David Friedman interviewed by e-rooster.gr

Q. In your new book, Future Imperfect, you discuss the «uncertain world» of the near future and «a variety of technological revolutions that might happen over the next few decades». You do not mention however the ‘precautionary principle’ that seems to be the current norm in lawmaking regarding all new technologies. Can the precautionary principle be a sound approach to discussing these issues?

A. No. It’s incoherent. Deciding to develop a new technology is a decision, but so is deciding not to. Either might have catastrophic consequences, so the precautionary principle, taken literally, implies that you can neither develop it or not develop it.

For a concrete example, consider nuclear power. It’s at least arguable that the reason it doesn’t play a much larger role as a source of electric power is the precautionary principle, even if it wasn’t put in those terms. Nuclear reactors were (and are) seen as dangerous, so it was very difficult and expensive to get permission to build them.

Arguably, our failure to build more reactions is one of the main reasons for global warming. Nuclear power is, after all, the one source of power which we currently have and can expand more or less without limit – unlike wind power or hydro – that doesn’t produce CO2. If we had a lot more reactors we would be producing a lot less carbon dioxide. So that’s a case where applying the precautionary principle to avoid one risk arguably results in a different risk.

Q. You write that «where intellectual property cannot be protected by law, it may still be possible to protect it by technology». Can intellectual ‘property’ be justified from a libertarian perspective and can it be efficiently protected by state regulation in the future?

A. I don’t have a clear answer to your first question, although it’s an interesting one. I think protecting IP via technological protection clearly is justified from a libertarian perspective, but whether protecting it via patent and copyright law is less clear.

I think it is becoming increasingly difficult to protect via legal rules any form of intellectual property that exists in digital form. On the other hand, I don’t see that enforcement of ordinary patent law is going to be much harder in the future than it is now.

Q. Is there any validity in the Long Tail theory, and can it tell us anything about the way we’ll be doing business in a world of digital inventories?

A. Not a subject I have any special expertise on. The internet and computer technology more generally pretty clearly lower the cost of having and selling a wide variety of goods, but I don’t know how large the effect will be.

Q. What is the greatest threat to our freedom going to be in the near future?

A. Probably environmentalism, since it provides a new and not unreasonable set of arguments, linked to an emotionally moving story – almost a religion – for government interference with individual acts.
The short term threat is the reaction by governments, with a good deal of public support, to the current credit crisis.

Q. Did the ‘Swedes Get It Right’ this time around by awarding this year’s Nobel Prize to Paul Krugman?

A. Very possibly. As is often the case, the prize was awarded for work done a long time ago. It isn’t in my field, but the descriptions I’ve seen of it make it sound as though it was important and interesting work.

Q. You describe yourself as a ‘classical liberal’. Who are the intellectuals that best represent, from your point of view, the ‘classical liberal’ tradition and have had the most influence on your work?

A. That’s very hard to say. Probably the biggest influence on me was my father, for obvious reasons. I can’t think of anyone else who had much influenced my beliefs, at least as far as I can tell – mostly I have thought things out for myself to my satisfaction.

Q. One of the conditions that you define as necessary «for anarcho-capitalism to be a stable and attractive system» is to «have a set of working anarcho-capitalist institutions that people are used to». Is privatization of government-owned companies the right step to start with, in countries where no such anarcho-capitalist institutions exist?

A. That’s one possibility. Another, that may be more attractive, is to make it legal for private companies to compete with government owned ones, remove the subsidies to the latter, and let things go from there. That eliminates some of the obvious problems with privatization – that the process can be used to give valuable favors to whoever ends up with what is being privatized.

Q. What is your view on societal experiments like The Seasteading Institute, or the Free State Project? Can they lead to the realization of a libertarian utopia?

A. I doubt anything can lead to a libertarian utopia. I think such projects have a low probability of succeeding, but if one succeeded it could produce large benefits.

Q. What is your view on Sunstein/Thaler’s libertarian paternalism? Is it just another form of central planning, or can it indeed increase the efficiency of our freedom of choice?

A. I thought their book was interesting. If it’s done with the limits they propose, I don’t think it is another form of central planning. Indeed, taking their arguments literally, they aren’t limited to government action – they are describing a way in which anyone offering choices to other people can try to influence the outcomes by how the choices are put.

The danger in the approach, as I see it, is that it’s pretty easy to slide from «Here are two alternatives, we will make it equally easy to choose A or B, but since we think you would be better off choosing A we will present the alternatives in a way that will tend to make you, for irrational reasons, choose it» to «since we know A is better for you, we will make it increasingly difficult, even if not impossible, for you to choose B» to «Since we want you to choose A, … .»

I actually observed a real world example of that at Oberlin, the college my wife went to and my daughter is now going to. Many years ago, they voted to set up a voluntary one dollar donation from each student to a particular cause – a group created by Ralph Nader. «Voluntary» ended up meaning «we will pay the dollar on your behalf unless you go to the right office on the right day of the year to tell us not to, and we will not make any effort to tell you that you have the option of not paying or how to exercise it.» A similar «optional» payment to a different cause, this time of ten dollars per student, was voted in last year, and I found out about it when I noticed an unexplained $10 item labelled «green edge fund» in the list of what I was supposed to pay the college for my daughter’s room, board, etc. and googled for information on it. It took an email to the president of the college, followed by an exchange of emails with the dean of students and a letter to whoever at Oberlin was trying to bill me for the «optional» ten dollars I had chosen not to pay, to get them to stop doing so. I will be pleasantly surprised if, next semester, the $10 is actually set up as an optional payment, and astonished if Oberlin informs all the parents who paid it last semester because it had been presented as something they owed that they are entitled to a refund.

Q. Although you did not support Obama’s candidacy, you blogged that you preferred him to McCain. Can libertarians feel optimistic about Obama’s presidency?

A. I think «optimistic» is an overstatement. There is an off chance that he will be a substantial improvement on recent presidents, but I wouldn’t want to bet on it.

Q. «Crisis», «Recession», «Depression». Is this the end of capitalism as we know it? And is this necessarily a bad thing?

A. It isn’t the end of capitalism as we know it, and it is a bad thing, since it provides an excuse for governments to do lots of things they want to do that had become politically costly.

Q. How can we resist the ‘common sense’ attitude that claims that state intervention is now required to ‘correct’ the results of a not sufficiently regulated market?

A. We can try to point out how much of the crisis is due to state intervention, most notably in the American mortgage market. And we can point out how much of the response already takes forms unrelated to the crisis, because those expenditures happen to be the politically profitable ones.
A good first step is to look at the history of the 700 billion dollar bailout in the U.S. Congress. The first time around the House of Representatives voted it down. The plan was altered to include a whole lot of additional expenditures, I think about another hundred billion, designed to buy the votes of particular congressmen – and in that form passed.

Q. Can foreign intervention be justified to prevent a possible humanitarian crisis? Should the international community consider a more interventionist approach to the current crisis in the Middle East?

A. I think that, as a practical matter, intervention by one state in things happening in another is very risky, both because it’s hard to do well and governments aren’t very competent. I spend a chapter in ‘Machinery of Freedom’ arguing, on prudential grounds, that an interventionist foreign policy is usually a mistake, although there I’m considering interventionism in a more conventional context. A further problem with interventionism justified by humanitarian concerns is that the intervening state is likely to have its own agenda – consider Hitler’s annexation of the Sudetenland, defended at the time in part as needed to protect German speaking Czechs from mistreatment by the Czech government. Or consider the Iraq war as an example of both problems.

In the current situation in Israel, it’s not entirely clear which side a neutral party would want to intervene in favor of. It’s true that the Israelis are killing some Palestinian civilians as a side effect of trying to attack Hamas – but then, Hamas has been deliberately targeting Israeli civilians with missiles for a long time. One could argue that a benevolent foreign government should intervene to stop the Israelis, but one could equally argue that a benevolent foreign government should have intervened long ago to stop Hamas – i.e. should have done more or less what the Israelis are now doing.

From a moral standpoint, I see no problem with individuals intervening to protect people from their own government, since I don’t think governments have rights. At the moment Zimbabwe would be an obvious example of a place where such intervention might be justified. But I have problems with governments intervening, since such intervention is being paid for by taxes collected from people some of whom will disapprove of the intervention.