Link to the YouTube video (the timestamps are based on this): https://youtu.be/AQmMe2IeGPU
Hans-Hermann Hoppe: I first want to explain to you what I consider to be the problem of social order: Alone on his island, Robinson Crusoe can obviously do whatever he pleases. For him, the question concerning rules of orderly human conduct and of social cooperation simply does not arise. This question can only arise once a second person — namely, Friday — arrives on the island. Yet even then, the question remains largely irrelevant so long as no scarcity exists. Suppose the island is the Garden of Eden: All external goods are available in superabundance. They are free goods, just as the air that we breathe is a free good under normal circumstances. Whatever Crusoe does with these goods, his actions have no repercussions neither with respect to his own future supply of such goods, nor regarding the present or future supply of the same goods for Friday. Hence, it is impossible that a conflict concerning the use of such goods can arise between Crusoe and Friday. A conflict is possible only if goods are scarce, and only then is there a need to formulate rules that make orderly, conflict-free cooperation possible. In the Garden of Eden, only two scarce goods exist: (1) a person’s physical body and (2) its standing room. Crusoe and Friday each have only one body and can stand only at one place at a time. Hence, even in the Garden of Eden, conflicts between Crusoe and Friday can arise — namely, if Crusoe and Friday would want to occupy the same standing room simultaneously without coming into physical conflict with each other. Accordingly, even in the Garden of Eden, rules of orderly social conduct must exist — namely, rules regarding the proper location and movement of human bodies. And outside the Garden of Eden — in the realm of all-around scarcity — there must be rules that regulate the use not only of personal bodies, but of everything that is scarce, such that all possible conflicts can be ruled out. Now, this is the problem of social order.
[3:09] In the history of social and political thought, myriad proposals have been offered as solutions to the problem of social order, and this multitude of mutually incompatible proposals has contributed to the widespread belief that the search for a single correct solution is futile and illusory — yet the correct solution does exist! There is no reason to just succumb to moral relativism. Indeed, the solution to the problem of social order has been known for hundreds of years: The solution is the idea of private property. Now, let me formulate the solution first for the special case represented by the Garden of Eden, and then for the general case represented by the real world of all-around scarcity. In the Garden of Eden, the solution is provided by the simple rule stipulating that everyone may place or move his own body wherever he pleases, provided only that no one else is already standing there and occupying the same space. And outside the Garden of Eden — in the realm of all-around scarcity — the solution is provided by four logically interrelated rules: (1) First, every person is a private, exclusive owner of his own physical body. In fact, who else if not Crusoe should be the owner of Crusoe’s body — Friday? Or, Friday and Crusoe jointly? Yet these “solutions” — somebody else owns my body, or that my body is owned jointly by myself and somebody else — these other rules would not help avoid conflict. Rather, it would create conflict and make conflict permanent. (2) Second, every person is a private owner of all nature-given goods that he has perceived as scarce and put to use by means of his body, before anybody else has done so. Again: Who else if not the first user should be their owner — the second user? Or, the first and the second user jointly? Yet again, such rulings would be contrary to the very purpose of norms — namely, of helping to avoid conflict rather than to create it. (3) Third, every person who — with the help of his body and his originally-appropriated goods — produces new products thereby becomes the proper owner of these products, provided only that in the process of production, he does not physically damage the goods owned by other persons. And (4) forth, once a good has been acquired — first through original appropriation, or been produced — ownership in such a good can only be acquired by means of a voluntary contractual transfer of its property title from a previous to a later owner.
[7:00] I will spare myself here the task of providing a detailed ethical as well as economic justification of these rules — I have done this elsewhere: If you look in my book, A Theory of Socialism and Capitalism, you find detailed justifications of these rules. Or in my book, The Economics and Ethics of Private Property. However, a few statements on these connections are in order. Contrary to the frequently heard claim that the institution of private property is only some sort of convention, it must be categorically stated that a convention serves a purpose and it is something to which an alternative exists. The Latin alphabet, for instance, serves the purpose of written communication — and there exists an alternative to it such as, for instance, the Cyrillic alphabet. That is why it is referred to as a convention. What, however, is the purpose of action norms? If no interpersonal conflict existed — that is, if due to some pre-stabilized harmony of all interests, no situation ever arises in which two or more people want to use one and the same good in incompatible ways, then we would not need any norms. It is the purpose of norms to help avoid otherwise unavoidable conflict. Now a norm that generates conflict rather than helps avoid it is contrary to the very purpose of norms — it is a dysfunctional norm, or a perversion. And with regard to the purpose of conflict avoidance, the institution of private property is definitely not just a convention, because no alternative to it exists! Only private, exclusive property makes it possible that all otherwise unavoidable conflicts can be avoided. And only the principle of property acquisition — through acts of original appropriation performed by specific individuals at specific points in time and at specific locations — makes it possible that conflicts can be avoided from the beginning of mankind onward, since only the first appropriation of some previously unappropriated good can be conflict-free, simply because, by definition, no one else had any previous dealings with this good.
[10:00] Now, as important as this insight is — that is, the insight that the institution of private property ultimately grounded in acts of original appropriation is without alternatives, given the goal of conflict-free interaction and of peace — it is not sufficient to establish a functioning social order. For even if everyone knows how conflict can be avoided, it is still possible that people simply do not want to avoid conflict because they expect to benefit from it at the expense of others. In fact, as long as mankind is what it is, there will always exist murderers, robbers, thieves, thugs, and con artists — that is, people who do not act according to these rules that I mentioned before. Hence every social order — if it is to be successfully maintained — requires institutions and mechanisms designed to keep such rule breakers in check. How to accomplish this task? And by whom? The standard reply to this question is to say, This task — that is, the enforcement of law and order — is the first and primary duty, indeed the raison d’être, of the state. In particular, this is also the answer given by classical liberals such as my master, Ludwig von Mises. Whether or not this answer is correct depends on how state is defined. The state, according to the standard definition — not just a definition that I just arbitrarily assume here — is not a regular, specialized firm. Rather, the state is defined as an agency that is characterized by two unique, logically connected features. The (1) first one is: The state is an agency that exercises a territorial monopoly of ultimate decision-making — that is, the state is the ultimate arbiter in every case of conflict, including conflicts involving itself. It allows no appeal above and beyond itself. And (2) second, the state is an agency that exercises a territorial monopoly of taxation — that is, it is an agency that unilaterally fixes the price that private citizens must pay for the state’s service as ultimate judge and enforcer of law and order.
[13:18] Now, as widespread as a standard view concerning the necessity of the institution of the state as a provider of law and order is, it stands in clear contradiction to elementary economic and moral laws and principles. First off: Among economists and philosophers, there exist two near-universally accepted propositions. The (1) first one is: every monopoly is bad from the viewpoint of consumers, not from the viewpoint of the producer — every producer loves to be a monopolist. Monopoly is here understood in its classic meaning as an exclusive privilege granted to a single producer of a commodity or a service, or as the absence of free entry into one particular line of production — only one agency, Agency A, may produce a given good or service X. Such a monopoly is bad for consumers because — shielded from potential new entrants into a given area of production — the price of the product will be higher, and the quality will be lower than would otherwise be the case under competitive conditions. And (2) the second almost-universally accepted proposition among economists and philosophers is: The production of law and order — that is, of security — is the primary function of the state, as I just defined it. Security is here understood in the wide sense that is adopted in the American Declaration of Independence — namely, as the protection of life, property, and the pursuit of happiness, from domestic violence (crime) as well as external or foreign aggression (war). Now, both of these propositions are apparently incompatible with each other! This, however, has rarely caused any concern among philosophers and economists. And insofar as it did concern any problems for them, the typical reaction has been one of taking exception with the first proposition (the monopoly proposition) rather than the second one (that we need a monopolist of law and order). Yet there exist fundamental theoretical reasons, and mountains of empirical evidence, that it is indeed the second proposition — that we need a monopolist to protect us — which is false.
[16:22] As a territorial monopoly of ultimate decision-making and of law enforcement, the state is not just like any other monopoly, such as a milk or a car monopoly that produces milk or cars of comparatively lower quality and higher prices. In contrast to all other monopolists, the state does not only produce inferior, lousy goods, but bad or non-goods. In fact, the state must first produce bad [goods] — such as taxes, for instance — before it can produce anything that might be considered a lousy product. If an agency is the ultimate judge in every case of conflict, then it is also the judge in all conflicts involving itself. Consequently, instead of merely preventing and resolving conflicts, a monopolist of ultimate decision-making will also cause and provoke conflict in order to settle it then to his own advantage — that is, if one can appeal to the state only for justice, justice will be necessarily perverted in favor of the state, constitutions and supreme courts notwithstanding. These constitutions and courts are always state constitutions and state courts, and whatever limitations on state action they may set or find, invariably is decided by agents of the very same institution under consideration. Predictably, then, the definition of property and protection will be continually altered — and the range of jurisdiction expanded — to the state’s advantage. The idea of some given eternal and immutable law that must be discovered will completely disappear, and will be replaced by the idea of law as legislation — that is, as arbitrary state-made law. Moreover, as ultimate judge, the state is also a monopolist of taxation — that is, it can unilaterally, without the consent of everyone affected, determine the price that its subject must pay for the state’s provision of perverted law. However, a tax-funded life and property protection agency is a contradiction in terms: It is an expropriating property-protector, motivated then — as everyone is — by self-interest and by the disutility of labor. But equipped with a unique power to tax, state agents will invariably strive to maximize expenditures on protection — and almost all of a nation’s wealth can be conceivably consumed by the cost of protection — and, at the same time, to minimize the actual production of protection. The more money one can spend — and the less one must work for it — the better off one is.
[20:16] Now, apart from the fundamental error of statism in general, additional errors are involved in the special case of a democratic state — a detailed treatment of this subject again has been provided by myself in another book of mine, Democracy: The God That Failed, but I want to make at least a brief mention on this. The traditional pre-modern state form is that of an absolute monarchy. Yet monarchies were faulted — in particular also by classical liberals such as Mises — for being incompatible with the basic principle of equality before the law. Monarchy instead rested, obviously, on personal privilege. Thus the critics of monarchies argued the monarchical state had to be replaced by a democratic one. In opening participation and entry into a state government to everyone on equal terms — not just to an hereditary class of nobles — it was thought that the principle of equality of all before the law had been satisfied. However, this democratic equality before the law is something entirely different than and incompatible with the idea of one universal law equally applicable to everyone, everywhere, and at all times. In fact, the objectionable schism and inequality of a higher law of kings — versus a subordinate law of ordinary subjects — is fully preserved under democracy, in the separation of public versus private law, and the supremacy of public law over private law. Under a democracy, everyone is equal insofar as entry into government is open to all on equal terms: Everyone can become king, so to say — not only a privileged circle of people. Thus, in democracy, no personal privileges or privileged persons exist. However, functional privileges and privileged functions continue to exist: Public officials — as long as they act in an official capacity — are governed and protected by public law and occupy thereby a privileged position vis-à-vis persons acting under the mere authority of private law. In particular, public officials are permitted to finance or subsidize their own activities through taxes. That is, they do not — as every private law-subject must — earn their income through the production and the subsequent sale of goods or services to voluntarily buying or not-buying consumers. Rather, as public officials, they are permitted to engage in and live off what in private dealings between private law-subjects is considered theft and stolen loot. Thus, privilege and legal discrimination — and the distinction between rulers and subjects — will not disappear under democracy. To the contrary — rather than being restricted to princes and nobles — under democracy, privileges will be available to everyone! Everyone can engage now in theft and live off stolen loot, if only he becomes a public official. Predictably, then — under democratic conditions — the tendency of every monopoly of ultimate decision-making to increase the price of justice and to lower its quality and substitute injustice for justice is not diminished, but is actually aggravated.
[24:56] As an hereditary monopolist, a king or a prince regards the territory and the people under his jurisdiction as his personal property, and engages in the monopolistic exploitation of this property. Under democracy, monopoly and monopolistic exploitation do not disappear — rather, what happens is simply this: Instead of a prince and a nobility who regard the country as their private property, a temporary and interchangeable caretaker is put in monopolistic charge of the country. The caretaker does not own the country, but as long as he is in office he is permitted to use it to his and his protégé’s advantage. He owns its current use — or what is called usufruct — but he does not own its capital stock. This does not eliminate exploitation — to the contrary, it makes exploitation less calculating and carried out with little or no regard to the capital stock. Exploitation becomes short-sighted, and capital consumption will be systematically promoted. Let me just give an example: I can give you a house and make you the owner of the house. Or, I can make you a temporary caretaker of the house — for four years, you can try to get as much out of the house as you want, but you cannot pass it on as an inheritance, you cannot sell it in the market, and so forth. Will you treat the house in a different way, whether you are a private owner who can pass it on in the form of an inheritance? Or you will be just a temporary caretaker who cannot pass it on — you cannot sell it in the market? And the answer should be clear as daylight: Of course, if you are only a temporary caretaker of the house, you try to run down the capital, get as much out of it in as short a possible time as possible, whereas as a private owner you will try to preserve the value of it in order to pass it on in some sort of intact form to the next generation. Democratic politicians are people who try to rob the country as quickly as possible, because after four years they have no chance to rob anymore — or after eight years, whatever the term is.
[27:36] Now, if the state — and especially the democratic state, then — is demonstrably incapable of creating and maintaining social order, if instead of helping avoid conflict, the state is a source of permanent conflict, and if rather than assuring legal security and predictability, the state itself continuously generates insecurity and unpredictability through its legislation and replaces constant law with flexible and arbitrary legislation, then inescapably the question arises as to what is then the correct and obviously non-statist solution to the problem of enforcing social order? Now the solution is what I call a private law society — that is, a society in which every individual and institution is subject to one and the same set of laws. No public law-granting privileges to specific persons or specific functions, and no public property exists in this society — there is only private law and private property, equally applicable to each and every one. No one is permitted to acquire property by any means other than through original appropriation, production, or voluntary exchange. And no one possesses a privilege to tax and expropriate. Moreover, in a private law society, no one is permitted to prohibit anyone else from using his property in order to enter any line of production he wishes to enter and compete against whomever he wants to compete. Specifically, regarding the problem at hand — that is, in a private law society, the production of security, of law and order, will be undertaken by freely financed individuals and agencies competing for a voluntarily paying clientele or a non-paying clientele just as [much like] the production of all other goods and services. Now it would be presumptuous to want to predict the precise shape and form of the security industry that would emerge within the framework of a private law society. However, it is not difficult at all to predict a few central changes that would fundamentally and favorably distinguish a competitive security industry from the present all too well known statist production of injustice and disorder. First off: In a complex society based on the division of labor, self-defense will play only a secondary role, as I will explain in a moment. It should be emphasized from the outset that in a private law society, everyone’s right to defend oneself from aggression, against one’s person and property, is entirely undisputed. In distinct contrast to the present statist situation, which renders people increasingly unarmed and defenseless against aggressors. In a private law society, no restrictions on the private ownership of firearms and other weapons exist — everyone’s elementary right to engage in self-defense to protect his life and property against invaders would be sacrosanct. And as one knows from the experience of the not-so-wild Wild West — as well as numerous recent empirical investigations into the relationship between the frequency of gun ownership and crime rates — more guns imply less crime. Recall this Norwegian incident that just happened: For 40 minutes this guy was shooting down people! Now, would that have been possible if people had been armed? He might have killed a single person, and then he would have been dead himself. Just as in today’s complex economy we do not produce our own shoes or suits or telephones but partake in the advantages of the division of labour, so it is also to be expected that we will also do so when it comes to the production of security, especially the more property a person owns and the richer a society becomes. Hence most security services will without doubt be provided by specialized agencies competing for voluntarily paying clients by various private police insurance and arbitration agencies. If one wanted to summarize in one word the decisive difference and advantage of a competitive security industry as compared to the current statist practice, this word would be: Contract. The state — as the ultimate decision-maker and judge — operates currently in a contract-less legal vacuum. There exists no contract between the state and its citizens. It is not contractually fixed what is actually owned by whom and what accordingly is to be protected. It is not fixed what service the state is to provide, what is to happen if the allegedly protected people think that the state failed in its task of protecting them. Rather, the state unilaterally fixes the rules of the game and can change them — per legislation — during the game. Obviously, such behavior is inconceivable for freely financed security providers. Just imagine a security provider — whether that is a police, an insurer, or an arbitrator — whose offer consisted in something like this: I will not contractually guarantee you anything. I will not tell you what specific things I will regard as yours to be protected property. Nor will I tell you what I oblige myself to do if — according to your opinion — I do not fulfill my service to you. But in any case, I reserve the right to unilaterally determine the price that you must pay me for such undefined service! Now, any security provider would immediately disappear from the market due to a complete lack of customers. Each private, freely financed security producer instead must offer its protective clients a contract. And these contracts must — in order to appear acceptable to voluntarily paying consumers — contain clear property descriptions, as well as clearly defined mutual services and obligations. Moreover, each party to the contract for the duration — until the fulfillment of the contract — would be bound by its terms and conditions. And every change in terms or conditions would require the unanimous consent of all parties concerned. Specifically: In order to appear acceptable to security buyers, these contracts must contain provisions about what will be done in the case of a conflict or a dispute between the protector or the insurer — and his own protected or insured clients — and also must have provisions for what will happen in the case of a conflict between different protectors or different insurers and their respective clients. And in this regard, only one mutually agreeable solution exists: In these cases — of conflicts between insurers and insured protectors and protected, or different protection agencies and so forth — the conflicting parties must contractually agree to arbitration by a mutually trusted but independent third party. And this third party, too, is freely financed and stands in competition with other arbitration agencies. And its clients — that is, the insurers and the insured — expect of these arbitration agencies that they come up with a verdict that is recognized as fair and just by all sides, because only arbitrators capable of forming such judgments that are deemed just and fair by all sides will succeed in the arbitration market. Arbitrators that are incapable of this and that are viewed as biased or partial will disappear from the market — no one will choose them in another case where arbitration is needed.
[38:17] Now, from this fundamental advantage of a private law society, all other advantages follow: first off, competition among police, insurers, and arbitrators for paying clients would bring about a tendency toward a continuous fall in the price of protection per insured value, thus rendering protection increasingly more affordable. Whereas under present monopolistic conditions, the price of protection will steadily arise and become increasingly unaffordable. Furthermore, as I have already indicated, protection and security are goods and services that compete with other goods and services. If more resources are allocated to protection, fewer can be expended on cars, vacations, food and drink. Also, resources allocated to the protection of one group — let’s say people living on the Pacific, for instance — compete with resources expended for the protection of another group that is, let’s say, people living on the Atlantic. As a tax-funded protection monopolist, the state’s allocation of resources will necessarily be arbitrary: There will be overproduction or underproduction of security as compared to other competing goods and services, and there will be overprotection of some individuals or groups or regions, and underprotection of other groups or regions. In distinct contrast, in a system of freely competing protection agencies, all arbitrariness of allocation — all overproduction or underproduction — would disappear. Protection would be accorded the relative importance that it has in the eyes of voluntarily paying consumers, and no person, group, or region would receive protection at the expense of any other one. Each and every one would receive protection in accordance with his own payments. The most important advantage of a private contract-based production of law and order, however, is of a qualitative nature: First, there is the fight against crime. The state, as we know, is notoriously inefficient in this regard, because the state agents entrusted with this task are paid out of taxes — that is, independent of their productivity. Why should one work if one is also paid for doing nothing at all? In fact, it can be expected that the state agents take an interest in maintaining a moderately high crime rate because this way they can justify ever-increased funding. Worse: For state agents, the victims of crime — and the indemnification and compensation of such victims — plays at best a negligible role. The state does not indemnify the victims of crime — they are supposed to protect you, but they don’t do anything in order to help you if they fail in this task. To the contrary, the harmed victims are still further insulted by making them — as taxpayers — pay for the incarceration and the rehabilitation of criminals, should he ever be captured. The situation in a private law society is entirely different: Security providers — in particular, insurers — will have to indemnify their clients in the case of actual damage, otherwise they would simply not find any clients, and hence they must operate efficiently in this regard. They must be efficient in the prevention of crime, for unless they can prevent a crime, they would have to pay up. Further, even if a criminal act could not be prevented, they must be efficient in detecting and recovering the stolen loot, because otherwise they must pay to replace these goods. And in particular, they must be efficient in the detection and apprehension of the criminals, for only if the criminal is apprehended is it possible for the insurers to make the criminal pay for the compensation owed to the victim, and thus reduce their own costs of operation. Moreover, a private, competitive, and contract-based security industry has a general peace-promoting effect. States are — as I have already explained — by nature aggressive institutions. They can cause or provoke conflict in order to then solve it to their own advantage. Or, put differently: As tax-funded monopolists of ultimate decision-making, states can externalize the costs associated with aggressive behavior onto others — namely, the hapless taxpayers. And accordingly, they will tend to be more aggressive vis-à-vis their own population and also vis-à-vis foreigners than normal firms or normal people would ever be. In distinct contrast, competing private insurers are by nature defensive and peaceful organizations: On the one hand, this is because every act of aggression is costly, and an insurance company engaged in aggressive conduct would require comparatively higher premiums, involving the loss of clients to cheaper non-aggressive competitors. And on the other hand, it is not possible to insure oneself against every conceivable risk. Rather, it is only possible to insure oneself against accidents — that is, risks over whose outcome the insured has no control, and to which he contributes nothing. Thus, it is possible to insure oneself against the risk of deaths and fire, for instance, but it is impossible to insure oneself against the risk of committing suicide tomorrow, or setting one’s own house on fire. Similarly, it is impossible to insure oneself against the risk of business failure, or of unemployment, or of disliking one’s neighbor, for in each case one has some control over the event in question. Most significantly, the uninsurability of individual actions and sentiments — in contrast to insurability of accidents — implies that it is also impossible to insure oneself against the risk of damages resulting from one’s own prior aggression or provocation. Instead, every insurer must restrict the actions of his clients so as to exclude all aggression and provocation on their part — that is, any insurance against social disaster such as crime must be contingent on the insured submitting themselves to specified norms of civilized, non-aggressive conduct. Furthermore, due to the same reason and financial concerns, insurers will tend to require that their clients abstain from all forms of vigilante justice — except perhaps under quite extraordinary circumstances — because vigilante justice, even if it is justified, invariably causes uncertainty, and provokes possible third party intervention. By obliging their clients instead to submit to regular, publicized procedures whenever they think that they have been victimized, these disturbances and associated costs can be largely avoided. And lastly, it is worthwhile pointing out that while states as tax-funded agencies can and do engage in the large-scale prosecution of victimless crimes such as illegal drug use, prostitution, or gambling, these so-called “crimes” or victimless crimes would tend to be of little or no concern within a system of freely financed protection agencies, because protection against such victimless crimes would require higher insurance premiums, but since these crimes — unlike genuine crimes against persons and property — do not create victims, very few people, if any at all, would be willing to spend higher insurance premiums on such protection against something that does not victimize them. Still more, while states as I have already said are always and everywhere eager to disarm its population — and thus rob it of an essential means of self-defense — private law societies are characterized by an unrestricted right to self-defense, and hence by widespread private gun ownership and weapons ownership in general. Again, just imagine a security producer who demanded of its prospective clients that they would first have to completely disarm themselves before it would be willing to defend the clients’ life and property. Now, correctly, everyone would think of this as a bad joke and refuse to accept such an offer: Hand me over all of your knives, and then I will protect you. You know what’s up, then. Freely financed insurance companies that demand that potential clients first hand over all of their means of self-defense as a prerequisite of protection would immediately arouse the utmost suspicion as to their true motives, and they would quickly go bankrupt. In their own best interests, then, insurance companies would actually reward armed clients, in particular those client who are able to certify some level of training in the handling of arms, and charging them lower premiums, reflecting the lower risks that they represent. In the same way as insurers nowadays charge less if home owners have an alarm system or a safe installed, so would a trained gun owner represent a lower insurance risk. Last, and most importantly, a system of competing protection agencies would have a two-fold impact on the development of law: On the one hand, it would allow for a greater variability of law. Rather than imposing a uniform set of standards onto everyone — as under statist conditions — protection agencies could compete against each other not just through prices, but also through product differentiation. There could exist side by side, for instance, Catholic protection agencies or insurers applying canon law, Jewish agencies applying Mosaic law, and Muslim agencies applying Islamic law, and agencies applying secular law of one variety or another — all of them sustained by a voluntarily paying clientele. Consumers could choose the law applied to them and their property and no one would have to live under foreign law. And on the other hand, the very same system of private law and order production would promote a tendency towards the unification and harmonization of law, because the so-called domestic Catholic, Jewish, Roman, Islamic law, and so forth, would apply obviously only to the person and property of those who had chosen this law. Canon law, for instance, would apply only to professed Catholics and deal solely with intra-Catholic conflict and conflict resolution, yet it is obviously also possible of course that a Catholic might have a conflict with a subscriber of some other law code — let’s say a Muslim. If both law codes reached the same or a similar conclusion, then no difficulties would arise. However, if competing law codes arrived at distinctly different conclusions — as they would, at least in some cases — a problem arises: The domestic intragroup law would be useless, obviously, but naturally every insured person would want protection against this contingency of intergroup conflicts as well. And each insurer would have to have provisions in his contract: What do we do if such conflicts break out between a Jew going to Jewish courts and an Islamic person going to an Islamic court? So domestic law would be useless, but naturally — as I said — every person would want protection against the contingency of intergroup conflicts as well. And in this situation, it cannot be expected that one insurer — or the subscribers of its law court — simply subordinate their own judgment to that of another insurer and its law. Rather — as I have already indicated before — in this situation there exists only one credible and acceptable way out of this predicament: from the outset, every insurer would have to be contractually obliged to submit itself and its clients to arbitration by an independent third party. This party would not only be independent, but at the same time it would be the unanimous choice of both parties. It would be agreed upon because of its commonly perceived ability to find mutually agreeable, fair solutions in cases of intergroup conflict and disagreement. If an arbitrator failed in this task and arrived at conclusions that were perceived as unfair or as biased by either one of the parties — by either one of the insurers or of their clients — this person or this agency would not likely be chosen again as an arbitrator in the future. And as a result of the constant cooperation of various insurers and arbitrators, the tendency toward the unification of property and contract law, and the harmonization of the rules of procedure, evidence, and conflict resolution, would be set in motion. Thus, in buying protection insurance, every insurer and every insured person becomes a participant in an integrated system of conflict avoidance and peacekeeping. Every single conflict and damage claim — regardless of where and by or against whom — would fall in the jurisdiction of one or more specific insurance agency, and would be handled either by an individual insurer’s domestic law, or by the international or universal law provisions and procedures agreed upon by everyone in advance and administered and conducted by arbitration agencies. So hence, instead of permanent conflict, injustice, and legal insecurity, as under the present statist conditions — in a private law society, peace, justice, and legal security would hold sway. Thank you very much.