The Internet as Reputation Mechanism

“Google is not a search engine. Google is a reputation-management system.” - from The See-Through CEO.

This is a great article on how the internet makes companies more responsive to consumers. Now that vast amounts of information are available at the click of a button, companies that try to cheat or abuse their customers must face the wrath of the blogosphere and the chance of having their reputation destroyed. The result is that companies are becoming more and more transparent.

This is another reason for thinking that, contrary to Tyler Cowen, protection agencies under market anarchism would not be able to form a cartel.

Some googling shows there’s already some literature on the internet as a reputation mechanism.

Warlord Inc. is not going to care about their reputation when they align with Heavy Weapons R Us and create a cartel in order to force consumers to pay tribute to them; all that they are going to care about is how much fire power they can bring down upon anybody who challenges their will. Therefore, your argument is unconvincing.

Blogger X: “Warlords Inc. is guilty of crimes against humanity in our region!”

Warlords Inc. Mercenary: :sends a predator missle drone to kill Blogger X:

Boom.

@ Lam,

How do you know?

I find it ironic that you tell an-caps that they can’t predict how an an-cap society would work, yet you know that Warlord Inc. isn’t going to care about its reputation.

Call it a hypothesis, but it is a far more believable scenario than:
Blogger X: “Warlords Inc. has been commiting crimes against humanity in our area.”
Warlords Inc. Mercenary: “Wow, I better start cleaning up my act. Let’s forget all of the heavy weapons I have, and the fact I could just force everyone to pay me tribute through their use.”

While it may be true that, hypothetically, 2/3 of all mercenary companies may clean up their act upon being challenged, but when 1/3 unite in order to form an oriental dictatorship, those other mercs will have to coordinate in order to bring down the united threat (uncoordinated campaigns throughout military history have ended in failure when faced with a centralized machine). Do you really think that when the war is over, assuming that the 2/3 won, that they will return affairs to the status quo before the conflict? When has that ever been anything other than the exception in human history (Cincinatus is the one example I can think of), or are things different in this scenario?

Furthermore, look at how successful media campaigns against tyrannical regimes have been, dictators have been able to silence dissent through the force of arms. Like it or not, an organization that can counter with physical force against whistle-blowers is very much likely to react differently than one that cannot.

As far as my epistemological certainty, I believe the assumption that the proposition that at least one organization will have the reaction of Warlords Inc. is a rather sound assumption with a very large probability of being true.

That’s pretty weak lam. It seems like you are committing the same fallacy as Rand, as pointed out by Wollstein in his Society Without Coercion, from page 19:

Men live by myths, and the twentieth century American is no exception. From birth to death men live believing in absurdities which even the most cursory investigation would have disproven. Most twentieth century Americans believe that God exists, that psychoanalysis works, that the United States is a free country and that government is necessary in order to insure social order. It is this latter myth which we will be primarily concerned with here.

The belief that government is necessary to insure social order is a pure superstitution, based upon a psycho-epistemological process different in no important respect from the Medieval belief in goblins and witches. The Medieval peasant invested the abstractions of evil and “things that go bump in the night” with an irrational anthropomorphism and power, and similarly most twentieth century Americans (unfortunately including Ayn Rand and most otherwise Objectivists) invest the abstractions of goverment and political authority with a similar aura of supernatural power.

At the outset let it be made clear that government is nothing but men acting in concert. The morality and value of government, like any other association of men, will be no greater and no less than the morality and value of the men comprising it. Since government is nothing but men, its inherent authority to act is in no way greater or different than the authority to act of individuals in isolation. If it is moral for government policemen to arrest suspect criminals, it is also moral for “private policemen” to do so. If it is moral for government to try and imprison men, then it is also moral for non-governmental corporations to do so. Government has no magic powers or authority not possessed by private individuals. Let he who asserts that government may do that which the individual may not assume the onus of proof and demonstrate his contention.

The basic reason why a social order could and would arise in the absence of governments (as they are known today) is the fact that man has an objective need for social order and protection from initiatory force. This objective need would create human associations producing order in society. The morality and permanence of these associations will be determined by the morality and rationality of the men creating and working in them, as is the case for any social institution.

Perhaps the strongest attack on “anarchism” – certainly the most vitro!ic – was made a few years ago by Ayn Rand. In her article on “The Nature of Government” she states:


A recent variant of anarchistic theory, which is befuddling some of the younger advocates of freedom, is a weird absurdity called “competing governments.” Accepting the basic premise of the modern statists — who see no difference between the functions of government and the functions of industry, between force and production, and who advocate government ownership of business — the proponents of “competing governments” take the other side of the same coin and declare that since competition is so beneficial to business it should also be applied to government. Instead of a single, monopolistic government, they declare, there should be a number of governments in the same geographical area, competing for the allegiance of individual citizens, with every citizen free to “shop” and to patronize whatever government he chooses.

Remember that forcible restraint of- men is the only service a government has to offer. Ask yourself what a competition in forcible restraint would have to mean.

One cannot call this theory a contradiction in terms, since it is obviously devoid of any understanding of the terms “competition” and “government”. Nor can one call it a floating abstraction, since it is devoid of any contact with or reference to reality and cannot be concretized at all, not even roughly or approximately. One illustration will be sufficient: suppose Mr. Smith, a customer of Government A, suspects that his nextdoor neighbor, Mr. Jones, a customer of Government B, has robbed him; a squad of Police A proceeds to Mr. Jones’ house and is met at the door by a squad of Police B, who delcare that they do not accept the validity of Mr. Smith’s complaint and do not recognize the authority of Government A. What happens then? You take it from there.


Once one gets past Miss Rand’s typically vitriolic rhetoric (which only indicates that Miss Rand is quite hostile to what she mislabels as “competing governments”) one finds that she has essentially one argument. Miss Rand asserts that what is properly designated as “competing agencies of retaliatory force” or a free market of justice would not work because the competing agencies would end up protecting criminals and shooting it out with each other. One can only term this a straw man argument.

The situation which Miss Rand “describes” is patently absurd. If competing agencies of retaliatory force protected criminal they would not be competing agencies of retaliatory force at all. Rather they would be criminal gangs, plain and simple. Further it would be sheer insanity for individuals “subscribing” to competing criminal gangs to live on the same “turf.” In this respect, Miss Rand is correct. However what I and every other advocate of a society without coercion are advocating are not “competing governments” (a misnomer) or “competing criminal gangs” (an ethical monstrosity) but “competing agencies of retaliatory force,” which Miss Rand has in fact not dealt with at all.

In the situation described above, in which neighbors subscribed to competing police departments, what is certain (if they were in fact police departments operating on the basis of objective law, rather than criminal gangs operating on the basis of mob rule – which is what Miss Rand described) is that Police B would accept the validity of Police A, or in fact the validity of any reputable police department and cooperate with them in the arrest of Mr. Jones. Police B certainly would not protect Mr. Jones from justice if there was objective evidence that Mr. Jones had committed a crime, nor would Police A proceed to attempt to arrest Mr. Jones unless there were such evidence. In this manner, objective law would eliminate coercive “shoot-outs.”

Once competing police departments began to function, standard operating procedures would be created to deal with such cases. At least two possible procedures come to mind: Either by stipulation the police department to which a man subscribed would be the only one which could incarcerate him; or, by stipulation, the police department where the complaint was filed would incarcerate him. In the extreme there would be little motivation for policemen to put their lives on the line for a suspected thief, and if competing police departments operated as Miss Rand falsely pictures, then they would quickly go out of business due to the attrition rate of policemen killed in the “line of duty.”

This is only one of the flaws of Miss Rand’s argument. Other problems include her failure to explain exactly how government can morally outlaw competing agencies of retaliatory force, or what it is that prevents the state police from shooting it out with the county police in similar situations. Clearly both Miss Rand’s premises and logic are in error in this case. But we do not have to rely solely on speculation to demonstrate the practicality of “anarchism.” There does in fact already exist a country with operating competing agencies of retaliatory force – the New Hebrides.

This is not the first and probably not the last time I will see this fallacious line of attack. People must keep in mind that it costs a lot more, generally speaking, to hire a gang of personal hitmen rather than pay a small premium as part of a group of people who accept a certain standard of justice and trust a firm to uphold it. Imagine how much it would take to convince Google to supply whoever searched for a set of various religious keywords with bestiality porn rather than its familiar format of relevant results.

The internet is full of nonsense though, just saying.

That’s true… I did cause World War I after all.

But by this logic, a state, i.e. a protection agency with a monopoly on force, will be even worse. If competing agencies cannot be made accountable to their customers, how on earth is it possible to control a state?

Proof by vigorous assertion. LMAO!

Advocating it will surely make it happen!

Proof by vigorous assertion. LMAO!

Name a society which hasn’t sought social order and protection from initiatory force. The only problem is what people have conceived of as initiatory force and what measures were deemed necessary. In a gradual process, people have shed the belief that chattel slavery and the divine rule of kings are just. As democratic statism fails, superior ways of ordering society will emerge.

Advocating it will surely make it happen!

It just might. I think you really serve as more of an embarrassment to the anti-freedom lobby. Thanks for all the help scineram.

Nothing wrong with model playing like this, but the model misses a few critical parts of market dynamics:

The demand for defensive protection(basically all people in the society) far exceeds that of offensive action(few criminals).

Offensive action includes high risk(especially against unregulated market of freely owned guns by civilians), makes offensive business labour expensive.

Economic capability assumes property rights. When a corporation goes into the business of robbery, what will happen to its original capital? The whole overwhelming defensive service industry would be free to destroy it, as they have more economic capability due to more demand for their services.

Conclusion: Making profitable offensive business is nigh impossible, when defenders are open to the market(which is not the case in the state).

I’m one of those people who grew up mired in the mythology of American statism, so can you predict that county/parish governments will become more efficient and/or less corruption-ridden as this gradual decentralization of the ownership of force continues?