On Libertarianism and Statecraft, Part IX: Trust

By Insula Qui

Author’s note: The main themes of this series are further expounded upon in my book Anarcho-Monarchism, which you can buy here.

Introduction

The first eight parts of this series demonstrated that libertarian governance is both necessary and desirable, explained how it ought to be structured, and showed that statism is inferior to libertarian statecraft. The next task, which will occupy the remainder of this series, is to explore the nature of wise statecraft. The principles laid out here will apply to all statecraft, whether done on an individual, collective, or even statist level. However, these principles of statecraft use libertarianism in a way that is not blindly dismissive of statecraft.

This can be thought of as the libertarian theory of efficient property management. Of course, if profit maximization would impose a cost on some person, that cost should eventually be internalized. If anyone else has to subsidize personal profit maximization, then social profit is not maximized. By applying libertarian theory, we have already eliminated the main concern that profit maximization will be anti-social. Imposing costs is contradictory to libertarianism, thus libertarianism can never consistently be anti-social.

The Good Effects

There are four major reasons why social trust is desirable. First, social trust strengthens property rights as property-oriented norms develop. Second, trust funds social activity and community spaces. The only way property can be managed in the social realm is if the managers have trust with the community. Without trust, any non-profit endeavor is made nearly impossible and the optimal size of all organization is greatly reduced. All social and community interaction is not quantifiable in material terms, as such it cannot simply use the logic of the marketplace for material goods. Third, trust lowers transaction costs, as transactions attain a less stringent necessity for verification while scams and fraudulence become less of a concern. Fourth, trust inherently creates opportunity as high-trust social networks lend themselves to an easier process of allocating resources. These features of trust are essential for creating and maintaining a society that can actually function and compete with other societies, but this warrants further explanation. It is imperative to establish how societies can create trust and then profit from it.

Property Rights

Within a society that has higher levels of trust, people also have a higher degree of social responsibility. Social trust means that each person can be relied on and all people are expected to function within society, with minimal exceptions. When people are expected to refrain from value-destructive behavior, they are expected to refrain from lessening the value of all property, regardless of who owns it.

The most egregious violation of the principle of social responsibility is the violation of property rights, especially the ultimate property right within one's own body. When property rights are threatened, the necessary result is a general reduction in profits because theft is a complete social loss. There are two mechanisms by which social trust will necessarily reduce theft. First, when all people are expected to take care of themselves and social attitudes are conducive to this, there will be a significant reduction in people who are relegated to poverty and degenerate behavior. When people retain their cognitive abilities and have no need to steal, they rarely do so. Second, when people trust each other, they will reciprocate property rights. This is a main distinction between property rights in first-world versus third-world countries. In many third-world countries, property itself is met with envy. Low social trust leads people to believe that prosperity is built from poverty, that property is only held at the expense of everyone else. This lack of trust and reciprocity results in property being under constant attack. This reduces profits and creates general social stagnation.

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