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Do you write as well?

It was November. Shorts were fading rapidly out of the streets. Many girls queued to the ATM machines near my home in night clothes around midnight, their t-shirts knotted at their waist. Aren’t their parents home? I don’t read newspapers, and I don’t watch TV. The bright fellows I follow on Twitter and Facebook don’t like news either.  So, I didn’t know what was coming. I slept for many hours without knowing that those clever girls were trying to get cash before the news got through to everybody.

There are always enough such girls to go around in Noida. My landlady’s niece is one of them. When I first met her, she was sitting on the bed, pouting and sulking, complaining about some ridiculous thing. My landlady and her mother tried to calm her down, but that didn’t have any effect on her. I, the scholar and gentleman, was at my desk, poring over tomes on economics of culture. It was not that I did not see her, but my mind wasn’t there. When her mother said that it was time for them to go, she snapped straight and scratched her back, raising her top. She then turned  around  and  smiled  at  me,  her  eyes  twinkling.  I  raised  my eyebrows, glanced at her and smiled. “Bye”. Continue Reading

Books, Uncategorized

Law can’t be placed under competition.

Why can’t it be placed under competition? We are not placing the concept of rights under competition. We are placing the laws derived from the concept of rights under competition. For objective law to emerge there should be competition. One argument quoted (Of Isabel Paterson) in Ayn Rand’s “Capitalism” is that for Objective truth to win in education, it should be put under competition. That’s true of law too. No single person or body should decide on a particular set of laws and force it on people. Your argument is similar to the statist argument that education is too important to be subject to the vagaries of competition. If there is objective truth in education, why should be it subject to competition? Why can’t it be provided by an agreed up body? The answer is: To reach the objective truth, competition is necessary in education, as in law.

Competition will lead to contradictions in law.

The laws will be the same for all private defense agencies? Or there will be a tendency towards a common, agreed upon law. You just have to look at the present world to come to such a conclusion. All floppy disks and CD ROM’s fit into the existing systems. The same is true of ATM cards. There is no law prescribing that this should be so. But, if someone producers an incompatible CD ROM, he will be soon out of business. That’s true of incompatible law and “contradictory interpretations”. It simply won’t happen. Don’t you think so? Imagine the worse-It happens. So what? Most countries or even states have different laws. But it doesn’t lead to irresolvable conflicts.

Government is a neutral body and is more likely to be objective

Government is not a neutral body. Everyone has biases and prejudices, and Government judges are not exceptions. They are likely to be biased in favor of the Government. It is easier to bribe a Government judge, politician or bureaucrat and get ones things done. They have nothing to lose. They don’t have incentives. There is no strong reward and punishment mechanism in the system. There are no profit-loss calculations. But, a private judge loses his reputation, profits and eventually his job if he is not honest or Objective.

Objective law prevents the Government from initiating force.

A Government should begin by initiating force, in any case? Let’s assume a Government which never punishes an innocent person-How does the Government get its revenues from? By taxing people-coercion! There is no other way. What If I don’t wish to live under a Government? Won’t I be coerced? What if I wish to compete against it? Won’t I be coerced? People can’t rely on re-elections or “democracy” to mend the system. Deciding policies require extremely complex thought, and even the most intelligent and educated people are not in a position of voting on them-As there are no market signals for voters.

What happens to a customer of the Bloods gang, when he gets into a dispute with somebody from the Crips gang? Does he receive equal, fair and just treatment? Not bloody likely.”

If this is true, who would deal with a customer of the Crips gang? No sane person. So, there is a strong financial incentive for the Crips PDA to be fair with someone from Bloods PDA. Otherwise, who would deal with it customers? If no one would deal with its customers, won’t its customers desert the PDA? So, won’t it be soon out of business? If this can be as easily refuted as this, we won’t be holding such an absurd notion. This was an argument of Ayn Rand and her followers who have never bothered to read anarchist literature.

Anarchy would lead to gang warfare.

A classic case of such anarchy (and gang warfare) cited was Iraq, but such arguments do not hold much water. Don’t forget the US presence in the case of Iraq. The same was said of Sicily. But Italian Government has an influence there. Such arguments are as valid as saying that violence will happen in drug and liquor industries –which obviously are a result of Government coercion and interference. Gang warfare and takeover of mafia (Ayn Rand raised such an argument) can happen only if there is a coercive atmosphere. A more cooperative system is in Somalia, which is stateless. There is much order there after the collapse of state, and it showed great improvement in almost all development indicators. It is not an utopia, but people are better off without a ??????

There is no guarantee that PDA’s won’t initiate force.

It is true that the Government or a private defense agency can initiate force. But, a Government has to initiate force. There is no other way. But, a private defense agency, by necessity, doesn’t have to initiate force. And more importantly, a PDA can’t externalize the cost of aggression onto citizens-But, the Government can externalize the cost in the form of taxes. Moreover, under Government coercion is guaranteed. In the case of a PDA, coercion is only a possibility!

Government can be run on voluntary taxation.

Well, “voluntary taxation” is a contradiction in terms? A tax is a forcefully collected revenue. How can it be voluntary? Of course, maybe the Government can rely on voluntary contributions. That would be hardly a tax. But, how can you be sure that the income collected in that manner would be sufficient for law enforcement? One method suggested by Ayn Rand was that Government can run a lottery.(I am aware of these arguments) But, for a Government lottery to be successful, it should prevent anyone from competing with it. That would be coercion. Next, even if it does so, it is not guaranteed that it can make profits. Government, as you know, is a highly inefficient organization. The most important point however is that even if the Government succeeds in collecting all its revenues voluntarily, it still would be initiating force-As it would have to prevent anyone from competing with it. Also, it would have to force people to take use of its services. Otherwise people should be allowed to ignore the Government. That doesn’t seem to be a working model.

There is no empirical evidence to support the viability of Anarcho Capitalism.

Firstly, this argument is invalid as economics and political science are not empirical sciences. Anarcho capitalism was not practiced in most parts of the world for most of the human history. However, there were societies which were really close to Anarcho-Capitalism. There was the law merchant in the past, as Bruce Benson has pointed out. Such a system has worked in Iceland, Celtic Ireland, American old west, British colonies in North America, Rhode Island, Albemarle, and Pennsylvania. There is a lot of historical evidence to prove that these societies worked really well and had sophisticated legal codes. Crime rates were strikingly low. In Celtic Ireland, it lasted for nearly thousand years. It was a civilized, advanced society as there was no Government administered justice. Even when these societies collapsed, it was not due to extreme anarchy, but due to contradictions in the anarchistic structure. Iceland is a classic example, where chieftains were granted more power, and religious issues led to a civil war.

If you want to reject anarchy as it was never practice everywhere, you will have to reject minarchy too? Absolute minarchy was never practiced anywhere. I think, as a minarchist you believe in a free banking system and gold standard too. You will have to reject both as there was never a fully consistent gold standard or absolutely free banking in the past. Would you? I have asked this quesion to several minarchists. They were not willing to be consistent in their positions. What matters is logic, not empirical evidence. In Economics, facts don’t prove or disprove a theory.

If PDA’s are a viable model, who don’t PDA’s emerge despite of the Government?

PDA’s will find it impossible to act in a non-coercive manner under a Government even if it were allowed to function? Imagine I am a customer of Bloods PDA and you are a customer of Cribs PDA. Both these PDA’s, let’s assume, runs Insurance companies. You rob me. I take the case to a common arbitration agency. The arbitration agency finds you guilty. Now, Cribs PDA will have to compensate me, and make arrangements to garnish your wages. This will work alright only in the absence of a Government. If a Government exists, why should you cooperate when Cribs garnish your wage? You would have to fear Cribs only if Cribs initiates force. A business boycott can’t work, as people will continue to deal with you as long as the Government exists-because they have a change of legal recourse in case you commit a crime. And why should Cribs pay you? People will deal with its customers as long as the Government exists. In the absence of Government, Cribs won’t have to initiate force against you. It just has to tell you that no one will deal with you if you don’t pay half your wages, for instance, to compensate me. If Cribs doesn’t do it, no one will deal with the customers of Cribs and Cribs will soon be out of business. So, if a Government exists, PDA’s have only one option-To fight it out, as long as they can get away with it! This is what statists have in mind when they liken PDA’s to mafias and gang warfare. I am sorry, they are dead wrong. Ayn Rand repeatedly pointed out that statists blame Capitalism for the faults of Government intervention. This exactly is what you are doing in this case.

PDA’s will become a state.

If you fear the possibility that a PDA will become a state, by what logic do you support the state? You are in the position of someone who supports a Government monopoly in the fear that a private firm is likely to become a monopoly. This again, was something refuted many times. You always have the option of stop patronizing such a PDA.

PDA’s have an option of inititating force which they might use against its customers.

It is, of course, true that there are two ways in which PDA’s can settle disputes? One is through force. The other is through mutual cooperation. So, why do I think that they will not resort to force? Firstly, I don’t think they will never resort to force. That’s a remote possibility. But, there is too much evidence, that if left to themselves, people will find ways to resolve their disputes peacefully, as they tried to do in many historical cases in the past. There is even a book “Order without Law’, which explains how people settle their disputes peacefully without resorting to law. What anarchy does is to make co-operation and respect of law profitable. There are of course, irrational people who don’t care for long term profits. But, such people will exist even in a Government run society. The difference is that under Government, they profit financially from their irrationality and corruption. Under anarchy, they lose. There are several reasons why under anarchy, PDA’s are not likely to resort to force 1) Force is non-productive and costly. 2) It will alienate customers, who find that no one wants to enter into a contract with them. 3) Using force will result in high insurance premiums for customers, which will further alienate them. 4) One can always look at the present world. Legal conflicts between ordinary individual citizens usually don’t result in wars between nations even though Governments can externalize their cost of aggression. So, how likely is it that PDA’s will do it when they have no way of externalizing their costs?

Human nature is flawed and is not consonant with anarchy.

It is irrelevant whether human nature is good or evil (rational or irrational). I have never thought of anarchy this way, and I don’t know any anarchist (Capitalist) who made such an assumption. There is no need at all to imagine such a miraculous transformation of human nature. Some people are of course, irrational and evil. Under statism 1) Such people get to power as power attracts people who enjoy wielding power 2) Politicians always have to make promises, which are usually evil and requires force in its implementation. If most people are evil, more evil will be the promises they have to make. Politicians who rise to power in this manner are likely to be much, much more evil than PDA staff. 3) Even if the person who gets into power is reasonably good, he will be continually tempted to be evil. Power corrupts! PDA’s don’t really have any serious power. There are necessary checks and balances under anarchy. They have to bear the consequences of their irrationality. Politicians don’t.

Second, when one says many people are irrational and evil, they reach that conclusion by looking at the present world? It is as if someone is looking at Nazi Germany or Soviet Russia, and concluding that concentration camps and forced labor camps are the lot of mankind, and these things are here to stay-which is far from the truth. The problem is that at present we have a system which rewards the evil and irrational. Don’t blame human nature for the evils of statism!

Law and Defense can’t be run on profit motive.

Profit and loss are not just motivators? Profit-loss signals are very important signals for the proper functioning of the market. I don’t know why Randians distrust profit motive and signals in this particular realm. Profit-loss signals co-ordinate the market system. When you see theory demonstrated in case after case, you have to accept it. Many people ask-For instance, how would profit-loss calculations solve environmental problems? But, there too it is proven to be valid. Countries where profit system is not hampered have better environment. Now, many people say it works all right in all these cases, but what of law enforcement? Here too, it appears to be valid. A natural law is valid under all circumstances, and allows of no exceptions. Lacking profit loss signals, what reliable data does have the Government have to guide their decisions? The Government can only act arbitrarily-which means: the use of force by Government is purely arbitrary. For instance, how much security should be provided at what cost? This is an extremely complex problem. The Government has no objective way of deciding all this. I hope you are aware of the economic calculation problem, which is one of reasons of the failure of socialism. Economic calculation is one terrible problem which anarchy faces. Bureaucracy is another problem. (In case you need a detailed description of these problems, read “Socialism” and “Bureaucracy” by Ludwig Von Mises. He was not an anarchist, but his arguments could be used against him) How would you argue out of this? By arguing that it doesn’t apply in the case of production of security? I am sorry; it would be hypocritical-and wrong.

How does profit loss calculations lead to order in security production?

To take some concrete cases, to demonstrate how profit-loss calculations work in law enforcement: … See More

1) If an insurance company sets its level of compensation extremely high, it won’t have many customers. If it sets it extremely low, no one will deal with its customers-and hence it will not have many customers. So, profit loss calculations lead to a reasonable amount of compensation-which means: justice.

2) If a private court is not honest and objective, it won’t make profits. So, profit-loss calculations lead to honest, objective decisions-justice. Even if a Government judge wants to be objective, he won’t know what means an objective decision, because he doesn’t have profit-loss signals. If a court hands out severe punishments, most people won’t agree to avail the services of the court. If the punishments are too mild, then too most people won’t make use of its services.

3) If a policeman in jail turns sadistic, customers will switch jails, and jail owner will lose profits. Here profit-loss calculations will lead to just, human treatment of prisoners.

4) If a law breaker knows that he will have to compensate his victims by an amount higher than what he hopes to gain, it will be a deterrent.

5) If a defense agency uses force against people who are not its customers, as I have been telling repeatedly, no one will deal with its customers. Hence, here profit-loss calculations lead to peaceful interactions between customers of different PDA’s.

I could go one and on, because each and every decision of a PDA is based upon such calculations and these calculations bring order in the market?

The fallacy of anarchy is apparent when we look at how a road would be if there is no traffic police.

No one ever said that there shouldn’t be traffic police in road. Here too profit-loss calculations come into play. A private road owner will decide whether to employ policemen based on these calculations. If the road rules are too strict, most people will not use the road. If they are too lenient, it will lead to more accidents, and hence, then too, people will not use the road. So, these calculations lead to just, reasonable rules on the road.