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Hello and thank you for joining me here today. My name is Barry Belmont and (I guess) I am president of this club…the UNR Students for Liberty. Through events such as our infamous “Nobody „08” campaign, our “Recycling Hurts the Environment” day, the whole START business which lit a fire under our good-fornothing jokes-of-student-senators, our bringing two world-renowned economists on campus to lecture, our excruciatingly fun bi-weekly meetings, and our currentlynominated-for-best-undergraduate-blog (which can be seen at UNRforLiberty.com) we have sought to promote liberty and freedom as best we can. We are a relatively new club but an active and totally awesome one with another speaker, Nick Dranias from the Goldwater Institute, coming April 2nd to discuss “The Top Ten Ways to Effectively Increase Liberty at the Local Level,” our upcoming participation in “Diversity Week” where we will expound the pluralism of capitalism as well as the implicit racism of “diversity awareness,” and three more meetings in which we will discuss right wing politics, left wing politics, and address critical thinking skills. Today's lecture is about anarcho-capitalism and a discussion will follow in which you can ask more specific questions and I will try to answer them as best I can. This is actually the second part of a lecture I gave six months ago. This will focus more heavily on the two main concerns most people seemed to have with an anarchocapitalist system: (1) how could a legal system possibly form under the
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“lawlessness” of anarchy? (2) supposing a legal system could somehow work, how could an effective defense system for that legal system develop without turning into protection racket and eventually another state? Clearly I have my work cut out for me. Before we dive into this, there are a few house-keeping details we must agree to: we must define our terms. These are: Anarchy, capitalism, the market, the state, economic and political means, and, perhaps trickiest of all, how will we view the nature of humans? Anarchy. The term has meant many things to many people over the years. Its original intent probably meant something along the lines of no authority whatsoever. Meaning no government, no hierarchy, no laws, no order, no managers, no bosses, no rulers, no rules, no schools, no tools, no market, no private property, no nothing. Anarchy has mostly been seen as a very negative and defeatist position, embodying only nihilism, rage, and adolescents sporting bad hairdos. For this lecture, we will take our definition of anarchy to mean “no State.” Capitalism has also had a fairly checkered past. However, for our present purposes (and I believe in line with its true overall definition), it will mean that individuals must interact with each other voluntarily. This means that exchanges, trades, payments and even charity will be made voluntarily. The interaction does
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not mean that the two people are not necessarily trying to get the “better” of the other, in fact this is very likely the case: both people must think they are getting a better deal out of the trade than the other person, otherwise the exchange would not occur. For instance, let us say I have a pen and you have a book and I say, “hey, I‟ll give you my pen if you give me your book.” If I value your book over my pen and you value my pen over your book, we will exchange them and both of us will feel that we have gotten the better deal. With capitalism all parties benefit at least in the ex ante sense, making all voluntary actions the work of fat capitalist pigs. Thus “exploitation” has no real meaning in this sense. Exploitation, so far as I know, means that one person is taking unfair advantage of another. But if all parties involved in an exchange agree to the terms voluntarily, I do not see how this is possible. Where all this “capitalism” takes places is an ephemeral landscape known as “The Free Market.” It is my contention that all markets must be free markets, otherwise they simply aren‟t markets. If this doesn‟t quite jive with what you think of as a market, try to bear with this definition for the rest of the lecture, at least. On the Market, there must be nothing but free, voluntary interactions (our “capitalism”). If someone decides to take unfair advantage of another, it is by using political means (which we will get into) wherein coercion is used to “exploit”
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someone legitimately. Coercion here is taken to mean the use or threat of physical force to make someone do something. This is different from persuasion, which is simply “tempting” someone to do something. If I point a gun at you it‟s coercion, if I wave money under your nose its persuasion. Obviously, there is some grey area as to what the difference is in every case (and I‟m sure there are some interesting “what-ifs” brewing in the people‟s minds already), but this is a continuum issue and not a matter of actual difference. Since a free market consists of only voluntary interactions, they are thus only free insofar as they lack coercion, that is, they lack individuals who use political means. Therefore, it can rightfully be said, that markets are only free insofar as they lack governmental intervention. The State. This is what all the hubbub is about. Because I can think of no more concise and precise a definition as the one provided by my man and yours, Murray Rothbard, we will take his definition of the State “as that institution which possesses one or both (almost always both) of the following properties: (1) it acquires its income by the physical coercion known as "taxation"; and (2) it asserts and usually obtains a coerced monopoly of the provision of defense service (police and courts) over a given territorial area." If an institution lacks both of these attributes, it is not a State.
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When it comes to means of obtainment there are two distinct classes: economic and political. By economic means we mean all those available to a person on a free market. This means that labor, talent, receiving gifts, (i.e. all voluntary means) are exclusively economic. Means in which coercion or the threat of coercion is used to obtain something is known, for our case, as political means. They are called political because they can only be “legitimized” through a State. Think back to our definition of market: without being forced to exist by the State, no market could tolerate coercion. For most people it is the threat of force that causes them to accept force. Imagine yourself with a knife to your throat, I am sure you would gladly give up your wallet or your purse. If someone tried this in the free market they would be punished, because all initiations of coercion are illegitimate regardless of their intent. What are politicians if not well-intentioned thieves taking from some and giving to others? Human nature. This is a complex issue that I will shamelessly boil down in about minute or two, so clearly for this discussion it will not be as nuanced as it should be. Yes, people are complicated and their “nature” is very flexible, but for the purposes of this discussion we will focus only on one part: whether human nature allows for this system to exist. First we must recognize that human nature has been molded through our species‟ years of evolution. Modern Homo sapiens
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developed roughly 200,000 years ago in Africa and only very recently moved into anything close to what we would consider “civilization,” approximately 10,000 years ago with the agricultural revolution. This means that for 95% of their existence, modern humans existed exclusively in small tribes which consisted mostly of family members and best friends. Our brains grew up and were developed to understand this way of life and all interpretations of human nature must take this into account. That being the case I maintain that most people are “good,” in the sense that most people most of the time in most situations would do what is considered by those around them to be “good.” This implies that people are more apt to cooperate, which anthropological and psychological evidence bears out. Consider, if you did not share your food when you had excess with your family and friends in your ancestral environment, then the next time they had excess food they might not share with you. This is the classic “tit-for-tat” strategy (a variation of which can be recognized as “the Golden Rule”), seen in every culture on earth. This is why it is so crucial to remember the mean people you see, so that your tit can match their tat at some future date. Because cooperation is so omnipresent in society it is often hard to see. Right now I am talking and you are listening and we cooperating. If I call up a pizza joint and place an order, the person on the phone and I are cooperating, the person on the phone and the cook are cooperating, the
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cook and the delivery man are cooperating, the delivery man is cooperating in traffic with other drivers, and the delivery man and I are cooperating when I pay for the pizza. This is what makes the world go round. And if it turns out I have this entirely wrong, that is if people conflict more than they cooperate, this entire theory of anarcho-capitalism is wrong and can never be right. In the previous lecture, we discussed the two important principles of anarchocapitalism 1.) The sovereignty of the individual. The idea all people own themselves to begin with. This is to say that people are free to do with themselves what they wish and that they are responsible for everything they do and do not do. And 2.) The non-aggression axiom, which is a fancy way of saying that all actions between individuals and their property must be voluntary. We then applied these to various areas of interested and saw that guns, gay marriage, and drugs should not be outlawed whereas universal healthcare, governmental licensing, and monopolies should be. We even touched upon the concept of anarchic justice and defense which are the topics of this discussion. Now these can, should, and would be privatized if only there were not some armed gang preventing entry into the market. Now, those of you from the first lecture will remember the crazy discussion that followed with donut shaped RapeLands filled with zombies created once the FDA was abolished. This got a little out of hand. For this lecture we will assume
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that human nature is how I have said it is above and that this is not likely to change in the near future. Counterfactual conditionals are all in good fun (and we will probably have a few in the Q&A section that follows), but let me state right off the bat: RapeLand or any variation thereof cannot exist because it necessarily violates the non-aggression axiom which requires voluntary interaction. Oh and zombies aren‟t real. What is real, however, is a world of human interactions. All human action is based on the desire to fulfill unachieved ends. However, unachieved ends are not nearly enough and these ends must also be expected to be obtained by a certain mode of behavior. That is, individuals must have ideas about how to accomplish their desire in addition to their wish to attain their ends in order to act. These ideas do not necessarily need to be accurate nor their ends practical for there to be action, though this does help. And after generations of weeding out the ineffective “actors” through natural selection, people have gotten quite good seeking out and achieving their ends. This is not to be confused with the often misleading assumption that people are always rational and always self-interested. Rest assured we are not living in a surrealistic landscape of Dali and our lives are not as labyrinthine as a Borges novel, but nor are we living in the environments for which our brains were grown for. As we mentioned previously at least 95% of our evolutionary history has been
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spent in sub-Saharan Africa in tribes in which everyone was either genetically related or known intimately and our brains were developed to understand this world. In such an environment, sharing resources (labor, material, technology, etc…) would lead to more people surviving and procreating. Since the people who are procreating are to a large extent your family, it is in the interest of your genes (whose sole purpose is to see themselves replicate and take up a larger portion of the gene pool) to have you help them as best you can. Altruism in such environments is praised because it leads to a greater fitness for the genes and selfishness which, in the long run, does not increase the fitness of genes as well as altruism does, is punished. The anthropological record bears this out very well. Well, since resources were shared and wealth accumulation almost completely unheard of to our ancestors, it natural that many of us respond to the free market system--with its expressed purpose of generating wealth for individuals--with skepticism, envy, fear, and anger. Many people have an innate expectation that someone or something more powerful than those greedy, selfish, fat, capitalist pigs should step in and correct this inequality of wealth. Micheal Shermer refers to this as “evolutionary egalitarianism.” However, people do have a strong desire to have things for themselves, that is, people wish to better their lives. The ultimate reason people wish to better their lives is because those that did not wish to do so left fewer
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ancestors than those who wished to. We are their end product. Modern humans are thus a hodge-podge of selfish and altruistic desires. As Shermer notes, “a tension arises between our selfish desire to gain greater wealth and our social desire for equality (or at least that no one should be inordinately unequal--either too reach or too poor). In monstrously large modern states we have both abject poverty and unimaginable wealth, which causes considerable consternation. In most nations, this translates into political policy to raise the poor and lower the rich, because during our evolutionary tenure we lived in a zero-sum (win-lose) world, in which one person‟s gain meant another person‟s loss.” This is at least one argument for the creation of the State. Others are listed elsewhere and my bibliography at the end lists a few, so if you are interested check a few of those out. Now we have come to the idea of the State and while its origins are of importance elsewhere, here we will restrict ourselves simply to a discussion of the popular rationalizations used to justify the State. We will take a look at two leading proponents of the State, Thomas Hobbes and John Locke, and see where they are wrong. Perhaps the single most believed argument in favor of a State is that popularized by Thomas Hobbes. In fact I would be willing to wager that practically everyone in this room believes it to some extent. Hobbes contends that a State is necessary to keep people from hurting one another. He claims that in the state of
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nature (a fictitious abstraction used when evidence of actual human nature was unavailable) that there will be a war of all against all and life would be “nasty, brutish, and short.” Hobbes‟s state of nature is full of cutthroats and backstabbers. Somehow, a State forms that is full of unheard-of benevolence and steps in to stop this chaos. Hobbes holds that with the formation of a government all the citizens can trust one another to cooperate because of mutual fear of punishment should they decide to break the laws of the government. This—in a nutshell—is why people agree to get along under a State, at least according to Tommy Hobbes. But this argument, as Roderick T. Long points out, assumes a great many things: 1.) It assumes there cannot be cooperation without law. 2.) It assumes there can be no law without enforcement by physical force. And 3.) it assumes that enforcement cannot happen except by a coercive State monopoly. Well, each one of these assumptions is completely wrong. Therefore, Hobbes is wrong. Cooperation is implicit in human nature as we established earlier in this talk. For further proof of this, consider the converse, that there is more conflict that cooperation among people. If we are all on an island (the “on an island” conjecture seems to help people understand positions I‟ve noticed) and if instead of helping each other gather wood, build huts, share food, etc, we instead steal from, hurt, and kill one another, how long do you think we will last? If
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no one is working to gather wood, build huts, or hunt game and instead simply waiting to steal from someone who is doing those things, there will be a lot of cold and hungry thieves. If we are too busy breaking each other‟s bones instead of working to thrive on the island, many of us will be put out of commission and the total productivity of the island and the rest of the community will be harmed. If, as Hobbes believes we are all busy killing one another and spending all of our time simply defending ourselves against the attacks of others, it is easy to see that little to no food or supplies will be gathered. It is clear to see that an island of murderers cannot survive. Evolution has removed most of the bad apples, so much so to the point that Hobbes‟s first assumption is utterly wrong. Well, what if there is law, certainly it needs to be backed by physical force. Nope. One prime example to note is the Law Merchant (or merchant law) of the Middle Ages where laws were not backed by the threat of punishment but by the threat of ostracism and boycott. This is not to suggest that force should be excluded from law enforcement, but rather to highlight the fact that it is not a necessity. But most importantly, there is nothing to suggest that legal systems and police forces need to be monopolistic or State run. I understand monopoly to mean “a grant of privilege (through coercive means) restricting competition.” Monopolies are decried as harmful in every other aspect of society, but somehow when it
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suggested that perhaps a monopoly is not the best way to run a legal system, people cannot wait to throw up their arms, exclaim anarchy, and storm off from the conversation. At the very least, no one will take you seriously. The fact that you are all here listening politely and maybe even considering my arguments lends me hope that maybe this position is not nearly as crazy as it sounds. To illustrate the “badness” of monopoly, let me borrow from Long and say that my gang and I are going into the shoe selling business. Not only are we going into the business, but we are also saying that no one else gets to. The first objection to be lodged is what makes us so special? Aren‟t we just regular people? Where do I get off claiming I am allowed to do something that you are not? Well, let‟s suppose I am better than you, even then, what do you think will happen to the price and quality? If we are the only selling shoes, chances are you are not going to get these shoes for very cheap or at a high quality. In fact, if I plan just do not like you, I have the power to deny this product to you entirely. But, even if I were the nicest guy and really wanted to sell you these shoes as cheaply as I can, how could I possibly tell if I were doing a good job? How could I tell, without competition, that my method of making shoes is efficient or if my shoes are really what my customers want? I could poll or test or guess, but no matter what I do it will not be as effective as having a market tell me. These are all effective arguments against monopolies, all monopolies. In case this
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needs further spelling out: even the State held monopolies of legal and defense services. Another famous dead guy who had a profound influence on political thought and pushed for the legitimacy of the State is John Locke. Locke is not as mean as Hobbes and in fact believes that anarchy could possibly exist, but claims that governments (or at least the right kinds of governments) are better overall. He has three main problems (he calls them “inconveniences”) with anarchy: 1) There is no general body of law that is known and agreed upon, 2) There is a lack of power to enforce laws, and 3) People cannot be trusted to be judges in their own case. Locke believes governments remedy these problems and effectively protect life, liberty, and property. Well, it turns out Locke could not be wronger. Not only would these things not occur under anarchy (at least anarchy laced with capitalism), but they happen very readily under governments. Law produced by governments is created at an unprecedented level. Try to wrap your head around the amount of laws passed by the federal, state, county, city, and local levels of government last year. Do you think you could rattle each of them off the top of your head? I mean these are the newest and most pertinent certainly these should be known. Anyone want to try. Me neither. I doubt anyone could. And no one should, because the great bulk of these
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laws are redundant or pointless. But your ignorance of the law is not held as a viable excuse for not following it. There are literally more laws than could possibly be upheld under the current government. This excess and waste is untenable under a private system. On the subject of uniformity, notice also that governments do not always hold up the laws of other countries and it was in fact this lack of uniformity that made the creation of merchant law necessary. Locke, like Hobbes, just somehow thinks that cooperation simply cannot exist outside of “society” and thinks that all societies must (for some reason) contain a coercive State apparatus. But there is no reason to think people cannot organize in a variety of ways without the State. One way people are prone to come together to organize is on the free market. Going back to our shoe example for a moment, if shoes are deemed necessary and of vital importance, this does not mean that the State should come in and create all shoes. The alternative to a State monopoly in shoes is not that everyone is their own shoesmith, but instead that under a free market there will be a division of labor in which it would be possible to trade for shoes. Now just replace the word “shoe” with “law” and “shoesmith” with “police officer” and it is clear to see that the step toward a market law is not an unreasonable one. At least not as unreasonable as creating a singularly powerful aggressor in the form of the State in the name of “forcing” people to cooperate.
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Locke‟s one point with which I whole-heartedly agree—people cannot be trusted to be judges in their own case—happens especially under government and not under anarchy. It is one thing to say that everybody involved in a dispute should submit their disputes to a third party and quite another to say that there should be one particular third party that everyone should submit their disputes to. Think about it, everybody may like one flavor of ice cream but that does not mean that there is one flavor of ice cream that everybody likes. So if Moe, Larry, and Curly have disputes with one another you do not have Curly be the arbitrator in all three possible variations: you can have Moe arbitrate between Larry and Curly; Larry arbitrate between Moe and Curly; and Curly may arbitrate between Moe and Larry. Imagine if Curly was always arbitrating and Moe tried to levy a charge against him. Needless to say, but Curly will likely not be all that impartial. Well it‟s the same thing with a monopoly, State-run institution like we have now. What happens if I want to sue the Supreme Court or take the idea of a coercive police force to task? How exactly is one suppose to try the government when there is only the government who does the trying? This helps expose the myth of checks and balances in the “American System” of democracy. The executive, legislative, and judicial branches are all part of the same government and each of these institutions is a coercive monopoly in its own
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special area. Compare their pseudo system of checks and balances with the real checks and balances provided by the free market. What keeps Payless Shoes honest is the competition, both actual and potential, from Footlocker and countless other shoe stores. Knowing that customers could cut patronage would also keep free market courts and police on their toes, unlike now in which they are paid the same or even more for a job they do the same at. For instance, a free market police system would be based on preventing crime, that is the highest paid cops would be the ones who stopped the most crime, whereas now the areas with the most crime get paid the most money. Thus, the current system provides a strong incentive to not prevent crime. Which finally brings us to our main course: private legal and defense services. It is an all too common fallacy, as Rothbard points out, that the government must supply “police protection,” as if police protection were a singular, absolute entity, a fixed quantity of something which the government supplies to all. But there is no actual “protection” commodity anymore than there is a single “food” or “clothing” commodity. There are multiple degrees of protection from a personal can of pepper spray to an ensemble of body guards that watch someone every minute of every day. The way people would determine how much of this “security” they want is by how much they are willing to pay for it, exactly how they decide for everything else
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in life. Because it is the individual‟s money they will allocate it in a way that they believe is in their best interest and best serve their desire ends. The companies they pay for these services (more on these in a minute) would then have to do the exact same thing. Police services have many complicated and important decisions to make from how much to invest in guns and ammunition to whether new cars should be purchased or simply retrofitted; how much money should go towards funding new investments and how much should be allocated to tried and true methods? What is the best way to run a police force, kind and courteous or brusque and harsh? But if we remember what we said about all monopolies, no matter how well intentioned, there is no possible way for them to know if they are doing a good job. There are no market forces guiding them in the direction that the Market wants (the Market of course is nothing less than the sum total of all voluntary human interactions). That is to say that there is no rational way that the government sponsored police system can allocate its resources despite possible genuineness and ingenuity. Rather than the funds for the police service being determined by fulfilling the wishes of its customers, the State-run system is subject to the politics and bureaucratic inefficiency that by definition must come with a governmentbased, monopolistic institution.
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With a private police service all these problems become entirely more manageable because instead of being in the hands of a few bureaucrats (who could very well be geniuses, though they usually are not) the decisions to be made will be helped along with all the people involved in the service, from customers to producers, from cops to criminals, in short, the Market will help to determine how a police system should be run. But the question may be asked “what laws will really be enforced?” But this question assumes that it cannot be asked of a State-run system. There are literally thousands of laws that you are subjected to everyday. Violate one of them and you should be punished. Well, obviously that‟s not what happens. How many people speed, do drugs in the privacy of their own homes, jay walk, drank alcohol while being underage, saw someone drink alcohol while underage and failed to report it? So many. How did the State do in stopping any of these behaviors? The evidence is staring you right in the face. The same problem, I agree, would present itself under anarcho-capitalism. No doubt about it, what laws to enforce and how strictly to enforce them will be a problem for every system. But under anarcho-capitalism there is a simply solution: what would be enforced is whatever the customers paying for the enforcement would be willing to pay for. Rothbard‟s example on this is insightful:
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Suppose, for example, that Mr. Jones has a precious gem he believes might soon be stolen. He can ask, and pay for, round-the-clock police protection at whatever strength he may wish to work out with the police company. He might, on the other hand, also have a private road on his estate he doesn‟t want many people to travel on—but he might not care very much about trespasser on that road. In that case, he won‟t devote any police resources to protecting the road. As on the market in general, it is up to the consumer—and since all of us are consumers this means each person individually decides how much and what kind of protection he wants and is willing to buy. Most people who think about these sort of things are in agreement that police protection would most likely be provided by insurance companies. It is difficult to layout exactly what will happen in an entire society that currently exists only as a hypothesis, especially one that is designed to be as pluralistic and flexible as anarcho-capitalism, but since insurance companies are in the business to protect or restore people‟s property, it is not an unreasonable step to claim that they would provide police services. As a totally unscientific thought experiment, let us imagine what this scenario might be like. As any avid reader of detective fiction knows private detectives are far more efficient than the police in recovering stolen
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property. (And they‟re also total badass looking, look at ol Bogey up there). This is because private the private insurance companies hiring these detectives are impelled by economics to serve their costumer (by trying to avoid paying benefits) and thus return the stolen goods. It is easy to see one of the main differences between Staterun and private police. Where State-run police, who serves “society,” are more interested in capturing and punishing the criminal with the recovery and restitution of property being secondary, private police are more interested in recovering property with the punishment of the criminal as a secondary consideration. There would be no “crimes against society” in an anarcho-capitalist system. And, indeed, there is no such thing as a crime against society even now: there are only crimes against individuals. By making crimes “against society,” the government no longer had to restore damages to the aggrieved and thus decided only to “punish” criminals. There is a long and complex history with many intertwining elements in the study of criminal justice and time will not permit us to delve into it, however it must be known that somewhere along the line the State-run police went from private property defenders and restorers to an armed gang whose sole purpose is the punishment of other criminals. The reason for this change was the notion of crimes against society for which there was no one to whom property could be restored. With our innate “tit” waiting after suffering a “tat” the only thing
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that could be done is to punish the criminal. However, we have put a check on this “bloodlust” and be content to just have criminals “rot in jail.” But having a criminal sit around in a cell all day does nobody any good: it costs money, wastes viable labor, and does not provide criminals with any disincentives toward their lifestyle (except, perhaps, for the mild inconvenience of waiting around). In fact, many prisons now are just training grounds for future criminals. Now many people would likely agree that there is some use to be had in making prisons: there are certain criminals that should not be released back into society because their crime is so heinous or there are criminals who simply cannot function within society and should just be locked away. I would argue there is another reason for prisons to exist and that as a place where criminals work to repay their debt. Since most thieves steal because they do not have money (you know, kinda like the government), it is unlikely that if they stole a TV from someone that they would be able to repay or replace the TV (plus the price in finding and capturing them) just out of their pocket. Therefore they would have to work off this debt. The place to do this is in prison. Thus in an anarcho-capitalist society prisons would probably be debtors prisons. In a private prison, where the prison has to turn a profit somehow, part of the money earned by the criminals in working would go to pay for their living expenses, for prison security, and various other factors
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involved in running a prison and the other part of the money would go toward the person whom the criminal owes. However, aren‟t I getting ahead of myself? Even assuming the police captured a criminal, where will he be tried? That is, what is the nature of anarchic courts? Let us take the easy case of one person, A, being accused of a crime, theft for instance, by another person, B. Clearly, as Locke pointed out, neither should arbitrate the case and instead should choose a neutral third party. This third party in an anarcho-capitalist society would be a private arbitrator. Private arbitrators have existed for hundreds of years and exist to quite an extent even in modern times because government courts become so inefficient that it is often cheaper and far less time-consuming to simply turn to private arbitration. Let me not underemphasize the serious drawbacks of the monopolistic system we have now. The exact same problems as having a monopoly of shoes and a monopoly of police exists for a monopoly of judicial services. Nevertheless, before we start deciding that private courts are the way to go (in theory), how would they be paid for within a free society? Well there are several possible way that I can think of (and several possible other ways that I can‟t, but perhaps some entrepreneur can): 1) Individuals could subscribe to a particular court service, paying a monthly or yearly premium. The individual could call upon the court when need be. 2) Individuals, utilizing courts
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far less frequently than police services, could simply pay a fee whenever they choose to use the court. Possibly the criminal would even have to pay the fee of the plaintiff if they are found guilty. 3) Courts could be hired by police agencies or insurance companies to settle disputes. 4) Courts could be part of a package deal with police services. Now whether people will pay for particular sets of laws or for particular laws of some universal set to be upheld, only the market would be willing to tell. Anarcho-capitalism cannot answer definitively whether people would all live under the same rules or whether they would live under a small set of universal rules with localities deciding how to apply those rules in particular cases, it can only say that whatever the people who constitute the market wish to have happen is what will happen. It might be objected, that if court proceedings are voluntary (which they apparently must be under the Non-Aggression Axiom), couldn‟t people simply ignore the decisions made by a court? Well, I suppose they could. But the merchant courts, from the Middle age down to the 1920s, relied solely on ostracism and boycott as the means of following the decisions of the courts. That is, if a merchant should refuse to submit to arbitration or decided to ignore the decision passed down by a court, other merchants took this fact into consideration when dealing with them. Who wants to deal with someone who will not listen to an objective
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arbitrator? And anyone who ignored an arbitrator‟s decision could never avail himself of the arbitrator‟s services. Thus, if you don‟t want to have no protection against other criminals, don‟t be a criminal yourself. This logic should strike you being quite sound, it is after all a variation of the Golden Rule, which everybody already implicitly follows (recall the tit-for-tat strategy that has been engrained into us over our entire evolutionary history). Perhaps purely voluntary arbitration might work for commercial disputes, but what about the bad guys, the thief, the rapist, the killer? Once again, let‟s say A is being accused of stealing by B. If A and B both belong to the same court, there is no problem. If A and B belong to different courts, it is likely that the case would be tried at A‟s court because A is the one lodging the complaint and thus is calling upon his judicial services, though the court system of B would uphold the verdict, just as the US holds up the decision of Canadian courts. It must be remember that even if B is accused of theft, no use of force can impel him to be present at his trial as this would be a violation of the Non-Aggression Axiom. A voluntary subpoena would have to be issued to tell B that he (B for boy) is being accused and should be present to defend himself (which would probably help his case), but he would be under no obligation to do so. If B does not appear, he would likely be tried in absentia, and whatever decision the court handed down would be upheld. If B is
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found guilty, either the court‟s police service or A‟s would use force to seize him to exact whatever punishment is decided upon by the court, which would likely include being thrown into one of the fine jails that have been established previously. Well, these courts certainly infallible, what happens if they get it wrong and a convicted criminal wants to appeal the court‟s decision? Good businesses would recognize that they are not 100% efficient, not 100% correct all the time, every time, and thus incorporated into any private court‟s services would be an appeals procedure. Now, perhaps written into the contract of the judicial service company is the stipulation that the verdict of the appeals procedure will forever be upheld or each case can possibly be appealed a certain number of times or each person can continue to appeal until he runs out of money or whatever. Whatever would be decided would be decided upon the free market, but I suspect that to cut down on the cost of appeals ad infinitum there would be an agreed upon cut-off point between A and B stipulating that once such and such a decision is reached it is binding and there will be no further appeal. I do not know what specifically would happen, but neither do I know how many fry-alaters McDonald‟s needs. These kinds of decisions must be made by all voluntary actors involved, not just me. If I had all the answers as to what everything in an anarcho-capitalist would be I would
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merely be a bureaucrat or a king preaching for his own demise. The beauty of anarchy is its freedom, its fairness, and its variation. “Ok, ok ok,” you might say, “so we‟ve got these private cops and maybe I‟ll even agree that we‟ve got these private courts, but just how in the hell could a legal system possibly develop? You listed the problem yourself, would there be individual rules or universal rules? Huh, you douchebag, answer me that.” And I would respond, “ok, first of all, calm down, ok. Second of all, let me walk you through how I think the problem of legal services would be addressed.” Laws are necessary for private courts. Most laws are unnecessary for people because all the key laws, all the really important ones, are mostly ingrained into us. Do not murder people like you, do not steal from your neighbor, do not aggress against others, and in general do unto others as you would have them do unto you. Most people already, in a sense, know and follow these. Each of these springs from our two original concepts: the sovereignty of the individual and the Non-Aggression Axiom. Thus I would say these two precepts would be necessary for everybody to follow in an anarcho-capitalist society. Other principles of law would probably be to define property rights, set up rules of evidence, and establishment of punishment procedures. There would possibly be a handful of general laws which everyone could carry around in their back pocket and know and understand and the rest
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would be derivation by local judges applying their knowledge of justice as best they can. There is no reason for law to be as complicated as it is now, it can only bring about confusion and be more prone to injustices. Private law has existed in many forms throughout history such as medieval Iceland, Celtic Ireland, the American west, mercantile law, and admirably with admiralty laws. Finally even Anglo-Saxon common law was developed over centuries by competing judges who applied timehonored principles rather than being subject to shifting and arbitrary decrees by the State. The fact that each of these systems worked so incredibly well for such long periods of time (Celtic Ireland for instance lasted about 1,000 years, English common law has existed since the late 12th century, the Icelandic system for roughly 200 years) is further evidence that such systems can and do work. Even further evidence toward the greatness of private courts and separate laws is the fact that private courts can in no way make laws as they can now. This is because 1) Judges can only make decisions when private individuals bring cases to them 2) Each judge‟s decision would apply specifically to a particular case and 3) though precedents could be established, they would in no way be legally binding as they are now (thus an error made early in jurisprudence would not have the significant and devastating effect it has now). This view, that law is to be found within general principles, is considerably different than the modern idea that law is
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something which is to be enacted. Since judgesmanship in a totally private society would be a skill, something which must be earned through a good reputation, an acknowledge expertise, fairness, and the ability to properly apply the common legal principles, it is obvious that the judges that would judge would be chosen by the people! That is to say that good, impartial, and objective judges (assuming these are the qualities that people want in judges in the long run) are the ones who will be hired to perform the task of applying the law. As Bruno Leoni made perfectly clear, it is no different to hire a judge than it is a physicist or a doctor. “The emergence of good professional people in any society is […] based on a widespread consent on the part of clients, colleagues, and the public at large. […] Of course, people can be wrong about the true value chosen as being worthy, but these difficulties in their choice are inescapable in any kind of choice.” This fact also suggests the possibility of professional jurors who would be selected to make legal decisions. Twelve smart people are probably more likely to be more right than one smart person is. Anybody could recognize this and certainly people whose business it is to create good judicial services could recognize this and therefore the establishment of trial by jury is not only not out of the picture, but could very likely be a key functional element of many judicial services.
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“Ok, so even if private police, legal systems, and courts could work, how are you possibly going to defend these systems, who will protect us against the Chinese or [if you‟re kicking it old school] the Ruskies?” One sure fire way I am not going to advocate doing it is through a coercive government. As Rothbard reminds us, “Government is no more necessary for providing vital protection service than it is necessary for providing anything else. […] its compulsory monopoly over the weapons of coercion has led it, over the centuries, to infinitely more butcheries and infinitely greater tyranny and oppression than any decentralized private agencies could possibly have done. If we look at the black record of mass murder, exploitation, and tyranny levied on society by governments over the ages, we need not be loath to abandon the Leviathan State and…try freedom.” In fact, just a little bit of numbers to take home with you are these interesting statistics. According to political scientist R. J. Rummel, about 35,000,000 people died in all the wars of the 20th century. During that same time, it is estimated that anywhere from 170,000,000 to 260,000,000 people died due to their government. If governments are meant to protect life, liberty, and property, apparently war is about 5 times better at it. But the question asked “who will protect us against the Ruskies?” assumes several dubious things. First of all it assumes that “they” are out to get “us.” There is precious little biological, psychological, or anthropological evidence to suggest
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that the majority of humanity is hell bent on destroying other people, in fact it is most often these very sentiments that can be traced to nationalism which breeds contempt and xenophobia among other things. Secondly, it assumes that “the Ruskies” would maintain this desire to destroy America after America has already been done away with. Keep in mind, it is right there in the title, “ANARCHOcapitalism.” No State, no United States. The belief that any other State would still be after an anarchic society overlooks the lessons of history in which wars are the result of conflicts between nations each armed to the teeth and directly suspicious of attack by the other. But an anarcho-capitalist society would pose no threat of aggression to anybody, and to suggest that it would would be to be talking about a society that does not following the Non-Aggression Axiom and is thus not an anarcho-capitalist society. Throughout history people have been identified with their State thus making the slaughter of innocent people acceptable because ultimately States view other States as enemies failing to recognize that it is individuals fighting other individuals, most of which simply want to live and do not deserve to die. Thus, thirdly, it would be impossible for such an identification to be established if there were no State. But even supposing some police company went of the hanger and decided to attack Canada, the Canadian army would recognize that it is the police service which is to blame and not all “Americans” as they would
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now. So rather than bombing New York as retaliation, Canada (and probably the majority of citizens who do not agree with unprovoked aggression) would attempt to put down the specific aggressor, because an anarcho-capitalist society recognizes that it is individuals who must come together to uphold their rights and the rights of other. There would be no delusion that a State is something separate from the individuals who compose, thus no one could possibly believe that there is anything which protects them but their fellow man. (Now is it clear that anarcho-capitalist society requires that cooperation exist in greater than conflict) However, this question also assumes that this anarcho-capitalist society has, for some reason, only been established in America. But why should we assume this? What is wrong with assuming the entire world is anarcho-capitalist and see if we like the way it looks? I believe I have shown that an anarcho-capitalist society is a viable, fair, and efficient society. So, if we could make the whole world anarcho-capitalist, why shouldn‟t we? Certainly there is nothing wrong with individual liberty and responsibility coupled with freedom of choice and voluntary interactions with others? However, let‟s say country A (probably founded by the plaintiff in our previous case) and country B would like to have armies. Let‟s say country B is a little more gung-ho about it and thus instead of being an anarcho-capitalist society they decide to try a society that is a little more violent and bloodthirsty, a
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democracy for instance. In fact, B is going to use its army to attack A. How will A defend itself? That is, how will A afford to construct an army? Hopefully a few of you caught on that I set this hypothetical as a trap: if A is really anarcho-capitalist then there wouldn‟t be any country A deciding to create any army. It would merely be a collection of individual people deciding whether they think it would be worth it to defend their property. So, yea, be careful. But let‟s assume there‟s a little community that‟s anarcho-capitalist and it is conveniently a circle. Let us say, to make things easier, that each house is worth $100,000 and there are a total of 10,000 of them. So the community is worth, collectively a cool, crisp $1 billion. And all they have to do to hold off the attacking B army is collectively purchase $50,000,000 worth of missiles or some such defense. So if everyone contributes that‟s only $500 to protect $100,000, not an unreasonable thing to do. However, if you are at the center of the circle, you realize, army B isn‟t going to be fighting you, they are going to attacking the edges first. So it dawns on you, why should you pay for defense? There are 9,999 other people it affects more, let them worry about it. And other people near the middle of the circle would realize this too. And maybe B‟s army is coming from the east and so the west side people don‟t really care either. Well with each person who decides not to pay, the price of protection begins to rise and once it reaches a certain point, the people on the eastern edge will just
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consider it more reasonable to up and run rather than pay a vast sum to defend something that might not be worth it. Now you‟ve got the eastern side jumping ship and no one has paid for defense and there‟s no A army and B just comes in and sweeps the whole community. This in a nutshell is the free rider problem that is the constant pain in the ass of anyone trying to develop a voluntary defense system. This is tricky, many people have said that the Coase theorem explains this situation away since whatever solution is best will ultimately be provided by the market. If it is economically feasible simply to be incorporated into country B rather than fight it this will happen. If people value their little anarchy more than they value the prospect of leaving it they will defend it. I must stress this, I cannot accurately predict what exactly will occur in an anarcho-capitalist society for the simple fact that more people with more minds and not just me and mine will be deciding what they wish to see out of it. Anarcho-capitalist is ultimately very flexible with few absolutes. Besides the contingencies of history make whatever I would try to predict even in the near future almost entirely worthless (honestly, who 100 years ago would have been able to predict the iPod?). And besides, while we are on the subject, advancement does not progress by decree. If, a hundred, two hundred years ago, the King (Queen?) of England said “make me a box that will show moving pictures of me. Not only moving pictures, but sounds as well. I want
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the image to be so real that it could very well be mistaken for me.” No matter how much money the King (Queen?) poured into this venture it is doubtful anyone would have invented the cathode ray tube necessary to construct a modern television. Such progress was made by an immeasurable amount of individuals mostly concerned with themselves and bettering their lives. This self-interest has benefitted practically the entirety of humanity and yet not a single person could, even if they tried, predict where this self-interest would specifically lead. All that can really be predicted is that on the free market, all those who participate necessarily benefit in the ex ante sense. So what people decide on the market is what they think will benefit them. So how the people respond to this Free Rider problem will by definition be what benefits them most in the long run. Well, is there any way we can hint at what this solution might be? Yes, I believe I can. Let me abstract the problem a little bit with a similar situation known as the Prisoner‟s Dilemma. Two criminals are put in separate rooms and questioned separately. If neither one rolls on the other they each get two years in prison. However, cops being the nice guys they are decide to offer a deal, if A turns on B they‟ll let A go scot free and throw the book at B. They give the same deal to B. But if each rolls on the other they both get four years. Now what should A or B do? Well from A‟s perspective there are two options to chose from, stay
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quiet and get two years or renege and do no time. From A‟s perspective it appears always to be beneficial to rat on B, because even if B rats on A, A gets either 0 years of less 4 years if he rats on B, which is better than if he cooperated and got cheated by B and ended up serving 5 years. The same is true for B. So it appears that purely blind “self-interest” will result in both parties serving 4 years. But if they are smart (or had ancestors who were, hint hint) they will both stay silent and serve the two years in jail, which in the long run is the best strategy. Well, wouldn‟t you know it, A and B if they weren‟t fictional characters but human beings would in fact have ancestors that knew how to properly play this game. Evidence for this is listed all over the biological and psychological and game theory literature. In fact, your own indignation at someone not “earning their keep” or “paying what they owe” is evidence enough to show that in an anarcho-capitalist society any freeriders would have a tough time trying to interact with individuals who have “done their fair share.” The main point here is to emphasize that even if it appears the selfinterest in the short run will have a crippling effect, the concerns of the long run are for all parties involved to cooperate. Well this simple two person example can be extended to three and four person and five person and so on and the same result will always appear: if, in the long run, it pays to cooperate, people will cooperate in the long run. Thus those anarcho-capitalist societies that banded together and each
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pitched in their $500 would long outlast the ones composed of the free riders. So, that‟s my answer. Perhaps not all anarcho-capitalist societies would solve the free rider problem, but those that did would be the ones that survive and thrive and be able to fend off army B even without the State forcing them to finance a war. As this lecture has gone on long enough, I will simply try to nip in the bud a frequently asked questions that are bound to be stirring in a few heads in this room: 1.) Won‟t the police just fight amongst each other? Won‟t A‟s police just fight B‟s police if there‟s a disagreement. Well, probably not. Bloodbaths are costly and economically backwardass ways of solving problems (that‟s why they are usually only done by States). To suggest that police forces would continually clash and fight is absurd because such behavior is horribly bad for business. Not only do many people (that is, the people financing the police) find violence (especially unseemly amounts of it) reprehensible, but wars are not cheap things to fight. It is much more likely that police agencies would solve their problems civilly amongst themselves or, like other private individuals, simply submit their disputes to a neutral third party arbiter. 2.) Won‟t the police just become another State? What‟s to stop the police from simply become a protection racket and extorting money from its costumers? Well, obviously this could happen. But unlike the modern day police (which are the very
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definition of a protection racket. If you do not pay your fees—taxes—they will come and arrest you) there would be other police services who could band together to put down this aggressor. If A‟s police decide to run amok, all of society could flock to B‟s police or C‟s police and pay them to stop A‟s police. This is very real contrast to what would happen if a band of gangsters captured the monopolistic State apparatus where nothing can be done. This has happened countless times through Central and South America. 3.) Couldn‟t all the independent police services just bind together into a cartel and just simply dominate everybody? Once again, yes, that could happen. But the reason people bind together to extort other people is because they are greedy. But if A‟s police and B‟s police and C‟s police all bound together to extort payment, it would make sense for A‟s police, who is clearly greedy, to take a little something of the top or do a little less extorting than B or C‟s police. But B‟s police and C‟s police don‟t like to be exploited anymore than anyone else and would try to put this down. The very thing that brings cartels together is ultimately the very thing that leads to their dissolution. 4.) And finally what about the poor? How are they supposed to afford all these luxurious protections and courts and what not? First of all it must be recognized that unlike the monopolistic system now, there would be many degrees of protection and
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courts and what not. Instead of everyone being forced to pay for Cadillac police and BMW courts and Ferrari militaries, people will now get to chose among many alternatives such as Honda cops and Toyota justice and bicycle armies. On the free market there are options. Some people may simply not to pay for police or courts and this would be fine, but they could not utilize their services unless the police or the courts decided voluntary to allow them to use them as an act of charity. Private businesses giving to charity is not a rare occurrence, so why should be unheard of in an anarcho-capitalist society? But supposing the poor person really wants to bring a case against some criminal that has wronged him but can‟t afford to go to use the courts? And suppose he is given no charity. Well, he could sell part of his claim to someone who could represent his case. If A wants to sue B, but wishes to use C‟s courts, A could tell C, “say, look here, I‟ve got this case where I will likely get $50,000 but I have no courts of my own as I am poor. If you take up my case I will give you $10,000 of the winnings.” This might sound like a fine deal to C and C will take up the case. The numbers are arbitrary but you get the point. Or someone, still A, unable to afford services now can find a lawyer to work for them on a contingency fee, that is, if the lawyer should win the case the lawyer gets part of the sum awarded, but if the lawyer loses, A doesn‟t owe the lawyer anything. This kind of system already exists in the present day. And there are probably several other
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ways the issues of “the poor” in anarcho-capitalist society can be addressed, but time is a scarce resource and I have used all of mine that you have given me. What have we learned? Well hopefully by now you can see that anarchy doesn‟t mean this and capitalism isn‟t as bleak as all this. I have advocated for anarcho-capitalism on the hope that it is in several ways a better way to live than under any State, no matter how benevolent the latter might be. But as I said in the last lecture, “I hope everything I have just told you is wrong. I hope that I‟ve made some terrible mistake and that anarcho-capitalism is bad and the State is good and I‟ve just got some wires crossed: I want to love Big Brother. Because if I‟m wrong, there‟s something I can do about it. I can change. There‟s hope. I can join up in righteous statism and declare that I have been wrong and that I will serve the greater good, I will serve that which is greater than me. But I sense dimly that I am not: our two initial premises are strikingly clear and our conclusions follow directly. Even granting that the State can do good things (look at this fine institution for instance) that is no justification for having a State. If I steal your radio to use it at a YMCA event, it doesn‟t matter how happy I‟ve made other people, I had no right to steal your radio to begin with.” While at first this anarcho-capitalist society might at first sound bad (anarchy and capitalism must be two of the most detested words in our modern day) I hope that after you leave this lecture you will continue to think about
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the things I have said. I hope you will look at your daily life and see that there is a reason why the DMV takes so long, there is a reason why there are so many car accidents on public roads, there is a reason why wars are fought pointless and why cops are so rude and why the court systems are so clogged. But there is also a reason to ask why. Why should it be this way? Why should we not support voluntary interaction, why should we not advocate personal responsibility, why should we be content to submit to a band of self-righteous thieves and crooks? The reason for all these travesties, from unwarranted invasions of personal liberty to the mass slaughter of innocent, law-abiding, loving, good, and decent people does not spring from human reason but rather it has a name. And its name is the State. And it was bad. They were all bad. And it is for these reasons that we must rid ourselves of it. Thank you.