs in a non-coercive manner. And, in the particular case before us of the book in question, the price of insuring against the possibility of getting ripped off by the somewhat unreliable first seller in the price rankings, with a 60% satisfaction ranking, is one penny, since the second most costly seller is offering to sell essentially the same item for twice the price (two cents instead of one cent), but with a satisfaction rating in the high 90s, thus giving you what amounts to insurance against being ripped off costing one cent.

"Also who in this case of the internet transaction you gave as an example has replaced government protection?"

Amazon.com has replaced government "protection" with their software reporting on seller reliability. If you pay for the item, but the seller doesn't deliver it -- if they try to rip you off -- you get to threaten retaliation by using Amazon's software to downgrade the seller's reputation, costing them future business. So, even though a government court or police force would be useless in preventing such ripoffs because the cost of the item is so small, Amazon.com has come up with a clever way to use user feedback to persuade their sellers to voluntarily decide to not rip off customers because it is in their long-term interest to maintain their reputation.

It is a non-coercive, private, voluntary solution to the problem of theft that doesn't rely on government to enforce honesty, but rather relies on software and reputation.

Post 6

Monday, March 7, 2011 - 12:43pm

Getting back to the Hayek quote, I would define money as "a commonly accepted medium of exchange." The genus is "medium of exchange," and the differentia is "commonly accepted." This definition implies that there are other media of exchange that are not commonly accepted and are therefore not money. The term "medium of exchange" refers to any commodity that is purchased for the sake of purchasing something else, a process called "indirect exchange," rather than purchased for its own sake, which is called "direct exchange."

An example of direct exchange is one in which a farmer wants new shoes for his family, and a cobbler wants some meat for his, so they exchange one for the other and consume what they've purchased. An example of indirect exchange is one in which the cobbler still wants meat but the farmer doesn't want shoes. However, it turns out that the farmer wants new clothes, and a clothier wants new shoes. So the cobbler sell shoes to the clothier in exchange for the clothes and in turn sell the clothes to the farmer in exchange for the meat. In this case, the clothes are purchased by the cobbler not for his own consumption but in order to purchase meat from the farmer.

Although the clothes serve as a medium of exchange in this example, they are not considered money, because they are not a commonly used medium of exchange. Nevertheless, it is through this localized process of indirect exchange in a barter economy that a commonly accepted medium of exchange (i.e., money) gradually emerged, as people looked for media of exchange that could be used for a larger number of indirect transactions. Eventually, people were willing to accept gold and silver for virtually any transaction because of the obvious advantages of these metals over other commodities.

So I would have to disagree with Hayek that "[there is] no clear distinction between money and non-money." I think there is. A localized medium of exchange, such as the clothes in my example, is not yet money. But when gold and silver gained acceptance as a general medium of exchange by virtually everyone in the society, then that is when "money" emerged.

(Edited by William Dwyer on 3/07, 12:46pm)

Post 7

Monday, March 7, 2011 - 2:20pm

I think Hayek's point is that "moneyness" is a continuum rather than either/or. We don't usually think of cigarettes as money, yet in some POW camps in WWII (as well as in some prisons today) cigarettes were the chief form of currency. They are not "commonly" considered currency, but in those peculiar circumstances cigarettes turned out to be what the marketplace preferred over the alternatives.

There are various traits that make a commodity better or worse to use as currency, and no commodity is ideal, and in some circumstances one trait may be weighted more than it usually is, making it become the chief form of currency, perhaps not in all of society, but certainly in some segments of that society. So, "generally accepted" doesn't apply -- if even two people making exchanges accept something as currency, it is.

For example, in a relationship, backrubs or sexual favors can become an informal currency, or at least edge toward the more "moneyness" end of the continuum, even if that "currency" can't be traded elsewhere (or at least not without a lot of unpleasantness ensuing).

So, yes, I think Hayek made a true and profound statement.

Post 8

Monday, March 7, 2011 - 3:48pm

Ok Jim so to sum up your thoughts:

1) It is human nature to steal

2) We need 'buyer beware'

3) Those assigned to wield retaliatory force need to have that power 'checked'

Seems like your points don't reconcile with your conclusion government ought to be abolished.

(Edited by John Armaos on 3/07, 3:51pm)

Post 9

Monday, March 7, 2011 - 3:52pm

LOL separation of powers. :P

Post 10

Monday, March 7, 2011 - 4:22pm

We don't usually think of cigarettes as money, yet in some POW camps in WWII (as well as in some prisons today) cigarettes were the chief form of currency. They are not "commonly" considered currency, but in those peculiar circumstances cigarettes turned out to be what the marketplace preferred over the alternatives.

Jim, I would say that cigarettes did fit the definition of money in the POW camps, because within those closed societies, cigarettes did function as a commonly accepted medium of exchange.

So, "generally accepted" doesn't apply -- if even two people making exchanges accept something as currency, it is.

Assuming that you're talking about indirect and not direct exchange, it would certainly qualify as a medium of exchange, but that doesn't mean that it is, therefore, currency or money. And if it's direct exchange, then there is no medium of exchange at all, let alone a commonly accepted one.

For example, in a relationship, backrubs or sexual favors can become an informal currency, or at least edge toward the more "moneyness" end of the continuum, even if that "currency" can't be traded elsewhere (or at least not without a lot of unpleasantness ensuing).

Backrubs and sexual favors are money?? I don't think so! Not only are they not money; they don't even qualify as media of exchange. At best, they're a form of direct exchange. I can't buy a backrub or a sexual favor from one person and then turn around and exchange it for something else that I want personally to consume -- which is the definition of a medium of exchange.

To be sure, there may be borderline cases in which it cannot be decided whether or not a medium of exchange is "commonly" accepted and should therefore be called "money," but that doesn't negate any readily identifiable distinctions between a medium of exchange that is commonly accepted and one that is not.

Post 11

Monday, March 7, 2011 - 8:28pm

John: Ok Jim so to sum up your thoughts:

1) It is human nature to steal

2) We need 'buyer beware'

3) Those assigned to wield retaliatory force need to have that power 'checked'

Seems like your points don't reconcile with your conclusion government ought to be abolished.

You left off 4) In many jurisdictions the government is the biggest thief and the biggest initiator of violence.

My conclusion is slightly different than what you stated, and a lot wordier. I would phrase it like this: "Government is not the benevolent benefactor that most assume it is, but rather mostly a predator that sometimes provides protective services against other predators. Currently neither minarchy nor anarcho-libertarianism exists anywhere. Anarcho-libertarianism would preferable to any other system of governance if it could be maintained, because less coercion is better, but in practice any attempt to do so has either resulted in invasion and conquest by a predatory government, or the initial near-anarchic conditions (think the American colonies under the Articles of Confederation) has morphed over time into minarchy and then into massive statism.

So the challenge is to find a stable system that minimizes predation and physical harm both by individual thieves and murderers, other governments, and by the government, if any, in one's geographic location that purports to protect one from these others but in practice tends to become the worst violator of those rights. So far both minarchy and anarchy have failed to be stable for very long. This dismal record does not mean we should give up on trying to find a way to make these work. The technology of microcomputers and the internet offers a lot of promise toward achieving those goals."

Shorter: I want to minimize the total amount of coercion being foisted upon me by individual and governmental predators, and I have not given up on the possibility that something approaching anarcho-capitalism can be maintained over time, since we once, briefly, had it.

Post 12

Monday, March 7, 2011 - 8:43pm

I can't buy a backrub or a sexual favor from one person and then turn around and exchange it for something else that I want personally to consume -- which is the definition of a medium of exchange.

Well, sure, YOU personally can't do that, because you are inclined to obey the current laws prohibiting that sort of exchange.

Rest of post deleted per request.
(Edited by Jim Henshaw on 3/08, 12:04pm)

Post 13

Monday, March 7, 2011 - 8:57pm

Jim

You left off 4) In many jurisdictions the government is the biggest thief and the biggest initiator of violence.

No that fits into 1) and 3)

Anarcho-libertarianism would preferable to any other system of governance if it could be maintained, because less coercion is better, but in practice any attempt to do so has either resulted in invasion and conquest by a predatory government, or the initial near-anarchic conditions (think the American colonies under the Articles of Confederation) has morphed over time into minarchy and then into massive statism.

That's why philosophy matters. Hoping to devise some Platonic Ideal of a 'system' to shield yourself from living in a culture with bad philosophy isn't going to work. This is probably why you can't think of something that would work because in the example you give of the United States morphing into 'massive statism' it happened because people with a morally bankrupt philosophy changed this 'system'. So it doesn't matter what 'system' you come up with unless it is within a culture that respects individual rights.

And when you argue that it is human nature to steal then why shouldn't people act according to their nature? What kind of philosophy is that? I actually emphatically disagree that this is human nature. If it's human nature to steal then it's human nature to produce since you can't steal that which is not produced. And if it's human nature to steal then this 'nature' couldn't actually survive, since this so called 'nature' is anti-life and would just lead to extinction since no one is producing any value.

No, it's human nature to produce. That's not to say that there are no thieves, but let's be clear here, these thieves are not acting according to human nature, since acting according to human nature should presume acting to survive and flourish, stealing is an anti-life behavior.
(Edited by John Armaos on 3/07, 9:13pm)

Post 14

Monday, March 7, 2011 - 9:09pm

John,

I essentially agree with much of what you said in post 13, with the caveat that minarchy could also be said to be a Platonic Ideal under conventional Objectivist thought, and anarchy considered either impossible or anathema under that system of thought.

re this: "So it doesn't matter what 'system' you come up with unless it is within a culture that respects individual rights."

Well, sure. Of course. But, anarcho-libertarianism respects individual rights more than minarchy. No coercion respects rights more than a small amount of coercion.

Are you contesting that we briefly had near-anarchic conditions under the Articles of Confederation, and then a somewhat longer stretch of minarchy under the Constitution, and then a racheting up of statism ever since?

If not, if you stipulate to those, then are you conceding that both anarchy and minarchy are in fact possible, and in fact have both happened, and in fact both worked pretty well for most individuals while they lasted, and thus the challenge is finding a way to make either one last for a longer stretch?

If not, what would you assert?
(Edited by Jim Henshaw on 3/07, 9:13pm)

Post 15

Monday, March 7, 2011 - 9:11pm

I'm saying I agree with Rand that philosophy matters. The founding fathers had a philosophy, and that's what lead them to action. You can't escape the need for a good philosophy.

By the way you might want to re-read my post as I added a bit more content.

Post 16

Monday, March 7, 2011 - 9:21pm

Jim,

You wrote, "Anarcho-libertarianism would [be] preferable to any other system of governance if it could be maintained..."

Santa Clause would be preferable if he could make weekly deliveries.

Frogs wouldn't bump their asses so often if they just had wings.

Anarcho-libertarianism would be preferable to anything if it wasn't totally impossible to make it work.

Anarcho-Capitalism still remains a contradiction in terms.

Post 17

Monday, March 7, 2011 - 9:37pm

And when you argue that it is human nature to steal then why shouldn't people act according to their nature? What kind of philosophy is that? I actually emphatically disagree that this is human nature. If it's human nature to steal then it's human nature to produce since you can't steal that which is not produced. And if it's human nature to steal then this 'nature' couldn't actually survive, since this so called 'nature' is anti-life and would just lead to extinction since no one is producing any value.

Hmmm, let me restate your characterization of what you think I meant to reflect my actual views, since apparently I lacked clarity in my writing:

It is an objective fact that every known culture of any size throughout the entirety of human history has had its share of thieves and those who mistreat their fellow human beings.

It is an objective fact that virtually everyone in the world by their actions engages in initiation of force, either directly by stealing from others or by voting for involuntary taxation, etc. Those adults who entirely abstain from this behavior are conspicuous by their rarity.

It is an easily verifiable fact that very young kids not yet very socialized or indoctrinated have a strong propensity to try to steal and take what they can. To do otherwise generally takes training, and the application of rigorous logic, and undoing the statist indoctrination most of us are subjected to.

So, yes, most people steal in some form or the other, if they think they can get away with it, and that is their default behavior, and it takes an unusual epiphany for someone to quit that entirely. I'd say that comes perilously close to being characterizable as ONE ASPECT of "human nature", certainly not the only aspect, certainly not precluding productive activity.

Now, why should people not act according to their nature, their inclination to steal if they can get away with it?

Because the free-est societies that manage to minimize that behavior get the happiest citizens. It is in our interests to get others to act against that aspect of their nature and embrace reason and the non-initiation of force. Unfortunately, it is a prisoner's dilemma situation -- there are incentives for everyone to cheat. So the trick is to arrive at a system however one can manage it, that makes it unprofitable for anyone to cheat, or at least minimizes that behavior as much as possible taking into account the enforcement costs of preventing it.

Oh, and human nature is really complex. People try a variety of strategies to thrive based on the incentives they face, and their grasp of what is in their perceived best interests.

Post 18

Monday, March 7, 2011 - 9:46pm

I'm saying I agree with Rand that philosophy matters. The founding fathers had a philosophy, and that's what lead them to action. You can't escape the need for a good philosophy.

I, too, agree with Rand that philosophy matters. I disagree with some of the conclusions she arrived at, despite agreeing with the vast bulk of her philosophy and reasoning. In particular, I disagree with her on the notion that minarchy is the ideal and most moral form of government, because I believe government inescapably involves the initiation of force, and so minarchy violates her contention that we shouldn't initiate force. (Her arguments are more complex than that, but that is the best simplification I can come up with in the limited time I have right now.)

The founding fathers had a philosophy, too. Part of that philosophy led some of them to talk about all men being equal while simultaneously owning slaves. I would contend that, despite the massive amount of freedom they unleashed, this is pretty compelling evidence that their philosophy had some holes in it.

re this: "You can't escape the need for a good philosophy."

Agreed. We have some mild disagreements about what constitutes the best philosophy, while agreeing about most everything, at least relative to the general populace.

Post 19

Monday, March 7, 2011 - 9:58pm