Hans Hermann Hoppe, Private Law Society without a State - Modelhof Academy 2012 - in German

I thank Daniel Model for the invitation and especially, of course, for allowing me to be the first to perform here. For this occasion, knowing that it was taking place in the green hall, I even wore a green tie. um, has it already been mentioned that a central theme of this academy is the question of the ideal state? And I will try to give an answer. The ideal state is no state. um, or what I call a private law company . But when I come to the topic of private law society , I would first like to make a few remarks about the basic human situation, a fundamental human problem, and the proposed solutions that have been put forward, which I consider to be wrong. And then I come to the actual topic. Um, suppose, perhaps I should also point out that this is a long train of thought and you should simply try to follow it in a relaxed manner. If you want to read about it, or at least roughly, there's a little booklet by me below, "The Competition of Crooks". uh then they can take a closer look at these things again, uh slowly. Um, if we imagine Robinson Cruso all alone on the island, then there are no social problems for a single person . He can do whatever he wants. Um, and then two people appear. On Friday, a problem arises on the island that would n't exist for a single person. Uh, and to explain what kind of problem it is, let's first assume that on this, uh, on this island, conditions are paradisiacal . There is therefore no shortage of goods. Um, and if there is no shortage of goods , then there is hardly any possibility that Robinson Crusoe and Friday can argue. Because whatever I take for myself, uh, that doesn't take anything away from uh, what the second person wants. Uh, in order for disputes to arise, there needs to be scarcity. Um , that means there's a situation where I want to do something with something, and another person wants to do something different with the same thing . This is the prerequisite for interpersonal conflicts to exist . Without scarcity, there are no interpersonal conflicts. And conflict resolution consists of finding a solution. What do you do when there are goods where one person wants to do one thing and another person wants to do something else with the same good? Even in paradise there is a scarce resource, and there is also the possibility of a conflict between Robinson Crusoe and Friday, even in paradise. Insofar as our own physical body is naturally scarce. Robinson might want to do something to Friday, or Friday might want to do something to Robinson, and then there will be a conflict. And how do you resolve this conflict? In the Garden of Eden, in paradise, it is relatively easy to resolve this conflict. Then [snorting] one would say, my body belongs to me, their body belongs to them, I can do whatever I want with my body, as long as I do n't, um, interfere with their body. If I want to do something to your body , then you must give me your consent . And if you want to do something with my body, then I have to give you my consent and I can move wherever I want. uh, and take up every seat. Unless that seat has already been occupied by another person. Then I have to wait until he leaves and then I can take his place. So in the Garden of Eden, you only need this simple rule. Every person owns their own body. If we now turn to the real world, the real world differs essentially only in that there is an infinite number of scarce goods, uh, regarding which there can be conflicts. Let me first introduce the rules that virtually all people accept to a greater or lesser extent in order to avoid conflicts in a world governed by widespread scarcity . I didn't invent this rule . These rules have been formulated by many people, and if you look at your own private life, you will find that you almost always adhere to these rules. And those are the rules. Firstly, that which would already apply in paradise. Every person owns their own body and has exclusive control over it . If you consider what alternatives are there? Uh, who else should own my body ? I am the only person who can directly do something with the body. The only way I can harm anyone else is by first controlling my own body and then accessing another body. The alternative is simply slavery. Uh, I belong to another person instead of being the owner of my own body. The second rule, um, every person is the owner and has exclusive rights of disposal over the things that were previously in a state of nature and that this person has acquired for the very first time . Um, that also happens in children. Every child thinks, "I had the toy first, and therefore I have a better claim to it than any other child who comes later." Um, so one becomes the owner of what one has transformed from a natural state into an appropriated state. The first person to do that is the owner of that thing. Um, the second rule or the third rule is, um, everything I then do with my body and the things I originally acquired, everything I subsequently produce, as long as I do not damage the property of other people through the act of production, is also my property. The producer is the owner of what he has produced . And finally, the last rule: um, you can also acquire ownership of things by voluntarily exchanging them with previous owners . There are no other ways to acquire property. All other forms of property appropriation would be considered criminal behavior . Um, I don't want to go into too much detail about the reasoning behind these rules . I trust that everyone intuitively recognizes that these are the rules we follow in normal life . Um, perhaps I should emphasize the following. The idea that conflicts can only be avoided by assigning private property to individuals is by no means a mere convention. There is no other way to avoid conflicts except by always ensuring that it is clear who owns which scarce resource . Well, with common property, for example, there are always conflicts automatically, unless there is a harmony of interests. Uh, if there is a harmony of interests, meaning I always do what you expect of me and you always do what I expect of you, then we don't need any rules at all, then the world is perfect. But such harmony does not exist. And since such harmony does not exist, and if one wants to avoid conflicts, this is only possible if it is always clear that this good belongs to so-and-so, and that good belongs to so-and-so. He can do what he wants with it, and I'll do what I want with other things. Then we don't need harmony. Private property ensures that people can live together peacefully , even if there is no harmony among them, even if they have very different interests . And if one wants to avoid conflict from the very beginning of humanity, then this can only be done by applying this rule: Whoever appropriates something first becomes the owner. For he who appropriates something first has not thereby plunged himself into any conflict . There was nobody there before. Um, and all the others who come later, if they dispute the first owner's right to own what he first acquired, they would then cause a conflict. [clears throat] As important as insight into these rules is, um, and it is equally important to recognize that if one adheres to these rules, all conflicts can be more or less avoided . However, it is of course the case that there are also people who simply do not follow these rules . Um, and the question that I call the social problem is, what do we do with these people who are lawbreakers and do n't want to follow these rules? And the traditional answer to this question is, what do we do with the lawbreakers? What do we do with those who attack me? My physical integrity, uh, not be respected? What do we do with those who want to take away what I have produced myself? What do we do with them? The traditional answer is that this is the task of the state. The state is there to enforce these rules , uh, to ensure that rule-breakers are brought to reason and either put back on the right track or punished for breaking the rules, so that civilized life can return . Um, that's the answer that all classical liberals, for example, have given. That is the task of the state, to enforce law and order, nothing else. Um, whether the answer is right or wrong depends on how the [snorting] state is defined. Um, and the definition of a state that I am about to present is by no means my own definition. That is the traditional definition of what constitutes a state. A state is not a normal company. Uh, a state is an institution characterized by two special properties. The first characteristic is that the state is the final deciding authority in all conflict situations. Whenever a conflict arises between individuals, the state decides who is right and who is wrong. And in particular, the state also decides who is right and wrong in cases of conflict that involve the state and its agents themselves. They immediately recognize, uh, if, well, I don't know, if they have a conflict with a police officer or a bureaucrat, who decides who is right in this conflict? another person who is part of the same organization. And they immediately recognize—I'll elaborate on this a little more in a moment—they immediately recognize what a strange construction this is. Conflicts, uh, so in all cases of conflict, including those in which one is personally involved, to have the last word . And if one is allowed to have the last word in all conflicts, then one also has the right, of course, to levy taxes. Um, that means levying compulsory contributions from individuals. You can instigate a conflict and then decide it in your favor by saying: "No, no, you have to give me the money. Um, I'm the one who has the final say in all disputes ." Um, what is the fundamental error of this statism, this idea that we need a state to be allowed to act as a mediator and final judge ? Well, economists have always maintained that there is something wrong with monopolies. What is a monopoly? A monopoly is a producer who alone is allowed to manufacture a certain item and who is allowed to exclude all other persons or institutions from the manufacture of that item. A milk producer, a milk monopolist, is a company that has the right to produce milk; only I am allowed to do so, and all other people are prohibited from producing milk. Why is this bad from a consumer's point of view? Yes, the answer is because then the price of milk will be higher and the quality of milk will be lower than it would be if other people could compete against this monopolist. Oddly enough, economists who hold this view—or perhaps I should add—claim that monopolists are bad from the consumer's point of view . From the monopolist's point of view, monopolies are of course wonderful. Well, every entrepreneur would ideally like to be a monopolist. However, from the consumer's point of view, it is of course disastrous to deal with monopolists. Interestingly, almost all economists agree that, yes, but when it comes to the production of law and order, we need a monopolist. Most economists are not even able to recognize that it is a contradiction to be against monopolies on the one hand and to say on the other hand that we need one. And if one now poses the question of whether a monopolist of law and order is perhaps less disastrous than a monopolist of milk production or car production, one naturally arrives at the same conclusion immediately. That's a much more dangerous monopolist. It's okay if the milk is a little more expensive or not so good; you can live with that. Um, but if law and order are produced by a monopolist, and law and order affect virtually every aspect of life, that is obviously a much more dangerous situation. What can one actually predict about what will happen when a legal monopolist, a security monopolist, or a law enforcement monopolist is appointed? What can one predict simply based on the structure of a state ? What can be predicted is, um, that this monopolist will naturally use his position and cause conflicts, and then decide them in his own favor . Um, you don't have to be Einstein to recognize that this is a necessary consequence. If one were to believe that state employees are, so to speak, angels, one might come to different conclusions than that it is dangerous to entrust such a monopoly to anyone. He will therefore provoke conflicts and then decide them in his own favor . Then there's always the objection, yes, but there's a constitution and there are constitutional judges and, uh, control bodies and things like that. Uh, these control bodies, these constitutional judges are also parts of the state apparatus. Can you imagine? They are initiating legal proceedings and saying that I never signed a contract to pay taxes. So I'm suing; I do n't pay taxes. Where are the contractual grounds for this? If you take this to the Constitutional Court, the constitutional judges will of course find, my dear God, my own salary is also paid from taxes, and they will come up with the correct verdict, namely exactly that this is an irrelevant argument. Of course they have to pay taxes, and if they don't, we will imprison them. So, what the state is, one could say, is a law-breaking protector of rights, an expropriating protector of property. And we can of course predict something else: that the expenditures made by the state for the production of law and order will continue to increase . Um, that means spending on security is maximized and production of security is minimized. The more money one can spend and waste, and the less one actually has to be productive and work, the better it is for the person in such a position. Now a few more remarks about the democratic state, in particular. I have a bone to pick with him too . Um, the traditional form of government was that of a monarchy. Um, the monarchy has been attacked, uh, with the simple argument that it is a violation of the principle of equality. Not all people are the same. There is the king, who can do certain things, and all these things are forbidden to ordinary people, and we want all people to be equal before the law. And for this reason, it was suggested that, well, how we do it is quite simple. That's where we introduce democracy. Anyone can become, so to speak, a king . Uh, and then equality for all before the law is established. Anyone can become king now . Everyone is treated equally. Is that correct? The answer is, no, that's absolutely not true. Even under a democracy, the contrast between people who are treated according to higher law or a special law and people who are treated according to a lower law remains. The only difference is that there are no longer any personal privileges, but there are functional privileges. Um , that's supposed to mean that if I'm acting on behalf of the state, then I'm subject to the regulations of public law, so to speak, and I'm allowed to do things that a private individual, who is treated according to private law norms, is not allowed to do. For example, I am allowed to do something that is called stealing in private law transactions , namely I am allowed to collect taxes, that is, I just can't steal anymore. Um, I'm allowed to, if in private legal transactions, if I steal something from you and then give a gift to another person , then that's called stealing and misappropriating. Uh, if you do that as a civil servant, then it's called social policy. You take something away from certain people and give the stolen goods to other people. And these people who do such things can do it on a large scale; you all know them, the politicians, who are of course extraordinarily generous in their donations, because it is not their own money, but money that they have previously stolen from other people. People are always very generous with other people's money. People are usually a bit more careful with their own money . Um, so the contrast is between two different types of law. In a democracy, just as in a monarchy, there is a group of people who are treated according to the law and another group who are treated according to the law. But that's not all. The situation is even worse. What has actually been done by replacing a monarchy with a democracy is to replace a person who, in a sense, considers the country as their property with people who are only temporary administrators of the country. And that makes you more short-sighted. Uh, people's orientation is becoming more short-term. Imagine the following: we have two identical houses. One day I'll give you the house and say you are now the owner of this house. They can bequeath it, they can sell it, and so on. And in the other case, I say they are the manager of this house for 4 years, 8 years, and so on. You cannot sell it, you cannot bequeath it, but during the time you are the manager, you can profit from this house. So you can try to get as much rental income out of this house as possible in 48 years. Would you behave differently? Uh, what are the consequences if you are merely a beneficiary, the manager of the house? Yes, then it is of interest to them. I need to get as much out of this house as possible. Even if the house is nothing but a ruin after 8 years , you would behave this way if you were the owner of the house. And the answer is: No, that would never be done. Democratic politicians are the ones who want to rob the country as quickly as possible because they only have a limited time to do so . A king usually has a much long-term orientation and wants to leave his children an intact kingdom. Not only that, but resistance to the expansion of state power is much greater under kings, because everyone knows, "I ca n't become king." What's that guy doing there ? How could he possibly do something like that to me ? Um, I have absolutely no chance of ever rising to his position . That's why there is resistance when taxes are increased, new regulations are introduced, and so on. Under a democracy, everyone can hope, oh, perhaps I too will one day be in that position, and resistance to the expansion of state power decreases considerably. And one last argument, which speaks in favor of monarchy and against democracy as a form of government. I am not a monarchist, but I have sympathies for monarchy. Um, this is it. Uh, a king, because he came to his position by chance, can coincidentally be a nice man . Um, he can also be evil. But what happens if he's evil? If he is evil, the dynasty of which he is a part is usually concerned that the entire country might be lost. And what does the family circle do then? Well, they'll just order someone up and that person will kill the king . Uh, simply to preserve the dynasty . Hundreds of historical examples of this. And that is of course an extremely positive event, that such people are simply beheaded. And now we ask ourselves, what happens under democratic conditions? Well, under democratic conditions, it's like this: no one comes to power by chance; there is competition for this position. Um , but competition isn't always good. Competition is good when it comes to the production of goods. Something is good, but competition is not good when it comes to doing something evil. And as I have already explained, states, as lawbreakers and expropriating property protectors, are in the business of doing harm to producers. They don't want any competition there. We do n't want a competition. Who has the best racket? Who is the best man, uh, who can manage a concentration camp? Uh, who won the competition among the killers? Um, and in democratic competition, it's precisely those who make the biggest promises, knowing full well that none of it can be kept , who prevail. Imagine a politician appearing and saying, "I am against any redistribution of wealth; I am in favor of abolishing taxes." Even the idea that one is in favor of reducing taxes by, let's say, 10, 20, 30% . Ask yourself, what are the chances of such a man being elected anywhere? Maybe in a small village where everyone knows everyone else, but not in a society of millions of people. Democracy allows individuals to indulge their desire for the property of other people. This promotes the formation of nasty characters, and of course, the people who end up at the top are always the most cunning and nasty characters. So, after this observation, um, I now come to the private law society, and as you have already recognized, quite undoubtedly, the solution—uh, how can people avoid their conflicts— must also be offered by frequent enterprises. Everyone must adhere to the same basic rules, the rules I mentioned at the beginning. So we need a non-statist solution. Law and order, and especially law and order, must not be offered by a monopolist . Therefore, there is no ultimate legal monopoly. There is no tax privilege. Um, nobody is permitted to acquire property other than through original appropriation, production, and voluntary exchange. And no one is permitted to prevent another person from freely [ahem] using their property, as long as they do not infringe upon the physical integrity of the property of others. Um, and every person is allowed to enter any business area with their property . It is allowed to produce whatever it wants. And specifically regarding the problem of law and order, this means that in a private law society, the production of security and law and order will also be carried out by freely financed and competing service providers and service companies, just like the production of everything else, because I do not presume to predict what a society of this kind would look like in detail. But you can make a whole range of relatively detailed predictions about what will happen and how what happens will differ. very clearly different from what we are currently facing . First, um, to the small point, and I'll come back to that later. Of course, in such a society there is a right to self-defense. Every person has the right to defend their property if they are attacked or if their property is attacked. Um, you know, in Switzerland this is less pronounced than in most other countries, that most states tend to increasingly disarm their citizens. Um, and to get straight to the point, the reason for this is quite obvious: if you're in the business of taking other people's property, then of course you prefer that the other people are not able to defend themselves. I would do the same if I held a monopoly on law and order: I would disarm them all. First of all, in a private law society, gun ownership is sacrosanct. Everyone has the right to own weapons, of course . And although I'll get to that in a moment , although self-defense will play a relatively minor role in a private law society, um, one should perhaps point out that there is a myth that such societies, which were similar to this model, were characterized by constant murder and slaughter. This is often compared to the Wild West, where everyone ran around with weapons, giving the impression that such societies were characterized by constant use of violence. That's all complete nonsense. Uh, the Wild West was an exceptionally peaceful society. Um, imagine you want to rob a bank, and every one of the bank employees has a gun. Uh, do you think you'll get out of there alive ? Imagine they want to rob a carriage and everyone on the carriage has weapons in their pockets . Yes, they'll never manage that . Um, those are all figments of the imagination, told by state propagandists that things are different. [clears throat][snort] Robberies and such have been extremely rare . Uh, there's an interesting book. It means, um, more ganun Less Crime, where it is empirically demonstrated in great detail that the higher the gun ownership, the lower the crime rate is for all other things, of course kept constant. In very heterogeneous societies, there is generally more crime than in very homogeneous societies. [ahem] Switzerland, incidentally, is a relatively good example of a low crime rate, even though, or perhaps precisely because, people own a lot of weapons. Most people do n't like it when you point to Switzerland , um, as an example of a society that is relatively peaceful compared to all the others, and yet most people have an assault rifle at home. Um, but as I said, in a private law society one would generally rely on the division of labor. We do n't manufacture our own televisions or sew our own suits. This is done through a division of labor, and we can expect that in a private law society, law and order are naturally also established through a division of labor by specialized companies, i.e., private police services, private insurance companies, private arbitration organizations, and so on. If one wants to describe the crucial difference between a privately organized security industry and current state-run practices, and express it in one word, then that word is contract. Um, the state, that is, our state in the current situation, is in a legally non-contractual state vis-à-vis us as the ultimate legal monopolist . There is no contract between the state and us, and it is not defined what belongs to us as property, as inviolable property. I just have to say, there are, for example, property taxes, and there are real estate taxes. What portion of your property belongs to you, as much as the state leaves you with. What portion of your land belongs to you. As much as he leaves them. Um, and it also doesn't say what the price is that you have to pay the state , as it's constantly changing. Let's imagine, um, that a private security provider would say something like that. I'm not guaranteeing you anything contractually. I will not tell you which specific items I intend to protect as your property. I will not tell you what I am obligated to do if, in your opinion, I fail to perform my duties. I also reserve the right to change the rules of the game at any time. Um, and furthermore, I reserve the right in any case to unilaterally determine the price for my rather vague service . Is there anyone here who would sign such a contract? And yet, that is exactly what we are facing. Conversely, it is also perfectly clear what would naturally be the case in a private law society. in a private company, since a provider of this type of contract would naturally not find a single customer. Well, in a private law company, contracts must be offered. These contracts must contain clear descriptions of ownership and clearly defined reciprocal services and obligations. Furthermore, these contracts can only be amended by mutual agreement during their period of validity. No unilateral changes to the contract are possible. Well, from this fundamental advantage of the private law society, a whole series of detailed improvements result compared to the current state. Um, first of all, competition among privately funded security providers would ensure that the price of security per unit of value tends to fall, whereas currently it is of course always rising. Furthermore, competition would ensure that there is neither an overproduction nor an underproduction of security. What I mean by that is this. Security is also a good that competes with all other goods. Um, if I spend more on insurance, on police protection, uh, then I can spend less money on drinking beer or eating out at a restaurant. Um, every good competes with all other goods. Um, how much security should actually be produced? How much money needs to be spent to produce security? If you leave it to a monopolist, the more money I get, the better we need it. One police officer, two police officers, three police officers, 100 police officers get paid 100 francs, 200 francs, 3000 francs. Do we need one tank, two tanks, 100 tanks, uh, do we perhaps also need to send a personal bodyguard next to each person , uh, equipped with a machine gun, and so on? The state's stance on the state is always: the more money I have, the more I can protect you. But perhaps we don't want to be protected so extensively , because this good competes with all other goods. Only through competition will it become clear how much money people are actually willing to spend on their security . Not everyone wants the same level of security. Some people are strong and can defend themselves, while others are weaker and want more protection. People in the city may need more protection than those in the countryside. Younger people may need less, older people perhaps a little more. Well, in eastern Switzerland they might want less than in western Switzerland, and so on. In a market society, everyone gets as much security as security is worth to them. Um, but most importantly, the difference between state-run security producers and privately run security producers lies in the content. First, there is the problem of fighting crime. Um, as you know, the state is notoriously inefficient in this area because the payment of its agents tasked with this job comes from tax revenue, meaning it is independent of productivity . Why work when you get rewarded for doing nothing? Why should I chase criminals when I can hand out parking tickets? Furthermore, one can even assume that the state has a certain interest in deliberately allowing a certain level of crime , because then one can always hope for larger budget allocations. Um, as an anecdote, for example: The American intelligence agency CIA systematically dramatized the fighting strength of the Soviet Union during the Cold War. Uh, for what reason? Because then, of course, they received a larger allocation for the CIA . Everyone who has seen these countries knew that of these thousands of tanks, half of them didn't work on any given day because a few screws were missing. Uh, and the economic power of the Soviet Union was of course incredibly low and simply exaggerated. Well, one can of course assume a similar interest in all police forces . Um, it's even worse when, um, in the fight against crime, you realize that currently, uh, it's not about compensating the victims in any way. On the contrary, if the state actually catches the criminals, at which it is very inefficient, then the victims are often forced to pay for the accommodation of these crooks and bandits through taxes, so that they can play table tennis and get their Bircher muesli every day, and possibly even study law in America. And are there still halls where one can, uh, strengthen oneself, so that one might be a little more successful in one's, uh, performance next time? Um, look into private security services . And when I say "sometimes insurance," always keep in mind that insurance companies are currently heavily regulated businesses under state control. Insurance organizations are no longer doing what insurance organizations would do in a free market. Um, an insurance company, for example, would of course be good when it comes to crime prevention. Because whenever he can't prevent something, he has to pay. The state is not coming to the rescue; he says he actually wanted to protect you. Unfortunately, that did n't work out, but he's now getting 10,000 francs in compensation, 100,000 francs in compensation. No, no compensation will be paid. An insurer must provide compensation. For that reason, he will be good at prevention . If a crime has been committed and damage has been caused, an insurer must compensate for the damage. So he will be good at , uh, for example, finding the stolen goods again if your house is burgled and you go to the police and say, well, this and that has been stolen, you can be sure that it will simply be filed away . No one will make any effort to recover the loot . Uh, an insurer will make every effort to recover the stolen goods. He doesn't have to replace anything he finds . And finally, an insurer will also have an interest in tracking down the perpetrators, because only then is it possible to hold the perpetrators liable for victim compensation, instead of having the victims pay for locking up an apprehended perpetrator somewhere. Furthermore, the private sector and the security industry are also generally conducive to peace. Um, states, as I've already hinted, are inherently aggressive institutions because they can shift the costs associated with aggression onto third parties. Um, these are, and this applies both to the relationship with interfering citizens and to, uh, foreign states. Look, uh, when Bush and Clinton and, um, what's the name of the current guy, Obama? Um, if they went to war and had to bear all the associated costs themselves , they probably would n't do it. But since they can shift the blame onto innocent third parties who have absolutely nothing to do with it , well, then I am naturally more aggressive. Um, for private organizations, aggression is costly. One would have to increase the premiums. Uh, and if I increase the premiums, then I lose customers compared to companies that say, "I stay out of all conflicts, uh, and therefore offer you lower premiums." Furthermore, not all risks are insurable. Um, for example, is it possible to insure oneself against, let's say, the risk of committing suicide tomorrow? The answer is, no, an insurance company will not do that. Is it possible to insure oneself against setting fire to one's own house? Um, that's not possible either. Is it possible to insure against business bankruptcy? That's not possible either. Is it possible to insure oneself against unemployment? That's not possible either. There is something that calls itself that, but it has nothing to do with it. You can only insure yourself against events over which you have no control. Anything that you can control yourself falls under your own responsibility. For this reason, insurers, for example, will refuse to help them if they have provoked conflicts. That means no insurer will say, "I will insure you in every case if someone attacks you," but rather they will say, "I will only insure you if someone attacks you unprovoked." However, if they have previously committed a provocation and there is a retaliatory measure, we do not insure them against such types of risks. This means that every insurer will insist that policyholders behave in a civilized manner and comply with the rules. Uh, otherwise there is no insurance, uh [snorting] there is no insurance coverage. Um, for the same reason, insurers will also insist that they do not take the law into their own hands . Um, vigilantism, even if it is justified, i.e., in the case where one is attacked and simply defends oneself. Well, vigilantism carries the risk of retaliation and the creation of uncertainty . Um, and since all of this is costly, insurers will insist that in such cases [snorting] one submits to regulated, orderly procedures that determine who is right, who is wrong, and so on. Therefore, vigilante justice practically never occurs in such cases anymore. Eventually, insurance companies will no longer prosecute victimless crimes. Currently, endless sums of money are being spent by all states to prosecute crimes for which there are actually no victims. These are things like prostitution, uh, drugs, drug use, uh, luck, gambling, and so on. All of these things are things that are voluntarily agreed upon between adults. Um, there is no victim. If there are victims, that 's a different matter; then it's just ordinary crime. But there are a multitude of things that are currently being prosecuted, for which vast amounts of money are spent, where there are no victims whatsoever. Now you might wonder , would an insurance company insure something like that? First, they must collect a huge, huge amount more in bonuses . And who would be willing to pay such increased premiums for something they are not affected by at all? That means victimless crimes would revert to what they are. These may be private sins, uh, these may be people who get involved in things one doesn't want to have anything to do with. Since they do not affect one's own person or property, one would not insure against them. Um, to come back to the problem of armament, already emphasized [snorting] why states disarm their populations. What would insurance companies do? Imagine you go to an insurance company and they say, "I will only insure you on the condition that you first hand over all hammers, all nails, all knives, uh, all firearms to me ." [snorting] Um, you don't need to be inventive there either. You would immediately know that something was wrong with this insurance company. On the contrary, insurance companies would encourage that. That reduces the risk. They would offer special discounted premiums if you can prove that you are experienced in handling handguns. Just like you get a reduction in insurance premiums if you say, "I have a safe at home and all my valuables are always locked in the safe ." Um, insurance would actually contribute to the population being armed, whereas currently the exact opposite is true. And finally, a system of competing security producers also has a twofold effect on the [snorting] content of the law. On the one hand, this allows for greater variability in the law, and on the other hand, it leads to a harmonization of the law. And I'll explain that briefly. Insurance companies can now say, for example, I offer Mosaic law , I offer atheist law, I offer Islamic law, uh, I offer canon law. And then people can decide. As a Catholic, I submit to canon law. As a Jew, I am subject to the Mosaic Law and so on. Then, of course, the problem arises: what happens if there is a conflict between people who are insured by two different insurance companies? What happens in that case if you and I are under the same law? That much is clear from the outset . We agreed to that. Um, but as I said, what happens if the insurance companies are of different types? And of course, every client of insurance companies knows that such cases can occur, and everyone will naturally be careful to ensure that their own insurance company has also made provisions for such situations in its contracts. What happens in such cases? And also, what happens in cases where I, as the policyholder, have a conflict with my insurance company? And there is only one solution. If both insurers reach the same conclusion, there is no problem, just as is the case now. Um, but if they don't reach the same verdict, or if I have a complaint against my own insurance company, then each insurance company will provide for this in its contract with its client. Then an independent, simply independent, arbitration panel is involved. If there's no insurance history, then I decide, or someone else decides, then I decide. Every client knows that this can't work. It can only work if there is now an independent arbitration organization. And there is n't just one of these independent arbitration organizations. There are competing, simpler organizations to which one should then turn . And this simple organization, which also competes with each other, ensures that there is something like a harmonization of law, that a universal law emerges, namely precisely in those cases where, I don't know, a Jew has a dispute with a Christian or a Muslim has a dispute with a Jew. In that case, there are no Jewish rights and no Muslim rights; it must be an international law. Um, something like that does exist , if you look at international business, i.e., business between Swiss and Germans, Austrians, Americans, whatever, [ahem] there is no superstate. Uh, they're looking at the tripoint near Basel. There they have French people, there they have Germans, there they have Swiss people. Are there more conflicts between these people , let's say, than between the people of Zurich and Bern? Uh, I've never heard of that before. Um, it seems to me that there is just as much or as little conflict between people who are on this side of the border and those on the other side, as there is between people who are inside a territory. And what do you do in such cases, when these people have conflicts? Yes, people also go to arbitration organizations, and in international business transactions it is quite common for companies to engage with arbitration organizations, and if they do not submit to this simple ruling, they are finished in business. You don't do business with people like that anymore . Uh, well, in international business transactions we already have something similar to what I would develop in a private law company . From the conflicts of individuals, which are handled by insurance companies , competing simple organizations then form, and they make judgments according to a universal law, which gradually emerges in legal transactions . Um, and if these mediators fail, that is, if they come out with judgments saying things like, " This is outrageous, how can anyone do such a thing, how can anyone make such a judgment," then you can be sure that these mediators will not be used again in the next case . And what can you do in such a situation if you feel that the verdict that has been handed down is a huge outrage? Then you can't do anything at all. Can they go back to an authority that is itself part of the organization that was responsible for these outrageous rulings? Okay, so with that I'd like to conclude. Uh, as I said, if you want to read up on it a bit, my little booklet is here. I hope, um, that this was at least somewhat stimulating and thought-provoking. That's what this academy is for, [snorting] so that we can think together and they might hear something that might seem strange to them at first. But I am confident that you have realized that what I have presented here is not entirely ill-conceived . Thank you very much.