From J.Levy@adfa.oz.au Mon Dec 13 05:30:23 1993 Received: from sserve.cc.adfa.oz.au by ponyexpress.princeton.edu (5.65c/1.113/newPE) id AA05664; Mon, 13 Dec 1993 05:30:16 -0500 Received: from [131.236.76.118] by sserve.cc.adfa.oz.au (5.67a/1.34) id AA27038; Mon, 13 Dec 1993 21:30:07 +1100 Date: Mon, 13 Dec 1993 21:30:07 +1100 Message-Id: <199312131030.AA27038@sserve.cc.adfa.oz.au> To: Bryan Douglas Caplan From: J.Levy@adfa.oz.au (Jacob Levy) X-Sender: j-levy@pop.cc.adfa.oz.au Subject: Re: critique of Cowen Status: R Bryan, I apologize for the delay in responding. I felt like I had to go back and reread Cowen's piece, and then enough time had past that I didn't remember your arguments in enough detail, and... now, with both of them in front of me, I'm finally going to reply. Thanks for sending the piece; I think it's quite good. It's also mostly out of my baliwick, so if my comments are on marginal parts it's not because I missed the point but because I don't feel qualified to say much about the main thrust. Your suspicion that Visa and MasterCard accept payments from one another sounds counterintuitive to me-- I'd assume that they wouldn't. But that's a minor point. Your credit card analogy seems to me a pretty strong argument against Cowen. The distinction between self-interested boycotts and altruistic boycotts also seems right to me-- except that it crucially assumes the point you made in the credit card analogy, namely that there will not be only one network. If there is only one network (or two or three colluding mega-networks), then an altruistic boycott which "benefits the whole industry" isn't any different from self-interested boycott. Nothing wrong with building on a prior part of your argument, of course. On banking clearinghouses: the period before the US Civil War is an even clearer example, because (in conditions of semi-free banking and competing note issue) there weren't even monopolistic clearinghouses to exchange *currency*, much less to cash checks. Naomi Lamoreaux has an upcoming book about 19th c. US banking; or Lawrence White might be able to supply some information. I don't know how to get info on pre-1913 check-cashing clearinghouses, though. (I assume that you want to publish this somewhere, and that obviously means losing "I guess" statements from the historical discussions.) I would have liked you to talk a little more explicitly about the fact that under an anarchist legal system only crimes with victims would be prosecuted, to get rid of the idea that David Friedman introduced and Cowen repeates of paying for a non-libertarian legal code in an anarchist system. There needs to be a *dispute,* something for the arbiters to settle. What does it mean to say that people can buy a prohibition on other people using drugs? That they're going to pay their own defence agency to break into the homes of non-clients and see if they're using drugs? Surely everyone would place a higher value on paying for defence against their home being broken into than they would on paying an agency to break into other people's homes; it will always be profitable for a defence agency to protect its customers against other defence agencies' attempts to enforce victimless crime laws. Of course, a defence agency's (for example) prohibition of drugs might apply only to members; but this is nothing different from members making an enforceable promise not to use drugs as a condition of belonging to a certain agency, and there's nothin unlibertarian about that. You mention this in passing in 6b, but I'd like to see you (or someone) elaborate on it more, since it's always struck me as a silly concession for Friedman to have made. Your drug trade comments in 6a are relevant, too-- remember that Cowen *doesn't* think that drugs will necessarily be legal in an anarchist system, and he doesn't think that because Friedman doesn't think that. Making your point in 6a-- that most interlocality crime would vanish under anarchism-- requires making the point that anarchism would not give rise to victimless crime laws. I think that 5/6c and 5/6d are the really crucial arguments against Cowen. They seserve to be built on. I think you're absolutely right that the networks would be minimal coordination networks and would not themselves create most of the industry standards, and that's ultimately why I think Cowen is wrong. To the reader who starts out unpersuaded, though, I'm not sure 6c and 6d are powerful enough. I'd suggest both elaborating on those sections and making them more prominent-- at least make services/coordination and designed/evolved either the first two or the last two features of networks so you can discuss them at the beginning or end of the section. Obviously, if you disagree that those two are much more important than the other features discussed, then there's no reason; but they seem to me the most central questions. I'm not at all sure that I agree with section 7. I think that if ideology is necessary to sustain government and ideology is necessary to sustain anarchy, then government wins. Loren Lomasky and Geoffrey Brennan argue, I think rightly, in their recent _Democracy and Decision_ that the fact that a voter is nondecisive and a consumer is decisive leads voters to behave more ideologically than they would as private economic actors. It's much cheaper for someone to vote for massive programs to help the poor than to voluntarily give the amount he will later be taxed-- because the former is expressive, not decisive; each individual voter knows that his or her vote will not impact the final outcome, so each has economic constraints loosed and expresses sentiments he would never express if he actually had to choose. Similarly, it's cheaper to vote for David Duke and "express" racism than it is to engage in discrimination as a private actor. The fact that every voter thinks that he won't be decisive can lead them all to create an outcome which none of them would have chosen if decisive. Ideology is cheaper to express through [democratic] governmental institutions than it is to sustain as private action. It's worth having a look at Brennan and Lomasky's argument, even if only to confront it directly in the paper; but I find it persuasive, and so disagree with your position in section 7. Section 8 sounds right to me. If this is for publication, then it probably needs a pretty thorough stylistic revision; but purely as a matter of pursuit of truth, I think you score some important points against Cowen and win the debate on the merits. Anyway, thanks for sending it; I feel like I understand several of the important issues better than I did before. On a slightly different note, have you noticed how many of the contributors to the pro-anarchy side are economists? Rothbard, Friedman, Benson, Lavoie, and Anderson and Hill are all economists (Barnett's a lawyer). The archist side includes economists (Cowen and Buchanan) but Sampson, Newman, Kavka, Hospers, Kelley, and Rand are all philosophers or political theorists, and Posner's a lawyer. You've studied this more in depth than I have: do the non-economists generally line up on the other side? I'd be intrigued if that were true, and have my guesses as to why it is. You'll still be at Princeton when I get there next year, right? I'd like to have a look at the thesis you mention. Hope the end of the semester's going well for you! Talk to you later. Jacob. -------------------------------------------- Jacob T. Levy Department of Politics, ADFA University College University of New South Wales Canberra ACT 2600 Australia J.Levy@adfa.oz.au ph: +61 (6) 268 8889 fax: +61 (6) 268 8852 "I could tell you of heartbreak, hatred blind, I could tell of crimes that shame mankind, Of brutal wrongs and deeds malign, Of rape and murder, son of mine; But I'll tell instead of brave and fine When lives of black and white entwine, And men in brotherhood combine- This would I tell you, son of mine." - Oodgeroo Noonuccal -------------------------------------------