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ok I will begin my lecture at the beginning I want to repeat a few points that I have made in my previous lecture on law and economics and then I want to get to a entirely different subject than the one that I dealt with in that previous lecture because they exist scarcity in the world we can have conflicts regarding these scarce resources and because conflicts can exist whenever and wherever there exists scarcity we do need norms to regulate human human life norms the purpose of norms is to avoid avoid conflicts in in order to avoid conflicts regarding scarce resources we need rules of exclusive ownership of such scarce resources or this is to say exactly the same we need property rights to determine who is entitled to control what and who is not entitled to control what these rules I have defended in my previous lecture the rules at austrians regard as rules capable of doing this avoiding conflict and at the same time being just rules are the following once every person owns himself his own physical body has exclusive control over his own physical body the second rule we refers to how do we acquire property the right of exclusive control of scarce resources outside of our body the external world previously initially the outside world is unknown and we acquire property in objects outside of our body by being the first one to put certain resources to use and thereby we become the owner this is also sometimes referred to as original appropriation or as homesteading rule number three and four implied in the previous two he who uses his physically his physical body and those things that he originally appropriates in order to produce something to transform things into a more valuable state of affairs thereby becomes the owner of what he has produced producer owns the product and finally we can also acquire property by a voluntary transfer from a previous owner to a later owner me again only emphasize at this in this lecture that they are intuitively sensible rules who should own us unless who should owners except ourselves somebody else should or not sounds absurd should the second one busy owner who has done nothing to a resource instead of the first one again that sounds absurd the producer does not own the product but somebody was not produced it should own the product again that sounds absurd in obviously rule number four if it would be possible just take simply away from from other people against their consent civilization would be destroyed in a moment's moment's time in addition you also realize that if we would follow these rules by and large wealth will be maximum maximized and if we follow these rules then all conflicts can conceivably be avoided the question is they are of course people would just say so what even if we can justify them and show that they are economically beneficial to follow and that all conflicts can be avoided if people were to follow these rules there will be lawbreakers there will be criminals evil people as long as mankind exists what do we do with these people how do we enforce these rules merely stating them does not mean that people will actually act according to them under all circumstances there will always be bad people the classical liberals gave the following answer to the question how do we enforce these rules they said this is the sole task of government the sole task of a state a state doesn't do anything else except to make sure that everyone who breaks these laws will be hit on the head and brought to brought to their sins brought to their senses now what do we have to make of this answer of the classical liberals that includes in this case also would be fun Mises in Lewisham muses position was precisely these rules are the rules of a just society and it is a task of a state to see to it that people adhere to these rules and punish and threatened to punish potential lawbreakers now what does this answer is right or wrong that is whether this is a task of the state and the state will do it efficiently that depends of course on what is a definition of a state and I'm not giving you a fanciful definition of a state but that definition that is more or less accepted by everyone who has ever written about the state that is a standard definition of a state and that is the state is a territorial monopolist of ultimate decision making or ultimate arbitration in some territory that is whenever there is a conflict arising the state is the ultimate arbiter to decide who is right and who is wrong there is no appeal beyond the state his is the final word you are right you are wrong and this implies also that the state is the final arbiter the final judge the final decision-maker even in cases of conflict involving the state or state agents himself we will see in a moment that this is a very important implication of what a state is and from that lots of consequences follow a corollary of this is the state is then also the only agency that is permitted to text people to unilaterally determine the price that we must pay for doing the service to us that is enforcing these enforcing these rules now given this definition of the state i want to show that it is an illusion to believe that the state will be successful in doing what alleged what according to the classical liberals is his sole and only task namely to enforce these rules the first argument against this position of a minimal state is to say look at economics we always say monopoly is bad from the point of view of consumers and competition is good from the point of view of consumers should emphasize from the point of consumers from the point of view of a producer monopoly is always great and competition is always terrible but from the point of view of consumers competition is good and monopoly bad for simple reason that whenever we have a monopoly the price of the product will be higher than it otherwise would be and the quality of the product will be lower than it otherwise would be because he is shielded from competition by other people entering the market by offering lower prices or offering a higher-quality product if we have freak if we have free competition then there is a constant attempt of producers to produce at the lowest possible production costs passes on in the form of lower prices to consumers and to produce the highest quality product otherwise he will simply lose out in competition against us otherwise he will invite so to speak competition against himself so the first argument would be simply why should this also not be also true for providing the service of protecting our private property why should a monopoly be in this area good whereas in all other areas we say monopoly is bad not only this when it comes to say a monopoly of milk production then all we can say is yeah a monopolist of milk milk production will offer comparatively lousy product at comparatively high prices so we get a lousy product in a way but when it comes to a monopoly of law and order of ultimate decision making the situation is actually far worse not only can they produce Oh to speak a lousy good what a monopolist of ultimate decision making can produce is they can produce Bad's in the following in the following way look if I am the ultimate decision-maker in every in any state of area conflict that might arise what can i do what i can do is i can cause conflict myself and then be the arbitrator in my own case i can then determine who is right and wrong and if i have caused the conflict myself then it is of course easy to predict what a monopolist will buy at large desai he will decide I was entirely justified in doing what I did to this complaining complaining party and I'm right a policeman hits you on the head ah you complain about this about this fact who then decides who is right and wrong maybe not the policeman directly but another person who is employed by exactly the same agency that employs the policeman also so what you can predict in this situation is you will instead of having a situation where a peaceful cooperation between various individual exists you can predict that there will be constantly conflicts generated on the part of those people supposedly protecting our lives and property and then a decision will be made that favors them over those people that have been addressed upon by by the state agents themselves and to make matters worse then they can also decide what you have to pay them for this type of justice that is that is committed to eat them unto you unto you it is first they hit you on the head then they decide that it was entirely justified you look the wrong way or whatever it was and then they tell you and for this service please pay me hundred dollars and you cannot say no otherwise we will jail you again this is this follows so to speak automatically from what the definition of the state is a conflict arbitrator even in cases where you have yourself generated generated the conflict and on top of it the standard anti-monopoly arguments apply of course as well there will be a constant tendency for the quality of justice to deteriorate and parallel to this a constant tendency for the price of this ever lower quality of justice to go up you must pay more and more and more for getting less and less and less in terms in terms of justice so an entirely failed argument as far as I can see in defense of a minimal state the idea of a minimal state is some sort of absurdity next point class on top of this the classical liberals made another fateful error that is defenders of minimal states when the classical liberals develop their program then they saw in front of them states that were by at large monarchical states kings and queens and so forth and classical liberals now made a fateful error they said monarchical states are bad institutions for the reason that monarchs kings or Queens have privileges kings and queens are so to speak a violation of the principle of equality before the law the King can do certain things that other people simply cannot cannot do and we must institute a society where equality before the law is is effect and what solution did they propose they proposed as a solution democracy again not all classical liberals did that but most of them did this and they said democracy is somehow compatible with the idea of equality before the law because everybody can now become king or queen or senator or Prime Minister instead of just a hereditary class of individuals now I want to show first that this is again a faithful era to believe that democracy implies equality before the law all that in fact happens by substituting democracy for monarchy is that we replace personal privileges with functional privileges in democracy our democratic rulers also have privileges as compared with what normal citizens have to give you just an example and this privilege is reflected so to speak in the fact that we have a separation or distinction between on the one hand what is called public law that covers a relationship between the rulers the Democratic rulers and the citizenry and on the other hand private law that covers the relationships between private citizens under public law that is if you are a public official you can do things that on the private law you can never do if I steal your money from your wallet I will be punished as a private citizen if I however do this as an IRS agent this is not considered to be a crime even though from the point of view of the person who is being robbed there is absolutely no difference whatsoever public law allows stealing under private law if I take you and force you to work in my my garden for 16 hours this is called kidnapping and slaving and so forth and again is a punishable offense on the other hand if I I do this as a public official and draft you into the army and send you off to get killed to fight for democracy someplace then then this sort of thing is just called you are compelled to engage in public in public service if I take your money and give it to somebody else as a private citizen this is called stealing and fencing of stolen goods if I do that as a public official it's called social policy taking from some and then pretending to be a generous benefactor on to others if you just look at your politicians they go around spend millions on this country in that country and give it to these people and then they even get a medal for as a sort of medal for this sort of thing it is not their own money that they give away so it is fencing of fencing off stolen stolen goods so matter of fact we might even say what states do is even worse and what what private criminals do in so far as private Kim criminals at least after when they are done with their bad stuff at least it disappeared next time you can prepare yourself for such an attack and maybe smash them when they come again worse states do that on an institutional basis they rob you and then the next week oh you can expect another visit from hahaha so it is an error to believe that under democracy you have sort of speak equality before the law only functional privileges take the place of personal privileges but there exist privileges just as much as under monarchy situation is even worse than this if you look at the transition between a transition from monarchy to democracy where everybody can reach any type of position in the government and no hereditary privileges exist what takes place here is that we replace someone who or regards the country as his own private property by someone who is a temporary caretaker of a country and this has dramatic effects in order to illustrate this just imagine for a second I give you a house one time I make you the owner of the house you can now pass it on to your sons or daughters or whatever and you can sell it in the market and keep the money from the sale for yourself in the other case i give you the house and say 45 45 years or four years you have exclusive control over this house but you do not own the house you cannot determine who will be the successor nor can you sell the house in the market and keep the money yourself from the sale but you can try to maximize your own income from using the house for four or five years will that make a difference in terms of how you treat the house and the answer is of course it will make a drastic difference in the one case you will be interested in preserving the value of your property you will not try if you are the owner you will not try to just run down the house very quickly after all if you would do this you would get less in the market the price of the house what for or you might be interested in giving something that is decently valuable still in the future to the next to the next generation on the other hand if you are just a temporary caretaker what is your incentive then then your incentive is I want to maximize whatever I can get out of the house within four or five years regardless of what happens to the capital value embodied in the house even if the house is then in ruins so to speak at least you had four or five glorious glorious years could make all sorts of friends with your rental income that that you received you can put whatever 20-30 people in the house each paying rent the wallpaper is falling off after a while the toilets are plugged the plumbing does not work work anymore the carpets are ruined and so forth but what would you care after all you don't have to just it is not you has to pay the price for this behavior on your part in the form of a lower price that you would get for the house after all you don't on you don't own the place so what you see here this is so to speak the difference between monarchy and democracy on a large on a large scale a monarch has a long run perspective by and large he wants to preserve the value of his realm in order to pass something valuable on to the next generation a democratic politician because he knows i'm only in power for a few years his incentive is i have to milk the cow as quickly as possible and then run away from it whatever the consequences are politician democratic politicians precisely short-sighted monarchs are farsighted individuals comparatively speaking so to speak so this is an additional error in believing democracy to be an advantageous form of social organization as I want to also give you a third rgument against democracy and that somehow speaks favorably of of monarchy and this is when people say look aren't you always in favor of open entry and don't we have to embrace democracy because as open entry into into positions there's competition going on whereas otherwise if we have hereditary rulers there is not open entry there's no competition now the argument as it goes is perfectly correct except it applies only to the production of goods that is you do want to have competition in the area of producing things that are regarded as goods by people but you do not want to have competition in the area when it concerns the production of bad but it is production of beds if you can cause conflicts and then decide in your own favor it is a production of beds if you text people tell them you have no choice you cannot deny my right to text you tell you what you have to pay for them for my services in the production of that it is good to have not no competition only in the production of goods we want to have competition we do not want to have competition in who is the best one in beating up other people who is the best one in running a concentration camp there we are happy if we have in competence running the whole show so we want in competence in power we do not want to have efficient people texting texting us causing causing conflicts so the argument was open entry does work exactly the other way around as soon as we consider precisely what states do as compared to what the producer of genuine goods demanded by consumers consumers one that we add a few considerations here look a king comes into power by accident of birth now this does not prevent that the King can be a bad guy if he is a bad guy however there is usually a dynasty it is a family of which he is a member if he is a bad guy in ruins the country his family members will be very much concerned that they might lose power over this type of behavior and what they frequently do then is to surround this bad guy by people who keep him in check and if this does not work they frequently resort to the means of simply having somebody kill the guy off which of course would be a good thing to do on the other hand because he comes into power by accident of birth you can also not rule out that he might be a decent guy that you might be a nice type grandpa who just cares about his people and so forth you cannot rule out that he might be actually a nice nice man after all these people are educated in such a way they are prepared for such a position and more often than not they are decent individuals now ask yourself what happens under under democracy where we have competition for this type of field first of all you realize that if you have bad Democratic rulers their likelihood that these people will be killed is comparatively low why is it low because people are saying okay only for four years and then of course a really good guy from my party will come to rule the place and there is then a certain hesitation to kill the guy off because all you say is we have to wait four years and then things will be will be better so less less numbers of killing of rulers and I think this is a bad thing second the second secondly now ask yourself can a good guy ever rise to the top in a democracy that is can a guy who says I will not tax the rich in order to give to the to the poor I will strictly enforce private property rights which people are not bad people and and and poor people are not good people I will do absolutely nothing I will adhere to a less a fair policy can a person like this ever rise to the very top of government and I'm telling you that is absolutely impossible try to run a campaign on these sorts of things maybe you can win in some small district maybe you can win if that election would be in a small village where everybody knows everybody else but you can certainly not do this in a society with millions of people where each has the temptation of course to rob people through the vote of their property and personally benefit from from these robbing exercises so even on that count again I think monarchies are clearly superior I'm not defending monarchies now I come to what then is the correct answer to the initial question how do we enforce these types of these types of laws and the correct answer is we have to abolish monopolies that is this task must also be taken on by individuals or agencies that adhere to exactly the same principles as everybody else only then do we have of course equality before the law that is those institutions those individuals that provide this specific service of protecting our lives and our property must themselves adhere to exactly the same rules that we require other people to adhere to and because this a pure private law society a society where only private law exists this distinction between public law on the one hand and private law on the other hunt simply disappears now how would how would a society such as this work first this implies of course that every person is perfectly free to engage in self-defense Oh merely says something more about this it should be clear that just as in a complex society we do not make our own shoes or so our own suits or cut our own hair but rely on the division of labor in a complex society will also rely on division of labor when it comes to this specific task but nonetheless it should be emphasized from the outset that yes of course each individual has the absolute right to engage in self-defense against people who addressed his private property rights and there should be no doubt in your mind that this is a very effective means to achieve this this goal we do know for instance that in the Wild West when the power of the federal government did not really extend to all the corners of of the country that and when almost all people were heavily armed that the crime rate was actually significantly lower than it then are currently is in the wild west movie some to get a different impression but that is entirely mistake many studies have been have been done on this imagine for instance how likely it is that you will get away was becoming a bank robber if you go into a bank where every teller is armed before you ever before you get out of the bank you you will be a dead man the the violence that occurred in in the wild west where in most cases actually violence between bill willing participants that is if you go to a bar and then just get drunk and then you just start a fight with somebody else and then it okay let's go outside and and see who is right and who is wrong and then and then more than one or both lie dead on the street this is not a crime this is after all something that just like a boxing fight that two people just decide that they want to engage in this sort of stuff and nobody except these two people have to worry about this if you abstain from going to bars and getting drunk you were pretty safe in in the Wild West and a very important book in this in this area has been written by John lot more more guns less crime he gives a huge amount of empirical data showing that of course if people are free to defend themselves that crime rates tend to tend to go down but as I said in a complex society this is only a small part a small contribution to defending ourselves we will rely on specialized agents and agencies to provide us with with the service and a particularly important role in all of this would likely be played by by insurance insurance agencies and I want to illustrate in what regard a society where this service would be provided by competing insurance agencies and again do not think of insurance agencies sa exists nowadays insurance industry is one of the most heavily regulated industries at the current moment but think of insurance companies really freely having to compete in the market for customers willing to pay them for their service and being permitted to change their provider of security services if they are dissatisfied with what their particular agency is doing doing for them so what can we expect in such a situation where we have competing defense insurance agencies and so forth providing us with these services the first thing that we can expect is that as in all areas where we have free competition prizes will tend to fall and the quality of the product will tend to increase as it is the case in any other area also worse if we have a monopolist doing it we have predictably the tendency of prices will be higher than they otherwise would be in the quality of the product will be lower than it otherwise would be second thing in such a situation we can avoid over an under production of security how many resources should be committed to be a production to milk production to car production in the market it is consumers who decide how many resources are committed to this purpose or to that purpose consumers make certain firms grow or make them shrink or ultimately disappear from the market if you have a monopolist providing the service nobody can go into competition against they can force you how much you have to pay for them what will be their answers how many resources should be committed to the specific purpose and the answer is the more resources we can commit to this the better off we as a producer of this particular service are should there be one policeman or should there be ten policemen or thousand policeman should the policemen have just a stick or should they have a machine gun should they have should they have tanks in order to provide this this type of service you can imagine that almost all resources in a society are used to protect you but you have hardly anything left over to eat the government has no answer to how many resources should be committed to the sort of thing but you should realize that the amount of security that we want the the amount of money that we would spend on feeling secure is very different from individual to individual and also from region to region there are certain regions where you would not need any specialized provider of security at all if you live on top of a mountain alone you can defend yourself perfectly well just on your own in if you live in tents densely populated city regions you might want to pay more forces for the sort of stuff if you are an old lady you might be more fearful and spend more of your resources on this then if you are whatever Arnold Schwarzenegger who who feels capable that he can do it on on his own or with a few a few bodyguards so this problem would be automatically soft if we would have free competition in the area of security / you get as much as you want you can increase it decrease it but it is not some other entities that tells you this is how much icing you need and they of course always think that more is better that doesn't mean that they provide more services but the expenses that they have available to themselves are higher and higher then next next advantage victimless crimes you know that currently a huge amount of resources are committed to combating victimless crimes in particular of course the entire war on drugs there are millions of people in the United States locked up because they have done nothing else but to whatever smoked dope or it will take cocaine or whatever it is without having committed any any crime that has a victim that you can point to can you imagine that the insurance company insurance company that that would ensure you or protect you against victimless crimes would obviously have to charge a higher price than an agency that abstained from offering such a service it is easy to predict that of course most people because they are not affected by victimless crimes because after all they are not victimized by it would say if I don't I don't want to shell out extra money because there are there is a prostitute somewhere having a client in some place and and do crack down on them of both requires extra resources after all I'm not involved in any any of any activity such as that I only want to be protected in my own home and in my own with my own property so companies that would offer these types of services would likely go out of business instantly currently as I said a huge amount of resources is wasted in things like this person going after after victimless crimes then even more importantly insurance companies would have to indemnify you in case something does happen to you you realize currently with monopoly provision of these services so they say we protect you in your life with your life and your property so what if somebody gets killed or somebody somebody's home gets broken in that's a state then say look we failed in doing what we are supposed to do and because we failed we owe you compensation I have not heard of cases such as this where the government and says I'm I feel so bad about what happened to you and I really failed in my obligation towards you and because of this here you have company you have a compensation and because insurance companies would have indemnify you in case imagine you go to an insurance company say okay this is a premium okay I pay my premium and then you say so what if something happens to me and then they say your tough luck you can immediately see that no insurance company would get off the ground if they would have this this type of attitude people want to have three sinks in particular prevention about prevention what is the incentive of a tax funded policeman to be good at preventing crime the answer is is virtually is virtually zero his salary does not depend whether he is good at preventing or not preventing as a matter of fact preventing crime might be somewhat dangerous to do it's better to go out hand out parking tickets spisz feeders and this these types of people the danger is relatively low that you get shot by doing this sort of thing why would insurance companies be good at prevention the answers whatever they can prevent they do not have to pay up that is it is an element of reducing the cost of operation for them so they tend to be better at it what's the next thing that people would want the next things that people would want to set of course the whatever has been stolen or broken or whatever is is recovered now how likely is that if somebody steal something in your house your your car or your stereo that the police will actually find the sort of thing the answer is you can you can forget about it they will find practically nothing except by except by accident on the other hand what is the incentive of insurance detective so to speak the incentive is what you do I try to find it as best I can because whatever I find I do not have to compensate the victim for it an example I had to some friend whose VW got stolen in in Italy so he went to the Italian police and reported my car has been stolen and then police wrote it down and he said no what will you do and they said we will file it away so then he went to his German insurance companies that my car has been stolen the insurance detective was a German guy and the car was stolen in Italy the insurance detective founded after three days your work major damage to the car and so forth but nonetheless there was a recovery of the object for an obvious reason this is in the financial interest of such an agency to do this there is no financial incentive on the part of monopolized police forces to do anything anything remotely remotely similar last thing that we want is of course that we have to catch the guy and we have to punish the guy now an insurance company what of course have an incentive to get the guy and then force the guy to make compensation to the victim again in order to reduce their own cost of operation now what is what the state currently does first of all they hardly ever find them except for capital crimes and if they do find them what will they do yeah thus the victim of the crime ever receive compensation the answers I have not heard of cases such as that so you don't get compensation on top of it these people are then locked up and who pays up for locking them up is the victim is one of those people who have to pay them for incarceration of of the perpetrator of crime and the housing of criminals in American presence is an expensive venture I'm not betting my life on the numbers but I've read some sometime a o is it it costs almost seventy thousand dollars per man per year to just house these people because in the meantime they can of course get their breakfast buffet and moose Lee and complain about insufficiently clean toilets they can play table tennis watch watch TV engage in work out so the next time they are stronger when they when they get out big they can they can even stick and even study law as far as I know so that they know next time better to defend you think themselves against next point insurance companies will definitely not ask you to disarm yourself imagine you would go to an insurance company i want you to protect me and what is supreme bein and stuff like this and then they would say yeah but in order to be better able to protect you first we must make sure that you hand over all types of weapons to me if you have done at home or a hammer or a knife or something like this everything has to be handed handed over to me then we can protect you better if they would ask something like this you would immediately know there is something fishy going on nonetheless this is of course precisely what states everywhere do in some cases they have already progressed further along this road and in other countries they have progressed less far on on this road but everywhere the attempt is exactly the same to disarm you and this is of course what every agency that isn't the business of robbing other people would do yes of course if I would be in the robbing business I'm love it if I would know that none of you has any sharp knives hammers sickles anything like this not to speak of revolvers and machine guns at home because then I can freely enter your premises I am the only one who has all the weapons and it is easy for me to engage in my beloved activity that I do it will also be an assistive where you have competitive provision of security and attempt by all insurance companies to to make their clients comply to certain norms of civilized behavior an insurance company would not cover you help you if you provoke other people they will only ensure you if you have been provoked if you have been agresta pond but not if I just hit you on the head and then you retaliate against me and then I run to my insurance company helped me this guy is smashing me if it was a case that I was the one who initially initiated the whole thing that is they want to avoid conflicts in order to avoid conflicts every client that is accepted by a company whoa before so to speak will be compelled to adhere to you have to behave in an unprovoked if why only then will of course we provide you with these services but if you behave like a wild beast none we will not accept you as a client as a matter of fact there will be lists out of people lists of people that will not be insured because they are considered to be too high a risk and if they have no insurance life is very dangerous so vigilante justice would also be by not disappear because vigilante justice of course is again expensive if you immediately engage in retaliation or so that is a costly thing for insurance companies only if needed attacks are done upon you would you be permitted so to speak to defend yourself if the thing is already over and you know who the guy is and immediately go after him and then as retaliation from his family and all the rest of all of this would by and large disappear instantly in a free market of security provision then most importantly there would be contracts that you are offered look currently we have no contract with the state whatsoever exam we protect you but do we have anything that we can refer to what will happen in what type of case in what situation and the answer is not at all well again go to an insurance company and they say this is the premium that we charge and then you ask you what what did will you offer in return until I don't notice that defense that depends on the circumstances you will be offered a contract and the contract providing so to speak for various contingencies what will happen in such and such a situation and of course the contract cannot be changed that is the insurance companies they cannot say look we offer use this contract but we reserve the right on our part to unilaterally change the contract as we as we go along this is precisely however what states do States constantly change laws make something that was yesterday still legal tomorrow it is illegal and vice versa so constantly the rules are changed no contract offered by insurance companies would ever stipulate we can unilaterally change the rules declare this to be legal and that to be illegal and tomorrow we change our mind and redefine redefine matters and the fact that contracts would be offered has now the following additional advantages we can imagine three scenarios you can imagine that two individuals have a conflict with each other that are protected by the same agency by the same insurance agency everybody knows that such a case can arise that I have a conflict with somebody who is exactly this client of the same company obviously knowing this every company what its contracts have a stipulation what will happen in such a case if one of my guys has a conflict was another one of my guys and then they describe so to speak there's a procedure that will be set set in motion most clients agree to this procedure from the outset and it wouldn't afterwards simply be enforced just like there's an end to it just like it is now the second the second case that we can have is I have a conflict with somebody else who is insured by a different company than I am myself again every company would for its own clients offer a contract that has a stipulation what will happen in such a case because everybody knows that can of course happen that I have conflicts with somebody else insured by someone else so again there's there are clauses in the contract thing but what will happen in such a case if these two insurance companies then come to the same conclusion I'm the guilty one or you are as a guilty one again there's no problem then whatever they decide they come to the unanimous agreement there might be hearings and all this again exactly stipulated what will happen then this will be again enforced no problem now we come to the most complicated but in a way the most interesting case so what would happen in the case that two people are insured was a different company ever conflict and they come to different judgments that is my company says I'm right and your company says I'm arrived my client is in the right well they then shoot it out again everybody knows of course that such a situation can arise and again each company will have an incentive so to speak to say exactly what will happen in this case we do not agree who was right and who was wrong what do we do in this case now what the company then say okay in that case one company decides has the ultimate say and the other company will be overruled no company would offer any contract like this nobody would want to be insured with a company that comes out always as a loser now in this case what they would do is they would appeal to independent third parties that is to arbitration agencies that also compete on the market who offer precisely the service who are neither so to speak part of company a nor part of Company B but an entirely independent party they would now take on this type of case and there might be different layers of this but what would be the incentive of such an independent third-party arbitrator what would be the financial incentive for them to do the answer is no independent third-party arbitration agency has a guarantee that they will be called upon again in the next instance in order to stay in business what they must do is they must come up with a judgment that is considered to be a fair judgement by both insurance companies and by implication also by the clients of most insurance companies and this means of course that what the judgment will be is a judgment that does indeed incorporate so to speak the highest possible degree of consensus on principles of justice to illustrate this a little bit more we can imagine for instance that we have agencies that have adhere internally to canonical law or to Mosaic law who are to Islamic law or whatever it is this refers only to people who are those members of this of this group now what happens you see as a conflict between whatever Christian and somebody who is insured by a Muslim Islamic organization or somebody who is canonical law s compared to Mosaic law the answer is of course that the arbitration agencies that deal with such cases then must come up with principles of justice that are generally universal that is that are so general that all of these in their internal law called different agencies and clients could possibly agree to so we would have a large a variety of law plus a constant tendency to work out a universal legal or universal law code and this universal law code would most likely be precisely this type of law code as the greatest common denominator of all different legal systems that might that might exist I should mention you know then I end that when it comes to international relationships there is already something like this to a certain extent what for instance if a Canadian has a conflict with an American realize that sometimes Canadians and Americans can live very close together it's just across the street so to speak or as conflict in your Swiss and a German just just one Street separates these two people there is no monopoly judge in this case that is these people the German and the Swiss a Canadian and American live in a state of anarchy visa vie each other first the first observation is there more conflict between Canadians and Americans living in close proximity to each other then there is conflict between Americans to Americans living in close proximity to each other I'm not aware of it is there more conflict between Swiss and citizens and German citizens who live in close proximity to each other than there is between Swiss people to Swiss guys living in close proximity or two German guys I'm not aware officers what do say what happens in this case the Swiss goes to the Swiss Court the German goes to a german court if they agree no problem if they don't agree again arbitration would will set in in this case and this arbitration in the current system is of course also semi-state arbitration courts because after all even these supranational courts are again manned by people that this state or that states ends in 2 z's into these courts but nonetheless you can see that at least as far as a frequency and smoothness of operations is concerned the fact that there is no monopoly judge does not cause any problems whatsoever and what I'm proposing the same sort of thing cut of course work also was in any given any given country was this I'll stop and let you sink the ball you