What is Anarcho Capitalism? And What's So Good About it?

When newly elected President of Argentina Javier Milei described his anarcho-capitalist position, he referenced economist Bob Murphy's Chaos Theory. So I asked Bob to come on the show and explain to everyone what anarcho capitalism IS.

We cover a lot of ground in this one, discussing how a society could operate with privatized justice, law enforcement, and even defense, and taking on all of the usual objections, from the control of nuclear weaponry to preventing new states from arising. Bob even answers the age-old question: Why should anarcho capitalists move to Somalia?

Prepare to have your perceptions of governance and societal organization challenged.

Bob Murphy is a renowned Austrian economist. His podcast is The Bob Murphy Show, and he is on Twitter. His essays on anarcho-capitalist principles, "Chaos Theory", can be found here and here.

He also speaks about anarcho capitalism here and here.

Hayek's "Law, Legislation, and Liberty" is here.

And the article by Benjamin Powell, "Somalia After State Collapse: Chaos or Improvement?" can be found here.

Chapters

• 0:04 Anarcho-Capitalism and Private Defense
• 11:58 Defense Funding and Private Law
• 23:54 The Evolution of Law and Language
• 36:24 The Flaws of a Monopoly System
• 49:20 Private Property in an Ancap World
• 57:46 Discussion on Justice and Morality
• 1:05:13 Rule of Law and Governance Debate
• 1:09:32 Privacy and Competition in Society
• 1:16:38 Legal System Issues and Nuclear Weapons Control
• 1:26:21 Comparing Anarchy With Government Influence
• 1:32:20 Emergence of States and Limited Government
• 1:39:01 Dollarization Plan and Mafia Influence

Transcript

Bretigne Shaffer: 0:04

Welcome to the podcast that's all about solutions. If you're tired of complaining about tyranny and you want to take action to create a freer world, this is the place for you. Join us as we ask what then must we do? All right, I am here today with Bob Murphy. He's a renowned economist, austrian economist, very prolific. He published a lot of stuff on things from anarcho-capitalism to sort of basic fundamentals of Austrian economics all kinds of stuff, some of which I'll link to in the show notes. Welcome to the show.

Bob Murphy: 0:47

Thanks for having me, Brittany.

Bretigne Shaffer: 0:49

So I asked you here today because, possibly for the first time in my lifetime, anarcho-capitalism is in the news, like in the mainstream news, so that's something to be astounded by. In the first place, javier Millay I'm probably saying it wrong was elected president in Argentina and he was running on an anarcho-capitalist platform. We'll talk a little bit about him later on, but I first just wanted to ask you if you could explain to listeners what is anarcho-capitalism.

Bob Murphy: 1:28

Sure thing. I think Barry Rothbard coined the term, but what it means is that it's the blending, obviously, of anarchism and capitalism, and so the idea is that it's get rid of the state altogether, so hence the anarchism part of it, but also maintain private property. And partly the reason for that terminology is to distinguish it, because historically there were other groups who called themselves anarchists, and they not only wanted to get rid of the state, but they also thought private property itself was this unnatural hierarchical system that, in their view, the state upheld. So, to them, capitalism was itself a product of the violent hierarchical state, and if you got rid of all unjust authority and illegitimate authorities because you were an anarchist, then you would sweep away capitalism as well. That's what the anarcho-socialists thought, and so anarcho-capitalist is designed specifically to clarify that, yes, we favor getting rid of the political state, thinking that it's rooted in injustice and violation of property rights, but it's because we uphold property rights, not because we think property rights are an expression of the state.

Bretigne Shaffer: 2:43

And why is that a good thing?

Bob Murphy: 2:47

Okay, so there's two main categories of trying to get that across. I know we'll probably flesh these out in more detail as we go through this, but one thing is just, in terms of basic principles, that from that perspective the idea is it's unjust to violate someone's property rights or to initiate aggression. That's the standard definition of libertarianism, at least in the American tradition in the wake of Murray Rothbard. And so if that's your principle, that you can't initiate aggression against somebody else, well then the state, by its very nature, does that. It's not that the state empirically, a lot of times happens to do that, it's just, no, by its very nature. If it were a voluntary institution, to put it differently, it wouldn't qualify as a state.

Bob Murphy: 3:34

And so the two specific attributes of the state that I have in mind are the fact that it engages in taxation and that it claims, at least within a certain territory, a monopoly on the determination of the legitimate use of violence. All right, so it's not that the states is worthy, the only ones who can use violence, but, they say, the people running it. We can determine when a use of violence is justified or not. So like they can say if someone's breaking into your house, you're allowed to shoot them if they want. So it's not that they're saying only police officers can ever shoot somebody, but the state is saying it's up to us to determine whether you are allowed to do that or not. And if we want to, we can say no. The rule is you can't do that in areas that are so called gun free zones.

Bob Murphy: 4:16

And taxation again, that's qualitatively different from any other kind of payment for a service. That, what it means to say you're being taxed for something, as opposed to the state provides them like a bridge, and if they charge a toll, that's not really a tax, because you don't have to use the bridge or not. But the state doesn't say, hey, anybody who wants to use our military services, here's how much we're going to bill you each month. It's like, no, we are going to provide these services and we're charging you, and if you don't like it, we'll put you in a cage ultimately.

Bob Murphy: 4:48

Okay, so that's the sense. So that's, you know. One umbrella is just to say you can't support such an institution if you have a certain ethical framework. And then the other element is just a pragmatic listing and just an analysis of the various things that the state does and to show that not only like any legitimate thing a state does could be handled through voluntary means. And so, and on top of that, it's that in practice, when the state tries to accomplish something, even if it's inherently okay, like education or building roads, things like that that aren't intrinsically evil that still the state does a worse job of it for standard economic reasons that free market economists can go through.

Bretigne Shaffer: 5:38

So I've got a whole list of all the what abouts, all the objections that always come up. The biggest one I think that people have the most trouble with is that you kind of alluded to, is protection from crime, and also I'll lump the two together, even though they're a little bit separate and national defense. You know, how do you? How do you let's say, you've got this Anarcho-Capitalist Society going, how do you prevent? You know, not everybody else is Anarcho-Capitalist, so they've got these aggressive militaries going how do you prevent one of those militaries from coming in and taking over and occupying, and then domestically, how do you? How do you, how do people protect themselves against crime?

Bob Murphy: 6:20

Okay, sure, so this is. I know you're going to be linking to things, but this, this was the essence of my booklet Chaos Theory, which was two essays One was private law and one was private defense. For people to just know that what I'm going to be saying now is that's where I laid a lot of this stuff out. So the private defense, like for military invasion, I think that's actually conceptually easier to walk through, and so maybe we'll start with that one. So, again, the logic here is just like you could hear, people who are libertarians, again in the American political context, with a small L at least, might argue against. Oh, we don't need political support of schools. You know, you don't need taxpayer funding of schools. You could just have it be done voluntarily. The quality will be better, there's more competition and then, yeah, in cases if there's poor kids who either they're orphans or their parents really can't afford to send them to school, they'll be philanthropic organizations. The community's not going to sit there and let some kids grow up and not know how to read. That's crazy. They'll support them and you don't need, effectively, the government to stick a gun at everyone's head, and so you better contribute to this thing that we all agree is worthwhile, right, that you don't need to force the community to do something that just 99.9% agree. Yeah, of course we would do that in a civilized world. Ok, so that's kind of the logic. And so where even a lot of people who favor privatization of services, they think that, ok, yeah, that works for things like schools and mail delivery and even building roads. Maybe people can have some trouble about, well, gee, who would determine the right of way and the traffic lights and what? But the idea that you don't need political officials in charge of hiring guys to lay concrete and stuff, most people get that. But when it comes to what if there's foreign nations that are amassing armies and they're going to invade us, surely just to let the free market fend that off seems kind of crazy. How would that work? So that's what we'll tackle here.

Bob Murphy: 8:14

So I think the first thing for what I have in mind is a major city like a New Yorker and LA, something like that. And then what if it were an anarcho capitalist? How would it defend itself against invasion? So I think one thing is you'd start with insurance contracts and so, just like the owners of the skyscrapers would have fire insurance policies like hey, what if there's a big war, alarm blaze or something? What do you do? Well, of course there'd be insurance to say if the property is damaged from fire, then insurance company compensates the owners. And then it would be in the interest of the insurance companies to say, okay, for a huge building where potentially we might owe billions in compensation.

Bob Murphy: 8:59

One thing that we'll do is we'll have clauses and say here's what your premium would be if you don't have any standard common sense things that would prevent fire. But it would be astronomical the premiums because the potential liability is so high. And if it's a building that's made up out of lumber and gasoline that's sprinkled all over the place and people are smoking, they would say, yeah, if you want us to ensure that for fire, we're going to charge you a huge premium. And so instead they say however, if you build according to these codes and you have a sprinkler system and you have contractual arrangement with the local voluntary, you know private sector fire departments and blah, blah, blah, and you go through all these things that would prevent a fire from occurring and then quickly suppress it in case it starts, you know up to the latest industry, you know cutting edge standards in the industry, then we can afford to charge you a much lower premium for this coverage because we as the insurance company know, okay, now the chance of there being a billion dollar claim from this building is a lot lower, because look at all these procedures and we would have the right to like, send an inspector's and check your sprinklers with, you know, spot checks. We're not going to announce that, we're just going to show up, you know, and have you walk us through and we'll see what the fire extinguishers are located in, their full, you know all that kind of stuff and the smoke alarms are working. So, you know, that's kind of the model, so that's the idea, and I think most people can follow what I said there. And so I just noticed I'm saying you that's why you don't need the mayor's office to come up with building codes and to have a, you know, fire up like that stuff's all volunteer Like, and in fact you would expect that to be better in the long run than if it was a political process determining those fire codes and things, because it's, you know, the politicians, it's not their money on the line, whereas you'd expect the insurance company to really be on top of the latest innovations and studying, you know, the experience of their competitors and other cities and things. Okay, so then just take it one step further.

Bob Murphy: 10:57

Another possible bad thing that could happen to your skyscraper is a foreign army. Might, you know, send its air force over and drop bombs on it, and so maybe you'd want to have insurance against that kind of contingency, and so it'd be a similar process, and again you're paying premiums. But now here the insurance company is going to have to, you know when they're going to cover you and say how much would we charge in a premium? They would have to say well, what's the chance that this event is going to happen? And it's a lot lower if we have, you know, surface to air missile sites set up, and if there's, we have our own air force and whatever that can repel invasion. We have radar stations and blah, blah, blah. We have intelligence networks that scour the globe to give us early warning about oh, these people over here are massing troops and their politicians are saying that you know, we're sitting on their historical land and they're trying to get their people ginned up to be okay with them conquering us, and blah, blah, blah, but that you know. That's the kind of information that the so it'd be in the insurance.

Bob Murphy: 11:58

In this model and this is just one idea I think it would play out like this, but again, it's. If it's a free society they might come up with a better idea, but this could work, is so it would be. When you say, like, well, who would fund you know, national defense or city defense in this example, if it's just a big giant city, it would be the insurance companies, would be the direct payers. And so the system is like the broad property owners would be paying premiums to their insurance companies, defending or compensating them in the possibility of a invasion and, or, you know, military damage, whatever. So it, just it, just it, and then it would be the companies hiring it. Yep.

Bretigne Shaffer: 12:36

So you might be about to go onto this tangent, but I think a question that'll come up for people as well, then what's to prevent those insurance companies or whoever it is that's setting up the surface to air missiles and all that, what's to prevent them from becoming an aggressive, imperialist type military?

Bob Murphy: 12:54

Okay, yeah, great question. So here and this is going to bleed into you know, the other big thing about private law how could that work? So if you just for the moment and again we'll come back to this and explore it but if we just stipulate the sake of argument, that there is a law, you know there's law and order, there's the rule of law in this society right now, and then we're just saying, if that could be possible, suspend your disbelief for the moment how could these people, these free people, defend themselves from a foreign invasion? You know that that's what we're answering right now. So the answer is like all these insurance companies, so, for one thing, they would not be themselves maintaining the SAM sites and the tanks and troops and snipers and blah, blah, blah.

Bob Murphy: 13:37

I think they would just be buying those services, right. So I think there'd be competition. So it wouldn't be one company that would own all of the military hardware. There would be competition. Just like you know, in any private industry right now that's not propped up by government regulations. There's. Even in industries where there's like one giant player, there's typically one competitor, right. That kind of keeps them honest, and you know that phrase is metaphorical.

Bretigne Shaffer: 14:03

But at least the threat of competition, at least they know that they can't go too crazy, or someone will come in and Right, right.

Bob Murphy: 14:11

So that's, you know that that's what happens. So there still would be the rule of law. Again, there, there's not taxing them, they're not allowed to take money from anybody, and so that I mean that's the quick answer and even, by the way, just to show what I mean, so right now it's standard, like, if you know if troops are invading your country, you might do things like blow up the bridges and, you know, do things to try to like slow their advance. So in the kind of world I'm talking about, in the framework, even if certain, let me say one thing just so people finish the train of thought so how would the insurance company figure out how to price these services, like to know what they're worth? Again, it would just go back to they might say, okay, so you know, we have policies that we've provided coverage and all these major skyscrapers in this region, or some of them at least, and maybe there's competitors that have done other ones, and maybe we'll pay bounties so that our actuaries run the numbers and we say, given that there might be an invasion, if they're sending air force sorties over us and a given company that's operating certain SAM sites, for every bomber you knock out, we will give you $800,000.

Bob Murphy: 15:26

But I'm making that number up, but the number wouldn't be arbitrary. They would do a cost benefit and just see how much would that be sparing us in expected payouts on the margin. And that's how there would be some rationality there and so that would help guide the defense effort, whereas right now, if the government's in charge, you've got a bunch of guys and maybe they went to West Point or something and they served in Iraq or whatever, but it's a bunch of central planners basically saying we have all these resources at our disposal, what's the best way to use them to stop an invasion and why would we expect them to be able to do that? If you're familiar with the general critique of economic planning, then it's the same logic here. So here I'm saying there's genuine market prices where the insurance companies can come up with and say knocking out one bomber is worth $800,000, taking out $100 infantry is worth blah, blah, blah and then depending. So that could help guide the efforts.

Bretigne Shaffer: 16:22

Well, and not only that, but in the model you're talking about, these guys, whoever's making these pricing decisions, they stand to go out of business if they get it wrong, whereas in the system we have currently the military planners, they're not going to go out of business. I mean, the worst that might happen is maybe somebody will lose their position, but that enterprise if you want to call it an enterprise it's going to keep going. There's no threat of bankruptcy for the military industrial complex. So I think that's another.

Bob Murphy: 16:54

But right, I mean if you're, if we're talking about like being invaded, I guess you could say the ultimate downside would be, if you screw it up, you get taken over by a foreign power.

Bretigne Shaffer: 17:02

Yeah, there's that.

Bob Murphy: 17:04

And one little asterisk on that. So also because I have some people, you know, objected to what I was saying and they were like, well, what's the point of being compensated if some enemy came in and took over your area? But again, if we're talking about people who own skyscrapers, like they would have the ability they might leave the vicinity and still have international bank accounts, and you know what I mean. So it's, it's even one city gets devastated. The fact that you had insurance policies with these major corporations that have a global footprint, you know they would still owe you the money contractually and all that kind of stuff. So they're just that.

Bob Murphy: 17:35

But just to quickly finish the appointment before. So in this framework, where there's still the rule of law and property rights, if the insurance companies either themselves or they delegate it, you know, to some other company, you know some other company might be have its, maybe they have sharp shooters all over the place and like that's what they specialize in is they have a sniper force and they take out infantry and they have a you know a schedule of compensation where you know oh, you take out a general, you get such and such, you take out a corporal, you get blah, blah, blah. If you plant explosives and take out one of their tanks, this is how much you get. And maybe they would find that they could increase their profits by blowing up key bridges and stuff to slow the enemy advance so they can get their snipers all positioned to then start taking people out or whatever. They couldn't just do that without cost. They would have to compensate the domestic, you know, their, their neighbors, who own the bridge. So they could still do it like they wouldn't be brought up on criminal charges. And in this system I think people would have, you know, recognize the courts would recognize that. Okay, yeah, you did that because of the situation, just like if somebody is starving in the woods and breaks into a cabin and eats their food. They don't just get to do that for no, with no consequences, but they're not going to be charged the same way like a regular home invader would be charged, so people would recognize what was going on. So likewise, here and again, that doesn't hamstring the defense effort. That's what makes it more effective. You don't want the army thinking it could just go around blowing up your neighbor you know that's owned people's property because, well, in our opinion, this helps the war effort. Like you don't know that. And so market prices. Keep you honest and make sure that the efforts are coordinated.

Bob Murphy: 19:10

Maybe no, this bridge is really essential for evacuating civilians to, and if you take it out, yeah, it slows the enemy advance, but then it means more people get trapped in their side and get captured or killed, or so you know that kind of stuff. So ultimately, and if normal people had policies to, that would compensate them in the event that, you know, if you had a life insurance that also paid off in the event of a military invasion, you know those insurance companies would have something to say. And again, so it's always competing interests. When you're trying to determine, like to repel an invasion, like one thing you could do is, oh, let the troops come in and then just drop a nuclear bomb and wipe out the invading army. You kill half your population too. But hey, so clearly it's not repel the enemy with no other considerations or criteria. That's not what they're tasked with. And I'm saying market prices that try to make people feel the incentives and realize these are all the competing interests at play.

Bob Murphy: 20:06

That's how, in other arenas, we allow for social, you know, rational coordination of activity.

Bob Murphy: 20:12

And you could bring that to bear even on something like military defense that most people think.

Bob Murphy: 20:17

Well, that has nothing to do with the market economy and you know there's a sense and right. But the defense does like, yeah, what the invading armies do when that's not free market, that's not voluntary but organ. In other words, it's not that, all of a sudden, coercion is great when it comes to organizing your defense activities. For the same reason that if you want to feed your people, you don't have the government in charge of wheat output, you let the market figure that out. And which farmland should be devoted to what, and blah, blah, blah. And truckers bringing food to the grocery stores, and how many grocery stores should they be, and where should they be located? Those are all things we leave up to the market, and that feeds our people way better than centrally planning it. Likewise, yeah, defending us from a military invasion is important, just like food is important, and so the best way to take our given resources and knowledge and come up with the most potent, efficient defense is to let market forces help coordinate things.

Bretigne Shaffer: 21:13

And just to clarify I don't think you're saying you were talking about. You know if they blew up a bridge they wouldn't necessarily be tried on. You know they would run up against on criminal charges. I don't think you're saying they would be above the law, that they that there's nothing these companies could do that that would have them tried as criminals. Is that right?

Bob Murphy: 21:34

Oh, correct, right. So yeah, they like they couldn't. If they went out at gunpoint and rounded up 1000 people and conscripted them and said you're fighting now for the resistance or else we're going to shoot you. Yeah, I don't. I think they would. If they did that, they would be charged with kidnapping. You know they would there's.

Bretigne Shaffer: 21:52

There's still held to the same laws. That everyone else is right. There's still right. There's not a special standard for them.

Bob Murphy: 21:58

Right, right, that's what I was saying. Yeah, so I was trying to get at what you know in the woods when you bring someone's cabin because, yeah, it's a special circumstance.

Bob Murphy: 22:06

That's different from, like you know, teenage kids are just bored and they see this thing hey, let's break in there and see if there's anything good in there. They would be charged differently. But still, even the person who breaks in just because he's starving, when he's back on his feet and back in society, has to, you know, compensate the person for the food he took. Yeah, something likewise. Yeah, if you blow up a bridge for strategic reasons to slow the enemy invasion, you still have to pay the owners compensation. But yeah, you're probably would not be charged in that instance with crime, you would just be charged with property damage.

Bretigne Shaffer: 22:36

Okay, so I've got a couple more specific questions about the defense thing, but I think this might be a good place to start talking about the rule of law. And how would that happen if you don't have a monopoly state, if you don't have some authority dictating you know what the law is and how it's enforced. How do you, how do you get that?

Bob Murphy: 22:59

Great, yep. So so here I want to kind of like shake people out of it, because you're right, there's this like, if you think about it in a certain way, it seems like it's an impossible problem that like, okay, yeah, the rule of law and property rights and even the military defense, you're given that, we know. But if we don't, you know, don't we need to have an agency that defines the property rights, just to even start before then the free market can get going. Like, how could you have the market defined property rights, if that's one way of thinking about it? Because don't you need to know who owns what in the first place? So I get that issue in and I think that a lot of objectivists, you know, like people following the tradition of iron Rand, that's how they come to this and that's why they conclude anarchism, even the anarcho capital is a variant of it Doesn't make any sense and so. But I think there's a logical fallacy in that way of thinking. So let me just warm people up. I think we all agree.

Bob Murphy: 23:54

There's definitely, you know, rules of grammar and spelling and punctuation and things like when it comes to the English language right, it's not that English is arbitrary. There's definitely rules of grammar. There's certain sentences we can all say, yep, that's grammatical or that isn't grammatical. And then I was like, okay, so who's in charge of the English language? What group of experts or authority figures dictates to the everybody else what the rules of grammar are? And there is no such group of people. Now there's things like dictionaries and grammar books and style guides, but what those are doing are just codifying what the community's usage shows. Are the actual rules right that if the Oxford English Dictionary came out and said the word up you know, up, if that means moving towards the ground and that's how it defined it in a certain edition, it's not that we would also say, oh, I guess that's what up means. We would say no, that's wrong, that's not the definition of up. And if they did do that, and especially if they consistently did that, they would go out of business. People would stop buying the Oxford English Dictionary because they would say its definitions are wrong, right, so again, so it's not that the people publishing the Oxford Dictionary define words. What they do is they codify, they distill down for public reference what the definitions are, and it's not that they made that decision.

Bob Murphy: 25:14

Okay, so that's what I think the law is right. It's this organic thing for lack of a better term right now that you know governs human interaction and that what happens when two parties are having a dispute. And, by the way, what I'm saying here this is this isn't just me inventing this, this is coming from reading people talking about, like how the common law emerged and how you know law came, you know from, you know Rome, and then through England and whatever, to come over here to the United States. So that's what I'm just taking, that and then kind of elaborating upon or extending it. But the idea is that you know, when people have a dispute, they can't.

Bob Murphy: 25:58

You know someone says, oh, he stole my television set, and the guy says, no, I didn't that. You know how do you resolve that. And so they can go to a judge and just present their case and the judge gives the interpretation, gives the opinion. We even use that term opinion. It's not that the judge is making the law. The judge is saying In my opinion, we have this antecedent body of law and that's how it applies in this situation. And you know, nowadays, in a modern context, with the state being so omnipresent in all of our activities, a lot of people think you know from what I just said, like, okay, fine, but the law that the judge is applying is just what a bunch of legislators said, and I'm saying that's a relatively recent bit of hubris in terms of humanity, but historically, you know, the law was just this thing, independent of you know, human rights.

Bretigne Shaffer: 26:50

I think that's an important is. I think that's an important distinction to make between common law and administrative law. I mean, I don't know at what point we started having these, these you know professionals who sat in rooms making up laws for everybody. But my understanding of the history of common laws, it's, it's as you say, it's, you know, it's sort of the collection of people's experience in resolving disputes. But then this other thing came in where it's like these guys sitting in these rooms saying, okay, what laws are we going to come up with, you know, this year, and you know, impose on these people, whether they, you know, want them or not. There's there's there's a qualitative distinction between those two kinds of law.

Bob Murphy: 27:33

Exactly so. For your listeners who are familiar, friedrich Hayek has a collection called law, legislation and liberty, and if it's there he's making the distinction between law and legislation. That's not redundant and those are the terms that he used to say you know, law means things like you know you can't kill people, blah, blah, blah, whereas legislation he meant things that political officials get together and they explicitly formulate and just say, yeah, issue by fear, and that's what legislation is. So he was saying no, the law is ancient, that you know.

Bob Murphy: 28:07

Way back in the day, even if there was like kings or tribal elders or whatever, they would apply the law. They knew stealing is illegal, murder is illegal. And if you said why, they wouldn't have said well, because I'm the king and I said so, they would say speak because it is you know. Maybe they would say the gods gave it, or you know, under monotheism, you'd say came from God or whatever. Or later they might say natural law. But the idea, you know, being that no, murder really is illegal, just like two plus two is for. Not because some mathematician said so, it just. It is like a mathematician can grasp it and study it and maybe try to explain it to you, but it's not because the mathematician said so. It is two plus two is for, just like murder is illegal, whether or not some political officials say.

Bob Murphy: 28:50

If they say it isn't, then they're wrong. You know in that, in that conception then, and so you're right. I don't remember. I mean I, if you'd asked me 15 years ago I would have given you a better answer, but it's been a while since I've read some of those material. But yeah, at some point in the in like Europe, it did evolve away from just you know the king and you know his subordinates administering the common law and you know judges making rulings, because they just thought there was this preexisting antisene body of law that were just you know the law, that were just the ministers of, or the enforcers of, into more of a. This is, these are the rules, because we said so.

Bretigne Shaffer: 29:29

Yeah.

Bob Murphy: 29:30

And that was. It was some of a gradual, I think it's would start in certain cases and then, you know, expanded and also like a huge shift, just as an aside was that crime came to be. You didn't commit a crime against the direct victim, you committed against the state, and that's why I like your chart in the United States.

Bob Murphy: 29:51

It's like the people of New York state versus the defendant. Yeah, it's not the, you know, the people who had deposits, the bank that that's stolen, you know, you think, why shouldn't they be the ones, or, you know, kill somebody? It's not that guy's a state bringing a criminal case against you. Maybe it's a civil case, but no, it's the people of New York versus blah blah, which again is just the government, you know, sticking its nose in and saying oh you, as a front to us, you know which. Anyway, Right.

Bretigne Shaffer: 30:21

So so how at this? So we're kind of we're talking about common law here, we're not really we're not talking about administrative law. How in a, in a society without a monopoly on force or a monopoly on the judicial system, how would that even happen? How would? I guess the big question is how. You know, in a nuts and bolts sense, you know, I think it's easy to imagine how there could, how there could be, you know, judges and courts of law that are competing, that are independent. But when it comes to enforcement, when it comes to actually okay, this guy is guilty of murder, there's some penalty for that how does that getting forced in a world where there's no monopoly on force?

Bob Murphy: 31:06

Okay, sure, if I can just take a second just to say a little bit more, just to make sure we're not, you know, too skeptical. Yeah, we do it like with math, but you know, math and science, there's all kinds of fields of human enterprise where there's definite objective conclusions or results, things people believe in and yet they're not promulgated by some authority. Figure Right Again with math. Yeah, nobody's in charge of math. Now there's certain experts and things, but again, you know, and it any given thing, it's like some guy solves some theorem that was took, you know, decades of an unsolved famous math problem. Some guy solves it. The average person in the public, I mean, they might not even care, but even if they do care, they're not in a position they couldn't read the proof and say, oh yeah, that checks out, good job.

Bretigne Shaffer: 31:53

Yeah.

Bob Murphy: 31:53

They have to rely on other math. But the idea is you kind of trust? There's enough of independence and competition and rivalry and objectivity in this field that if a bunch of the experts all sign off and say, yep, that's a valid proof, this guy finally did it. You know Fermat said this on his deathbed and this guy finally proved it. That that's probably accurate, right, even though you know nobody's in charge of that. There's anarchy and math and yeah, no, it's actually very high up, but there's respected journals and whatever. And so I'm saying, likewise with the law, there would be you know different authority figures. You know experts who would be publishing codes and things and saying like this is the way in terms of property theft or property law, you know, this is the procedures that would be used and this is homicide and all kinds of different areas of the law where there'd be experts writing. But again, it wouldn't be. They would just say, because I said so, they would have reasoning and whatever they would be trying to get. And the reason they would become and rise from the through the ranks among their peers is being a recognized authority is because the people who are experts in that would agree that oh yeah, that person. The thing he wrote three years ago is the definitive work on home invasion, and so if you're ever a judge, you know I totally like a judge who takes that as the framework and then applies that to the particular facts of the case. To me that's a really fair, just ruling, right? That's the idea. And then also, if people are familiar with modern day arbitration, that's how I think it would work as well.

Bob Murphy: 33:20

So people have a dispute and you know it's, it's, most people think they're, or they say they're right. You know, I think it's it's and we can deal a minute right. And you with you know cases of like what, if you know someone really is just a bad actor and whatever. But in general, when people have a dispute, you know they're, they're self serving by somewhere, but they they're not up there and say, well, I have more guns and so that's why I'm right, it's more. They will come up with self serving arguments.

Bob Murphy: 33:48

And then the issue is well, how do we adjudicate among those claims? And so for them to, I would say in a typical dispute, like each side would say oh, I'm sorry, I'm sorry. Like each side would say, I'm willing to submit our disagreement, you know, to a third party here and abide by the decisions by by the you know, opinion that this third party gives. And right now in the real world, that's kind of how arbitration works. Yeah, and so how would those people get a clientele? By having a reputation for fairness, like so it couldn't be in a divorce proceeding, one judge is always pro wife or, as always, pro husband, because then when a couple's having a dispute, at least one of them would object and say, no, we're not going to that guy because you know he's always biased against. You know my side of the. So you would have, you know, the only way a judge could stay in business is if he or she has a reputation for being very fair and just applying the law dispassionately. And so I'm saying that's, you know, that's how that would arise. So now just to come back to your question about okay, enforcement.

Bob Murphy: 34:49

So here I disagree with a lot of the literature. I don't know if it's disagreement, but if you go read some of the classic works in anergo capitalism, like Murray Rothbard's stuff like for a new liberty is, I think, one of his earliest works where he has a chapter on this, and they've written other stuff they tend to cut, collapse it into oh the. There's like a defense agency that both has like internal people who make the ruling and they also have burly guys on the payroll who have guns and then they go and and I don't think that's how it would play out. I think they would be distinct entities in a free society where one you know, the judge is just a person. I mean it would have support staff and whatever, but I think the judge would be, just like you know, a solo person.

Bob Murphy: 35:36

Or maybe there'd be a company that has a team of judges that you know. Oh, anytime someone has a dispute like this and they get referred to us, we figure out who's schedule. Can you know who can hear this case? You know quick list is quit most quickly and boom, there you go. But I think you know that would be one. Just like right now, law firms don't also have on this payroll security personnel, right like the local mall might have security like mall cops. You know what I mean.

Bob Murphy: 36:05

Yeah not not actual police officers? And I'm just saying in practice law firms don't also run those services out of the same company. I mean, those are just different things.

Bob Murphy: 36:15

And so I think, that's how it would be in a free society where there wouldn't be government provided police. What would happen, is you know? So I think the guy down the street stole my television set. I say that you know he and we go and I say hey, I'm willing, and I list like the top 10 in the community, either judicial firms or individuals who specialize in property theft, property crime and say I'm willing to submit our case to any one of those 10 you pick. And the guys are no, no, they're all crooks. I don't trust those guys here. What about this guy? It's his brother in law who's no one's ever heard of. Let's take our case to him. The community is going to quickly recognize that, you know.

Bob Murphy: 36:56

I'm probably in the right. And so then I still go and take the case. And so I go and you know, there's agencies like property retrieval Inc. And you know, and I contact them, I say, hey, this guy stole my TV. I need you to go. It's in his house, like I looked in and I see he's watching stuff with my TV. And then I tell them and they're going to say, well, we need to maintain our good standing in the community. We're not just going to go to this guy's house and break in and take his TV. We need a court order. You know, show us a reputable judge who has ruled that in his opinion, that is your TV and then we'll go do it.

Bob Murphy: 37:31

And so then I take my case and it gets tried in absentia. If that guy refuses to show up, I show, you know, my receipt, my footage from the night it was stolen and it's someone walking out that looks kind of like him. And then I give all the circumstance and I you know that trying to demonstrate that's his and let's say I have enough evidence that the judge is comfortable saying, yes, in my opinion he is guilty of stealing your TV and, among other things, he should return the television set, in you know two ounces of gold for your time in trouble, and blah, blah, blah. So that, right there, the judge. You know he's not, he doesn't have an army at his disposal he doesn't press a button, that's just his ruling.

Bob Murphy: 38:09

And now the separate agency? Who has a reputation in the community? The community trusts these guys.

Bob Murphy: 38:15

they're not worried about them being rogue criminals because oh no, we only will step onto someone's property against their will if we have a valid you know or opinion from a respected legal authority. Because it's in their business interest to maintain to the trust of the community that they're themselves not a bunch of thieves. Right, they show up again. Are they gonna kick the guys door in and shoot up a plate or throw in flashbang grenades and then killing the guys infant? Of course not. They would be terrible for business. No one would ever go to them again if they did that.

Bob Murphy: 38:44

And so instead, you know they'll wait for the to when the guy's out of the house and they'll go in and retrieve the TV that way or something. Or first obviously they'll send notices saying, hey, we've got this pending thing, you've got 60 days to comply, and then if it doesn't, you know. So I'm just saying that's the way I think the system would play out, so you can just see it each step. So as long as there's competition and you notice, you know it's in everybody's interest in a civilized society, reputable companies are not gonna wanna even have the appearance that they're engaging in criminal activity, because that's just bad for business.

Bretigne Shaffer: 39:15

Right and presumably. Let's say a company did do something like that broke into someone's, broke down someone's door, killed family members, killed their dog, whatever that person could then take legal action against them in a way that you really can't against the police Is. Am I right about that?

Bob Murphy: 39:33

Yes right.

Bretigne Shaffer: 39:35

They would be held accountable for their own criminal activities. They wouldn't have this. You know special status, you know qualified immunity or any other special status that you get just by virtue of being part of that monopoly.

Bob Murphy: 39:49

Yeah, right. So yes, the quick answer is I agree with you wholeheartedly there wouldn't be immunity. And oh, just because you're in the act of law enforcement, that means all bets are off and you can do whatever you want. And oh, I feared for my life and that's why I shot that dog. I mean, there could be things where you know the carrying out of your standard duties.

Bob Murphy: 40:12

If certain things happen, just like you know, you can come up with crazy scenarios. Let's say, the house is on fire and the you know the private company that has firefighters on the payroll and they go there and someone you know takes the hose out and sprays it in there. And what if there was someone that they didn't realize and he was trying to climb out the window and the water smacks him in the face and kills them? You know they presumably would be treated more leniently than if some people you know it was a mob hit and they went up and said, okay, we're gonna kill this guy to get this high powered hose and just drown him. You know what I'm saying.

Bob Murphy: 40:42

So like obviously the intention. Blah, blah, blah matter. But right, it's not that simply because you're enforcing property rights, that therefore you can do whatever you want, the law doesn't apply to you. That no, the law would apply to everybody. That's again the whole point. There's no privileged group in this system that is above the law. Everyone is subject to the law. So here you really do have the rule of law.

Bob Murphy: 41:04

It's what's ironic about this that, like the objectivists and whatever say oh no, we uphold the rule of law. It's so special to us. We can't bear a system of anarchy where there's no rule of law. It's just, you know whatever is profitable, and I would say no, it's in your, it's only in this decentralized system I'm talking about that. The rule of law does get applied to everyone equally, just like right now. If the president says something ungrammatical and that happens a lot with Joe Biden we can all say he just said something ungrammatical. It's not that, oh no. By definition, whatever the president says is defines what grammatical usage right. So the rules of grammar apply to everyone, and likewise property rights. You know the rule of title transfer, and with the rule of what constitutes a crime and blah blah, those rules apply to everyone in the system, even the people who are. You know whose job it is to enforce those rules.

Bretigne Shaffer: 41:56

Yeah, that does seem to be sort of a fundamental misconception. I think I look at it almost as kind of magical thinking about the state, like somehow, without really thinking through how this happens, somehow there's this belief that you can get rule of law and you can get like genuine rule of law in a system where there's a monopoly. And I think when you look closely you kind of see what you've just described, which is well, no, you get this special privileged space for the people who are part of the monopoly and the rules are different for them and everyone else. You know, maybe there's rule of law, maybe there's not, but there's this distinction between everyone else and the people in the monopoly. And I feel like that's kind of one of the biggest barriers to breakthrough, because in my view it does kind of just boil down to this like just belief, like a faith-based belief in this monopoly system. But the opposite is actually true.

Bob Murphy: 43:01

Right and at a certain level of abstraction. You know, it could be true or not true in either system, right? So right now, I can imagine people listening to us objecting and saying what are you talking about? Biden can't do whatever he wants. Right now, trump is being tried for blah, blah, blah, you know. So we're showing the president's not above the law and the police, if they. You know what's his name, was it Chauvin?

Bretigne Shaffer: 43:24

Yeah, yeah, he got convicted, you know. So the police just can't go around killing.

Bob Murphy: 43:27

We talking about it's a so yeah, at a certain level of abstraction, yep, there's the rule of law in that system and then it's a matter of I would say, just okay, using your analysis, just say in practice which system is more likely to actually have the reality line up with the spirit of what you know, the defender of the system hopes would happen. So, just like we can kind of say you know, in practice we think that yeah, they're, even though on paper the people in the government aren't above the law. You know, I think you and I, brett, and you still think, yeah, the people in the CIA are not subject to the same laws as everybody else. They get away with a lot of stuff that if you or I did it would be criminal, rightly so, yeah.

Bretigne Shaffer: 44:12

And most and police all the time. You know there might be a few isolated cases. You know that's kind of, you know that prove the rule, but you know you do see crazy things happening at the hands of police. It's like no, if an ordinary human being did that, they'd be in jail. Right, yeah, yeah.

Bob Murphy: 44:31

And so, yeah, and so in this system too, that again with the anarcho-capitalist sketch of that world that I just gave on paper, like I'm telling you my story, oh, it works out well. And then, yeah, you can imagine and maybe this is, you know, some of the objections you want to get into about, okay, but yeah, what if there's like major wealthy individuals? Aren't they gonna be able to buy verdicts and things? So theoretically that could happen. And then, if we want to get into it at some point, you know, talking about why I think the checks and balances would be better in that system than in the first one, yeah, let's talk a little bit about checks and balances.

Bretigne Shaffer: 45:07

So that's a good example. And also, like you know what happens when you do have, like a genuine bad actors, like you know, people who have no interest. So what you're describing is a system where people really everyone has an interest in maintaining their reputation in society. But what about people who don't care? What about people who, just, you know, want to go around and kill people or, you know, wreak havoc or whatever? How does it work with people like that?

Bob Murphy: 45:38

Okay, sure. So maybe we'll do like the crazy axe murder first and then do like the rich guy. And then the yeah, commits crimes and just pays judges.

Bretigne Shaffer: 45:45

And then the rich axe murderers.

Bob Murphy: 45:47

Yeah, yeah, yeah. What was that movie? You know? The 80s movie with the serial, or the movie about the guy in the 80s, the serial killer, the guy who played Christian Bale.

Bretigne Shaffer: 45:59

Oh, I don't know, I don't know, I don't watch enough movies.

Bob Murphy: 46:01

Okay Well, anyway it's. I can't believe it's not. Anyways, there's certain it's a cult classic. So some of your listeners, I'm sure, are like, oh yeah, I can't believe Bob can't. This is blanking on the name, but anyway, it was a Wall Street executive guy who also happened to be a serial killer, and it was.

Bretigne Shaffer: 46:15

Oh, American Psycho.

Bob Murphy: 46:17

Yes, was that? Yes, okay, okay, okay, so, yeah, so, and you're right that a lot of what I said I was appealing to incentives that ultimately came down to like, yeah, your goodwill in the community, things like that. So I think partly what would happen is again, at least in Western society, like how things would play out if it was like a relatively poor Muslim community might look a lot different. But I'm talking here about a fairly secular but based on a Judeo-Christian heritage, capitalist society that just goes full A and cap. And I think the way that would play out is people would get either fraternal organizations or just literal insurance companies would effectively be vouching for you. And so, just like right now, like a brain surgeon has male practice insurance, and so what does that say? That if it's demonstrated, not just that something went wrong, but that, no, if he did something that really was not medically appropriate, and blah, blah, blah, and that he's on the hook but he has insurance to cover that, okay.

Bob Murphy: 47:26

And so I think, just generalizing that idea. Or just with auto insurance, Like right now, if you kill somebody or you mess up somebody's car, your insurance pays for it directly, right, even if you're at fault. And so, likewise, I think, just generalizing that concept. I think people would have standard policies, or at least in certain areas, like particularly in big cities where there's a lot of anonymity and people don't know who's who, because it's a big community and you're seeing a lot of strangers day in and day out, I think there probably would be a role for insurance policies like that. So, like before, a, an apartment complex would rent you a, give you a lease for a year or something Besides running your credit, and there's still would be credit rating agencies in this kind of a world. They would also like you'd have a standard policy that if you're convicted in a reputable court system and this would all be specified in the contract like what does it mean to say a reputable?

Bob Murphy: 48:24

whatever, if it's just convicted that you did a bunch of damage or, like you, assaulted another resident and the property and blah blah. That if you owe us damages, that you have a policy that covers that. So we know we're good, right.

Bob Murphy: 48:40

And so so there and then maybe and it's just like with your auto insurance if you're constantly causing accidents, your rates go up. So likewise here. If you're constantly getting convicted of, like beating people up or petty theft or whatever vandalizing the building and your insurance company keeps covering for that and making everybody whole, it's gonna be harder for you to maintain coverage, or at least your premiums are gonna go way up. So that's partly to get you to feel the consequences of what you're doing. So, but so those kind of mechanisms I think would work for 98% of the population and just give people incentives to keep their behavior in line. Again, it's not gonna be perfect, but right now, in the real world, people commit crimes all the time. It's not the threat of the state finding you, convicting you and putting you in a cage with some other unsavory people. That's not eliminating crime at all, right. So it's just a matter of which system. But so now we just focus. Okay, yeah, but the crazy axe murder, serial killer, what have you? It's not that he wakes up and says I could go, you know, chop off 10 people's heads today, but, gee, my insurance rates might go up. Maybe I won't do that, like that's not what's going on with a guy like that. Okay, so he does it.

Bob Murphy: 49:51

And so, at the very least, among other things you could possibly say, I wanna say keep in mind, in an Ancap world, every piece of property, every bit of land, is privately owned, like some of it might be owned by a corporation or so you know. It might not be that, oh, jim owns that. It might be, you know, an entity that has shareholders and whatever, but still there's no such thing as private property. There's not, like there's the public sidewalk, that, hey, I have a right to be here like anybody else. No, everything's privately owned and you can set whatever rules you want as far as who's allowed on my property. So I think in crazy cases like that, where the guy's on video camera, he just walks into a crowd and just starts, you know, just taking out some samurai sword and starts killing people, and you know they go to 10 different judges who all review the footage and they make sure they identify the guy and he has no alibi or he doesn't show up and it's well understood that, yes, this individual is a convicted serial killer or mass murderer. At the very least, every property owner in the area is gonna say you are not allowed on our property. And so wherever that guy finds himself besides, if he you know, if he owned his own house or something the people will be able to call you know the local security agencies to say get this guy off my property, right? So you don't? I don't need to have a separate theory of under what circumstances is it legitimate for us to physically grab someone and drive him somewhere and put him in a cage. I'm saying everybody can say get off my land.

Bob Murphy: 51:21

And I think in that framework there would emerge a role for institutions that would be like sanctuaries for people like that, and so it could be religiously motivated or it could just be a business that says hey, at any given time in this society, this big city of 10 million people, there's 800 people at any given time that are pariahs because they're like serious criminals and no one wants them on their property. So hey, if you're such a person, come here, we're gonna pat you down and make sure you don't have any weapons on you. We're gonna put you in a you know a very monitored cell and blah, blah, blah. You're gonna sign paper or coming in that says you agree. You know that you can't come and go as you please and you're agreed a bunch of stuff. But on the other hand we're not gonna treat you sadistically. You have the right to you know transfer to a different one of our competitors. That's part of the clause and you know you have open lines of communication with our competitors If you feel you're being mistreated.

Bob Murphy: 52:17

Once you're in here that you know they can send their representatives and say do you wanna come over here? So there'd be. So it would be like the prisons in this world would actually be like hotels competing for the patronage of these people, but yet they wouldn't. It would be like the hotel California, right, the ones you go to. You can't leave the system and the only way you would get out that is if one of those agencies again like would vouch for you at some point. So if you really are rehabilitated and notice you know what's the incentive for all this? Just pure profit motive. People are not as productive if they're sitting in a cell somewhere and, by the way, if the person could work from within that facility, that institution, they would. They wouldn't have them doing something stupid like breaking rocks or making license plates. That's not productive.

Bob Murphy: 53:01

If the guy was an accountant, they would try to come up with a way can he do his accountant work from in here, Because right now he's got an $800,000 or it'd be in gold ounces or Bitcoin or something. Amount he owes the estates of the people he killed and he's gotta work that debt off.

Bretigne Shaffer: 53:17

You know, and so he's not gonna do the breaking part. I also wonder what would happen, you know, let's say again, there's somebody where it's on the record, it's clear, this person murdered a bunch of people or murdered one person. And I wonder what would happen in a situation like that, where it is absolutely clear, and the family of one of the people that he killed just goes and takes the guy out. You know what would the legal consequences be to them, what you know, in our current world they would be in trouble, but would they necessarily in Capistan?

Bob Murphy: 53:53

Okay, yeah, great question. So quick answer is I'm not sure, because I can't centrally plan the law, just like if you asked me how many grocery stores per capita would there be? I don't know, that's. You'd let market forces determine that. So my guess is that I think what would happen is that there would be a legal principle that like, for example, if someone steals your television set and you take it back, I think the legal ruling you know would be that if a reasonable person in your shoes would have been quite certain that that was your television set, it's okay for you to take it back. You get what I'm saying where is it?

Bob Murphy: 54:34

You couldn't just bomb their house Well, that too. But also you couldn't take someone else's Like, even if you legitimately got robbed. And then someone down the street had a TV model that was similar to yours and you went in and took it and it turned out.

Bretigne Shaffer: 54:48

Yeah, you can't just do that.

Bob Murphy: 54:49

No, it looked like it that you would be in trouble. But again, I think the specific thing would be you couldn't have been sure that that was your television set and there's a high burden of proof that you gotta be pretty sure before you do something like that, you know. So I think it would be like that and likewise. So, yeah, if somebody you know kills somebody, then yeah, the guy's next of kin, I could imagine, legally speaking, would have the right to kill him. That there's a lot of tradition in Western society and culture about you know an eye for an eye.

Bob Murphy: 55:20

But I think what would happen is, you know, so that would be the limit. Like you couldn't kill the guy's kids. It would just be no, if he's a killer, you can kill him, but also you couldn't, like, torture him for three weeks. That I think it would just be. You know, you can end his life, and so that, yeah, if the family did that on their own and it would have to be them, right, it couldn't just be some other person who was out, like I was saying the family is Amish or something and they forgive him.

Bob Murphy: 55:43

Somebody else couldn't kill the guy and say, well, I'm not letting a murderer live in this neighborhood. Other property owners could say, well, you're a murderer, get off my land, you know what I mean. Like the fact that they forgave you, good for them. But you know, get off my property. They could still do that, but they couldn't, you know, shoot him. They say, oh, he was a murderer walking around.

Bob Murphy: 56:01

That's kind of how I think. And so I think in practice the law might say you're allowed to do up to this amount of you know, retaliation, right. But in practice I think what would happen pretty quickly is. It would just become standard that you know the convicted murderer could say, okay, yeah, you have the right to kill me, but what if I gave you $800,000 instead and you let me work for the next 20 years, paying you that debt off? And then you know the family would think about it and say, well, that's not gonna bring dad back if we kill him, and you know we could do a lot with this money and blah, blah, blah.

Bob Murphy: 56:35

And also, I think that's better for the convicted individual. You know what I mean, like in terms of rehabilitating people instead of just putting him in a cage, like I know we were talking about death penalty but short of that, like oh no, he should be sitting in prison for 20 years. That doesn't make him a better person, right? It doesn't help anybody. And then he's like mixing it up with other criminals, like that's and maybe-.

Bretigne Shaffer: 56:54

They're reflecting the art of being the criminal in that setting.

Bob Murphy: 56:56

yeah, or maybe being himself abused in there from those other you know.

Bob Murphy: 57:01

and so then you let him out for 20 years and they're rampaging maniacs, right right, so that's just crazy, and so I think a much more humane system that also would tend to minimize recidivism would be that, no, when you're convicted, technically, yeah, the family or whoever can do this much in punishment to you, but I think in practice, they would just get, you know, a monetary compensation in lieu of that, and I think, as that became more widespread, that would just become the civilized thing, so that if somebody ever didn't say like, oh yeah, this guy in a bar fight broke this guy's arm and this guy broke both of his arms because the judge said that you're allowed to do that, I think most people was like, oh, why didn't you just take $300,000? What's wrong with you? What are you? You know sick? What's you twist it? So I think that's-.

Bretigne Shaffer: 57:46

Yeah, creates an incentive for more civilized behavior actually. Right because More civilized responses.

Bob Murphy: 57:52

Yeah, because there is a certain I don't know paradox is the right word. But like to sit, you know, if little kids are growing up and they're like, oh, how come that guy is, you know, is being hanged, and say because he killed someone in this community we don't like killers and that's why we killed him.

Bretigne Shaffer: 58:08

You know, like- yeah, wait a second.

Bob Murphy: 58:11

And ultimately you know there's some limit to that logic, right? Like if some guy kidnapped a bunch of people and kept them in his basement for 10 years and did awful stuff and then killed them, you're not gonna take him and put him in a basement for 10 years and talk. You know what I mean. The most you're gonna do is kill him. Yeah.

Bob Murphy: 58:25

And most people realize you're not gonna literally just do to everybody what they did to their victims. And so once you admit that, well then, okay, just because they killed someone, why does that mean we need to kill him? And again, it doesn't bring anybody but but yeah, going back to your question, I do think, at least in the initial implementation of this. I think because there is a sizable segment of the population who would you know, who think that no, and if somebody killed somebody, you know, either they deserve to die or, at the very least, the victim's family has the right to claim their life if they so choose, like you, leave it up to them. That's not what the community should impose. That choice on them. Right, I can imagine that being the legal norm.

Bretigne Shaffer: 59:09

Right, and presumably the way this would look from place to place would differ based on, you know, the values of that community. I mean, a place that was full of Amish people, I'm imagining the law and how it plays out would look a lot different from, you know, an East Coast or a West Coast sort of urban environment. I mean, If there really is no monopoly, then it seems like local values would sort of rise to the top wherever you are, and it's gonna. It would look different from place to place.

Bob Murphy: 59:43

Right. And it's precisely because of that, that's why a lot of people recoil on this kind of system that I'm sketching, because it seems arbitrary, and that's I get. Why, like, an objectivist gets frustrated, is like no, what you're describing is like saying you know, in a vegetarian community the restaurants aren't going to serve burgers, but in another place there. But that's not because there's anything intrinsically moral or moral. But if you're a vegan and animal rights person you would think there would be. But you get what I mean Chocolate versus vanilla ice cream, like, oh yeah, it's just profitability and we're going to cater to what the community wants. But when it comes to matters of justice, there really is an objective right or wrong. And yeah, I mean I'm Christian. I do think you know there's absolutes. But likewise, having a government doesn't solve that, right? If you've got a hardcore community of, you know, followers of Islam and they think that it's more illegal for a woman to walk, walk around in a bikini, having representative government and a bicameral legislature, and you know, executive, that if it's 99% hardcore Muslims who think that, well then in their system you're going to the government police are going to arrest her and try her because she's walking around in a bikini, right? So I'm saying, the virtue of a more voluntary framework, like I'm saying, is it doesn't allow some people to impose their will actually on others or things. Where it's, if it's there's really a high cost, at least that will be expressed, right. So just to give a quick example so let's say you know there's some despised minority, they're much more likely to have their basic rights protected in the kind of framework I'm talking about, even though a lot of people might have thought it would go the other way. They might say, oh no, in, in a system where there's, there's no absolutes, it's just profit makes, right, or something. Then you know, why wouldn't the 90% who despise the other 10%, why wouldn't they just, you know, patronize legal systems and whatever, and they have more voting power. But by the same token, ok, if it's a majority rule, democratic system, you're going to get the same outcome, right. But the difference is the, you know, the 10%, like it's very costly, like it depends how extreme we're talking about.

Bob Murphy: 1:01:56

But if it's like, oh yeah, people, it's not illegal to kill, let's say it's redheads, just, you know, to make it not so inflammatory, right, just say, oh yeah, you can go, it's not illegal to go kill a redhead because they're not, you know, they're not the same thing as other people that that would be a very expensive thing Because, like, among other things, redheads would pay a lot, you know, to avoid that outcome and it would just be very costly. Right, like they work, play, you know, employers hire them and whatever their productive members. So I'm saying, just killing them and there's no, that imposes a lot of costs on the community or losses, let's say damages beyond, just to the individual who just got killed. And I'm saying a market system like I'm describing, though that has ramifications. Other people feel that, more so than in a society where it's just we vote and then that that's what the outcome is.

Bretigne Shaffer: 1:02:43

And there's also, there's also something about this whole idea of imposing a one size fits all solution on an entire nation of people who have different cultures, different values, different beliefs. It's never going to make everyone happy, and I think everyone. That just seems so obvious to me. You know, you're not going to be able to impose these one size fits all rules that's going to make for a happy, harmonious, big, big, huge group of people. And yeah, you can believe that. You know well, my, my view of morality is the right one. Or you know that this is some objective truth, and I think they're objective truths too. But I think the ones we can agree on are things like, you know, murder and theft and that kind of thing. Beyond that, you know, there I think there's something.

Bretigne Shaffer: 1:03:35

I think it's always going to just lead to more conflict to try and find one view of justice or morality that's going to fit everyone, because it's not.

Bretigne Shaffer: 1:03:45

I mean, you know you could take the example of abortion and definitely don't want to go down that trail, but it really comes down to it's. It's a, it's a clash of fundamental values and you're just not going to get in this country especially, you're not going to get everybody to be on one side or the other side and to try and impose I feel like to try and impose one view of what the right answer to that is across the country. It's just going to result in more conflict and more divisiveness, as opposed to having you know different communities, where the downside of that is you have to, you have to know that. You know, across the border, these people are doing something that that I find morally objectionable. And there are all these other communities all over, you know, all over the place, doing things I find morally objectionable. But which is worse? Living like that or trying to, you know, force everybody into one box.

Bob Murphy: 1:04:46

Yeah, and what you just said ties into a point that I want to make sure we we got across in this episode that the people thinking like again with that objective is mine and I'm just. I keep going back to that because I just recently saw at the Soho forum it was Brian Kaplan and I'm blanking on the guy's name now, but the head of the Iran Institute.

Bretigne Shaffer: 1:05:07

Oh yeah, ok, I can't think of a name either. I know who you mean.

Bob Murphy: 1:05:10

And so they were arguing just over this stuff. And so again they seem to think that right now, in the real world, with states, we have the rule of law. And no, we don't, even in the United States, right, some states have the death penalty and other states don't. Yeah Right, so we don't have a single body of law that's applied equally to all Americans. It depends which state you're in, and then certainly the laws change if you leave the US and go into Canada or Mexico.

Bretigne Shaffer: 1:05:36

Yeah.

Bob Murphy: 1:05:36

Right and so, ultimately, to be consistent, the person saying oh, you need the state to have a monopoly to enforce the rule of law because there's objectives and we don't want to just leave it up to the whims of the local population. You would need to have one world government that would impose a uniform law code to everyone on earth.

Bretigne Shaffer: 1:05:54

Right.

Bob Murphy: 1:05:54

And most people don't. I mean, some people might think that's ideal, but most people think no, it's OK if people across the globe have a different government that they set up and I recognize, even if they use procedures that I think are democratic, and blah, blah, blah.

Bob Murphy: 1:06:10

The specific you know, details of their legal code are going to be different from what's over here and most people kind of are they're OK with that and I'm saying, all right, well, that's what would happen under voluntary, decentralized systems. Yeah, no matter which city you went to, whatever and kept city you went to, murder is going to be illegal. But in some of them, yeah, maybe, public nudity is going to be illegal, whereas in other ones it won't be. You know who knows? Or other ones. Yeah, you can't be walking around shooting up heroin on a bench out in the public view. In maybe other places you could whatever, but the idea is that you know community standards and things. That's all going to find its expression in those codes.

Bretigne Shaffer: 1:06:50

I wanted to get back to one thing you were talking about. The whole idea of insurance coverage is sort of a way of vetting people and like if you're, if you don't have good coverage, you know, if you've committed crimes or whatever you're going to, your insurance coverage isn't going to be great. A hotel is not going to want to take you in, people aren't going to want to do business with you. It starts to sound a little bit like a social credit system. So how do you distinguish between the two?

Bob Murphy: 1:07:18

Right, and I'm glad you asked that. And also, too, let's try to remember, not forget. To come back to the what if the rich guy just pays judges to rule in his favor.

Bob Murphy: 1:07:25

Yeah, ok, but yes, so you're right, because you know what's what I found hilarious? So I wrote this stuff up when I was in grad school. So this was the early to mid 2000s and well, early 2000s. And it was funny that the conversation you know and I would be arguing this stuff on internet forums and things, and it would typically start out with oh yeah, you'd have this completely lawless society where anything goes and there'd be XMERS running around and, you know, children just going into the local CVS and getting heroin and blah, blah, blah, and it would just be crazy, might makes right and there'd be no rule. And then I would start going through and describing my system and by the end of it they say that's a totalitarian nightmare in your framework to even get into the local mall.

Bob Murphy: 1:08:08

You'd have to flash your credentials and show your papers at checkpoint Charlie just to get in and go. You know, go to the mall. This is what a totalitarian. I wouldn't want to live under your unfree society, murphy, where, you know, corporations control micromanage. So I'm just saying, notice, those are two completely opposite objections, right, yeah? So, having said that, though again it's going to sound like I'm, you know, trying to say, oh, my system has the best of everything, ha ha.

Bob Murphy: 1:08:33

But I think, yes, we don't want there to be the Chinese system where if you criticize the government, then you know you get dinged and then you know hotels and stuff won't rent rooms to you and whatever. Or if you, you know, if you don't have enough carbon credits, or if you do things, that you get dinged. We don't want that, right, that's totalitarian micromanagement of your day to day life and that's that's creepy. But on the other hand, again, we don't want wild recklessness and so, like, if you're a lender and you're deciding whether or not to give a loan to somebody, I think most of us are okay that there exists such a thing as a credit score, right, and it's. It's completely voluntary, right, that it's, you know, these and agency and there's competition among them and they. But they just keep track of your debts and whatever. And so you and you could say I don't want that. And then they could say, okay, fine then, but no major credit card is ever going to give you a you know a card and no banks going to give you a loan or whatever If you've never agreed to. You know, this kind of thing.

Bob Murphy: 1:09:32

So I think again, likewise in the system I'm describing, you know, once we stipulate what the basic property rights are, no one's forcing you to, you know, forcing you to do anything. But you could imagine, you know, in certain settings again, if you're the apartment owner and some random guy shows up and you have no idea who he is, like, you know, I think most people are you okay with if they do a background check just to see is this guy, you know, from a neighboring community where there's pending, you know, judgments against him that, oh yeah, he just he robbed a bank 200 kilometers away and now he came over here and he's trying to rent a room. Well, no, I don't want you to rent it, you know. So I think it's just a matter of competing interests that yeah, on the one hand, you as an individual don't want a bunch of other people prying into your business and thinking every little thing I do is going to have some impact. But on the other hand, other types of businesses realize we got to protect the people in our organization and we can't let antisocial individuals come in here without some kind of filter on the front end.

Bob Murphy: 1:10:31

And I think the trade off between those two desires to say, well, what's the right line? I think it depends on a case by case basis and again put it into a voluntary competitive framework you're going to get, you know, the outcome that caters to the most people and what their preferences are. So probably like in a small community where everyone kind of knows each other and there's not a lot of you know drifters coming and going, you know, maybe when you go to apply for an apartment they actually wouldn't say, well, you got to have a policy by a reputable insurance company, because they would just know we've been running this place for eight years and only once has there ever been an issue and so we're not going to annoy most of our customers for some rare thing. That's probably not going to even matter. You know they could do right.

Bob Murphy: 1:11:19

Just like. Maybe a better, more practical example for people is if you've noticed, if you're like in a suburb and you go to buy baby formula in the in the ballgreens or something, it's up on the shelves, but if you're in a rough neighborhood and you go in, it's behind the glass. You know what I mean. You got to go to the front and ask for it.

Bretigne Shaffer: 1:11:39

Yeah.

Bob Murphy: 1:11:40

And you know that's inconvenient or whatever, but you can understand why the store's doing that in a high crime area, and so I think it's a similar kind of thing here, where you know businesses would respond appropriately and if it really isn't an issue then they wouldn't have those, those screens up or those extra checks. But you know and certain you know.

Bretigne Shaffer: 1:11:57

Well, you'd also think that you know if people, if your experience of using your insurance as a way to you know, to vet yourself for people you want to do business with, if your experience of that feels like a totalitarian nightmare, you might switch insurance companies. Or you know, there's it's in this system, it seems like the, the individuals, have a voice, whereas you know, in China, you don't have a voice. You don't have. You know there's no, there's no, there's no feedback loop for the people who are being social, credited upon Right To sort of voice their, their objections.

Bob Murphy: 1:12:34

Right, yeah, just to extend what you're saying. Right, because partly what's going on with you know the Chinese system, and then in the US how they're trying to unveil it, and I think you know, like the World Economic Forum and those characters are all involved. They're lying, right they're. They want to implement it, like with the, the Vax ID. Yeah, right, they don't. They weren't trying to stop to spread a coronavirus. That's not what the point of those was. Yeah, the point was to track people and they knew, oh, yeah, just try to get national ID card that everyone's got to carry around to get in a plan where the American public's not going to be for that. So let's do the Vax passport and set or the Vax port, was that they called it Vax port?

Bretigne Shaffer: 1:13:14

That's passport.

Bob Murphy: 1:13:15

Yeah, whatever, I think they had some I mean not the authorities, like the, the libertarians who are against it, like they. I think they call it Vax port, like just a. But anyway, it was all a farce right, it wasn't about it. And I'm not even taking a stand on COVID and the effects of it, I'm just saying the authorities were not implementing a lot of those rules and procedures because they were just lying awake and like, oh my gosh, graham is going to catch this and what can we do to help her? That's not what was going on.

Bretigne Shaffer: 1:13:41

No.

Bob Murphy: 1:13:42

And so that's partly why people recoil against that stuff is because we know it's phony and they're lying to us and they're unveiling these things or unrolling them for other reasons. Like CBDC is not to prevent fraud, it's to be able to track people and to be able to shut them out of the Commerce. You know what I mean. That's why they're doing it, and so, yeah, with this stuff there would be genuine competition. And so, yeah, if, if there were different, you know, like there could be rating agencies like beyond just a credit score, but just in general, like your law and law and order score, or something which sounds eerily similar, but at the very least it would be accurate. It would be classifying stuff that other people would plausibly care about.

Bretigne Shaffer: 1:14:20

Yeah.

Bob Murphy: 1:14:21

You know what I mean, that like a potential employer or whatever. If it's going to say, oh yeah, this guy and you know he, you know he eats a lot of beef and that has a lot of carbon emissions. Someone who's thinking about hiring you to work in their factories and say I don't care, you know now it is previous job that he get into fistfights all the time. I care about that, and so that's the kind of you know what I mean.

Bretigne Shaffer: 1:14:41

So they would yeah, the incentives lineup the incentives lineup to produce something and like yeah.

Bob Murphy: 1:14:46

And, like you said, there's also the flip side that the people being surveilled or investigated or reported upon you know they also would have an interest in privacy and so those companies would only maintain stuff that you know in the interplay between the two. You know, in other words, you might say, hey, what business of it is yours credit agency that I got into six fistfights in my last job. And they would say, well, because for our business model, employers are only going to care about our reports if we include stuff like that. If we didn't include that, we would go out of business and they would cater to reporting agencies that do tell them if you got into fistfights to your last job. So, yeah, that's a pretty relevant thing.

Bob Murphy: 1:15:25

And then, who is an employee? You might say, well, I'm going to shop around. But if all the major agency is like, no, if you got in a fistfight in your last job, we got to tell the potential player that, then you would realize, OK, if I want to work and you wouldn't need to use that, you could say, OK, well, I'm going to go out of business and I'm going to shop around.

Bretigne Shaffer: 1:15:42

Oops, you just froze up. Oh there you are. You froze up per second there.

Bob Murphy: 1:15:47

Okay so, but again, even there, it's not that it's imposed on you. You could just say, okay, fine, well, you know, screw you guys, I'm going to go find you know a sole proprietor and talk to the owner and say you know, yeah, you know what, I don't have reporting agencies. I did get into a fight in the last job, but you should have heard with the guy, you know, the guy who was sleeping with my wife, and the guy was like oh to it, really. Okay, yeah, well, I'll give you a shot. If you start a fight here, you're gone. But okay, I'll give you a shot, you get. I'm saying so.

Bretigne Shaffer: 1:16:15

Yeah.

Bob Murphy: 1:16:15

Nobody's being forced. It's just be different groups have their in. But yeah, no one's going to be maintaining records of things that really have nothing to do with the ostensible purpose, just because they're snoops or trying to spy on you, because that would go out of business.

Bretigne Shaffer: 1:16:28

Yeah, yeah, okay, let's get back to the rich guy who pays the judges to ruin his favor.

Bob Murphy: 1:16:36

Right, okay. So what's funny about that objection is so it's a valid objection to concern, but what's funny is it seems like the implication is because right now, when we had the state running the court system, there really is a one rule of law that applies to everybody, and rich people are prosecuted with just as much zeal and vigor is the lowly, you know, poor, homeless guy, when, of course, no, everyone knows, in the current legal framework, if you're wealthy, you can afford really good lawyers and whatever, and you're going to be able to beat cases that someone without as much as much means would be prosecuted, you know, would be convicted on, right. So right now, it's not the case that a rich person isn't able to to evade the consequences of illegal activity more than a poor person, right? So it's just, as always, a matter of degree. Yeah, which system do you think is more susceptible to that? So, in a free society, again, the way the judge. Again, in the typical case, it's not.

Bob Murphy: 1:17:40

This is another thing. I haven't highlighted the distinction. Right now, if you get charged with a crime and you go before a court, you have no role in who your judges. That's just a side, right. And so, even if that judge has a notorious history of corruption and making terrible rulings that the public can kind of see. That's crazy. That would have a crazy ruling. You know, if it's a place where the judge is due to election you can try to vote the guy out or something, but you know it might be a political appointee. It's a very tenuous, you know, like the mayor, when two people are running for mayor, the fact that one judge in that city's framework made a crazy ruling two years ago, that's not going to determine the outcome of that election.

Bob Murphy: 1:18:20

Yeah Right, so everything just gets all bundled together, whereas again, this more decentralized framework that I'm talking about, the way a particular judge maintains his or her livelihood is, both parties to the dispute have to submit to it ahead of time and say, yeah, I'm willing to go before this judge. Are you Sure? Yeah, and so if it were, you know, documented that? Oh yeah, occasionally this judge, whenever there's rich clients, tends to rule in their favor, even if we didn't know, we didn't see the paper trail, it just looked like huh. It seems kind of funny that rich defendants always get off with this guy, even when it looks like there was a smoking gun case against them. Then you know, other people, when they're plaintiffs against a rich defendant, are going to not agree to that judge Right, and so that's you know the way it would work that, yeah at any given time.

Bob Murphy: 1:19:09

certainly, people are susceptible to bribery or whatnot, but if you're whole there's a cost to it for them.

Bob Murphy: 1:19:15

Right, right, you're more likely to be punished, whereas in the current system, again, at best, it means oh, that might be something that would anger people and in the next election maybe that's going to be used against you. But you know people aren't going to remember that two years later, and you know so anyway, that's. I think the penalties for corruption are much lower in practice in the current system than it would be in the kind of one that I'm describing.

Bretigne Shaffer: 1:19:39

Yeah, yeah, I've got a bunch of other sort of what about? What about one really sort of targeted, specific one? Gets back to defense, because I hear this objection sometimes, which is nuclear weapons exist. You know, we're not going to get rid of them. Isn't it safer for humanity? Isn't it better that they're held by governments, that we have this way of limiting who gets them and there are very strict controls on how they can be used? If we didn't have those governments, the nuclear weapons are still there, wouldn't anybody have access to them. And how would you? It just seems like that would be a very dangerous thing to have this terrible technology available to anyone with no controls on it. How do you respond to that?

Bob Murphy: 1:20:31

Okay, sure, so. So one thing is to say you know, in the last 150 years, the biggest mass murderers have been political states. Yeah, right. So in terms of what's the last group like? I would rather plumbers or electricians or soccer players have control of the nukes rather than politicians. Ultimately, right, like in terms of, or, you know, let's say, political rulers, because in some countries, like you know, with Stalin a politician, I would use that word for him.

Bob Murphy: 1:20:59

So there's, there's that, but I get, you know, the, the prime, the premise, the idea being shouldn't there be strict legal limits on who can control these things? And then, given that we have a world dominated by states, doesn't that mean that the state should be in control? So the way I would hand that in my framework is again going back to, you know, the basic framework that the way you would interact with other members of society, other institutions, is, I think you'd have an insurance company or fraternal organization, or whatever it's going to be called, vouching for you. And so, likewise, if you're some company that wants to, you know, buy a factory and start processing uranium and building really powerful weapons, I think, in order for an insurance company to sign off on that, to say yes, if this company is convicted of causing damages to anyone in the community, you know we will pay that off and then we'll deal with them ourselves.

Bob Murphy: 1:22:00

They're going to have, they're going to have rules in place like, say, well, no, if you have equipment on your premises that could possibly kill a million people, then and then we're going to be on the hook for those legal damages. There's no way we're going to vouch for you. I don't care what you pay us in premiums, that's too risky. And so I think that's the way things like that would would would play out, that you would see the the legal so effectively. I don't think private organizations would be legally allowed to hold the you know super aggressive weapons that, if misused, could cause widespread carnage. So there might be like tactical nukes that could be used offensively, but in terms of, do we need to have the ability to blow up a whole city, I don't think that that would legally happen in the kind of world I'm talking about it wouldn't be insurable.

Bretigne Shaffer: 1:22:50

Right, I mean, there was an argument I remember when, when Fukushima happened, and there was an argument at that time that and I believe it was the case that that nuclear power, at least that nuclear power station, was not insured. That it's, that it's not insurable because of the, because of the, because of exactly what you're talking about the high degree of risk is that? Do you know?

Bob Murphy: 1:23:12

if that's the case, I know about the US. I don't know over there like what their deal was, but yeah, in the US one of the issues with developing building more nuclear plants was apparently with the regulation and the liability, and that's why a lot of pro nuclear people wanted the legal code to be changed. That, yes, like you're saying, I think a lot of insurers would not put themselves on the hook for that because you know, geez, if something goes wrong there's a potentially open ended liability. And so they wanted the pro nuclear people wanted government rules, kind of like with the vaccine stuff.

Bretigne Shaffer: 1:23:51

Yeah, yeah, don't hold us accountable for the harm we do, so, so right so it's now I can't speak to, like.

Bob Murphy: 1:23:58

I've talked to some pro nuclear people that that agree with the limits but they say no, it's common sense. Things like if you knew enough about the science and blah blah, you'd see that you know what we're talking about is quite reasonable. It's more like just not giving the jury the ability to say, oh, that's a trillion dollars in damages, when really it's not. You know that kind of thing, right, right.

Bretigne Shaffer: 1:24:18

So I don't know enough to weigh in on whether it's wrong.

Bob Murphy: 1:24:20

I'm just saying in the free society that I'm talking about the legal damage, you know, liability would be sensible and if it turned in, I think in practice that, yeah, the so, whereas a nuclear power facility, if it's got safeguards and whatever, poses not a very big threat.

Bob Murphy: 1:24:36

yeah, the population, whereas if you have a bunch, of things that have, oh Jesus, some group broken, or if just the people running this organization went rogue and they weren't going to do that and they wanted to, they could kill millions of people. That, yeah, I don't think any third party would want to say. Yep, we vouch for them and we're on the hook legally for any damage they cause.

Bretigne Shaffer: 1:24:56

Yeah, yeah, Okay. One of the biggest objections I hear all the time is this has never been tried historically. There are no historic examples of anything like what you're talking about. So this is crazy. It never has been, it never can be. How do you address that?

Bob Murphy: 1:25:15

Okay. So if I want to be glib about it, I can say, well, good, so this way at least we know it's not a demonstrated failure. In contrast, your proposal typically the person I'm talking to of limited constitutional government, we know that doesn't work Because you know, look at who we had. We had Samuel Adams and Ben Franklin and Thomas Jefferson and James Madison, and they all got together and gave us this great system, this great experiment, and it blew up in our face. So you really think we're going to reboot and have a bunch of founding fathers that are better than those guys were to give us Constitution 2.0, and this time we mean it Right. So I'm going to say, if you're going to use lessons of history, you can say limited government clearly does not work. It's been tried hundreds of times. It always has failed, always 100% failure rate. And so you know, I could again, being glib, I could say the very least, the system I'm saying it's not that there was some society that we could point to that oh yeah, that was doing what Murphy wanted. Oh yeah, that was doing what Murphy wanted, and then, 50 years later, it's a big state that took over or something. So less glibly, it's true, no one society has ever had all the attributes I'm talking about. But each particular thing I'm saying there are analogies, just like in this conversation we've been having. You know, I would try to say, like with the medical malpractice, right, like it really is the case right now that for you to drive your car you need to get insurance. That you know vouches for you and says, yep, if this guy causes damage with his vehicle, we will make the person good, good and otherwise you can't drive on the road. So I think you know that's a standard thing to say in a free society. It would be similar the owner of the road, we would say you need to have a policy, you know. So a lot of these things are like that.

Bob Murphy: 1:26:54

And again, arbitration, you know, you see, that right now there's private security in terms of, you know, personnel. I think there's more people employed privately in security right now in the US than there are public sector police forces. Okay, so their legal standing is different, but I'm just showing it's not that everyone just sits back and says, oh, we have the police to protect us, that no, lots of organizations know the way you actually protect your person and property and your employees and stuff is. You have private sector employees, you know, with that function. It's just they're not government police.

Bob Murphy: 1:27:31

So you know, again, with all these things, the ratings agency, like things with Amazon and stuff, the thing that shows a real world application of, well, gee, what if you send money to someone and they don't send you your books or your merchandise? Well, that could happen, but they have rating systems and in practice it's pretty good. Whereas if I told you how Amazoncom worked before, it was a thing you could imagine, a lot of people saying that would never work. Are you out of your mind? You're just going to send money to random people 200 miles away and just hope they send you their stuff. That's not going to work, and yet it does work right. So I realize a lot of this stuff. If I say, the whole system at once sounds crazy, but if you just think of each little component of it, it's not crazy. And we do see real world analogs of that already, and I'm just kind of combining it all into one thing. Yeah, yeah.

Bretigne Shaffer: 1:28:21

Why do people tell anarcho capitalists to go? Move to Somalia.

Bob Murphy: 1:28:28

So, yeah, this is a very popular thing. So Somalia per se, I don't think is so unfair and I'll come back to that in a second. But in general, yeah, people will point to, like recently I saw someone say, oh, if you like free markets, go to Gaza right now, because there there's no government. And I and I got to my point was, yeah, a region being completely obliterated by a government right now is showing this is what it looks like if there's no government involvement Like that's just crazy. Yeah, so with Somalia, in fairness to there, it really was genuine period of statelessness. We know when the I forget the guy's name when the you know previous dictator fell, and then you know there were squabbling clans and things, but there was no other government that was established in his absence and so it was genuine statelessness. So it wasn't a picnic, but you know what Somalia under anarchy was better than Somalia with a state, okay. And so again, with all these things you got to do apples to apples.

Bretigne Shaffer: 1:29:29

By what measurements?

Bob Murphy: 1:29:31

Life expectancy literacy rates, One that maybe doesn't strike people as particularly important, but like cell phone usage per capita, you know, various metrics.

Bob Murphy: 1:29:42

That and also too. So Ben Powell has an article on this. If you want to look that up and put it in the show notes page yeah, that's P-O-W-E-L-L is how you spell his last name. And also, too, he did it like a comparison of Somalia with some of the neighboring countries and just showed over time. And so it's not only that, in absolute terms, somalia did better when their government fell, because you might just say, oh well, in general, humanity progresses, or whatever, but no, that the rate of improvement, like Somalia, compared to its neighbors, somalia's relative standing, improved when their government fell. And why did their government fell? It's not because everyone read Rothbard, it's because the guy was so corrupted, it was such an awful regime that it collapsed under its own weight. Okay, so it's not surprising that taking away the awful, parasitical regime and leaving it with nothing, those people did better off, right and so. So again. But it's to point to that. See, that's what happens. You take away the government is like no, no again. So, for one thing is yep, they were better. So, even so, somalia does live up to the claim, which is take a given group of people, other things equal. You take away their state, they're going to be better off. Somalia actually fulfills that.

Bob Murphy: 1:30:59

Now, that again, the claim is not for any group of people with a state. Compared to any other group of people without a state, the latter is better. That's not what we're saying, right, right. And so it's like if I say it's good for a basketball team to pass the ball around and not just have one guy, you know, take all the shots, and you could say, oh so the Chicago Bulls with Michael Jordan, if he just took the shots all the time, isn't going to be able to beat a high school team if they pass the ball a lot. Well, no, the Bulls would win. But I'm saying other things equal, right, so the Chicago Bulls if they pass more is better than the Chicago Bulls If Jordan just shoots every shot, right. And so likewise, yeah, the US, if you take their state away, we're going to be way more productive and better and peaceful than Somalia without a state.

Bretigne Shaffer: 1:31:42

Okay, so that's you know yeah, yeah, it's not as apples to oranges Really quickly because I realized how much, how much, how little time we have left. So if you can quickly address the issue of how do you prevent a new monopoly state from rising up, Okay.

Bob Murphy: 1:32:03

So I can't guarantee that, right, you know, humans, humans have free will. There's nothing that would necessarily prevent you from forming a state. You know, depending on your view of history, whether you believe in the literal genesis account or whether you believe in more of an evolutionary thing. At some point there wasn't what we think of as human government or states, let's say because government could be a more generic term yeah, political states of the kind we mean, those definitely started at some point in human history. Right, and so if there was a period when humans existed and they didn't have the political course of state that we have in mind by that term, and then later it existed, clearly that shows States can come into existence, right, and so I can't prevent that and say, oh, because of clause 8 on my contracts, well, what if people just ignore them? Right, so I can't prevent that. But what I can say is I think if you had a system like I'm talking about, up and running, it would be very robust to the emergence of a new state. And so I think what's what's really crazy is to start with a limited state and assume it's gonna stay limited. Right, because there it's very easy, especially when the state is in charge. Oh, we have a Supreme Court, and so when we're accused of violating our prerogatives, we turn to the Justices we appointed and said, hey, did we break the law? And they say no, you didn't. Okay, good, great, I'm glad we got that straightened out. Yeah, and you know, we took away these people's guns. Does that violate the second amendment? No, it doesn't. Okay, phew, okay, great, right, that's what's ludicrous. Whereas if you don't have that apparatus and it's all competing Organizations with a general decentralized rule of law where nobody's above the law, it's hard for one organization to kind of rise and dominate the others. And you know, to kind of go back to like say, oh, wouldn't the dominant defense saying she just turned into the state. They could try, but everybody would at least recognize that they were criminals. That's, I mean that the state right now.

Bob Murphy: 1:33:58

It's not merely that they have guns and they point and I think a lot of libertarian types miss this sometimes that they're real jaded and they say, oh, yeah, the reason the government can do xyz is because they have more guns than people. No, they have legitimacy. Now you might think it's a misplaced, and so do I, but the general public does not view. The mayor's office is the same thing as like a mob boss headquarters. Right, that certain libertarians do, that's not the general population. If the general population thought that the mayor wouldn't be a ruler anymore, he would lose his authority. Yeah, and so I think people underestimate that that in order for a group to rise above and then you know they would have to Gain some legitimacy, and it would be hard to go from a situation of Anarchal capitalism to one group coming on and taking over all those powers that we traditionally associate with a nation state and Not having anybody along the way say wait a minute, you guys are violating your prerogatives. You can't do that. You're a criminal, right.

Bretigne Shaffer: 1:34:55

Right, yeah, especially if you've got, if you've got, this established rule of law where, where everyone is held accountable, and suddenly someone rises up and is like, well, no, we're not gonna, we're not, we don't want to be held accountable, we're you know, we're gonna do our own thing. It's like I think people just based on their own experience would have a problem with that.

Bob Murphy: 1:35:14

I would, I would hope, I would think and also just to elaborate or extend what you said, I think the fact that there would be competing agencies providing the same type of certain would be critical. So right now you go to a restaurant, you go to a fast food place and you get food poisoning. People can be mad at that chain and say, hey, watch out, community, don't go to, you know, burger King, because I got a whopper the other day and I got real sick and da, da, da they wouldn't say oh well, the next time you're hungry I guess you're just gonna stay home then you know what I mean. Like they wouldn't talk like that.

Bob Murphy: 1:35:47

Yeah because there's other competing places, whereas if people say, hey, you know the cops, last week they took that, cut that suspect in the custody and they broke his arms I don't think they should have done that you'll get a lot of people saying, oh well, next time someone's breaking into your house I guess you're just gonna deal with it yourself and not call the cops, right. Right. And the reason they think like that that dichotomy, it's all or nothing is because there's one agency, the police that do that. But if there were ten different police organizations providing the services and one of them was consistently more aggressive than the other nine, it would make sense to say, hey, instead of patronizing this tenth one, let's do these other nine. And it wouldn't be. You're either choosing between Having laws enforced at all or cops who you know break your arm just because you mouth off to him. Yeah.

Bretigne Shaffer: 1:36:28

Yeah, yeah, you have any thoughts on Javier Millay and Whether he's really is here real anarcho capitalists. Is he are you hopeful?

Bob Murphy: 1:36:40

Mm-hmm. Okay, so I'm biased, because in an interview he literally cited chaos theory.

Bretigne Shaffer: 1:36:46

Oh, wow.

Bob Murphy: 1:36:46

I was asking him for my point of view. He was like Robert Murphy Kyle's theory, but I don't know what he said, but I think it was a favorable and so, yeah, and he is, he really does know, and in a crook capital he's not just bluffing and again, why would you bluffing? Although he won. So I guess you could say maybe he did realize that. Note the time is right. What do people want? Yeah, and I'm gonna pretend to be it, even though actually I'm a menarchist. Yeah. So I do think that, yeah, he actually is an ancap and you know, he's a trained economist. They're getting people don't know his background. He's a professional economist, he's worked for major banks and stuff. So he's definitely, you know, in that vein and has read the literature and knows the theory and believes in it. So I don't know, I don't know him personally.

Bob Murphy: 1:37:38

I know a lot of people who are close, you know, to him. Like I interviewed this guy, nicholas Kachinowski, who was one of the co-authors of the proposal to a, to get rid of their central bank and to dollarize. So I know a lot of people that are, you know, like I'm like one or two layers of separation from him and a lot of them are very Complementary and they're hopeful that they, you know. So like when the people on the left are accusing him now being a fascist and whatever, because he's Like saying, oh, if you're protesting and blocking traffic, we're gonna arrest you, and so, like the left, so look at this, see right wing fascist. And I know a lot of people who are, you know, coming out and defending him. And so I don't know him personally, I haven't followed his career or anything, but I definitely can say he's, he knows the material, he's not bluffing about that. And A lot of people who I respect Are hopeful like let's see if this guy can really pull this off.

Bretigne Shaffer: 1:38:35

They don't think it was like some cynical thing and oh yeah, he's gonna get in there and disappoint it's just like everybody else does yeah, he did say he was gonna get rid of the central bank and I think people, people had had the sense that that was gonna happen, like on day one, and it hasn't happened yet. And right, what do you? What do you think about that? Do you think he's broken his word on that?

Bob Murphy: 1:38:53

Um, so I, I don't know, I Agree, like he was, you know, having a chainsaw and stuff like that. Yeah, it seemed pretty bombastic. Having said that, though, he did publicly endorse the dollarization plan. Like I said, this guy know Nicholas, and I forget what his co-authors name was In in their proposal. Like that was written, you know, a few years ago, so it's before Javier was was a thing, or a frontrunner at least. You know it was a laborious process. It wasn't just on. You know, next Thursday we get rid of the central bank because the deal was all of the existing banks, all of their Assets, like on reserve with the, with the central bank, were denominated in their local currency, you know what I mean.

Bob Murphy: 1:39:38

You can't just snap your fingers and switch the whole thing over, just like right now. Imagine if you know, we were gonna get rid of the Federal Reserve and, instead of everybody using dollars, we were gonna use Swiss francs or something that would be hard to pull off in one month. Yeah, transition, yeah, without this right. So that's what, the what, the feedback I've gotten on that. So, again, I don't know, Did it was his campaign rhetoric? Did he leave that open to nuance? Or like what? Did he lead his supporters to believe, no, we're really gonna, on day one, get rid of that thing? I don't know, because I don't speak the language and I, you know, I haven't been able to see what his commercials were like but it sounds like that wouldn't have been a realistic thing to promise.

Bob Murphy: 1:40:18

Anyway, you know right and what I can say is, yeah, that he publicly endorsed this plan, for this is the blueprint we're gonna use for the dollarization, and if you went and read that, it was clear this was gonna be a drawn-out process.

Bretigne Shaffer: 1:40:31

Yeah so yeah, yeah, yeah, okay, we've gone close to two hours. Um, is there anything? I mean we could probably go on and on and on, but is there anything else? Is there anything critical? We've left out anything that you know big misunderstandings. People have something, anything that needs to be addressed.

Bob Murphy: 1:40:53

Well, it's a funny. Can we talk about the mafia like wouldn't?

Bob Murphy: 1:40:55

yeah, yeah, yeah over yeah, this is a good one, like I think they just kind of underscores how, if you study free market economics, you have a certain insight into this. So right now and again, use the US is the the the place where I'll make my points and reference students as the history I know. But in the United States, what are the sectors where the mafia or organized crime in general thrives? It's all those that are either literally prohibited or heavily regulated by the state. Yeah, so prostitution, gambling, illegal narcotics and back in the 20s, when alcohol was illegal, right, that's what Oregon, you know, al Capone was a bootlegger and all this right. Once you, they legalized alcohol. It's not that organized crime had anything to do with liquor anymore.

Bob Murphy: 1:41:41

Okay, and so as an economist, you can study that and try to figure out why that is and go through and say, well, yeah, cuz when it's illegal there's market share and you know there's incentive to Like the costs and benefits have taken out your competitor, because this is my area where I'm gonna sell the whiskey in this region, those, those numbers. The incentives are different if it's illegal and the only people selling the whiskey are, by definition, criminals. Right to be able to stay in business must have networks in place where they pay off the cops and pay off the judges, like if the community knows, oh yeah, you need liquor, you go to that guy. Well, the cops know that too. So the only reason you're gonna be able to persist in there is if you're paying them off. Right, right and so right.

Bretigne Shaffer: 1:42:20

So you've already, you already paid sort of the entry fee to the world of criminality, and so you might as well, you know, be committing crimes right on the market real crimes.

Bob Murphy: 1:42:31

Yeah, on the margin. For you then to Occasionally shoot people is not that qualitatively different, because you already gonna have the police and the judges on your payroll and whatever, yeah. Whereas if you're a law abiding CEO, you know anheuser-bush and you're at a board meeting and they're like okay, we're gonna unveil a new product line and whatever, and let's make sure we don't have commercials involving trans people, because that pisses people off, apparently, and did a. Oh and, by the way, why don't we go do a drive-by and kill the shareholders of Heineken? Maybe that will be good. It'll be like what are you out of your mind? Why would we do that? You know what I mean. Like we're running a reputable business here. They would expose us all kinds of risk. So, and also, the margins are smaller, right, when it's a reputable legal business, the markup from what you pay wholesale to get the product and then resell it right, the markup's not that big. So to capture 2% more market share Doesn't mean that much. It's not worth killing somebody over.

Bretigne Shaffer: 1:43:24

Whereas yeah, don't.

Bob Murphy: 1:43:26

I have the rights to sell cocaine in this neighborhood, based on what I pay the Colombian drug lords For the product and then what I resell it for. You know you're mostly paid for the, for the risk of being that, you know, middleman. That's what you're getting compensated for, and so, yeah, to take somebody out might mean you make an extra $300,000 a month and, yeah, I'd kill somebody for that. I mean not me, but the person could right, right. So I'm just saying there's so, just more generally, that's kind of the idea. And so it's Precisely in those areas where the state comes in and outlaws or heavily regulates quote Legitimist business people from operating in yeah, that the mafia thrive right, because they, because this the regulation creates those profit margins Right, they wouldn't exist without right without that, and so then, one way of thinking about an Anarcho capitalist world, if you want.

Bob Murphy: 1:44:15

It's like if the state is still there, but legalized everything. And so some people think, oh, if everything's legal, that means mafia is gonna run everything, and I would say, no, that means the mafia would run nothing right, go out of business.

Bob Murphy: 1:44:27

Yeah, the current level, with the state regulating some things and legalizing others. The state, the roster, the mafia thrives in those sectors that are heavily regulated, not in the thing that are wide open. The mafia doesn't run dry cleaning operations because there's no margin there. You know people really need to have dry cleaners, just like they really like to drink. But if there's no, you know.

Bretigne Shaffer: 1:44:48

Anyway, that's, yeah, that's a really good point, that's a really good, that's a really good point. Okay, thank you so much. This has been fantastic and I will. I've got a bunch of stuff to link to. I'll link to your chaos theory and, oh, what is your website? How do people, how do people, keep current with you? How do they know what you're doing?

Bob Murphy: 1:45:12

Yeah, I guess I would point people to my podcast. Probably so Bob Murphy show. Calm is the place to go. I do have a personal set, but I won't even mention it because I haven't updated that in a while.

Bretigne Shaffer: 1:45:21

So okay, I would say Bob Murphy, show calm.

Bob Murphy: 1:45:23

If you're into the kind of stuff I've been talking about, this is that's the place to go.

Bretigne Shaffer: 1:45:26

Okay, and you're on Twitter and I don't think you're not on sub stack or anything else. Right, you're just um right Twitter.

Bob Murphy: 1:45:32

I'm Bob Murphy econ.

Bretigne Shaffer: 1:45:33

Okay, okay, Okay, thank you so much Well thank you. You've been listening to. What, then, must we do? The podcast. For those who understand the state is the problem and are seeking solutions For more episodes, go to Bretney dot sub stack calm. That's Bret E dot sub stack calm and subscribe.