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Source link: http://archive.mises.org/6356/hoppean-anarcho-capitalism-in-slate/

Hoppean Anarcho-Capitalism in Slate

March 8, 2007 by

Timothy Noah’s Would You Privatize Defense?The case for socialized medicine, Part 1, in the March 6, 2007 Slate unwittingly shows the danger of minarchism and the idea of public goods. Once you accept the notion that the state is legitimate and there are some public goods, then the door is open to argue that more and more domains of private life should be considered public goods and thus handled by the state. In short, any sort of state-advocacy, including minarchy, is a recipe for socialism.

Noah tries to argue this by mocking the idea of private defense. To do so, he paints a surprisingly anarcho-capitalist-looking picture of such a society–”Instead of the publicly funded Army, Navy, Air Force, and Marines, the country would be defended by private militias funded mainly by insurance companies”. Shades of Hans-Hermann Hoppe!

Of course, he gets many details wrong, and he paints this picture to mock it, as a means of showing how absurd it is that medical care is privately provided–he wants them both socialized. If he had only read a bit more Hoppe when trying to imagine private defense, he’d have found it a bit harder to mock it.


Angelo March 8, 2007 at 6:43 pm

I have no patience for people like him who are so ignorant on a topic they write so forcefully about. I sent Noah this email.

You obviously haven’t informed yourself on the economics of private versus public defense. While your premise is true-that if socialized defense is necessary, then socialized health care, and everything else, is necessary-there is no defensible position for making defense public.

I would suggest reading an essay on the production of defense and how states don’t provide defense, but mere offense at higher and higher costs. Since you are influencing people to your views, the only responsible thing to do is to inform yourself on a topic that you’re ignorant of.



Of course, he’ll likely ignore it.

Walt D. March 8, 2007 at 11:11 pm

Whatever your views are on the morality of defense and a “dollars down the crapper” mentality, we would have to admit that the difference between the Soviet Union and the US in the cold war was that the US capitalist system, with all the funneling of taxpayers money to private defense contactors, was able to essentially waste money more efficiently than the Soviet Union with its socialist system and central control.

The analogy to Health Care is in fact correct. However, the author does not compare the socialist system, where there were no antibiotics for Boris Yeltsin’s mother, to the US system, where anything and everything is available in the open market.

So hip and knee replacments in the US are too expensive? Entrepreneurs have set up an alternative, where patients can fly to India, Thailand, or Indonesia and have the same surgery performed at a fraction of the cost in sate-of-the -art facilities and world class surgeons. (This is not a back alley procedure).

My point is that the free market can provide soultions to the expensive health care problem. The state run programs exacerbate the problem by collecting taxes for healthcare, allocating resources in a sub-optimal way, and forcing private providers to accept below-market fees for procedures provided to people who can not pay. The difference is made up by over-charging those who can.

My solution to the problem is Hillary-Care – people should have the option to choose from the same private plans that Hillary Clinton has to choose from for the same price that Hillary pays.
This is not socialized medicine

Nick Bradley March 9, 2007 at 6:26 am

The Slate.com article was simply asinine.

In an anarchocapitalist system, there would be no such thing as “defense insurance”, just insurance.

The role of insurance/protection agencies would be to protect clients’ life and property from coercion, whether that be from crime or warfare. If an attack was looming, it would be in the self-interest of the insurance companies to prevent such an attack; If they allowed the attack to happen, insurance companies would be looking at staggering losses. Accordingly, insurance companies would probably coordinate activities to defend their territory. In fact, there would probably be some type of intelligence exchange network between the insurance companies (or the hiring of intelligence firms) to estimate future threats.

If the enemy already had boots on the ground, it would be cost-effective for insurance companies to issue weapons to policy-holders (and train them). Once they chances of actual invasion reached a certain level, it would be a mere pennance to give away arms to the populace when faced with total loss of property.

Insurance companies could also give customers a discount if they (1) had arms in the home, (2) attended militia training, or (3) agreed to help defend the local area in the event of an attack.

On top of insurance companies defending the country against attack, local citizens would probably form their own militias as a second layer of defense.

Not everything provided in a totally free market will be from a for-profit firm.

Finally, all of this talk of an invasion is moot when there is no central node to attack. What does the enemy attack? What are our centers of gravity (CoGs)? We would have none. An enemy strike would have to aim to “clear, build, and hold” every square inch of a territory — with a population hostile to outside control.

Dan Coleman March 9, 2007 at 7:08 am

Noah inadvertently makes a great case for privatizing defense. After reading that piece, I couldn’t help but think: ‘That was the best you could do?!

I can’t wait to see Part 2.

Mark March 9, 2007 at 1:17 pm

Exactly when has the U.S. military done anything that was remotely defensive? What private defense entity would have invaded Iraq? Case closed Noah, unless 500,000 plus deaths and billions in property damages is no big deal to you.

Björn Lundahl March 12, 2007 at 2:35 am

National defence is a private good and not a public good*.

Why would individuals, in a pure free market, want to spend money on national defence?

As people in a free market would want to protect themselves (life and property) against aggression (physical violence and theft), for example, through insurers (or other protection agencies), risks against warfare would, also, be included in the insurance premium.

Warfare is only aggression or physical violence of a greater magnitude, but is still the implementation of physical violence.

Aggressors prefer to aggress against people in densely populated and market valuable areas than unpopulated and worthless areas**.

The more heavily populated an area is, the more valuable properties are and the more threatened people are in a certain area, the more incentive they will have to protect themselves against aggressions and therefore, also, the more recourses would they allocate to fulfil that need.

As named areas are risky places, property values are therefore also lower than what they would be if those risks did not exist. People have an incentive to invest and live in other, less risky areas.

Insurers and protection agencies have incentives to cooperate against the intruder and pinpoint retaliation against them. That would reduce risks and increase property values, wages and prosperity.

The government apparatus is clumsy machinery against free market institutions. Producing consumer goods and services by government owned organizations and through taxation, does not stand a chance in their effectiveness of the utilization of resources and in their quality of output compared to free market institutions.

Thanks to Hans-Hermann Hoppe, a so called typical public good has been instead concluded to be a private good.

Because of this, consumers and the free market, have every incentive to spend and invest in a national defence.

As teaching of economics in our universities are objective and true, this will be common knowledge among economists in a few years time. Honesty and truthfulness are teacher’s lodestar (joke).

* A quote on public goods from an interview with Hans-Hermann Hoppe:

“The mistake of public goods theory is to presume that economists can detect that something that is needed but is not being provided by markets, either at all or in sufficient quantity. But this is just an observation that we don’t live in a Garden of Eden. At all times, people want goods and services that do not exist or are unaffordable. But just because we want something to be made available does not mean that it should be made available.

If we have to consult with economists to discover whether there are not enough lakes and roads, shouldn’t we also check with them to see if are too many tennis shoes and toothpaste brands on the market? Ultimately, public goods theory is a rationale for central planning and an attack on the market itself. The real question is whether it is economically beneficial and economically justified to override voluntary transactions and market verdicts, and forcibly transfer property from private owners to the state. I don’t think it ever can be justified.”


** To occupy unpopulated and worthless land would be aggressions against people wanting, in the future, to visit or to make use of those areas.

Björn Lundahl
Göteborg, Sweden

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