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.

Earlier, I wrote about how  the term economies of scale is really a euphemism for special privileges and immunities.  I’d like to continue that train of thought, in a tangential way, here.

So, why have we become familiar with multinationals that dwarf the economies of many lesser-developed nations?  Governmens have a lot to do with it.  Most of the corporations with which we have become familiar are propped up in one or more ways by a government, either oppressing us, or poor brown people in another country whose plight most people can easily ignore.  It’s because of a million distortions, and exploitations, that many people wrongly believe that economies of scale can only be had by the biggest of the big.  They fail to account for that which is not seen.

Many Capitalists like to overemphasize the gains from trade, while dismissing the positive harm caused by their state-enforced cartels.

Realistically, it should be possible for people to collaborate effectively and acheive enough economies of scale to profit from the division of labor. Maybe a small group isn’t “efficient” in the traditional sense. I’ll grant that this is probably true. But what’s also true, is that a small group of people producing primarily for their own consumption in general is also never responsible for the evils attributed to what most people understand to be Capitalism.

Would a small group of people be able to churn out automobiles by the thousands? Maybe not, but maybe they don’t need a thousand gas-guzzling automobiles.  The only reason we pay tens of thousands of dollars a year for them now, is so we can use them to drive to jobs we probably don’t really enjoy, in order to make enough money to pay our taxes and have a little bit left over to buy shit that we don’t need. Almost all of our productivity is wasted by the State.

Someone at work sent an e-mail, she’s part of a local produce co-operative or something. She was offering fresh, organic produce on a “take as much as you want, and pay as much as you feel is appropriate” basis.  It doesn’t take a thousand of these people in a vertically integrated supply chain with state-of-the-art logistics management to accommodate their consumption.  Is she breaking the law?  I don’t know.  Sometimes it’s illegal to barter, and of course it’s always illegal not to report income.

We can take another example from the black-market, being a close approximation of agorism insofar as it exists side-by-side with, but outside the established rule of law. The biggest difference between a black marketeer and an agorist is ideological in nature.  But that’s another discussion entirely.

Probably 100 million people smoked some amount of pot last year. Less than a million of them got busted, and most of them only for mere possession.  Your chances of getting caught are less than 1%, and this takes into account the substantial risk involved with buying dope from people you don’t really know, and can’t presume to trust.  It should be possible for an individual, a small group of individuals, to put together a relatively sophisticated grow-operation to supply themselves with “illegal” drugs, provided the understand the nature of their precarious situation. It’s about managing risk.That’s where most people go wrong.

Risk on the black market is a transactional function. We can model risk simply as a function of the frequency and severity of transactions.  If you’re buying small amounts of illegal drugs very frequently, you might very well be taking on as much risk (or more) as someone else who buys in bulk, but less frequently.  The most effective way to mitigate risk is to stop importing other people’s exposures.

Most people who get in trouble because of drug laws or other prohibitions are caught because they’ve left their safety zone; and they’re operating on a scale the risks of which they’re not prepared to internalize.  They are either buying from someone who can’t manage risk, or they are incapable of managing their own, and they’re selling to anyone with a dime.

What I’m not saying is that in order to circumvent the system, you have to start peddling crystal meth. I’m also not saying that you need to become self-reliant. There’s no need to go stone-age.  What I am saying is that markets rule, and a community of people who know and trust one another may be able to provide a great many of life’s necessities.  What you need is a reliable network of known and trustworthy individuals, with whom to exchange value for value.

It doesn’t matter if you grow your own dope, or bake your own bread, or raise your own vegetables, for your own consumption, it is almost impossible to get caught as long as you don’t lose sight of the risks involved and how best to manage them. If you start selling it to acquaintances you hardly know, or strangers altogether, in order to profit or if you start buying it from those people when your irrigation system springs a leak and your crop fails, you’re significantly increasing your transactional risk exposure.

The fact that markets rule is handily proven by the existence of black markets which are able to circumvent (and in some cases, exploit) the government. The problem is risk. A drug-smuggler and a raw-milk purveyor face very similar risks.