This is How DRO's work

[LibFedDemRepCon]

Hey guys, long time lurker first time poster.

 

I was thinking we should have an example of how DRO's would work so that we can explain to others (and help explain to new people) how a DRO (and overall how a stateless socitey) would deal with crime and whatnot.

 

Situation:

 

So we've just got ridden of the state and the stateless society is operating well. Bob's use to the old way and so has been traumatised by his parents and so he decides to kill another man named Paul. The free markets in full swing so Bob used one of his guns to shoot Paul. Bob's signed up for a DRO that his friend Chris and Robbie set up.

 

Okay guys so if you were the family of Paul (the guy who got shot) how would you respond? Let's come up with some good answers so we can show these sheeple statists how a stateless society would work!

[anarcho-science-dude]

Ignoring that I think this sounds like flame bait for the moment, since I'm new here can you LibFedDemRepCo describe what is a DRO?

[LibFedDemRepCon]

DRO's are dispute resolution organisations which would serve the role of being a third party and helping resolve disputes between individuals in a stateless society where there isn't the traditional government/legal system. People are still going to have conflict without the government so there needs to be some way of dealing with that. 

 

Is that your understanding of them aswell?

[anarcho-science-dude]

Yes but I didn't recognize the abbreviation. I have a question for you.These DRO, do you think they should be non-profit or for profit and please elaborate why?

[LovePrevails]

 

I personally disagree that the "ruling would have no force" (necessarily)

it could be, that he had signed a contract before hand with his own DRO or insurance company, or employer, or landlord

which state "I hereby sign that if I shoot someone I consent to consequence x"

Yes but I didn't recognize the abbreviation. I have a question for you.These DRO, do you think they should be non-profit or for profit and please elaborate why?

 

that is completely up to the consumer.

If the consumer wants some kind of cooperative arrangement with "profits" going back into te self-contained system then that is what they get

if for-profit companies tend to do a better job then they will hhave a market advantage.

[anarcho-science-dude]

Okay guys so if you were the family of Paul (the guy who got shot) how would you respond? Let's come up with some good answers so we can show these sheeple statists how a stateless society would work!

 

Why is your question for the family of Paul? Don't you want to know how this situation can be prevented or why there might be high risks to Bob's actions or how a DRO would work in this situation?

[LibFedDemRepCon]

Why is your question for the family of Paul? Don't you want to know how this situation can be prevented or why there might be high risks to Bob's actions or how a DRO would work in this situation?

 

I framed the question this way because a lot of people who have had someone in their family disappear or murdered would feel entitled to 'justice' and so how would they go about achieving such an ends is a pertinent question. This is where the DRO comes in and their function is then evident in the way it resolves this situation.

 

So Bob has killed Paul. Presumably, Paul's family concerned for his wellbeing wonder where he is. How do they know that Bob killed him if Bob just grabbed him randomly off the street? What do they do then?

[anarcho-science-dude]

I framed the question this way because a lot of people who have had someone in their family disappear or murdered would feel entitled to 'justice' and so how would they go about achieving such an ends is a pertinent question. This is where the DRO comes in and their function is then evident in the way it resolves this situation.

 

So Bob has killed Paul. Presumably, Paul's family concerned for his wellbeing wonder where he is. How do they know that Bob killed him if Bob just grabbed him randomly off the street? What do they do then?

 

That's a good question though I don't think this is the type of situation that a DRO is best suited for. Your line of argument seems to  be leading in how a party can get justice or revenge. Some Austrian scholars have addressed this topic before. I think there are some videos that mention it on the Mises website though I don't remember which ones. Maybe someone knows.

[LovePrevails]

[LibFedDemRepCon]

Watched the video so here's how it goes

 

1. Alice lives in a society without a government

2. She contracts her security needs out to a private company

3. She is mugged at gunpoint on the way home

4. She rings security company who attend crime scene and they collect evidence, mugger has gone

5. They immediately pay Alice 'compensation for her losses enought to cover possessions taken and a good deal more for her time, trouble and distress'.

6. Security company does detective work and identifies Bill with 'reasonable confidence' as the aggressor of the crime.

7. They issue a letter to Bill insisting that he pay them $10,000

8. Bill can pay up and admit guilt or refuse to pay

9. Bill refuses to pay and claims he is innocent

10. Security company listen to his case and I quote "it will listen to his case. After hearing his case if they remain convinced of his guilt they will insist on payment. Threatening to use force against him if necessary"

11. If Bill then refuses security company will 'send armed men around to his house to enforce their punishment'.

 

There are a number of queries regarding this system.

 

Firstly, who decides what the law is?

Secondly, there is a conflict of interest between the Security Companies (I'll call them SC's from now on) as they make a profit by extracting money from Bill and they are involved in the judgment call into whether he is innocent or not.

 

Case # 1

FACTS: Bill is innocent, Bill is unable to afford a security company to represent him

 

Alice's SC charges Bill with mugging. Bill refuses initial payment as he can't afford it. SC conduct their inhouse decision of whether or not he is guilty. They decide that he is guilty (mostly due to the fact that they want to recoup the money that they had to give Alice) and so they issue the second letter. Bill can't afford a defence contractor so the case never goes to the DRO (3rd Party) and Alice's SC therefore initates force against him and takes his property and makes him confined to a certain area and work for them. As all security companies are private none are interested in his case because he has no money (they exist to make a profit).

 

Alice's SC offer to pay her money and provide her with free protection if she is willing to continue to find poor men without private security protection who they can charge with 'muggings' and therefore initiate force against. Perhaps, some consumers move away from the company when they hear this is happening but others are attracted by the opportunity to recieve a bit of cash on the side and free protection. The company does not go bust despite the move of some consumers away from it as they are extracting free labour, money and property from poor people without protection such as Bill.

 

A week later. Alice tells her SC that she got mugged again. They investigate and find Robert, a poor man with no security company, guilty of the crime. Robert protests his innocence but the SC say he is guilty and demand a payment of $2,000,000 from him. He barely makes ends meet each week and is unable to pay this amount. Alice's SC then decide that he can pay off that debt by working for them for the next 25 years. Robert was innocent but is now subjecated to the force of Alice's SC.

 

Case #2

FACTS: Bill is guilty, Bill has close links with the people who run his SC (friends and family)

 

Alice's SC charges Bill with mugging. Bill refuses initial payment and claims his innocence (even though he is guilty). SC conduct their inhouse decision and decide Bill is guilty. Bill's SC do their own independent research and conclude that he is innocent. Alice's SC suggests going to a DRO and signing an agreement for both parties to be bound by the decision. Bill's SC decline (because they know he will be found guilty) and state that if Alice's SC initiate force against Bill (which they will be doing without the authority of a DRO or of Bill) then they will protect Bill with military force.  Alice's SC initiates force. Bill's security company responds and soon there is bloodshed, fighting and violence in the suburb.

 

Case #3

FACTS: There is an increase in crime in the area which means that the cost of having private security has increased. This is because the security companies must pay out money more often to victims, they have to pay more wages in investigation and dispute resolution.

 

As the cost of private security increases only the more wealthy would be able to afford it and then the poor have no protection.

 

Case #4

FACTS: Bill does not mug Alice but sees her in the street and looks at her. Bill is able to afford a SC in this scenario.

 

Alice tells her SC that Bill looked at her in a weird way and she demands compensation. The SC conclude that Bill did look at her funny and demand $10,000,000 from Bill in repayment of this crime. Bill is outraged and his SC say 'That's not even a crime' to which Alice's SC suggest that they go to an DRO to decide this issue. Alice's SC pay the DRO $100,000 to rule in their favour and they do so. Bill's SC is bound by the decision and leaves Bill to work off his debt to Alice's SC on his own.

 

Lots of people stop using this particular DRO (say 98%) but Alice's SC always insists on using it and if the opposing SC disagrees they use military force to kill people such as Bill as well as those involved in running the opposing SC. Every case that Alice's SC uses the DRO they slip them a big bribe so that the DRO is able to remain functioning financially. Furthermore, the DRO has low costs as they don't actually need to hear trials fairly and decide trials based on what Alice's SC tells them to.

 

-------

 

The ease of corruption, bribery and exploitation in this system is very concerning.

[anarcho-science-dude]

LibFedDemRepCon, since your first post and the way you write I though you are not really interested in really getting an answer to your question but rather trying to argue for the statist quo. To me it's apparent that's what you're trying to do by the language and the words you use in your subsequent posts. Still I'm trying to refrain from just calling you a statist and ignoring you. Regardless of your views, and this is a forum so we don't have to agree, you bring up questions that need to be answered.

And maybe I'm wrong about your actual views, but as long as you bring up important points I think they should be addressed.

[LovePrevails]

thanks for summarising that video, I really couldn't stand that guys voice

 

What is your feedback on the other video I posted for you

Case1

 

So Bill contacts a no-win-no-fee reprisentative who sues Alices security company for not being thorough and making allegations against the wrong part

 

Case2

 

An independent watchdog audits this company and exposes and destroys them for their corruption, they get huge incentives for doing so

 

Case3

The insurance companies, tired of paying out money to victims of violent crime, put their heads together, pool their resources and start working on preventative measures rather than react to these events after the fact. They use all the evidence available on crime prevention to find out the cheapest and most effective way of reducing crime.

 

 

Case4

I think this example is so ridiculous I don't want to gratify it with a response.

 

The ease of corruption, bribery and exploitation in this system is very concerning.

 

Really? this system is corrupt? How about a system where 93% of the people in prison are in there for non-violent offenses

and there are 200,000+ victims of rape a year in the jail

and it's funded at gun point

and there is no incentive to prevent crime rather than react to it after the fact

please get in touch with the real world

[FreedomPhilosophy]

Common Law predates the state.

 

[Kevin Beal]

Some relevant podcasts:

 

1 – The Stateless Society - An Examination of Alternatives

http://media.freedomainradio.com/feed/stateless_society_take_2_320.mp3

 

2 – Caging the Devils: The Stateless Society and Violent Crime

http://cdn.media.freedomainradio.com/feed/caging_the_beasts32.mp3

 

139 – Saving Children: The Stateless Society and the Protection of the Helpless

http://cdn.media.freedomainradio.com/feed/saving_children.mp3

 

203 – Stateless Prisons

http://cdn.media.freedomainradio.com/feed/FDR_203_Stateless_Prisons.mp3

[LibFedDemRepCon]

 

 

Case4

I think this example is so ridiculous I don't want to gratify it with a response.

 

 

 

 

 

I'll respond to the others in turn but I believe this one brings up an important point. It does seem ridiculous that one person could seek damages from another for them looking at them funny but that's just because in our statist society's the laws made by politicians and enforced by the judiciary do not see this as illegal. Who decides what is and isn't illegal once the state has been removed?

 

and how do they decide what is illegal and what is legal?

[LovePrevails]

I'll respond to the others in turn but I believe this one brings up an important point. It does seem ridiculous that one person could seek damages from another for them looking at them funny but that's just because in our statist society's the laws made by politicians and enforced by the judiciary do not see this as illegal. Who decides what is and isn't illegal once the state has been removed?

 

and how do they decide what is illegal and what is legal?

 

No security company is seriously going to pursue someone for giving someone a look.

IF the victim goes to the media then all their clients will phone them up and complain, 

they may be involved in contracts with other bodies who check their work and regulate them, or are entitled to money from them if they are abusive

They have to cooperate with so many organisations that have a stake in them doing a good job that it's not worth the trouble to do something daft

 

You see it's really easy to stop abuses, all you need to do is put yourself in the shoes of the service provider

now imagine a client come to you and says "How do I know you won't abuse your power by doing x?"I am sure you can come up with a solution yourself

 

"Well, yes, a lot of customers have that concern right, that's why we have a contract with our bank that says if we violate these principles which you see clearly hear, our watchdog Y is entitled to remove up to $100,000 a month from our account - without our consent - to pay compensation to our victims, and they receive 15% of the sum they make in  pay outs so they are highly incentivised to scruitinise our work and make sure we are squeaky clean."

That is just one example of a solution off the top of my head 

god said LET THEIR BE BRAIN - please use yours and you will find that if you can think of one solution

then  someone else can improve on your solution

and someone else can improve on that

and on and on it goes, just like natural selection

until the solution is highly optimized

 

that is the free market

[LibFedDemRepCon]

Case3

The insurance companies, tired of paying out money to victims of violent crime, put their heads together, pool their resources and start working on preventative measures rather than react to these events after the fact. They use all the evidence available on crime prevention to find out the cheapest and most effective way of reducing crime.

 

 

I think that it is possible that the insurance companies could work together. It is also possible that the companies get together and decide to price fix or collude for mutual benefit at the consumers expense. Currently collusion is illegal in the U.S and although it does still occur it is likely that without laws preventing it could expand. These companies will be driven by the profit motive. Their goal is to make a profit. What's to stop all of them colluding together and just raising prices so that no matter the level of crime they're making a profit?

If the expected payout per person (Averaged out for non-claimants) is $20 a month then they can charge $40 a month and if crime increases so costs per person increase to $40 a month they could increase the charges to $60 a month.

 

I expect the response argument to this will be

 

1. The free market will then see other companies intervening and consumers will shift to the cheaper options.

What if by this stage these insurance companies have been reporting profits in the $millions for years (say 5-10) and are able to use price-dumping to drive out new competitors from the market?

 

When a new competitor enters the existing companies agree to drop their rates below what is even profitable. The new company is either going to receive little business if it remains pricing above the point where they make a profit. Consumers are going to move to the cheapest companies and are likely to stick with the familiar, much cheaper company that they are already are with. The existing companies are able to survive price dumping due to the reserve of cash their profits have provided over the years while the new enterprise has little cash reserves to draw from.

 

Once the new company has been driven out of business due to the significant costs of starting an insurance business and then having very few customers, the existing companies can then again raise their prices and extort consumers.

 

Insurance companies are in the business of making money. They are interested in the bottom line rather than fighting crime. Imagine this situation.

Company A and Company B are the only two companies in the insurance market in an area (for simplicity sake only two but there would be more)

 

Company A decides to take action against crime and spends millions in funds trying to prevent crime, researching ways to reduce crime, implementing these solutions. They face the not insignificant task of answering the question "How do you prevent crime from happening?" and so they spend lots of money of R & D in this area. If they are unsuccessful and crime stays high, they've wasted millions of dollars. If they are successful the crime rate is lower.

 

Company B sees that the crime rate is lower and thanks to the fact that they didn't have to spend millions dealing with this problem they can offer cheaper rates of insurance to customers and can spend more on marketing and advertising to sway customers from Company A.

 

If the insurance companies can make a profit any level of crime what motivation would they have to spend money solving a problem which doesn't create any more profits for them? This scenario is a case of the tragedy of the commons. Company B can free ride and benefit from Company A's work without having to put in any effort themselves.

 

Consumers are fickle just because A is doing a 'nice' thing doesn't mean they would pick it over the cheaper Company B. People in the US and around the world by products made by slave labour, cheap wages and made in terrible conditions. People by chocolate that isn't fair trade because it's cheaper than fair trade. Consumers buy products that are against their own health and economic interests all the time. Think of things like unhealthy food, credit card purchases they can't afford. Consumers often want the cheapest product even if it isn't the morally 'right' thing to do. Think of how many people download illegally TV shows, movies and what not on the internet. These people understand that what they are doing is wrong and the 'right' thing is to pay for these things but they don't.

 

2. I expect you'll argue that a watchdog organisation will control all of this.

 

How?

Who funds the watchdog organisation?

What powers do they have over the companies?

How do they enforce these?

Who is incentivising them to tackle these issues? You mentioned in Case 2 that they would get huge incentives. Who is funding this?

That money has got to come from somewhere. The companies themselves wouldn't want regulation or to pay for it as it'd affect their bottom line. Consumers wouldn't want to pay for it as it would make their insurance even more expensive?

[LovePrevails]

The watchdog organization is funded by whoever wants the service or by the security company or by making claims against people who violate contracts or whatever it's impossible to predict it. I'm not answering any more questions that I think you can answer yourself if you use your imagination. You are trying to look at something emergeant in a statist way, it's like trying to predict what windows 14 will look like. How do I know? I don't, but it will probably have a lot of great new features, and if it's worse that windows 13, then windows 15 will look better because the drawback will be accounted for. See you later.

[LibFedDemRepCon]

The watchdog organization is funded by whoever wants the service or by the security company or by making claims against people who violate contracts or whatever it's impossible to predict it. I'm not answering any more questions that I think you can answer yourself if you use your imagination. You are trying to look at something emergeant in a statist way, it's like trying to predict what windows 14 will look like. How do I know? I don't, but it will probably have a lot of great new features, and if it's worse that windows 13, then windows 15 will look better because the drawback will be accounted for. See you later.

 

Okay no worries. Thanks for playing haha.

 

Perhaps you don't know how Windows 14 will look like but the software engineers at Microsoft would have a pretty damn good idea of what they're designing. If FDR is a place for philosophy, reason and truth and figuring out solutions for stateless societies then a reluctance to engage in practical conversaton and come up with solutions for these types of problems seems to indicate that perhaps it isn't living up to these ideals. Isn't FDR the engineers of the post-state society?

 

Specifics and concrete models that can withstand criticism is what will make people move away from statist ideaologue.

[LovePrevails]

Supposing I were a slave-abolitionist

and you say "when you abolish slavery who will pick the cotton?"

and I said "big metal monsters that run on dinosaur juice pumped out of the ground that can be burned to create motion"

you'd say I was crazy

 

it is not predictable

 

the models can withstand criticism but you are talking in the abstract about something that may not even be used

you are saying "Ok so you have a theoretical blueprint for a hovercar, but what about this feature here and that one?"

I can give suggestions but it's completely pointless,

What if people invent teleports? then there would be no need to make hovercars in the first place

 

the model is only an example people might come up with better examples that are completely different but better

which would make the example we are discussing obsolete

which would make all the nitpicking over a theoretical example in this conversation a waste of time

[LibFedDemRepCon]

Supposing I were a slave-abolitionist

and you say "when you abolish slavery who will pick the cotton?"

and I said "big metal monsters that run on dinosaur juice pumped out of the ground that can be burned to create motion"

you'd say I was crazy

 

it is not predictable

 

 

I have heard that example from Stefan himself and I understand the analogy. Future predictions sometimes sound crazy at that point in time but the unpredictability of life may provide a solution to us that isn't even thought of now.

 

Here I would like to make a couple of points.

 

1. In the slavery scenario who was it that implemented the abolishment of slavery?

 

Abraham Lincoln, the government and the state. The southern plantation owners didn't give up their slave on their own accord and enact a voluntary relationship with them. The government, which has many shortcomings (as Stefan points out in podcasts), in this scenario improved the situation and did something good. It's important to acknowledge that the government is not entirely bad and has done good things in its time.

 

2. Here's another analogy

 

Say we're in Russia 1915 Russia and you're advovating an abolishment of the monarchy.

I say to you "When we get rid of the monarchy how will we ensure that the country is responsibly governed?"

and then you would say "It's not predictable but communism will provide a model. Communism is a model than can survive criticism and what you are talking about is in the abstract. People will come up with better ways of governing and who know what we will invent that will make the future amazing. People will collaborate together and through the thought process of survival of the fittest come up with a great way of living!"

 

and I'd say "you're crazy".

 

Next thing you know Bolshevik's overthrow the government and the paradise of communism doesn't appear and the great way of governing that you assured me would happen never appears. Next thing you know we've got 5-10 million people dying of starvation and Joseph Stalin leading the country.

 

Let's draw the comparison here

Monarchy represents the State

Communism represents Anarchy and the Free market in a stateless society

 

Yes, things might be better but as Communism illustrates when you overthrow an existing social system things can be really, really bad.

 

Would you criticise someone who questioned Communism and it's ideals in Russia in 1915 "nitpicking over theoretical examples..wasting time and talking in the abstract"?

[LovePrevails]

straw man, no one here is saying abolish the government tomorrow

 

and slavery was impossible without the state to enforce it, if Slaves could just run away and you had to pay to pursue them yourself it would become difficult

[LibFedDemRepCon]

straw man, no one here is saying abolish the government tomorrow

 

and slavery was impossible without the state to enforce it, if Slaves could just run away and you had to pay to pursue them yourself it would become difficult

 

I never said you suggested abolishing the government tomorrow. Your position is that "Having a state is not the best social system and society would be better off without a state" correct? If that isn't your position then please correct me.

 

and my point is "Sometimes overthrowing an existing social system might seem like a great idea and infallible but it can lead to horrific consequences. The Russian Revolution and the overthrowing of the monarchy is one example of that."

 

The Communists truly believed that it was going to create a utopia situation but it didn't turn out like that. You're advocating the removal of the state which is a huge social structure change and I'm suggesting that simply having good intentions and a few good ideas and saying that "we'll figure out the details later" can lead to bad things happening.

[LuckyNumber23]

Wouldn't it be natural for the Mafia to change into DROs as soon as there is no state? This is one likely scenario that Stevenson depicts in Snow Crash.

[LibFedDemRepCon]

Wouldn't it be natural for the Mafia to change into DROs as soon as there is no state? This is one likely scenario that Stevenson depicts in Snow Crash.

 

I haven't seen/read/heard of Snow Crash but uh how do things turn out? haha

[Carl Green]

Wouldn't it be natural for the Mafia to change into DROs as soon as there is no state? This is one likely scenario that Stevenson depicts in Snow Crash.

 

If your DRO is acting like the mafia you're free to switch to a different one, and if enough people feel the same way, the mafia like DRO will no longer be profitable and have to close.

 

Just remember, everyone is FREE.  No one has to use one DRO over another.

[LovePrevails]

If your DRO is acting like the mafia you're free to switch to a different one, and if enough people feel the same way, the mafia like DRO will no longer be profitable and have to close.

 

Just remember, everyone is FREE.  No one has to use one DRO over another.

 

Yes, the problem here is your (frankly irrational) assumption that a system with an opt-out option will be worse that one where you can "love it or leave it"

 

there is no precedent for this at all,, the opposite is the case. 

 

Where there is no choice to opt out service providers treat tehir consumers worse, not better. That's pure logic and demonstrated by the available evidence.

[LovePrevails]

on the economic inefficience of viollence: http://youtu.be/UEGpuQIPVt8?t=18m

[Carl Green]

Yes, the problem here is your (frankly irrational) assumption that a system with an opt-out option will be worse that one where you can "love it or leave it"

 

there is no precedent for this at all,, the opposite is the case. 

 

Where there is no choice to opt out service providers treat tehir consumers worse, not better. That's pure logic and demonstrated by the available evidence.

 

Were you qouting me or the member I was quoting?  I was trying to make the same point as your last sentence.  As long as everyone is free to chose who they go with, you can opt-out of using a mafiaesque DRO.

[LovePrevails]

I was agreeing with you Carl, my point was to  LibFedDemRepCon

[doglash]

There are a number of queries regarding this system.

 

Firstly, who decides what the law is?

 

Society decides what becomes laws. The laws that society demands become the services that the DRO/security companies provide. If demand in society for a law against "looking at people the wrong way" becomes great enough to be provitable to a security company they will provide it. Similarly, if the demand for laws sponsoring slavery fall enough then those services will no longer be provided, and the security companies that support the small band of die-hard slave owners that are left will either stop supporting them or go out of business due to loss of customers.