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Agorism and Risk Management

August 11th, 2008

In “Small Scale Production and Risk Management,” I introduced the discussion of local co-operatives producing things in a black-market sense. Then I drew a hasty comparison to the current black market and said that as long as the black marketeer keeps risk in mind, it’s almost impossible to get caught. The same is true for agorism, in general, at least initially.

Some people (e.g., on this Mises.org thread) point to a lack of (or a perceived lack of) agorist activity, and claim that agorism has failed. I’m not sure that’s giving full credit where it’s due. Political libertarianism has been around at least 200 years longer than agorist theory, and it hasn’t fared any better. But that’s an entirely different discussion altogether.

In one way or another, most people trading on a black market are working with a network of people who they have no good reason to trust, and about whom they know relatively nothing. Every transaction is an exposure to risk. There is a substantial, although I do not believe an uninsurable amount of risk involved in such propositions. That risk exists is not the problem. Managing that risk is the biggest problem agorists face.

The reason that traditional black market operations tend to fail is that they lose sight of the risk involved in circumventing the State. Traditional black market enterprises fail because they endeavor to be too large. A Tony Soprano, an Al Capone, a Scarface like character, attracts a lot of attention, financially and otherwise. A portion of their revenues are expended on bribing customs officers, police officers, and other officials. These are problems that scale with the growth of their industries – as a small operation outgrows the local sheriff’s office, it needs to bribe the State police, or the FBI, or the customs bureau. It needs to bribe judges, to intimidate snitches, to kill witnesses, and so on. None of these things are free, and all of them incur additional risks of escalating perils.

Profitable economies of scale are reserved for the State’s friends and cronies.  Traditional black market enterprises often attempt to operate on this sort of scale, which is a risk they’re not prepared to assume. These organizations are subjected to increasing scrutiny, as their scope eventually draws unwanted attention; the government hates competition.

An agorist network, like a peer-to-peer filesharing system, operates on an entirely different scale. Because they are necessarily smaller and more social in nature, a preponderance of agorist activity, at some point ought to result in an exponential growth in the number of trading groups and networks. Each of these networks is likely to be small enough to individually warrant little or no attention from pre-occupied authorities.

Individual workers are not benefitting from economies of scale, because of this, an agorist network doesn’t need to be anywhere near as “productive” as a state-sanctioned corporation.

By the time the State understands and accepts the problem, it will have already gone viral, and it will be probably be too late to prevent the proliferation of agorist praxis. Until that point, the State is looking around and saying, “I don’t see any agorism, therefore it either doesn’t exist or it must be a failure.”

Whether agorism turns out to be a failure, I believe, remains to be seen. However, if agorists can succeed in risk management, where all others have failed, the prospects are promising.

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  • Mike says on: August 14, 2008 at 12:56 pm

     

    Selling: Slovak to English translation, blogosphere polemic-writing, hackish sloppy coding, book-reading, html-tweaking, css-bashing, whiskey-drinking, English text correction/editing and bloviating services. Specie, payment in kind and fiat gladly accepted.

no third solution

Blogging about liberty, anarchy, economics and politics