Escrow agents

James A. Donald jamesd at echeque.com
Wed Apr 18 08:21:09 PDT 2001


    --
At 02:48 PM 4/15/2001 -0700, Tim May wrote:
> How non-law-regulated (black) markets work, and how they deal with
> deception and cheating, is a huge topic. (I recently suggested to
> David Friedman that he consider taking on this topic for a major
> book.)

David Friedman lacks empirical data.

I have some empirical data.

My empirical data is as follows:  Information about people's reputations
tends to be poor and unreliable, since one cannot report satisfactory or
unsatisfactory performance widely.  The worst people tend to be discovered
and excluded, however because one cannot exercise as much choice about
those one does business with as one would prefer, one needs the
temperament, physical size, and business associations that enables one to
make credible threats of breaking people's arms and legs.

Among the better class of people, illegal entrepreneurs who went to the
right schools and refrain from taking opiate drugs, one relies
overwhelmingly on reputation and character.  However among the worse class
of people, fly-by-night illegal entrepreneurs, and people who take opiate
drugs, one relies heavily on the threat of physical harm.

Illegal entrepreneurs tend to become snobs.  It is the only practical way
to operate an illegal business.

    --digsig
         James A. Donald
     6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG
     Q/RIlFG+UJ6pqGUy3X9AETW273ySxFK5z+AUeSE0
     4lhnDjbUKw95Q08QUiuCur6+KdzxsKpS/tBzQQW0L

-----------------------------------------------------
We have the right to defend ourselves and our property, because 
of the kind of animals that we are. True law derives from this 
right, not from the arbitrary power of the omnipotent state.


http://www.jim.com/jamesd/      James A. Donald





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