 Before I get going, let me just sort of give an apology here. I'm a little bit discombobulated. This is weird. I mean, if you guys were your first year at Mises U, you wouldn't know this. The schedule is totally different. I mean, you have no idea of the amount of new services we're offering for you this year. It's really amazing. And one of the things that we change up is normally we do the sessions where everybody's in the same thing early on in the week, for Monday and Tuesday. And then from Wednesday on, we just break up and you have like three, possibly, sessions going on simultaneously. And so in the early sessions of the week, people are supposed to dress up and have a coat and tie because that's being broadcast to everybody. Donors might be tuned in and whatever. But then later on, when we're just off in little classrooms, it gets more casual normally during the week. And so for me to be here on Thursday wearing the suit, I'm just out of place. I mean, normally at Mises U, by Thursday, you're lucky if I'm still in a Speedo. OK, so this is very strange. So I am in a Speedo, but just there's a suit on. OK, so obviously what I'm talking about, market for security, before I'm going to get into that stuff, but I just I want to make the statement because a lot of people know that I personally am a pacifist. And for various moral reasons, but also just strategically, I do think that if you want to change the world and you think that there's these powerful forces arrayed against you, I don't think that it's smart like to say, oh, let's take on the federal government with guns. I think that they're going to they had the comparative advantage and they're better at using violence than we would be. And so for various moral and strategic reasons, I do think that people really should consider the efficacy of violence. And is that really the way you want to go? Couldn't you achieve more even against governments and trying to affect political change using civil disobedience and things like that with some of these people from history that obviously were very influential? And I think you'd be hard pressed to say, oh, if only they had been willing to gouge people in the eye or stab someone, they would have gotten so much more accomplished with their lives. You wouldn't say that about these people. But now having said that, so then people say, well, how can you be a pacifist and then do all your stuff writing about private security and talking about the market for surface-to-air missiles and all that kind? Because don't go, we're going to get in the fun stuff about blowing stuff up in a minute. But so people say, how can you talk about that? Aren't you being a hypocrite? And I just so you know, for those of you considering going into Austrian economics and libertarianism as a career, or as a vocation, Joe would want me to say, every other day, you're going to get someone calling you a hypocrite. I mean, it's just part of the job description. For some reason, everything you say you're a hypocrite based on your views over here. So here, that's what people say. And that doesn't make any sense to me that, no, as an economist, I can talk about market forces and say, if we did have a free market in police services, judicial services, military defense, then this is the way things would unfold. And it would be a lot more efficient than giving a government monopoly in those areas, just like I can talk about the case for legalizing drugs as an economist. And then if someone found out that I don't do heroin, they say, oh, you're such a hypocrite, Bob. Right? So we'll get the nail down. I don't need to beat that to death. OK. So what's interesting, I think, is that actually the case for private defense is a piece of cake. That's really not what trips people up. Really, when people give you all these zingers about, well, what if this happens? What if this happens? What if there's 18 midgets who are armed with broadswords and they jump off of a plane? And what happens is, a lot of times, it boils down to really what the issue is, is they can't get how private law could work. And that's really what the stumbling block is. And that admittedly is a much more difficult problem. But I think once you see how that system could work, just in terms of having society or the consensus emerging within a group of people to say, who is the aggressor here? Who's the lawbreaker? Or what is the law? And how do we determine who's law abiding? Who's a criminal? That's really the hard part, to say, how could you do that without some monopoly agency that arrogates it to itself the right to make such pronouncements? And then the rest of us just have to fall in the line. If you don't have a single group vested with that authority to do that, it's a lot more difficult to just picture. How could that work? Because everyone just kind of automatically assumes you need to have such a single group with the ability to do that in order to promulgate laws. So like I say, I think a lot of these issues that trip people up in terms of private defense or just private police forces and so on, it's really an issue of private law. So I would say, work up, keep them separate. They're different problems. There was one issue of how do we determine what property rights are? How do we determine who's a criminal? Who's not? How do we determine what the lawful use of self-defense is and things like that? And then once you know that, then it's just a matter of people contracting that out. If you have the legal right to go use force to get your television set back because you think someone stole it from you, well then it's say, well, I'm actually a 98 pound weakling. I'm gonna go hire someone else to do it. That's not really an issue. And you can totally see how, oh, the market would be more efficient there if there was competing agencies hiring out burly guys to go get your television set as opposed to that you have to go to the monopoly government that does that for you, right? So the issue is the definition of legal rights and so forth and what your redress is in case you think someone's violated your rights, that's the hard part. You get that solved and then just enforcing those rules by having competing agencies trying to get your patronage, that's nothing. So let me just spend a few minutes then talking about this issue of how would private law work? Well, I think the, again, the conceptual thing is to separate out the enforcement of it from the decision making, the rendering of decisions. And so there's a clue when you say, what does a judge do? A judge gives his or her opinion on something. And that's now how you see your reports about the Supreme Court and oh, and he wrote the majority opinion and he wrote the dissenting opinion. And we use that term opinion to be associated with judges and what they do but I don't think, I think we just take it for granted. So yeah, that's a judge's opinion but I take that word literally. I really think that you should consider as a literal thing that what the judge is saying is in my opinion, looking at my knowledge of precedent, looking at my knowledge of the facts of this case and my intuitive sense of justice or whatever, I think the correct ruling in this case would be such and such, that's my opinion. And that's really all that a private judicial system is doing is it's people who are experts in various types of cases when disputes arise between people and they can't solve it on their own, they take that dispute to a third party and how do they pick that person in a free society? It's not because a bunch of guys with guns say, oh, if anyone has a dispute in this area, then you get assigned this person and this person's gonna tell you who's right and who's wrong. Obviously that's not the way it works in a free society. In a free society, people can't decide, there's an argument, they then say, well, we can't work this out, let's take it to somebody and the person they're gonna take it to is gonna have a reputation for fairness and objectivity and knowing the law in that particular area. So that's I think the way 99% of judicial issues would be resolved in a free society is that people would take it voluntarily. Both sides would agree beforehand to go to this particular person that they might call a judge. Nowadays in our society, we would think, oh, that's arbitration and that's exactly what happens in our arbitration. Both people, if someone's going through a divorce or some business and an employee, the business fires the employee and the employee says, no, that wasn't right, you owe me wages that you didn't pay me and the business says, no, we don't. And they can't work it out. They don't wanna take it to a government court because it'll just take forever. And so they can both agree beforehand, all right, let's go to some arbitrator and just deal with this because we need to move on. This is costly for both of us to have this up in the air. We have to resolve this dispute. We're not gonna settle it by arm wrestling. We're not gonna settle it by having a duel because that's crazy. We're gonna, it's bad for business and also you might get shot. So what we're gonna do instead is take it to an arbitrator and it's not that, oh, well then we're in trouble. Everyone knows that this, the arbitrator's always ruling favor of the business. Well, no, that's not true because if it were true, then the employees would never agree to that, right? So there is a market for an actually objectively fair arbitration process. So let me just give you some quick analogies because a lot of people think that, no, no, that's impossible. What you're describing can't exist but we see that sort of thing all the time in different areas. So like if it's, if you're talking about science, scientific journals for example, I mean there, how is it that good science is promulgated and of course if there's government funding and things that messes it up but in the original spirit and how would it be in a free society, there wouldn't have to be just some group of people called the physicists and then they get to determine who the other physicists are using force and they have a monopoly. That's not the way it would work. Some would come along and try to do, publish a paper and submit it for peer review and so on and the other physicists in the field would decide whether they thought it was good or not and it's hard to actually put your finger on who is determining who the right physicists are or who the best physicists are. You'd say, well, the people in the field are but how do they get to be in the field? Well, because the other physicists let them in. So it's an odd process but it's, I think we can all agree, especially in a free society, it's not that physics would be arbitrary, it's not that the people who would be getting accolades and they would be teaching at the top schools would be a bunch of fools and wouldn't know anything about the laws of nature better than the average Joe. No, those people would be experts in that area and it wouldn't be arbitrary and yet there would be no monopoly. The way the government right now has a monopoly on judicial rulings. I'll just give you one more example. You know, especially in a free society but even right now, who determines what words mean? Who defines words? And people might say, you know, a very superficial answer would be to say, oh, the people, the publishers of dictionaries, they define what words are, but no they don't. If Webster's came out with a new addition and said that the word op-up means moving towards the floor, we wouldn't just all walk around saying, oh, I guess I was mistaken. No, we would say, we would say that's, they put the wrong definition and what are they doing? And if they did that a lot and we kept finding those mistakes, people would stop buying from Webster's and they'd go out of business, right? So what the publishers of dictionaries do is codify the definitions that prevail in the community, right? So they don't get to invent what the words mean, they just codify it. And then you could say, well, wait a minute, but then what's the role of having a dictionary? What's the point of having a dictionary in the first place? If they're just writing down what we already know, and again, you see like these superficial things that might be objections to private law, but you can see in the case of dictionaries that's silly. No, dictionaries serve a very useful function. Because a lot of us don't know exactly what words mean or we think we know what they mean and we use it in a certain way and then you look it up and say, oh my gosh, I've been using this word wrong for 20 years, right? That's happened to me before you use a certain word in a way and because you use it in one sense where it works and then you try to apply it somewhere else and you realize that actually it didn't carry over because you'll look up the actual definition. So the point is we collectively as English speakers know what those words mean, the community somehow knows, but yet not everyone is an expert on it. There are some people that that's what they do. They specialize in knowing the definitions of English words and they are the ones who write dictionaries. Or it's even more compelling in the case of grammar books or style books for writers. And you can look up and say, oh yeah, I shouldn't say firstly, I should say first when I start the sentence or whatever. So there the point is there are rules of grammar. They're not completely arbitrary. It's not that you can just say whatever you want because hey, there's no such thing as real language or there's no rules of language. No, there are rules, but there's also a sentient in which we decide what they are. The English we speak now is different from the time when Shakespeare wrote. So the definitions of words and the grammar has evolved over time. So there is a sense in which we decide what the words are and what the rules are, but in other sense anyone who tries to deviate from that is an oddball and is violating the rules of grammar. So I think that's a good analogy in some respects for how private law works in general. That there would be people codifying certain principles. So there would be a role for people writing theoretical books on this is the way the law ought to look in a just society. So, you know, Rothbard could have a natural law approach. Utilitarians might put their views out. Other people could put different things. And then the judges would render opinions, would give opinions when cases are brought before them, perhaps drawing on those various strands that they think are relevant. And then the market would determine which judges got more cases brought to them. And they also would probably rely a lot on precedent and case law because clients would wanna have some inkling before they went into the case of how is this guy gonna rule, right? That if the company's having the dispute with the employee and saying, we think we paid you what we owe you when they said the employee says, no, because you said you were gonna give me bonus and you didn't, da, da, da, da. They wouldn't wanna, if they went to an arbitrator and then they got in there and he said, okay, the way we're gonna solve this is to see who can chug this beer faster. Go, right? They would be stunned. And they said, that's not the way you ruled on previous case. We thought you were gonna rule on this and that's the way, you know. So the point is you would want predictability going into it. So it would be in the judge's interest to have standards to say things like, these are the rules of evidence. You can't use hearsay, or maybe you can use hearsay with these exceptions. So a lot of the stuff that we now, that if you go into law, things that seem natural and just to us, there would still be a role for that. It's just the way it would manifest itself is the judge would have to provide a service to attract people so that both sides would be willing to submit to the judge beforehand, going into it. Okay, so then, of course the question is, all right, that's fine for like civil disagreements and so, but what about actual crimes? How would that work? And so here I'll start bringing in now the issue of actual enforcement of the law too. So somebody, I come, I'm driving home. I see some guy breaking into my house and he runs out with the TV. And I get it, so he gets away before I can stop him. And I see him run out and I'm pretty sure it's the guy from down the street. I can't stand that guy. And I just know he's a criminal, right? So I'm pretty sure he's the guy that took my TV. And so I go down to his house the next day and I accuse him of it. So he gave me my TV back. I can look in there and see it. It's a TV that looks just like mine. And he says, you're nuts. I've had this for three months, whatever. So we can't resolve it. Now I could, let's say I'm absolutely certain that that's my TV. You might say, especially from a Rothbardian point of view, you might say that I am perfectly morally justified in just marching in and taking that TV. And if this guy is a tough guy or like he's got pit bull or something, you might even go further and say, I'm justified in calling up a bunch of buddies to come shoot the dog and take the television set, buying the guy or whatever, not kill him, but do what I need to do to get my TV. You might even go that far and say, well, it's his fault. He aggressed against me. I can do the least amount of damage to him to get my TV back for sure. And that's his own fault if he's putting obstacles in my way. So my point is, whatever your views on that issue are, that's irrelevant because the community is not gonna like me doing that. They're not gonna like people just unilaterally saying, this guy's a criminal, he took my TV, I'm dead certain. And so I'm gonna get a bunch of my buddies and break down his door and shoot his dog and take the television set. That's just not a neighborly thing to do. My employer's not gonna like that. They're gonna say, yeah, we heard that you're breaking down to what are you doing? So you get the point that it's just not smart to do that. So rather than do that, I'm gonna wanna have a professional agency coming to people that are trained. They might have guys that are burly guys with bulletproof stuff on and flak jackets and things. And maybe the plastic stuff that the police with the riots use so that they can be, and that they would have non-lethal means, like they would have nets and foam guns and stuff like that. They wouldn't come in with guns blazing to get a TV because that would be reckless. There would be no reason to escalate it to that level. So you would do that, but then even there, the private agency, the enforcement agencies, again, they wouldn't just take my word for it. They couldn't just say, yep, whoever comes in here is willing to plunk down the money, we'll go and get TVs for you and break down doors and give them to. That'd be crazy because how do they know whether that really is the TV or the right person's TV? So those agencies would say, before we act on your behalf, you have to bring us an opinion from a reputable judge saying, you know, ruling in your favor. So what I have to do in this case, I say to my neighbor, hey, that's my TV. He says, no, it's not. And I said, well, then prove it, show me the receipt if you said you bought it three months ago or so, I don't have it. I said, well, what store did you buy it from? I'll go ask them if it's in their record. And he said, no, I paid cash from some guy in the street. Sorry. He's just making all these convenient excuses and then I can say, all right, and I'm telling all my neighbors, this guy stole my TV. Oh, really? And so I challenged him and I said, look it here. I come up with a list of a bunch of reputable arbitrators who specialize in burglary and so forth and say, here you go. Here's a list of 20 people within 15 minutes of driving. I'm willing to take our case to any one of them. And then I will agree with whatever that arbitrator decides because I think I have a strong case against you. And then maybe I have a security camera and so maybe I have a bunch of circumstantial evidence. Maybe I'm saying, just look at the serial number on your TV because I have the receipt from when I bought it and I'm telling you that's my TV, but he won't let me in his house to look at the serial number. All right, so I do that. And then if he just says, no, I don't, these arbitrators are all a bunch of scoundrels. Let's use my brother-in-law. He's fair, right? Take it or leave it. If he does, if he's acting like that, my neighbors are gonna start to say, okay, Bob is in the right, this guy stole his TV. And so I'll say, well, since you're being ridiculous, I'm gonna go to one of these professional arbitrators who hears 30 cases like this a week and there's never been an issue of them taking bribes or anything and they've given rulings and they always explain why they ruled the way they did in the ruling. And it's no other legal theorist or scholar has ever thought these people did anything outrageous. Their colleagues think, oh, these guys are women or good judges. So I'm gonna just pick one of them since you're not being helpful here and I'm gonna take my case and we're gonna try it. And if you don't show up tough for you and then that judge may decide that, okay, so the guy doesn't do that and so I take it to some judge, reputable judge and I'll probably take it to somebody who's got a reputation for being really hard on criminals. And so then the judge makes the ruling and he says, yep, I agree. This guy stole your TV. Okay, so now I go back to the enforcement agency, you know, the company that hires a bunch of goons to come in and I show him that, oh, Judge Hoppe has ruled in favor of this. Like I show him, you know, there's, I've given notice to the other guys saying there's now this pending ruling where a judge agrees you took my TV. Do you wanna dispute that? And he says, no, that guy Hoppe is crazy, blah, blah, all right. So at that point now, I go to that security agency and say, look, I don't wanna go into this guy's house by myself. I need, you know, he's calling the big guns and they say, okay, sure. And then he comes in. All right. And he comes and gets the TV. All right, so you get the point though that what I'm getting at here is that I think you need to disentangle the issue of who this, how is it decided that there has been a crime or not? And then once that's an issue and there's no doubt. So the community's not gonna think that that Guido is a criminal. They're not gonna look at him going into a house and coming out with a TV and saying, oh my gosh, he's a criminal. Cause for one thing, he's gonna be doing it in broad daylight. He's gonna have a big van with his number. You know, call us if some looter takes your stuff. You know, we hate looters. And he's gonna be very professional. And like I said, he's gonna have a lot of body armor and stuff like, well, he doesn't need it. But you know what the point, so. And he's not, and the crucial thing is he's not gonna kill the guy. He's probably not even gonna hurt him. Like he may incapacitate him, like put a net on him or some of those, when he goes a little, those things and they. So you get the point, because it would be bad for business. You know, you might say, well no, they have the right to do. Like if they go in there and that guy comes in with a kitchen knife, they can shoot him in the head. Yeah, maybe morally you think they have the right to do it, but that would be bad for business. No one's gonna wanna hire them again cause that's just a nightmare. It's a bad, you know, to say, oh, some guy took my TV. I hired some guys to get it back and the guy ended up dead. You know, that's in his own house. That doesn't sound good, right? So it'd be much better if they go in and incapacitate the, you know, whether, like maybe they knock out a window and shoot in tear gas and make the guy leave the house first. And they of course would have checked before to make sure there's not like an infant sleeping or something, you know. The point is they would be much more careful because there's competition, because they kept doing stuff like that and, you know, oh, we gotta get tough on these criminals and Guido feared for his life. No, well, okay, maybe he would be exonerated but he wouldn't get any more business. All right, so that's the idea, that the stuff we associate with police brutality now, and you see these, it is just shocking. I don't know if you guys look at this stuff, but no matter how much a police officer overreacts to something, like whether it's a 13-year-old in a school who mouths off and he just beats the heck out of the kid and tackles them and breaks his nose, people always say in the comments with those news articles stuff like, well, you know, these police are putting their lives on the line every day. And I mean, they could do anything, literally anything. And there would be people who just rushed to their defense. So my point is, that happens because it's a monopoly. People think they have to choose between having law enforcement or not. And then, well, if we have to have it, then yeah, sometimes people, they overreact and whatever, but that's just the cost of living in a society of laws. And no, it's not, that's the cost of living in a society with one group that has a monopoly on law enforcement. Okay, let me just take a minute talking about this interesting question. Would there be prisons in a free society? Yes, there would. Oh, right, I was wondering what you guys are laughing at. Okay. Don't worry, this will make sense in a minute. So let me, I think thus far everything I've said, most of the anarcho-capitalists would agree with that, with this stuff here. This is my own particular idiosyncratic take, so I just want you to be aware of that. You can be an anarchist and disagree or have different views of things. The way I picture law enforcement working in a modern, westernized, capitalistic society is that for most people, especially the wealthier they were, if they live in a suburban community where people kind of know each other especially, I think one of the ways that you would supplement just the stuff I talked about before about just randomly interacting with people and then taking your disputes to a judge, I think that would all be supplemented by people sort of unilaterally making pledges to the community at large, saying if I agree that if I'm convicted of any of these types of offenses, I will pay out such and such in terms of monetary penalties. And then I am a member of this larger group with financial resources, so you know I'm good for it. And at first that might sound odd to you, but that's what we do with driving right now and that's what surgeons do. When you drive around right now, if you're insured, you get into a car accident, if you're at fault, okay you or the other person, let's say you own $500,000, like if you kill somebody, you can say well gee, I don't have $500,000, but you're insured. And so your insurance company pays them, even though you were at fault, you could say the insurance company, they didn't do it, but that's the point, you pay premiums to them, partly not only because your car might get totaled and you need to get it fixed, but also if you cause an accident and are at fault, you're not gonna have the money to pay that huge settlement. The same thing a surgeon, the surgeon screws up and kills somebody on the operating table, and especially if it's concluded that they did something really bad, it wasn't just, it was a tough operation, but no, they botched it and are legally responsible for killing that person. He would say oh the state of million dollars, well the surgeon might not have it, but that's what they have malpractice insurance for. Okay, so by the, I'm saying take that logic and extend it, I'm saying, I think it's possible that in a society, at least a certain type of society, you might see things like that where I apply for a job somewhere and they say well what association are you a part of? And then if I tell them that they could trust it, they say okay, because what's happening is this group that I'm a part of vouches for me and they say let's, you hire him and then one day you show up to work and all your inventory's been cleaned out and Bob's in Mexico drinking tequila shots with all your stuff, well then we will pay you for it because we had been vouching for him and so yet we'll do that and then maybe we'll try to go get Bob and recover the stuff but that company's made whole right away by the association of which I was a part. So why do they do that? Because I pay them dues or premiums or whatever you wanna call it. And of course they're only gonna let me in if they look at my history and see that okay, I don't have a violent history just like a life insurance company is gonna charge different premiums to people or some people they're not gonna insure at all if they have a brain tumor and things like that whereas if they're a smoker, they'll charge a higher premium, it's still giving them a policy but if they have a brain tumor and skydive every Tuesday they might say we're not giving you a policy at all because that's just so risky. The same token here, I think you would see that kind of mechanism play out to supplement the stuff I was talking about earlier. So now just keep that logic going through. So let's say they're really crazy cases like some guy, I don't know, Axe Murderer or something like that. And then they catch the guy, they capture him, he's still alive. They take him, the judge's rule and say yeah, this guy, he killed 16 people with an Axe, that's kind of unusual, what do you have to say for yourself and he explains and say wow, so what do we do with this person? And I'm saying I think there would be a role for companies that would offer things, places, buildings where people like that that could not just be out in the community because no association would vouch for that person. No one's gonna say sure, I promise that if this person does something criminal we'll pay you for it because this guy just killed 16 people with an Axe, this guy's crazy, we can't do that. So what do you do? A company might say hey, we will vouch for him but only if we take him into our possession and he stays in this building and we have cameras and things like that and we can keep him here and that person you'd say well why would the person, the point is the person would agree to it though because you could explain to them, no you're not gonna be able to walk around freely because the owners of the private roads and the malls and the people who have businesses they're not gonna let you onto their property. That you're a pariah right now, you have this outstanding settlement against you, you killed these 16 people and the judge has ruled that you owe their estates a million dollars a piece, something like that so what are you gonna do? The point is the person could say come into this area and then you can work from here. Now maybe the person is a brilliant engineer or something, he can't just be out free but maybe you have in a controlled environment doing that. So the reason I'm saying it's like a hotel is these things would be competing for each other. If there is a market for that, if there are some criminals that are just really anti-social enough that they just can't be out, I think the humane market solution might be that the companies would build these things and the reason I'm depicting it as a hotel is that they would try to attract them because the point is the landowners would say get off my property so they wouldn't be able to stand anywhere they would end up in the ocean and drown except these people say you can come onto our property if you abide by these rules. We're gonna search you of course before you get here make sure you don't have any shivs on you or anything like that. We're gonna maybe shave your head and you gotta do all these things wear this jumpsuit and whatever and submit what you think are humiliating procedures but those are the rules if you wanna come here but other than that it's not gonna be that they're gonna, I'm not, it's the stuff that happens in prison right now none of that would happen because people would just choose a different prison, right? So they would, yes, you would be in there and you would be unfree to leave but the point is the guards wouldn't be sadistic and you wouldn't be doing crazy things like making license plates and you also wouldn't be probably getting into talking to other criminals and then learning how to do stuff and getting out later and then committing worse crimes which is what happens right now in the criminal justice system. All right, so I am calling it a hotel but of course the people that are vouching for you so there's a group saying, okay, yeah, we'll vouch for this person but you say that and say, but you gotta come in here they're gonna wanna make sure the person doesn't get out so it's gonna be an odd sort of hotel it's gonna be like the Hotel California when you get in there, okay? So, but the point is that you see like it's inefficient, like to execute somebody from a purely utilitarian, pragmatic sense if the person, it could be productive and could be rehabilitated, then that's kind of a waste and so I think in a market society, a free society over time, even if it's true that the victims' families had the legal right to kill the person, I think the person might be able to buy that off of them, like there could be mutually voluntary arrangements or agreements where the person says, yeah, you have the right to kill me right now, because I killed your father or something and you're the legal heir of the state you have the moral right to kill me because I did that but how about I go to this thing and work 20 years let's say the guy's 50, I'm probably gonna live another 50 years, what if I go here and I give you 80% of my income, how you feel about that and then I think over time that would become the socially acceptable response so yes, you could say no, I want this person dead if you wanted to, that would be your legal right but I think over time, more and more people would view that as sort of sadistic and that's not gonna bring your dad back, why don't you just let bygones be gone and I think in that sort of society you would see less crime in the long run because I don't wanna sound cliched but the cycle of violence would be minimized that would be teaching kids would see in our very civilized society even when someone goes crazy and kills people with an ax what do we do, well we contain them so we can't hurt anybody else and there wouldn't ever be prison breaks from these things because these people would be on the line if someone escaped, it's not like the politicians who really don't suffer if someone breaks out of a prison that's in their jurisdiction and then so we contain them and then they're productive and they probably would be rehabilitated or there would be a much better chance of rehabilitating the people there especially if it was just they were on drugs or something, if there was some issue going on when they did all that stuff, there's a much better chance that they would be rehabilitated through that process legitimately and then even there when you talk about parole how would parole work? Well, if people run that association and said, okay, we actually think this person's reformed he's expressed genuine contrition or whatever they might then say, okay, we'll let him go out we are the association vouching for him and they've charged much higher premiums and they're on the hook, if he does go back and go back to his criminal past then or criminal ways then they're paying for it so there would be the possibility of parole I think through the logic of what would get you in prison in the first place, how would you get out is when people thought, yeah, I'm willing to vouch for you so you can go get back among society but again, the incentives would be there for them to make the right decision whereas now the people on the prison parole boards who make decisions if they're wrong and the person goes out and kills somebody that doesn't mean they lose $100,000 next year it just means they might feel bad but the point is here, if you screw up and vouch for someone who actually goes back and falls into recidivism then you financially lose or your company does all right, well let's start talking about the real fun stuff about blowing things up what would, what we think of as military defense how would that work? Well, most, I think most anarcho capitalists think that insurance companies would play a major role in this area, so let me just give you the basics of it so I don't know if you can see that but that's supposed to be the prudential there's my laser pointer over there so the idea is let's say you got a big city and their owners, the people who own the big buildings the skyscrapers and so they take out insurance for things like what if there's a fire so they take out fire insurance what if there's other sorts of disasters that can strike that might have various types of insurance policies and then you say well what if a bombers fly overhead and drop bombs and blow up our skyscraper, that would kind of be a pain and so you say well what, how do we just like a fire would be devastating that would be devastating if foreign bombers took out our skyscraper and ruined our property so they could go to prudential and take out large policies against that saying in the case that our property is damaged because of foreign military action you indemnify us so now prudential has, if you know the economics has internalized the externalities there if they have policies from a large group of clients in the same region, now dollar for dollar prudential is suffering the loss from anything that happens to any of their clients so it's now in prudential's interest they could say well what if we so they might be on the hook potentially let's say for a billion dollars like if some foreign army comes up or Air Force comes in and just starts carpet bombing our city we're gonna be out a billion dollars and then you could run the numbers and say what's the chance of that happening and well you know that they're not too hostile or they're this hostile and they're foreign that the leaders are making really aggressive speeches saying that we stole their land or whatever and it looks like they're trying to drum up their own population in a pretext to invade this isn't good we're just sitting ducks right here so what could they do they say well we're on the hook for a billion dollars if we just spent a few hundred million we could really make it hard for them to do that you know we could buy surface to air missiles we could buy our own you know enemy fighters or aircraft fighters we could get radar installations we could maybe get naval vessels that were putting out mines in case they're trying to send their navy and so forth so the point is if you ran the numbers they would be the ones who would actually be funding the purchase of military hardware and they would be doing it in a competitive market it wouldn't just be you know if they could do it more cheaply they would get to pocket the difference is the point now I don't think you would see huge standing armies and they certainly wouldn't have swastikas right just because that's bad for business but especially if it if it's the Guido Hulsman agency that's just that you know his marketing people would say no no all right so why wouldn't they have that is it just because I want to say well I don't you know we want to make sure we don't end up like the Nazi no because they think of how ridiculously expensive that would be to have that huge of a workforce it would be much more efficient and cost effective I think to have a smaller group of professionals who were supplemented with extraordinary capital goods and you know tools and equipment and that was the way they would repel the hordes of incoming invaders if that's what a state was gonna throw against them all right now on this point let me just go off on a little bit of a tangent what is an economist I really think the way warfare is treated in the popular imagination even like in things where we're supposed to be rooting for these guys it's just crazy like a few years ago it was really rampant where there were all these Hollywood blockbusters showing you know the movie would be building up and then at the end there would be these grand epic battles where you'd have thousands of people on this side and thousands of people on this side and then they just go and they run at each other and I'm just thinking the best you can do with the thousands of incredibly productive people on your side those resources that are like computers and very creative things is to say let's all just sprint into a wall of swords that's crazy that is just the stupidest thing imaginable right in terms of if you especially like in the civil war the war between the states the war of northern aggression whatever you want to call it there I mean on paper the southern states should have easily been able to survive they should have easily fended off the invasion from the north and if you wanted to what's the way well how did they lose well look what they did they went around and like basically at gunpoint rounded up all their able-bodied men and then said okay you see these cannons let's go like if you were a spy sent by Lincoln to destroy the fighting power of the Confederacy what better thing could you do than to say okay we could just like do guerrilla warfare we could just like take pot shots that their commanding officers then run away like we did in the Revolutionary War against the British or we could all get into a single file line put on nice bright colors to make sure they know who we are and then march at them and maybe yell stuff at them and maybe that'll work I mean that crazy just marching into their guns that's crazy when they're clearly more better equipped than we are right so the point is that the conventional warfare that site of warfare in which states engage that's crazy and I don't think in a free society you would see us copying their methods only it would be private I think we would do things completely differently it would be like I think the Vietnam War except the technological roles would be reversed right so you would have the invading state would have all these big bombs and have all kinds of troops and stuff whereas the resistance would be guerrilla warfare doing all these sorts of decentralized things that was hard to fight except the anarchist society would other things equal be a lot more technologically advanced and so I think when you see well I'm getting ahead of myself we're gonna have a slide at the end about this stuff okay whoops I skipped one point here down here what about public goods I just wanna mention when you bring this stuff up to academic economists they think they have a trump card and say no military defense is the epitome of a public good it can't be provided in the private sector by a public good they mean that once you provide it you can't exclude others from being able to use it and also one person's enjoyment of it doesn't detract from somebody else's enjoyment of it so if you build this SAM site here and that deters the enemy from coming in because they know oh we're gonna lose a lot of our fighter pilots and our pilots for the bombers and so it's not worth us going in there well what if people could decide well we're not gonna pay it prudential you know we're not gonna be part of their company anymore because we're just gonna sit back and enjoy this public good so that is an issue but in practice I think that it's overblown that it's not that military defense actually is a lot more of a private good than people normally think of so especially for things like protecting shipping like if you're trying to ship merchandise across the ocean and you need to have a convoy of military vessels to provide an escort clearly if the people in the convoy aren't paying for it you can just not protect them right so you can clearly exclude service there now yeah if you're gonna have something like ICBMs and that's how you're gonna deter a Soviet invasion that it's kind of hard to restrict it to the paying customers versus you can't protect this half of the city from getting nuked and not protect that half you know if you're gonna protect the city from an incoming nuclear bomb everyone's protected that is true but a lot of stuff in military defense isn't quite like that another example if you have enemy troops marching then clearly the people on the border of your region have to be paying customers otherwise you would just pull back your own forces further and let those outliers just get eaten up by the incoming hordes right so the point is yeah there is some slipperiness and it's a public good in some respects but it's not if you actually think through the logic of it it's not really as clear cut as a standard economics textbook would have you believe okay wouldn't warlords take over now I have a Mises.org article with that title so if you are interested in this I would recommend that you read this if you just Google Robert Murphy wouldn't warlords take over this will it'll be one of the top hits Walter Block has told me I don't remember his exact words but something like this is one of the single best pieces on private military defense he's ever read and I kind of have to agree with him it's really uh you remember the scene from a Christmas story when little Ralph he's reading his essay over and says oh wow that's great that's kind of how I felt reading this so what let me just very quickly what are the points here this what you need to do is compare apples to apples right so yes it is it is possible and we have we've seen historically there can be regions where there's no state and a libertarian utopia doesn't emerge next Tuesday right that that's clear that happens so no one's making the claim that anytime you have the absence of a state all these market forces are gonna kick in and everyone's just gonna have these voluntary peaceful society just pop out but the point is usually where where we see this happen is a region that used to have a government that descended into civil war and that's why it's the message is now so it's not that the people had a government and then they were all reading Rothbard and said oh my gosh and then their government just dissolved the way that's not what happened they are all still statists and they started trying to kill each other because they wanted to seize control of the government and then no one group was strong enough and the government fell and now they're all fighting each other okay so that is hardly an argument against anarcho-capitalism and moreover you could just easily cite that and say well that's why you can't have a government or a state because look at sometimes it descends into civil war right so it's interesting that these cases these alleged case studies in Rothbardism are actually cases of failed states again you just say well that's what happens when you try to set up a government if the balance of power shifts it might devolve into civil war so what the claim is is that take any group of people whatever their level of peacefulness and their ability to put us as compromise and to not use violence and so forth to settle disputes and we're saying it's less likely that there's gonna be warfare if you disperse the power that you're more likely to see aggression and so forth if you give one group all the guns or most of the guns and the authority to tell everyone else what to do and then there's this ideological background where everyone else thinks yet these people are in charge and they can take as much of our money as they want and they have a monopoly on these things that that actually is a recipe for disaster and so again it's not it doesn't matter what your view of human nature is whether you think people are angels or whether you think they're devils the point is having a group given a monopoly of the legitimate use of violence that seems like a very dangerous thing and in either case so just to follow this train with all a little bit more what happens is that people will say to make the case for a limited government excuse me they'll say well if you got a group of people in a state of anarchy and they're all patronizing different competing judicial agencies or defense agencies and people have different views initially like some people believe in capital punishment some people think abortions murder some people don't think it is some people think that if you violate certain religious laws you should get your hand chopped off other people think that's crazy so you got these people in a pressure cooker and if you just had anarchy the way you guys are talking about they would just be duking it out and perhaps as a matter of prudence you're right maybe the agencies wouldn't necessarily be shooting each other at all the time but there would be no rule of law it would just be real hostile and it would just be groups always at each other's throats and maybe just not attacking out of prudence but that's not the kind of world I want to live in instead let's form a government where we all agree yet we have these different viewpoints of what the just society looks like but let's have periodic elections and we all agree we're not going to contest it as long as it's a fair election we all abide by the rules we're going to elect a government to implement these views to try to build a consensus and if people don't like it they can elect somebody else the next cycle okay so we're going to not use violence to settle these disputes and that's the role that's why we have a limited state and that's the argument so what I'm going to say is if you have a society that's capable of doing that and for one thing that's no state ever actually emerged in that nice peaceful voluntary fashion but if it did I'm saying that population that's so virtuous enough to be able to do that why when they're in a state of anarcho capitalism why would they be patronizing defense agencies that were shooting each other up? If you're willing to say yeah I realize I have fundamentally different views from me you think abortion is fine I think it's murder I'm not going to physically attack you let's vote and try to settle at the ballot box if you're that reasonable of a person why then wouldn't you also say okay I see we have legitimate differences so I'm not going to pay money to a private security agency that goes and tackles you when you go into an abortion clinic because I recognize that you live even though I think you're wrong I understand you don't think that that's murder and so I'm not going to patronize a defense agency that's just going to just be real provocative and I can see that that's not good in the long run if we're having our agencies fight each other over this issue okay so the point is because that's not realistic but then why can we settle at the ballot box so my point is just a society that can compromise and settle things peacefully even though there's legitimate and serious disagreement on really important issues through the ballot box why couldn't they do that much more effectively through the market where there's not all the other problems that go along with government democracy okay then the last objection I'll entertain and I'll answer a few of your questions wouldn't a neighboring state invade so I've already given a little bit of my answer here so let me just mention a few points one thing is I think a crucial point people say oh man the government would have so many advantages a neighboring state would have so many advantages the free society wouldn't they could engage in a drafting they could conscript a lot of people so they could throw a lot more manpower at us they can tax their own people and raise a lot more revenue than the insurance companies could do in the private analog the next-door society that's relying on purely voluntary means and so even though it's not fair it's undeniable that yet that neighboring state if it wanted to could just steamroll over us because they could just throw so many more resources at us so there's a couple things one is other things equal the anarchist society that's a free society of the kind of word visioning is gonna be phenomenally wealthy so even if it's true that they can only devote 1% of their output to military defense whereas the neighboring state devotes 50% of their output to defense even on its own terms that it doesn't follow therefore that the defender is gonna be at a loss because they're gonna be so much richer the other thing is governments notoriously don't spend their military funds wisely so it's the amount that like the Pentagon spends to get fighter aircraft I don't think a truly anarchist society that is buying planes to defend itself military jets to defend itself is gonna spend the same amount just because they're gonna be more careful with their money so the point is the Pentagon overspends because it's a corrupt process where they're basically funneling shoveling money to their buddies and then they know when they leave the Pentagon they're gonna get nice plush consulting contracts and things like that so it's a big game as a way for them to take taxpayer money without literally just pocketing it when they're in office or when they're in the military so you have that issue too that don't be afraid of these big numbers that it's not apples to apples the other thing and that's what the point of having a porcupine here is that right now you think oh man look at how much the US government spends on its military but the US government is trying to run the world they need to have aircraft carriers to be able to project force that's what the history channel always talks about the US military's ability to project force in order to project that force so the point is the anarchists that wouldn't need to do that they would just have to make it really inconvenient for someone to invade them they don't need to be able to project force around the globe they don't need to be able to bomb and take out some city 10,000 miles away they don't have to have the ability they just have to so they don't need to have long range bombers they don't need to have submarines that can go around the world and can stay out at sea for six months at a time before going to port and getting more food and all that kind of stuff they just need to have submarines that can go out a little bit and try to shoot the enemy submarines that are trying to infiltrate their waters or that can lay mines or whatever so my point is that they could for a lot less money they could repel a military that on paper was a lot more expensive and do a good job of it all right so why don't I stop there and I'll turn it over to your I'm sure interesting thought experiments yeah will this ever happen? I don't know I mean it could so we can always dream yeah do you like that answer? okay so the question in case you didn't hear it was Hapa following Mises you know has talked about the difference between events that are insurable and those that really aren't and it's abusive language to say that we insured against this thing and I was asking you know is it really true that insurance companies could provide these types of services so here and I'm glad you brought that up so again let me just stress there is a difference in treatment here I think just about everybody who subscribes to the Rothbardian view thinks that insurance companies would like insure law abiding people and then if somebody aggresses against them would then try to go get you know pay them off then try to go get the bad guy so like the stuff I was talking about prudential insuring the owners of skyscrapers and then saying well we know if bombers come in and take it out we have to pay them so we're gonna spend money to try to prevent that damage in the first place I think everybody is on board with that because that's I mean that let's say you could have insurance against vandalism or if someone breaks into your house and steals things and you can be insured against that and that's an example of human action doing this so that was the answer now the thing where there is controversy is me saying what if you're in a sense insuring yourself against being the criminal and there are a lot of people say wait a minute that's kind of weird you can't you know because you have control over whether you're a criminal or not and so some people don't like that me taking it that way but most people agree you can insure against bad people doing stuff to you because that is a quantifiable thing so I'm not I understand what you're saying I'm trying to say it isn't that's fine but they would just say well there's plenty of things right now where insurance companies insure you against stuff that ultimately other people are controlling it's just not the policy holder isn't controlling it okay maybe one more yep okay so the question is would I advocate is that the verb would I advocate the execution of a criminal who is unwilling to work and doesn't and hasn't wasn't insured and is like so he does something and the judge says okay you owe the estate a million dollars he doesn't have it and he doesn't want to work and okay well when you say would I advocate it no I personally would not because I'm a pacifist alright but if you're saying is an economist what I predict would that be the status of the law yeah I think it would be elite like with people's conceptions of justice right now I do predict if the world went anarcho-capitalist tomorrow at least you know among western societies that yeah I think people would say you have if somebody kills somebody in your family you have the right to kill them if you want and I do think some people would would agree I think some people wouldn't you know some people would just say now let's just move on and that's that's gonna make it worse if we try to take revenge but I think plenty people would and I do predict that that would be legal well okay the question was would the man just walk free if it could be a woman let's not be sexist ladies if you want to murder someone then you know girl power um so the question is would the person just walk free and this is that this is the last point I'll let you guys go to dinner here but this is a good segue and I think important point that's when the neat things about having a private property society even if there is a crazy judicial ruling and it was oh my gosh a murderer just walked because let's say there's some technicality the way the contracts were written somebody actually gets off with what everyone knows was was a crime or because the the he committed against like some Amish people or something and they just said no we forgive you we're not going to press charges so everyone knows that's a murderer walking around the people who own the private roads could say all right well you can't walk on my road and the people who own the grocery stores well you can't shop here and so the person would still be a pariah and you know would be shunted to the outskirts of society even though technically we wouldn't have the legal ability to grab him I mean he could and you know he owned his house and he might live in his house and maybe the electricity company would still do business with him but the point is he would have his freedom restricted in in the the everyday sense of that term even though technically he wasn't convicted of that crime so that's that's the issue alright thanks everybody