05 Nov 2014

Anarchy, State, and Government: No Means No

private law, Religious, Rothbard 78 Comments

Sometimes you can read something that you’ve heard a thousand times before, but for whatever reason it hits you in a new way that changes your whole perspective. That recently happened to me when I was reading Albert Jay Nock’s Our Enemy, the State. To understand the context, you should know that I am a huge fan of the writings of Murray Rothbard, Thomas Paine, Thomas Jefferson, and Paul the Apostle. Yet there were some apparently enormous tensions (if not outright contradictions) between their works, which I had grappled with over the years but never fully resolved to my satisfaction. After reading a section from Nock, the tensions fell away; I feel intellectually liberated. In this post I’ll summarize my revelation, though this will be a theme I expect to elaborate for the rest of my career.

Nock: Government versus the State

Let me quote a lengthy passage from Nock, constituting the first section from Chapter 2 of his book, after which I will explain why it relieved so much of my cognitive dissonance:


AS FAR back as one can follow the run of civilization, it presents two fundamentally different types of political organization. This difference is not one of degree, but of kind. It does not do to take the one type as merely marking a lower order of civilization and the other a higher; they are commonly so taken, but erroneously. Still less does it do to classify both as species of the same genus – to classify both under the generic name of “government,” though this also, until very lately, has always been done, and has always led to confusion and misunderstanding.

A good example of this error and its effects is supplied by Thomas Paine. At the outset of his pamphlet called Common Sense, Paine draws a distinction between society and government. While society in any state is a blessing, he says, “government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.” In another place, he speaks of government as “a mode rendered necessary by the inability of moral virtue to govern the world.” He proceeds then to show how and why government comes into being. Its origin is in the common understanding and common agreement of society; and “the design and end of government,” he says, is “freedom and security.” Teleologically, government implements the common desire of society, first, for freedom, and second, for security. Beyond this it does not go; it contemplates no positive intervention upon the individual, but only a negative intervention. It would seem that in Paine’s view the code of government should be that of the legendary king Pausole, who prescribed but two laws for his subjects, the first being, Hurt no man, and the second, Then do as you please; and that the whole business of government should be the purely negative one of seeing that this code is carried out.

So far, Paine is sound as he is simple. He goes on, however, to attack the British political organization in terms that are logically inconclusive. There should be no complaint of this, for he was writing as a
pamphleteer, a special pleader with an ad captandum argument to make, and as everyone knows, he did it most successfully. Nevertheless, the point remains that when he talks about the British system he is talking about a type of political organization essentially different from the type that he has just been describing; different in origin, in intention, in primary function, in the order of interest that it reflects. It did not originate in the common understanding and agreement of society; it originated in conquest and confiscation.[1]

Its intention, far from contemplating “freedom and security,” contemplated nothing of the kind. It contemplated primarily the continuous economic exploitation of one class by another, and it concerned itself with only so much freedom and security as was consistent with this primary intention; and this was, in fact, very little. Its primary function or exercise was not by way of Paine’s purely negative interventions upon the individual, but by way of innumerable and most onerous positive interventions, all of which were for the purpose of maintaining the stratification of society into an owning and exploiting class, and a propertyless dependent class. The order of interest that it reflected was not social, but purely antisocial; and those who administered it, judged by the common standard of ethics, or even the common standard of law as applied to private persons, were indistinguishable from a professional-criminal class.

Clearly, then, we have two distinct types of political organization to take into account; and clearly, too, when their origins are considered, it is impossible to make out that the one is a mere perversion of the other. Therefore, when we include both types under a general term like government, we get into logical difficulties; difficulties of which most writers on the subject have been more or less vaguely aware, but which, until within the last half-century, none of them has tried to resolve. Mr. Jefferson, for example, remarked that the hunting tribes of Indians, with which he had a good deal to do in his early days, had a highly organized and admirable social order, but were “without government.” Commenting on this, he wrote Madison that “it is a problem not clear in my mind that [this] condition is not the best,” but he suspected that it was “inconsistent with any great degree of population.” Schoolcraft observes that the Chippewas, though living in a highly-organized social order, had no “regular” government. Herbert Spencer, speaking of the Bechuanas, Araucanians and Koranna Hottentots, says they have no “definite” government; while Parkman, in his introduction to The Conspiracy of Pontiac, reports the same phenomenon, and is frankly puzzled by its apparent anomalies.

Paine’s theory of government agrees exactly with the theory set forth by Mr. Jefferson in the Declaration of Independence. The doctrine of natural rights, which is explicit in the Declaration, is implicit in Common Sense; [2] and Paine’s view of the “design and end of government” is precisely the Declaration’s view, that “to secure these rights, governments are instituted among men”; and further, Paine’s view of the origin of government is that it “derives its just powers from the consent of the governed.” Now, if we apply Paine’s formulas or the Declaration’s formulas, it is abundantly clear that the Virginian Indians had government; Mr. Jefferson’s own observations show that they had it. Their political organization, simple as it was, answered its purpose. Their code-apparatus sufficed for assuring freedom and security to the individual, and for dealing with such trespasses as in that state of society the individual might encounter – fraud, theft, assault, adultery, murder. The same is as clearly true of the various peoples cited by Parkman, Schoolcraft and Spencer. Assuredly, if the language of the Declaration amounts to anything, all these peoples had government; and all these reporters make it appear as a government quite competent to its purpose.

Therefore when Mr. Jefferson says his Indians were “without government,” he must be taken to mean that they did not have a type of government like the one he knew; and when Schoolcraft and Spencer speak of “regular” and “definite” government, their qualifying words must be taken in the same way. This type of government, nevertheless, has always existed and still exists, answering perfectly to Paine’s formulas and the Declaration’s formulas; though it is a type which we also, most of us, have seldom had the chance to observe. It may not be put down as the mark of an inferior race, for institutional simplicity is in itself by no means a mark of backwardness or inferiority; and it has been sufficiently shown that in certain essential respects the peoples who have this type of government are, by comparison, in a position to say a good deal for themselves on the score of a civilized character. Mr. Jefferson’s own testimony on this point is worth notice, and so is Parkman’s. This type, however, even though documented by the Declaration, is fundamentally so different from the type that has always prevailed in history, and is still prevailing in the world at the moment, that for the sake of clearness the two types should be set apart by name, as they are by nature. They are so different in theory that drawing a sharp distinction between them is now probably the most important duty that civilization owes to its own safety. Hence it is by no means either an arbitrary or academic proceeding to give the one type the name of government, and to call the second type simply the State. [Bold added.]

The Importance of Consent

I had known for a long time that some people stressed the distinction between “government” and “the State,” but for whatever reason that had never seemed very important to me. I knew that in terms of political theory, I was a Rothbardian; I favored voluntary, contractual relationships for the provision of legal, police, and military services. The free market could provide these important services just as well as it could provide roads and schools. Since Rothbard himself used the term, I thought that made me an “anarchist” and I thought I was against “the government.” Sure, we could reflect on the rhetorical brilliance and moral courage of people like Thomas Paine, but oh they were just so naive, weren’t they?

But now I see that there’s no reason for me to jettison the classical liberal tradition; I can just take it at face value. Look again at how Thomas Jefferson explained the origin of “government” in the Declaration (I put it in bold above): People come together to secure their rights (which of course he earlier said were given to men by their Creator, and could be discerned as part of the Laws of Nature) and the resulting government is only just if it enjoys their consent.

Well great, that’s what it means to be a Rothbardian: A company offering judicial rulings or armed defense against robbers can’t shake its “customers” down for protection money against their will. That’s what the mafia does, and that’s what modern agents of the State do–which is why they are a professional criminal class, just as Nock diagnosed.

Amidst the drive to “raise consciousness” about the importance of consent when it comes to women’s bodies, let’s apply the same standard to all human interactions. When it comes to taking my money to fund wars in the Middle East, no means no.

Anarchism vs. Authority

Perhaps the reader doesn’t understand why the above was such an epiphany for me, but if it adds more detail, I should add that I was in a hotel room and had just read the Bible passage generated by Biblegateway.com, which drew from the opening of Romans 13:

Submission to Governing Authorities

13 Let everyone be subject to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God.

So I had the above in my mind–which caused the obvious and familiar trouble for me, since I am a Christian but also a Rothbardian–and then I literally started the second chapter of Nock’s book, which I’ve reproduced above; that’s precisely where my bookmark had been from the reading I’d done on the plane.

Notice that Romans 13 talks about the governing authorities, not the agents of the State. I am not at all opposed to authorities; in fact they are indispensable to civilization and the division of labor. Here’s an anarchist with serious street cred, Bakunin, making this point:

Does it follow that I reject all authority? Far from me such a thought. In the matter of boots, I refer to the authority of the bootmaker; concerning houses, canals, or railroads, I consult that of the architect or the engineer. For such or such special knowledge I apply to such or such a savant. But I allow neither the bootmaker nor the architect nor the savant to impose his authority upon me. I listen to them freely and with all the respect merited by their intelligence, their character, their knowledge, reserving always my incontestable right of criticism and censure.

So by the same token, if we imagine a truly free society in the vision of a Rothbard, there would be private judges rendering legal opinions that would be enforced (perhaps at gunpoint, depending on the situation) by employees of another agency. Yet as I stressed in my pamphlet, there is an important sense in which people would (normally) have submitted beforehand to these professionals and their “authority.”

The classical liberal tradition is imbued with the idea that one can only have freedom with the rule of law. I submit to my atheist friends that this seemingly paradoxical symbiosis is best captured in the doctrines of Christianity, with their perfect law of liberty, merging God’s Law and freedom under Christ. (I realize there will be a flurry of objections, but just remember that if the Christian God exists, then He created the entire physical universe de novo–atheist libertarians love homesteading except when it comes to the universe itself.)


I am not claiming that the above musings resolve all conflicts among the writers I’ve cited. Obviously, Thomas Jefferson didn’t think he was endorsing privatized military forces, and Murray Rothbard didn’t consider himself a Protestant.

However, what I am saying is that Nock’s distinction between government and the State is a crucial one, which I will respect from now on. The essential difference is consent: that makes all the difference between a legitimate agency of government providing protection services, versus a criminal department of a State running a protection racket.

78 Responses to “Anarchy, State, and Government: No Means No”

  1. Z says:

    Nock, Nock?

    Who’s There?

    Kbob Kmurphy


    I took the ‘K’s’ from his name.

    • Tim Miller says:

      I recently came to a similar conclusion as you in debating with my dad. I see no reason to confine this statement to the Government/state only. If voting with out ballots to decide who governs us is in compliance with Romans, then so would be voting with out dollars to decide what private judges, defense agencies, etc. represent us.

  2. Joseph Fetz says:

    I know that I’m not some sort of serious thinker, but shit, I’ve been talking about this for years; the difference between government and the state.

    Granted, I’m not a linguistic dictator, but I at least showed the difference in grammatical meaning (in the linguistic sense) here:


    Here’s another. Sure, it isn’t as sophisticated as your argument, but it is what I was thinking at the time …


    I guess that the basic understanding that I’ve had in this realm is the “government” is not an entity, but is rather a process of organization. Whereas the “state” is a monopolistic entity in that regard.

    • Joseph Fetz says:

      In any case, I realized that while I may be correct in seeing this distinction, that I’m also not the best person to be making that point (or any point). So yeah, I’m pretty much done with the whole blogosphere (or whatever you call it).

      It (the blogosphere) was this whole thing where I found that people would actually listen to what I say. I finally came to the conclusion that I really don’t want people listening to what I say and/or taking advice from me. So yeah, I essentially dropped out. It seemed like the most responsible thing to do.

  3. Ryan Novak says:

    That is an excellent distinction that I, as a Christian anarcho-capitalist, am happy to have pointed out to me. Great insight Bob! Many thanks!

  4. Juan Manuel Pérez Porrúa says:

    What is of great concern is, what exactly prevents a private security agency completely armed and backed by private judgments from shaking you down.

    • Joseph Fetz says:

      A better question is “what prevents a state agency from shaking you down?”, and given this, what are the incentive structures that differentiate between a private defense agency and a state police structure (in terms of “shaking one down”?

      • Bob Murphy says:

        Good response Joe.

      • LK says:

        A privatised system of justice can’t even explain how it will enforce the law properly and effectively if powerful individuals with their own private armies refuse to obey the law or accept private court rulings. The result will be anarchy and civil war.

        There is a reason why governments — effective monopolies on the enforcement of law and order — emerge in all sufficiently complex human societies:

        “Liberalism differs radically from anarchism. It has nothing in common with the absurd illusions of the anarchists. We must emphasize this point because etatists sometimes try to discover a similarity. Liberalism is not so foolish as to aim at the abolition of the state. Liberals fully recognize that no social coöperation and no civilization could exist without some amount of compulsion and coercion. It is the task of government to protect the social system against the attacks of those who plan actions detrimental to its maintenance and operation.”
        Mises, L. von. 2010 [1944]. Omnipotent Government: The Rise of the Total State and Total War, Yale University Press, New Haven. p. 48.

        • Ben B says:

          Right, and states never ignore international law, which leads to war between different states. What do you call someone who is against both privatized defense agencies and territorial monopolists? Or, are you just an advocate for one global stage?

          • Ben B says:

            *state* and not stage

            • LK says:

              The fact states can and do fight wars does not undermine the argument that a government is the best way to ensure effective law and order WITHIN its borders.

              • Ben B says:

                ok, so then wouldn’t one global government be the best way to ensure effective law within the entire globe?

                What’s the difference between a private army that chooses to disregard the law and a state that chooses to constantly change the law? Both of them are disregarding the law.

              • Major.Freedom says:

                By the same token, the fact that private armies can fight each other does not undermine the argument that a private protector is the best way to ensure effective law and order WITHIN the separately owned lands it protects.

              • LK says:

                There’s an expression for such a world: feudal anarchy.

              • Bob Roddis says:

                Can someone explain why requiring a 100% consensus for collective actions (as opposed to a quite arbitrary 50.00001% consensus or 50.000001% of actual voters) leads to or causes “feudal anarchy”?

              • Major.Freedom says:


                Calling an ethic a name does not undermine its moral quality.

                I don’t stoop so low as to believe that calling your ideal “feudal statism” suffices as a rebuttal.

                Feudalism is an absence of free trade and economic competition for land. Feudalism requires property rights violations.

              • Major.Freedom says:


                It is because LK doesn’t even have a 1/300,000,000 say in how you run your land via “voting” for armed thugs to take monopolistic control over other people’s lands by force.

                He would have a 1/300,000,000 say in how you run your land in social democracy.

                Thus, because he wouldn’t have coercive, aggressive control over your land in anarcho-capitalism, you being free from his s#!t represents a “feudal” arrangement to him. Lack of control over your land = feudalism, control over your land = freedom.

            • John says:

              Isn’t the answer because as a practical matter and matter of experience a 100% agreement to almost any action is effectively impossible to achieve in a community. — consequently such a requirement means that there can almost never be any collective action.

              • Bob Roddis says:

                Then how can a political entity based upon a mere 50.0000000001% of actual voters (which could be 10% of all citizens) engage in violence against a peaceful voluntary community 100% of whom have signed a communal contractual agreement of community by-laws?

              • Major.Freedom says:

                Don’t worry John, there is no such thing as collective action anyway.

                Future reflection on the thought of losing what never existed in the first place will actually lead to a gain in knowledge.

              • John says:

                I think the response here may be a bit of a nonsequitur. I think the original question is why does seeking a 100% consensus lead to a sort of feudal anarchy, and I think the reason it likely does is because such a consensus is practically impossible to achieve so certain kinds of collective action — and by that I mean action for the collective in the name of the collective, not action that every person agrees with — like, for example, regulation of certain dangerous business practices, or the building of certain types of infrastructure, or decisions about what to do about external dangers, whether disease, animal or human, may become, as a practical matter, impossible.

                This is not connected to Bob Roddis’ response, which I think raises a moral question: why should we allow voters, who probably represent a minority of the population, to decide such things, and furthermore permit laws based on votes or the actions of representatives elected based on votes to be enforced?

                That’s a diffeent question. I think there are some pretty good reasons, which have been described by smarter people than me better than I could do. And I know there are some arguments that such a system is inherently immoral, which have also been described by smarter people than me. But I have become increasingly convinced that the practical issue is an important one. If we are to eventually impose a libertarian system of “nongovernment” on people, even if (as right now) most do not want it, and do so because it is the only moral system of “government,” if the consequences of libertarianism are in fact a feudal type anarchy, where does that leave the push for libertarianism as a moral matter?

              • Major.Freedom says:


                “I think the response here may be a bit of a nonsequitur. I think the original question is why does seeking a 100% consensus lead to a sort of feudal anarchy, and I think the reason it likely does is because such a consensus is practically impossible to achieve so certain kinds of collective action — and by that I mean action for the collective in the name of the collective, not action that every person agrees with — like, for example, regulation of certain dangerous business practices, or the building of certain types of infrastructure, or decisions about what to do about external dangers, whether disease, animal or human, may become, as a practical matter, impossible.”

                Regulations that people do not want to abide by, by choice, do not NEED to be imposed on them in the name of some “collective regulation” ideal.

                And there is no need for everyone to sign a contract agreeing not to initiate force against each other’s persons and property. If anyone does it, then the victim always has the legal right to defend himself using force.

                Total agreement is not needed!

              • Ben B says:


                There’s no need to get 100% agreement on every action within a community. The only 100% agreement that is needed for an action is between those property owners involved. It is possible to have within an “AnCap” community actions that aren’t 100% in agreement with all “members” of the community. Of course, the disagreeing parties ultimately do not matter if their property is not physically involved in the proposed action. How does this necessarily preclude safe business practices, the containment of infectious diseases, and the existence of roads? This seems to imply that you think these things are not actually desired by people, and that they would prefer to live in poverty and despair.

                I don’t think Bob Roddis presented a non-sequitur. You originally implied that no “collective action” is possible if there is less than 100% agreement, which Bob then asked how this could be true, if we currently live in a society where at best there is only 10% agreement before action is taken on behalf of the “collective”.

              • John says:

                Again, I think both of these responses may be beside the point. On MFs point, it may well be that one does not “need” to impose regulations that everyone does not want. My point is if 100% agreement is required, as practical matter one cannot impose them whether one needs to or not.

                The other point seems to be that 100% agreement is not required for private transactions between people. This seems to beg the question. If one is dealing with quarantine, or business regulation, or issues of that kind which inherently involve just about everyone in a community, then what private individuals or people can do is not so much the issue as whether it is possible for such types of, for want of a better word, group or collective action to exist if 100% agreement is required. I don’t see how such things could exist if 100% agreement is required. As MF says, we may conclude such rules, including against indentured servitude, or child labor, are unnecessary, but I don’t think we can have them at all if 100% agreement is required. This is why I’m not sure Bob Roddis’ original comment was responsive.

              • John says:

                And to close the loop, there is I think some evidence to suggest that absent such collective or group action, certain types of abusive practices (such as those described above and others) would return. Eventually, it seems to me fairly likely based on the 18th and 19th century, that something akin to the colorful phrase “feudal anarchy” might recur. This I think is why Bob Roddis runs into people who think requiring 100% agreement to actions would result in degradation of society as we currently understand it.

        • Tel says:

          You got me on that one LK. Looks like Eric Holder really was the best option we can ever hope for.

          Can’t talk now, I’m off to Mexico. Seems some guy needs a new computer system to index his gun collection. Strangest thing I ever worked on, but he seems to pay his bills in Euros, so I can’t complain.

        • Joseph Fetz says:

          Thank you for that non-answer and equivocation.

        • Major.Freedom says:

          “A privatised system of justice can’t even explain how it will enforce the law properly and effectively if powerful individuals with their own private armies refuse to obey the law or accept private court rulings. The result will be anarchy and civil war.”

          “There is a reason why governments — effective monopolies on the enforcement of law and order — emerge in all sufficiently complex human societies”.

          A non-private system of “justice” isn’t just. It can’t even explain how it will enforce the law properly and effectively if powerful individuals with their own state armies refuse to obey anarchist law or accept state court rulings. The result will be archy and civil war.

          There is a reason why private protection — effective competitors on the enforcement of law and order — emerge in all sufficiently complex human societies.

      • LK says:

        And more:

        “There are people who call government an evil, although a necessary evil. However, what is needed in order to attain a definite end must not be called an evil in the moral connotation of the term. It is a means, but not an evil. Government may even be called the most beneficial of all earthly institutions as without it no peaceful human cooperation, no civilization, and no moral life would be possible. In this sense the apostle declared that ‘the powers that be are ordained of God.’”
        Mises, L. von. 2007. Economic Freedom and Interventionism: An Anthology of Articles and Essays (ed. B. B. Greaves), Liberty Fund, Indianapolis, Ind. p. 57.

        • Ben B says:

          Did you miss the distinction between government and the state?

          • Bob Roddis says:

            LK absolutely “misses” the distinction between government and the state. Or else it’s intentional. This failure to distinguish permeates everything he ever writes.

            In fact, MF just explained how this applies to the Keynesian mentality (meaning all of them):

            The paradox of thrift claims that people are by definition, “from above”, worse off if they voluntarily act according to their own choices, and would be better off if some armed thugs made choices for them.

            Statists percieve this as ” no, the state isn’t making decisions for you when they inflate and spend, they are just replacing your drop in spending, with spending of their own.”

            They don’t get that this requires and implies some individuals, whom they call government, to have their choices replace other people’s choices by force, to get them to use their own property in ways they otherwise would not have done


          • LK says:

            What? You mean the distinction between the “state” as an abstract concept versus governments are realities on the ground? yeah,. I’m really unaware of that….

            • LK says:

              “*as* realities on the ground”

            • Ben B says:

              Ok, so you did miss it.

              Do you know what a natural hierarchy is? And no, it’s not an abstract concept.

              • LK says:

                Enlighten me.

              • Ben B says:

                C’mon LK, you’re better than that. Read the actual blog post before you start commenting.

                Here’s a hint: you would be subordinate to John Maynard Keynes if he were still alive.

              • Major.Freedom says:

                LK believes Keynes was wrong, which is why he has to add “Post”.

                Since adding an ‘s’ to every time the phrase “natural interest rate” is written apparently implies ABCT is refuted, heck, let’s just consider Keynesianism’s theory of demand refuted because we added “Post” to every time the name “Keynesian” is written.

              • Bob Roddis says:

                MF: I think we can finally bury the “ABCT DEPENDS upon a single natural rate” nonsense forever based upon LK’s recent post.

                LK quotes Rothbard:

                Willingness to pay interest will always be less than or equal to the anticipated profit rate; and in the long-run general-equilibrium world of changeless certainty—a world that has never and can never come into existence—the rate of return would be equal throughout the market economy. In that world, the rate of profit in every firm would be equal to the rate of interest on loans.”(Rothbard 2011: 451).

                LK then claims:

                Yet, despite this, Rothbard just blathers on about the single “natural rate” when he discusses the Austrian business cycle theory (ABCT)


                That’s because the “single natural rate of interest” is just a simplified mental or teaching tool. The ABCT does not “depend” upon the real world ever attaining a “single natural rate of interest”. This is really all LK has in his quiver.

                A big nothing.

              • LK says:

                Better break the news to Robert Murphy, roddis:

                “In his brief remarks [in Hayek’s 1932 reply to Sraffa], Hayek certainly did not fully reconcile his analysis of the trade cycle with the possibility of multiple own-rates of interest. Moreover, Hayek never did so later in his career. His Pure Theory of Capital (1975 [1941]) explicitly avoided monetary complications, and he never returned to the matter. Unfortunately, Hayek’s successors have made no progress on this issue, and in fact, have muddled the discussion. As I will show in the case of Ludwig Lachmann—the most prolific Austrian writer on the Sraffa-Hayek dispute over own-rates of interest—modern Austrians not only have failed to resolve the problem raised by Sraffa, but in fact no longer even recognize it.

                Austrian expositions of their trade cycle theory never incorporated the points raised during the Sraffa-Hayek debate. Despite several editions, Mises’ magnum opus (1998 [1949]) continued to talk of ‘the’ originary rate of interest, corresponding to the uniform premium placed on present versus future goods. The other definitive Austrian treatise, Murray Rothbard’s (2004 [1962]) Man, Economy, and State, also treats the possibility of different commodity rates of interest as a disequilibrium phenomenon that would be eliminated through entrepreneurship.”
                Murphy, “Multiple Interest Rates and Austrian Business Cycle Theory,” pp. 11–12.
                Quite simply, Bob Murphy is real Austrian economist who understands the finer points of the ABCT, and honestly acknowledges how the Sraffa-Hayek debate raises serious problems for Austrians.

                In contrast, you, bob roddis, are an ignorant loudmouth who knows very little of the Austrian theory you viciously accuse other people of not understanding.

              • Ben B says:


                Why did you leave out the previous passage where Dr. Murphy specifically points out that Sraffa ultimately misses the essence of the ABCT, which is not whether there are multiple rates of interest, but rather that the expansion of bank credit not backed by voluntary savings induces entrepreneurs to invest in physically unsustainable projects?

                If this is the essence of the ABCT, then I’m not sure that this “raises serious problems for Austrians”.

              • Major.Freedom says:


                If Rothbard and Murphy have different opinions on the importance of whether or not ABCT depends on a single natural rate, whether or not it should be communicated that way for convenience and simplicity, then you are not proving Roddis or anyone else does not know Austrian economics by presuming that Murphy’s word is the last word on the subject.

                The only reason, and I mean the only reason why you laughably claim that Murphy is “the real” Austrian whereas Rothbard is not, is because he is open to the idea of someone taking the trouble to add an “s” to every instance of “natural interest rate”, which plays into “Sraffa demolished ABCT” nonsense you have been trying to peddle for years and utterly failing.

                If you want to add an “s” to every instance of “natural interest rate” in every ABCT exposition, properly cite everything and then put your name behind it, go right ahead. You will have added very little value because nothing about ABCT’s framework on why the business cycle occurs, what the effects of government intervention in money, relative prices and interest rates are, is challenged in any way due the appearance of an additional “s”.

                Adding an “s” does suddenly make the economic calculation argument false, or the effects on capital argument false, or anything else. Nothing is affected.

                It is a grammatical amendment, for the purposes of personal preference.

                Rothbard and Mises knew that in a free market MULTIPLE interest rates would prevail. The reason why they used a single natural interest rate is to juxtapose two separate sets of interest rates, unhampered on the one side, and hampered on the other.

                Mises called unhampered rates “originary interest.” Well, to be more precise he called the difference in value of future goods and present goods as “originary interest”, which is not the rate on loans per se, but is the reason why there is interest on loans.

    • Ben B says:

      It’s bad for business, especially since it would be seen as an illigitimate act by the rest of society. You might as well ask, “what prevents that sweet old granny down the street from turning into an axe-wielding homicidal maniac”? Well, it’s out of character for one, and she didn’t become a sweet old granny overnight.

      Also, don’t give up your guns, and don’t enter a contract with them that says you must give up your guns in return for their protection. Hey, but at least they can’t create new rules every so often that eliminates your ability to produce or buy certain weapons.

  5. Major.Freedom says:

    “Nevertheless, the point remains that when he talks about the British system he is talking about a type of political organization essentially different from the type that he has just been describing; different in origin, in intention, in primary function, in the order of interest that it reflects. It did not originate in the common understanding and agreement of society; it originated in conquest and confiscation.”

    This reminds me of Callahan’s similar attempt to justify statism in his scenario of “Ancapsville” and “Statesburg”.

    The way he described the two cities, both Ancapsville and Statesburg are private ancap communities.

    It’s likely a guilt thing. Guilt for supporting institutions formed by conquest and confiscation, so pretend they’re formed in “common understanding.”

    • skylien says:

      “This reminds me of Callahan’s similar attempt to justify statism in his scenario of “Ancapsville” and “Statesburg”.

      The way he described the two cities, both Ancapsville and Statesburg are private ancap communities.

      As I keep saying. Callahan is no statist, he is an anarchist in disguise/denial. He would never say, “Oh Texans aren’t happy with the level of texation (or whatever other reason they might have), so they want to secede. Not on my watch, send the drones/troops!”

      • skylien says:

        Oh, I guess people in Texas don’t pay taxes but texes..

  6. Major.Freedom says:

    “Notice that Romans 13 talks about the governing authorities, not the agents of the State.”

    The writer(s) of Romans 13 were not talking about “government” as defined by the Nockian distinction between “the state” and “government.”

    The writers at the time were talking about “the state”. The writers were not living in a world of democracy. The authorities were all authorities due to conquest.

    I get it that there might be a feeling of relief by believing that you might now be able to justify Romans 13 as some sort of “voluntary government” consistent with liberalism, but let’s be honest here, that Bible passage was written during a time of Caesars, Kings and Pharaohs…of conquest. By “governing authorities” the Bible writer(s) of Romans 13 did not mean privately financed and competing defense agencies.

    • Harold says:

      Authority also means two distinct things – the bootmaker is an authority by virtue of being “A person with extensive or specialized knowledge about a subject; an expert:”. The Govt agent is an authority because he has: “The power or right to give orders, make decisions, and enforce obedience” (definitions from Oxford dictionaries).

      Since the Bible is a translation, I don’t know if the original word could mean both these things as well.

      • Major.Freedom says:

        Pretty sure the writer of Romans 13 wasn’t referring to bootmakers.

        Another clue that Romans 13 was referring to involuntary states and not private protection agencies is that there would be no need for the writer to go out of their way to tell everyone to submit to the authority of their choosing.

        Would it make any sense to say

        “Hey Bob, you know that private security guard you personally chose to protect you, whom you can fire anytime you want? Yeah, about that, I should tell you and everyone else that everyone should submit to their private protecters. You know, because it is not enough that you just make an exchange with them. We want you to SUBMIT to your chosen protector because he was put in that position by God. What’s that? Were you as a customer put there by God? Well, um, yeah, but your protector shall not submit to you, because that would be just weird.”

    • Brian says:

      As a Christian reader of the Bible, I have to agree that there’s no way to interpret Romans 13 but that the immediate context is in reference to the State.

      However, the main point here is not that Romans 13 refers to non-State “government,” in its immediate context. But rather that the instructions in Romans 13 would still have clear implications for a Christian living in an anarcho-capitalist society. Anarchism does not negate Romans 13 or vice versa.

      It also seems obvious to me that the larger point of the passage is merely what our response to the State should be, not a prescription for or against any particular “-narchism.” Other relevant points:
      1) I’m not aware of any theologian that interprets “not resisting” as an absolute rule (and if you’re a Virginian in 1861 – what then?)
      2) Re: “rulers are ordained of God” is most likely merely a reference to the overall sovereignty of God, and in sync with passages like Acts 4:28, which says that the crucifixion of Christ, carried out freely by evil men was nevertheless part of the sovereign plan of God. So too, if we suffer under the rule of an oppressive State, we can take comfort that is not without good use for the Christian (cf. Romans 8:28).

  7. skylien says:

    Wholeheartedly agree with the first part, don’t know yet about your interpretation of the bible.

  8. Ruben says:

    “atheist libertarians love homesteading except when it comes to the universe itself.”

    Nothing wrong with homesteading regarding the universe. My objection would rather be that God is not a fellow human being. And if someone tells me an unvisible being owns me (and everything else) and that this has some real implications, I become suspicious.

  9. OFelixCulpa says:


    Thanks for writing about this. I am really interested to read more of your thinking on this. Romans 13 and similar passages have been uncomfortable for me for a long time. As I understand them, they are not incompatible with liberty, but I understand why most people interpret Romans 13 to mean that Christians must treat the government as a god beneath God. Certainly that has been the dominant interpretation throughout church history.

    Please keep thinking and writing about this.

  10. Josiah says:

    Notice that Romans 13 talks about the governing authorities, not the agents of the State.

    “Governing authorities” is one possible English translation. The passage, however, goes on to speak of obeying rulers, the need to pay taxes, etc. The idea that St. Paul had in mind Rothbard’s distinction between government and state is untenable.

  11. Skyler J. Collins says:

    I made this distinction some time back, which I got from Stephan Kinsella. Good stuff.



  12. Ivan Jankovic says:

    Bob, Paul refers to government, not to the abstract “social authorities”. When Roman governor threatened to hand him over to Jewish “social authorities” to be tried for heresy he “appealed unto Caesar”, i.e. invoked his status of a Roman citizen, having a right be judged by Roman government rather than by local “social authorities”.

    Further, remember “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s” from the synoptic Gospels? You are now developing a kind of interpretation of Paul the Apostle that flies in the face of what Jesus himself explicitly said in the Gospels.

    • Bob Murphy says:

      Ivan wrote:

      Further, remember “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s” from the synoptic Gospels? You are now developing a kind of interpretation of Paul the Apostle that flies in the face of what Jesus himself explicitly said in the Gospels.

      Interesting Ivan. Do you think I, or Murray Rothbard for that matter, would deny that Americans today should “render unto Barack Obama the things that are Barack Obama’s”? You think I am advocating not giving someone what is his?

      • Brian says:

        Bob is exactly correct here. Furthermore, to interpret Jesus’ saying as one dimensional – i.e., “pay your taxes” and nothing more – is to read this exchange in isolation from many other conversations recorded in the gospels. A one dimensional direct answer is never his pattern in responding to questions like this. Which is the greatest commandment? Is it permissible to perform healings on the sabbath? Etc, etc. His deeper point on this issue is: 1) All things belong to God, and 2) A rhetorical response to prompt them to evaluate whether they believe that anything with Caesar’s image on it is really his.

        Also, I think what I said above in response to MF is relevant re: the original context of Romans 13 vs. *implications* of Romans 13 in anarcho-capitalist society.

      • Keshav Srinivasan says:

        Bob, why do you think Jesus asked his disciples whose face was on the coin then?

        • Bob Murphy says:

          Keshav, the question was clearly a trap; read the whole context if you don’t know what I mean. It was designed so that if Jesus clearly said “yes” OR “no,” He would be in trouble. So His answer was at once plain yet cryptic; something you would expect the Son of God to say.

  13. poppies says:

    A few thoughts:

    – The Greek word translated as “governing authorities” or “higher powers” in Romans 13 has a wide and flexible range of meaning, not unlike the English word “authority.”

    – Jesus and Paul are recorded as directly disobeying and/or ignoring the State multiple times. In fact, both were ultimately killed by the State.

    – It is entirely consistent to pay taxes and encourage others to pay taxes to a highly armed State you view as evil/unauthorized if you place great value on peaceful living (see Jesus’ concepts of turning the other cheek, walking the extra mile, etc.).

  14. LK says:

    The relevant passages from the New Testament:

    (1) St Paul, Romans 13.1–7 (written c. 56 AD):
    Let every person be subject to the governing authorities; for there is no authority except from God, and those authorities that exist have been instituted by God. Therefore whoever resists authority resists what God has appointed, and those who resist will incur judgement. For rulers are not a terror to good conduct, but to bad. Do you wish to have no fear of the authority? Then do what is good, and you will receive its approval; for it is God’s servant for your good. But if you do what is wrong, you should be afraid, for the authority does not bear the sword in vain! It is the servant of God to execute wrath on the wrongdoer. Therefore one must be subject, not only because of wrath but also because of conscience. For the same reason you also pay taxes, for the authorities are God’s servants, busy with this very thing. Pay to all what is due to them—taxes to whom taxes are due, revenue to whom revenue is due, respect to whom respect is due, honour to whom honour is due.”

    (2) Titus 3:1:
    “Remind them (viz., believing Christians) to be subject to the rulers and authorities, to be obedient, to be ready for every good work …”

    (3) 1 Peter, 2.13–15, 17:
    “For the sake of the Lord, submit to every human institution, whether to the emperor as the supreme authority, or to the governors sent by the emperor to punish evildoers and to praise those doing good … Honour the emperor.”
    It follows from this, the good Christian:

    (1) submits to government authorities, since these have been “have been instituted by God” and

    (2) pays his/her taxes.

    It takes a lot of desperate apologetics to get around the fact that this is incompatible with Rothbardian anarcho-capitalism.

    • poppies says:

      Not desperate LK, just interested in the material nuances of what the Bible is teaching here. Paul and Peter both actively disobeyed the State; either they were total hypocrites, or they, like Jesus, recommended generally going along with the guys with the swords for pragmatic and peace-loving purposes. Bob Wenzel often points out how fruitless it is to advocate violence against the State.

      God instituted Satan, too; His purposes are often portrayed as being achieved through imperfect or even evil vessels. Doesn’t mean we don’t regard those vessels as evil, but it also doesn’t mean that we should resist them to the point of the demise of ourselves and our loved ones when nothing strategic is to be gained.

    • poppies says:

      Note that the whole theme of the book of Philemon is this idea of indirectly confronting evil institutions through humility and a servant’s perspective. This concept comes up again and again in the NT; don’t pay back evil with evil; rather submit when it doesn’t mean complicity, and thereby meet evil with good. That sort of radical living is something that I’ve personally seen achieve actual change in situations that seemed hopeless!

    • Matt S says:

      I don’t see how that passage makes the teaching of the New Testament incompatible with Rothbardian anarchy. Granted that I do think it makes it compatible with living in the world where there are governments though.

      If there are no taxes and there no kings or rulers that you live under then I don’t think that particular passage would apply to you.

  15. Jake J says:

    Aside from its negative connotations, this is why I don’t like the term anarchy. Anarchy means without a ruler or chief. I believe in the authority of God and I voluntarily accept him as my ruler. I also believe that people have a fundamental right to voluntarily consent to be governed and delegate their powers to rulers if they wish, though no one has the right to assume to rule over any one else.

    The term anarchy implies that one is against the State and against government, and I am only against the State. I much prefer the term voluntarism and call myself a voluntarist rather than an anarcho-capitalist.

  16. Andrew says:


    Thank you for writing this article. I found it enlightening and enjoyed it very much.

  17. Ivan Jankovic says:

    Bob, your explanation does not make much sense. The biblical passage in question does not discuss the private contractual dealings of the Christians with the Roman emperor, but the question whether Christians should be paying TAXES. And Jesus says: yes. At least, that’s how Christians throughout the ages understood him.

  18. Ivan Jankovic says:

    And Paul himself directly says you should pay taxes.

  19. Ben B says:

    If I was a Rothabrdian-Christian apostle, I would have made it clear that I meant you should pay your taxes only as a temporary “strategy” until our numbers had swelled, where then it would be more practical to go about refusing to pay taxes.

    Of course, what if the apostle had originally written that, but it was changed over the years by “well-meaning” Statist-Christians? But then, why should you believe any of the writings of this apostle, if you believe that his writings had been manipulated? Unless, you had some “underground” writings that showed the apostle had wanted to conceal this strategy.

    Anyways, even then you should ignore my what-if conspiracy theory, because, as I understand it, the Bible is intended to be a guide to how one should always live, and not how one should strategize to live in the future.

  20. Bob Murphy says:

    Guys, I explicitly wrote:

    I am not claiming that the above musings resolve all conflicts among the writers I’ve cited. Obviously, Thomas Jefferson didn’t think he was endorsing privatized military forces, and Murray Rothbard didn’t consider himself a Protestant.

    I guess I should have also written:

    “Paul the Apostle didn’t consider himself an anarcho-capitalist.”

    Look, many modern Bible-belt Christians think the USA is the greatest nation on Earth. They would cite Romans 13 if they heard my high-falutin theories on private law. And yet, Paul certainly wasn’t imagining a political system in which millions of women cast votes in an Electoral College to elect the president and a bicameral legislature, in a society where slavery is illegal. Yet today’s Bible-belt Christians have no problem incorporating all of the changes in culture and political/legal theory in those respects, to give us today’s USA.

  21. K.P. says:

    For the longest time I thought distinctions between government and state were pretty well understood, but that seems to be less and less the case lately. I’m glad you agree (and find it important).

    • Bob Murphy says:

      K.P. it’s really hard to respect the distinction. E.g. I’m giving a PowerPoint tomorrow, where I contrast “government with household debt.” It just sounds horrible if I try to say “State with household debt.”

  22. Bob Murphy says:

    Hey kids,

    (1) Stop calling each other names, please.

    (2) If you want to know what I think of the ABCT and Sraffa, I gave the takeaway message in the second paragraph of the paper you are quoting:

    “The present paper explores the implications of these real-world facts—namely, the
    different rates of interest based on the term structure and risk spreads—on the traditional
    ABCT. I argue that the original Misesian insights still hold valid, and that the economist
    armed with ABCT has much to contribute to contemporary debates. However, I also
    conclude that the canonical ABCT does need to be updated, in light of a crippling
    objection raised early on by Pierro Sraffa (1932a, 1932b).”

    • Joseph Fetz says:

      I must ask, Bob, don’t you think that the average mainstream economist would say, “nonsense”, if only because of the a priori nature of the ABCT?i.e. a difference in methodology

      • LK says:

        The “average mainstream economist” rejects the ABCT for the reasons described by Daniel Kuehn:

        (1) the empirical evidence shows that business people do not respond to interest rates in the way the ABCT predicts: interest rate changes downwards do not much affect production decisions in already established firms, and do not induce the alleged widespread unsustainable distortion in the structure of production.

        Most job creation and destruction “happens at large, mature establishments which are presumably primarily making capacity-utilization decisions rather than new capital-expenditure decisions” (Kuehn 2013: 506).

        (2) Any lengthening of the capital structure that does happen is “a consequence of the business cycle, rather than as its cause” (Kuehn 2013: 523).

        Kuehn, Daniel. 2013. “Hayek’s Business-Cycle Theory: Half Right,” Critical Review 25.3–4: 497–529


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