David Friedman. What About The Poor?

Some people have no money, no friends, and no assets. Would these people also have no rights in an anarcho-capitalist society? Now, if you have somebody with no money at all, and nobody who likes them is willing to help him out, he may not be able to afford to have a rights enforcement agency. So, he might indeed be perfectly helpless.

But, of course, people in the equivalent of that situation can be perfectly helpless now, and they can even be the people whom the government goes after for one reason or another. I think it's very hard in any system to prevent mistreatment of people who really have no friends and no assets.

The anarcho-capitalist system allows the option of not paying for rights protection and not getting it, whereas the present system, the only option is pay for rights protection, the price we decide to charge, and get whatever level of rights protection we choose to give you. Under anarcho-capitalism, would the rich have more rights than the poor?

Bob would like to be free to steal from Alice. He'd like to have legal rules agreed to between their two agencies, which say that when Alice comes to complain about the fact that Bob has just mugged her and taken her purse, the agency will ignore it and say, "That's not against the law."

Then, the question is: how much is it worth to Bob? The amount it's worth to Bob is the amount he can steal from Alice minus the cost to him of the effort of stealing it. If Bob believes he can steal a hundred dollars from Alice, he’d be willing to pay something less than a hundred dollars more to his rights enforcement agency if it can get a contract that specifies that it's not illegal for him to steal from Alice.

From Alice's standpoint, his stealing a hundred dollars has the cost of more than a hundred dollars because there's also all the efforts she makes to hold it down to a hundred dollars—even stealing two hundred. So, that means the value to her of being protected is greater than the value to him of being able to violate her rights.

I think you would expect, in any case that involved violations, as it were, of a monetary sort, such as stealing money or objects, that you would end up getting the legal rule that maximized the sum benefit to all of the parties involved. That's typically gonna be rights, which affect the mass market—not the market of very wealthy people or very poor people, but people in between.

So, if you look at the auto industry, it spends very, very little of its resources making gold-plated limousines for Bill Gates or his equivalent. It spends most of its resources making cars in a range that the mass of the population can buy. I would expect that probably rights enforcement agencies would follow a similar strategy.

In terms of actual bribery, it would be a very serious problem for a private court to accept bribes. People will start refusing to use that court because neither of us want to have a court where we know that we're gonna do bidding against each other by giving money to the judge, and we're gonna lose that money, and one or the other of us will win.

My guess is that the risks of bribery are largest when the people who you are bribing are, as it were, spending someone else's money. So, if you imagine a fairly common pattern, I think a government regulation which says that in order to start a restaurant you have to be approved by the relevant authorities, you can see that the people controlling those credentials would have a very natural incentive to say, "Well, you're going to be better off if I approve of you; therefore, how about you make it worth my while to approve of you?"

But you're much less likely to have problems of bribery and corruption when you're dealing with private firms rather than government agents. If you'd like to see more videos like this, support Thomas on Patreon.