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Illustrated Summary of David Friedman’s The Machinery of Freedom

May 10, 2012
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16 Comments
  1. dm33 permalink
    May 10, 2012 8:25 pm

    Ignores reality of monopolies or even profit motive. Big companies will yield more power. If a “security firm” becomes very successful, it (and its owners or CEO) can decide what laws to enforce or not. They can be big enough to eliminate competition or complaints. You quickly de-evolve into a food fight. LIke an elementary school with no teachers.

    You clearly need an impartial arbiter that isn’t supposed to be affected by profit motive. Hence democracy.

    What Friendman describes is a profit motive rules everything, the more money give you law enforcement. Apparently poor people could be robbed and attacked and they can’t afford to pay off the legal system to defend themselves.

    If anything this presentation describes why this approach can not work.

  2. valueprax permalink
    May 10, 2012 10:00 pm

    dm33,

    Government is a monopoly.

    You contradicted yourself within one sentence of your rebuttal. That takes some skill. Well done.

  3. TFG permalink
    May 11, 2012 5:26 am

    “You clearly need an impartial arbiter that isn’t supposed to be affected by profit motive. Hence democracy.”

    Ok now that’s some funny shit.

    • valueprax permalink
      May 12, 2012 3:15 am

      TFg,

      I’ve got a better one…

      The world is not perfect. Hence, government.

  4. Jeff permalink
    May 12, 2012 1:31 am

    I really loved reading this book, it was a great introduction into the Anarcho-Capitalist viewpoint…that said, he makes an important assumption early on in his reasoning: homogeneous actors. The basic problem is that not all actors are the same and so there exist significant power disparities-ergo, conflict is not equally costly for all parties. Certain players will have different dominant strategies from the get go…

    • valueprax permalink
      May 12, 2012 3:14 am

      Jeff,

      Yes, in reality people aren’t equal… Your point being?

      • Jeff permalink
        May 12, 2012 3:33 am

        Friedman assumes that the costliness of conflict will prevent it, at least in the case of private security firms. My critique is that [armed] conflict is not always equally costly, therefore it’s likely to occur or the threat of it used for coercion when the more powerful has no other institutional constraints.

        Moreover, it’s not just that people are unequal-they’re different with varying strengths and weaknesses relative each other; now consider not just individuals but organizations of every kind.

        The point is that in the absence of an institutional framework that makes coercion a more costly alternative to cooperation, power disparities mean coercion remains viable; where the power disparities are unclear or miscalculated, you get armed conflict. Ergo, Freidman’s Anarcho-capitalist counter factual doesn’t work without the necessary framework.

      • valueprax permalink
        May 12, 2012 3:44 am

        Jeff,

        Friedmans counterfactual IS that institutional framework.

        So, again, what is your point? Ergo government? Where are you going with this? D you think you’ve “refuted” something?

        You’re merely stating the facts of reality. You need to make a positive assertion about the implications of this observation to have a point.

        I don’t think Friedman ever put forth the idea there would be NO armed conflict. Only that there is generally an incentive against it because it is often costlier than negotiation and arbitration. If that’s your premise, that’s your belief or a misinterpretation of his argument, not a problem with him or his theory.

        Reality is imperfect. Agreed. So what?

      • Jeff permalink
        May 12, 2012 4:37 am

        As long as some actors have immediately bigger payoffs from clubbing others over the head, they will-even though society would be better off is everyone only interacted through voluntary exchange. So I disagree that cooperation would necessarily win out even most of the time.

        As to a framework-Freidman’s vision is devoid of one. It simply paints a picture of a society full of people interacting through voluntary exchange without answering why they would do so (since certain groups/individuals have bigger payoffs from the before mentioned clubbing).

        Modern nation states-usually-provide a legal framework through which actors interact. Alternatively, you could have emergent cultural systems that provide enforcement mechanisms/ shape subjective values such that clubbing is discouraged.

      • valueprax permalink
        May 12, 2012 4:56 am

        Jeff,

        Sorry to hear people voluntarily forming themselves into private security and insurance agencies and customers thereof via markets don’t qualify as “emergent cultural systems” to you.

        Not sure how to help you with that. Maybe someone from a modern nation-state can club your thick skull?

      • Jeff permalink
        May 12, 2012 5:35 am

        I think we may just be talking past each other here…I don’t think that what Friedman describes can’t exist-just that there is more to it. In most cases where we don’t solve the problems with a government, there are often strong cultural norms that help-Friedman just doesn’t go into any great depth on that.

        When I was talking about culture I mean the beliefs/heritage people are immersed in that shape the things they subjectively value-differences in these values affect how/whether people work together-cooperation and exchange that takes place in the market is to some extent reflective of the underlying culture.

        Sorry if that’s not terribly clear, bit of a big topic to tackle through internet comments…

      • valueprax permalink
        May 12, 2012 5:57 am

        Jeff,

        Fair enough. I just don’t think you have the nuanced contradiction you think you do.

        Subjective cultural values are true of the existence of markets for ANY good. This is not a special problem for the voluntary provision of law and security. If we lived in a society where the violence principle predominates, it would essentially be impossible to utilize market exchange mechanisms for any goods and services. How could you trade oranges reliably if most of your neighbors stood ready to beat you into submission to take your oranges?

        To truly raise a meaningful objection you have to explain what is special about the provision of law and security that make this calculus different. As I see it, it isn’t– a person with “nothing to lose” bent on using coercive means can always tip over the apple cart; and the existence of government everywhere demonstrates in reality these people often do act in such a way.

        HOWEVER, we also have strong evidence that enough people, nowadays at least, understand the value of market exchange in most goods and services that this is “allowed” as a cultural value.

        It is not unreasonable to believe that at some point in the future cultural norms may shift and encompass the provision of security and law as well within the domain of “things we can provide ourselves with through voluntary means.” It will not be perfect, there will be incentives for people to be dickish and screw it all up for everyone else. That doesn’t mean the problem is necessarily insurmountable or destined to ruin the on average proper functioning of such a system.

        I don’t think Friedman needs to go into much more depth than he did. All the concerns you raise are implied and dealt with by simple acceptance of: a.) the world is not perfect and b.) there are always incentives for people to go against the crowd.

        The question is not, “Will everyone go along?” but rather, “Will enough?” Enough people have learned to go along for the purposes of making bread, shoes and automobiles. Why can’t enough go along to make private provision of law and security viable?

      • Jeff permalink
        May 12, 2012 6:21 am

        Valueprax, I now see where we were talking past each other.

        I wasn’t commenting on the feasibility of private arbitration/policing-I’m aware the former is quite common and the latter actually exists (more or less as Freidman describes) in some places in Africa.

        What I was trying to get at is in a world where there is no government, the enforcement/punitive mechanism against being a dick will be embedded in culture; to me, a world with no gov where few people kick over the proverbial apple cart must have a culture that discourages them doing so.

        So, if I’m reading you right and adequately expressing myself in turn-we’re both in agreement up to here.

        The only thing I’d say is that you could get Friedman’s world in two ways. The first is what I think you’re describing where people largely understand and acknowledge the benefits of market mechanisms and act accordingly.

        The second is one where people don’t break contracts simply because it’s wrong, don’t resort to violence simply because it’s wrong, don’t steal because it’s wrong-norms that have a priori legitimacy. You could get all the same results as case one without anyone knowing anything about market mechanisms. Not saying this is more likely or what have, just making a distinction.

  5. May 12, 2012 2:54 am

    What do poor people do?

    • valueprax permalink
      May 12, 2012 3:11 am

      Nobilisreed,

      What do poor people do with other goods and services?

      In socialist systems, they tend to stand in line for increasingly scarce, increasingly poorer quality items, if they get any at all.

      In market systems, they tend to start with abundant, low grade items and then benefit over time like everyone else from steadily growing quality and quantity at steadily falling real costs, until they reach the point where they enjoy things that weren’t even imaginable to the richest of the richest a few generations earlier. At which point they take all of this for granted.

      Maybe you’re suggesting that if poor people can’t do as well as everyone else, this logically implies the use of coercion to attempt to bridge the equity gap? But that’d be a crude fallacy if ever I saw one.

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