"Properly understood,
anarcho-capitalism is not some crazy theory that "there should be no
rules!""
If You Like Your Governance,
You Can Keep It
You might be an anarcho-capitalist if you
consider this case
DECEMBER 11, 2013
by DAVID J. HEBERT
People often recoil when I mention the very idea of anarcho-capitalism.
It has both the A word and the C wordconnected by a hyphen. That’s some
heavy baggage. After all, shouldn’t that mean ruthless robber barons
getting rich amid social chaos?
Not exactly.
Some great scholars have blazed a trail out of those bad connotations.
For example,
Don Boudreaux
wrote a fantastic essay in which he asks whether the State must
supply and enforce law. More recently,
Benjamin Powell put forth an excellent case in which he argues that
the proper question is whether or not anarchy is better than feasible
government arrangements a given country faces.
Peter
Leeson and Claudia Williamson point out that anarchy may be the best
that failed or weak states can achieve. And
Leeson, along with Daniel Smith, discusses how anarchy once
“governed” international trade in the eleventh century -- in fact, it
still largely does today.
This is all well and good. But people will have to feel that such a
worldview works to the benefit of the least advantaged around the globe
-- that is, if they can get past the connotations. What about proposing
anarcho-capitalism in the developed world?
In my experience, putting forth anarcho-capitalism as a solution to
policy problems is usually dismissed out of hand -- even among economists
who are otherwise pro-market. This has always puzzled me.
Anarcho-capitalism seems like a logical extension of already existing
arguments for market arrangements in other contexts. For example, it’s no
mystery why cable companies routinely provide poor service at high cost.
They enjoy a geographic monopoly on the provision of their services
despite technological advances making the stated reasons for their
monopoly status obsolete. Why can't the same be said about governments?
Properly understood, anarcho-capitalism is not some crazy theory that
"there should be no rules!" As far as what anarcho-capitalism
actually is, let’s start with a very basic thought
experiment.
You Might Be an Anarcho-Capitalist If . . .
Suppose that there is a household on the border between the United States
and Canada. Currently, this household is a part of the United States and
is thus subject to all of its laws, regulations, and tax obligations.
After years of being subject to U.S. law, this household is finally fed
up (perhaps as a result of some recent policy initiative that passed
through Congress). Rather than simply accepting the fact that they must
live under a new regime they do not like, they phone up the Canadian
government and inquire about the costs and benefits of being subject to
Canadian law instead. After careful deliberation, this household decides
that it would be much happier as a Canadian household than as an American
household. And after similarly careful consideration, the Canadian
government decides that they would rather have this household as a
citizen of Canada than not. As a result, this household purchases its
governance from Canada instead of the United States. This much, at least,
should not be terribly contentious: Governments sell governance and
citizens purchase this governance in the form of paying taxes. All that
is different in this case is that the border between the United States
and Canada is not exogenously defined and, instead, is determined by
people shopping for their government without having to move. If this
doesn't sound contentious, then you might be an anarcho-capitalist.
Pizza in Virginia
The next step would be to consider a household in, say, Virginia. We can
imagine this household similarly getting fed up with U.S. policy and
wanting to purchase governance from Canada as well. However, it would be
unlikely that the Canadian government would agree to sell governance to
this household: The cost of providing the services would be entirely too
high. Imagine providing national defense or a police force for a small
household that is geographically separate from the rest of your
customers. And in fact, this is not all that difficult to imagine. For
example, in college I spent many a Friday night eating Hungry Howie's
pizza with friends. In Virginia, however, there is no Hungry Howie's. If
I were to call the Hungry Howie's in Hillsdale, Michigan, and ask them to
deliver a pizza to Fairfax, Virginia, they would (correctly) deny me
service. Why? The cost of getting the pizza to me is entirely too high to
be worth their effort at a price that I would be willing to pay.
Governments, like pizza shops, would not have an obligation to provide
governance to anyone. Only to those who pay the requisite price would
receive the service.
What this household in Virginia could do then is to start their own
government that is completely separate from the U.S. government. This
household would be free to offer governance to nearby households as well,
and if those other households found the terms agreeable, they would be
free to join this new country. This is no different from saying that the
household in Virginia is free to set up their own pizza company and sell
their pizza to the locals.
Self-Determination
So, to recap: Anarcho-capitalism is not a radical idea that there should
be no rules at all. Instead, it's a system where man is free to choose
the provider of the rules under which he lives. Discussion of
anarcho-capitalism in this light is nothing new. In fact, this discussion
was inspired directly by rereading Mises's Liberalism (1929),
where he says:
The right of self-determination in regard to the question of membership
in a state thus means: whenever the inhabitants of a particular
territory, whether it be a single village, a whole district, or a series
of adjacent districts, make it known, by a freely conducted plebiscite,
that they no longer wish to remain united to the state to which they
belong at the time, but wish either to form an independent state or to
attach themselves to some other state, their wishes are to be respected
and complied with.
Obviously the explanation of anarcho-capitalism put forth here is simple
and leaves much to be discussed (provision of public goods, interaction
between governments, etc.). I won't pretend to have all of the answers to
these questions or solutions to these problems. That’s not evidence that
anything I’ve said up to this point is wrong, though. In fact, economics
-- properly understood -- is a practice in which one acknowledges the
fact that one person can't have solutions to certain kinds of complex
problems, which is the job of markets made up of millions of
entrepreneurs and arbitrageurs. Adam Smith wrote in 1776 about how a
woolen coat gets made. Bastiat recognized that Paris gets fed daily
without any one person being in charge. And Leonard Read regaled us with
his classic “I, Pencil.” That one person cannot answer a question of
"well how would X be provided or accomplished?" is by no means
an admission that government should try to accomplish it by default. (An
excellent place to start thinking about these problems is David
Friedman's Machinery of Freedom,
available for free in its entirety here.)
You Can Have Whatever You Like
Instead, beyond what I have shown, all I want to advocate for here is the
consistent and persistent application of economic thinking to the world
around us. Rules, laws and other forms of governance are economic goods.
And as economics teaches us, the provision of economic goods is best left
to the market. Properly understood, anarcho-capitalism is simply the
belief that individuals know what's best for them regarding the provision
of governance. As such, they should be able to purchase whatever
governance they like just as they can purchase pizza from whatever pizza
company they like.
http
://
www.fee.org/the_freeman/detail/if-you-like-your-governance-you-can-keep-it#ixzz2ouGvRcg8
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