Why does government exist?

Economics Economics Questions
1

I know this question has probably been brought up many times (the “Why aren’t we all moving to Somalia?” thread is related). But I think the question deserves an answer.

This is why I think the question is problematic. Let’s take a look at the Austrian view of fiat currency. Fiat currency is dominant because the government has distorted the market so that the costs and benefits of using fiat versus other money favor the use of fiat money. Gold or other commodity money hide in the background as “shadow money” (to borrow a term from a recent LvMI lead article). The question has to be asked why does the government care to do this? Well, they care to do it because they can inflate the money supply if they control it and use that as a way to steal from all holders of its monopolized currency.

Let’s go back to the question of the existence of government at all. Clearly, the government provides services which would be otherwise provided on the market - but at much lower cost and much higher quality if not monopolized. Courts, national defense, police services, (the mail!) are all state monopolies which have the primary effect of lowering quality and raising costs. The purpose of monopolizing this particular bundle of services is the same as the purpose for monopolizing the currency: to extract the greatest amount of property from the inhabitants of a territory as possible.

However, if I understand the Austrian view of money correctly, the triumph of market money is inevitable because the currency market has never stopped operating. Gold is always a potential competitor to fiat money and the market will always continue to hold it in reserve to hedge against fiat money collapse. Since it is inevitable that fiat monies collapse (in the same sense that it is inevitable that children, left unattended, will eat candy left in front of them), this implies that, on the long-term, honest, market money will inevitably come, even if it takes a long time coming.

But the market for the bundle of services which the government currently monopolizes (law, defense, dispute resolution, security services, etc.) also has not disappeared. People buy guns even in countries with absolute legal prohibition of gun ownership, and this constitutes competition with the government’s monopoly on force. Similarly for dispute resolution (look at the recent British ruling that decisions reached in Sharia courts are enforceable by British law enforcement) and the other services.

Now, the same argument that holds for explaining the existence of fiat currency cannot hold for explaining the existence of government at all, because such an argument would be circular (the argument explaining the existence of fiat money first presupposes that governments exist and intend to extract as much property from the populace as they can…) What I am really asking is why does there exist the behavior of organized plunder at all? In some sense, organized plunder must have been more efficient than the alternatives. To deny this is to deny that the market for the bundle of services which modern governments monopolize has always been in operation. I hope my conundrum is clear.

In other words, maybe we commit what has been termed a “moralistic fallacy” (the opposite of the naturalistic fallacy… reasoning that since something is immoral, therefore it must not be the case) when we assert that the natural order is freedom from coercion because coercion is immoral. It does seem that one level or another of organized coercion has always been present in human society, even human pre-history.

I hope someone can convince me I’m mistaken. [:)]

Clayton -

2

More efficient for whom?

3

I am at a loss to see how government imposing itself has anything to do with a market, as opposed to first deceit of its subjects and then subsequently their acquiescence.

-Jon

4

Well, I guess I mean in the evolutionary sense - more efficient genetically. Perhaps those who have engaged in organized plunder in the past have been more successful in passing along their genes (and predisposition to engage in organized plunder) than those who have been productive. I read a fascinating book recently tited, Why Beautiful People Have More Daughters about evolutionary psychology. It tries to explain culturally universal human behaviors from an evolutionary perspective. One human behavior they don’t discuss that is also culturally universal is the behavior of organized plunder (government).

Clayton -

5

oops.

Clayton -

6

Yes, but fraud, cons and robbery are threats in any market. Why should the markets for defense, dispute resolution, etc. be given special treatment? That is, why are people especially vulnerable to being tricked and subjugated by governments but not other actors?

Clayton -

7

The government exists for the same reasons religions exist: fear, uncertainty, and doubt.

8

I am religious but I will grant that you may well be correct. However, this goes back to my concern there may be a moralistic fallacy in anarcho-capitalism. Governments (and religion) are culturally universal. This suggests that governments (and religion) are not mere social constructs since, in that case, we would expect to see an example or two of anarchic cultures, or an example or two of irreligious cultures. If it is true that religion has conferred an evolutionary advantage (explaining why all cultures are religious), perhaps it’s also the case that a predisposition to organized plunder has also conferred an evolutionary advantage. If so, then the disposition towards socialism is not just the result of poor education or the undue influence of bad ideas, it is in some sense inevitable. That socialism is immoral does not mean it is not a state of nature since there is no reason to believe that nature cares about morality (moralistic fallacy).

Clayton -

9

Why did the government appear in the first place?

I think this is what the OP is asking.

10

Yes, that’s another way to phrase it. Given that governments obviously result in massive misallocations of society’s wealth and that a free society would be immensely more efficient and productive (even at defending itself from foreign aggression), how did it come to be that the story of human history has been the movement from a relatively free condition to a condition of state dominance? I guess I’m trying to decide whether I feel optimistic or pessimistic about the long-term future of liberty. In the short term in the US, I’m definitely pessimistic. In the long-term I have been up to now optimistic, but I’m having second thoughts.

On the one hand, I see a general trend toward greater individual liberty through technological and economic progress - things like the automobile, the computer and the internet have given individuals far more power for self-direction and the ever lower costs of production present the individual with an ever greater array of choices. But, on the other hand, in-principle tolerance of state plunder does not seem to have similarly decreased. The state seems, in fact, to be plundering more than ever both in absolute terms and in proportional terms*.* Our continued prosperity despite this rampant plunder seems to be the consequence of the fact that our astounding technological progress and industrialization over the last few centuries has made it less absolutely painful to part with a greater portion of our wealth than it was for our forebears.

The tolerance - all-out embrace, in fact - of this latest government intervention indicates to me that people are highly tolerant of state plunder. Many people I talk to understand that this bailout is funded on our backs and benefits a small number of ultra-wealthy power elites but they argue that it’s somehow necessary anyway. I guess I’m less sure that liberty will win out than I was before this collapse. [:(]

Clayton -

11

What is a “state of nature” exactly? I know what Hobbesians mean by it but to me blindly following his impulses is not in man’s nature, rather it is a failure to fulfill it. What you might mean is that socialism is rooted in primitive impulses of man. So what?

Perhaps because they’re deluded into thinking it is some “special” kind of good, or because they falsely believe a given ruler has some sort of legitimacy? Insecurity? Fear? Like I said, giving into impulses.

-Jon

12

At some point, the members of some tribe decide that it may improve their security to grant someone special powers over them. Once that takes place, the process unfolds to a great increase of power until an all-powerful government exists.

Hoppe wrote some articles about this in Democracy, and there are also some interesting historical perspectives in Bertrand de Jouvenel’s On Power and Martin van Creveld’s Rise and Decline of the State.

13

Personally, I blame the Jews. :slight_smile:

14

Why do governments exist? Because, while people may realize the benefits of property rights and division of labor within their own group, they believe that the benefit of externalizing costs through aggression against others is acceptable within other areas. This tendency towards aggression results in certain people winning out over other people and gaining more and more power to coerce, until the point that they are able to establish a monopoly on jurisdiction with greater and greater powers over time.

This is the case in places like early Anglo-Saxon England, in which, while people in associations known as the Hundreds believed that it was wrong to aggress against one another, freemen nonetheless would participate in attacks against their neighbors under war leaders. Were they have to applied their libertarian principles across the board and engage in peaceful cooperation with their neighbors instead of violence, there would have been no rise of the state and our living standards would be infinitely higher. So, in effect, states are not the product of any kind of attempt to gain utility but an ideological scheme to benefit aggressors at the disproportionate cost of their victims.

15

But this seems to me to be self-refuting - if the Scots or Irish had been consistently libertarian, they too would have had infinitely higher standard of living and could therefore have afforded far stronger defenses that would have bankrupted foreign powers who attempted to defeat them. This would suggest that the world should automatically have tended toward greater freedom and greater prosperity. Instead, real history is that England used its aggression to subjugate the Scots and the Irish and set about to establish a worldwide naval empire, in the shadow of which we still live today. As I conceded in my OP, I do see clear movement towards greater individual freedom since the Industrial Revolution, but only as a result of technological/economic innovations, not as a consequence of human predisposition.

I am not aware of an instance in history where private groups utilizing only non-state, voluntary, contractual defense services (including self-funded defense) were able to withstand the organized aggression of a foreign state and thereby preserve the prosperity of their libertarian society against plunderous aggression. I believe this would be a far more moral social order than the territorial monopolization of defense that we see today, but that doesn’t imply that it will actually come about.

Clayton -

16

If you look at the history of civilisation you’ll see that governments have generally decreased in power, democracy is just a temporary set back.

17

I should have explained further, so I shall.

  1. I do not see a religion in itself an evil anymore than I see a child believing in Santa Claus being evil. Equally, I wouldn’t say a child who believes in Santa Claus is anymore irreligious than a devout Catholic. Both hold beliefs without substance (they hold them on faith, blind or otherwise), and both see values attached to them in which they wish to emulate or recipient of (Altruistic attitude(s) toward others, and ‘salvation’/gift-receiving too).

  2. A society without a government doesn’t necessarily mean a society without religions, rather it’s a society without one religion being dominant on the basis of violence, which is the biggest irk for me being in the United States as many ‘devout’ religious folks claim it is their moral duty and right to make me and others “see the light” come Hell or otherwise.

As such, I think it should be realized that a free society will never be a society devoid of religion, but devoid of violence enforcing any one religion into dominance. But it also means that even if a religion comes into dominance by other non-violent means, that in that society it is still considered universally an immoral act to enforce any one religion, dominant or not, on others. In essence, a free society is a society free from moral relativism (in which such moral relativism that has allowed all degrees in severity of immoral acts toward one kind of people by other kind of people).

Thus, to me, when I state both governments and religions hinge on fear, uncertainty, and doubt, I mean it in a neutral sense of those terms in that humankind has sought answers to everyday problems in a similar fashion as they have sought answers for their less than everyday questions. The difference between both State and Religion in this case is the matter of whether or not the most basic universal moral theory is accepted or not. In a universal moral theory that rejects the initiation of violence it follows that pretty much most religions can abide by it and still retain their core tenets with no revision, but a State by comparison cannot as a State requires violence to enact its ‘tenets (its policies).’ So, really the point of saying they both originate from FUD is to state that both originate from the natural need to resolve our ignorance; the difference is in how each one does it.

18

The origin of the government, historically, probably actually originated differently for different peoples and places.

However, I can imagine the system went most like this,

One group wanted one thing.
The other group wanted another.
The first group had a strong arm.
The first group defeated the second group.
To ensure that their positions would then be assured to be carried out, something like a government arose. From there, it evolved.

This FEE podcast does have another interesting take on this though.

19

Except, they weren’t consistently libertarian (though they were relatively libertarian, and thus gave a rather heroic defense against English imperialists- Hell, Scotland wasn’t conquered but just absorbed through mutual agreement.) Had they not squabbled amongst each other and expanded their sureties, they would have been able to give an even more impressive resistance, and likely kept their freedom.

Do you mean that governments have generally increased in power? Democracy wasn’t a set-back, either; Massachussetts was far more oppressive to its people than the English crown ever was, thus prompting Shays’ Rebellion, the Constitution basically replicated the British mercantilist/imperialist system, and the French Republic was far more horrid with its inflation, confiscation, and total warfare than the relatively benign Bourbons, who, even under Louis XIV, were greatly constrained even in their power to tax (see the Fronde.)