WEBVTT

NOTE The Privatization of Roads and Highways

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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.

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Dr. Walter Block, he's the Harold Worth Eminent Scholar Chair in Economics and Professor of Economics at Loyola University in New Orleans.

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He's got a PhD in Economics from Columbia. He studied under people as eminent as Richard Landis and Gary Becker.

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and he's the author of such works as Defending the Undefendable, Employing the Unemployable and the Privatization of Roads and Highways.

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I'm guessing that in this recruiting season, employing the unemployable may be of great interest to a lot of people here.

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This is actually the first of five events. He's barnstorming through the southeast. It's Vanderbilt next, I think, where he's talking.

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He's talking about there's no such thing as market failure.

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He's going to talk for a while and then we're going to have a panel discussion featuring

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my esteemed colleagues, Don Leatherman, the W. Allen C. Park Distinguished Professor of

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Law, who actually has a math degree.

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You know, they took the math off the LSAT and I've noticed that the math folks have

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really come into law and law, but he's from the days when there were still people who

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knew math who came into law, which is why he's now a tax professor, I guess.

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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

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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.

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And with that, if you'd like to begin, Professor Block?

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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.

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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.

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And the spectrum is supposed to indicate the further away you are in politics, and yet they should be close.

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And you get people like Mother Teresa, I guess, who's a lefty, just like her buddy Stalin, which is a little weird.

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So the whole political spectrum is just nonsense.

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And one of these days, I'll tell you the correct political spectrum.

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But before that, I have to do what I've been assigned to do, and that is, should we privatize roads and highways?

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And what I'll do is make two cases in the affirmative, one on morality or ethics and the other on economics.

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On the moral case, I notice there's this young lady here with a nice backpack. What's your name?

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Melissa. I like that backpack. I really yearn for that backpack and I want that backpack.

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And there are two ways, and only two ways that I can get that backpack.

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And there's a gigantic difference between the two ways.

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One is the voluntary way and the other is the coercive way.

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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.

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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.

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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.

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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.

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Well, the first way, the voluntary way, is the market way. Everything in the market is voluntary.

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You guys were all wearing shirts and pants and wristwatches, all that stuff you got through the market.

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You seduced them into giving it to you by giving them an offer that they regarded as appropriate, namely the price.

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That's what the market is. It's the concatenation of all voluntary acts in the economy.

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and we can even go further and say that friendship too is part of the market if you want to go in that direction.

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In contrast, there's the political field and in the political field, it's coercive.

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We vote and then the majority wins and it's not a voluntary way of doing it.

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So it seems to me that it's much more ethically sound that I get that backpack with her permission

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Then by steamrolling over her, either by myself with a gun or all of us together with guns.

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Well, when we have things that are private, like pizza and hot dogs and wristwatches and pens and ties,

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that's the voluntary sector. When we have things through government, it's coercive.

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Now you might say it's necessary, it's a necessary evil, but it's an evil, because it's coercive.

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And according to at least the libertarian doctrine, coercion is, per se, problematic.

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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.

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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,

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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.

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It's not like that because nobody signed anything.

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Okay, they signed the Declaration of Independence and John Hancock wrote big, but

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none of us signed anything.

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Look, if I said one of you owed me a hundred bucks and I went to a judge and

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they'd ask for some proof, they'd ask for some evidence. There's no evidence that we join any club.

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It's not a voluntary club.

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It's a coercive club.

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And don't tell me that democracy is great. Hitler came to power as a result of a

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democracy QEB.

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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.

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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.

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Since everything either moves or doesn't move, you privatize everything. That would be the extreme case.

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I don't know that I'll get to cover everything, but I'm certainly going to take a hack at highways.

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I don't think I'll do too much on post offices. That's sort of like shooting fish in a barrel.

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It's not really, you know, a challenge.

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I mean, sure, we should privatize the post office. The present post office is a monopoly.

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If they do a lousy job, you know, they don't go broke.

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You know, I'm from New Orleans and we had Katrina in the aftermath.

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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,

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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.

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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.

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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.

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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.

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Also, prices are very important. We can't really have much of an economy as the Soviets found to their dismay.

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If you don't have free prices, market prices, market prices tell you things. They give information as to scarcities and desires.

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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,

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in the public sector, we put everything in the public sector, and now there are no markets whatsoever.

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Well, now, how do you determine prices? Well, prices are to the economy as street signs are to the geography.

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If you don't have them, you can't plan. You can't plan your way out of a paper bag.

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The Soviets had great chess grandmasters and they could put their efforts together for Sputnik,

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but they couldn't plan their way out of a paper bag. They had a horrible economy.

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So prices are important, they give information, they allow us to make rational decisions.

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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.

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Without prices indicating scarcities, you're in a morass economically.

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Okay, so that's sort of the general case for privatization on the grounds of morality, on the grounds of economics.

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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.

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Okay, now let me apply this to roads.

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Why am I so hopped up about highways, roads, streets, avenues, thoroughfares, things like that? Why should that be privatized?

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And by privatized I don't mean this sort of wussy privatization we were discussing before

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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.

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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.

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Get the government out. Why am I so hopped up about that?

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Not because I'm hopped up about everything, but I am hopped up about everything, but I'm more hopped up about this. Why?

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One reason is that, do you know how many people die on the highways every year?

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It's about 40,000 people die in the US.

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Sometimes it's 39,000, sometimes it's 41,000, but by and large it's around 40,000.

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It's been reduced in deaths per mile traveled, because we're traveling more miles, but the death rate is still around 40,000.

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To just put this in perspective, I think only 3,000 people died in 9-11.

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I think only 1,500 people died in New Orleans. I think only, what is it, 4,000 soldiers now in Iraq?

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This is 40,000 mothers, grandmothers, babies, people, ordinary people walking around getting smushed like, you know, like nothing.

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Now, the usual answer that people will say, well, you know, what's this got to do with anything?

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The usual answer that they give is that it's not the cause of government.

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What is the cause of speed, or alcohol, or vehicle malfunction, or driver error?

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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.

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Holtzman, a Chicagoite, lists about 25 of these reasons.

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All sorts of weird things, I mean, these are the big four,

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the so-called explanations, these are the big four.

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Other things like, well, how fast is the ambulance,

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or is there a helicopter ambulance, how good is the hospital,

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things like that.

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The NHTSA National Highway Traffic Safety Administration lists 125 causes of accidents.

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In my view, this is just proximate causes, they're not ultimate causes.

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What's the difference between approximate and ultimate cause?

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If I take this gun here and I shoot over here with a heavy rifle and I kill somebody

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over there, and then you all capture me and want to put me in jail, I say, tut-tut, not

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so fast. It was the bullet that did it. I didn't do it. It's 200 miles away. I'm innocent.

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You would never in a million years allow me to get away with that sort of an excuse because

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I would be confusing an ultimate cause, namely me, with the proximate cause, the bullet that

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Look, suppose a restaurant failed, and we start making lists as to why the restaurant failed.

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And one is lousy food, and another is poor service, and another is location, location, location,

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another one is dirty dishes, dirty floors. Would we accept that? No, not in a million years.

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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.

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The management didn't get a good cook. The manager didn't get good waitresses. The management didn't locate in the proper place.

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Because the management didn't get some guy with a broom and tell him to go sweep or have

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dishwashing good.

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It's the management.

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Well, who's the manager here?

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It's the bloody government who's the manager.

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It's the government that has not done well with regard to speed.

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It's the government that hasn't done well with regard to reducing alcohol, drunken drivers.

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It's the government that is responsible for all these things.

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Those are just proximate causes.

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The ultimate cause is government management.

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Now let's get back to something I said before.

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What I said before was I talked about the weeding out process.

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The weeding out process would mean, in this case, if different people owned different

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The U.S. Highway 40 was owned by the U.S. Highway 40 Corporation

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and the Cumberland Road Corporation owned the Cumberland Road

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and, I don't know, Elm Street was owned by the Elm Street Association.

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Well, then they would be competing with each other

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and maybe some of them were better at stopping these things than others.

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Let's take speed, for example.

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Now, maybe it's speed that's doing it, but maybe it's the variance or the standard deviation of speed.

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You know, I used to have a Honda 90cc motorcycle.

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It was capable downhill with a tailwind of doing 45 miles an hour.

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uphill, with a passenger and a headwind, I could do maybe 35, but I'd get on the highway.

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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.

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And you know that if you do 70 on a highway that says 70, people go by you like that.

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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.

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We'll never know, because as Uncle Mao said, you don't have a thousand flowers blooming,

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you don't have different entrepreneurs doing different things as they do in the automobile

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or the chair industry or the shoe industry, and some of them, their plans fail and they

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go broke and others succeed and they make money and can expand their base of operations.

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You know, you don't have any of that.

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All you have is a made-in-Washington DC policy of whatever it is, the double nickel, or now

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it's 70.

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In other words, there's no experimentation about how to reduce debts.

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Washington D.C., Obama now, or whoever he appoints to the NHTSA will...

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Look, these rules don't come down to us on stone tablets.

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We have to discover them.

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Markets are the mechanism par excellence for discovering how best to reduce debts.

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Look, here's a possibility.

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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.

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Would that be better? I don't know. Maybe.

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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.

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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.

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Some of them the government sort of follows but not really fully.

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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.

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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.

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I had in mind real big ones. Nowadays they do it, but they're only about this big.

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I had in mind 20 foot crosses or Jewish stars or whatever.

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Another one, you know those cars where a truck hits them from one end and hits them from the other end

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and now the truck and the car, instead of being 20 feet long, it's 5 feet long, sort of accordionized?

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Put that up on a pedestal, right where the accident occurred.

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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.

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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.

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Do you know what we ought to do the next time we catch someone who's drunk driving?

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I think it was Charles Barkley recently in the news.

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Maybe we do something more serious to him than what was done to him.

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I don't know. Maybe the death penalty.

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Look, one guy gets executed for doing this stuff.

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Maybe save hundreds of lives. I don't know.

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But the point is that if I announce this in advance and on my road you get caught drunk and driving,

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We're gonna, you know, take a bite out of you, a serious bite, maybe it'll help. I don't know.

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All I do know is that this is an impossibility. Our system doesn't allow for this sort of experimentation,

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so we're never gonna really solve this death problem.

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The second reason that I was getting into private roads is I used to live in New York City,

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And the traffic jams there, you wouldn't believe.

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Even in little towns or moderate cities like Knoxville, the traffic congestion is horrendous.

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Why is that? Well, in economics we have this thing called supply and demand, quantity and price.

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What price do they charge for highway use during rush hour?

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Or rather, what additional price do they charge for highway use during rush hour

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The answer is zero. They don't make you pay more when you drive at five o'clock.

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Well, at zero, the demand is much greater than the supply, and that's traffic congestion, excess demand.

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What's the economic answer? Well, get the price a little higher. Charge a little bit more.

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In other words, if what you do is you have a time, this is time and this is quantity of people in the highway.

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Well, let's say this is midnight, 12 p.m. or 12 a.m., low traffic.

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Now we get to 7 a.m. to 9, high traffic.

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This is the rush hour.

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And then it goes down a little lower, although in New York it's up there at all hours.

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And then let's say 6 to 8 at night, another rush hour.

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Mainly what you do, what the price system naturally does, is if you charge more during

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the rush hour, you decrease the amount of usage.

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If you charge less during the non-rush hours, you increase, in other words you sort of even

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this out.

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That's what hotels do. They charge more during the season than in the non-season.

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I mean, if it's a skiing hotel, they charge more for the rooms during the winter than the summer.

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And if it's a beach one, they do the opposite. In other words, they flatten it out.

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Everyone following me on this? Yes? Just common sense.

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They do that for certain holidays, with restaurants, whatever.

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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.

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You don't ask, was he in tune? You say, wow, a bear riding a unicycle and playing violin, what do you do?

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So, when an economist tells a joke, you don't say, well, was it funny or not? You say, wow, amazing.

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In any case, what these rascals do in government is they do anti-peak load pricing.

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Namely, they exacerbate the congestion. The idea is when you buy those trip tickets,

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they'll give you a month trip, a month ticket, right, to get through those tollboats.

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It's a little cheaper per trip than if you were to buy one each time.

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Well, who uses those monthly tickets? People who ride during the peaks or during the troughs?

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Obviously during the peaks. Those are the people that go to work nine to five.

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So what they do is they charge less, so that increases this a little bit.

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Mainly they're exacerbating the variances.

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And then they give us all these whining things.

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If they raised the prices enough, the market would see to it that we did that.

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That's the beauty of the market, the magic of the marketplace.

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But if you don't have markets, if you just have government edicts, it doesn't work.

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Okay, those are the two reasons.

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Now what I'm going to do is give objections to my wonderful theory.

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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?

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Well, you know how the first roads were? The first roads were turnpike roads. My research goes back to the 8th century in England.

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The first roads there were private. The first roads here in North America, in the US, were turnpike roads.

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In New York City, the BMT and the IRT were private subways, and they were charging in nickels.

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The government refused to uphold the law, namely there were people who were toll busters,

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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.

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So the thing isn't viable if the government doesn't uphold property rights.

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So it didn't work. In New York City, the BMT and the IRT were private subways,

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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,

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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.

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Namely, you have this idea that if you have private roads, they'll trap you there.

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Well, this is silly. Right now, if you buy a house, you have to do title insurance.

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Namely, make sure that the guy who's selling you the house is the owner of the house.

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Well, you'd have a new thing called access insurance.

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Namely, you're not buying a house until you tie up contractually the owner of the road and say,

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and say, well, you know, what's the deal here?

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Can you raise, can you triple the access price

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and buy your whim?

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In which case, I'm not buying the house in the first place.

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The economics of it is that if I have a road

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on an empty path somewhere,

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I want to encourage people to move in

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so that I'll have more customers, more traffic, whatever.

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I can charge more people more money.

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So I'll encourage them.

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And one way to encourage them is to

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time myself up contractually to make sure that I can

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can't be arbitrary and capricious and you know sort of trap them in the house and

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the idea is you have to be either a good pole vaulter or you have to have a

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helicopter or something. No. The law system will take care of that problem.

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Another one is eminent domain. They say, well, Block, you're such a big supporter

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Well, you can't have long, thin things without eminent domain, because, you know, if I want

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to build a road from Knoxville to New York City, how many people's property will I have

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to go through to get a new road going there?

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I don't know, 10,000, 100,000 different people would own land in that way, right?

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And then you have the problem of a hole down.

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The long guy over here says, sure, I'll sell you my land for six trillion dollars.

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Well, the real way we have our days, that was another joke before that.

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One way is you can go around them.

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Yes, the shortest distance between the two points is a straight line, but what the heck, you can go the great circle route.

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If you have someone like that, you can go around them.

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Another thing that you could do, suppose he owns land like that, and he's very obstructive.

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Well, you can go under it, or go over it.

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Namely, this doctrine of, what do they call it, where you can't add colon?

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The add colon doctrine says that if, here's the earth, if you own a square mile of the earth,

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Remember, if you own a pyramid or a cone down to the center of the earth and then up into the heavens?

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See, the Ad Colum Doctrine would say you can't do that, you can't go under him or over him

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because he owns down below to the core of the earth and up into the heavens?

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Well, the Ad Colum Doctrine is not compatible with libertarianism.

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Libertarianism is based on the John Lockean, Murray Rothbardian homesteading theory.

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You didn't homestead anything 5,000 miles down in the core of the earth.

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You didn't homestead anything 50,000 feet above.

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If you had Cullen Doctrine, you couldn't have airplanes.

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Every time somebody went over your house, you'd say,

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oh, that'll be a quarter or 20 bucks or whatever,

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and air flight would be precluded.

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What other objections are there?

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Well, I think I've gone on for about a half hour.

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In my writings, I must consider maybe 20, 25 objections. I don't want to take any more time.

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Let me just summarize. If it moves, privatize it. If it doesn't move, privatize it.

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Everything moves. If it doesn't move, privatize everything. And you get brownie points on ethics.

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Because when things are private, we deal with each other in a civilized, non-barbaric way.

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I can't take Melissa's backpack without her permission. That's what the market is.

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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.

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It's not legitimate. And also, it's not efficient.

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Now, I don't know how many debts there would be if all the roads were private.

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My speculation, it'd take too long to get into why, there'd be about 8,000 debts based on weird things.

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There'd still be some debts. I mean, when people go 70 miles an hour, there'd be some debts.

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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.

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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.

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I know on the internet everybody's dream, the holy grail of the internet is micropayment.

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So that you can have a PayPal account or something, when you visit my page I get like a half cent,

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and you go visit somebody else's page and they get a half cent, and you don't have to subscribe,

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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,

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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.

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It's been the holy grail and it just doesn't work.

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PayPal doesn't really work efficiently with amounts of money less than a dollar.

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It actually costs enough to make micropayments heavy.

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But that still seems like it would be a lot easier than me driving around Knoxville

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with lots of different roads owned by lots of different people.

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I mean, I suppose I could buy a subscription to each one and my car would be covered with little stickers

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or RFID chips or whatever, but that's sort of awkward.

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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

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When I first started writing about this, I was doing a lot of research in grocery journals.

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I didn't even know there were such things as grocery journals, but there were grocery journals.

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Why was I doing research in grocery journals? Because this stuff right here, these barcode things, were just coming in.

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And my idea is that each car would have one, not many, but there'd be an amalgamator.

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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.

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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.

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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,

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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.

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So now the people pay through advertising and you don't have to, everyone doesn't have to pay a penny.

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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.

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What's your response to the privacy concerns of having everybody know where you're driving because they're reading your barcode?

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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.

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Maybe they're both the same.

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Right.

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It could be the same.

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Different strokes.

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Well, we have precedent for that. You buy at a certain higher price a thing that just gives you a fixed fee.

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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,

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we're smart enough to figure out technical ways of making sure that privacy is respected.

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How do you deal with fraud in the barcodes or with someone simply eliminating it?

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Well, one or two percent of the population is always going to do that.

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I don't know what the percentage is, but a small number of people...

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Look, if everyone was a criminal, we wouldn't have much of a society.

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We couldn't have stores where you pick stuff up and you don't put it in your pocket.

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You have to assume that only a small number of people would be active criminals.

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And you know, libertarians are pretty harsh on criminals. We would, you saw what I was

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contemplating doing with drunken drivers. Now, if it's an accident, you know, you don't

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have the thing or it's malfunctioning, presumably there would be ways, we have our ways of dealing

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with these sort of things. But to say that since there'll be fraud and theft, we can't

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have private enterprise, I think is wrong. Look, some people steal watches. It doesn't

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I'm still not sure I'm convinced by that. Who would you have deal with the crimes?

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That's a vicious question. But before I answer it as a good professor, I have to make a circle here.

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And that is, I just wanted to mention one thing with transactions cost.

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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.

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So don't get me started on transactions costs, but now there is...

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On transaction costs, though, there are a number of different places where you've talked

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about parties coming together and contracting.

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Each of those situations has transaction costs, so you have to talk about how you would minimize

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those costs, thinking about the scheme that you're setting up, and we could talk, I think,

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a long time about that.

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Well let me get to your question about who does it.

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And now we're, you see, there are, the way I see the political map, there are anarchists,

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libertarian anarchists, I don't mean lefty anarchists who hate money and think that markets

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are greedy or something like that. I'm talking about anarcho-capitalists such as Murray Rothbard.

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That would be roughly my position. Just below them are what we call minarchists, minimal

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Rural government, anarchists is ruled by, so anarchist is ruled by no one, arbitrary rule.

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Minarchist is limited government, the most famous person that holds that view is Ayn Rand.

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And in her view, the government has only one function and that is to protect persons and

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property against rape, murder, theft, whatever.

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And to that end it has only three legitimate institutions, armies to keep foreign bad guys

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to keep local bad guys off of us, police to keep local bad guys off of us, and courts

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to determine who the good guys and the bad guys are. If I claim that I really am the

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owner of Melissa's backpack, well, we have to go to some sort of court and find out and

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for Ayn Rand that would be a legitimate government enterprise. Below the libertarians, and some

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libertarians add on a little bit more maybe for public health or what have you, and I

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don't mean socialized medicine, I mean communicable diseases. You know, who's going to spray the

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and the mosquitoes kind of thing.

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Below that in this hierarchy as I see it

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would be classical liberals who believe in government

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for armies, courts and police but add on four or five

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or 10 other things like Milton Friedman and Friedrich Hayek.

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They're not real libertarians, they're classical liberals

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for want of a better term.

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Okay, so one answer to this is well,

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we have a minimal government and it's limited

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to armies, courts and police and they decide who done it.

376
00:39:12.740 --> 00:39:39.740
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.

377
00:39:39.740 --> 00:39:42.740
No Quiz, since I'm not your professor, but if you're interested.

378
00:39:42.740 --> 00:39:44.740
Okay, so how would it work?

379
00:39:44.740 --> 00:39:52.740
Well, there would be courts-insurance companies-police firms.

380
00:39:52.740 --> 00:39:57.740
And they would be private purveyors of justice or judicial services.

381
00:39:57.740 --> 00:40:04.740
And there are precedents for this, for example the law merchant, the laws of salvage.

382
00:40:04.740 --> 00:40:14.740
The law is that if Glenn's boat capsizes and I come and bring Glenn's boat back into harbor,

383
00:40:14.740 --> 00:40:19.740
it's very clear that he gets two-thirds of the value of it and I get one-third of the value of it.

384
00:40:19.740 --> 00:40:22.740
Why? Well, that's what the Admiralty Courts decided.

385
00:40:22.740 --> 00:40:24.740
And why should we pay any attention to them?

386
00:40:24.740 --> 00:40:30.740
Because this was the way that commerce was done in the 14th, 15th, 16th, 17th centuries.

387
00:40:30.740 --> 00:40:35.780
There is legal precedent, which came about through private arbitrators, people who had

388
00:40:35.780 --> 00:40:39.900
reputation for probity, unlike nowadays the way we pick judges, there's some political

389
00:40:39.900 --> 00:40:44.540
hack who didn't make office or who stood aside for somebody else, very different sort

390
00:40:44.540 --> 00:40:45.540
of a thing.

391
00:40:45.540 --> 00:40:47.520
So there are cases of private law courts.

392
00:40:47.520 --> 00:40:54.380
We have the American Arbitration Association, a friend of mine is an engineer at Stanford,

393
00:40:54.380 --> 00:40:59.740
and he's called in as a private arbitration person whenever there are very technical things

394
00:40:59.740 --> 00:41:29.740
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.

395
00:41:29.740 --> 00:41:36.740
with Murray Rothbard's view and also David Friedman, Milton Friedman's son, who is also an anarcho-capitalist.

396
00:41:36.740 --> 00:41:43.740
And let me give you an example. Suppose I'm having a dispute with Glenn. I say that I own this jacket.

397
00:41:43.740 --> 00:41:51.740
It's a very nice jacket, and it's my jacket. And this wretched person has grabbed it from me yesterday. Rotten, too.

398
00:41:51.740 --> 00:42:01.740
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.

399
00:42:01.740 --> 00:42:07.740
And I pick Don as my judge. Don is an old buddy of mine. And Glenn knows this.

400
00:42:07.740 --> 00:42:23.740
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.

401
00:42:23.740 --> 00:42:35.740
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.

402
00:42:35.740 --> 00:42:44.740
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.

403
00:42:44.740 --> 00:42:53.740
Well, now, Glenn is in trouble because you have two courts – insurance companies – police companies that are going to come after him and say,

404
00:42:53.740 --> 00:42:57.740
Give Walter your jacket. Give Walter Walter's jacket.

405
00:42:57.740 --> 00:42:59.740
I almost lost it there.

406
00:42:59.740 --> 00:43:01.740
You've got to stick to your story.

407
00:43:01.740 --> 00:43:04.740
I've got to stick to my story. That's my story and I'm sticking to it.

408
00:43:04.740 --> 00:43:10.740
Okay, so one possible resolution is that both courts agree with either me or him in which case the case is over.

409
00:43:10.740 --> 00:43:15.740
But we can have disagreements. The Iris Court and the Dawn Court can disagree.

410
00:43:15.740 --> 00:43:20.740
Now it's possible that the Dawn Court can go along with Glenn and the Iris Court can go along with me,

411
00:43:20.740 --> 00:43:39.740
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.

412
00:43:39.740 --> 00:43:48.740
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.

413
00:43:48.740 --> 00:44:17.740
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.

414
00:44:17.740 --> 00:44:23.740
So that would be, now you see, now we bring in economics. The bandit courts are going to have to fight everyone.

415
00:44:23.740 --> 00:44:27.740
They're going to have to fight other bandit courts and they're going to have to fight legitimate courts.

416
00:44:27.740 --> 00:44:31.740
Fighting is expensive. You have to pay extra money to your workers.

417
00:44:31.740 --> 00:44:35.740
Whereas the legitimate courts will not have to fight every time.

418
00:44:35.740 --> 00:44:39.740
They'll only have to fight when they're on opposite sides of a bandit court.

419
00:44:39.740 --> 00:44:43.740
And the presumption is that this means it's economically stable.

420
00:44:43.740 --> 00:44:51.740
And the implicit idea here is that all the courts in a libertarian society will go along with libertarian law.

421
00:44:51.740 --> 00:44:55.740
And what's libertarian law? Well, libertarian law is based on two axioms.

422
00:44:55.740 --> 00:44:58.740
The non-aggression axiom, which I was illustrating with Melissa.

423
00:44:58.740 --> 00:45:02.740
The way you deal with people is not with a fist or a gun, but by volunteeringness.

424
00:45:02.740 --> 00:45:08.740
Look, suppose I grab his coat and he stops me and I smack him and he smacks me.

425
00:45:08.740 --> 00:45:11.740
But I started it. Does that mean that I'm the aggressor? No.

426
00:45:11.740 --> 00:45:16.740
Because you have to bring in the second axiom of libertarianism and that is private property rights.

427
00:45:16.740 --> 00:45:24.740
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.

428
00:45:24.740 --> 00:45:28.740
On the other hand, if he always had that coat and I start grabbing it, well then I'm the bad guy.

429
00:45:28.740 --> 00:45:33.740
So in order to know whether something is aggression or not, you have to know who is the rightful owner of things.

430
00:45:33.740 --> 00:45:40.060
and here we bring in Robert Nozick who is a famous philosopher who dealt with

431
00:45:40.060 --> 00:45:44.500
politics I'm sure you would have heard of him I don't agree with him but he's

432
00:45:44.500 --> 00:45:49.780
certainly a very big name in philosophy of law and what Robert Nozick says

433
00:45:49.780 --> 00:45:53.940
taking off from Rothbard and Locke is the way you get to own stuff is first by

434
00:45:53.940 --> 00:45:58.540
homesteading it and then through any legitimate means of what he calls title

435
00:45:58.540 --> 00:46:03.180
transfer, buying, selling, gift giving, gambling, whatever.

436
00:46:03.180 --> 00:46:05.740
So that's a five-minute answer to the question of,

437
00:46:05.740 --> 00:46:08.900
who would determine if I say I'm not speeding

438
00:46:08.900 --> 00:46:10.180
and you say I am speeding?

439
00:46:10.180 --> 00:46:12.180
Well, then the courts, the private courts

440
00:46:12.180 --> 00:46:15.420
would determine that.

441
00:46:15.420 --> 00:46:17.900
Just one comment, I think I've said a couple of questions.

442
00:46:17.900 --> 00:46:21.260
I see some inefficiencies in your suggestion.

443
00:46:21.260 --> 00:46:23.660
And it seems like the current course of the system

444
00:46:23.660 --> 00:46:27.100
we have is more efficient, since the real part is only one.

445
00:46:27.100 --> 00:46:28.380
That's arguable, I suppose.

446
00:46:28.380 --> 00:46:32.380
Do you want to elaborate on that? Why do you think it's more efficient now?

447
00:46:32.380 --> 00:46:43.380
If there is one court system where a criminal would be brought, rather than possibly three.

448
00:46:43.380 --> 00:46:48.380
And in fact, I think there would be an economic incentive for a court that would favor your point of view.

449
00:46:48.380 --> 00:46:54.380
Oh yes, there would be judge shopping, I guess you'd call it, forum shopping.

450
00:46:54.380 --> 00:47:02.380
So economically it seems likely there would be two different outcomes with a possible

451
00:47:02.380 --> 00:47:06.620
third outcome. So to resolve any matter it would require disposition of three courts

452
00:47:06.620 --> 00:47:12.220
rather than one. Well, even now we have, you know, you go to the local court, then you

453
00:47:12.220 --> 00:47:15.620
go to the appellate court, then you go to this court, then you go to the Supreme Court.

454
00:47:15.620 --> 00:47:19.380
So you have that even now, so I don't see... You certainly see forum shopping when people

455
00:47:19.380 --> 00:47:30.820
Well there would be a legal integration of the private courts if they were what I call

456
00:47:30.820 --> 00:47:35.580
non-bandit courts, namely they would have all anticipated this and they would have had

457
00:47:35.580 --> 00:47:43.060
some person or persons like this friend of mine in electronics at Stanford who is seen

458
00:47:43.060 --> 00:47:48.180
as a real expert and very fair on this and people go to him and any two courts would

459
00:47:48.180 --> 00:48:18.180
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

460
00:48:18.180 --> 00:48:24.180
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.

461
00:48:24.180 --> 00:48:30.180
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.

462
00:48:30.180 --> 00:48:36.180
You see, we now get into the question of one world government. What's the optimal number of countries?

463
00:48:36.180 --> 00:48:42.180
Right now we have about 225 countries, give or take. I'm not sure it changes.

464
00:48:42.180 --> 00:48:44.180
Well, what's the optimal number of countries?

465
00:48:44.180 --> 00:48:53.180
Well, if we have a continuum here, at one end of the continuum is one country, one world government.

466
00:48:53.180 --> 00:48:56.180
The problem with that is, you know, you put all your eggs in one basket.

467
00:48:56.180 --> 00:48:59.180
And if the one world government is bad, there's no place to run.

468
00:48:59.180 --> 00:49:02.180
You can't go to the moon or, you know, at least not yet.

469
00:49:02.180 --> 00:49:03.180
We're working on that.

470
00:49:03.180 --> 00:49:06.180
We're working on it, but oh yeah, we do overlap on the space thing.

471
00:49:06.180 --> 00:49:16.180
I think I wrote an article and you dare to criticize me on space economics or space law, but that's a different issue.

472
00:49:16.180 --> 00:49:26.180
So one way to go if you're worrying about too much diffusion is to one world government, but you have a problem there.

473
00:49:26.180 --> 00:49:35.180
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.

474
00:49:35.180 --> 00:49:45.180
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.

475
00:49:45.180 --> 00:49:49.180
So I'm sort of leery of, let's have one centralized...

476
00:49:49.180 --> 00:49:55.180
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?

477
00:50:55.180 --> 00:51:25.180
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

478
00:51:25.180 --> 00:51:30.180
I'm not sure who my bag should go to, but I do believe it should go to someone else.

479
00:51:30.180 --> 00:51:34.180
Is it then not right to take it from her?

480
00:51:34.180 --> 00:51:37.180
Well, then you wouldn't have to take it from her. She'd give it to you.

481
00:51:37.180 --> 00:51:40.180
No, not necessarily. No, she may...

482
00:51:40.180 --> 00:51:42.180
Then I don't understand.

483
00:51:42.180 --> 00:51:45.180
No, she could agree to...

484
00:51:45.180 --> 00:51:53.140
I mean, because what that simple analogy is, it really looks to the reallocative process

485
00:51:53.140 --> 00:51:58.100
that the state would take on in the form of taxation or something like that.

486
00:51:58.100 --> 00:52:05.420
So if I agree to be taxed, is the tax then wrong with respect to me?

487
00:52:05.420 --> 00:52:08.700
Is it wrong only with respect to the people who might disagree?

488
00:52:08.700 --> 00:52:10.300
No, I agree with you.

489
00:52:10.300 --> 00:52:12.300
Now, I think I understand what you're saying better.

490
00:52:12.300 --> 00:52:26.300
The existence of anyone who would disagree to the taxation vitiates the tax with respect to all of us.

491
00:52:26.300 --> 00:52:32.300
If there's one person who says no, then it's wrong to reallocate with respect to everyone.

492
00:52:32.300 --> 00:52:37.300
If you have one no vote, I assume that's what you've got to argue,

493
00:52:37.300 --> 00:53:07.300
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

494
00:53:07.300 --> 00:53:29.300
I was going to come to that, because democracy is in and of itself very difficult, doesn't

495
00:53:29.300 --> 00:53:36.460
have a kind of normative, does not necessarily have a normative dimension to the edicts that

496
00:53:36.460 --> 00:53:43.820
flow out of it. A majoritarian government, to the extent it's arbitrary and capricious,

497
00:53:43.820 --> 00:53:47.180
it's just like any other tyrant relative to other people.

498
00:53:47.180 --> 00:53:48.900
In the name of the majority.

499
00:53:48.900 --> 00:53:56.780
Right. And so the only way for a democratic government to acquire a kind of normativity

500
00:53:56.780 --> 00:54:03.380
is to buttress it with other principles, such as minority rights, the rule of law, a requirement

501
00:54:03.380 --> 00:54:10.380
of Consistency, courts, whatever, right? And that's why most of us are not Democrats.

502
00:54:10.380 --> 00:54:17.060
So if I sleep with a thousand people, and 900, have sex with them, I'll be clear here,

503
00:54:17.060 --> 00:54:24.860
and 999 of them consent, but one doesn't, I'm still a rapist, right? So if I take the

504
00:54:24.860 --> 00:54:30.620
property of 999 volunteers, and one person doesn't volunteer, and I take their property,

505
00:54:30.620 --> 00:54:32.140
I'm still a robber, right?

506
00:54:32.140 --> 00:54:33.740
But you gotta have taxes to maintain

507
00:54:33.740 --> 00:54:35.420
some kind of system of order.

508
00:54:35.420 --> 00:54:38.220
I mean, Justice Holmes, I think, said taxes

509
00:54:38.220 --> 00:54:41.100
is the price you pay for civilization,

510
00:54:41.100 --> 00:54:43.140
although we've now taxed way above that, right?

511
00:54:43.140 --> 00:54:44.460
Now we have taxes.

512
00:54:44.460 --> 00:54:46.140
Well, I've been civilization going down,

513
00:54:46.140 --> 00:54:47.940
but I was just wondering.

514
00:54:47.940 --> 00:54:50.180
Taxes is what you pay for barbarism.

515
00:54:50.180 --> 00:54:51.820
Look, look, to me...

516
00:54:51.820 --> 00:54:53.900
Can I respond to Glenn's comment?

517
00:54:53.900 --> 00:54:56.860
You know, to the extent, I mean, let's talk about stealing

518
00:54:56.860 --> 00:54:58.460
rather than rape, because, you know, women

519
00:54:58.460 --> 00:55:04.460
And don't really get comfortable on that topic, too, either, out of the way, OK?

520
00:55:04.460 --> 00:55:14.620
I mean, to the extent that you steal, to the extent that you've stolen from one person,

521
00:55:14.620 --> 00:55:23.180
it's problematic unless we have some way in which to allow that person to opt out, right?

522
00:55:23.180 --> 00:55:24.900
Which is what we do with minority rights.

523
00:55:24.900 --> 00:55:27.740
We don't do it with taxes, though.

524
00:55:27.740 --> 00:55:29.620
We don't do it with taxes.

525
00:55:29.620 --> 00:55:30.620
Nobody opts out.

526
00:55:30.620 --> 00:55:39.620
No, we don't do it with taxes, but the taxation question usually implicates other forms, other

527
00:55:39.620 --> 00:55:40.620
things.

528
00:55:40.620 --> 00:55:47.740
I mean, you are also assuming that property rights are prior to the political process.

529
00:55:47.740 --> 00:55:48.740
Absolutely.

530
00:55:48.740 --> 00:55:49.740
Absolutely.

531
00:55:49.740 --> 00:55:55.740
I just, the idea, conceiving a property independent of the legal regime is, unless you've got

532
00:55:55.740 --> 00:55:59.340
So, unless you're talking my toothbrush, you got a problem.

533
00:55:59.340 --> 00:56:03.900
Look, let's take the beginning of the United States.

534
00:56:03.900 --> 00:56:08.380
The U.S. started in 1789, 179, I forget when, I'm not at the start.

535
00:56:08.380 --> 00:56:10.900
It's all what you mean by start.

536
00:56:10.900 --> 00:56:11.860
Began?

537
00:56:11.860 --> 00:56:14.460
I mean, at one time...

538
00:56:14.460 --> 00:56:16.060
Well, I mean, there were states and...

539
00:56:16.060 --> 00:56:20.020
No, no, no, at one time, at one time there were colonies of Britain,

540
00:56:20.020 --> 00:56:23.580
and then all of a sudden there was this war, the War of Secession,

541
00:56:23.580 --> 00:56:25.420
and now there was the United States.

542
00:56:25.420 --> 00:56:28.180
Okay, and the United States had 13 colonies.

543
00:56:28.180 --> 00:56:30.780
And there's this guy out in Ohio somewhere.

544
00:56:30.780 --> 00:56:32.980
And this is maybe five years later.

545
00:56:32.980 --> 00:56:37.020
And the revenue taxman comes out to this guy in Ohio

546
00:56:37.020 --> 00:56:38.460
and says, hey, guess what?

547
00:56:38.460 --> 00:56:40.860
We just set up this new club.

548
00:56:40.860 --> 00:56:42.300
It's a voluntary club.

549
00:56:42.300 --> 00:56:45.140
See, look, I'm in favor of democracy in the chess club.

550
00:56:45.140 --> 00:56:48.260
If the chess club votes for Thursday night games,

551
00:56:48.260 --> 00:56:50.980
you don't like it tough because by joining the chess club,

552
00:56:50.980 --> 00:56:53.360
you've agreed to be banned by the majority.

553
00:56:53.360 --> 00:57:10.360
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.

554
00:57:10.360 --> 00:57:17.360
Okay, so some guy comes out to Ohio or Western Pennsylvania, which is not part of the US, but it soon will be,

555
00:57:17.360 --> 00:57:22.360
and he says, you know, we just started this club, the United States Club, and this guy in Ohio says,

556
00:57:22.360 --> 00:57:28.360
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.

557
00:57:28.360 --> 00:57:31.360
And the guy says, you don't understand, you're part of it.

558
00:57:31.360 --> 00:57:35.360
He says, what, me, part of it? I didn't agree to join it.

559
00:57:35.360 --> 00:57:41.160
I've been here for a hundred years, my grandfather homesteaded this land and then my father and

560
00:57:41.160 --> 00:57:45.560
now I'm in charge of this little bit of hundred acres or whatever it is and you're telling

561
00:57:45.560 --> 00:57:51.160
me I have to join whether I like to or not? Look, even in the thirteen colonies, there

562
00:57:51.160 --> 00:57:57.200
was a vote, I think the first nine, I think they said when there were nine colonies that

563
00:57:57.200 --> 00:58:02.560
agreed they would then constitute the U.S. but four colonies didn't agree and in each

564
00:58:02.560 --> 00:58:32.560
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.

565
00:58:32.560 --> 00:58:41.060
As a free enterpriser? Bastard. I didn't say it. I love Big Brother. What he's giving us

566
00:58:41.060 --> 00:58:45.800
is this crap about conceptual unanimity. In other words, he knows there's never any unanimity

567
00:58:45.800 --> 00:58:50.560
like there was in the chess club, like there was in the purchase of the orange shirt. Unanimity

568
00:58:50.560 --> 00:58:54.840
is absolutely required if you then want to go and say, well, then people have to be bound

569
00:58:54.840 --> 00:58:59.480
by the majority. Because if you don't have unanimity, then you get this one person who

570
00:58:59.480 --> 00:59:24.880
A slightly different subject. I just wanted to say, I think your use of the term proximate

571
00:59:24.880 --> 00:59:32.880
I haven't visited this terrain since I was in law school, but I think it's somewhat different than, I think, law students.

572
00:59:32.880 --> 00:59:38.880
I think we use proximate cause in a slightly different way.

573
00:59:38.880 --> 00:59:44.880
And in fact, the nearer you are, the proximate cause isn't about...

574
00:59:44.880 --> 00:59:50.880
I haven't done this since I was in law school. My intuition is that that's not...

575
00:59:50.880 --> 00:59:54.880
The person who pulls the trigger would be the proximate cause of the death.

576
00:59:54.880 --> 01:00:01.880
What proximate cause tries to take account of is intervening voluntary agents.

577
01:00:01.880 --> 01:00:09.880
If I shoved Dawn into Iris, and now Iris gets a concussion, and Dawn is just an innocent person just sitting there,

578
01:00:09.880 --> 01:00:15.880
but I shoved him, and then he hit her head, and he's the proximate cause.

579
01:00:15.880 --> 01:00:27.880
We're just using words differently, but I don't think there's any substantive disagreement.

580
01:00:27.880 --> 01:00:30.880
No one would hold Don responsible. Everyone would hold me responsible.

581
01:00:30.880 --> 01:00:31.880
Depends on what Don was doing.

582
01:00:31.880 --> 01:00:39.880
He was just sitting there. He's got his hands like this. He's a good guy.

583
01:00:39.880 --> 01:00:42.880
If I knew that you were coming and I didn't...

584
01:00:42.880 --> 01:00:44.880
Well, that's complexity now.

585
01:00:44.880 --> 01:00:46.880
No, it's your responsibility.

586
01:00:46.880 --> 01:00:50.880
If you're just sitting there innocently and I shove you, you're not a bad guy.

587
01:00:50.880 --> 01:00:52.880
So you're right. I'm the weapon that you're using.

588
01:00:52.880 --> 01:00:54.880
Right. It's as if I tossed you at her.

589
01:00:54.880 --> 01:01:00.880
But if I could also just look at the analogy between the restaurant and the highways.

590
01:01:00.880 --> 01:01:09.880
In the case of the highways, in the case of alcohol, right, driver error, whatever, I have intervening voluntary agents.

591
01:01:09.880 --> 01:01:16.780
In the case of the restaurant with the lousy food, the poor service and whatever, the only

592
01:01:16.780 --> 01:01:21.220
voluntary agent that I see in that list of things, unless you want to blame, say, the

593
01:01:21.220 --> 01:01:28.180
dirty dishes on the kitchen staff, who are derelict, is, I mean, there is no intervening

594
01:01:28.180 --> 01:01:29.180
voluntary agent.

595
01:01:29.180 --> 01:01:30.180
Except the manager.

596
01:01:30.180 --> 01:01:35.540
Yeah, the only cause, there is no question of proximate cause, it is the manager who

597
01:01:35.540 --> 01:01:41.460
who is the cause of the problem, whereas in the case of the highways, I think from the

598
01:01:41.460 --> 01:01:48.860
perspective of the law, we would have to take into account the voluntary nature of the actions

599
01:01:48.860 --> 01:01:54.220
that are intervening between the government and the people, the drunk driver, for example,

600
01:01:54.220 --> 01:01:56.020
who chose to get on the road drunk.

601
01:01:56.020 --> 01:02:02.940
The law would view this differently than the question of lousy food or poor service.

602
01:02:02.940 --> 01:02:08.860
You could put alcohol here, too, because there are some restaurants or bars that don't have

603
01:02:08.860 --> 01:02:14.980
a bouncer and the people get obstreperous and then other people don't want to come in.

604
01:02:14.980 --> 01:02:16.540
That introduces a voluntary nature.

605
01:02:16.540 --> 01:02:17.540
Right.

606
01:02:17.540 --> 01:02:21.300
What I'm saying is that, you see, I think the way I interpret what Iris is saying is

607
01:02:21.300 --> 01:02:23.300
that my analogy is not good.

608
01:02:23.300 --> 01:02:24.300
Right.

609
01:02:24.300 --> 01:02:25.300
That's one of the...

610
01:02:25.300 --> 01:02:27.780
But then I wanted to ask you...

611
01:02:27.780 --> 01:02:28.780
Let me just...

612
01:02:28.780 --> 01:02:29.780
All right.

613
01:02:29.780 --> 01:02:30.780
Recline to that.

614
01:02:30.780 --> 01:02:31.780
I think the analogy is pretty good.

615
01:02:31.780 --> 01:03:01.780
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,

616
01:03:01.780 --> 01:03:03.980
Other people wouldn't want to come here.

617
01:03:03.980 --> 01:03:08.540
And then I would say, well, unless they're into Sado

618
01:03:08.540 --> 01:03:10.700
masochism, I don't know, they wouldn't like it.

619
01:03:10.700 --> 01:03:13.700
We'd attract different law students.

620
01:03:13.700 --> 01:03:14.940
Different clientele.

621
01:03:14.940 --> 01:03:17.940
But the point is that I accepted this analogy.

622
01:03:17.940 --> 01:03:19.180
Iris is making a good point.

623
01:03:19.180 --> 01:03:20.700
There is some sort of a disanalogy,

624
01:03:20.700 --> 01:03:27.180
because here it's generated from customers, here it's not.

625
01:03:27.180 --> 01:03:30.500
But it could be, as in the case of alcohol.

626
01:03:30.500 --> 01:04:00.500
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

627
01:04:00.500 --> 01:04:07.380
I drive from here to Atlanta. I do have to keep an eye on what the speed limit is because it changes.

628
01:04:08.420 --> 01:04:16.180
Sometimes it's 75, sometimes it's 70. And when there's a work zone, it says 55.

629
01:04:17.380 --> 01:04:21.780
So you're suggesting that's all arbitrary. I mean, we went through something, 55 saves life.

630
01:04:21.780 --> 01:04:27.300
So there must be some way in which we are managing within the current regime to accumulate

631
01:04:27.300 --> 01:04:57.300
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

632
01:04:57.300 --> 01:05:00.980
Weeding Out System for Ineffective Experts.

633
01:05:00.980 --> 01:05:05.400
I mean, there are experts all over, but what the beauty of the market is, is when they

634
01:05:05.400 --> 01:05:08.080
look, FEMA has probably got a lot of experts.

635
01:05:08.080 --> 01:05:12.900
The Army Corps of Engineers that built those, what do you call them, the levies, they say

636
01:05:12.900 --> 01:05:20.820
now make levies not war, another joke, they're experts, those guys, the Army Corps of Engineers,

637
01:05:20.820 --> 01:05:25.560
I'm sure they graduated from good engineering schools, but what is lacking is that there's

638
01:05:25.560 --> 01:05:29.560
There's no fail-safe mechanism. If they screw up, they don't go broke. You give them more money.

639
01:05:29.560 --> 01:05:33.560
And that's not a recipe for success.

640
01:05:33.560 --> 01:05:37.560
Should we open it up for questions from the audience?

641
01:05:37.560 --> 01:05:41.560
The gentleman in the very back can just hang up for a while.

642
01:05:41.560 --> 01:05:45.560
It sounds like you're playing with a road.

643
01:05:45.560 --> 01:05:49.560
Could you stand up, please? I can't hear you too well.

644
01:05:49.560 --> 01:05:53.560
It sounds like you're playing with a road based pretty heavily on modern and even future technology.

645
01:05:53.560 --> 01:05:59.560
Technology, but you've also talked about, you know, the moral concerns and taxes and all that.

646
01:05:59.560 --> 01:06:10.560
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?

647
01:06:10.560 --> 01:06:14.560
It wouldn't be completely impractical. Liberty is timeless.

648
01:06:14.560 --> 01:06:22.280
Look, when the first wheels came out in the US in 1776 or whatever it was, they had a

649
01:06:22.280 --> 01:06:23.280
beautiful system.

650
01:06:23.280 --> 01:06:29.280
What they did is they would charge wagons based on how many axles you had, how heavy

651
01:06:29.280 --> 01:06:30.960
the load was, how many horses you had.

652
01:06:30.960 --> 01:06:33.680
They even charged on the width of the wheel.

653
01:06:33.680 --> 01:06:37.960
If the wheel was very thin, think ice skates, they would charge more because you'd rip up

654
01:06:37.960 --> 01:06:41.080
the road because they didn't have macadam roads then.

655
01:06:41.080 --> 01:06:42.080
You had dirt roads.

656
01:06:42.080 --> 01:06:47.080
Whereas if the wheel was wide, think steam shovel, they would charge you less.

657
01:06:47.080 --> 01:06:54.080
Look, the way they did it in Hong Kong, no, not Hong Kong, Singapore, is they did it like this.

658
01:06:54.080 --> 01:06:59.080
Here is a map of Singapore.

659
01:06:59.080 --> 01:07:04.080
What they do is they make these concentric circles, sort of like bullseyes,

660
01:07:04.080 --> 01:07:11.080
and they give a different color for each one, like here's the black area, here's the green area,

661
01:07:11.080 --> 01:07:41.080
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

662
01:07:41.080 --> 01:07:46.080
In the 18th century, it could have occurred in the 1950s, and it certainly can occur now.

663
01:07:46.080 --> 01:07:49.080
You don't need technology to be free.

664
01:07:53.080 --> 01:08:00.080
What kinds of rights do people have in an anarcho-capitalist distinction?

665
01:08:00.080 --> 01:08:10.080
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,

666
01:08:10.080 --> 01:08:36.440
One of the things I've written about, the way I understand the question is how limited

667
01:08:36.440 --> 01:08:42.160
Supposed there's a guy driving on the highway and I own the highway and I think he's going

668
01:08:42.160 --> 01:08:46.160
a little too fast and I just shoot him in the back of the head. Would this be legitimate

669
01:08:46.160 --> 01:08:50.720
or does he have certain rights? Well the way to answer the question of what rights the

670
01:08:50.720 --> 01:08:54.140
people have, they have negative rights, not positive rights. They have the right to be

671
01:08:54.140 --> 01:08:59.640
free of punching and shooting and stuff like that. They don't have a right to food, clothing

672
01:08:59.640 --> 01:09:04.680
and shelter because that means you have to steal it from other people. Now, the specific

673
01:09:04.680 --> 01:09:10.200
Another question that you ask, I sometimes write about this thing called murder park.

674
01:09:10.200 --> 01:09:15.720
What does murder park consist of? Murder park consists of they give you a gun and six bullets

675
01:09:15.720 --> 01:09:21.720
and you have to wait until the whistle blows and then everyone can shoot anyone else. And

676
01:09:21.720 --> 01:09:25.720
then every 50 minutes another whistle blows and everybody has to stop and you caught out

677
01:09:25.720 --> 01:09:29.520
the dead bodies and you give everyone more bullets and you go at it again. Would this

678
01:09:29.520 --> 01:09:34.520
Can this be legal in a libertarian society? Sure. Provided everyone knew what's going on.

679
01:09:34.520 --> 01:09:39.520
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.

680
01:09:39.520 --> 01:09:44.520
No. You have to, there are implicit contracts.

681
01:09:44.520 --> 01:09:49.520
And who's going to enforce them?

682
01:09:49.520 --> 01:09:55.520
There's the murdered family and the other family. And they have to get two arbitration courts together?

683
01:09:55.520 --> 01:10:06.520
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...

684
01:10:06.520 --> 01:10:07.520
I know this joke.

685
01:10:07.520 --> 01:10:09.520
The can-open a joke?

686
01:10:09.520 --> 01:10:10.520
Yes.

687
01:10:10.520 --> 01:10:12.520
Right. Do you want to tell it or shall I?

688
01:10:12.520 --> 01:10:15.520
It's a joke told by other social scientists about economists.

689
01:10:15.520 --> 01:10:19.520
Oh, tell me. We're proud of it.

690
01:10:19.520 --> 01:10:21.520
Does this assume the can-open?

691
01:10:21.520 --> 01:10:33.520
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.

692
01:10:33.520 --> 01:10:42.520
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.

693
01:10:42.520 --> 01:10:48.520
The chemist says, well, but if we heat it up, then it'll open up and we'll have hot food.

694
01:10:48.520 --> 01:10:51.520
And then they turn to the economist and says, assume a can opener.

695
01:10:51.520 --> 01:11:01.520
The reason you have to assume a can opener is that we do not have controlled experiments at our beck and call.

696
01:11:01.520 --> 01:11:06.520
If you're a chemist, you take a chemical thing and you divide it into two and you do certain things to this one,

697
01:11:06.520 --> 01:11:11.520
you don't do it to that, and then you infer that the differences are due to the different things that you did

698
01:11:11.520 --> 01:11:41.520
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.

699
01:11:41.520 --> 01:11:50.520
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.

700
01:11:50.520 --> 01:11:55.520
Well, when I'm answering this question, I have to assume this one is solved, otherwise I can't do justice to that one.

701
01:11:55.520 --> 01:12:01.520
So I'm now assuming a can-oper. I'm assuming I have law and order the good way, whatever the good way is.

702
01:12:01.520 --> 01:12:06.520
And now how will it deal with my private road? Well, it's the same thing in my private movie.

703
01:12:06.520 --> 01:12:14.520
I have a movie and you're being obstreperous and you're, you know, interfering with the show and I shoot you.

704
01:12:14.520 --> 01:12:18.520
Well, is that legitimate? Yes, if everyone knows that that's the rules.

705
01:12:18.520 --> 01:12:21.520
You come to my movie, we better behave.

706
01:12:21.520 --> 01:12:27.520
That would be like Murder Park for consenting adults, children different.

707
01:12:27.520 --> 01:12:31.520
Look, children are a problem in law and children are a problem, period.

708
01:12:31.520 --> 01:12:35.520
When you have children, oh, you don't understand, children are unique.

709
01:12:35.520 --> 01:12:40.520
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.

710
01:12:40.520 --> 01:12:41.520
Absolutely.

711
01:12:41.520 --> 01:12:43.520
Unless they're murder-park types.

712
01:12:43.520 --> 01:12:45.520
Look, there are people that do drag races.

713
01:12:45.520 --> 01:12:49.520
One of the things, maybe a private road would allow drag races.

714
01:12:49.520 --> 01:12:55.520
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.

715
01:12:55.520 --> 01:12:57.520
So you could have drag races.

716
01:12:57.520 --> 01:12:59.520
And now suppose there's a head-on and they both die.

717
01:12:59.520 --> 01:13:00.520
Should they be able to assume?

718
01:13:00.520 --> 01:13:01.520
How?

719
01:13:01.520 --> 01:13:06.280
Because they've agreed to be bound by the rules of chicken racing or whatever it is.

720
01:13:06.280 --> 01:13:09.560
So no, you couldn't have that unless it was with prior agreement.

721
01:13:09.560 --> 01:13:11.800
Prior agreement is crucial.

722
01:13:11.800 --> 01:13:19.240
Could I ask you the principled reason for which a libertarian cannot shoot someone coming

723
01:13:19.240 --> 01:13:22.960
onto his or her private property?

724
01:13:22.960 --> 01:13:27.080
Well, if there's a trespass...

725
01:13:27.080 --> 01:13:31.440
I mean I understand why you're saying, I mean Glenn's saying nobody would do it, if nobody

726
01:13:31.440 --> 01:13:38.280
would patronize the road if the person believed that he or she were going to be shot, okay.

727
01:13:38.280 --> 01:13:44.080
But out of that, what is the principled reason for which someone, that the person can't be

728
01:13:44.080 --> 01:13:50.360
shot, setting aside the fact that there would be a disincentive to put oneself in that predicament?

729
01:13:50.360 --> 01:13:56.360
Well, the way I see the principled reason for not having murder is theft of property,

730
01:13:56.360 --> 01:14:03.360
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.

731
01:14:03.360 --> 01:14:05.360
So I can sell myself into slavery?

732
01:14:05.360 --> 01:14:09.360
Absolutely, you can sell yourself into slavery. If you own yourself, you can sell yourself into slavery.

733
01:14:09.360 --> 01:14:16.360
Look, suppose my son has this horrible disease, and it costs five million to cure it, and I don't have the five million.

734
01:14:16.360 --> 01:14:21.360
And Don has long wanted me to be his slave, and he could order me around.

735
01:14:21.360 --> 01:14:25.200
and I say, Dawn, I'll be your slave, give me the five million, I'll give it to my son's doctors,

736
01:14:25.200 --> 01:14:31.920
I value his life more than my freedom, he values my slaver-tude or servitude more than the five million,

737
01:14:31.920 --> 01:14:37.440
sure, voluntary slavery, now I'm sure that somebody is going to interpret, Block comes out in favor of

738
01:14:37.440 --> 01:14:42.800
slavery of black people or something like that, I didn't say that, I didn't say that, I'm against

739
01:14:42.800 --> 01:14:48.320
coercive slavery, I'm just in favor of voluntary slavery, I'm against coercive murder, but I'm not

740
01:14:48.320 --> 01:14:56.320
are not against sadomasochism where they really get at it and they kill each other, as long as it's consenting adults.

741
01:14:56.320 --> 01:15:04.320
I'm going to use the example of trying to limit debts on the vote.

742
01:15:04.320 --> 01:15:06.320
Well, what about privatizing?

743
01:15:06.320 --> 01:15:11.320
Like you say, let's say you have to pass nine different private rates to get to work.

744
01:15:11.320 --> 01:15:14.320
And you have to pay.

745
01:15:14.320 --> 01:15:16.320
Well, you get home from work.

746
01:15:16.320 --> 01:15:18.320
Oh, you know, I forgot my briefcase.

747
01:15:18.320 --> 01:15:19.320
You got to go back.

748
01:15:19.320 --> 01:15:20.320
Well, I don't want that on my bill.

749
01:15:20.320 --> 01:15:23.320
You know, I don't want to go back and just spend that, depending on how much it is.

750
01:15:23.320 --> 01:15:50.320
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.

751
01:15:50.320 --> 01:16:00.320
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.

752
01:16:00.320 --> 01:16:06.320
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.

753
01:16:06.320 --> 01:16:12.320
Well, you know, suppose I break my watch. Breaking a watch is similar to forgetting your briefcase.

754
01:16:12.320 --> 01:16:19.320
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.

755
01:16:19.320 --> 01:16:33.320
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...

756
01:16:40.320 --> 01:16:45.320
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?

757
01:16:45.320 --> 01:17:15.320
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,

758
01:17:15.320 --> 01:17:23.320
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.

759
01:17:23.320 --> 01:17:30.320
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.

760
01:17:30.320 --> 01:17:34.320
The guy's going to say, huh? You weird?

761
01:17:34.320 --> 01:17:42.320
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.

762
01:17:42.320 --> 01:17:52.880
Well, what you're really now getting into is what is libertarian punishment theory.

763
01:17:52.880 --> 01:17:58.200
And this is very divisive and debating, but my views are very, very draconian.

764
01:17:58.200 --> 01:18:04.120
In my view, if I steal his code, it's two teeth for a tooth, plus a cross of capture,

765
01:18:04.120 --> 01:18:05.120
plus scaring.

766
01:18:05.120 --> 01:18:06.120
So here it is.

767
01:18:06.120 --> 01:18:08.160
I steal Glenn's code.

768
01:18:08.160 --> 01:18:38.160
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.

769
01:18:38.160 --> 01:18:51.160
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.

770
01:18:51.160 --> 01:19:04.160
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.

771
01:19:04.160 --> 01:19:34.160
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?

772
01:19:34.160 --> 01:19:41.160
Somebody come up to me and go, boo? No. In the libertarian circles, we play Russian roulette.

773
01:19:41.160 --> 01:19:45.160
I play Russian roulette. So you can't have the death penalty for stealing a coat.

774
01:19:45.160 --> 01:19:51.160
But the number of bullets and the number of chambers in the gun are proportional to how bad the scaring was.

775
01:19:51.160 --> 01:19:57.160
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.

776
01:19:57.160 --> 01:20:01.160
If he was not in the house, better than if he was in the house.

777
01:20:01.160 --> 01:20:03.160
The Theory of Money and Credit

778
01:20:31.160 --> 01:20:35.840
and a few other things. We wouldn't have so many government-created crimes. You know,

779
01:20:35.840 --> 01:20:39.560
when they prohibit drugs, they drive the price of it very high, and then people start shooting

780
01:20:39.560 --> 01:20:43.680
each other over, shooting innocent people. And then in order to pay for the drugs, you

781
01:20:43.680 --> 01:20:48.760
have to start stealing TV sets and cars. So if the government wouldn't create crime in

782
01:20:48.760 --> 01:20:51.720
the first place, we'd have a lot less of it.

783
01:20:51.720 --> 01:20:56.200
What do you do if you kill Glenn, it sounds like? I mean, presumably you've got to ratchet

784
01:20:56.200 --> 01:21:00.360
up from where you are. You sound like you're pretty already pretty high up on that.

785
01:21:00.360 --> 01:21:06.360
If I kill Glenn, they can do whatever they want with me. They can kill me. And they can

786
01:21:06.360 --> 01:21:11.360
make their money by having a public execution and charging entry fees, you know, visiting

787
01:21:11.360 --> 01:21:17.480
visual fees. They can't torture me unless I tortured him, because that would be more.

788
01:21:17.480 --> 01:21:22.920
But they could kill me. So the death penalty certainly is justified. There's this guy who

789
01:21:22.920 --> 01:21:27.400
I went to school with at Columbia, Isaac Ehrlich, who did a lot of studies on death penalty

790
01:21:27.400 --> 01:21:31.440
and the Efficacy of the Death Penalty.

791
01:21:31.440 --> 01:21:34.440
See, the usual view is what they do, these cretins,

792
01:21:34.440 --> 01:21:38.640
is they do an econometric analysis of death penalty states

793
01:21:38.640 --> 01:21:40.360
and non-death penalty states,

794
01:21:40.360 --> 01:21:41.640
and they don't find much difference,

795
01:21:41.640 --> 01:21:44.200
so they say, well, death penalty doesn't mean much.

796
01:21:44.200 --> 01:21:45.880
What Isaac Ehrlich did, he said,

797
01:21:45.880 --> 01:21:48.080
I'm not care about death penalty and non-death penalty,

798
01:21:48.080 --> 01:21:51.840
I'm gonna take execution states and non-execution states.

799
01:21:51.840 --> 01:21:54.240
Because if you have a death penalty state like California

800
01:21:54.240 --> 01:21:57.240
and they never execute anyone, you know, big deal.

801
01:21:57.240 --> 01:22:00.240
And what he did is he took execution states versus non-execution states

802
01:22:00.240 --> 01:22:03.240
and now he got a big statistically significant difference.

803
01:22:03.240 --> 01:22:07.240
So the death penalty is a very, very serious business.

804
01:22:07.240 --> 01:22:09.240
Otherwise all those people in death row, why don't they just say,

805
01:22:09.240 --> 01:22:11.240
oh yeah, kill me, I don't care.

806
01:22:11.240 --> 01:22:15.240
No, they try to stave it off, people want to live, most people.

807
01:22:15.240 --> 01:22:31.240
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?

808
01:22:31.240 --> 01:22:38.240
The question is if the libertarian system is implemented tomorrow, what changes?

809
01:22:38.240 --> 01:22:42.240
Yes, the federal government goes, but what about state and city and local and county governments?

810
01:22:42.240 --> 01:22:51.240
All governments go, they're not voluntary institutions, they're coercive institutions, and they are replaced by market institutions.

811
01:22:51.240 --> 01:22:57.240
You don't need government to have libraries and museums and schools.

812
01:22:57.240 --> 01:23:06.240
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.

813
01:23:06.240 --> 01:23:10.760
Now again, if everyone's agreed to be bound by this, like in a condominium association,

814
01:23:10.760 --> 01:23:14.960
I used to be part of a condominium association, and they were very weird.

815
01:23:14.960 --> 01:23:18.560
You couldn't have different colored drapes than other people.

816
01:23:18.560 --> 01:23:20.720
All the houses had to be painted the same.

817
01:23:20.720 --> 01:23:25.880
You had to have a certain kind of fence, picket fence, and nobody could have a different fence.

818
01:23:25.880 --> 01:23:27.880
But we had all agreed.

819
01:23:27.880 --> 01:23:31.040
So they could be as picky as they wanted.

820
01:23:31.040 --> 01:23:34.800
They could say, in order to be in this condo association, you have to wear a beanie with

821
01:23:34.800 --> 01:23:38.800
Do you have a propeller on top, or do you have to push a peanut with your nose?

822
01:23:38.800 --> 01:23:42.800
Well, if people agree to it, well then they have to do that.

823
01:23:46.800 --> 01:23:48.800
Do you have two arguments? One is the moral case...

824
01:23:48.800 --> 01:23:51.800
I can't hear you. Could you stand up or speak louder?

825
01:23:51.800 --> 01:23:57.800
You presented two arguments, the moral case and the economic case, and we're going to hear which is more important.

826
01:23:57.800 --> 01:24:03.800
And I understand that you fused the two, meaning that if you maximize and you agree, that gets the most efficient results.

827
01:24:03.800 --> 01:24:23.800
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?

828
01:24:23.800 --> 01:24:35.800
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?

829
01:24:35.800 --> 01:24:46.800
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.

830
01:24:46.800 --> 01:25:04.800
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.

831
01:25:04.800 --> 01:25:11.800
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?

832
01:25:11.800 --> 01:25:21.800
This student is a vicious student asking vicious questions. I therefore assume he's a Dawn student because Dawn asks vicious questions too.

833
01:25:21.800 --> 01:25:22.800
How about that?

834
01:25:22.800 --> 01:25:26.800
No, he's not. I think he is. I don't care whether he is or not. Assume he is.

835
01:25:26.800 --> 01:25:29.800
Along with the cat opener.

836
01:25:29.800 --> 01:25:36.800
Look, you've got something that works. You work with it. There are two questions here, both a little complicated.

837
01:25:36.800 --> 01:25:44.800
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.

838
01:25:44.800 --> 01:25:49.800
Suppose you can save millions of lives, namely utilitarian, but you have to violate someone's right.

839
01:25:49.800 --> 01:25:56.800
There was this wonderful case in, what was that thing with vital bodily fluids? What was that movie?

840
01:25:56.800 --> 01:25:57.800
Doctor Strange Love.

841
01:25:57.800 --> 01:26:04.800
Doctor Strange Love. Remember when they shot the Coca-Cola machine in order to save the world?

842
01:26:04.800 --> 01:26:13.800
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.

843
01:26:13.800 --> 01:26:18.800
And some guy would say, but that's private property. You can't shoot that.

844
01:26:18.800 --> 01:26:30.800
A more rigorous case is, suppose the Martians send down a message that unless you shoot a call, we blow up the whole world.

845
01:26:30.800 --> 01:26:43.800
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.

846
01:26:43.800 --> 01:26:58.800
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.

847
01:26:58.800 --> 01:27:05.800
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.

848
01:27:05.800 --> 01:27:08.800
And according to the Talmud, you can't do that.

849
01:27:08.800 --> 01:27:15.800
My view is similar to that. The way I see it is, here's what should happen and what would happen.

850
01:27:15.800 --> 01:27:25.800
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.

851
01:27:25.800 --> 01:27:32.800
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?

852
01:27:32.800 --> 01:27:37.800
Here's the way I see it. Some hero is going to go over to call and shoot him.

853
01:27:37.800 --> 01:27:46.800
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.

854
01:27:46.800 --> 01:27:54.800
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.

855
01:27:54.800 --> 01:28:02.800
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?

856
01:28:02.800 --> 01:28:06.800
In other words, there's some sort of connection between liberty and utilitarianism.

857
01:28:06.800 --> 01:28:10.800
The question is whether you should, as you personally read it.

858
01:28:10.800 --> 01:28:19.800
You should not. Death though the heavens fall? No, justice though the heavens fall. I'm a deontological libertarian.

859
01:28:19.800 --> 01:28:27.800
I don't believe in these cases. They're interesting theoretical cases to probe where you're sitting.

860
01:28:27.800 --> 01:28:33.800
And where I'm sitting is with deontology. I'm not a utilitarian. If that's the way the world is, then F it.

861
01:28:33.800 --> 01:28:40.800
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,

862
01:28:40.800 --> 01:28:45.800
they made it in such a way, you know, sometimes I'm both a libertarian and a utilitarian,

863
01:28:45.800 --> 01:28:49.160
And when I come up with a problem in the one area and I can't solve it, I go to the other

864
01:28:49.160 --> 01:28:53.040
one and look, well, what's the answer coming from there? And I say, aha, now I know the

865
01:28:53.040 --> 01:29:00.120
right answer. A little fudging. Because the two are so integrated. There are no real life

866
01:29:00.120 --> 01:29:06.200
examples. There are only these weird Martian examples or the example you're giving. Kill

867
01:29:06.200 --> 01:29:13.220
one person now to save 999 later or whatever it is. It's the same thing. Could a libertarian

868
01:29:13.220 --> 01:29:21.260
and be in a Nazi concentration camp, a Schindler type. Right? Are you following me? Schindler?

869
01:29:21.260 --> 01:29:26.060
And what you do in the Nazi concentration camp is you kill people, but you kill fewer

870
01:29:26.060 --> 01:29:30.420
of them. Instead of killing 100 people, you kill 50 of them and you save the other 50.

871
01:29:30.420 --> 01:29:35.340
Whereas any other guy would have to kill them all. And you have to kill 50, otherwise they'll

872
01:29:35.340 --> 01:29:40.300
find out that you're a non-Nazi, you're a libertarian behind enemy lines. Well, should

873
01:29:40.300 --> 01:29:57.300
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.

874
01:29:57.300 --> 01:30:07.300
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.

875
01:30:07.300 --> 01:30:12.300
Now the second question is Nozick. What is my view on the Nozickian view? Well, Nozick

876
01:30:12.300 --> 01:30:19.100
is a monarchist. And what Nozick was saying is that you could have an invisible hand process.

877
01:30:19.100 --> 01:30:23.800
You know what an invisible hand process is. Through no violation of rights, you go from

878
01:30:23.800 --> 01:30:32.420
an anarchy into a government. Because you have a, what is it, a big defense agency,

879
01:30:32.420 --> 01:30:36.560
and the big defense agency questions the little defense agency's techniques because they use

880
01:30:36.560 --> 01:30:43.560
I think the Nozick has been viciously attacked in the first issue of the Journal of libertarian studies.

881
01:30:43.560 --> 01:30:48.560
If you're interested in that, email me. I'll give you anti-Nozick propaganda.

882
01:30:48.560 --> 01:30:53.560
I mean, Nozick is a pinko compared to the one true faith.

883
01:30:53.560 --> 01:30:57.560
Compared to everyone else, he's a free enterprise, I admit that, and so is Milton Friedman.

884
01:30:57.560 --> 01:30:59.560
But we're out here in extremesville.

885
01:30:59.560 --> 01:31:04.560
And I think that's the kind of thing that people are going to be talking about.

886
01:31:04.560 --> 01:31:09.280
and Freedom, but we're out here in Extremesville. They don't call me Walter Extremist Block

887
01:31:09.280 --> 01:31:17.040
for nothing. Suppose that the small defense agency had the right way of evidence and the

888
01:31:17.040 --> 01:31:22.960
big one had the tea leaves. You can't justify violating rights period and Nozick did that.

889
01:31:22.960 --> 01:31:41.040
Could I just ask, you talk about an heir, a person's heirs, acquiring, sort of being

890
01:31:41.040 --> 01:31:49.320
successors in interest. What is the connection between a person and his or her heirs? What's

891
01:31:49.320 --> 01:31:55.320
What's the nature of that connection? Why is that? Why do you recognize that connection?

892
01:31:55.320 --> 01:32:04.320
Well, because I'm trying... I don't have to repeat that because I'm trying to figure out rights.

893
01:32:04.320 --> 01:32:08.320
And rights are based on property rights, and I'm trying to figure out who owns what.

894
01:32:08.320 --> 01:32:14.320
Well, if I kill Glenn, somebody's got to have a right to do something to me.

895
01:32:14.320 --> 01:32:17.320
Who better than his wife or his parents or somebody like that?

896
01:32:17.320 --> 01:32:20.920
Take the case of, what was her name in Florida, that woman who was comatose?

897
01:32:20.920 --> 01:32:21.920
Sorry?

898
01:32:21.920 --> 01:32:22.920
Terry Schabow.

899
01:32:22.920 --> 01:32:24.520
Terry Schabow.

900
01:32:24.520 --> 01:32:26.560
That would be an interesting case along these lines.

901
01:32:26.560 --> 01:32:28.560
How would the libertarian analyze that?

902
01:32:28.560 --> 01:32:30.000
You all know the Terry Schabow case.

903
01:32:30.000 --> 01:32:35.880
She was on life support and her husband wanted to pull the plug.

904
01:32:35.880 --> 01:32:36.880
Well...

905
01:32:36.880 --> 01:32:38.880
And her parents didn't.

906
01:32:38.880 --> 01:32:39.880
Her parents did not.

907
01:32:39.880 --> 01:32:44.680
See, what I would say is, now we're getting into libertarian theory on children, and what

908
01:32:44.680 --> 01:32:49.560
What I say that the relationship of parents, adults to children is you can't own them,

909
01:32:49.560 --> 01:32:53.280
but you can own the rights to homestead them or to bring them up, to be their guardians.

910
01:32:53.280 --> 01:32:58.160
How do you get the rights to be their guardians? First of all, by giving birth to them. And

911
01:32:58.160 --> 01:33:03.440
second of all, by caring for them. So you have to feed and diaper them and whatever.

912
01:33:03.440 --> 01:33:07.520
If you want to pull the plug, that means that you lose your guardianship rights. So the

913
01:33:07.520 --> 01:33:11.800
husband loses his guardianship rights as soon as he mentions the word plug, as in pulling

914
01:33:11.800 --> 01:33:16.300
and then the next person I'm willing to say the husband is number one but

915
01:33:16.300 --> 01:33:19.320
certainly the parents or the siblings are number two or three and if they want

916
01:33:19.320 --> 01:33:24.460
to pull the plug well then you get friends of comatose people now if

917
01:33:24.460 --> 01:33:28.200
there's no one on the whole earth that wants to save her then it's tough on her

918
01:33:28.200 --> 01:33:33.720
but presumably the church the synagogue somebody is gonna be filled with the

919
01:33:33.720 --> 01:33:38.040
milk of human kindness and hope for a miracle that one day she'll you know be

920
01:33:38.040 --> 01:33:45.040
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?

921
01:33:45.040 --> 01:33:53.040
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.

922
01:33:53.040 --> 01:33:56.040
He's only the second owner of herself when she's comatose.

923
01:33:56.040 --> 01:34:04.040
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.

924
01:34:04.040 --> 01:34:11.040
If there was a definitive thing that was signed and notarized and said, in case of comatose, pull the plug, that's definitive.

925
01:34:11.040 --> 01:34:15.040
Or if there's like a video thing where she was interviewed and said that, fine, then she goes.

926
01:34:15.040 --> 01:34:22.040
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,

927
01:34:22.040 --> 01:34:25.040
I mean, if we assume that, then we lose this case as an example.

928
01:34:25.040 --> 01:34:40.040
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.

929
01:34:40.040 --> 01:34:49.040
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.

930
01:34:49.040 --> 01:35:19.040
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.

931
01:35:19.040 --> 01:35:26.040
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.

932
01:35:26.040 --> 01:35:30.040
And he shows a sign, and I didn't see it.

933
01:35:30.040 --> 01:35:32.040
It's sort of like Murder Park.

934
01:35:32.040 --> 01:35:36.040
You didn't tell me this was Murder Park, and now you shoot me for giving a bad lecture.

935
01:35:36.040 --> 01:35:38.040
No, no, no.

936
01:35:38.040 --> 01:35:43.040
There are implicit contracts which are not part of the non-aggression axiom of private property.

937
01:35:43.040 --> 01:35:47.040
Of course, these have to be embedded in reality and social customs,

938
01:35:47.040 --> 01:35:55.040
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.

939
01:35:55.040 --> 01:36:01.040
Well, where did you get that from? Is that libertarian? No, but it's, you know, give me a break.

940
01:36:01.040 --> 01:36:13.040
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.

941
01:36:13.040 --> 01:36:16.040
You're right. I agree. We agree on that.

942
01:36:16.040 --> 01:36:46.040
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.

943
01:36:46.040 --> 01:36:48.040
It's better than the can opener joke, I think.

944
01:36:48.040 --> 01:36:50.040
Can we all tell them?

945
01:36:50.040 --> 01:36:52.040
Two economists are walking down the street.

946
01:36:52.040 --> 01:36:54.040
One of them points at the sidewalk

947
01:36:54.040 --> 01:36:56.040
and says, look, on the sidewalk, a $20 bill.

948
01:36:56.040 --> 01:36:58.040
The other one says, impossible,

949
01:36:58.040 --> 01:37:00.040
someone would have already picked it up.