Part 3: Finding the Dragon

I have addressed many of the challenges to libertarianism which I have been hearing in what I written previously. I could be satisfied with this, but, while my ideas may be different from the way libertarianism or anarchism is usually presented, the more fundamental criticisms might still apply to them. If a government allows any secession, then it is a voluntary association, not a state. If a community separates from it, then that is anarchy. We return to the original problem of how to make this work. If a state splits into smaller ones, there will be a power vacuum. The idea of 10,000 Liechtensteins has similar potential problems as 10,000 free individuals. This might be an unstable condition which will change to stable one, which would be a state. There might be conflict among the various parties. Some of them might join together and dominate others and form a new empire just as bad as the one which broke up. Indeed, some say that a problem with the non-aggression principle is that allows evil to gain power before it aggresses until the point where it cannot be stopped. If a state were to break up into smaller ones and those could in turn break into even smaller ones, there is no guarantee that it would lead to chaos, but it easily could. From this chaos, a new empire could arise. It seems that centralization is inevitable. Even nation-states will not remain sovereign as a one world government in some form will be created. Preventing this requires solving the problem Curtis Yarvin wrote about in “From Mises to Carlyle”. Only states can create lasting order on a large scale. He wrote that that possibility of alternatives to a state is like the idea of blue dragons on Neptune. There is no proof that that they do not exist, but there is no evidence that they do, so it is reasonable to assume they do not exist. Perhaps the only way to have small communities each managing their own affairs is for an empire to maintain peace among them and protect them from foreign threats, and of course, that empire should be run by good people rather than bad ones. Perhaps a virtuous man who believes in peace and civilization should not be content with securing his own freedom or that of his community. Perhaps he should seek to acquire as much power over as many people and as much territory as possible if for no other reason than to deny worse people that power. Perhaps he should attempt to impose his values on as many people as he can for no other reason than ensuring that his values survive.

However, if it really is wrong to steal and murder and I am right that an orderly regime cannot survive in a modern liberal culture with a Christian background unless it more or less follows this principle, then perhaps it is worth spending a small amount of effort searching for the dragon. Gornoski, citing Girard, says that science developed because the scapegoat mechanism was weakened, and people were no longer satisfied by superstitious explanations for plagues and bad weather. They did not stop burning witches because of science. They developed science because they stopped burning witches. If the old forms of government do not work and chaos in the form of democracy take their place, then new ways of creating order should be explored. The utility of a moral principle is that it forces people to invent solutions they would not have otherwise.

There seems to be no reason why the power vacuum cannot be filled by a voluntary private corporation. Again, a state simply consists of people with aligned interest acting for particular purposes. There can never be a true monarchy consisting of one perfect ruler named Fnargl who can magically destroy anyone who disobeys. If the purposes of an organization are to protect life and property, then they do not aggress against people by necessity. They just need a business model with the right incentives. One that is particularly interesting is kind of insurance-based security and defense service anarcho-capitalists have imagined. I would want to thank Robert Murphy for introducing me to this idea. If an insurance company were to promise to compensate a customer for the destruction or theft of his property, the premium would be determined by the likelihood of that loss occurring. The insurance provider would reduce the premium if the customer’s behavior made him less likely to lose his property, but also if the provider does things which reduce that chance. Someone who is able to shoot an attacker would cost less to insure and would cost even less if the insurer is able to send agents to shoot attackers

As a for-profit company seeking to minimize expenses and unable to tax, borrow, and print unlimited amounts of money, the insurance provider would try to find the most efficient means of defense possible and give the best possible advice to customers on how they can defend themselves. Shooting attackers is expensive and dangerous and would risk collateral damage for which they would ideally face liability. If that is necessary, then the insurance provider has failed and is only trying to reduce the damage. Instead, it would be better to anticipate threats far in advance and mitigate them preemptively. No one would be forced to pay for the defense, but those who do not are uninsured, even if they benefit from criminals and invaders being stopped. The free rider problem is solved, but the cost of insurance will go down if more people buy it and behave as the insurance provider advises, so people will pressure others into doing so. In order to decrease costs, the insured would be advised to act in disciplined, responsible, self-sufficient, and low-time preference ways in order to form a cohesive and stable society. Because this business model partly relies on empowering customers to defend themselves and would seek to minimize costs, the insurance provider would not assemble enough armed forces to become a coercive state. Individual people might have their own insurance policies, but it might be more likely that an entire community or micro-state would share one negotiated by the local governing institution and the costs would be determined by judging the qualities of the community. Perhaps one or a few competing insurance providers could act like states and fill a power vacuum and maintain peace among free individuals, small communities, and micro-states, as well create an environment, the Newtonian envelope as Yarvin would say, which makes it possible for large political associations to break into smaller ones in an orderly way and for new large ones to form without threatening the small ones. Some say that the problem with libertarianism or anarchism is that it is similar to communism in that the latter says everyone should have equal wealth while the former says everyone should have equal sovereignty and both are impossible and are dangerous to attempt. However, just as capitalism makes it possible to produce goods so cheaply that anyone can buy them, innovative technologies and business models might make sovereignty so cheap that any person or tiny community can buy it.

This possibility might be easier to imagine if the insurance provider were thought of as a conventional state which does not forcibly tax its citizens and its borders are the boundaries of their property. It might represent a nation, but not every member of the nation would need to buy its services. Such a corporation would not perfectly follow the non-aggression principle as it would not be immune from corruption and there may be extraordinary circumstances where preemptive violence is needed to stop a threat, but coercion of innocent people would not be a necessary part of its usual operation. Additionally, this business model would profit by creating order. It would be the opposite of a democratic state which profits from creating chaos. Instead of breaking people’s legs and giving them crutches, this model would profit when people’s legs are never broken. Instead of a empire which gains power through conquest and exploitation, this empire’s power would increase with the strength and independence of its constituent communities. Perhaps such a power structure could be referred to as an anti-state or anti-empire. Perhaps this is the way virtuous people can acquire massive amounts of power through virtuous means and use it for virtuous ends. Perhaps this is the way to create something resembling the monarchical regimes of the past on a large scale. Perhaps this is the way to build an empire which people of the modern age can be proud of. Perhaps this is the blue dragon of Neptune.

I do not know if this insurance-based model is the best way to achieve this, but the idea is useful imagining the kind of thing which might do so, which is a way to reduce the price of sovereignty. While imagining this, I realize something interesting about this idea. This anti-empire could be described as sovereign of sovereigns as it effectively rules over people for the purpose of protecting their independence. The business model by which it would do this is based on self-sacrifice rather than the sacrifice of scapegoats as in a conventional state. The people in power would risk their own wealth and would suffer if they fail. There is an extent to which the anti-empire works by imitating Jesus, which is to say what I imagine here might be impossible for humans to do. Perhaps, this should be the final realization which shows that libertarianism and all forms of liberalism really should be rejected as utopian fantasies. However, once I imagine this possibility, I cannot help but imagine how it could be made reality. Perhaps the police or military of an existing government could be changed so that they operate this way. This could be part of the process of changing a government into a voluntary association; insurance would be one of the benefits one receives for following the rules and paying taxes. Of course, this entire process might go wrong, as I said before. Instead, it would probably be best to start very small.

I would first wonder why insurance providers which actively work to prevent the events they insure against are not a common thing. This business model is effectively a way for one group of people to sell their low time preference and long-term planning abilities to those with less. This kind of service seems like it would be very helpful in many areas, especially medicine. This seems like a way to provide healthcare which focuses on prevention and incentivizing people to take care of their own health. This would destroy the medical-industrial complex which profits people’s disease. Could it just be regulations which prevent this? Could it be that this business model just does not work? In any case, the only way to find out is for an entrepreneur to try. In a time when government police cannot be relied upon, a private service might be very profitable. When people are arrested for defending themselves against rioters, innovative means of protection would need to be developed. The insurance-based model might make existing private security services to be even more effective and scalable. Perhaps the creation of such a service could be done in a locality where libertarians are taking over the local government and would allow them to reduce the local police force. What I am imagining is not a utopian project. I am not trying to design the perfect society with the perfect government outlined with a perfect constitution. This would be a business which would either succeed or fail in the market. If this business fails, then no one will be any worse off except the entrepreneur. If these kinds of businesses are effective at preventing crime, then that would be an amazing success, perhaps more than anyone should expect, and any reasonable person should be satisfied with this. However, what if someone were to ask one of these services to insure his property against state aggression?

If someone wants to be insured against being forced to pay taxes or imprisoned after violating a prohibition, then the insurance provider would refuse. There would be nothing either the customer or insurer could do to stop the aggression. This would be like health insurance for pre-existing conditions unless there were a viable movement to overthrow the state or secede from it. The insurance provider would do nothing to encourage such movements. An unstable state is not conducive to protecting property. However, if that instability occurs anyway, then by attempting to determine under what conditions and for what costs the property of secessionists or rebels could be insured, the insurance provider could create and execute a plan to free them from the state with minimal violence, perhaps by negotiating a mutually beneficial arrangement with those in power. This would happen if citizens want to be insured against the state, but it might also happen if the elites of the state want to be insured against violence from discontent citizens. This is when the insurance provider would take the place of the state as the dominant producer of security and defense. If people living in a foreign state were to seek independence, they could buy the services of the insurance provider so that it would assist them with the same process. The next time a neocon says libertarians do not care about people being oppressed by tyrannical foreign regimes, the response should be that there is a hypothetical way to do intervention correctly, but the present regime is incapable of this.

In order for this insurance-based service to work, particularly if it is ever do more than prevent common crime, there needs to be a way to absolutely guarantee that it pays what it promised if the property is lost. This guarantee must be enforced no matter what legal system exists. The strength of the guarantee is how the customers know that that the insurer will lose money if the insured property is lost and that they will want it protected as if it were their own. Some kind of smart contract or escrow service might be an important part of making this work. On the other hand, these contracts might be useless and unnecessary for preventing large scale wars in which the threat of total conquest or destruction is enough incentive for a defense agency to do its job. Such a contract, however it is enforced, would be what differentiates any armed agents employed by the insurance provider from a simple private army. This is what might make it possible for different providers to peacefully coexist and compete with each other, as they would all suffer great losses from escalating violent conflict. In my fantasy world in which this business model becomes dominant and replaces conventional states, any large heavily armed groups which are not bound by such contracts might be regarded as potential criminal organizations. Additionally, they themselves might buy insurance policies which would compensate anyone they might harm in order to show they will not do that.

There may be a somewhat more realistic way this kind of service could mitigate the evils of a democratic state. What if people wanted to be insured against potential future state aggression, such as an increase in taxes, inflation, or other onerous government policies? Would an insurance company ever be willing to compensate customers in the event of a tax increase? Perhaps this could be the way to do effective lobbying and political campaigns in favor of the middle class. The elites are able to get the government to do what they want, but those of average wealth can only contribute to campaigns which promise to serve them, but have little incentive to do so. If someone had a plan to lobby against tax increases, as well as influence the culture in ways which make it amenable to a more libertarian government, then he might be willing to promise to compensate the people who contribute to his campaign in the event he fails. This way, the supporters could have the same confidence in the campaign as its leaders. As before, this would have to start very small and local, and there might be a need to find ways around regulations. Could this be a way to have a sane democracy which does not constantly move leftward? Of course, if what I imagine here is successful enough, then it might result in ending large-scale democracy and transitioning to the anarchic system I have described.

Whether or not these fantasies of mine are possible, they may illustrate two realizations which bring even more clarity to these discussions. The first is that there may be a principle better than simply non-aggression. Instead of it being always wrong to violate property rights, a better principle might be that people should be trusted with large amounts of power of any kind only if they bear large amounts of risk. It might be permissible for an authority to coerce or tax people to ensure the common good, but only if that authority bears the greatest liability if it fails to achieve that goal. Additionally, if some people acquire huge amounts of wealth and property through entirely peaceful means, but does not bear risk, perhaps by selling non-preventative medicine, then it might be permissible to either confiscate their wealth or force them to change their business model. Of course, any authority which does this should also operate on a risk-bearing model. The non-aggression principle is a useful guide for imagining how any of this might work or be achieved because every consensual association involves the risk that anyone involved might withdraw consent and leave the association. As such, this idea, which could be called “liabilitarianism” would be the same as libertarianism, but could better address its shortcomings.

The other realization is one I have touched on a few times before. Someone who wants to solve a large-scale and pervasive societal problem should adopt an entrepreneurial mindset and think of the solution as a good or service which can be produced, advertised, and sold for profit. The idea of an insurance-based defense service might be a way of manufacturing and selling peace. This would be using capitalist means to produce a good which has almost always been produced with socialist means. The opponents of capitalism blame it for consumerism and corporatism. Corporations become extremely wealthy and powerful selling cheap goods and services which satisfy particular desires of consumers but are not necessarily good for society as a whole. Libertarians will say these problems are caused by government policy, but when ending those policies is not a likely possibility, it may be more useful to think of the problem as resulting from many goods being produced through capitalist means, while other goods, perhaps the most important ones such as peace, the preservation of tradition, and the strength of families, are nearly always produced with socialist means if they are produced at all. This might be a way to describe a large fraction of the problems with the modern age. The modern economy is good at producing weapons, but not defense. It produces drugs and medical treatments, but not health. It produces entertainment and artistic works, but not culture.

It may be possible to for a government to enact policies which mitigate the excesses resulting from the capitalist production of physical goods while also attempting to produce those less tangible ones, but if this is opposed to the interests of the elites whose profits would be harmed by these policies, then it will be far more difficult to enact these policies and they may just be undone later. See what happened with Donald Trump. A populist movement attempting to achieve this can only go so far. If there were a way to profit from a particular change occurring, then it would be far easier as the elites would be able to profit from the change or other people will become elites by doing so. The challenge is finding profitable ways to produce these kinds of goods. If this can be done, then persuading people that the problem exists and needs to be solved would be a matter of advertising. Perhaps power should be thought of as, not just the ability to do things, but the ability to do things profitably.

When trying to find ways to produce goods which the market normally does not produce, it might be helpful to examine the ideas anarcho-capitalists have imagined and figure out how to such business models could be created in reality while the state exists, as I discussed in the beginning of this post. However, the obvious way which everyone understands to get people to produce goods they would not otherwise is for a government to force them to. As I explained earlier, this can be done in a somewhat capitalist way, which respects people’s ownership of their bodies and other movable property, if the government doing this is localized and it can be done in a perfectly capitalist way if there is a way to opt-out or secede. In either case, a government can be thought of as producing the common good. It does this by bundling costs and prohibitions with benefits, some of which result from people obeying the prohibitions. The challenge then is making localism profitable. A localist political strategy needs to be integrated with counter-economics.

I should clarify that producing goods through capitalist, meaning property-respecting, means is not the same as producing them profitably. not every non-aggressive action is profitable, and aggressive ones often are, but only for the state. Perhaps the state could be defined as the institution which is able to violate property rights profitably. If someone does not have access to state power, then he can only profit by creating a mutually beneficial arrangement which everyone involved consents to. Of course, this does not mean someone could simply do anything profitably if only he were to control the state.

(I have more thoughts on this matter which I might add later)