Friday, January 6, 2012

Why Abolishing Government Would Not Bring Chaos

I wrote recently that government should be abolished. Among the responses to the article were objections of the sort shared by most who encounter for the first time the prospect of living without forcible government. The most common objections are fundamentally similar to each other: Violence would rule the day; corporations would run over us little people; foreign governments would invade; big neighborhoods would pillage small neighborhoods; etc. The books I linked in the previous article answer these objections, but since most of us (myself included) might not buy a book online – and then be sure to read it – every single time we surf the net, I’ll address those objections briefly here, and provide links to online articles wherever possible.
The pervasiveness of these objections makes it worth addressing them, as does the fact that it seems counterintuitive to assert that abolishing government would bring more peace, security, and abundance – just as it seems counterintuitive that the way to reduce gun violence is to allow everybody to own guns.

Without government, you still must deal with local criminals. Most people believe you need government police departments to do this, else the nation would become a violent jungle.
Mary Ruwart, in her book, documents examples of private police departments in the US. These agencies charge subscription fees and provide patrol services. In each case, the private police cost substantially less than the government police yet produce significant decreases in crime by, among other things, patrolling more often and actually checking the doors and windows of homes when there is no one there. In other words, the private policemen work all day instead of driving around intimidating innocent drivers or sitting in donut shops and speed traps. In some cases Ruwart recounts, local governments have forcibly shut down the private police and replaced them with government police. Crime and cost both increased dramatically thereafter.
There are private security forces providing neighborhood and town security around the nation, and they are effective and affordable. Why would someone start up a private police force? For the same reasons you’d open a dentist’s or marriage-counseling office: To provide a valued service while making a profit. Abolishing government police would produce entrepreneurs who would compete with each other to do the best job for the lowest cost while making a profit. We already have these entrepreneurs wherever government allows them, and they have arisen because government police are ineffective while residents are willing to pay for good service, just as we pay for cable television even though we get the major networks over the air. Most importantly, a private police force that destroyed property and harmed innocent people would go out of business in a hurry, with the responsible individuals sued and jailed. In other words, the agency would be contractually bound to perform. The market provides – enforces – incentives for businesses to do what’s good for customers (a.k.a. society), and this applies to every good or service – roads, medicine, plumbing, underwear. Such pressure cannot be applied to government police.

What about foreign governments observing a prosperous anarcho-capitalist society, and deciding to invade? Don’t we need a military, funded by tax dollars, to defend us from aggressors? Hans-Hermann Hoppe has discussed this question at length: Already, large insurance companies have the financial resources, the incentive, and the general business skills to provide for regional defense. As customers, we would have the option to pay a little more in homeowner’s insurance, and be able to make a claim in the case of lost property or personal harm resulting from foreign invasion. It is good for private insurers to provide "military," or regional, defense: Insurers can be sued and/or driven out of business by customers if the insurers do a bad job by either failing to keep their promises, or by hurting innocent people in an attempt to keep their promises.
It gets better: Extensive historical experience shows that private militaries have incentive to kill as few of the enemy, and destroy as little of their property, as possible, while there is still incentive to defeat the enemy. This is covered in detail in the new book edited by Hoppe, The Myth of National Defense, which discusses the problems with government defense, of course, but doesn’t stop there; there are numerous historical examples of the superiority of private defense. Further, insurers would never have incentive to initiate war – the insurers would have to pay for it out of reserves, or raise customer’s prices (while customers can change insurers); and insurers would have to pay restitution and penalties to each victim of "collateral damage." Notably, though insurance companies already are capable of developing a powerful regional defensive deterrent, history has shown that they would have less need to worry about foreign invasion if more of us are armed, and we would be in the absence of government gun control laws. (Insurers probably would offer lower premiums to gun owners to encourage widespread gun ownership.)

A side note: As the loon Ross Perot suggested by personally outperforming the US Army in Iran, insurers wouldn’t even have to maintain their own defense forces. A market of private defense forces of varying sizes and specialties would develop. And as is the case with private security agencies today (as in 99.1% of the occasions a law-abiding individual draws a gun to stop a crime), private defense forces would rarely need to fire a shot.

As to the haves running roughshod over the have-nots, history is again our guide. As Mary Ruwart discusses in detail, one famous example is Standard Oil, believed by many today to have been a stronger monopoly than Microsoft. Standard Oil became a near-monopoly by bringing down the price – from 58 cents to 8 cents (!) per gallon – at which it could sell kerosene to the consumer. Very soon, oil companies around the world matched Standard’s efficiency. Rockefeller then resorted to underhanded tactics to sustain monopoly power in the US (which he never really had; even at its peak, Standard had competitors who were constantly reducing their own costs and prices, though they were usually a step behind). The only efforts that had any effect were his activism in getting enacted laws that would hamstring the competition. By the way, Microsoft’s share of the operating-system market has been decreasing steadily to Apple, Linux, and others, and was decreasing even before the big government antitrust attack.
As to public safety against greedy corporations, Ruwart reminds us that before the FDA and its approval requirements, women’s magazines routinely ran articles detailing the side effects of drugs on the market. Many private consumer-interest agencies exist today, even though government is supposedly doing the job for us. You can subscribe to Consumer Reports yourself for information on product safety and reliability. Entrepreneurs always arise to take care of social needs, and they always do it faster, more effectively, and at a lower cost than government. Entrepreneurs don’t enjoy the sovereign immunity government enjoys, so they are always required by their customers to live up to their promises, and the only people ever charged for their services are the ones who come to them freely, offering money.

Without government licensing, trade restrictions, centrally-imposed regulations, and other barriers to entrepreneurs, there would be more companies able to offer services, not fewer; and any innovator who approached monopoly power would enjoy profits that attract intense competition. Thus, any firm that approaches monopoly power and profits in a free market produces the seeds of its own downsizing. No firm can approach monopoly power unless everybody wants that firm’s product at the price the firm offers. And no powerful corporation will ever be free from the continuous, nagging oversight of customers and consumer-interest agencies.

There would still be crime in the absence of forcible government, but it would be far less frequent without gun laws, as John Lott has shown using data from every county in the US for the last 100 years or so. Since there are always some evil people, we would need a court system. Bruce Benson (read a few of the papers at his web page, and scroll down on this link for a start on his books) has written extensively on the topic of private justice, showing examples of actual practice to demonstrate that not only are such systems less expensive, more effective, and more available to us than government justice, but that incentives to commit crimes decrease with private courts and police. Additionally, recidivism and violence among inmates decrease under private penal systems. Private penal systems produce profits, produce restitution for victims, and can produce earnings, sometimes substantial ones, for convicts – no taxation required. Such systems are in use in the US right now. Benson also addresses the greater fairness of private courts, again using historical examples. None of this should be surprising: Anyone whose income depends on satisfying customers has a strong incentive to do good by them; government employees lack this incentive. Private courts must, over time, impress all their customers – winners and losers – with their fairness.
And since everything about an anarcho-capitalist society is voluntary, a convicted criminal would be able to choose from among various private prisons (choosing the one with the best living conditions, or the one that would produce the greatest income given his skills, thereby shortening his incarceration), or simply ignore the court’s verdict. What about a convicted criminal who refuses to go to prison or make restitution to his victims? As Benson shows, historically in societies that allow criminals to ignore their convictions, such persons have been considered "outside the law." The victim’s insurer might then forcibly confiscate some or all of a convict’s property to pay court costs and make restitution to the victim.
Insurers wouldn’t do this lightly, as private appeals courts would be available to the convict, and insurance companies forcibly confiscating property (as when forcibly defending it) would be held responsible for any errors. Watchdog consumer agencies, such as we already have, would publicize insurers’ mistakes. In the US today, many people who have property confiscated by the government and are later found innocent wait years to have their property returned, often damaged; and sometimes the government charges the acquitted party for storage. An insurer, by contrast, would have to make full restitution for an error, and would pay compensatory and punitive penalties as well.
And whenever such a company might face customer pressure to use coercion, you can be sure that that pressure would be matched by market pressure not to use coercion. Insurers representing opposing parties would tend to work between themselves first, out of court. In a free society, businesses simply don’t have incentives to resort to violence.
The assumption that people are basically good
Remaining are the "human nature" objections to freedom from forcible government. A common protest is that a completely free market requires that "people are basically good." This is not correct; to the contrary, what makes a market work is that people are self-interested. In every field of endeavor outside government, producers must attract and keep customers. They can do this only by pleasing customers, inducing them to purchase from them when the customers are free to purchase from someone else. Humans already are self-interested, and want to be pleased. Hence, the market is a 24/7 watchdog with 280 million pairs of eyes and ears. Each one of those 280 million customers earns less money than he wants to, and therefore makes purchases in a discriminating fashion. This applies to customers of private police forces and insurance agencies who provide coverage against natural disasters, foreign invasions, etc., just as it applies to customers who buy shoes. Everybody watches everybody else by demanding good products and services at reasonable prices – you already do this every day – and everybody has greater and more affordable recourse against frauds and unethical manufacturers when private justice is available.
Establishing all these private systems is easy: Entrepreneurs do all the difficult and risky business-development work for you, while you just keep on living, making decisions in your own best interest the way you always have. That’s how you already do the critical, governing work of deciding which solutions, entrepreneurs, and firms survive and which ones fail.
So, is anarcho-capitalism (that’s really just another name for liberty) utopian? Of course not; much of what is attractive about the absence of forcible government is how the market handles the conflicts that any adult knows are inevitable. Anarcho-capitalism is in this sense the same as any other political system. Political systems are attempts to handle conflicts. Under a truly free market, you have 280 million American minds working to handle the conflicts, voting voluntarily with their dollars for the best solutions for each of them under their own circumstances; under forcible government, you have a tiny percentage of those minds trying to handle things for everyone else, and forcing everyone else at gunpoint to accept government’s ideas of solutions.
Many regular readers of know more than I’ve written here already; I’m hoping readers new to libertarian theory, and readers of other websites who might pick up this article, will pursue the links above and find that there is a mountain of proof, covering all of recorded history up to the present day, that we can do anything government can do, and better. People acting freely in their own interest continue to prove this, and they do so not because of government benevolence, but in spite of it.
December 15, 2003
Copyright © 2003

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