Tag: David Friedman

Conflating Democracy with Freedom

By chance I came across this interview with a Harvard political scientist on his new book titled The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It.

Reading the interview was frustrating because it showed that even political scientists (even from Harvard) are apparently unaware that democracy is not the only alternative to authoritarianism, let alone the best one.

The interviewer, Sean Illing, introduces the book as follows:

Mounk’s book asks a fairly simple question: Why are citizens across the world falling out of love with democracy?

This fairly simple question also has a fairly simple answer: democracy doesn’t work very well.

In the system of democracy good laws are public goods and therefore underproduced, as David D. Friedman pointed out in The Machinery of Freedom almost half a century ago:

Imagine buying cars the way we buy governments. Ten thousand people would get together and agree to vote, each for the car he preferred. Whichever car won, each of the ten thousand would have to buy it. It would not pay any of us to make any serious effort to find out which car was best; whatever I decide, my car is being picked for me by other members of the group. Under such institutions, the quality of cars would quickly decline.

In a Polycentric Legal System, on the other hand, law would be far more like a private good. Different people in the same country could subscribe to different legal codes.

This way, the negative effects of a bad legal code would be internalised by the persons subscribing to that legal code – at least far more so than in a democratic system where I am no less subject to the costs of bad laws than the people voting for them. Hence, market forces can be expected to lead to rapid improvement in the quality of law in general.

Put differently: freedom in a Polycentric Legal System, where making a choice between different legal codes is similar to making a choice between different Internet providers, is far greater than in a democracy with its “one-size-fits-all” approach.

The problem is that people keep conflating the terms Democracy and Freedom – even political scientists from Harvard.

The must-read book for libertarians, socialists, conservatives, progressives as well as the politically confused

Finally, a book showing the way to strike at the root of bad government is out.

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In Seasteading: How Floating Nations Will Restore the Environment, Enrich the Poor, Cure the Sick, and Liberate Humanity from Politicians Joe Quirk and Patri Friedman set out how creating permanent, autonomous communities on the ocean will create a vibrant start-up government sector – a Silicon Valley of the Sea – with many small groups experimenting with innovative ideas as they compete to serve their citizens’ needs better.

Disrupting the Largest Industry in the World

When viewed as an industry, governance is the largest in the world, representing about 30 percent of global GDP. And today, this industry exhibits a serious lack of competition. There are extremely high barriers to market entry because putting a new idea into practice means having to win either an election, a war or a revolution.

As a result, products (the bundle of rules and public goods provided by governments) are low-quality, prices (taxes) are high and customers (citizens) are generally unsatisfied.

The creation of ocean platforms constitutes a much lower barrier to entry for forming a new government than winning an election or a revolution – or a war. And with technology advancing, the barriers of entry to the market of governance will decline year by year.

A Silicon Valley of the Sea, where those who wish to experiment with building new societies can demonstrate their ideas in practice would apply the scientific principle of trial and error to governance.

Science Fiction Fact

The technology to create floating cities is basically already there. Take, for example, the Portunus Project, a plan to build six floating mega ports surrounding the United States, each four hundred acres in size and located twenty to forty miles offshore.

The Dutch architectural firm Waterstudio, on the other hand, has designed a floating stadium that could travel the world hosting the Olympic Games.

In 2014, India began installing a solar power plant on a 1.27-million-square-meter floating platform and by 2025, Shimizu Corporation, a Japanese construction giant, plans to have self-sufficient, carbon-negative botanical skyscrapers floating in Tokyo Bay.

A Technology rather than an Ideology

Seasteading is a technology for anybody to try their vision of society. Seasteaders are from all political spectrums – and some simply identify as politically confused. They share the conviction that experiments are the source of all progress and that humanity needs more experiments in governance. They have realised that arguing about politics is a waste of time and that trial and error is the way to go.

I recently argued that the most important book for every libertarian to read was The Machinery of Freedom by David Friedman. Seasteading by Joe Quirk and Patri Friedman, on the other hand, is a must-read for anybody who believes that not all political systems are equally good. Seasteading, not arguing, is the way to find out what works best.

The Most Important Book For Every Libertarian To Read

I recently saw a list of Ten Books Every Libertarian Should Read on the website of the Adam Smith Institute, which did not include the one book I consider to be (by far) the most important for every libertarian to read.

I am talking about The Machinery of Freedom by David Friedman.

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The book shows that libertarianism cannot be stated as a simple and convincing moral principle from which everything else follows. Instead, economic analysis is used to arrive at libertarian conclusions.

The obvious way to find out what the laws of a society ought to be is to start with general principles of justice and see what laws are necessary to implement them. David Friedman argues that that cannot be done and gives a long list of questions which cannot be answered using libertarian principles. For example, libertarian principles of justice provide no way of deciding what ought to be included in property rights, how they may legitimately be defended, or how violations ought to be punished.

Friedman argues that, while libertarian principles provide no answer to the relevant questions, they are all questions that can, at least in principle, be answered by using economic theory to discover what rules maximize human happiness.

Friedman shows that a system in which legal rules are generated by firms competing in a private market can be expected to produce efficient rules and goes on to use the tools of economic analysis to show under what circumstances such a legal system would or would not be stable.

The reason why, in my opinion, The Machinery of Freedom is the most important book to read for a libertarian is this application of economics to the field of law.

So, if you are a libertarian, go and read The Machinery of Freedom by David Friedman. And if you aren’t a libertarian, still read it. It’s stellar economics and a hell of a lot of fun to read.