Two versions of anarcho-capitalism: David Friedman vs. Murray Rothbard

Economics Political Theory
1

Many seems to think that anarcho-capitalism of the Murray Rothbard and David Friedman differs only in arguments, the former using “natural right” ones and the latter “consequentalists”. I think that diversion is much more fundamental, and that their versions of anarcho-capitalism are different.

The difference is simple, and it’s about the law. David Friedman supports polycentric law, while Rothbard is for “natural law”. In polycentric law, the property owners decide what set of laws is used in their lands, and this is the definition of anarcho-capitalism used by Friedman. Rothbard states, that an area which uses “libertarian ethics” and non-aggression principle, is anarcho-capitalist. But according to the definition of Rothbard, Friedmanite version is only partly anarcho-capitalist, basicly in those areas where property owners choose to follow NAP and libertarian ethics. Other areas are not, according to Rothbards definition. This is Rothbard in For a new liberty:

It is now clear that there will have to be a legal code in the libertarian society. How? How can there be a legal code, a system of law without a government to promulgate it, an appointed system of judges, or a legislature to vote on statutes? To begin with, is a legal code consistent with libertarian principles?
To answer the last question first, it should be clear that a legal code is necessary to lay down precise guidelines for the private courts. If, for example, Court A decides that all redheads are inherently evil and must be punished, it is clear that such decisions are the reverse of libertarian, that such a law would constitute an invasion of the rights of redheads. Hence, any such decision would be illegal in terms of libertarian principle, and could not be upheld by the rest of society. It then becomes necessary to have a legal code which would be generally accepted, and which the courts would pledge themselves to follow. http://mises.org/books/newliberty.pdf page 282

Also, this is what Rothbard says about “Friedmanite anarchism”:

The free bankers accept a kind of David Friedmanite anarchism, where there is no law, only people engaging in exchange and buying people out. If you have a group that wants to kill redheads, the redheads will have to buy them off if they value their hair. I think this is monstrous, the kind of anarchism would indeed be chaos. Just because there is a demand for something doesn’t mean it should be fulfilled.

http://mises.org/journals/aen/aen11_2_1.asp (ctrl + F + “david friedman”)

So if Catholics restrict abortion in their lands, that’s not anarcho-capitalism according to the Rothbard. Same goes for Jewish regions and circumcision. Hans-Hermann Hoppe has supported the idea of some kind of polycentric law(http://mises.org/daily/5270 ctrl + F + catholic), but holds still the Rothbardian viewpoint of ethics. This “Hoppean” synthesis seems to be quite common in modern days, where libertarians think that polycentic law is good and property owners can choose any laws they want, but through some mystic way most or at least big minority of property owners start to follow Rothbardin NAP. This wasn’t Rothbards idea, and it seems that ideas have evolved among the Austrians since the days of Murray.

But few questions about the polycentric law - what if some property owners actually do what Rothbard feared, and start to punish redheads with death in their property? For an adults this isn’t a big problem for a long time - they can move out and/or never move in. But what if property owner decides that you can’t leave? And what about children? What if property owner decides, “In my property, all newborn shall be automaticly citizens of my property, even without contract”. In Friedmanite anarcho-capitalis, there is no-one to stop him. This would naturally be a birth for a new state, because every new generation born under that property are basically under the authority of the property owner, and he could create laws denying the exit from his area. So if anarcho-capitalism is Friedmanite and property owner has total control over his land, what stops it from evolving to a new state?

Minarchy vs Anarchy
2

You’re asbolutely right that the intellectual divide between Rothbard and Friedman is actually very large.

As much as I love Rothbard’s fiery anti-statism, I have to say that I think Friedman’s approach is superior both on the issue of fact (it’s a better description of the world-as-it-is) and in point of norms (it’s a view that is more aligned with how human ethics and law actually develop in society).

I think where Rothbard and Friedman start to diverge is actually on the issue of the importance of the opinion-molding class. While I agree with Rothbard’s emphasis on the role of the opinion-molding class in maintaining the State, I think that its role in the shape and character of society itself is distinctly smaller. In other words, while the State is a creature whose existence is dependent on the propaganda of the opinion-molding class, this is not the case for the attributes of anarchic society.

Absent the tax-fed intellectuals spewing propaganda through the State-controlled media, people will not go rushing out to find substitutes for them. The influence of the opinion-molding class is amplified by the State and diminished in its absence. Cultural ideas and social norms develop “from the bottom-up” in this case. The character of society is then largely determined by a much more democratic kind of “memetic competition”.

To my knowledge, Friedman is silent about the importance of the opinion-molding class is maintaining the state order (he has this in common with other State-university employed intellectuals with otherwise anti-establishment ideas such as Daniel Dennett or Richard Dawkins). This doesn’t mean he disagrees with Rothbard, however. Rather, Friedman’s focus is on the character of society as it emerges from the bottom-up processes already well-understood by economics.

Drawn out in cartoon form:

Rothbard: natural laws → discovered by natural law theorists → promulgated by opinion-molding class → (universal?) natural law society

Hoppe: market competition between “aggression insurers” → diminishing profitability of operating a gang or State → territorial private property/natural law society

Friedman: market competition between law/security firms → better law, diminishing profitability of operating an oppressive State → freer States/private property societies

Me: market competition between law firms (arbitrators) → better law and morality → diminishing profitability of operating an oppressive State → freer States/private property societies → natural law society?

I would hesitate to call Friedman a legal polycentricist as I’m not aware of any place where he comes down hard on the question of territoriality. Hoppe is strongly territorial and I get the impression that he sees private-law societies as well-defended islands of prosperity, moral decency and legal sanity amidst an ocean of socieities where private property rights are less strong and people are, concomitantly, poorer, more immoral and more lawless.

I can’t think of any place where Rothbard talks about territoriality but I think he foresees the natural law order as emerging at the highest levels (i.e. international commerce, merchant law, treaty law, etc.) and then working its way down to smaller, more local legal systems. In this way, there really is no question of territoriality as the natural law order is inherently global and simply works its way down to local law systems.

I think that territoriality is crucial and is built into human nature at such a fundamental level that - even if it’s a poor organizing principle by some artificial measures we might devise - it is an inevitable principle of human society. We can imagine competing law systems coexisting territorially (and Friedman actually gives some examples somewhere in his online material) but I think this will remain an exception more than a rule.

I think all three of Rothbard, Hoppe and Friedman contribute important insights into the eventual nature of a freer social order than the present one. Territoriality is important. (Hoppe) Large cap individuals and organizations tend to have better legal arrangements based on saner principles than smaller cap individuals and organizations. (Rothbard) But law is never absolutely territorial. (Friedman)

My one gripe with Friedman is that I think he gives up too easily on the issue of moral philosophy and I think a great deal of valuable work is waiting to just be done by someone in this area.

Clayton -

3

in my opinion, a private law society would, over time, discover actual natural law through market processes. Rothbardian natural law is theoretical in the sense that it was developed by people through thought processes and data analysis. Market-discovered law would be practical because it would be identified through application of theory to the real world.

as for property owners acting like little nations, thats going to happen. But other people can hire private police, security, military, and hostage retrieval services. And in time the market would discover effective service providers, because thats what markets do.

4

Rothbard supported argumentation ethics.. so really, the whole attempting to refute “natural law” is useless and a waste of time.

This is an excerpt where he discusses Hans-Hermann Hoppe’s argumentation ethics.

  • Nevertheless, by coming out with a genuinely new theory (amazing in itself, considering the long history of political philosophy) Hoppe is in danger of offending all the intellectual vested interests of the libertarian camp. Utilitarians, who should be happy that value-freedom was preserved, will be appalled to find that Hoppean rights are even more absolutist and “dogmatic” than natural rights. Natural rightsers, while happy at the “dogmatism,” will be unwilling to accept an ethics not grounded in the broad nature of things. Randians will be particularly upset because the Hoppean system is grounded (as was the Misesian) on the Satanic Immanuel Kant and his “synthetic a priori.”

    Randians might be mollified, however, to learn that Hoppe is influenced by a group of German Kantians (headed by mathematician Paul Lorenzen) who interpret Kant as a deeply realistic Aristotelian, in contrast to the idealist interpretation common in the United States.

    As a natural rightser, I don’t see any real contradiction here, or why one cannot hold to both the natural-rights and the Hoppean-rights ethic at the same time. Both rights ethics, after all, are grounded, like the realist version of Kantianism, in the nature of reality.

    — Murray N. Rothbard, Beyond Is and Ought

Re: “So if Catholics restrict abortion in their lands, that’s not anarcho-capitalism according to the Rothbard. Same goes for Jewish regions and circumcision.”

= Sorry no, that’s complete bullshit and a terrible strawman.

Under total privatization [..] With every locale and neighborhood owned by private firms, corporations, or contractual communities, true diversity would reign, in accordance with the preferences of each community. Some neighborhoods would be ethnically or economically diverse, while others would be ethnically or economically homogeneous. Some localities would permit pornography or prostitution or drugs or abortions, others would prohibit any or all of them. The prohibitions would not be state imposed, but would simply be requirements for residence or use of some person’s or community’s land area.

While statists who have the itch to impose their values on everyone else would be disappointed, every group or interest would at least have the satisfaction of living in neighborhoods of people who share its values and preferences. While neighborhood ownership would not provide Utopia or a panacea for all conflicts, it would at least provide a “second best” solution that most people might be willing to live with.

20M. N. ROTHBARD, Nations by Consent: Decomposing the Nation State, in <>, vol. 11, n.1, Fall 1994, p. 7

Consequentialists if you want to take down Murray and AE’s “dogmatism” you’re going to have to go through it. AE clears up the red head issue clearly.

Seriously, just no to this whole thread and pretty much everything said in it.

5

“In polycentric law, the property owners decide what set of laws is used in their lands, and this is the definition of anarcho-capitalism used by Friedman.”

That is not correct. Not even close to correct.

The Machinery of Freedom is webbed on my site, if you want to find out what the system I am proposing actually is.

6

“To my knowledge, Friedman is silent about the importance of the opinion-molding class is maintaining the state order (he has this in common with other State-university employed intellectuals”

Do you define “state-university employed intellectual” as anyone who has ever worked for a state university? I last taught at a state university (UCLA) 29 years ago, and I first taught at one after I had written The Machinery of Freedom, so it’s hard to see how such employment could explain my views.

Friedman: market competition between law/security firms → better law, diminishing profitability of operating an oppressive State → freer States/private property societies"

From your first arrow on, that is not my argument.

"I would hesitate to call Friedman a legal polycentricist as I’m not aware of any place where he comes down hard on the question of territoriality. "

Why would you assume that territoriality is required for polycentric law?

“My one gripe with Friedman is that I think he gives up too easily on the issue of moral philosophy and I think a great deal of valuable work is waiting to just be done by someone in this area.”

Any millenium now.

Philosophers still study Plato and Aristotle. Physicists and biologists don’t.

7

@David Friedman: I stand corrected and retract the comments about employment (though I’m still disgruntled with Dennett). And, of course, I will not insist on my summary of your ideas in the face of your correction.

I think evolutionary psychology is giving us a microscope on human nature that we never had before so we can actually give some answers to the question “What is human nature?” that rise above the level of mere opinion. And why can’t it be the case that Epicurus and Aristotle - or even Buddha - got it right the first time and people have been simply ignoring the clear and concise answers that they worked out thousands of years ago?

Clayton -

8

Thank you for your personal answer Professor Friedman. I have a copy of your book, but it’s at my other aparment at the moment, so thanks for the information.

I have never seen that writing before. It seems that Rothbard changed his views when he got older.

Why not? I own a huge chunk of land let people move in if they obey my orders. They do it voluntarily, and no one else has right to stop me on my land. After few decades I decide that people in my property cannot live without my permission, punished by death. More years pass, and I decide that all children will have to follow my orders and law from the birth. All who live in my property accept this, but it doesn’t matter because when they moved to my property, they voluntarily decided to live under my reign. So years pass, and first movers die. Those who remain are children, and they must follow my orders, because law in my property says so. And we have a new state. What could stop me or any other, if property owner can decide about anything on his lands? Children are important part of this scenario.

9

Hmm, I’ve re-read some parts of Machinery of Freedom, and I think they seem to support my original statement.

I have described how a private system of courts and police might function, but not the laws it would produce and
enforce; I have discussed institutions, not results. That is why I have used the term anarcho-capitalist, which describes
the institutions, rather than libertarian. Whether these institutions will produce a libertarian society—a society in which
each person is free to do as he likes with himself and his property as long as he does not use either to initiate force
against others—remains to be proven.
Under some circumstances they will not. If almost everyone believes strongly that heroin addiction is so horrible that it
should not be permitted anywhere under any circumstances, anarcho-capitalist institutions will produce laws against
heroin. Laws are being produced for a market, and that is what the market wants.

I think this seems to be pretty clear polycentric law - property owners decide what law is used in their property.

10

Yeah, good luck with that.

That said, “rights” conceived as historically evolved phenomena must be kept distinct from “rights” viewed within the framework of a priori reasoning and justification, as discussed in Part I. On this, Hoppe writes: “Can rights emerge from tradition a la Hume or Burke? Of course, they always do. But the question of the factual emergence of rights has nothing to do with the question of whether or not what exists can be justified” — HHH, 2006, p. 402

11

Re: “I have never seen that writing before. It seems that Rothbard changed his views when he got older.”

He didn’t change his views. If something has lead you to that conclusion, it is because you are confused.

Introduction to Libertarian Legal Theory - Kinsella

"… Obviously, there remains much work for libertarian intellectuals to do, to refine, develop, and extend this relatively young body of political theory. Rothbard, for example, recognized that even in a free society there is a need to further develop libertarian principles so that they could be applied to human interaction. In particular, libertarian legal and political theorists and specialists would use general libertarian principles to develop a more concrete body of libertarian law. As Rothbard wrote in Power and Market,

The Law Code of the purely free society would simply enshrine the libertarian axiom: prohibition of any violence against the person or property of another (except in defense of someone’s person or property), property to be defined as self-ownership plus the ownership of resources that one has found, transformed, or bought or received after such transformation. The task of the Code would be to spell out the implications of this axiom (e.g., the libertarian sections of the law merchant or common law would be co-opted, while the statist accretions would be discarded). The Code would then be applied to specific cases by the free-market judges, who would all pledge themselves to follow it.

And in his preface to The Ethics of Liberty, Rothbard said,

While the book establishes the general outlines of a system of libertarian law, however, it is only an outline, a prolegomenon to what I hope will be a fully developed libertarian law code of the future. Hopefully libertarian jurists and legal theorists will arise to hammer out the system of libertarian law in detail, for such a law code will be necessary to the truly successful functioning of what we may hope will be the libertarian society of the future.[3]

In addition to applying libertarian principles in this manner, there is much to digest in Rothbard’s body of writing alone, not to mention that of other important thinkers…"

[3] Emphasis added. See also this passage from The Ethics of Liberty:

Law would develop in an anarchistic market society without any form of State. Specifically, the concrete form of anarchist legal institutions — judges, arbitrators, procedural methods for resolving disputes, etc. — would indeed grow by a market invisible-hand process, while the basic Law Code (requiring that no one invade any one else’s person and property) would have to be agreed upon by all the judicial agencies, just as all the competing judges once agreed to apply and extend the basic principles of the customary or common law.

===================================

That is what is essentially meant in regards to the ‘law code’. Of course renegade judges could choose not to adhere to the NAP at all.. but then their patronage would be miniscule, and they would end up going out of business.

“Ethics — the validity of the principle of self-ownership and original appropriation — is demonstrably not dependent and contingent upon agreement or contract; and the universality claim connected with Rothbard’s libertarianism is not affected in the slightest by the circumstance that moral discussants may or may not always come to an agreement or contract. Ethics is the logical-praxeological presupposition — in Kantian terminology: die Bedingung der Moeglichkeit — rather than the result of agreement or contract. The principles of self-ownership and original appropriation make agreement and contract — including that of not agreeing and contracting — possible. Set in motion and stimulated by the universal experience of conflict, moral discussion and argument can discover, reconstruct, explicate, and formulate the principles of self-ownership and original appropriation, but their validity in no way depends on whether or not this is the case, and if so whether or not these formulations then find universal assent.”

— Hoppe, Intro to TEOL.

The whole “vs.” issue is boring. The way I see it is that others simply choose to focus on different elements of the same system [image].

Action-based legal theory provides tools to take into each case. It supplies some of the underlying questions to which case-specific details shape answers. Legal principles guide inquiry into specifics while emerging details suggest the most relevant set of legal principles to apply. Justice may be found at the meeting theory and practice—of deduction, institutions, and the details of specific cases. Sound theory functions as a service to legal practitioners, enabling them do their jobs more easily and reliably. […]

Legal practice should always be on trial in the court of legal theory, while legal theory should be recognized as insufficient to do justice in any real case. Legal theory and legal practice must therefore persist in a challenging but necessary marriage between distinctive partners if they are to produce the offspring of justice. Used properly, praxeological legal concepts not only boost the clarity of legal theorizing from “the armchair,” they also enhance the ability of practitioners to parse specific cases from “the bench.”

(Source: libertarianpapers.org)

12

This is my main point on Rothbard. What if there is no demand for libertarian ethics in the law market? Why would anyone aside Rothbardians adopt NAP as legal code in their property? It seems that people assume that most of property owners would magically become Rothbardians and create this demand for NAP judges.

13

The current legal system in the Anglo-Saxon world is an awkward marriage of common-law with state legislation. Once you get rid of the latter, the old common-law does essentially use the non-aggression principle as its basis. No positive duties are imposed non-consensually in terms of common-law principles.

The state, the family, and the institution of slavery are the only historical situations in which universal natural law has been generally believed by those alive at the time not to apply.

The challenge is not to introduce most people to the concept that aggression is wrong - almost everyone who has ever lived has accepted that principle, with exceptions. Every system of law that has ever been put to stone or parchment has held it as a general principle, and enumerated various exceptions to it from there. The challenge is to eliminate the notion that there are any valid exceptions.

14

it will happen, but not in a vacuum. Where do these subjects of yours engage in trade? Unless you envision a totalitarian state with a totally self-sufficient economy, some of your subjects will have to interact with people outside your control. This is an opportunity for them to contract with a protection agency and end your tyranny.

15

they would demand it because its more profitable than other law schema. People who demanded other types of law would, over the long term, fail to acheive the same levels of prosperity as libertarians (both law providers and law consumers).

16

Dr. Friedman, how do you define “law”? I could find nowhere in The Machinery of Freedom where you define it before you talk about it in Part III of that book.

17

Common law systems are close to the right idea but not quite there, in my opinion. Common law is far better than statutory law, but it is rule by judges. It is highly decentralized, as opposed to statutory law which is centralized by definition. This is why I prefer common law to statutory law, but I don’t think it goes the whole nine yards. The system I prefer is essentially mediation as the basis of law, and I believe that customary law is the closest to that.

QFT. Golden rule ftw!

18

Isn’t common law the same thing as customary law?

19

No, common law is precedent law. Customary law is just based on customs.

20

*Re: "*This is my main point on Rothbard. What if there is no demand for libertarian ethics in the law market? Why would anyone aside Rothbardians adopt NAP as legal code in their property? It seems that people assume that most of property owners would magically become Rothbardians and create this demand for NAP judges."

That’s your main “point” on Rothbard, which fails yet again.

“A further point: in a profound sense, no social system, whether anarchist or statist, can work at all unless most people are “good” in the sense that they are not all hell-bent upon assaulting and robbing their neighbors. If everyone were so disposed, no amount of protection, whether state or private, could succeed in staving off chaos. Furthermore, the more that people are disposed to be peaceful and not aggress against their neighbors, the more successfully any social system will work, and the fewer resources will need to be devoted to police protection. The anarchist view holds that, given the “nature of man,” given the degree of goodness or badness at any point in time, anarchism will maximize the opportunities for the good and minimize the channels for the bad. The rest depends on the values held by the individual members of society. The only further point that need be made is that by eliminating the living example and the social legitimacy of the massive legalized crime of the state, anarchism will to a large extent promote peaceful values in the minds of the public.”

– Society Without a State, Rothbard.