The failure of Anarcho-Capitalism

Economics Political Theory
21

Yes, Xarthaz hits it on the head. The harsh reality is that there is no such thing as a protection agency. There are only exploiters and monopolist-exploiters. Or stated another way there are only common thugs or states. As Hoppe said in “Democracy: TGTF,” we only want competition in the production of goods, but we do not want competition it in the production of bads.

A monopolist exploiter is less bad than competing exploiters for the same reason that owned resources are “better-off” than unowned ones. If an exploiter is not a monopolist, his incentive will be to exploit as much, and as quickly, as possible. A monopolist exploiter has taken (by force) sole exploitative access to a given region and thus will try to preserve his asset (you). It is a bleak view of reality, but history shows this to be the case. Nature is harsh, the strong eat the weak.

If you accept the inevitability of this, it becomes clear that the only humane path any Libertarian can take is to depose and replace the monopolist exploiter (peacefully if possible). He can then usher in a society structured on sound economics, freedom oriented policy, and general libertarian principles which could last many years. Sure society would devolve back into a tyrannical state of affairs after some time. But by then the revolutionaries, their children, and maybe even their children’s children will be dead. How far into the future do you want to influence anyway? This is essentially what our founders accomplished. Since we are all mortal, it is either now or never.

22

How probable is it that mgmcintyre and xarthaz are the same person? Very probable. How probable is it that mgmcintyre will be able to find a quote of an anarcho-capitalist theorist that believes that “the state was formed by agrarian peoples to protect themselves from roaming marauders, barbarians, and thugs”? Not very probable.

23

Sure we don’t want competition in the bads (crime), that’s exactly why we need competition in the goods (defense).

24

Nature is harsh, the strong eat the weak.

This is the basic fallacy that everyone of these arguments rests upon. Read some literature on game theory and biology to find out why this doesn’t happen in systems with reputation as a component in them. It especially doesn’t work when production is a factor. I don’t fear the government, I fear it’s backing by the people it governs. Government isn’t strong, the masses are. That’s why Walmart makes more money than Bergdorf Goodman.

25

This is a complete misinterpretation of Rothbards theory, which is that for competition between producers to effectively drive down costs, it is not neceassry that there be many more than the one active producers so long as that producer is in a state of rival competition which is defined as there being no institutional barriers to entry. The idea being that a single producer would not raise his price to extort monopoly profits since he has awareness that such an act would call his competitors into the market. So you took the wrong lesson. it is not that 1000 producers ‘are as bad’ as 1 producer. it is that ‘1 producer’ is as good as 1000 producers.

big difference is that in a market you choose who to pay to be your defender, a choice you dont have under institutional monopoly. and your defender is not the same as the thug !!! The way you talk, you are the victim of someone who only protects you and does not threaten you, the person that makes the threats is someone else.

26

How probable is it that mgmcintyre will be able to find a quote of an anarcho-capitalist theorist that believes that “the state was formed by agrarian peoples to protect themselves from roaming marauders, barbarians, and thugs”?

The mutual defense theory of the state is the most common argument I hear in any debate about the subject and I have also read it posited on these forums several times. Most of what I have read from Rothbard, Hoppe, etc. rejects social contract theory. However, I haven’t read anything on WHY a potential exploiter would instead act as a paid defender.

How probable is it that mgmcintyre and xarthaz are the same person? Very probable.

How probable is that Solid_Choke can’t form a logical argument or any cohesive response and thus makes idiotic personal attacks that don’t make any sense. Confirmed.

I still haven’t heard an answer to my question about the value of protection. If you stand to loose everything from exploiters, a protector has no incentive to charge you less-than everything, unless he is also a monopolist exploiter. And don’t say “competition drives down prices” b/c that presupposes the existence of PDAs. How did this market get started? Don’t say “protection is a good just like electricity” b/c it isn’t. Aggression differs from any other service in that it does not require a voluntary exchange and thus does not need to be mutually beneficial, it need only be exerted by the stronger party. Don’t tell me “we already use private security,” because we don’t. All body-guards etc act under the umbrella of the monopolist exploiter (govt) and are subject to it’s rule. These body-guards are mere subjects of the very same exploiter as their clients. When I can go hire a defense firm to fight off IRS agents and Swat teams, I will say we have private defense firms.

Once again I ask the same question: under what circumstance would it be more profitable to protect the helpless than to exploit them? I can think of none, other than from the point of view of a monopolist exploiter.

27

I’m sure you are all familiar with the basic justification for private defense agencies. Namely, that in goods production monopolies lead to higher prices and lower quality. This axiom applies also to the production of defense/protection. Additionally, any non-profit seeking ‘Public Defense Agency’ will face a calculation problem, namely how much total to spend on defense and also how best to allocate the allotted funds. Thus competing, profit-seeking, private-defense firms are preferable to a monopolist public defender.

But sometimes monopolies are a good thing. Hoppe says, in his critic of democracy, that we do not want competition in the production of bads, only in the production of goods (thus free entry into politics is bad). Therefore, in order for Hoppe to remain consistent, he must conclude that the production of protection/defense is a good and not a bad.

But is it really possible to produce “defense?” What do you need to set up a defense agency? First you will need man power. Since you will be called on to deal with individuals who refuse to “follow the rules,” you will need a trained staff of professional fighters capable of defeating various levels of aggressors in no-holds-bared combat. These employees (solider?officers?) will need equipment, weapons, armor, transportation, communications, etc. But the question is, are all of these things actually “defense?”

Or is the defense agency really producing a capability to provide defense. Specifically, the capability to competently use force against non-cooperative “villains.”

A sword maker who sells his wares to a local militia for use in legitimate defense is producing the exact same good as a sword maker who sells his wares to the local exploitative warlord. A defense agency requires the same general setup as a similar agency built for the purpose of exploitation. Thus, only if such institutions are used exclusively for defense can they be considered a good. But will they be? The use of force differs from any other “good” in that it does not require a voluntary exchange to be profitable to the producer and thus does not need to be mutually beneficial, it need only be exerted by the stronger party.

Can an institution, capable of competently using force against others, profit more from selling defensive-services then it could by simply using force to exploit those who need protection?

Perhaps a thought experiment: You are walking down the street with $100 in your pocket. A ruffian leaps out and demands your money. A “protector” then comes along and offers to drive off this ruffian. How much would you be willing to pay for this service? Would you pay $50 to keep your $100? How about $99? $99.99? $100?

If you stand to loose everything from exploiters, a protector has no incentive to charge you any less than that, unless he is also a monopolist exploiter. (i.e. unless he is protecting you as a farmer protects his sheep … to enjoy exclusive benefit from the shearing/slaughtering.)

28

I refuted your poor economic analysis on competition and pricing earlier, scroll up.

29

Once we accept this explanation of the state, we can see that working for a stateless society is like a gazelle working for a lion-less savannah. Thus, in order to see our libertarian ideolologies manifested in reality, rather than reject the state, we must instead seize control of it.

If we could seize control over the lion how could we be considered gazelles?

30

You used that position to show that anarcho-capitalism is misguided, but I pointed out that no anarcho-capitalist theorist actually holds that position. Unless you can show that they do, than your claim that anarcho-capitalism is misguided for that reason is false. I will accept any quote from Murray Rothbard, David Friedman, or Anthony de Jasay showing that they hold a “mutual defense theory of the state” as a refutation of my argument. If you can’t provide a quote I will not engage with the rest of your theory, since your rejection of anarcho-capitalism would be shown to be based on a falsehood.

31

Again I ask: How much would you be willing to pay someone to prevent the theft of your $100. Would you pay $50 to keep your $100? How about $99? $99.99? $100? Why would any “protector” capable of driving off the thug take less than $100 unless he is also a monopolist exploiter

What a backwards question. The question should be, how much would a PPA charge to ensure the protection of $100.00 and by charging this they would be agreeing, via insurance for your property, to reimburse such theft if were to take place from within their jurisdiction.

32

Thanks for the lively debate guys, I’m the type of person that like to try to refute any and all theories i find appealing in order to strengthen and/or alter my belief in them. I find An-Cap to be a very appealing ideology, probably b/c of it is so uncompromising and ideologically consistent. Plus, I think Rothbard is the man. Now some replies:

“The basic argument I hear is that the state was formed by agrarian peoples to protect themselves from roaming marauders, barbarians, and thugs.”

“Is this a joke? I know of NO anarcho-capitalist that thinks the state originated in this way.” - Yes, it’s a joke… glad you liked it.

“You used that position to show that anarcho-capitalism is misguided.” - Simply remove this one sentence from the OP: “The source of this error is a mistaken understanding of the origin of the state.” Everything else is valid. This way I have not misrepresented anyones theories, simply repeated a common misconception and refuted it. Anarchist views on the origin of the state notwithstanding, the rest of the argument regarding the efficacy of PDA remains valid.

“The same way every other price is driven down. Competition among agencies. There are currently more private police than public, and their rates are not one penny under the damage they prevent.” - We currently have nothing like PDA’s in the modern world. These “private police,” body-guard, bouncers, mercenaries, etc that you speak of operate under the umbrella of the monopolist exploiter and are subjects of the same. As such, they have no opportunity to establish an organized exploitation racket as the monopolist will not allow it. Anarchist PDA’s would not be under the same restraints.

“because he is in competition with protectors who would compete with him on price, and he is not in a prisoners dilemma but in a society were repeat business and good reputations are critical to profitability” - You are presupposing the existence of a market in defense services without explaining how any capable defender would not be better off by exploiting those in need of defense. As i have stated (and you never disagreed in your 2 sentences of analysis) you can not actually produce defense, only the capability to effectively exercise force, therefor defense is not a good. The capability to effectively use force is something that can be produced and then used in many different ways, including defense. As to the game theory stuff, if multiple games and reputation were sufficient to escape a prisoners dilemma then why do cartels need governments to keep them intact? And, as you are (no doubt) well aware, even in repeat games, if any of the players anticipates a final round (say a large PDA starts getting too aggressive, or a new firm enters the market), all optimal decisions will change.

“I refuted your poor economic analysis on competition and pricing earlier, scroll up.” - oh good, another arrogant poster with moderator status. You gave a one sentence blurb about game theory and never addressed the vast majority of my arguments. You refuted nothing. If you want to participate, pleas take the time to actually do it.

33

“Perhaps a thought experiment: You are walking down the street with $100 in your pocket. A ruffian leaps out and demands your money. A “protector” then comes along and offers to drive off this ruffian .. for a price. How much would you be willing to pay for this service?”

Well, there are several things to be said about this. First off, what does the ruffian do while you are negotiating this nonsense contract? He could throw a rock at the “protector” and take him out of the picture. You’re assuming this guy just shows up and says, “Hey, I can give this guy the boot, but let’s talk about my fee.” Granting the ruffian sticks around and doesn’t do anything while this goes on, clearly the best thing to do is say, “Whoa, whoa…Look, will you help me for twenty dollars? It’s all I’ve got.” If he does, you’re out twenty dollars. If he doesn’t, you casually reach into your wallet, pull out a twenty, and hand it to the ruffian, along with the suggestion that he could also rob the protector, if he was feeling ambitious.

But the real answer one might want to look at is to just shoot the ruffian. With no government to tell you not to carry guns, you’re good. You no longer have to worry about the law coming down on you for defending yourself.

As to this ridiculous idea of a “protector”, what is he protecting? Where are you? In a world with no government, practically all land is private property. It is not far-fetched to assume that a passing “protector” would be working security on private grounds, and is already being paid to handle “ruffians”. If he interferes and demands payment, just run off and leave him and the ruffian to deal with each other. And if the ruffian has a gun, who in their right mind is going to enter into contract negotiations before taking action? I’m sorry, but this whole mental exercise is moot.

34

@Valject

The thought experiment with the ruffian is an overly simplistic story that demonstrates the basic point. It is not meant to be taken completely literally.

… If you must, imagine a small fishing village (private property) which gets raided every harvest season by a Viking-style raiding/pillaging event. If the villagers do not acquire the aid of some 3rd party defender capable of besting the Vikings in combat, they will be entirely at the mercy of the Vikings. Hence, they are entirely at the mercy of a would be defender … who could just as easily do the exact same thing as the Vikings. After all, if they can drive off the Vikings then they can also defeat the fishing village, otherwise the fishing village wouldn’t need protection from them in the first place. If the pay-out for sacking the village is everything, how can the fishermen make a better offer?

If it were just as simple as shooting any would be exploiters/ruffians … then why would we need private defense in the first place? Self defense would be sufficient. It is organized exploiters that pose a threat to individuals.

35

What is this obsession with “stateless” societies? A voluntary association will still most likely have a state, except it would derive its powers from the consent of the governed; thus voluntary. As Mises saw it, self determination down to the smallest invidivdual if it is in anyway possible.

36

See Hoppe’s undisputed definition of a state.

37

Hence, they are entirely at the mercy of a would be defender

not if they can pick and choose from a number of possible defenders. in market competition environment they can, in a statist monopoly they cant .

38

not if they can pick and choose from a number of possible defenders. in market competition environment they can, in a statist monopoly they cant -

You are presupposing the existence of a market in defense services without explaining how any capable defender would not be better off by exploiting those in need of defense. As i have stated, you can not actually produce defense, only the capability to effectively exercise force, therefore defense is not a good. The capability to effectively use force is something that can be produced and then used in many different ways, including (but not limited to) defense.

Another way to think of this is to ask what is motivating the Vikings to attack the village in the first place. Why wouldn’t the Vikings just become the village defenders?

You see, before defense is ever needed in society it must be the case that all currently existing users of force are exploiters. What you are arguing is that as soon as there exists one or more aggressive exploiter using force, the next group to develop the capability to defeat them should go into the defense industry … this is the most profitable way to use the new capability in the anarchist view. But why not just exploit the individuals that the original aggressors were exploiting? How are you better off trading with them instead. The use of force need not be mutually beneficial to be profitable.

39

You are presupposing the existence of a market in defense services without explaining how any capable defender would not be better off by exploiting those in need of defense.

I must presuppose the existance of a market for defense services if its the economics of that that I want to analyse. If I want to analyse the economics of a monopoly in defense services then it would be appropriate not to? make sense?

As i have stated, you can not actually produce defense, only thecapability to effectively exercise force, therefore defense is not a good.

I agree with you that ‘defense’ is shorthand for lots of services and physical goods that people purchase, from men patrolling streets on foot, video surveillance to locks on doors. so no arguments there.

Why wouldn’t the Vikings just become the village defenders?

maybe they already have defenders, or the villagers don’t want them to? regardless these arent arguments about economics, these are ‘just so’ stories that you tell yourself, that let you convince yourself you are right.

But why not just exploit the individuals that the original aggressors were exploiting?

you are just asking ‘why not be the state’? Thats hardly a pro-state argument.

It all comes back to the division of labour, the benefits of being engaged harmoniously in trade has benefits that being a predator outside of the division of labour does not have.

The use of force need not be mutually beneficial to be profitable.

thats right! that’s why we promote a market for defense, so that people that seek protection from evil users of force - who seek profits through exploitation like the state - can get the best protection that they are willing to pay for at the lowest price it can be delivered… from who? from competitive agencies that can benefit from being integrated in the division of labour.

40

you are just asking ‘why not be the state’? Thats hardly a pro-state argument. - I don’t want to make a pro-state argument. I’m not suggesting that dependency on our exploiters to protect us from other exploiters is a good thing. Its a sad state of affairs. What I am saying is that no one who could act as a protector will have any incentive to do it unless they desire exclusive exploitation rights. The only reason any armed group would ever defend any weaker group is if they are long-term exploiters who wish to preserve their ‘capital stock.’ There is no other economic reason to engage in trade with individuals you can simply dominate. This is why we live in a world dominated by states. Much to my dismay.

This does not negate the possibility of a “righteous defender.” An defense-provider who, for whatever reason, values their own sense of justice/fairness/morality/etc. higher than the total possible exploitable wealth. In fact there have been many instances of such groups. However, this cannot be relied upon as a theoretical basis for security in a stateless society. But in our own lives, in our own generation, we could become “righteous defenders” by ousting the exploiters amongst us and setting up a system we find just .. I would classify the American revolutionaries as such individuals, in general.

Well anyway … I think after some time we did get down to the real difference in opinion. They key issue after all this debate seems to be weather or not PDA’s could ever gain a foothold in reality and thus generate a competitive market, or if instead they would simply exploit those who need defensive services from “use-of-force” providers. I will have to give that point some more thought to see where i come down on the issue.

(PS) – This entire line of reasoning was inspired by watching the movie “The Seven Samurai.” Thanks for the good responses, I gained some useful incites from this exercise.

(PS) – Go see the movie “The Other Guys.” It is off the charts funny and has more than a few anti-state jabs fellow libertarians should enjoy.