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From nomadic community to dynamic nation, hurting the state

What is the most effective way to hurt the state? Various people have various answers to this question, it can be direct action, politics, grey market economy, education, lobbying etc. In my opinion, one of the most effective way to hurst the state is to use competition, to migrate from one place to the other. Not only can you enjoy more freedom this way, you are also pulling out your skills, your capital, your tax money out of the system you wish to attack. It is very effective. I live by my standards and emigrated from France to the US. Ok, New-York city can be as socialist as France is, but I still get better wages and enjoy comparatively more freedom. In the recent years, France has known an exodus similar to the losses of World War I. Highly skilled people (who enjoyed free education) are leaving, wealthy people are leaving... they export masters and phds and import welfare receivers...  when you export assets and import liabilities, bankcrupcy is near. OK, I made my point, moving is beneficial for you and hurts the State. Well it's not necesseraly beneficial for you, otherwise everybody would move... so what's keeping people from moving? There are many reasons, work permit is one: it can be very hard to obtain permission to work and live in a foreign country... few things can be done about that. There is also family and friends. People spend time during their lives to build networks of friendship, and they are not ready to live that behind so easily. Social recognition is also valuable and can be lost when emigrating. Last but not least, it can be hard to leave your job.

I think there is a way to attenuate this difficulties and make moving less painful, less costly. The key idea is to create a mobile community. A community of people enter into a covenant to agree to move from one place to another when decided through a standard procedure (say voting for example). They befriend each other, create ventures together, even families. The fewer the people, the more difficult it is to have an autonomous community (in term of social links), the more the people, the more difficult it is to enter into a covenant and make everyone move. I believe however that mobile communities of a few thousand people are possible. They can even incorporate which makes it easier to work in foreign countries. Since they are incorporated, wages inside the community can be paid indirectly with dividends which might be a way around income tax in many countries. There is also a possibility of influencing local politics. Think of it as a kind as a movable "free-state-project"...  Of course, the purpose is not to move 10 times a year, and since politics can be slow, it may not even be necessary to move within a 20 years or so, but creating a strong community sense may enable the community to move costlessly over the generations to te freest places available. As the community evolves it can grow bigger and stronger (imagine a million people) it then becomes more and more influent : it could negociate taxes directly with governments before settling somewhere, it could even overpower a small state and decide to ignore it.


Corporate murder

First of all I want to make sure it's clear I look at murder with disgust and find it appalling. This is not about murder as an ethical issue (a pretty consensual subject) but as en economical issue.

Some murders are due to uncontrolled emotions, passion etc. There is no pecuniary incentive here. Other murders, however, are motivated by financial concerns, from the thug in the street to the guy pushing his uncle down the stairs. But how frequent are corporate murders? What is the benefit for a company to murder the CEO of another competing company to get a market? There are various possibilities:

a) it happens all the time and no one knows about it, the accident rate is just higher for CEOs
b) people are ethical, very few people actually are morally capable of committing murder
c) police and justice are efficient, the prospect of getting caught stops people from doing it, killing a CEO may help your company but it's not profitable enough to take the risk
d) the people who would commit murder don't figure the opportunity

(a) doesn't seem likely. I don't have any data to support this, it is just a gut feeling... somehow if it were true, he'd be known.
(b) is what I want to believe, what I hope is the true reason. Yet some people do commit murder, so maybe it's a combination of b and d.
(c) is what I'll discuss now

More than ever, demand for goods is very elastic and you compete with almost every business... killing a competitor may not be very useful to you. It is also possible that CEO are disposables and don't affect company revenues, or that when they do they are extremely well guarded. However, whenever there are CEO changes, the stock market reacts. Theoretically, a CEO murderer could make very profitable trades on the market, even on smaller companies whose boss is not extremely protected. The same is true for terrorism, which can be extremely cheap. Why don't we see apolitical terrorists targeting publicly traded companies for stock speculation? A few years ago in France, a group tried to get a few millions from the government by threatening to use terror... this is extremely risky, there is a money trail, they have to make their existence known etc... and the money is pocket change to what they could have been quietly making.

It seems that crime does pay, unless smartness correlates with morality, unless I am widely mistaken about the extent of crime in society, I think there is a strange puzzle here.


Radical gradualism

This is a pointless thought experiment, but I think it gives interesting results. Assume that you gain political power in a country, and - before you become absolutely corrupted - try to turn it into a happy anarcho-capitalistic society. How would you do it?

The first approach is to dissolve the State. Tear apart the whole structure, leave your office and throw the key. Unfortunately, should you do that, the State will be recreated instantly, election held etc. Society is sensitive to hysteresis, it's not just the institutions that define how it works, it's also where you come from. By shutting down the State, you will just have quit your job not destroyed it. The second approach is to gradually transform the State by reforming it until it completely disappears. Unfortunately, this second approach has drawbacks. First, it is unethical, it makes you a criminal. Second, you are very susceptible to become corrupted by the power on the way, to encounter obstacles etc.

Fortunately, there is a way to combine gradualism and radicalism all in an ethical way (hooray).

The way to do it is to grant secession rights to every landowner. Most likely, few people will use that right at first, because the services provided by the states are needed, therefore they will voluntarily chose to stay in the State. Once this right is granted, you are not a criminal anymore! You can then engage in extensive gradual reforms with the ultimate check and balance that people can secede.

At first, secession would probably be used to create free trade zones, that require little protection. Later on it could be used for gated communities. Meanwhile, you'd try to do the best job you can to provide something efficient people want to stay in, with very little budget due to easy tax avoidance.

The key idea here, is that market will provide the best balance between incremental changes and radical transformation of society by letting people chose. Pragmatism dictates that people won't probably secede en masse, but their right to ensures efficient policies and satisfies any ethical concerns.


Slander, libel, free speech and duels

A point of contention between libertarians concerns slander and libel. Those who insist on natural rights, say that these cannot be considered crime as they do not invade anyone's property. Indeed, other people's opinion of X is not X's property. On the other hand, consequentialists argue that slander and libel create actual and sometimes measurable damage to an individual or a corporation. However, we have no way to know if the person originating the slander and libel did actually harm X, no one knows what would have happened if he hadn't done it... maybe X, instead of staying home making phone calls to his lawyers would have stepped out and be hit by a car. Read more »


On private universities

Along with roads and defense, education often comes as a necessary output of the State. Even Hayek claims that, since we need to be educated to value education, it has to be compulsory. I will not go into the details of the implication of State controlled education, nor will I discuss the question of compulsory education. I want to focus on a slightly different question, the cost of universities. There are various statist arguments around State funded universities, based on different angles

- Universities produce positive externalities, a country needs to be smart (although knowledgeable would be more appropriate) to develop, thus we need to finance education.
- Paying universities increases inequalities since rich people get to have education while poor people don't, thus creating an endless separation.
- (Combination of both) It's unfair that smart but poor students have to pay, providing them with free education is necessary.

All of the goals stated in these arguments can actually be fulfilled with greater efficiency by the free market. There are four ways by which university education is funded. Direct payment, grants, work, loans.

Direct payment is of course the easiest. The student's parents will save money in order to pay for the children education. Although this system makes them, it is doubtful it will convince leftist. They'll argue that the poors still can't afford it, come up with the paternalistic argument that parents don't know what's good for their children or argue that relying on ones parents is an unacceptable tyranny.

Grants work fine... basically you're given money by a generous entity. Arguing for grants is like arguing for private charity, it's doomed to fail - as an argument - because no one can actually know the amount that would be spent in charity, men are greedy, etc.

Working is another possibility, but it's not always easy to work and study at the same time. It puts students who cannot rely on direct payment at a disadvantage and there comes the same argument again.

Of all the payments method, the loan is probably the healthiest. It highlights education as an investment. Why should you pay for your education?
a) Because you want to be educated, for your own pleasure
b) To be more successful in your life, make more money

In the first case, education is pure consumption, at that point few people will argue for the need of "free" education. The second case sheds an interesting light on education as investment. The cost of studying becomes a market price signal to know if it's a good idea to study or not.

One problem remains, lending represents a low risk to the bank, since loans are aggregated and collateral can be required. However, it represents a huge risk to the student. If you don't plan on defaulting, you know you'll have to pay a fixed cash flow in the future, but depending on your future, the disutility could be very different. If your studies succeed and you make tons of money, repaying the loan is nothing, if you don't, you face a lot of nights eating spaghettis.

How do we remove this risk? By replacing debt with equity. A student could issue shares of his future work and sell them to ventures capitalists, or rather students capitalists planning to cash in on his future income. However, this is impractical and the much more logical solution is to integrate this task with the university itself.

A university could offer students the choice of paying the whole cost upfront or agree to a future cash flow indexed on this income. For example, you could give up 10% of your income for the next 10 years in exchange for free education. You face absolutely no risk in doing so. Now the university faces the risk that you will choose not to become a doctor but to start living a simple life raising goats. Venture capitalists protect from such thing by having a say in the direction the business is going, the university would only rely on the student's incentive to do something with his life. Maybe he can contractually agree to seek work or pay a fee etc.

What would be the consequences if universities adopted this mean of payment

- The best students would get lower rates since they are likely to make more money, thus the system becomes meritocratic
- Anyone could afford the studies, at no risk to him
- The rates would reflect market demand for specific job and thus create incentive to adapt the supply. If there are too much university educated persons, the universities forecasts that wages will go down and raise their rates. If the universities expects a higher demand for biologists, the rates for biologist fall and more students will opt for biology.

Having a plain upfront price doesn't reflect the market at all and leaves the forecast to the students, while private competing university might be better at it....

- The university has a very good incentive to provide excellent education. Instead of suffering from bad results indirectly, through reputation, they suffer direct financial damage if their education is not good enough.

This is how the free market could provide efficient, meritocratic, market driven universities.