This article is not for pacifists. I do have great respect for pacifists and would enjoy reading articles similar to this one outlining strategies and tactics for anarchist pacifist defense agencies. Sadly, I’ve come across very few, if any, that employed outside of the cage thinking. Maybe I’ll write one myself one of these days. Also, this article is not concerned about the basics of why private defense agencies are needed or why they would not turn into governments themselves. This article is strictly about the nuts and bolts and assumes that the reader is already on board with the philosophy. Furthermore, it must be understood that the economics I present below absolutely require Bitcoin as the medium of exchange. The elaborate nature of underground defense agencies precludes the use of corporate bank accounts or easily seizable stockpiles of precious metals or cash. Let’s get started.
To begin, I’d like you to use your imagination. I’d like you to pretend that you are about to grow a sizable marijuana garden. Hundreds of plants on your own property, not hidden in the slightest. You’re ready to start making a lot of money and you’re willing to openly break the law to do it. You estimate a gross annual income of $5 million. The costs to grow, cure, and trim your marijuana garden necessary for bulk sales is only $100,000. That’s a $4.9 million net profit. But you’re not stupid. You know you’re going to need a lot of security to pull this off. In fact, you’d be perfectly happy to make $400,000 annually, leaving you with $4.5 million that you can allot towards security. So, how does this security work? What does it look like? That’s what this article is about. Maybe by releasing this into our collective consciousness we’ll begin to see something like this sooner rather than later.
The numbers I’m using for this article are completely arbitrary, as is the scenario. The business could be anything such as an underground machine shop, a cattle ranch, a sweatshop, you name it.
To get back to my example, I’ve got a large garden and ideally I’d have ten men with high-powered automatic rifles, bullet proof vests, and Kevlar helmets patrolling the perimeter of my garden at all times. In order to cover all shifts, including weekends and holidays, we’re probably looking at fifty full-time employees. Let’s pay them $50,000 each annually. That’s $2.5 million. (I know what you’re thinking at this point. I’ll address that in a minute. Stay with me.)
So, we’ve got $2 million left to spend on security annually. We can’t just have ten men patrolling the property without any support. They’d be sitting ducks. We need spies. Lots of spies. Spies are a lot less expensive, though. All they do is sit a distance from the airports, police stations, etc. with a pair of binoculars and radio and report any build up of police presence. Okay, it’s a little more complicated than that. But nothing inherently dangerous like having to get into a battle with the state. Let’s pay them $20,000 annually for full-time work. We’ll need them ’round the clock as well. Let’s say fifty men in total to do the job. There goes another million.
We’ve got $1 million left. Where can that go? How about reservists? If the state, or any other criminal organization, ever does attempt an attack we’re going to need backup. But backup isn’t working full-time. They’re simply on-call. Let’s get one hundred men ready to throw on their body armor and arrive at your garden ready to start blasting away intruders if they ever get the call. Of course, these reservists are going to be expensive. You might not pay them any other day of the year, but the one day you do need them they’re guaranteed to be fighting for you. They each cost $10,000 per day. There’s goes our $4.5 million dollars annually for security. We’ve now got a profitable business with very decent security. Granted, the state could drop a large warhead on your property, but doing so would likely piss off your neighbors and severely hurt the state’s legitimacy, causing further disobedience. Any other ground attack would only come with severe loss of life on the side of the police. And frankly, I don’t really expect those cowards to risk their lives to stop a marijuana garden. They may love the war on drugs when nobody is shooting back, but not-so-much against a well organized defense agency populated by people willing to risk their lives.
And that brings me back to a criticism you likely had earlier. Who in their right minds would risk death for a lousy $50,000 a year, or $10,000 in a day? This is where the thought experiment gets fun.
The defense agency I envision does not rely on altruism. Under no circumstances do I expect anywhere near enough people willing to risk their lives for somebody else’s business. Sure, there will always be a very small number of militia members looking for a standoff. But the example I’ve outlined above needs to be able to be replicated not just in a few locations, but globally and simultaneously.
So, if not for altruism, how will a gardener get individuals to protect his crop? Let’s start with more money. $50,000 annually might be good money to stand around a perimeter all day, but does it offset the risks of getting thrown in jail or getting killed? Probably not for most people. But what if there were a gigantic insurance policy on your life? Imagine if getting killed or seriously injured on the job meant a $1 million payout to you or your designated family member(s). Also imagine earning $100,000 annually for every year spent in prison. You could walk out of prison a multi-millionaire for a twenty year prison sentence. Now we’re talking about some real incentive. Good pay for an easy job that might never result in a battle with the state, and a hefty insurance policy in case it does.
Okay, you’re probably wondering where all that money comes from for the insurance policy. Assuming an insurance liability of roughly $110 million, that being $1 million for every one of the one hundred ten men willing to battle the state to defend your property, unless the gardener is already well off financially, he’s going to be paying premiums. Now maybe $350,000 annually in premiums is paid leaving him with a net of $50,000 annually. It’s important to note that the premiums the proprietor pays depends on the liability and risk. If the business is simply knitting grey market sweaters in the comfort of your own home, you likely won’t need the ten armed, full-time guards. Also, the likelihood of your house being raided for illegal sweaters is significantly reduced. So, too, would be the insurance premiums.
Now let’s talk about desertion. Surely, the gardener in our example would not want to pay large annual salaries to guards who are going to surrender at first site of the police. That would defeat the entire purpose. There must be some penalty for desertion. And this is the beauty of free-market anarchism. We’re finding voluntary, incentive based solutions to problems instead of coercion. The state, when confronted with desertion, resorts to court martial, prison, and historically, even death. What could we do to punish individuals who desert their post when in danger? I believe the punishment would not be some Pollyanna view that shame or a poor work history preventing him from future employment is the right answer. The answer must be financial. The guard must stand to lose a significant chunk of wealth for desertion.
So, how would we do that? Surely we can do better than raiding his home and stealing his house and emptying his pockets. The answer is simple. A requisite for employment as a guard would be a hefty bond. Imagine each potential guard putting up a bond of $500,000 held by a third party, or escrow. If the guard ever deserts his post, the bond will be released by escrow to the gardener, thus offsetting the loss to his business and investment for lack of proper defense. If, however, the guard finishes his employment with the gardener he will be refunded his full bond from escrow in its entirety.
One of the beautiful aspects of bonds is that the larger one’s bond, the greater respect an individual will command in the marketplace. I imagine a fresh, twenty year old guard just getting started would have a very small amount to his name. He might only be able to scrape together a few thousand dollars for a bond. In this case, his employment opportunities would be defending those establishments that require little to no risk of desertion such as a bouncer at a club, or an usher at a movie theater. The pay would be as low as the risk. Over time the young guard would build up his bond, squirreling away a portion of his monthly income. Eventually his bond might be worth tens of thousands of dollars, fetching him more lucrative, and dangerous work if he chose.
One interesting side-effect of the defense market is that older individuals are likely to engage in the most dangerous work. Juxtapose this with state defense agencies, whereby young men fight and die in wars despite having the most amount of life to lose. In the system I’ve outlined, it may very well be individuals in their 60’s and 70’s that stand around the garden with their rifles and body armor. Sure, the state is interested in young, healthy individuals for their war machine, because they are expected to traverse hundreds of miles with heavy loads on their shoulders. But that is strictly an offensive skill. Defending plots of land while sitting, standing, or even laying around truthfully does not require individuals be in the pinnacle of physical fitness. Even terminally ill patients could do that.
As far as bonds and insurance go, these types of intricate models cannot exist in the underground economy without Bitcoin. With cash, desertion doesn’t mean a loss of a bond. It means a mafia with a vendetta to end the deserter’s life. With cash, insurance means paying off the local district attorney and chief of police. With Bitcoin, trustless options exist to store and move large amounts of wealth between any number of parties. Even the idea of a defense company may be outdated with the new idea of decentralized autonomous corporations possibly coming into play.
There are numerous possibilities for a market in defense. The ideas I’ve outlined above are what get me really excited for the future. There are too many stale ideas about how to change the world floating around. We need to change not only our philosophical paradigm, but our tactical paradigm as well. Play with this model in your head a while. Try to think up varying scenarios. Imagine doing the exact opposite of what the state does.