Excellent response Zorg.

“War insurance fails obviously and spectacularly.”

I read your article. I didn’t read anything new in it, and I don’t see how
you can dismiss the one solution that has actually come forth from the
market to deal with the economics of risk management – namely, insurance.

You wrote about “war insurance” as if it would be isolated from
everything else. How do you know that? You don’t. In fact, it is quite
likely that the legal agencies in your piece would be related to insurance
companies as contractors or vertically integrated into them. There are
many possibilities of organization and business relations, but one thing
we do know is that insurance is the market’s response to the individual’s
need to protect himself from the effects of unforeseen catastrophic events (fire, flood,
earthquake, riots, infestation, disease, death of the breadwinner, disability,
vandalism, etc., on and on and on). Invasion is just one more unforeseen catastrophic
event, except that it has a wider social context.

Now, in a free society, it is only natural that this market mechanism would
fill the void left by vacated state services. There is no doubt that anyone
offering security or legal services will want (as will their customers demand)
to be covered by insurance. Business needs insurance the same way individuals
do. They need liability coverage also. There is no doubt also that trade associations
will encourage and require and facilitate insurance coverage. There are many
market mechanisms that “enforce” wise business practices. Such mechanisms
can and do deal with free riders. The individual is always “forced” to navigate the
larger society, so it’s reasonable to assume that anyone who has any stake at all
in a free society will be contributing to defense through these market mechanisms.
The leftover free riders will likely be people without a stake in society because
they don’t have resources and so don’t have insurance anyway, and who probably don’t
contribute now either – so they are a wash.

It is within this interconnectedness of a free society that insurance companies
will have the ability to both charge for and pay for defense services. You made
the claim that insurance companies could not effectively deal with free riders
but that “legal agencies” could. The mechanism was the company declaring
a non-defense-paying person an outlaw. Well, why can’t an insurance company
not provide ANY insurance to a non-defense-payer and do the same? Why can’t trade associations of lawyers, doctors, engineers, teachers, not do the same? Why can’t
insurance companies require trade associations to make all members contribute
the defense premium? There is also no reason why insurers could not charge
everyone a flat fee rather than premiums based on living in riskier areas such
as borders and coasts. In fact, there could be various levels. You could have
a flat charge per head on one level, such that anytime you buy insurance for
anything at all you pay that. Then different associations you are apart of might
also require one. This would make it graduated. The more you are involved and
have a stake in society through various organizations and activities, the more
you pay. If you’re a New York banker, and you want to keep being such in a booming
free market society, you are going to funnel lots of cash as well to the New York Coastal Defense Compact. This is how people with more of a stake will pay more, but that
doesn’t exclude the farmer in Iowa who is not in immediate danger if NY falls. If
he is producing for the market and not just himself, he will be tapped into the
insurance biz and thus pay his share. If it’s just a self-sufficient loner on 10 acres
and he doesn’t have insurance or belong to churches, civic groups, professional associations, or anything like that, then he probably doesn’t have much to give anyway.
But maybe when he goes to the doctor, the doc asks to see his “blue eagle” Defense
Card, eh? “Sorry, Mr Jones, the rate for free riders is $5,000. Will that be cash or
charge?” : )

Defense is vital, and so the provision of it must be dealt with by society. Your
idea of ostracism and denial of service is not new, so I don’t see how you can
arrogantly refer to the writing of someone else on this topic as “bullshit”.

It is obvious that you failed to understand the context. Why the hell would I pay
a premium for “war insurance” to a start-up with few assets who was not tied
in with the giants in the industry who were actually *paying* for F-15 squadrons on
the coasts and such? In other words, you left out the consumer as well as the
industry as a whole in your analysis of the “bullshit”. You said that a start-up could
be a competitor without paying for defense! What kind of understanding
of the market is that???

It’s fine if you want to criticize Hoppe, but you should really try to understand
what it is you are criticizing first. It’s true that we don’t know exactly how the
market will work, but that doesn’t mean we do not know THAT it works and
what some of the various avenues are.

There is certainly much more work to be done with regard to defense in a stateless
society. I tend to think that we do also need some sort of militia structure organized
by geography, pacts, commitments and oaths, to both train during peacetime and
take up arms at the call of the larger federal structure (by agreement in advance
with stipulations, penalties, enforcement, etc.) in the event of an actual
invasion. People always refer to the Swiss model, and it does seem like a
formidable obstacle to any would-be conqueror to know that he faces a population
armed to the teeth and fully cable of a 24-hour mobilization of millions – as well as being
free (having something to defend), rich (having the means to defend it), and covered by insurance (the ability to sustain and recover from losses through risk management). : )

Sign me up for a society like that!

The difficulty everyone has is in going from state to stateless without any information
about the possible evolutionary path it will take (which is beyond anyone’s control).

If you’re going to be on mises, I hope you will decide to be more open and civil
than you have been on YouTube and elsewhere. That’s all I have to say about it.

Why does Oppenheimer forget that the obvious choice for a sedentary group of farms to protect itself against raiding nomads would be to create their own army!

He didn’t forget it, the editors who wrote this article just didn’t use that part. But he covers it in the material Wikipedia used, that I quoted above.

Nomad groups rarely ever form states, for they do not have resources to create standing armies.

That’s a non sequitur, and in fact they do have the resources to create standing armies – the whole of them becomes a “nation in arms”. See Gibbon’s comments on how many more barbarians in arms as a proportion, and why.

And, due to the nomads’ poverty, rarely is there conflict between them and the settled population, for they are dependent upon it.

Another non sequitur with a faulty conclusion. They are indeed dependent on settled peoples – that’s why they raid them, to get what they need more cheaply. And it often did happen that they took over places like Bokhara and Samarkand; only, a generation or two later, they weren’t the nomads any more.

Most states start off with a central government within a nomad tribe, with taxation, then settlement, trade with others, trade within itself, then conquests-a state forms naturally, as civilization progresses.

Um, I think you’re starting the clock at a different point, and not counting in as nomads the sort of people Oppenheimer did. Sure, the Asian nomads we are familiar with came along after states. Only, the states we know came along after other more mobile groups started to dominate more settled groups; it’s just that today we might call the Celts or the Goths (say) pastoralists rather than nomads, because they weren’t such specialists in being nomads as the Mongols (say).

Why! Why does Oppenheimer forget that the obvious choice for a sedentary group of farms to protect itself against raiding nomads would be to create their own army! Nomad groups rarely ever form states, for they do not have resources to create standing armies. The Hyksos, who took over a pre-existing capital at Avaris are no exception. And, due to the nomads’ poverty, rarely is there conflict between them and the settled population, for they are dependent upon it. The nomad kingdom of Qedar might be an exception, but that state only rose up to defend itself against the Persian Empire, and to protect its already existing caravan routes. Most states start off with a central government within a nomad tribe, with taxation, then settlement, trade with others, trade within itself, then conquests-a state forms naturally, as civilization progresses. It is only with an advanced economy that society might become independent of the state.

So it’s really silly to get all fired up as either pro-Hoppe in this regard and anti-Hoppe. Who cares? Hoppe isn’t right. He can’t be. It’s almost impossible for him to be right, and he surely knew that going in. Robert Murphy has said the exact same thing in lectures on ancap. He states right off the bat that he doesn’t know the final market form and no one can.

Rejecting ancap because you don’t know the final form is the same as rejecting the private production of food while suffering government rations. If I say, “if we remove government rations, it might look like X” and you respond, “X could never be the way!” So what? This is a thought exercise. The reason we remove government rations is because we know that voluntary exchange produces a better society than involuntary.

As for Oppenheimer’s article, it’s an excerpt of a book written in 1922. The book is fantastic. You can quibble over certain classifications of State development, or new evidence since 1922 that contradicts aspects Oppenheimer’s theory, but your original criticism above is just a tad emotional. Oppenheimer’s book is extensively researched and been available to critics for almost 100 years. Objections to conquest theory are not sociological proofs either, and I’m sure the argument will continue for another 100 years.

And in no way does conquest theory destroy ancap. I know it sounds cool to say, like a Huffington Post headline or something, but it’s simply ridiculous. Again see above, considering the unknown form of ancap defense services it also follows that it is impossible to predict how effective they will be. The only actual implementation of completely private military services in our lifetime for the purpose of conducting a large scale war was the Ivory Coast’s hiring of Executive Outcomes in the early 1990′s. It’s a very interesting story, if you are not already familiar.

I’m on my own bandwagon.

http://fringeelements.info/post/1310220925/stateless-defense-funding-for-external-threats

War insurance fails obviously and spectacularly.

In Southwest Africa the Germans recently experienced the difficulties that a well-disciplined and superior force, equipped with a supply train, with a railway reaching back to its base of supply, and with millions of the German Empire behind it, may have with a handful of herdsmen warriors, who were able to give the Germans a decided setback. In the case of primitive levies, this difficulty is increased by the narrow spirit of the peasant, who considers only his own neighborhood, and by the fact that while the war is going on the lands are uncultivated. Therefore, in such cases, in the long run, the small but compact and easily mobilized body constantly defeats the greater disjointed mass, as the panther triumphs over the buffalo.

The Celtic system of levies did not leave the lands uncultivated, but left a certain proportion of the men behind to keep things ticking over; at any rate, that was the practice among Scottish clans. It certainly belongs in Oppenheimer’s first stage, that he is describing here. They did, however, have difficulty operating out of their area (or, more precisely, it was hard for leaders to lead them far away) in case they had to hurry back for other defence.

Later research has shown that organised nomads of the Asian sort only developed after nearby settled peoples, because they needed the latter’s products to survive on the steppe whether they got them by raiding or trading.

Gradually, from this first stage, there develops the second, in which the peasant, through thousands of unsuccessful attempts at revolt, has accepted his fate and has ceased every resistance. About this time, it begins to dawn on the consciousness of the wild herdsman that a murdered peasant can no longer plow, and that a fruit tree hacked down will no longer bear. In his own interest, then, wherever it is possible, he lets the peasant live and the tree stand. The expedition of the herdsmen comes just as before, every member bristling with arms, but no longer intending nor expecting war and violent appropriation.

The raiders burn and kill only so far as is necessary to enforce a wholesome respect, or to break an isolated resistance. But in general, principally in accordance with a developing customary right — the first germ of the development of all public law — the herdsman now appropriates only the surplus of the peasant. That is to say, he leaves the peasant his house, his gear, and his provisions up to the next crop.

That simply wasn’t the case, unless and until the raiders developed a unity among themselves, whether by agreement or by overcoming competition. Even if the peasants were willing to be tapped in this way, raiding continued while yet other outsiders had access to them. It isn’t often recognised by ordinary people that “survival of the fittest” doesn’t describe competition as between predators and prey, but within each group. To be sure, Oppenheimer describes this exclusion of competing raiders later, but he sets it at the wrong point; it is both logically and chronologically prior to conserving the exploited (he is also wrong in thinking that this is a unifying and integrating tendency in general rather than merely locally; in fact it created separation geographically, e.g. as between the Normans in various parts of Europe). Again, Oppenheimer notes this later; but he supposes incorrectly that the two strata effectively come together before geography separates things.

Also, Oppenheimer has assumed what is in fact a later stage of economic balance, in which leaving peasants on their land as tributaries makes more sense than carrying them off as slaves to work on their owners’ lands. But in fact, while there is still enough land elsewhere to which peasants can flee, this is not yet the case – as Evsey Domar discovered.

The duty of protecting their tributaries against other “bears” forces them to keep a levy of young warriors in the neighborhood of their subjects…

No, actually, not once Domar’s criteria for land being more valuable than slaves have been met. With that, you can always afford to lose a few peasants, and the defence is more focussed on protecting the land and a mere core of peasants. That’s why it was practical to hole up in castles even when not all the peasants could take shelter there.

In case the herdsmen are dealing with utterly unwarlike subjects, they carry on their nomad life, peaceably wandering up and down and herding their cattle among the perioike and helots.

This brings up a crucial omission from Oppenheimer’s analysis: he supposes that there are merely interactions between pairs of groups. In fact, stable dynamics actually involved three or more (many more in the Indian Caste system, particularly if you count various subcastes and lesser gradations). In simple tribes like Australian aborigines, the type was elders and young men within each tribe (and a parallel structure among women) with outsiders as the third group, ganged up on by the others since the young men also gained even though the elders got most out of it; however, subject to survival, tribe members had upward mobility. In more sophisticated tribal structures (e.g. in Africa, Polynesia and among the Celts) there were still the outsiders but the tribe itself had an inner and outer group, the inner one being most inherited and with less entry. And then you come to class systems and similar, in which in general the outsider is tolerated within, as a lower class beneath the middle and upper classes; here there is less mobility still, and the links of mutual support do not actually reach the lower class, which is really an under class (compare and contrast the Caste System’s untouchables, or the Japanese equivalent). Earl is not to churl as churl (or earl) is to thrall. In Sparta, it was the true Spartiates oppressing the Helots – but it took the co-operation of the Perioeci middle class both to make it stable and to make it cost effective. (Something rather odd happened to distort this pattern in Britain, but I have neither the time nor the space for the digression.) Of course, more stratification hinders the interbreeding Oppenheimer infers from intermingling.

Oppenheimer has here omitted another case under which rulers emerge: when, as in ancient Israel, the locals adopt it of themselves, in emulation of and perhaps as a defence against rulers from outside. This may perhaps be discerned in Fiji, where ethnic Melanesians have a Polynesian social structure (there are actually some Polynesians in the east of Fiji, with Tongans in particular towards the north of those). However, he did refer obliquely to this case elsewhere, in the part I have emphasised in this:-

No primitive state known to history originated in any other manner. Wherever a reliable tradition reports otherwise, either it concerns the amalgamation of two fully developed primitive states into one body of more complete organisation, or else it is an adaptation to men of the fable of the sheep which made a bear their king in order to be protected against the wolf [emphasis added]. But even in this latter case, the form and content of the State became precisely the same as in those states where nothing intervened, and which became immediately ‘wolf states’.

1. Anarchy is everywhere. Look around you. 99.9% of your daily interactions are anarchistic. The world has always been and will always be anarchistic. Anarchy doesn’t have to be argued into existence. It’s the nature of human society, and can’t be eliminated no matter how many mafia organizations try to stamp it out.

2. The State is violence. Statism doesn’t reduce violence. It institutionalizes and regularizes it, then pulls a veneer of lies over itself so no one pays any attention to it any more.

Bingo!

You’re the guy that went from white nationalism to socialism to
anarcho-vague-ism to ancap to….what now? What’s the latest installment
of your revolutionary thinking that beats Hoppe?

Whose bandwagon are you on now?

Just because it looks more efficient on paper says nothing about the stability, viability, or even the desirability by participants. Although the laws of praxeology might be a priori, there is nothing to say that an cap is praxeologically superior to states. That does not follow. We must TEST this assumption before we can say this, otherwise, the whole case behind an-cap consists of nothing more than a bunch of hunchisms.

P.S. Not a state lover here, but not about to jump into an empty pool head-first. Ancap requires that others see some real-world evidence and the result of tests.

Did the Xia dynasty come about from barbarian invaders? The limited evidence suggests not. Circumscription tells us why the “marginal state” is more effective in areas of concentrated resources.

This author it talking about herdsmen conquering other states, absorbing tribute, and then conquering more states. The broadness and holistic nature of this is painfully inappropriate. How did these nomadic empires form? By force? And by force they were compelled to use force against others? And were they invading other states, or were they subduing – by force alone – stateless peoples?

Oppenheimer, at least in this excerpt, is skipping quite a few steps. This is a terrible article and does terrific damage to the libertarian case. If a band of thugs can just amass enough force and create a state, then that means ancapistan is going to become a state again in nothing flat.

The conquest theory, if it were true, would DESTROY anarcho-capitalism! I was about to say that I couldn’t believe the mises institute would post such tripe, but after reading Hoppe’s “The Private Production of Defense”, this bullshit no longer surprises me.