Well, I am here with our panelists. To my immediate right, he's probably actually further to my right than that, but I don't know.
Dr. Walter Block, he's the Harold Worth Eminent Scholar Chair in Economics and Professor of Economics at Loyola University in New Orleans.
He's got a PhD in Economics from Columbia. He studied under people as eminent as Richard Landis and Gary Becker.
and he's the author of such works as Defending the Undefendable, Employing the Unemployable and the Privatization of Roads and Highways.
I'm guessing that in this recruiting season, employing the unemployable may be of great interest to a lot of people here.
This is actually the first of five events. He's barnstorming through the southeast. It's Vanderbilt next, I think, where he's talking.
He's talking about there's no such thing as market failure.
He's going to talk for a while and then we're going to have a panel discussion featuring
my esteemed colleagues, Don Leatherman, the W. Allen C. Park Distinguished Professor of
Law, who actually has a math degree.
You know, they took the math off the LSAT and I've noticed that the math folks have
really come into law and law, but he's from the days when there were still people who
knew math who came into law, which is why he's now a tax professor, I guess.
and he got his LLM in Tax from New York University. He is an eminent scholar of tax law cited by the Supreme Court and feared by many in the tax field and some students as well and to his right is Iris Goodwin who is an associate professor of law here who has her PhD from Columbia as well as a JD from New York University and practiced at Sullivan and Cromwell's Estates Group
and has great knowledge in the area of trusts and estates and brings a lot of practice experience and is also publishing up a storm now, so she is one of our many rising stars.
And with that, if you'd like to begin, Professor Block?
Sure. Thanks for the kind introduction. I don't accept right-wing because as a libertarian I'm neither of the right nor the left.
The political spectrum is all messed up. Left is supposed to be Stalin, and right is supposed to be Hitler, and yet they're buddies.
And the spectrum is supposed to indicate the further away you are in politics, and yet they should be close.
And you get people like Mother Teresa, I guess, who's a lefty, just like her buddy Stalin, which is a little weird.
So the whole political spectrum is just nonsense.
And one of these days, I'll tell you the correct political spectrum.
But before that, I have to do what I've been assigned to do, and that is, should we privatize roads and highways?
And what I'll do is make two cases in the affirmative, one on morality or ethics and the other on economics.
On the moral case, I notice there's this young lady here with a nice backpack. What's your name?
Melissa. I like that backpack. I really yearn for that backpack and I want that backpack.
And there are two ways, and only two ways that I can get that backpack.
And there's a gigantic difference between the two ways.
One is the voluntary way and the other is the coercive way.
What's the coercive way? Well, what's the voluntary way? I can say, I'll give you a hundred bucks for it, and the contents of it.
Shut up, I was going to raise. She's not in economics. Or I could say, I'll be your best friend forever, or any voluntary thing.
And if she says no, she doesn't want to be my best friend, and she doesn't want to take whatever money because it's precious to her, I just can't get it.
The other way is I go up to her with a gun and I say, give it to me or I'll plug you or I get the rest of you guys to say, yeah, it's a great idea for Block to have it, Melissa doesn't really need it, Block needs it more, for whatever reason, I'm a demagogue, I convince you we have an election, you all vote to give me her backpack and then she has to because if she doesn't we'll put her in jail because it's a democracy. So there are only two ways to do it.
Well, the first way, the voluntary way, is the market way. Everything in the market is voluntary.
You guys were all wearing shirts and pants and wristwatches, all that stuff you got through the market.
You seduced them into giving it to you by giving them an offer that they regarded as appropriate, namely the price.
That's what the market is. It's the concatenation of all voluntary acts in the economy.
and we can even go further and say that friendship too is part of the market if you want to go in that direction.
In contrast, there's the political field and in the political field, it's coercive.
We vote and then the majority wins and it's not a voluntary way of doing it.
So it seems to me that it's much more ethically sound that I get that backpack with her permission
Then by steamrolling over her, either by myself with a gun or all of us together with guns.
Well, when we have things that are private, like pizza and hot dogs and wristwatches and pens and ties,
that's the voluntary sector. When we have things through government, it's coercive.
Now you might say it's necessary, it's a necessary evil, but it's an evil, because it's coercive.
And according to at least the libertarian doctrine, coercion is, per se, problematic.
How do we finance public things? Well, we say everyone's got to chip in, whether you like it or not, you have to chip in.
And it's not voluntary. We didn't agree to be, the US government isn't really like a club, where we agree to, it's not really like a golf club,
if you don't pay you can't be in the golf club, if you don't pay your dues in the chess club you can't be in the chess club.
It's not like that because nobody signed anything.
Okay, they signed the Declaration of Independence and John Hancock wrote big, but
none of us signed anything.
Look, if I said one of you owed me a hundred bucks and I went to a judge and
they'd ask for some proof, they'd ask for some evidence. There's no evidence that we join any club.
It's not a voluntary club.
It's a coercive club.
And don't tell me that democracy is great. Hitler came to power as a result of a
democracy QEB.
So much for democracy. Democracy doesn't justify anything. It just says a majority agree. Well, a majority can agree to a lot of stuff. That's pretty grim.
So, I'm trying to say that there's a case for privatization. My motto is, if it moves, privatize it. If it doesn't move, privatize it.
Since everything either moves or doesn't move, you privatize everything. That would be the extreme case.
I don't know that I'll get to cover everything, but I'm certainly going to take a hack at highways.
I don't think I'll do too much on post offices. That's sort of like shooting fish in a barrel.
It's not really, you know, a challenge.
I mean, sure, we should privatize the post office. The present post office is a monopoly.
If they do a lousy job, you know, they don't go broke.
You know, I'm from New Orleans and we had Katrina in the aftermath.
And about 1,500 people died in Katrina, that didn't bother me that much, although I don't like 1,500 people being killed needlessly, but what really bothered me is that the people responsible for it are still in business, and they're moving toward the economics of it, or the efficiency, they're still in business, that's horrible, look, if the people made these pens with this watch or a pizza or whatever,
And if they did a bad job, they'd go broke, or they'd lose money, and that would give them a hint to shape up and fly right, and if they didn't, they'd go broke.
That's why we don't have a pen crisis, or a pizza crisis, or a shoe crisis, or a wristwatch crisis, or any of those crises, because there's an automatic weeding out mechanism.
That is, if in the market you don't do a good job, somebody is going to undercut you or undersell you and, you know, where is Pan Am nowadays, where are the Fortune 500 of 10, 20, 30, 40 years ago, they didn't do a good job, they're gone.
The problem with a government enterprise is no matter how bad they do a job, you're getting wrong money. That's the result. They don't go broke automatically. There's no automatic feedback mechanism.
Also, prices are very important. We can't really have much of an economy as the Soviets found to their dismay.
If you don't have free prices, market prices, market prices tell you things. They give information as to scarcities and desires.
And, you know, one way to see things clearly is to extrapolate or infer. In other words, if we put this in the public sector, we put that in the public sector,
in the public sector, we put everything in the public sector, and now there are no markets whatsoever.
Well, now, how do you determine prices? Well, prices are to the economy as street signs are to the geography.
If you don't have them, you can't plan. You can't plan your way out of a paper bag.
The Soviets had great chess grandmasters and they could put their efforts together for Sputnik,
but they couldn't plan their way out of a paper bag. They had a horrible economy.
So prices are important, they give information, they allow us to make rational decisions.
The Soviets had no ideas to whether to use, if they want to make rowboats, should they be made out of plastic, wood, tungsten, platinum.
Without prices indicating scarcities, you're in a morass economically.
Okay, so that's sort of the general case for privatization on the grounds of morality, on the grounds of economics.
You can't have efficiency or morality in the public sector or to the extent that you have a public sector, your morality and your efficiency plummets.
Okay, now let me apply this to roads.
Why am I so hopped up about highways, roads, streets, avenues, thoroughfares, things like that? Why should that be privatized?
And by privatized I don't mean this sort of wussy privatization we were discussing before
Where, you know, the government sort of determines things, and they have eminent domain, and then you sort of have a quasi-demi, semi-private road, but you have to give it to the government in 10 or 20 years.
I mean, privatized roads as much as t-shirts are now privatized, as much as sneakers are privatized, as much as basketballs are now privatized.
Get the government out. Why am I so hopped up about that?
Not because I'm hopped up about everything, but I am hopped up about everything, but I'm more hopped up about this. Why?
One reason is that, do you know how many people die on the highways every year?
It's about 40,000 people die in the US.
Sometimes it's 39,000, sometimes it's 41,000, but by and large it's around 40,000.
It's been reduced in deaths per mile traveled, because we're traveling more miles, but the death rate is still around 40,000.
To just put this in perspective, I think only 3,000 people died in 9-11.
I think only 1,500 people died in New Orleans. I think only, what is it, 4,000 soldiers now in Iraq?
This is 40,000 mothers, grandmothers, babies, people, ordinary people walking around getting smushed like, you know, like nothing.
Now, the usual answer that people will say, well, you know, what's this got to do with anything?
The usual answer that they give is that it's not the cause of government.
What is the cause of speed, or alcohol, or vehicle malfunction, or driver error?
The Chicago types, Sam Peltzman, I'm not a big fan of Chicago, even though they're supposedly free enterprise, they're sort of semi-free enterprise.
Holtzman, a Chicagoite, lists about 25 of these reasons.
All sorts of weird things, I mean, these are the big four,
the so-called explanations, these are the big four.
Other things like, well, how fast is the ambulance,
or is there a helicopter ambulance, how good is the hospital,
things like that.
The NHTSA National Highway Traffic Safety Administration lists 125 causes of accidents.
In my view, this is just proximate causes, they're not ultimate causes.
What's the difference between approximate and ultimate cause?
If I take this gun here and I shoot over here with a heavy rifle and I kill somebody
over there, and then you all capture me and want to put me in jail, I say, tut-tut, not
so fast. It was the bullet that did it. I didn't do it. It's 200 miles away. I'm innocent.
You would never in a million years allow me to get away with that sort of an excuse because
I would be confusing an ultimate cause, namely me, with the proximate cause, the bullet that
Look, suppose a restaurant failed, and we start making lists as to why the restaurant failed.
And one is lousy food, and another is poor service, and another is location, location, location,
another one is dirty dishes, dirty floors. Would we accept that? No, not in a million years.
What we'd say is those are the proximate causes. What's the ultimate cause? What's the real cause of the restaurant going broke? It's not those things. It's rather the management.
The management didn't get a good cook. The manager didn't get good waitresses. The management didn't locate in the proper place.
Because the management didn't get some guy with a broom and tell him to go sweep or have
dishwashing good.
It's the management.
Well, who's the manager here?
It's the bloody government who's the manager.
It's the government that has not done well with regard to speed.
It's the government that hasn't done well with regard to reducing alcohol, drunken drivers.
It's the government that is responsible for all these things.
Those are just proximate causes.
The ultimate cause is government management.
Now let's get back to something I said before.
What I said before was I talked about the weeding out process.
The weeding out process would mean, in this case, if different people owned different
The U.S. Highway 40 was owned by the U.S. Highway 40 Corporation
and the Cumberland Road Corporation owned the Cumberland Road
and, I don't know, Elm Street was owned by the Elm Street Association.
Well, then they would be competing with each other
and maybe some of them were better at stopping these things than others.
Let's take speed, for example.
Now, maybe it's speed that's doing it, but maybe it's the variance or the standard deviation of speed.
You know, I used to have a Honda 90cc motorcycle.
It was capable downhill with a tailwind of doing 45 miles an hour.
uphill, with a passenger and a headwind, I could do maybe 35, but I'd get on the highway.
I'm talking highway where the speed limit is 70 miles an hour, but the minimum speed is 40, and I could sort of make 40.
And you know that if you do 70 on a highway that says 70, people go by you like that.
So the variation in speed is somewhere between 40 and 80. Maybe that is too much. Maybe that's the cause of it. We don't know.
We'll never know, because as Uncle Mao said, you don't have a thousand flowers blooming,
you don't have different entrepreneurs doing different things as they do in the automobile
or the chair industry or the shoe industry, and some of them, their plans fail and they
go broke and others succeed and they make money and can expand their base of operations.
You know, you don't have any of that.
All you have is a made-in-Washington DC policy of whatever it is, the double nickel, or now
it's 70.
In other words, there's no experimentation about how to reduce debts.
Washington D.C., Obama now, or whoever he appoints to the NHTSA will...
Look, these rules don't come down to us on stone tablets.
We have to discover them.
Markets are the mechanism par excellence for discovering how best to reduce debts.
Look, here's a possibility.
Suppose I had a road, and I had three lanes, instead of a minimum of 40 and a maximum of 70, suppose I said, well, everyone has to do 55 here, they have to do 70 here, and they have to do 85 there.
Would that be better? I don't know. Maybe.
All I'm saying is that if we had a system, a competitive system, which we trust for good quality and low prices in every other realm of endeavor, if we had a system like that, we'd find out.
When I wrote about this, and I'm coming out with a book on it soon, I came up with all sorts of other schemes beside that that might or might not work.
Some of them the government sort of follows but not really fully.
For example, one of my ideas was to make a cross, or a Jewish star, or a Muslim thing, or whatever, whatever, there was a death on the highway, you put one there, and that'll sort of scare people.
Do I know that that would work? No. I'm not a road manager. I don't know. I'm just speculating. I'm trying to infer from what I know about private markets to this public market and saying, well, here's the sort of things that they could be doing.
I had in mind real big ones. Nowadays they do it, but they're only about this big.
I had in mind 20 foot crosses or Jewish stars or whatever.
Another one, you know those cars where a truck hits them from one end and hits them from the other end
and now the truck and the car, instead of being 20 feet long, it's 5 feet long, sort of accordionized?
Put that up on a pedestal, right where the accident occurred.
Will that stop? I don't know, but if I try it on the Walter Block Road and it doesn't work, I'll lose money, I'll go broke, and maybe someone else will try something else.
And what I'm saying is that from this sort of a system of buying and selling through the voluntary purchase of rights to go on different highways, we'll get better highways, we'll deal better with these problems.
Do you know what we ought to do the next time we catch someone who's drunk driving?
I think it was Charles Barkley recently in the news.
Maybe we do something more serious to him than what was done to him.
I don't know. Maybe the death penalty.
Look, one guy gets executed for doing this stuff.
Maybe save hundreds of lives. I don't know.
But the point is that if I announce this in advance and on my road you get caught drunk and driving,
We're gonna, you know, take a bite out of you, a serious bite, maybe it'll help. I don't know.
All I do know is that this is an impossibility. Our system doesn't allow for this sort of experimentation,
so we're never gonna really solve this death problem.
The second reason that I was getting into private roads is I used to live in New York City,
And the traffic jams there, you wouldn't believe.
Even in little towns or moderate cities like Knoxville, the traffic congestion is horrendous.
Why is that? Well, in economics we have this thing called supply and demand, quantity and price.
What price do they charge for highway use during rush hour?
Or rather, what additional price do they charge for highway use during rush hour
The answer is zero. They don't make you pay more when you drive at five o'clock.
Well, at zero, the demand is much greater than the supply, and that's traffic congestion, excess demand.
What's the economic answer? Well, get the price a little higher. Charge a little bit more.
In other words, if what you do is you have a time, this is time and this is quantity of people in the highway.
Well, let's say this is midnight, 12 p.m. or 12 a.m., low traffic.
Now we get to 7 a.m. to 9, high traffic.
This is the rush hour.
And then it goes down a little lower, although in New York it's up there at all hours.
And then let's say 6 to 8 at night, another rush hour.
Mainly what you do, what the price system naturally does, is if you charge more during
the rush hour, you decrease the amount of usage.
If you charge less during the non-rush hours, you increase, in other words you sort of even
this out.
That's what hotels do. They charge more during the season than in the non-season.
I mean, if it's a skiing hotel, they charge more for the rooms during the winter than the summer.
And if it's a beach one, they do the opposite. In other words, they flatten it out.
Everyone following me on this? Yes? Just common sense.
They do that for certain holidays, with restaurants, whatever.
But what the stupid government does, and that's a redundancy, that was a joke. It didn't work too well, but look, when an economist tells a joke, it's sort of like a bear plays the violin while riding a unicycle.
You don't ask, was he in tune? You say, wow, a bear riding a unicycle and playing violin, what do you do?
So, when an economist tells a joke, you don't say, well, was it funny or not? You say, wow, amazing.
In any case, what these rascals do in government is they do anti-peak load pricing.
Namely, they exacerbate the congestion. The idea is when you buy those trip tickets,
they'll give you a month trip, a month ticket, right, to get through those tollboats.
It's a little cheaper per trip than if you were to buy one each time.
Well, who uses those monthly tickets? People who ride during the peaks or during the troughs?
Obviously during the peaks. Those are the people that go to work nine to five.
So what they do is they charge less, so that increases this a little bit.
Mainly they're exacerbating the variances.
And then they give us all these whining things.
If they raised the prices enough, the market would see to it that we did that.
That's the beauty of the market, the magic of the marketplace.
But if you don't have markets, if you just have government edicts, it doesn't work.
Okay, those are the two reasons.
Now what I'm going to do is give objections to my wonderful theory.
The first objection is, oh by the way, I should say that this sounds a little weird, you know, what's blocked, what drug, what controlled substance am I on to be saying such weird things?
Well, you know how the first roads were? The first roads were turnpike roads. My research goes back to the 8th century in England.
The first roads there were private. The first roads here in North America, in the US, were turnpike roads.
In New York City, the BMT and the IRT were private subways, and they were charging in nickels.
The government refused to uphold the law, namely there were people who were toll busters,
or they would run around the toll and they wouldn't pay, and when they called upon the police to support them, they wouldn't.
So the thing isn't viable if the government doesn't uphold property rights.
So it didn't work. In New York City, the BMT and the IRT were private subways,
The government of the day said, oh, this is unconscionable greed, whatever, so they nationalized it, or in this case, municipalized it, I don't remember, 30 somewhere, I've got it in my book, but I just don't remember things like that, and then guess what they did, they raised it to a dime, so go figure, but the whole point was that these, just because they are a long, thin thing,
The first one is the trap. Here you are on this road, and there's your little house, and I'll put the little smiley face to indicate that you're a happy person, and now you want to get out on the road, and that'll be a million dollars each trip.
Namely, you have this idea that if you have private roads, they'll trap you there.
Well, this is silly. Right now, if you buy a house, you have to do title insurance.
Namely, make sure that the guy who's selling you the house is the owner of the house.
Well, you'd have a new thing called access insurance.
Namely, you're not buying a house until you tie up contractually the owner of the road and say,
and say, well, you know, what's the deal here?
Can you raise, can you triple the access price
and buy your whim?
In which case, I'm not buying the house in the first place.
The economics of it is that if I have a road
on an empty path somewhere,
I want to encourage people to move in
so that I'll have more customers, more traffic, whatever.
I can charge more people more money.
So I'll encourage them.
And one way to encourage them is to
time myself up contractually to make sure that I can
can't be arbitrary and capricious and you know sort of trap them in the house and
the idea is you have to be either a good pole vaulter or you have to have a
helicopter or something. No. The law system will take care of that problem.
Another one is eminent domain. They say, well, Block, you're such a big supporter
Well, you can't have long, thin things without eminent domain, because, you know, if I want
to build a road from Knoxville to New York City, how many people's property will I have
to go through to get a new road going there?
I don't know, 10,000, 100,000 different people would own land in that way, right?
And then you have the problem of a hole down.
The long guy over here says, sure, I'll sell you my land for six trillion dollars.
Well, the real way we have our days, that was another joke before that.
One way is you can go around them.
Yes, the shortest distance between the two points is a straight line, but what the heck, you can go the great circle route.
If you have someone like that, you can go around them.
Another thing that you could do, suppose he owns land like that, and he's very obstructive.
Well, you can go under it, or go over it.
Namely, this doctrine of, what do they call it, where you can't add colon?
The add colon doctrine says that if, here's the earth, if you own a square mile of the earth,
Remember, if you own a pyramid or a cone down to the center of the earth and then up into the heavens?
See, the Ad Colum Doctrine would say you can't do that, you can't go under him or over him
because he owns down below to the core of the earth and up into the heavens?
Well, the Ad Colum Doctrine is not compatible with libertarianism.
Libertarianism is based on the John Lockean, Murray Rothbardian homesteading theory.
You didn't homestead anything 5,000 miles down in the core of the earth.
You didn't homestead anything 50,000 feet above.
If you had Cullen Doctrine, you couldn't have airplanes.
Every time somebody went over your house, you'd say,
oh, that'll be a quarter or 20 bucks or whatever,
and air flight would be precluded.
What other objections are there?
Well, I think I've gone on for about a half hour.
In my writings, I must consider maybe 20, 25 objections. I don't want to take any more time.
Let me just summarize. If it moves, privatize it. If it doesn't move, privatize it.
Everything moves. If it doesn't move, privatize everything. And you get brownie points on ethics.
Because when things are private, we deal with each other in a civilized, non-barbaric way.
I can't take Melissa's backpack without her permission. That's what the market is.
And when we have things in the public sector, we ride roughshod over each other, we treat each other like animals, we treat each other like barbarians.
It's not legitimate. And also, it's not efficient.
Now, I don't know how many debts there would be if all the roads were private.
My speculation, it'd take too long to get into why, there'd be about 8,000 debts based on weird things.
There'd still be some debts. I mean, when people go 70 miles an hour, there'd be some debts.
But the death rate would be vastly reduced, and the congestion would be not eliminated, but greatly reduced, and that's my case for privatizing roads.
We're going to have a little discussion on the panel, but I'm actually going to kick it off with a question, which has to do with transaction costs.
I know on the internet everybody's dream, the holy grail of the internet is micropayment.
So that you can have a PayPal account or something, when you visit my page I get like a half cent,
and you go visit somebody else's page and they get a half cent, and you don't have to subscribe,
and it's all kind of seamless, but I can have a page and if I can have, you know, 100,000 people visiting my page,
I get 50,000 cents a day, which turns out to add up to real money, and the only problem with it is nobody can make it work.
It's been the holy grail and it just doesn't work.
PayPal doesn't really work efficiently with amounts of money less than a dollar.
It actually costs enough to make micropayments heavy.
But that still seems like it would be a lot easier than me driving around Knoxville
with lots of different roads owned by lots of different people.
I mean, I suppose I could buy a subscription to each one and my car would be covered with little stickers
or RFID chips or whatever, but that's sort of awkward.
I could probably go to some aggregator outfit, like Fred's Road Syndicate that would sell me one RFID thing that would be recognized by everybody, but if it's not working on the internet where we don't have the constraints of physical space, I'm sure you've anticipated this objection, but how can we possibly drive across hundreds or thousands of roads owned by hundreds or thousands of different people and companies and make sure that they get paid and we don't get held up by some bozo with his
When I first started writing about this, I was doing a lot of research in grocery journals.
I didn't even know there were such things as grocery journals, but there were grocery journals.
Why was I doing research in grocery journals? Because this stuff right here, these barcode things, were just coming in.
And my idea is that each car would have one, not many, but there'd be an amalgamator.
One guy would have this barcode and then wherever you went the road would have in its surface a machine that would read past where you went and then at the end of the month you'd get a bill.
So I don't see that as any problem at all and I don't see that this transaction's cost is any problem even on the internet because we have advertising.
In other words, if you have a web portal that a lot of people go to, you can now go to McDonald's or Burger King or somebody like that and say,
Hey, I've got 30,000 people a day going on my portal to hear my views on law. You know, I'll put your little thing, the arches on there, let's make a deal.
So now the people pay through advertising and you don't have to, everyone doesn't have to pay a penny.
So I don't think that that's a... I think it's a good objection, and I certainly do anticipate that, but I don't think it's a knockout blow against the system.
What's your response to the privacy concerns of having everybody know where you're driving because they're reading your barcode?
I also talk about that, because, you know, suppose you want to see your mistress or your proctologist or, you know, you don't want people to know.
Maybe they're both the same.
Right.
It could be the same.
Different strokes.
Well, we have precedent for that. You buy at a certain higher price a thing that just gives you a fixed fee.
I mean, if we're smart enough to put a man on the moon or to have a civilized economy, which we're fast losing out on,
we're smart enough to figure out technical ways of making sure that privacy is respected.
How do you deal with fraud in the barcodes or with someone simply eliminating it?
Well, one or two percent of the population is always going to do that.
I don't know what the percentage is, but a small number of people...
Look, if everyone was a criminal, we wouldn't have much of a society.
We couldn't have stores where you pick stuff up and you don't put it in your pocket.
You have to assume that only a small number of people would be active criminals.
And you know, libertarians are pretty harsh on criminals. We would, you saw what I was
contemplating doing with drunken drivers. Now, if it's an accident, you know, you don't
have the thing or it's malfunctioning, presumably there would be ways, we have our ways of dealing
with these sort of things. But to say that since there'll be fraud and theft, we can't
have private enterprise, I think is wrong. Look, some people steal watches. It doesn't
I'm still not sure I'm convinced by that. Who would you have deal with the crimes?
That's a vicious question. But before I answer it as a good professor, I have to make a circle here.
And that is, I just wanted to mention one thing with transactions cost.
Transactions Cost for me is sort of like waving a red flag at a bull. The key person involved in Transactions Cost, Mr. Transactions Cost, a guy named Ronald Coase, are people familiar with him in law and economics, and he's one of my main enemies. I've written maybe 10 or 15 articles showing what a commie he is, even though, see, what bugs me about these Chicago guys, I don't mind that they're commies, but what really bugs me is that they pass themselves off as free enterprises, and that is really despicable, and Coase is one of them.
So don't get me started on transactions costs, but now there is...
On transaction costs, though, there are a number of different places where you've talked
about parties coming together and contracting.
Each of those situations has transaction costs, so you have to talk about how you would minimize
those costs, thinking about the scheme that you're setting up, and we could talk, I think,
a long time about that.
Well let me get to your question about who does it.
And now we're, you see, there are, the way I see the political map, there are anarchists,
libertarian anarchists, I don't mean lefty anarchists who hate money and think that markets
are greedy or something like that. I'm talking about anarcho-capitalists such as Murray Rothbard.
That would be roughly my position. Just below them are what we call minarchists, minimal
Rural government, anarchists is ruled by, so anarchist is ruled by no one, arbitrary rule.
Minarchist is limited government, the most famous person that holds that view is Ayn Rand.
And in her view, the government has only one function and that is to protect persons and
property against rape, murder, theft, whatever.
And to that end it has only three legitimate institutions, armies to keep foreign bad guys
to keep local bad guys off of us, police to keep local bad guys off of us, and courts
to determine who the good guys and the bad guys are. If I claim that I really am the
owner of Melissa's backpack, well, we have to go to some sort of court and find out and
for Ayn Rand that would be a legitimate government enterprise. Below the libertarians, and some
libertarians add on a little bit more maybe for public health or what have you, and I
don't mean socialized medicine, I mean communicable diseases. You know, who's going to spray the
and the mosquitoes kind of thing.
Below that in this hierarchy as I see it
would be classical liberals who believe in government
for armies, courts and police but add on four or five
or 10 other things like Milton Friedman and Friedrich Hayek.
They're not real libertarians, they're classical liberals
for want of a better term.
Okay, so one answer to this is well,
we have a minimal government and it's limited
to armies, courts and police and they decide who done it.
But my own position is the anarchist position, and by the way, I really can't do full justice to it in two or three minutes, but if you're interested, you can hit me up for a bibliography on that stuff, just email me, and I will send you more bibliography than you want to read.
No Quiz, since I'm not your professor, but if you're interested.
Okay, so how would it work?
Well, there would be courts-insurance companies-police firms.
And they would be private purveyors of justice or judicial services.
And there are precedents for this, for example the law merchant, the laws of salvage.
The law is that if Glenn's boat capsizes and I come and bring Glenn's boat back into harbor,
it's very clear that he gets two-thirds of the value of it and I get one-third of the value of it.
Why? Well, that's what the Admiralty Courts decided.
And why should we pay any attention to them?
Because this was the way that commerce was done in the 14th, 15th, 16th, 17th centuries.
There is legal precedent, which came about through private arbitrators, people who had
reputation for probity, unlike nowadays the way we pick judges, there's some political
hack who didn't make office or who stood aside for somebody else, very different sort
of a thing.
So there are cases of private law courts.
We have the American Arbitration Association, a friend of mine is an engineer at Stanford,
and he's called in as a private arbitration person whenever there are very technical things
We do nowadays have private courts. We have the Bet-Dean, which is the Hebrew court. We have Catholic ecclesiastical courts. We have Islamic courts that decide who can get a divorce and who can't, and all sorts of other things. So there is precedent for that. I'm now going to go a long way, and I'm going to go a long way, and I'm going to go a long way, and I'm going to go a long way, and I'm going to go a long way.
with Murray Rothbard's view and also David Friedman, Milton Friedman's son, who is also an anarcho-capitalist.
And let me give you an example. Suppose I'm having a dispute with Glenn. I say that I own this jacket.
It's a very nice jacket, and it's my jacket. And this wretched person has grabbed it from me yesterday. Rotten, too.
Okay, so if we're civilized people, we don't just do it out. We say, well, you know, let's go to an arbitrator or a judge or a court.
And I pick Don as my judge. Don is an old buddy of mine. And Glenn knows this.
So we invite Glenn to come to the Dawn Court and go along with whatever Dawn says, and Glenn says, well, Dawn, he's untrustworthy, let's go to the Iris Court.
Iris is solid, she's reasonable, she's a mensch, as we say, you know, we'll go to her, and I say, what, Iris? No, she's a bum, she's got a PhD from Columbia, you can't trust people like that. I'm not going.
Well, now, so we each go to our own courts. Now, one possibility is Glenn goes to the Irish Court and I go to the Don Court and they both agree with me.
Well, now, Glenn is in trouble because you have two courts – insurance companies – police companies that are going to come after him and say,
Give Walter your jacket. Give Walter Walter's jacket.
I almost lost it there.
You've got to stick to your story.
I've got to stick to my story. That's my story and I'm sticking to it.
Okay, so one possible resolution is that both courts agree with either me or him in which case the case is over.
But we can have disagreements. The Iris Court and the Dawn Court can disagree.
Now it's possible that the Dawn Court can go along with Glenn and the Iris Court can go along with me,
Now, there are two kinds of courts. There are bandit courts, who either didn't anticipate this problem, or who will refuse to do anything civilized about it.
Those are the bandit courts. And then there are the good guy courts. The good guy courts are courts who are civilized, non-barbarians, and say, well, you know, this could happen.
and if it happens, we'll go to the Akal Court and he'll decide, namely Iris and Don, who are the courts here, have decided among themselves that if we two ever come out on opposite sides of any judicial dispute, we'll pick somebody with random numbers and here are 9 people or 15 people we can agree upon, you people can agree upon, and that will be definitive.
So that would be, now you see, now we bring in economics. The bandit courts are going to have to fight everyone.
They're going to have to fight other bandit courts and they're going to have to fight legitimate courts.
Fighting is expensive. You have to pay extra money to your workers.
Whereas the legitimate courts will not have to fight every time.
They'll only have to fight when they're on opposite sides of a bandit court.
And the presumption is that this means it's economically stable.
And the implicit idea here is that all the courts in a libertarian society will go along with libertarian law.
And what's libertarian law? Well, libertarian law is based on two axioms.
The non-aggression axiom, which I was illustrating with Melissa.
The way you deal with people is not with a fist or a gun, but by volunteeringness.
Look, suppose I grab his coat and he stops me and I smack him and he smacks me.
But I started it. Does that mean that I'm the aggressor? No.
Because you have to bring in the second axiom of libertarianism and that is private property rights.
If he stole that coat from me yesterday and now I'm merely repossessing it, well then he's the bad guy in resisting my physical grabbing now.
On the other hand, if he always had that coat and I start grabbing it, well then I'm the bad guy.
So in order to know whether something is aggression or not, you have to know who is the rightful owner of things.
and here we bring in Robert Nozick who is a famous philosopher who dealt with
politics I'm sure you would have heard of him I don't agree with him but he's
certainly a very big name in philosophy of law and what Robert Nozick says
taking off from Rothbard and Locke is the way you get to own stuff is first by
homesteading it and then through any legitimate means of what he calls title
transfer, buying, selling, gift giving, gambling, whatever.
So that's a five-minute answer to the question of,
who would determine if I say I'm not speeding
and you say I am speeding?
Well, then the courts, the private courts
would determine that.
Just one comment, I think I've said a couple of questions.
I see some inefficiencies in your suggestion.
And it seems like the current course of the system
we have is more efficient, since the real part is only one.
That's arguable, I suppose.
Do you want to elaborate on that? Why do you think it's more efficient now?
If there is one court system where a criminal would be brought, rather than possibly three.
And in fact, I think there would be an economic incentive for a court that would favor your point of view.
Oh yes, there would be judge shopping, I guess you'd call it, forum shopping.
So economically it seems likely there would be two different outcomes with a possible
third outcome. So to resolve any matter it would require disposition of three courts
rather than one. Well, even now we have, you know, you go to the local court, then you
go to the appellate court, then you go to this court, then you go to the Supreme Court.
So you have that even now, so I don't see... You certainly see forum shopping when people
Well there would be a legal integration of the private courts if they were what I call
non-bandit courts, namely they would have all anticipated this and they would have had
some person or persons like this friend of mine in electronics at Stanford who is seen
as a real expert and very fair on this and people go to him and any two courts would
to go to this guy and allow him to be the Supreme Court and if you see a lot of what's going on is a thing called legitimacy if you don't mean the only difference as far as I can see between a mafia gang and a government is legitimacy the government has better PR but some people think that's huge oh I think it's a big deal oh I think it's gigantic it's a stupendous difference but the point is that if you had two courts
that didn't do this civilized thing, they would lose legitimacy, which is a big, big deal. I agree with you. It's a tremendous deal.
And what I'm saying is that this cuts in my direction, but I just wanted to add one more thing on Don's point.
You see, we now get into the question of one world government. What's the optimal number of countries?
Right now we have about 225 countries, give or take. I'm not sure it changes.
Well, what's the optimal number of countries?
Well, if we have a continuum here, at one end of the continuum is one country, one world government.
The problem with that is, you know, you put all your eggs in one basket.
And if the one world government is bad, there's no place to run.
You can't go to the moon or, you know, at least not yet.
We're working on that.
We're working on it, but oh yeah, we do overlap on the space thing.
I think I wrote an article and you dare to criticize me on space economics or space law, but that's a different issue.
So one way to go if you're worrying about too much diffusion is to one world government, but you have a problem there.
I happen to be Jewish and one of the benefits of a people that's been persecuted for many years is if you don't like this king, you go there, you don't go there.
One of the reasons we got into diamonds and jewels is because you sort of take it with you and also human capital, you take it with you, whereas if you own real estate, you can't take it with you so quickly.
So I'm sort of leery of, let's have one centralized...
In the diamond trade, an area where there are a lot of private courts, that's an area where it's pretty much all arbitration, isn't it?
I want to go back to a sort of basic, I want to go back to Melissa's bag. What if she votes to reallocate? What if she, you know, you said there are several ways of getting it. One way is for people collectively to say, you know, Melissa's bag really ought to go to someone else. What if Melissa, as part of the collectivity, votes, says, you know what, you're
I'm not sure who my bag should go to, but I do believe it should go to someone else.
Is it then not right to take it from her?
Well, then you wouldn't have to take it from her. She'd give it to you.
No, not necessarily. No, she may...
Then I don't understand.
No, she could agree to...
I mean, because what that simple analogy is, it really looks to the reallocative process
that the state would take on in the form of taxation or something like that.
So if I agree to be taxed, is the tax then wrong with respect to me?
Is it wrong only with respect to the people who might disagree?
No, I agree with you.
Now, I think I understand what you're saying better.
The existence of anyone who would disagree to the taxation vitiates the tax with respect to all of us.
If there's one person who says no, then it's wrong to reallocate with respect to everyone.
If you have one no vote, I assume that's what you've got to argue,
I think there was John Stuart Mill, I might be misquoting, who said that the majority, if all of mankind except one agreed to something, there would be no more justified and imposed
I was going to come to that, because democracy is in and of itself very difficult, doesn't
have a kind of normative, does not necessarily have a normative dimension to the edicts that
flow out of it. A majoritarian government, to the extent it's arbitrary and capricious,
it's just like any other tyrant relative to other people.
In the name of the majority.
Right. And so the only way for a democratic government to acquire a kind of normativity
is to buttress it with other principles, such as minority rights, the rule of law, a requirement
of Consistency, courts, whatever, right? And that's why most of us are not Democrats.
So if I sleep with a thousand people, and 900, have sex with them, I'll be clear here,
and 999 of them consent, but one doesn't, I'm still a rapist, right? So if I take the
property of 999 volunteers, and one person doesn't volunteer, and I take their property,
I'm still a robber, right?
But you gotta have taxes to maintain
some kind of system of order.
I mean, Justice Holmes, I think, said taxes
is the price you pay for civilization,
although we've now taxed way above that, right?
Now we have taxes.
Well, I've been civilization going down,
but I was just wondering.
Taxes is what you pay for barbarism.
Look, look, to me...
Can I respond to Glenn's comment?
You know, to the extent, I mean, let's talk about stealing
rather than rape, because, you know, women
And don't really get comfortable on that topic, too, either, out of the way, OK?
I mean, to the extent that you steal, to the extent that you've stolen from one person,
it's problematic unless we have some way in which to allow that person to opt out, right?
Which is what we do with minority rights.
We don't do it with taxes, though.
We don't do it with taxes.
Nobody opts out.
No, we don't do it with taxes, but the taxation question usually implicates other forms, other
things.
I mean, you are also assuming that property rights are prior to the political process.
Absolutely.
I just, the idea, conceiving a property independent of the legal regime is, unless you've got
So, unless you're talking my toothbrush, you got a problem.
Look, let's take the beginning of the United States.
The U.S. started in 1789, 179, I forget when, I'm not at the start.
It's all what you mean by start.
Began?
I mean, at one time...
Well, I mean, there were states and...
No, no, no, at one time, at one time there were colonies of Britain,
and then all of a sudden there was this war, the War of Secession,
and now there was the United States.
Okay, and the United States had 13 colonies.
And there's this guy out in Ohio somewhere.
And this is maybe five years later.
And the revenue taxman comes out to this guy in Ohio
and says, hey, guess what?
We just set up this new club.
It's a voluntary club.
See, look, I'm in favor of democracy in the chess club.
If the chess club votes for Thursday night games,
you don't like it tough because by joining the chess club,
you've agreed to be banned by the majority.
So there's nothing wrong with majority vote, as long as everyone's agreed to be bound by the majority in the first place, but if you don't agree to be bound by the majority, and then they say, well the majority says, therefore you have to do, well then I think Glenn's point is absolutely correct about the 999 and one person.
Okay, so some guy comes out to Ohio or Western Pennsylvania, which is not part of the US, but it soon will be,
and he says, you know, we just started this club, the United States Club, and this guy in Ohio says,
oh, wonderful, I'll be a good neighbor, I wish you the best of luck, I'll trade with you, you trade with me, we'll be buddies.
And the guy says, you don't understand, you're part of it.
He says, what, me, part of it? I didn't agree to join it.
I've been here for a hundred years, my grandfather homesteaded this land and then my father and
now I'm in charge of this little bit of hundred acres or whatever it is and you're telling
me I have to join whether I like to or not? Look, even in the thirteen colonies, there
was a vote, I think the first nine, I think they said when there were nine colonies that
agreed they would then constitute the U.S. but four colonies didn't agree and in each
This young lady bought that orange shirt. It was a unanimous deal. There were two people, her and the shirt purveyor, and she agreed to buy the shirt for 50 bucks, and the guy with the shirt agreed to sell it to her for 50 bucks, and it was unanimous. See, that's the beauty. Now, there's this rotten kid named James Buchanan, evil, pure evil, and also masquerading as a man. He's a man. He's a man. He's a man.
As a free enterpriser? Bastard. I didn't say it. I love Big Brother. What he's giving us
is this crap about conceptual unanimity. In other words, he knows there's never any unanimity
like there was in the chess club, like there was in the purchase of the orange shirt. Unanimity
is absolutely required if you then want to go and say, well, then people have to be bound
by the majority. Because if you don't have unanimity, then you get this one person who
A slightly different subject. I just wanted to say, I think your use of the term proximate
I haven't visited this terrain since I was in law school, but I think it's somewhat different than, I think, law students.
I think we use proximate cause in a slightly different way.
And in fact, the nearer you are, the proximate cause isn't about...
I haven't done this since I was in law school. My intuition is that that's not...
The person who pulls the trigger would be the proximate cause of the death.
What proximate cause tries to take account of is intervening voluntary agents.
If I shoved Dawn into Iris, and now Iris gets a concussion, and Dawn is just an innocent person just sitting there,
but I shoved him, and then he hit her head, and he's the proximate cause.
We're just using words differently, but I don't think there's any substantive disagreement.
No one would hold Don responsible. Everyone would hold me responsible.
Depends on what Don was doing.
He was just sitting there. He's got his hands like this. He's a good guy.
If I knew that you were coming and I didn't...
Well, that's complexity now.
No, it's your responsibility.
If you're just sitting there innocently and I shove you, you're not a bad guy.
So you're right. I'm the weapon that you're using.
Right. It's as if I tossed you at her.
But if I could also just look at the analogy between the restaurant and the highways.
In the case of the highways, in the case of alcohol, right, driver error, whatever, I have intervening voluntary agents.
In the case of the restaurant with the lousy food, the poor service and whatever, the only
voluntary agent that I see in that list of things, unless you want to blame, say, the
dirty dishes on the kitchen staff, who are derelict, is, I mean, there is no intervening
voluntary agent.
Except the manager.
Yeah, the only cause, there is no question of proximate cause, it is the manager who
who is the cause of the problem, whereas in the case of the highways, I think from the
perspective of the law, we would have to take into account the voluntary nature of the actions
that are intervening between the government and the people, the drunk driver, for example,
who chose to get on the road drunk.
The law would view this differently than the question of lousy food or poor service.
You could put alcohol here, too, because there are some restaurants or bars that don't have
a bouncer and the people get obstreperous and then other people don't want to come in.
That introduces a voluntary nature.
Right.
What I'm saying is that, you see, I think the way I interpret what Iris is saying is
that my analogy is not good.
Right.
That's one of the...
But then I wanted to ask you...
Let me just...
All right.
Recline to that.
I think the analogy is pretty good.
I think that in both cases, well, you'd expect me to say that, but I have to say it, because in both cases, like, take the alcohol, or the patrons, you see, here, she makes a very good point, that here, it's the customers that are all doing this, here it's not the customers, but it can be the customers too, namely, if you have alcohol at customers, you have too many, look, if half the people at this law school were drunk and, you know, tottering around and picking fights with each other,
Other people wouldn't want to come here.
And then I would say, well, unless they're into Sado
masochism, I don't know, they wouldn't like it.
We'd attract different law students.
Different clientele.
But the point is that I accepted this analogy.
Iris is making a good point.
There is some sort of a disanalogy,
because here it's generated from customers, here it's not.
But it could be, as in the case of alcohol.
So, could I, let me follow up with a question about highways, which is, I mean, you, I think you suggest, and maybe you don't, maybe I'm radicalizing your position, if that's, if I could, but are you suggesting that the speed limits that are currently in place, they are arbitrary, because we don't have a market in which to test them, so, I mean, even though we have, say, 75
I drive from here to Atlanta. I do have to keep an eye on what the speed limit is because it changes.
Sometimes it's 75, sometimes it's 70. And when there's a work zone, it says 55.
So you're suggesting that's all arbitrary. I mean, we went through something, 55 saves life.
So there must be some way in which we are managing within the current regime to accumulate
I don't say it's arbitrary. I'm sure there are traffic safety engineers. I think in engineering schools now, in addition to electric or mechanical or whatever, the computer engineers, there are safety engineers. I might be using the wrong word. But I'm sure there are experts at this. But the point is that they're expert chefs. They're expert people in making these pens. They're experts all over the place. But what is lacking is an automatic
Weeding Out System for Ineffective Experts.
I mean, there are experts all over, but what the beauty of the market is, is when they
look, FEMA has probably got a lot of experts.
The Army Corps of Engineers that built those, what do you call them, the levies, they say
now make levies not war, another joke, they're experts, those guys, the Army Corps of Engineers,
I'm sure they graduated from good engineering schools, but what is lacking is that there's
There's no fail-safe mechanism. If they screw up, they don't go broke. You give them more money.
And that's not a recipe for success.
Should we open it up for questions from the audience?
The gentleman in the very back can just hang up for a while.
It sounds like you're playing with a road.
Could you stand up, please? I can't hear you too well.
It sounds like you're playing with a road based pretty heavily on modern and even future technology.
Technology, but you've also talked about, you know, the moral concerns and taxes and all that.
If we were having this conversation 50 years ago before DTSs and bar codes, would you still be advocating for the same thing even if it were completely impractical?
It wouldn't be completely impractical. Liberty is timeless.
Look, when the first wheels came out in the US in 1776 or whatever it was, they had a
beautiful system.
What they did is they would charge wagons based on how many axles you had, how heavy
the load was, how many horses you had.
They even charged on the width of the wheel.
If the wheel was very thin, think ice skates, they would charge more because you'd rip up
the road because they didn't have macadam roads then.
You had dirt roads.
Whereas if the wheel was wide, think steam shovel, they would charge you less.
Look, the way they did it in Hong Kong, no, not Hong Kong, Singapore, is they did it like this.
Here is a map of Singapore.
What they do is they make these concentric circles, sort of like bullseyes,
and they give a different color for each one, like here's the black area, here's the green area,
and the blue area in the middle and you get a different little thing like in the 50s you put it on your dashboard and if you're caught in the blue area the best area the downtown central business district area which costs more if you're caught with a green card you get a ticket or whatever and it costs more in the bullseye than on the periphery so it's not a matter of technology it occurred in the eighth century they were doing this it occurred in the
In the 18th century, it could have occurred in the 1950s, and it certainly can occur now.
You don't need technology to be free.
What kinds of rights do people have in an anarcho-capitalist distinction?
For instance, if I'm on a private road and I'm speeding in contravention of the privately established rules set forth by the Labor and Cooperation Management Act,
One of the things I've written about, the way I understand the question is how limited
Supposed there's a guy driving on the highway and I own the highway and I think he's going
a little too fast and I just shoot him in the back of the head. Would this be legitimate
or does he have certain rights? Well the way to answer the question of what rights the
people have, they have negative rights, not positive rights. They have the right to be
free of punching and shooting and stuff like that. They don't have a right to food, clothing
and shelter because that means you have to steal it from other people. Now, the specific
Another question that you ask, I sometimes write about this thing called murder park.
What does murder park consist of? Murder park consists of they give you a gun and six bullets
and you have to wait until the whistle blows and then everyone can shoot anyone else. And
then every 50 minutes another whistle blows and everybody has to stop and you caught out
the dead bodies and you give everyone more bullets and you go at it again. Would this
Can this be legal in a libertarian society? Sure. Provided everyone knew what's going on.
On the other hand, if I invite you to my house and then I plug you in and I say, well, it's my house, my rules.
No. You have to, there are implicit contracts.
And who's going to enforce them?
There's the murdered family and the other family. And they have to get two arbitration courts together?
See, in economics, we have this thing called ceteris paribus. What it means is other things equal. Namely, when you're dealing with one problem, you assume away all other problems. The big joke...
I know this joke.
The can-open a joke?
Yes.
Right. Do you want to tell it or shall I?
It's a joke told by other social scientists about economists.
Oh, tell me. We're proud of it.
Does this assume the can-open?
There's a physicist, an engineer and an economist and they're all on a desert island, there's a can of beans and they're going to starve to death and they don't get in it.
And there's no can opener. So the various people are huddling and the physicist says, let's drop it from a certain height onto a rock and it'll open up.
The chemist says, well, but if we heat it up, then it'll open up and we'll have hot food.
And then they turn to the economist and says, assume a can opener.
The reason you have to assume a can opener is that we do not have controlled experiments at our beck and call.
If you're a chemist, you take a chemical thing and you divide it into two and you do certain things to this one,
you don't do it to that, and then you infer that the differences are due to the different things that you did
under a certain pressure, temperature, whatever. We don't have that. We can't say, okay, look, you guys, you're free enterprise, you're moderates, and you guys are commies. And now go. And then we'll study. We can't do that. We do have certain almost controlled experiments like North and South Korea, East and West Germany, the same people, the same culture, the same everything, only through active history, you had very different systems, and you can sort of infer, but people can say, well, you didn't have the right commie rulers. In other words, we have to assume... You never have the right commie rulers.
You have to assume a can-oper. And now what I'm trying to say here is that this gentleman is asking me a question A, and Don is bringing in question B.
Well, when I'm answering this question, I have to assume this one is solved, otherwise I can't do justice to that one.
So I'm now assuming a can-oper. I'm assuming I have law and order the good way, whatever the good way is.
And now how will it deal with my private road? Well, it's the same thing in my private movie.
I have a movie and you're being obstreperous and you're, you know, interfering with the show and I shoot you.
Well, is that legitimate? Yes, if everyone knows that that's the rules.
You come to my movie, we better behave.
That would be like Murder Park for consenting adults, children different.
Look, children are a problem in law and children are a problem, period.
When you have children, oh, you don't understand, children are unique.
The short answer is very few people would patronize a private road where they were likely to be shot in the back for no particular reason.
Absolutely.
Unless they're murder-park types.
Look, there are people that do drag races.
One of the things, maybe a private road would allow drag races.
That would get rid of a certain element of society, which I wouldn't be too unhappy with, because otherwise, you know, at least they're not taking me with them.
So you could have drag races.
And now suppose there's a head-on and they both die.
Should they be able to assume?
How?
Because they've agreed to be bound by the rules of chicken racing or whatever it is.
So no, you couldn't have that unless it was with prior agreement.
Prior agreement is crucial.
Could I ask you the principled reason for which a libertarian cannot shoot someone coming
onto his or her private property?
Well, if there's a trespass...
I mean I understand why you're saying, I mean Glenn's saying nobody would do it, if nobody
would patronize the road if the person believed that he or she were going to be shot, okay.
But out of that, what is the principled reason for which someone, that the person can't be
shot, setting aside the fact that there would be a disincentive to put oneself in that predicament?
Well, the way I see the principled reason for not having murder is theft of property,
So everything is property rights, your property rights and your person. I own this body, he owns that body, he and she own those bodies.
So I can sell myself into slavery?
Absolutely, you can sell yourself into slavery. If you own yourself, you can sell yourself into slavery.
Look, suppose my son has this horrible disease, and it costs five million to cure it, and I don't have the five million.
And Don has long wanted me to be his slave, and he could order me around.
and I say, Dawn, I'll be your slave, give me the five million, I'll give it to my son's doctors,
I value his life more than my freedom, he values my slaver-tude or servitude more than the five million,
sure, voluntary slavery, now I'm sure that somebody is going to interpret, Block comes out in favor of
slavery of black people or something like that, I didn't say that, I didn't say that, I'm against
coercive slavery, I'm just in favor of voluntary slavery, I'm against coercive murder, but I'm not
are not against sadomasochism where they really get at it and they kill each other, as long as it's consenting adults.
I'm going to use the example of trying to limit debts on the vote.
Well, what about privatizing?
Like you say, let's say you have to pass nine different private rates to get to work.
And you have to pay.
Well, you get home from work.
Oh, you know, I forgot my briefcase.
You got to go back.
Well, I don't want that on my bill.
You know, I don't want to go back and just spend that, depending on how much it is.
The question that's being asked is, well, suppose you go from home to work and then you go back home, but you forgot your briefcase. You have to go back to work and pick it up and then go home. You have to make two trips instead of one. It seems unfair to charge you double.
But in many other cases that would be, look, suppose you took a cab to work, and you took a cab home, and then you realized here you are at home without your briefcase, and you've got to go back.
Well, the cab driver is going to say, you want to go back? You're going to pay me for two trips, because you used two trips.
Well, you know, suppose I break my watch. Breaking a watch is similar to forgetting your briefcase.
Well, I've got to buy another watch. It seems a bit unfair. Well, I had a watch. It was perfectly good. I broke it. I should get another one for free.
Well, let's say, you know, they took your car, and then you're like, wait, my neighbor took my car to go do this. Now, you want to debate that while on your bill. So you have to go to some court and then...
Yeah, but let's say you took someone else's car to go get it. Like, would it increase maybe stealing or a different problem?
Well, if you, or is there an economic incentive to steal? Of course, there's economic incentives to steal. I mean, if I have the jacket for free, it's a very nice jacket, then I don't have to pay for it. But so what? I mean, it works for jackets. It works for wristwatches. It works for everything. There's nothing unique about roads or road services or say trains. Now, if you steal your neighbor's car,
If you're a bad guy, if you're a buddy of his and he doesn't mind, you borrow his, he borrows your car, well then somebody's got to pay for the road use.
Somebody's got to pay for the gasoline, the extra gasoline. You can't go to the gas station and say, well look, I don't want to pay for this gas because I forgot my briefcase.
The guy's going to say, huh? You weird?
Right. I'm just saying, instead of just dealing with it in criminal court, just the stealing part, now you're going to have to deal with it as far as what happened with going on the road.
Well, what you're really now getting into is what is libertarian punishment theory.
And this is very divisive and debating, but my views are very, very draconian.
In my view, if I steal his code, it's two teeth for a tooth, plus a cross of capture,
plus scaring.
So here it is.
I steal Glenn's code.
Well, I've got to give him back an equal valued one. First of all, I have to give him that one back, because it's his. Second, what I try to do to him has to be done unto me. I have to give him an equal jacket. Third, if right after I steal it, I have a pang of conscience and I go to dawn the policeman in court and I say, hey, you know, I stole Glenn's coat. Here it is. I feel badly. Well, nobody has to come capture me or look for me because it's case closed.
In addition to stealing his coat, I then hide. Well, now I'm guilty of two crimes and I have to pay for it. You guys come look for me. Where is his coat? And finally you catch me. Well, I've got to pay for that.
The fourth element of libertarian punishment theory is scaring. You see, the idea is to make him whole, as if it never happened. Now, this can't be. You can never make him whole. So what we do is we do as best we can.
And then we say, well, there was another element. When I stole his coat, he felt bad for the average man or the reasonable man. If he's Arnold Schwarzenegger, he just says, I don't care, you know, I'm a macho. And if there's some little person who's scared of everything, you know, I just sort of go boo and they go berserk. He's sort of the average man. Okay, well, I undermine his confidence in life, civilization, and I have to pay for scaring him. Now, how am I going to do that?
Somebody come up to me and go, boo? No. In the libertarian circles, we play Russian roulette.
I play Russian roulette. So you can't have the death penalty for stealing a coat.
But the number of bullets and the number of chambers in the gun are proportional to how bad the scaring was.
If I came to his house just with burglar tools, that's one thing. If I came with burglar tools plus a gun, much more.
If he was not in the house, better than if he was in the house.
The Theory of Money and Credit
and a few other things. We wouldn't have so many government-created crimes. You know,
when they prohibit drugs, they drive the price of it very high, and then people start shooting
each other over, shooting innocent people. And then in order to pay for the drugs, you
have to start stealing TV sets and cars. So if the government wouldn't create crime in
the first place, we'd have a lot less of it.
What do you do if you kill Glenn, it sounds like? I mean, presumably you've got to ratchet
up from where you are. You sound like you're pretty already pretty high up on that.
If I kill Glenn, they can do whatever they want with me. They can kill me. And they can
make their money by having a public execution and charging entry fees, you know, visiting
visual fees. They can't torture me unless I tortured him, because that would be more.
But they could kill me. So the death penalty certainly is justified. There's this guy who
I went to school with at Columbia, Isaac Ehrlich, who did a lot of studies on death penalty
and the Efficacy of the Death Penalty.
See, the usual view is what they do, these cretins,
is they do an econometric analysis of death penalty states
and non-death penalty states,
and they don't find much difference,
so they say, well, death penalty doesn't mean much.
What Isaac Ehrlich did, he said,
I'm not care about death penalty and non-death penalty,
I'm gonna take execution states and non-execution states.
Because if you have a death penalty state like California
and they never execute anyone, you know, big deal.
And what he did is he took execution states versus non-execution states
and now he got a big statistically significant difference.
So the death penalty is a very, very serious business.
Otherwise all those people in death row, why don't they just say,
oh yeah, kill me, I don't care.
No, they try to stave it off, people want to live, most people.
Does the system, if it's realized to your ideal parameters, does it dissolve anything other than the national government, whereas the individual states disappear?
The question is if the libertarian system is implemented tomorrow, what changes?
Yes, the federal government goes, but what about state and city and local and county governments?
All governments go, they're not voluntary institutions, they're coercive institutions, and they are replaced by market institutions.
You don't need government to have libraries and museums and schools.
All these things have been private upon occasion and can be private again, and they do much better, and they don't take money from people against their will.
Now again, if everyone's agreed to be bound by this, like in a condominium association,
I used to be part of a condominium association, and they were very weird.
You couldn't have different colored drapes than other people.
All the houses had to be painted the same.
You had to have a certain kind of fence, picket fence, and nobody could have a different fence.
But we had all agreed.
So they could be as picky as they wanted.
They could say, in order to be in this condo association, you have to wear a beanie with
Do you have a propeller on top, or do you have to push a peanut with your nose?
Well, if people agree to it, well then they have to do that.
Do you have two arguments? One is the moral case...
I can't hear you. Could you stand up or speak louder?
You presented two arguments, the moral case and the economic case, and we're going to hear which is more important.
And I understand that you fused the two, meaning that if you maximize and you agree, that gets the most efficient results.
If I wanted to violate one person's rights now in the future to defend the violation of 99% of 99 people's rights, would you prohibit the action or would you favor the action?
My second question was, could you talk a little bit about distinguishing himself from Nozick's position, because he didn't actually address yet, who actually enacts the punishment?
We talked about courts, but in a total libertarian society, if I should, it's my right to seek retribution against people who violate my rights.
So, in that case, as who decides the punishment, Ludwig's answer is that, well, there's one particular protective association and they would compensate those individuals who try to violate it by giving them, by including them in this protective association, therefore generating the minimal state.
Since you are opposed to the minimal state in that sense, I'm wondering how you can say much more from that position. Who decides what the punishment is?
This student is a vicious student asking vicious questions. I therefore assume he's a Dawn student because Dawn asks vicious questions too.
How about that?
No, he's not. I think he is. I don't care whether he is or not. Assume he is.
Along with the cat opener.
Look, you've got something that works. You work with it. There are two questions here, both a little complicated.
The first one, and I'll put it in my own words, and hopefully it'll satisfy what you said, is suppose utilitarianism and deontology diverge.
Suppose you can save millions of lives, namely utilitarian, but you have to violate someone's right.
There was this wonderful case in, what was that thing with vital bodily fluids? What was that movie?
Doctor Strange Love.
Doctor Strange Love. Remember when they shot the Coca-Cola machine in order to save the world?
Don't ask. There was a scene where, in order to save the world, you had to shoot the Coca-Cola machine to get changed to call the president or something.
And some guy would say, but that's private property. You can't shoot that.
A more rigorous case is, suppose the Martians send down a message that unless you shoot a call, we blow up the whole world.
Am I being in your spirit? Namely, here we have a divergence between, I mean, it's wrong, he's an innocent person, it's wrong to shoot him deontologically, but utilitarian-wise it is. You've got to do it, otherwise the whole world blows up.
It's interesting, I have a friend who's a Hasidic Jew, a rabbi, and he said that in the German case, what the Nazis would sometimes do is come to a town and say, look, give us one Jew and we'll kill him and we'll save the whole village.
If you don't give us one Jew to kill, it could be the worst Jew, whoever doesn't pray right, whatever, we'll kill the whole village.
And according to the Talmud, you can't do that.
My view is similar to that. The way I see it is, here's what should happen and what would happen.
And we assume that the Martians have this power, we don't try to get out of this, what do you call it, what's the word, dilemma.
We don't try to get out of the dilemma by saying we'll go kick the Martian butt or something like that, because that would ruin the example, right?
Here's the way I see it. Some hero is going to go over to call and shoot him.
And then we're going to have a ticker-tape parade for him, because he saved the world, and then we're going to execute him.
I told this to my son, and he said, well, then suppose the Martians say, well, if you execute him, then we'll blow up the world.
The answer that I have to that one is, do you see how far you have to go, do you see how weird you have to be to undermine liberty?
In other words, there's some sort of connection between liberty and utilitarianism.
The question is whether you should, as you personally read it.
You should not. Death though the heavens fall? No, justice though the heavens fall. I'm a deontological libertarian.
I don't believe in these cases. They're interesting theoretical cases to probe where you're sitting.
And where I'm sitting is with deontology. I'm not a utilitarian. If that's the way the world is, then F it.
But happily the world isn't that way. Happily, the way they made the world, whoever they were, and I don't want to get into that,
they made it in such a way, you know, sometimes I'm both a libertarian and a utilitarian,
And when I come up with a problem in the one area and I can't solve it, I go to the other
one and look, well, what's the answer coming from there? And I say, aha, now I know the
right answer. A little fudging. Because the two are so integrated. There are no real life
examples. There are only these weird Martian examples or the example you're giving. Kill
one person now to save 999 later or whatever it is. It's the same thing. Could a libertarian
and be in a Nazi concentration camp, a Schindler type. Right? Are you following me? Schindler?
And what you do in the Nazi concentration camp is you kill people, but you kill fewer
of them. Instead of killing 100 people, you kill 50 of them and you save the other 50.
Whereas any other guy would have to kill them all. And you have to kill 50, otherwise they'll
find out that you're a non-Nazi, you're a libertarian behind enemy lines. Well, should
How did you do it? The only answer I can think of is, if you do it, you're a hero, and what you should do then is go to the heirs of the 50 people you had killed and say, look, here's the situation, you really want to kill me, and if they do, then you've got to die.
Is it right to do it? No. It's always wrong to kill people, even to save more people. That's my answer. It's not a good answer. I wish I had a better answer, but it's a tough question.
Now the second question is Nozick. What is my view on the Nozickian view? Well, Nozick
is a monarchist. And what Nozick was saying is that you could have an invisible hand process.
You know what an invisible hand process is. Through no violation of rights, you go from
an anarchy into a government. Because you have a, what is it, a big defense agency,
and the big defense agency questions the little defense agency's techniques because they use
I think the Nozick has been viciously attacked in the first issue of the Journal of libertarian studies.
If you're interested in that, email me. I'll give you anti-Nozick propaganda.
I mean, Nozick is a pinko compared to the one true faith.
Compared to everyone else, he's a free enterprise, I admit that, and so is Milton Friedman.
But we're out here in extremesville.
And I think that's the kind of thing that people are going to be talking about.
and Freedom, but we're out here in Extremesville. They don't call me Walter Extremist Block
for nothing. Suppose that the small defense agency had the right way of evidence and the
big one had the tea leaves. You can't justify violating rights period and Nozick did that.
Could I just ask, you talk about an heir, a person's heirs, acquiring, sort of being
successors in interest. What is the connection between a person and his or her heirs? What's
What's the nature of that connection? Why is that? Why do you recognize that connection?
Well, because I'm trying... I don't have to repeat that because I'm trying to figure out rights.
And rights are based on property rights, and I'm trying to figure out who owns what.
Well, if I kill Glenn, somebody's got to have a right to do something to me.
Who better than his wife or his parents or somebody like that?
Take the case of, what was her name in Florida, that woman who was comatose?
Sorry?
Terry Schabow.
That would be an interesting case along these lines.
How would the libertarian analyze that?
You all know the Terry Schabow case.
She was on life support and her husband wanted to pull the plug.
Well...
And her parents didn't.
Her parents did not.
See, what I would say is, now we're getting into libertarian theory on children, and what
What I say that the relationship of parents, adults to children is you can't own them,
but you can own the rights to homestead them or to bring them up, to be their guardians.
How do you get the rights to be their guardians? First of all, by giving birth to them. And
second of all, by caring for them. So you have to feed and diaper them and whatever.
If you want to pull the plug, that means that you lose your guardianship rights. So the
husband loses his guardianship rights as soon as he mentions the word plug, as in pulling
and then the next person I'm willing to say the husband is number one but
certainly the parents or the siblings are number two or three and if they want
to pull the plug well then you get friends of comatose people now if
there's no one on the whole earth that wants to save her then it's tough on her
but presumably the church the synagogue somebody is gonna be filled with the
milk of human kindness and hope for a miracle that one day she'll you know be
Does it complicate things that the husband said and I think the court said as well that he was carrying out her wishes in pulling the plug?
If that was really true, then that would be very definitive because she rates even higher than him because she is the first owner of herself.
He's only the second owner of herself when she's comatose.
But my understanding is that this wasn't proven and then he had another girlfriend that he wanted to marry and there was a lot of, you know, question about that.
If there was a definitive thing that was signed and notarized and said, in case of comatose, pull the plug, that's definitive.
Or if there's like a video thing where she was interviewed and said that, fine, then she goes.
But there wasn't that. Or we can assume that there wasn't that to get to this case, because we want to, you know,
I mean, if we assume that, then we lose this case as an example.
I was just going to say, but it does seem to me that you import into this a whole nexus of social relationships that I don't see that you can really extract on libertarian grounds.
I mean, you really have to import other ideas into this, which I don't think is a wrong thing. I just think they are other ideas.
and other ideas. And I guess I would also distinguish between the relationship between a parent and a minor child or a small child, a child that still needs care, and a parent and an adult child, and you're suggesting that somehow adult children become successors in interest, which I mean, I just think there's a whole sort of set of social assumptions in that, which are not, they are whatever they are. I don't understand how they're libertarian. Well, of course you have to bring in the real world.
Sometimes I go and order a cup of coffee, and I drink it down, and the guy says, well, that'll be a million dollars, please.
And he shows a sign, and I didn't see it.
It's sort of like Murder Park.
You didn't tell me this was Murder Park, and now you shoot me for giving a bad lecture.
No, no, no.
There are implicit contracts which are not part of the non-aggression axiom of private property.
Of course, these have to be embedded in reality and social customs,
The presumption is that the father would have given his money to the kids, so if the father gets bumped off interstate, without a will, that the kids get it.
Well, where did you get that from? Is that libertarian? No, but it's, you know, give me a break.
But I just, I think there are a whole set of normative assumptions built into it, which are, which remain to be unpacked as to whether they are libertarian or something else.
You're right. I agree. We agree on that.
Of course you might argue that under the true libertarian state, all those bourgeois inheritances would wither away given time, but you'd have to let that happen, you know, you don't know, and I think it's fair to assume, see he likes my little Marxist thing, I saw the reaction, but I think it's fair to assume, though, that people mostly do what people mostly want, and what people mostly want to do is to take care of their kids and take care of their parents, and so as a default assumption, that's a pretty safe one. They tell me I have time for one more question, but first I want to tell my favorite economist joke.
It's better than the can opener joke, I think.
Can we all tell them?
Two economists are walking down the street.
One of them points at the sidewalk
and says, look, on the sidewalk, a $20 bill.
The other one says, impossible,
someone would have already picked it up.