A Persian Cafe, Edward Lord Weeks

Tuesday, 3 December 2013

Perspective on Anarcho-Capitalism

One way I often like think about the goal of anarcho-capitalists is not so much that we wish to abolish government, as to create a free and competitive market in governance. Many functions of the modern state - defence, legal service, healthcare, disaster insurance, education - will continue to exist in the absence of the state providing civilisation remains. I personally think that it is unlikely that these goods really need to be provided by the same organisation, or even that it is efficient for this to be the case, but hey! It's possible!

Besides which, if someone wants to live in a socialist society then why shouldn't they, so long as they don't force anyone else to be part of that society? I don't personally want any government above me, but if people truly do want governments then why, in a state of nature, should they be prevented from banding together and forming one above themselves?

Even if you don't have a government, then I think it is pretty much inevitable that one will be subject to rules. Rules are not inherently necessary for a stable society, but I think it is fair to say that:

  • A stable society requires people to have the ability to plan ahead.
  • For people to be able to plan ahead, it is necessary for behaviour to be predictable within certain bounds.
  • These bounds must either be determined ahead of time in some way - essentially becoming rules - or must be the same over time.
  • While rules are not metaphysically necessary for behavioural norms to persist, they are an obvious and usually successful way of achieving this.
Sets of rules and enforcement procedures - governances, one might say - would in an anarcho-capitalist society be the products of governance firms, or governments. We already have these governments, but unfortunately the market for them is neither free nor competitive. There are massive costs to switching between providers, the link between payment by consumers and performance by firms is virtually non-existent, and there is little to no possibility for a firm to fail and go under, freeing up resources for a competitor.

This, along with some generally accepted empirical premises, should lead us to a few conclusions.

Firstly, since free and competitive markets are possible, it is likely that a stable anarcho-capitalist society is possible. There may be some difference between the current products of government and other products currently produced by functioning markets which makes this particular competitive market impossible, but then the onus is on the statist to demonstrate this. I may at some point write a debunking of various potential arguments of this type, but I'm rather too tired and alcohol-laden to do it properly right now.

Second, since the vast majority of new products in competitive markets - somewhere in the region of 90% - fail, we should expect most prospective governances in a anarcho-capitalist system also to fail. If a firm offers a bundle of goods (we'll say personal protection, protection of property and prosecution of any trespassers against the individual) for £2500 per annum and another offers the same or better services for £2000 per annum, then that first firm will fail as surely as we are enriched by international trade.

Given this explicit admission that I expect 90% of rights-protection agencies (or DROs) to fold within a few years of starting up, do I regard anarcho-capitalism as a terrible system? No. You see, there is rather a difference between failure for a governance and failure for an existing state. For a governance, failure simply means that it fails to provide the same value for money as its competitors - it is perfectly possible that purchasing a firm's services would make a consumer massively better off (in terms of consumer surplus) and yet the firm is still not efficient enough to survive. However, a state possesses a monopoly on violence and, more to the point, people are forced to pay for its services whether or not they consume these services. Hence, failure for a state means not only that it is failing to provide value for money, but it is producing so little value for the money which it extracts that people are willing to take on severe personal risk and cost  in order to overthrow this state.

I believe that, subject to the market test of anarcho-capitalism, almost every state currently in existence would fail. Hence, I believe that anarcho-capitalism provides a reasonable prospect for a better society. That said, if a small group of people were to form a single anarcho-capitalist society tomorrow, I would be sceptical of its chance of success. What I would wish to see would be numerous groups, each trying to create their utopian vision of the perfect state and society, with those which succeed to a greater extent attracting immigrants and imitators. That, I believe, is the way in which the truly good society is to be achieved.

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