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Author Topic: DROs vs States  (Read 1312 times)

Lex

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DROs vs States
« on: May 16, 2011, 02:22 PM NHFT »

In a free society one would be highly compelled to subscribe to some DRO or protection organization, etc; I can't see a scenario where you could avoid being a member in some DRO or protection organization, unless of course you've found some remote piece of land where nobody will find you...

So, given the assumption that you have to join some DRO or protection agency, how would that be any different than becoming a citizen of one country or another?
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gibson042

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Re: DROs vs States
« Reply #1 on: May 16, 2011, 03:45 PM NHFT »

Even if market forces work out such that almost everyone contracts with one (or more) protection agencies, the situation would still differ from citizenship (read: serfdom) because one could terminate the contracts and/or form new ones without uprooting one's life.

By analogy, people are now free to choose a religion without regard to geographic location. This was not true in centuries past, when church and state were practically indistinguishable. And the consequences have been world-changing.
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Lex

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Re: DROs vs States
« Reply #2 on: May 16, 2011, 03:49 PM NHFT »

Even if market forces work out such that almost everyone contracts with one (or more) protection agencies, the situation would still differ from citizenship (read: serfdom) because one could terminate the contracts and/or form new ones without uprooting one's life.

By analogy, people are now free to choose a religion without regard to geographic location. This was not true in centuries past, when church and state were practically indistinguishable. And the consequences have been world-changing.

You are assuming that DROs would be geography agnostic. Why do you think that?

Why wouldn't DROs gain regional monopolies? There is nothing innately special about free market protection that prevents regional monopolies.
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gibson042

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Re: DROs vs States
« Reply #3 on: May 16, 2011, 04:05 PM NHFT »

Because I have no reason to believe that every such agency would both hold an exclusive geographic monopoly and remain confined to it. Monopoly status essentially serves as a key differentiator between states and DROs.
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Lex

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Re: DROs vs States
« Reply #4 on: May 16, 2011, 04:18 PM NHFT »

Because I have no reason to believe that every such agency would both hold an exclusive geographic monopoly and remain confined to it. Monopoly status essentially serves as a key differentiator between states and DROs.

If nobody wants to offer a competing service or if it's not economical to do so than it's quite possible that there will only be one service. Additionally, if an area starts out with one service and overtime becomes complacent about having that one service. If the agency then makes every effort to become even more entrenched in the society it would later be financially unattractive for someone to try and break into that market in the area.

A protection agency could purchase roads or other important resources in the area and then require membership in order to use those resources. It would become very inconvenient for people to avoid subscribing. As everyone subscribes, the agency would have more money to maintain a monopoloy, hire better PR department to cover up or dampen any bad decisions by the agency, etc.

Once an agency stretches deeply into the community socially and economically and is able to keep at least the majority of it's subscribers happy there is no reason it couldn't maintain a monopoly.

A competitor would have to have a lot of resources to even begin to compete and since there is no protection for a protection agency there is nothing to prevent the monopolistic agency from using violence against the new entrant as long as they have a good PR department and can appease their subscribers that the action was somehow justified.

People will still be people in a free market society. They can and will be swayed by skilled PR.
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gibson042

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Re: DROs vs States
« Reply #5 on: May 16, 2011, 04:34 PM NHFT »

Your hypothetical is conceptually possible, but runs counter to all evidence I have ever encountered about what happens in free markets, even those with high barriers to entry.

It seems like you want to assume that DROs will inevitably become states and enforce voluntarily-acquired geographic monopolies with aggression, which I reject on both historical and theoretical grounds. Why do you think that?
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CurtHowland

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Re: DROs vs States
« Reply #6 on: May 16, 2011, 05:37 PM NHFT »

It's not like this kind of objection has not been raised before.

The Mises Circle: An Informal Talk on Anarchism [Roderick T. Long]
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ShortyLong

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Re: DROs vs States
« Reply #7 on: May 16, 2011, 09:51 PM NHFT »

In a free society one would be highly compelled to subscribe to some DRO or protection organization, etc; I can't see a scenario where you could avoid being a member in some DRO or protection organization, unless of course you've found some remote piece of land where nobody will find you...

So, given the assumption that you have to join some DRO or protection agency, how would that be any different than becoming a citizen of one country or another?

Just a quick thought, Lex. What if your DRO, as you put it, were your family, friends and neighbors?

Shorty Long
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KBCraig

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Re: DROs vs States
« Reply #8 on: May 17, 2011, 03:45 AM NHFT »

"Sole provider of a service" is perfectly compatible with a free market. It happens all the time where there are niche or narrowly focused small markets, where there is not enough potential profit for multiple providers to exist long-term.

"Monopolies" can only exist through force, usually government force.

Example: I grew up in rural Arkansas, when Wal-Mart was just a regional chain retailer starting to spread its wings. Wal-Mart numbers their stores in the order they opened; they currently have ~8,500 stores, but up through college (graduated 1985) I never shopped in a Wal-Mart with a three-digit store number.

Even back then, people screamed about "Wal-Mart is killing the local mom-and-pop stores! Wal-Mart is killing local pharmacies!"

Truth? Local stores that don't try to compete, but instead offer added value or unique merchandise, actually do very well when Wal-Mart comes to town. People naturally miss that local touch, and are willing to pay more for personal service, and sometimes they just want to wear clothes that obviously didn't come from Wal-Mart, like everyone else is wearing.

This is in a highly regulated market, not a free market. Why would you expect an actual free market to provide less diversity?

Oh, and let me point out that the threat of competition is just as real as actual competition: in the late 1970s to early 1980s, when Wal-Mart first got into the pharmacy business, we heard tales of woe about how the Waltons would kill local pharmacists by undercutting their prices, then raising prices as soon as the local pharmacies closed.

Funny thing about retail pharmacy: it's a highly competitive business. As soon as one pharmacy closed because of "Wal-Mart's predatory pricing", another popped up, so that Wal-Mart couldn't "jack up their prices", as had been predicted.  Wherever local clothiers were "run out of business by Wal-Mart", others either modified and thrived, or popped up to fill the demand for clothing that wasn't cheap crap from Indonesia.

Why would private security be any different absent a state monopoly? Especially when you consider that Wal-Mart fails to be a monopoly with government assistance?
« Last Edit: May 17, 2011, 03:51 AM NHFT by KBCraig »
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MaineShark

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Re: DROs vs States
« Reply #9 on: May 17, 2011, 09:05 AM NHFT »

"Monopolies" can only exist through force, usually government force.

Exactly.  It's absolutely impossible for a monopoly to exist in the free market.

We only have one general store here in Grafton.  But they don't have a monopoly, because I can come right along and open another one, if I like.  If the general store were to raise their prices substantially, I would take a look at that and say, "hey, I want me some of that there profit margin!," and open a competing store.  The only way the general store can remain the only store in town, is by behaving as if there were a second store, and setting their prices and service accordingly.  They are still subject to the competitive influence of the free market, because the artificial barriers to entry are low, here.

Compare that with the fire department, which has a monopoly.  I can't open a competing fire department, because it would be a crime to do so without being approved by the State.  Nor could I compete with their tax-funded status; all my potential customers are required to hire the official government fire department.  Same goes for the police department, the highway department, and all other theft-funded "services."  Why would they also hire me, when they've already paid for the service, and nothing I can do can make them switch to my offerings, no matter how much they might want to?  My freedom to open a business is restricted, and my potential customers' freedom choose whom they will hire is also restricted.  The artificial barriers to entry prevent competition, and create a monopoly.

None of this would exist in a free-market.  If some provider raises their prices or lowers their service, someone else will step up and offer lower prices, or higher service.

Joe
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Lex

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Re: DROs vs States
« Reply #10 on: May 17, 2011, 10:40 AM NHFT »

Just a quick thought, Lex. What if your DRO, as you put it, were your family, friends and neighbors?

Two points here:

1. I don't always agree with all of my family, friends and neighbors, so I'm not sure what the implication is of your comment. Them being my family, friends and neighbors doesn't really change anything. I believe that every person on this planet is my family, friend or neighbor just to different degrees. I believe in evolution and thus that we all have the same ancestral family.

2. If you're suggesting a much more nuclear family unit. Then what difference would it make for my safety if I'm close to the heads of power in a government based society vs being part of a very powerful family owned protection service business. In both cases the assurance of safety is a result of being born into a powerful family. That's not a very general purpose system for security.

Also, to elaborate more on the second point, this also means that I will be closely tied to the business of security. What if my skills and interests are elsewhere, I want to make money doing what I'm good at and then use that money to pay for protection.
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Lex

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Re: DROs vs States
« Reply #11 on: May 17, 2011, 11:05 AM NHFT »

Why would private security be any different absent a state monopoly? Especially when you consider that Wal-Mart fails to be a monopoly with government assistance?

I totally agree with you about Walmart and most other consumer centric products and services.

I disagree with the attempt by almost everyone to assume that a Walmart and a protection service operate under the same principles.

A non-protection based service operates primarly on customer satisfaction, the basis of free markets. I think that for all products and services that rely on customer satisfaction the free market applies. Protection is sort of a meta service, it's the service on which the free market is built.

The amount of free market activity is proportional to how safe people feel both buying and selling.

So, protection is kind of like a meta service. It is a platform on which society can function and more forward, it allows for commerce and the division of labor (people can concentrate on other pursuits and pay someone else to keep them safe).

The service provided by a protection agency is essentially force. Which means the rules are not the same for a protection agency as they are for Walmart. A Walmart would have to play inside the sandbox created by the prevailing protection agencies in the area. A protection agency, especially one that becomes the "Sole provider of a service" for a given area, would become the defacto government. As long as they keep a majority (at least highest paying) customers happy they can stay in power. A lot of PR sprinkled in here as well since it's mostly about public perception. They can do whatever they want as long as they can keep people complacent enough to keep paying.
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Lex

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Re: DROs vs States
« Reply #12 on: May 17, 2011, 11:25 AM NHFT »

Exactly.  It's absolutely impossible for a monopoly to exist in the free market.

We only have one general store here in Grafton.  But they don't have a monopoly, because I can come right along and open another one, if I like.  If the general store were to raise their prices substantially, I would take a look at that and say, "hey, I want me some of that there profit margin!," and open a competing store.  The only way the general store can remain the only store in town, is by behaving as if there were a second store, and setting their prices and service accordingly.  They are still subject to the competitive influence of the free market, because the artificial barriers to entry are low, here.

Compare that with the fire department, which has a monopoly.  I can't open a competing fire department, because it would be a crime to do so without being approved by the State.  Nor could I compete with their tax-funded status; all my potential customers are required to hire the official government fire department.  Same goes for the police department, the highway department, and all other theft-funded "services."  Why would they also hire me, when they've already paid for the service, and nothing I can do can make them switch to my offerings, no matter how much they might want to?  My freedom to open a business is restricted, and my potential customers' freedom choose whom they will hire is also restricted.  The artificial barriers to entry prevent competition, and create a monopoly.

None of this would exist in a free-market.  If some provider raises their prices or lowers their service, someone else will step up and offer lower prices, or higher service.

I think you pointed out an important thing here, competition works best if the barriers to entry are low.

The barrier to entry for a protection agency, on the other hand, could be rather dangerous or even deadly. It could also be financially impractical. For example, if the prevailing protection agency invests in other high stakes infrastructure like roads and requires travelers to subscribe to their service in order to use the particular roads. To break into this market you would need a lot of start up capital to provide competing road infrastructure and it may not be that profitable in the long run.

Business are always trying to get more customers or maintain their customer base and when the business is also the provider of force, it's very hard to believe that they will avoid using their expertise in force to maintain their power. I think they will do it judiciously to keep good PR but I don't think they will avoid it completely. Even if they do it once in their life time, that is enough to not think of them as functioning under the same principles as a Walmart.
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Lex

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Re: DROs vs States
« Reply #13 on: May 17, 2011, 11:32 AM NHFT »

It's not like this kind of objection has not been raised before.

The Mises Circle: An Informal Talk on Anarchism [Roderick T. Long]

I tried listening to this but did not catch the answer to my question. Would you be so kind as to transcribe the part of this monologue where my question is addressed. Thanks.
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MaineShark

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Re: DROs vs States
« Reply #14 on: May 17, 2011, 11:37 AM NHFT »

The barrier to entry for a protection agency, on the other hand, could be rather dangerous or even deadly.

No, that's the current model.  If I start a protection agency, the cops will murder me.  No ifs, ands, or buts about that one.  Starting a protection agency to compete with the State's official enforcers carries a guaranteed death sentence.

Anything less than that is an improvement.

It could also be financially impractical.

Only if they are behaving competitively, offering services of such a quality and so cheaply, that no one else can manage it.  In which case, why would anyone want to?  If everyone is getting extraordinary service for low prices, that sounds pretty darn good!

For example, if the prevailing protection agency invests in other high stakes infrastructure like roads and requires travelers to subscribe to their service in order to use the particular roads. To break into this market you would need a lot of start up capital to provide competing road infrastructure and it may not be that profitable in the long run.

The roads already exist.  What, are they going to buy every road into town?  Let's not be silly.  If you buy one major road, the price is going to be substantial.  As soon as you try to buy another, the price will go up (supply and demand).  Since the demand for the last road into town is obviously high (given that you've been buying up the rest of that item) and the supply is low (it's the last one left), the price will be astronomical.

Business are always trying to get more customers or maintain their customer base and when the business is also the provider of force, it's very hard to believe that they will avoid using their expertise in force to maintain their power. I think they will do it judiciously to keep good PR but I don't think they will avoid it completely. Even if they do it once in their life time, that is enough to not think of them as functioning under the same principles as a Walmart.

So, what you're saying is that, absolute worst-case scenario, private protection agencies are less than perfect, but are about a million times better than the best-case for Statism?  I think I can live with an imperfect world having imperfections in it.  C'est la vie.  The important thing is to make it the best possible world.  And any honest comparison (ie, none of this double-standard nonsense) says that private is better in every measurable way.

Joe
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