One of the books that is still on sale at Audible.com is Legacy of Ashes: The History of the CIA.

Some Austrian scholars are discussing it on one of the mailing lists, and I decided to move it from my wishlist to my shopping cart.

I can't really review or recommend it, since I've only listened to about a quarter of it, so far, but I suspect I'll be giving it a thumbs up.

Meanwhile, I mention it here because I'm overwhelmed by how much of it already vindicates

1. Murray Rothbard's foreign-policy analysis from the 1950s onward, and

2. Robert Anton Wilson's information-theory analysis from "Celine's Laws," which you can read here on my website.

On blog.Mises, as a late comment to Hans Hoppe's "On the Impossibility of Limited Government," Joe Stoutenburg makes an important point that I have yet to hear any of the better-known ancaps address:

Having an actuarial background and working for a large insurance company, I have long been intrigued with the idea of insurance companies providing security. I believe that the arrangements could work. There are two main factors (in addition to throwing off the yoke of oppressive government) that must be worked out:

1. The public greatly mistrusts insurance companies. How would they be convinced to accept insurance company services for government? [Though I have to wonder why they trust government more than insurance companies...]

2. Sadly, much of the mistrust is well-placed. Insurance companies enjoy many advantages through regulations, barriers to entry, tax laws and so forth. While the institutions of insurance require massive assets, I'm not convinced that individual companies must be so gigantic. There are markets for sharing risk, and insurance industries fight their development for fear of losing dominance. While insurance companies do compete among each, the level of innovation in a free market would drastically change the industry.

In short, the marketplace could provide the services outlined in this article. But the current insurance industry would probably drastically change if it was to adapt to an unfettered market.

"If the public ever figures out that it can escape the clutches of higher education in the United States, which absorbs about a third of a trillion dollars a year, the game will end. The guilds will have to compete in a free market. They are not used to this. They will resent it. But they are going to have to learn to live with it."

– Gary North, "The Self-Serving System of Peer Review"

A few years ago, just before I discovered the Austrian School, I read The Evolution of Cooperation by Robert Axelrod. Austrians are somewhere between suspicious and dismissive of game theory (see this paper [pdf] for an exception and this article for a more typical example), but I find the central "point" of this book quite compelling and relevant to libertarianism. I'll explain why after this humorous interruption from my mother:

As a young boy enters a barber shop, the barber whispers to his customer, "This is the dumbest kid in the world. Watch while I prove it to you."

The barber puts a dollar bill in one hand and two quarters in the other, then calls the boy over and asks, "Which do you want, son?"

The boy takes the quarters and leaves.

"What did I tell you?" says the barber. "That kid never learns!"

Later, when the customer leaves, he sees the same young boy coming out of the ice cream store. "Hey, son!" he says. "May I ask you a question? Why did you take the quarters instead of the dollar bill?"

The boy licks his cone and replies, "Because the day I take the dollar, the game's over!"

That's one she sent me last week in email. I laughed out loud and then thought about it. It reminded me of Axelrod's book, which is also about how the meaning of a single event is turned upside down when we can expect the event to be iterative — when, in other words, we expect it to repeat. How's that for humorless nerd talk?

The boy seems stupid when we think he believes $1 < 50¢. He seems surprisingly cunning when we realize he knows $1 < 50¢+50¢+50¢…

(I won't even touch the question of time preference, though you'll notice the joke implicitly includes that concept, as well.)

So Axelrod's book is about a similar shift involving the prisoner's dilemma.

In its "classical" form, the prisoner's dilemma (PD) is presented as follows:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies ("defects") for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act? (Wikipedia)

Pure self-interest, guided by reason, will lead a prisoner to rat out his partner.

The standard interpretation of this classical prisoner's dilemma is that rational self-interest guides individuals to reject cooperation, even when cooperation assures the greatest good for the greatest number. And the standard interpretation of that standard interpretation is that therefore we need a coercive authority to impose cooperation on us for our own good.

To borrow the Google Books summary of The Evolution of Cooperation,

This widely praised and much-discussed book explores how cooperation can emerge in a world of self-seeking egoists—whether superpowers, businesses, or individuals—when there is no central authority.

Axelrod changed the rules to create the "iterated prisoner's dilemma" (IPD), wherein prisoner A and prisoner B face the classical prisoner's dilemma over and over again, remembering what decisions were made and what results occurred in previous iterations. He invited others to submit strategies (programmed in BASIC) to compete in an IPD tournament.

The result: the best strategy was called "Tit-for-Tat" in which the player is always cooperative with strangers and always imitates the last move, cooperative or uncooperative, of any player whose game history is known.

That result is already interesting, and the Tit-for-Tat strategy seems to me to be something you could reasonably call "the libertarian strategy": don't hit first; do hit back.*

As the Wikipedia page puts it, "Axelrod reached the Utopian-sounding conclusion that selfish individuals for their own selfish good will tend to be nice and forgiving and non-envious."

The even more interesting and "Utopian-sounding" result comes from iterating the already-iterated form of the PD, in which winning strategies "go forth and multiply" where the game rules dictate that losing players adopt the strategies of the players that beat them. The more successful a player's strategy, the more like-minded players are encountered over time. Tit-for-Tat ends up taking over the world. Eventually everyone cooperates. This is a very different result, obviously, than the one-shot "lesson" of the classical prisoner's dilemma.

My favorite part of Axelrod's book is the historical section, where he applies the Tit-for-Tat insights to examples of spontaneous cooperation among strangers and enemies across battle lines. Unfortunately, while most of his conclusions are libertarian friendly, he also draws some very interventionist conclusions about the need to prevent the forms of spontaneous cooperation that might take place between market competitors in the absence of antitrust policing.

Despite what might seem like two strikes against it (from an Austrolibertarian perspective), I still recommend the book to anyone who is trying to think through the dynamics of cooperation and self-interest.

* Pacifist libertarians might object to my summary of libertarianism as "don't hit first; do hit back," and they'd be right: the libertarian strategy says don't hit first; whether or not to hit back is, technically, outside the limits of libertarian theory.

You will thank me for this one.

Years ago, our dear friends AC and Carolyn taught us the ultimate cure for having a song stuck in your head. In fact, that's probably at least part of the reason they became such dear friends. (I may not be sociable, but I'm good at gratitude and loyalty.)

The trick is this: you can displace a stuck song with another song; of course, this new song will then annoy you just as much if it stays stuck, so you have to displace the first song with "the world's least sticky song." After that, you will have found peace. At least until you listen to the radio again.

This is the world's least sticky song, only 99¢ at Amazon.com/mp3:

I posted my seasteading comments to blog.Mises over the weekend. Patri Friedman of the Seasteading Institute left a comment, saying, "Polycentric Order has a nice counter-argument to Rothbard here."

The post at Polycentric Order is written by Kevin K. Biomech, and I think he makes the right points, by which I mean he makes my points — only more thoroughly and less hesitantly.

On Jun 10, 2008, at 7:19 AM, neural wrote:

http://arstechnica.com/articles/culture/seasteading-engineering-the-long-tail.ars

(Be sure to click Next Page at the bottom... it's a three page article, but that isn't initially obvious.)

Thanks!

I've heard the term "seasteading" but I hadn't yet looked into it.

Murray Rothbard dismissed such schemes as "anarcho-zionism," emphasizing that libertarian goals had to be pursued in the world of industrial-level division of labor, but I find the pirate radio introduction compelling. The point isn't necessarily "a place to escape the state" so much as it is, as the article says, a lowering of the barriers to competition. It would be nice if "government" could become a voluntarily acquired service in the context of competition, rather than the coercive territorial monopoly of the nation-state.

I understand why Rothbard discouraged the science-fictional fantasies of lifestyle libertarians, but I'm not ready to dismiss these schemes, especially as they become ever-more focused on practical issues.

I stopped following Walter Williams around the time I learned he was a war hawk, but Lew Rockwell points us to Williams's latest column, which is definitely worth a read. Here are the central questions:

In 1970, when environmentalists were making predictions of manmade global cooling and the threat of an ice age and millions of Americans starving to death, what kind of government policy should we have undertaken to prevent such a calamity? When Ehrlich predicted that England would not exist in the year 2000, what steps should the British Parliament have taken in 1970 to prevent such a dire outcome? In 1939, when the U.S. Department of the Interior warned that we only had oil supplies for another 13 years, what actions should President Roosevelt have taken? Finally, what makes us think that environmental alarmism is any more correct now that they have switched their tune to manmade global warming?

Ludwig von Mises wrote,

The system of free enterprise has been dubbed capitalism in order to deprecate and to smear it. However, this term can be considered very pertinent. It refers to the most characteristic feature of the system, its main eminence, viz., the role the notion of capital plays in its conduct.

That's from chapter 13 of Human Action.

I think Robert Murphy's summary is even better:

Capitalism was originally a smear term for the system of free enterprise, meant to imply that this system only serves the narrow interests of the capitalists. However, the term is a good one, for the very notion of capital — of summing the market prices of the resources available for a project — is inextricably linked to monetary calculation, which itself can only occur in a capitalist society.

I was a free-market advocate before I became an advocate of capitalism. The free market is an ethical concept, not an economic one; it is merely the recognition that nonaggression needs to apply to exchange as much as it applies to anything else. (Robert Nozick summarized this idea as "capitalist acts between consenting adults.")

Capitalism is a separate issue and a separate agenda — a positive agenda, in contradistinction to the negative agenda of nonaggression, a utilitarian concept rather than an ethical one — but the more I learned of economics, capital theory, and economic history, the less I could understand the left-libertarian position of embracing the free market while rejecting capitalism.

The free-market anticapitalists define capitalism as any system of political privilege for current capitalists, especially as it suppresses bottom-up competition, entry-level entrepreneurship, and the rights of labor. But we already have plenty of other terms to cover that idea — mercantilism, corporatism, even fascism — but what alternative is there to indicate the universal benefits of capital accumulation, capital structure, and capital calculation — all of which result from the private ownership of the means of production?

In fact, private ownership of the means of production (that is, of capital) was the technical definition of capitalism, even among the anticapitalists who coined the term! The idea of political privilege for capital owners was just an assumed consequence, a conflation of definition and theory.

The only advantage I see to accepting this linguistic conflation is to conciliate the heirs of the New Left, to tease out of them a more consistent individualism without tripping their anticommercial reflexes. But aside from what I consider its intellectual dishonesty, this strategy, it seems to me, does more than postpone anti-economic prejudices; it implicitly promotes them.

Faced with these same prejudices, many anti-anti-capitalists adopted the label of "free enterprise," but that term, taken literally, tells us nothing more than "free market" does. It certainly indicates nothing about the structure of ownership or of the means of production.

Until a free-market anticapitalist can offer me a useful alternative label for the utilitarian economic concept Mises called "capitalism," I'll stick with his reclaimed word.

On LRC this morning, Gary North offers this non-negotiable list of demands, followed by some very encouraging commentary.

Serious, no-nonsense libertarians, whether anarchist or minarchist, demand the abolition of

1. Wars that have not been declared by Congress
2. The maintenance of military bases outside the United States
3. Military defense treaties (NATO, CENTO, etc.)
4. America's membership in the United Nations Organization
5. Graduated ("progressive") income taxation
6. Tax-funded education at any level
7. Government licensing of the right to keep and bear arms
8. The Federal Reserve System's monopoly over money
9. The Social Security system
10. Medicare and Medicaid
11. The Central Intelligence Agency
12. NASA (National Aeronautics and Space Administration)
13. The National Parks system
14. The Post Office
15. The Federal Deposit Insurance Corporation
16. The Pension Benefit Guaranty Corporation
17. The Food and Drug Administration

North adds, "This list of things to abolish is so far outside of mainstream politics that anyone proposing more than one of them is dismissed as a kook."

But he goes on to say,

Yet I contend that most of these demands will be met within the lifetime of my children. Why am I so optimistic about this list? Because I am optimistic about the costs of continuing to operate everything on the list. They will bankrupt the central government.

I hope for Benjamin's sake that he's right.

Read the rest.