September 12, 2004

Defending Property Rights; Hoppe

I was just dipping into Hans-Hermann Hoppe's Democracy-- The God that Failed (Transaction, 2001). It seems to be anarcho-capitalist, in the style of David Friedman's Machinery of Freedom, which is, however, the better book. Hoppe, though, proclaims himself a "social and cultural conservative" too, which is an interesting combination quite appealing to me. Both authors raise very good questions about the fundamentals of political philosophy, focussing especially on the question,

"How can property rights be defended?" ...

... The hard question is not to define property rights. Indeed, economics tells us that if the initial allocation isn't efficient, people will trade to get to an efficient allocation, so long as they must trade rather than just take. But that is the catch. Why should they prefer trading to taking? Or, to put the aphorism a bit differently, why make instead of take?

The classic answer, which I will teach tomorrow unless I convince myself otherwise, is that we create government to defend property rights. A group of people chip in taxes for a government to hire police and soldiers who prevent people in the group from stealing from each other and outsiders from stealing too. Each person in the group realizes that the police will keep him from stealing too, but he accepts that, since stealing is inefficient, reducing the group's total wealth.

One of the readings for my class tomorrow classifies property as individual, communal, and government. That's not a bad way to do it, but in thinking about the purpose of government, it has some problems. It is not hard to see that individual property rights are usually what we want; the problem is how to enforce them.

Hoppe says somewhere that this classic answer is wrong. Government is not the defender of property rights, but the biggest threat to them. This has some truth to it, but in a perverse way. It is quite true that the government is the biggest threat to my property. Besides the 10% or so of my income that it takes for the legitimate purpose of fending off other internal and external thieves and for providing public goods, it grabs another 10% for transfers to people more politically powerful than myself-- the old, the poor, people from small states (but two senators nonetheless), and so forth. If we look at government laws and regulations, we see much the same proportion-- some laws are for the common good, and others for special interests. I lose a trivial amount each year to private thieves, and none at all to foreign thieves, so the government is the biggest actual thief and the biggest threat for increasing thieving.

But the government is the biggest thief only because it so effectively blocks other thieves. If we got rid of the US and Indiana governments would I be 20% richer? No. If I did nothing, then internal thieves would take my car and other movables, and extort my liquid assets by threatening to kill me and my family. External thieves would move in with their armies and, most likely, wipe out the internal thieves and reduce me to slavery.

Of course, I'd do something. I'd buy guns. Better than that, I'd chip in with the neighbors to buy some professional soldiers. We could even make a profit off it, by using our soldiers to pillage neighboring Elletsville and rural Monroe County. But other localities would do the same. We'd soon see that since fighting costs a lot, and the biggest army would win, we'd be best off by joining forces and just requiring everybody to pitch in to pay for it. And so we'd be back to our status quo-- including the 10% government thievery, since it's hard to keep a big organization like that from taking advantage of its power.

That's the flaw in anarcho-capitalism-- when you think about it, the private protection agencies would evolve into pretty much what we've got now.

No-- the real problem is think how to keep a government, a monopoly provider of security in a given geographic locality, from stealing too much.

This could use formal modelling, I think. I started trying to put something together on these lines. Suppose we have 100 people, 100 guns, and 1000 cows, with guns and cows allocated as property according to some arbitrary initial distribution. Everybody is risk averse, and there is no production. Anybody with a gun can try to steal from someone else, with a certain wastage of cows in the process, unless someone with a larger number of guns intervenes to stop him. A starting position can either have someone with a large number of guns volunteer to be a policeman for one or more other people, or not.

Any group of people with more than 20 guns can declare a revolution. If they do, then two things happen. First, there is some chance each of those people is killed. Second, property is reshuffled. There is a probability distribution over the new possible property allocations, with a significant chance either that the revolutionaries gain a lot (success) or lose a lot (failure). Also, there is wastage-- 50 cows die in the revolution.

The question is which property allocations and police systems are stable and which have the greatest number of cows. If nobody acts as policeman, then there will be theft, with a certain number of dead cows. If too many people are too poor, yet have guns, they will declare a revolution, so that allocation is unstable, and inefficient since it leads to a revolution that kills cows. Probably in equilibrium we'd have someone with lots of guns acting as policeman, who would get cows from everyone else in return for protecting them, and although he'd charge them a lot, he'd refrain from stealing or overcharging in order to avoid revolution.

To a non-economist, this probably sounds silly and unserious. Formal models sound like that, which is one reason-- the main reason?-- economists use X and Y instead of guns and cows. The mathematical notation scares off the boobs so they don't make fun of us. But I'll make a more honest defense. Trying to understand something like the origins of society is like trying to tell a persuasive story, one that hangs together and sounds like it would work. This is hard, and to be persuasive needs to be understandable, which means it needs to be simple. The style of political philosophy is to be verbal and vague, which may sound profound but actually slides over the hard points. Economic models insist on the rigor of setting up the choices people have and then seeing what they will choose, rather than just loosely saying what will happen. This results in a story that is stylized but not vague. It lacks the details of reality, but that is good, not bad, because the aim is to strip the situation down to its essentials.

For more on that, see the Introduction to my Games and Information, which is a bit unusual for an introduction in that I actually try to teach something important.

If I could put together a formal model of the guns and cows, not an easy task, I would then be ready to attack the harder question of the psychological costs of revolution, and the shape of that transition matrix from the initial allocation to the post-revolutionary one. That is where things such as moral and religious principles would enter-- legitimacy and guilt. Libertarians tend to downplay the positive theory of legitimacy, though they often make a big deal of the normative. For present purposes, though, what matters is why some people would not start a revolution even though they would personally benefit; why some people would die for the status quo, and how others can be induced to die to upend the status quo.

Permalink: 11:20 PM | Comments (1) | TrackBack

August 01, 2004

The 2004 Libertarian Convention and Nominee Badnarik

Via The Volokh Conspiracy I found an excellent article on the The 2004 Libertarian Convention Since the Libertarians are a small party, their convention does not get TV coverage and hence is more than just an extended campaign ad cum try-out session for future vice-presidential candidates. They actually fight over nominations. And this year an underdog (not really a "dark horse") won the nomination.

The winner, Mr. Badnarik,

... has written a book on the Constitution for students in his one-day, $50 seminar on the Constitution, but it is available elsewhere, including on It features an introduction by Congressman Ron Paul and Badnarik's theory about taxes. His campaign website included a potpourri of right-wing constitutional positions, as well as some very unorthodox views on various issues. He proposed that convicted felons serve the first month of their sentence in bed so that their muscles would atrophy and they'd be less trouble for prison guards and to blow up the U.N. building on the eighth day of his administration, after giving the building's occupants a chance to evacuate. In one especially picturesque proposal, he wrote:

I would announce a special one-week session of Congress where all 535 members would be required to sit through a special version of my Constitution class. Once I was convinced that every member of Congress understood my interpretation of their very limited powers, I would insist that they restate their oath of office while being videotaped.

This is not an intelligent nomination, even for the Libertarians. How did it happen?

The Libertarian party did not want a failed campaign--

... another campaign like the past two, in which LP nominee Harry Browne had spent millions of dollars but had gotten .50% and .36% of the vote. Russo thinks Browne is a "disgrace to the Libertarian Party" because Browne promised to spend the money he raised during the campaign on advertising, but spent it instead on personal travel, generous salaries for his staff, and building a fundraising base for future use. (Browne had spent only $8,840 of $1.4 million on advertising in his first campaign, and about $117,000 of $2.7 million on advertising in his second.


In 1996, Browne hired Perry Willis, the party's national director, and Bill Winter, editor of the party's newspaper, to work for his nomination. This violated party rules and the terms of both employees' contracts. When exposed, Browne, Willis, and Winter all agreed to end their business relationship. Five years later, copies of invoices for services rendered were found among files archived on Willis' computer at LP headquarters, revealing that he and Browne had conspired to continue their illicit relationship and, with other members of Browne's staff, had conspired to pay Willis by a process of laundering the funds through another legal entity. Willis admitted that he had done this, arguing that his work for Browne's candidacy, though in violation of his employment contract and LP rules, was of such vital importance to the party that it justified his and Browne's lying and defrauding the party. Browne at first told supporters that he could explain everything in a way they'd find acceptable, but as the evidence mounted, he simply refused to say anything on the subject, not even responding to the National Committee's investigation.

The party's National Committee passed a resolution banning the party from doing further business with Willis or any entity with which he was involved, and condemning Browne and the other members of his management team who were implicated in the scheme.

But one of Browne's conspirators remained in charge of the party's publications and, not surprisingly, chose not to report very much about the episode, and other party officials presumably were reluctant to publicize Browne's misdeeds out of fear of hurting their ability to raise funds. Despite the lack of publicity within the party about Browne's malfeasance, a substantial number of party activists learned about it and were disgusted with Browne.

What happened in 2004 was that the two front-runners knocked each other out with much bad feeling, and the backers of one went to Badnarik. Nobody had expected this, so nobody knew much about Badnarik. The whole process was confused:
The situation on the floor was confusing: the chair had called for the second ballot, and the nominating session was recessed for delegates to get lunch. Many left without realizing that they were supposed to vote before going to lunch. Outside the convention hall, people were running about asking delegates whether they'd voted, and sending them back into the hall to do so.


The nomination process was over. LP delegates had chosen as their standard-bearer a man who had willfully refused to file his federal tax return for years, refused to get a driver's license but continued to drive his car despite having been ticketed so many times that he couldn't recall the exact number, proposed to blow up the United Nations building, wanted to force criminals in prisons to stay in bed until their muscles atrophied, and planned to force Congress to take a "special version" of his class on the Constitution. And the overwhelming majority of delegates didn't know any of this about their nominee.

Shortly after Badnarik made his acceptance speech, Larry Fullmer, an Idaho delegate and Russo supporter, learned from an Oregon delegate that Badnarik hadn't been filing his income tax returns. Fullmer, he later recalled, "freaked" at the news. "From early afternoon until 5:00 a.m. Monday, I spent every second telling folks about Badnarik and the IRS." Fullmer spoke to more than a hundred delegates, and didn't find a single delegate who knew that Badnarik hadn't been filing returns. Most were "shocked" at the news.

Among others, Fullmer spoke with Mary Ruwart, who responded, "Larry, ya gotta get the election reconsidered," and proceeded to tell him that Robert's Rules required that a motion to reconsider the nomination was in order only if it was made by someone who had voted for the nominee. Fullmer also approached Judge Jim Gray, the LP senate candidate in California, and told him about Badnarik's not filing his tax returns. "You are running on a ticket headed up by a constitutional nutcase who has refused to pay his taxes for years. What do you think about that?" Gray responded, according to Fullmer, in these words: "Larry, if what you say is true . . . you already know what I think."

No doubt getting Libertarians organized is like herding sheep, but this perhaps show the limitations of guided rationality. Politics, unlike economics, lacks the Invisible Hand, and needs some bosses to run things. In this case, the bosses could have helped by putting together their information about Badnarik, or by generating some by using the economies of scale of staff and delegation. Their followers would, if rational, have willingly lent their votes to the bosses in blocs, knowing that the bosses would have better information and could direct their votes better than could they themselves.

Permalink: 04:01 PM | Comments (1) | TrackBack