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June 22, 2006 - Freedomain Radio - Stefan Molyneux
32:22
294 Social Contracts - Anarchy, Abortion and Crime
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Good afternoon, everybody. Hope you're doing well.
It's Steph. It's quarter past four, heading home a few minutes early today.
And sorry about the rumbling that went on in this morning's podcast.
It turns out that it was not that I was driving along the highway with the sunroof down, but rather that air conditioning was blowing on the microphone.
See, this is the kind of technology stuff that Howard Stern himself just does not have to deal with.
So I got a funny IM today.
This guy was asking me, how do I get past Podcast 271?
freedomainradio.com forward slash freedomainradio podcast underbar 1.xml, of course, is the way to do it.
But he saw my picture, I guess, right?
Because my picture is on MSN. And he's like, I just can't put the voice together with the face.
He said, I thought for sure you'd look like Bill Gates or something like that.
And it's not true. I actually look quite a bit like Melinda Gates, but not Bill Gates, which is, of course, what is surprising to most people.
But I'm actually waiting for the time when we're all at a party together so I can go home with him.
But that won't be today.
So, he said, you know, with that voice, you know, you sound so scientific, which is nice, I guess, but, like, you know, you look like a hard-nosed laboring guy.
That was kind of funny.
But it just goes to show, you can't judge a face by its voice.
Or a voice by its cover, or the look by the lover, or something like that.
Media suggestion today is Good Boy, a song by Bare Naked Ladies off their very first and very best album called Gordon, which is a great album all around.
But Good Boy is a great college song.
It's one of the best college songs I have ever heard, and quite moving in its own way.
I do it sometimes at karaoke, but not for you just now.
But I will...
I will do that.
Sorry, I will suggest that you give it a listen.
The live version of Rock Spectacle is also really great.
Stephen Page is quite the set of pipes, but the studio version is fantastic.
And it's a very sad song, but very good.
The Barenaked Ladies are known a lot for their silly songs, which are great fun.
But give it a shot to enjoy some of their serious songs.
The Flag is also good on that album, but I would really recommend Good Boy.
It's a great song. Alright, so let's take dispute resolutions for a workout and see if we can't find as many holes as possible in the theory.
The kind of holes that make it well worthwhile for us to put up with the suicidal expansion of violence that we call the monopolistic centralized coercive state.
So let's see if we can't find enough holes that it's well worth us flushing ourselves down the black and bloody sewer of state power every couple of generations.
So let's have a look at something like violent crime, abortion, and so on.
So... Let's just say that you're going from one state to another.
You know what? I do enough United States stuff.
Let's do some Canadian stuff.
So you're going from one Canton to another.
Wait, no, that's Switzerland. You're going from one province to another.
And in the next province over, there's a whole bunch of people who have DROs, not that there'll be provinces, but we'll just use it for now.
There's a whole bunch of DROs that don't view abortion as a problem.
So you are subscribed to a DRO, whereas if you go and get an abortion, then the DRO will provide some sanction against you.
Well, of course, the first thing that you're going to do if you want an abortion is you're going to go to a doctor whose DRO does not sanction abortion, right?
Who won't punish him for giving you an abortion.
I think that's somewhat important because, of course, if the doctor's DRO will punish him for giving you an abortion, then he's not likely to give you an abortion, right?
I mean, that's just something quite likely.
Now, another DRO will not sanction a doctor for having an abortion.
And in this way, of course, we have no problem with a democratic voting for abortion, right?
Everyone's pro-abortion, pro-choice, or whatever.
Anti-murder, pro-life, whatever you want to call it.
Let's just say that this is an arguable point, and I think it's fair to say that it's arguable in the way that, say, premeditated murder and rape is not arguable.
Well, ideally, of course, we want a democratic vote.
And the best way to have a democratic vote is, let's see how many people join DROs that will provide sanctions for abortions.
Now, if nobody wants abortions, or if like two people in the United States or Canada or America or wherever, two people in the world want abortions, then there will be no such thing as abortions because nobody's going to learn how to do the procedure and accept the risk of that if no DRO is going to fund it in terms of malpractice or liability.
And so here we have a perfectly sensible way, at least of figuring out whether abortion is a topic that people feel strongly enough to put their money by their mouth is, because of course, The more that you ask your DRO to enforce, the more it's going to charge you.
That's just logical, right?
And so the sweet spot, which we don't know what it is, but there is a sweet spot, and I believe in this.
So lots of people say, well, if there are no rules whatsoever, then more violence may ensue, or will ensue.
And I, you know, it's possible.
Fine, fine. It could be.
Who knows, right? We don't know what the minimum level of rules are in a society to prevent violence.
But I certainly would not be amiss in thinking that it would be possible that no rules would be bad, right?
So... So too many, let's just say, take the standard view, right?
It's a bell curve, right? A little bit slanted towards fewer rules, but too many rules is really bad because you've got a gulag and a totalitarian state.
Too few rules is bad because then it's, you know, a state of nature or whoever, right?
So the question is, well, what's the right number of rules?
Well, the right number of rules is, I mean, given that the free market is the most powerful way we know of optimizing resources and there's no other conceivable way that it can be done, The optimum level of rules is something that only competition is going to create and ensure and continue to optimize.
See, the one thing that happens with the state is that the state puts a rule in and never takes it out, right?
You read these silly rules like you can't put hay on the ground in the street because once it used to have horses or whatever and You'd put hay down to jump people on horses.
I have no idea, right? But you see all these silly laws.
They never go away. Government almost never adapts to modern situations, right?
So the technological advances recently that have increased the sharing of information and closed-circuit TV and recordings and all that kind of stuff and home alarm systems.
I mean, the government has not reacted to any of that sort of stuff.
All it's done is said, oh, okay, well, people need less protection.
Let's start a war on drugs.
So the government never, ever optimizes based on changing conditions.
So you set it up and it just stays there till it eats itself with a good chunk of the fiscal weight of the general population.
So you constantly want optimization to occur in the creation of rules and the dissemination of rules, the reciprocities of rules that are sort of put together through cooperating, it's like cooperation plus competition, coopetition that goes on between DROs.
So the optimal level of rules in society, it might be zero, in which case we won't need DROs at all.
It might be, I don't know, 5% or 2% of society's resources go to rules, 1%, 10%, who knows?
We won't know until there's a free market in providing rules and services in the realm of dispute resolution.
We have no idea. Obviously, it's far more practical and cheaper for everyone, to be honest, but there will always be people out there who don't do the cheap and practical thing.
And so there is no way to be sure what the optimum level of rules are.
But once you get competition in the realm of contract enforcement and the protection of the innocent and the punishment of the guilty, once you get that kind of system set up in competition, then we find out.
See, abortion, in terms of I'm against it, is something that's relatively easy to do when you get to make speeches and have other people shoulder the costs.
So the costs of ferreting out and getting rid of abortion are born in a state society, as are all rules, are born by...
let's not use the word born for abortion...
are absorbed by the population as a whole.
So you may be fervently pro-choice, but if anti-abortion laws get passed, your tax dollars go towards the ferreting out, imprisonment, punishment, rehabilitation, disbarment, reviews, court cases, legal fees, everything you can think of.
If you're vehemently pro-choice and anti-abortion laws go through, then you are stuck with the bill along with everyone else.
But of course, the state allows people to shift the costs of enforcement to other people.
That's why wars work.
Now, the real question is, if you're very much against abortion, then a DRO will do whatever you tell it to, assuming it's not ideological, which a lot of businesses are mostly just focused on what the customers want.
But if you are very anti-abortion, then of course you're going to join a GRO that does everything within its power to prevent abortions.
So it will pay doctors not to do abortions.
It will pay women who are pregnant to bring the child to term and it will find abortions.
Homes for the children and so on.
All other things being equal, I think that's a better solution.
More life is better than less life.
And so if you can pay women to bring the children to term, so much the better.
So you can just make it... Any woman you give a million dollars to to give the child, just about, except maybe the aforementioned Melinda Gates, any woman you give a million dollars to is probably going to take the child to term, right?
So that's... Of course, you may have a slight overproduction, but let's just say that that's possible.
And so... If you're very, very keen on preventing abortions, then all you need to do is put your money where your mouth is, right?
Pay people to subsidize alternative options and subsidize birth control and subsidize paying doctors not to perform abortions, all that kind of stuff.
So that's fine. You join a DRO or you set up your own DRO. You join some group that does all of this sort of stuff, right?
There's no central government, so you can create incentives and dissentives wherever you want.
The real question is how many people are going to participate in that?
Well, I, for one, would throw a percentage of my income towards getting lost children home or fighting pedophilia or whatever.
I mean, 5% of my income.
Who knows? If I've got suddenly more than double my income because there's no state and I don't have to pay nearly as much for the services that the state is currently providing me...
I'm more than keen to throw some money at good causes.
They just have to be verifiably and independently audited as good causes, low overheads.
The money's actually getting to the people they're trying to help and all that kind of stuff.
Stuff that you can never, ever confirm with the state.
In fact, you can confirm quite the opposite without glancing at a single book.
The question is, how committed are you to being anti-abortion?
Now, if a million people are going to turn over half their income to the DROs that are anti-abortion, or 100 million people are going to turn over half their income, then I bet you there'll be no abortions.
Pretty much. I mean, there may be the odd freak one, but there will be no abortions, I guess, other than rape or maybe birth defects or whatever.
But there will be effectively no abortions if 100 million people turn over half their income to DROs that focus on preventing or eliminating the possibilities of abortion.
So that, to me, is an interesting question.
If you're willing to put resources into it, then it's going to be the case that it will occur.
The same thing, of course, is true in anti-drug stuff, right?
So if you want to get rid of drugs and you think they're the greatest evil in the world, then you can join a DRO that's going to put a lot of resources into paying people not to take drugs, into paying for the rehabilitation of drug dealers and this and that and the other, and, you know, getting this stuff off the streets and this and that and the other.
And so the cost benefit of there are abortions occurring in the world.
It's not directly affecting me.
It's not like I've had anything stolen or somebody stuck a knife in my ribs.
So abortions are occurring in the world.
What is it worth to you to prevent them?
And this is sort of where the rubber meets the road, so to speak, in terms of ethics.
Because you hear a lot of people talking about, I'm very, very opposed to abortion.
And some of them, of course, do fantastic work in this field, right?
They are anti-abortion, and so they follow their true calling and their ethics.
And they'll cancel women who are pregnant, and they'll find homes for children that might go up for adoption, and they'll do all of this kind of fun stuff.
And from there, they do good.
They save lives. They do all that kind of stuff.
I think that that's all fine.
But the majority of people, if you say, oh, I'm anti-abortion, fantastic.
All you have to do is hand over 10% of your income to a DRO, and that DRO will then do everything within its power to minimize, you know, you can't prevent, right, to minimize the number of abortions that are out there.
Because, of course, one of the major problems with abortions is the lack of a victim.
I don't mean that the fetus doesn't get killed, but it's different from being raped.
If you've raped or stolen from you, then you will go and...
Press a complaint, right?
So you have a complainant, right?
You have somebody who says, I've been violated and I want restitution.
You don't really have that with a fetus.
You obviously don't have that with a baby either other than maybe the...
And you could have it with both because the opposite-sex parent might have, you know, in the case of a...
Of an abortion, the father might object to it and say, well, this is my baby too, and so he's the complainant, and in murder you have the spouse or somebody else that is the complainant.
And so...
So this kind of situation is only the case in sort of violent crimes and property crimes and crimes of fraud where you have a complainant.
And where you don't have a complainant, then you have to have other people subsidizing this sort of issue.
And so if people are anti-abortion, then they'll donate money and DROs will do whatever they can to prevent abortion.
Now, if you have something stolen from you, Let's say that you have a A stereo that's worth $500 and you go to your DRO because you have, I don't know, a $400 deductible or whatever.
Maybe there wouldn't be these things. Maybe there would.
And you say, look, my stereo just got stolen.
It's $500. Well, then the DRO is going to leap into action.
It's going to try and get your stereo back, right?
They'll have made it biometrically.
Only your thumbprint or your retina scan can get this thing to work or who knows what.
Lots of different stuff can be done to make stealing less lucrative, to make stealing less valuable.
And it's not done now, of course, because we pay the same amount of taxes.
And, of course, the more secure we make our stuff, the more we free up the government.
Security forces to come and prey on us for other stupid stuff that we never asked for and spy on us and so on.
So there's actually a negative incentive to securing your own property in a state-run system because it frees up the police to do horrible things like a war on terror and...
They spy on you and do war on drugs and arrest prostitutes and consenting adults and all that kind of stuff.
Ignore children that are in danger.
All that kind of stuff. Anyway, so your DRO is going to leap into action and say, well, we're either going to get you your stereo back or we're going to pay you $500.
That's what they do. Now, let's say that they call up the DRO. They find this thing, right?
Because if they don't find it, they just pay you the $500, right?
And your deductibles go up or they come and do a security audit of your house or something like that.
So let's say that they find the stereo.
Well, they simply go to that DRO, right?
So some guy is represented by a DRO. They go to that DRO, and they say, here's our proof.
Your guy stole this stuff, right?
And maybe these two DROs have a third DRO, which arbitrates their disputes if they can't agree on it, but that seems unlikely.
They're going to have just statutes and reciprocal obligations, partnerships, synergies, all that kind of stuff.
Co-opetition, once more.
So, the DRO goes to the other DRO and says, your guy stole this stereo, here's the proof, and we want it back, right?
Now, let's say that the other DRO basically slams the door in their face and says, stuff you, DRO meister, we're not giving the stereo back at all.
Well, what does the DRO do?
What do you do? Well, of course, you turn around and you pay $500 to the person who had the money stolen.
And you then say that to the central DRO guys, somebody's going to have to keep a registry of which DROs are doing well and which DROs are doing badly, which ones are legitimately paying up claims and which ones are not legitimately paying up claims, and which ones are successfully defending their clients and so on, right?
Because The DRO that the thief belongs to, he doesn't want them to restore the property, right?
This is sort of fairly obvious, right?
So if somebody comes to me as a DRO owner and says, one of your guys stole a stereo, and I see the proof and I recognize that he did, well, I don't want to lose this guy from my client roster, so my impulse is going to be to say to the DRO, get lost. I don't care.
It's not true. It's fake.
It's this and that's the other. Well, that's fine.
I mean... Nobody's forcing anyone to participate.
The DRO's going to pay you $500, and you're not going to get your stereo back.
You go out and buy a new stereo. And what options does the DRO have in order to perform a restitution?
Well, it's exactly the same as occurs between individuals.
These two DROs have a third insurance DRO, possibly.
Maybe they have outright rules.
Maybe they have a third insurance DRO. Then they simply go to this third insurance DRO and says, look, these guys, we proved that this area was taken by one of their clients, and they're not giving us anything back, and they're not turning over the client for any sort of punishment, they're not garnishing the wages for this client, they're not doing any of that kind of stuff, and they're not coughing up the money even if they can't find their client, so they have reneged upon an agreement that we had.
Well, that's fine. The contract rating agency then says to that guy's entire DRO, you, sir...
Have been found wanting, and what happens is, of course, the guy's DRO, the thief's DRO, is his contract rating is downgraded.
Alright, so that all makes sense.
Well, why should they care?
Why should they, oh, it's just a number, what do we care, right?
Well, don't forget that it's a two-way relationship.
So, your stereo is stolen.
Let's just give you the ABC DRO again.
Your stereo is stolen, and they go to XYZ DRO, who's got the thief as a client, and says, your client stole, blah, blah, here's the proof.
Well, XYZDRO can then break off relationships with ABCDRO, no longer be reciprocal, blah, blah, blah, and they're going to report this as a violation of contract between DROs.
So then the contract rating of ABCDRO, the thief's DRO, goes down.
And what does that mean? And of course a whole bunch of people are then going to stop doing business with ABCDRO. And why should ABCDRO care?
Because it's reciprocal. Because the fewer people that you have reciprocity agreements with, the less valuable you are.
See, DROs are required where a lack of knowledge exists.
So if I lend $500 to a friend of mine, I'm not going to worry about getting it paid back.
Especially most of my friends.
I just know it's a gift.
I know, right? They're going to pay me back.
If I lend 500 bucks to a stranger, then I'm going to need a contract.
So DROs are where you don't have personal knowledge.
So people are only going to deal with DROs when they are going outside their immediate circle and community and so on.
They're only going to even bother dealing with DROs when a handshake isn't good enough.
And so you need participation between DROs for the very reason that you're going out to deal with DROs because you don't have enough information, so you need a sort of third party to mediate disputes, and so you're going pretty wide in terms of your economic activity, and so there's no way you can guarantee that everyone's going to be part of the same DRO. We consider that to be enormously unlikely.
Because as soon as you get a large market share, people tend to get somewhat complacent and new ideas then come along.
And so you need your DRO to be reciprocal with other DROs.
Otherwise, there's really not much point having one.
If you just have a DRO for your street, well, you know everyone.
So don't deal with them or if you have to, you know, you know them.
And, of course, if you do want to order something from Singapore or something from the town over or something over eBay or something from the Internet or you want your local store to special order something or anything, anything, right?
I mean, you're going to have to have a DRO because you've got electricity and water and all that kind of stuff.
And they don't know you from Adam, right?
Unless you're, again, the Mennonite community.
So you need your DRO to have reciprocal relationships.
So if ABC DRO shafts XYZ DRO and simply refuses to comply with an agreed-upon dispute resolution, then all that's going to happen is a lot of DROs are going to stop doing business with ABC DRO. Because what's the point?
Because if you're in a reciprocal business with somebody who's not reciprocal to you, like if it's a one-way street, then you're heavily subsidizing them, right?
Because that means that you're offering protection that you have to pay for.
And they're gaining the benefits of association with you while you're paying all the costs, because they never have to pay costs for risks.
They're shifting all their risk to you, and that's not going to work.
It doesn't matter. It doesn't work at all.
And so... When a whole bunch of DROs stop doing business with ABC DRO, the Thief's DRO, then the value of ABC as a DRO virtually vanishes.
So as soon as you do something bad as a DRO and don't pay up a claim and don't do the right thing, then people will stop doing it.
It's freedom of association. There's no government.
It's not a union. You can't be forced to do stuff.
So people will simply stop doing business with you.
And once they stop doing business with you, then it could well be that, I mean, I would only sign up with a DRO that any time there was a judgment against that DRO, that I would be notified via email, right?
Oh, your DRO rating, these DROs, and this is their population base, and this is their geographic location, have all decided to stop doing business with your DRO. And by the way, they're going to offer you like half price for the first year to join their DRO service.
And they vow never to whatever, whatever, right?
And of course, if I was setting up a DRO as well, I would say that I'm going to charge you, you know, 500 bucks a year to be part of my DRO. But I'll tell you what, if our contract rating ever dips below 90% or 95%, then I'm going to pay you $25,000.
I mean, that's all I would do is put that in.
And so, you know, that's then an incentive, right?
It's the way that you... Or you can say, if I ever lose the reciprocity of two-thirds of the market or three-thirds of the market, I'm going to pay you $50,000.
So there's tons of ways to set all this stuff up so that everyone's protected and it all works beautifully and hummingly and everyone's incented in the right way and so on.
And that's how DROs would work from that standpoint, just in terms of property theft.
So as far as protecting one client, there's simply no incentive for a DRO that's been set up and is running and is profitable and has got millions of customers or thousands even customers.
One client steals a stereo...
And it's been proven to you there's simply no conceivable way that you are going to end up protecting that one client.
For the sake of everybody else.
Because everybody else is going to end up fleeing your DRO as your contract rating gets shredded and all this and that.
And, of course, you could be falsely accused of stuff and there'd be safeguards in it for that.
I mean, every risk that you can think of, minds far smarter than ours will find solutions to.
People who have, you know, who are absolute geniuses in managing risk through incentives.
Economists and insurance geniuses and...
Accountants and statisticians will all be swarming over it to make sure that the incentives and disincentives are put into the right place.
It's going to be constantly optimized like a well-oiled machine in order to find as fewer rules as possible that have the greatest value to human life as possible.
Now, let's say that there's some town...
Let's make up as many problems as we can, right?
I think we're solving them relatively well as we go along, but...
Let's just say that there's some town, a town called Malice, let's say, where the DRO doesn't represent any, it doesn't have any reciprocal relationships with any other DRO, right?
So, the Malice DRO doesn't have any relationships with either.
You go in there and you get mugged, you're toast.
You get nothing, right?
I don't see what the big problem with that is.
I mean, we already have that in the existing world, and nobody gives too much of a fig, right?
So there are lots of countries that don't have extradition treaties with your country.
There are lots of countries where the laws are radically different, where you're going to face certain problems, and all that happens is you get a travel advisor who says, if you go to this country, you know, watch yourself.
First of all, don't go, right?
Don't go to Iran. If you're in Iran right now, run!
If you're in North Korea right now, get something to eat and then run.
So you just get a travel advisory, right?
So you get an email which says, don't go to these places, right?
I mean, this is deliverance country, right?
Your deliverance email will be delivered to you because, of course, everyone's just going to, you know, DRO's looking out for you.
They don't want you to go out there and get shafted by someone and then for them to say, oh, we don't have a reciprocal agreement with these guys.
And this will be something, you know, I mean, is it that hard to do?
No, of course it's not that hard to do.
All that happens is when you go to Expedia and you key in where it is that you want to go and travel, it's going to do an auto-lookup on your DRO and make sure there are reciprocal DROs out there with good contract ratings.
I mean, this stuff is also easy to solve.
I know people, their minds get a little blown by DROs and all that kind of stuff, but really, people, this is not like designing a computer chip, right?
This is not like, you know, sending a...
A microscopic camera up somebody's vein.
This is not brain surgery.
This is not rocket science. This is just, well, what would you do, right?
Well, if I'm traveling to Botswana...
And I'm going to stay in this hotel in this town.
Well, if no reciprocal DROs are around, then it's going to pop up in my travel itinerary that says, by the way, dude, you can go here, but you're really kind of taking your life in your hands, as far as that goes, right? You really are, you know, you're rolling the dice, so to speak.
So you can do it, but it's a little risky.
And... That would be another approach that I would take in terms of reciprocal DROs.
And so, of course, what's going to happen? Well, nobody's going to want to go and visit these places.
They're going to lose lots of tourist dollars.
And so at some point they're going to say, you know what, if we just pay a DRO to have reciprocity with other people, we're going to get a whole lot of tourist dollars in here.
So, of course, the Hotel and Travelers Association are going to cough up for subsidized DROs and so on.
All this kind of stuff is going to happen.
So these aren't really situations that are going to last for very long.
And what if you're some guy in a foreign city, nobody knows who you are or where you are, and some guy kills you?
Well, I would sign a...
I would sign a contract with the DRO that said, if I get killed, you're going to take up the case.
If I get murdered by someone, I want you to find who's responsible and punish them.
That would be my contract.
You may choose not to.
You might say, I'm dead.
What do I care? I just pay insurance to my wife and kids and I don't care.
Let me die and rot in my grave.
I'm dead. Justice.
Who cares? So you might save yourself like two bucks a year on your DRO cost because you don't care.
I might say, you know, I'm a bitter, vengeful Protestant, so I'm going to make sure that, or I want to make sure that whoever bumps me off gets the tar.
Gets punished, let's say, by my friendly neighborhood DRO and I'm willing to pay the two bucks a year extra that's going to pay for all of that unlikely event.
I mean, that's fine, right?
Maybe people don't care if they get killed because they're dead, right?
If I'm a single guy and I get killed, well, I'm dead and gone.
What do I care? I might choose not to do that.
So for every problem that you can come up with in terms of DROs, there's a solution, right?
And the reason for that, it's not because I'm some sort of brain-bending genius.
It's just because it's the free market.
It's the free market. Everybody's competing.
Everybody needs protection, both in terms of persons, property, and contract.
Everybody needs it. We don't know the degree to which they need it.
We don't know the degree to which it can drop off after a certain amount of time.
We don't know all of these things because it's never been subjected to the free market.
But the free market is about optimizing solutions because everybody wants to maximize their resource gain and minimize their resource cost.
I mean, that's just human nature.
It's the way we're built, right?
That's what people do in a state of freedom.
When you free up the economy, people don't sit around scratching their bellies.
They actually go and start optimizing.
It's just our nature. That's why we're at the top of the food chain.
That's what we do. So this isn't any sort of genius on my part.
This is just you're trying to out-argue the market, right?
You're saying, well, there are all these problems.
Well, the free market is just one giant problem-solving machine.
It is a massive, muscular, brain-crunching, number-manipulating, concept-juggling solution machine.
Anything you feed into it will come out as a solution because there's so much money to be made from solving problems, and it's kind of fun.
I do it mostly for free.
So I hope this has been helpful.
Thank you so much for listening. Please come by and donate.
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I would really appreciate that. And thank you so much for listening.
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