Come, Let Us Reason Together

My reviews of a few of the titles that were featured in the Human Wave Garage Sale... at least, the ones I've finished reading in the 5 days since the sale ended:

"Spinning Away" by Sarah Hoyt is a fun look at the future of media, introducing a world where Spinmasters provide the news for 90% of the population, but pay for it with a lack of personal space and attempts on the life that remains to them. It's just a short story, but the world introduced could contain an entire series.

Well written, professionally done Science Fiction, "Spinning Away" also weaves in a bonus forsaken love story on the loom of futuristic science fiction.

Highly recommended, especially if you like to consider the future of media in a connected world, or just want to enjoy the plight of those caught up in the future.

Plenty of present tense action intertwined with a personal history of the main character's career in Spinning mean you'll likely finish this story quickly, but enjoy it all the more.

"The Sky Suspended" by Laura Montgomery follows two main characters. This first, Tri, is a young man yearning for space, but cynical about the process to get there. The second, Calvin, is a young government lawyer unwillingly falling into legally forbidden love while trying to orchestrate mankind's open expansion into the stars. There are several villains, but primarily the government bureaucracy and those that serve it and feed off of it. The government makes an indifferent, but powerful villain, with Tri working to sign up for future interplanetary flights and Calvin taking an interest from a related government agency.

The writing and editing is professional. The disparate plot elements and story-lines come together rapidly at the end in ways you suspect, but don't necessarily expect. Laura's descriptions of how government space agencies could work in the future rings true to anyone with insider knowledge of the regulatory process. She puts her real life experience out for the reader to experience themselves. Maybe it's not everyone's cup of tea, but I love it. The logic and give and take of the law and working around it is fascinating to those of us interested in it.

If you're looking for a lot of swashbuckling science fiction action, this isn't that book, but if you are of an intellectual bent, or prone to philosophy and like your science fiction to analyze and project societies and the interplay of world-changing space events, then this book will be just what you're looking for.

Highly recommended, surprisingly readable and enjoyable, only the shallowest of Science Fiction readers, those who prefer sound and explosions in space to philosophizing about the impact of space on humanity, would find the story and the background lacking.

A legal thriller set in the future and revolving around the consequences of interplanetary space flight and colonization, "The Sky Suspended" is a great book and I can't wait to see if there is a sequel!

"Snow Angel" by Cedar Sanderson is a short story which introduces you to a world large enough to support a series. The story is just a taste, not long enough to explain how everything works, but it's a sweet description of a specific incident tied around a family with a special needs child and their guardian angels.

The writing is professional and full of feeling, but the story itself is cute and full of the right kinds of "family values" for everyone. It's obvious Cedar is writing something she knows with regard to medical science.

Recommended for anyone with a heart and a few minutes to spare in order to fill it.

Not in the sale, but recently finished book by one of the HWGS Authors:

"A Few Good Men" by Sarah Hoyt, a novel in the Darkship series, follows the personal journey of Lucius Keeva, son of one of the "Good Men" who rule Earth in Sarah's far future history. Besides revealing many of the society's quirks hinted at in the previous books, the book primarily covers the revolution of various anti-good-men groups descended from several of today's philosophies and societies.

Along the way Sarah delves into Lucius' background and life throughout the revolution, including his relationships with key members of his family and personal staff. Lucius struggles against both the twisted morality he was brought up in, but also with the conflicts between that morality and the philosophy the local revolutionaries he becomes involved with. The revolutionaries are appealing, but he has to decide to give up the many personal advantages his own society brings him as a member of the ruling class in order to support them. The actions of his foes among the "Good Men" weighs heavily on one side of that scale, but he also has to reconcile his personal views of the world over time.

The book reminds in style and content me of a memoir for a real historical revolutionary. The revolution is covered, but mostly in the background. There is plenty of action, as Lucius is key to several battles, escapes, etc..., but an even larger dose of personal discovery and philosophizing.

Highly recommended, especially if you are a fan of the American Revolution, libertarian philosophy or just action-oriented Science Fiction.

 The Human Wave Garage Sale

When did it become fashionable for published fiction to be full of self-loathing for qualities most intelligent humans value? Where's the adventure, the courage, the fun? We suppose it was about the same time that Literature Majors because the arbiters of what was good and right in publishing.

Fortunately their reign of grey goo and boredom is at an end.  Having gone Indie, authors can choose to write humans as they wish.  And since most authors are (allegedly) human they can even write heroic humans who fight for things that have meaning.

The ennui of the cognoscenti no longer holds sway. The new bad boys on the block are Human Wave authors, whose characters might sometimes be trapped in dystopia but never helpless. And if they must go down fighting, they do so gloriously and for principles bigger than themselves.

Be daring.  Be creative.  Be revolutionary.  Read (and write) Human Wave.

Guest Post above by Sabrina Chase.The authors below are all participating in the Human Wave Garage Sale!

Thomas Sewell

Hitchhiking Killer For Hire -- A border gang beats Ex-Special Forces soldier Sam Harper and leaves him for dead in the desert. Sam must discover “Why?” in this story of government corruption and human smuggling in the near future west. Dedicated to Louis L’Amour. Free for Kindle August 1st through 5th

Sarah Hoyt

Ill Met By Moonlight -- Young Will Shakespeare is a humble school master who arrives home to find his wife and infant daughter, Susannah are missing, kidnapped by the fairies of Arden Woods, the children of Titania and Oberon. His attempts at rescue are interrupted and complicated by a feud over throne of fairyland, between Sylvanus, king regnant, and his younger brother Quicksilver who is both more and less than he seems. Amid treachery, murder, duel and seduction, Shakespeare discovers the enchantment of fairyland, which will always remain with him, for good and ill. Free from the 1st to the 5th of August.

Spinning Away-- In a world where the ability to pick what news will interest most people is very real power, Layna Smythe strives to stay ahead of her rivals and alive. She often forgets that she's also lonely, until an attack reminds her of the man she left behind. Free from the 1st to the 5th of August.

Crawling Between Heaven and Earth -- Sarah A. Hoyt’s first short story collection, initially published by Dark Regions Press in 2003.  Contains most of Sarah’s early published work. Free

Wings -- Second short story collection. $2.99

Michael Hooten

Cricket's Song, Book 1: The Cricket Learns to Sing -- Cricket is a young orphan growing up on an obscure farm in the country of Glencairck.  He wants to be just like Harper, who plays for the people through the winter, but Harper is not content to let him just learn how to harp.  He teaches him the ancient traditions of the Bards of Glencairck, a noble order that is responsible for not just entertaining the people, but for providing impartial judgement to their disputes.  When Cricket is old enough, he enters the wide world  and finds that not everyone knows the old rules, or follows them.  He has to decide for himself what is right--and how far he is willing to go to defend his beliefs. Free for Kindle August 1-5

Rawle Nyanzi

Alien Frontier-- Fifteen-year-old Norma Teague must avoid getting drafted into an alien army. However, her home village demands that she go since she has a magic belt that lets her destroy any armor made of matter. $1.99

Elizabeth Bruner

Flash of Fire -- A collection of super short stories (1000 words or less) on the subject of fire. Ranging from the love of a volcano goddess to natural phenomena encountered as humans explore a distant planet, these stories evoke a sense of wonder and awe at the nature and power of fire. $.99 for Kindle August 1 through 5th

Zachary Ricks

Battlehymn -- (Also Barnes & Noble)  It's a story of giant robots, forbidden love, princesses in danger, and the power of rock 'n roll. If you're a fan of Macross, you might enjoy Battlehymn. $1.99

Cedar Sanderson

Snow Angel-- When a child's imagination leads his mother to a startling discovery, she must then protect him and his guardian from unknown danger. A human mother is fiercer than angels! Free July 31 to August 4

Little Red and the Wolf-Man-- Little Red wears a red cloak, and keeps her shotgun hidden under it. But Grandmother has the biggest secret in the forest, and she is dying… can Little Red help the forest dwellers? $1.49

Mike Weatherford

Cynthia -- (Also Barnes & Noble) Cynthia was a nice girl from a prestigious family, with a "nice-girl" education.  That didn't help much when she found herself chased by an organized criminal element, captured by pirates, and stranded on a planet that was so deadly human government had declared it forbidden.  Luck, in the form of Rat - a trained survivalist - can help, but will it enable her to survive? $0.99

Kiti Lappi

Novels:

Fourth Sword-- A portal fantasy: woman from our world gets transported to one with an ongoing generations long war and working magic, and finds out, after some adventures and to her chagrin, that she was taken there for a purpose. $ 1.49

The Demons of Khemas-- A tavern wench has fallen for a barbarian swordsman (not that she admits it). When he disappears she needs to find out what happened. $ 1.49

Short stories:

Nights of the Wampyrs -- A small town has problems with a couple of vampires, and the only people who figure out what is going on realize they have to become vampire hunters. Old school vampires, based more on the European folk tales than the later fictionalized versions. First story tells of the birth of one vampire, the two others concentrate on the hunters.

    Raven’s Night$0.99

    After Night Descends$0.99

    Night Work free from 1st of August to 5th, $ 0.99 after that

Dealing with Elves-- A young woman is drawn to a forest where elves live. Urban fantasy, mostly a mood piece. Free from 1st of August to 5th., $ 0.99 after that.

The Task-- A ghost story set in a traditional fantasy world, a peasant girls shelters for a night in an abandoned castle. $ 0.99

Sabrina Chase

Bureau of Substandards Annual Report -- (B&N)Five short stories of that pearl among pan-dimensional bureaucracies, the Bureau of Substandards--and the stalwart security janitors, attack admins, and bemused subdirectors that serve there. $1.99

The Long Way Home-- (Book 1 of the Sequoyah trilogy) (B&N) Webspace pilot Moire Cameron is one of the best--but even she can’t fly her way out of a catastrophic drive failure that triggers a time-dilation bubble. Left suddenly eighty years out of date, she is on the run in a world she no longer knows, caught in the middle of a human-alien war while agents of Toren hunt her for the information only she has--the location of the pristine world of Sequoyah.$1.99

Like what you see? Tweet it out with #HumanWaveGarageSale !

One point of contention between pro- and anti-immigration folks is whether immigrants are a net benefit or a net cost to the country they are immigrating to. This debate especially revolves around government taxes paid vs. benefits received.

A bond posted by the immigrant (could be subsidized by a company, or whomever) purchased from a bonding company to cover the entire net cost from their moving to the United States solves this problem.

By net cost, I mean +taxes paid, -welfare received, -criminal damage done, -direct government benefits received.

The key point is that the competing bond companies would be on the hook for the total net cost, but could set the price to the immigrant (or their sponsor) to whatever is mutually agreed upon.

You'd have to create requirements similar to an insurance company's capital requirements for the bonding companies, but competition would help ensure the immigrant would be charged a fair and individual rate, minus transaction and tracking costs.

Thus if immigrants from a particular country are a higher risk of doing massive criminal damage, that would be priced into the cost of their bonds. If immigrants from another country, or without a degree, or without a job offer, are higher risk of ending up on welfare, their bond price would be appropriately more expensive.

If, as the pro-immigration side proposes, immigrants are a net benefit, then the bonds will be very inexpensive on average, just covering administrative costs.

If, as the anti-immigration side suggests, immigrants are a net drain, that drain will be paid for by the immigrant.

Either way, the "good" immigrants will be more encouraged to come than the "bad" immigrants and the bonding companies will be incentivized to gather all the most relevant information to telling the two apart.

Seems like a simple enough solution to work.

What are the most valuable items for a typical consumer to recycle?

People routinely recycle houses, cars, bikes and most of what you'll find in a pawn shop or on craigslist. There's no government/social encouragement required to convince people that it's ok to live in a "used" house that requires a few repairs rather than building a brand new one on the site.

The difference in that type of recycling is that it actually makes economic sense, vs. the kind of municipality/government/school encouraged recycling which is nothing more than ritualized worship of world enviro-socialism and association with the "cool kid" celebrities disguised as superior moral preening.

If it made sense to recycle your processed sand (glass) and other "recyclables", businesses would pay you enough for your time and resources to make it worthwhile for you to recycle them. Any scheme where the government must subsidize recycling is strong evidence that it's not economically efficient to recycle that product. In reality, even once people have invested time and resources into sorting, cleaning and transporting-to-a-recycling-center green glass, so as perfect a condition you can get, no one wants to buy it, let alone pay enough for it to justify all that effort.

The key piece of information in recycling is the price for that material. If you have to pay someone else to haul a material away, it's garbage. If someone will pay you enough for the material that it's worthwhile to give it to them, it's a resource to be recycled. Typically, laws and regulations are made to encourage or even force people to recycle what is actually garbage.

What about landfill use?

In part this is a result of another type of government failure, landfills.

The government doesn't want people to dump randomly, so they subsidize a landfill. Note, not a competitive market for garbage disposal, but with typical ham-handedness, a government managed monopoly scheme. Then they get concerned about landfill use, so they regulate what goes into it and start requiring "recycling" of anything they think they can avoid going into it, because after all, if they're subsidizing it, they need to prevent unnecessary use of it, right?

Look, there's plenty of space for landfills around and when land is done being used for a landfill and covered over, it can be recycled into another land use. Talk about bulk recycling! If ever predictions of garbage being "valuable resources" come true, then they can be mined out of the old landfills. We'll know where they were stored.

Something municipal recyclers prefer not to discuss is how much of the "recyclables" that are collected in these programs actually just end up in a landfill after all. I suppose they count it as a win that sometimes the city is forced to pay to truck the material to a landfill in another state because of state recycling regulations.

Just recognize government-subsidized recycling for what it is, nonsense disguised as environmental religion.

In the meantime, if someone calls you evil for not putting your garbage in the "correct" bin, just let them know you've recycled entire houses before.

Campaign finance reform is periodically all the rage. Typically, when people who disagree with the media or Hollywood have the temerity to want to broadcast their views.

Generally, there is a desire to "get money out of politics", or "stop special interests from controlling elections." What it generally comes down to in the end is a desire to shut people up. There is a pretense that they just want to restrict or ban political advertising so that the "little guy" can be heard. In reality, it's just another method of power and rent seeking from media and politicians trying to tile the playing field in their favor.

In theory, you could ban all political advertisements. In reality, you need an enforcement mechanism, which comes with regulators, prosecutors, etc... You also get a government board or committee to setup rules defining what is allowed and what isn't under a law banning political advertisements.

Pretty soon, that board is run by either big media companies or else entrenched political consultants, because hey, they're the ones that really care enough to really study the laws and the regulations and gosh darn it, they have all sorts of relevant experience that makes them perfect for the job, right? So the board starts defining terms like "political" and "advertisement". Is a movie about events in Benghazi political? Is it an advertisement? Perhaps that depends on who is making the movie, some right-wing group, of course it's political. Hollywood? Of course not, they're not political, right? Maybe it depends on if Hilary or Obama are mentioned by name in the movie or not? Or perhaps we can just exclude stuff like that when it's shown say, within 60 days of an election where people mentioned in the move are involved?

Not sure if you're movie is going to fall afoul of the regulations? Better to just make sure your movie gets preclearance from the regulators who report to the board. That way you can be sure you aren't wasting your money on that Benghazi movie the government will order you to not release, or fine you or throw you in prison for showing.

Of course, like with all other laws, there's prosecutorial discretion. I mean, we have to allow for the prosecutor to have some common sense in only going after the actual bad guys, right? Maybe if the prosecuting attorney happens to be appointed by someone who is politically friendly to you, you get a little more leeway in what kind of movies and advertisements you can put out there? Perhaps everyone knows that if old Joe wasn't the prosecutor, you couldn't put that union "Let's all work together!" ad out there because someone else might call it political, but since Joe doesn't prosecute that sort of thing, you're ok.

I mean, it's not as if your elected and bureaucratic representatives have any incentives around caring which politicians get elected, right? No incentive to ensure the system can be gamed for their benefit?

Hopefully you can begin to see why restricting or banning political advertisements is in effect, the same as giving whoever is in power a filter to tilt media and advertising in their direction. That's what campaign finance reform has always been about in Congress in this country. Gaining an advantage over your political foes, tilting the playing field and ensuring you keep power.

Campaign Finance Reform is just a special case of regulatory capture as predicted by Public Choice economics. The only thing special about it is that those doing the capturing are the politicians themselves.

Fortunately, we (all forms) have a right to free speech and the current supreme court is interested in preserving it more than they're interested in letting those in power in the government restrict it. Before you propose a fix, make sure it's not worse than the original issue.

This is Part III of a continuing series about how sovereign security companies and military underwriters could work to provide private justice and defense from foreign aggression in a society.
Original Econlog Post is here.
Part I is here.
Part II with Dr. Huemer's response is here.

Dave has some comments and follow-up questions about the discussion. His comment was:

Michael, I think your objection to "invasion insurance" being impossible to collect really only applies if we are concerned about the whole world being conquered. Against more moderate threats, the insurance can be backed by people all over the world in different jurisdictions. (I don't think you could run a private defense force out of, say, the US or Britain, but maybe you could write a credit default swap on one, or hold money in escrow for one)

Thomas, I guess I'll have to read your book. It sounds like you rely on some kind of limited "cartelish" norms enforcement to ensure that security firms pay "their share" of defense costs? What do you think of my claim that the possibility of "moderate scale" extortionary attacks, targeted against security firms without any defense insurance, would discourage free riding security firms?

What laboratory can you use to find out if these ideas actually work? EVE online?

Dave

My response:
Dave,

Thanks for the excellent notes on how a market can use financial transactions to spread risk across borders.

It sounds like you rely on some kind of limited "cartelish" norms enforcement to ensure that security firms pay "their share" of defense costs?

More along the lines of each underwriter, i.e. military defense unit, is an independent company, but the norm is to agree to a set of interlocking contracts with the others in the area because keeping the peace is what their ultimate customers are paying them for. A refinement of the threat of force being the best way to keep the peace, if you will. Also a way of specializing, because one group may be best at mobile armor, but desire support from an air group and a light infantry group, and some specialists in anti-air defense, and a medical team, and contracts with suppliers who specialize in military logistics, and arms dealers, etc... Modern warfare capability is a complex thing and ultimately the market advantage would go to groups that can arrange to do it most efficiently for their customers.

In terms of individual customer cost, that would be the subject of negotiations between the large consortia and the local security companies. As long as there is competition, or at least the possibility of competition, then the payment for services would have to converge on the amount willing to be paid by the ultimate individual consumer. In that case, the local security companies end up as just a pass through in the average case, because other than having an ability to potentially negotiate a better deal for themselves, the average prices are going to revolve around the available supply and demand for military defense services overall.

What do you think of my claim that the possibility of "moderate scale" extortionary attacks, targeted against security firms without any defense insurance, would discourage free riding security firms?

I think that could occur, but it may be more likely to come into play when two local security firms are negotiating with each other over a case between their subscribers. If one of them has a contract with a big underwriting company to back them up as long as they are following the agreed upon rules of justice, choice of law and courts, etc... defined in their contract and the other one is on their own with no such relationship, guess who is going to have the negotiating advantage and is going to attract more subscribers? It's a competitive advantage in servicing their customers to ensure they're taken seriously enough.

As a result, once they've both contracted with an underwriter, either the same one or underwriters that also contract with each other, directly or indirectly, then that also creates a strong norm to keep the peace and work out any minor differences of opinion through the arbitration provisions in their web of contractual relationships.

A similar situation of friction between a "backed" company and an area that doesn't want to allow competition for government-style services arises in the sequel to Sharper Security, which isn't quite out yet. That competitive advantage explains part of the process of how local unaffiliated groups end up joining enough of the sovereign security company/underwriter legal framework to keep the peace and keep their influence. Similar to how having an industry standard for something causes competitors to converge on it because while there isn't direct enforcement of it, if they don't, they'll be at a competitive disadvantage to those that are interoperable as their customers desire.

What laboratory can you use to find out if these ideas actually work? EVE online?

That's a good suggestion. I'd like to see it. :) Currently I'm exploring them by writing fiction based on such a society and seeing how things turn out, how problems that arise are dealt with, etc... as much to see where the ideas take me as to expose them to the competitive light of the market place for ideas. If nothing else, it gets some people used to pondering the possibilities.

Myths

There are a couple of pervasive myths out there that are used to imagine that economic progress is bad, or unfair, or not compatible with "social justice".

The first is usually stated something like "People are getting wealthier over time, but inequality is increasing!" as if the second refutes the first.

The second is along the lines of "the poorest 20% still make about the same as they used to." or various statistics about the poorest 20% of people over time thrown in.

Financial Inequality

Consider the following scenario:
Jack is an engineer. He makes $100K/year.
Jill is a lab assistant. She makes $50K/year.

Obviously, Jack's financial situation is double that of Jill's. Taking this simplified situation as a society, we'll say this simplified society has a financial inequality of $50K, as Jack is paid $50K more than what Jill receives.

A series of technological advances and productivity innovation hit our simplified society. Over time, everyone in society is paid twice as much as a result!

So now consider:
Jack is an engineer. He makes $200K/year.
Jill is a lab assistant. She makes $100K/year.

Our updated simplified society now has a financial inequality of $100K! Clearly Jill is worse off and would rather go back to the society with more equality where she only made $50K each year, right? This is what we're meant to believe when told that despite everyone increasing in wealth over time, inequality is increasing... Apparently jealousy is more important to some folks than absolute levels of wealth.

To them, I say to cast your eyes on the vast majority of the people in the world, to whom the average wealth of the bottom 20% of people in the U.S. is something they can never hope to achieve. If you're reading this sentence, you're likely in the top 1% of income earners in the world. If you're in poverty in the U.S., with welfare benefits included, that puts you in the top 10% of the world. Just think, 6 Billion+ people are poorer than that. People in many places still spend hours of labor every day to supply themselves with hopefully clean water. You probably walk a few feet to your indoor plumbing and get clean water on-demand.

Now consider all the people who've ever lived. Where do you fall in the historical wealth scale? Top 0.01%? Top 0.0001%? Wealthier in material conveniences, knowledge and leisure than many of the "super-wealthy" of only 100 years ago, with no mobile phone, no internet, no hot/cold running water, no dishwasher, no car, no decent roads, no TV shows, etc...

So before complaining about financial inequality, ask yourself if you're willing to right now take half your own wealth and make several actually poor people in the world tremendously wealthy by their standards. Maybe you should do so voluntarily, but do you really believe that they need to get together and force you to pay them your "fair share"? If so, I look forward to your advocacy of financial equality.

Bottom 20% over time

People, especially left-wing article writers, like to throw around statistics about how the poorest 20% in the U.S. are doing over time. Leaving aside the fact that they are among the incredibly super-wealthy by world historical standards, obviously that doesn't make them feel better about only having digital cable with HBO, live sports and on-demand movies in HD instead of visiting actual concert halls each weekend. They may even have to put up with basic digital cable and rental movies or a netflix subscription!

But, there's good news. Most of the people in the "bottom 20% of income earners" in the U.S. will change categories. What's that you say, people's income changes over time? Yep, it turns out that a college student in the bottom 20% of income earners, might get a decent job and move into the middle classes of income earners, then ultimately retire as one of the top 20%. While at the same time, these article writers are lamenting that this same person isn't improving as fast as other income groups.

Oops, they don't actually mean the same person. They really mean a "new" poor person. See, the original bottom 20% of income earners they're talking about have mostly moved on to become richer and wealthier. Over time, new people are born (poor), go to school (poor), get a job (richer), get a better job (even richer), retire (wealthy, but poor in terms of income measurements), and die (no income statistics anymore) . People's situations change with time and the results of those changes are generally much better in the U.S. than in more "equal" countries. They're comparing different groups of people over time and trying to say there is something meaningful about the fact that they're different groups of people however many years later. Well duh, they're actually comparing different people... why would you expect them to be the same?

It's common for these folks to mistake the group for the individual and talk about a group as if it's an actual person, rather than a collection of individuals. Imagine going to the beach and watching a social scientist analyzing sand. He scoops up a shovel of sand and says "Hmm... very dry sand." then dumps it out again. He walks over closer to the waves and scoops up another shovel of sand and says, "Ah-hah, lots of water in this sand! The sand in my second sample is much wetter than the sand in my first sample, therefore I have a new theory, sand has become wetter over time." Does the fact that it isn't the exact same sand matter? After all, it's all just a shovel full of sand, right? Interchangeable?

Now if you took the 20% lowest income earners in 1960 and tracked those same exact individuals over time for 50 years, you might be able to say something meaningful about what has happened to their income and wealth. But to compare those people to a different group of 20% lowest income earners 50 years later is meaningless.

Finally, notice how it's always done using percentages. If they used absolute measurements of income instead, someone might notice that the "poorest 20%" of income earners now are much wealthier than the "poorest 20%" of income earners were 50 or 100 years ago. But if you simply define the bottom 20% as "in poverty", then you'll always have 20% of the people labeled as "in poverty", no matter how rich they become. Think about that the next time you see any measurement talking about the bottom 20% of income earners over time.

Summary

"There are three kinds of lies: lies, damned lies and statistics." from Mark Twain has an accurate theory concerning the order in which untruths are told and people are fooled. Watch out for that third kind and take anything relating to financial inequality and the bottom 20% with a huge shovel full of sand.

This is a continued conversation, sparked by Michael Huemer's book The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey.
Part I is here.

Dr. Huemer was kind enough to respond with what he thought of the sovereign security company idea I previously outlined.

His full response:

Thomas S asked more about private military defense. Let's see if I understand your idea. Is this it: You buy "unjust violence insurance" from your local protection agency (to insure you against suffering unjust violence). The local agency takes care of reducing unjust violence from small-time criminals. They do this because when unjust violence happens they have to pay out claims.
But your unjust violence insurance also covers unjust violence by states. Your local protection agency would have to pay out a lot if there were an invasion by a foreign government. But they can't prevent this by themselves. So they (along with many other local agencies) pay a much bigger company to insure them against the losses that would result from a foreign invasion. The bigger company then hires some soldiers to prevent foreign invasions, so that they won't have to pay out claims.
Is that something like the idea? I'm not sure if I got it right, because I'm not sure if you were buying insurance, or just directly paying people to combat rights-violators.
I like the idea at first glance. I'm a little worried, though. Let's say the private military is defeated in combat with a foreign state. They're not actually going to have to pay out any insurance claims, because the society will now be under the control of that foreign state, and the state won't enforce the insurance claims. Knowing this, why would anyone buy the insurance? Have I misunderstood something?

My reply:
Thank you for your reply.

In essence, yes. You could add a couple of additions like assignable and inheritable claims, etc...

I'm not sure if you were buying insurance, or just directly paying people to combat rights-violators.

More along the lines of buying protection with liquidated damages if the protection isn't able to be provided. Some companies could specialize in prevention to lower costs, others in investigation/retaliation to force the criminals to pay for the claims, etc... it's a market for services, so the possible outcomes would vary with actual individual preferences. Some would want catastrophic-style reimbursement coverage, others with more wealth might desire a team of 24x7 guards dedicated to their account. They could all coexist in the same marketplace.

... they're not actually going to have to pay out any insurance claims, because the society will now be under the control of that foreign state, and the state won't enforce the insurance claims. Knowing this, why would anyone buy the insurance?

I have a few answers to your "winner-takes-all" concern:
1. Caveat Emptor? Like any other business, the insurers would have to create at least a credible impressions that they will be able to deliver their product, or why would anyone buy it? At the very least make it clear that their defense will be damaging enough to a potential attacker that a reasonable purchaser is going to believe it's sufficient deterrence.
2. Historically, mercenary armies have successfully used bonding authorities to lend credibility to keep their promises. It adds some business overhead, but combined with assignable/inheritable claims, could be made to work for subscribers to gain assurances. I suspect it'd only come into widespread use if enough failures occurred to make the extra overhead worth it to buyers.
3. Comparing your concern to the current systems, in any country, if a foreign invader successfully invaded and took over completely, the current government would be deposed and that government's promises of future services, legal enforcement, etc... would be only worth as much as the winners allowed them to be. Despite this lack of assurance, people still generally pay their taxes and those taxes pay to hire soldiers for foreign defense. In other words, the actual existence of the defensive army is what is being paid for, not a guarantee of winning every war. Presumably the parties providing the underwriting services would be ruined as well if they were totally defeated. If not, then the inheritable/transferable claim against them by the "protected" would be rather large, with enough out there and willing to be an agent collecting on it to make it a decent deterrent to malfeasance.

Dr. Michael Huemer, author of The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey, has been kind enough to respond to reader questions for Bryan Caplan.

I had my own follow-up for a question and because it got so long, decided to post it here as well.

Dr Heumer:
Dave also asked about (I guess?) whether a paramilitary group of ideologues might take over the anarchist society. Very briefly, I think some group of pro-government ideologues could take over, and set up government in, a community that was sympathetic to the need for government. But if they tried to take over in a community that was generally opposed to government, I think they would face problems similar to those of a government trying to occupy a hostile foreign territory.

Dave also asked about private militaries. I don’t see how the free rider problem is solved. If a few people don’t pay their military bill, and the Russians decide to attack, they aren’t going to attack just the three houses in the neighborhood that didn’t pay their defense bill.
However, maybe you could have an HOA that pays for military defense of the whole neighborhood.

Dr Heumer,

I have a follow-up on your response to Dave's questions about private militaries, security companies, etc...

I've written a book that describes something similar (Sharper Security), with individuals contracting with security companies that provide both private law enforcement/local criminal defense and also military defense. The idea is that they contract to protect individuals and their specific property, so it's a mix of territorial and individual.

In turn, the security companies contract with each other in terms of how they will interrelate and also with larger umbrella-style military organizations that act in a manner similar to insurance underwriters. In this way, local groups deal with local issues such as crime, investigation and courts, with the security company on the hook to make good if they can't enforce a claim, but larger voluntarily formed groups provide protection against larger threats that we'd currently associate with a foreign military.

Obviously it's required that the security companies understand that it's in everyone's best interest to have limited relations with someone who doesn't pay their bills. It's self-enforcing when someone can't get a property/personal defense commitment without also paying their share of the military defense required to actually make that possible.

In our current society, ultimately criminals aren't prevented from just taking a whole town over by the police force of that particular town, but by the knowledge that if they ever succeeded, a larger group of armed individuals would intervene, right up to the military as necessary.

There's no reason why groups of smaller security companies wouldn't make agreements about enforcement among themselves, including agreements for paying a military group for defense, and then pass those costs on to their customers. It seems less realistic to me that a customer would want to contract for only limited protection against local threats, but be fine with an exclusion for larger threats. If anything, most customer-driven insurance works the other way, being more concerned with larger devastating threats and more tolerant of self-insuring against petty threats.

As for foreign travel, the power of trade and contracts comes to the rescue. If your security company (or affiliated group of companies) has a mutual protection agreement with a foreign country that covers members, than you're covered. Otherwise, your agreement with that security company would have to contain an exclusion where you travel to foreign lands at your own risk.

All of this seems to be easily covered under an insurance model with companies and individuals using standard waivers/riders and normal underwriting practices. I believe you are underestimating the power of creative individuals motivated to write and enforce contracts to serve customer needs.

What do you think?

P.S. More about private legal systems in the page about Sharper Security's setting and technology.

David Henderson calls this "Obama's Mistake on Social Security".

If congressional Republicans refuse to pay America's bills on time, Social Security checks, and veterans benefits will be delayed.

A "mistake" is when someone says something they believe is true, or accidentally says something they don't actually mean.

What Obama says here is a purposeful lie designed to scare the public and influence the complicit media.

If all the administration does is pay debt interest and make already committed payments and pay salaries without making new purchases/commitments for payment, then they can stay under the debt ceiling indefinitely. All of that committed spending doesn't add up to the tax receipts and other income the federal government has coming in. What's already contracted with individuals and companies is covered. New spending is what would have to go.

If the federal government starting selling their accumulated gold, that would give them a $200,000,000,000 cushion to work with. If they started selling federal land that's not currently in use for a park/military base/etc... they could raise another few trillion or so. At the very minimum, the department of the Interior could stop blocking oil and gas leases that bring in revenue and make a "mint" from that. Lots of options out there for additional revenue besides taxes.

No, Obama prefers to scare people that they won't get their already expected money, rather than just say, "Well, we won't make any new deals to owe people money, then!"

Whenever they run out of money, left-wing politicians always claim that it'll cause the most popular programs (teachers, police, firefighters) to not get paid and never mention not paying the people who get the latest sweet-heart contract pork deal.

I bet you'll never hear Obama lamenting how a failure to raise the debt ceiling will prevent him from doing any more $535,000,000 loan guarantees for solar companies run by his cronies. In a responsible administration, that's what would be the first thing to go.