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Well, what's the alternative to having majorities vote? Since I gather you're a libertarian, let's make a market-based argument.

There will always be some demand for violence (meaning the application or threat of force to cause other autonomous agents to act a certain way), and there will always be suppliers of violence. The question then becomes of market structure: do we want decentralized and competing suppliers of violence in a given geographic area, or a monopoly? Both can be Pareto-efficient, so that provides no guidance.

Having a monopoly supplier, however, gives that supplier an incentive to maximize the net economic value of its customers: this allows it to extract more of that value. Competing suppliers, however, have no such incentive: if one cultivates a client, there's no reason for the others not to swoop in and extract the surplus. It's a race to the economic bottom. If economic well-being and surplus are good, then having a competitive market in violence is bad.

Okay, so we have a monopoly supplier of violence. What then, though? How do we structure it internally? Well, the way it arises will be the way it's structured, regardless of what we might like in an imaginary world. And that will be some group of agents who have to negotiate contracts with each other and with the customers who are exchanging labor in exchange for violence.

What remains is squeezing out the information and liquidity gaps that make every market inefficient. People should have a clear set of rules that they can assume will be okay with the monopoly violence supplier: then they will not miscalculate when they do something thinking it will not cause violent reprisals. That's what we call rule of law.

That says nothing about what the contract is, though: it may be "everyone pays a flat fee," it may be commission based, it may be commission based on a sliding scale. Who should decide that? Well, you ultimately don't want internal factions to splinter off to compete with the original monopoly (after all, we like the monopoly! At least at the margins.) So you've got to set up an corporate structure where no large enough group of customers feel that they could have a better deal with another supplier in the market. Everyone needs equal input.

We've tended to solve that problem with majority vote.




I think you're assuming that violence is somehow more profitable than no violence. I disagree. In fact, I think it's the opposite: violence is much less profitable than a non-violent solution. Violence only becomes more profitable when you have a monopoly to it: it doesn't cost you anything to use it, because you know no one is even gonna try to challenge you.

On the other hand, when you don't have a monopoly, even if the other side is weaker than you are, you would still have to factor in your potential losses and see if you can strike a deal that would allow you to avoid violence and, thus, losses completely.

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I'd agree that without a monopoly you'd have lots of deals being struck. If you're just talking about violence-suppliers, the likely equilibrium is no violence at all.

But you're always fighting over stuff and, moreover, people. In all the cases I can think of, violence-suppliers would look at all the people it can extract value from, look at each other, and then combine forces to extract the most value from people. The only time they'd fight each other is if someone miscalculated who had more capability to deliver violence. But either way, violence suppliers would either combine forces or get destroyed, ultimately leading to a monopoly and making violence a profit center.

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Wait, so if you say the likely equilibrium is no violence at all, what's bad about it? If violence-suppliers form a cartel and people are happy about the way it serves them - what's wrong with that? If some become unhappy, they do 2 things: stop paying their monthly fees and seek a new company to protect them (which will inevitably emerge, because there's a demand).

On a side note, libertarians call violence suppliers "private protection agencies". Reflects their nature better, since we agreed that the equilibrium status quo would be no violence.

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I think this is getting to semantics, but revealing semantics. I would say a situation where "violence-suppliers form a cartel and people are happy about the way it serves them" to be a wordy way of saying the State. And the same agglomerating forces that lead to a cartel in the first place make it difficult for another violence-supplier to appear: if it offers a better deal to customers than what the cartel is offering, the cartel will point its guns at it and say, "are you sure? You should reconsider."

That's why "private protection agencies" really doesn't get at their nature: being plural is contradictory with having a single cartel supplier of violence. And it's hard to say "private from whom" when there's only one party you negotiate with. And when you're negotiating for protection from violence with the only likely source of that violence... the word racket comes to mind better than protection agency.

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It's a valid argument that private protection agencies may become de-facto government. With one crucial distinction: no one's giving them any legitimacy to be one. If they point guns to people, people are free to organize themselves and fight or hire somebody else to fight for them. Either way, it would put a cost on the protection agency. And as we determined, it is always more costly to fight than to strike a deal, even if you're stronger. Wouldn't you agree then, that the equilibrium would be reached in which protection agencies act more like actual businesses serving their customers, rather than as racketeers?

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Well, who's giving the State its legitimacy right now?

It's not some god in the sky that does. We do: not just a generic we, but most people reading this, you and me included. We choose to participate in the markets it establishes; it tells us what property rights are and says they're property rights because it says so and has the guns to back them up. The corporations we work for rely on it to break down people's doors when someone gets ahold of a next gen device that they misplaced, and we feel safe that the money we put into our banks is safe for us because the State will yell at the bank if it takes our money and pay for it if the bank loses it.

There's no reason a protection agency wouldn't do the same to establish its own legitimacy. It seems like a good business model, in fact: convince everyone that questioning it is morally bad, create some ideal of "citizenship" that amounts to brand loyalty to violence, and then expropriate value from a populace that's not only cowed but actively consenting.

Don't get me wrong: it gets my goat as much as yours that that's the situation. But I wasn't describing before how a hypothetical, ahistoric government-like entity might develop: I was offering a general theory of how it actually did. If it's right, the State isn't some aberration but an emergent, self organizing maelstrom that has gradually grown to envelope virtually all people in all places.

My issue with libertarianism as it exists in popular culture is that its idea of liberation seems to be getting the State to deign to rewrite property rights to privilege one part of society instead of the current one (that's all of electoral politics, actually). Once that's achieved, one gathers, we can all become happy and free consumers because a certain property right regime has become the law of the land, imposed from above by our now-purified and almighty State.

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I think scarmig means that the equilibrium would be a monopoly which would then take the role of government. And in fact, on an international scale, there's an oligopoly violence suppliers, it's just that they're not "private", but "public".

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Why assume an equilibrium?

Events, power struggles as people rise and fall in strength are all likely. Economics is a dynamic process, modelling as a stable or convergent systems is an extremely naive approach.

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Violence only becomes more profitable when you have a monopoly to it: it doesn't cost you anything to use it, because you know no one is even gonna try to challenge you

Unfortunately, it looks like nobody explained this to criminal gangs. They obstinately use violence against each other, especially when no one gang has a near monopoly...

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> Having a monopoly supplier, however, gives that supplier an incentive to maximize the net economic value of its customers: this allows it to extract more of that value

Could you explain this claim? I wouldn't agree with it if you we're talking about fulfilling the demand of other sectors (like music or food), so I'm curious why it would apply to violence.

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Sure.

Represent an economic transaction with {M, X, V}, where M is currency, X is some good or service, and V is violence.

For a music cd, there's three parties involved, though the third is sometimes not explicitly accounted for.

1:{-M, +X, 0}

2:{+(1-p)M, -X, 0}

3:{+pM, 0, V}

(aside: money, you see, plays a nice role of making it a 3-tuple instead of an infinite-tuple)

The first two elements of a tuple have the constraint that they must sum to nullity across all the other parties involved. You can't make labor or goods appear out of thin air.

Violence, however, doesn't have that constraint. You can always throw in more violence, and it's always a positive amount.

(Why doesn't 3 just set p = 1? It certainly could, but that isn't the optimal proportion to maximize sum(M). The incentive structure breaks down: Laffer bites with a vengeance. So there's some other optimal p 0<p<1 that maximizes sum(M) over all clients--what that value is is simply an empirical question.)

So let's look at a market of violence, with multiple suppliers:

1:{-(q+r)M', 0, 0}

2:{+qM', 0, V'}

3:{+rM', 0, V''}

where q + r = p' and M' is the total value that 1 provides at p' where p' maximizes M'.

This satisfies the required constraints, but it's not a stable equilibrium. q+r is that same optimal value p from before, but with a twist: it's not set by only one agent trying to maximize sum(M) but by two trying to maximize their own. There's no reason for 2 not to go for (q+e) instead of q, and the same is true of 3. Taking only q and r as varying qualities, and you rapidly end up at q + r = 1, which means no one gets anything.

In practice, what happens is that 2 and 3 have their own separate transaction since they can foresee that upcoming equilibrium:

2:{0, 0, V'}

3:{0, 0, V''}

That itself is unstable: assuming that V' > V'', the new equilibrium is

2:{0, 0, V'}

Leading to

1:{-p'M', 0, 0}

2:{+p'M', 0, V'}

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I lose you at the part where you essentially claim that violence is free or unlimited. In reality, violence is very costly and risky. In this sort of analysis, I don't see why violence would be considered a separate variable, rather than simply one cost factor for both sides of the transaction, just like the cost of advertising, or paying employees.

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