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Dec. 19, 2006 - Freedomain Radio - Stefan Molyneux
45:28
563 Restitution and Anarcho-Capitalism

Payback and crime in the stateless society

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Good morning, everybody.
It's Steph. Hope you're doing well. It is the...
Oh, what chance do I have to do this without checking the computer?
Don't worry. I'm not driving.
It is perfectly safe.
I'm actually still in the driveway.
It is the 19th of December, 2006.
Hope you're doing well. I have an interesting article.
I'm not going to read it all, of course, because I've got to get to work.
But we'll read a little bit of it.
By Paul Birch.
Who is at paulbirch.net.
I don't think he's associated with John Birch, the John Birch Society.
But he says, a fatal instability in anarcho-capitalism?
Excellent, excellent question.
Because fatal instabilities would be pretty good to know before we start building this bridge.
It's nice to know that it stays up.
And he says, justice is full restitution.
So he writes, justice obtains when an offender makes amends for his offense, when a criminal pays for his crime, when a victim receives full restitution.
This is the basis of common law.
When you are trespassed against, justice demands that you be recompensed for all the loss and suffering wrongfully inflicted upon you.
Justice demands that you be returned to the indifference curve you would have occupied had the offense not taken place.
Thus, when you have received full justice, you will be marginally glad, not sorry, that the trespass occurred.
When you trespass against another, justice demands that you be punished for the loss and suffering you have wrongfully inflicted.
Justice demands that you return your victim to his previous indifference curve.
Justice demands that the expectation value of your payment should equal the restitution due your victim, plus the full cost of delivering that restitution.
Thus, in justice, the criminal must pay the costs of the court, the costs of policing, and the costs of witnesses and counsel, as well as the amount necessary to make good his debt to the victim.
Thank you.
At his discretion, an offender may own up at once and make restitution to the victim without ever involving the police and the courts.
In a just society under common law, this will usually be the cheapest option.
But he may also choose to gamble on not being caught or not being convicted.
For this to be a fair bet, the penalty will be increased in proportion to the improbability of being caught or of being convicted.
Its expectation value will then remain the same, apart from the additional incidental costs.
For example, if the police catch 50% of the burglars, and if our burglar is caught, And pleads guilty, he will have to pay twice what his victim is entitled to, plus police costs.
If he pleads not guilty and is subsequently convicted, the court having a 50% conviction rate, he will have to pay twice as much again, plus court costs.
Of course, he may get off.
On average, though, he will pay just the right amount.
Unless he considers the thrill of the chase and the gamble of the courtroom worth the extra cost, he will find it better to settle.
A plaintiff, on the other hand, should be provided with full restitution by the court directly upon filing a complaint, irrespective of whether the offender is subsequently caught or convicted.
Think of it as an insurance claim.
With the court in the position of the insurer, it is unlikely that the plaintiff would then wish to gamble on the capture or conviction of the offender, but if he did, he could easily take out a bet with the bookmaker.
Making a false claim is a course in offense in itself for which the claimant could himself be prosecuted.
Justice demands that offenders make full and complete restitution for their offenses, but justice also demands that offenders be punished no more than this.
Justice says that every offense creates a debt that must be paid.
But justice also says that once this debt is paid, the offense is washed away.
All are measured entitled to justice.
The offender just as much as the offended against.
Justice is proportional. Justice is measured.
Justice is even-handed.
Such a simple justice is a corollary of the free market.
It allows the violation of rights to be justified, that is, made just, paid for, made as if they had occurred by voluntary agreement on the free market, and so on and so on and so on.
In an anarcho-capitalist society, There is no state, he says, and all the courts are private courts.
There is no final court of appeal that all are obliged to recognize.
No uniform code of justice can be enforced.
Laws are determined on the market.
Everyone may choose which of the competing courts he will look to for protection, and he may alter his choice at will.
In a just anarcho-capitalist society, the courts enforce the common law, but there is no guarantee that an anarcho-capitalist society will be just.
It will be just only if the hidden hand of the market makes it so.
Since a just society is economically efficient, there is reason to hope that the hidden hand will lead to justice, even or especially in the absence of the state.
This is the hope of anarcho-capitalism.
Even if a just anarcho-capitalist society should exist, there is no guarantee that it will be stable.
There are many conceivable sources of instability and many possible ways in which the threat of such instabilities might be averted.
But in this essay, I'm concerned with only one.
That one may prove fatal.
The flaw, if it is a flaw, lies in the nature of the courts.
Again, there are a number of difficulties that may arise in the operation of the courts under anarcho-capitalism.
Again, I shall concentrate on only one.
That one is basic. Will anarcho-capitalist courts be just?
Just, will they provide full restitution and cost-free service or not?
On first analysis, it seems that they will be just, for suppose the contrary, that some of the courts provide only partial restitution and require their clients to foot the bill, then such courts will lose business to other courts that do provide full restitution and cost-free service.
To maintain their market share and stay in business, then, anarcho-capitalist courts will be obliged to honor their customers' demands for full common law justice, no less than under the ultra-minimal states.
So far, so good.
So And then he says there's an instability in the restitution ratio.
And it goes something like this.
I'm going to paraphrase a little because it's a long article.
And his objection is to say that people should receive some proportion of restitution.
So if I steal $100 from you, I should be obliged to pay back $120 or something like that.
Now, one of the competing courts, though, might make a special offer.
150% restitution, cost-free, attracting clients away from the conservative 100% courts.
Who wouldn't then have a 150% restitution, then 100%?
And why not? After all, it's the criminals who pay.
Who cares about them? True, there will be some honest souls with a keen sense of justice who will refuse to go along with the scam, but for most people, let's face it, greed will win out every time.
Besides, this business of proportional restitution justice is a bit rarified.
Will the man in the privately owned street even bother to understand it?
Whatever the ethics, the customers will flock to the 150% court, and all other courts will be forced to follow suit or go out of business.
Some may go out of business being too honest for their own good, but most will follow the trend up to restitution equals 3 divided by 2.
This starts the restitution war, courts leapfrogging the competition to win a greater market share.
The restitution ratio climbs 150%, 200%, 250%.
The devil take the hindmost, and to hell with justice!
It gets worse. Crime is an example of an elastic commodity.
Reduce the cost and you increase the demand.
Increase the cost and you reduce the demand.
If the restitution ratio is increased, the cost of criminals will increase in proportion, but if the cost of crime goes up, the crime will fall even faster.
In technical terms, the elasticity of demand is approximately 2, although I think it's minus 2.
Double the cost and the crime factor falls by a factor of four.
So now the courts find themselves competing for an ever smaller cake.
They must take a larger share or go under.
The restitution ratio climbs again.
Marginal courts go bankrupt, but the ramp continues.
More and more courts collapse. The rest start to panic, but they're riding the tiger.
They don't get off. At all costs, they must avoid hyper-transfer of their remaining business to the competitive competition.
So they hyper-inflate the restitution ratio instead.
1,000%, 15,000%, 2,000% the crime rate plummets.
Where will it end?
So then, of course, his idea is that...
And it's a very interesting idea, and I certainly compliment this gentleman on his writing style, which makes my pedantic style look rather fluid, but it's very well written.
It's a very intelligently put-together article.
I really think it's wonderful to put a question mark at the end of unproven hypotheses, unless they're put forward as mere suppositions, as is my case sometimes with psychological stuff, but...
It's a very nice article, and it's a very good objection to bring forward.
So, this is...
And again, it's very hard to...
You can't read the future.
Who knows what an anarcho-capital society is going to look like down to its final particulars, but there are certainly some trends that we can evaluate and make sense of ahead of time.
So... The common law fantasy, and it is a fantasy, because there is no example of a successful property rights-based common law any time in history.
People look back to the common law that occurred sort of in the 17th or 18th century, and that's all very nice and dandy if you happen to be an aristocrat, but the common law is not a utopia that we can run to inhabit by examining the past and wishing to move back there.
Because if you just sort of imagine moving back to some point in the past, such as the 18th century, and somebody said, hey, you can go and live under common law, you'd be like, hey, that's great, because that's a whole lot less taxation, and that's a whole lot less government interference.
Well, that's fine. But what if that same person said, well, I can't guarantee what race you're going to be, and I can't guarantee what gender you're going to be.
Well, then suddenly the common law doesn't look so good, right?
Because if you're a woman, you can be legally beaten by your husband and can't own property, and he can drag you back if you try to run away.
If you're a child, the same thing can occur.
You're basically the property of your parents, and they can beat you at will.
And if you are a vassal or a serf or an underling of some lord, your property rights are not exactly guaranteed.
So, when you look at a utopia, it's always worth looking at the practice rather than the theory.
It's always worth looking at what people do rather than what they say.
In fact, I would say that what they say is not too, too relevant.
So, the common law that he's talking about is...
It's a species of fantasy law.
It's like creating a constitution for the country in the Sword of Shannara series or figuring out the rules for Hobbit Town.
It's a fun intellectual exercise, but it bears no relation to reality.
It's like inventing your own language.
I'm sure it makes you sharper and smarter, but it doesn't do any good to anyone else.
You can't speak it to anyone.
And so somebody posted this morning and said, I wonder what Steph's thoughts are about the U.S. Constitution.
Well, it's this kind of stuff, right?
It's just a bunch of highfalutin words and, you know, thou shalt's and thou shalt not's in a vacuum which doesn't recognize the reality of power.
So, I mean, the U.S. Constitution and the Declaration of Independence, however beautifully written and however smart the people, to me, is just an amateur.
It's an amateur production. It's an amateur production because they're not taking into account the basic reality of power.
And these were not men who were not educated about history and human nature.
They knew exactly what states had done in the past.
Yet they thought, as every damn fool has thought throughout the history of the world, that we can tame the tiger.
We can tame the tiger.
We can make the tiger to our bidding.
We can control the whirlwind.
We can move the tides with our mind.
We can make the state a good thing.
That is the fundamental error that everyone makes, and I still make it sometimes on the board.
I can make people listen to reason, but it's just a fantasy that we all have.
It's just that The one that involves the state gets millions of people killed.
So, this idea that he has of common law, that common law is a kind of automatic calculus that restores just enough to the victim that he is pleased to have been a victim, is a kind of calculus and it has a kind of pleasing symmetry in the mind, but it bears no relation to the way that the world actually operates.
And for a guy who's into anarcho-capitalism to criticize somebody else for...
Being too abstract, maybe this is an unjust criticism, but it's like Mickey Rooney saying, hey, you're kind of short.
So I certainly do understand this common law thing, and that justice means that if I steal $100 from you, that you get $110 or $120 back until you're vaguely satisfied that you're vaguely glad that the crime occurred because you're just on the other side of this curve that he mentions.
But that's not ever how it works, right?
Justice doesn't operate in a vacuum.
Justice doesn't operate like the law of gravity.
Justice operates from fallible human beings.
And this is the criticism that is constantly leveled against anarcho-capitalism as if there's some alternative.
So let's say that courts are corrupt and those who run the courts want to make a lot of money.
Let's say that they're greedy, amoral people who just want to grab as many clients, throw as many people in jail and make as much money as possible.
And to put as much of the burden of the costs onto other people and to keep as much of the profits for themselves.
Let's say that, absolutely.
Boy, oh boy, I just can't understand that, you know, to use a horrible metaphor, there's a scene in...
Schindler's List, where Ralph Fiennes plays that evil—well, sorry, that's a bit redundant—the German camp commander, and he's looking out his balcony one morning, and there is a row of Jews and gypsies and homosexuals—I think they're mostly referred to as Jews in this movie—and they're standing in a row,
and the guy, one of his guards, pulls out a rifle and shoots— I think it's a wonderful thing.
But this is the thing that is not seen by people.
That the state is the first guy in the line when you pull the trigger trying to hit anarcho-capitalism.
And anarcho-capitalism doesn't actually get hit.
There's the state, there's the family, there's the church, and then there's anarcho-capitalism at the back that walks away unscathed, to break from the metaphor of the concentration camp.
Because this guy's saying, well, the courts are greedy and the people are greedy, and I agree with him.
I mean, why wouldn't we assume that's to be the case?
We want to put the worst-case scenarios in front of the model, right?
So the people who are running the courts want to bribe the people because they're greedy and they want to make as much money as possible, so they want to get as many customers as possible, and the customers are greedy and they want as much restitution as possible, so there's this bidding war.
A perfectly ingenious criticism.
Again, massive respect for the ingenuity behind this.
But if people are like this, giving them a coercive monopoly is the worst disaster in the world, right?
If people are as he says they are, and I have no reason to necessarily believe that they're not, but let's just say that they are, that's fine with me, then they're going to be the same people running the common law in a state society.
Right? So...
Given that people are greedy and do want to maximize their resource usage, and fundamentally in many ways a lot of people don't care that much about the victims, you know, it's always sort of amazed me that, you know, if you're a cop and this seems to happen with some not inconsequential regularity,
You give false testimony, you manufacture evidence to make your numbers, to throw some guy in jail that you know is innocent for like 20 years, and then you go on with your life.
Well, call me a limp-wristed moral fairy, but I would be tortured.
I would imagine every day that I go to bed with my wife, this guy going to bed in a cold cell, being buggered by his roommate, I would think about him frightened in the shower.
I would think about him frightened in the yard.
I'd think about him getting stabbed or beaten.
I'd think about him in this hell that I'd put him, and I would just be tortured.
But empirically, most people don't give a rat's ass.
I shouldn't say most.
That's probably an exaggeration.
I don't know the prevalence of this kind of behavior, and I wouldn't even want to guess.
But there's a significant number of people Who don't give a rat's ass.
It does not register on them.
Other people simply don't register on them, other than as objects to be manipulated.
There's something I posted on the web, which was derived from a daily show.
There's a dog at the White House that they make Christmas movies about.
And everyone, like George Bush and Tony Snow and all these freaks, they...
They play with the dog, and they chat with the dog, and there's this happy little music, and there's, you know, sentimentality and brutality, right?
Sentimentality and brutality, two sides of the same coin.
And there's Barbara Bush in there, sorry, Laura Bush talking to the dog, and this is astounding.
I mean, these people have started a war and have not had time to read the Iraq report, but they have time to make a Christmas video about how cute their dog is.
I mean, and they're smiling, and they're chatting, and they're friendly, and it does not take any root in them at all, what they have done, right?
What they participate in, the slaughter that they have participated in.
And you see this kind of stuff in a number of different places throughout history, and look at the dictatorships.
They always have a sentimental streak, and they're always cutesy-cutesy in many ways in public with their children and so on.
It's like the Pope, right?
The Pope with his fingers upside down.
He did something where, and this is supposed to be the playful Pope, right?
The Pope John Paul II, I think.
And this is the guy who said that use of condoms to prevent the spread of AIDS from a husband to a wife is wrong.
And that the use of condom in Africa, where four million people a year are dying of AIDS, is wrong.
Right? Genocidal. Because he knows he's going to be listened to.
He knows that there's a bunch of slaves, mental slaves, who are going to follow his edict.
So he could, in a word, take away this pain and suffering, or at least alleviate good portions of it, but chooses not to.
And then he's playful, and he's cutesy, and he's happy.
And there's dewy-eyed poems that are written about him that hang in funeral homes and so on, but they just don't register him.
Doesn't register. The death, the murder, the suffering doesn't register.
But if you do say something that offends them in any way, shape, or form, they come out swinging with righteous rage, right?
I mean, they're incredibly sensitive to their own vanity and status and how other people view them.
Zero empathy for the suffering that they cause, which is staggering.
So... These are the kinds of people who run the common law.
I mean, if you're going to say that this bidding for restitution is going to cause a fatal problem in anarcho-capitalism because people are greedy and this and that and the other, well, how does a state solve that?
Well, for these people, or for people who are like this, and this is a very common belief, however eloquent and imaginative this guy's criticism is, and it is both, it is a very common belief to say...
It's turtles all the way down, as I've mentioned before.
Right? How do you control the corruption of power?
Well, you have a final arbiter.
Boom! The gavel comes down.
The father has spoken, and that is just the way that it is.
And that is how the squabbling of mere and petty humanity is solved.
Bang! The gavel comes down, and that's just it.
Well, why should we assume that the gavel-banger is not...
More corrupt than anybody else.
He just isn't.
I would guess that this person comes from a religious background.
Because, of course, in the religious world, there is a final authority.
Like in the religious fantasy land, in the fantasy universe of gods and devils, there is a final authority who is infinitely just.
Bang! The gavel comes down and God makes perfect judgments every time.
And so they love talking about abstract things like the common law and justice.
But everything, everything on this planet that is moral is administered by flawed human beings.
There is an extraordinary humility at the heart of anarcho-capitalism, just as there is at the heart of science and rational philosophy.
There is an extraordinary humility at the heart of it, which says none can be trusted with power.
None can be trusted with violent monopolies.
None, none, none, none.
No one, nowhere, no how, at any time, under any circumstances, no matter what their virtues, no matter what their history, no matter how much they have big fuzzy beards, long flowing white hair, and look like Gandalf, Dumbledore, Marx, and God put together, none can be trusted with a monopoly of power.
So, he's shooting at anarcho-capitalism, but he just takes down state religion and parenting and politicians and doesn't touch anarcho-capitalism.
Because anarcho-capitalism fully recognizes, in a way that no other system does, it fully recognizes the fundamental fallibility of human beings.
Because especially atheist anarcho-capitalism, which is really the only kind that makes sense, that's really the application of the scientific method to problems of theology and social organization.
Especially in atheist anarcho-capitalism.
Because in religious anarcho-capitalism or religious libertarianism, the leader can always pray to God and get a perfectly just solution.
That's one of the reasons that I fight against religion so much.
Because religion provides the possibility of a perfectly just solution.
That a human being can be uncorruptible if he simply listens to God.
But of course, there is no human being who is uncorruptible.
And even if there were a human being who himself is uncorruptible, the amount of goodies that can be bestowed upon Someone, upon other people, by a monopolistic state are so great that corruption will inevitably occur.
Let's say that I become the dictator of the United States tomorrow and I start liberalizing everything because I'm just that virtuous and let's just say that I could survive the temptations of power and would start liberalizing everything and repealing taxes and this and that.
Well, suddenly Christina would go missing.
Or something like it.
Or people would manufacture pedophile charges against me.
Or people would do something.
Or people would just assassinate me.
It's not the individual, it's the entire ecosystem that hangs on power that is the real problem.
The people whose livelihoods depend on it, whose moral guilt would be exposed through the destruction of power.
And then I would simply change everything.
In order to get my wife back or to avoid going to jail for the rest of my life, I'd just say, oh, that's it, I quit.
And they'd move some other guy in.
It's not all about bribery.
There's an enormous amount of threat in the political world as well.
So... Even if there isn't an individual who would not be corrupted by that power, there's Harry Brown's fantasy that he would get in to be president and he would simply stop repealing everything and wouldn't sign any new bills.
Well, bad things would happen to him, right?
I mean, this is not paranoia.
This is simply history. I'm just listening to an audiobook about America's 14 regime changes over the last 100 years, a little bit more than 100, starting with the one in the late 19th century when they basically deposed the Hawaiian queen.
Bad things happen.
You don't stand up to the people behind the power.
You don't stand up to the backroom boys.
You don't stand up to the shadowy men in trench coats who are the ones benefiting from state power and for whom the politicians are just something shiny that they throw to one side.
In order to distract people from the real hoovering of their lives and resources and talents through government power.
You don't mess with those people, right?
If you mess with those people, very bad things happen to you.
If governments can kill thousands or hundreds of thousands or even millions of people, And not bat an eye, what makes anyone think that they would not simply kill somebody who was in a position of power, who miraculously ended up in a position of power, who acted against their interests?
I mean, that would be completely illogical.
It's not conspiratorial, because the evidence is pretty clear.
So... This idea that there's some common law and some final arbiter of justice that is not equally as corruptible as all of the anarcho-capitalist law courts, but with the added and almost infinitely worse bonus of controlling and having a final monopoly on the dispensation of justice.
I mean, good heavens!
Not only would that person Be corrupted by everyone who wanted their favors to go their way, but you wouldn't even get.
The kind of competition that produces is the only known way to reduce corruption and increase certain kinds of virtues.
Competition is the only way to do that.
And it's funny because I bet you a million dollars this guy would, if you said we should get rid of all of the private Delivery companies like FedEx and UPS and so on.
If we should get rid of those and hand over the entire monopoly of mail delivery to the government, he'd be horrified.
He'd say, well, that's ridiculous.
Those agencies, those other companies, are the only way that things get sent and received.
But for some reason, people get, they kind of blank out when you try to apply the same principle to justice, or money, or other things, or road construction.
People just get kind of...
They just short out, right?
And I understand it. I mean, I really do.
I spend a good chunk of my life shorting out on some of those questions.
Voluntary taxation. I mean, it's a problem that we have, because there's just so much nonsense that's thrown around about these topics.
So that's sort of one aspect of his formulation that I would sort of object to, but that's a little bit outside his formulation.
So let me do another one that's outside his formulation.
For most crimes, there is no circumstance under which people would prefer to be paid.
So, a woman would probably accept almost no money in exchange for a rape.
Again, I know we're getting back to the prostitution debate here, but it's not...
That's a little bit different, right?
That's the sort of economic circumstance.
She's going in knowing that she's going to have sex without pleasure or love.
But... For a woman to be jumped in an alley and raped and have a knife pressed against her throat and fear death and suffer flashbacks for the rest of her life and have her sexuality smashed in a very fundamental way, there's not a lot of decent women who would say, yeah, if you give me 50 grand afterwards, maybe that's okay.
But of course there is none of that, right?
Because there is no deal, because then it's not rape.
If you know that you're going to get paid for it afterwards and so on, it's not rape.
So... If somebody killed Christina, there is no amount of money in this or any other world that would ever be acceptable to me in that manner.
So for many crimes, there's simply no restitution.
Things that are stolen that are of sentimental value.
So I'm not sure that I believe that there is a A curve, excuse me, a curve, a, what is it, satisfaction curve, I think you called it, or something like that, that if you steal $100 from me and I get $120 backer, I still would rather have had you not steal the money in the first place, unless I get paid a million dollars for you stealing $100.
But, of course, if that occurs, all that will happen is people will fake The stealing, right?
If you say, oh, if somebody steals $100 from you, I will pay you a million dollars, whether or not I convict a criminal, that was his approach as well, then all that will happen is people will steal $100 from you, or you'll say, hey, some guy stole $100 from me, I didn't get a good look at him, but he was pretty much carbon-based, of that I'm fairly certain.
Well, then you get your million dollars and the DRO or whatever goes on a wild goose chase to try and catch the criminal.
That's never going to work, right?
And clearly that would be economically impossible or unviable, let's say.
So, it is true that there is a satisfaction curve that can be approached, right?
I mean, if Christina was killed and someone gave me a million dollars, I'd be happier than if Christina wasn't killed and no one gave me any money at all.
But, I would never take the money to have Christina as restitution.
There is no restitution for the love of my life.
So I think that looking at the restitution curve is a bit of a misleader if you're talking about what people really want.
What people really want is not justice or restitution.
This is, I think, missing the central sort of purpose of what a protection agency is supposed to do.
People do not want justice, capital punishment, restitution, and jail.
People do not want that at all.
What people want, most fundamentally, what people want is protection, which is they want prevention of crime, not restitution for crime.
They want prevention.
There is no way to restore someone to who they were before the crime, after the crime, because of the trauma and the frustration, not to mention the time sink.
So you simply can't, right?
You simply can't.
If I just up and punch you in the face and chip one or break one of your teeth out, yeah, I can pay for you to go to the dentist and get this and that, but I can never make you somebody who was never punched in the face.
I mean, it's impossible.
It's a fantasy. There is no restoring somebody to who they were before a crime.
You can pay them for stuff, but there's still no restoration.
People don't want that anyway.
What they want is they want prevention.
They don't want money back for having been stolen from.
They want to not be stolen from, right?
And Governments aren't too good at that, right?
I mean, so he's sort of missing the point of a protection agency, which is not this medieval wereguild restitution eye for an eye thing, but people don't want to be hassled by crime in the first place.
People don't want there to be criminals in the first place.
And... That is something that tough guys who talk about crime don't sort of get.
That we weenies would rather there not be criminals in the first place, and there's an enormous amount that can be done, which we've talked about before on this show.
There's an enormous amount that can be done prior to any of that.
So... The other aspect that you have to balance in a market economy kind of justice provision situation is that, I mean, he's quite right, that, I mean, incentives that are too high, sorry, paybacks that are too high are going to put people out of business.
But that's exactly the same as insurance companies, and that's exactly the same as non-monopolistic, non-mecantilistic capitalist concerns.
So, this is the same problem that if you run a car manufacturing plant and you pay your employees too much, you go out of business.
And if you're an insurance company and you pay people a trillion dollars every time they step their toe, you're going to go out of business.
I mean, this is not a problem that has not been solved by capitalism about a billion times in the past.
So, yes, absolutely.
There is going to be a competition.
First of all, the first competition that DROs will have with each other is that if a crime occurs at all, I will pay you some money.
So if your house gets broken into...
I will pay you some money. And of course, if it turns out you faked it, then bad things will occur, which we've talked about before, how to control criminal activity in the absence of a centrally coercive police force and state and so on.
Because what people are paying for is prevention.
This is the way the doctoring should work, right?
You should pay a doctor until you get sick.
That's just one possibility.
It's the way it works in China, I think.
But... The first thing is that you are going to pay a DRO until a crime occurs, if you've got crime protection, right?
This is why the DRO has...
And this is to keep the DRO honest, right?
And DROs will want to offer this so that you know that they'll be kept honest.
And then, sure, there'll be some restitution elements in it.
And those restitution elements will be derived from the labor of the criminal or through the DRO. If the DRO drives the criminal out of society through means that we've talked about before...
But all they're doing then is they're preventing a recurrence, which seems like a fairly sensible thing to do as well.
And so, sure, the DRO is going to want to extract from the labor of the criminal some restitution to you.
They'll pay you up front and they'll collect it from the criminal over time.
And if the criminal won't do the labor or just vanishes, they'll pay you anyway, and they'll assume that they're saving costs, of course, because the criminal is not around anymore, and so isn't stealing from some other people and so on.
So that's fine, right?
That's good. Now, sure, some DROs are going to want to offer you more.
If you are the victim of a crime, without a doubt, no question, of course.
Insurance companies want to pay you out the maximum benefits, but they also want to stay in business.
And so insurance companies have to offer up financial statements every year, and they get credit ratings, and their access to capital is determined by the general health of their business.
And all insurance companies need access to capital from time to time because things can cluster, which you can't plan for, and a bunch of people can die at once.
That could be some sort of accident or something like that, right?
So... If an insurance company's balance sheet begins to decay because it's paying out too much, then the shareholders will start to rebel.
Then you'll have to start laying people off.
You won't have access to capital markets.
I mean, there's a lot of stuff in capitalism that intervenes before a company goes bust.
You don't sort of wake up one day and it's like, oh my God, we have to close the whole thing down, right?
There's about a million...
People involved in any decent-sized enterprise, from shareholders to board members to employees to employees' families to whoever, right?
Who all have a strong stake in making sure that the organization stays healthy.
So there's lots and lots of advance warning signs for this kind of stuff.
So if a DRO, much like an insurance company, if a DRO is paying out too much, In its restitution, then it's going to have its access to capital markets closed off or diminished.
It's going to get a bad credit rating from the agencies, and it's going to be all over the newspapers or the internet for the people who want to know, and so on, right?
In fact, a good DRO would include a push mechanism from financial agencies to all of its members so that they would be fully informed of everything that was going on.
So that they wouldn't worry.
So there would be a balance on this, of course, right?
The other issue, of course, that would be negative around restitution is that a very high restitution rate would simply, as I mentioned before, would simply breed forgery.
And these forgeries could get very complex.
Nobody bothers stealing my blockbuster...
Gift card booklet, but lots of people will spend an enormous amount of effort to steal something of less economic value, objectively, which is a passport.
People will spend an enormous amount of time forging social birth certificates and all the other things that you need to get fake ID. I don't think anyone spent an enormous amount of time forging a library card, right?
So, when the value of something goes up, forgery goes up, right?
I mean, if it's an artificial kind of value.
So, if you have restitution of 1,500%, then everyone's just going to start faking everyone.
A lot of people would just start faking crimes, right?
And this, of course, is partly what he's saying as well.
But what it means, of course, is that there is no possibility that...
There's no possibility that this could ever be sort of economically sustainable in any significant kind of way.
So that, of course, is not going to occur, and there's lots of reasons why this would be intervened with and caught right up front.
And these tendencies, everybody would be perfectly aware of these tendencies, and therefore there would be sort of guardianship against them.
So, he's got another article, which maybe we can talk about another time.
And I'm not saying that I've exploded all of his arguments.
I'm just sort of putting up counter-examples.
This is all a little bit of mental math.
But I think that taking some sort of real-world examples of how these problems have been solved in the past is very instructive.
And I would also say that If the fantasy exists that a final arbiter of justice will dispense justice, because all prior human agencies of justice have proven fallible, this is the gravest and most dangerous fantasy, right?
That... If you have private roads, then people are just going to ban people from using those roads and raise their costs, and then people at the end of the road are going to get charged a million dollars to put their foot on the road and so on.
But if that's who people are, then the best that you can conceivably hope for is competition.
To reduce the risk of that kind of corruption.
Giving human beings a monopoly where human beings have a fallible desire for corruption and exploitation, giving them a legal monopoly, all it does is provide the appearance of virtue.
Governments, I mean, this is a fundamental sort of issue.
We don't have to talk about it all now.
Governments simply provide the appearance of social stability.
Yes, in the DRO world, things would be a little bit messier.
Yes, you'd have a whole bunch of options.
Yes, it might be like trying to choose a long-distance plan in the 90s.
But of course, there would be agencies that would try and make that more simple.
And that's how they would make their money.
But government simply provides the appearance of order because it's overwhelming force.
It's like a parent who just beats their children to within an inch of their life.
Well, yeah, I bet you in public, those children are pretty freaking well-behaved.
I bet you they sweat if they spill a drop of tea.
No question. Everyone's like, wow, those kids are so polite.
It's like, yes, because they're terrified.
It's not the same as being a good parent.
And government is exactly like that.
It's like people who are good because they're terrified of going to hell.
Well, that's not the same as being good.
That's just the same as being terrified.
People love this sort of final arbiter.
Gavel comes down and you obey or you go to jail for the rest of your life.
And they think that that is justice or virtue or whatever, but it's not.
And what government brings and what government provides to the world is mere terror.
What government provides to the world is mere terror.
And yes, I guess to the untutored eye, that mere terror looks a little something like peace, order and virtue.
But it's not! And that is pretty clear when you think about wars and you think about inflation and you think about corruption within the government and the lack of justice that obtains to everyone who lives in a government system.
That chaos, right?
As I said, government is anarchy.
Government is chaos. It merely provides the appearance of order through overwhelming force.
Right? I mean, if you're a slave owner and you have a button that you can push at any time that makes any of your slaves' head explode, yes, your slaves are going to laugh and be happy and just think you're the best guy ever and never say boo to a mouse.
And everyone's going to say, wow, what a well-organized plantation we have here.
These slaves seem really happy.
Look at this. It's wonderful. I guess it works.
Well, no. They're just terrified.
They're just terrified.
And, of course, people's inability to see this terror largely rises out of the history of their own childhoods, though I'm not saying that about this gentleman.
Thank you so much for listening. Look forward to your donations.
Another dry day through the desert of Christmas.
See if you can send a little rain my way.
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