For a New Liberty CTIR Literature Series 1Part 5Chapters 10-12

Government in Business

But Don’t We Need the State?

•How will people pay for defense, fire protection, postal service? ▫How do they pay for anything provided on

the free market?

Battles/Divisions/Conflicts

•If government provides monopoly services, its choices will be coercively imposed on all. ▫This will lead to conflict.

•If consumers purchase goods or services they demand, there are no battles. ▫The minority buys another product!

Service and Payment

•“Inherent in all government operation is a grave and fatal split between service and payment.”

•The private firm gets its money from serving the consumer. ▫The State need not worry.

It can treat the consumer however it wants. Example – NY City water shortage.

▫The consumer should drink less water!

Profit and Loss Mechanism

•Private market. ▫Successful = obtains capital for expansion. ▫NOT successful = go out of business.

•Government.▫No profits or losses.

Let’s Run Government as a Business!•Always a monopoly.

▫Example – post office. ▫Far more costly, higher priced, and poorer

quality. Need not cut costs.

▫Capital acquired through taxation. •Free market establishes prices which

permit private firms to calculate the costs.

Solution?

•Abolition of the public sector. •Instead, performed by private enterprise

economy.

Streets and Roads

Result of Abolition of Public Sector•All pieces of land and all land areas would

be owned privately by individuals or groups. ▫Solve numerous problems.

But We Need Police!

•If crime was rampant in a particular area, customers would stop going to businesses there.

•Economic interest of merchants to supply police protection. ▫Must be courteous and pleasant.

State has no incentive.

What About Residential Neighborhoods?•The capital value of the land would

determine the safety provided. ▫Varying degrees of service.

•Character of police protection and neighborhood would depend on wishes of landowners.

What About Discriminatory Residential Sellers?•Discrimination – choosing favorably or

unfavorably in accordance with whatever criteria a person may employ.

•Price for discrimination is paid by the owner.▫Example – If owner NOT rent place to couples

with young children, he may lose money but he could also have less risk of defacing his property.

▫Example – If owner NOT rent to redheads, will suffer economic losses.

•More discrimination = less willing consumers.

We Need Traffic Lights!

•Interest of all road owners to have uniform rules. ▫Any maverick road owner would find

himself with numerous accidents and less customers.

But What About the Roads?

•Public roads serve as a subsidy.▫People who use it a lot pay the same as

someone who never does. •Public roads have numerous negative

consequences:▫Overexpansion of use of vehicles;▫Bulldozing of homes.

But What About the Roads? (cont.)•Highways would charge tolls.

▫Much higher at rush hour. Once congestion lowers, prices would decrease.

•Private parking would cost more on congested streets. ▫To induce rapid turnover.

•Urban street owners might require anyone driving to buy a license (maybe different ones for peak hours); TV cameras; meter in the vehicle.

Police, Law, and the Courts

Police Protection

•With a limited budget, the state must allocate its funds according to politics.

•In the free market, consumers would pay for whatever degree of protection they wish to purchase.

Private Protection Now• Block or neighborhood

protection. • Private guards. • Insurance companies. • Private detectives. • Safes. • Locks, • Closed circuit TV. • Burglar alarms.

Goal of Government Police• Police mostly interested in

catching and punishing the criminal. ▫ NOT restoring loot

(restitution).

If No Protection What Happens?•Cultivate good will by doing something. •Ask for voluntary donation afterwards. •Private charity. •Special police aid societies (i.e. Legal

Aid).

Won’t the Police Attack One Another?•Well, at least we won’t have inter-State

wars. ▫Now, we become identified with our

government. ▫But if A battles B, only those consumers

will be at war. •NOT make sense.

▫Costs money and bad for business. ▫Conflicts solved in private courts.

The Courts

•Judge decides A is in the wrong, he aggressed B.▫If A accepts, no problem. ▫But what if he does NOT?

Current Court Problems

•Judges NOT selected for wisdom or efficiency.

•Courts are monopolies.▫So, if corrupt nothing you can do. ▫In free market, there would be many.

Who Would Pay for the Courts?

•Each individual could subscribe to a court service and pay monthly.

•Individual pay fee whenever he uses court, with violator paying eventually.

•Hired by police agencies to settle disputes.

•May be both police and court together.

Arbitration

•Works well today.•What if merchant refused to submit?

▫Other merchants could Publish this fact to others in the trade; Refuse to deal with him.

▫Credit ratings could be more effective.

But What About Crime?

•Ostracism likely would NOT work. ▫Though landowners could refuse access.

•At least everyone would be liable; now, government workers granted immunity.

Appellate Process

•Every court would agree to abide by appeals trials.

•Now, only one appellate court regardless of wishes of P or D.

•In free market, could go to any appeals judge.

•Most likely paid by various original courts who would add charge to premiums or fees.

Example• Judge decides A is in the wrong, he aggressed

B.▫If A accepts, no problem. ▫But what if he does NOT?

•Same court: ▫If guilty, court would employ force to seize A and

exact a punishment with focus on restitution. •Different courts:

▫B pleads case in his court. If guilty, A could take case to his court. If guilty, ends controversy. But what if A found NOT guilty?

Example (cont.)

•Appellate process.▫Could A appeal forever?

Nothing is forever. Seems sensible to declare a decision arrived

at by any two courts shall be binding. Covers the situation if A court and B court

disagree.

Will there be Laws?•Legal code is necessary to lay down precise

guidelines for private courts. ▫Insist on libertarian principle of no aggression. ▫Define property rights. ▫Set up rules of evidence. ▫Set up code of maximum punishment for

crimes. •Courts would compete on the most efficient

procedures. ▫Market would decide whether judges, juries,

etc are most efficient.

Common Law Traditions

•The imposed personal views of judges were kept to a minimum: ▫Could only make decisions when private

citizens brought case forward; ▫Decisions applied only to the particular

case; and▫Decisions of common law judges always

considered precedent of the centuries.

What if Court Biases Occurred?

•Libertarianism does not “assume that the lion will lie down with the lamb.”

•Instead, men will be the most moral and most efficient.

•Any favoritism highly unlikely. ▫Life of the court will depend on reputation,

integrity, objectivity. “Brand name.”

▫Businesses earn their keep from a mass market of consumers.

But What About Our System of Checks and Balances? • A myth that the executive,

legislature, and courts all balance and check each other.

• Each institution is a coercive monopoly in its area AND part of one government.

But Won’t Private Police Become Like Mobs? •In contrast to government, there would be

other police forces to combat the outlaw. •Governments have legitimacy to do the

monstrous things they do. ▫A bandit gang could never command such

legitimacy. ▫Public would resist.

National Defense

•Wars result from conflicts between nation states, each armed to the teeth, each suspicious of attack by the other.

•Libertarian state would NOT be a threat o anyone. ▫Dedicated to non aggression.

National Defense (cont.)

•A nation state is able to identify all of its subjects with itself. ▫If a private police force attacked Mexico,

the Mexican government would attack the private police force (NOT everyone). Others within the state would attack as well. If no governments, then any problems would

be local police problems.

But What if Russia Invades Us?

•Main reason a conquering country can rule a defeated country is that the latter has an existing State apparatus to transmit and enforce the victor's orders onto a subject population. ▫No worry in Libertarian society. ▫Plus, guerilla warfare.

Themes

•Government monopoly creates conflict.•State has NO price mechanism. • Is the alternative (what we have today)

better?

Thank you!

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