I think many people, in various discussions about the structure of society, have come across analogies with an apartment building. I have long noticed that the usefulness of a discussion is inversely proportional to whether an apartment building appears in it and how much effort people spend trying to explain themselves through this analogy.
The thing is that this analogy itself is erroneous in most cases. In talking about situations where the apartment building illustrates the fact that people depend on one another, whether it is “he smokes and the smoke goes into my window,” or (most often) the situation when one person’s sabotage leads to consequences for everyone—for example, when someone refuses to pay for housing and communal services, as a result of which the roof leaks, the elevator doesn’t work, and total armageddon ensues.
In the overwhelming majority of cases, such reasoning is intended to demonstrate the impossibility of “anarcho-capitalism,” because if he smokes and the smoke goes into my window, there should be someone to give him a scolding—not to mention that if he doesn’t pay, we’re done for, and therefore we own him. In general, it turns out that without a state it’s impossible. Moreover, as we are told, this is how states come into being, by themselves, of their own free will, otherwise it’s impossible.
Let us immediately note that this takes place in our hypothetical “libertarian future,” because considering the question “what will you, libertarians, do when Vasya-the-plumber suddenly gets drunk and starts…” is somehow strange. That is, it’s unclear what there is to discuss here, because comparing “libertarians” with “Vasya-the-plumber” creates no special problems. It is clear that experienced trolls constantly use magical time jumps, reasoning now in the categories of one situation (current practice), now in the categories of another (hypothetical future), and sometimes both at once within the same comment, but let us leave this problem to practitioners of internet battles.
Let us also note that the “apartment building” in question is a very specific formation, in which residents own their apartments. A significant portion of comments proceeds from the fact that, as is usually the case in a modern building, property rights to communications, the stairwell, and so on are weakly defined. One way or another, residents must regularly collect a certain sum of money and give it to people who keep all this building infrastructure in order.
Now let us transfer this wonder of nature into a hypothetical libertarian society. And before debating how libertarians would live in such a building, or whether a “state” might emerge there “by itself,” we must ask how probable it is that such a building would exist at all.
A “libertarian society” differs from currently existing societies only in that the intervention of third parties with their opinions about how you should act in your affairs is reduced to a minimum. In such a society, economic regularities operate most clearly. Specifically, we are interested in only one regularity—namely, that the value of anything is determined by what can be obtained from owning that thing.
Now let us look at housing from this perspective. The goals that people pursue when buying a dwelling can be very different, depending on the value they want to receive. “A house in which I and my descendants will live” and “to get by somehow for the time being” are completely different goals. There may also be “a workspace in this district,” “to show off real estate in a prestigious location,” and a host of other options.
Since there are no obstacles in the form of “land allocations,” “designated purposes,” “housing stock,” and so on, the market—those people who want to derive benefit for themselves from the land plots belonging to them—attempts to account for all possible goals of potential buyers in order to extract their profit.
At the same time, it goes without saying that there are no longer any ownerless water mains, sewers, roads, and other communications, there are no housing maintenance offices, not to mention ministries, benefits, budgets, and the state as such.
The latter means the following—the conditions of operation of the future dwelling become the most important factor when purchasing it. That is, any person of sound mind and firm memory will try to minimize uncertainty on this matter. Therefore, first on the list to purchase will be a private house on their own land plot. I think I will not stray much from the truth if I say that the second option most often will be rental, that is, a situation when the burden of maintenance falls entirely on the shoulders of the house owner. Renting in an apartment building resolves all questions that allegedly arise from apartment living, including “he smokes into my window,” because the house owner sets rules on his own property (for example, can forbid all tenants to smoke).
Can such a situation—an apartment building in which residents own apartments—arise “by itself” under these circumstances? Of course. However, two things are obvious here. First—the more apartments, the higher the uncertainty, and therefore, the less attractive such a project. Second—the most likely situation here will be when future residents themselves hire a developer. This means that the questions of future maintenance have already been resolved by them, and therefore, no special problems arise here.
Let us go further. Suppose, after all, some developer decided to build an apartment building and then sell apartments in it, assuming that residents will create some kind of HOA (homeowners association). I think everyone understands that due to the circumstances described above, or rather—the complete uncertainty on matters of maintenance, housing in such a building will be extremely cheap. It is clear that cheapness means a corresponding contingent of residents, so questions like “why is he smoking into my window” immediately disappear, because the answer is “what else did you expect for that price.”
In general, such a project can be evaluated in advance as an entrepreneurial mistake. Housing for the poor will bring much more income if it is ordinary rental. In this case, the owner has all legal levers to influence those who refuse to pay, and the building as a whole suffers less from such people.
If we include in our reasoning the land plot on which the house stands, everything becomes even clearer. If the house belongs to the residents, but the land, let us say, to the developer, then the latter is simply suicidal, because the value of such a plot (all else being equal) will fall every day, and the faster, the worse things are going in our building. If the land is the property of the collective of residents, things will go even faster.
Quarrelsome and unsociable residents reduce the value of surrounding plots as well. Therefore, their owners at the first opportunity will buy out this property. In any case, if the HOA cannot come to an agreement among themselves, the building will go bankrupt and the land will be sold. After all, we have a libertarian society—that is, there are no special legal regimes for “non-profit” enterprises and other quirks of a command economy.
A very significant point here—these are the relationships between the developer, the apartment owners, and the service providers—water, sewage, electricity. The latter must understand how they will ensure payment. I find it difficult to imagine private providers who would conclude a contract knowing that they will not be able to control the provision of the service. If, however, there is a possibility to effectively disconnect a particular apartment from the service, then the “free rider problem,” “public goods,” and the corresponding conclusions about the inevitable emergence of the state generally disappear into nowhere. However, it seems to me (though I may be wrong) that such organization of communications will lead to a significant increase in the cost of the project.
Thus, the business project “we build an apartment building and then sell apartments” in a libertarian society—this is a very exotic occurrence with a significant probability of entrepreneurial error.
However, let us imagine that somehow such a building has been built and exists (let us say, historians and local historians give tours of it). What happens when some residents sabotage payments to service provider companies in such a building? First, we can assume this is stipulated in the HOA formation agreement. Accordingly, the violator, after the usual court procedure, is declared bankrupt and leaves the building. In an extremely improbable case of the absence of liability in the contract, the question is still resolved through court. After all, if, let us say, you do not receive water because your neighbor is not paying for it, this can be considered aggression against your property.
Now let us imagine an even more improbable (for the described initial conditions, of course) situation, when for some reason the court and police do not function—that is, the residents either do not want or do not have the opportunity to resort to them.
This is usually where the specter of the state arises and a joyful “aha!” is spoken. Let us see where the state is there and whether one should say “aha.” Suppose someone does not want to pay. On this basis, statists claim that the best solution would be the establishment by residents of some Cheka that would have the capability to use violence against non-payers. However, is this solution obvious and simple? Let me remind you that the state is an office. Is it necessary to create it (that is, incur additional expenses) to enforce payment? Is it necessary to have certain people regularly engaged in taking money from residents in order to (perhaps) solve a one-time task of forcing one offender? I am not even mentioning that regular enforcement also does not solve the problem if the debtor simply has no money.
For a healthy person, the answer here is obvious. There is no sense in voluntarily submitting to a specially created office that immediately acquires a bunch of incentives for abuse. After all, the people in this office solve the same tasks that can be solved on a one-time basis, without creating a regular apparatus of coercion. For example, neighbors could buy out the debtor’s apartment, and mundane coercion doesn’t require either an office or “the consent of the majority” for implementation.
I think those who can will try to leave this wonderful house with a state inside as quickly as possible, especially if the office begins to do what states usually do—redistribution—will force those who can pay to pay for those who cannot. The matter will end in bankruptcy, as always happens with all states. True, unfortunately for real states, there are no external forces, such as the service providers in our example.
Thus, it can be said that in a hypothetical libertarian society, the situation of an “apartment building” is absolutely marginal. And even if we allow that a little state of their own would appear in such a building, the spread of this practice is impossible, because alternative practices are more accessible, cheaper, and more pleasant.
Exactly the same and for exactly the same reasons, the “spontaneous generation” of the state in a “natural” society is impossible. In our example, people act freely, striving to achieve their goals, using the resources available to them. As we have seen, those “tasks” that allegedly only the state is capable of solving simply do not arise in their activities. People account for these risks in advance, in the course of their activities, making various decisions—they buy a house with a plot, live in rented premises, or pre-negotiate the terms of maintenance before the building is constructed.
A state can appear only when some group of people seized control over some territory (building) with the purpose of forcing its residents to pay tribute. In this case, the “free rider problem” is simply one of the justifications for the existence of a gang.
In general, when they start telling you “well, imagine that you are in an apartment building…” ask a simple question—“well, tell me, why did I end up there?”
In conclusion, a few words about where the “apartment building error” comes from. There are two objective reasons for the use of the apartment building metaphor as an analogy that allegedly illustrates something.
First, it is not difficult to notice that the metaphor itself completely excludes the fact that housing is as much a part of our plans and as much a choice as everything else in our lives. It assumes that certain people, regardless of their previous decisions, suddenly found themselves in an apartment building under completely specific conditions. In ordinary reality, this does not happen. Apartment buildings in the sense the metaphor uses them are a rare phenomenon, and the more liberal the past of a particular country was—that is, the more freely people disposed of their choices—the fewer apartment buildings we will encounter. Moving from Russia toward the United States through Europe, we will encounter fewer and fewer apartment buildings whose residents own their apartments.
However, in our most recent history, things were not so. In our history, after the collapse of the USSR we really one day all together suddenly became owners of apartments in an apartment building. To a certain degree, this justifies those who resort to the analogy of such a building, but it in no way makes this analogy correct.
Second, both in Soviet and post-Soviet reality, the questions of building maintenance are not the concerns of the residents, but the concerns of some transcendent forces. If you visit the United States in winter, you will see how locals clear snow themselves, without waiting for the appearance of mighty forces. Here, this can be seen only in front of a “private house.” That is, the apartment building analogy completely ignores the fact that the problems of future housing maintenance are the most important factor in choosing it. It is completely unclear what, except for the most extreme need, could force me to buy an apartment in a building where it is known that they regularly turn off electricity, gas, and power, and whose residents beat each other’s faces, hoping to force them to pay for communal services.