IAmA economist, legal theorist, and novelist David Friedman. You may have seen a picture of me playing WoW at a conference last week. AMA!

How do you think a stateless society would attempt to handle the kinds of pollution externalities that don't seem to be easily covered by the Coase theorem? The sorts of scenarios I had in mind are (a) types of pollution contributing to global warming, or (b) harmful microbeads in soaps that contribute to the pollution of lakes and rivers, when used by too many people.

EDIT: ALSO, what is your favorite class in WoW, and how do you think the most recent expansion compares to the others?

I think large scale issues, such as global warming or air pollution, will be handled badly. I have a discussion in the new third edition of Machinery of market failure in the market for law, ways in which the law produced by the competitive market of an A-C society will be suboptimal, and that's one of them.

On the other hand, the conditions that lead to market failure are the exception on the private market, where in most cases the person who makes a decisions bears most of the costs and gets most of the benefit, the rule on the political market.

It's worth noting that in the case of global warming, the public good problem exists at the international level, so it isn't clear that, if AGW really is a big problem, states will solve it. I should probably add that although I think the fact of AGW is almost certainly true, I am skeptical of the claim that it can be expected to produce large net negative effects.

My three main characters (one of them currently sitting at 90 until I get back to him) are a mage, a DK, and a paladin. They are intended as different people, and I don't think I can say any of the classes is my favorite. Druid looks like fun, but my one druid is currently an auction house alt.

My most entertaining character is my gnome mage, who speaks only in rhymed verse and believes that juggling dynamite is no fun unless you light the fuses.

Hello Mr. Friedman. I'm also an Anarcho-Capitalist.

Obviously you have different views on law than Rothbard, but I was wondering what your opinion on his concept of law in an ancap society is?

As best I understand it, his view was that legal philosophers would figure out what the law should be and all courts would follow it. In the system I describe, law is produced on a competitive market by arbitration agencies, each pair of private rights enforcement agencies agrees on an arbitration agency to settle disputes between their customers, so the arbitration agencies are trying to create the law that customers want to be under.

For a more complete description see my Machinery of Freedom. The third edition is available as a kindle:http://tinyurl.com/p6xjm46 and as hardcopy: http://tinyurl.com/osbpq4x

Recently, a picture of you playing WoW at a libertarian conference went viral. It seems that this may have been in large part due to the fact that most view ‘gaming’ as, as you put it in your blog, a juvenile activity. Do you believe that adults do not participate in gaming due to the stigma, or more so due to the fact that we naturally lose our curiosity and ability to adopt new technologies as we age – and that you have been resistant to this phenomena?

Adults do participate in it. Somewhere in an old blog post I have the figure for the average age, and I think it somewhere in the twenties, so although I'm at the high end of the age distribution a lot of people, probably a majority, are adults.

I expect the participants are biased towards younger ages for several reasons:

1. It's a new form of entertainment, and people form their tastes mostly young.

2. Adults are less likely than kids to have lots of leisure time for playing.

It's worth noting that there are lots of "play" activities that are popular with adults, such as bridge and tennis. I think I've discussed on my blog the question of why some activities seem real and worthwhile, others not. I would not feel good about my involvement in WoW if it was using most of my time and energy—I see it as recreation, close to what I classify as lotus eating, and I don't feel happy if most of my time goes to such activities.

But it's unclear to me why some other things I do don't feel that way—building replicas of Germanic lyres (early medieval musical instrument), for example, feels more like "doing something."

What are your current preferences on alternative educational approaches? Have your views on Sudbury, Montessori and unschooling changed since you wrote this comment?

My preferred model is unschooling, home unschooling if practical and if there isn't a local unschooling school available, which is usually the situation. I discuss it in one of the new chapters in the third edition of Machinery, and in several blog comments. Try searching my blog (Ideas) for "unschooling."

My reservations about the Sudbury model were and are based on my experience with one instantiation of it, a small school we were involved with for some years. I've had no experience of it since.

What about the University of Chicago Laboratory Schools?

The lab school when I went to it was a very good private school on the conventional model. As best I can remember, I was bored most of the time. I had a few good teachers, including a liberal social studies teacher who had no objection to being disagreed with, but a large part of my education consisted of reading books, arguing with my friends and my father, stuff outside of school.

I pointed out to the drivers' ed teacher that something he was saying was not true (that two cars hitting head on at 50 mph had the same effect on each as hitting a brick wall at 100). His response was that he didn't know enough to tell but that was what the book said, so we agreed to take it to the physics teacher. The physics teacher agreed with the book, although he had no rebuttal to my proof that it could not be true. Pure argument from authority.

And that was at one of the best conventional schools in the state of Illinois.

Didn't realize it was that conventional. Was there any trace of Dewey in the pedagogy?

I don't think I know enough about the history of pedagogy to tell. I'm describing it as conventional in contrast to something like unschooling, or to the model where most studying is individual rather than in a classroom. It may have differed from other schools in the details of how classroom instruction was done.

Hi David,

I read some foundational information about your research, and I have three questions:

1. What do you think is the most interesting aspect of a virtual economy from a research standpoint?

2. If you had unlimited resources, what kind of experiments would you perform in virtual economies.

3. What is the biggest limiting factor in the study of virtual economies?

To me, the most interesting feature of WoW and similar games from a research standpoint is the potential for doing the sort of controlled experiments that social scientists have long complained about not doing. You could put characters on a hundred servers, do something on fifty of them, and compare what happens on those fifty with the other fifty, used as your control group. I haven't done that, have only tried to get others interested--I'm really a theorist not an experimentalist.

The other thing that intrigues me is the potential of a game like WoW to be used for educational purposes, both in economics and in other fields. I have a blog post discussing how it could be used to teach statistics. Teaching things works a lot better if they are things your students actually want to learn.

Thank you for the response, and I love that you say a game like WoW could be used for educational purposes. The fact that so many users feel obligated to play is indicative that the developers of WoW know something about risk / reward and getting users interested in realistically boring tasks. If these concepts of tangible, immediate rewards could be implemented into scaffolding techniques in education I think we would see a huge increase in the effectiveness of education.

Edited to improve readability.

You might want to follow the link I gave at the beginning for my blog posts re WoW to see some of my ideas about its educational uses.

Not sure you'll have time to answer this, but in one of your blog posts you mentioned that there were several questions that could be studied by economists in a MMO environment. Could you elaborate on one or two of these questions? Would love to explore myself but don't really have a direction.

The limits to the efficient markets hypothesis. Try to construct simple rules for trading on the auction house, across goods or across time, that consistently make money.

The workability/unworkability of various strategies for artificial monopoly, cartelization, and the like.

You’ve stated your fondness for Mike Huemer’s work in libertarian philosophy. Huemer acknowledges a place for morality in justifying a libertarian position, while also emphasizing the importance of an empirical / economic rationale. Do you believe that appeals to “common sense morality”, as he puts it, have a place in libertarian thought?

Yes. But I also believe in the division of labor, and will be happy to leave that part of the project mostly to him.

Mr. Friedman - you gave a great speech many years ago about the problems of libertarianism. For those interested, it is here.

https://www.youtube.com/watch?v=GuYt6X2g0cY

It's an immensely entertaining run through various issues with the libertarian philosophy, but to me, all this speech really did was further convince me that libertarianism is just an unsupportable philosophy; I guess that's what happens when you give an entire lecture about problems and don't give any of the solutions.

Can you recommend a companion piece or two, video or book, which provides a response to the issues you raise? The one that always struck me the most is the idea that almost all property, if you trace it back in time, is stolen from someone, and therefore a foundational bedrock of libertarianism - that we have a right to stuff we posses, for the most part - just totally falls apart. I'd be curious for a followup.

Most of what I've written on the subject can be found in the third edition of The Machinery of Freedom. I just gave the links above.

I don't think there is any proof of what moral beliefs are right, and I don't know any simple set of rules that works—fits all situations and our moral intuitions. I have one chapter in the new edition that offers a possible approach to the problem of unproduced resources such as land. The problem is not so much that the land has been stolen from another owner as that it's hard to see how it becomes property at all, how one person can have the right to exclude another.

You might consider the general point that you need a candidate to beat a candidate. I don't know of any alternative political ideology that works better than, or even as well as, libertarianism. My reservations about trying to derive conclusions from moral philosophy are part of the reason that I put most of my arguments in consequentialist terms. I think I can offer good reasons to believe that a libertarian society produces consequences that most people would prefer to the consequences of alternative systems. Since I can't prove what people ought to prefer I am basing my arguments on what they do prefer--in terms of outcomes not institutions, since preferences over institutions are largely based on opinions about their consequences.

So you don't buy into homesteading as a valid method of acquiring land as property? Even as pure theory?

I think the best answer I can give is to point you at the chapter on that subject in the new edition of Machinery. I offer a libertarian justification for a rather limited version of homesteading, but point out that the rules implied by that justification are not very efficient ones from the standpoint of property law.

I haven't looked into it but have you examined Georgism as an alternative?

I don't think Georgism solves the problem. Not only did I not create the land, we didn't create it, nor did the government. So how does the government get any more right to tell you that you can't use a piece of land without its permission than I can get?

What science fiction most needs to be brought back into print?

I don't know. If it isn't in print, the odds are pretty good I haven't read it.

At a slight tangent, one consequence of the existence of Amazon is that books are less likely to go out of print. A book that sells a hundred copies a year, worldwide, isn't worth carrying for any single bookstore, but I expect it is worth carrying for Amazon.

David,

What is your opinion on the potential for cryptographic networks and potential future cost reduction in anonymous violence to facilitate the ability of groups to alter people's behavior through threat of violence by establishing a pseudo anonymous reputation for carrying out threats. In essence will people in the future be able to unilaterally write targeted anonymous laws?

Interesting question. The violence still has to be carried out in realspace. You might want to think of the Hashashim as the nearest historical equivalent.

I'm thinking something like a cheap drone committing arson or murder and then self destructing.

The version of the problem that bothers me is extortion. In a world with anonymous digital currency, it looks as though "I'll do something terrible to you if you don't email me a hundred dollars" is going to be a pretty successful business model.

I'm not sure to what extent it is already happening in the online context—do something bad to your web site/online reputation/... .

The simplest form - ransomware - already exists. Your computer is infected and you receive a message to the effect of 'send 10 BTC to this address send an email to this address to receive unlock code'.

The more extreme - and worrying - form would be something like what Bumgardner proposed. If such technology is cheap, and if the idea proliferated I imagine it would have profound ramifications for digital anonymity. I worry that a society with good and cheap technology and the means to extort anonymously would necessarily become one of total information awareness.

Note that anonymity is also a shield. If all the things that might make someone want to attack me, whether evidence I am rich and so a target for extortion or my saying things someone doesn't want said, are happening online, I can keep my realspace identity secret. It's real hard to get a bullet through a T-1 line.

What do you think of Nozick's argument that anarchy itself is unstable which will cause the rights enforcement agencies to become psuedo state then essentially states?

The one time I interacted with Nozick on that I was giving a talk on his book and he was in the audience. He didn't try to defend that argument, which I don't find very convincing, but instead fell back on the stronger point that we don't observe A-C societies in the modern, developed world, which suggests that they may not be sustainable in that environment.

Do you still maintain, as you wrote in The Machinery of Freedom, that “It seems more reasonable to suppose that there is no ruling class, that we are ruled, rather, by a myriad of quarreling gangs, constantly engaged in stealing from each other to the great impoverishment of their own members as well as the rest of us”? Have you been impressed by any of the attempts at a libertarian class analysis?

I still don't think a "ruling class" model makes much sense for a society like ours, for the reasons I sketched back then.

So, this is generally true for every president, regardless of the party, and is disputed no matter what happens, but I'd like to hear your opinion: How much power of the economy does the president of the United States have?

And follow: how much credit do you give the sanctions against Russia for their tanking economy?

I think a president may have substantial long run power, since he can change the rules of the game in ways which, for instance, make property rights more or less secure. But I don't think that, as a general rule, the current President deserves much credit or much blame for current conditions.

I don't know that much about the Russian economy. My guess is that sanctions get more credit than they deserve.

My standard example of the weakness of sanctions is the case of Southern Rhodesia (now Zimbabwe). After it declared unilateral independence from Britain under a white minority government, it was sanctioned by, I think, every nation in the world except Portugal and South Africa. It had a two product economy (Tobacco and, I think, Chrome), so should have been particularly vulnerable. And it was fighting a civil war against rebels supported, I believe, by adjacent black ruled states.

It survived (again I'm going by memory) for over a decade before the white government finally gave up power.

Who is your favorite liberal?

Not exactly a liberal, but my favorite left winger is probably George Orwell.

Do you have a favorite civil-libertarian liberal?

No. I don't know enough about the relevant people.

He isn't really a liberal, but my favorite blogger is Scott Alexander (Slate Star Codex). I think he identifies emotionally with the left but, like Orwell, sees a lot of things wrong on the left and has considerable libertarian sympathies.

He also writes amazingly good essays on a wide variety of different topics.

Hi Dr. Friedman, thank you for doing this AmA.

I'm not completely familiar with a lot of ancap ideas, but I've wondered, what mechanism of a free market would keep a corporation from expanding into so many ventures and growing so large that it becomes essentially a government? I'm assuming its simply competition from other corporations, but to me it seems like eventually in an ancap system, some form of government would eventually emerge. I'm probably completely wrong, so could you clear this up for me?

I think the version of that one should worry about is not "a corporation" but a firm selling the service of rights enforcement, substituting for government in its most central function.

In most industries, there are economies of scale up to some size, diseconomies above that, with the result that natural monopolies are rare except in very small markets (the only general store in a small town, for instance). If economies of scale in rights enforcement run up to the size of the population of the U.S., you could get a monopoly enforcer turning into a government. If they run almost up to that size, so you have only three or four such firms, they decide to catelize and become a government.

I think it more likely that you would have many more than that, in which case the shift is not likely. You can find the question discussed in two chapters (one old, one new) in the third edition of The Machinery of Freedom. Kindle: http://tinyurl.com/p6xjm46 Hardcopy: http://tinyurl.com/osbpq4x

Even if a government eventually emerges, we'd just be back at square one. I could then at least celebrate the years humanity lived in freedom.

Not all governments are equally bad, and the one that emerged might be worse than the one you started with.

Hello Dr. Friedman!

I spoke with you at the 2014 ISFLC about WoW, specifically about the auction house and price discrepancies between different gems with the same stats but different rarity - and why those price discrepancies existed. (Very specific, but I hope it jogs your memory as to who I am.) Even if you don't remember me, I have an interesting topic which I don't know if you'd thought about before, but I would like to hear your thoughts.

If you've observed prices on the Alliance/Horde auction house on your server and then made another character on the opposite faction on the same server, you'll probably notice there's a discrepancy in prices between two similar goods. I.e. Blackrock ore may be listed for a different price on the Horde Auction House than the Alliance.

However, this shouldn't be the case, because of the fact that the Goblin auction house exists. The law of one price isn't holding. There is an immense arbitrage opportunity here, and with the accessibility of server forums, why do you think that more people aren't exploiting these arbitrage opportunities? Furthermore, do you think that these arbitrage opportunities - which wouldn't be reasonable to think exist in the real world - limit the kind of economic experimentation that could be done in virtual worlds, as they don't reflect reality very well?

Sorry if that was garbled and long-winded.

EDIT: fixed some tenses/words.

I don't know enough about that situation at present. My memory is that the goblin auction house had a substantially larger house cut than the others.

I know that my wife, who has characters on both sides (I don't), sometimes uses me to transfer goods from an alliance character to a horde character by putting them up for auction at a trivial price and having her buy them two seconds later. That method ought to work for cross faction arbitrage. How big are the discrepencies in relative prices?

One general issue in the economics of WoW is the cost of player time. If you have someone who regard arbitrage as fun, that cost could be low or negative. But if not, you may have to be awfully good at it to make minimum wage, given the exchange rate between WoW gold and dollars.

Do you have any beliefs that are too controversial to mention publically?

Yes.

What are your thoughts on bitcoin and do you own any?

It's a neat idea. I have no opinion on how well it will hold up in the long run.

A year or two back I spoke at PorcFest, the Free State Society event. They paid my expenses in bitcoins, and I also put a little money into the world's only bitcoin atm, which was at PorcFest. I think I've made money on it, but haven't actually been paying much attention.

Hello Dr. Friedman,

I was just curious what, if any disagreements you had with your father relating to economics?

Also what do you think about voting? Do you consider it worth while to vote people in that are in favour of smaller government? Or do you think there is no real point to voting? Thank you.

I don't remember any real disagreements with my father on economics. There were things he had views on that I didn't. We disagreed for a while on drug legalization, but he eventually came around on that. I remember pointing out to him that a system of competing private money issuers would, in first approximation, produce the result of his optimal quantity of money essay, but he didn't disagree.

Mostly different interests rather than disagreement.

Will I be able to live on a seastead in my lifetime (I'm about Patri's age)?

Possibly, but I think odds against. Seasteading is a nice idea, but I see it as a lower probability/high payoff gamble.

Mr. Friedman, what do you think about the most important issues, messages, or arguments that should be spread regarding anarcho-capitalism?

I also love you for you are such an amazing person and you also play wow.

I think the most important point is that it isn't impossible--that one can pretty easily imagine systems of decentralized rights enforcement without government that work, and that such systems have functioned many times in the past. That doesn't tell us whether such a system could work or would be desirable in a modern society, but it eliminates the big barrier to thinking about the question.

I have a chapter in the third edition of Machinery entitled "Anarcho-Capitalism: The Kindergarten Version" that tries to do that.

As a former physicist: Do you still do any physics? Or do you keep up with the latest news in the field? What's your view on string theory?

I do not keep up with physics.

I like to claim that the one advantage of having a doctorate in theoretical physics is that I can do non-mathematical work in economics without being suspected of being afraid of math.

Thanks for your work and writing. I also really appreciate you trying to put up audio lectures of your courses. Sadly they are not the best quality and listing to them, specially for a long time is not the best experiance. Have you considered making better quality web lectures or maybe something like a coursea course on Legal Systems? While there are some courses on Law&Econoimcs, I would still like your take on the subject.

Another question, in a polymorthic private legal system where (in theory) every pair of two people have a unique set of laws between them and even in practice there are many diffrent 'law codes' going around. It seams that such a system could create high transaction cost, because acters strive to protect themselfs from uncertenty. Maybe the common culture lead to enougth simularity that day to day one would not think of these things. Love to hear your thougths.

Thank you.

I don't really understand why people prefer lectures to books, so if I'm going to do the work I'm more likely to do it by writing. Recordings of my classes don't cost me anything to produce, aside from a little trouble when I do them myself.

Should I be worried about global warming?

I don't think there is any good reason to expect AGW to produce bad effects on net, let alone catastrophic effects. But it isn't impossible.

If you want things to worry about, I offer three more serious threats in my Future Imperfect. For the short version, see the talk on the book that I gave at Google:

https://www.youtube.com/watch?v=l8talvLDfow

Incidentally, I have a page of links to talks and interviews and such at:

http://www.daviddfriedman.com/MyTalks/MyRecentTalks.html

Hello David,

Long question...

In "The State in the 21st Century", prince Hans-Adam of Liechtenstein seems to make a lot of points that reminded me of your writings, particularly in how he describes the state as a service provider. He further argues that, in fact, many monarchies have had this view at their core for centuries. For example, the British royal family has used the motto "Ich Dien" (I serve) since the 18th century.

This would lead one to the conclusion that states run by monarchs are comparable to family businesses. As long as there are many of them competing with each other, small enough not to be too bureaucratic and inefficient, you would have something similar to a polycentric law enforcement system, since people who are unhappy with the way things are can easily exit the service (vote with their feet).

One of the advantages I can see with this approach is also that, in states run by a family or board of directors, there would be no confusion between the manager and the customer. Just as a customer doesn't vote for the CEO of Apple – they just accept to buy its products or not – so a state's customer shouldn't have any business in deciding who the CEO of the state should be.

So, my question is, do you see it possible that a libertarian of the AC variety such as yourself might "go full circle" and actually conclude logically that monarchism, or some kind of evolution from it (e.g. a state run by boards of directors, similar to corporations that used to be family businesses) is the way to go?

1. One of my mottoes in the SCA context (and the final line of one of my poems) is "The King is a servant or nothing at all."

2. I have long argued that the ideal form of government is competitive dictatorship, the way in which restaurants and hotels work. I have no vote on the menu, and absolute vote on where I go for dinner.

Applying that to governments runs into two problems. One is mobility of people—most people at present have sizable sunk costs in their current location, so will only move if the competing state is much superior to their own. The other is fixed resources.

Consider a simple model, one I used in an old unfinished article about U.S. states. People are mobile, land is not. A government engages in exploitive taxation--taxes people and pockets the money. People leave. As they leave, the price of all immobile resource, such as land and houses, falls. In the new equilibrium, the exploitive taxation is still there, the population is a little lower, the cost of the exploitive taxation (relative to some other polity without it) is just balanced by the availability of cheaper land and housing. So the Thibout model, which is roughly what you are describing, ends up with whoever controls the government producing an optimal level of public services but collecting more than enough revenue to fund them. And the ruler's surplus may get competed away in rent seeking competition to become the ruler, details depending on form of government.

A secure monarchy avoids the final problem, but at the cost of doing a poor job of selecting the best person for the job.

Could be a long discussion, but not, I think, in this context.

Hello Mr.Friedman.

I'm curious, did your father ever review Machinery of Freedom, and what were his general thoughts on it?

He liked it. He pointed out that I had proved too much--that following out my arguments government ought to be expected to work even worse than it did. He thought the A-C system I sketched might work but probably wouldn't. I thought it might not work but probably would. Given the limits of arguments for how untried institutions will work, that level of disagreement doesn't lead to much argument.

Every parent is overall glad they had their last child.

And if they had one more they would probably be glad they had that one too.

When deciding whether to have another one and another one and another one... it seems it would take A LOT of babies before they would say, "you know, we probably shouldn't have had little Jimmy"

Why is it not rational to have about as many babies as one can have since one will almost certainly be glad they had their last child?

I doubt your claim is true. My wife and I would have liked one more, although it didn't happen because we started too old, but probably not beyond that.

My guess is that, at our present age, even if some form of reproductive technology made it possible to produce another baby, we would not choose to do so--too much high strain work, and not enough years left to enjoy the payoffs.

On the other hand, I just put the question to my wife (her office is next to mine), and her response is that she probably wouldn't but might.

Have you changed any of your economic beliefs after Reading Thinking Fast and Slow?

No. It's a very good book, but I have not seen any applications of the idea that much affect the parts of economics I am involved with (price theory, public choice, economic analysis of law).

I've been arguing for a while that the place where the ideas ought to be useful is in macro. I'm only an observer, but my impression is that all versions of macro depend on lots of people making the same mistake, with the particular mistake varying by version. Kahneman's ideas suggest reasons that might happen.

Would the concentration of power through economic inequality be a serious problem to the stability of a anarchocapitalistic society? It seemed so in your analysis of Iceland (about power, not economic inequality):“A second objection is that the rich (or powerful) could commit crimes with impunity, since nobody would be able to enforce judgment against them. Where power is sufficiently concentrated this might be true; this was one of the problems which led to the eventual breakdown of the Icelandic legal system in the thirteenth century. But so long as power was reasonably dispersed, as it seems to have been for the first two centuries after the system was established, this was a less serious problem.” http://www.daviddfriedman.com/Academic/Iceland/Iceland.html

Any thoughts?

In a modern society, I don't think concentration through economic inequality would be a serious problem, since even a very rich individual has a very small fraction of the total wealth of everyone. The version of the problem that I think one does have to worry about is concentration of the rights enforcement industry. I discuss that in a couple of chapters of Machinery.

Do you like the idea of prediction markets? Can it be leveraged into a more efficient form of Democracy?

They are a neat idea. I have my doubt that they can solve the problems with democracy.

Consider what happens when all the good arguments point one way and political incentives the other, with tariffs the obvious example. We have known that the standard arguments for protectionism are wrong for about two hundred years. Over that time, only two polities I know of followed out the implication—19th c. England and 20th c. Hong Kong. Both were spectacularly successful--and almost all countries still have tariffs.

Hi Dr. Friedman, thank you for taking the time to answer our questions this afternoon.

I would describe my political philosophy as a system that attempts to account for reality (as I understand it) while erring on the side of individual freedom. I would support dismantling all iterations of centralized authority if I could justify it, but I can't shake the belief that some type of authority is needed to enforce rules that help markets operate efficiently and to the mutual benefit of participants. For example, a transaction isn't truly voluntary if one party is using coercion to ensure the other party's participation. I see a benefit of having an authority that punishes participants who engage in coercive tactics. How would an anarcho-capitalist system alleviate this concern? Thank you again!

I tried to answer that question in the part III of The Machinery of Freedom, published a little more than forty years ago, where I sketched a decentralized system for rights protection/law enforcement. I've expanded on that in the second and the current third edition.

It's worth noting that decentralized mechanisms for rights protection are very old. Indeed, my current view is that many, perhaps most, existing legal systems were built on top of such systems, and in some cases retain fossilized remnants thereof. For details, see the third edition.

Do you support open borders?

Yes. I argued for them back in the first edition of Machinery.

Your Wikipedia page mentions that you are an atheist. Could you elaborate on your thoughts regarding religion, and your lack thereof? Do you believe society would be better off if we were entirely secular (“better”, of course, relative to certain outcomes rather than in a moral context). As a semi-related follow-up, if you had the means, would you consider freezing yourself when you die?

I think religions have both good and bad consequences, so the comparison would have to be between a particular sort of secular society and a particular sort of religious society. I'm sure some religious societies would be better than some secular societies, resources, technology, etc. held constant, and some secular societies better than some religious societies.

My basic attitude to religion is that it seems crazy to me, but I conclude that that can't be entirely correct, because quite a lot of intelligent and reasonable people, past and present, including some I know and think well of, believe in it.

I have the resources to have myself frozen and have considered doing it, but haven't yet made up my mind.

Like you, I fall somewhere way out in the right tail of the typical age distribution for MMO players. I also came late to the MMO scene, both because I entirely skipped most of the first generation (pre-2004) games, and because I first started playing much later in life than I assume most active players did.

When I read about very high profile (IRL) people like Robin Williams being active players of WoW, it makes me wonder how many more people we wouldn't think of as WoW players actually are.

I'm curious then, how you started playing WoW, and how old you were when you first picked it up.

Also what class or classes do you play most in WoW, and why do you like them?

If you run dungeons or raids regularly, what roles do you tend toward in group instances?

I started playing WoW pretty nearly at launch, which must have been about ten years ago. I would have been about 59.

Before that I played Diablo and Diablo II, which were multiplayer but not online—mostly done with my family on the house net.

My two current active characters are a paladin and a DK, and I have a mage at 90 who I plan to bring back in sometime soon. Part of the fun of the DK was trying to give him a character that fitted the implied history. He hated "the Prince" (Arthos/Litch King) at a personal level, for having wronged him by making him a DK. For a long time he wouldn't use his ghoul, because it reminded him too much of things he wanted to forget.

My most fun character is my gnome fire mage, who speaks only in rhymed verse. That makes him fun to play but also more work to play. Also, his dps was looking pretty bad when I was last playing him, so I went back to my first character (paladin) when the new upgrade came in.

I have sometimes had a regular weekly raid, usually been a dps, occasionally a tank. I don't play a huge amount or work hard at being as good as possible, so am reluctant to take a role (tank or healer) where one mistake can crash the raid.

Mr Friedman, In chapter 34 of the 2nd edition of Machinery of Freedom you explain why National Defense is a difficult public good to fund in a free, anarchic society.

You gave some possible solutions to the problem (such as charity, and endowed voluntary defense organizations), but in the end you seemed to acknowledge that we might need a state for national defense, in a world where there are other powerful state entities.

Have your thoughts on this topic evolved since, given the prevalence of voluntary funding mechanisms like Kickstarter, FundMe, etc.?

I have another chapter on the subject in the third edition, sketching out some ways in which a stateless society might defend itself. It's still my view that it is a hard problem, so that in some environments one might be better off retaining a state for purposes of defense, despite all the other disadvantages of having such an institution.

I read a criticism you had of Michael Huemer's Ethical Intuitionism, and it involved "evolutionary debunking" in the sense that evolution is supposed to provide us a good undercutting defeater for belief in objective morality. I think you had an email conversation with Huemer about this, and you came away still convinced it was a problem.

Two questions on this.

• (1) Would you be able to reveal any of the details of the general form this conversation took? It's main points?
• (2) Have you read Huemer's (recent?) paper relating to this topic (called "A Liberal Realist Answer to Debunking Skepticism: The Empirical Case for Realism")? If so, what did you think? (Also, have you read Russ Shafer-Landau's paper on the subject, called "Evolutionary Debunking, Moral Realism, and Moral Knowledge"?)

I have read neither paper and should. I think summarizing our exchanges would take more time and effort than I'm going to spend in this context.

Hi David,

What are your thoughts on the withholding tax?

We would be better off without it. That was my father's view was well. At the point when he worked on it WWII was happening, and he saw raising additional revenue as a very high priority objective.

Thank you for your reply!

I have a two-part question for you if you don't mind. In your opinion:

1) Which is least bad: funding the government through government borrowing; funding the government through taxation; some combination of both?

2) If taxation is a given, what form(s) of taxation are least horrible?

1. Taxation, I think. The incentives with borrowing are even more messed up.

2. There isn't a general answer—it depends on the society. If land produces a lot of income and it's reasonably easy to measure the site value of land, then George's single tax makes sense. But, as my father pointed out a long time ago, an IQ tax would make sense on the same basis and the corresponding assumptions.

The basic questions are how much the tax distorts economic activity and how much it diverts efforts into avoiding it (a particular sort of distortion, which includes efforts made to conceal income).

Also to what degree it is self limiting. There's an old piece by Jim Buchanan arguing in favor of the sort of tax conventional analysis argues against (taxing goods in elastic supply), on the grounds that if those are the only things a (revenue maximizing) government can tax, it can't collect all that much.

"A Tax Constitution for Leviathan" as I remember the title.

Hello Mr. Friedman. I just came here to say it's awesome to see someone In your position playing WoW. How are you liking the new expansion Warlords Of Draenor? What is your favorite type of gameplay? PvE? PvP?

I do almost entirely PvE. A while back I was part of a group that organized defensive PvP, defending against Horde raids on Alliance cities, but that was my only significant involvement with it.

I think part of the reason is that PvP requires a lot more investment in being as good as possible, humans being harder opponents than NPC's. I've never made WoW that sort of a project.

I enjoy the expansion, in part because doing things in the garrison is a relaxing form of low level entertainment.

Would you be interested in debating Noam Chomsky on the subject of an/capitalism vs an/communism?

I don't know. I have a low opinion of him because of the whole Cambodia business--he coauthored a chapter of apologetics for the most murderous regime of the 20th century, and I don't think has ever really conceded that he did so or shouldn't have.

I did have an exchange with another left anarchist, Robert Wolff, a year or so ago. You can read about that at:

http://daviddfriedman.blogspot.com/2013/04/which-side-are-you-on-robert-wolff.html

I liked him, didn't think much of his view of the world, but more exploration might interesting.

I'm pretty sure there is a recording of our interaction webbed somewhere, possibly one of the links on the page of my talks and interviews on my web site.

Have you ever taken a meyer-briggs personality test? If so, what is your personalty type? If not, could you describe some of your personality traits? (e.g. introversion vs. extroversion, etc.)

I don't think I've ever taken such a test. My original WoW character used to respond to invitations to join a guild by explaining that he was solitary by nature, which is part of the answer. I enjoy interacting with other people, but doing it all the time is a bit of a strain and I am comfortable and relaxed when by myself.

At one point I did take an online ADD test, and didn't quite make the cutoff. But I do have a tendency to focus on one activity, then switch to another, then to another. I have a blog post on the subject that you might find of interest.

http://daviddfriedman.blogspot.com/2008/11/distractions-serial-and-parallel.html

Which are the areas libertarians are most deficient?

Would you agree with the statement that libertarians have ceded too much ground culturally and socially to the left?

Yes.

Thank you for doing this AMA. I heard of you first through references in Stefan's Florilegium, all of them appropriately terrifying.

You've written quite a bit about working around the temporal and geographic boundaries while maintaining persona within the SCA, but I don't think I've seen any remarks about handling socioeconomic distance. Having a peasant persona, for instance, would nearly preclude participation in any Enchanted Ground-type environment due to proximity to persons of noble rank who already inhabit it. Do you have any opinions on this issue?

I don't see that as a problem. People of noble rank routinely interacted with peasants in SCA period, and not necessarily as the lords of those peasants.

One way of getting a feel for how diverse real medieval societies were is reading the Rehla of Ibn Battuta, the account of the travels of a 14th c. North African world traveler (I like to describe Marco Polo as a 13th c. Italian imitator). He interacted with an enormous range of people. For a still more readable, although post SCA period, example, try Casanova's memoirs. He interacted with sovereigns, with peasants, with everything in between.

Interesting! I've been looking for accounts of peasant women (my persona is a 14th century Scandinavian peasant woman) interacting with anyone more important than their immediate overlord.

For my very favorite account of someone at close to that level interacting with a powerful (and frightening) sovereign, see if you can find "The Tale of Sarcastic Halli" in a good collection of saga material. He was a poor Icelander and very good skald who decided to join the court of Harald Haardrada. Halli had unlimited gall—he insulted Harald the first time they met—but managed never to quite get Harald to kill him, in part because he entertained Harald, in part because Harald admired his courage.

What is the most firmly held belief that you had to let go of?

Not sure. Some candidates:

1. That the legal framework for a laissez-faire society had to be produced exogenously, hence that one needed some sort of government.

2. That moral beliefs were only tastes.

3. That I was naturally a very poor athlete. I don't think it occurred to me, growing up, that activities such as baseball or basketball were things I did rarely and only because I had to in gym class, but things that the other kids did often for the fun of it—and so were much better at.

Then I started SCA combat, at a point when it was new for all of us.

In my 1978 copy of The Machinery of Freedom, two of you more unusual magazine recommendations are for The Libertarian Connection (“something between a chain letter and the best libertarian magazine existing”) and the Cato Institute’s Inquiry (“A new magazine with a libertarian slant but aimed at a general audience.”) Do you still keep up with The Libertarian Connection, and do you think Inquiry was successful in its attempt at outreach?

I don't know if the Connection still exists. I updated my list of publications, and added lots of links to stuff online, in the new third edition.

What probability would you put on the proposition that the United States--with the same territorial boundaries and the same form of government--will break up within the next 25 years?

Low probability for 25 years, perhaps significant for a hundred.

Are you a coffee drinker? What do you drink? Are you a Starbucks gold member?

I have gone from never drinking coffee to very occasionally drinking it. I have no particular preferences on the subject.

I should probably have added that I drink a lot of Diet Coke/Coke Zero and, judging by that, do not seem to react to caffeine. I can do without it for a week without any serious withdrawal symptoms and it doesn't keep me awake.

Hi David. I'm somewhat familiar with your work and theory of polycentric law. I've read before that you discounted the possibility of war in a privatized future because such an act is expensive. I feel my understanding of such a pronouncement is incomplete, because the price of harmful activities have seldom prevented their attainment by those with the desire to do so. Heroin addicts obtain heroin, welfare queens get iphones, and all of this defies temperance and reason. Do you consider money to be the only motivation of rational actors?

This in mind, I'm curious what your rebuttal is to the possibility of an ancap future full of private military corporations formed over ethnic, geographic, religious, and cultural ties, as opposed to merely a profit incentive, which may or may not reap grand financial returns. Do you consider something like this likely, or possible even?

I don't consider money to be the only motivation, or in a fundamental sense a motivation at all. People want money for what they can do with it, not for itself. The relevant distinction for your question, I think, is not money vs other things but something closer to rational self interest vs other things.

People are sometimes willing to bear large costs for ideological motives that don't easily fit a model of rational self interest, but I don't think it's so common that such behavior is likely to dominate the structure of the society.

What do you think about the signaling theory of education?

Clearly part of what is happening. Bryan Caplan is a bright guy, but I haven't looked at the whole argument carefully enough to see how one or another of the models fits the facts.

Hello David,

I've got a couple questions that are interrelated. What do you think the marginal cost curve for successful threats would look like? How is it related to reputation? And how are these related to coordination and communication capacity?

Interesting, but too hard a conversation for this level of interaction and time.

Hello David,

What is a question that you currently find interesting, and how would you answer that question?

I'm currently trying to understand legal systems better, working on a book on legal systems very different from ours (current draft webbed for comments on my site). But I don't think I can put that as a single question.

How often did you get into debates with your dad about the role of central banks?

Never. I can't remember his arguing that central banks were a good idea, merely offering views about what they ought to do. I pointed out to him that a system of competing private issuers would, in first approximation, produce the result of his "Optimal Quantity of Money" essay, and he didn't disagree.

Did you watch that bitbutter video illustrating the machinery of freedom?

I watched a very well done illustrated video of a talk of mine. I don't know if it was the one you refer to, but probably. I had had no input in creating it, liked it, emailed Larry Lessig to tell him I no longer had to be jealous of the illustrated version of one of his talks that he had webbed.

Does the highly cerebral personality that libertarians tend to have get in the way of their rhetoric?

Probably make the rhetoric more convincing for people like them, less convincing for others, with the latter group much larger than the former.

Along distantly related lines ... . One criticism of my second novel is that the characters are implausibly rational. Another commenter, on the other side, described it as "A Thinking Wizard's Adventure."

Kindle. http://tinyurl.com/q6o74kv Hardcopy http://tinyurl.com/pupwc2o

What do you think about Class Collaboration?

I don't know what "Class Collaboration" means.

In Machinery of Freedom you explain how a system of dispute-resolution organizations (DROs) / arbitration orgs could offer packages of law for people to use, etc. (and it's a great book generally, thank you).

Why couldn't individual people to craft private law themselves or via their explicit agents via contract --why rely on orgs to make law that people then adopt?

If we're going to decentralize law production, why not decentralize it fully down the very individual? Then people who agree on basic legal principles can live together and create communities based around shared values in this way. Arbitration orgs need only become involved when there's a dispute.

Because there are economies of scale in both crafting legal systems and negotiating agreement.

Are there any economist consensus' that you disagree with?

The view that market failure is an adequate justification for government action probably qualifies.

Thanks for doing this and your work. What do you think is the strongest counter argument to AnCapism? Also, what are the biggest areas of the AnCap System that are not explored enougth yet?

The strongest counter argument, in my view, is the nonexistence of modern developed A-C societies.

When it comes to decentralized law, which seems to be your forte, does the efficacy of the arbitration and enforcement markets inversely correlate to theories of abandonment? What would you say is a likely outcome of abandonment law? Should this be used as the balance to counteract a possibility of accumulation of wealth?

To begin with, in the sort of decentralized system I describe there isn't anyone in a position to tweak the legal rules "to counteract a possibility of accumulation of wealth." The legal rules are the outcome of a market process. So the question is what rules will come out. Rules on abandonment will be limited by the fact that the customers of rights enforcement agencies will not value them very much—property you have abandoned isn't worth much to you, and rules restricting what you can do with property that might have an owner who cannot be located and is making no use of the property might be a nuisance to you.

The clearest example of that issue would be orphan works in copyright law.

The hypothetical system you describe seems to compete very well with real life governments, but have you ever considered what kind of hypothetical government might best translate citizen's values into policy? Could it compete with anarcho-capitalism for the utilitarian trophy?

You would have to first define "government." I can't think of any form of institution involving a government in my sense, an agency of legitimized coercion (filling out what that means is one of the things I do in the additional material in the third edition) that would work better than A-C under circumstances in which A-C works (i.e. is stable against both external and internal problems, another subject discussed at some length in Machinery).

If you think you can describe such a hypothetical government, try specifying the institutions and doing your best to deduce what the consequences would be, assuming that individuals act on their rational self-interest. Too many arguments along these lines specify outcomes without showing that there are institutions that would produce them. The obvious example would be a government that only does those things that market institutions should do but don't because of market failure problems (explanation of that also in ...).

I remember at one point you talking about the proper compensatory payments for someone that has been found responsible by an arbitrator/court. You suggested the idea that we would have multipliers based on the chance of catching a perpetrator. If roughly 1 in 10 bank robbers are caught, the damages for robbing banks should be multiplied by 10. My initial reaction to this was that people would set up honeypot like situations to easily catch criminals and make scamming the system a kind of business. Even though their chance to catch the criminal in their specific circumstance was much closer to 100%, they would still try to claim 10x damages. This whole systems strikes me as extremely convoluted and hard to manage. Technically every individual crime has a different chance of catching the guilty party based on individual circumstances. We also have the effect of no longer encouraging people to take reasonable measures to defend themselves. I don't see things like door locks or security cameras as particularly onerous investments to defend my property, and the incentive structure of our society has made those technologies ubiquitous.

I guess my question is would you err on the side of encouraging investment in defense of property or overpaying victims of crimes?

I've discussed versions of that problem. One real world example, in 18th c. England, came from very high rewards for convicting someone of certain sorts of felonies in a system were prosecution was private. The incentive was to either entrap someone into committing a felony or frame someone.

For another discussion of part of the problem, see my old JPE article "Why Not Hang The All: The Inefficiency of Efficient Punishment."

Hi David,

Did you know about last weeks Ancap conference in Acapulco, Mexico? (www.anarchapulco.com) Would you consider attending as a speaker or guest if it is held again next year? The conference was great but there were not many hardcore economists.

Consider, yes.

Mr. Friedman, why do you think contemporary libertarians/ancaps have such a high intersection rate with white supremacists and queerphobic people?

I haven't observed that it's true. There is one cluster of people in the libertarian movement which seems to have a significant overlap with some odd religious and racial views, in part possibly a relic of Rothbard's paleo-libertarian period, but I don't see it as a general pattern.

Deirdre McClosky is a transsexual and a libertarian, and I haven't noticed any hostility to her on that basis--she was one of the main speakers at the recent ISFL conference in DC.