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This is the discussion thread for iCEBREAKER and I regarding the minimal state vs. market anarchy.

This promises to be an interesting debate, as iCEBREAKER (and Nozick) contend that a minimal state will arise out of market anarchy, even without violating the Non-aggression principle.

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For those wishing to join the debate, or just follow along in the books as we argue points, here are the books (ePub format):
Anarchy, State, and Utopia, by Robert Nozick (https://dl.dropboxusercontent.com/u/146411/BookClub/Anarchy%2C%20State%2C%20and%20Utopia%20-%20Robert%20Nozick.epub)
The Production of Security, by Gustave de Molinari (http://library.mises.org/books/Gustave%20de%20Molinari/The%20Production%20of%20Security.epub) (a much shorter work)
The freeware program Calibre (http://calibre-ebook.com/) can be used to convert the files to your preferred format, and comes with reader software capable of reading either one without conversion.

Edit: I'll probably be drawing from Rothbard's critique of the book, as well, you may want to grab that, too: Robert Nozick and the Immaculate Conception of the State, by Murray Rothbard (http://www.mises.org/journals/jls/1_1/1_1_6.pdf)

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As of this writing, I am approximately 1/3 of the way through the book, and time and again, I see a glaring error in Nozick's reasoning. He appears to have never heard of arbitration. Arbitration, for those who are not familiar, is a private court system. An arbitrator acts as a judge between the two parties involved in the case. The arbitrator is not in the employ of either party, and so is neutral. Both parties agree to trust and abide by the judgment of the arbitrator, and if both parties cannot agree, another arbitrator is selected. Thus, arbitrators who are trusted and give fair judgments get more business, and arbitrators who are not trusted get less.

To be fair, both books focus primarily on the industry of Security, defense against threats both internal and external - in a State, provided by the police and military, respectively, in a market anarchy provided by a defense agency - yet it is through the industry of Justice which Nozick's minimal State acquires it's power. It claims the right to punish (his words, not mine) any who use justice methods not approved by it. So here, then, is the flaw - the violation of non-aggression - the monopolization of justice by a defense firm.

A second flaw is that he assumes justice is better served by a larger defense firm. In truth, justice is an entirely different matter, and the quality of the justice that you receive is not limited by the size of your defense firm, but rather the quality of the arbitrator selected. To be certain, defense, especially from external threats, is better provided by larger firms, but not so much so that smaller firms could not provide adequate defense, especially if aided by the larger ones in times of need. For internal defense - police work, essentially - a smaller firm might even be better suited. But defense is not justice, and it's foolish to conflate the two.

Much of Nozick's cases rest on the interaction between "independents" and clients of the dominant protection agency. This is where his third flaw comes in: The assumption that all interactions between one agency and another, or an agency and those "independents" would be settled violently. This is what happens when you cast a defense agency in the role of adjudicator. This, too, is a simple problem to resolve with arbitration. Agencies would have, between each other, agreements to arbitrate disputes when the client of one agency accuses the client of another of violating his or her rights. The client, when they signed up for the defense service, would have, as part of the contract, agreed to abide by this agreement, and therefore, any disputes between customers of two agencies would be solved via arbitration.

The independents pose a slightly different problem, for they have no agency with which they have contracted for their defense. They are, in effect, their own agency. As such, they would need to contract with the various other agencies to arbitrate any disputes which might occur. You might assume - correctly - that this would be a rather arduous task, especially if there are a large number of agencies with which to contract. Thankfully, a solution to this problem also presents itself: the general submission to arbitration (http://c4ss.org/gsa/). This is an agreement, directly with an arbitrator, that any disputes which arise will be dealt with via arbitration. This connects the "independent" to the rest of the agencies' arbitration agreements, without the tedious task of contracting with all the agencies. The independent simply chooses a few arbitrators whose judgment he trusts, signs a GSA with them, and goes on about his life. It would be even simpler if the arbitrators, amongst themselves, all agreed to honor one another's GSAs.

There is a second sort of independent, however - those who have not signed a GSA. These people, along with those who have broken their agreements to arbitrate, are outlaws, in the original, literal sense of the word: neither bound nor protected by the law. These people would be trusted very little, for they are not obligated to appear for arbitration in the event of an accusation. By the same token, however, they have no recourse to require others to appear for arbitration, for they've made no agreements to that effect, and nobody has made any agreements with them. They are, in the truest sense, on their own. This is, as you might imagine, not a pleasant state for most. Given that they cannot be trusted to appear for arbitration in the event of a dispute, few would deal with them, and those that did would likely not make long-term deals with them - strictly up-front payments.

This network of arbitration agreements, backed up with the prospect of outlawry for refusal to participate, not only keeps the State at bay by separating the industries of justice and security, but provides incentive to keep society civil, without resorting to the threat of violence.

Hopefully, I'm not derailing the thread here but I think the key for this is to know, how exactly did states come along originally?

I honestly don't know the answer to this, but I assume it had to do with various things, like for example, the fact that people only generally had primitive thought processes, the general lack of resources that meant people had to band together into groups and the bigger groups were able to get more resources, through either division of labour and warfare.

The fact that states arose in more than one place, I think, seems to attest to this fact.  That it was sort of an outgrowth of the tribal model.  Religion seems to have played a big part in it too, keeping the group together and following the leader.

But this was all pre-enlightenment pre-industrial revolution and the world is quite a different place today.  Free market economics and the wealth that it creates doesn't require these models anymore imo.

Sorry that's a bit scattershot, trying to articulate my thoughts as I'm having them.  I'll try to take a look at the books.

Well, the one thing we can pretty conclusively state, is that it was not via Nozick's invisible hand. The current best theory is that shortly (in historical terms) after hunter-gatherers settled down to be farmers, some of the roving groups of bandits decided that it would be a good deal easier to live off just one or two villages, could they but get them to go along with it, and the villagers found that being predictably robbed by only one group of bandits, and protected by them from others wasn't as bad as being randomly robbed by whoever came along.

You're not derailing the debate, the question of the origin of states (both empirical and theoretical) is *exactly* what myrkul and I are discussing.

As I understand it, he and de Molinari (the AnCaps) contend that states are born in blood, intrinsically coercive and destined to oppress their citizens.

Nozick and I (the Minarchists) allow for the possibility that states may come into existence as a natural monopoly on dispute resolution and use of retaliatory force, via the consent of the governed.

Here's a brief overview and a helpful graphic; thanks for dropping in our little debate!   8)

http://en.wikipedia.org/wiki/Anarcho-capitalism_and_minarchism

https://i.imgur.com/u6mAebp.png

That's certainly mine and Rothbard's position, and for every State where we have any evidence, the evidence backs that up. de Molinari doesn't come at it from a moral POV, though, strictly economic, in the tradition of the classical liberals who were his contemporaries. I suggested that book because it addresses a few points in Nozick's formulation, namely on the natural monopoly angle.

So we are kind of saying protection was paramount in such a world and people wanted to go along with whatever lies these people would spin because it was generally the difference between a relatively certain world and an uncertain world.  Survival and death really.

I mean, if we look at the structure of Ancient Egyptian society with the Pharoahs for example, you kind of had the situation where the High Priest/s would tell everyone that the Pharoah was ordained by the Gods to be the leader.  And then the High Priest/s would get favours from the Pharoah in return.   So even back in the ancient world they had propaganda.  It wasn't simply a protection racket, there was more to it.

So it seems more likely to me that, and I'm only postulating here, I'm certainly no expert, that it had a lot to do with lack of resources.  Back when civilization started a hell of a lot more of people's resources would be allocated to farming than would be today.   Big groups were more likely to be able to defend from other groups.   There would have been a lot of fearfulness of a largely unknown world (which feeds into the religious ideas which provide answers to these questions).   I'm trying to put myself in the shoes of one of these people as to what life might have been like then.  And if there was a group that came along providing answers and protection from what must have been quite a scary world how I might react.

But at the end of the day, none of this is applicable anymore.  And government is like many of our old traditions that we are gradually purging, unnecessary and built on lies.  Just a convenience to keep people alive in a primitive world.

Yeah, you've got it.

Imagine you're a neolithic tribesman, and just a few centuries ago - maybe even more recently, you figured out that if you took care of the scattered seeds from last year's harvest, the next year's would be more bountiful. Maybe you've even figured out that putting the seeds in little holes in the dirt makes them grow even better. You might also have figured out that keeping baby aurochs means that when they grow up, you don't have to chase them down to eat them. The catch is, others have figured out that you've figured something out. They see your tribe living fat and happy, in one place, while they scrounge over a large area, trying to scrape together enough food. Rather than trying to learn what you've figured out and do it themselves, which might be hard, they'll just take it from you. So now, you have to spend some of your time defending the fields, rather than tending them, and perhaps your crops suffer for it.

Now, imagine you're one of those other tribesmen, and you just watched your cousin bleed out because some fucking farmer jabbed him with a spear. There's got to be an easier way, you think. Then you hit upon an ingenious design: If they can domesticate cows, why don't we domesticate them? So next year, instead of swarming in with torches and spears waving, you go in calmly, and announce that you are going to protect them from the other raiders...for a fee. Now, of course, you don't really give them a choice in the matter. Perhaps you have to stab a few who resist. But it goes over a lot smoother than just trying to take all of their stuff. So now they have their herd of cattle, and you have yours.

Fast forward a few generations, and you've managed to parley that protection racket into a kingdom. Perhaps you even have the people believing you were set upon the throne by god (or, at least, a god). Maybe you even have them believing you are a god. At any rate, they've completely forgotten that you were just the biggest, baddest barbarian. As the centuries pass, you layer more pomp, more mysticism, more fancy clothes onto that biggest, baddest barbarian, until he almost starts to look civilized.

And you call it the State.

So in other words, to procure a state, you must first secure a monopoly on security.

Pretty much. Even Nozick acknowledges that an "ultra-minimal" state is essentially a natural monopoly on protection.

Does he acknowledge that monopolies are bad?  ;D

Not in so many words.

But remember that there are two kinds of monopolies. This is, in fact, the crux of the disagreement between iCEBREAKER and I. There is the coercive monopoly, which achieves and maintains it's dominant position by force, and the "natural" or market monopoly, which achieves and maintains it's dominant position through superior service. Nozick claims that the "ultra-minimal" state is a natural monopoly. Unfortunately, he describes it taking actions which enforce it's monopoly through violence, which makes it a coercive monopoly like any other State.

For a true natural monopoly on security, you can look in The Production of Security, where de Molinari describes "governments" competing in the marketplace, like any other service. A good comparison would be soda companies. Most people drink either Coke products or Pepsi products, with their respective colas being the flagship brands. Both have made deals with restaurant chains to be served exclusively in that chain. But you can still get RC at the grocery store - not to mention the store brands. Most people would be customers of one or two large agencies, but smaller agencies - the store brands - would thrive on niche or low-cost services.

But now I'm confused; doesn't it cease to be a monopoly when you have competition?  (But then does it become an oligarchy?)

In the example of security: if you had government A competing with government B, C, D, etc, and most people choose government D because it's the best one there is, eventually they would go with A or B or C once government D got lazy and stopped providing quality work, right?  Unless, as you said, they maintain dominance through force, which would be exactly what we have now.

So natural monopolies are okay?  My gov teacher never said anything about more than one monopoly :P

Franz Oppenheimer was an early progenitor of the Bandit State theory. Based on some of his language and suppositions, I suspect he was influenced by Bastiat but haven't looked into it:

Exactly. the only way to stay on top in a free market is to provide, and keep providing, the best service in town. It's because of this that a natural monopoly isn't actually a monopoly at all, it's just the biggest player in any field, and usually dwarfs it's nearest competitor by a large margin. An even better example than the Cola Wars would be Wal-Mart. The reason wal-mart drives out mom-and-pop stores in an area is that they can't compete with it's prices. Economies of scale come into play, and the more wal-mart can buy, the better it's prices can be, which increases sales... you get the idea. They pretty much kicked K-Mart's ass in just this manner.

Yep, because as I said, a natural monopoly keeps it's position by being the best, not just being the biggest. The minute Wal-mart starts charging more than a mom-and-pop store can, the m&p opens back up, and undercuts them. If Wal-mart doesn't change back, people will start preferentially going to the m&p, until eventually, they buy the building the wal-mart was in, and set up their first franchise. :) A natural monopoly is a tenuous position, and few companies can hold it for long, even assuming they can get there. (Even Standard Oil only had 88% of market share, at the peak)


Interesting.

Do you have a theory as to why we still have governments?  And what it might take for society to overcome the idea that we need them and eventually get rid of them?  It's something I'm very curious about but haven't come up with any satisfying answers yet.

I think the only piece of the puzzle missing is an abundance of intelligent people.  It's far too easy to rule the stupid; is it any wonder state schools are so awful?

If that's the case we might as well give up now.  :)

Communication. The slower ideas move, the easier it is for the bad ones to persist.

State-run education probably doesn't help, either.

Not so fast--our last hope is an open and free Internet!  People are slowly realizing what the world is actually about; my generation, at least, is extraordinarily more open and understand than the preceding, and this is thanks to an abundance of easily accessible knowledge; now with our abundance of knowledge, we can achieve an abundance of intelligence.  Honestly, if it wasn't for the Internet, I'd still be dumber than a door nail.

Me also, actually.   It's amazing all the stuff I've been able to learn through the internet that's just not possible through traditional media (tv, radio, even books).

I often think of the 20th century as a dark age in terms of people's access to information.  The fact that we saw the greatest horrors of history committed by governments is not a surprise against that backdrop.

The thing that makes me skeptical is that we had an age like this before where there was a burst of information accessibility a few hundred years ago, and while it made the world in many ways a better place, govt survived it and eventually govt thrived.

Access to information is an increasing trend. The printing press forced kings to give way to presidents, and play greater lip service to the people (access to guns might have helped a little with that;) ) but ultimately it wasn't enough, because printing presses are expensive things, and the average Joe can't necessarily get one to spread his ideas. The internet changed all that, because the 'zines and pamphlets were suddenly replaced by twitter and blogs. Now everyone can put their ideas out there, and market forces have taken over. Bad ideas wither, good ones spread like wildfire.

Access to information is a 2 steps forward 1 step back thing imo.  It definitely increased with the printing press, but then as governments began to institute public education, and radio and TV became in vogue the access to information by the regular citizen seemed to drop.  I only need to look at my parents and extended family to see this.  TV drones struggle to do any thinking at all.

Now we have the internet, and we have seen govts try to censor it, particularly here in Australia where they tried to follow the Chinese model.  I wonder what the future holds.  If there is some as yet unthought of way that access to information will be stunted again, the 1 step backwards essentially.

Facebook. ;)

lol, good point.

http://images.wikia.com/glee/images/7/72/Jaejoong_popcorn.gif

So when will this debate begin?  ;D

Presumably as soon as iCEBREAKER finishes The Production of Security. It's a short book, but I suspect he's one of those people that actually have a life, so that may take a bit.