I was invited to guest lecture at a casual Show-Me Institute lunch on the topic of market anarchy. I will just post here my opening statement and some notes on pre-written questions, but the talk varied from this in depth and topic, lasting about an hour. It was a fun honor.
In the broadest sense, the scientific process involves making observations until a pattern emerges, then you isolate variables until you can confidently hypothesize a logical rule for predicting future cases. For the rule to be valid, it has to hold sway in even the most extreme cases. The law of gravity applies equally to a slinky falling down the stairs and an astronomical body that bends light.
I see no reason why the phenomenon of trade and decision making in human groups is any less open to scientific analysis than the physics of motion. And the net results of observations by myself and lots of other intelligent commentators has outputted the hypothesis that “trade is better than force.”
By “better” I mean more efficient, which means with a given pile of resources, how do we get the most stuff, better quantity and quality of goods and services across the board, cheaper?
And just to be clear, “force” covers 100% of government operations, no matter how well intentioned, or even well received.
I posit that “trade is better than force” is a law of nature on par with the physical sciences, and as such it holds true in ALL cases. This means that public goods do not exist. There is nothing special about the services that government, even a minarchist one, might provide that allows them an exception to the more syllable-intensive versions of the law, such as, “privatization outproduces collectivization” and “individualism is superior to centralization.”
If it’s bad to have socialized health care, why is it ok to have socialized police? You are way more likely to need a doctor than a cop.
What is police protection? It is a valued service. So is financial advice and dish washing and event planning and anonymous sex. So everyone with a comparative advantage in any of the above will, as we know well, compete to innovate and undercut each other, then trade their proceeds with the other specialists. Dispute resolution is valuable! So pay for it!
So the reason I am an anarchist boils down to two fundamental principles:
- Economics is a science, and the law we have extracted from our countless observations points unambiguously to a law describing transactions as either consensual or coerced. The degree to which transactions are contractual indicates the degree to which wealth accumulates in that society.
- This applies for every situation, with every type of good. There is no sacred function performable only by monopoly states.
Has this ever been tried? Not in any particularly compelling way. That governments have essentially always existed is not particularly surprising based on how the human mind works. My model of human mind is a biological machine evolved to solve n-dimensional game theory grids. Lower animals are very good at the 2D prisoner dilemma–style puzzles. Fight or Flight. Feed yourself or your young, etc. Humans can solve grids, where the payoff in each cell is itself a grid, with an arbitrary number of players, etc. Like being able to see multiple moves ahead in chess, humans are subconsciously calculating multi-dimensional game theory matrices all the time, and this directly underlies things like time preference (the further in advance you are investing, the higher your n) and the sophisticated power struggles which appear in every social group and level.
So out of this tendency, a niche evolved very early on, in which an individual who has the knack can defect, yet send a signal of cooperation, thus short-circuiting the optimal tit-for-tat strategy. If you are willing to cooperate so long as those around you are cooperating, but you are in fact receiving a cooperation signal, but a defected payoff, most will keep playing the game, without stopping to assess what they are really getting out of this. The extreme depth at which the game-theory-mind is operating at the human level allows for this kind of manipulation.
This results in three kinds of people:
- Those capable of masking defection as cooperation, and fearlessly reaping the higher defect payoff.
- Those who see the defection as defection, and then advocate defection, or actually defect.
- Those who see what the defectors want them to see, and cooperate ad infinitum.
Which translates into our experience as:
- Politicians, corporatists, interest groups, etc.
- Malcontents (libertarians and other assorted revolutionaries)
- Everybody else.
So long as the “Everybody else” is the lion’s share of the population, the parasite class can feed at leisure, and the malcontents will be ignored. Of course there can be overlap, and a parasite might use the malcontent class to overthrow the current parasite regime and install his own group.
So that is my spin on the theory in summary. I will briefly go over the questions Josh posed for me, and will gladly go into more detail as desired.
“If there were no government, what stops someone from just taking things from someone else?”
Given the unapologetic pathetic rate of recovery in property crimes under our current system, the same question could be asked minus the “no.” A professional thief has a fairly paltry upside to his labor, the fence value of his target, and the down side is quite real and extremely negative, i.e., being killed by the rightful owner. The deterrence to theft is, in any system, first and foremost the fact that someone is going to be sporadically guarding that item, possibly with lethal force.
Insurance
Incentives
“Who or what would maintain public order?”
There is no public. If a mob trespasses on private land, the owner can call upon whatever security service he has contracted with to disperse them, or by whatever means he deems necessary.
“How would people who do bad things be punished?”
It’s important to understand that taking out a protection contract is not one-size-fits-all. The more enemies you have, the more expensive it is to protect you, and thus higher premiums. It doesn’t matter to your insurer why you have these enemies, but they will certainly notice patterns, like people who commit murder tend to be under vastly greater threat of retaliation than the actuarially average customer. If you are a wanton public threat, your premiums will skyrocket. If you are not a fabulously wealthy villain, you will eventually run out of money, and then be at the mercy of companies who have been contracted to avenge/compensate your victims.
But again, your insurer doesnt necessarily care about the nature of your enemies’ complaints against you, only that they exist. If, for example, there was a relatively peaceful society that had a lot of people that agreed with the idea that women who don’t cover their heads should be stoned, then a woman who flouts that custom would find it more expensive to insure her personal safety. Then it becomes a market equilibrium.
Women who want to wear what they want, and seek damages from people who throw rocks at them.
vs.
People who want to throw rocks at hatless women, and be protected from retaliation.
Whoever on net pays more for the service will tend to get their way. If I’m willing to pay a higher premium in order to go out of my way and make enemies, that is a luxury I can indulge, regardless of which side of this arbitrary dispute I fall. The women can save money by wearing their hajibs, and the fundamentalists can save money by not caring if women forgo their scarves. If a lot of women pay extra for a contract that says “if I get hit by a rock, pay me $500,” then their insurer has to raise their rates and eat the outpayments, or go extract from the men.
If the men sign a contract “if someone asks me to pay $500 for throwing a rock, make them go away,” then THEIR insurer has to either pay the $500 or physically deter debt collectors at some cost for guards. Every time they have to hire another guard or pay the other insurer the $500 for the claim, they have to raise rates on their customers.
“What stops police from just taking things over?”
They are specialists in taking voluntary payments from customers and providing protection against third party initiators of force. If the cops become predators themselves, they have vacated their market niche and will be replaced by a competitor.
“How do we ensure that people’s natural rights are protected? Do you believe in natural rights?”
I believe that things we call natural rights are things that people would be willing to be pay to have protected, and are free to make whatever contracts or take whatever action they deem necessary to achieve that goal.
“What about national defense?”
This is always a rather alarmist argument. On a pragmatic level, anti-statism will demonstrably increase wealth production, and place no restrictions on personal acquisition of armaments, thus resulting in a situation akin to the Nazis’ unwillingness to test the Swiss resolve.
“What about intellectual property?”
This a non-existent concept. Rights enforcement is a commodity. If an individual or organization can cost-effectively enforce, or contract out the enforcement of, intellectual property rights, more power to them. In the absence of state support, I sincerely doubt this is the case.
The consumer surplus boom from just music distribution is unprecedented.
For example, without internet, the music experience I get from say Pandora.com would cost, I don’t know, thousands of dollars to reproduce. But it’s virtually free, and while Pandora makes some profit, my life is literally wealthier. It’s not directly transferable, of course, because if I had exactly as much extra money to create the Pandora experience, but had to pay for it the old way, I would spend that money on other things. But since it IS so cheap, I get this benefit, as do millions of others. So music experience, which had a previous market value of perhaps billions of dollars, is being produced for next to nothing. This bonus has to be weighed against any enforcement regime, and will necessarily come up lacking for the overall wealth output.
“Without public education, what keeps the poor from falling behind the wealthy permanently?”
And the status quo is doing what about that? There will always be wealth disparity, the real question is whether upward mobility is possible. The extent to which property rights are protected increases the ease at which an impoverished individual can accumulate capital, take a risk on a long-term investment, and leverage himself into the middle class.
“Would you describe yourself as a Georgist?”
Georgists are equivalent to any other minarchists, with a radically simplified tax program. I would certainly support a Georgist candidate with any kind of chance, over the status quo; but I am not a minarchist, so the peculiarities of their funding method is irrelevant next to the fact that they are financing dangerous and unnecessary state activity.
“If there are no public roads, won’t it be hard to get from place to place?”
Under the Trade Trumps Force Law, it is necessarily true that either:
- privatized roads will be better, cheaper and more efficient
OR - roads as a subsidized good are currently too cheap, and if privatized roads become more expensive to use, other areas of the economy will improve by a greater proportion than roads lose, resulting in an overall increase in wealth.
Some other common tropes:
- Somebody wants to buy a nuke
Nukes are expensive. If you have $20 million to spare, you can probably do whatever you want in the current system as well. There are legitimate reasons for a widely subscribed security insurance company to consider the nuclear option. Mutually Assured Destruction works. This is why there was no WWIII. - You can buy and sell slaves
Slavery only exists via state subsidized police forces. Without that monopoly power, if someone’s output is valuable enough to make them worth enslaving, then a free labor competitor will always be able to pay less in protection costs to pay the same effective wage as the slaver was paying in survival expenses plus enforcement overhead, because the worker is cooperating with the free-labor employer, and resisting the slaver. - Anarchism means no heirarchy period, including workplace.
I am fine calling myself “absolute propertarian” or “market anti-statist,” etc., if the word anarchism is so utterly sacred as to forestall any further discussion until our labels are settled. In any case, stateless socialism is rather short-sighted in that it ignores the possibility of comparative advantage in management, and that such talent might be scarcer, and thus better paid, than general labor.
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