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>>"The direct use of physical force is so poor a solution to the problem
>>of limited resources that it is commonly employed only by small
>>children and great nations." -- David Friedman,
>>_The_Machinery_of_Freedom_
>
>
> It's one of my favorites, too.
>
> One hopes that if there is an afterlife he has a chance to explain it
> to his six million fellow Jews who went to the crematoria chanting
> this mantra.
>
> Or he could fly to Rwanda and tell this to the Hutus and Tutsis.
Touch�. Nietzsche's "Where are your claws?", and all that.
Certainly the creation of superior force-capability, and the will to use
it, especially on people who can't or won't fight back, creates
situations like the above. The book "Guns, Germs, and Steel" is
chock-a-block with examples of the same kind of thing throughout human
history.
It's interesting, nonetheless, that the cases above are perfect examples
of exactly what David Friedman (for those here who don't know of him,
he's the current intellectual standard-bearer for anarcho-capitalism, a
"law and economics" professor in Santa Clara, and the son of Milton and
Rose Friedman) was talking about: nation states using force as a poor
solution to the distribution of limited resources.
In the first example, the Nazis distributed, by force, the resources of
mostly unarmed Jews. The same Nazis who came to power themselves because
of a completely uneconomic World War I reparation/
resource-redistribution scheme. A scheme imposed, by force, at the
armistice, by other states, including the U.S. A "great nation", which,
by the way, was the sole holdout against relaxation of those reparations
in the face of the very German hyperinflation that gave the Nazi party
its start to begin with. It was also, not cooincidentally, the same
"great nation" who had to, later, using its own force, distribute the
resources, if not the lives, taken by Nazis from the Jews, or, more
properly, to destroy those expropriated resources almost completely.
Killing the economic patient to save him, as it were.
In the second example, there's a post-colonial Rwandan government,
controlled by a previously disempowered majority (created, again by
another nation state, France, or Belgium, or whoever) looking the other
way while the majority population itself took it upon themselves, mostly,
to distribute the resources of a comparatively richer minority with in a
machete-slashing bloodbath. The fact that a colonizing nation-state had
the ability to merge those two iron-spear-armed enemy populations at
gunpoint sometime in the past might have also had something to do with
the problem, I think.
Fat lot of good it does to either set of victims, no matter how right the
analysis is, of course.
Note, nonetheless, that in both cases, people contracted with their
government to protect the most precious resource of all, their lives, or,
more properly, their freedom, from "distribution by force", and their
government failed to live up to whatever contract they thought they had.
Proving that, more often than not, laws, and, frankly, constitutions, say
what the guys with the guns say they do, and no more -- and why it's also
very important for *everyone* to be "one of the guys with guns" as a
result.
So David Friedman, being, like lots of us here, an anarchocapitalist,
would probably think that privately operated markets for force would have
prevented both incidents before they even started. Meaning that the
heretofore-massacred millions would have instead been in possession of
arms, freely available in an open market for same, and, more importantly,
convinced of the necessity to provide for their own defense, and trained
accordingly.
And, again, saying something is right doesn't make it so, which, I
suppose, might have been the point, even if Friedman has been saying it
in the language of economics instead of moral outrage.
Which brings me to the reason I still like the quote above, in spite of
such an apparently strenuous objection to it.
[The 20% or so of you who are long-time cypherpunks, and who've heard me
say the following before, can skip it, I bet. :-).]
I think we have tranfer-priced violence-enforced (lie about a trade, go
to jail) monopoly-structured markets for a reason, and that's because
it's cheaper than, as Pierpont Morgan might have put it, "ruinous
competition" between competing economic entities. Human heads, until the
advent of electromechanical switches in the 1930's or so, were the only
"switches" of information available. Such expensive switches make for
hierarchical, transfer-priced economic networks, and the faster the
transmission of information, over longer distances, the larger those
hierarchies become.
Under those kinds of conditions, it's better to merge someone else's firm
into yours, than it is to compete with it, even if the firm is a force
monopoly called a nation-state. That, ultimately, is where large
empire-scale nation-states like China, the old Soviet Union, and the US
come from, or for that matter, mostly non-agressive states like Canada,
or even Brazil. (The European Union, oddly enough, is probably doing it
too late for it to be much use, and, though I would hate to cite the
current state of the Euro as proof of that, I'll take any port in a storm
on that point. :-).)
Moore's law changes all that. Switches are falling by half every one or
two years, or at least they have for the last 35+ years or so. When
switches become relatively cheaper than lines, you get a geodesic network
instead of a hierarchical one. More to the point, you end up with, in the
presence of strong financial cryptography, cash-settled auction markets
for resources, instead of force-settled transfer priced ones.
[the 20%-ers can come back, now :-)]
In light of all the above, I think a ubiquitous geodesic network, strong
cryptography, internet bearer transactions, and so on, create an
environment where individuals are more *likely* to protect themselves, to
become *more* self-reliant, because it will be *cheaper*, economically,
than relying on a government transfer-priced force monopoly for the same
result. It will be cheaper, if those technologies work as promised, to
have direct auctions of resources on the net, than to transfer-price them
backed by, or explicitly using, the force of a nation-state. Competition
in such an environment is not "ruinous", in Morgan's sense of the word,
it's "virtuous", it's more profitable. Firms become increasingly cheaper
to operate as stand-alone entities, and so more of them, and smaller
ones, proliferate.
In other words, if financial cryptography technology and bearer
transactions can get financial *intermediaries* -- much less
proprietorship -- down to the size of devices, boards in a machine, which
they should do next year sometime :-), then certainly individuals will
become more "sovereign", to lift a little from Rees-Mogg, or whatever his
name is...
That's where Friedman would probably come down as well. I'd point to his
price theory book, for starters. Or, maybe, some hypothetical revision of
the "Machinery of Freedom", which I quoted above, though it came out in
the 1970's and was last revised in the late 1980's sometime.
I can say that mostly because he has said a bunch of cypherpunk-driven
stuff in the recent past, and he's certainly talked to lots of
once-and-future cypherpunks about the effect of strong internet
cryptography on freedom, economic and otherwise: Perry Metzger that I
know about, and possibly Declan McCullagh too, at various Cato
conferences they both attended. <plug> The fact that I sicced a Forbes
reporter on him for cover story on financial cryptography in 1997 might
have had something to do with it, as well, I think :-).</plug>
On my own, I would say that the lower transaction costs caused by the
above technologies should, at the very least, reduce the size of
nation-states themselves in the aggregate, which would, in turn, one
would hope, make them less likely to have time to do that kind of thing
to their citizenry. A parasite not killing a scarcer population of hosts,
as it were.
So, for instance, we would end up with a Hutu state, and a Tutsi state,
just like we ended up with Israel after World War II, and they would be
able to function because, using increasingly cheaper information
technology, they could expropriate their tax revenue just as well as any
combined entity would be able to now.
Hopefully, because title to resources in question, including the cash
required to protect meatspace assets, would eventually be held on the net
itself -- and, using m-of-n secret splitting, be distributed among as
many machines as possible instead of a single "point of failure" like a
modern nation-state-chartered bank -- state-sponsored control and defense
of borders, and the control of violence inside them, would become more
ceremonial than anything else in the long run.
Probably just whistling past a literal graveyard, that, but at least it's
a testable proposition, as opposed to the presupposition of a Jewish
afterlife, which, if I remember correctly, Jews don't even believe in
themselves -- or whether Friedman would take it upon himself to fly to
Rwanda, and defend himself by the mere "force" of a fairly accurate
economic joke...
Cheers,
RAH
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R. A. Hettinga <mailto: [EMAIL PROTECTED]>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
