Journey into a Libertarian Future: Part III – Regulation

Lambert here: Andrew’s dead-pan voice and genre-bending technique seem to perplexed some readers. “Journey into a Libertarian Future” is not a genuine interview, although it is cast in the form of an interview. The interviewee, “Code Name Cain,” is fictional, but also a proxy for the libertarian thought leader, Hans Hoppe, whose words Andrew “puts into Cain’s mouth” in the form of direct quotations (formatted in red). Andrew’s work is satire in the sense that it holds “human folly and vice” “up to scorn, derision, or ridicule,” but I’m not aware of a satire that has these formal characteristics. Perhaps it’s best to think of the piece as Andrew gently giving Cain (and Hoppe) enough rope to hang themselves with their own words; a “self-own” on an enormous scale; self-owning being ironic for a libertarian, if you think about it.

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

This is the third installment of a six-part interview. For the previous parts, see Part 1 and Part 2. Red indicates exact quotes from Hans-Hermann Hoppe’s 2001 book “Democracy: The God That Failed.”

ANDREW: Let’s imagine that a future libertarian society has been established, and security and justice are provided by competing insurance companies. What will happen if two different people, covered by two different security GLOs, disagree about what their rights are?

CODE NAME CAIN: The two people would find an independent arbitrator that would be the unanimous choice of both parties [251].

ANDREW: Suppose that one of the two parties is stronger, and so will likely outlast the other in a direct conflict. Wouldn’t that party prefer to refuse all arbitration and, during the delay, squeeze the other party into submission?

CNC: No.

ANDREW: Suppose someone annoys you, and you pay their GLO a sum of money that is significantly more than the present value of that person’s future insurance payments. Would the GLO kill the person for you?

CNC: No.

ANDREW: Suppose that one security GLO is much stronger than a competing GLO, and it wishes to expand its market share. Will it strategically assassinate clients of the weaker GLO in order to advertise its superior security capabilities?

CNC: No.

ANDREW: These scenarios all appear plausible to me. Why are you sure they won’t happen?

CNC: Security GLOs will understand that the sort of aggressive behavior you describe is economically irrational. In fact, insurers will [not engage] in any form of external aggression because any aggression is costly… implying the loss of clients to other, nonaggressive competitors. Insurers will engage exclusively in defensive violence… [287]

ANDREW: Suppose the CEO of a security GLO understands his own self-interest differently than you do, and starts killing people. What would happen then?

CNC: A security GLO that started assassinating people would represent a threat to stable order not just for the insurer of the murdered individuals, but for all security GLOs. Therefore, the security GLOs would cooperate and defend weaker GLOs from aggression.

ANDREW: How can we be sure about whether you’re right? What if the security GLOs fail to cooperate in the way you say?

CNC: There is nothing that would stop the GLOs from cooperating in order to establish stability. Already today, all insurance companies are connected through a network of contractual agreements… as well as a system of… reinsurance agencies, representing a combined economic power which dwarfs that of most existing governments. [248] Under pressure to settle questions about intergroup conflict, competition would promote the development and refinement of a body of law that incorporated the widest… consensus and agreement… [250-251]

ANDREW: So the insurance companies, taken together, will constitute a sort of global, non-coercive, non-government GLO, established in a consensual and rights-protecting manner.

CNC: Exactly.

ANDREW: Although it can be very difficult, ordinary people in America can sometimes influence what their government does. I get that the global GLO will be different in that ordinary people will have no voice in what happens – but in what other ways will the global GLO not be a government?

CNC: First, you’re wrong – not only will consumers have a voice in the global GLO, they will be sovereign. They will completely control the GLO through their decisions about where to purchase insurance.

Anyway, to answer your question, a government is an organization that exercises a compulsory territorial monopoly of protection and the power to tax [256]. The global GLO will be very different.

ANDREW: The global GLO will protect people through the security GLOs that are part of it. Those organizations will be paid money by people who desire protection: noncoercive Tax-Like Payments. Aside from everything being completely voluntary, what is the difference here?

CNC: The fact that everything will be completely voluntary is, of course, a very important difference. But there will be another difference.

Governments not only monopolize the business of protecting people, but they also monopolize control over territory. In the libertarian society, security GLOs will protect people, but they will not hold final authority over a specific piece of real estate.

ANDREW: Oh, I see, private homeowners will rule over territory instead.

CNC: Not exactly. Most of the time, houses will be part of “proprietary communities,” like modern-day gated residential communities… owned by a single entity, either an individual or a private corporation… The proprietor [will be] an entrepreneur seeking profits from developing and managing… communities… [215]. The residents will not have full title to their homes, since the proprietor will retain the right to enforce covenants – i.e. rules about who can live there under what conditions.

ANDREW: Since these real estate corporations will have authority over specific territorial areas, could we call them territory GLOs?

CNC: We can call them whatever we want, as long as we use our terms precisely.

ANDREW: So I guess the idea is that even though the global GLO and the security GLOs will impose a few basic rules on everyone, there will be a lot of room for each territory GLO to create its own individual culture.

CNC: You’re finally starting to understand. Catholics will be able to live by their principles, Muslims by Islamic principles, and Non-believers by Secular principles.

ANDREW: So these local communities will increasingly separate from each other… That might not bother some people, but given that Dr. Hoppe is an economist, isn’t he worried that the world will divide up into small, economically isolated units?

CNC: That won’t happen – just because one does not want to associate with or live in the neighborhood of Blacks, Turks, Catholics or Hindus, etc., it does not follow that one does not want to trade with them from a distance [140].

ANDREW: Uh… will a lot of people not want to live with blacks or Catholics?

CNC: Each territory GLO will have entrance requirements (for example, no beggars, bums, or homeless, but also no homosexuals, drug users, Jews, Moslems, Germans, or Zulus) and those who [do] not meet those entrance requirements [will] be kicked out as trespassers. [211]

ANDREW: If you’re only allowed to live in certain areas depending on your race, behavior, and religion, that might sound to some people like a less free society.

CNC: Those people are clearly uncomfortable with free individuals making decisions that they think are mutually beneficial. Maybe they would prefer living in the United States of today, where [d]iscrimination is outlawed… [t]eachers cannot get rid of lousy or ill-behaved students, employers are stuck with poor or destructive employees… banks and insurance companies are not allowed to avoid bad risks… and private clubs and covenants are compelled to accept members… in violation of their very own rules and restrictions. [210]

ANDREW: Presumably, some people will not mind living with people of other races.

CNC: Of course, every territory GLO would be free to discriminate in whatever way it wishes. But we need to be realistic. Notwithstanding the variety of discriminatory policies pursued by different proprietary communities… no proprietary community can be as “tolerant” and “non-discriminatory” as left-libertarians wish every place to be. [212]

ANDREW: What do you mean by “left-libertarians”?

CNC: Murray Rothbard likes to call them “modal-libertarians” (MLs). As Rothbard says, “the ML is an adolescent rebel against everyone around him,” who only hates government because it is something else to disrespect. MLs think that profanity, drug use… homosexuality… pedophilia… or any other conceivable perversity or abnormality… are perfectly normal and legitimate activities and lifestyles [206]. What these countercultural libertarians fail to realize… is that the restoration of private property rights and laissez-faire economics implies a sharp and drastic rise in social “discrimination” and will swiftly eliminate most if not all of the… life style experiments so close to the heart of left libertarians. [208]

Left-libertarians and multi- or countercultural lifestyle experimentalists, even if they were not engaged in any crime, would once again have to pay a price for their behavior. If they continued with their behavior or lifestyle [in public], they would be barred from civilized society and live physically separate from it, in ghettos or on the fringes of society, and many positions or professions would be unattainable to them. [212]

ANDREW: I can tell you’re excited about this… But maybe you’re getting your hopes up. After all, you’ve said that every territory GLO will be free to develop its own culture. What if some territory GLOs make it so people are rewarded for smoking weed?

CNC: Every territory GLO is free to develop its own culture, but only subject to the constraints of inexorable economic laws. First of all, the proprietor and largest investors in the territory GLO would, in order to protect and possibly enhance the value of their property and investments, [216] be very careful about whom to welcome to their territory, and these leaders would set clear standards on what kind of behavior is acceptable for local residents.

Second, the security GLOs would also have a say on who immigrates into the territory GLOs, and even more than any one of their clients, insurers would be interested in… excluding those whose presence leads to a higher risk and lower property values. That is, rather than eliminating discrimination, insurers would rationalize and perfect its practice. [262]

ANDREW: So the security GLOs would regulate the territory GLOs… Let’s see if I understand. Suppose that the security GLOs decide, based on their research, that watching television makes people more docile. Do you think maybe they would require every family to watch television for a certain number of hours per day?

CNC: No, you don’t understand. If one security GLO tried to do this, they would lose business to competing security GLOs that allowed people not to watch television.

ANDREW: Suppose that the security GLOs decide, based on their research, that kids who are home-schooled are more likely to oppose a libertarian society. Would they refuse to insure territory GLOs where kids are home-schooled?

CNC: Once again, you fail to reckon with the power of market competition. Security GLOs will only cooperate when doing so leads to positive consequences. For example …insurers would… be particularly interested in gathering information on potential… crimes and aggressors… [A]lways under competitive pressure, they would develop and continually refine an elaborate system of demographic and sociological crime indicators. That is, every neighborhood would be described, and its risk assessed, in terms of a multitude of crime indicators, such as… its inhabitants’ sexes, age groups, races, nationalities, ethnicities, religions, languages, professions, and incomes. [260-261]

ANDREW: Do you think that the security GLOs might offer people they consider to be potential criminals the opportunity to wear a device keeping them under surveillance – as a condition for granting them insurance?

CNC: Now you’re coming up with more practical ideas. But the insurance companies are good at thinking outside the box – they’ve probably already thought of that.

ANDREW: Let’s see – so security GLOs will set up precise financial incentives to segregate residential communities by race, etc., following detailed mathematical models. Many people will be effectively forced, in a rights-respecting manner, to be under 24-hour surveillance. I’m curious – what kind of society do you think this will produce?

CNC: I think most people would agree that under such conditions, all … regional, racial, national… religious, and linguistic wealth redistribution would disappear, and [so] a constant source of social conflict would be removed permanently [262].

ANDREW: I know that you think this is very unlikely, but suppose people living in the free society of the future decide that they don’t like it very much, and would like to go back to living in a democracy. Could they do it?

CNC: That will not be possible.

ANDREW: You mean, you are sure that no one will want to go back to democracy?

CNC: No, I mean they won’t be allowed to discuss that possibility. In a covenant… among proprietor and community tenants for the purpose of protecting their private property, no such thing as a right to free (unlimited) speech exists, not even to unlimited speech on one’s own tenant-property. One may say innumerable things and promote almost any idea under the sun, but naturally no one is permitted to advocate ideas contrary to the very covenant of preserving and protecting private property, such as democracy and communism. There can be no tolerance toward democrats and communists in a libertarian social order. They will have to be physically separated and removed from society. [218]

ANDREW: But all of these outlaws, excluded from the libertarian society – how do you know they won’t try to rebel against the civilization you’ve created?

CNC: You mean, what if the rejects continue to nurture ideas of democracy, and they make plans to take away the rights of rich people? Keep in mind that in the society of the future, a lot of jobs will be done by robots. As pacifist libertarian Bryan Caplan says, “rich people rarely take the ‘transition to socialism’ lying down…. [If you were a rich person in this scenario], you might want to reprogram your robots for civil war…. True, all of the soldiers of the future may be robots… But… [j]ust because robots do all of the killing doesn’t mean humans won’t do their share of the dying.”

In part 4 of this interview series, Code Name Cain will explain why an attentive survey of history shows that all of the rights of governments are illegitimate, and that all of the rights of modern corporations and property-holders are legitimate.


Karl Widerquist envisions a fully sovereign state growing from landholdings like this (“A Dilemma for Libertarianism,” Politics, Philosophy, and Economics 8.1 (2009): 43-72).

“Now that I think of it, they already have”: Insurance 2020: Innovating beyond old models IBM
p. 2: “The… rising tide of technology… empowers insurance underwriters to bring their products closer to realtime interaction via sensor networks and enlightened privacy regulations.” See also p. 6, second paragraph from the top.

Bryan Caplan, however, points out that since the libertarian society will be incredibly wealthy, it will be “child’s play” for the numerous billionaires to support everyone else through “voluntary charity.” He therefore considers a revolution extremely unlikely.

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  1. Synoia

    Why will a Terratory GLO not become the Lord of the Manor? That is, become a despot?

    Who will police any discussion of the commons, that is the beginning of a discussion about democracy?

  2. The Rev Kev

    Why do I get the feeling that these so-called libertarians in this series of articles would have been perfectly happy at home in the John Birth Society of an earlier generation?

    1. Massinissa

      Because the Birchers never actually went away. They’re still around peddling this sort of twaddle themselves.

    2. rob

      I don’t know.
      I have found a number of “john birch society “books from back in the day. They are interesting reads, especially when taking into account the koch connection and feud with the standard oil company.I don’t know what they are doing these days, but my take is that they would actually be against an insurance company running the world. As far as they were concerned, the corporations controlled by the communist infiltrators already ran all the insurance companies. And those books were from the fifties and sixties and seventies. The earlier ones were openly racist, the latter less so, but more about the controlling corporations and the erosion of american liberty.
      The irony of ironies, they were being lied to by the kochs whose money was made by building an industry for stalin. Koch said because he was intimately aware of soviet leadership, he was aware of their desire and plan for world domination. That was twaddle.At the same time they were trying to create the corporate/academic/media saturated propaganda platforms they were warning against.To rival their competition.
      Then the libertarian angle was a completely separate form of attack.Again taking a movement that already existed, and furnishing all the pseudo-academic and foundational support.

  3. Synoia

    What prevents thr GzLOs from forming Cartels? Why is the Insurance GLO, terratory GLO any different for kingdoms, warlords and aristocracy?

    There is little historicsl evidence that the wealty suppoert the poor in any society. Why would the wealthy in the Insurance Cartel/Terratorry GLO (Church and Aristorcracy) scheme be any more generous?

    Also sacrilege appears to be severly punished without civil due process. How does this system avoid kangaroo courts, lynchings, and long running blood feuds?

  4. Massinissa

    So apparently you aren’t actually ‘free’ on your own tenant-property. How is that different than being a feudal serf, then? As bad as capitalist society seems now, this seems worse: at least I can critique whatever I want from the comfort of my own home…

  5. albrt

    Hoppe and Cain do seem to have captured the attitudes of insurance company employees pretty accurately. Insurance companies do not act in the selflessly selfish manner described, but their employees self-righteously believe that they do, and they sound pretty much like this if you depose them.

    1. TroyMcClure

      I have experienced this first hand talking to a friend who represents insurance companies in court. She’s otherwise sensible and lovely. But get her talking about all the scum out there cheating the benevolent insurance companies and her inner Rothbard comes out…chilling stuff.

  6. AlexHache

    This kind of libertarian utopia is so ridiculous and far-fetched that it would be best ignored, rather than debated. Such a society (if you can call it that) would go haywire so quickly that discussing all the details is pointless.

  7. rob

    in the long list of things this libertarian fetish list has a real issue with, is their belief in “the rich”. They forget that this country is a Republic. It was set up to favor the “rich”. This Republican form of gov’t was supposed to temper the fickle will of the masses and their Democracy, by means of Republican control. Too bad the founders were wrong about the morality of those with the means to influence the gov’t of the people.
    Another thing is that this type of thinking is openly Fascist/corporatist
    Any libertarian espousing this drivel ,is a fascist wannabe.

    1. Richard

      I had no idea about this branch of “libertarianism”, so thanks to Yves for bringing it to our attention. Openly fascist about covers it. The term is overused, especially among TDS sufferers, but you got to give the thing its name when it works so hard for it. 24 hr. surveillance, racialized ghettos, no freedom of speech whatsoever. I imagine people have brought these similarities to Hoppe’s attention before; I wonder how he responded? Maybe that’s in pt. 4. Or in pt. 2 which I haven’t read yet…

      1. ape

        But it’s the *main* thread of libertarianism, when you look at the real movers and shakers in the movement, the Pelerin Society type people (who also pushed neoliberalism as a soft version of this ideology).

  8. Jane

    “these leaders would set clear standards on what kind of behavior is acceptable for local residents”

    So leaders get to define the choices the rest of us are free to make. Sounds as if the Libertarians don’t have a problem with democracy per se, just with the way the public is prone to pick less right(s)-minded leaders.

    1. RepubAnon

      I’m still not seeing how the GLOs are different than a fascist government. Frightening that anyone is seriously considering this proposed system as a good thing. Of course, all libertarians seem to think that they’ll be the top dogs in these non-governmental governments where only they have any real liberty of action.

  9. Off The Street

    Reading that article may provoke any number of reactions. Here are a few:

    ‘Open the pod bay doors….’
    ‘When I hear the word Libertarian, I reach to secure my wallet…’
    ‘Proprietors (at some later point I lost the plot…

  10. John

    Thomas T. Thomas’s novel First Citizen has insurance companies or an insurance conglomerate that controls people’s lives in a manner similar to what is described in these ‘interviews.’ The lead character is Granville James Corbin (Gaius Julius Caesar) and the story placed in turn of the millennium USA. It is a good read.

    It is always gratifying to discover that while the fascist bad guys of the first half of the 20th century are dead and gone and their regimes with them, their ideas keep sprouting like crab grass. Hoppe’s notions are crab grass.

  11. Generalfeldmarschall von Hindenburg

    A project to recreate feudalism will also revive that system’s biggest downside, baronial private armies raiding one another’s property.

    1. ape

      Isn’t it obvious that such a system has to devolve/evolve into continual low level aggression to police inter-GLO affairs? 10k years of history shows that.

      So is that the actual goal? I mean, assuming that Hoppe and Rothbard and Mises and Peter Thiel have at least some brains that they can see such obvious consequences, are they crazy (delusional and unable to see the consequences) or is this the secret goal for some unfathomable reason?

  12. shinola

    Take some plutocratic feudalism, mix in some social Darwinism, add a healthy dash of fascism, half bake it and -voila!- you have Libertarianism.

  13. Darius

    It should be noted that Cain’s ideal society emerges whole and finished without diversions or dead ends. Leaving aside one’s objections to this vision of an ideal future, Cain is like a college kid who read a few books and has constructed a complete new society. Marx diagnosed a lot of society’s fundamental problems, but he had no idea about where things would go and constructed a dreamland. Cain misidentifies the problems and constructs a dreamland on top of that. The state is always with us. Deal with it.

  14. ape

    So, if people happen to think that such a parody is far from the libertarian self-parody, that it’s “unfair”, please see bring Peter Thiel’s favorite philosopher together with alt-right internet troll Moldbug (don’t know whether it’s the same guy) to create this same Hoppe-based fantasy as a long troll explaining libertarian philosophy — from someone who actually believes it (and thus loves to get decent people angry by pushing it to its logical limit).

  15. Pookah Harvey

    insurers will [not engage] in any form of external aggression because any aggression is costly… implying the loss of clients to other, nonaggressive competitors. Insurers will engage exclusively in defensive violence… [287]

    What if a security GLO determines that monopolistic pricing increases profit? I seem to remember that 2 gangs in the protection racket, sorry, I meant 2 Security GLOs had a discussion about the loss of clients. I believe it was between the Malone Security GLO and the Capone Security GLO on St Valentines Day a few years ago.

    1. greg

      I’ve got a question about rights. Libertarians believe that they should have complete rights over their property, including the right to degrade, damage and destroy what ever property they own, whether for profit, or merely at will.

      So. The question I have is: Are the rights ascribed to property, under any system, the minimum rights that that system can guarantee to people?


  16. Tomonthebeach

    Wow. I did not realize that libertarians (as cast in this post) were so much like economists in that they seem to assume people will behave in linear conformity with social norms once ghettoized from dissenters. That seems to be a rather simplistic view of how fickle human nature actually is. Of course human nature being what it is, there will be those who will exploit this naive model and run amok at the expense of those in their community. Fortunately, prisons, left over from a prior democratic era, will be available to lock them up to preserve the GLO.

    Yet, over time, history has examples of cases in which more and more people will be in the prisons for lesser and lesser infractions. At that point, like currently in the USA, GLOs would be Gulags. Oh, we already have those. I wonder how they are working out. But, not to worry, it is likely that one GLO will try to exploit another GLO, and then war is likely. Doubtless, the oligarchs will send in the robots and decimate both to exterminate the threat they pose to the system. That may freak out other GLOs who will wish to withdraw to the fringes, but, there may be no fringes to withdraw to, since we are talking globalism here, right? I thought a guy named Hitler tried to do something like this. Human nature rose up and ended the experiment – gulags and all.

  17. George Phillies

    The notion that Hans-Hoppe is a leader of Libertarian thought is, let us say, bizarre, even before we get to his apparent (or perhaps not) endorsement of monarchy as the ideal form of government. Rothbard is the fellow who claimed that mandatory Christian prayer in public schools was an appropriate libertarian stand. These people do not resemble libertarians.

    Unlike most of you, I have twice been on the ballot in a Federal election as a Libertarian and have some familiarity with actual libertarian positions, such as shutting down the warfare state, ending the surveillance state, and ending the racist war on drugs.

    1. Yves Smith Post author

      In his final post, which will run next Monday, Andrew Dittmer debunks your claim that Hans-Hoppe’s views are unrepresentative of libertarian thought.

      And using the Libertarian party as a basis for your assertion is weak tea. By that logic, the Democratic party is democratic. Review its superdelegate system and its pay to play rules for Congress (hint: we had a post by Thomas Ferguson on that) and get back to us.

    2. skippy

      I have some associates that used to be local and state level libertarians, report I get is the higher up the higher the hypocrisy, hence why they left the cult.

      Seems the rhetoric left out being a front group for big business and a dusting of esoteric OT moralism.

    3. ape

      And Peter Thiel just represents himself, and Rothbard has nothing to do with Mises, and even if he did, Mises has nothing to do with real liberterianism.

      I guess we can say as well that 20th century communism has nothing to do with Lenin?

  18. Paul Hirschman

    How is this stuff different from John Locke circa 1690? Not much has gone down since then. Private property losing it. I feel sorry for them.

    1. Todde

      John Locke would ask questions such as:

      How much land can a man own?

      And answer with:

      How much land can a man till?

      Locke wasnt who most people thought he was.

  19. Oregoncharles

    For another take, I’d again recommend a couple of Ken McLeod’s books: “Cassini Division,” which is set in a future socialist anarchy; and “Stone Canal,” set mostly in a capitalist anarchy – on Mars, as it happens. They’re both entertaining science fiction, which means he doesn’t go into huge detail about how these systems work, though there is some how-did-we-get-here in one of them. “Stone Canal”, especially, carries out some of the vision in the “interview.”

    McLeod’s books are exciting to read partly because they’re a fountain of ideas and speculation, much of it political. His whole future history series is worthwhile if you like that sort of thing.

    1. Richard Musser

      Thanks for the recommendation. I’ll give him a try. Have you ever read any Octavia Butler? Of course good old Ursula LeGuin’s The Dispossessed is a classic in the genre polysci scifi (if that’s a thing).

      1. Lambert Strether

        Marge Piercy’s Woman on the Edge of Time is terrific. I can’t recommend it enough. There are very, very few utopias* that are also successful works of fiction; plot, character, etc. It’s long out of print but can still be ordered online or from a library.

        NOTE * Although this utopia may or may not come into being, for reasons hinted at in the title.

        1. Richard

          Thanks Lambert. I’ll definitely give her a try. If you’ve never read the Octavia Butler Earthseed books, they’re definitely worth a try as well. Definitely a heavy dose of dystopian, with the “seed” of utopianism developing through the trilogy. Maybe it’s just who I am, but the dystopian part (very like our mr. hoppe’s dream world) rang much truer than the utopian part, though the whole thing is really fantastic. The utopia is left libertarian, which is where our best instincts always are, imo.
          Butler died a few years ago, much too young, just up the road from me in Lake Forest Park, WA.

  20. Octopii

    Sounds a bit like Neal Stephenson’s sci-fi satire Snow Crash, where world governments have been mostly superseded by large corporations that one may become a member of for security or a place to live (such as “Mr. Lee’s Greater Hong Kong” which may have locations in different areas of the earth). The poors drift around on plastic rafts in the ocean…

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