This article was published in the Summer 1999 issue of Formulations
by the Free Nation Foundation

Removing the Market for Coercion

by Jack W. Coxe

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The Proceedure
How the Proceedure Would Affect the Personal Profit Motive of Every Person
The Basic Principle
Establishing the System

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In a free market, exchanges are made voluntarily, which means that all people concerned consider the exchanges to be profitable. But if coercion is in any way involved, then someone profits at the expense of whoever gets coerced. And so, the designers of a free nation need to find some way to free the market by removing the option to use coercion to gain profits.

It might be tempting to assume that the free market would supply the demand for defense against aggressive acts of coercion, and to leave it at that. But what about the market for aggressive coercion?

For example, suppose an ambitious businessman with a sizable amount of money hired the most powerful guards he could find, to defend himself against aggressive acts of coercion. Wouldn't he be tempted to use the coercive abilities of the guards to aggressively increase his wealth?

He might be stopped by a call for arbitration, but if there is a way for him to pressure the arbiters he might hire an army able to ignore arbitration and assert his organization as a coercive government. And since coercion would be their business, wouldn't the guards be tempted to use their abilities this way? Couldn't such an organization gain huge profits for all of its members?

Even if most people retained their ethics and morals, it would only take one such renegade to motivate many or most people to compound the problem by demanding some kind of elective government, hoping to overpower the use of coercion for personal profit. The distinction between aggression and self-defense can become very debatable. It is my opinion that the governments that we have now are basically highly evolved markets for coercion in many disguises. "Justice" is for sale to the highest bidder or to the most influential political organization.

I need to qualify this by acknowledging that this motive to manipulate coercion for profit is to some degree held in check by the natural motive for people to try to do what is right. And I predict that our natural motive to do what is right will eventually find a way to remove coercion from the market.

In this article I will suggest an arbitration procedure which I believe would free the market by removing coercion from the market and replacing it with a common ingredient in the personal profit motive of every person. The common ingredient would be the motive to estimate as accurately as possible an impersonal but universally agreeable standard of fairness and reason, and to act accordingly.

This standard of fairness which everyone would be estimating would literally be agreeable to everyone—accommodating any way of life that did not infringe on the freedom of another way of life. Even if this perfectly agreeable standard didn't exist, the motive resulting from this procedure would be for everyone to estimate or approximate it as closely as possible.

I will describe the procedure and then show how it would affect the personal profit motive of every person. Then I will summarize the basic principle of the procedure and ask for comments on the principle and on the possibilities of organizing the establishment of the procedure.

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The Procedure

As I describe the procedure, please bear in mind that the obvious questions, which you will have while you read the description, do have answers which will be explained or implied by what follows.

1. Anyone could call for arbitration to settle any dispute with anyone else. No money would be needed—just a simple call to the police.

2. For each call for arbitration, a panel of 7 arbiters would be chosen completely at random—no screening.

3. The arbiters would have the recognized authority to settle the case at their own discretion, coercively binding on a maximum of 50 people of their choosing, for a period of 6 months. This authority would include the authority to coercively penalize any attempt to pressure the arbiters, to penalize any abuse of police force, and to penalize unreasonable calls for arbitration—all according to the discretion of the arbiters.

4. Anyone could observe and subsequently call for a new random arbitration to settle any allegation that the former arbiters were abusive or deficient in exercise of their temporary authority. This would not be an appeal—the decision of the former arbiters would stand—but the former arbiters would become subject to the new panel of arbiters.

5. A panel of arbiters would have 7 days to make their decision. Otherwise, a new panel of arbiters would be randomly chosen.

6. All details about the system would be decided by voluntary agreement with random arbitration as a last resort.

7. The purpose of the system would be to motivate people NOT to use it, but to seek voluntary agreement instead. This seeking would be the source of justice and fairness.

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How the Procedure Would Affect the Personal Profit Motive of Every Person

If you were a randomly chosen arbiter, how could you avoid being subsequently called to a new arbitration for alleged abuse of your temporary authority? Interested people would have reason to inform you that anyone on any side of the issue could accuse you, and that many would have good reason to scrutinize your conduct as an arbiter.

Would you as an arbiter allow yourself to be bribed or threatened? To do so would just about guarantee that someone would call you to a new arbitration for abuse of your authority. Would you imagine yourself to be qualified? Wouldn't you be realistic enough to know that you need expert advice on how to use your recognized authority to coercively penalize anyone who tried to pressure you, and on how to settle your case fairly? Knowing that you would be watched from all sides, you would need to walk the straight and narrow—using all necessary coercive authority but not an ounce more.

Your basic need would be to try to conduct your case in such a way that any subsequent random selection of arbiters could find no fault with your conduct. If called, the subsequent panel of arbiters would have the same motive, since they too could subsequently be called to another arbitration by random arbiters who would in turn have the same motive—and so on, having the effect that all panels of arbiters would ultimately need to estimate what an impersonal but universally agreeable standard of reason and fairness would say about their case.

If you were an expert who was asked for advice by a panel of arbiters, how would you yourself avoid being called to a new random arbitration for offering corrupt advice? Isn't it likely that other experts would be watching you? Wouldn't you bend over backwards to give the most honest and fair advice you could? Again, you would need to estimate what any random selection of people (who themselves would be looking out for their own best interests) would think of your advice. And again you would end up estimating the impersonal but mutually agreeable standard of fairness and reason.

Would you as an expert dare to offer advice that would rob anyone of any part of his natural wage? Would you dare to offer advice that would be detrimental to a minority or to a disabled person, or to a victim of unfortunate circumstances, or to the environment? To offer such advice would nearly guarantee that someone would call you to a new random arbitration. You would then have to try to convince that random selection of arbiters that you did nothing wrong. And those arbiters would be on the same spot. If they dared to approve of your corrupt advice, they in turn would have to try to convince another random selection of arbiters that they did not abuse their temporary authority. And so on.

If you were just going about whatever your business is, and you were offended by someone, how would you decide whether it would be worth it for you to call for random arbitration? Again, wouldn't you need to estimate the best you could what any random selection would think of your complaint? Knowing that the arbiters would most likely seek expert advice, wouldn't it make more sense for you to skip the arbiters and seek advice yourself? And knowing that the experts, for their own sakes, will try their best to estimate the mutually agreeable standard of reason and fairness, wouldn't it make more sense for you to skip the experts and estimate the standard yourself?

If someone else was offended by something you did and threatened to call you to a random arbitration, what would be in your best interest? Again, wouldn't you need to estimate what any random selection of people would think of the problem? Wouldn't you and your adversary be better off if you try to reason with each other and reach agreement on the basis of the agreeable standard of reason and fairness that everyone would be trying to estimate? If you couldn't reach agreement, wouldn't your next choice be to seek expert advice? A call for random arbitration would be your last choice, and experience and education would teach you how to avoid it.

And finally, as you contemplate your routines of life, how would you go about dealing with other people in such a way that you know and can demonstrate that you are doing what any random selection would expect you to do according to the standard of reason and fairness? Wouldn't you seek expert guidelines—proven effective at harmonizing the routines of the lives of people? Wouldn't you be willing to pay for the guidelines?

Wouldn't there most likely be a demand for "proposal planning systems", enabling people with ideas to make their proposals, and for everyone else to pledge their support for the plans of their choice? All the details of mutual cooperation, that are now monopolized by power-struggling government officials, could be handled voluntarily by this provision for inviting proposals and for counting pledges of support for them. In the context of our monopolistic governmental system, there might not be much of a motive to participate in such proposal planning systems. But in a random arbiter system, they would be the logical means for organization. And if you think about it, how could anyone really know how to avoid random arbitrations without the guidance of organizations? The real motives would be there.

We have seen the economic effect of the personal profit motive. If a profit can be made by building houses, cars, computers, or whatever, people are likely to organize to get the job done. Likewise, as long as a profit can be made by manipulating our agreed-on procedure to coerce, then there will always be those who will try—struggling with each other at the expense of all who would rather just live and let live. But if the common motive is to estimate the perfectly agreeable standard of fairness, imagine what could be accomplished with all motives in harmony with each other!

Any selection that is not random is a selection that could be manipulated. And whatever can be manipulated, could be used for personal profit.

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The Basic Principle

What I propose is a principle, which I will call "the principle of natural government". I ask for comments on the principle and suggestions on how to organize the practical application of it.

This is the principle:

Coercion could be removed from the market by building a prevailing consensus that no act of coercion would be legal except as directed by randomly chosen arbiters, who would be limited only by the possibility of being subsequently called for arbitration by another random selection of arbiters, who in turn would be limited only by the possibility of being subsequently called for arbitration by another random selection of arbiters, and so on—effectively motivating everyone to estimate as accurately as possible the universally agreeable standard of fairness, and to act accordingly. (to top of page)

Establishing the System

Once established, the system would be self-organizing—that is, the motives would be there for people with ideas for organization to make their proposals, and the motives would be there for everyone else to respond with pledges of support for the plans of their choice. Agreeable plans for organization would be a high priority for everyone, as they seek to avoid random arbitration. Random arbitration as the last resort, final authority for all unresolved disputes, would provide the motive for everyone to do whatever is necessary to learn how to cooperate with each other.

But until the system is initiated, action is needed from self-motivated people who understand the principle and are willing and able to spread the understanding, and to formulate plans for establishing the procedure.

The first step would be to find out how agreeable this basic principle is. I would appreciate comments on this.

If the principle is agreeable, then we might request proposals on how to organize the establishment of the procedure.

This idea is explained more completely at <>, which welcomes comments, and includes the option for people to send a notice of agreement that the procedure should be investigated, tried, and tested. D

Jack Coxe studied government and economics at Sacramento State College. He was drafted into the Army in 1969, and while in Vietnam the idea of random selection of arbiters came to him as the only way to motivate the effort to agree with adversaries instead of trying to overpower them. The idea wouldn't let go of him, and he has been working on it since that time. He can be reached at: <>

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