Free Nation Foundation Working Paper, December 1994

Win-Win Society is Possible

by Richard O. Hammer

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I have been piecing together my view of the human society in which I would like to live. That view, in one sentence, is:

Human society, happy and successful, can be built almost entirely with voluntary, win-win interactions.

I have thought that this view, while new for me, must have been seen by the great leaders of libertarian thought; it must have given them a foundation upon which they expounded. But I cannot think of a source which succinctly describes the view I tell here. And, in my discussions with libertarian friends I get the impression that not many think in a way that shows that they know this view. So here I will try to describe it.

My view rests on practicality as opposed to morality or rights. I use economic ideas to argue that the win-win society can succeed. The theory requires maximal extension of private property rights; publicly owned spaces must be minimized. As I understand this theory, private property rights must extend to include all things which have enough value to humans to reward the effort of defining and policing those rights.

Following the work plan of the Free Nation Foundation, I write here to an audience which I assume to be already libertarian. I focus on ideas which might be new to some libertarians, and omit arguments which I assume libertarians already know. My aim in doing this is to help empower the libertarian movement, by building its strength from within.

In the following four sections of this paper I will:

    define what I mean by voluntary, win-win, interaction.

    explain why I think it is possible that society could be composed entirely of win-win interactions.

    outline some of the advantages that I think should accrue to society composed this way.

    consider objections to this theory.

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A voluntary, win-win, interaction between people exists when each individual participant to the interaction chooses, of his own free will, to engage in the interaction.


Now I want to make several points to help complete the concept.

Note that this definition includes all human intercourse. It includes an exchange of smiles as well as an exchange of goods.

In this scheme the individual participant in an interaction decides what constitutes winning. People outside the interaction who believe that they know better than one of the participants what is good for that participant may attempt to influence the participant, but only through voluntary means. Voluntary means include persuasion, perquisites, and ostracism.

An interaction normally offers a bundle of things which the participant must accept or reject as a bundle: A candy bar comes with a wrapper; a friend comes with a wart. What matters is that the participant chooses the package.

Generally there is no guarantee that an expected win, which has induced a participant to enter an interaction, will actually materialize. Of course a guarantee may exist if it is stated as a term of the interaction, or if it is mutually understood to exist; but this is a separate issue.

The lack of a guarantee does not condone fraud. Conscious misrepresentation of facts by a participant in a transaction violates the voluntary condition of the transaction. (A victim of fraud finds himself in a transaction which he did not enter voluntarily.)

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In this section I argue that three critical human needs, those for security, material wants, and expression of compassion, can find satisfaction in win-win society.


3.1.1 History provides numerous examples.

Most of us have grown up in a country where the government purported to supply most of our needs for security from aggression or theft. As a natural consequence of this enculturation, we find it difficult to imagine that private institutions could police, judge or enforce to our satisfaction. But, for libertarians predisposed to reduce the role of government, brief study of the history of law quickly dissolves this tie upon the imagination.

This history provides numerous accounts of sponantaneously-organized institutions of police, courts, and means of enforcement. Where the role of providing security has not been usurped by the state people have seen their need and formed institutions to satisfy it. The common law provides one example that may be familiar to readers; this body of law grew up among people who needed law, without aid or taint of state.

For readers who doubt this I recommend reading: chapters 2 and 3 of The Enterprise of Law: Justice Without the State, by Bruce Benson; and the several articles on the subject which we have published in Formulations.

3.1.2 Economic reasoning about property rights offers a theoretical basis.

It has been difficult for me to write this section because I keep having new insights as I attempt to write my present understanding. At a future date I may write more on this subject alone. For this paper I will tell the theme in a few sentences, and then give a list of ideas which support the theme.

The theme:

A win-win society will provide security to life and property for economic reasons. Assuming it is true that a scheme of organization which we might call a free market in human behavior will produce more wealth than alternate schemes, then this most productive scheme should be able to invest most in protecting itself. Better defended, it should prevail.

Ideas which support this theme:

    Since conflict over ownership is costly people will avoid it where possible.

    To decide a question of ownership, contestants might be willing to spend a value just short of the value of that ownership. But we should expect a system to evolve which minimizes this counterproductive expenditure.

    Also, assuming that judgements would make aggressors pay the costs of defense incurred by owners, aggressors face an even lower expected value for their aggression.

    Assets will tend to be owned by those people who value their ownership most highly, and who therefore will be willing to invest the most to protect their ownership. Because of differences among people, an asset typically will have greater value to some people than to other people. We should expect voluntary exchange to move ownership of particular assets toward the people who most value that ownership.

    This tends toward a stable state in which few could expect to gain by attacking the ownership of others.

    This reasoning also suggests that individual liberty, that is self ownership, should prevail for economic reasons. Following Hayekian reasoning about optimal use of information that becomes available to an individual, the asset of choice at the individual level (which is liberty) will be most productive to the one best able to use it, that is to the self. In a system of voluntary exchange we should expect ownership of this asset to move toward the self.

    Following this argument slavery should disappear in a system of voluntary exchange. Individuals are worth more to themselves than to others.

    The security and liberty of poor and relatively powerless people should be protected in a win-win society by institutions of risk sharing and selling. Again, the question of who will have power over a poor person should be decided, not so much by the comparative wealth of the contestants, but by comparative advantage in employment of the asset in dispute.

    So long as activities exist which create new wealth we should expect most people to tend to choose these activities. These activities by their nature will find cooperation with other people, and should therefore promise higher expected return than wealth-stealing activities, which by their nature are apt to bring conflict.

    Assuming no government-erected barriers to privatization, a win-win society would offer little public space in which a known aggressor could escape ostracism. We could expect wrongdoers to be penalized, since communication of the grievance of the wronged individual could flow through voluntary relationships to the usual trading partners of the wrongdoers. For more on this topic, see my paper "The Power of Ostracism."

    In the steady state, in a win-win society, aggression against the life or property of another could be expected to succeed only in isolated and difficult-to-predict instances. We can expect owners of property to continually guard against aggression from predictable directions. Aggressors might find opportunities to succeed only with lax owners or in rapidly changing conditions.

    As a final argument for the likelihood that security would prevail in win-win society, I appeal to the libertarian's belief in free markets. Do not free markets function to satisfy our needs? Should not markets find a way to satisfy our need for security in life and property, as surely as markets satisfy our other needs? One who would argue that free markets could not provide security must be saying that there is a clear human need, something for which humans would gladly be willing to pay, which markets would not supply.


3.2.1 Voluntary Human Society Works.

Briefly: Humans can fulfill their needs for material goods in a society composed entirely of voluntary relationships. Individuals can work alone to satisfy their needs. Or they can join other people in trade, or in membership in a family or other supporting community.

3.2.2 Natural Resources are Sufficient.

Some, even perhaps among libertarians, will argue that limits on the availability natural resources must at some point halt the human appetite for material fulfillment. These people might use this argument to bolster their belief that state action must rein in human industry. In rebuttal I might argue that the limit on natural resources is the universe. But this rebuttal wrongly constrains the vision of human potential because it overlooks the greatest human resource, innovation.

Doomsayers assume that innovation will halt: that at some point in time the methods employed by humans will cease to change and flow, and that after that point in time the day of doom for humanity can be calculated based upon the rate of usage of a finite resource. But I do not see any reason to assume that human intelligence will at some point stop inventing new ways to solve problems.

Another way to make this case is to invite the pessimist to look at the history of the human race on this planet. Surely it has always been true, at each stage in time, that the human population was consuming finite resources the depletion of which could be foreseen. Any employment of any finite resource provides soil for growing forecasts of doom. But, continuously stimulated by scarcity, the human race has not diminished toward extinction, but rather has grown dramatically in both numbers and per capita wealth. I see no reason to assume that this growth will stop.

To support this optimism I offer an observation: as technology advances we learn to make what we want from basic raw materials, such as sand and sunlight, and we rely less upon harvests of other life. We do not need to worry that the abundance of human life, either in the number of humans or in the wealth per capita, is limited by the amount of other life which we can harvest. In the appendix, for anyone who may be interested, I offer further argument for this view.


Under the heading of compassion I see two orders of need: first, the need of impaired people; second, the need of capable people to wail, ostensibly on behalf of impaired people.

I have no doubt, and I think most libertarians concur, that the first order needs, the real needs of impaired people, can be filled to my satisfaction in win-win society. I experience strong social motivations. A statement by John Stuart Mill adds to this point,

"The thought that our dead parents or friends would have approved our conduct is a scarcely less powerful motive than the knowledge that our living ones do approve it: ... "
John Stuart Mill essay "The Utility of Religion", quoted in The Foundations of Morality by Henry Hazlitt.

The second order need does require our attention. People acting on this need threaten the liberty we cherish. They threaten liberty when they forget private means and assume that they should express their charitable impulses through government.

But I believe this need can find satisfaction in win-win society. The history of charity in America shows spontaneous growth of innumerable charitableorganizations. People, expressing their need to express charity, form organizations to satisfy this need if none already exist.

On the subject of charity we have published several articles. See FormulationsVol. 1 No. 2.

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Most readers will already believe that a free market economy produces more of what people want than alternate schemes of organization. I emphasize just two points:
    Because property rights in a win-win society will be clear and well protected, a larger proportion of human industry will focus upon creation of new wealth. People will experience incentives to choose activities which create new wealth as opposed to activities which attempt to seize already-existing wealth.

    A win-win society makes more productive use of the information which becomes available to it. As has been argued by others, the power to make decisions will tend to move to those most able to employ relevant information.


In win-win society, because of economic incentives, honesty would emerge as the norm. Partners who exchange honesty in their relationships need to invest less in policing the quality of the information they receive,and therefore have more to invest in productive effort. Complete honesty, typically, will characterize the most mutually-productive relationships.

On the other side of the coin, a win-win society should also supply disincentives for dishonesty. Again, as with violations of property rights, society being an interconnected mesh of voluntary relationships, no state-erected barriers would cut communication of ire through this mesh from dupe to liar. No public spaces would offer refuge to a liar or cheater.

I owe thanks to Philip Jacobson for starting me thinking in this line, as he once taught that it is possible for all parties in a positive-sum game to both win and be honest.


In a win-win society, as compared with the socialistic alternatives, I believe that a larger proportion of the people would feel and display dignity. Dignity can only grow, I believe, from within a person. It rests upon one who knows that he has helped himself. It cannot be given through the beneficence of another.

In the socialistic alternative, in which government sets standards determining who will and who will not receive support, some human ability will inevitably be wasted. Usually those categorized as eligible to receive support will nonetheless possess some few abilities. These individuals will feel best about themselves when they are able to employ their abilities meaningfully. But the act by government, of categorizing, inevitably ignores unique abilities of individual humans.

In win-win society no rigid and demeaning standards would be imposed by the state. Private charities could be expected to have standards, but these standards would flex and evolve to match the needs of both recipients and donors. Any standard which wasted human ability should face competition from another, more suitable standard. Human ability being more completely employed, more members of win-win society would feel dignity.

Now, notice the fundamental design of these two competing schemes of organization, and notice how it seems to predict the psychological state of participants. Win-win society is designed to give expression to pride and industry; socialism is designed to give protection to infirmity. Since I believe that the overwhelming majority of people, 98% or more, have abilities which may be beneficially employed, I assert that it makes sense to adopt the scheme that allows meaningful expression of these abilities, and thereby allows the overwhelming majority to feel dignity.

For those few who are truly incapable of doing anything to benefit themselves or others, I believe that win-win society also offers more dignity than the alternate. Win-win society is honest, offering aid as aid. It does not erect a pretense which can be sensed, even by most of the most helpless.

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5.1.1 But who is in charge? This society will drift aimlessly.

Some people will anxiously want to know where their society is headed. They will feel most comfortable if they believe that society is guided by benevolent control. But of course, with the win-win society I advocate, no one is in command. People will plan as best they can, some will even make businesses of forecasting, but no one can say for sure what will transpire.

Some readers might find reassurance in being reminded that influence abounds in human society. People are always copying each other, copying what they like. While this copying cannot be commanded, it is guided by a hunger which reliably communicates human needs.

Readers who believe that God directs society may also favor voluntary, win-win society. If God expresses his will by speaking directly to the heart each of his followers, then he does not necessarily need the help of politically ambitious people. And if God does happen to want a particular social structure, he can direct its formation by communicating throughhis individual followers.

Other readers may be open to the idea that humanity is guided by a great and benevolent force, but not necessarily by God. The story told in the science fiction novel 2001, A Space Odyssey, by Arthur C. Clarke, made it seem possible to me that an advanced alien civilization may, for some purposes, be indistinguishable from God.

In that story humans encountered a superior civilization which had started just as humans, according to the theory of evolution, had started. But they had started hundreds of millions of years sooner. And during their extra hundreds of millions of years they had been puttering with their technology. In one stage of advance, being able to copy the programming of their brains into computers, they moved out of their bodies and into machines which need not die. At a later stage, having learned more of matter and energy, they discovered that the essence of their intelligence, merely patterns of energy, could exist and travel without carrying a burden of material. Henceforth they existed only as energy.

In this sequence of technological progress the next step, said the author, was God. Ironically, while my bias leaves me doubting that the Biblical God could perform the miracles of the Bible, I find it easy to believe that an Advanced Civilization could perform such feats. The Advanced Civilization could if it wanted appear before man as God, and we humans would not be smart enough to sort it out.

Human society, whether or not organized in the win-win fashion advocated here, might for all I know exist under the watchful eye of a superior force.

5.1.2 This Places Human Values Above Natural Values.

Some will object that the win-win scheme allows humans to harvest at will from the extra-human environment, without regard for other life or for mother earth. Placing myself temporarily in the mindset of these objectors, I think I can empathize with their reasoning. But I counter with four points.

    It has always been this way. Humans have always taken from nature all that we could successfully employ toward our ends. And so have all other species of life. According to the theory of evolution, the rich, healthy, and varied life which now populates earth, evolved not under the constraining guidance of some environmental protection agency, but rather in headlong lust for life.

    Humans are part of nature, not above it. It seems to me that some who object to the effects of human industry must think that homo sapiens is the ultimate and last achievement of evolution. These seem to think that humans, no longer part of nature, are now in charge of nature. But evolution will continue. I would argue that we humans can be most in tune with natural processes if we view our ambitions as an expression of natural processes.

    In win-win society conservationists who want to preserve nature can do so through voluntary exchanges with other humans. They can buy and set aside parts of nature. Conservationists who act this way recognize that their ambition to preserve nature is a human value, no more and no less.

    I have often been struck that people who would preserve the beauty of the earth, as we happen to find it at present, are quite short sighted. The natural beauty to which preservationists cling was created in a series of disruptions none of which, it seems to me, would have been approved by preservationists. Imagine this:

    Before the Rocky Mountains formed, there were only broad, sweeping plateaus. There were thousands of miles of grasses and wildflowers providing grazing for deer and antelope. If some capitalist developer appeared on this scene and proposed to manipulate nature so to produce mountains, which the developer billed as "a scenic playground offering lots of jobs", do you think an agency charged with the preserving the beauty of nature would have approved the plan?

    The human sentiment for preservation clings to what it knows. Beauty, a human judgment, may not exist at all in nature, but may merely show that humans are programmed to sort what they see around them into categories, from beautiful to ugly.



5.2.1 The Evident Herd Instinct of People

What makes people march off, in large groups, following a leader such as Hitler? I do not have a satisfactory hypothesis to explain this. While this remains unanswered I must continue to question how win-win society could coexist with certain of the dark forces that evidently stir within humanity.

We people, it seems, are social animals. Speaking for myself, I observe that my assumptions, my very words, tend to focus not on myself alone but on a larger group. In section 3.1 of this paper, for instance, I find myself trying to convince the reader (both of us supposedly libertarian), by arguing about a good which will accrue, not to an individual, but to society.

The win-win society, of which I am trying to complete the vision, is built of numerous little building blocks, each of which is a win-win interaction between two self-interested individuals. So the building blocks had better serve the purpose I intend, or the whole vision may suffer. Can people actually learn, for the sake of their society, to mind their own business?

Does belief in coercion result from nature or from nurture? Such an overwhelming majority of people believe in coercion that I have to question whether we libertarians might be fighting something inherent in humanity. If so, success in our fight may await discovery of some more powerful tools.

5.2.2 Is Liberty Sweet or Sour?

Freedom can oppress and render disagreeable a person who does not want to do the homework which it assigns - to decide for oneself one's very reasons for living. Dostoevsky drives this point home in his essay "The Grand Inquisitor" which appears in The Brothers Karamazov. So tome it is an open question of whether enough humans can handle liberty, enough that is to successfully constitute a win-win society.

5.2.3 Many People may Harbor Hatred for Humanity.

In section 3.3, when I argued that the human need to express compassion could be fulfilled in win-win society, I took at face value the expression of caring which emanates endlessly from the left. But this expression might be motivated by something else.

A person who advocates taking from Peter to give to Paul might be motivated by honest desire to help Paul - but might also be motivated by desire to cut down Peter. Win-win society could, I believe, comfortably accommodate the former, positive motive, but I have not considered how win-win society could withstand the latter motive, if indeed this latter motive drives much of humanity.

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This paper has tried to bring a libertarian reader closer to believing that win-win society can succeed. Being more productive, win-win society should be able to prevail over statist alternatives. And we need not worry that environmental limitations will constrain the success of humanity. The limits which daunt our movement are psychological and sociological.

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1) Our Employment of Resources Evolves Toward More Primitive and More Abundant Resources.

I think I see a direction in the history of human employment of resources. In a primitive state humans satisfy their needs by taking from each other, or by taking from other life. In the more advanced state humans satisfy their needs by drawing from lifeless nature. Consider three examples.

2) The Quantity of Life is Not Limited.

Accepting the evolutionary account of the history of life on earth, I believe the total mass of living material has been increasing, and will probably continue to increase. At the outset, billions of years ago, the total mass of life consisted of a few molecules in oceans. At present the total mass surely exceeds that. Life, it seems, creates more of itself by mixing energy and lifeless raw materials. I see no reason why this creation of more life will not continue.

Probably the environment limits this process. Limits may exist in the size of the universe and the laws of thermodynamics. But, if these be the limits, prudence requires - not that we heed these limits - but rather that we should ignore these limits for the next millennium.

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