Consulting by RPM || Free Advice Blog

Attacking Anarchy

My former star pupil Gennady Stolyarov II repays my kindness by criticizing Rothbardian anarcho-capitalism (what I call “market anarchy” [.pdf]). In the below article, guest blogger Edward Gonzalez also takes me to task. I would be nervous, if I weren’t right.–RPM

After a seven month tour in Iraq fighting an insurgency, it became obvious to me that much of what I had been taught in school about government, law, and economics was utter nonsense. I returned home with a simple model in my mind and began picking up books, trying to find academics whose theories matched what I had witnessed. It took a while but I eventually found the Austrian School and have been a self taught student this past year. I will admit that I am a novice and do not fully understand all the intricacies of the theories, but so far, everything I have read by Ludwig von Mises holds true to the reality that I witnessed. Much of what Murray Rothbard wrote also holds true, but not all of it. I have recently read Rothbard’s “Anatomy of the State” and For a New Liberty, and Robert Murphy’s Chaos Theory [.pdf]. Here I will point out where I agree with the theory of market anarchy but also where I believe the theory departs from the reality of human nature. I hope to give specific examples of why I believe the theory is flawed and give Dr. Murphy a chance to correct me if I simply do not understand the theory in full.

First, I concede to all the economic theories and arguments. The free market is certainly the most efficient way to provide goods and services to people. However, the utilization of force against human beings is different and to treat it like any other service in the market economy is contrary to human nature.

In “Anatomy of the State,” Murray Rothbard said,

One method of the birth of a State may be illustrated as follows: in the hills of southern “Ruritania,” a bandit group manages to obtain physical control over the territory, and finally the bandit chieftain proclaims himself “King of the sovereign and independent government of South Ruritania”; and, if he and his men have the force to maintain this rule for a while, lo and behold! a new State has joined the “family of nations,” and the former bandit leaders have been transformed into the lawful nobility of the realm.

I can personally attest to the reality of this scenario. In one town I operated in, all doings were under the control of an Iraqi Police Colonel. In the first year of the American invasion, that small city was thrown into chaos. There was a great deal of crime, vendetta killings, etc. A former sergeant from the Saddam era Iraqi Army was the toughest criminal around and, one by one, defeated the other gangs until he controlled the area. He declared himself in charge and saw fit to promote himself several times, and when I met him he was a self declared Colonel and ran the town.

The people of the town did not like this man. However, he was a strong man and a dominant leader that most people seemed to accept as a lesser evil than the chaos they had experienced immediately following the war. To use praxeology, the majority of people saw their acceptance of this self appointed Colonel as an improved condition over the constant criminal attacks, murder, and street fighting that accompanied the post war chaos. Obviously, there were many problems with his method of leadership. He dominated local business and extorted money from numerous people. There were several attempts on his life in the few months I was around. I have no doubt that a tougher tyrant will one day replace him.

This brings me to my first question regarding market anarchy: Why didn’t voluntary exchange services of defense arise during this post war chaos? Both Robert Murphy and Murray Rothbard claim that voluntary organizations of defense will emerge in a free market. This state of anarchy certainly provided the opportunity for these services to arise, but they didn’t.

My answer to this question is that like every other form of specialization in a free market, people will naturally seek out what they enjoy and what they are good at. In a total anarchy, the individuals who become the strong men are not only good at using force on other people, but they enjoy doing it and will seek to employ their specialized skill often. A farmer or fishermen has no desire to test his fighting prowess against a professional initiator of force, so they submit to his rule. Hence, if we are to achieve true liberty, services that involve using force on other human beings must be treated differently than all other services provided in a market economy.

I would love Dr. Murphy or any other theorist comments on this topic.

I also spent time in a much smaller farming and fishing village. This village had no local strong man. Al Qaeda insurgent cells did operate in the area, and anyone who had spoken out against them had met with death, and usually the death of whatever family members happened to be in the house with them at the time of the murder. People were scared, kept to themselves, and were not producing much of anything for trade. Again, my question is why didn’t voluntary exchange defense services arise in this environment? The Al Qaeda cells had no permanent presence in the village so an individual looking to start a protection service would have been able to do so.

My answer is that when most libertarians discuss liberty vs. security it is always discussed with only the individual in mind. In practice, people’s children and loved ones are at the forefront of their minds when making decisions regarding liberty, security, and force. Would you start a business whose failure would result in the immediate execution of your children? Would you employ an individual or company whose competitor would murder your family if you gave him your business? Maybe for some the answer is yes, but for most the answer is no. People will give up many things, including individual liberty, if the result is that their children are free from harm. It is human nature to do so.

How does market anarchy address this?

Most importantly, the greatest chink I see in market anarchy would be its inability to deal with revenge killings and blood feuds. My last mission in Iraq, I was required to oversee the security of the Hajj, the religious trek Muslims make to Mecca. The year before religious extremists had removed twenty people on the trek from their bus and executed them. This spurred revenge killings that resulted in mass sectarian violence that claimed over a thousand lives in a matter of weeks. The reason blood feuds are so dangerous is that without a strong judicial authority dealing out punishments, people feel honor bound to exact revenge themselves. Hence, if two young men argue and one kills another, the family members feel honor bound to avenge the young man’s death. In practice, there is a multiplier effect where if a person is killed in your family, usually you go and kill two or three from the other family and back and forth it goes. This may seem surprising to those living in the United States, but revenge killings are something we had to deal with often.

The market anarchy idea of monetary damage as the only method of punishment does not abide by the laws of human nature as I see it. If someone raped and murdered your child, would you be content to a cash settlement and the knowledge that person is off living their life somewhere? For a select few the answer may be yes, but for most the answer is that if someone does not harshly punish the murderer, they will do it themselves.

A strong court and police force can deal with rape, murder and prevent blood feuds. Has this been considered in the theory of market anarchy?

Please do not mistake my arguments for support of our current system. Our system is full of problems that need serious correction. What I am saying is that to treat the use of force like any other service in a market economy would be a mistake. I believe that Ludwig von Mises has the model for government, economy, and law that is most in line with human nature.

There was a village in Iraq that emerged from the chaos of war as a free society, but I will save that and the system they arranged for another essay.

Edward M. Gonzalez is a graduate of New York University and served on active duty in the United States Marines Corps from January 2004 to August of 2008. He is currently a Captain in the reserves and works for a private school in San Jose, CA. The views expressed in this article are not necessarily endorsed by the United States Marine Corps.