TGIF: Notes on Anarcho-Capitalism

I'm pretty sure I won't be around long enough to see anarcho-capitalism—or what I call market-ordered anarchism—prevail in the United States. I'm just as sure that I won't see government strictly limited to protecting individual rights and never violating them (if that's coherent).

So that's a wash.

But it doesn't follow that discussing individualist, pro-property, free-market alternatives to the current, virtually out-of-control political system in America is time wasted. Far from it! If we want to progress toward liberty, we'd better get a move on. The only proper way to proceed is through discussion. No name-calling—no shouting Statist! or Tyrant! or Fascist! or Oppressor! or Psychopath! or Warmonger! Just discussion. (I almost said "civilized discussion," but that is redundant.) People can be badly wrong with the best of intentions. We all know how the road to hell is paved. Nevertheless, don't insult. Rebut. Refute. Don't go for the jugular. Be patient. You once did not know the case you're making today.

TGIF: Limited Government's Bait and Switch

In a fundamental respect, libertarian minarchism (minimal, or limited, government) and market anarchism (or anarcho-capitalism) have something important in common: neither can guarantee individual rights.

But there's a big difference: unlike market anarchism, minarchism appears to offer a guarantee, which allegedly makes it preferable to market anarchism. Actually, it's a false guarantee, a bait-and-switch. So it's not preferable to market anarchism, at least on those grounds.

However, what market anarchism can do is show how everyday incentives will tend to protect liberty (and already do now). Minarchism can't credibly say the same thing because constitutionally limited representative democracy is riddled with well-known perverse political incentives. That makes market anarchism the better bet.

It's instructive to watch the recent Soho Forum debate on the proposition "Anarcho-capitalism would definitely be a complete disaster for humanity." Yaron Brook, chairman of the Ayn Rand Institute, took the affirmative, and Bryan Caplan, libertarian professor of economics at George Mason University, took the negative. I think Caplan demolished Brook's case, which isn't exclusive to Ayn Rand Objectivists. This was a debate between two people starting from similar premises in favor of individual freedom, rational self-interest, and competition.

While what follows may not convince anyone to advocate market anarchism, it should eliminate a big argument against it.

Most limited-government advocates think that only a monopoly government can produce the objective law and fair and peaceful adjudication/enforcement that human beings need to flourish. The problem, as indicated, is that minarchism is all talk. It can't deliver.

Remember the old joke in which a tourist asks a grumpy local how to get somewhere? The local responds, "You can't get there from here." That's the problem. Brook's theory of constitutionally limited government promises to get us to a place where we cannot go because it doesn't exist. Why not? As Dr. Seuss might say, because it's people all the way down. Limited-government advocates ignore this obvious fact.

Contrary to its fans, limited government is conceptually impossible. It, not anarchism, is a "floating abstraction." If this standard argument for limited government disappears, what's left?

Any advocate of liberty who knows even a little U.S. political history should see the problem for minarchism. In freedom-loving quarters, the American constitutional system wins kudos  -- the obvious serious contradictions such as slavery excepted. But what about the government's horrendous expansion since 1789? Isn't that a hint that something did not quite work?

Some Americans began complaining about the bigness of the national government at the turn of the 19th century! And let's not forget that the first constitution, the Articles of Confederation, denied the national quasi-government the power to tax and regulate trade. Within a few years, that changed. Wasn't that a bad omen?

Anarcho-libertarian abolitionist and businessman Lysander Spooner's 1870 "The Constitution of No Authority" concluded, "But whether the Constitution really be one thing, or another, this much is certain -- that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case it is unfit to exist.”

The Constitution has not guaranteed freedom. Brook himself called today's U.S. government a "gang." So what could have been different, minarchists? A nation full of perfect Objectivists? Good luck with that.

The Soho Forum debate, which I highly recommend, could have been over early when Caplan identified the impossible guarantee. Brook responded that his ideal government would "strive" to make that guarantee. Caplan pointed out that a striven-for guarantee is not a guarantee.

Undeterred, Brook resorted to the catechism "A proper government is the means by which we place retaliatory use of force under objective control and objectively defined laws ... for the purpose of protecting rights."

Caplan called this mere "tautological." You can define the term proper government as an objective and reliable rights-protector. But in the real world, how do you get there from anywhere? It sounds Platonic. It's more like a version of the ontological argument.

Brook also said that the banishment of force from society "doesn't just happen. That's not something you negotiate. That is just something that is." (My emphasis.)

"Just is"? What does that mean? How does it materialize -- immaculate conception? And how would it be maintained? Is the state an infallible Objectivist Mr. Spock? Or Gort, the robot in The Day the Earth Stood Still? (The original movie costarred Patricia Neal, who ironically also played heroine Dominique Francon in the film version of Rand's The Fountainhead.)

Remember, it's people all the way down -- from the inception of the government to maintenance. People are fallible. They disagree. They change their minds. They ask for free stuff from politicians. Some will even be corrupt and dishonest when they run for office. And, as Public Choice shows, the ones in government are prone to bias in favor of their careers. No one can reasonably hope to keep a government limited, nonaggressive, and efficient -- a square circle indeed. Is a New Man required? (See my take on someone who long grappled with this question, Anthony de Jasy.)

Pro-market economist Harold Demsetz warned against the "Nirvana fallacy": positing an unachievable "ideal" as an alternative to anything that can be achieved. That's what we have here in limited government. If it isn't on the actual menu, we must determine the best actual alternative.

Caplan repeatedly challenged Brook with this basic objection, but Brook bobbed and weaved. (See the exchange starting here.) He seems not to have read anything but Rand's 1960s essay on the need for government, predicting routine widespread violence under market anarchism. But she was answered many times. Brook casually dismissed the voluminous market-anarchist historical, economic, and ethical scholarship as a mere intellectual exercise.

It was good to hear that Book supports free immigration. Among its many virtues, it would be a potential escape from tyranny. But why shouldn't people be free to "migrate" from one rights-protecting institution to another without changing location? Brook says a location (undefined) must have one law. But Western Europe doesn't have one law. Yet he agreed with Caplan that, unlike in previous eras, a war between, say, France and Germany or Norway and Sweden is unthinkable and will very likely remain so.

Caplan noted that what keeps the big governments in those countries from fighting (which would be made possible by taxation and conscription) is people's general expectation of peaceful dispute resolution. That would apply even more to accountable, reputable, and competitive businesses selling security to free customers.

War isn't impossible in Western Europe and elsewhere, just unlikely in our more pacific era. (See Steven Pinker's The Better Angels of Our Nature: Why Violence Has Declined.) Yes, Russia and Ukraine are at war. But how many of the almost 200 countries in our anarchist world without a super-government would rather fight costly wars even for the winner than settle disputes diplomatically? (For an analogy, think of what two auto insurance companies routinely do when each has a client in a conflict. The companies already have contracts to deal with each other peacefully. They couldn't afford a Randian war of all against all.)

Well, why does market anarchism, unlike minarchism, inspire reasonable confidence about the chances of protecting liberty? That's a topic for another day, but suffice it to say that, as Caplan argues, rational self-interest, free competition, the need for a good reputation, and today's general expectation of peaceful conflict resolution provide our best chance. This doesn't mean pushing the "anarchist button," which doesn't exist anyway. It means showing people that major alternatives to the state already exist, including arbitration and private security firms.

It is said that freedom isn't free. Protection of freedom certainly isn't free. But we need not be forced to pay monopoly prices for inferior services and even rights violations in order to enjoy our freedom.

More reading

Roderick Long, "Market Anarchism as Constitutionalism."
Sheldon Richman, "The Constitution of Anarchy," in America's Counter-Revolution: The Constitution Revisited.
David D. Friedman, The Machinery of Freedom: A Guide to Radical Capitalism, 3d ed.

A Flaw in the Limited-Government Case

A flaw in the limited-government advocate's brief against statelessness is the overlooked fact that the state is not a homogeneous blob. It is a group of individuals who cooperate to accomplish certain ends (for good or ill). No superstate compels their cooperation. That is, they exist in a state of anarchy with respect to one another. In other words, widespread, decisive cooperation goes on everyday without state supervision or enforcement. QED.

Limited-government advocates thus reify the state as much as other statists do.

Another way of putting my point: the minarchist's goverment is un-praxeological. The state does not seem to consist of individuals who need reasons (incentives) to act in the ways the minarchist assumes. Rather it's as if the state were a single acting entity that conducts itself appropriately. Why? Because it has no other choice under its constitution.

This assumes away all the interesting problems -- e.g., why do armed people (police, soldiers) carry out the orders of unarmed people (dictators, kings, presidents, prime ministers)?

It is unreal.

You can see this argument more fully developed in the last chapter of America's Counter-Revolution: The Constitution Revisited.

Unlimited Limited Government

One thing that bothers me about the idea of limited government is how unlimited it is. After all the acknowledged illegitimate departments are eliminated, what's left? Only the IRS (perhaps under another name), the police/courts/prison complex, and the military. Lovers of liberty are supposed to be comforted by that program? Those are the three most threatening parts of the state -- and they are left standing! (Minarchists may object that I assume the taxman won't face unemployment, but have no doubts about this. A monopoly state without the power to tax is as imaginable as a square circle.) I'd feel much better if all that remained were the department of motor vehicles and the bureau of weights and measures.

Minarchists may try to reassure us that the remaining departments will be strictly limited by a constitution. To evaluate that claim, consult the Public Choice literature and the work of Anthony de Jasay. Also American history.

TGIF: The Choice Is between Government and Liberty

An article by George H. Smith from a few years ago makes a distinction about freedom that seems worth pursuing. In “Jack and Jill and Two Kinds of Freedom” (also a podcast), Smith distinguishes between (as the title indicates) two kinds of freedom, or between freedom and liberty. He tells the story of Jack, who wants to climb a hill to fetch a pail of water and needs Jill’s help to bring the heavy pail back down. Being a “moral nihilist,” Jack is just as willing to force Jill to help him as he is to persuade her. It all depends on his cost-benefit calculation at the time. In Smith’s story, Jack chooses persuasion and succeeds, so he does not need to resort to Plan B, compulsion. Jill, by the way, does not know that Jack would have forced her.

Jill, on the other hand, is a libertarian who believes in rights and justice. Had the tables been turned and she needed Jack’s help, her only acceptable course would have been persuasion.

Hoist by His Own Petard

Tibor Machan takes John Stossel to task for not espousing the pure libertarian position during his recent Fox Business Network show on the health-insurance overhaul. A proponent of Obamacare, Russel Mokhiber, challenged Stossel, an opponent of government-run medicine, by asking if he also opposes government parks and schools. Machan is unhappy with how Stossel responded, because instead of invoking the libertarian principle against government parks and schools, Stossel said "the issue is big versus limited government."

[S]o that in the last analysis [Machan writes] John Stossel and [guest] John Mackey were trapped in a dilemma: they either embrace a pure libertarian position in which there is no room for any wealth redistribution and public works--everything must be privatized apart from the judicial system and the military--or they have to accept the socialist health-care proposals of the liberal Democrats, better known as Obamacare, as just another task the government can take over.

But hold on. Machan is stuck in his own dilemma. If he opposes socialist health care, why does he favor a socialist judicial system and military? As he says, "It isn't the size of government, really, that is of concern but its proper scope." He's right. But why does he want a government whose scope includes the judiciary and military?

He responds, "Matters pertaining to the protection of the basic and derivative rights of the citizenry are the government's purview but nothing else, including parks, forests, lakes, roads and so forth."

This seems wholly arbitrary. What does it mean to say that protecting rights is the government's purview? Historically that has not been the case; government has been the greater killer of liberty. Rulers may have claimed they were protecting people, but that doesn't make it true or proper, since it routinely coerced innocents in the process. More fundamentally, who says that rights protection is government's--and only government's--purview? Is that carved on a tablet somewhere?

Machan might say that everything but judicial and military (by which I presume he means bona fide defense) functions can be provided in the competitive market. But that's mere assertion, belied by theory and history.

Enforced monopoly is bad for everything--except the production of security? Why?

Gustave de Molinari thought this through more clearly:

It offends reason to believe that a well established natural law can admit of exceptions. A natural law must hold everywhere and always, or be invalid. I cannot believe, for example, that the universal law of gravitation, which governs the physical world, is ever suspended in any instance or at any point of the universe. Now I consider economic laws comparable to natural laws, and I have just as much faith in the principle of the division of labor as I have in the universal law of gravitation. I believe that while these principles can be disturbed, they admit of no exceptions.

But, if this is the case, the production of security should not be removed from the jurisdiction of free competition; and if it is removed, society as a whole suffers a loss.

Either this is logical and true, or else the principles on which economic science is based are invalid...

In the entire world, there is not a single establishment of the security industry that is not based on monopoly or on communism.

In this connection, we add, in passing, a simple remark.

Political economy has disapproved equally of monopoly and communism in the various branches of human activity, wherever it has found them. Is it not then strange and unreasonable that it accepts them in the security industry?