WEBVTT NOTE Structure of Production of Free Market Adjudication 1 00:00:00.000 --> 00:00:05.000 It is an honor and pleasure, as always, to come and present at the Mises Institute. 2 00:00:07.000 --> 00:00:09.000 I changed the title, of course. 3 00:00:10.000 --> 00:00:15.000 I want to talk a little bit more broadly about the structure of production of free market dispute resolution. 4 00:00:16.000 --> 00:00:23.000 What I'll talk about today is, I want to give you a little bit of understanding of my research program, who I am and what I'm doing, 5 00:00:23.000 --> 00:00:25.000 and then an overview of this project. 6 00:00:25.000 --> 00:00:28.760 Project. And the things that we'll talk about is I'm going to talk about the categories 7 00:00:28.760 --> 00:00:36.600 of dispute resolution and the dispute cycle. And then if you study this in legal anthropology 8 00:00:36.600 --> 00:00:42.020 and so forth, you find there are natural roles in dispute resolution that just kind of fall 9 00:00:42.020 --> 00:00:47.900 out when you consider the different categories of dispute resolution. I'm going to talk 10 00:00:47.900 --> 00:00:56.460 Talk just a little bit about the four causes of law from Aquinas and kind of a refinement 11 00:00:56.460 --> 00:00:59.040 of what he has to say about it. 12 00:00:59.040 --> 00:01:04.520 Talk about supply and demand for data and some insights on norms and how they diffuse 13 00:01:04.520 --> 00:01:09.620 into the body of law in a natural dispute resolution order. 14 00:01:09.620 --> 00:01:15.100 And then we give you a little potpourri because this presentation is really a commercial for 15 00:01:15.100 --> 00:01:22.580 For my 30 page paper, which you're welcome to kick up, and I really look forward to critical 16 00:01:22.580 --> 00:01:28.740 feedback. That's why I do these things. And so I'll list some future work that's related 17 00:01:28.740 --> 00:01:30.620 to this. 18 00:01:30.620 --> 00:01:40.220 So first, let me talk a little bit about what I do. My long-term goal is to establish a 19 00:01:40.220 --> 00:01:49.300 Company that produces free market defense services and if I follow Stephen Covey's 20 00:01:49.300 --> 00:01:55.460 advice and begin with the end in mind, sometimes I have to think quite a bit about what does 21 00:01:55.460 --> 00:02:01.520 a free market insecurity really look like so that when I make a step in an interventionist 22 00:02:01.520 --> 00:02:10.480 Market with a defense service, it can evolve and grow into a truly free market order. 23 00:02:10.480 --> 00:02:22.760 So this in particular is kind of an attempt to figure out, well, what does a free market 24 00:02:22.760 --> 00:02:26.880 in mediation and arbitration look like? 25 00:02:26.880 --> 00:02:31.480 Is there a difference between arbitration and litigation? 26 00:02:31.480 --> 00:02:39.480 What is the role of lawyers in a free society? What are their different roles as lawyers? 27 00:02:39.480 --> 00:02:45.640 And so that's what this paper attempts to come to terms with. 28 00:02:45.640 --> 00:02:52.080 So let's go on to the categories of dispute resolution. As it turns out, there are seven 29 00:02:52.080 --> 00:02:59.200 ways that you can handle a dispute. And these are completely exhaustive of all the ways. 30 00:02:59.200 --> 00:03:01.400 And I didn't make this up. 31 00:03:01.400 --> 00:03:06.680 This is from the insights from legal anthropology. 32 00:03:06.680 --> 00:03:07.680 You can do nothing. 33 00:03:07.680 --> 00:03:10.920 You know, you should come home from the grocery store and they left a can of beans out of 34 00:03:10.920 --> 00:03:11.920 your bag. 35 00:03:11.920 --> 00:03:16.520 Oh, okay, well, forget it, okay? 36 00:03:16.520 --> 00:03:19.240 It's a violation of my rights, but I don't care. 37 00:03:19.240 --> 00:03:20.240 That's fine. 38 00:03:20.240 --> 00:03:23.000 I'll just take that as a loss. 39 00:03:23.000 --> 00:03:28.260 We do nothing when there are small amounts involved, small violations. 40 00:03:28.260 --> 00:03:32.180 We also do them when there are substantial power imbalances involved, you know, you can't 41 00:03:32.180 --> 00:03:36.820 fight city hall, that sort of thing, right? 42 00:03:36.820 --> 00:03:39.340 Seeking a concession is quite simple. 43 00:03:39.340 --> 00:03:44.180 It's the supposed victim goes to the supposed offender and says, hey, you know, you're sitting 44 00:03:44.180 --> 00:03:49.160 in front of where I was trying to watch the Mardi Gras parade, I just went down to Mardi 45 00:03:49.160 --> 00:03:55.500 Gras on Galveston, and you know, I really would like an unobstructed view here. 46 00:03:55.500 --> 00:03:58.500 And they say, oh, okay, well, we'll remove our stuff, no problem. 47 00:03:58.500 --> 00:04:08.740 So if the supposed offender directly gives a concession, that also can end the dispute. 48 00:04:08.740 --> 00:04:13.940 Oftentimes seeking a concession will lead to a negotiated settlement. 49 00:04:13.940 --> 00:04:18.200 And this is where the two parties work it out among themselves. 50 00:04:18.200 --> 00:04:21.000 What shall we do about this situation? 51 00:04:21.000 --> 00:04:25.920 And if they end up agreeing, this is kind of the high road and the gold standard of it 52 00:04:25.920 --> 00:04:30.420 would be great if everybody could kind of agree on their disputes and we can all hold 53 00:04:30.420 --> 00:04:33.280 hands and sing kumbaya. 54 00:04:33.280 --> 00:04:43.380 But the reality is that oftentimes with acrimonious disputes, they escalate in contentiousness 55 00:04:43.380 --> 00:04:56.540 and they require therefore increasing amounts of formality and I don't know if technology 56 00:04:56.540 --> 00:05:05.100 is the right word, but a mediator has a certain skill set, everyone has these natural abilities 57 00:05:05.100 --> 00:05:11.980 to be a mediator but it is actually a profession nowadays and there are things to learn about 58 00:05:11.980 --> 00:05:20.580 about how to be a mediator, and the same thing is true about being an arbiter, and as you 59 00:05:20.580 --> 00:05:27.520 move along this scale here from left to right, you have an increase in the formality and 60 00:05:27.520 --> 00:05:35.900 contentiousness of the disputes. At each stage you also have roles that fall out of this. 61 00:05:35.900 --> 00:05:49.100 I'm not going to spend a lot more time about this particular graph, but the coloring means 62 00:05:49.100 --> 00:05:50.100 something. 63 00:05:50.100 --> 00:05:56.580 The green indicates complete voluntariness and agreement by the parties. 64 00:05:56.580 --> 00:06:03.900 The blue indicates areas where the parties have agreed that a third party can decide. 65 00:06:03.900 --> 00:06:15.400 And the red indicates a non-adjudicative area, self-help, which is sometimes, there are two 66 00:06:15.400 --> 00:06:18.420 definitions of vigilantism that you'll see. 67 00:06:18.420 --> 00:06:21.120 One of them is synonymous with self-help. 68 00:06:21.120 --> 00:06:28.320 Another one is that there's an adjudicative element that lacks the requirements of litigation 69 00:06:28.320 --> 00:06:39.400 and therefore is illegitimate in the minds of the society at large. 70 00:06:39.400 --> 00:06:48.760 But self-help as defined here and in the legal anthropology literature is direct action on 71 00:06:48.760 --> 00:06:58.760 on the part of a claimant against an offender or his property to either punish or get his 72 00:06:58.760 --> 00:07:04.880 due or get retribution or secure restitution directly. 73 00:07:04.880 --> 00:07:10.880 It's a non-rational activity that does not seek to justify what it's doing, it simply 74 00:07:10.880 --> 00:07:11.880 does it. 75 00:07:11.880 --> 00:07:18.520 And as a result, it can be quite destructive of the social order, which is why many people 76 00:07:18.520 --> 00:07:25.520 Authors throughout history have said that self-help needs to be limited to a very few cases. 77 00:07:25.520 --> 00:07:32.520 There are always cases where people believe that self-help is okay. 78 00:07:32.520 --> 00:07:36.520 Antigone can bury her brother, you know, these sorts of things. 79 00:07:36.520 --> 00:07:44.520 But it needs to be limited because if you exercise self-help without having justified what you're doing, 80 00:07:44.520 --> 00:07:51.040 Banking, then this is indistinguishable from aggression to a third party. This is one of 81 00:07:51.040 --> 00:07:56.040 the problems. 82 00:07:56.040 --> 00:08:05.040 So the dispute cycle is real simple. You have a dispute. You try to solve it in the 83 00:08:05.040 --> 00:08:14.480 six categories that are reasonable, that have to do with rational deliberation. And then 84 00:08:14.480 --> 00:08:38.480 You end up with either a settlement or a judgment, or an arbitral award, and if the offender agrees and complies with the remedies, then the dispute ends with finality, as long as no significant negative effects come from the carrying out of the terms and this sort of thing. 85 00:08:38.480 --> 00:09:08.480 If they don't agree with the remedy for whatever reason, maybe they don't agree with it in principle, maybe they don't agree with the way things are working out, it creates either a new dispute or it renovates the dispute, and of course when you're in this box, you can always devolve into self-help, and so having these disputes kick back and renovate is what we don't want because then you 86 00:09:08.480 --> 00:09:18.480 If you don't have peace and when you don't have peace, then you don't have the advantages of social cooperation. 87 00:09:18.480 --> 00:09:26.480 So the natural roles that fall out of dispute resolution are of course the disputants themselves. 88 00:09:26.480 --> 00:09:37.480 And I take my best shot in the paper at carefully picking words and in many cases defining them in the text. 89 00:09:37.480 --> 00:09:46.360 because what I've done is to comprehend all disputes here and to not, that is what we've 90 00:09:46.360 --> 00:09:56.000 just discussed includes a case where someone somewhere is enjoying themselves and I have 91 00:09:56.000 --> 00:10:06.480 a problem with that, okay, that could be a dispute or it could be that A harmed B and 92 00:10:06.480 --> 00:10:10.940 and C has a problem with that and he comes to A and he says, hey, I have a dispute with 93 00:10:10.940 --> 00:10:17.040 you, you harmed B. So if you are a claimant or a disputant, it does not necessarily mean 94 00:10:17.040 --> 00:10:24.740 you fall into the category of a supposed victim or a supposed offender. Mediators, of course, 95 00:10:24.740 --> 00:10:30.540 arbiters and judges, which together are the category of adjudicators, jurists, jurists 96 00:10:30.540 --> 00:10:37.100 Disputes are people that review decisions on appeals and advocates, people who argue 97 00:10:37.100 --> 00:10:39.980 for your behalf in some cases. 98 00:10:39.980 --> 00:10:44.300 These are all natural categories that fall out of thinking about what does dispute resolution 99 00:10:44.300 --> 00:10:46.900 look like. 100 00:10:46.900 --> 00:10:54.180 You will recognize these terms as being part of modern parlance, but they are in many cases 101 00:10:54.180 --> 00:10:59.640 just natural categories and there are of course non-participating roles. 102 00:10:59.640 --> 00:11:02.620 There are third parties of at least two types. 103 00:11:02.620 --> 00:11:04.140 One is the communities of care. 104 00:11:04.140 --> 00:11:07.300 These are kind of the second order victims and offenders. 105 00:11:07.300 --> 00:11:13.580 These are the people closely connected to the supposed victims or offenders and those 106 00:11:13.580 --> 00:11:17.060 who are closely impacted by it. 107 00:11:17.060 --> 00:11:26.900 Often they're people that are very well known by the victims and offenders. 108 00:11:26.900 --> 00:11:34.300 I want to talk just a bit about what Aquinas had to say about, in his Summa Theologica 109 00:11:34.300 --> 00:11:39.740 he has a number of questions devoted to law and people call that the treaties on law. 110 00:11:39.740 --> 00:11:46.580 It's actually quite short. 111 00:11:46.580 --> 00:11:53.220 What he has to say is he takes Aristotle's Four Causes and he says that the legislator 112 00:11:53.220 --> 00:12:00.460 or the judge in applying their prudence to enact promulgated law and of course decisions 113 00:12:00.460 --> 00:12:07.620 which is kind of implicit in this, attempts to achieve the common good through human acts. 114 00:12:07.620 --> 00:12:16.780 And it's an interesting way to kind of cut things up but what it does not do is it does 115 00:12:16.780 --> 00:12:25.940 is not really look at individual actors and an advantage of the Austrian method of analyzing 116 00:12:25.940 --> 00:12:35.740 individual actions is that different people have different ends and so each category of 117 00:12:35.740 --> 00:12:41.300 each role in dispute resolution they obviously have different ends so if you're a disputant 118 00:12:41.300 --> 00:12:46.460 you're seeking your end now if the disputant is paying an advocate well the advocate once 119 00:12:46.460 --> 00:13:15.460 A mediator, and I argue these positions to some extent in the paper. If you are a mediator, what you try to do is you try to establish peace. This is true if you are a first among equals in a customary law society, but it's also true if you are a mediator for hire, because part of what you want to achieve as a mediator is you want a good settlement rate. 120 00:13:15.460 --> 00:13:21.740 a good settlement rate and you want settlements that do not renovate into new disputes and 121 00:13:21.740 --> 00:13:25.780 are settled with finality. 122 00:13:25.780 --> 00:13:31.500 What a mediator is not after is he's not really after justice, he's after peace. 123 00:13:31.500 --> 00:13:34.940 And really the same thing is true for an arbiter. 124 00:13:34.940 --> 00:13:37.100 An arbiter is after peace. 125 00:13:37.100 --> 00:13:43.860 He's only after justice to the extent that he really wants his judgments to be under 126 00:13:43.860 --> 00:13:54.580 Under review by jurists to be upheld as just and upheld as socially legitimate. 127 00:13:54.580 --> 00:14:02.740 So the two words you don't find on this page here are justice or common good. 128 00:14:02.740 --> 00:14:07.100 The closest you get is under disputant. 129 00:14:07.100 --> 00:14:12.980 He's looking for his due as he sees it, and the other disputant is as well, but they may 130 00:14:12.980 --> 00:14:18.860 have competing theories of justice that they provide arguments for in front of an arbiter 131 00:14:18.860 --> 00:14:24.020 and the arbiter has to either pick between competing theories of justice and competing 132 00:14:24.020 --> 00:14:27.620 arguments or supply his own. 133 00:14:27.620 --> 00:14:35.700 Okay, so I'll leave it at that and let me just move to the next topic. 134 00:14:35.700 --> 00:14:44.020 Another thing that I cover in this paper is a discussion about the data of dispute resolution. 135 00:14:44.020 --> 00:14:50.220 There are all of these things, these objects, these items, settlements, and collections 136 00:14:50.220 --> 00:14:57.220 of settlements, judgments and collections of judgments, or arbitral awards, adjudicators 137 00:14:57.220 --> 00:15:03.040 issue summons and notices of refusal to arbitrate, advisory opinions, orders like garnishment 138 00:15:03.040 --> 00:15:09.640 orders, attachment orders, things like this, jurists issue opinions, jurists also are the 139 00:15:09.640 --> 00:15:16.120 people who provide restatements of the law, they codify things, after you have a bunch 140 00:15:16.120 --> 00:15:21.780 of cases, it's quite easy to, well I know it's not quite easy, but it's possible to 141 00:15:21.780 --> 00:15:30.680 take all of the awards and judgments and even within the judgments sometimes rules are suggested 142 00:15:30.680 --> 00:15:37.520 by Arbiters and of course they suggest these general rules as a means to persuade the disputants 143 00:15:37.520 --> 00:15:42.060 and the third parties to accept the legitimacy of their judgment. 144 00:15:42.060 --> 00:15:52.000 You take these as a jurist, you take all of these various claims of general rules that 145 00:15:52.000 --> 00:15:58.560 arbiters and judges make and you can create a body of law or a restatement of the law 146 00:15:58.560 --> 00:16:04.760 to Guide Arbiters in the Future, and it's a corrective as well. 147 00:16:04.760 --> 00:16:11.440 What they often seek to do in restating the law is to eliminate inconsistencies. 148 00:16:11.440 --> 00:16:25.400 The German civil lawyers, the German civilians in the 1800s and early 1900s were very concerned 149 00:16:25.400 --> 00:16:33.000 and with trying to reconcile the German Civilian Legal Code with Kantian philosophy and to 150 00:16:33.000 --> 00:16:36.880 ground it ethically. 151 00:16:36.880 --> 00:16:42.200 So jurists have a very important role to play. 152 00:16:42.200 --> 00:16:47.740 Each one of these things, titles, identification of persons, even some of these things that 153 00:16:47.740 --> 00:16:53.600 people like to register in some sort of way, it's simple to go through these things and 154 00:16:53.600 --> 00:16:57.920 And say, well, it's quite clear that you have to have a publisher, but, you know, how is 155 00:16:57.920 --> 00:17:05.120 this publisher going to make money? How is he going to, if you are a publisher of a restatement 156 00:17:05.120 --> 00:17:11.000 of the law, an individual jurist is going to have a problem with that. And I regard 157 00:17:11.000 --> 00:17:16.160 things like the American Law Institute, which is a non-profit organization that produces 158 00:17:16.160 --> 00:17:24.800 Restatements of Common Law in the U.S. as essentially free market type organizations. 159 00:17:24.800 --> 00:17:29.960 That's the type of organization we would expect in a stateless order. 160 00:17:29.960 --> 00:17:35.480 And so they would be able to, through their membership organization, create subcommittees 161 00:17:35.480 --> 00:17:42.480 that enjoyed large social legitimacy and therefore their restatements would be socially legitimate. 162 00:17:42.480 --> 00:17:49.040 But these registry firms also, it's quite clear that there would have to be a registry 163 00:17:49.040 --> 00:17:56.440 firm or firms that would emerge to handle a number of these data and connect the suppliers 164 00:17:56.440 --> 00:18:01.440 with the users. 165 00:18:01.440 --> 00:18:09.400 Another little topic that I wanted to mention that's in the paper is to talk about how norms 166 00:18:09.400 --> 00:18:18.940 and so forth. 167 00:18:18.940 --> 00:18:27.600 So we'll start from the bottom of this diagram and general education, let's just say, people 168 00:18:27.600 --> 00:18:33.560 who go to the university and so forth and become second-hand dealers and knowledge university 169 00:18:33.560 --> 00:18:39.920 University professors and journalists and these sorts of things. They become second-hand 170 00:18:39.920 --> 00:18:45.720 dealers in whatever general education they receive. They influence the general public. 171 00:18:45.720 --> 00:18:54.580 From the general public, the disputants identify themselves. And when settlements are created, 172 00:18:54.580 --> 00:18:58.800 the disputants themselves present their norms and they are not mediated by any other third 173 00:18:58.800 --> 00:19:03.920 They could be mediated in the sense that the discussions are mediated, but they're not 174 00:19:03.920 --> 00:19:06.620 imposed by an outside party. 175 00:19:06.620 --> 00:19:21.560 This is important because in real practice, even today, most disputes are solved either 176 00:19:21.560 --> 00:19:27.560 informally or even in a formal mediated settlement. 177 00:19:27.560 --> 00:19:38.400 Most disputes are settled. That's just the facts. And many fewer disputes are arbitrated 178 00:19:38.400 --> 00:19:47.320 or adjudicated in any way. And so as a result, settlements, if we have a bunch of settlements, 179 00:19:47.320 --> 00:19:54.220 they are a great window onto community norms of punishment and restitution and these sorts 180 00:19:54.220 --> 00:20:00.220 of Things, and I've written a separate paper on that before that's referenced within this 181 00:20:00.220 --> 00:20:10.220 paper. I'll give an example. Imagine, if you will, that a mediator mediates victim-offender 182 00:20:10.220 --> 00:20:19.420 mediations and he sees a series of cases. In each of these cases, one of the person's 183 00:20:19.420 --> 00:20:29.580 A thumb is cut off through whatever reason that is part of the dispute. 184 00:20:29.580 --> 00:20:42.700 Part of the negotiated settlement that comes out is that the offender owes the victim $10,000 185 00:20:42.700 --> 00:20:48.980 and then in another case $11,000 and then in another case $8,000. 186 00:20:48.980 --> 00:20:59.680 As these settlements rack up, you get to see a freely negotiated price, shall we say, for 187 00:20:59.680 --> 00:21:04.380 providing a restitution payment for a lost thumb. 188 00:21:04.380 --> 00:21:09.960 And in fact, there's an analogous institution that already exists, which are the so-called 189 00:21:09.960 --> 00:21:17.880 quantum books that many lawyers use where they take liability cases and they put together 190 00:21:17.880 --> 00:21:27.800 There are, in fact, multiple cases of similar types where people lose a hand or a thumb or 191 00:21:27.800 --> 00:21:33.720 use of a leg or various things like this and they tabulate the cases in jury awards and 192 00:21:33.720 --> 00:21:42.040 then mediating lawyers use them as reference when they're trying to negotiate settlements. 193 00:21:42.040 --> 00:21:47.800 But these, unlike jury awards, would be freely assented to and are, and this is actually 194 00:21:47.800 --> 00:22:08.800 In a free market order, there would be a significant demand for it, because you would not have, as a judge, sentencing guidelines to guide you. 195 00:22:08.800 --> 00:22:17.200 Okay, so that's the most diffuse, it's the most diffuse way that norms enter the body 196 00:22:17.200 --> 00:22:22.480 of law, but it is actually one of the largest portions of the body of law because there 197 00:22:22.480 --> 00:22:31.840 are many more settlements than there are arbitral awards and judgments. 198 00:22:31.840 --> 00:22:40.520 The disciplines of criminology and psychology influence mediators, which then create facilitation 199 00:22:40.520 --> 00:22:47.600 models that reflect these disciplines, the state of the art of these disciplines, so 200 00:22:47.600 --> 00:22:51.760 that they can affect settlement outcomes. 201 00:22:51.760 --> 00:22:57.120 If you're a mediator, you want to have a mediation that sticks, that is, you want terms 202 00:22:57.120 --> 00:22:59.000 of the Mediation. 203 00:22:59.000 --> 00:23:06.560 You want to guide your mediated parties to terms that will be upheld and that will actually 204 00:23:06.560 --> 00:23:14.640 conduce to the good of your parties that you're mediating. 205 00:23:14.640 --> 00:23:19.260 And there's a natural feedback loop here. 206 00:23:19.260 --> 00:23:26.360 Defense providers also will look at the outcomes that take place and mold their defense institutions 207 00:23:26.360 --> 00:23:43.360 on Insights from These Disciplines, the area of ethics, economics and rhetoric is where the body of law is affected and I'm just going to leave it at that for now, there's quite a bit in the paper on this. 208 00:23:43.360 --> 00:24:13.360 Some things that are in the paper that I haven't discussed in this little commercial are forms that the law takes, types of lawyers, there are different categories, how litigation is different from arbitration, and this is a natural category, there are five categories of difference between an arbitration and a litigation, even in a free market order, how appeals are held, holdouts and scoff laws and enforcement and goats and outlaws and deadbeats and insurance and registry firms 209 00:24:13.360 --> 00:24:36.360 Future Work is on these items. I'll tell you openly that my hope is to write a little book on this, and I'm modeling it in some ways on Rothbard's What Has Government Done to Our Money. 210 00:24:36.360 --> 00:24:45.360 What I want to do is show what the institution of a free market looks like without aggressive interventions. 211 00:24:45.360 --> 00:24:50.360 And then in the second half, we'll look at the interventions of forced jurisdiction, 212 00:24:50.360 --> 00:24:53.360 compelled testimony and legislation, etc. 213 00:24:53.360 --> 00:25:02.360 And there's actually a very clear sequence of how one intervention leads to other related interventions. 214 00:25:02.360 --> 00:25:07.360 and this is actually kind of the order in which they kind of go. 215 00:25:07.360 --> 00:25:11.360 Once you legislate things then people start suing over things 216 00:25:11.360 --> 00:25:18.360 and then the state manipulates standing to keep citizens away from being able to challenge laws and so forth. 217 00:25:18.360 --> 00:25:20.360 It's a very interesting story. 218 00:25:20.360 --> 00:25:22.360 So I look forward to writing it. 219 00:25:22.360 --> 00:25:25.360 And that's all I have. Thank you.