Market anarchy objections

I contacted Scott from UTNow to talk to him about minarchism (small/limited government) versus market anarchism (no government); he referred to the constitution several times in his videoblog, as well as certain governmental duties.

He wasn't introduced to market anarchy thought yet, so I explained the general idea behind it. He was very quick to give me certain objections that he thought made it unfeasable.

A difference in opinion about how a free society would behave is not easy to resolve because it is quite a complex matter: interpretation of historical empirical data, underlying assumptions, incentive systems in a dynamic environment, etc.

This is actually an argument from effect; not an argument from morality. We are not discussing the moral nature of the state, but in fact argue the effects of a society without one. This is important to realize as the claim of government is a positive claim far removed from the default position towards human interaction (the problem of introducing different classes of people and so on). Read more about that here.



Now, onto the objections (as I understood them):

- Under anarchy (no government) there will be corporations who will acquire vast amounts of land so that people cannot act without passing through them and will have to pay large amounts of money because they have no choice. This is claimed to be a very profitable business plan; so much so that the corporation will grow enormously and succumb entire arbitration and security networks, and basically will resemble a state once again.

- Under anarchy, large Dispute Resolution Organizations (DROs) will create cartels stopping smaller businesses from entering through declining contractual agreements with them. They will start to act as one organization, will not be responsible to market forces, and will have tremendous amounts of power (..which they will use for their own benefit ??). ..again, similar to the state.

We ofcourse make the observation here that the minarchist position of a state having a certain kind of justifiable function or duty, and at the same time viewing the state as a culmination of parasitical extortion and exploitation for their own benefit, is inherently inconsistent.

First of all I would like to point to two presentations from Thomas DiLorenzo:

Protectionist Origins of Antitrust
http://mises.org/multimedia/video/DiLorenzo/6.wmv

The Myth of Natural monopolies
http://mises.org/multimedia/video/DiLorenzo/7.wmv

DiLorenzo shows that the myths of free market failures and the need for government invervention are totally unproven (even though they are widely assumed and taught). And in fact: these theories usually come after the fact as a way to justify them to the (voting) public. And it's even worse: these regulations have tremendous negative effects for the market and the consumer, and are actually a scam to benefit the ruling class. This is very important to realize because people tend to cling to the idea that politicians (or any kind of collectivists) are wholly motivated by making their fellow man's lives better.

Stefan Molyneux expands on the effects and the economics of government expansion in regulation and redistribution, and the mutually dependent leviathan it becomes.

He also expands on the economic impossibilities of supposed natural monopolies and natural cartels.



Now that the reader (hopefully) has a different idea about free market tendencies, we can look at how complete market non-intervention could look like.

For this end I want to direct the reader to two articles by Stefan Molyneux:

The Stateless Society; An Examination of Alternatives

Caging the Devils: The Stateless Society and Violent Crime



..onto the specific claims about market anarchy:

The idea that anarchy will end up in government or gang warfare is actually specifically addressed by a number of authors. I will list them (it is advised to read the articles in full):

Anarchy and Gang Warfare,
[..] In the first scenario, Smith asks his security agency A to impose legal sanctions on Jones for an alleged robbery, and Jones asks his security agency B to protect him. Mustn't such a situation inevitably lead to violent conflict between security agencies?

Perhaps, but it seems unlikely. Security agencies are not governments with a guaranteed supply of tax revenues. They depend on their customers, and so are much more responsive to customer demands. War is an expensive means of settling disputes, and even the most belligerent customer may think twice on receiving his monthly bill. Security agencies that settle their disputes by force rather than through arbitration will have to charge higher premiums, and so will lose customers to their competitors.

Does this guarantee that a system of competitive security agencies will never break down into warfare? No, nothing can guarantee that. All I am making is a comparative claim: competitive security agencies are far less likely than monopoly governments to resort to force.
-Roderick T. Long


Law as a Private Good; A Response to Tyler Cowen on the Economics of Anarchy,
[..] We must ask, not whether an anarcho-capitalist society would be safe from a power grab by the men with the guns (safety is not an available option), but whether it would be safer than our society is from a comparable seizure of power by the men with the guns. I think the answer is yes. In our society, the men who must engineer such a coup are politicians, military officers, and policemen, men selected precisely for the characteristic of desiring power and being good at using it. They are men who already believe that they have a right to push other men around--that is their job. They are particularly well qualified for the job of seizing power. Under anarcho-capitalism the men in control of protection agencies are selected for their ability to run an efficient business and please their customers. It is always possible that some will turn out to be secret power freaks as well, but it is surely less likely than under our system where the corresponding jobs are labeled 'non-power freaks need not apply.'

In addition to the temperament of potential conspirators, there is another relevant factor: the number of protection agencies. If there are only two or three agencies in the entire area now covered by the United States, a conspiracy among them may be practical. If there are 10,000, then when any group of them start acting like a government, their customers will hire someone else to protect them against their protectors.

How many agencies there are depends on what size agency does the most efficient job of protecting its clients. My own guess is that the umber will be nearer 10,000 than 3. If the performance of present-day police forces is any indication, a protection agency protecting as many as one million people is far above optimum size.
-David D Friedman

These Cages Are Only For Beasts
[..] In other words, every person who says, "DROs will turn into dangerous fascistic organizations," represents a fantastic business opportunity to anyone who can address that concern in a positive manner! If you dislike the idea of DROs, just ask yourself: is there any way that my concerns could be alleviated? Are there any contractual provisions that might tempt me into a relationship with a DRO? If so, the magic of the free market will drop them right in your lap! Some DROs will pay you a million dollars if they treat you unjustly. (And you can choose the DRO that makes that decision!) Other DROs will band together and form a review board which regularly searches their warehouses for black helicopters and robot armies. Other DROs will fund "watchdog" organizations which regularly rate DRO integrity.
-Stefan Molyneux


Lastly, we can look at one of the very succesful historical examples of a stateless society to both show how it would look like as well as prove that it can be a stable and peaceful society.

The Icelandic Commonwealth or Icelandic Free State, which flourished between 930 and 1262, offers modern libertarians a well-documented, real world example of how a market anarchist political system worked in the past, and how it can work again in the future [..]

[..]

The Icelandic Commonwealth was a single, unified nation with a single, overarching constitution, but a multiplicity of "competing governments," all of which had jurisdiction over the same territory.

Instead of public property, i.e., "government property," the Icelandic Commonwealth had only private property. The entire island was privately owned by one private citizen or another.

As difficult as it may be for us to grasp, the Icelandic Commonwealth had no executive and no judiciary.
-Bevin Chu

More writing about Iceland and other examples can be found here.