 Thanks everyone for coming for those who are watching this online. Let me just and you've never been to Mises you Let me just explain what Mises you was about. I have this slide up here the middle one Has the Jedi and so some young man comes up to me beforehand He says what do you got Jedi up there for and I sit down private security there look cool Liam Neeson I mean that's kind of explanation right there and he said oh, but in episode one It says the Chancellor dispatched the Jedi in an episode three Obi-Wan says they're sworn to uphold the Republic so clearly, you know, this has no business in an anarchist talk, so At that point I pulled the fire alarm and just left but the the point is these are the sorts of Doctrinal issues you get into it Mises you and if you're gonna come lecture here ever just be ready that the kids are sharp All right, so what am I talking about today the market for security? this is I think one of the most important things for a Anarcho-capitalist a libertarian in the Rothbardian tradition to deal with Some people let me just let me just justify why we spend time on this because some people will say Who are minarchists meaning they believe in a very minimal state like the night watchman state that oh come on There should be a government that defends property and maybe administers Very general laws, but that's all that it does but that's an important thing or at least a lot of people believe That's what the government should be doing. So why are you Rothbardians over there in the corner, you know Calling them a bunch of status and stuff and just raising a hassle right now. The state is so big We got a global empire in the United States blowing kids up with drones Can't we focus on rolling that back first and then we'll deal with these little doctrinal issues once we have a minimal state 20 years from now, you know, that's the kind of argument we get a lot and I think the the answer is Well, first of all, this is more fun, right and talking about cutting back social security by 16% by fiscal years 2016 That's kind of boring talking about Obi-Wan and how could we hire him? That's much more fun but beyond that it's that We have as Rothbardian libertarians. There's a whole host of moral arguments for the illegitimacy of the state and Incidentally in this talk, I'm gonna be using terms like state and government Interchangeably just because it's kind of a casual talk and I'm focusing more on applications So theoretically people might make distinctions between those terms So what I mean when I refer to the state or government is an institution of organized Violence that claims to be the sole arbiter of who can legitimately use violence in that region and on top of this So it can delegate that authority to people but it claims that ultimately this institution is the one that decides who can use violence And who can't and that moreover it derives its funding Involuntarily in the sense that even if there are people who have broken no rules according to the state itself if They don't want to give money to it to help it enforce those rules then the state says well then that's also a rule that you just broke you have to be give us money and We determine how much it is, you know through procedures But that's what I mean by the state or government in this context. Okay, so There are lots of moral arguments that can be deployed against that sort of institution you're just saying in general hate aren't monopolies bad or Isn't it wrong to take someone's property against his will? I mean if we just had a bunch of neighbors and 51% of them thought hey, there's this poor guy down the street Why don't we all Raise money and get him a turkey dinner for Thanksgiving and then some cranky guy down the street says no, I don't like that guy I don't want to give him money nobody in this bright mind would say you were allowed to break in that guy's door and go Take $20 from him because it's the right thing to do and it's helping poor people eat And so therefore we're allowed to do that nobody would say that but yet that's what you know the Rothbardian things taxation is so in there's really no Good argument against us I mean there are people who have arguments for why the state should exist in a moral sense But I think the average person The simple reason is always what we need to have it otherwise Those crafty Canadians would have invaded us and taken us over right and so that's why we need to have and then there's one Infiltrator right here in the front row. So just everyone be careful. Don't don't tell her what the launch codes are Right so that's that's the trump card They always have that you know We don't even need to deal with your moral issues because we would all be dead or what I'll be speaking German or whatever the cliche is If we didn't have a state or you know, there'd be a bunch of rapists running around or that kind of thing So that's the that's why I think it's important to go over this topic is to show that no The free market works here too and then also since this is such a you know The hardest case if you can show somebody why privatizing Judicial and military defense services Wouldn't be the catastrophe that people assume because this has issues of public goods and externalities and all these things that a Mainstream economists will bring up to justify government intervention in other areas and here this isn't some minor issue about like oh my gosh With all these sneaker companies, there's inefficiency and shouldn't we have government intervention or there's too many breakfast cereals You know, these are things that interventions used to worry about. I'm not those aren't strawmen like in the 60s Those are things to show how awful the market was Here it's life or death and it's you know making sure that an axe murderer doesn't break down your door So if we can show people that the market would work well here Then that's that's pretty much showing them the market really works in general So that's why it's important I think to for us to hash out these issues even though in some sense that this kind of isn't relevant That this isn't even gonna be an issue that we need the majority to care about for a long time In the in the sense that a lot of people mean Okay, one another large caveat to explain the framing of this lecture. I personally Call myself a pacifist, right? So And people say what do you mean by that? You know with if aliens were gonna invade and you had to go punch Paul Krugman in the shin or else you know 16,000 Catholics gets vaporized. What would you do? I would probably punch him in the shin. All right, but then I would apologize and buy his book All right, so that's So, you know, what I mean, I'm just saying in general. I think that there are the in general Violence is overrated whether it's private violence or government violence that just as you know going through the reasons for How you can say, you know, I'm not sure the US government should have gone into World War two when you can start listing reasons By the same token, I could come up with things saying, you know, just because that that Armed robber came in and tried to steal money from your bank. I'm not sure that you know using Shooting him was the right thing to do like that sends a message to the community that guns are okay And like it would have been better if we could have used nets or even better That it you know or we'll go ahead let him take the money and then have contracts with people so that The electric company shuts off the power to his house until he gives the money, you know things like that I'm saying I think in general using violence should be shunned and that even a lot of libertarians Believe that violence is really great when used under these circumstances and I want to say no actually I think it's it's not great in those circumstances either, right, but Those are my personal views that doesn't have anything to do with libertarian rights theory per se And so I'm not there's no contradiction there and the analogy I'll give you and in terms of what am I going to be doing in today's talk where I'm going to talk about the market for security I could give them a lecture saying what would the free market in Recreational drugs look like and we all know that that would mean therefore I'm for you out going out and using heroin, right? And so I'm not by the way just to make sure there's no ambiguity on that point Right, but I would be talking to clearly there are some people who don't think it's a more or if they do feel guilty about it They don't care because they're addiction trumps that or whatever And so clearly if the government totally legalized what are currently illicit drugs There would be a booming market in heroin and cocaine and so forth and we could talk as economists about The supply and demand and what would happen to the price of heroin in that market and would there be competition? And what would standards of quality do blah blah blah? What would happen to overdoses and none of that would mean that I personally think it's moral to go do that stuff So it's the same thing here with my particular religious views and so forth. I actually think in General certainly if someone's breaking into my house and I shoot him and kill him I'm gonna feel awful about that and think I probably committed a sin or acted immorally But that's a separate thing from me as an economist analyzing a society very much like the current United States or other so-called Western democratic nations and saying with the people in their value systems and the things they care about in These types of communities right now if the government's monopoly were lifted on Private providers of judicial rulings and defense services. What would that market look like? Okay, so that's that's the way I'm framing this and reconciling what I'm gonna say now with my own personal views of the acceptable use of violence Okay, the next Framing issue is for me to say I Actually think private defense even though a lot of people believe oh my gosh That's the biggest stumbling block for pure Libertarianism or anarcho-capitalism a lot of people think you know to them it would just be the Trump card of oh Yeah, okay We're gonna privatize the military or yeah, I'd like to see what your theories do would add off Hitler's coming down the street Yeah, you know, but actually Private law is is hard. All right. That's the thing. I think conceptually is difficult to imagine What would it even mean to have a rule of law and what would it mean to talk about? Property rights if there's not some default agency that gets to define all that stuff That it's that's really that the hard part to then if you assume that you have that framework in place And then it's crystal clear in the community who the criminal is and who the rightful property owner is and when a law Has been broken or when property rights have been violated if that's if you've assumed that problem solved Then it's child's play to say could there be private? Competitive suppliers of services to enforce that existing framework of law or those existing body of property rights So we'll see that later in the lecture But I just wanted to clarify that that's why I'm gonna spend more time talking about the legal Aspects of this because to me that's that's really the stumbling block and once you saw that the other stuff It's just an application. It's kind of like you know If you're talking about privatizing the roads and somebody was really worried about What type of material you were gonna use for the surface of the road and they had that was the really complicated part not Well, how do the what how do you determine right of way and if some road over here thinks it should be on the right-hand side and In cars and people sort of drive on the right hand But the guy over here thinks cars should drive in the left hand. How do they coordinate? I mean that's kind of the issue with road privatization. It's not real trivial details About the type of concrete to use or whatever the asphalt to use in the surface. So that's to me is the same thing here that Defining the property rights Without a state is hard and then once you have that protecting them or enforcing their protection is pretty simple and the so as far as The the work on that I'm gonna give some recommendations at the end But probably the classic work in a Rothbardian framework for the nature of private law would be Rothbard's the ethics of liberty and But even here I'm gonna I'm not gonna Take that per se. I'm just gonna I'm gonna take a step back and say Whatever views people have about property rights and who owns what and what it's acceptable to do if somebody Violates your property rights Take that as a given and then what would a free market in that sort of context look like all right, so Let me just make sure you know what I mean. It's It's not enough just to say This is what everybody owns or in a just world. This is how property titles would be allocated and Rothbard does talk about that in the ethics of liberty We have theories about Homesteading and then how do you exchange titles to things and and what sort of things is it possible to Exchange titles for and that that's an argument in libertarian theory, right? Like can you sell yourself into slavery that sort of thing, but beyond that there's a whole other area of Punishment theory so given that we all agree on Who justly owns what and what sort of things can be owned by their very nature? What now if somebody comes along and quite clearly in the eyes of the community? Breaks those rules and steals from someone or engages in you know bodily aggression and that since violates the property rights and self-ownership What can that what can we do is the community to that person and not ourselves be criminals? And that's again a whole messy fuzzy area where Even libertarians who are on board with everything else don't necessarily agree on that so if if somebody comes up to me and Punches me and and blinds me in one eye Can I kill him and most libertarians would say no you can't The only reason you could is if it's in the middle of the fight and you're fearing for your life And so in self-defense to you know stop the attack you do that or even some people might say no No, it's not even that you have to fear for your life, but if a guy's coming at you with a Letter opener or something he's going for your eye and you know he's not going to be able to kill you Like you can see there's other people in the bar or whatever because you know you bring letter openers to the bar That's what I do There's not too many bars that that say you know no letter openers allowed So I think I'm not violating any implicit contracts You know let's say you got some guy coming at you with that thing and he's not that big and there's plenty of other patrons Standing around and you know okay He's gonna take out my eye, but then they're gonna tackle him a lot of people would say you're still if you happen to have A gun on you you're allowed to kill the guy to save your eye Okay, but what you're not allowed to do is he takes your eye out He gets apprehended he gets hauled off he gets convicted and then the penalty is we hang him and to death You know that's most libertarian thing that you can't do that because he yeah He took out your eye, but you can't take his life for that. Okay, so that's the kind of thing The people wonder about or does he have to pay your court costs to well if he has to do that Well, can you just go and take the court the case to your brother-in-law who's a judge and have him charge a million dollars? You see I'm saying so they gets really complicated really fast Even if you can agree on what this does default standard just property titles are all right So these are things that get fleshed out and so books like the ethics of liberty have positive statements of What should be the norm and I'm saying in a free society books like that would influence the rulings that judges would make But what I'm talking about here is more the economic forces for how those decisions are made and in the market for them I'm not talking about what I think the rulings should be Okay, so let's just what work through a simple example so let's say you're in you know that we're in this free society and Somebody breaks into your house you come home you see a guy breaking into your house And he runs out the back door with your TV. All right, so what happens? So what I want to suggest is that there's there's two separate things here and that a lot of times We link them and even in certain treatments Sometimes I think these things are linked and they shouldn't be at least conceptually that I think there is it one whole separate area is Judicial rulings and people giving statements as to what they think happened and what happened with property titles And then a whole separate issue is What do we do about it now that we've got this pending or the standing judgment that a crime has occurred or that somebody has violated a Contract and that certain redresses do and I think those in practice, but certainly conceptually should be distinct things not the least reason for which is that People might get scared if one company both renders judicial rulings and has Guys with guns who then back them up that that starts to look a little bit like a state even if it's not Theoretically I think in practice a free society would be suspicious about those things and that they would be distinct And just in terms of economies of scale and comparative advantage and other reasons I don't see why those two agencies would be the same just like you wouldn't think in a free society One company does your oil changes and also has all the bazookas that would just seem odd Like why would that be the case it could be it wouldn't be a violation of libertarian rights if it were But that seems like that would be an odd outcome and by the same token I don't see why the company that specializes in providing judicial opinions when there's allegations of TV theft would also have a division of People with body armor and mace and assault rifles who then go out and get your TV back That seems like those are different things and why would they why would the same company have those two branches in it? Okay, so so what happens you somebody I the scenario I describe you I come home somebody's run out my back door with a TV So I would say the first thing that you do is You go and you want to? Have the community you want to build a consensus in the community as to who you think did it So let's say there's a guy down the street This punk kid and he's always been stealing stuff from other neighbors And I'm pretty sure you know the build of the person running out my back door. I'm pretty sure it was that kid like I mean I person I know it was that kid all right and And we can make it me more or less confident as you want I mean suppose I literally saw his face, so I really truly know it was that kid that did it It's so in terms of libertarian theory I Would be justified if I go and get a bunch of my cousins and we go down and kick down the kids door and take My TV back right and actually according to Roth or we could take his TV also So that would be fine like I would not have violated anybody's rights I can't go to my neighbors and put a gun in their heads and take up a collection So then I can hire my cousins to take the flight out to go do that because then I would be aggressing against my neighbors to fund What otherwise would be a legitimate activity? But the point is I have violated nobody's rights if I did that but in practice I wouldn't do that Because my neighbors don't know that I know it was that kid, right? They would be concerned that Bob you and your tough cousins can't just go around kicking down people's doors That's not a neighborly thing to do. What if you're wrong? It's not that we're saying that you're consciously Stealing some kids TV, but for all we know you made a mistake You know, it was dark when you came home and maybe you saw the back of his head and You know, he's been stealing other stuff and so maybe you just had this bias in your mind you know that kind of stuff so we want to live in a society where We don't need to worry about people kicking down our own doors For similar mistakes that there has to we want to live in a society where there's rules in place to protect the so-called rights of the Accused that sort of thing. So there it's it's not so much That he has this either God-given or natural rights given Right to a fair trial by his peers or anything like that. It's just more pragmatically. I think the way things would evolve You would not be doing that. You wouldn't just go around doing vigilante activity And if you want some of you aren't comfortable and think oh, this sounds too wishy-washy. I want stuff spelled out There could be rules in place where you when you buy a house in a certain subdivision The developer of that might have you sign Covenants or whatever you want to call them Contractual agreements saying if I ever think that somebody in the neighborhood has committed a crime against me or is violated a contract or whatever I will submit the dispute to arbitration. I won't just take the matter into my own hands Right, so if you want you know the stuff can be spelled out formally so that it's not just pure custom and getting along with your neighbors That it actually is you would be violating Contractual agreements you would be an aggressor Not because of the grand nature of what you're doing, but because you had earlier agreed in this sort of scenario I promise to do things this way and that's how I'm gonna handle it. Okay, so So then what what do you do? Would it work for you then to just call up, you know to say hey my wife was there too and Honey, what who do you think stole the TV and she says that kid down the street? Is it there you go? Okay, let's go do guys, you know your cousin. No because again people would say that's that's not right So what sort of thing would convince the community as to who that the proper TV thief was and who should be punished? Who should answer for this crime? It would be a judge and that's what judges do. So there is a role for Judges in a in a free market. It's not that they need to be appointed by the state and historically we see examples of this and currently there's arbitrators and You know if you're you guys are relatively young So you may not have seen this firsthand But this happens all the time when people get divorced even when certain companies have disputes that they typically will settle it Through arbitration and then there'll be agreements where they'll sign and say and therefore You know the weight of the state's law now backs up with the arbitrator said because we agree to it And there's exceptions where if you think you didn't get treated fairly you can sue in the state court But the point is in practice there are plenty of arbitrators right now who render opinions on things and settle disputes More so than the government legal system not because everybody's a bunch of anarchists right now But just because the government legal system is so expensive and so long that if you're a company, you know two companies have a dispute with each other They can't afford both monetarily and in terms of time to have that thing in court for five years They want to just settle it and know one way or the other What's the agreement so we can get on with our business so they go to private arbitration so These private judges are arbitrators. How do they stay in business? They have to have a reputation for fairness so I can't just go to some judge who is notorious for being hard on crime and That it just takes the faintest whiff of evidence for him to to convict somebody Right because then my neighbors aren't going to be convinced that's going to be like me asking my wife Did you think that kid did and she'll say yeah I just go to some judge and all I have to do is give my testimony and he's that's all I need to hear You know, there's this good upstanding man in the community wouldn't lie about something like that Clearly this kid's guilty that wouldn't be enough But what what if I took it to a different judge and I had Video footage in my house, you know, I had a security camera and you saw the kids face Well, that would be pretty damning evidence or what if somehow we could you know, there's a a neutral agency that's very fair and Goes to his house and says we're just collecting information for this this decision Can we look at the the serial number on that TV because your neighbor down the street? Murphy alleges that you took his TV and he can have the documentation and show what the serial number is on his unit Can we look at yours and they couldn't just barge in I mean he could say no But if he said no that might be suspicious if he said sure go ahead and it's the wrong serial number Well, then that would be a pretty good defense for his part, right? So you see there's all kinds of natural things you could think of for how would we determine this? In reality that the legal system could adopt right there there wouldn't have to be Constitutionally laid out Evidentiary rules and so forth it would be things that made sense could it could exist and The market would determine that in the sense that judges who used things that most of the people in the community thought That's a sensible way to figure out who the criminal is Those judges would would rise in popularity right because again what I want to do I want to get my TV back I want to make sure my neighbors don't get suspicious of me And so I what I want is I want some objective third party to say I am in the right here And then we'll figure out what to do about it And so that's what the judges would be doing so what they would be selling is their opinion and that sounds odd to people so it would not be a you know This thing that has the force of law per se behind it They would be giving their opinion and that and we have that language now with judicial rulings They'll say so-and-so wrote the majority opinion and that's you know That's an interesting concept when you think about it We don't have too much time to spend on this because I want to get to other stuff But just taking that if you never thought these things through just to think about that and carry it forward That's actually a very interesting idea that there's this because the idea is the judges are Grappling with this existing body of thought or these principles and they're applying it in a specific instance And they're giving their opinion as to what the law says on this case And that's what they're doing and that's why they could be overturned because what happens there is some other judge says I think that opinion was wrong so it's not that the judges are creating the law out of thin air It's not that they are the government or something what they're doing is Coming along and they're very wise and they're trained in the law and They know more about it than anybody else in the community and they're coming along saying this is what I think the law Says on this case And that's all they do and you're paying them for that and that and how they stay in business is they have to have given such wise Equitable rulings judicious rulings right they want to be the fairest maiden in the land so to speak They do that because their whole service what they're selling to you is a fair Judgment because you then want to be able to show that to the community and say look at I got a fair judgment from this guy so it's sort of like Things other areas like grammar people the the companies that write Books that grammar textbooks and things like that or or companies that publish dictionaries They aren't defining the English language Right. It's not so if websters comes out with this next edition and you go and look up the word up And it says tending to go towards the ground It's not that oh my gosh webster just redefined what up means now up means down and you just walk around and what has to it No, what would we do? We would say that's stupid. They got it wrong. That's not what the word means That's the wrong definition. They improperly codified it. All right, but also at the same time. It's It's not that we can dispense with having dictionaries and grammar textbooks and Style manuals and so that when you're editing a paper for your class that you know Oh, gee am I supposed to use a semicolon here or comma? I mean you can go look that stuff up and see what the rule is Even though those rules themselves are not set in stone the way we talk now and right now what's considered grammatical now is Not what was considered grammatical when William Shakespeare was writing so things do change But yet it's there is some rhyme and reason to it There are rules in place even though the rules themselves are not derived purely from our reason and they're set in stone Won't you deduce them? Okay, so I think studying Language and how there are Experts in language who codify things but there could be disagreements right some people think that You can say certain things and that's fine and other people say no no you can't do that and they disagree with each other even So-called experts in grammar will disagree on things. So that's the the analog for judges disagreeing. All right So back to this story. So you you take your case to a wise scholar that the community recognizes as an expert in the law And he renders his opinion and he says yep that guy down the street is guilty In my opinion so now once you have that in hand and what you could do of course Part of what the service would be This person this judge would say to the accused Come present Defend a defense and he would go hire lawyers because not everyone's an expert in how the law works And you see there would still be lawyers who would advocate on your behalf who know the system will know Oh, yeah, this judge and you might say well, what if he doesn't like that judge? What if he thinks now this guy hoppa has it out for TV thieves and he's you know Real itchy with his trigger finger so to speak He could say the kid down the street because they know my lawyer suggests somebody else like Roderick long He's a pushover right you really if you're accused you want to have Roderick long be your judge But the and so we could go back and forth and we would settle on somewhat a judge that we can both agree on that This person's fair. So that's what I'm trying to get across to you guys is a Typical objection is to say wait a minute. There's nothing conceivable. There can't be a voluntary judge Because the defendant would just always say no no no I don't like this judge But that would start to look suspicious right and eventually you would just say okay Well, clearly this guy's stonewalling. I'll take it to a judge that most people in the community agree This person doesn't have it out for the accused. It's not like they have a personal grudge I'll take some judges even know this kid and then and you know That's not some guy whose father was killed when someone broken and stole a TV when he was eight And so he hates TV thieves Right, so you find somebody like that and then he says the kid's guilty. That's a pretty good say so The point is it but if you're accused of something you're gonna want to go to court you're gonna want to present evidence in your defense if you if you're innocent and so What I'm saying is you can vie for it and you'll be able to reach agreement and find some arbitrator That you can both say yeah, this guy's fair So judges are not gonna be able to stay in business if they consistently Rule for the accused and they're always throwing things out and say now I don't think there's a sufficient evidence here because then plaintiffs would never go to that court or that judge But on the other hand if somebody's real hard-nosed tough on law or tough on crime that kind of person who's always ruling in favor of the plaintiff Then accused defendants won't agree to that person. So there will be a market Vying process and you'll have judges that are considered fair and again if people think Well, that's that's impossible that wouldn't happen in practice but that's because People are thinking that there's no such thing as objective law They think that it's just purely arbitrary and just whoever has the most guns Gets their way, but if instead you think no, there really is some reason involved and there are general principles determining who What the legal code should be and then what it says in this particular application Then you think there is a scope for true experts to arise just like another nail to be sized language might be mathematics where In one sense if you say well, who are the leading mathematicians? Well, how does it get determined? Who the world's experts in math are and most of us don't really know that much about math And so we would have to say well whoever's working at Harvard and MIT and whoever publishes in the top journals And whoever writes the textbooks that get adopted by most math professors That's who the world's leading experts in math are but if you think that through you're basically delegating that And so in theory it could be the case that just to this crazy historical accident a Bunch of crazy people who are awful at math somehow got in charge of those You know key positions in power and now the editors of all the really prestigious math journals publish articles that are terrible and That really there's always brilliant mathematicians out there that I can't get published right? See if you I'm kind of describing Austrian economics think about it And that is really what we think's happened when we you know Austrians do think happen in economics right the way other reason we're not getting top journals because a bunch of Keynesians Running those things or a bunch of neoclassical crazy guys Okay, but with something like math where most people think that is a just objectively There's nothing a very little ambiguity on that I mean there's certain little areas where people wonder does this make sense. Can you Have a proof by contradiction or not or is that a valid thing to okay? But in general people know what math is and various branches of it and they kind of agree on that And they can agree mathematicians can agree Take two mathematicians. Who's the better mathematician there? There's some sense of when all this person's a genius This person's just a rank-and-file guy who teaches undergrads. Okay, so I'm saying that if you think law has some natural intrinsic Meaning and that it makes sense to talk about what was just or what wasn't and what's legal and what's not then it Makes sense that these private individuals could discover the right ruling in certain cases and apply And that it would make sense the community could agree on somebody who is fair It's not that all these judges would be infallible But that there would be no reason to systematically think that they're biased one last analogy would be professional sports There are rules of the game and yeah on a particular thing You know some fan might say oh my team got robbed, you know back in the 87 World Series in game 4 That was clearly a strike and he called it a ball. That's crazy and then my team lost it You could say that but that's the point is you have to go back to 1987 Whereas it's not like now people say hey, do you think that the government makes fair rulings and I was like Oh, yeah one time back in 87. I think a judge ruled the wrong way, you know And that's you know the one time that I can imagine the government did said something wrong No, it's like yeah last Tuesday They beat the heck out of some lady kicked her in the face because she took a picture of them You know and that's so I'm trying to get across that and the reason for that discrepancy is not because Professional sports has objective rules and human living doesn't it's that no professional sports is run in a voluntary setting and the people making You know the officials and sports are hired Privately and they're catering to consumers who are watching the game and want to see a fair game So even if you're a Yankee fan You actually wouldn't want to patronize a System an organization that always had umpires who threw the game for the Yankees all the time After a while because then the other you know the fans of other teams would point that out to you You want it to be that no your team legitimately beats them? Yeah, sure It's because you have a lot of money and you have the biggest payroll and you can have all the heavy hitters and so forth But the point is you don't want to actually be known as the team that always literally cheats And that's why you win because of the whole systems rigged, okay? So it's just not profitable for a professional baseball to have umpires who consistently throw the game to the biggest teams Okay, yeah, you can come up with the cases or if there's a scandal But that's the thing when we talk about scandal and baseball we go back to the Black Sox incident If you want to come up with corruption in government You don't have to go back to the early 1900s to come up with that one time that remember that when some judge Took money and did something corruptly. Wow. You see what I'm saying. So the difference again It's not because of baseball is easy and Crime is hard. It is that it's the monopoly organization providing it Okay, so Hoppe gives his ruling. He says yeah that kid down the street. He did it. I'm pretty you've you've shown me the surveillance footage He gave his alibi that was inconsistent and so forth he said all these things and And then he's refusing to let these other groups come in and just verify what the serial number on the TV is Or he let him come in and it had been scratched off You know that kind of stuff. So it really looks like this kid. So I in my opinion I'm saying that kid's guilty You a lot then a lot of kids say hey, do you want to appeal that and he you know If you want to take your case if you think you were treated unfairly and he goes he's the oh, yeah I didn't do it and so he has his lawyer and they go around and shop it around and all these other judges review The case and say look kid, you know, you can hire me to give a ruling, but I'm gonna rule the same way You know, so you'll be out 500 bucks or whatever because this is an open and shut case you it looks like you did it Maybe you didn't do it and I'm that's too bad if you didn't I feel bad for you if you're Just you have the dumb luck that someone who looked just like you and you happen to scratch the serial number off your TV When you bought it last week at best, but I don't know why you did that, but You know sucks to be you all right, so Even he so he knows he's in trouble. So now what happens finally now I don't call my cousins to come because the kids of what I'm just you know These does judges crazy. I'm getting set up here. This is this is unfair. So now Part of the you know the the covenants with the neighborhood association whatever might say if there is a pending ruling You are that someone says you stole their thing and you refuse to comply with the totally accepted legitimate Judge judges opinions and so forth Then you are agreeing that you're not gonna resist if someone comes in and forcibly Takes it back from you and that's you're agreeing beforehand of these things You know, so there could be stuff built in and even if it's not I would say that would just be that the community would realize in certain cases Okay, something's got to give here. I mean there's this disagreement and This guy has gone through all the procedures. He's shopped at a rate He's allowed the kids to appeal the case and so forth and all these other judges who we know from our experience are totally fair Have said no, it's an open and shut case the kid took the TV then at that point. I don't go to my cousins I go to a professional Whose job it is to enforce Contract rulings, right and so now what is the the ghetto Hulsman agency do? Do they go to the kids house? Do they roll up with tanks? Do they send in tear gas canisters that then start on fire and they have nerve toxins that are banned in international warfare? And end up killing the kids whole family and then say but we're doing it for the TVs, right? No, that's not what happens. That would be awful for business He would not stay in business if he did that once his company would go out of business Nobody would ever take their you know this pending ruling and then take it to his agency to enforce that They would take it to some other agency that didn't have such a horrible blemish on their on their track record All right, so what would he do he wouldn't I mean I was exaggerating before but he actually wouldn't break down the kids door for a TV That would be crazy All right, that would be so it would if if he if I thought The kid had kidnapped my daughter or something was holding her then they might break down the door It's the you know saying but for a TV they probably would just because they would be bad for business Not that big a deal right in my and it's true I would have insurance that would have compensated me So I'm not going to be out the TV and they would work these things out But the point is I'm just giving you the the framework in which these things would happen and so again notice His agency they would show up. They probably wouldn't even have guns. They probably you know have body armor on things in case he's armed and They might just wait the kid out and say you know come on out Give us the TV and we'll go you know do is the hardware the easy way And you know they might start playing David Gordon lectures and beaming them into the kids house until he says no All right, here's the TV, you know There's all kinds of things they could do But they would not probably send in Toxic gas that would kill an infant if an infant happened to be in the premises That would just be really bad for business among all the I mean it might be illegal Also, but the point is even if it weren't if you're saying come on you're begging the question We're trying to determine what is legal and what isn't it doesn't even matter whether they had the right to do that That would be a silly thing for them to do and the same token if you're Just a store and you're hiring private security like you're a convenience store You've been getting victimized by shoplifting and so you bring in some heavy muscle You're you're not gonna want it to be the case that if some Teenage kids swipes the candy bar that this huge guy tackles him and breaks his arm while bringing him into custody That's not good for business whether you know So it's not that if the kids family brings a lawsuit against you and the judges throw it out and say no We got you on surveillance. You were doing that and you know the way the law applies Technically they're allowed to use force to bring you under if you're stealing if you're in the act of stealing they can do that Three if they even if that's what the law said, that's just not good for business You don't need to do it and so you would even though technically you wouldn't have had a legal ruling against you You're gonna fire that security company because there's gonna be a competitor that says We will make sure your candy bars are okay, sir And we won't break kids arms while doing it So you're not gonna have you know this awful publicity and have the community think that you hire You know racist security guards or something right? So that's the kind of thing that he's in practice. You wouldn't have anything in the same zip code is what the government Agents do now enforcing the law Okay, would there be prisons in a free society? Well, so here This is something I haven't heard anybody Tell me I'm right or wrong in this. I just want to be clear I think up till now a stuff I've been saying is pretty much on the reservation here This is stuff that I've come up with and I don't know maybe in the Q&A or something of Roderick wants to jump in and say Whether this is standard stuff or if this is something but anyway, this is the way I think about it. So What you'll have in practice is So I've talked about TV is it would have crazy case, you know Some guys literally going around with an axe chopping people up. Okay, it's a bit of a problem So a little bit awkward stuff your evil would say all right. So what do you do about that? So people are going around Bringing cases to judges it was an emergency, you know, like the guy gets paged at 2 o'clock in the morning get up There's an axe murder runner up. So they make a quick ruling, you know, they see the surveillance footage They see the guy, you know, he's missing his arm and says yeah, he's swung an axe at me Okay, they see the guy walking down the street not on the guy's arm We're like, I think that's probably guys probably guilty. All right. So what are they so they rule? So it's crystal clear. There's no doubt that this guy's an axe murder. So now what happens? Well, you're a lot even without talking about what does the law give us the right to do? Everyone's a property owner So whoever owns that street whether it's a corporation or whether it's a Neighborhood association or whatever they can certainly say to that person. You know what? We don't like convicted axe murderers walking around on our sidewalks would get off and It was so it's not so much, you know, we don't have to say do they have the right to go shoot him in the head Maybe they do maybe they don't but I'm saying it wouldn't even come to that They can certainly say this is our property. We don't want you here You're not welcome because you're a convicted axe murder and you're spilling blood all over the place It's gonna have to clean that up get to get off my property and I think it's everybody can say that right? There's no such thing as public land in this community. We're envisioning every but every parcel of land is privately held by somebody or some organization and Presumably most people are gonna agree if some guy is literally a convicted serial killer and he's roaming around I don't want him on my property. And so I'm saying get off. So And what you can do, of course, you're allowed to Say to someone get off my property and if they say no You can forcibly eject them and again with in terms of libertarian theory We can come up with what are you allowed to do if I say to some kids that are playing football on my Front lawn get off and they say no. I probably can't go shoot him in the head You know in the next two minutes. I probably have to let things escalate a little bit before I'm totally within my rights in terms of libertarian theory whatever your views are But clearly the point is you ultimately can get them off the property and so by the same token That's the way I think Legally this would would manifest itself that it's not so much or it doesn't need to be That somebody is a convicted killer and therefore we have the right to go take him by force and kidnap him And go put him in a cage. That's not the way I'm picturing it. I'm picturing it as I Have the right as a property to kick you off my property in any way that I need to Based on what your reaction is. I asked first. I asked you to go nicely if you don't do it I can then hire some you know groups to come up and they have body armor on or they had those plastic Shields that you know the police use when there's riots and stuff and they pushed me off the property Because you know the guy has an axe or he could have a gun or whatever and then get him off And I but everybody's doing that so the point is he has nowhere to go And so you could push him into the ocean and say, I hope you know how to swim or or maybe he's Aquaman or something You have a whale give him a ride But that's where the the prison's come into place. So that I'm viewing them as hotels Right and they say this isn't a building that we establish and what we do here is we're a refuge for outlaws people, you know people in society Who are being shunned by everybody else with you don't have a place and you're literally going to starve to death because of course all the Stores and stuff say we don't you know, you're not allowed to come in here You can't buy food from us if you had an apartment even if The way the contract contracts works It wasn't actually spelled out beforehand that if you get convicted of being an axe murderer You can't come into the apartment or if you have your your shack somewhere up on the mountain You know you might be a little but no one's gonna sell you food the electric companies You're gonna lose your Wi-Fi I mean that right there with no Wi-Fi. You might as well just turn yourself in right? So you see how that works. Okay, so my point is there would be plenty of ways society could Deal with people that they need to neutralize and they would get them into these things and so these So-called prisons would be competing with each other Right, there would be different prisons saying no no you're an axe murderer. Hey, we love axe murder So we got plenty of in here come on talk to these other ex murders and tell them how they'll tell you how great it is here And so the prisons would be competing so they're they're not gonna have sadistic guards. It's not gonna be you know, and I Talk with people that have been In prison for you know for drug offenses and things and the stuff that the guards do to them there That my favorite is this kid told me that So his parents visited him and of course everyone's real nice and everything and then when the parents weren't in the room The guard said that he gave him a broom and he wanted him to sweep up so the kids sweeping up and the guards said to him There's some sunlight there you missed a spot Like meaning sweep up the sunlight just to mess with the kid you guys are don't get what I'm saying You can't sweep up sunlight. All right. There's not physics majors here. Okay. I realize what happened You thought I meant the sunlight is showing that there's dirt. That's not what he was saying He was saying there's sunlight on the ground. You clearly fail to pick something up off the ground Keep sweeping just to mess with the kid All right, but he the guard was totally nice when his parents were there because you want to get yell that by the warden, you know I'm saying so There wouldn't be that kind of crazy stuff where people who are on power trips would be Lording it over people who are in there That because that would be bad for business and because the prisoners could just switch because it's like a hotel The only difference is You can't leave. All right, so it's like the hotel, California, right? So and I'm actually sort of contradicting myself what I mean You can leave like you could apply for a formal process to get transferred to a different prison But my point is you can't just come and go as you please Because why would the community tolerate having this prison there? Why would You know the property developers who are building housing units and stuff around there Why would they agree to someone who comes along and says I want to buy this land from you and develop a place Where we're gonna have serial killers stay is you say well You know to not kill the property value if I'm the developer building this area up You better convince me that they're not gonna escape All right, and so that you go through things like that So I think on the one hand you wouldn't have Sadistic guards you also wouldn't have Prisoners raping each other and all kinds of disgusting stuff that happens in the real world because again these They would be competing with each other and you say well where they're gonna get the money Who's gonna fund that well the prisoners would they could still work from in there if there was various things They could come up with it would be in the prison's interest to have you be productive Right, they don't benefit from you just being a mindless zombie and sitting around They would want you to be able to be productive so they could charge you for staying in their place Okay, but you're not gonna go somewhere where you hear stories about. Oh, yeah, it's you know You really got to be careful There's a bunch of bad stuff that other prisoners do to you in this place You wouldn't go there you'd go somewhere else where you know that they set it up and they monitor and make sure the prisoners Aren't abusing each other. All right, so that's the basic framework For how I picture prisons in this kind of society Okay Now so that was that the the hard stuff now easy stuff is just military defense. So I think The basic structure would be through insurance companies. All right, so You have a big society like New York City a big big city New York City It's a free society. They're dealing with serial killers and they're dealing with TV thieves the way I just talked about All right, so there's a basic framework of who owns what people have made rulings and so there's a there's a well-established body of law But people realize, okay, we're kind of sitting ducks here and because it's an anarcho capitalist world is very productive It's the wealthiest people on planet Earth this this little city here. And so then we noticed that oh China or some of those those chai comms the Chinese communists are gearing up They're assembling a fleet, you know, they're building some aircraft carriers and they're and we can kind of get the sense that they're Gonna come over in about six months. They're gonna just totally conquer us and Gito and his guys in flak jackets and stuff. They're not gonna be able to repel aircraft carriers. So what do we do? I? Think what would happen is there would be a market now for insurance contracts to come along And so the insurance companies would say to the owners of the skyscrapers and people who have billions of dollars worth of assets They would say look just like right now. You give us monthly premium payments in case of fire Causes 20 million dollars worth of damage to your property and then we indemnify you And we look at the situation and determine what's the likelihood of a fire and so forth And we charge you a premium accordingly by the same token. We'll charge you a premium And then in the event that your property gets destroyed by enemy bombers or that the troops come in and kind of seize it And then you is the person who has fled to Ohio or something You know you'd no longer get control of your property because these guys can yeah And our judges would have rulings and say you know you Chinese communists are bad your lawbreakers But nobody cares because we can't really do anything to them Then we'll send you a check you know we the insurance company and our in their headquarters could be elsewhere, too And they could have assets elsewhere so that they would be able to literally Fulfill their promises that it's not that the money they would have to use to pay off the victims or the Would be itself confiscated in the invasion alright, so they could come up with things like that where you're paying for that Okay, so then you say alright So now we've just transferred it and the premiums would be really high Wouldn't they because if there's a pretty high chance that these guys are coming and that they're gonna take us out The premiums would be astronomical. Well, no because now what the insurance companies would do is they say what can we do? To minimize the chance of this happening and this isn't purely theoretical this happens like with fire insurance contracts If you have sprinklers installed or you have a fire extinguisher that kind of thing you pay lower premiums And obviously and you know you guys are familiar with if you're a driver if you have a bad record your premiums are higher even just demographically depending if you're a 19 year old male you pay much higher rates than if you're a 40 year old female in terms of your auto insurance just because they know statistically you're more likely to have claims All right, so by the same token then they can say well We could afford to charge them lower premiums if we took that money And it's not that we just like as normal insurance companies do we don't just invest in bonds and real estate Things like that to have a big pool of wealth to pay claims. Why don't we spend some of these incoming premium payments on? Putting mines around the water of our city so that will keep you know enemy troops ships from come being able to come in Or why don't we start buying some submarines? Why don't we maybe start funding some intelligence operations to give us an idea of are they really coming? You know we'll put up a satellite or something to monitor them We'll start paying people to go over there without bringing contracts running but just to start spying on what they're doing over there Okay, so you start to see how that works and then even Things service to air missiles and all kinds of stuff even aircraft So the point is what is the insurance companies would be the ones? I think that would be paying for this stuff and then how would they structure it? Well, if an actual war starts I think they would just set bounties and they would come up with they'd run numbers There would be a purely economic calculation and they would say well the way our contracts work You know there's this skyscraper that we've insured for a billion dollars and We think you know if some company out there if you could sink an aircraft carrier We would pay you a hundred million dollars if you could do that You know if it got to the point where the Chinese aircraft carriers literally within striking distance at that point That's pretty serious that billion dollar liabilities looming pretty large So they'd be willing to pay a lot to take that thing out and the body said oh if you could just knock out one single enemy aircraft that's in the air will give you $20,000 right because that on the margins not gonna be the difference between the skyscraper getting captured or getting destroyed But that's still a significant thing whereas if you kill one enemy soldier That's not that big a deal in the grand scheme of things will give you a thousand dollars for that Right, so they would come up with numbers, but again the numbers would not be arbitrary They would be determined by them assessing what are our liabilities in terms of the property we've insured and then What what is the relationship between the military accomplishment and minimizing that liability from our point of view, right? So you would have the analog of economic calculation in the military defense arena So if you understand why Stalin Couldn't centrally plan very well and couldn't determine okay We've got all this all this farmland and all this wheat and all these tractors and everything and all these silos And then we have all these population centers So how do I grow food to make sure people don't starve even if he's trying to help everybody? You see how there's the economic calculation issue by the same token a Central planner who says we've got all these tanks and bombers and troops infantry and service to air missiles and da da da da And now there's an enemy attack coming How do I best use these scarce resources to repel that invader because all I have in my heart is the interest of my subjects There's a calculation issue there It's not obvious how to do it and should I spend more of my resources trying to sink the aircraft carrier or should I instead focus on Stopping the bombers from hitting, you know daycare centers, and it's not clear So at least with the insurance approach you would have objective numbers now You could quibble and say well those numbers aren't fair that the daycare can't pay as high as the The guy running the nightclub or something and so we had this weird thing where there's more defense given to nightclubs than daycare center But that would be like you know same thing saying that the economic calculation favors rich people over poor people and more food Goes into the bellies of rich people than poor people, which is true, but you still see why economic calculation is crucial for producing food Okay, now what you wouldn't see for sure is this kind of thing All right, first of all Guido Hulsman, you know his PR people would say sir You really don't want to have that kind of stuff on your on your brochures. That's just not gonna fly But just think look having all these that would be crazy think of how expensive that would be that would be silly All right, you would not have huge standing armies again, not because of the general fear of a standing army, which is all true, but just Economically that wouldn't make any sense I mean when you see these movies about You know these these battles and it was in the gladiator movie in the beginning It was in the the chronicles of Narnia movie in the beginning hell all these things and of course all the Lord the Ring And these giant armies on one side is giant army on the other and then what do they do? And they just run at each other just start slaughtering and that to me is an economist. I was like what a waste of labor Oh, you know and it think of how many commercials you could have written instead of doing that, you know, so To me, you know, it's you could augment it with capital, right? I mean that's like saying oh Let's start growing food and then you just have an army of people who go out and start planting seeds and You know start spinning in the ground or something to water them And he's like no you use tools to augment your labor and you have fewer workers and before more production All right, so it's the same thing here that in practice I think you'd have much leaner forces who would use a lot more capital equipment. You would not have these giant standing armies Okay, let me Handle some common objections. I'm gonna I guess go the full time here and then I'll you know step aside after your questions afterwards Okay, so when the mafia become the government people ask this all the time The first point is to say so what if it did the mafia is so much better in practice than the actual state is Right, even if that were true that would be great like I should say boom I just win the argument if that's what your response is Right that in practice how much how much has the mafia taken from you guys in your lives? I don't think they've taken anything from me So if they have been stealing from me, they're doing a really clever job of hiding it Whereas I'm quite aware of how much the government has taken from me. All right So but more seriously more to the point think in the United States right now And I'm just speaking to us because I know that from personal experience and studying it I can't speak with authority about other areas, but for sure in the United States. Where does organized crime? Dominate what sectors it's those areas that are heavily regulated or outright prohibited by the state Right, so you don't see the mafia Running GRE prep classes. No, you see You see the mafia Dealing and gambling prostitution Loan sharking which means lending money at interest rates that are illegal for banks to charge, right? You see the mafia doing that and drugs of course, right? So to me and we have a classic experiment in terms of alcohol prohibition that Al Capone and other organized crime figures were in the alcohol business when it was illegal Then when they legalized it, it's not that all of a sudden Al Capone those guys got more powerful No, they lost that business and so by the same token the more you start legalizing stuff I think the mafia's power would shrink and shrink and shrink not that oh all of a sudden if you leave in the sense Legalized everything meaning totally privatized now all of a sudden the mafia would run the world No, it'd be the other way around that it would have lost all the ability to compete in those areas Okay, wouldn't warlords take over here Because of we're out at almost that time. Let me just sit point you to this essay that I've written Walter Block has said something like it's one of the best essays it on anarcho-capitalism. He's read so that that's not me praising myself That's Walter Block. So I would recommend that and there what I do though is I I point out The type of thing you would have to assume for warlords to take over further be constant battles In this geographical area that we're saying could anarcho-capitalism work for these people you're right We I can't prove to you that all we would need is an initial situation where there's no state with these 16 million individuals and boom I guarantee you from that point forward It'll be a nice peaceful orderly society and everyone will settle things through chess matches and not through violence I can't prove that to you but what I will say is if Anarcho-capitalism wouldn't work in that group area because they have such cultural prejudices. They hate each other so much They're so quick to settle things with guns Well, then a state would be a bad thing too. In other words, you don't get rid of all those problems by just saying Well, so let's let's just have one group. That's the state and the classic example. Here's Somalia People's you know make jokes that oh you guys you Rothbardians once you move to Somalia That's to show you how great anarchy is and the point is anarchy in Somalia is better than government in Somalia was Right that by many objective measures Somalia when it hit a state Was awful and then now that it doesn't have a state has competing warlords and things it's better than it was And so it's just doing an apples to apples comparison and then last thing because I'm seeing I'm gonna get gonged here wouldn't a neighboring state invade Again, we can't prove anything But what we are seeing is making a relative argument that given your resources given the knowledge that the warfare experience Whatever of these group of people if they have competing agencies that just tap into all their knowledge Will be a more effective defense than if they appoint one group to monopolize everything and put all their eggs in one basket So to speak all right. Thanks everybody