David Friedman

The National Liberal Club has the unfortunate distinction of being famous for its toilets. The fame arises from the story told about the habit of F E Smith of popping into the club on his way to the Commons to use their facilities. The problem was that he didn’t belong to the club and one or two of the members got a bit shirty about this and asked the porter to have a discreet word with him about it. And so, on his next visit the porter accosted him with the words: ​

“I hope you won’t mind me pointing out sir, that this is a private member’s club?”. To which Smith retorted “Good God, is it a club as well?”

F E Smith, like his best friend Winston Churchill, was devoted to his cigars, and it was appropriate that we met tonight in the club’s Smoking Room, for a talk by David Friedman, the anarcho-capitalist and the author of The Machinery of Freedom, on the subject of ‘Law Without the State’. It was an apt reflection of just how less liberal we are now that no smoking was allowed in the Smoking Room.

One of David Friedman’s themes was the way contractual law has been changed by the internet because we are now dealing with overseas companies, such as Apple, eBay and iTunes, against whom we have, in practice, no recourse through the courts. It reminded me of a music business conference where the audience of 200 were asked if they would ever sign a contract without reading it. When everyone, including me, replied “No, of course not” we were all reminded that we dealt with iTunes every day, and no-one has ever bothered to read their terms and conditions, which amount to about 500 pages. And the same applies to Vodafone or Amazon or whoever. David Friedman said that “reputational enforcement”, ie the fear which every company has of losing its reputation, is the new means by which the customer is able to make a company meet its contractual obligations. Yes, I thought, and in my business TripAdvisor performs this function very well. I didn’t get the opportunity to ask David Friedman why Ryanair seems to be immune to this rule.
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On my way out I followed the signs saying “Lavatories” to inspect the famous loos, expecting to see rows of stately porcelain urinal stalls, as in the old days. I’m sorry to say they’ve been ripped out. The whole point of the National Liberal Club went with them.