Sunday, September 26, 2004

Defense, Anarcho-Capitalist Style

The Traditional View: Defense Must Be Produced by Government

Defense usually is considered a public good, which Wikipedia defines thus:
In economics, a public good is one that cannot or will not be produced for individual profit, since it is difficult to get people to pay for its large beneficial externalities. A public good is defined as an economic good which possesses two properties:

• ...once it has been produced, each person can benefit from it without diminishing anyone else's enjoyment.

• ...once it has been created, it is impossible to prevent people from gaining access to the good....

The public goods problem is that a free market is unlikely to produce the theoretically optimum amount of any public good: such important goods as national defense will be underproduced due to the free-rider problem....

A free-rider is an individual who is extremely individualistic, considering benefits and costs that affect only him or her. Suppose this individual thinks about exerting some extra effort to defend the nation. The benefits to the individual of this effort would be very low, since the benefits would be distributed among all of the millions of other people in the country. Further, the free rider knows that he or she cannot be excluded from the benefits of national defense. There is also no way that these benefits can be split up and distributed as individual parcels to people. But just because one person refuses to defend the country does not mean that the nation is not going to be defended. So this person would not voluntarily exert any extra effort, unless there is some inherent pleasure in doing so....

If voluntary provision of public goods will not work, then the obvious solution is making their provision involuntary. (Each of us is saved from our own individualistic short-sightedness.) One general solution to the problem is for governments or states to impose taxation to fund the production of public goods....
Defense as a Marketable Good: The Anarcho-Capitalist View

Anarcho-capitalists take an entirely different view. They see the state as illegitimate. Defense, therefore, is something that individuals should provide for themselves. How would that work? To find out, we turn to the Mises Institute, which in 2003 published a book of essays with the title The Myth of National Defense: Essays on the Theory and History of Security Production. The Mises Review (Vol. 10, No. 1; Spring 2004) carries an incestuous and, therefore, sycophantic and faithful review of that tome. Here are excerpts of the review, with my comments interspersed:
...History shows that no civilized community of substantial size can exist without a state; and arguments from political theory and economics show that the state is a necessity for adequate defense. The state may be evil, but it is a necessary evil.

The contributors to the Myth of National Defense dissent entirely from the line of thought just sketched. They raise a host of objections to the conventional view....

Jeffrey Hummel succinctly presents the argument that history shows the necessity of the state: "If private defense is better than government defense, why has government kept winning over the centuries? Indeed, the State’s military prowess has more than seemingly precluded the modern emergence of any anarcho-capitalist society....How can [radical libertarians such as Rothbard] attribute the origins of government to successful conquest and simultaneously maintain that a completely free society, without government, could prevent such conquest"...?

Both Hummel and the team of Luigi Marco Bassani and Carlo Lottieri endeavor in differing ways to respond to the argument just posed. According to Hummel,..."The free-rider problem, long presented by economists as a normative justification of the State, is in reality a positive explanation for why the State first arose and persisted"....

[D]oes not his very explanation render impossible successful resistance to the contemporary state? Will not the free-rider problem once more explain the persistence of the state?

Hummel has an ingenious response. Since the Industrial Revolution, wealth has become much more important than before in military conflict. This gives stateless groups a better chance of success than before, given the undoubted fact that the free market promotes economic growth more efficiently than a state-controlled society.
Aha! Things are different now. We're in a "new economy" -- just as we were before the stock market bubble burst in 2000. Well, when are the stateless groups going to get off their duffs and provide their own defense? We have stateless groups providing "offense" against which we must defend. Why haven't the wealthy investment bankers who were victimized on 9/11 (and who might well be victimized again) raised mercenary armies to track down terrorists?
But what about the free-rider problem? Hummel maintains that this does not totally rule out collective action. It can be overcome if people have a strong enough commitment to the rightness of their cause....
If, if, if! The magic word. The world would be perfect only if it weren't imperfect
Bassani and Lottieri respond in a different way. They reject the conquest theory of the state, as well as other accounts that postulate for the state a vast antiquity. Quite the contrary, they contend that the state began only when the Middle Ages came to an end. Not until then did people suffer from that baleful development, a centralized authority holding a monopoly of force over a national territory....

Once we grasp the modern origins of the state, is not our task of resistance to it made easier? No longer need we view the state as a fixed and irremovable presence. If the state did not always exist, may we not hope to remove it?...
Bad logic. It won't work unless you can remove the conditions that arose at the end of the Middle Ages. That is, it won't work unless you have a time-reversal machine.
Hobbes argued that without a state, individuals would find themselves in constant conflict. In order to avoid the "war of all against all," must not everyone surrender his arms to the sovereign, who will then protect us? Hans Hoppe finds this argument less than convincing. Hobbes maintains that "in order to institute peaceful cooperation among themselves, two individuals, A and B, require a third independent party, S, as ultimate judge and peacemaker....To be sure, S will make peace between A and B, but only so that he himself can rob both of them more profitably. Surely S is better protected, but the more he is protected, the less A and B are protected against attacks by S"....Hobbes fails to show that the sovereign improves on the state of nature....
Well, by that example the sovereign doesn't do worse than the state of nature. But there's more:
[T]he question raised earlier recurs. Even if the state acts as a predator, is it not needed for defense against other states? But why should we accept this contention?

Here we must turn to arguments from economic theory. It is often alleged that national defense is a "public good" that the market cannot supply in adequate quantity. Both Larry Sechrest and Walter Block dissent from this all-too-prevalent orthodoxy. Why should we think that defense is a single good that must be supplied on an equal basis to everyone resident in a nation? "It is neither impossible to exclude nonpayers nor is it true that bringing in an additional person under the safety umbrella costs no additional resources"....With his customary imaginative flair, Block offers numerous ingenious examples to support his challenge to the standard view....
Well, here's a counter-example for you: How would you have excluded non-payers who happened to be working in the World Trade Center on 9/11? And, if the Air Force had arrived on the scene in time to shoot down the hijacked airliners before they struck the World Trade Center, how would it have cost more to shoot them down if, say, one more non-payer had been present in the World Trade Center?
Joseph Stromberg strengthens the case with a vital point. It by no means follows that a free society must match the bloated expenditures of the Leviathan state in order to defend itself effectively. "I assume that minimal states and anarchies can do without nuclear bombs, cruise missiles, stealth bombers, and expensive ‘systems’ suited to world conquest or universal meddling.
This is merely an assertion that a people who "mind their own business" don’t' need to be ready to defend themselves of their overseas interests against potential aggressors. It's head-in-the-sand isolationism of the most na├»ve sort. It assumes that aggressors act only when provoked and not for their own reasons.
As for the ‘force structure’ of mere defense, I believe we would see some rough combination of militias and ‘insurance companies’—perhaps not as mutually exclusive as we think—with resort to mass-based guerrilla war, however and by whomever organized, in extremis"....
Right! Our overseas economic interests won't be attacked if we lack offensive weapons and we can protect our domestic interests solely with militias and "insurance companies". How would that work? The militias would rise up on the spot to protect...whom? subscribers?. What happens when those who underwrite the militias get tired of paying for protection when nothing's happening? Do they just drop out of the syndicate? And what happens when enough of them do it and the militias are practically disarmed? Aha! That's when terrorists strike. And what do "insurance companies" do, sell protection? How do the bad guys discriminate between policy-holders and free-riders? They can't, unless you believe that terrorists will go door-to-do and attack only those who don't have a policy. And there's the problem of what happens when people tire of paying premiums when things have been calm for a long while.

The state, like it or not, is less likely to lose interest in what's going on. The state isn't perfect, certainly, but it has an incentive to make things look bad so that it can maintain large, standing armed forces and intelligence systems. Now, that may seem like a damaging admission on my part, but it isn't. There are things it's better to have too much of than too little of. Too much defense is expensive -- but it's likely to save your neck. Too little defense is cheap -- but fatal. And anyone who thinks he can prescribe just the right amount and kind of defense must also think he knows, now, when the next stock market bubble will form and burst.

And so we approach the finale:
The argument for libertarian defense rests on two points. First, a libertarian society would have a much less ambitious agenda than states in the contemporary world.
Oh really? No overseas economic interests? And what about predators who don't care about our agenda?
Murray Rothbard, with characteristic incisiveness, makes clear the drastically limited circumstances in which war is justified. Specifically, there is no universal mandate to impose a good society all over the world: nations must mind their own business....
That is, the United States must mind its own business. And if other nations -- or independent operators -- decide not to mind their own business, they'll simply leave us alone because of the purity of our motives. There's more of that, but it's just nonsense:
…Democracies, swollen with self-righteousness, tend to wage unlimited wars that ignore humane restraints....
As opposed to fanatical totalitarian regimes?
[T]here is good reason to think that if a libertarian society found itself the victim of invasion, guerrilla warfare would prove a successful response…"We start from the truism that defense has the advantage....And once people are driven to guerrilla tactics defeating them raises the ratio of attackers to defenders to somewhere between 4-to-1 and 6-to-1 or higher. Successful ‘pacification’ and occupation may require a 10-to-1 superiority"....
These guys have been watching too many movies. (Red Dawn comes immediately to mind.)

Conclusion

The merry band of anarcho-capitalists at the Mises Institute must believe that Laden and his ilk wouldn't bother us if we were retreat to within our borders, though that would mean abandoning vital economic interests overseas. (I guess those are of no interest to anarcho-capitalists, who are free to assume oil wells in every yard.) The critical assumption, of course, is that we would be left alone. Is that a reasonable assumption to make? I don't think so. Bin Laden and his ilk are religious fanatics, bent on avenging the past failures of Islam, which they attribute wrongly to infidels.

Anarcho-capitalists also must believe that by effectively disarming we wouldn't be inviting other nation-states to arm and fill the power void. That belief flies in the face of human nature. Greed and power-lust are self-generating; they aren't brought into existence by provocation. If these anarcho-capitalists believe that Hitler only wanted "lebensraum" and Stalin only wanted a buffer zone around his "utopia", then these anarcho-capitalists are bigger fools than Neville Chamberlain, Franklin D. Roosevelt, and Jimmy Carter.

Finally -- resorting to the logic that "my client isn't guilty, but if he is guilty he only acted in self-defense" -- anarcho-capitalists admit that we might be attacked by terrorists or nation-states even if we were to withdraw within our borders and effectively disarm, as a nation. Then, they assert, some of us could resort to guerrilla warfare, for which militias and "insurance companies" would be well prepared. Now there's a strategy for you: Wait until the enemy attacks us, then hope that he only attacks those who haven't paid for protection. Or hope that enough of us have voluntarily paid someone to have stockpiled the right kinds of weapons and trained properly -- for a guerrilla war against weapons of mass destruction. I'd laugh if it weren't suicidally stupid.

Anarcho-capitalists, meet Alice. I'm sure you'll all be very happy together in Wonderland.

P.S. Notice how I got through all that without invoking images of competing ganglords, gunbattles in the streets, innocent bystanders being shot, and other innocents being forced to pay protection money at gunpoint? Well, I couldn't resist adding this P.S. about those, the penultimate consequences of anarcho-capitalism -- before an outside enemy would swoop in and bring "peace" to our troubled shores.