Let’s take the mafia that deals with drugs and gambling. They are outlaws and therefore operate in anarchy. Why can’t the different gangs get along in the same way we expect PDAs to get along? Why do they constantly shoot each other? Why can’t they use a private court to settle their disputes?
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Drugs are illegal so if there’s a contractual dispute you don’t have the recourse to go to the courts.
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Gambling is illegal in many places, and there is also the issue of taxes. People who don’t want to pay taxes on their earnings have no legal recourse.
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Same goes for bootleg cigarettes
The mafia is closer to a state than a private group, they charge protection money. But at least they’re honest about it. It’s an organization that is inherently criminal, one that sees aggressive violence as an acceptable way of earning an income. The existence of the state is corruptive as well. as this video clip shows http://www.youtube.com/watch?v=ksO_NZWcgoo
Gangs are violent because in order to enter the market, you have to buy enough guns to scare off the police. Once you’ve done that, you’ve already paid for all the guns and muscle, so it lowers the cost of aggression against other gangs.
Self defence is also castrated because gangs cannot pool themselves in with society’s larger security bodies. They can’t go to private security agencies because they’re cooking meth. So they have no way to access economies of scale in defense.
Economies of scale in defense are likely to be categorically stable because providers are engaged in long term repeat relationships with one another. I.e. they don’t need external laws to establish cooperation.
The whole idea behind anarchic order is that you can make short term relationships work by running them within a framework of long term relationships.
Dr. Murphy covers this in chapter 20 of his new book Lessons for the Young Economist. It’s a quick read and he explains how the marginal costs of violence are lowered when individuals are trading in outlawed goods.
I’ve read what Murphy had to say, and I must say I was not convinced. Mafia gang wars seem to be the strongest argument against Anarcho-capitalism I’ve encountered until now.
For example Murphy says:
I think the mainstream explanation actually makes sense.
Could you explain, if you have the time, what specifically was unconvincing about his argument?
I’ve read what Murphy had to say, and I must say I was not convinced. Mafia gang wars seem to be the strongest argument against Anarcho-capitalism I’ve encountered until now.
I’m in no way an anarcho-capitalist. but I have to disagree with you there. How could the most regulated (outlawing is the most extreme form of regulation) industry be an example of anarcho-capitalism?
Secondly, there is nothing inherent in the commodity of recreational drugs that lends itself to violence, it is the outlawing of it that removes competition and leaves only a small group of ‘businessmen’ who are willing to use violence. I mean, when was the last time you saw a shootout between glaxosmithkline and beechams or whoever? Never is the answer.
Thirdly, look at the era when organised crime became powerful - it is the era of prohibition when government sought to control and regulate peoples consumption decisions. It is the state that makes the mafia powerful not the market.
Anarcho-capitalism is not an endorsement of outlaw-ism. If you wish to refer to anarchy as lawlessness or outlawism, fine, but the answer to your following questions are…
Because PDA’s operate within the law.
Because gangs operate outside of the law.
The fact that the mafia is outlawed means the mafia can’t use police force for protection and government courts. So they have to come up with their own solutions, exactly what we expect people in the free market to do. However the solution they did come up with was far from the orderly courts and PDAs in our imagined an-cap society. Their solution to disputes is too many times violence.
Now Murphy explains this in a quite unconvincing way. He says that since business expenses are fixed, it follows that what matters is not the amount sold but the number of customers. Therefore it is more lucrative to take customers from your rivals than in a regular business, even by using violence. First of all I didn’t understand why the expenses are fixed. Second of all there are lots of businesses with relatively fixed expenses, yet they don’t shoot each other. This explanation is unsatisfactory.
I agee it seems a somewhat unsatisfactory answer. I would rely more on the ‘crowdig out’ explanation. Most socially integrated people follow the law almost instinctually. Those who are willing to step outside the law in one area are more likely to be the sort of person to step outside the law in other areas such as using violence.
You are purposefully conflating outlawism with anarcho-capitalism. Why?
Yes, that explanation is more satisfactory. However it is still somewhat odd that apparently the mafia does things that are not in its best interest.
The mafia operates in the state of anarchy since the state has no control over it. What makes it different from anarcho-capitalism?
Why is the mafia not anarcho-capitalist?
Because they benefit from government intervention.
Eugene, you are being extremely naive by saying that the mafia is “isolated” from the state, since YOU know very well that most mafias out there have a very cozy relationship with the state by the means of corruption of politicians, the police, judgers, etc.
So what if they corrupt police or judges? What does it have to do with gang violence? Why can’t they resolve conflicts peacefully using arbitrators as we expect conflicts to be resolved in an-cap society?
Yes, that explanation is more satisfactory. However it is still somewhat odd that apparently the mafia does things that are not in its best interest.
What are they doing that isn’t in their best interest?
They are shooting each other instead of going to arbitrators and accepting their judgement.
They probably resolve or avoid 10,000 conflicts peacefully for every one resolved violently, you’re just not accustomed to recognizing that the majority of all human interaction is peaceful, respectful and civil.
I’m sure the vast majority of conflicts are resolved peacefully and not violently. However there is not a single conflict let’s say between high-tech companies that is resolved violently. The mafia members in Israel kill other members every few months. You don’t see that happening between HP and Microsoft.