Journal of a Libertarian Anarchist and Austrian Economist
Friday, 30 September 2011
Monday, 19 September 2011
Sunday, 18 September 2011
Ron Paul and the six kinds of libertarian (video)
Ron Paul does the impossible: he unites libertarians!
Saturday, 17 September 2011
Where do Ron Paul's ideas come from?
Quotes and Audio Clips
0:04-0:09 - quote from Mises and Austrian Economics: A Personal View by Ron Paul
0:07-0:11 - audio from Ron Paul at the MSNBC debate, 3rd May 2007. Full video.
0:11-0:16 - quote from Ron Paul from Time Magazine.
0:26-0:29 - quote from Mises and Austrian Economics: A Personal View by Ron Paul
0:31-0:42 - quote from Human Action by Ludwig von Mises.
0:46-1:39 - quote from The Revolution: A Manifesto by Ron Paul.
2:00-2:05 - quote from The Revolution: A Manifesto by Ron Paul.
2:07-2:12 - quote from Lew Rockwell in an interview for The Liberal Post.
2:21-2:38 - quote from Murray Rothbard: In Memoriam chapter by Ron Paul.
2:40-2:52 - quote from The Ethics of Liberty by Murray Rothbard.
2:53-3:25 - quote from Ron Paul: A Most Unusual Politician by Murray Rothbard.
4:46-4:49 - audio from Ron Paul interview with Adam Kokesh for Adam vs. The Man. Full video
4:46-4:53 - quote from Freedom Under Siege by Ron Paul.
4:55-5:03 - quote and audio from The Arena with Eliot Spitzer, CNN, 13th May 2011. Full video.
5:06-5:13 - quote from Liberty Defined by Ron Paul.
5:11-5:20 - audio of Ron Paul being interviewed for Motorhome Diaries. Full video.
5:22-5:32 - quote from What is to be done? - 1961 Confidential Memorandum to the Volker Fund by Murray Rothbard.
5:37-5:41 - quote from Ron Paul from Time Magazine.
5:42-5:44 - audio from Ron Paul and Rand Paul interview by Neil Cavuto. Full video.
5:42-5:47 - quote from Liberty Defined by Ron Paul.
5:57-6:02 - quote from The Revolution: A Manifesto by Ron Paul.
6:03-6:07 - quote from End The Fed by Ron Paul.
6:13-6:21 - quote from No Treason: The Constitution of No Authority by Lysander Spooner.
6:20-6:33 - quote and audio from question posed to Ron Paul after his speech at the New Hampshire Lincoln-Regan Dinner, 25th March 2011. Full video.
6:23-6:33 - quote from Liberty Defined by Ron Paul.
6:41-6:48 - audio of Ron Paul being interviewed for Motorhome Diaries. Full video.
6:57-7:08 - audio of Ron Paul's speech at the Rally for the Republic. Full video.
7:07-7:29 - quote from The Ethics of Liberty by Murray Rothbard.
7:27-7:36 - audio from CNN Presidential Debate, 5th June 2007. Full video.
7:38-7:47 - quote from Liberty Defined by Ron Paul.
Links
The Ludwig von Mises Institute
LewRockwell.com
V for Voluntary
Man Against The State (blog of the creator)
Music
0:00-3:25 - "Ron Paul Free" by Carolyn Kruger. Full song.
3:27-7:48 - "Ready or Not (Instrumental)" by The Fugees. Full song.
In Defense of Market Pricing and Ticket Scalping
Tickets to popular cultural or sporting events, such as the London 2012 Olympics, can be distributed in a number of different ways. In this blog I consider some of the different methods and what consequences we might expect to result from these methods.
Supply and Scarcity
For any given cultural or sporting event, the supply of tickets is limited. That is, the tickets are a scarce good. If there are 50,000 seats in the venue, a maximum of 50,000 people can attend the event.
The question is: which 50,000 people in particular get to attend?
If fewer than 50,000 people desire to attend the event, then there is no problem with distribution of tickets. Every individual who wants one can have a ticket. A distribution problem only arises when there are more people who desire a ticket than there are tickets to be distributed. Let us suppose that 80,000 people desire to attend the event. Now a scarcity of tickets means that they cannot all be satisfied.
Random Distribution
One way to distribute tickets would be a random lottery. 80,000 names are entered into a hat, and 50,000 are chosen. The other 30,000 people are out of luck. (For now, assume the tickets are named so that they cannot be traded after they have been distributed).
There is a sense in which this the most fair way to distribute tickets. No one has any greater chance of attending the event than anyone else. And yet, among the 80,000 people, common sense tells us that not everyone desires a ticket with the same intensity. For a cycling event, say, there will be some avid fans, who attend cycling events regularly, know and support the cyclists and the sport with passion, and who get great pleasure from watching cycling events. There will also be some individuals who don’t care much for cycling, but want to go as a novelty, and for a nice day out. It seems unfair that the passionate fan might not be able to go because he was one of the unlucky 30,000, while some individuals who are far less bothered get to go instead.
Desire Cannot be Directly Measured
To make the allocation more efficient, then, what is needed is some way to assess how much the individuals desire the tickets. The best system will be one that allocates the 50,000 tickets to the 50,000 people who most desire them.
How then to do this? One way might be to get the ticket applicants to rate from 1 to 10 how much they desire a ticket. Put 10 if you are a big fan. Put 1 if you’re not that bothered. Clearly this isn’t going to work. Who would put 1? Anyone who does that is obviously not going to get a ticket, so why would they even bother applying? By the same principle, no one would give themselves less than a 10. It won’t do to just ask people how much they desire a ticket. What is needed is some way for people to demonstrate how much they desire a ticket.
Time-Commitment as a Measure of Desire
One way to do this would be to distribute tickets on a first-come-first-served basis. Whoever makes the application first gets the ticket. The idea is that the passionate fans will be the ones first in line at the box office. But is this necessarily the case? What of the family-man who cannot take the time to stand in line? What about the person has prior commitments on the day tickets go on sale? What about people who live far away from the box-office? These people are all discriminated against and disadvantaged by this system, at the expense of those with time to spare (like the unemployed) and those who live closest to the box office. It is still quite arbitrary to distribute tickets to those willing to give up the most time for them.[1] Why discriminate based on time? Why must this be the resource that must be given up to demonstrate a high desire?
Resource-Commitment as a Measure of Desire
A less arbitrary method of discrimination would be to allocate tickets to those willing to give up the most resources in general for them; in other words, to allocate tickets to individuals who most demand them.
To distinguish ticket applicants based on their relative demand, a price is set. In a monetary economy, the price is stated in money terms. As the price increases, the number of individuals willing to pay to attain the tickets decreases. There always exists some price at which demand equals supply; this is the equilibrium price.
For example, setting a price of £10 per ticket for the cycling event reduces the number of applicants from 80,000 to 60,000. That is, 20,000 people, although they desire the ticket if they were given it for free, are not willing to give up £10 in order to attain the ticket. Suppose the equilibrium price is £15. That is, exactly 50,000 people are willing to give up £15 to attain a ticket. By setting the price at the equilibrium price, the tickets go precisely to those individuals that demand them the most.
Demand and desire are not the same thing. Individuals with the highest demand are not necessarily those with the most desire. Demand is a function of both desire and wealth. The wealthy man who has all his basic needs satisfied can afford to be frivolous with his money, while a poorer person with a greater desire may be less willing to give up the same amount of money. But given that desire cannot be measured directly (a questionnaire won’t work), this is the least arbitrary way of discriminating ticket applicants.
Side-Benefits to Discriminating Based on Demand
There are also side-benefits to discriminating based on demand.
First, the money generated by ticket-sales generates revenue for the producer (the event organizer and distributor of the tickets). Without this income, the producer would have to fund the event out of his own pocket or through other means such as advertising.[2] This would mean that there would be far fewer events to attend, since it would not be profitable for producers to hold them. As a result of this, there will be far fewer professional performers.
The ticket price which generates the highest revenue for the producer is, in almost all cases, precisely the equilibrium price. For example, at the equilibrium price of $15 per ticket, the producer will generate 15 x 50,000 = $750,000. If he sets his price too low at $10 per ticket, he will only generate 10 x 50,000 = $500,000. If he sets his price too high at $20 per ticket, he will not be able to sell them all. He might only sell 30,000 of them, giving him a revenue of 20 x 30,000 = $600,000.
So there is a harmony of interests between producers and consumers. Purely out of self-interest, a producer will seek to set the price of his tickets at the equilibrium price – the price that will result in the tickets being acquired by the people who demand them the most.
Second, when good things come to those who demand things the most, there is a strong incentive to increase one’s wealth, since one’s wealth is a component of one’s demand. This incentivizes everyone to become wealthier, and this means producing goods and services that are in demand.
Once again, we see the harmony of interests: individuals acting in their own self-interest benefit all other individuals by being productive. Being wealthy (being able to satisfy more of one’s desires), is the reward for effectively satisfying the desires of others.[3]
Neither of these two side-benefits of demand-based distribution are present under any alternative method of distribution. In fact, for a time-based distribution, the incentives are reversed. Instead of rewarding productivity, a time-based distribution rewards time spent merely waiting, queuing, doing nothing, when that time could be spent productively. If goods are going to be distributed based on time, rather than demand, gone is the incentive to enrich oneself, and, by so doing, enriching others.
The Task of the Entrepreneur
A key task for an entrepreneur is to set prices such that profit will be maximized. The equilibrium price is the revenue-maximizing price, and the skill of the entrepreneur is in estimating what this price is. Competition ensures that the most skilful entrepreneurs are rewarded and remain in business, while entrepreneurs who perform badly are weeded out through bankruptcy.
But entrepreneurs are only human, and they often err, by mistakenly setting prices either too low or too high. In either case, his total revenue will be lower because of this. And as another consequence of his error, tickets no longer get into the hands of precisely those who demand them the most. Some other factor – time, favoritism, or maybe just luck – will end up determining who gets a ticket.
If an event-organizer sets the price of tickets too high, he will notice that they are not selling. He may decide to lower the price nearer the event, to make sure all tickets are sold. This makes up for his mistake somewhat, but total revenue is still lower, and the ticket allocation less efficient, than it would have been had he correctly estimated the equilibrium price.
If an event-organizer sets the price of tickets too low, he will sell out quickly. He could have maximized his revenue by charging a higher price. Tickets also end up in the hands of people who demand them less, and people who demand them more are left unsatisfied. Since he no longer has any tickets left, the event-organizer is powerless to correct this mistake.[4] But in terms of ticket distribution, the mistake can be corrected: by making the tickets tradable.
Tradable Tickets
When tickets are named, there is no possibility of trading them independently of the event organizer, so there is no way that an entrepreneurial error of setting a price too low can be corrected. The tickets remain inefficiently distributed.
But when tickets are anonymous, the market is able to correct the deficiency in resource allocation that results from the initial entrepreneurial error. Allowing tickets to be traded after they have been initially distributed ensures that tickets still end up in the hands of those who demand them the most.
For example, suppose the cycling event is sold at $10 per ticket. Some of the ticket-holders will be people who were willing to give up $10 to go, but not much more. Given the choice of $10 or the ticket, these people will take the ticket. But given the choice of $15 and the ticket, these people will take the $15. Conversely, there will be people without tickets who are willing to give up $20 for them.
The obvious solution is for these people to trade. Those without a ticket who demand a ticket more buy ticket from those who demand them less. A market for secondhand tickets might develop. The market price will be equilibrium price: the price that would have maximized revenue for the producer and ensured an efficient allocation of tickets to begin with. The revenue lost by the event-organizer goes to those ticket-holders that decide to sell their ticket on. In this example, each of these people on average would have received $5 revenue.
Ticket Scalping
The opportunity to make money by buying tickets with the intent to sell them is known as “ticket scalping” (or “ticket touting”) and this practice has unjustly acquired a bad reputation. In fact, ticket scalping has the effect of improving the distribution of tickets. The ticket scalper provides tickets to people who greatly demand them, and are willing to pay more than the initial ticket price, but did not acquire a ticket directly from the event-organizer because they were discriminated against in the initial distribution of tickets. Like all profit-making entrepreneurs, the ticket scalper is a public benefactor.
There is usually a lengthy time between tickets going on sale and the event itself. Because of ticket scalpers eager for a bargain, if the event-organizer sets his price too low, they will tend to sell out very quickly, primarily to these ticket scalpers. This should be welcomed, because it makes it easier for the people who most demand tickets to acquire them. There is a heavy element of speculation in what the ticket scalper does. He is taking a chance that the price of the ticket will increase as the event draws near. Like all speculators, ticket scalpers have the effect of reducing price fluctuations out over time. The expert ticket-scalper will sell at a price so that he sells his last ticket at the last moment before the event. This way he will maximize his revenue, and tickets will be available for consumers right up until the last moment. Successful ticket scalping benefits consumers by ensuring the tickets are allocated efficiently to those who most demand them.
Like all entrepreneurs, ticket scalpers may err, but those who do will be weeded out. A ticket scalper who has set his price too high will be seen at the gates of the event, selling his remaining tickets for less than the initial box-office price. At this point, he is cutting his losses, and should consider giving up the ticket scalping business.
Olympic Tickets
The London 2012 Olympic tickets were sold to the public through a combination of demand-based distribution and a random lottery. Tickets were offered at well below their equilibrium price. The applicants’ names were placed into hat, and names were drawn until all the tickets were gone. The tickets contain the name of the applicant, and trading of them is expressly forbidden.
The predictable result is that the tickets have been distributed in a highly inefficient way. There are people that haphazardly applied for a dozen events, just hoping to have a nice day out, and to be able to say they went to the Olympics, whose names were drawn from the hat. They gladly paid £20 for their ticket. Meanwhile you have the most passionate, loyal, excited fans of obscure sports who are left hugely disappointed. They might have paid £100 for what would be, to them, a once-in-a-lifetime experience. Many welfare recipients received tickets; their handout from the government loot easily covering the low price. Productive high-earners who could have paid more missed out. It is a slap in the face for people earning a living by successfully satisfying consumer desires. If all goods were distributed this way, there would be no incentive to be productive at all.
Why were the tickets distributed in this way? The answer usually given involves some notion of “fairness”. Why should “the rich” get tickets and “the poor” get no tickets? Isn’t this supposed to be a “special event”, one that everybody should have “a chance” to go to?
It is telling that the tickets were not distributed for free. Surely if it is unfair on poor people to have to pay a high price, it is unfair on the very poorest people to have to pay any price at all. Making it free would exclude no-one from having a chance to go, right? Why weren’t tickets distributed for free? It seems the sanity of using at least partial demand-based distribution prevailed.
Conclusion
While it is common for people to moan about the details of how the Olympic tickets were distributed, and many are rightfully bitter about not personally acquiring tickets, the view that they should have simply been sold at the equilibrium price, or, at the very least, that trading of tickets should be allowed, is apparently an unpopular one. As I have explained in this blog, any form of distribution besides demand-based distribution, market pricing, is unfair, arbitrary, inefficient and economically destructive.
Footnotes
[1] Online selling of tickets may help alleviate some of these problems, but then the whole point is lost, because simply placing an order as soon as tickets go on sale does not demonstrate a strong desire for the ticket in the same way that being first in line at a box office does. Also, it biases those with internet access, and technical capability.
[2] Theft could also be a source of income for the producer, in the form of taxation granted to him as a subsidy. A discussion of the (harmful) effects of subsidies would take us too far from our subject.
[3] Stealing is another way to become wealthy, of course. In fact, due to rampant corporatism, there is today a huge disconnect between one’s wealth and how effectively one has satisfied the desires of others. The super-rich are without exception only super-rich because they have secured government privileges. They have been able to become wealthy through violence, rather than through satisfying the desires of others.
[4] It should be noted that event-organizers do not always intend to sell at the equilibrium price. They may forsake the maximum revenue for wider business reasons, such as customer good will. For example, cinemas could easily charge a much higher price for opening nights of major movies (as evidenced by the tickets selling out very quickly), and could charge a lower price towards the end of the run (as evidenced by lots of empty seats). Why don’t they? It must be because, overall, they believe this policy would lose them revenue. Thankfully, ticket scalpers often save the day here, by selling coveted opening night tickets to those willing to pay a premium for them.
Supply and Scarcity
For any given cultural or sporting event, the supply of tickets is limited. That is, the tickets are a scarce good. If there are 50,000 seats in the venue, a maximum of 50,000 people can attend the event.
The question is: which 50,000 people in particular get to attend?
If fewer than 50,000 people desire to attend the event, then there is no problem with distribution of tickets. Every individual who wants one can have a ticket. A distribution problem only arises when there are more people who desire a ticket than there are tickets to be distributed. Let us suppose that 80,000 people desire to attend the event. Now a scarcity of tickets means that they cannot all be satisfied.
Random Distribution
One way to distribute tickets would be a random lottery. 80,000 names are entered into a hat, and 50,000 are chosen. The other 30,000 people are out of luck. (For now, assume the tickets are named so that they cannot be traded after they have been distributed).
There is a sense in which this the most fair way to distribute tickets. No one has any greater chance of attending the event than anyone else. And yet, among the 80,000 people, common sense tells us that not everyone desires a ticket with the same intensity. For a cycling event, say, there will be some avid fans, who attend cycling events regularly, know and support the cyclists and the sport with passion, and who get great pleasure from watching cycling events. There will also be some individuals who don’t care much for cycling, but want to go as a novelty, and for a nice day out. It seems unfair that the passionate fan might not be able to go because he was one of the unlucky 30,000, while some individuals who are far less bothered get to go instead.
Desire Cannot be Directly Measured
To make the allocation more efficient, then, what is needed is some way to assess how much the individuals desire the tickets. The best system will be one that allocates the 50,000 tickets to the 50,000 people who most desire them.
How then to do this? One way might be to get the ticket applicants to rate from 1 to 10 how much they desire a ticket. Put 10 if you are a big fan. Put 1 if you’re not that bothered. Clearly this isn’t going to work. Who would put 1? Anyone who does that is obviously not going to get a ticket, so why would they even bother applying? By the same principle, no one would give themselves less than a 10. It won’t do to just ask people how much they desire a ticket. What is needed is some way for people to demonstrate how much they desire a ticket.
Time-Commitment as a Measure of Desire
One way to do this would be to distribute tickets on a first-come-first-served basis. Whoever makes the application first gets the ticket. The idea is that the passionate fans will be the ones first in line at the box office. But is this necessarily the case? What of the family-man who cannot take the time to stand in line? What about the person has prior commitments on the day tickets go on sale? What about people who live far away from the box-office? These people are all discriminated against and disadvantaged by this system, at the expense of those with time to spare (like the unemployed) and those who live closest to the box office. It is still quite arbitrary to distribute tickets to those willing to give up the most time for them.[1] Why discriminate based on time? Why must this be the resource that must be given up to demonstrate a high desire?
Resource-Commitment as a Measure of Desire
A less arbitrary method of discrimination would be to allocate tickets to those willing to give up the most resources in general for them; in other words, to allocate tickets to individuals who most demand them.
To distinguish ticket applicants based on their relative demand, a price is set. In a monetary economy, the price is stated in money terms. As the price increases, the number of individuals willing to pay to attain the tickets decreases. There always exists some price at which demand equals supply; this is the equilibrium price.
For example, setting a price of £10 per ticket for the cycling event reduces the number of applicants from 80,000 to 60,000. That is, 20,000 people, although they desire the ticket if they were given it for free, are not willing to give up £10 in order to attain the ticket. Suppose the equilibrium price is £15. That is, exactly 50,000 people are willing to give up £15 to attain a ticket. By setting the price at the equilibrium price, the tickets go precisely to those individuals that demand them the most.
Demand and desire are not the same thing. Individuals with the highest demand are not necessarily those with the most desire. Demand is a function of both desire and wealth. The wealthy man who has all his basic needs satisfied can afford to be frivolous with his money, while a poorer person with a greater desire may be less willing to give up the same amount of money. But given that desire cannot be measured directly (a questionnaire won’t work), this is the least arbitrary way of discriminating ticket applicants.
Side-Benefits to Discriminating Based on Demand
There are also side-benefits to discriminating based on demand.
First, the money generated by ticket-sales generates revenue for the producer (the event organizer and distributor of the tickets). Without this income, the producer would have to fund the event out of his own pocket or through other means such as advertising.[2] This would mean that there would be far fewer events to attend, since it would not be profitable for producers to hold them. As a result of this, there will be far fewer professional performers.
The ticket price which generates the highest revenue for the producer is, in almost all cases, precisely the equilibrium price. For example, at the equilibrium price of $15 per ticket, the producer will generate 15 x 50,000 = $750,000. If he sets his price too low at $10 per ticket, he will only generate 10 x 50,000 = $500,000. If he sets his price too high at $20 per ticket, he will not be able to sell them all. He might only sell 30,000 of them, giving him a revenue of 20 x 30,000 = $600,000.
So there is a harmony of interests between producers and consumers. Purely out of self-interest, a producer will seek to set the price of his tickets at the equilibrium price – the price that will result in the tickets being acquired by the people who demand them the most.
Second, when good things come to those who demand things the most, there is a strong incentive to increase one’s wealth, since one’s wealth is a component of one’s demand. This incentivizes everyone to become wealthier, and this means producing goods and services that are in demand.
Once again, we see the harmony of interests: individuals acting in their own self-interest benefit all other individuals by being productive. Being wealthy (being able to satisfy more of one’s desires), is the reward for effectively satisfying the desires of others.[3]
Neither of these two side-benefits of demand-based distribution are present under any alternative method of distribution. In fact, for a time-based distribution, the incentives are reversed. Instead of rewarding productivity, a time-based distribution rewards time spent merely waiting, queuing, doing nothing, when that time could be spent productively. If goods are going to be distributed based on time, rather than demand, gone is the incentive to enrich oneself, and, by so doing, enriching others.
The Task of the Entrepreneur
A key task for an entrepreneur is to set prices such that profit will be maximized. The equilibrium price is the revenue-maximizing price, and the skill of the entrepreneur is in estimating what this price is. Competition ensures that the most skilful entrepreneurs are rewarded and remain in business, while entrepreneurs who perform badly are weeded out through bankruptcy.
But entrepreneurs are only human, and they often err, by mistakenly setting prices either too low or too high. In either case, his total revenue will be lower because of this. And as another consequence of his error, tickets no longer get into the hands of precisely those who demand them the most. Some other factor – time, favoritism, or maybe just luck – will end up determining who gets a ticket.
If an event-organizer sets the price of tickets too high, he will notice that they are not selling. He may decide to lower the price nearer the event, to make sure all tickets are sold. This makes up for his mistake somewhat, but total revenue is still lower, and the ticket allocation less efficient, than it would have been had he correctly estimated the equilibrium price.
If an event-organizer sets the price of tickets too low, he will sell out quickly. He could have maximized his revenue by charging a higher price. Tickets also end up in the hands of people who demand them less, and people who demand them more are left unsatisfied. Since he no longer has any tickets left, the event-organizer is powerless to correct this mistake.[4] But in terms of ticket distribution, the mistake can be corrected: by making the tickets tradable.
Tradable Tickets
When tickets are named, there is no possibility of trading them independently of the event organizer, so there is no way that an entrepreneurial error of setting a price too low can be corrected. The tickets remain inefficiently distributed.
But when tickets are anonymous, the market is able to correct the deficiency in resource allocation that results from the initial entrepreneurial error. Allowing tickets to be traded after they have been initially distributed ensures that tickets still end up in the hands of those who demand them the most.
For example, suppose the cycling event is sold at $10 per ticket. Some of the ticket-holders will be people who were willing to give up $10 to go, but not much more. Given the choice of $10 or the ticket, these people will take the ticket. But given the choice of $15 and the ticket, these people will take the $15. Conversely, there will be people without tickets who are willing to give up $20 for them.
The obvious solution is for these people to trade. Those without a ticket who demand a ticket more buy ticket from those who demand them less. A market for secondhand tickets might develop. The market price will be equilibrium price: the price that would have maximized revenue for the producer and ensured an efficient allocation of tickets to begin with. The revenue lost by the event-organizer goes to those ticket-holders that decide to sell their ticket on. In this example, each of these people on average would have received $5 revenue.
Ticket Scalping
The opportunity to make money by buying tickets with the intent to sell them is known as “ticket scalping” (or “ticket touting”) and this practice has unjustly acquired a bad reputation. In fact, ticket scalping has the effect of improving the distribution of tickets. The ticket scalper provides tickets to people who greatly demand them, and are willing to pay more than the initial ticket price, but did not acquire a ticket directly from the event-organizer because they were discriminated against in the initial distribution of tickets. Like all profit-making entrepreneurs, the ticket scalper is a public benefactor.
There is usually a lengthy time between tickets going on sale and the event itself. Because of ticket scalpers eager for a bargain, if the event-organizer sets his price too low, they will tend to sell out very quickly, primarily to these ticket scalpers. This should be welcomed, because it makes it easier for the people who most demand tickets to acquire them. There is a heavy element of speculation in what the ticket scalper does. He is taking a chance that the price of the ticket will increase as the event draws near. Like all speculators, ticket scalpers have the effect of reducing price fluctuations out over time. The expert ticket-scalper will sell at a price so that he sells his last ticket at the last moment before the event. This way he will maximize his revenue, and tickets will be available for consumers right up until the last moment. Successful ticket scalping benefits consumers by ensuring the tickets are allocated efficiently to those who most demand them.
Like all entrepreneurs, ticket scalpers may err, but those who do will be weeded out. A ticket scalper who has set his price too high will be seen at the gates of the event, selling his remaining tickets for less than the initial box-office price. At this point, he is cutting his losses, and should consider giving up the ticket scalping business.
Olympic Tickets
The London 2012 Olympic tickets were sold to the public through a combination of demand-based distribution and a random lottery. Tickets were offered at well below their equilibrium price. The applicants’ names were placed into hat, and names were drawn until all the tickets were gone. The tickets contain the name of the applicant, and trading of them is expressly forbidden.
The predictable result is that the tickets have been distributed in a highly inefficient way. There are people that haphazardly applied for a dozen events, just hoping to have a nice day out, and to be able to say they went to the Olympics, whose names were drawn from the hat. They gladly paid £20 for their ticket. Meanwhile you have the most passionate, loyal, excited fans of obscure sports who are left hugely disappointed. They might have paid £100 for what would be, to them, a once-in-a-lifetime experience. Many welfare recipients received tickets; their handout from the government loot easily covering the low price. Productive high-earners who could have paid more missed out. It is a slap in the face for people earning a living by successfully satisfying consumer desires. If all goods were distributed this way, there would be no incentive to be productive at all.
Why were the tickets distributed in this way? The answer usually given involves some notion of “fairness”. Why should “the rich” get tickets and “the poor” get no tickets? Isn’t this supposed to be a “special event”, one that everybody should have “a chance” to go to?
It is telling that the tickets were not distributed for free. Surely if it is unfair on poor people to have to pay a high price, it is unfair on the very poorest people to have to pay any price at all. Making it free would exclude no-one from having a chance to go, right? Why weren’t tickets distributed for free? It seems the sanity of using at least partial demand-based distribution prevailed.
Conclusion
While it is common for people to moan about the details of how the Olympic tickets were distributed, and many are rightfully bitter about not personally acquiring tickets, the view that they should have simply been sold at the equilibrium price, or, at the very least, that trading of tickets should be allowed, is apparently an unpopular one. As I have explained in this blog, any form of distribution besides demand-based distribution, market pricing, is unfair, arbitrary, inefficient and economically destructive.
Footnotes
[1] Online selling of tickets may help alleviate some of these problems, but then the whole point is lost, because simply placing an order as soon as tickets go on sale does not demonstrate a strong desire for the ticket in the same way that being first in line at a box office does. Also, it biases those with internet access, and technical capability.
[2] Theft could also be a source of income for the producer, in the form of taxation granted to him as a subsidy. A discussion of the (harmful) effects of subsidies would take us too far from our subject.
[3] Stealing is another way to become wealthy, of course. In fact, due to rampant corporatism, there is today a huge disconnect between one’s wealth and how effectively one has satisfied the desires of others. The super-rich are without exception only super-rich because they have secured government privileges. They have been able to become wealthy through violence, rather than through satisfying the desires of others.
[4] It should be noted that event-organizers do not always intend to sell at the equilibrium price. They may forsake the maximum revenue for wider business reasons, such as customer good will. For example, cinemas could easily charge a much higher price for opening nights of major movies (as evidenced by the tickets selling out very quickly), and could charge a lower price towards the end of the run (as evidenced by lots of empty seats). Why don’t they? It must be because, overall, they believe this policy would lose them revenue. Thankfully, ticket scalpers often save the day here, by selling coveted opening night tickets to those willing to pay a premium for them.
Wednesday, 14 September 2011
Monday, 12 September 2011
Further response to WelcometotheUnknown: punishment theories
Here is WelcometotheUnknown's response to my blog post. My response follows.
Glad I helped you understand it better. You bring up a lot of good points here.
The nature of the beast is that, whenever political philosophies are applied in the real world, there are always going to be “continuum issues” or “boundary issues”. Libertarianism is no exception to this. From the armchair, we can explain principles, and we can construct hypotheticals to try to demonstrate how to apply these principles, but we cannot escape continuum issues.
For example, what exactly constitutes homesteading of a plot of land? A court can be fully libertarian, but it still must ask, did what Joe did to the plot of land qualify as homesteading? Perhaps he fenced off the land, and put a sign up. Is that enough? Or does he need to do some other physical thing to the land to make it his, and if so, what?
Of course, the answer is that we cannot answer this. It has to be determined by custom; by whatever works. The courts will draw a line somewhere and say ‘to homestead a field, the following requirements must be filled…’ We can only be vague about what these requirements might be.
Similarly, we need the courts to draw a line to distinguish coercion from voluntary exchange, because there is a continuum; there are ambiguous cases, which we cannot resolve from the armchair. There is no ‘libertarian place’ to draw the line. Libertarianism only outlines the principle itself; we need the courts to apply it, and in a free market setting, those courts will be guided by the customs of the society, and the opinions of the consumers.
All the questions you bring up in your post are matters of application, not of principle. Clearly all matters of application are subjective. This is regardless of whether the principles themselves are considered subjective or objective.
My point is that it is no vice to recognize continuum issues, or to admit that something is subjective. This is unavoidable. I don’t know how much compensation you will get from Bill Gates for stealing your precious stick-man painting. The only honest answer is that old libertarian cliché “let the market decide”. I can speculate that you probably won’t get a billion dollars from him, because any court that made such a preposterous decision would quickly lose customers.
With my descriptive hat on, I can predict that courts would enforce some kind of punishment or some kind of compensation that must be paid by aggressors. A “market for punishments” would develop. For example, in many evolved legal systems, it was customary for aggressors to have to pay the victim X times the price of what was stolen. X may be 2 or 3 or 5. I have not read of any system where X was 1. In other words, aggressors are usually made to pay to their victim more than what they stole. It really doesn’t matter how this was justified. Likewise, in a setting of competing private courts, it won’t matter how they try to ‘justify’ their policies. The merits of “punishment theories” don’t really matter when they are being actively tested out on the market.
Now I’ll put on my normative hat. What do libertarians have to say about the limits of retaliatory coercion?
There are retributionists and there are restitutionists. Both positions are nuanced. The difference between them is clear in theory, but not in practice. Given any court decision, it is futile to try to assign some portion of it as “restitution” and some other portion as “retribution”.
For example, take a punishment of 3X. Perhaps we call 1X the “restitution” part. But restitutionists do not stop here. They would rightly say that the victim is not “fully restored” just by giving back her property - the victim has also been “scared” and “inconvenienced”. They say that the aggressor has to pay more than 1X to account for this. They might say 2X covers these two things. So we cannot say that a punishment of 3X comprises 1X restitution plus 2X retribution. It may be all restitution.
The restitutionists are focussed solely on the victim. Their goal is to “make the victim whole again,” or to make it as far as possible as if they crime never happened.
The retributionists abandon the idea of “restoring the victim”. Their goal is to “make the aggressor suffer like he made the victim suffer”.
Both of these approaches are obviously beset by continuum issues, but we must not let such issues cloud the principles being discussed. In principle, does it make more sense for a court to focus on making the aggressor suffer, or on restoring the victim? In other words, should punishments be thought of primarily as retributive, or restitutive?
Traditionally, restitution has been the libertarian position, and people like Walter Block take this view. Stephan Kinsella convinced me that retribution should be the primary consideration, using his “estoppel” argument. There are just too many problems with restitutionism, even in principle.
Having said that, I believe that in a competitive market, while the courts may consider retribution primary when making their decisions, victims will probably “make deals” with their aggressors such that most people will think of the system as primarily restitutive. This adds another layer of complexity.
Personally however, I am inclined to think that there really isn’t a ‘correct’ libertarian theory of punishment. It’s a whole different subject. Libertarianism forbids aggression, but it doesn’t imply – without bringing in extra principles – anything about the limits of retaliatory coercion. It is a matter of taste whether a libertarian believes restitution or retribution ought to be primary in determining punishments.
Your last two paragraphs are spot on. The one thing I would point out is that some people (notably Rothbard) used the term monopoly to mean a compulsory monopoly. A firm that happened to gain 100% market share in a free market is not a ‘non-compulsory monopoly’: it is not a monopoly at all, but just a highly successful firm. This explains why I did not use the term ‘compulsory’ as a qualifier for ‘monopoly’ in my post, and also why the dichotomy that defines anarchy/government is free market vs. monopoly, and this is equivalent to voluntary vs. compulsory. Compulsory is implied by the term monopoly, to Rothbard and me.
Thank you for your detailed reply. Before I reply, first note that I used the word “retribution” in my posts accidentally multiple times. I meant to use the word “restitution” instead. Interestingly, they have similar meanings, so my mistake led you to bring up a good point.
First to clear up a few things: I certainly do not consider myself a pacifist. I think there is a difference between uses of force in defense and retaliatory uses of force. Perhaps the Non-Aggression Principle does not forbid either kind of force, but there is still a difference. For example, if you tried stealing from me I would consider it just to use force to prevent you from stealing from me. If you managed to steal something from me, I would also feel justified using force against you to get it back (“restitution”). Would I consider it just to demand you give me back something extra in return for my troubles or for punishment of some kind against you for the act of theft? Perhaps, but I think we soon run into trouble saying that such uses of retaliatory force for retribution are justified.
I think there may be a gray area between your description of what I call anarchy and what you call anarchy. The gray area is centered on what instances we say people can legitimately use physical force and how far they go with that use of force. The gray area may simply be a spectrum from “restitution” to “retribution.” These terms may be ambiguous in and of themselves seeing as it is very difficult if not impossible to come up with a clear objective definition of what counts as “restitution” and what counts as “retribution.” For example, if an item of subjective value is stolen (e.g. a painting, rather than an amount of money as in the DD vs. Bill example), then what counts as restitution? Surely what one person may say counts as restitution another will say is retribution due to the fact that the value of the property stolen is completely subjective, rather than something like a quantity of money.
If someone were to steal a painting from me and then destroy it, I wouldn’t be able to get it back, no matter how much coercion I used. Could I thus demand some amount of money from the thief and legitimately use force against the thief to get the money from him in the name of restitution? Even if I’m someone who believes that obtaining only restitution rather than retribution is just, there is still a problem in defining what counts as restitution. What if I value the painting at a billion dollars? If I draw a stick figure on a piece of paper (my painting) and then Bill Gates takes out a match and burns it, am I really justified in using physical force against Gates to take a billion dollars from him? Perhaps the Non-Aggression Principle doesn’t forbid my actions because my actions are indeed retaliatory force rather in reaction to an act of aggressive force, but I think you and I would agree that there is something unjust about this. But, what is unjust about it? Can we define it?
And what about crimes other than theft? If someone commits rape or murder, what counts as “restitution” and what counts as “retribution”? I can’t think of an objective definition for either term. Thus, I think that unless I’m prepared to say that no amount of retaliatory force is justified (beyond re-obtaining something that was stolen), even in the case of murder, then I must accept the subjective spectrum of retaliatory force in subjectively defined degrees as legitimate.
The only time that I would confidently say retaliatory force is justified is when it is used to re-obtain something that was stolen. As soon as retaliatory force is used to get something extra (retribution) or even something “equivalent” but in a different form (restitution in the form of money, for example, for a stolen/destroyed piece of property without a market value (i.e. something that is not replaceable), e.g. a one-of-a-kind painting) then we run into the problem of calling it just to coercively seize a billion dollars from Bill Gates for destroying my stick figure painting.
So am I prepared to say that such retaliatory force to demand restitution and retribution from murderers, rapists, and thieves (thieves who have destroyed what they have stolen or done something else to what they have stolen so that the stolen property can no longer be returned, even using force to return it) is unjust and unnecessary? I certainly would consider some acts of retaliatory force unjust, but others seem very reasonable, such as demanding that a murderer pay the victim’s family/next of kin at least some small fee as “restitution” for his crime. Due to the subjective nature of them and our inability, at least as far as I now see, to objectively define the degrees of retaliatory force, I think that if I want to accept the use of retaliatory force to obtain a small fee of “restitution” for the murder victim’s family as legitimate, then I have to agree with you and accept the whole spectrum of retaliatory forces in all degrees as legitimate. While I may personally disagree with some uses of retaliatory force, such as using retaliatory force to obtain a billion dollars from Gates for the stick figure drawing he burned, the difference is subjective as far as I see.
“It may help if you can clarify what degree of retaliatory coercion you see as justifiable.”
It’s just to use retaliatory force to retrieve something that was stolen.
It may or may not be just, in my own subjective opinion, to use retaliatory force to obtain “restitution” or “retribution” for property that is stolen that is not returnable or replaceable or to use retaliatory force or obtain “restitution” or “retribution” for acts of rape, murder, etc.
It may be just to use retaliatory force to lock up a murderer, in the name of defensive force. I haven’t thought about this very much, but I think a case can be made to say that locking up someone who has committed a murder in the name of defending others from other possible acts of murder may be justified. I’m not very confident about saying this is just, however, because I think it could also be argued that this idea could be extended to locking up other violent criminals for the same reason. What if someone starts a fist fight? Can he be locked up for life as well for the same reason? If force can be used to lock up the murderer in the name of defending people from other possible future attacks, then can’t the same be said of the person who started the fist fight? The differences don’t seem too clear to me.
Out of curiosity, what degree of retaliatory coercion do you think is justifiable? I don’t think the terms “restitution” and “retribution” define the degrees well enough. They have some subjective meaning, but objectively I think they fail to define what acts of retaliatory forces are justified and which are not.
Lastly, while I called your description of a free society a system of “competing governments” in my post on YouTube, my realization in this post that the degree of retaliatory force that is justified does not seem to be objectively definable and the fact that I think it would be very reasonable to use retaliatory force against a murder to make him pay at least a small sum of money to the victim’s next of kin in the name of “restitution” has made me change my mind: I now consider what you described in the video as a system of law without government, law in a stateless/free/anarchic society.
Furthermore, I have realized that the distinction between what you describe and government is not the lack of monopoly, but rather, the lack of compulsory monopoly. Even if Dawn Defense were to obtain a monopoly in a geographic region and be the sole provider of such law services in a geographic region, it still would not qualify as a government/state, for the very reason that people would choose to fund it voluntarily. If people in the region where Dawn Defense had gained a monopoly choose to stop funding it Dawn Defense would allow this. If Dawn Defense did not allow it, then the funding would be renamed from “voluntary” to “compulsory taxation” and at this point Dawn Defense would be a government/state.
If everyone in the world subscribed to Dawn Defense’s services and nobody else in the world offered any law services, Dawn Defense would have a monopoly on law services, but still would not be a government. Thus, I believe the defining distinction between private law organizations and governments is not the presence of competing firms vs. a monopoly, but rather voluntary funding vs. compulsory taxation. Having said this, I have no doubt that when we transition from compulsory taxation to a free society of voluntarily funded law organizations, competition will thrive. So while law services in a free society may be marked by competition, all I mean to say is that the competition is not the defining aspect of what makes the society free.
Glad I helped you understand it better. You bring up a lot of good points here.
The nature of the beast is that, whenever political philosophies are applied in the real world, there are always going to be “continuum issues” or “boundary issues”. Libertarianism is no exception to this. From the armchair, we can explain principles, and we can construct hypotheticals to try to demonstrate how to apply these principles, but we cannot escape continuum issues.
For example, what exactly constitutes homesteading of a plot of land? A court can be fully libertarian, but it still must ask, did what Joe did to the plot of land qualify as homesteading? Perhaps he fenced off the land, and put a sign up. Is that enough? Or does he need to do some other physical thing to the land to make it his, and if so, what?
Of course, the answer is that we cannot answer this. It has to be determined by custom; by whatever works. The courts will draw a line somewhere and say ‘to homestead a field, the following requirements must be filled…’ We can only be vague about what these requirements might be.
Similarly, we need the courts to draw a line to distinguish coercion from voluntary exchange, because there is a continuum; there are ambiguous cases, which we cannot resolve from the armchair. There is no ‘libertarian place’ to draw the line. Libertarianism only outlines the principle itself; we need the courts to apply it, and in a free market setting, those courts will be guided by the customs of the society, and the opinions of the consumers.
All the questions you bring up in your post are matters of application, not of principle. Clearly all matters of application are subjective. This is regardless of whether the principles themselves are considered subjective or objective.
My point is that it is no vice to recognize continuum issues, or to admit that something is subjective. This is unavoidable. I don’t know how much compensation you will get from Bill Gates for stealing your precious stick-man painting. The only honest answer is that old libertarian cliché “let the market decide”. I can speculate that you probably won’t get a billion dollars from him, because any court that made such a preposterous decision would quickly lose customers.
With my descriptive hat on, I can predict that courts would enforce some kind of punishment or some kind of compensation that must be paid by aggressors. A “market for punishments” would develop. For example, in many evolved legal systems, it was customary for aggressors to have to pay the victim X times the price of what was stolen. X may be 2 or 3 or 5. I have not read of any system where X was 1. In other words, aggressors are usually made to pay to their victim more than what they stole. It really doesn’t matter how this was justified. Likewise, in a setting of competing private courts, it won’t matter how they try to ‘justify’ their policies. The merits of “punishment theories” don’t really matter when they are being actively tested out on the market.
Now I’ll put on my normative hat. What do libertarians have to say about the limits of retaliatory coercion?
There are retributionists and there are restitutionists. Both positions are nuanced. The difference between them is clear in theory, but not in practice. Given any court decision, it is futile to try to assign some portion of it as “restitution” and some other portion as “retribution”.
For example, take a punishment of 3X. Perhaps we call 1X the “restitution” part. But restitutionists do not stop here. They would rightly say that the victim is not “fully restored” just by giving back her property - the victim has also been “scared” and “inconvenienced”. They say that the aggressor has to pay more than 1X to account for this. They might say 2X covers these two things. So we cannot say that a punishment of 3X comprises 1X restitution plus 2X retribution. It may be all restitution.
The restitutionists are focussed solely on the victim. Their goal is to “make the victim whole again,” or to make it as far as possible as if they crime never happened.
The retributionists abandon the idea of “restoring the victim”. Their goal is to “make the aggressor suffer like he made the victim suffer”.
Both of these approaches are obviously beset by continuum issues, but we must not let such issues cloud the principles being discussed. In principle, does it make more sense for a court to focus on making the aggressor suffer, or on restoring the victim? In other words, should punishments be thought of primarily as retributive, or restitutive?
Traditionally, restitution has been the libertarian position, and people like Walter Block take this view. Stephan Kinsella convinced me that retribution should be the primary consideration, using his “estoppel” argument. There are just too many problems with restitutionism, even in principle.
Having said that, I believe that in a competitive market, while the courts may consider retribution primary when making their decisions, victims will probably “make deals” with their aggressors such that most people will think of the system as primarily restitutive. This adds another layer of complexity.
Personally however, I am inclined to think that there really isn’t a ‘correct’ libertarian theory of punishment. It’s a whole different subject. Libertarianism forbids aggression, but it doesn’t imply – without bringing in extra principles – anything about the limits of retaliatory coercion. It is a matter of taste whether a libertarian believes restitution or retribution ought to be primary in determining punishments.
Your last two paragraphs are spot on. The one thing I would point out is that some people (notably Rothbard) used the term monopoly to mean a compulsory monopoly. A firm that happened to gain 100% market share in a free market is not a ‘non-compulsory monopoly’: it is not a monopoly at all, but just a highly successful firm. This explains why I did not use the term ‘compulsory’ as a qualifier for ‘monopoly’ in my post, and also why the dichotomy that defines anarchy/government is free market vs. monopoly, and this is equivalent to voluntary vs. compulsory. Compulsory is implied by the term monopoly, to Rothbard and me.
Sunday, 11 September 2011
What Libertarianism Is (by Stephan Kinsella)
Stephan Kinsella explores what makes libertarianism different from other political philosophies.
Property, Rights, and Liberty
Property in Bodies
Self-ownership and Conflict-avoidance
Property in External Things
Consistency and Principle
The article text is at http://mises.org/daily/3660.
Read by Graham Wright.
Property, Rights, and Liberty
Property in Bodies
Self-ownership and Conflict-avoidance
Property in External Things
Consistency and Principle
The article text is at http://mises.org/daily/3660.
Read by Graham Wright.
Symphony of Science: The Quantum World! (video)
A musical investigation into the nature of atoms and subatomic particles, the jiggly things that make up everything we see. Featuring Morgan Freeman, Stephen Hawking, Michio Kaku, Brian Cox, Richard Feynman, and Frank Close.
Response to comment on my video "Conflict Resolution in a Free Society"
This is a response to a youtube comment left on my video "Law Without Government Part 2: Conflict Resolution in a Free Society" by WelcometotheUnknown.
WelcometotheUnknown says:
Thanks for this thoughtful response, which is worthy of a detailed reply.
First, let’s not get bogged down in terminology. We’re using several words differently. You are saying any security firm (like Dawn Defense) that uses force is by definition a government, and any such force is “political power”. I use a different definition of government. I would say that government is by definition a monopolist, so Dawn Defense is not a government. I use the term government interchangeably with State; all governments are compulsory; all governments tax. So “multiple governments competing for the voluntary funding of individuals on a market [in the same geographic area]” is a misuse of the term government, by my definition. If they’re competing for customers, they’re not governments.
Anarchy, since it means anti-government to us both, means different things to us because we have a different definition of government. To me, the situation in my video – multiple firms competing in the same territorial area competing for voluntary funding - is the definition of anarchy. The only requirement for anarchy is no monopolist. To you, it is not anarchy because there is still force being used against aggressors. I would call this situation pacificism, which is a kind of anarchy.
Now to our substantive disagreement about the kind of society we advocate. My position is that a pacific society (what you call anarchy) is desirable, in fact ideal. However, I also consider it somewhat utopian. Yes, ostracism would be a very powerful check on criminals, but the question is: would it be enough to maintain order? We can speculate about this, but we’ll only know by finding out, through a competitive law system.
My opinion is that voluntary actions like ostracism would not be sufficient, at least at first, for maintaining order. Ostracism just isn’t a big enough deterrent against some criminals; force would be needed against them. I may be wrong. I hope I am wrong. It may be that a competitive law system will become less and less coercive over time, until coercion is not used at all, and law becomes voluntary.
My video is an attempt to describe competitive law, and I used competitive-coercive law as I think that it is more realistic, and takes things one-step-at-a-time. The competitive part is what makes this society anarchy, by my definition. You are advocating a society of competitive-voluntary law. The voluntary part, to you, is necessary for it to be called anarchy. This is a mere terminological difference; our essential point of disagreement is that we speculate differently about whether coercion will be used in a competitive law system. We both agree it would be ideal; I say it is also unrealistic.
The current situation, of course, is monopolistic-coercive law, and both of us oppose the monopolistic part. That’s the most important thing; whether law is to be coercive or voluntary is just speculation about how things might turn out in a competitive environment.
You bring up the non-aggression principle.
So we must now step out of the descriptive realm (where we think about how a competitive law system might work in practice) and into the normative realm (where we think about what kinds of actions are justified according to libertarian principles)…
I insist that, if Dawn Defense did use force against Bill to take their $10,000, they would NOT be violating the NAP. The NAP forbids aggression, which is the initiation of coercion. What Dawn Defense did was retaliatory coercion; coercion in response to aggression. This is defensive action, not aggressive action, and thus not a violation of the NAP. Dawn Defense is acting on behalf of Alice, who was aggressed against, and she is entitled to retaliate, at least to attain restitution.
Within libertarian circles it is up for debate how much retaliatory coercion is justified. That is, at what point retaliatory coercion becomes a new aggressive action, and thus forbidden. Stephan Kinsella, for example, would say that retribution is primary; the “equal suffering” principle. The Rothbardian position is that retaliation is acceptable only to attain restitution; the “restore the victim” principle.
You say that using physical force is justified only in “self-defense”. The question is: what do you include within this term? Surely Alice has a right to use force take back her stolen handbag, if nothing else? And surely she also has the right to pay someone to use force on her behalf?
If by “self-defense” you mean she is not allowed to pay someone to use force on her behalf, then that is an odd rejection of the division of labor. What’s wrong with Alice’s wrestler boyfriend going round Bill’s house to grab the stolen handbag?
If by “self-defense” you do not include any right of Alice is to use retaliatory coercion even to attain restitution, then you are at odds with most libertarians, who are at least restitutionists (Rothbard, Block, Long), if not retributionists (Kinsella) as well.
In fact, the term “self-defense” is often used very loosely by libertarians. It is used interchangeably with “defense”. When someone like Rothbard says “only force used in self-defense is justified” he might as well say “only force used in defense is justified”. He does not mean to imply any of the two interpretations above by the use of “self-defense” rather than merely “defense”.
It may help if you can clarify what degree of retaliatory coercion you see as justifiable.
In my video, I left it ambiguous whether Dawn Defense were demanding $10,000 as retribution, or restitution only, or how they came up with the amount. It could be, for example, that Alice had $10,000 cash in the handbag Bill stole, so Dawn Defense are demanding pure restitution only. If Bill does not admit his guilt and voluntarily give the money back (perhaps ostracism is no worry to him), do you maintain that Dawn Defense are still violating the NAP if they threaten Bill with force to get him to pay the money back? If so, you are using an uncommonly broad definition of “aggression”, which extends the NAP to forbid far more than it usually does. It extends so far that criminals are justified in keeping the proceeds of their crimes, since it is unjustified for the victim to take back his property using force.
WelcometotheUnknown says:
[At 4:20 in the video you say] "...threatening to use force against him if necessary." This is a tyrannical government then. It differs from our current governments in that there are multiple governments competing for the voluntary funding of individuals on a market. While this would be a lot better than our current system, it still does not qualify as anarchism as Dawn Defense will use force to make Bill pay whatever amount DD deems is fair. Under true anarchy, the enforcement of this will be by ostracism not coercion.
It seems to me that what you are advocating in this video is not a truly free society (anarchy). What you are advocating is competing governments in a single geographic area. You say that rather than being forced to pay taxes to the US government and their courts, police, and law systems, I can choose which law organizations I wish to subscribe to. This does not qualify as anarchism because you still give these law organizations political power.
The ability to "legitimately" use physical coercion to make Bill pay the $10,000 is called political power, something that is non-existent in a free society. If Bill agrees to follow by the ruling of his protection agency or dispute resolution organization and agrees to have the agency enforce their rulings against him should he not follow them, then if his agency says he owes the person $10,000 and he refuses to pay, then the coercion is justified.
But, if he does not agree to have the organization's ruling on the crime imposed against him forcefully to make him pay X in retribution, then that is illegitimate in terms of the non-aggression principle that defines a free society. Thus, if Bill doesn't agree to follow the rulings of any protection agency like DD, etc, then we cannot justly use force against him to make him pay retribution. Using physical force against Bill is only justified in self-defense.
So you might ask, how then is society to deal with thieves such as Bill? Easy, if someone in society doesn't agree to follow the rulings of some third party dispute resolution organization, then ostracize that person, because you know that if a dispute should arise (such as whether or not he committed a crime or how much he has to pay up if he did) then there will be no easy peaceful way of dealing with it.
By "ostracize" I basically mean to cut all economic (and/or social) ties with him. People are very dependent on each other. If there is someone who does not wish to submit himself to some third party arbitrator who can make dispute resolution easier, then that person is too difficult to live with. Don't buy anything from him, don't sell him anything, etc, unless he agrees to accept the rulings of some organization like DD when he fails to resolve disputes himself.
Thanks for this thoughtful response, which is worthy of a detailed reply.
First, let’s not get bogged down in terminology. We’re using several words differently. You are saying any security firm (like Dawn Defense) that uses force is by definition a government, and any such force is “political power”. I use a different definition of government. I would say that government is by definition a monopolist, so Dawn Defense is not a government. I use the term government interchangeably with State; all governments are compulsory; all governments tax. So “multiple governments competing for the voluntary funding of individuals on a market [in the same geographic area]” is a misuse of the term government, by my definition. If they’re competing for customers, they’re not governments.
Anarchy, since it means anti-government to us both, means different things to us because we have a different definition of government. To me, the situation in my video – multiple firms competing in the same territorial area competing for voluntary funding - is the definition of anarchy. The only requirement for anarchy is no monopolist. To you, it is not anarchy because there is still force being used against aggressors. I would call this situation pacificism, which is a kind of anarchy.
Now to our substantive disagreement about the kind of society we advocate. My position is that a pacific society (what you call anarchy) is desirable, in fact ideal. However, I also consider it somewhat utopian. Yes, ostracism would be a very powerful check on criminals, but the question is: would it be enough to maintain order? We can speculate about this, but we’ll only know by finding out, through a competitive law system.
My opinion is that voluntary actions like ostracism would not be sufficient, at least at first, for maintaining order. Ostracism just isn’t a big enough deterrent against some criminals; force would be needed against them. I may be wrong. I hope I am wrong. It may be that a competitive law system will become less and less coercive over time, until coercion is not used at all, and law becomes voluntary.
My video is an attempt to describe competitive law, and I used competitive-coercive law as I think that it is more realistic, and takes things one-step-at-a-time. The competitive part is what makes this society anarchy, by my definition. You are advocating a society of competitive-voluntary law. The voluntary part, to you, is necessary for it to be called anarchy. This is a mere terminological difference; our essential point of disagreement is that we speculate differently about whether coercion will be used in a competitive law system. We both agree it would be ideal; I say it is also unrealistic.
The current situation, of course, is monopolistic-coercive law, and both of us oppose the monopolistic part. That’s the most important thing; whether law is to be coercive or voluntary is just speculation about how things might turn out in a competitive environment.
You bring up the non-aggression principle.
So we must now step out of the descriptive realm (where we think about how a competitive law system might work in practice) and into the normative realm (where we think about what kinds of actions are justified according to libertarian principles)…
I insist that, if Dawn Defense did use force against Bill to take their $10,000, they would NOT be violating the NAP. The NAP forbids aggression, which is the initiation of coercion. What Dawn Defense did was retaliatory coercion; coercion in response to aggression. This is defensive action, not aggressive action, and thus not a violation of the NAP. Dawn Defense is acting on behalf of Alice, who was aggressed against, and she is entitled to retaliate, at least to attain restitution.
Within libertarian circles it is up for debate how much retaliatory coercion is justified. That is, at what point retaliatory coercion becomes a new aggressive action, and thus forbidden. Stephan Kinsella, for example, would say that retribution is primary; the “equal suffering” principle. The Rothbardian position is that retaliation is acceptable only to attain restitution; the “restore the victim” principle.
You say that using physical force is justified only in “self-defense”. The question is: what do you include within this term? Surely Alice has a right to use force take back her stolen handbag, if nothing else? And surely she also has the right to pay someone to use force on her behalf?
If by “self-defense” you mean she is not allowed to pay someone to use force on her behalf, then that is an odd rejection of the division of labor. What’s wrong with Alice’s wrestler boyfriend going round Bill’s house to grab the stolen handbag?
If by “self-defense” you do not include any right of Alice is to use retaliatory coercion even to attain restitution, then you are at odds with most libertarians, who are at least restitutionists (Rothbard, Block, Long), if not retributionists (Kinsella) as well.
In fact, the term “self-defense” is often used very loosely by libertarians. It is used interchangeably with “defense”. When someone like Rothbard says “only force used in self-defense is justified” he might as well say “only force used in defense is justified”. He does not mean to imply any of the two interpretations above by the use of “self-defense” rather than merely “defense”.
It may help if you can clarify what degree of retaliatory coercion you see as justifiable.
In my video, I left it ambiguous whether Dawn Defense were demanding $10,000 as retribution, or restitution only, or how they came up with the amount. It could be, for example, that Alice had $10,000 cash in the handbag Bill stole, so Dawn Defense are demanding pure restitution only. If Bill does not admit his guilt and voluntarily give the money back (perhaps ostracism is no worry to him), do you maintain that Dawn Defense are still violating the NAP if they threaten Bill with force to get him to pay the money back? If so, you are using an uncommonly broad definition of “aggression”, which extends the NAP to forbid far more than it usually does. It extends so far that criminals are justified in keeping the proceeds of their crimes, since it is unjustified for the victim to take back his property using force.
Saturday, 10 September 2011
Vote For Peace (video)
Videos like this make it clear why, if Ron Paul wins the Republican nomination, he will easily beat Obama for the White House.
Wednesday, 7 September 2011
The Ron Paul Revolution: Be a part of it (video)
Recollection of the Ron Paul 2008 campaign, looking forward to the 2012 presidential election, and the continuation of the Ron Paul Revolution.
Presented chronologically, the video highlights:
- The first (MSNBC) debate, 3rd May 2007, where Ron Paul's message of peace and liberty first reached millions of ordinary people, eager for real change.
- The Fox debate, 15th May 2007, which was lit up by the confrontation between Ron Paul and Rudy Guiliani over the reasons behind 9/11. Ron Paul seized the moment by explaining the concept of blowback: that terrorists attack us because of our foreign policy of invading and meddling in the affairs of the Middle East.
- The first major Moneybomb, on 5th November 2007, where $4.2 million was raised in one day, bringing him more mainstream coverage and discussion.
- The Tea Party Moneybomb, on 16th December 2007, where $6 million was raised in one day, sparking the Tea Party Movement, dedicated to ending the wars and ending the Fed, and restoring the Constitution.
- Ron Paul's withdrawal from the Presidential race in June 2008, saying: "We must remember, elections are short-term efforts. Revolutions are long term projects... Our job now is to plan for the next phase."
Presented chronologically, the video highlights:
- The first (MSNBC) debate, 3rd May 2007, where Ron Paul's message of peace and liberty first reached millions of ordinary people, eager for real change.
- The Fox debate, 15th May 2007, which was lit up by the confrontation between Ron Paul and Rudy Guiliani over the reasons behind 9/11. Ron Paul seized the moment by explaining the concept of blowback: that terrorists attack us because of our foreign policy of invading and meddling in the affairs of the Middle East.
- The first major Moneybomb, on 5th November 2007, where $4.2 million was raised in one day, bringing him more mainstream coverage and discussion.
- The Tea Party Moneybomb, on 16th December 2007, where $6 million was raised in one day, sparking the Tea Party Movement, dedicated to ending the wars and ending the Fed, and restoring the Constitution.
- Ron Paul's withdrawal from the Presidential race in June 2008, saying: "We must remember, elections are short-term efforts. Revolutions are long term projects... Our job now is to plan for the next phase."
"They push the human race forward" (video)
Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules and they have no respect for the status quo.
You can quote them, disagree with them, glorify or villify them, but the only thing you can't do is ignore them. Because they change things. They push the human race forward.
And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
You can quote them, disagree with them, glorify or villify them, but the only thing you can't do is ignore them. Because they change things. They push the human race forward.
And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
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