Positive Externalities

Home

The positive externalities that result in greater peace, security, respect for personal rights and property creates the incentive for privately provided public police to provide services to more customers and thereby increase their marketability and to police a larger area, investigate more crimes, convict and fine more criminals and recruit more customers.
It is absolutely morally wrong and criminal to use the crimes of the guilty to commit further crimes against the innocent. Legitimate police must protect the rights of law abiding people without stealing from them and honestly earn their wages.
   The politicians lie to people who are ignorant enough to think that they have to pay extortion to a protection racket to be secure. As I have stated, legitimate police are to protect people from the very crimes committed against them by the political police and military. Much of the presumed justification for taxation is their premise that if everyone isn't forced to pay for the police and "national defense" then the so called "free riders" will enjoy the benefits of security while not paying for its costs, that if people are free to choose whether or not to pay the police and defense, most people will choose not to pay while using the service that is paid for by others. This premise is a lie and is nothing but being forced to pay off a protection racket.
   First of all, being robbed and forced to support an organization that violates your rights is not a service, the political police and military commit crimes against basic human rights, they don't protect individuals, they protect the state and enforce its political edicts and they steal through taxation to support their protection racket. Secondly, people pay for what they use or for what they are responsible; criminals commit crimes which are the reason that the police exist in the first place. Criminals are the ones who must be forced to pay for the cost of the police, not innocent law abiding people. Law abiding people may pay for the police also has a voluntary service through their insurance company, they may choose to purchase greater security or support the police through securities and futures trading. Free market police and defense are a service provided to people in which the police themselves are looking for the opportunity to be allowed to police and catch criminals, for which they will receive their earnings from convict restitution and fines as well as payment from insurance companies and securities for a job well done.
   They claim that so-called "national defense", is a non-excludable good; once the good is produced, the seller is unable to exclude those who refuse to contribute from enjoying its benefits. The euphemistic propaganda of "national defense" is the defense of the tyranny and criminality of the state, the "nation" is an artificial cultural orientation, there can be no true national defense, a nation has no rights, it is a fantasy, an illusion, only individuals have rights and only individuals need defending. The "national defense" good produced is tyranny and terrorism, the benefits enjoyed is slavery, armed robbery and mass murder. Of course people, if given the choice, are going to refuse to pay extortion to a malevolent gang of terrorists who use the money to wage wars against their rights. After all, if people aren't forced to pay the extortion, who will produce the wars? Who will provide the service of conscripting young men into a career of terrorism? Who will provide the service of mass murdering foreigners? Who will operate the cartel of military contractors who really benefit from war?

The problem of externalities is solved by the fact that despite security services being provided to the public and not excluding anyone from their protection or benefit they are able to internalize the rewards and profit. The services protect the security of individuals who have signed up and their properties, but are also offered to the public in order to attract customers who will be billed if they call for help. The way this is done is an environment is created where people will have to pay for the services they actually use or they will have to choose to exclude themselves, meaning that a person under assault from a burglar will have either made a prior choice to pay for security or that person will at that time have to choose between either calling the police, knowing that one will be billed for their response or choosing to deal with the burglar oneself, including having to track down the burglar and retrieve one's property afterward. This creates a powerful incentive to purchase security insurance ahead of time and avoid the high cost of paying later. The police are public and don't exclude anyone in the fact that they will respond to any call, it's the person who makes the call that also makes the choice to pay for the police response, so it is the individual who makes the choice to pay or be excluded. Besides that, security is a public good in the fact that the security services are trying to produce maximum security in order to reduce insurance premiums and to increase the value of their stocks by doing a better job, the more security they produce, the more people benefit from this public service and the more people who are willing to pay insurance premiums or call successful police and later pay the bill, thus it will benefit everyone in a way that maximizes the profits of the security services. Besides that, police exist because criminals exist, it is therefore the criminals who are considered the primary consumers of police services and therefore the criminals will pay the majority of the bill to the police.
   With the political police there is no real incentive to spend more money or reap more profits by doing a better job, since they spend other people's money and they are paid on salary whether they catch criminals or not, the police will continue to do a poor job and sometimes take bribes to look the other way. Free market police will expend whatever is necessary to get the job done. If the political police are faced with a burglar who is stealing exactly $100 each day, the police will reason that the cost of spending $100 a day to catch the thief isn't worth it because they would be no better off for it then and they need to allocate resources for more serious costly crimes. Conversely, free market police will have a market incentive to spend more than $100 a day because they will be able to recover the cost of whenever they spend when they eventually catch the thief, they can't spend outrageous sums, like a $1,000,000 a day, because it will be more difficult to extract payment from the thief. but they certainly will spend whatever is reasonably necessary to catch the a and there will the market will push them toward hiring more officers because the profit potential has increased. They also have an incentive to spend more than the marginal cost of property stolen because by catching the thief quickly the value of their securities will increase and premiums will stay low which means more profits. There is the inverse disincentive, that if they don't do what it takes give catch the thief then insurance premiums may rise, their salaries may drop and their securities may fall in value. So like any other business, the police will spend as much on their marginal cost as will equal their highest marginal benefit which will always exceed the cost of the crimes being committed at the time which naturally pushes them toward more a efficient effort an increases the likelihood of arrest and conviction.

Defense works the same way, in the free market there is no real difference between the police and defense forces, they are all the same thing, they provide the same service, the defense forces are police who are better armed and use different tactics but they are doing the same job, defending individual freedom, they don't defend some illusionary cult, like a nation, they defend individuals everywhere from crimes committed by large criminal organizations, such as the state. The defense services earn their money in the same way as the police and the public benefits from that security the same as they do with the police.
Defense services are all tied in with other security services, people purchase them in a bundle, the police would not be able to produce effective security on their own if the people are threatened by military states who may invade, enslave or mass murder them at any time. Because the police need the partnership of defense forces, they work together and earn their profits from the same sources because they're doing the same work. Those who primarily pay for defense will be the criminals who are arrested and forced to work to pay the bill to the defense services, namely the enemy politicians and their military who will be forced into servitude. And the defense forces have the incredible profit motive of being able to seize the entire assets of a state whom they destroy including its entire military, agencies and property and to seize the entire assets of everyone who worked for the state. Portions of this money will of course be shared with the police and emergency services in line with what they contribute to maintaining order within a liberated territory, so money seized by defense forces will flow through the free market to other security services and to the private sector as newly liberated territories are built into orderly and efficient Libercratic systems. The defense forces have natural incentives that will provide more than enough money to motivate them to do a good job in exterminating the cancer of political states from the world.

The twisted rationalizing by the politicians allow them to sell the big lie in the face of the truth which is the opposite of what they say. Innocent law abiding people are not "free riders". As I said, criminals cause crimes which results in increased costs of policing and replacement of property, therefore the convict must be made to pay. Responsible people who respect other's rights aren't "free riders", as though respecting other people's rights according to just laws is being a free loader. Political police and the military are blood sucking vampires running a protection racket, damn the politicians to hell for calling responsible people "free riders", it shows their arrogant contempt for individual responsibility in a way which they use derogatory insults to cow their slaves into supporting their criminal protection racket, they are the ones who are putting a burden on responsible people and preventing them from having legitimate police and human rights defense and living a more secure life. An individual who is responsible and respects other's rights and the law does not "free ride" or place a burden on anyone else, anyone who would say that one does is lying for ulterior motives to deceive people into using victims of crimes to perpetuate the larger crime of the political police racket.
   The responsible individual creates an environment of positive externalities of which everyone else benefits. The person who polices one's own behavior and activities in relation to others in a responsible way reduces the cost of policing, the need for security resources, and reduces the cost of insurance and promotes an environment of peace and prosperity where people may enjoy life more and businesses can succeed. The more people who live responsibly and provide their own security so as to create greater residual order and security the more people benefit from it and thereby it reduces their efforts and expenditures in pursuing security while generating greater security for others, which is returned to them, there is a reciprocal effect. Such a person does not take from others, but gives to others the opportunity to live a better life, be secure in their person and property and earn more money.
   If anything, other people are receiving the positive externalities of responsible behavior and could be considered "free riders" who should pay the responsible free sovereign individual for one's behavior since this provides a benefit to them. Of course, that's not a serious consideration because it is a person's duty to respect the rights of others, of which everyone mutually benefits.
   Its the people of a community that produces security, therefor its responsible individuals who are primarily responsible for the security of all, the police are an important, but a secondary producer of security. Indeed where a group of people have no respect for each other's rights or property, no amount of policing will produce real or lasting security, but conversely, in a community where everyone is responsible and completely respects the rights of others, no police are needed.
   For the Libercratic security services themselves, the more responsible individuals are, which the police have a duty to encourage and support, not undermine, the greater windfall for the police who will be more successful in preventing crimes and in getting cooperation from people in capturing criminals which will lead to a greater environment of security which will reduce police costs and lead to an inflow of revenue to the police from the insurance companies, who will not have to pay out large amounts in claims, and from securities trading which will encourage more investment in security with more profits going to the police who are doing a good job thanks to a society of responsible law abiding people who are largely responsible for the positive externalities of a secure society. Responsible people are indeed rewarded for their behavior in the reduced cost of insurance and greater prosperity for all.

There is no tragedy of the commons for privately provided security any more than for any other privately supplied good or service which has traditionally been thought to be a "public good" which must be supplied by the state because all goods, including public goods, are supplied within a particular area, a distinct space which benefits individual property owners, therefor they are territorial goods and are thus inherently excludable. As explained by Dr. Fred Foldvary in his Public Goods and Private Communities, "because the economic value of space is affected by the goods available within that area, individuals have no choice but to reveal their demand as the owner of space collects the rent. So entrepreneurs will, in the absence of regulation, create 'communities' and adapt to provide public good characteristics, maximizing positive externalities and minimizing negative externalities, on a range of territorial scales."
The economist Anthony de Jasay has argued(3) that, "Many of the most important de facto public goods owe their publicness not at all to the 'logistics' of exclusion, but to what we tend glibly to call, for want of a less question-begging word, 'social choice'". "The result is that the state does not eliminate free riders; it generates them" observed Robert Taylor.(4)
Sheldon Richman wrote,(1) "Such [political] action bestows great benefits on a relatively small group, while spreading the costs across the whole of society. Moreover, unlike in the market, when a "public good" is obtained through government, the beneficiary group pays only a small portion of the costs, since government shifts most of the expense to the taxpayers. "This makes it possible for organized groups to get the state to provide bogus public goods, goods and services which in fact cost much more than the beneficiaries would be willing to pay even if exclusion were possible and they could not free-ride. In this manner, the state generates externalities, and ones that are negative. Rather than overcoming the free-rider problem, the state benefits free-loaders."⁽²⁾

So it is possible to exclude non-payers and eternalize the benefits of security. This is done by the police and emergency services refusing to respond to people or properties who have not paid for security insurance, the poor may receive protection by signing up to pay what they can in small premiums now and pay more as their earnings increase. Private police today strictly guard secure communities, shopping centers and corporate property while some bordering neighborhoods are rampant with crime because people in those neighborhood haven't paid for effective security and the political police are doing a poor job. Furthermore, protection may be completely internalized by only allowing people who have security insurance to prosecute crimes. But, as I have said, I believe that security services will maximize their profits by providing security services to the public for the reasons stated above, this will extend full and equal protection to all people including the poorest of the poor.

by Libercratus

1- Education vs. Democracy - by Sheldon Richman; Future of Freedom Foundation
2 - Jeffrey Rogers Hummel and Don Lavoie, "National Defense and the Public-Goods Problem" in Robert Higgs, ed., Arms Politics and the Economy: Historical and Contemporary Perspectives (New York: Holmes and Meier, 1990). p. 44.
3 - Social Contract, Free Ride - Anthony de Jasay [New York: Oxford University Press, 1989]
4 - Economics, Ecology, and Exchange: Free Market Environmentalism - by Robert Taylor [Humane Studies Review Volume 8, Number 1 Fall 1992]