I have just been reading Edward Stringham's Anarchy and the Law, an interesting collection of articles and extracts, pro and con, on the subject of free market anarchism (aka anarcho-capitalism, individualist anarchism, ...). One of the pieces, by David Osterfeld, points out that there is no guarantee that anarcho-capitalist institutions would generate libertarian law, especially in a society where most people held some non-libertarian beliefs in common. In a footnote he correctly reports me as recognizing the distinction between anarchism and libertarianism, while incorrectly asserting that I extricate myself from the dilemma by refusing to classify myself as a libertarian.
His more fundamental mistake is in seeing this as an argument on the minarchist side of the debate. Once you set up your limited government, you too have no way to guarantee that what it produces will be libertarian law. If law is made by direct democracy, the majority might vote to ban heroin or prostitution. If it is made by representative democracy, the representatives might so vote--especially if the position is supported by most voters. If the law is to be kept free by the courts, the courts might come down on the wrong side.
The only complete solution to this problem is to cheat--to define your preferred system in terms of outcomes as well as institutions. Thus a libertarian anarchist might say that the society he advocates is an anarchist society that produces libertarian law, and similarly for a libertarian minarchist. In either case, once the institutions actually come into existence, they will not be constrained by how their advocates defined them.
There is, however, a partial solution, at least on the anarchist side of the argument--one I sketched in my Machinery of Freedom and, in somewhat more detail, in a later essay. The market for law in an anarcho-capitalist society will tend to produce economically efficient law for reasons related, but not identical, to the reasons that other markets tend to produce efficient outcomes. Libertarians believe that freedom works, that libertarian law is closely, if not perfectly, correlated with efficient law. If that belief is correct, there will be a strong tendency for the market for law to generate libertarian law.
So far as I know, no comparable argument exists for the minarchist side of the debate, no good reason, short of assuming that everyone has become a libertarian, to expect law produced by political mechanisms to be either efficient or libertarian.
Neither anarchy nor minarchy is necessarily libertarian. But anarchy comes closer.
His more fundamental mistake is in seeing this as an argument on the minarchist side of the debate. Once you set up your limited government, you too have no way to guarantee that what it produces will be libertarian law. If law is made by direct democracy, the majority might vote to ban heroin or prostitution. If it is made by representative democracy, the representatives might so vote--especially if the position is supported by most voters. If the law is to be kept free by the courts, the courts might come down on the wrong side.
The only complete solution to this problem is to cheat--to define your preferred system in terms of outcomes as well as institutions. Thus a libertarian anarchist might say that the society he advocates is an anarchist society that produces libertarian law, and similarly for a libertarian minarchist. In either case, once the institutions actually come into existence, they will not be constrained by how their advocates defined them.
There is, however, a partial solution, at least on the anarchist side of the argument--one I sketched in my Machinery of Freedom and, in somewhat more detail, in a later essay. The market for law in an anarcho-capitalist society will tend to produce economically efficient law for reasons related, but not identical, to the reasons that other markets tend to produce efficient outcomes. Libertarians believe that freedom works, that libertarian law is closely, if not perfectly, correlated with efficient law. If that belief is correct, there will be a strong tendency for the market for law to generate libertarian law.
So far as I know, no comparable argument exists for the minarchist side of the debate, no good reason, short of assuming that everyone has become a libertarian, to expect law produced by political mechanisms to be either efficient or libertarian.
Neither anarchy nor minarchy is necessarily libertarian. But anarchy comes closer.
22 comments:
First of all, why do institutions need to "produce" libertarian law? If one were to start with libertarian law (as best as one could write it), institutions would merely need to enforce it. A branch of government that does nothing but continually write new laws has definite draw backs. The courts can extrapolate existing law to apply to new developments as best they can (creating case law); and a special assembly can be created to form new laws if truly necessary, which ought to be extraordinarily difficult.
Second, the assumption that a Minarchy would be a democracy, is a significant assumption. I've always imagined a Minarchy having an "administrator" and not much more.
Even if a minarchist regime were more "democratic", it would start with a "libertarian" constitution that would strongly restrict the scope of powers and legislation (e.g. a ban heroin or prostitution would not be constitutional).
"Even if a minarchist regime were more 'democratic', it would start with a 'libertarian' constitution that would strongly restrict the scope of powers and legislation (e.g. a ban heroin or prostitution would not be constitutional)."
Isn't that how the United States started?
Isn't that how the United States started?
Yeah, constitutions were a noble experiment, but I think I am a citizen of the best empirical proof that they don't restrain the state forever.
So far as I know, no comparable argument exists for the minarchist side of the debate, no good reason, short of assuming that everyone has become a libertarian, to expect law produced by political mechanisms to be either efficient or libertarian.
The difference between anarchism and minarchism is enormous. We might be able to reason our way to what would be produced in a free market, thanks to economic and social theory, and so we could establish probable outcomes of libertarian anarchism.
But that is not in any way true of minarchism, since it is a system, like any statist system, based on power and force. Such a system is not rational in the way a market system is, simply because "it" doesn't produce what "people" want - it produces what whoever is in power wants. Who knows who will get/claim power over a minarchist state? Who knows what he or she or them will do when they finally have it? Power corrupts.
In a market system, contrary to the statist ditto, people's acts are constrained by other people's interests and actions. In such a system standards arise spontaneously and outcomes are usually the product of cooperation and mutual respect, simply because it is rational and in your self interest to cooperate and respect others (kind of Golden Rule).
The philosophical difference between anarchism and minarchism is discussed e.g. here.
This is precicely where I disagree with what you've written in the books of yours that I've read.
I'm not a capitalist, becasue I think a corporation, even a monetary system, represents a form of government. I think they damage anarchy.
It occurred to me durring a talk you gave that I really *had* to accept that someone living in "my" anarchy might not agree with me on this, and although I might have a right to argue, and to take actions to prevent things I didn't want, I had to allow the opinion, and for that someone to take actions in accordance with those opinions.
Anyway, the upshot is that I think this is an under-discussed question. Usually, if there is discussion of this it is very superficial.
I really think that the only "solution" to anarchy really is that everyone has to "be an anarchist..." except that I think this is more to do with recognising that we are all agents. If people recognised their own power, we would have an anarchy, regardless of what political system or government technically existed.
Hope that made sense... If I had more time I'd write a shorter letter :)
So far as I know, no comparable argument exists for the minarchist side of the debate, no good reason, short of assuming that everyone has become a libertarian, to expect law produced by political mechanisms to be either efficient or libertarian.
Isn't this Judge Posner's efficiency argument? Actually, it's better than an argument; it's got evidence!
Unnr writes:
"I'm not a capitalist, becasue I think a corporation, even a monetary system, represents a form of government. I think they damage anarchy."
Would you argue that any voluntary organization--say a marriage, or a group of people jointly running a restaurant--damages anarchy? If not, what's special about a corporation?
And how does a monetary system represent a form of government? The kinds of money we are familiar with happen to be government run, but there are lots of historical examples of private money.
If I am a reliable sort and people use my standardized promises to pay (say) an ounce of silver as a convenient item for simplifying exchanges, how is that either a form of government or a threat to anarchy?
"Isn't that how the United States started?"
Yes, and some people will say that it's a terrible system, just better than anything else ever tried.
The constitution did work well for a while, but the U.S. constitution was very far from being libertarian.
What is true is that constitutions erode over time. But what is also true, is that systems collapse under the weight of an exponentially growing body of law (e.g. see the Internal Revenue Code).
Constitutions make themselves very difficult to change. Personally I believe that the body of law ought to be also be very difficult to change, and subject to constitutional review before (not after) enacted. Eliminate the idea of a legislature, and perhaps create within the constitution the ability to convene a legislative special assembly once every 10 years.
There could be institutional features of a minarchy that tended to keep a society libertarian. If the constitution of a minarchy stipulated, for instance, that any increase in taxation required a 2/3rds majority vote, while a decrease would require a 2/5ths minority vote, this would tend to keep the society more libertarian. A similar provision, suggested by Alan Greenspan, is that most or all laws would have mandatory sunset provisions, maybe related proportionally to the percent of votes they received.
Anonymous wrote:
There could be institutional features of a minarchy that tended to keep a society libertarian.
I like the idea of those institutional features you mentioned, but I still can't help thinking they would be abandoned as soon as the first military or economic disaster panic could be cultivated among the public. Those who run the system will attempt to claim unprecedented circumstances as their justifications for increasing their power. And if history is any guide, people will always fall for that.
Michael Martin writes:
"Isn't this Judge Posner's efficiency argument? Actually, it's better than an argument; it's got evidence!"
Funny you should mention that.
I don't think it has any substantial argument supporting, i.e. any good reason to expect it to be true. It does have evidence, but the evidence is pretty ambiguous. You might consider, for instance, that under traditional common law rules, if I tortiously caused your death I owed no damages to anyone, your claim having died with you.
As it happens, I've written a book, Law's Order, that is in part an attempt to look at the evidence for and against the Posner thesis. A late draft is webbed in HTML at:
http://www.daviddfriedman.com/Laws_Order_draft/laws_order_ToC.htm
and the published version, as page images (less readable), at
http://www.daviddfriedman.com/laws_order/index.shtml
The final chapter sums up the evidence on the Posner conjecture.
I should add that Posner's claim is only about the common law, not about legislated law.
Incidentally, I believe that Posner first published his thesis about the efficiency of the common law at about the same time I first published my argument about the efficiency of the law generated by anarcho-capitalism. He had evidence and (in my view) no theory, I had theory but no evidence.
And one possible explanation for at least some of the elements of efficiency in the common law is that they are fossils left over from the private law, in particular the Law Merchant, that parts of the common law were built on.
A truly minarchical government would be subject to a constitution or other constraints that severely limited it's size. E.g., suppose the only tax allowed was a sales tax, not to exceed 6%. That would pay for an effective defensive military, but very little else. It might not prevent a majority of foolish voters from gutting the DOD to fund a DEA, but such a nation wouldn't survive for long.
Of course, the USA started with a minarchist national government, (although with very few limitations on state governments beyond what the voters would stand for). The Constitution tried to keep the federal government minimal in three ways:
1) A short list of enumerated powers, with the feds allowed only to do what was explicitly on the list.
2) In addition, the Bill of Rights listed individual rights the feds were bound to respect. Perhaps this was a mistake, as it blunted the force of #1...
3) Federal taxation was limited to import duties, excise taxes, and a head ("poll") tax. All the import duties and excise taxes the public would stand for hardly even raised enough revenue to pay the Revolutionary War debt. Poll taxes were even touchier politically; AFAIK, the only time one was imposed was a small tax during the Mexican-American War, which is best known for inspiring Henry David Thoreau to civil disobedience.
Of course, over the years these barriers were eroded somewhat. The second-worst erosion was the incredible stretching of "interstate commerce", to the point that it's not necessary for something to cross state lines or ever be sold to be regulated as "interstate commerce". But if the feds were still restricted to the originally allowed forms of taxations, they would not have the budget for huge regulatory agencies, let alone to run nationwide welfare programs in their own right as well as in the guise of Social Security, especially while a majority of voters still think that defending ourselves is more important than statists' regulatory dreams - and it took a Constitutional Amendment to get around that restriction.
We lost our original minarchy only because a vast majority approved of expanding the government, and continued to support that for over thirty years (from the passing of the 16th Amendment to FDR's intimidation of the Supreme Court into stretching "Interstate Commerce", and on to the WWII introduction of withholding taxes and sky-high income tax rates.
markm
I have read (and bought!) your books, Prof. Friedman. But thanks for pointing out the commentary on Posner's hypothesis, which I had forgotten about.
Ultimately, I believe the debate between minarchists and anarho-capitalists boils down to a difference between utilitarian and deontological approaches to the problem of government. Minarchists, such as Posner, aren't interested in a priori arguments except for their heuristic value. Anarcho-capitalists aren't interested in evidence except for its anarcho-capitalist-theory supporting value. ;-P
But seriously, the right a priori justification for Posner's hypothesis, to the extent there can be one, must be something along the lines of an emergent sociological phenomena.
In the same sense that only certain wavelengths of light diffracting from a crystal will contstructively interfere, only certain legal rules will survive over time when subject to the damping and driving of a flood of legal disputes over similar facts. The common law emerges in phase with economic efficiency over time. Statutory rules are more volatile because the feedback from damping and driving are more attenuated; but these too should eventually reflect more efficient rules.
There's the argument.
And one possible explanation for at least some of the elements of efficiency in the common law is that they are fossils left over from the private law, in particular the Law Merchant, that parts of the common law were built on.
This could be evidence either for or against depending on how we draw the line between public and private. And why should the distinction be analytical. For me this is another point for the utilitarian approach.
Michael writes:
"Ultimately, I believe the debate between minarchists and anarho-capitalists boils down to a difference between utilitarian and deontological approaches to the problem of government. Minarchists, such as Posner, aren't interested in a priori arguments except for their heuristic value."
I believe you are mistaken. I take a consequentialist approach and am an anarchist. Orthodox Objectivists take something closer to a deontological approach, and are minarchists.
I also think you are confusing two different sorts of a priori arguments. A consequentialist can still be interested in arguments that give you reasons to expect something to be true even before you have looked at the evidence to see if it is true. Such arguments are particularly important if you are considering something new, for which direct evidence isn't available.
Posner is clearly interested in offering arguments for why we would expect common law to be economically efficient--I just don't think he has found any persuasive ones. For my objections to the arguments that he (and others) offer, see the book.
Neither anarchy nor minarchy is necessarily libertarian but the claim is actually stronger for minarchy which is necessarily not libertarian since it relies either on taxes or on coercive monopoly to exist.
I tend to believe there is no such thing as a stable minarchy. The power of the government is essentially the power to maintain or expands itself. Either it is powerful enough to expand and it will, either it is not and it can only get weaker and weaker hence melting into anarchy.
Sorry I didn't get to this sooner... It's been a crazy week.
Basically, I think all relationships should be subject to continuous consent, that all avenues of negotiation/change should be available at all times, and that consent should not be manufactured though durress.
That, obviously, indicates a social system very much different from ours, and it's doubful wheather someone raised in ours could make the transition completly. There is also likey to be a population pressure issue, which isn't a problem, but it does create a there-from-here problem.
So... Marriage and small restaurants. Yes, or no, depending on context. It's the actual relationship that matters, not the superficial features of the relationship.
Money. We live in a society where we think of money as 'real,' even when it's a number on a page representing a number on a small fancy sheet, representing a constantly changing and very odd looking fraction of a unit of weight of any of several metals, whichin turn represent a kind of language of value-giving, which represents a method of enforcing property rights, which wouldn't exist if the legalistic concept of property did not.
So that's not just a system of property laws, but a system for enforcing them.
And, it's not 'real,' not all human cultures have a system like this, and the dove-tail with proletarization is particularly dangerous to anarchy.
I may like owning property, but creating/maintaining a system which imposes this on others is an example of my choosing to damage anarchy.
All of this is a continuum, and not black and white; most "Big Man" societies use currencies, and the money is what makes the men, but they retain the continuous-consent requirement at least as far as following the "big man" goes, becasue people are also largely self-sufficent (IE: no or small proletariat)
All the standard disclaimers apply (particularly given it's 8:30 am, and I've only had half a coffee)
Unnr, you store wood in the summer to heat yourself during the winter. Someone comes, takes the wood that you chopped and use it to cook his dinner. You do not say anything because you don't believe in private property. Comes the winter and everyone freezes to death.
Another true story. My girlfriend and I like to eat our desserts very slowly to enjoy it longer, yet, whenever we share a plate, the dessert is gone in 30 seconds. Why do you think that is?
If there is no private property, how do you store wood to heat yourself during the winter ? Everyone wants wood in the winter but wood in the summer is useful too and no one really want to chop wood. Either you have private property which you enforce yourself, or you fall back to some form of socialism with and authoritarian decision process on who does what and who gets to use what. Not really anarchy.
Cultures which don't have this concept in the same way we do don't seem to have a problem.
You assume I don't say anything: I don't need the idea of private property to say "I need to heat my house this winter." The person who needed dinner doesn't need the concept of private property to understand it, either. Besides, evidently he needed dinner. This is not theft, this is the beginning of a wonderful friendship.
Like I said, it's doubtful if people who were raised in our (rather dangerous) lifestyle could make the transition completely. Many probably can't even get started.
I have spent a few short periods of time with groups that function that way. It's lovely, but I have to keep checking myself -- I'm just so used to being terrified of other people, I don't know how to be comfortable with them.
One aquaintance in particular used to do this little head cock when he was confused. He never did catch on to the pattern in the things I did which confused him, or that other people did allong the same lines. He basically died because he never really could catch on to the idea of private property, even though he could explain it. It was slightly amusing when it came to him paying us -- he was very particular over the counting, making sure it was exact, and that all the bills were crisp, but the handshake was clearly more important, and although he understood, he did not "grok" why we didn't want to be paid in cash in a dark alley in a bad area of town... so he paid us there, and then walked the more nervous people to the subway (which, incidentally, constituted significant protection).
It goes both ways with this idea, and all the ways in between are also represented.
I'd also take exception with corporations. I don't think that such beast would exist in their present form without substantial coercive incentives.
Right now, the state goes out of its way to make sure that enterprises are run as corporations, because in order for corporate governance to align incentives even approximately well, the enterprise would need to provide the state all the information it needs to win the measurement game known as taxation. So, the state makes it really hard for people to cooperate on largish scale without forming a corporation. But in a free world?
An employee of a corporation takes stuff from A to B because the boss so told him/her. The primary incentive is to keep the job.
The boss tells to take stuff from A to B, because s/he believes it to be in his/her own interest, which, if governance is done right (wich is a big "if"), happens to coincide with the incentive to keep the job (of being boss).
The boss is chosen by the majority owner(s) on the basis of information over which s/he has substantial influence.
Bona fide economic planning, in short.
Wouldn't a setting where the primary incentive for anyone to take stuff from A to B be the fact that one can buy stuff cheaper at A and sell it at profit at B be inherently more efficient?
Kevin Carson of the Mutualist Blog has written about how the State causes big corporations to usurp the place of small/local businesses. I can't say I agree with him, but he's an interesting writer.
I'm a minarchist because I just don't see power vacuums going unfilled. Like Randall Holcombe, the state seems inevitable to me. States are everywhere we look except outer space and the ocean. The United States could be better but it could also be a whole hell of a lot worse. A foundation of limited government seems to have the most livable result. Perhaps Patri's seasteading idea will change things though.
Isn't the best compromise between anarcho-capitalism and minarchy low transaction costs between states?
If you can easily switch states then you are living in a quasi-anarcho-capitalism by choosing your law system out of almost 200 candidates. Libertarian states would have the highest number of immigrants if Libertarianism is the natural outcome of an anarcho-capitalist system.
So decreasing transaction costs, for example, by having a common world language would be a good start.
Interesting. I thought of this, recently, when thinking of condo boards. Condo boards are voluntary institutions, but paying their fees and adhering to their rules are required to live in your condo.
Here in Canada, the federal government considered making a law preventing condo boards from preventing condo-dwellers from flying the Canadian flag. So we have the federal government (a non-voluntary government) enforcing individual freedoms on smaller, lower-level voluntary governments. I suppose a condo board should be free to make rules prohibiting flag-flying.
But why would they?
I suppose with less people who are free to leave if they don't like it (albeit at a considerable transaction cost), they are more likely to reach a consensus than among 30 Million people.
Or, possibly, the type of person who sits on condo boards is the type of person who is bothered enough by what their neighbours are doing to meet for several hours per month to restrict their neighbours actions. Whereas a more libertarian condo dweller, would not enjoy attending condo board meetings, as he would see them as boring, unnecessary and even if he voted against a certain regulation, he would feel somewhat complicit if that regulation passes.
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