Saturday, August 22, 2009
Anarchy, the Mafia, and Somalia: Clearing Up the Confusion
In an earlier entry I posted the concerns of a skeptical reader of my pamphlet Chaos Theory [.pdf]. The event turned into a proverbial town hall meeting, with 47 heated comments as of this writing, not to mention an old guy with a swastika declaring that God would judge me and my anarchist cronies in Auburn. I thought some of the points raised by critics Blackadder and Bobby1011 were worthy of this standalone essay. --RPM
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Anarchy, the Mafia, and Somalia: Clearing Up the Confusion
By Robert P. Murphy
When confronted with a sketch [.pdf] of how a truly voluntary society might work, with private companies providing judicial and defense services along with education and Big Macs, the critic often replies, "That arrangement could never last in the real world. The mafia would take over and become the new government."
This typical view actually gets things backwards. Contrary to popular belief, the government doesn't hinder the mafia, it actually helps it. (Note that for this essay, I am going to use "mafia" as shorthand for "organized crime." I am not impugning Sicilians specifically in this post.)
Stop for a moment and consider which sectors of the economy the mafia occupies. Prostitution, gambling, loan-sharking, narcotics, labor unions, and of course simple robberies and homicides. What do they all share in common? They are activities that are either heavily regulated or downright prohibited by the State. In contrast, in sectors that are relatively free from government interference, the mafia has no foothold.
The classic experiment to show that we've put our finger on the true explanation, is alcohol Prohibition. When it was illegal to sell liquor, gangsters such as Al Capone engaged in bootlegging, and shot up other competitors in turf wars. Yet after Prohibition was repealed (in one of the few decent things that FDR did upon taking office), organized crime left the alcohol industry and focused on the remaining sectors that were still prohibited.
Now if the above analysis is correct, and the mafia (and violent gangs in general) thrives only in those areas infested with heavy State intervention, then it seems obvious that market anarchy would emasculate such criminal groups. To put it in other words, as the government legalized more and more sectors, the mafia would have to concentrate its activities in fewer and fewer businesses. In the limit, as everything were legalized (from a State legislative point of view), the mafia would have no special advantages at all. Just as the mafia can't withstand open competition with Budweiser, it would also lose market share to honest entrepreneurs in judicial and police services, if only the State would lift the ban on producing such services.
A Rival Explanation of the Prohibition Episode
In the comments of a previous post on Free Advice, critics Blackadder and Bobby1011 offered a rival interpretation to my theory above. They argued that I was wrong to interpret the repeal of Prohibition as a reduction in State intervention into the liquor industry. On the contrary, they viewed it as a resumption of government provision of property protection for the producers of alcohol.
I must confess that this alternate explanation took me by surprise; I thought my Prohibition example was airtight, but my critics did at least offer a plausible comeback. However, on balance I still think my interpretation is far superior. This is a crucial point so allow me to belabor it.
I am saying that the mafia benefited from alcohol Prohibition because the police effectively chased away legitimate businessmen from the industry. If the State were to literally declare that Al Capone had a monopoly in Chicago liquor distribution, and sent any competitors to jail, then the price of alcohol in Chicago would shoot up, and Capone would make exorbitant profits. This is obvious. So by the same token, I argue, when the State threatens to put any liquor distributor in jail--but then actually looks the other way when Capone pays bribes--that is economically very similar to the outright, legislated monopoly.
I am using Capone just to make an illustrative point. I haven't done any particular research on him, but it is certainly true that in modern times, big-time crime families regularly pay the police "protection money." If any reader doubts this, then he or she really doesn't understand the first thing about the drug trade. For a low-effort introduction, rent the movie Serpico, which is a great Al Pacino movie based on the true story of a NYC narcotics officer who didn't want to take dirty money. (Come to think of it, you can rent just about any Al Pacino movie to learn that big-time drug dealers routinely pay off the police.)
The Marginal Costs and Benefits of Violence in Markets
It should be quite obvious empirically that violence goes hand-in-hand with markets that suffer from extensive government prohibition. Again, the classic experiment is alcohol Prohibition. It would be inconceivable that executives at Budweiser would order a drive-by shooting of their rivals at Heineken. Yet when the State stamped out most producers in this industry, killings were common. This insight shows that the gangland turf wars in inner cities today are due to drug prohibition, and not to the intrinsic "craziness" of cocaine selling.
But even though most libertarians recognize the association of government prohibition and violence, its causes are rarely spelled out. Very briefly, the answer is simple: Government prohibition raises the marginal benefits and lowers the marginal costs of using violence against one's competitors in a particular industry.
Let's start with the cost side, since that's easier to grasp. Right now, if you are going to become a cocaine distributor, you are already breaking laws that could send you to prison for life. Moreover, if you're big enough, you regularly give bag(s) of money to the local police. So on the margin, the cost to you of killing a rival dealer is much lower than it would be if you ran a Thai restaurant. When you're a normal restaurateur, the worst that the government can do is audit your tax returns. But if you're a cocaine dealer, if you fall out of the good graces of the cops they can give you life. So it's really not such a reckless move to kill somebody, when you're a cocaine dealer, even though it would be insane for a restaurant owner to order a hit of the guy opening a sushi shop down the street. The cocaine dealer already has dirty cops on his payroll, who presumably would be willing to overlook a homicide too for an extra payoff, and the cocaine dealer also is a lot more connected and able to bribe judges should he ever go to trial.
On the other hand, the marginal benefits of violence are much higher for the cocaine dealer than for the Thai restaurateur. Drug dealers aren't (completely) reckless; they do it for the money. In order to compensate for the huge risk, the monetary returns on dealing cocaine must rise to astronomical levels. (If you like charts, when the government threatens to imprison cocaine sellers, the supply curve shifts way way to the left, whereas the demand curve shifts left but not nearly as much. So the equilibrium price of a kilo of cocaine skyrockets, far above the monetary costs of production.)
Because of the above considerations, the benefit of gaining market share in the cocaine business is huge. Every new customer might mean thousands of extra dollars per month in monetary profits. In sharp contrast, if the Thai owner "steals" a customer from the Japanese restaurant, that might add only $100 per month to the bottom line. This is because there's a much lower (monetary) profit margin in the restaurant industry. It might make sense for drug dealers to hang around schoolyards, selling their products to kids, or possibly even giving some of it away for free to newcomers (though I don't know if that really happens, outside of anti-drug commercials). But you never see representatives from General Mills hanging around the monkey bars, selling the single-serve boxes of Cheerios. Because of this huge difference, gaining additional customers means a lot more in the prohibited industry than in the free sector. That's why killing off a rival--and thereby gaining access to his customers--is so much more profitable in the prohibited sector.
So we see that when the State threatens to imprison the producers of a certain good, it alters the incentives so that violence is now much more lucrative in the industry. Naturally, people in the real world are not simply robotic utility calculators. It's not so much that the same entrepreneur will be either a hard-nosed businessman, versus a ruthless killer, depending on the DEA's policies. No, what happens is that people who are predisposed to being cold-blooded killers are allowed to thrive and grow very rich in a society with strict drug laws. So rather than being some isolated sociopath, who kills a guy in a bar for looking at his girlfriend and then goes to jail, instead the asinine drug laws allow this same sociopath to make millions per year selling cocaine, with which he buys automatic weapons and hires cronies, and also buys off the police so he stays on the streets.
Does the State Actually Protect Private Property?
What's really ironic about the rival theory of Blackadder and Bobby1011 is that it assumes that government is actually good at protecting property rights. In other words, their theory assumes that the honest folks at Budweiser couldn't compete with Al Capone in 1930, because he would threaten to kill them and the bootlegging people of Bud couldn't very well call the cops and complain. But once Prohibition was repealed, now all of a sudden the legitimate producers of alcohol could press charges against gangsters for wrecking their stores or for shooting their employees.
I suppose there is a grain of truth to this, but I stress that it really is a grain. We know that the government does a horrible job in every other enterprise it touches, be it education, road paving, electricity provision, and intelligence gathering. But we're supposed to believe that it does a really great job in protecting people from gangsters? If that's true, then why the growing reliance on private arbitration efforts? Isn't it obvious that government courts and police are just as inefficient and counterproductive as everything else the State does?
To truly test the different theories, we need to come up with an activity where the government (a) doesn't interfere with producers but (b) doesn't defend the property rights of those same producers. If such areas are rife with theft and violence, then Blackadder and Bobby1011 are right. But if those sectors are generally orderly and peaceful, then I'm right.
I can think of a few examples where I'm right. (Maybe in the comments my critics can counter with examples that suit their theory.) For example, commerce over the internet is hardly regulated. Sure, in principle if you bought a book from a third party through Amazon, and the guy never sent it to you, you could bring him to small claims court. But that's not what makes the system work. It's clearly reputational effects, not the threat of government lawsuits.
Other examples are the "Not So Wild Wild West" [.pdf], where prospectors in California respected the claims of earlier arrivals, even though there was (initially) no formal government establishing the property rights. And Ed Stringham has done great work (see his 2002 and 2003 papers [.pdf]) explaining how fairly sophisticated financial markets operated in the 17th century even without official law enforcement.
I can give a personal anecdote here as well. After I graduated a semester early from Hillsdale, I had to kill seven months or so before starting at NYU. So three of us rented an apartment in a very shady neighborhood west of Chicago. One morning I went outside and saw that my truck's window had been smashed and my CD player stolen. So I went back in, called the cops, and they said they'd send out a car. (I had to warn my one roommate to hide his pot.) But guess what? The cops never showed up. And I daresay no detectives were burning the midnight oil, trying to crack my case wide open.
So in this neighborhood, I think the police really didn't care too much about protecting the residents' property rights. And although I guess I can't really prove it, I'm pretty sure that the mob didn't run all the grocery stores in the area. Now it may be true that criminal organizations were involved with the bars, but guess what? You need a liquor license to run a bar. But when it came to something that was fairly wide open to competition, like a grocery store or a restaurant, I am pretty sure those were run by legitimate businesspeople, who didn't use violence to keep out would-be competitors. And this is true, even though I don't believe the police would have been rushing over to protect these businesspeople from mob harassment.
Confusing Correlation and Causation in Somalia
Besides claiming that the mafia (or insurance companies) would take over and become the new State, critics of my writings on market anarchy will often say, "Well why didn't your utopia rise out of the ashes in Somalia? History shows that when the State stops providing security services, chaos breaks out."
I need to wrap this essay up, so I must be brief. But a few quick responses:
* As far as the "lessons of history" go, yes it's true that a Rothbardian paradise has not developed and proved its stability. But by the very same token, we have not a single example in world history of a stable, limited government. The best attempt was the government set up by James Madison and friends, and we all know how that turned out.
* Somalia is not a fair illustration of what I described above, in terms of a State legalizing more and more activities. No, the government in Somalia fell; it didn't disband itself because the public became Rothbardians. This is also true in regions in Colombia where the government exercises no authority. It's not that the State ceded its power, but rather that it was beaten back by a rival gang. To give an analogy, suppose I say that lowering taxes as a share of GDP is good for the economy. Would it really make sense to say, "Well, I agree that after a certain point, if the government takes too much in taxes, that's bad. But if the government takes too little in taxes, that hurts the economy too. Why, look at Somalia, where central government tax revenues are 0% of GDP. That place is a hellhole. Yet according to your supply-side theories, Somalia should be booming!"
Conclusion
The proponent of market anarchy is making the simple claim that systematic violation of acknowledged property rights does not help a society. Standard economic theory tells us that monopolies enforced through violence (or its threat) lead to lower quality and higher prices; this analysis holds true even when the monopoly refers to judicial, police, and military services. Libertarians generally recognize that the government does a horrible job educating children, maintaining roads, and sending telescopes into space. Why in the world would we want to entrust politicians and bureaucrats with protecting us from thieves and killers? After all, they're the worst thieves and killers in the world!
Robert P. Murphy holds a Ph.D. in economics from New York University. He is the author of The Politically Incorrect Guide to the Great Depression and the New Deal (Regnery, 2009), and is the editor of the blog Free Advice.
Anarchy, the Mafia, and Somalia: Clearing Up the Confusion
By Robert P. Murphy
When confronted with a sketch [.pdf] of how a truly voluntary society might work, with private companies providing judicial and defense services along with education and Big Macs, the critic often replies, "That arrangement could never last in the real world. The mafia would take over and become the new government."
This typical view actually gets things backwards. Contrary to popular belief, the government doesn't hinder the mafia, it actually helps it. (Note that for this essay, I am going to use "mafia" as shorthand for "organized crime." I am not impugning Sicilians specifically in this post.)
Stop for a moment and consider which sectors of the economy the mafia occupies. Prostitution, gambling, loan-sharking, narcotics, labor unions, and of course simple robberies and homicides. What do they all share in common? They are activities that are either heavily regulated or downright prohibited by the State. In contrast, in sectors that are relatively free from government interference, the mafia has no foothold.
The classic experiment to show that we've put our finger on the true explanation, is alcohol Prohibition. When it was illegal to sell liquor, gangsters such as Al Capone engaged in bootlegging, and shot up other competitors in turf wars. Yet after Prohibition was repealed (in one of the few decent things that FDR did upon taking office), organized crime left the alcohol industry and focused on the remaining sectors that were still prohibited.
Now if the above analysis is correct, and the mafia (and violent gangs in general) thrives only in those areas infested with heavy State intervention, then it seems obvious that market anarchy would emasculate such criminal groups. To put it in other words, as the government legalized more and more sectors, the mafia would have to concentrate its activities in fewer and fewer businesses. In the limit, as everything were legalized (from a State legislative point of view), the mafia would have no special advantages at all. Just as the mafia can't withstand open competition with Budweiser, it would also lose market share to honest entrepreneurs in judicial and police services, if only the State would lift the ban on producing such services.
A Rival Explanation of the Prohibition Episode
In the comments of a previous post on Free Advice, critics Blackadder and Bobby1011 offered a rival interpretation to my theory above. They argued that I was wrong to interpret the repeal of Prohibition as a reduction in State intervention into the liquor industry. On the contrary, they viewed it as a resumption of government provision of property protection for the producers of alcohol.
I must confess that this alternate explanation took me by surprise; I thought my Prohibition example was airtight, but my critics did at least offer a plausible comeback. However, on balance I still think my interpretation is far superior. This is a crucial point so allow me to belabor it.
I am saying that the mafia benefited from alcohol Prohibition because the police effectively chased away legitimate businessmen from the industry. If the State were to literally declare that Al Capone had a monopoly in Chicago liquor distribution, and sent any competitors to jail, then the price of alcohol in Chicago would shoot up, and Capone would make exorbitant profits. This is obvious. So by the same token, I argue, when the State threatens to put any liquor distributor in jail--but then actually looks the other way when Capone pays bribes--that is economically very similar to the outright, legislated monopoly.
I am using Capone just to make an illustrative point. I haven't done any particular research on him, but it is certainly true that in modern times, big-time crime families regularly pay the police "protection money." If any reader doubts this, then he or she really doesn't understand the first thing about the drug trade. For a low-effort introduction, rent the movie Serpico, which is a great Al Pacino movie based on the true story of a NYC narcotics officer who didn't want to take dirty money. (Come to think of it, you can rent just about any Al Pacino movie to learn that big-time drug dealers routinely pay off the police.)
The Marginal Costs and Benefits of Violence in Markets
It should be quite obvious empirically that violence goes hand-in-hand with markets that suffer from extensive government prohibition. Again, the classic experiment is alcohol Prohibition. It would be inconceivable that executives at Budweiser would order a drive-by shooting of their rivals at Heineken. Yet when the State stamped out most producers in this industry, killings were common. This insight shows that the gangland turf wars in inner cities today are due to drug prohibition, and not to the intrinsic "craziness" of cocaine selling.
But even though most libertarians recognize the association of government prohibition and violence, its causes are rarely spelled out. Very briefly, the answer is simple: Government prohibition raises the marginal benefits and lowers the marginal costs of using violence against one's competitors in a particular industry.
Let's start with the cost side, since that's easier to grasp. Right now, if you are going to become a cocaine distributor, you are already breaking laws that could send you to prison for life. Moreover, if you're big enough, you regularly give bag(s) of money to the local police. So on the margin, the cost to you of killing a rival dealer is much lower than it would be if you ran a Thai restaurant. When you're a normal restaurateur, the worst that the government can do is audit your tax returns. But if you're a cocaine dealer, if you fall out of the good graces of the cops they can give you life. So it's really not such a reckless move to kill somebody, when you're a cocaine dealer, even though it would be insane for a restaurant owner to order a hit of the guy opening a sushi shop down the street. The cocaine dealer already has dirty cops on his payroll, who presumably would be willing to overlook a homicide too for an extra payoff, and the cocaine dealer also is a lot more connected and able to bribe judges should he ever go to trial.
On the other hand, the marginal benefits of violence are much higher for the cocaine dealer than for the Thai restaurateur. Drug dealers aren't (completely) reckless; they do it for the money. In order to compensate for the huge risk, the monetary returns on dealing cocaine must rise to astronomical levels. (If you like charts, when the government threatens to imprison cocaine sellers, the supply curve shifts way way to the left, whereas the demand curve shifts left but not nearly as much. So the equilibrium price of a kilo of cocaine skyrockets, far above the monetary costs of production.)
Because of the above considerations, the benefit of gaining market share in the cocaine business is huge. Every new customer might mean thousands of extra dollars per month in monetary profits. In sharp contrast, if the Thai owner "steals" a customer from the Japanese restaurant, that might add only $100 per month to the bottom line. This is because there's a much lower (monetary) profit margin in the restaurant industry. It might make sense for drug dealers to hang around schoolyards, selling their products to kids, or possibly even giving some of it away for free to newcomers (though I don't know if that really happens, outside of anti-drug commercials). But you never see representatives from General Mills hanging around the monkey bars, selling the single-serve boxes of Cheerios. Because of this huge difference, gaining additional customers means a lot more in the prohibited industry than in the free sector. That's why killing off a rival--and thereby gaining access to his customers--is so much more profitable in the prohibited sector.
So we see that when the State threatens to imprison the producers of a certain good, it alters the incentives so that violence is now much more lucrative in the industry. Naturally, people in the real world are not simply robotic utility calculators. It's not so much that the same entrepreneur will be either a hard-nosed businessman, versus a ruthless killer, depending on the DEA's policies. No, what happens is that people who are predisposed to being cold-blooded killers are allowed to thrive and grow very rich in a society with strict drug laws. So rather than being some isolated sociopath, who kills a guy in a bar for looking at his girlfriend and then goes to jail, instead the asinine drug laws allow this same sociopath to make millions per year selling cocaine, with which he buys automatic weapons and hires cronies, and also buys off the police so he stays on the streets.
Does the State Actually Protect Private Property?
What's really ironic about the rival theory of Blackadder and Bobby1011 is that it assumes that government is actually good at protecting property rights. In other words, their theory assumes that the honest folks at Budweiser couldn't compete with Al Capone in 1930, because he would threaten to kill them and the bootlegging people of Bud couldn't very well call the cops and complain. But once Prohibition was repealed, now all of a sudden the legitimate producers of alcohol could press charges against gangsters for wrecking their stores or for shooting their employees.
I suppose there is a grain of truth to this, but I stress that it really is a grain. We know that the government does a horrible job in every other enterprise it touches, be it education, road paving, electricity provision, and intelligence gathering. But we're supposed to believe that it does a really great job in protecting people from gangsters? If that's true, then why the growing reliance on private arbitration efforts? Isn't it obvious that government courts and police are just as inefficient and counterproductive as everything else the State does?
To truly test the different theories, we need to come up with an activity where the government (a) doesn't interfere with producers but (b) doesn't defend the property rights of those same producers. If such areas are rife with theft and violence, then Blackadder and Bobby1011 are right. But if those sectors are generally orderly and peaceful, then I'm right.
I can think of a few examples where I'm right. (Maybe in the comments my critics can counter with examples that suit their theory.) For example, commerce over the internet is hardly regulated. Sure, in principle if you bought a book from a third party through Amazon, and the guy never sent it to you, you could bring him to small claims court. But that's not what makes the system work. It's clearly reputational effects, not the threat of government lawsuits.
Other examples are the "Not So Wild Wild West" [.pdf], where prospectors in California respected the claims of earlier arrivals, even though there was (initially) no formal government establishing the property rights. And Ed Stringham has done great work (see his 2002 and 2003 papers [.pdf]) explaining how fairly sophisticated financial markets operated in the 17th century even without official law enforcement.
I can give a personal anecdote here as well. After I graduated a semester early from Hillsdale, I had to kill seven months or so before starting at NYU. So three of us rented an apartment in a very shady neighborhood west of Chicago. One morning I went outside and saw that my truck's window had been smashed and my CD player stolen. So I went back in, called the cops, and they said they'd send out a car. (I had to warn my one roommate to hide his pot.) But guess what? The cops never showed up. And I daresay no detectives were burning the midnight oil, trying to crack my case wide open.
So in this neighborhood, I think the police really didn't care too much about protecting the residents' property rights. And although I guess I can't really prove it, I'm pretty sure that the mob didn't run all the grocery stores in the area. Now it may be true that criminal organizations were involved with the bars, but guess what? You need a liquor license to run a bar. But when it came to something that was fairly wide open to competition, like a grocery store or a restaurant, I am pretty sure those were run by legitimate businesspeople, who didn't use violence to keep out would-be competitors. And this is true, even though I don't believe the police would have been rushing over to protect these businesspeople from mob harassment.
Confusing Correlation and Causation in Somalia
Besides claiming that the mafia (or insurance companies) would take over and become the new State, critics of my writings on market anarchy will often say, "Well why didn't your utopia rise out of the ashes in Somalia? History shows that when the State stops providing security services, chaos breaks out."
I need to wrap this essay up, so I must be brief. But a few quick responses:
* As far as the "lessons of history" go, yes it's true that a Rothbardian paradise has not developed and proved its stability. But by the very same token, we have not a single example in world history of a stable, limited government. The best attempt was the government set up by James Madison and friends, and we all know how that turned out.
* Somalia is not a fair illustration of what I described above, in terms of a State legalizing more and more activities. No, the government in Somalia fell; it didn't disband itself because the public became Rothbardians. This is also true in regions in Colombia where the government exercises no authority. It's not that the State ceded its power, but rather that it was beaten back by a rival gang. To give an analogy, suppose I say that lowering taxes as a share of GDP is good for the economy. Would it really make sense to say, "Well, I agree that after a certain point, if the government takes too much in taxes, that's bad. But if the government takes too little in taxes, that hurts the economy too. Why, look at Somalia, where central government tax revenues are 0% of GDP. That place is a hellhole. Yet according to your supply-side theories, Somalia should be booming!"
Conclusion
The proponent of market anarchy is making the simple claim that systematic violation of acknowledged property rights does not help a society. Standard economic theory tells us that monopolies enforced through violence (or its threat) lead to lower quality and higher prices; this analysis holds true even when the monopoly refers to judicial, police, and military services. Libertarians generally recognize that the government does a horrible job educating children, maintaining roads, and sending telescopes into space. Why in the world would we want to entrust politicians and bureaucrats with protecting us from thieves and killers? After all, they're the worst thieves and killers in the world!
Robert P. Murphy holds a Ph.D. in economics from New York University. He is the author of The Politically Incorrect Guide to the Great Depression and the New Deal (Regnery, 2009), and is the editor of the blog Free Advice.
Comments:
Study the organisation of society in Scandinavia during the Vikings, 800-1200, or even earlier. That was a society with no government.
Justice was basically civil justice. Murder was punished by the murderer's family paying fines to the victim's family.
There was no higher authority to cling to, other than what was decided on the family meetings, the "courts" of the time.
The problem with that from a libertarian POW was that the family became the smallest unit. Just like the mafia BTW. The value of the individual became a function of his or her role in the clan.
If authority exists to protect the individual, we need an mutual agreement throughout the whole jurisdiction that exactly that is the role of government. An agreement upon a constitution that guarantees the right of the individual.
It is not clear how that is realized in your sketch. How do an individual protect itself in that society?
Justice was basically civil justice. Murder was punished by the murderer's family paying fines to the victim's family.
There was no higher authority to cling to, other than what was decided on the family meetings, the "courts" of the time.
The problem with that from a libertarian POW was that the family became the smallest unit. Just like the mafia BTW. The value of the individual became a function of his or her role in the clan.
If authority exists to protect the individual, we need an mutual agreement throughout the whole jurisdiction that exactly that is the role of government. An agreement upon a constitution that guarantees the right of the individual.
It is not clear how that is realized in your sketch. How do an individual protect itself in that society?
Ola, you'd need a world government to make international trade then. From medieval's mercantile law to modern private arbitrage or Internet reputation based mechanisms, people have figured out ways to create an environment that enabled mutually beneficial games.
# posted by 
: August 22, 2009 at 5:44 AM
: August 22, 2009 at 5:44 AM
Btw, David Friedman has a completely different take on the Vikings: he has some papers on that, and also he has written on it on his Machinery of Freedom, and Law's Order (or in both).
# posted by : August 22, 2009 at 5:46 AM
: August 22, 2009 at 5:46 AM
Bob,
I'm on your side, but let me play devil's advocate for a moment.
Why wouldn't defense firms engage in the practices that governments engage in now, like using violence to deter rival entrants and forcing people to pay for their services in all kinds of areas and putting up impressive buildings with Roman columns and providing "education" to everyone from around birth to the mid twenties?
It seems like the interests of senior management would be better served by acting like a government.
Ancap literature always posits defense firms that respect property rights themselves and allow people to refuse their services and allow others to compete with them, but this seems like a pretty strong assumption. If acting like that kind of defense firm made the upper management of an organization better off than than they would be if they acted like a government, then we should expect to see governments start acting like polite defense services firms any day now.
I'm on your side, but let me play devil's advocate for a moment.
Why wouldn't defense firms engage in the practices that governments engage in now, like using violence to deter rival entrants and forcing people to pay for their services in all kinds of areas and putting up impressive buildings with Roman columns and providing "education" to everyone from around birth to the mid twenties?
It seems like the interests of senior management would be better served by acting like a government.
Ancap literature always posits defense firms that respect property rights themselves and allow people to refuse their services and allow others to compete with them, but this seems like a pretty strong assumption. If acting like that kind of defense firm made the upper management of an organization better off than than they would be if they acted like a government, then we should expect to see governments start acting like polite defense services firms any day now.
One big difference between governments and private defense firms is that governments have tax payer money and private defense firms rely on people voluntarily paying for their services. The second a private defense firm decided they would want to become a government people could simply cut them off. Just think of how quickly businesses go under everyday and they aren't trying to enslave anyone.
Also there would be a profit opportunity in an ancap society to oversee and weed out any criminal defense firms. The fact that the question is raised so much shows that people do not just blindly trust them to do the right thing. An ancap society could provide many checks and balances to help ensure that these companies would not take over.
If it were likely that the defense companies would take over if say America was in anarchy, then wouldn't it be just as likely, if not more, that the military would overthrow our current government and take over. Not only do we have the biggest and most powerful military in human history but they have virtually no competition. What stops them from saying forget all these wars overseas lets just be kings in America.
Also there would be a profit opportunity in an ancap society to oversee and weed out any criminal defense firms. The fact that the question is raised so much shows that people do not just blindly trust them to do the right thing. An ancap society could provide many checks and balances to help ensure that these companies would not take over.
If it were likely that the defense companies would take over if say America was in anarchy, then wouldn't it be just as likely, if not more, that the military would overthrow our current government and take over. Not only do we have the biggest and most powerful military in human history but they have virtually no competition. What stops them from saying forget all these wars overseas lets just be kings in America.
The Blackadder Says:
Bob, thanks for taking the time to respond to my comments.
Let my start with something you say towards the end of your post. You say:
We know that the government does a horrible job in every other enterprise it touches, be it education, road paving, electricity provision, and intelligence gathering. But we're supposed to believe that it does a really great job in protecting people from gangsters?
I actually don't agree that the government does a horrible job at each of the things you mention. It does a worse job than the market; that I'll grant you. But it's not the case that no one learns anything in public schools, or that roads consist of nothing but potholes, or that people who get their electricity via a government utility are always without power. To say otherwise is just libertarian hyperbole.
In my view markets tend to outperform government, but only if certain conditions are met. One of those conditions is that you have enforceable property and contract rights (you might even say that without enforceable property and contract rights you can't have a market at all). If enforceable property and contract rights are a prerequisite for having a successful market, then we shouldn't be surprised if a market in the enforcement of property and contract rights doesn't work the same as in other areas.
In the case of the mafia, you make a good point when you note that the very act of prohibiting an activity might deter some decent people from starting businesses in the prohibited activity (at least in a society like others where decent people tend to think that you ought to respect the law) so that we shouldn't be surprised if prohibited businesses end up being run in a less moral fashion.
I think there's some truth to this, but not nearly enough to get you where you want to go. Suppose you hear that the CEO of Budweiser has been charged with trying to bribe some government officials. Are you going to say "that can't be right. the CEO or Budweiser just wouldn't do something like that!" Probably not. If private business worked better than government only on the assumption that businessmen were paragons of moral virtue, we'd all be in a lot of trouble. A couple days ago you said that if a senator got caught killing a man for his shoes, you "would be amazed all right, but only because of the ridiculous risk/reward judgment involved." It seems to me that the same is true of people in business.
As for your examples, it may be the case that commerce over the Internet is "hardly regulated" but it's not the case that the state doesn't enforce property and contract rights involved in such commerce. If Amazon sends some goons to my house to beat me up because they don't like the competition my eBay business is bringing, I can call the cops without worrying that I'm also going to go to jail. And I'm going to object to your anecdotal example since by you're own admission you have no idea whether the local businesses were paying protection money to a local gang or not. I'll have to look into the other two examples before I can comment, as I am not familiar with those particular historical incidents.
Bob, thanks for taking the time to respond to my comments.
Let my start with something you say towards the end of your post. You say:
We know that the government does a horrible job in every other enterprise it touches, be it education, road paving, electricity provision, and intelligence gathering. But we're supposed to believe that it does a really great job in protecting people from gangsters?
I actually don't agree that the government does a horrible job at each of the things you mention. It does a worse job than the market; that I'll grant you. But it's not the case that no one learns anything in public schools, or that roads consist of nothing but potholes, or that people who get their electricity via a government utility are always without power. To say otherwise is just libertarian hyperbole.
In my view markets tend to outperform government, but only if certain conditions are met. One of those conditions is that you have enforceable property and contract rights (you might even say that without enforceable property and contract rights you can't have a market at all). If enforceable property and contract rights are a prerequisite for having a successful market, then we shouldn't be surprised if a market in the enforcement of property and contract rights doesn't work the same as in other areas.
In the case of the mafia, you make a good point when you note that the very act of prohibiting an activity might deter some decent people from starting businesses in the prohibited activity (at least in a society like others where decent people tend to think that you ought to respect the law) so that we shouldn't be surprised if prohibited businesses end up being run in a less moral fashion.
I think there's some truth to this, but not nearly enough to get you where you want to go. Suppose you hear that the CEO of Budweiser has been charged with trying to bribe some government officials. Are you going to say "that can't be right. the CEO or Budweiser just wouldn't do something like that!" Probably not. If private business worked better than government only on the assumption that businessmen were paragons of moral virtue, we'd all be in a lot of trouble. A couple days ago you said that if a senator got caught killing a man for his shoes, you "would be amazed all right, but only because of the ridiculous risk/reward judgment involved." It seems to me that the same is true of people in business.
As for your examples, it may be the case that commerce over the Internet is "hardly regulated" but it's not the case that the state doesn't enforce property and contract rights involved in such commerce. If Amazon sends some goons to my house to beat me up because they don't like the competition my eBay business is bringing, I can call the cops without worrying that I'm also going to go to jail. And I'm going to object to your anecdotal example since by you're own admission you have no idea whether the local businesses were paying protection money to a local gang or not. I'll have to look into the other two examples before I can comment, as I am not familiar with those particular historical incidents.
# posted by : August 22, 2009 at 5:02 PM
: August 22, 2009 at 5:02 PM
Cotterdan321 said,
If it were likely that the defense companies would take over if say America was in anarchy, then wouldn't it be just as likely, if not more, that the military would overthrow our current government and take over. Not only do we have the biggest and most powerful military in human history but they have virtually no competition. What stops them from saying forget all these wars overseas lets just be kings in America.
There have been many military coups in history where that exact thing has happened. As for the United States, every member in the US military swears an oath to The Constitution. Whether we agree with Congress on a specific declaration of war or with the President as to our specific strategy, we are bound by honor to our oaths of office. If anyone has a big problem with Congress or the President they can leave after their contract is up or go AWOL. However, they will not attempt a military coup.
Will the trigger pullers of a private agency swear an oath to a higher ideal?
If it were likely that the defense companies would take over if say America was in anarchy, then wouldn't it be just as likely, if not more, that the military would overthrow our current government and take over. Not only do we have the biggest and most powerful military in human history but they have virtually no competition. What stops them from saying forget all these wars overseas lets just be kings in America.
There have been many military coups in history where that exact thing has happened. As for the United States, every member in the US military swears an oath to The Constitution. Whether we agree with Congress on a specific declaration of war or with the President as to our specific strategy, we are bound by honor to our oaths of office. If anyone has a big problem with Congress or the President they can leave after their contract is up or go AWOL. However, they will not attempt a military coup.
Will the trigger pullers of a private agency swear an oath to a higher ideal?
Blackadder: I would also say that having food and water is a requirement for markets to work. Does this mean that food and water markets can't function?
OK I am pretty drained from typing this thing up, so I can't do justice to the comments you guys have raised. Some clarifications though:
* Blackadder, it's not enough that the restaurants in my Chicago suburb had to pay protection money to gangs. They would have to be run by gangs in order to validate your theory of the mafia and Prohibition. I.e. you (and Bobby1011) were saying the mobsters left the liquor industry once the government started enforcing property rights in it again. So since (per my anecdote) the police didn't give two poops about property rights in our neighborhood, that means (if your theory of Al Capone is right) that mobsters should have intimidated all the business owners to leave, allowing the mobsters to charge $50 for hamburgers and shooting anyone who tries to undercut them. Of course I'm exaggerating to make the point, but I hope you get what I'm saying. During Prohibition, it wasn't the case merely that mobsters shook down bootleggers--the mobsters were the bootleggers.
* James, you're right, if the public accorded the ancap defense firms the same "legitimacy" that they currently give to politicians, then it would quickly turn back into government. That's why I'm not trying to educate politicians. No, I aim my essays and books at the public, telling them to stop saying that murder and theft are wrong, unless the people ordering them have gotten 51% of the votes every two years.
* Blackadder, it's not enough that the restaurants in my Chicago suburb had to pay protection money to gangs. They would have to be run by gangs in order to validate your theory of the mafia and Prohibition. I.e. you (and Bobby1011) were saying the mobsters left the liquor industry once the government started enforcing property rights in it again. So since (per my anecdote) the police didn't give two poops about property rights in our neighborhood, that means (if your theory of Al Capone is right) that mobsters should have intimidated all the business owners to leave, allowing the mobsters to charge $50 for hamburgers and shooting anyone who tries to undercut them. Of course I'm exaggerating to make the point, but I hope you get what I'm saying. During Prohibition, it wasn't the case merely that mobsters shook down bootleggers--the mobsters were the bootleggers.
* James, you're right, if the public accorded the ancap defense firms the same "legitimacy" that they currently give to politicians, then it would quickly turn back into government. That's why I'm not trying to educate politicians. No, I aim my essays and books at the public, telling them to stop saying that murder and theft are wrong, unless the people ordering them have gotten 51% of the votes every two years.
"So by the same token, I argue, when the State threatens to put any liquor distributor in jail--but then actually looks the other way when Capone pays bribes--that is economically very similar to the outright, legislated monopoly."
I agree with your conclusions, but not with the premise. For this all to function, you need the state to be corrupt. If a state were to behave perfectly, then it would target all of the alcohol industry equally, their departure from the protection of all alcohol traders would be complete and the only monopolies would be those that arise through the use of their own force.
In more modern times, I think (though my trust may be misplaced) that the police where I live are pretty clean. There are safeguards in place to control police collusion in the drug trade like random drug testing and of course the all encompassing audits conducted by the Australian Tax Office to check up on their monetary affairs.
Yet drug traders exist. My academic background is in Pharmaceutical Chemistry. I could synthesize ice or MDMA or a myriad of other marketable drugs that are popular here, and the cops wouldn't have the slightest clue.
Even if they caught me, I'm protected legally by all sorts of rights before the court, but guess what? If I sold this stuff, it's not the cops that would worry me, it's the motorcycle gangs who I'd be competing with.
My product would be purer and safer and I could produce it cheaper and sell it cheaper. But when the Hell's Angels catch me, there's no presumption of innocence. There's no prohibition against cruel and unusual punishment.
In short, rightly or wrongly, the gangs, with their own force independent from the state's, scare me out of the industry. In a sense, they actually out compete me: they are better at the use of force.
There is also another way to look at the state's monopoly vs. the gangs. Rather than seeing the gangs who pay off the police as being licensees of the states monopoly, they can be viewed as competing with the state for the employment of the police. They just offer a higher wage, so they win over more police officers.
"The Marginal Costs and Benefits of Violence in Markets"
I thought that this section was very well done, and it certainly refines my arguments in favor of drug liberalization (which, as a minarchist, is something that I have always believed in). But it didn't really address statelessness, and how it would function better.
"I can think of a few examples where I'm right. (Maybe in the comments my critics can counter with examples that suit their theory.) For example, commerce over the internet is hardly regulated. Sure, in principle if you bought a book from a third party through Amazon, and the guy never sent it to you, you could bring him to small claims court. But that's not what makes the system work. It's clearly reputational effects, not the threat of government lawsuits."
It's difficult to use force over the internet. I could destroy the competition by doing a DoS attack on their website...but then the authorities do get involved. I could use force in the real world: go to their house and threaten them, but if they live in Nigeria...it's kind of hard. Plus I would need to know where they live etc.
"I am pretty sure those were run by legitimate businesspeople, who didn't use violence to keep out would-be competitors. And this is true, even though I don't believe the police would have been rushing over to protect these businesspeople from mob harassment."
I think that if anyone tried to establish a monopoly on the use of force in this area to fill the void left by the state, they would become of great interest to the police. But the state was still collecting it's taxes from those that it wasn't protecting, so it was happy to do nothing other than stifle any new competition from arising.
I agree with your conclusions, but not with the premise. For this all to function, you need the state to be corrupt. If a state were to behave perfectly, then it would target all of the alcohol industry equally, their departure from the protection of all alcohol traders would be complete and the only monopolies would be those that arise through the use of their own force.
In more modern times, I think (though my trust may be misplaced) that the police where I live are pretty clean. There are safeguards in place to control police collusion in the drug trade like random drug testing and of course the all encompassing audits conducted by the Australian Tax Office to check up on their monetary affairs.
Yet drug traders exist. My academic background is in Pharmaceutical Chemistry. I could synthesize ice or MDMA or a myriad of other marketable drugs that are popular here, and the cops wouldn't have the slightest clue.
Even if they caught me, I'm protected legally by all sorts of rights before the court, but guess what? If I sold this stuff, it's not the cops that would worry me, it's the motorcycle gangs who I'd be competing with.
My product would be purer and safer and I could produce it cheaper and sell it cheaper. But when the Hell's Angels catch me, there's no presumption of innocence. There's no prohibition against cruel and unusual punishment.
In short, rightly or wrongly, the gangs, with their own force independent from the state's, scare me out of the industry. In a sense, they actually out compete me: they are better at the use of force.
There is also another way to look at the state's monopoly vs. the gangs. Rather than seeing the gangs who pay off the police as being licensees of the states monopoly, they can be viewed as competing with the state for the employment of the police. They just offer a higher wage, so they win over more police officers.
"The Marginal Costs and Benefits of Violence in Markets"
I thought that this section was very well done, and it certainly refines my arguments in favor of drug liberalization (which, as a minarchist, is something that I have always believed in). But it didn't really address statelessness, and how it would function better.
"I can think of a few examples where I'm right. (Maybe in the comments my critics can counter with examples that suit their theory.) For example, commerce over the internet is hardly regulated. Sure, in principle if you bought a book from a third party through Amazon, and the guy never sent it to you, you could bring him to small claims court. But that's not what makes the system work. It's clearly reputational effects, not the threat of government lawsuits."
It's difficult to use force over the internet. I could destroy the competition by doing a DoS attack on their website...but then the authorities do get involved. I could use force in the real world: go to their house and threaten them, but if they live in Nigeria...it's kind of hard. Plus I would need to know where they live etc.
"I am pretty sure those were run by legitimate businesspeople, who didn't use violence to keep out would-be competitors. And this is true, even though I don't believe the police would have been rushing over to protect these businesspeople from mob harassment."
I think that if anyone tried to establish a monopoly on the use of force in this area to fill the void left by the state, they would become of great interest to the police. But the state was still collecting it's taxes from those that it wasn't protecting, so it was happy to do nothing other than stifle any new competition from arising.
# posted by : August 23, 2009 at 12:23 AM
: August 23, 2009 at 12:23 AM
I can think of one instance where the government has totally abdicated its responsibility to protect private property rights but doesn't interfere with the trade itself. In my state, hardcore pornography is technically illegal to sell, but it is in every adult shop.
That law really is just flaunted left right and centre, but I doubt that the porn shops would go crying to the police when someone steals from them, since the material is all prohibited.
Why don't people just steal the porn, rather than buy it? Well...maybe it's a cultural thing; it might be a bit awkward putting a gun in someone's face and demanding the latest installment of College Fuck-fest. Surely that's not anymore awkward than asking if they have it in stock yet, but perhaps that doesn't happen too often either.
Domination of the industry by force would probably not be profitable though. You'd need to make a significant investment in order to take out all of the competition, and then you'd surely draw state attention to the situation.
"But by the very same token, we have not a single example in world history of a stable, limited government. The best attempt was the government set up by James Madison and friends, and we all know how that turned out."
I still have hope that from the mistakes made back then, we can learn and make a state whose powers are truly limited to the protection of natural rights. I don't think that the form of government that we need is really a tyranny of the majority.
I don't accept that an ongoing legislative process is even necessary. The only functions of the state can be quickly and succinctly defined and the results should be timeless. No new developments can change that protection of natural rights are the only legitimate actions to be carried out.
That law really is just flaunted left right and centre, but I doubt that the porn shops would go crying to the police when someone steals from them, since the material is all prohibited.
Why don't people just steal the porn, rather than buy it? Well...maybe it's a cultural thing; it might be a bit awkward putting a gun in someone's face and demanding the latest installment of College Fuck-fest. Surely that's not anymore awkward than asking if they have it in stock yet, but perhaps that doesn't happen too often either.
Domination of the industry by force would probably not be profitable though. You'd need to make a significant investment in order to take out all of the competition, and then you'd surely draw state attention to the situation.
"But by the very same token, we have not a single example in world history of a stable, limited government. The best attempt was the government set up by James Madison and friends, and we all know how that turned out."
I still have hope that from the mistakes made back then, we can learn and make a state whose powers are truly limited to the protection of natural rights. I don't think that the form of government that we need is really a tyranny of the majority.
I don't accept that an ongoing legislative process is even necessary. The only functions of the state can be quickly and succinctly defined and the results should be timeless. No new developments can change that protection of natural rights are the only legitimate actions to be carried out.
# posted by : August 23, 2009 at 12:24 AM
: August 23, 2009 at 12:24 AM
If it were likely that the defense companies would take over if say America was in anarchy, then wouldn't it be just as likely, if not more, that the military would overthrow our current government and take over. Not only do we have the biggest and most powerful military in human history but they have virtually no competition. What stops them from saying forget all these wars overseas lets just be kings in America."
Perhaps it has to do with the fact that while the military may be a large organisation, it's members' allegiances lie with the government. Plus the leader of your government is also the Commander in Chief of the military, so your government is your military.
"I would also say that having food and water is a requirement for markets to work. Does this mean that food and water markets can't function?"
Having food and water is not necessary for markets to function. They are necessary for life. There's a huge difference. Food and water markets work because you have a desire for something that may be satisfied by someone who desires something that you have to trade.
Markets in the use of force would fail, in my view anyway, because without a disinterested third party to stop it, the suppliers of force will just use their force to take what you have in exchange for you keeping your life (just like the state was doing in Murphy's example of the rundown neighborhood, taxing the shops without proving security).
I agree that the states that we have don't do a great job when it comes to the provision of security.
"Blackadder, it's not enough that the restaurants in my Chicago suburb had to pay protection money to gangs. They would have to be run by gangs in order to validate your theory of the mafia and Prohibition."
I don't think that the example involved a complete enough abdication of the state's responsibility to protect property. Monopolizing the local hamburger market is no monopoly at all when the customers will just drive one or two suburbs over to save %90 or more on their Quarter Pounder with Cheese.
But of course they could monopolize the market and then charge more than the market price but such that driving to the nearest non-mafia burger shop costs more in time and fuel than just buying locally.
But then it would fail your own (quite excellent) marginal cost analysis. Killing people isn't really worth a few dollars extra for every customer served.
And again, the state would probably step in once you tried to do any of that anyway, so the investment is probably just not worth it.
Perhaps it has to do with the fact that while the military may be a large organisation, it's members' allegiances lie with the government. Plus the leader of your government is also the Commander in Chief of the military, so your government is your military.
"I would also say that having food and water is a requirement for markets to work. Does this mean that food and water markets can't function?"
Having food and water is not necessary for markets to function. They are necessary for life. There's a huge difference. Food and water markets work because you have a desire for something that may be satisfied by someone who desires something that you have to trade.
Markets in the use of force would fail, in my view anyway, because without a disinterested third party to stop it, the suppliers of force will just use their force to take what you have in exchange for you keeping your life (just like the state was doing in Murphy's example of the rundown neighborhood, taxing the shops without proving security).
I agree that the states that we have don't do a great job when it comes to the provision of security.
"Blackadder, it's not enough that the restaurants in my Chicago suburb had to pay protection money to gangs. They would have to be run by gangs in order to validate your theory of the mafia and Prohibition."
I don't think that the example involved a complete enough abdication of the state's responsibility to protect property. Monopolizing the local hamburger market is no monopoly at all when the customers will just drive one or two suburbs over to save %90 or more on their Quarter Pounder with Cheese.
But of course they could monopolize the market and then charge more than the market price but such that driving to the nearest non-mafia burger shop costs more in time and fuel than just buying locally.
But then it would fail your own (quite excellent) marginal cost analysis. Killing people isn't really worth a few dollars extra for every customer served.
And again, the state would probably step in once you tried to do any of that anyway, so the investment is probably just not worth it.
# posted by : August 23, 2009 at 6:01 AM
: August 23, 2009 at 6:01 AM
The Blackadder Says:
Bob, you are incorrect when you say: it's not enough that the restaurants in my Chicago suburb had to pay protection money to gangs. They would have to be run by gangs in order to validate your theory of the mafia and Prohibition.
The mob wasn't running most of the speakeasies during Prohibition, so I'm not sure why you think they'd have to being running grocery stores in poor neighborhoods.
The basic good supplied by the mob is protection. It can do other things (just as the state can run hospitals, operate steel mills, etc.) but there's no need for its involvement to be any more extensive than that.
Bob, you are incorrect when you say: it's not enough that the restaurants in my Chicago suburb had to pay protection money to gangs. They would have to be run by gangs in order to validate your theory of the mafia and Prohibition.
The mob wasn't running most of the speakeasies during Prohibition, so I'm not sure why you think they'd have to being running grocery stores in poor neighborhoods.
The basic good supplied by the mob is protection. It can do other things (just as the state can run hospitals, operate steel mills, etc.) but there's no need for its involvement to be any more extensive than that.
# posted by : August 23, 2009 at 10:05 AM
: August 23, 2009 at 10:05 AM
The Blackadder Says:
By the way, Bob, when you cite some examples of statelessness and then add:
by the very same token,we have not a single example in world history of a stable, limited government. The best attempt was the government set up by James Madison and friends, and we all know how that turned out."
I hope you can see that you are using a double standard. None of the examples you cite was as extensive or lasted as long or was as successful as the government set up by Madison and company. So if that doesn't count none of your examples are meaningful either.
By the way, Bob, when you cite some examples of statelessness and then add:
by the very same token,we have not a single example in world history of a stable, limited government. The best attempt was the government set up by James Madison and friends, and we all know how that turned out."
I hope you can see that you are using a double standard. None of the examples you cite was as extensive or lasted as long or was as successful as the government set up by Madison and company. So if that doesn't count none of your examples are meaningful either.
# posted by : August 23, 2009 at 10:15 AM
: August 23, 2009 at 10:15 AM
You wrote:
"But you never see representatives from General Mills hanging around the monkey bars, selling the single-serve boxes of Cheerios."
But you basically do. When I was in (public) Jr. High school, we got goody bags that had free samples and coupons for various things teenagers may want or need like gum and deodorant. (Actually, I remember Motrin IB was in the girl's package... wonder how that would go over now with the zero-tolerance drug policies)
I don't think this blows up your argument - it's just a bad analogy.
"But you never see representatives from General Mills hanging around the monkey bars, selling the single-serve boxes of Cheerios."
But you basically do. When I was in (public) Jr. High school, we got goody bags that had free samples and coupons for various things teenagers may want or need like gum and deodorant. (Actually, I remember Motrin IB was in the girl's package... wonder how that would go over now with the zero-tolerance drug policies)
I don't think this blows up your argument - it's just a bad analogy.
# posted by : August 23, 2009 at 3:17 PM
: August 23, 2009 at 3:17 PM
"I still have hope that from the mistakes made back then, we can learn and make a state whose powers are truly limited to the protection of natural rights. I don't think that the form of government that we need is really a tyranny of the majority.
I don't accept that an ongoing legislative process is even necessary. The only functions of the state can be quickly and succinctly defined and the results should be timeless. No new developments can change that protection of natural rights are the only legitimate actions to be carried out."
I am not sure how you can argue that an ancap society wouldn't be able to restrain the defense agencies if you are going to make the argument that these same people could restrain the State.
Either there is no way to restrain these two groups or there is. You can't have it both ways. You have made the case that a defense company would take over to become the State in an ancap society for various reasons and that the free market could not be able to stop this from happening. If this is true (which I don't believe it is) then to be consistent you would have to argue that there is no way to restrain the State from expanding these powers over time.
If you disagree and say that the State could be restrained by the people, how can you argue that these same people could not restrain the defense agencies, who wouldn't have tax payer money and would face competition?
I don't accept that an ongoing legislative process is even necessary. The only functions of the state can be quickly and succinctly defined and the results should be timeless. No new developments can change that protection of natural rights are the only legitimate actions to be carried out."
I am not sure how you can argue that an ancap society wouldn't be able to restrain the defense agencies if you are going to make the argument that these same people could restrain the State.
Either there is no way to restrain these two groups or there is. You can't have it both ways. You have made the case that a defense company would take over to become the State in an ancap society for various reasons and that the free market could not be able to stop this from happening. If this is true (which I don't believe it is) then to be consistent you would have to argue that there is no way to restrain the State from expanding these powers over time.
If you disagree and say that the State could be restrained by the people, how can you argue that these same people could not restrain the defense agencies, who wouldn't have tax payer money and would face competition?
Bobby1011 said...
"What both Blackadder and I have been trying to show is that anarcho-capitalism would require man to work against his own self interest in order to prevent a state from arising. That is not to say that having a state is in his interest, but rather that fighting against one is not."
This is along the same lines of what I just wrote above. If you believe that fighting against the State is not in peoples interest than you must argue that complete State control is inevitable and can't be restrained to be consistent. I of course believe this to be untrue.
"What both Blackadder and I have been trying to show is that anarcho-capitalism would require man to work against his own self interest in order to prevent a state from arising. That is not to say that having a state is in his interest, but rather that fighting against one is not."
This is along the same lines of what I just wrote above. If you believe that fighting against the State is not in peoples interest than you must argue that complete State control is inevitable and can't be restrained to be consistent. I of course believe this to be untrue.
Kathryn, I guess it's a matter of degree, not an absolute black and white difference. Obviously for some products, it pays to advertise, i.e. it is worth expending money to "steal customers" from your competitors. But even so, they don't actually have distributors hanging around school yards, selling it to kids. What you are talking about is more of a once-a-semester publicity stunt.
For those of you still hitting the "you need an Anarchist Man for your system to work" theme, let me paraphrase what I take Cotterdan to be saying: Actually the believers in limited government need that. I.e. you guys need the people to be "ever vigilant" and to refresh the tree of liberty with the blood of tyrants blah blah blah. Your prisoner's dilemma analysis would just as well prove that it's in nobody's interest to speak out against an unconstitutional administration etc.
To be clear, I do not think that the maintenance of an anarcho-capitalist equilibrium would require huge acts of self-sacrifice on the part of most people, just like it doesn't take massive amounts of altruism for a free market in TVs to work.
In my view, the State is powerful right now because the public supports it, generally speaking. Most people pay their taxes out of sense of duty, not merely because they don't want to go to jail. And the reason so few official government officials can't run the show, is that most of the public will report their neighbors if they are breaking the law etc.
In sharp contrast, if 50% of the country suddenly began thinking like Murray Rothbard, it wouldn't take a violent revolution to yield the libertarian paradise. The State would collapse, just like it did in the Soviet Union.
So to repeat, I'm not trying to get people fired up and willing to risk their lives to fight for ancap utopia. All I'm trying to get people to realize is that they are giving their support to an organization that systematically commits what would be considered as crimes, if any other organization behaved that way.
To be clear, I do not think that the maintenance of an anarcho-capitalist equilibrium would require huge acts of self-sacrifice on the part of most people, just like it doesn't take massive amounts of altruism for a free market in TVs to work.
In my view, the State is powerful right now because the public supports it, generally speaking. Most people pay their taxes out of sense of duty, not merely because they don't want to go to jail. And the reason so few official government officials can't run the show, is that most of the public will report their neighbors if they are breaking the law etc.
In sharp contrast, if 50% of the country suddenly began thinking like Murray Rothbard, it wouldn't take a violent revolution to yield the libertarian paradise. The State would collapse, just like it did in the Soviet Union.
So to repeat, I'm not trying to get people fired up and willing to risk their lives to fight for ancap utopia. All I'm trying to get people to realize is that they are giving their support to an organization that systematically commits what would be considered as crimes, if any other organization behaved that way.
Bob,
This essay is really fantastic. I read it through twice just to make sure I got all your points. That said, I wonder if we might be misunderstanding one another.
You said
"So to repeat, I'm not trying to get people fired up and willing to risk their lives to fight for ancap utopia. All I'm trying to get people to realize is that they are giving their support to an organization that systematically commits what would be considered as crimes, if any other organization behaved that way."
Ok, I agree with that. I don't think that any organization that tramples on property rights is just. But I also think that competing private defense firms would also lead to, in an even more totalitarian way, a disregard of property rights. That was why I gave you the example of the Colonel in Iraq. I think that the best way to ensure the 100% protection of property rights is a form of limited government. So there is no misunderstanding, I will wait to see what you think of the example of the village in Iraq that had a limited government. I would also like to know if Blackadder, Bobby1011, Cotterdan321, or anyone else views my description of this second village as government or anarchy.
This essay is really fantastic. I read it through twice just to make sure I got all your points. That said, I wonder if we might be misunderstanding one another.
You said
"So to repeat, I'm not trying to get people fired up and willing to risk their lives to fight for ancap utopia. All I'm trying to get people to realize is that they are giving their support to an organization that systematically commits what would be considered as crimes, if any other organization behaved that way."
Ok, I agree with that. I don't think that any organization that tramples on property rights is just. But I also think that competing private defense firms would also lead to, in an even more totalitarian way, a disregard of property rights. That was why I gave you the example of the Colonel in Iraq. I think that the best way to ensure the 100% protection of property rights is a form of limited government. So there is no misunderstanding, I will wait to see what you think of the example of the village in Iraq that had a limited government. I would also like to know if Blackadder, Bobby1011, Cotterdan321, or anyone else views my description of this second village as government or anarchy.
I think I would have to make a distinction between what would be described as anarchy in Iraq or Somalia in comparison with Rothbardian anarcho-capitalism. Bob Murphy made this point in the article But Wouldn't Warlords Takeover?
To answer your question, I think given the information you provided you could make a case either way. I think the more relevant thing would be that this town was not saved by government action but the actions of individuals doing what was best for them. These individuals and not government produced the only town you could enjoy relaxing dinners without fear of being attacked.
To answer your question, I think given the information you provided you could make a case either way. I think the more relevant thing would be that this town was not saved by government action but the actions of individuals doing what was best for them. These individuals and not government produced the only town you could enjoy relaxing dinners without fear of being attacked.
Cotterdan321,
My argument is that in the midst of chaos this village established a limited government in order to protect the lives and property of its people. Using collective strength to provide security was the most effective method for protecting property rights.
My argument is that in the midst of chaos this village established a limited government in order to protect the lives and property of its people. Using collective strength to provide security was the most effective method for protecting property rights.
As far as what I understood from what you wrote, didn't someone refusing to participate just get shamed? It sounded like people decided that safety was in such dire need that they were willing to do the task and the only price they paid was the time they sacrificed. If someone did not want to pay this price then they were just denied the benefits of its service. People weren't forcing anyone to pay the price (time spent) for defense but if they weren't willing then the others in society would simply boycott them. That seems consistent with freedom to me.
I'm just going off my interpretation of what you wrote, so I don't know if I am missing key information about how they did things over there.
I'm just going off my interpretation of what you wrote, so I don't know if I am missing key information about how they did things over there.
I think I missed your story about the village in Iraq there, Edward. Where do I go to read that?
"Either there is no way to restrain these two groups or there is. You can't have it both ways."
I think that if it is possible to restrain a monopoly on the use of force, then it must be instituted on the terms of those who live under it.
If it arises from an anarchist society who oppose it's existence, it will not be their protector. If they form a state on their own terms for the sole purpose of blocking an aggressive state from arising to enslave them, I think they will at least stand a chance.
I think that it is necessary for me to outline my own solution to the problems faced by the establishment and maintenance of a minimal state, but that will require some time to formulate and post somewhere.
"Either there is no way to restrain these two groups or there is. You can't have it both ways."
I think that if it is possible to restrain a monopoly on the use of force, then it must be instituted on the terms of those who live under it.
If it arises from an anarchist society who oppose it's existence, it will not be their protector. If they form a state on their own terms for the sole purpose of blocking an aggressive state from arising to enslave them, I think they will at least stand a chance.
I think that it is necessary for me to outline my own solution to the problems faced by the establishment and maintenance of a minimal state, but that will require some time to formulate and post somewhere.
# posted by : August 24, 2009 at 10:17 AM
: August 24, 2009 at 10:17 AM
Cotterdan321,
No, you are absolutely correct. Anyone refusing to pay the "tax" in the form of labor was shamed and boycotted. However, anyone attempting to murder someone in the village was met with violence. The police force executing that violence had a monolopy on the use of retalitory force.
There was a monoploy of force so they did have a limited government, but the fact that failure to pay the "tax" was met only with shame and boycott is consistant with freedom.
No, you are absolutely correct. Anyone refusing to pay the "tax" in the form of labor was shamed and boycotted. However, anyone attempting to murder someone in the village was met with violence. The police force executing that violence had a monolopy on the use of retalitory force.
There was a monoploy of force so they did have a limited government, but the fact that failure to pay the "tax" was met only with shame and boycott is consistant with freedom.
Bobby1011,
If you scroll down a ways on Free Advice it is titled "Limited Government in the al Anbar Province of Iraq."
If you scroll down a ways on Free Advice it is titled "Limited Government in the al Anbar Province of Iraq."
The system that you described in the Iraqi village sounds like government to me, but it's a close call.
There was one organisation that held the monopoly on the use of force. They only exercised force in matters of physical harm to others by the sound of things.
Private property rights were respected voluntarily, but failure to comply resulted in an embargo. The embargo itself was voluntary I take it though.
It certainly has anarchist elements.
There was one organisation that held the monopoly on the use of force. They only exercised force in matters of physical harm to others by the sound of things.
Private property rights were respected voluntarily, but failure to comply resulted in an embargo. The embargo itself was voluntary I take it though.
It certainly has anarchist elements.
# posted by : August 24, 2009 at 2:22 PM
: August 24, 2009 at 2:22 PM
To Bobby1011
3 questions that I was curious how you would address.
How would the people determine what the price should be to pay for defense?
How would the police force know if their policies were really the most beneficial without a profit and loss motive?
Is there a moral justification for theft to pay for these services?
3 questions that I was curious how you would address.
How would the people determine what the price should be to pay for defense?
How would the police force know if their policies were really the most beneficial without a profit and loss motive?
Is there a moral justification for theft to pay for these services?
To Edward
I would say that the system in that town was about as close to anarchy as you could expect in that situation. I think their system of contractual law is the worst part of their society and it is the most governmental. You can't really blame them because I'm sure they were not prepared to offer a substantive legal system when so much destruction was around them. If this same town had moved toward anarchy because that was their belief, instead of out of necessity to survive, I'm sure you would have seen a more sophisticated system.
I would say that the system in that town was about as close to anarchy as you could expect in that situation. I think their system of contractual law is the worst part of their society and it is the most governmental. You can't really blame them because I'm sure they were not prepared to offer a substantive legal system when so much destruction was around them. If this same town had moved toward anarchy because that was their belief, instead of out of necessity to survive, I'm sure you would have seen a more sophisticated system.
The following answers to your questions are excerpts from a more complete statement of my ideas for a minimal state that I was working on.
"How would the people determine what the price should be to pay for defense?"
National defense would be provided in part by the state, who would treat the invaders just as any other criminals (as outlined below) and in part by the people. The people would either be complicit with the invaders or would resist. If they were complicit then that says something about how much they really valued their freedoms to begin with.
There is obviously no prohibition on private defense contractors to supplement the people's defense, but unlike in AC, the state still exists to ensure that they do not violate the rights of citizens.
"How would the people determine what the price should be to pay for defense?"
National defense would be provided in part by the state, who would treat the invaders just as any other criminals (as outlined below) and in part by the people. The people would either be complicit with the invaders or would resist. If they were complicit then that says something about how much they really valued their freedoms to begin with.
There is obviously no prohibition on private defense contractors to supplement the people's defense, but unlike in AC, the state still exists to ensure that they do not violate the rights of citizens.
# posted by : August 25, 2009 at 12:47 PM
: August 25, 2009 at 12:47 PM
"How would the police force know if their policies were really the most beneficial without a profit and loss motive?
Is there a moral justification for theft to pay for these services?"
Since punishing aggression will have costs associated with it, the state needs some avenue through which it can fund itself. Since taxation, including tariffs, would represent a violation of natural private property rights, they are inconsistent with a minimal state. My proposed alternative is that the state fund itself through the fines imposed on those who violate natural law. This is major part of my idea for a minimal state so I will talk it through in more detail.
The major points that I want to discuss are:
• that this gives the state an incentive to solve crime
• that this gives the state an incentive to manufacture crime
• that Judges are independent of the rest of the state and each other
• that some of the proceeds of state action must be used to provide restitution to the victim
• that the state must initially borrow in order to investigate and prosecute a crime
• that victims may not always be genuine
Clearly, the life blood of the state under this system is solving crime. That has the advantage of incentivizing investigation and would make the state behave much more efficiently in order to maintain its revenue stream. Of course, some crimes are not very easy to solve and would cost large amounts to pursue, but the amount collected should be equal to the amount spent on the investigation and prosecution, plus the restitution and the return on the bonds issued to fund the venture, so it also makes it riskier to try and cover up something that you've done rather than the current system that encourages you to cover up what you've done.
Unfortunately this leads to an incentive for the state to manufacture crimes in order to raise revenue. This would be partly mitigated by the bonds system discussed later. The other major fix to this problem is the fact that the courts would weight evidence and decide guilt based on the facts as presented. This fix is only as good as the manufactured evidence is bad. The courts themselves would be a separate branch of the state that is funded by fees imposed on the losing party. This increases the incentive for the state to only prosecute real crimes and for guilty parties to confess and spare themselves the cost of a trial. This biases the system in favor of poor criminals, since the judge will know that they will be unlikely to be able to pay the court fees.
Is there a moral justification for theft to pay for these services?"
Since punishing aggression will have costs associated with it, the state needs some avenue through which it can fund itself. Since taxation, including tariffs, would represent a violation of natural private property rights, they are inconsistent with a minimal state. My proposed alternative is that the state fund itself through the fines imposed on those who violate natural law. This is major part of my idea for a minimal state so I will talk it through in more detail.
The major points that I want to discuss are:
• that this gives the state an incentive to solve crime
• that this gives the state an incentive to manufacture crime
• that Judges are independent of the rest of the state and each other
• that some of the proceeds of state action must be used to provide restitution to the victim
• that the state must initially borrow in order to investigate and prosecute a crime
• that victims may not always be genuine
Clearly, the life blood of the state under this system is solving crime. That has the advantage of incentivizing investigation and would make the state behave much more efficiently in order to maintain its revenue stream. Of course, some crimes are not very easy to solve and would cost large amounts to pursue, but the amount collected should be equal to the amount spent on the investigation and prosecution, plus the restitution and the return on the bonds issued to fund the venture, so it also makes it riskier to try and cover up something that you've done rather than the current system that encourages you to cover up what you've done.
Unfortunately this leads to an incentive for the state to manufacture crimes in order to raise revenue. This would be partly mitigated by the bonds system discussed later. The other major fix to this problem is the fact that the courts would weight evidence and decide guilt based on the facts as presented. This fix is only as good as the manufactured evidence is bad. The courts themselves would be a separate branch of the state that is funded by fees imposed on the losing party. This increases the incentive for the state to only prosecute real crimes and for guilty parties to confess and spare themselves the cost of a trial. This biases the system in favor of poor criminals, since the judge will know that they will be unlikely to be able to pay the court fees.
# posted by : August 25, 2009 at 12:50 PM
: August 25, 2009 at 12:50 PM
The judges themselves would determine their own fees associated with having cases heard in their court, but there would be no limit to the number of judges that may be nominated and elected by the people. In the case of a judge, a lack of approval would simply result in the abolition of his office. A judge who charges excessive fees would have his approval drop off. This system is meant to prevent any single person from benefiting from the monopoly at the expense of others.
The injured party should be inconvenienced as little as possible by the process since the whole reason for the state to guarantee their rights is so that people trust one another in the society. Ideally they should be able to continue as quickly as possible as though the event had never taken place. They should receive complete restitution for damages incurred, but punitive damages are not to be awarded to the victim, but rather to the state as payment for their investigation of the incident.
The state cannot begin the investigation of a crime without some initial funds. The funds should be acquired through the issuance of bonds that are specific to a particular incident and mature upon conviction of a guilty party. This way the state has a disincentive to simply issue bonds against fabricated crimes, since they'll destroy confidence in the bond market. This also encourages the injured party in a crime to invest in their own justice (but only if they were truly wronged). Bonds for crimes that are difficult to solve will command premium interest rates which helps to collect the amounts necessary to solve them. And since the punishment for a crime is related to how hard it was to solve as well as how much damage was done, even minor crimes, like breaking a window, could result in massive investigations to find the guilty party.
Complainants may fabricate crimes so as to have a chance at restitution money. This would be deterred both by the low chance of getting a conviction of an innocent party, but also by the state pursuing the false victim for damages in lost money spent on the investigation on behalf of the bond holders.
The injured party should be inconvenienced as little as possible by the process since the whole reason for the state to guarantee their rights is so that people trust one another in the society. Ideally they should be able to continue as quickly as possible as though the event had never taken place. They should receive complete restitution for damages incurred, but punitive damages are not to be awarded to the victim, but rather to the state as payment for their investigation of the incident.
The state cannot begin the investigation of a crime without some initial funds. The funds should be acquired through the issuance of bonds that are specific to a particular incident and mature upon conviction of a guilty party. This way the state has a disincentive to simply issue bonds against fabricated crimes, since they'll destroy confidence in the bond market. This also encourages the injured party in a crime to invest in their own justice (but only if they were truly wronged). Bonds for crimes that are difficult to solve will command premium interest rates which helps to collect the amounts necessary to solve them. And since the punishment for a crime is related to how hard it was to solve as well as how much damage was done, even minor crimes, like breaking a window, could result in massive investigations to find the guilty party.
Complainants may fabricate crimes so as to have a chance at restitution money. This would be deterred both by the low chance of getting a conviction of an innocent party, but also by the state pursuing the false victim for damages in lost money spent on the investigation on behalf of the bond holders.
# posted by : August 25, 2009 at 12:51 PM
: August 25, 2009 at 12:51 PM
To Bobby1011...
I haven't fully digested what you wrote, but just three quick questions.
How do you know what the proper price for the wages of police would be? In other words, how would you know that the police were getting paid too little or too much without a competitive price structure?
How would the State know that their investigations were the most cost efficient without competition and what would be the incentive to lessen these costs?
Why would a non-profit State defense be less likely to try to take more power than a private defense company free to make profits?
I haven't fully digested what you wrote, but just three quick questions.
How do you know what the proper price for the wages of police would be? In other words, how would you know that the police were getting paid too little or too much without a competitive price structure?
How would the State know that their investigations were the most cost efficient without competition and what would be the incentive to lessen these costs?
Why would a non-profit State defense be less likely to try to take more power than a private defense company free to make profits?
"How do you know what the proper price for the wages of police would be? In other words, how would you know that the police were getting paid too little or too much without a competitive price structure?
How would the State know that their investigations were the most cost efficient without competition and what would be the incentive to lessen these costs?"
The inefficiency of the state is in this system not something to be reduced, but rather a weapon to be wielded against aggressors. The state is encouraged to overspend in its investigations (but only those that result in a conviction) such that it can reap more in punitive damages from the convict.
"Why would a non-profit State defense be less likely to try to take more power than a private defense company free to make profits?"
My minimal state does not have the power to enact legislation, only to enforce natural law (as outlined in another section of my statement on my ideas for a minimal state). Their authority does not allow them to expand their influence into other areas, but clearly, I recognize that they may exceed their authority to build a more extensive state.
The relevant section follows:
Unfortunately, another feature of all states is that they do not restrict themselves to protecting natural law, but rather act in their own self interest and against the general welfare by expanding their control exponentially. I think that a major contributor to this problem is the notion that the state's laws need to be constantly updated to reflect the times. This has, at least to some extent, been noted by libertarians in the US through their opposition to "living document" interpretations of the constitution and their endorsement of the competing doctrine of "original intent".
Since natural laws are constant, and do not need to be updated with the times, I do not see the need for any ongoing legislative processes. The minimal state must consist of a legal framework of codified natural law and a group of employees to enforce it. The employees would be nominated and elected by their peers in the general population. Rather than have defined terms, I would prefer some system whereby the constituents register their support or opposition to an incumbent, and once the approval rating drops below a set figure an election is triggered. The criminal laws themselves would be rigid, but administrative changes could be made by direct democracy, but only within some defined limits e.g. the population could not vote civil servants to a life term in office.
This still does not avoid a government employee who is left in office indefinitely because he violates natural rights and that's the way the people like it, but whether you have unlimited statism, a minimal state or anarchy, you get the government that you deserve.
How would the State know that their investigations were the most cost efficient without competition and what would be the incentive to lessen these costs?"
The inefficiency of the state is in this system not something to be reduced, but rather a weapon to be wielded against aggressors. The state is encouraged to overspend in its investigations (but only those that result in a conviction) such that it can reap more in punitive damages from the convict.
"Why would a non-profit State defense be less likely to try to take more power than a private defense company free to make profits?"
My minimal state does not have the power to enact legislation, only to enforce natural law (as outlined in another section of my statement on my ideas for a minimal state). Their authority does not allow them to expand their influence into other areas, but clearly, I recognize that they may exceed their authority to build a more extensive state.
The relevant section follows:
Unfortunately, another feature of all states is that they do not restrict themselves to protecting natural law, but rather act in their own self interest and against the general welfare by expanding their control exponentially. I think that a major contributor to this problem is the notion that the state's laws need to be constantly updated to reflect the times. This has, at least to some extent, been noted by libertarians in the US through their opposition to "living document" interpretations of the constitution and their endorsement of the competing doctrine of "original intent".
Since natural laws are constant, and do not need to be updated with the times, I do not see the need for any ongoing legislative processes. The minimal state must consist of a legal framework of codified natural law and a group of employees to enforce it. The employees would be nominated and elected by their peers in the general population. Rather than have defined terms, I would prefer some system whereby the constituents register their support or opposition to an incumbent, and once the approval rating drops below a set figure an election is triggered. The criminal laws themselves would be rigid, but administrative changes could be made by direct democracy, but only within some defined limits e.g. the population could not vote civil servants to a life term in office.
This still does not avoid a government employee who is left in office indefinitely because he violates natural rights and that's the way the people like it, but whether you have unlimited statism, a minimal state or anarchy, you get the government that you deserve.
# posted by : August 26, 2009 at 6:06 AM
: August 26, 2009 at 6:06 AM
One big problem in that system would be who pays when the criminal has nothing? What if they spend millions or billions on an investigation and the criminals are all found dead? Who pays for that?
I still don't know how you would know that the police were being paid the correct price or how you would know how many to hire without a profit and loss motive? It seems that this system would be just as wasteful as current system and possibly more since they would be encouraged to overspend on investigations.
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I still don't know how you would know that the police were being paid the correct price or how you would know how many to hire without a profit and loss motive? It seems that this system would be just as wasteful as current system and possibly more since they would be encouraged to overspend on investigations.
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