“Summer” Rerun: Journey into a Libertarian Future: Part I –The Vision

Yves here. In some summers past, we’ve rerun NC classics during slow news periods. We haven’t had slow news period in a while, and one side effect is that we haven’t yet reprised this series on libertarianism, which will run this week and into next week. Enjoy!

This post first appeared on November 29, 2011

By Andrew Dittmer, who recently finished his PhD in mathematics at Harvard and is currently continuing work on his thesis topic. He also taught mathematics at a local elementary school. Andrew enjoys explaining the recent history of the financial sector to a popular audience.

Simulposted at The Distributist Review

Recently journalist Philip Pilkington has interviewed authors with unconventional perspectives on economic issues, including Satyajit Das and David Graeber. I thought it would be fun to interview someone too – but the man I interviewed uses a pseudonym. This is a six-part series.

ANDREW: Some people say that you represent a fringe view, and so interviewing you is a waste of time.

CODE NAME CAIN: If people obsessed with inside-the-Beltway conventional wisdom underestimate libertarians, so much the better.

ANDREW: Can you give any evidence that your ideas are taken seriously?

CNC: Well, people used to think that the financial crisis was caused by antisocial behavior in the finance sector. In September 2007, Tom DiLorenzo pointed out on the Lew Rockwell website that the crisis was actually the result of the government forcing banks to make risky loans to low-income borrowers. Although initially ignored, DiLorenzo’s thesis is now widely accepted among careful observers.

ANDREW: Is that your only convincing example?

CNC: Hardly. Did you notice how over the last year or so, everyone started to talk about how the threat of new taxes and regulations was making producers uncertain? And when producers are uncertain, the economy fails to improve? Well, the fact that worries about taxes and regulations cause uncertainty and so damage the economy is a key insight of Austrian economics that we have proclaimed for decades.

ANDREW: Wait, I thought people said that Obama was causing the uncertainty.

CNC: Obama is causing the uncertainty now. Before Obama, George W. Bush was causing the uncertainty. In general, democratic government causes uncertainty. Hans-Hermann Hoppe made all of this clear in his 2001 book “Democracy: The God That Failed.”

ANDREW: Are there things you have learned from the work of Dr. Hoppe that you had not found in the writings of other libertarians?

CNC: “Ludwig von Mises and Murray Rothbard were great men, but they lived in a time when supporters of freedom needed to be careful about what they said. As a result, libertarians often fail to describe their ideal future society in clear detail. But, as the Cato Institute’s Patri Friedman has recognized, Hans-Hermann Hoppe is an exception to this reticence. He is willing to speak the truth, no matter how much it makes “politically correct” people squirm, and he is so logical and eloquent that I routinely quote from his classic book on the failure of democracy. Please color such quotes in red – I would never try to pass off my own ideas as if they were on his level.

ANDREW: Tell us now about the libertarian society you are working to make possible.

CNC: It will be a free society – no government, no coercion. People will have their rights respected. Everyone will be free to do whatever they want as long as it doesn’t interfere with anyone else’s rights… why are you looking at me like that?

ANDREW: I was kind of hoping for less speeches and more details.

CNC: What do you mean?

ANDREW: In our society, the government is the only organization allowed to kill people. In the libertarian society, which organizations will kill people?

CNC: There will be no government that is allowed to use force against people and kill them.

ANDREW: Some people will be very rich, right?

CNC: Of course. Some people will always be stronger and more brilliant than others.

ANDREW: Will the wealthy people still be worried about people stealing from them?

CNC: Obviously – all property… is necessarily valuable; hence, every property owner becomes a possible target of other men’s aggressive desires. [255]

ANDREW: So who will protect property owners?

CNC: Insurance companies in a competitive marketplace.

ANDREW: So in your society, insurance companies will be sort of like governments. Can we call them security GLOs (Government-Like Organizations)?

CNC: Sure, as long as we stress that the insurance companies, as security GLOs, will be very different from the statist, coercive governments we have today.

ANDREW: Will security GLOs be different from governments because they will be small family firms?

CNC: No. One reason that insurance companies will be well-suited for the role of security GLOs is that they are “big” and in command of the resources… necessary to accomplish the task of dealing with the dangers… of the real world. Indeed, insurers operate on a national or even international scale, and they own substantial property holdings dispersed over wide territories… [281]

ANDREW: Will security GLOs be different from governments because they don’t use physical force against criminals?

CNC: You gotta be kidding, right? … in cooperation with one another, insurers [will] want to expel known criminals not just from their immediate neighborhoods, but from civilization altogether, into the wilderness or open frontier of the Amazon jungle, the Sahara, or the polar regions. [262]

ANDREW: So the security GLOs will be allowed to kill people, if they are known criminals?

CNC: The security GLOs will not kill people, they will just expel them to the Sahara or polar regions. What happens then is up to the criminals.

ANDREW: Can we say that the security GLOs will effectively kill them?

CNC: I really don’t like that choice of wording. You make it sound like the security GLOs will be committing aggression against the criminals. That’s backwards – the criminal commits aggression, and security GLOs will just defend people. They won’t violate anyone’s rights.

ANDREW: Maybe you would prefer that we say: the security GLOs will effectively kill people in a rights-respecting manner.

CNC: Yeah, that’s better.

ANDREW: Will everybody be able to get insurance from the security GLOs?

CNC: Of course – in a market economy, shortages are impossible. Anyone can get anything by paying the market price.

ANDREW: What if the market price of insurance for some people is more money than they can pay?

CNC: Don’t worry, competition among insurers for paying clients will bring about a tendency toward a continuous fall in the price of protection… [281-282].

ANDREW: In the future everyone will pay less for security than they currently pay in taxes?

CNC: Well, certain government-induced distortions would be eliminated. Government taxes more in low crime and high property value areas than in high crime and low property value areas. [259] Security GLOs would do the exact opposite.

ANDREW: So in rough neighborhoods, most people might not be able to afford security insurance.

CNC: Possibly.

ANDREW: Suppose there are people who aren’t covered by any security GLO – would it effectively be legal to kill them?

CNC: They would definitely be rendered economically isolated, weak, and vulnerable outcast[s] [287].

ANDREW: Then people are effectively forced to join a security GLO?

CNC: Maybe you haven’t realized it yet, but this will be a free society. The relationship between the insurer and the insured is consensual. Both are free to cooperate and not to cooperate. [281] No one will force people to buy protection, and no one will force insurers to offer protection at a price they think is too low.

ANDREW: What are some other ways that you think this would be a good system?

CNC: Well, every property … can be shaped and transformed by its owner so as to increase its safety and reduce the likelihood of aggression. I may acquire a gun or safe-deposit box, for instance, or I may be able to shoot down an attacking plane from my backyard or own a laser gun that can kill an aggressor thousands of miles away. [256] In a free society, security GLOs would encourage the ownership of weapons among their insured by means of selective price cuts [264] because the better the private protection of their clients, the lower the insurer’s protection and indemnification costs will be [285].

ANDREW: Let’s see if I understand. In poor neighborhoods, most people will not be insured, and it will be legal to kill them. The people that are insured will be encouraged by the security GLO to carry weapons that are as technologically advanced as possible. It sounds to me like this would be bad for the poor neighborhoods.

CNC: On the contrary – in “bad” neighborhoods the interests of the insurer and insured would coincide. Insurers would not want to suppress the expulsionist inclinations among the insured toward known criminals. They would rationalize such tendencies by offering selective price cuts (contingent on specific clean-up operations). [262]

ANDREW: Suppose that security GLOs, or private groups that they sponsor, are looking for criminals. When the enforcers catch the criminals, will they always transport them to an uninhabited area, or will they sometimes put them in prison?

CNC: Prisons like the ones we have? With basketball courts and televisions for the criminals? How would that be fair?

ANDREW: Maybe other kinds of prisons?

CNC: Look, it’s not about putting people in prisons. It’s about people getting what they deserve. And in the libertarian society of the future, people will get what they deserve. Security GLOs can be counted upon to apprehend the offender, and bring him to justice, because in so doing the insurer can reduce his costs and force the criminal… to pay for the damages and cost of indemnification. [282]

ANDREW: So they’ll have to do forced labor for the security GLO?

CNC: How can you possibly think this could be worse than our current system? Where instead of compensating the victims of crimes it did not prevent, the government forces victims to pay again as taxpayers for the cost of the apprehension, imprisonment, rehabilitation and/or entertainment of their aggressors [259]?

ANDREW: Still, as a libertarian, aren’t you against coercion?

CNC: Coercion? Obviously you don’t understand what you’re talking about. Coercion is only when someone interferes with rights someone else actually holds. Criminals can forfeit their rights through their own choices. When that happens, requiring them to make restitution for their actions doesn’t violate their rights.

ANDREW: Will there be any other people in the free society who will be slaves?

CNC: Slaves?! Don’t you know that the first condition of a libertarian society is that everyone owns themselves?

ANDREW: Sorry, I meant to say: effectively slaves in a rights-respecting manner.

CNC: Oh. Hmmm. Let me think about that.

ANDREW: For example, suppose someone signs a business contract and then, later, can’t fulfill the terms of the contract. What would happen?

CNC: In a libertarian society, sanctity of contract is absolutely fundamental.

ANDREW: Let me be a little more specific. Suppose some guy can’t pay his debts. Would he be allowed to declare bankruptcy and move on, or would he become, in a rights-respecting manner, the effective slave of whoever had loaned him the money?

CNC: That would depend upon the debt contract that the lender and borrower had together voluntarily signed. If they had chosen to include a bankruptcy proviso, then the borrower could declare bankruptcy.

ANDREW: Suppose that in the libertarian society, lenders would rather encourage borrowers to focus on repayment – and so they decide not to give borrowers an easy way out. Suppose that no lenders offer loans with a bankruptcy proviso. Would that be okay?

CNC: Economic theory tells us that loans without a bankruptcy proviso will be made at lower interest rates than loans allowing borrowers to go bankrupt. So if no loans contain a bankruptcy proviso, it will just mean that borrowers prefer low-interest no-bankruptcy loans.

ANDREW: I see some problems here.

CNC: Look, it sounds from your question like you think that the lenders should be coerced into allowing borrowers to be irresponsible and go bankrupt! That would effectively make them loan their hard-earned money in ways that they don’t want. How is that any different than forcing them to work at hard labor?

ANDREW: Obviously it would be better to have defaulting borrowers be effectively enslaved in a way that fully respects their natural rights.

CNC: Obviously. Now that we’ve cleared that up, can you turn off the tape recorder? I want to get started on my steak.

Now that Code Name Cain has indicated the promise of a libertarian society, in the next part of the interview he will give a step-by-step plan for how we can make this society a reality.

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  1. Synoia

    What puzzles me about the Libertarian Dream is their ability to ignore the Dark Ages in Western Europe.

    It fulfills all their requirements, and by what accounts survive, was remarkably unsuccessful. Life was poor, nasty, brutish and short.

    I’ve has the discussion of rule of law with libertarians, and it went like this:

    Lb: We could have a farming society without rule of law.
    Me: How are disputes resolved?
    Lb: We all get together and resolve the dispute.
    Me: How is the dispute resolution enforced?
    Lb: Everybody agrees to the resolution.
    Me: What happens if some do not agree? What happens if someone cheats?
    Lb: ……..
    Me: We’ve used this mechanism before, Hatfields vs McCoy’ in the US, and Campbells Vs McDonalds in Scotland.
    Lb: ……..

    Those who don’t know their History, are condemned to repeat it.

    Winston Churchill in his “History of the English Speaking Peoples” refers to the desire of the People in England to have “The King’s Peace,” otherwise known as “The Rule of Law” with all it’s apparatus, Police, Courts, etc.

    The Libertarians appear to want “Rule by the Rich and Powerful” and do not understand that that includes few, if any, of the current libertarians, except perhaps for the Koch Brothers.

    1. Sleeping Dog

      In the 90’s when encountering a want-to-be business tycoon spouting Libertarian nonsense, I would encourage them to seek their fortune in Somalia, where no government existed.

      I will say that, just as Marxism provides an essential way of examining capitalism, libertarianism provides a filter for examining and criticizing stateist impulses. But a society organized around libertarian principles, just silly.

  2. Robin Kash

    The choice you make is always yours, no matter what. So, no need to guard, protect, or defend it. Just make it. (You really cannot choose not to choose.) You just can’t help yourself. You’re predestined to make choices. No escaping that. The choices you make are yours, and no one else’s. And remember: choices are neither good nor bad. They’re just different. Those who choose to say otherwise have made their choice. They’re, well, different.

    1. JTMcPhee

      Hmmm, really? Ever heard of Ed Bernays? Do the people of Flint or Jefferson or the Ninth Ward or Sa’naa exercise “choice?” Deep-sounding words, but maybe shy on substance.

    2. neo-realist

      Does a black person exercise choice by getting shot in his apartment by a police officer? Does a black kid going home with skittles exercise choice by getting shot by a bigoted vigilante? Does a qualified POC candidate for a job exercise choice by being turned down because of his race? How do you make a choice of being born with darker skin in a culture that discriminates against it?

  3. Synoia

    Tom DiLorenzo pointed out on the Lew Rockwell website that the crisis was actually the result of the government forcing banks to make risky loans to low-income borrowers.

    Oh the poor banks, forced to loan money for houses aka: The Brer Rabbit Loan Origination philosophy.

    “Forced “the banks were not. They juiced the bankruptcy laws, and bundle up the loans and sold then to a willing set of buyers, Fannie Mae and Freddy Mac, “Government Corporations”, who were re-nationalized when they fell into trouble.

    The Bank’s happily took the loan origination fees, and survived when they were then “forced” to accept Government bail outs.

    Why some senior bank executives even took a cut in Bonuses – the misery of it all! /s

    1. rob

      That was the first thing that leaped out at me too./
      Are you kidding? the banks were “forced” by the government…… where to start with that one?
      The only thing that fits was said here not to long ago.
      ” arguing with an idiot is like playing chess with a pigeon. They just knock over the pieces,shit on the board, and strut around like they won anyway.”

  4. RP

    The one thing libertarians want desperately to ignore is that imposing their vision of an utopian society is that while no one is “coerced” and will have equal rights, the inequalities that exist today will be cemented into society. Until someone can explain to me what my recourse is when my right to breathe clean air and drink clean water or to speak my mind freely is destroyed by a polluter or someone who doesn’t like what I have to say, I will view libertarianism as the worst of all possible worlds.

    1. Amfortas the hippie

      when i was still on faceborg, years ago, I would often be confronted by wandering libertarians.
      one way to send them into conniptions was to say, “fine. let’s run your experiment of lawlessness and “freedom”…but first, in order to adhere to good experimental methodology, shouldn’t we first redistribute the wealth?”
      a race hardly proves anything if it’s between a fighter jet and a rickshaw.
      the resulting frothing fits were entertaining. They believe that they are paragons of logical thinking…as opposed to us silly lefties.
      and , like the neoreactionaries that threaten to take their place in corporate philosophy, they seem to believe that they will naturally be the Lords of the Manor.
      Libertarians hate to hear about Rawls’ Veil of Ignorance.

  5. JimK

    Cain’s libertarian views have the depth and breadth of a bunch of mutually contradictory bumper stickers. The views lack a grasp of system interactions and impacts, and display a narrow rigid simplicity that neglects scads of important social, economic and environmental factors. The views are so inept it makes me wonder, was this interview satire?

    1. Yves Smith Post author

      The interview is based on the works of Hans-Hermann Hoppe; the parts in red either links or when they have numbers, direct quotes with page references.

      1. Anarcissie

        In my experience (from Usenet days, mostly) libertarians vary quite a bit in their views. Mr. Hoppe’s seem to be of the anarcho-capitalist flavor, similar to David Friedman’s, but many libertarians would disagree with them and some would say they are crazy. Libertarianism seems to be a tendency, an attitude, a sensibility, rather than an explicit set of principles cast in the form of propositions and rules. It is more aesthetic than logical, in spite of the way they regard themselves; see Thus Spake Zarathustra, on ‘the coldest of all cold monsters’ for a taste.

        In regard to libertarianism on the ground: as with other marginal ideologies, there have been some experiments; for example, there was a project of getting libertarians to move to some county in New Hampshire where their numbers would enable them to have some influence on the social order and its government. None that I know about have been very successful.

    2. Lambert Strether

      > The views are so inept it makes me wonder, was this interview satire?

      The interview is satire, but as you can imagine, libertarianism is extremely hard to satirize; the author faced technical challenges in making the self-ownage even more obvious than it already is.

    1. Lambert Strether

      More perhaps a caper, frolic, or prank — of which are extended in time with no single punchline (except for the running gag of “in a rights-respecting manner”). It’s satirical.

  6. rob

    I have to admit that nowadays when someone says they are a libertarian, my 1st assumption is that they are an idiot, who doesn’t realize they are just a tool for the republican/neoliberal overlords/industrialists who just want to go back to pre-regulatory and pre-taxation years as were 120 years ago.Back when snake oil salesmen were free to peddle their wares, any how they saw fit.
    Thirty years ago, being a libertarian at least had some logic behind it. they were anti- drug war and anti- police state and things that actually make sense. They realized there had to be SOME laws, and Some civic responsibility.
    anyone who has crazy ideas like this today are actual and factual “conspiracy theorists”. Talk about crazy. There isn’t any substance here to refute…. this is all total BS.
    Again, we find the “information age” taken up by peoples opinions of “fact” that are pure propaganda.

  7. Harry Cording

    So does

    “republican/neoliberal overlords/industrialists”

    mean that you support neoliberal Democrats who you believe are going to save you?

    1. rob

      hell no!
      But they have a different “schtik”….. like cinton/obama doing the same thing… but they use different words…. appealing to different people.
      for clarity, i suppose I should have used some better punctuation.
      “republican/neoliberal” meaning “the deregulation crowd”
      “”overlords/industrialist” meaning the powers that be who make money in manufacturing and other related industries who have liabilities in relation to their waste/pollution disposal, working conditions,safety standards/practices/costs,etc…. who are the funders of this type of propaganda.
      I have no illusions that the deregulation gang didn’t gain ascension to our gov’t as of late; with carter, and has been in EVERY administration since.

  8. Telee

    I’ve had close contact with libertarians. One is a medical doctor. A primary goal is to eliminate democracy entirely. The people would have no input in determining the conditions under which they live. A market unpreturbed by taxes and regulations would yield the most optimum rusults which benefit the society. People who are lazy and who lack ambition, which is proven by their low economic status, would be isolated and cast aside into favelas because they are undeserving of anything better. The greatest threat is not global warming, or the threat of nuclear war but tyranny. He and his son are armed and expect to be able to defeat the government when the time comes. Based on a discussion where I used the term social justice, the good doctored recoiled and said social justice is communism. He was also against helping ( I suppose via the givernment) victims of natural catastrophies such as floods, hurricanes, fires, earth quakes etc. When asked what kind of society would result from these beliefs, they don’t have a clue except to say that when one persues a just and moral cause the outcome is of no consequence. When asked about global warming they emphasized their right to have all the plastic straws they want. A tyrannical government imposing rules is the greatest threat.

    All very logical. Yes? Another doctor, my primary care physician welcomes global warming because he thinks we can deal with it very easily and feels that it is most fortunate that we don’t have global cooling.

    Another retired doctor I talk to expressed the view that all Muslim mosques in the US should be blown up and all Muslims should leave the country or be killed.

    And these are the intelligent people!

  9. rob

    hell no!
    But they have a different “schtik”….. like cinton/obama doing the same thing… but they use different words…. appealing to different people.
    for clarity, i suppose I should have used some better punctuation.
    “republican/neoliberal” meaning “the deregulation crowd”
    “”overlords/industrialist” meaning the powers that be who make money in manufacturing and other related industries who have liabilities in relation to their waste/pollution disposal, working conditions,safety standards/practices/costs,etc…. who are the funders of this type of propaganda.
    I have no illusions that the deregulation gang didn’t gain ascension to our gov’t as of late; with carter, and has been in EVERY administration since.

  10. eg

    The absence of a thriving libertarian polity across all human history and geography implies a fundamental incompatibility with human nature.

    My guess is that any human group which tries it is simply destroyed and/or absorbed by neighbouring human groups which employ more effective arrangements (whatever defects those particular arrangements may have).

    Libertarians aren’t much for empiricism, I suppose ….

    1. Ape

      Most of the last 10k years are feudal and libertarianism is just feudalism. Even the Roman states were mostly run on a private law basis – aka libertarianism. Mass slavery, citizenship limited to an elite who personally acted as enforcers, courts and legislators.

      Libertarianism is the perennial philosophy, horribly compatible with human nature.

        1. Ape

          Anarchism is quite distinct. It worked for about a million years. It’s just not compatible with scalable technologies/economies.

  11. kees_popinga

    It’s interesting that this post is generating separate comment threads 7 years apart. I started reading the 2011 comments thinking they were current and was immediately struck by the thoroughness and passion of the debate, occurring around the time of the Obamacare rollout and closer to the 2008 crash. Possibly more people had a stake in libertarianism back then and found this interview threatening? In any event, one thing common to both threads is the tendency not to recognize the interview as satire. Compliments to Mr. Dittmer for his enduring dry wit (even though the internet makes irony hard to recognize).

  12. redleg

    The security GLOs would encounter Gresham’s Dynamic, eventually collecting the premiums and never following up on claims.

  13. d

    so what happens when the GLOs from different customers are pulled into a battle between them? and how does this work when some one who hired them to protect them dies from a business ?

Comments are closed.