A great many people –
more than ever, probably – describe themselves as supporters of the free
market today, in spite of the unrelenting propaganda against it. And that’s
great. Those statements of support, however, are followed by the inevitable but:
but we need government to provide physical security and dispute resolution,
the most critical services of all.
Almost without a thought,
people who otherwise support the market want to assign to government the
production of the most important goods and services. Many favor a
government or government-delegated monopoly on the production of money, and
all support a government monopoly on the production of law and protection services.
This isn’t to say these folks are stupid or doltish. Nearly all of us
passed through a limited-government – or “minarchist” – period, and it simply
never occurred to us to examine our premises closely.
To begin with, a few basic economic principles ought to give us pause
before we assume government activity is advisable:
- Monopolies (of which
government itself is a prime example) lead to higher prices and poorer
service over time.
- The free market’s
price system is constantly directing resources into such a pattern that
the desires of the consumers are served in a least-cost way in terms of
opportunities foregone.
- Government, by
contrast, cannot be “run like a business,” as Ludwig von Mises explained
in Bureaucracy.
Without the profit-and-loss test, by which society ratifies allocation
decisions, a government agency has no idea what to produce, in what
quantities, in what location, using what methods. Their every decision
is arbitrary, in a way directly analogous to the problem facing the
socialist planning board (as Mises also discussed, this time in his
famous essay “Economic Calculation in the Socialist Commonwealth”).
In other words, when it comes to government provision of anything, we have
good reason to expect poor quality, high prices, and arbitrary and wasteful
resource allocation.
There are plenty of other reasons that the market, the arena of voluntary
interactions between individuals, deserves the benefit of the doubt over the
state, and why we ought not assume the state is indispensable without first
seriously investigating to what degree human ingenuity and the economic
harmonies of the market can get by without it. For instance:
- The state acquires its
revenue by aggressing against peaceful individuals.
- The state encourages
the public to believe there are two sets of moral rules: one set that we
learn as children, involving the abstention from violence and theft, and
another set that applies only to government, which alone may aggress
against peaceful individuals in all kinds of ways.
- The educational
system, which governments invariably come to dominate, encourages the
people to consider the state’s predation morally legitimate, and the
world of voluntary exchange morally suspect.
- The government sector
is dominated by concentrated interests that ( I don’t think “interests”
would be taken as meaning people) lobby for special benefits at the
expense of the general public, while success in the private sector comes
only by pleasing the general public.
- The desire to please
organized pressure groups nearly always outweighs the desire to please
people who would like to see government spending reduced (and most of
those people, it turns out, want it reduced only marginally anyway).
- In the United States,
the government judiciary has been churning out preposterous decisions,
with little to no connection to “original intent,” for more than two
centuries.
- Governments teach
their subjects to wave flags and sing songs in their honor, thereby
contributing to the idea that resisting its expropriations and
enormities is treason.
This list could go on indefinitely.
It’s understandable, to be sure, that people may not understand how law,
which they assume must be provided in top-down fashion, could emerge absent
the state, although there is plenty of good historical work demonstrating
precisely this. But if government had historically monopolized the production
of any good or service, we would hear panicked objections to the
privatization of that good or service. Had government monopolized light bulb
production, for example, we’d be told that the private sector couldn’t
possibly produce light bulbs. The private sector won’t produce the size or
wattage people want, critics would insist. The private sector won’t produce
specialty bulbs with only a limited market, since there would be little
profit in that. The private sector will produce dangerous, exploding bulbs.
And so on.
Since we have lived with private light bulbs all along, these objections
seem laughable to us. No one would want any of the scenarios these
hypothetical critics warn about, so the private sector obviously wouldn’t
produce them.
The fact is, competing sources of law have been far from uncommon in the
history of Western civilization. When the king began to monopolize the legal
function, he did so not out of some abstract desire to establish order, which
already existed, but because he collected fees whenever cases were heard in
the royal courts. Naïve public-interest theories of government, which no
sensible person believes in any other context, do not suddenly become
persuasive here.
Murray N. Rothbard was fond of citing Franz Oppenheimer, who identified
two ways of acquiring wealth. The economic means to wealth involves enriching
oneself by voluntary exchange: creating some good or service for which other
people willingly pay. The political means, said Oppenheimer, involves “the
unrequited appropriation of the labor of others.”
How do we in the Rothbardian camp view the state? Not as the indispensable
provider of law and order, or security, or other so-called “public goods.”
(The whole theory of public goods is shot through with fallacies anyway.) The
state, rather, is a parasitic institution that lives off the wealth of its
subjects, concealing its anti-social, predatory nature beneath a
public-interest veneer. It is, as Oppenheimer said, the organization of the
political means to wealth. “The State,” wrote Rothbard,
is that organization in society which attempts to maintain a monopoly of
the use of force and violence in a given territorial area; in particular, it
is the only organization in society that obtains its revenue not by voluntary
contribution or payment for services rendered but by coercion. While other
individuals or institutions obtain their income by production of goods and
services and by the peaceful and voluntary sale of these goods and services
to others, the State obtains its revenue by the use of compulsion; that is,
by the use and the threat of the jailhouse and the bayonet. Having used
force and violence to obtain its revenue, the State generally goes on to
regulate and dictate the other actions of its individual subjects…. The State
provides a legal, orderly, systematic channel for the predation of private
property; it renders certain, secure, and relatively “peaceful” the lifeline
of the parasitic caste in society. Since production must always precede
predation, the free market is anterior to the State. The State has never been
created by a “social contract”; it has always been born in conquest and
exploitation.
Now if this description of the state is true, and I think we have good
reason to believe it is, is merely limiting it possible or even desirable?
Before dismissing the possibility outright, ought we at least to consider
whether we might be able to live without it altogether? Might the free
market, the arena of voluntary cooperation, really be the great engine of
civilization we otherwise know it to be?
Let’s get back to the Constitution and the Founding Fathers, people say.
That would be an improvement, no doubt, but experience has taught us that
“limited government” is an unstable equilibrium. Governments have no interest
in staying limited, when they can expand their power and wealth by instead
increasing their power.
The next time you find yourself insisting that we need to keep government
limited, ask yourself why it never, ever stays that way. Might you be chasing
a unicorn?
What about “the people”? Can’t they be trusted to keep government limited?
The answer to that question is all around you.
Unlike minarchism, anarcho-capitalism makes no unreasonable expectations
of the public. The minarchist has to figure out how to persuade the public
that even though the state has the raw power to redistribute wealth and fund
cute projects everyone likes, it really shouldn’t. The minarchist has to
explain, one at a time, the problems with each and every conceivable state
intervention, while in the meantime the intellectual class, the universities,
the media, and the political class combine against him to convey the very
opposite message.
Instead of requiring the fruitless task of teaching everyone what’s wrong
with farm subsidies, what’s wrong with Federal Reserve bailouts, what’s wrong
with the military-industrial complex, what’s wrong with price controls – in
other words, instead of trying to teach all Americans the equivalent of three
graduate courses in economics, history, and political philosophy – the
anarcho-capitalist society demands of the public only that it acknowledge the
basic moral ideas common to just about everyone: do not harm innocent people,
and do not steal. Everything we believe follows from these simple principles.
There
is a huge literature dealing with the most frequent and obvious objections –
e.g., Wouldn’t society descend into violent strife as armed bands fought for
turf? How would disputes be resolved if my neighbor chose one arbitrator and
I chose another? A short essay can’t answer all objections, so I refer you to
LRC’s
anarcho-capitalism bibliography, assembled by Hans-Hermann Hoppe.
There’s a joke that’s been going around over the past few years: what’s
the difference between a minarchist and an anarchist? Answer: six months.
If you value principle, consistency, and justice, and oppose violence,
parasitism, and monopoly, it may not take you even that long. Start reading,
and see where these ideas take you.
