Question about legit vs illegitimate businesses
 

It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.

Re: Question about legit vs illegitimate businesses
 

Are you pro illegitimate people taking your money or anti it?

Re: Question about legit vs illegitimate businesses
 

The governments monopoly on the use of coercive violence exists because the people under it believe that this is a desirable state of affairs. If we ever reach a point where people don't believe this we will quickly see the powers of 'illegitimate' organizations wane.

Re: Question about legit vs illegitimate businesses
 

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If an illegitimate government can last that long, why can't an illegitimate private company last that long?

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They can and they do, especially where governments are weak or non existent.

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It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses.

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This is another in a long list of AC silliness. If the core business of illegitimate businesses is run as any other business, but they use threats, intimidation, collusion, kidnappings, and so on in order to get what they want, get favorable deals, gain monopoly in an area, and so on, then there's no reason they can't prosper. This is how the mafia works today, and it's very successful at it, but of course kept in control by the government.

I am curious as to how ACers think an ethical company is more profitable than an unethical one, especially in a world where suppliers are often anonymous to the end purchaser (hence, no arguments from reputation).

Tom,

you seem to be missing the point that government (and those in them) are under the universal rule of law. Their use of force has a very different kind of legitimacy to that of the mafia, operating under their own whim and constrained by no moral or ethical code.

Re: Question about legit vs illegitimate businesses
 

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Tom,

you seem to be missing the point that government (and those in them) are under the universal rule of law. Their use of force has a very different kind of legitimacy to that of the mafia, operating under their own whim and constrained by no moral or ethical code.

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Actually the mafia have a pretty strong ethical code (snitching is evil respect the family etc). I don't understand what a "universal rule of law" is or how you think that anyone in the government is constrained by anything other than what we let them get away with. The OP knows that the government is illegitimate he just hasn't made the leap to take a stand on principle and say, lets deal with this form of illegitimate force now and if it doesn't take and another government reforms we'll deal with that form too, which is fair enough because there's enough propaganda out there to make that leap incredibly difficult. It's another story of "but what if we get back to the current situation wouldn't that be terrible?" Implicit in that statement is a rejection of the state. You just have to see it. I'm not trying to be condescending here it took me ages to come to the that logical conclusion it's tough to see those who taught you as at best misguided and at worst malicious liars.

Re: Question about legit vs illegitimate businesses
 

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If an illegitimate government can last that long, why can't an illegitimate private company last that long?

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They can and they do, especially where governments are weak or non existent.

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Last time I checked governments are by definition the anti-thesis of "weak or non-existent" in all black markets and they just happen to be the areas where both illegitimate businesses and violence thrive.

Wierd how that works, isn't it?
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This is another in a long list of AC silliness. If the core business of illegitimate businesses is run as any other business, but they use threats, intimidation, collusion, kidnappings, and so on in order to get what they want, get favorable deals, gain monopoly in an area, and so on, then there's no reason they can't prosper. This is how the mafia works today, and it's very successful at it, but of course kept in control by the government.

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Explain to me why it was only during prohibition that the mob dominated the alcohol market then. I guess I'm just silly for knowing how to put two and two together.
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I am curious as to how ACers think an ethical company is more profitable than an unethical one, especially in a world where suppliers are often anonymous to the end purchaser (hence, no arguments from reputation).

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Uh, outiside of rare cases this isn't realistic. Reputation and competition is the whole point of why a market works.

I am curious as to how you think an elected government official will see it in his best interests to act ethically rather then unethically.

Re: Question about legit vs illegitimate businesses
 

OP,

Here's an old post of mine dealing with the nature of the black market and why illegitmate businesses survive-
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It's on a black market. They have to spend a lot of money defending themselves from police knocking down their doors. If they get caught dealing they're screwed by current laws. They also don't have access to legitimate arbitration and courts, which usually leads to more violence. They also can't operate in the same effecient manner legitimate businesses can (ie, you don't see sneaker dealers selling shoes on street corners do you). All of these not only drive up costs and in effect prices, but also the risk associated with dealing. Since there's more risk involved (a) On average more intelligent people move on to legitimate businesses, leaving less intelligent people with on average less efficient business models and (b) those that do participate want more money to make up for the added risk, passing those costs on to the consumer (Would you rather make $50,000 doing something legal or doing something illegal, how much more money would you have to be making to make up for the risk associated with doing something illegal?)


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You'll notice that among non-black markets there is very little violence in the market. However what has been chosen in non-black markets is something that must be much more effective (being that it's used much more often then violence) for unethical market actors-take a guess-government intervention in the market in the form of favorable regulation, tax loop holes, corporate welfare, no bid government contracts, you know, all the works.

Governments continue to exist because a large amount of people accept it's existence. It isn't difficult to see why, patriotism (basically religion of the state) has been indoctinated in our heads since we could comprehend such concepts. So, essentially the same reason why the majority of Americans are Christians.

edt:
Here's another post of mine over lack of concern for violence in the market-
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For starters, a state creates tons of violence. In the 20th century 10s of millions of people were killed either by their own state, or in state on state wars. It's not even a matter of which prevents more violence, the state has always been a leading factor in violence in it's history. The Iraq War simply wouldn't have been possible for a free market to do. From an investing standpoint the Iraq War has been a very -$EV decision. The people making money off the war (contractors and mercenary forces) differ from those that pay for it (taxpayers who really had no say in the matter at the time).

Simply put, on a free market the rewards of cooperation outweigh the "rewards" (quotations because it's rarely profitable) of conflict. Now, unfortunately some will make the -EV decision to turn to aggression rather then cooperation, and people should defend against that. We don't think planning ahead of time is particularly useful. No one could really predict ahead of time how the free market would solve various problems. When the internet was created, do you think anyone could accurately predict then how the internet would unfold? Of course I doubt you see anything wrong with the internet, but just wait, congress will begin soon enough to regulate the internet, making up reasons and fear mongering the whole way (just like the justifications for the internet gambling bill, the government wasn't getting their piece so they decided Americans need to spend their money in ways that they could). Government really is a mafia. They want a piece of everything. And of course one of a mafia's first objectives is forcing people to pay their protection money "for their own good".

In a free market people have various problems, and someone acts to meet those demands (usually for profit but often through charity too). I see no reason why hiring a police agency would cause any free riding problems at all. Delagating security to another company may not even be as effecient as simply using your own means of protection. Although it's 21 pages The not so wild, wild west may have some answers on how a decentralized area would work. There was very little government to be had at all and violence was much lower then it's eastern and southern couterparts at the time (not to mention a lot lower then violence seen today). In the years following state intervention, crime rates immediately began rising.


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Re: Question about legit vs illegitimate businesses
 

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It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.

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Assuming what you say is true still you must recognize this:

No mafia will be one unitifed group with a single leader and millions and millions of soldiers with a territory of the USA. There will always be competing mafia's in different area's to keep the negative impacts low.

Moreover, on the local level citizens can band together and stand up to the mafia (even if stealthily). This can not be done with government because the government can call in unlimited resources, something the mafia can not and will not do.

Re: Question about legit vs illegitimate businesses
 

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It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.

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As any poker player should realize, there are no certainties, only probabilities. It's *likely* that legitimate, vouluntary businesses will outcompete violent, illegitimate businesses. However, there's more to it than just that. If a violent organization is big enough, it can very well crush the competition. We commonly refer to this condition as the "Death Star Objection" since you often see something like "Oh, well, what would AC do if the death star showed up? Huh?!" Obviously, "AC" would get blown to bits. But so would any state. Voluntary interations are not a magic bullet that automatically slay all thugs, stop all violence.

"illegitimate" governments can (and do) persist because lots of people feel they ARE legitimate. Just like the death star can blow Alderan to bits, the overwhelming number of people who buy into statism can easily steamroll those who seek liberty.

If you want to see some "empirical" data about legitimate businesses and illegitimate businesses competing head to head, you need look no further than Las Vegas. The mob ran all the casinos in town - until the government finally allowed corporate ownership of casinos. You can thank Howard Hughes.

Re: Question about legit vs illegitimate businesses
 

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If an illegitimate government can last that long, why can't an illegitimate private company last that long?

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They can and they do, especially where governments are weak or non existent.

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More often, they flourish where governments are strong. Mercantilishm FTW.


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This is how the mafia works today, and it's very successful at it, but of course kept in control by the government.

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LOL. THe mafia only comes into being when governments impose prohibition.

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I am curious as to how ACers think an ethical company is more profitable than an unethical one, especially in a world where suppliers are often anonymous to the end purchaser (hence, no arguments from reputation).

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If the violence-based business model is so much better than the voluntary transactions-based business model, why does the mob restrict itself to contraband? Why doesn't it compete in the soda market, or the ice cream market? Why, when it DOES compete head-to-head with legitimate businesses (cf alcohol distribution before and after prohibition), does it invariably lose?

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you seem to be missing the point that government (and those in them) are under the universal rule of law. Their use of force has a very different kind of legitimacy to that of the mafia, operating under their own whim and constrained by no moral or ethical code.

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LOL. "it's not bad when the guys I like do it."

Re: Question about legit vs illegitimate businesses
 

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LOL. THe mafia only comes into being when governments impose prohibition.


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This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

Cody

Re: Question about legit vs illegitimate businesses
 

[ QUOTE ]
It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.

[/ QUOTE ]


It seems like you view the state as a criminal organization. That's good. I do too.

But, many people are not at that point yet. If we keep chugging away at people's belief in the legitimacy of the state, then it will suffer and die?

How do we know this?

First, economically speaking, an organization that depends on violence must fall back on ideological support. Violence is an incredibly expensive strategy, and the more resilient people are, the more expensive it is. Iraq is a good example. The Americans are viewed as criminals and that's why the violence will never end.

Second, the state spends an incredible amount of energy into ideological support. It is literally everywhere. State education is really the crux for ideological support. Then there is the controlled media, and then there are things like movies/art which oftentimes are heavily embedded in the subsidies/welfare environment. So the reason we know they are so heavily dependent on ideological support is because of the amount of energy spent on it. Take it away (or see through it, or: thank god for the internets), and the state is quickly understood as a criminal organization, and the above-mentioned resilience comes in.

Re: Question about legit vs illegitimate businesses
 

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This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

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But violence itself doesn't scale. There are no nationwide networks of, for example, purse snatchers, or kidnappers, or bank robbers. It is only when prohibition creates black markets that large-scale organized "crime" can emerge.

Re: Question about legit vs illegitimate businesses
 

[ QUOTE ]
[ QUOTE ]
This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

[/ QUOTE ]

But violence itself doesn't scale. There are no nationwide networks of, for example, purse snatchers, or kidnappers, or bank robbers. It is only when prohibition creates black markets that large-scale organized "crime" can emerge.

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Isn't the government just a "large-scale organized "crime"" network. I mean it's taken 200+ years but saying "violence doesn't scale" seems awfully shortsighted.

I doubt seriously that it would take a government machine to create it, just time and money.

Cody

Re: Question about legit vs illegitimate businesses
 

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But, many people are not at that point yet. If we keep chugging away at people's belief in the legitimacy of the state, then it will suffer and die?

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no, it wont, it will give birth to a new state. Always has, always will.

Re: Question about legit vs illegitimate businesses
 

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This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

[/ QUOTE ]

But violence itself doesn't scale. There are no nationwide networks of, for example, purse snatchers, or kidnappers, or bank robbers. It is only when prohibition creates black markets that large-scale organized "crime" can emerge.

[/ QUOTE ]

Isn't the government just a "large-scale organized "crime"" network. I mean it's taken 200+ years but saying "violence doesn't scale" seems awfully shortsighted.

I doubt seriously that it would take a government machine to create it, just time and money.

Cody

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It's the indoctrination mechanisms that scale here not the violence. They still have to send a guy in a blue jacket round to your house to take you away if you don't give them your money.

Re: Question about legit vs illegitimate businesses
 

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But, many people are not at that point yet. If we keep chugging away at people's belief in the legitimacy of the state, then it will suffer and die?

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no, it wont, it will give birth to a new state. Always has, always will.

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So you believe a state will come about even when basically everyone believes it's a criminal organization?

Re: Question about legit vs illegitimate businesses
 

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This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

[/ QUOTE ]

But violence itself doesn't scale. There are no nationwide networks of, for example, purse snatchers, or kidnappers, or bank robbers. It is only when prohibition creates black markets that large-scale organized "crime" can emerge.

[/ QUOTE ]

Isn't the government just a "large-scale organized "crime"" network. I mean it's taken 200+ years but saying "violence doesn't scale" seems awfully shortsighted.

I doubt seriously that it would take a government machine to create it, just time and money.

Cody

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It's the indoctrination mechanisms that scale here not the violence. They still have to send a guy in a blue jacket round to your house to take you away if you don't give them your money.

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Potato Potato (that really works better when you speak it). Violence can stay on a small scale. The Don gives orders and the foot soldiers carry those orders out. Violence doesn't need to scale, so long as the Don doesn't want to shake-down everyone himself.

Why is this even up for debate, I don't know too many ACists that think that simply "going AC" stops violence. My only objections was that prohibtion fuels the mob but that the two don't have to be linked. I would think this would be obvious.

Cody

Re: Question about legit vs illegitimate businesses
 

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But, many people are not at that point yet. If we keep chugging away at people's belief in the legitimacy of the state, then it will suffer and die?

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no, it wont, it will give birth to a new state. Always has, always will.

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So you believe a state will come about even when basically everyone believes it's a criminal organization?

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Organized crime gangs like the Mafia and MS-13 continue to gain members, even though everybody, including the gang members themselves, know that these are criminal organizations. New gangs amongst immigrants of different ethicities continue to sprout up as well. Everyone knows that these new gangs are criminal organizations.

So, why again wouldn't a state come into existence? Many people want power, and don't care too much whether that power is derived from entirely moral means, somewhat immoral means, or even entirely immoral means. The argument that the state may be criminal, has little or nothing to do with whether states will come into existence. Most people want what they perceive to be good for themselves personally, and if that means gaining power at the expense of others, they are for that (to varying degrees).

edit: this is the Achilles' Heel of Anarchism. Banding together with others to wield power over "non-members" is a strong part of human history and probably human nature. An anarchistic world will give rise to states which attempt to gain power at the expense of outsiders, and which also band together for their common defense.

Following this path of reasoning, it can also be seen that this is the fatal flaw of Libertarian open-borders and unrestricted immigration policy. You can't maintain a Libertarian state unlesss most people within it share the Libertarian ideology. If you allow anyone and everyone to move to the Libertarian State (say if the USA became predominantly Libertarian in government and philosophy), that support would erode as others en masse who do not share those beliefs became citizens and had offspring. Pretty soon the Libertarian majority would be a minority, and poof! there goes your Libertarian State! The same thing would happen with Anarchism.

This is why borders are important, because borders are a mechanism for like-minded people to live together and be ruled by their own consent (the consent of the governed). If the USA is to remain a Constitutional Republic, people who live here had better mostly believe in the Constitution.

You can't have an Anarchy if most people moving into your neighborhood or country, or evev just next to you, believe in a State. You can't have a free Republic if most people moving in near you and into the country believe in State Communism or in Islamic Shari'a Law. Borders are essential to maintaining a government or a working political philosophy based upon anything.

Re: Question about legit vs illegitimate businesses
 

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[ QUOTE ]
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This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

[/ QUOTE ]

But violence itself doesn't scale. There are no nationwide networks of, for example, purse snatchers, or kidnappers, or bank robbers. It is only when prohibition creates black markets that large-scale organized "crime" can emerge.

[/ QUOTE ]

Isn't the government just a "large-scale organized "crime"" network. I mean it's taken 200+ years but saying "violence doesn't scale" seems awfully shortsighted.

I doubt seriously that it would take a government machine to create it, just time and money.

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Go back to exhibit A. Most people don't object to government, not enough to do something about it, at least, and prefer to have such activities conducted. There isn't widescale desire for purse-snatchings, bank-robberies, etc.

There IS widespread demand for drugs, booze, gambling, prostitution etc. That's why, when governments try to suppress these things, black markets spring up. That's also why, as Copernicus loves to point out, when governments collapse, new ones spring up.

It is not the illegal nature of the activities the Mafia engages in that motivates the activity, it is the *consumer demand* for them. If buggy whips were outlawed tomorrow, it is unlikely that the bloods, crips, gambinos, whoever would get into the buggy whip black market.

When the demand disappears, the "product" will, too.

Re: Question about legit vs illegitimate businesses
 

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But, many people are not at that point yet. If we keep chugging away at people's belief in the legitimacy of the state, then it will suffer and die?

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no, it wont, it will give birth to a new state. Always has, always will.

[/ QUOTE ]

"past performance is no guarantee of future results"

Re: Question about legit vs illegitimate businesses
 

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This is why borders are important, because borders are a mechanism for like-minded people to live together and be ruled by their own consent (the consent of the governed). If the USA is to remain a Constitutional Republic, people who live here had better mostly believe in the Constitution.

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What better borders than property lines? If the people around my neighborhood have some right to impose their "collective will" upon me simply because of proximity, then surely the people of the US have the same right to do so to the people of Canada, or Mexico; they're "in our neighborhood." And why stop there?

Re: Question about legit vs illegitimate businesses
 

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This is true of black markets but not the Mafia. The Mafia is a group of people that are powerful enough to extort another group of people. Black markets created by government prohibitions fuel Mafias no doubt, but a Mafia is just a group of guys with guns and subsequently power.

[/ QUOTE ]

But violence itself doesn't scale. There are no nationwide networks of, for example, purse snatchers, or kidnappers, or bank robbers. It is only when prohibition creates black markets that large-scale organized "crime" can emerge.

[/ QUOTE ]

Isn't the government just a "large-scale organized "crime"" network. I mean it's taken 200+ years but saying "violence doesn't scale" seems awfully shortsighted.

I doubt seriously that it would take a government machine to create it, just time and money.

Cody

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It's the indoctrination mechanisms that scale here not the violence. They still have to send a guy in a blue jacket round to your house to take you away if you don't give them your money.

[/ QUOTE ]

Potato Potato (that really works better when you speak it). Violence can stay on a small scale. The Don gives orders and the foot soldiers carry those orders out. Violence doesn't need to scale, so long as the Don doesn't want to shake-down everyone himself.

Why is this even up for debate, I don't know too many ACists that think that simply "going AC" stops violence. My only objections was that prohibtion fuels the mob but that the two don't have to be linked. I would think this would be obvious.

Cody

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And how is a mafia going to develop to such a large scale without sections factioning off? That happens today in mini mafia's that are factions within factions.

If 90% of the population was for voluntary transations and against violent imposition how do you think a mafia would fare? What are they going to do when they are outnumbered 9 to 1 and scattered all across the country?

And of the 10% let's assume that they would all be willing to be the hardcore murderers (I think that's fair to say as I think it is true today that less than 1 in 10 will go kill for money). So there are some criminals scattered around the world in the middle of large groups of people against violence and for voluntary exchanges. What happens, does one guy go around openly recruiting for a mafia army from town to town?

If you were on a desert island stranded there with 1000 people and 100 don't want to pull their weight, say 50% of the 100 will try to talk their way into some free meals, etc and make some promises for stuff that they only back up inconsistently.

Now of the other 50, 25 will outright steal and 3 or 4 want to organize the island into a slave labor camp under the threat of severe punnishment up to and including dealth if the others do not comply (i.e. mafia).

What do you think is going to happen?

Do you think that maybe 50 or more of the 1000 will make a plan to kill off the murderers or do you think that everyone will submit and there will be 1 king (don), 3-4 semi kings, 100 cop/soldiers, and 895 worker bee's/slaves for the king and his close knit circle to feed off of?