Tag: rothbard

An Introduction to Time Preference

Jack Parkos | United States

Suppose someone offers to pay you 20 dollars. You have the choice to receive the money today or tomorrow. In choosing the former, you are like everyone else. You would prefer wealth sooner rather than later. This economic concept is Time Preference. Time Preference affirms that current satisfaction is preferred over future satisfaction. People would prefer not to wait for wealth when it is easily achievable now. Wealth could be monetary, assets, experience, etc.

“Satisfaction of a want in the nearer future is, other things being equal, preferred to that in the farther distant future. Present goods are more valuable than future goods” – Ludwig Von Mises

However, the choice is not always equal and simple. Suppose someone offers you 20 dollars today, or 30 dollars tomorrow. The choice becomes a bit more complicated. We see a divide in people with high time preference and those with low time preference. Someone with high time preference puts their focus on their present well being. They would take the 20 dollars today. On the other hand, A person with low time preference puts emphasis on future satisfaction. This person would take 30 dollars tomorrow. A good example would be comparing savers and spenders. Those with low time preference tend to save their money and make wiser investments. Those with high time preference are more likely to blow through cash.

Real World Examples

Criminals tend to have extremely high time preferences. They are not willing to work to obtain wealth as that involves waiting for future wealth (paychecks). They would rather steal to achieve wealth in the present.

Another example of high vs. low time preference is in the context of college students. One who chooses to stay in and study over going out and partying has a lower time preference. The reasoning being, there will be a future benefit; a better chance at a higher grade, meaning better opportunities down the road. On the other hand, one who chooses to go out has a higher time preference; they prefer the instant short term gratification of partying.

Furthermore, different goods could be preferable in the future than in the present. During winter, ice has a low demand and is preferable in future (summer). However, it still is a general rule people value current wealth to future wealth.

Different groups of people tend to have different levels on time preference. Age is one of the biggest factors in determining one’s time preference. Young children tend to have high time preferences as they are not concerned with the future. A child would likely spend all of his money on ice cream. Adults tend to have lower time preference as they need to save for the future. However, The elderly tend to have higher time preference as they have less time for future consumption. Moreover, someone who has (or is planning to have) kids tends to have lower time preference as they need to save for the future.

Relation to Interest

In “Man, Economy, and State”, Murray Rothbard writes

“The time-market schedules of all individuals are aggregated on the market to form market-supply and market-demand schedules for present goods in terms of future goods. The supply schedule will increase with an increase in the rate of interest, and the demand schedule will fall with the higher rates of interest. A typical aggregate market diagram may be seen in Figure 44. Aggregating the supply and demand schedules on the time market for all individuals in the market, we obtain curves such as SS and DD. DD is the demand curve for present goods in terms of the supply of future goods; it slopes rightward as the rate of interest falls. SS is the supply curve of present goods in terms of the demand for future goods; it slopes rightward as the rate of interest increases. The intersection of the two curves determines the equilibrium rate of interest—the rate of interest as it would tend to be in the evenly rotating economy. This pure rate of interest, then, is determined solely by the time preferences of the individuals in the society, and by no other factor”.

The Time Preference Theory of Intrest explains how rates relate to one’s time preference. Demand for capital is driven by investment and the supply of capital is driven by savings. Interest rates fluctuate, eventually reaching a level at which the supply of capital meets the demand for capital.

Relationship to Civilization

In “Democracy the God That Failed”, Hans Hermann Hoppe notions that concern for future wealth is a key to the prosperity of civilization. If the majority holds a low enough time preference for the process of production, civilization would then be able to thrive. When one allows someone to use capital and resources, an economy forms with Division of Labor and private property. As previously mentioned, criminals have high time preference and will steal resources, slowing down production.

Hoppe describes that the state also has a high time preference. The state violates property rights and steals resources to give to others. The recipients in turn usually also have a high time preference. Hoppe describes this as “decivilizing”.

Time preference is arguably one of the most important parts of economic thought. It is the foundation of saving and interest. Furthermore, it distinguishes spending and saving.

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The Art of Pursuing Knowledge

Ian Brzeski | United States

Imagine a society where people did not strive to obtain knowledge, where people did not try and better themselves and society as a whole due to laziness or negligence. There would be no intellectual debate or discussion amongst peoples; there would not even be the high level of society we live in today. From generation to generation, society has progressed and there is no question about it. Life expectancy has gone up tremendously, and the impoverished are nowhere near the level of terrible poverty that they once endured. All of this progress comes from our desire to learn, our desire to improve, and our desire to make our lives easier and better. Without these desires, nobody would care about anything and we would have never achieved this progress. Without this desire, who knows where we would be at in society today. Would we still be stuck in the Dark Ages? Maybe it would be worse; perhaps we would still be neanderthals who have yet to invent the wheel.

The ability to learn is the most underappreciated and undervalued skill that people possess. Choosing to acquire knowledge in a particular subject is bound to shape who we are as a person. The saying “knowledge is power” holds a tremendous amount of weight. Knowledge opens up worlds of opportunity. It liberates our minds from the thinking of the masses. It allows us to think critically, analyze ideas, and develop our own conclusions from said ideas.  From the eagerness to learn comes knowledge and from knowledge comes wisdom.

The Importance of Reading

The best way to obtain knowledge is through reading. Reading is simply a wonder. Regardless of the subject matter, you can always learn something from a good piece of literature. Fiction, non-fiction, politics, sports, or history, the subject does not matter. Harvest the knowledge that comes from all these readings. There are always going to be facts to learn, concepts to grasp, morals to uncover, and ideas to critique through reading.

Reading a book may motivate you, relax you, give you information to better yourself as a person, or even give you random bits of information that you find interesting. No matter what you are reading, it will always help you. Reading poorly written books or conceptually poor books also have some benefit because you would be able to distinguish and analyze the faults of these books. If none of the prior reasons convinced you to pick up a book and start reading, remember that reading is overall inherently fun. When picking up a book, you never really know what to expect. The stories you read or the facts and opinions portrayed could be just full of surprises. Reading could change your life.

You are What You Read

What you choose to read stem from your interests and beliefs. If you read books and articles about politics and more specifically libertarianism, you are interested in politics and are probably a libertarian. While this claim is a given and is true most of the time, your interests and beliefs also stem from the books you read as long as you go into the book with an open mind. Reading with an open mind will help shape your political ideology and who you are. It will increase your understanding of different positions and mold you into a person who you would want to be.

When reading books about politics or political theory, it is just as important to read opposing views as it is to read the views you agree with or the ones you are most comfortable with. The books we read shape our persona and develop our livelihood and our way of thinking. Think about everything you can learn from reading. Think about the different viewpoints and understanding and knowledge you will obtain from reading your opposition. You will undoubtedly learn a lot and be incomparably more educated than the person who only reads Rothbard or the person who only reads Marx.

Read Differing Opinions

If you only read Marx or Baudrillard, you are still ignorant. If you only read Rothbard or Hoppe, you are still ignorant. This goes for anybody who reads only one side of things. These people will have no understanding of their political counterparts. They will sound stupid, ignorant, and hateful, inevitably leading to an abrupt halt to any political discussion. Civil discourse will be virtually nonexistent.

This is why it is so important to read your opposition. If we want to continue progressing as a society, we must be able to develop an understanding of different views and opinions. People must be prepared to understand and listen to different opinions if we want to maintain any civil discourse. Allowing for civil discourse makes way for a more transparent and more efficient exchange of information and ideas. Civil discourse will undoubtedly lead to a quicker progression in society.

Reading differing opinions is better than reading books with opinions in which you agree with. It will challenge your way of thinking while giving you more of an understanding of different opinions, making you more compassionate and sympathetic to people who think differently from you. Your critical thinking skills and levels of analysis will certainly improve by challenging your opinions and allow you to form your way of thinking in a more articulate manner.

Read Rothbard, read Marx, read Zizek, read Nozick, read Chomsky, read Orwell, and read Konkin. Read from all the brilliant minds who were able to develop and create discussion in politics. Especially read from the people who you disagree with or are maybe disgusted with. It is essential to do this in order to be able to formulate and strengthen your position. Keep on reading for the knowledge and wisdom that you will inevitably gain.


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How Murray Rothbard Helped in Creating Trump

By Jack Parkos | United States

In 2016, Donald Trump won the presidency of the United States with his rising movement of “right-wing populism”. Right-wing populism is a moment based on putting the “average man” and nation first. Many key tenants include opposition to elitism, mass immigration, social spending, and globalism. Though Trump has been the most successful with his movement, he was not the first right-wing populist.

The Beliefs of Right-Wing Populism

l. Slash Taxes. All taxes, sales, business, property, etc., but especially the most oppressive politically and personally: the income tax. We must work toward repeal of the income tax and abolition of the IRS.

2. Slash Welfare. Get rid of underclass rule by abolishing the welfare system, or, short of abolition, severely cutting and restricting it.

3. Abolish Racial or Group Privileges. Abolish affirmative action, set aside racial quotas, etc., and point out that the root of such quotas is the entire “civil rights” structure, which tramples on the property rights of every American.

4. Take Back the Streets: Crush Criminals. And by this I mean, of course, not “white collar criminals” or “inside traders” but violent street criminals – robbers, muggers, rapists, murderers. Cops must be unleashed, and allowed to administer instant punishment, subject of course to liability when they are in error.

5. Take Back the Streets: Get Rid of the Bums. Again: unleash the cops to clear the streets of bums and vagrants. Where will they go? Who cares? Hopefully, they will disappear, that is, move from the ranks of the petted and cosseted bum class to the ranks of the productive members of society.

6. Abolish the Fed; Attack the Banksters. Money and banking are recondite issues. But the realities can be made vivid: the Fed is an organized cartel of banksters, who are creating inflation, ripping off the public, destroying the savings of the average American. The hundreds of billions of taxpayer handouts to S&L banksters will be chicken-feed compared to the coming collapse of the commercial banks.

7. America First. A key point, and not meant to be seventh in priority. The American economy is not only in recession; it is stagnating. The average family is worse off now than it was two decades ago. Come home America. Stop supporting bums abroad. Stop all foreign aid, which is aid to banksters and their bonds and their export industries. Stop gloabaloney, and let’s solve our problems at home.

8. Defend Family Values. Which means, get the State out of the family, and replace State control with parental control. In the long run, this means ending public schools, and replacing them with private schools. But we must realize that voucher and even tax credit schemes are not, despite Milton Friedman, transitional demands on the path to privatized education; instead, they will make matters worse by fastening government control more totally upon the private schools. Within the sound alternative is decentralization, and back to local, community neighborhood control of the schools.

These statements sound extremely blunt and to the point. “America First”, unleashing the cops on criminals and “bums”, and slashing welfare. One may think this sounds like President Donald Trump. Indeed it does draw parallels to Trump’s platform, as Trump spoke much of clearing the streets, slashing taxes, and especially putting America first. However, Trump is not the pioneer of this movement

Murray Rothbard and Populism

In fact, it was anarcho-capitalist philosopher Murray Rothbard who wrote this in his essay entitled “Right-Wing Populism.” In the 1990s, Rothbard began his “Paleo strategy”, creating paleo-libertarianism. This movement attempted to create a right-wing populist libertarian coalition to take down the political elites.

This began when the conservative movement split into two groups: the “old right” as Rothbard stated, who were isolationist, and the neoconservative Warhawks. Rothbard, who was sick of the libertarian movement’s progressivism, decided that the former was the best option. Rothbard himself held socially conservative views and began his support for paleoconservative Pat Buchanan. With his help from Buchanan, the Paleo movement (right-wing populist movement ) was born. (During this time, Rothbard was also an avid supporter of Ron Paul).

Rothbard died in 1995, and with him, his right-wing populist movement. The neoconservatives and social democrats that he feared started to win offices. However, in this past election, a man was elected that Rothbard might have dreamed of. This man was Donald Trump. To quote Rothbard:

“And so the proper strategy for the right wing must be what we can call “right-wing populism”: exciting, dynamic, tough, and confrontational, rousing and inspiring not only the exploited masses, but the often-shell-shocked right-wing intellectual cadre as well. And in this era where the intellectual and media elites are all establishment liberal-conservatives, all in a deep sense one variety or another of social democrat, all bitterly hostile to a genuine Right, we need a dynamic, charismatic leader who has the ability to short-circuit the media elites, and to reach and rouse the masses directly. We need a leadership that can reach the masses and cut through the crippling and distorting hermeneutical fog spread by the media elites.”

Trump’s Populist Movement

At the time, this leader was Pat Buchanan. However, this leader is now Donald Trump, who is dynamic, charismatic, and has attacked the media elites plenty of times was the perfect man for Rothbard’s strategy. Rothbard would have loved Donald Trump and likely would have endorsed him in 2016.

Indeed, Donald Trump’s movement can be seen as Rothbard and Buchanan’s movement rising from the dead. Trump has been compared to Buchanan and has even quoted him in tweets. Furthermore, paleolibertarians such as Lew Rockwell (who also played a role in Rothbard’s movement), Walter Block, and Hans-Hermann Hoppe have shown some sympathy to the Trump movement, although they are not undying loyalists to his cause.

The parallels are very similar. Both of the movements do have a big theme of “America first” with an opposition to neoconservatives and globalism. Furthermore, both Buchanan and Trump were promoters of tariffs (although the libertarians were opposed to this). Trump’s views on immigration are similar to those of Buchanan and Rothbard. Moreover, the movements were tough on crime, progressivism, elitism, and the mainstream media.

Rothbard did not ideally want a state. However, he did have a pragmatic view of a decentralized state with less bureaucratic elites and less war. Although it took time, the 2016 election was a movement that was started by Rothbard and Buchanan two decades ago, and it has finally emerged.


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3 Times Anarcho-Capitalist Private Law Has Worked

By Mason Mohon | @mohonofficial

Everything is scarce. Time, space, human bodies, and all resources are limited. For each of them, there is a finite amount. Because of this finite amount, there are bound to be conflicts over who gets to use what. There will be conflict over who gets to use a piece of land or use a resource.

The greatest way to avoid this widespread conflict is a system of norms that aim to reduce conflict. A societally accepted private property norm that ensures that I own my body and my property can help in avoiding conflict. If the people in my community agree that my house is mine and my body is mine, they recognize that they are not allowed to enter without my permission or use my resources without my consent.

A system of widely accepted private property norms is what allows for peace to prevail. But what if the community does not accept these norms? It does not matter that I am the first user of a piece of property if nobody recognizes it as mine. If one is able to trample my property and steal my belongings without society caring, property doesn’t matter and peace it out of the question.

This is the problem that people often see with Anarcho-Capitalism. They believe that because there is no monopolized enforcer of property rights, then there is no chance at peace. Violence will prevail and a Hobbesian hell will ensue. Even libertarians have this problem with Anarcho-Capitalism. They think that property rights and individual freedom are important, but they do not believe that it is a sustainable model without a government minorly infringing on rights so as to provide protection.

The question must be posed, then: could private law work? Could we ensure that there is enforcement for property rights without a state? The theory behind this is well established, but even then it is hard to buy because the layman does not see examples of its success in the real world. We do not have exposure to private law, so we don’t think that it is possible for it to exist. The aim of this article is to establish the theory and then to look at how the theory has manifested in the real world.

The Economics of Private Law

First, we must ask the question of why bother? Why should we care about the private production of law and defense in the first place? Can we not just remain with the status quo? Libertarians, and especially Anarcho-Capitalists, respond with a resounding “no”. The status quo, especially in America, is unacceptable. The United States overtaxes and has a plethora of regulations that hold bad economic freedom and productivity. On top of that, we have various laws in the United States that trample on basic civil liberties, from the War on Drugs to the mass surveillance state. In addition to the economic and social lack of freedom, America has become an empire that reaches its talons across the Earth. We pillage smaller countries under the guise of counter-terrorism so as to satisfy our own interests.

As Lew Rockwell explains:

[T]he reason we focus on these issues in the first place is that we realize the State cannot be reformed. The State is a monopolist of aggressive violence and a massive wealth-transfer mechanism, and it is doing precisely what is in its nature to do. The utopian dream of “limited government” cannot be realized, since government has no interest in remaining limited. A smaller version of what we have now, while preferable, cannot be a stable, long-term solution. So we need to conceive of how we could live without the State or its parasitism at all.

The state cannot exist without monopolizing on violence and using it. To engage in any project, it must first take money from the population at the threat of force. From the very beginning, this is a moral atrocity. Because of this failure to live peacefully from the get-go, humanity needs to look for an alternative to state control. Because of this, we will explore the ideas of some libertarian economists and legal theorists who have explored possible alternatives.

Robert Murphy and Privatizing Law

Robert Murphy, also known as Bob, is a senior fellow at the Mises Institute who has been researching the ins and outs of private law for years. He believes that the market system could provide a system of law and order far better than a government can. Year after year he has given a lecture at the libertarian youth conference, Mises University, titled “The Market for Security.”

Of course, not all of the ins-and-outs of a market system of private law can be covered by a 40-minute lecture, so that is why he wrote his book Chaos Theory, which is a collection of essays that focus on private law and defense.

Within a private law society, contracts would dictate the bounds of a relationship between two people. An employer would make employees sign that they would not steal company assets, and embedded within the contract would be the stipulation that if they did steal, their method of repayment would be determined by a pre-determined arbitrator.

Unfair arbitrators would be discriminated against because firms and individuals that embedded them into their contracts would lose business. The fairest and nonbiased arbitrators would win out in the end due to competition on the free market.

Murphy then continues to explain the utility of insurance companies in the realm of arbitration:

It would be the same way with all torts and crimes under the system I’ve described. An insurance company would act as a guarantor (or co-signer) of a client’s contracts with various firms. Just as a bank uses experts to take depositors’ money and efficiently allocate it to borrowers, so too would the experts at the insurance company determine the risk of a certain client (i.e., the likelihood he or she would violate contracts by stealing or killing) and charge an appropriate premium. Thus, other firms wouldn’t have to keep tabs on all of their customers and employees; the firms’ only responsibility would be to make sure everyone they dealt with carried a policy with a reputable insurance agency.

A system of insurance agencies would ensure that the victims of violations of property rights would be immediately compensated. In the status quo, justice is a matter of placing people in a cage, which does nothing to help the victims. According to libertarians, though, justice is a matter of compensation. A thief should have to return the stolen goods and compensate the victim for lost time and psychological distress. A murderer should be forced to pay an inordinate sum of money to the family of the victim.

People would be far less likely to engage in business dealings with someone who has not paid insurance premiums. They would be skeptical of the fact that this person is not ready to pay for any damages to property that they engage in. Robert then goes into many of the objections and questions that people have about such a system, which I will not cover in this article. The intention of this section was to outline what Murphy’s prediction of a system of private law would look like. The answers to his objections are in Chaos Theory, which is linked for free both above and here. Chances are if you have a disagreement with this system, he has addressed it.

Hans-Hermann Hoppe and Property Insurance

Hans-Hermann Hoppe, in his book Democracy: The God That Failed, described that he believes that defense of property is the same as insurance. He cites past thinkers such as Rothbard, Molinari, and the Tannehills as evidence that he is not alone in this stance. All of these libertarian theoreticians have posited such a theory, which gives it credibility and a literature base that makes it worth considering.

Economically, it makes the most sense for insurance companies to take charge of protection of property. An individual pays a premium to the insurance agency, and in exchange, the company will protect the individual assets of the customer. The customer is incentivized to be nonaggressive and take their own precautions when it comes to self-defense. The installation of security or a firearms training course could possibly lower the premiums. A track record of harassing defenseless people and inciting conflict would raise one’s rates or possibly have them removed from the system altogether.

Like any other business, the insurance company must serve its consumers. Once a dues-paying consumer’s property is damaged/stolen, the company would be contractually obligated to find the perpetrator and compell them to compensate the victim. The company would want to do this in the most efficient and easy way possible, while still ensuring that they get their job done. Security cameras would become popular because of the possible insurance premium bonus. An insurance company that is slow at its job or did it in a costly manner would lose business to competitors.

Insurance companies seek to turn a profit, so they would incentivize customers to take every precaution possible so as to not have their property stolen, invaded, or damaged. This is because whenever damages occur, the customer costs the company resources in terms of investigation time and the manpower to take back compensation. Because of this, insurance premium bonuses may be procured for anyone who takes various safety precautions.

If a situation arose where the insurance company was attempting to collect damages from a perpetrator who claimed that they are not the violator, and that perpetrator is insured by another agency, what happens? Would a war between two insurance companies occur? Of course not, because war is costly. It is a budgetary black hole that only government wastes its time and resources on. Instead, the insurance agencies would go to a third party – an arbitrator. They would agree to one with a track record of not being biased, thus ensuring a constantly improving quality of arbitration. Arbitration agencies that were found to have secret ties to a certain insurance agency, or even ruled in favor of a certain agency suspiciously often, would go out of business because of suspicion or outright discovery of fraud.

Hoppe goes on to cover a few more of the intricacies of such a system, but above I have detailed the bare bones of the system and shown what would probably happen in a couple of situations based on economic incentives. Hans Hoppe’s system is one that incentivizes responsibility, quick justice, and perfectibility in law.

David Friedman and Private Arbitration Enforcement

In David Friedman’s book The Machinery of Freedom, he describes what he sees as the market solution to the problem of property enforcement. The core problem that he sees with private arbitrators (when compared to government courts) is their lack of ability to enforce a decision if one of the clients decides that they will not abide by the ruling.

He explains that all arbitration agencies would be forced by the market to remain completely honest. In the status quo of government courts, the incentive for honesty is shaky. A publicly appointed judge may rule in favor of those he likes and against those he does not. Along with the fact that many judges are appointed to life terms, the system insulates him from the consequences of his actions because regardless of what he does taxpayer dollars will flow into his pocket. Private arbitration agencies, on the other hand, are subject to the sovereignty of the consumer. Word of a dishonest arbitrator would spread quickly, and the arbitrator would go out of business.

There are two ways in which Friedman explains that a private arbitrator could ensure that clients would abide by its decision. The first is a contract in which both clients pay a sum that equals the highest possible damages. The arbitration agency holds onto this to ensure that both parties abide by the ruling. Once the ruling is made, the money is paid back to the rightful owners, with any damages paid out in addition. The arbitration agency takes a cut for their services.

The second method is a system of credit ratings. Client firms that enter arbitration would have a credit score. Client firms that fail to abide by the ruling would then be subject to a blacklist, meaning that they do not know how to play fair. Other firms and individuals would be very skeptical of firms with low credit ratings that have ended up on the blacklist. This would cause dishonest and cheating firms to lose clients and customers, ultimately resulting in financial demise.

The Empirics of Private Law

A true market lacks any central planning. It is the culmination of many individual actors seeking to satisfy demand in order to make a profit. This process leads to a plurality of products in each area of the economy, and in a completely free market society, this would also mean that there is a plurality in the types of defense goods produced. This plurality is also indicated by the fact that none of the theoretical standpoints that have been showcased above have been in 100% agreement.

All of the above economists have disclamed at one point or another that the market is unpredictable. The economists cannot predict the future, and they realize that. Because they cannot, they only attempt to draw rough sketches. They have pencil drawings of what Anarcho-Capitalist law and order could look like. The market, though, has given us a few complex paintings, which have shown us that this anarcho-capitalist system of governance is viable.

The Technology Age

The advent of the internet has allowed for an entire space to be carved out independent of the control of the state. This example is not as much of a historical account as the other real-world examples. This means it is more subject to skepticism than the other examples, which are purely historical. That is why this example is first: so that we may save the best for last.

The internet is not a physical place. The act of traveling through the internet is very distinct from traveling in the real world. The digital realm has properties completely alien to our present reality, but that does not mean that it isn’t real. It especially does not mean that it is not important and that there is no value in it. People can own property on the internet (and this is not limited to intellectual property). The site you have that is run by a server is yours, even if it just exists on the internet. Digital payment processes, although they are rooted in real-world offices, take place in the digital space.

Exchanges can be made online. Contracts can be secured. Confidential information can be sent back and forth between individuals or groups. Because of the vast amount of value that can be gained from a digital world, there is a risk that it may go wrong. Malicious individuals may take advantage of the non-physicality of it and violate the rights of others for their own personal gain. Hackers may breach digital walls to get to information or wealth. On top of all of this, the internet itself is independent of any governmental boundaries. This means that it needs to find its own methods to enforce its own property norms.

PayPal’s system of arbitration is one way in which the internet has managed to resolve conflicts between parties in a way that results in the rightful owners ending the day with their money. This is especially important because the internet allows for the possibility of anonymity. Because of this, companies (such as PayPal) will verify identities so as to keep clients honest with one another. In addition, what is to stop a PayPal user from claiming that a legitimate transaction was fraudulent and avoiding payment for a deal?

This is why PayPal has developed its own form of private dispute resolution. First, PayPal lets the clients see if they can resolve the conflict independently. If they prove incapable, PayPal itself will step in and resolve the conflict on behalf of the clients. They will open up their own investigation and make a ruling. This allows for fair payments to prevail and cheaters to be excluded from the system, thus ensuring the rightful owners keep their money.

The development of blockchain technology allows the internet to go even further in its insurance of fairness. Bitcoin’s birth came with a technology that removed the need for trust from the equation altogether, thus removing the need for identity independent of the blockchain. A completely decentralized ledger prohibits anyone from faking a blockchain system. In addition, it prohibits a strongman from climbing to the top and taking advantage of people. Digital systems that run on blockchain are experiencing the anarchy of the online world at its full force. It does not require leaders, coercion of any kind, or even trust.

The Chieftans of Iceland

Iceland was settled by Norwegians in 870 AD, and in 930 the Icelanders held an assembly to agree on the common law of the land. Their law was the same as Norway’s, with one exception: they did not feel that they needed a king. Instead, the Icelandic system was organized around chieftains.

Originally, these chieftains were entrepreneurs who would establish local temples. These local temples were the rights of the chieftain, and they were also private property. The chieftain had the authority to sell, lend, or inherit this property. It was voluntarily attained and voluntarily maintained.

According to David Friedman, these chieftains, through their estates, would protect the property of those who voluntarily submitted to their authority. Law would be determined through suits between people belonging to different chieftains’ estates. The subjects, known as thingmen, were not citizens, though. Their obligations to the chieftains were only what was mutually agreed upon.

The “government” of Iceland during this time had one government employee – the lawspeaker. This lawspeaker would preside over the law and give legal advice, but did not dictate what the law was and how it should work. He was elected through popular vote.

When one sued another, the defending party, if found guilty, would have to abide by the decision. If they refused, they would be socially ostracized and physically removed. If they further refused to leave after violating the law of the land, the victim could exact revenge without consequences.

One objection to this system would be that a strongman could defend himself properly and avoid having to ever pay damages, but the system had a solution to this too. A claim on damages was property, though. If one was not sufficiently powerful to take down the violator, they could sell the right to the damages. Thus, they are compensated, and a more powerful party now has a profit motive to exact justice.

But how long did it last? Longer than the United States has. As Friedman explains,

These extraordinary institutions survived for over three hundred years, and the society in which they survived appears to have been in many ways an attractive one.

This system was superior to ours for two reasons. The first is that it did not begin with state coercion so as to fund the methods of law enforcement. This meant that the enforcement of property through a sovereign was done in an ethically superior way. The state of affairs in Iceland was better than ours, ethically speaking.

Furthermore, it was decentralized. In the contemporary United States, the law is decided based on the popular vote of those in the House and Senate. The standards set by said law are arbitrary. One can call in as many experts as they want, but the end result will ultimately be detached from real experience. Decentralized law (like that of Iceland) on the other hand is developed as the sum of many cases over time. The judges and jury can decide on what is reasonably justified in the more difficult cases. This provides a solution to the oft-cited criticisms against libertarianism that forces the Non-Aggression Principle into justifying quite awful things (as seen by the previously popular “AnCap Memes”).

Liechtenstein

Liechtenstein is a very small principality nestled in the mountains of Europe. It neighbors Austria and Switzerland and is only 25 kilometers long. Its population is just under 40 thousand, but it is also the richest per capita country in the world. It seems like a nice little place with nothing too notable. But what sets Liechtenstein really apart from the rest of the world is its governmental style. Prince Hans-Adam, the current monarch, says the following towards the beginning of his book The State in the Third Millenium:

I would like to set out in this book the reasons why the traditional state as a monopoly enterprise not only is an inefficient enterprise with a poor price-performance ratio, but even more importantly, becomes more of a danger for humanity the longer it exists.

Liechtenstein is in anarchy. The reigning government is barely a government at all because it does not fit the minimum standards of what a government actually is. It is not a monopolist on the territory that it owns and it is not a monopolist on the production of defense. Every single town and household in the country has the right to secede. At the same time, it is legal to create a defense company that competes with the government’s production of defense. There is, however, no demand for non-governmental protection because the de-monopolized state does such a great job of it.

The country has a monarchical government, yet it has many democratic elements. There is a parliament with 25 members, yet the prince has the authority to either dissolve the parliament or veto their decisions. At the same time, popular referendums also keep the monarchy in check. The prince has no power to veto a referendum to dissolve completely the princely house.

Liechtenstein is probably the freest place on earth and is also one of the wealthiest. One may object that their system could not be implemented on the scale of the United States, but why keep it on such a scale? The monarchy of Liechtenstein operates in a way analogous to a business. Businesses have to grow and find their right size. They have to push their boundaries amidst competitors doing the same thing. The U.S. doesn’t need to turn into Liechtenstein, it needs to dissolve into many Liechtensteins.

* * *

Anarcho-capitalism is usually not taken seriously because of the supposed lack of solutions to the question of defense. This is what makes the difference between an anarchist and a statist. This article hopes to serve as both a theoretical first step and a proof of concept for the private production of defense. The first half discusses competing theories, each of which the reader can look deeper into, while the second half looks at the real world manifestations. Using the information that has been supplied here, the reader should be primed to engage in extensive research down the right avenues.


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The 7 Most Important Schools of Libertarian Thought

Jack Parkos | United States

When people think of libertarians, they often tend to think “fiscally conservative and socially liberal” or “a Republican who likes weed”. However, neither of these statements are fully true. The libertarian philosophy actually goes very deep; in fact, there are several factions of different libertarian schools of thought. The libertarian ideology is far more intellectually diverse than American conservatives and liberals. Below are some of the different major schools of libertarian thought. Though many more exist, these seven best capture the wide array of beliefs.

Classical Liberalism

Classical liberalism is one of the earliest schools of libertarian thought. Originating in the philosophy of John Locke, classical liberalism holds that all men are born with inalienable rights to life, liberty, and property and that the sole purpose of government is to protect those rights. The Declaration of Independence is an echo of classical liberal thought, as many of America’s Founding Father’s were classical liberals. Generally, they place emphasis on natural law, republicanism, and skepticism; many classical liberals are firm believers in the U.S. Constitution.

Key classical liberal figures include:

  • John Locke
  • Thomas Paine
  • Many of America’s Founding Fathers, including Thomas Jefferson and George Washington

Anarcho-capitalism

Anarcho-capitalists base their philosophy on the moral principle called the “Non-aggression Principle” (NAP). The basis of the NAP is that people do not have the right to initiate force against others. On the contrary, the only acceptable use of force is in self-defense. They also believe that the mere existence of the state violates the NAP, as it acquires all its income through coercive means (taxation). Thus, they believe that no government should exist. Instead, they believe that voluntary communities and private entities should fill the government’s role.

Key anarcho-capitalist figures include:

  • Murray Rothbard
  • Hans Hermann Hoppe
  • David Friedman

Minarchism

Minarchism basically falls in between anarcho-capitalism and classical liberalism. It holds many similar beliefs to anarcho-capitalism but criticizes the idea of a lack of government. Minarchists believe that the free market can cover almost all government programs. However, they maintain that a minimalist government is necessary for the protection of rights. Minarchists typically believe, with some variation, that government should be limited to a “Night-watchman State” consisting of police, military, and courts. Robert Nozick, author of “Anarchy, State, and Utopia” argued that out of anarcho-capitalism, minarchism would naturally arise, as monopolized private police and courts would form a “state” of sorts.

Key minarchists include:

  • Robert Nozick
  • Friedrich Hayek
  • Ludvig Von Mises

Objectivism

Objectivism is a philosophy that author Ayn Rand outlines in her books “Atlas Shrugged” and “The Fountainhead”. To begin with, objectivism is an extreme Laissez-faire capitalist belief with huge emphasis on individualism. Rand believed that man was best off serving his own self interest and should not need to help out the needy. In addition, it describes the pursuit of one’s own happiness as life’s most important goal. Accordingly, she, like many objectivists, rejected selflessness and altruism as an inefficient direction of resources.

Key figures in the Objectivist movement include:

  • Ayn Rand
  • Leonard Peikoff

Bleeding Heart Libertarianism

Bleeding Heart Libertarians can be considered more “moderate” libertarians. In some cases, they are associated with the libertarian left. The official site for bleeding heart libertarians says they believe in “free markets and social justice“. Bleeding Heart Libertarians tend to believe in social equality and egalitarianism. They often still believe in social safety nets and a welfare state, and fall on the progressive side on social issues.

Arguably, the most famous bleeding heart libertarian is Gary Johnson. Much of the moderate side of the Libertarian Party also falls under this category.

Libertarian Socialism

Libertarian socialism is a form of left libertarianism. Typically, it is a form of Marxist theory that believes in social liberties and limited to no government. However, they also support a voluntary sharing of resources in a communal way. They also tend to oppose the power of strong corporations and hierarchies. Libertarian socialists often believe capitalism to be a tyrannical force and compare the “economic” elite to the state. As a result, they believe in ending authoritarianism and bringing in systems of direct democracy (sometimes unanimous) that distribute wealth more evenly.

This mode of thought draws much criticism from most other branches of libertarianism. Conversely, many libertarian socialists firmly believe themselves to be the only true libertarians. This partly dates back to the origin of anarchism and libertarianism in 19th-century Europe as a term to describe the left.

Key libertarian socialists include:

  • Emma Goldman
  • Peter Kropotkin
  • Noam Chomsky

Paleolibertarianism

Paleolibertarians believe that while the state should be limited or abolished, society should still hold culturally conservative views. Paleolibertarians are thus very supportive of Western and American culture and are concerned about threats to it.

The paleolibertarian movement began in the 1990’s as a coalition of paleolibertarians and paleoconservatives that Rothbard (above) and paleoconservative presidential candidate Pat Buchanan formed. Basically, the goal was to stop interventionism, globalism, and social democracy.

Paleolibertarians usually oppose mass immigration and foreign wars. Many more radical paleolibertarians may consider themselves “Hoppeans”, following the anarcho-capitalist philosophy of Hans Hermann Hoppe.

Key paleolibertarians include:

  • Murray Rothbard
  • Lew Rockwell
  • Hans Hermann Hoppe
  • Ron Paul
  • Tom Woods

The movement, of course, is even more diverse than this. Countless versions of libertarian thought exist within it, and it would take ages to explain them all. Without a doubt, the area of thought is rich with diversity and variation. No two libertarians are alike, but all have one thing in common: a desire to live free.


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