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One problem I can see with Friedman's private courts/Rights Enforcement Agencies, is that if you have bigger and smaller REAs, a sufficiently big REA would be a
by ehmish 13y ago
One problem I can see with Friedman's private courts/Rights Enforcement Agencies, is that if you have bigger and smaller REAs, a sufficiently big REA would be able to compel smaller REAs to ignore violations by the customers of the big REA. Smaller REAs would go out of business, as the big REA would be a much better deal for anyone who doesn't want to get sued. Finally, you'd be left with one big REA, probably called "The Police" or something.
- DennisP 13y agoFriedman addressed that. It's been a while but I think he expected the small REAs to be smart enough to band together to resist the big one.
- notahacker 13y agoThe bit of David Friedman's book that stretches credulity beyond breaking point and into the realms of the laughable is where he explains how profit-motivated "Rights Enforcement Agencies" can solve all the difficult problems, like banding together to fight really dangerous enemies and contracting "fair" dispute resolution, and yet fails to explain why they wouldn't collude in simple ways that actually push their profits up, like forcing fresh entrants out of the market and fixing price demands and "territories"... the sort of things that protection rackets actually do.
- baddox 13y agoI think Friedman concedes that this certainly could happen. Of course, with government, all competitors are already pushed out, and it's already a complete monopoly.
- notahacker 13y agoThe difference representative democratic governments don't aim to maximise and retain their profits and as such are infinitely preferable to an emergent local mafia, even if the local mafia's protection racket is subject to regular challenge (by more people demanding money with menaces from you...)
- baddox 13y agoI disagree with all those claims. I think representative democratic governments do tend to aim to maximize and retain their profits, and they neither governments nor emergent local mafia are particularly preferable to the other.