Collusion in a free-market

I was having a discussion tonight with a friend of mine who was a philosophy major (BA in History and the Classics ultimately, but with a strong foundation in Philosophy), and although I disagree with him it was difficult for me to defend the libertarian case on the spot, because admittedly I don’t have a strong foundation in this part of anarchic theory.

He posed this example:

What if, in a small town, there was some type of gang which for some social reason (perhaps rascism) excluded a minority from owning property, setting up a business, et cetera. That minority would have no bounds in protecting itself, except bounds formed by their own means to do so. The fact of the matter is that the gang is more powerful than they are. In a free-market, if that minority is less powerful than those attacking it, how do they protect themselves?

He was assuming geographical limitations, whereas by doing so the gang does not risk business elsewhere (local entrepreneurs, more or less) by creating disincentives to trust them.

How would the minority protect themselves?

I then posed the question to him: How would government do a better job? And he said that perhaps it might just be a law, and government security enforces it.

In this specific case, how would I make the argument for libertarianism? It’s as if I have a proper argument on the tip of my tongue, but because I don’t have much experience in this area of political theory I think it might be wiser just to see what people here have to say about the topic.

And please, no snappy one-line comments on how, “Statists are stupid.”

First: Statists are stupid.

I don’t think your friend gave a satisfactory answer to your challenge. He has imagined a town in which the vast majority is violently racist; why would the town’s government not reflect this racism? Why should we expect legislators, themselves elected by the racists, to make a law with which the majority do not agree and would probably ignore? White men were legally allowed to enslave black men for quite a while, after all. Your friend can’t set these ludicrous conditions and then ignore them when you rightfully turn the question around on him.

And the standard free market answer, I imagine, is that the oppressed minority would leave for a town in which their labor is appreciated. That town will grow wealthier than the racist town, especially if the racists refuse to trade with any businesses that hire or are run by the minority. It is then up to an economist to rise and convince the people that their racism is worsening their quality of life.

Your friend has a point. It’s very much possible for a group to exclude others in a anarchic society. They could even form a state.

Since the owners of a small town don’t let me own their property, own a business on their property, et cetera, therefore we need state? What if I show up to your house, does the same apply?

One assumption is that the town is privately owned. Thus, the town is allowing the Minority into the town as guests; however, since the owners providing the hospitality don’t allow the guests to buy their land, set up a business on their land, et cetera, therefore, we need the state? If I show up to Disneyland, and the Disney allows me to enter the park, stay the hotel, wander about the park as a guest, what right do I have to buy a part of Disneyland, set up a business in Disneyland, et cetera?

This is a contradictory supposition. Why wouldn’t the Minority be able to homestead or otherwise own the land around the town?

So the Minority’s right to the owners’ property is superior to the owners’ right to their own property?

But how would the gang in an anarchy go about from excluding the minority from owning property (homesteading), setting up businesses etc? I do not think that possible, if the gang can prevent the minority from setting up a buisiness or own property then we can not talk about a state of anarchy, because the gang is from the point of view of the minority effectively a state.

Truly, how can the gang prevent economic transaction between minority members? This is all they need to have a buisiness. All the gang can do is vandalise their property without pause, or evict them from it, but how to protect against that is probably more of a specialist question for people in the defence industry rather than a philosophical enigma. Possibly if we assume there are many more villages with similar demographics the minorities from many villages can do some insurance risk pooling and form a tight knit joint defence organisation (a militia, a clan…) and hope the racist mayority does not reciproce with a similarly geographicaly expanded gang.

But ultimately yes, if we accept the premise of an irredeemably and malevolent racist mayority any solution may fall well short of the satisfactory, it is just that a.) the scenario is not very likely and b.) the government could not possibly make it any better. If anything historical examples show you need the legislature to maintain malevolent racism, once formal, institutionalised barriers to interaction are removed one by one former racists discover it profitable to trade and work with the formerly held down.

How are law’s made? I’ll bet your friend is a democrat, or at least a majoritarian. Which way would this majority vote? Surely if they are willing to forcefully exclude individuals from public life, they are willing to have someone else pay a third party to do it for them?

Surely then, in a closed society/democracy, not only would racism be affected – but it would be done at the cost of the taxpayer.

Look at history! Where has the greatest racism come from: the state or individuals and firms? Think of the Jim Crow laws etc.

This I think really hits the nail on the head. The example in the opening post is really no different from an example of a world which exists in a state of anarchy but where everyone is a totalitarian (or a minarchist), in favour of taxation and even happy to pay up himself, except for one person who is an anarchist. In such a scenario there is nothing the lone anarchist can do to prevent the rest of the world`s population from reforming the state and slapping a 90% (or a 10%) income tax on him. He is for all practical purposes a persecuted minority, his natural rights overriden by force and against his will.

If people were not racist neither would the state.

Guys, we need a standard way to think about all such objections, not ad hoc reasoning to deal with each one. I think it’s easy when you realize that monopoly is the problem with Statism. Society is in a diseased condition; Statists try to argue that because all the world is covered with monopoly tumors (States), that this is normal and healthy. If we let that slide, we’re left treading water in the argument from the start.

When talking to the uninitiated, I would say that anarchy (lack of monopoly) just results in better “democracy”: better representation for the majority and for the minority. If most people in the scenario are racist, this will cause problems for minorities whether under anarchy or Statism, but they will be worse under Statism because there is a monopoly.

When there is monopoly, all laws are made for universal application within the territory of jurisdiction. The voice of the majority is rounded up to 100%, and the voices of all minorities are rounded down to 0%. There is no other voting system that works under our present political system, although many have been proposed. The reason no other voting system really works or improves on anything is that we have a monopoly. This is why we can only have accurate representation of people’s preferences when there is no one single government presiding over a territory, no monopoly on force.

In this case, the primary harm caused by the monopoly would be allowing the majority to bring full-force universal laws against the minority with no recourse to protection agencies that would otherwise be available to protect them against the tyranny of the majority.

That is not necessarily true when taking into account the severity of racism. Quite often the racism formalised in law or executive action is many times more severe than the level of racism existing in the natural society. Eg the level of anti-semitism was historicaly not a great deal higher in Germany than in some of the neigbouring countries, but the policies pursued by Nazis in relation to Jews were without a match in any of them. Also the state can propagate racism and increase the level of racism in the natural society by social engineering.

Great point AJ. Statists typically come up with these hairbrained wierd examples they expect to be somehow different from other situations. They aren’t, and we can have a defense ready for them every time.

Here is the basic template statists use: “People can abuse their freedom, therefore freedom bad”

Most obvious points:

  1. Freedom is intrinsically good.
  2. Freedom is instrumentally good (see competition arguments about eliminating descrimination etc)
  3. An introduction of a monopoly into a bad situation can only make the situation worse. Even if the monopoly solves the initial problem it will create worse problems later.

Point 3 is very obvious if the government we consider is a monarchy. If he is advocating democracy, this is just filibustering and you can plow through it as AJ did above.

If he’s a philosophy major, he should have argued a lot more conceptually than this, instead of pretending like his 1 example is somehow a fatal blow to libertarian theory. But if you do run into someone who is convinced by evidence, just lay it on them. Slavery has typically thrived under the state (thread). The free market has raised the quality of life for poor and minorities. Things like the minimum wage law allow for racist employers to discriminate without incurring market penalties. Yadayadayada.

An interesting approach is one LS is experimenting with. Instead of being an anarchist or a libertarian, he is calling himself a voluntarist. This makes it painfully obvious to your opponents that you only support voluntary relationships, thus spiking many of the statist’s claims about your philosophy deteriorating into coercion.

Unfortunately, I don’t think you understood the argument.

PDAs. They’re not just your neighborhood grocer…

Oh, does he mean like the Nuremberg Laws of Nazi Germany? Tell him that. Watch him go apeshit.

Is this about Rush Limbaugh’s NFL bid?

I think it comes down to this.

In regards to the racist majority forming laws, he referred specifically to the US government’s 1950 and 1960 attempts to force racial integration as an example of government doing “good” and laws protecting the weak.

Statists typically stake out “good” government as opposed to bad government. This is kind of abusive, because they fiat through all the problems of checks and balances, which makes up a large chunk of the utilitarian argument against the state.

Yet he didn’t apparently grasp that the segregation laws were created by the states and localities–aka governments. So he needs to understand that his objection has 0 merit.

To be fair, in this case this is irrelevant. I am not suggesting that when considering the example of the United States this is not relevant, just that it is irrelevant to his make believe scenario. In this case, we are in an anarchic society and the fact of the matter is that the majority of a town for some reason colludes to deny a certain minority race to compete against them, or own property, through the use of force (they have monopolized force in that town). Had there been a larger government they would have been able to force integration, since they have a monopoly on force, not the armed force created by the majority racists.

I think, ultimately, the point is that the free market might not necessarily solve this in the sense that the minority race perhaps won’t be able to live in that town. But, there is nothing forcing those minorities to leave and migrate to a town where they are accepted and they can form part of the labor force. Naturally, the town they migrate too would not be more productive than the town they left, so it equates to a long-run economic loss for the original town. This said, it’s impossible to argue that all these things would be solved on the spot, and there would be obvious cases of the strong hurting the weak. I tried to make the argument that in the big picture, though, when this is the case there is nothing stopping the weak from leaving.

He said, “What if the weak don’t want to leave?”

This all stemmed from an argument on human rationality. He does not believe humans are always rational (that is, they do not always operate on the basis of judging benefits and costs).

This may be circular and not exactly on target but I feel it has some value.

Just because someone creates a hypothetical, doesn’t mean we have to be obligated to answer it. Molyneux talks about this. How you can get lost in an endless battle of facts and counterpoints. We’re not expected to solve market problems theoretically. To do so, undermines the premise of human action not being best directed by central planning. For lack of better terminology, this happens when we go on defense, when we should be on offense. The statist has the burden of proof for how the state resolves such and such scenario.

When the opposite in debate claims the government can do something positive to fix the problem, then it is incumbent on us to point out the gun in the room. That the government can only act by undermining liberty. If your opposite believes that undermining liberty (using force) is acceptable, they cannot be reasoned with. You’re wasting your time.

Now in this particular discussion, the opposite is proposing that a free market can lead to a state (group violence) so we need a state (group violence) to counteract the state (group violence).

Stripped to the essentials, his argument is self-refuting, one need only point it out.

Put the onus on them, to prove that violence and force can lead to liberty. Well conducted socratic inquiry will shock any sensitive individual into an epiphany.

If you’re confronted by someone who wants you to prove human liberty, walk away.