[hmkpoker]

xorbie:

You raise an excellent point. Private security/defense is one of the most confusing concepts in Austrian theory (in fact, this is what kept me from drinking the Kool-Aid for quite a while). You have to look at it from a bit of a game theory perspective.

Let's consider a few things here.

- Defense is less costly than offense. This should seem obvious; it is generally easier to defend one's property than it is to attack one's property. I suppose you could call this a "home field advantage" or something.

- Defense is higher in demand than offense. I think it is fair to say that far more people are willing to pay for defensive services (security guards, alarm systems, nightclub bouncers, bodyguards) than offensive services (contract killers, thugs, raids). This is just common sense; the need for people to be sade is much, much greater than the need for people to kill others.

- It is easier to acquire goods through trade than it is through aggression. This becomes increasingly true as productive capital becomes more abundant.

- Paying for damages is not profitable for an insurance company. GEICO doesn't want me getting into another car accident, I'm sure. Nor do I want to be in another car accident. Even though that's the only way for me to "reap the benefit" of my investment, it's still bad for me. I would much prefer to simply continue paying for my insurance and not have an accident than to pay and have an accident. Security is quite similar; no one with a home security system sits around hoping that a thug comes along so the system can catch him. And insurance/security companies know that.

Now put all these together. Where is the money going to be made in the aggression market? It's going to go toward defense and security. That's simply where the demand is; in a free market, people want to feel safe more than they want to harm others. So you have big private defensive security firms raking in tons of dough to protect their clients.

So what happens when these private security companies, who have all the money and power decide to go to war with one another to gain market dominance? Surely we should realize that this is pathological. Why would any successful business want to spend their own private assets on a war? It's ridiculous. The cost is enormous, the expectation negative, and the resolution unlikely at best. Any reasonable company would want to settle disputes (should, for example, the terms of different companies' services conflict with each other) with lawyers and fine print.

The only profitable outcome that could possibly be selected is a stand-off; the businesses agree to defend their clients, and not offer highly aggressive services (like contract killing), for fear of loss by the defense of the competitor (who also doesn't want to deal with such a problem). I have a feeling that any business not in agreement with this naturally-selected inevitability would be destroyed immediately; he poses a threat to the profits of everyone at the table, and terminating such threats is their job.



Even if you don't buy this, you have to admit: it is unreasonable to argue against a policy that could lead to an unbalanced centralization of force, and offer as an alternative an unbalanced centralization of force where the directors of the violence aren't even accountable to their own funds. With nothing at stake, standoffs that should be peace in a free society are cold wars. And with nothing at stake, this centralization of power has been the cause of every war in at least the last hundred years. How exactly is that the better alternative?