David R. Henderson  

Friday Night Video: Privatizing Everything

Revealed Preference... A Critique of Wisdom...

UPDATE: I was wondering if anyone would catch the contradiction between what David says at about the 2:00 point and what he says at about the 5:30 point. Apparently no one did or at least no one who did bothered to comment. It's a mild contradiction but, nevertheless, is one.

"Producing laws is not an easier problem than producing cars or food," says David Friedman, author, philosopher, and professor at Santa Clara University. "So if the government's incompetent to produce cars or food, why do you expect it to do a good job producing the legal system within which you are then going to produce the cars and the food?"

Here's David, with permission from Reason.tv.

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CATEGORIES: Economic Philosophy

COMMENTS (16 to date)
Lars P writes:

I love how he completely refuses to get worked up by the minarchist/anarchist controversy (at 2:47).

Joe Cushing writes:

David Friedman introduced me to Anarchy and Stefan Molyneux pushed me over the edge. I'm an anarchist now with total disdain for everything that is the state. (maybe you've noticed this shift show up in my comments of the last year or two) It's to the point now, where I have a hard time even feeling a oneness with oath keepers because by definition; if you are an oath keeper, you are a statist. Of course I found these great men, Stefan and David, because I already had an attitude that was susceptible to the ideas. The attitude comes from a complete frustration with everything that is the state and a knowledge that everything the state touches, it does so with incompetence and waste. I already got the pragmatic arguments. David expanded them in my mind to include everything the state does and Stefan showed me the moral argument that sealed it. He sealed it to the point where I have no tolerance for any amount of state at all in my ideology.

P.S. Huff writes:

"It's a mild contradiction but, nevertheless, is one."

Friedman's meaning seems to be that anarcho-capitalism is neither necessary nor sufficient for libertarianism. In place of "anarcho-capitalism is one form of libertarianism," read "there is one form of libertarianism which is anarcho-capitalist." Now all is well.

Thank you, David, for raising this tantalizing prospect: David Friedman in contradiction. Upon repeated listening I do not notice a contradiction, although this is a subtle point.

Let me I attempt to transcribe.
Around 2:00, DF says,
"anarcho-capitalism is one form of libertarianism".

Then around 5:30, DF says,
"anarcho-capitalism is not by definition libertarian. That anarcho-capitalism is libertarian is a prediction not a definition."

So he is saying that anarcho-capitalism is libertarian but not as a consequence of the definition of anarcho-capitalism. A definition of "libertarian" probably seems to stand upon a different foundation than a definition of "anarcho-capitalist". But one who behaves under the definition of anarcho-capitalist probably inevitably winds up behaving within the restraints of the definition of libertarian.

I think I've noticed what may be a similar consequence in the fully-informed jury movement FIJA. FIJA seems to stand upon a totally different foundation. At first I could not understand why FIJA put up booths at Libertarian Party conventions. But now I think a fully-informed jury, guided by the inborn consciences of its members, will never vote to convict for a victimless crime. It will vote to convict only for a real crime -- an act that libertarians would consider to be a crime.

Jim Glass writes:

So if the government's incompetent to produce cars or food...

A vastly larger and more important self contradiction:

The American people with their wisdom-of-crowds insight believe -- as plainly revealed by their political preferences -- that government is incompetent to design cars or provide food ... but alone by itself and exclusively has the competence to design and deliver an entire national health care industry (Medicare, Medicaid, Obamacare, top-to-bottom regulated state-level insurance and health industries, etc.)

As usual, the problem is not our politicians (who only strive to give us what we want) but ourselves.

"The strongest argument against democracy is a five-minute conversation with the average voter."
-- Churchill.

David Friedman writes:

That anarcho-capitalism is libertarian is a theorem, not a definition.

That doesn't mean it isn't true.

The above is slightly oversimplified, since one can, with a bit of stretching, imagine circumstances in which a-c institutions would not produce relatively libertarian law, but it is the point I was making.

ajb writes:

If -- a la the work of Yoram Barzel - we think of the problem of the state as the question of arriving at a stable and viable solution to cooperative rules in the presence of violence, coercion, and war, it is not clear that the states we observe are not in fact "efficient" in an equilibrium sense.

David's notion of an efficient state assumes away the problem of maintaining order with long term credible commitment to that order.

Joe Cushing writes:

The first time I watched, I was surprised by what David said at 5:30 but it made sense and I don't see the contradiction with 2:00. At 2:00, he is saying there will be laws even without government writing them and at 5:30, he is saying that the culmination of those laws may not be libertarian but he thinks they will be. He is saying that libertarian laws will emerge out of competition because libertarian laws are what he sees as the fittest for survival but that it is possible something else could emerge. I suspect culture could have a role to play here. For example, in some geographic areas, anti-gun propaganda has been so persistent that people who live there believe it. Anti-gun behavior doesn't have to be imposed by the government there, the people do it to themselves. So if you are a gun lover living in an anarcho-capitalist London, do you get to own, keep, and carry current technology firearms in a state that is ready for use? I don't know.

Tom West writes:

"Producing laws is not an easier problem than producing cars or food, so if the government's incompetent to produce cars or food, why do you expect it to do a good job producing the legal system within which you are then going to produce the cars and the food?"

For exactly the same reason that I think corporate managers are (for the most part) capable of producing the company rules under which things are manufactured, while being incompetent at personally manufacturing those things.

Joe Cushing writes:

Tom West,

I'd say corporate managers are not so good at righting rules under which things are manufactured but when they do something that isn't so good, they get instant feedback and make changes. If they don't change well enough fast enough, the corporation disappears and as another manager from another corporation moves into the market. This just does not happen with government. Government is much harder to change and it is much harder to change in the best direction. The incentives are completely different. The primary difference is that corporations get their money through voluntary exchange and governments get their money at the point of a gun.

Because of dispersed costs and concentrated benefits the government can do all kinds of things wrong that a company could never do wrong and still survive. It's very easy to withhold a $5 purchase from a company you don't like but not so easy to withhold $5 of tax money for a program you disagree with or feel harms you. Say you want to keep your property tax money and use it to pay for the education you want your kids to have. If you do so, men with guns will show up and kick you out of your house. If you resist, they shoot you dead. On the other hand if there was no tax money used to pay for school,and people didn't like one school but liked another, they could freely deny money to the school they don't like and give it to the one they do like. Nobody from the unfavorable school is going to show up at their home with guns to rob them.

responding to Tom West:
Yes, I think you've hit upon a limitation of what can be explained by a brief statement of libertarian principles. I continue to embrace libertarian principles, but I think those principles alone do not explain all that happens in life.

As I see it, people form organizations within which they work together. Within these organizations there are rules; rules are part of the definition of an organization.

As I see it, there are two important categories of organizations: voluntary and coercive. Voluntary organizations include individuals, families, churches, and most businesses. Coercive organizations include chicken farms (where the chickens are coerced) and states (where the inhabitants are coerced).

An important question to ask about any organization is: What happens if this organization fails? How will it collapse? What happens if the rules of the organization, however conceived, specify an organization which cannot sustain itself in the present ecology?

When a business fails there is a lot of disappointment but usually not any murder. When a state fails typically there is violence, often war. So a great advantage of voluntary organizations is that their failures are more humane.

Tom West writes:

Joe Cushing, Richard O. Hammer,

I was simply pointing out that executing is a very different job than managing and thus lack of competence in one doesn't imply lack of competence in the other.

(Indeed, note how many growing companies have real trouble when the founder's competence at the core task fails to translate into competence in management.)

I certainly acknowledge that businesses and government by their very nature are different beasts.

Personally, I don't have a problem with the coercive nature of government, as even with the very real flaws mentioned above, I personally (and suspect the vast majority) find the benefits outweigh the costs.

As to the size and scope of such a coercive government, I believe that's best left to the voters.

Hunter writes:

I've been reading Bruce Benson's book "Enterprise of Law" and a couple of things have struck me.

One the argument that you would have competing sets of laws doesn't sound quite right. At best you would have competing interpretations of precedent over the area where the law applies.

The second is assumption that law would be libertarian and I don't see that at all. Local customs and legal precedent can be just as oppressive as any other type of law

The problem is as always how do you maximize liberty within any given type of law creation.

paul writes:

maybe another way of saying it is "just because everyone agrees that no one has a monopoly on retaliatory force doesn't mean that people won't be coerced in a libertarian sense." or maybe not....

Mike writes:

Friedman seems to be arguing an extreme version of Hayek's concept of fatal conceit. I have always been amazed at how Minarchists who believe in fatal conceit miss the obvious example of our founders sitting down and inventing a constitutional republic out of whole cloth. I assume an anarcho capitalist who believes in Hayek would believe that a constitutional republic cannot succeed or at best would work poorly. I suppose Ben Franklin would be on the fence between Minarchist and AC when he answered the query about whether we were to have a monarchy or a republic and his response was "a republic if we can keep it."

John T. Kennedy writes:

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