Anarchy, State and Moore's Law
There are several arguments that defend the need for a coercive State. Most of the interesting ones tend to be utilitarian arguments. Now, I'm not a utilitarian, but I refer to these as the "interesting" arguments as they are debatable – if someone argues in favor of a theocratic state because Allah wills it, or in favor of a monarchical state because "it's always been that way", I just reject those axioms…and there's not much interesting about shouting "is too" and "is not".
…so if we limit ourselves to the utilitarian arguments for the State, they tend to fall into two classes:
- greater utility for some via redistribution (e.g. "'society' should take care of the poor").
- greater utility for almost everyone via collective action.
essay rant, I'd like to argue that while the State may have improved (or, at least, been CAPABLE of improving) collective utility at some point in time, we are undergoing a stunning novel revolution right now (comparable in scale the change from nomadism to pastoralism, and from farming to industrial society), and the outcome of that revolution in information technology and financial technology will render the utility of the State in collective action null and moot.
(You can see why I crossed out "essay" and replaced it with "rant": what follows are the crack-addled rantings of an anarchocapitalist who hopes to see the entire Westphalian system overthrown, kicked into pieces, set on fire, and then defecated on once it cools sufficiently.)
The concept of "greater utility for almost everyone via collective action" is known by the shorter term public good. The idea is that there are some things in life – immunizations, roads, national defense, education, etc., which (a) improve utility for almost everyone, (b) are very hard to coordinate via non-coercive one-to-one coordination.
Consider the game theory problem of the prisoner's dilemma. If the prisoners cooperate they get minimal punishments…but there is a very strong incentive for one prisoner to defect from the coalition. The TOTAL utility is highest when the prisoners cooperate, and the TOTAL utility drops when one defects…but the INDIVIDUAL incentives push each towards defecting.
(I should footnote this to mention that I'm talking only about the utility totaled across the two prisoners: the guards, the staff of the guard's union, the firm supplying food to the prison under a no-bid contract, and the three sisters, the niece, and the pool boy of various politicians who get hired for do-nothing jobs in the probation department, etc. are all higher when BOTH of the prisoners are convicted).
Anyway: the point is that (a) sometimes the best outcomes occur when people can coordinate and create binding contracts, (b) nuanced, bottom-up coordination is hard.
There is one kind of coordination that is easier than nuanced, bottom-up, negotiated coordination: naked force.
The pen may be mightier than the sword, but no one ever said anything about the pen being particularly quick.
Let's imagine an example of how high transaction costs can be solved by force, to the benefit of everyone…or, at least, almost everyone:
We imagine thirty folks all living in houses on a small dirt road… a road so narrow that delivery trucks can't get down it.
A few bright folks say "hey…we could all deed our front yards over to the village, move our fences back a bit, and then get Amazon deliveries to our front door, instead of having to trudge down to the village green every day where the UPS guy unceremoniously dumps them now".
A few dozen folks chat the idea up, but several others are unsure: "Well, even if we do that, will UPS drive up this new road?" "What if I deed over my front yard but no one else does: I've lost my yard, and yet I still don't get UPS deliveries", etc.
One day the local bully comes by with his crew, smashes down all the front fences, paves the road, and announces "There, it's done. The first UPS truck rolls in tomorrow. …also, you each owe me $200 for blacktop and labor".
There's some grumbling, but a few weeks later, everyone acknowledges that $200 and a lack of a front yard is a small price to pay to have the latest Twilight novel delivered to one's front step on release day. Also, it's nice not to have neighbors snooping over the pile of packages down at the village green and ask suspiciously "Sooooo….what exactly did you order from bukake.jp ?"
Yay, government! Yay collective action!
( Oh, and, yeah, it sucks that we had to knock down all of Old Man Fielder's house because it was too close to the new road, and now he's left the Village of New London and is writing cranky things about "takings" on the Internet, but progress is progress, cost be damned! )
So, anyway, if we posit that the benefits to everyone else exceed the pain to Old Man Fielder, and if we posit that somehow a good chunk of the money collected went to paying off Fielder and getting him to take down his cranky blog, we can see that total utility created is above zero, and progress was accomplished.
…and we also see that with out government it wouldn't have happened.
I assert that we haven't learned that "force is necessary to solve coordination problems" – I assert that what we've ACTUALLY learned is "force is necessary to solve coordination problems…where those 'problems' are defined AS A FUNCTION OF THE COST OF COMPUTATION".
Folks of a certain bent love the story of the Uniform Penny Post – the British post office realized that the costs of computing variable postage prices exceeded the extra revenue gained by the higher prices.
The response was the fairly clever idea of slashing the price to one low fixed point and then charging the same to deliver an envelope two doors down or 200 miles away.
This was a quite-clever bit of systems thinking and we should be impressed at the revolutionary idea (think it's not revolutionary? It was. It was such a revolution that it's reshaped our world to the point where we regard fixed pricing even over variable costs as "obvious").
…but it's also somewhat appalling: brute force labor was so much cheaper than computation that it made sense to replace expensive brains with cheap muscles.
We no longer live in a world where the computation of functions of multiple arguments is expensive. In fact, it's effectively free.
Which is a point with some radical implications.
It says that societal consensuses that were created in an era of cheap labor and expensive processing are perhaps exactly backwards.
What sorts of societal consensus? In this rant I'm arguing that "the State" is one big example.
The costs of coordination – or transaction costs – have several sub parts: search and information costs, bargaining costs, and enforcement costs.
At least two of these three are amenable to efficiencies from technological and financial engineering.
I'd say "we'll soon be at the point where you can go to a search engine and find a Chinese factory that will build drums to your custom specifications using Nigerian wood"…except we reached that point several years back.
Bargaining costs are likewise amenable to technological tools – we've got auctions, Dutch auctions, reverse Dutch auctions, and I'd have to do a quick Internet search to verify that "bi-curious Belgian auctions" are just a product of my fevered imagination, and not an actual thing.
Dominant assurance contracts may have been invented (or at least popularized) by anarchocapitalists, but they've been embraced by the hipster set (or, in this age of startups, is that "Hipstr"?).
There's no technical reason that we can't already coordinate the provision of shared goods like a new road serving a bunch of private homes via the tools and concepts we've already got on hand: futures markets, assurance contracts, microfinance, quick and easy online incorporation of single issue bodies, etc.
Leftists at this point trot out the talking point "Roads are public goods!"
Something is a public good if it satisfies the criteria of a public good. Merely saying " [ my favorite government program ] is a public good …as it was in the beginning, is now and ever shall be, world without end" is a statement of faith, not an argument.
Public goods are those things that are
Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others;
non-excludability means that no one can be effectively excluded from using the good.
Education is clearly rivalrous. If it was not so, we would not have admissions committees at colleges or residency requirements in high schools.
Good leftists tell us over and over that highways have fixed capacities.
Anyway, many of the things that we're told aren't rivalrous – education, roads, security, etc. – are actually rivalrous.
The other prong of the public good fork is non-excludability…and again we find that the arguments of the left are wrong and getting wronger as technology progresses.
Car parking is excludable, and meters these days take credit cards.
…and so do the roads.
As microprocessors get smaller, faster and cheaper at such a rate that industrial contracts specify price declines by the week, we are not at the point where there is a microchip in every car and every keyring – we're well beyond that point. There are more CPUs in your house than there are human beings.
…and one can almost envision the day when there will be more CPUs in your house than there are bacteria.
Television was once non-excludable, but now you pick a bundle that matches your programming choice and pay for it. Perhaps you pay more than your neighbors because you're a history fan and want to pay more for serious educational programming, or perhaps you make do with less material and pay less.
Roads were once non-excludable (except for turnpikes, and the computational overhead was fairly expensive, as you had to pay a human to stand in the toll-house and turn the wall of pikes after being paid), but now RFID cards and credit card merchant accounts make them more common. Do a "mashup" (as the kids say) of GPS, cheap transmitters, cheap security cameras repurposed, and you can do a business model inversion that name checks Zipcar.com but makes the roads the item you subscribe to.
The examples are numerous – technology lets us
- narrow cast benefits to individuals
- disambiguate those who use services from those who do not
- charge just those who use services
- allow individuals to coordinate for expensive development projects
Almost all of what are described as public goods are no longer so.
The world has changed.
…and thus technology is making anarchocapitalism far more realistic
than ever before.
P.S. Oh, right. Don't want to lose that bet with Ken. Wait. For. It. "crazy monkey sex".
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