According to objectivistcenter.com, professors Roderick Long and Tibor Machan are publishing a new book called Anarchism/Minarchism: Is a Government Part of a Free Country? William Thomas will have an essay in the book entitled “Objectivism against Anarchy.” While this debate is ancient to both libertarians and Objectivists, it seems it simply will not expire. However, for those of you new to it, I can assure you that the case for anarcho-capitalism over limited government has been made, again, and again.
Free-market anarchism would be more efficient and cheaper than minarchism
Free-market anarchism is more efficient than minarchism because of the coercive monopoly dilemma. Government, big or small, is defined as a coercive monopoly on the use of force over a given geographical territory. A monopoly is an enterprise that has total or alomost total control over production and distribution in a single industry or field. A market or non-coercive monopoly is an enterprise that achieved its monopoly status through non-coercively outcompeting its competition in the free-market place, i.e., by offering better goods and services than its competition and by offering those better goods and services at lower prices than its competition. A non-market or coercive monopoly is an enterprise that achieved its monopoly status by legally outlawing any competition, and backing such outlawing legislation with the use of force.
Under free-market anarchism, the only monopolies permitted would be market monopolies. Under minarchism, there exists a single enterprise which holds a coercive monopoly on the use of force over a geographic area. This logically leads us to deduce that free-market anarchism would be more efficient than minarchism because market monopolies are inherently more efficient than coercive monopolies and free-market anarchism is the only system that would abolish coercive monopolies while minarchism is a system that institutionalizes a coercive monopoly.
Market Monopolies vs Coercive Monopolies
Market monopolies are always more efficient than coercive monopolies because market monopolies have an eternally stronger incentive to be more efficient than coercive monopolies. That incentive is market competition. Competition is defined by the Austrian School of Economics as rivalrous behaviour. The free-market abolishes all forms of initiatory force, so the only rivalrous behaviour permitted on the free-market would be non-coercive behaviour. When rivalrous behaviour is regulated by the free-market, it remains non-coercive, so than outcompetition on the free-market can only be done by offering customers better goods and services at lower prices.
Under free-market anarchism, competing protection agencies would have to offer customers betters services at lower prices in order to survive and earn a large share of the defense market. They would be legally unable to physically force customers to patron their services so they would have to resort exclusively to reason and persuasion. Such agencies under anarcho-capitalism would have to persuade customers to purchase their services by making their services more attractive, again by offering more services at a greater quality and at a lower price than the competiton. Each protection agency, by continually offering more services at a greater quality and at a lower price in order to beat the competition would end up lowering costs, increaseing variety, increasing quality services, and ultimately increasing the standard of living. Because of the self-interest of competing agencies to survive, flourish, and eliminate the competition, society would reap social gains. This is called the market competition incentive.
The incentive in the free-market is to continually advance economically because a failure to continually advance economically, a failure to offer more services at a greater quality and at a lower price, would represent a failure to offer customers better values than the competition. A failure to do so would ultimately translate into joblessness as consumers would only patronize those firms that offered them the best services. Consumers, after all, are selfish and moral too and they want the best bargain and quality services they can find. They will only buy from those enterprises that cater to their demands, and cater to them best. This incentive is what encourages continual advancement in an economy.
Even market monopolies are encouraged to continually advance by the market competitive incentive because under a free-market, anyone has the right to compete with anyone else in any field. When it comes to justice, under anarcho-capitalism, anyone has the right to compete against anyone else in the provision of law enforcement and military defense, provided as long as they do not violate the individual rights of anyone they deal with. If a market monopoly were to exist in providing justice, any other enterprise would still retain the right to compete with it provided that no one violates the individual rights of anyone. In this case market monopolies would still have to continually innovate and offer better values to customers because the threat of new entrants would never cease.
No such market competitive incentive exists for the enterprise of justice under minarchism. A coercive monopoly on the use of force over a given territory has no market competitive incentive to continually advance, to innovate, and to explore. Competition is legally banned in the provision of justice under minarchism so the central government feels no market pressure to improve services or lower costs. Ultimately, the market competitive incentive works by emitting a non-coercive pressure, a pressure that brings with it the message “advance or cease to exist.” Under minarchism, this non-coecive pressure is forbidden by legislation. Thus, since the market survivial of a central government is not threatened, since no competitor could legally exist to offer better services at a lower cost, there exists no significant peacetime incentive to innovate or lower prices. Thus under minarchism, justice services are less efficient and more expensive than they should be.
Standard Objectivists have attempted to counter the above arguments by holding that their governments would be voluntarily financed and that an inefficient and expensive government could be overthrown by the populace in favor of an efficient, cost effective government. However, with a coercive monopoly on the use of force over a geographical territory, how could the populace know whether an Objectivist government were efficient and cost-effective enough?
Under free-market anarchism, the populace would be able to easily gauge how efficient and cost-effective a competing protection enterprise was by analyzing its proformance against other agencies and by analyzing trends in its profits. Under, minarchism, no such information is provided precisely because no other enterprise would be allowed to compete with the government. There would exist no standard of evaluation to evaluate the government’s performance. Objectivists say that the standard for evaluation of a government’s performance is the protection of individual rights, if individual rights are protected or not. Yet rights are not simply either protected or not protected. There are levels of quality in protection. The inability to determine the proper levels of quality rights protection plagues minarchism.
Under anarcho-capitalism, the public could be easily assured that competing protection agencies would be at their most efficient and would offer the highest quality service because of the market competition incentive. Under such a system, the most efficient firms would be at the top. Under minarchy, the government would just be.