this is a sideline post to 'The failure of Anarcho-Capitalism.' As that post has gone off in many different directions, I would like to talk specifically about only on thing here. a few of you have already commented directly on this and i have read those posts but feel free to re-post them here for clarification.
Please give a direct, concise, analyses of the following statement: *One post, your best counter-argument, no responses -mgmcintyre*
"There is no reason to engage in the 'voluntary exchange of defensive services' with those whom you can physically dominate. Potential customers must necessarily pay less than they stand to loose to exploiters. Therefore, potential defenders must necessarily be able to profit more by exploiting those in need of defense."
Thanks in advance ...
mgmcintyre:Potential customers must necessarily pay less than they stand to loose to exploiters.
mgmcintyre:Therefore, potential defenders must necessarily be able to profit more by exploiting those in need of defense."
But this would all be pre-empted anyway, because people don't agree to unenforceable contracts. No predatory PDA could ever get funding from consumers in the face of defensive PDAs. Defensive PDAs will have the best long term profits because they are not constantly engaged in fighting other PDAs.
See internet example. Utter failure to rebut this.
Your argument implies both Hobbesianism and so-called "Social Darwinism" -- a war of all against all, where the strong dominate the weak. It completely discounts the significant real-world effect of moral and ethical beliefs on human behavior. Furthermore, there seems to be an instinctive, evolutionary basis for people's conscious moral and ethical beliefs. The vast majority of people do not kill, rape, steal, etc. because there's some group of people with a monopoly over the use of violence; no such monopoly exists. Instead, they do not kill, rape, steal, etc. because they typically believe those actions to be morally wrong.
Were all people willing and trying to dominate others at all times, they would only submit temporarily at best; they would counter-attack at the earliest possible opportunity when they felt they had the upper hand. There is no absolute measure of "strength" -- it's highly context-dependent. Bigger, stronger people can be defeated by smaller, weaker people through sheer cunning. So who's truly "stronger"?
Finally, I'd like to add that I will post in this thread as many times as I wish. I will not abide by any arbitrary limitations that you attempt to put forth. Hence this post is only my opening salvo in this thread.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
You don't take into account the following:
- Aggressors face risks and make time and money investments to rob you, lowering the profit below the "revenue" they steal from you
- Agressors have alternative career options without those risks. For example, they could become defenders.
- Some level of crime is always acceptable, as the price would be infinite for total protection. The price of human life is a finite number, determined by the market (you yourself can pay more or less as you wish). Human action would be impossible when we value human life as infinitely valuable.
It's called comparative advantage.
Personally, I don't buy any of the responses to to mgmcintyre's statement offered thus far. I think the two best arguments were made by Sieben and Consultant, but they still didn't win me over. Let me see if I can explain one at a time. First....
"This assumes they can corner the market. We repeatedly state there is a demand for protection, not exploitation. So that out of the many firms I could choose to patronize, I will choose the one who offers me the best deal. Once they have this contract, if they try to break it and take my stuff, they might be able to get away with it but their reputation on the market will suffer, and they will have no more clients, going broke." - Sieben
The thing I don't like about this argument is that there are a lot of unstated assumptions at play here. For one, Sieben seems to assume that there will naturally be a lot of firms on the defense market. But is that true? Suppose the cost of defense falls as you increase your customer base in a certain geographic area (say that it is cheaper on a per person basis to protect 1,000 people than it is to protect 1 person). This would give "large" firms a significant cost advantage. Maybe so much of an advantage that only a handful of firms would operate in this "market" and new firms would find it difficult to enter.
If that is the case, it isn't obvious to me that competition will eliminate "exploitation". Imagine you're living in Iowa and the goverment of the USA was essentially a big defense company. But the company has treated you wrong for long enough and you want to "switch" defense companies. Could you do that without moving? I doubt it. And even if you did move to some other geographic area with another defense company, are you sure competition would ensure that the other defense company was better? Hey, you basically have your pick of moving to a few hundred countries now. How has voting with your feet turned out so far??
I have other complaints with Sieben's argument (robbing from your customers may ruin your reputation, but what about robbing from other people's customers), but I want to move on and address Consultant's comments too.
"You don't take into account the following: #1 Aggressors face risks and make time and money investments to rob you, lowering the profit below the "revenue" they steal from you #2 Agressors have alternative career options without those risks. For example, they could become defenders. #3 Some level of crime is always acceptable, as the price would be infinite for total protection".- Consultant
"You don't take into account the following:
#1 Aggressors face risks and make time and money investments to rob you, lowering the profit below the "revenue" they steal from you
#2 Agressors have alternative career options without those risks. For example, they could become defenders.
#3 Some level of crime is always acceptable, as the price would be infinite for total protection".- Consultant
She makes an excellent point in #1. It is true that in attacking you, the aggressors take on a variety of risks and costs which lowers the net benefit of the theft. So when hiring a defender, you don't need to hire one that can dominate you, you only need to hire one that will raise the cost of stealing from you to the point that it is no longer profitable for aggressors to try. BUT I think mgmcintyre's point still stands that if you there is no reason to trade with a defense company that can physically dominate you. And if there are indeed economies of scale in defense provision, then I think it is pretty likely that you would only be dealing with defense companies that could dominate you. So that is bad news all around!
Over all, I am still strongly inclined to agree with mgmcintyre. At least, I don't think think his initial statement has been proven false yet.
Ambition is a dream with a V8 engine - Elvis Presley
I've created a PDA. I have X amount of employees. x is the average extra amount I have to pay my employees to take on the risk of being outlawed by the current customary legal system. I can exploit Y amount of people, or I can defend Z amount of people. Y people make Y' amount of money. Z people make Z' income. Y people will resist at y average cost to being exploited. Z people won't resist because it's voluntary. F is the number of firms who have made the calculation that exploitation is more profitable than defense. F firms will challenge in order to exploit the same people at f average cost. D is the number of other firms who have made the calculation that defense is more profitable than exploitation. D firms will challenge exploiters at d average cost. Z people will pay z' percentage of income for defense. I will be able to take y' percentage of income from Y.
Each firm is in this same position and before it decides to defend or exploit has to determine which of the following formulas is greater.
Y'*y'-Y*y-F*f-D*d-X*x or Z'*z'-F*f
There are a few things that we know about the formulas
1. Z' will be greater than Y' because it requires fewer resources to defend than to exploit
2. y' will be greater than z' for the reasons posted in the OP
3. As D increases, fewer firms will evaluate the first formula is greater than the latter
4. As F increases, both formulas will evaluate lower, and so it will be a wash.
5. If the difference between Z and Y is not greater than the difference between z' and y', and y and x are not big enough to make firms calculate that the latter formula is greater than the former, there exists a threshold of D which in reality makes the latter formula greater than the former
6. Every time a firm calculates the latter formula is greater than the former, that increases D, causing more of effect 3 to occur.
Actual calculation of these formulas would require market research which I do not have, but what I do have are two formulas where it has yet to be shown in all cases that the former will be greater than the latter. Intuition tells me that because the former formula has so much going against it, that the latter formula can succeed in evaluating to a higher value, creating a positive feedback loop, making the system stable against internal exploitation and thus against creation of a state/society based on an exploitive tragedy of the commons.
The root problem is not the monopolization of security, it is the monopolization of law. More specifically, it is the widespread acceptance that there should be a dual-law/dual-morality whereby the many are prohibited from performing actions reserved to the few or, conversely, that the many are to be compelled to perform actions on behalf of the few.
Under unitary morality/law, systematic exploitation would be impossible. A profit could always be earned by breaking people out of protection rackets.
Clayton -
Student:This would give "large" firms a significant cost advantage. Maybe so much of an advantage that only a handful of firms would operate in this "market" and new firms would find it difficult to enter.
I don't know why it is that when you talk about defense, which is obviously a scarce good like anything else, all of a sudden, all of the oldest economic fallacies about markets come back to play.
Really, it is much easier to dominate you by starving you to death, therefore, it is not wise to let the market feed you? Or provide you with shelter or clothing? All of the reasons you've stated are not unique to defense. If they are true, then they are true for everything else that can be provided by the market.
And I'm also curious why and how it is that a small minority that requires your voluntary funding and constant approval to maintain its capital value, can begin to dominate the vast majority by coercion? Absent of legitimacy granted by the vast public, I claim it is economically and practically impossible. Or at least very close to that.
If you want to claim that people will remain statists at heart, and work towards the establishment of a State again, then that is a different argument and a different problem. But this is not what the concern here is about. It is about how the Ancap society, which would at large, view any attempt by some firm to dominate by coercion as illegitimate, come to dominate anyway. It is precisely economics science that can demonstrate how such an even is highly unlikely.
What happens when one defender faces multiple independent aggressors, each demanding all of the defender's property?
Defense against gangs? A gang can always win. But you can make it a pyrrhic victory. Gang suffers negative profit by attacking you.
What about competing aggressors? There may be more profit in helping the defender.
Student, how do you (personally) define "physical domination"? How possible is it, really?
Furthermore, what problems do you see with my earlier post in this thread?
(Oops, I've posted twice now -- so much for trying to impose your own limitations, mgmcintyre!)
Student:For one, Sieben seems to assume that there will naturally be a lot of firms on the defense market. But is that true? Suppose the cost of defense falls as you increase your customer base in a certain geographic area (say that it is cheaper on a per person basis to protect 1,000 people than it is to protect 1 person). This would give "large" firms a significant cost advantage. Maybe so much of an advantage that only a handful of firms would operate in this "market" and new firms would find it difficult to enter.
Even in the face of ultra aggressive PDAs dominating the market, new firms could enter much the same way we imagine firms entering the current (very violent) drug market - come in with an ultra no-nonsense business model based on serving the consumer.
Student:If that is the case, it isn't obvious to me that competition will eliminate "exploitation". Imagine you're living in Iowa and the goverment of the USA was essentially a big defense company. But the company has treated you wrong for long enough and you want to "switch" defense companies. Could you do that without moving? I doubt it. And even if you did move to some other geographic area with another defense company, are you sure competition would ensure that the other defense company was better? Hey, you basically have your pick of moving to a few hundred countries now. How has voting with your feet turned out so far??
In this sense, you have to "vote with your feet" if you live in one of these places, but there is still free entry into the market of defense provision, as well as the ability to homestead unappropriated land. Additionally, the competition between these organizations that causes them to provide good service when it comes to housing amenities extends to provision of security.
Student:I have other complaints with Sieben's argument (robbing from your customers may ruin your reputation, but what about robbing from other people's customers), but I want to move on and address Consultant's comments too.
It doesn't matter if there is only one firm. So long as there is free entry into the market there will be a force of competition.
As I mentioned, Increasing returns pose a barrier to entry for new firms. This is because they will have be operating at a higher cost than incumbant firms and therefore have a harder time competing with them on price. The severity of this barrier will depend on the extent of the economies to scale.
The idea is that you can have many PDAs in one jurisdiction. Everyone technically has the option to purchase their own defense, but I'm sure you agree that it would be more efficient to provide defense for groups. So patrons of defense are probably going to be apartment complexes, neighborhood associations, and insurance companies. I don't think this poses very much of a problem though, since the fundamentals remain the same.
You seem to be operating under the unstated assumption that economies of scale in defense provision do not extend very far. For example, you defend a 100 or so people (like in a neighborhood) then per unit costs start to rise again). If that assumption doesn't hold, and economies of scale extend further, then it would be more difficult to have multiple PDAs in smaller "jurisfiction" (geographic areas the size of cities say).
Other people's customers should probably get a PDA to fight back... fighting is expensive so this all gets pre-empted.
Wow. Fighting is "expensive" therefore it never happens? I guess thats why we never hear of gang wars or mob battles. :P You should see that it all depends on the strength of the PDAs. If my PDA is significantly stronger than yours, maybe I can defeat your PDA cheaply enough that fighting with you and stealing from your customers is still worth while.
PS* To whoever asked, I am assuming that "defender dominates you" means they are "strong enough" to take what you are trying to protect at a net benefit (so the cost of fighting you for what you are trying to protect is not so high that it would prevent him from taking it from you).
Student:As I mentioned, Increasing returns pose a barrier to entry for new firms. This is because they will have be operating at a higher cost than incumbant firms and therefore have a harder time competing with them on price. The severity of this barrier will depend on the extent of the economies to scale.
And the economy of scale cannot be exploited at higher prices than the next best option, which is multiple firms in the market. So there is a natural limit to "how bad" a natural monopoly can be even without direct competition.
Student:You seem to be operating under the unstated assumption that economies of scale in defense provision do not extend very far. For example, you defend a 100 or so people (like in a neighborhood) then per unit costs start to rise again). If that assumption doesn't hold, and economies of scale extend further, then it would be more difficult to have multiple PDAs in smaller "jurisfiction" (geographic areas the size of cities say).
Student:Wow. Fighting is "expensive" therefore it never happens? I guess thats why we never hear of gang wars or mob battles. :P You should see that it all depends on the strength of the PDAs. If my PDA is significantly stronger than yours, maybe I can defeat your PDA cheaply enough that fighting with you and stealing from your customers is still worth while.