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Source link: http://archive.mises.org/6485/private-defense-is-no-laughing-matter/

Private Defense Is No Laughing Matter

April 9, 2007 by

According to conventional wisdom, writes Robert Murphy, even though capitalism is better than socialism when it comes to varied products such as hot dogs, blue jeans, and laptops, nonetheless we need government central planners to provide us with military defense. In fact, this is so “obvious” to most people that the opposite view — namely, that a free market in defense would work just fine — is cause for ridicule. So let us rethink fundamentals. FULL ARTICLE

{ 79 comments }

Number Six April 9, 2007 at 8:59 am

I remember that article [referring to The Onion's pardoy]. While I do not advocate state-sponsored redistribution of wealth (and such a program would not be a “free market” one by any means), giving each Iraqi $3,544.91 would almost certainly have yielded better results than whatever resulted from the government-sanctioned “rebuilding” plan.

ilsm April 9, 2007 at 9:38 am

Where have you been since 1947.

The arsenals were privatized in 1947. The idea was private industry and profit motive could deliver better stuff than the military arsenals.

What we have is PAC’s selling jobs to congresspersons, high salaries, larger than would be allowed and bonuses.

Thiere is no performance and huge cost overruns to deliver the best military money can buy.

With little regard for whether it works or would be useful in a plce like Afghanistan.

There is no Soviet Union, yet we spend, in ral terms, what we did on the private depots in 1970.

Person April 9, 2007 at 9:41 am

Some minor quibbles:

1) The Onion doesn’t really “hate” US foreign policy; it’s a satire magazine that criticizes extremists on all sides. It would just as well criticize peace-and-love hippies.

2) Critics of Noah concede far too much. Even Noah’s reductio is flawed. For example, he mocked the idea that, “hey, nationalized defense means that people more at risk of attack get a subsidy!” In reality, that *is* a disadvantage of nationalized defense: disconnect defense prices from defense costs. That’s not really a dig on Murphy though; you don’t have to criticize every error someone makes, every time!

billwald April 9, 2007 at 10:33 am

Many large cities already have a private defense – the Mafia.

RogerM April 9, 2007 at 10:49 am

I don’t think you should blame the military for CPA’s incompetence. The military performed brilliantly in defeating Saddam Hussein. To win the peace, they had decided to use Iraq’s huge military as an adjunct. Paul Bremer, not the military, disbanded the Iraqi military, which stunned the US military and left them without a plan for maintaining order in Iraq. As for the enormous waste of money and incompetence, that was all due to the civilian CPA under Bremer, not the military.

RogerM April 9, 2007 at 11:23 am

I find the arguments for private defense interesting on a theoretical level, but the debate is unfortunately one-sided. We have historical evidence for the successes and failures of state-owned military, while the arguement for private military is largely theoretical. The potential successes and failures of a private military are theoretical. It might work; it might not. But comparing theoretical utopias, such as socialism, with a real world system is hardly fair or honest. I don’t fare well when compared to my wife’s ideal man, but fortunately, I don’t compete with ideal men for her attention.

Jim A Syler April 9, 2007 at 11:56 am

Robert: You obviously don’t read the Onion much. The irony in the article is that that’s the last thing that USG is likely to do, not that it wouldn’t work. It’s eminently reasonable, therefore, the chance is zero that it would be actually implemented.

Lay off the Onion folks. They’re pretty good guys. They’re not exactly libertarians, but they’re critical of pretty much everything, which is close enough.

D. Saul Weiner April 9, 2007 at 12:11 pm

Roger,

Who is the commander in chief of the military?

Paul Edwards April 9, 2007 at 1:20 pm

Roger,

“But comparing theoretical utopias, such as socialism, with a real world system is hardly fair or honest. I don’t fare well when compared to my wife’s ideal man, but fortunately, I don’t compete with ideal men for her attention.”

What we do, or should do, when we compare socialism to free markets, is to compare them theoretically, through the lens of praxeological analysis. When we do this, we see that socialism, statism, and violent intervention in voluntary, non-aggressive actions of others are both necessarily sub-optimal in terms of social utility – the economic consideration – and that these things cannot be morally justified – the ethical consideration. Therefore, the theoretical free market beats the theoretical state, hands down in all considerations.

Once we realize this, we can take it one step further and realize this: since praxeology is the study of what must be true, practically, given what we know to be true about the practical nature of humans and human action, that all theoretical conclusions derived here, are also practically true; necessarily. So this means that in practice, a completely free market must necessarily be better than a market hampered in any way by coercive intervention. We know this is true and we do not need to wait for or reference any historical examples to know this. This is called a priori knowledge, a concept Mises handed to us on a silver platter. Rothbard and Hoppe have further elaborated on a priori knowledge in this field and made it plainer for us all to see. The upshot: there is no way we can justify the state, this is a practical as well as theoretical matter.

RogerM April 9, 2007 at 2:52 pm

Paul: “What we do, or should do, when we compare socialism to free markets, is to compare them theoretically, through the lens of praxeological analysis.”

I agree, but it’s also easy to make mistakes in praxeological analysis by building on false premises and making logical leaps, which I think anarchists do a lot of. It’s only those mistakes in logic that make anarchism so appealing and seem morally superior.

In addition, anarchists never stop at a priori analysis, but always add anecdotes and historical accounts of government failure. But unless you argue that anarchism would produce a utopia, it must have some defects. What are they? No one knows because no one has practiced it for sufficient time in a large enough society to tell.

Finally, how can you tell if the premises of an arguement are valid or not? Only by comparing them with the real world.

Matt Robare April 9, 2007 at 3:57 pm

I tend to get the feeling that if some resource rich country changed to operate under a free market system it would never be involved in an international conflict partly because it could no longer be defined as a nation-state and partly because even the most insane militarists are not going to waste money on conquering land for resources that could be bought at competitive prices.

Paul Edwards April 9, 2007 at 4:00 pm

Roger,

“I agree, but it’s also easy to make mistakes in praxeological analysis by building on false premises and making logical leaps, which I think anarchists do a lot of. It’s only those mistakes in logic that make anarchism so appealing and seem morally superior.”

The beauty of praxeology is that while mistakes can be made in analysis or premises, it is also possible to iron them out via further praxeological analysis. So let’s say Mises makes a mistake or overlooks something. Not to worry, other praxeologists can come along using the same methods and discover this and point out what principle and line of reasoning they are applying to discover and correct the mistake or inconsistency. And if Rothbard makes a mistake, Block is there to show the flaw, and so on. There can be disagreement, but all agree that in the realm of praxeology, all that separates a valid conclusion from the others is a very limited number of premises, and understanding of human action, and a bit of logic.

“In addition, anarchists never stop at a priori analysis, but always add anecdotes and historical accounts of government failure.”

This is because it is interesting to show real life instances that demonstrate the truth of an a priori economic principle. The anecdote can never prove or disprove the correctness of the analysis, however.

“But unless you argue that anarchism would produce a utopia, it must have some defects. What are they? No one knows because no one has practiced it for sufficient time in a large enough society to tell.”

Well, it would be imperfect because it would still be based on a population of inherently imperfect humans. But its flaws would be the result of humans failing to omnisciently implement perfect justice in its optimal, if not perfect private courts. This is not a claim against anarchy really, but a claim against the imperfection of humans. While it can only get so good, anarchy is as good as it gets.

“Finally, how can you tell if the premises of an arguement are valid or not? Only by comparing them with the real world.”

What premises to you find dubious or questionable? In the world of praxeology, there is nothing that is not already obviously true that requires empirical testing. It all hinges on an Austrian understanding of human action.

Paul Edwards April 9, 2007 at 4:05 pm

Matt,

I agree. I think people are most sane, when their decisions put only their own personal possessions and resources on the line, rather than those of the general tax-payers’.

Allen Weingarten April 10, 2007 at 8:27 am

Robert Murphy shares the view with those who argue against a free market in industry, that the same rules should apply in the military as for industry (such as for health care). He might say that we need to be effective in both spheres, and are faced by threats in both as well. Yet essentially, the military (and government) has a destructive role, while industry has a productive role. The former has to protect us from aggression, while the latter, once protected, can be developmental. As Washington said “Government is not reason or eloquence. It is force. Like fire, it is a dangerous servant and a fearsome master.” Thus, government is to be used sparingly, as a last resort, while industry requires freedom, of which there is no oversupply.

This does not deny the poor performance of the governmental process, even when it subcontracts to industry. However, the need to fund and fight for common protection is not met by freedom, but by coercion.

Francisco Gutierrez April 10, 2007 at 8:43 am

The argument for the distinction between defense and health care that this article dismisses is the utilitarian efficiency-based argument. The argument that I did not see mentioned or dismissed is the rights-based argument.

The reason why some minarchists believe that defense should be government run while health care should be private has nothing to do with efficiency, it has to do with individual rights and the use of force. According to this argument, individuals form governments amongst themselves to protect and secure their natural rights. Rights can only be violated by the use of force by other individuals, so the use of force has to be eliminated from the realm of possible interactions between individuals and this elimination is enforce by government. In contrast, health care is the protection of individuals from the effects of nature, which is not an acting agent that can violate an individual’s rights. So it is not a legitimate function of government to step into this role. From this point of view, rights have a special place between all possible economic goods individuals may seek to obtain, and government is the institution whose job is to protect those rights.

Paul Edwards April 10, 2007 at 12:16 pm

Allen,

I have a few points in response to some of yours.

“Yet essentially, the military (and government) has a destructive role, while industry has a productive role.”

I think the state and its military do indeed play a purely destructive role, but this is not because the role of defense is destructive. Defense is as constructive as any other morally justifiable economic pursuit. The state is destructive because it is inherently aggressive, and all things it does, it does because it was able to initiate force against non-aggressors.

“The former has to protect us from aggression,”

Protection from aggression is a good and just action. It is not at all destructive. It is aggression alone which is destructive and it is the state alone which is in its essence, an aggressive entity. It is therefore a contradiction to invoke a destructive aggressive entity such as the state in the pretext of providing the valuable service of protection from aggression.

” while the latter, once protected, can be developmental.”

Protection from aggression and all other free market, non-aggressive, non-fraudulent activities all have in common that they allow for further advancement in human life. Economically, they are the same class of activity.

“As Washington said “Government is not reason or eloquence. It is force.”

It is worse than this. It is aggression – the initiation of force. The state cannot be justified.

“Like fire, it is a dangerous servant and a fearsome master.”

This is because the state in fact, never is a servant. It is a violent, aggressive master constantly scheming ways to dupe its ignorant subjects into believing it is their servant. In characterizing the state as a servant, Washington performed a huge disservice to his country. Bummer; we all thought quite highly of him.

“Thus, government is to be used sparingly, as a last resort, while industry requires freedom, of which there is no oversupply.”

Sparingly, as in not at all.

V Harris April 10, 2007 at 10:38 pm

Particularly regarding the defense of territory, the free-rider problem is insurmountable. In the long run, private defense efforts cannot resist war as waged by the autocratic conqueror. An autocratic conqueror acquires many of the accoutrements of war at little direct cost, and builds loyalty through an elaborate spoils system. Private actors have no such luxury, instead bearing the full cost of war–including the cost of recruitment from among reluctant property owners–each who calculates their own expected cost/benefit of war. Many owners calculate the cost too high, or the benefit too low, to fight the war–instead yielding to the conqueror. This problem can only be mitigated by the compulsory contribution to the war effort from all owners–allowing for no free-riders. Note that this is not to say that the compulsory system will prevail against the Conqueror either–as such a system still suffers from all the associated problems of socialized war.

TLWP Sam April 11, 2007 at 8:42 am

Talking about national defence and governments . . .

Do you know that there’s a certain government regulation that applies to today’s military personnel that can prevent them from being buried in the National Arlington Cemetary?

Allen Weingarten April 11, 2007 at 9:55 am

Paul Edwards writes “Defense is as constructive as any other morally justifiable economic pursuit.” This wording sounds reasonable, but does not address the essential disparity between the non-productive area of government, and the productive area of industry. It is clear that if someone starts a fire at your business, you must stop him, and put out the fire. From this perspective you are engaging in a constructive activity. Yet note, no more items are produced by your fighting the perpetrator, or by putting out the fire.

Any economist knows the essential difference between the expenditures for protection, and the expenditures for production. If Paul had noted this difference, he would not have spoken solely of the fact that both activities are constructive. Throughout history, it has been found that first one must protect his turf, for only in that context can he engage in developmental activities. One can employ the same words to describe protection and production, but the dichotomy remains.

A great development in game theory occurred, in areas such as linear (or non-linear, or dynamic) programming, by differentiating between the constraints and the objective function. Here, the analog is that government constitutes the constraints, while culture (including industry) constitutes the objective function. It is solely the objective function that measures the payoff, while it is solely the constraints that make this permissible. By not noting the difference, but speaking only of the need for both, one ignores what must be done by each. Again, the need to fund and fight for common protection is not met by freedom, but by coercion.

Does Paul not comprehend the difference between the pain of paying for a ticket to watch a game, and the enjoyment of actually watching it? Does he try to maximize both (or to minimize both) since both are constructive activities?

Paul Edwards April 11, 2007 at 12:10 pm

V Harris,

“Particularly regarding the defense of territory, the free-rider problem is insurmountable. In the long run, private defense efforts cannot resist war as waged by the autocratic conqueror. An autocratic conqueror acquires many of the accoutrements of war at little direct cost, and builds loyalty through an elaborate spoils system. Private actors have no such luxury, instead bearing the full cost of war–including the cost of recruitment from among reluctant property owners–each who calculates their own expected cost/benefit of war.”

For a moment, imagine this scenario: When an official head of some aggressive state demonstrates an intention to invade the property of those protected by a private insurance company, this company notifies the head of state, and his generals, that they are invited to defend themselves at their own trial. The charges: intent to commit military aggression with the likely result of death and destruction of the company’s policy holders. The penalty for a guilty verdict is death. The implementation of the guilty verdict is assassination via any method known to private industry.

Now. Put yourself in the shoes of this aggressive head of state or his generals. Is it really worth it to you to follow through with your aggressive plans? Even Hitler resisted the temptation of Switzerland. It is easy to understand why, when one realizes that it was Swiss policy to target leaders of aggressive states in its defense. It’s a great lesson – one that has great application in private insurance and defense in anarchy.

“Many owners calculate the cost too high, or the benefit too low, to fight the war–instead yielding to the conqueror.”

Assassination is quite inexpensive in the grand scheme of things. The threat of which would usually be enough to hold back any army directed by the few cowards who call men to war, but do not participate themselves.

“This problem can only be mitigated by the compulsory contribution to the war effort from all owners–allowing for no free-riders. Note that this is not to say that the compulsory system will prevail against the Conqueror either–as such a system still suffers from all the associated problems of socialized war.”

I think if one keeps an open mind, he will recognize that the private market in defense would be so much more resourceful, efficient and intelligent in its approach to state aggression, than a state ever could be that we would be very pleasantly surprised at the results and the savings. Not to mention, our approach could finally be fully morally justified.

Paul Edwards April 11, 2007 at 12:44 pm

Alen,

Paul Edwards writes “Defense is as constructive as any other morally justifiable economic pursuit.”

“This wording sounds reasonable, but does not address the essential disparity between the non-productive area of government, and the productive area of industry. It is clear that if someone starts a fire at your business, you must stop him, and put out the fire. From this perspective you are engaging in a constructive activity. Yet note, no more items are produced by your fighting the perpetrator, or by putting out the fire.”

There are innumerable productive activities associated with production that are both necessary for production to continue and yet do not directly result in any more items produced. Maintenance, sweeping the floor and putting tools in their correct place at the end of a job are such activities. Yet all of these activities must be counted as productive because failing to perform them would eventually lead to a reduction in production. Defense is of this class of productive activities; it is nothing special from an economic perspective.

“Any economist knows the essential difference between the expenditures for protection, and the expenditures for production.”

There is no economic difference. All necessary aspects of a business enterprise are productive, from actual assembly line production to sweeping the floor, renting a building, paying for distribution and sales networks, advertising, maintenance, fire protection, insurance and recruitment. It is all productive, as is defense.

“If Paul had noted this difference, he would not have spoken solely of the fact that both activities are constructive. Throughout history, it has been found that first one must protect his turf, for only in that context can he engage in developmental activities. One can employ the same words to describe protection and production, but the dichotomy remains.”

The dichotomy is unimportant from an economic and ethical standpoint. You are not saying that the state should sweep our floors or paint our buildings are you? So then why should we conclude the state should provide us with insurance and defense?

“A great development in game theory occurred, in areas such as linear (or non-linear, or dynamic) programming, by differentiating between the constraints and the objective function. Here, the analog is that government constitutes the constraints, while culture (including industry) constitutes the objective function. It is solely the objective function that measures the payoff, while it is solely the constraints that make this permissible. By not noting the difference, but speaking only of the need for both, one ignores what must be done by each. Again, the need to fund and fight for common protection is not met by freedom, but by coercion.”

I have not studied game theory, but I have studied a lot of praxeology in terms of economics and ethics, and also in terms of some specific areas related to these such as private defense, insurance and the nature of men with political power. This leads me to believe that the free market is orders of magnitude more capable of providing what people want and need over the aggressive and monopolistic state. This is a universally true principle applicable as much in defense as in any other field of human action. Politicians respond well to (especially justified) threats to their personal property, especially their person, because they are particularly cowardly thieving and murdering bastards. I think this is understood well enough to act on and capitalize on quite soundly by a private firm.

“Does Paul not comprehend the difference between the pain of paying for a ticket to watch a game, and the enjoyment of actually watching it? Does he try to maximize both (or to minimize both) since both are constructive activities?”

Paul doesn’t understand this question. I wonder if Alen could come again in a different way, and if it involves a rhetorical question again, could he also explicitly state his point as well.

Allen Weingarten April 11, 2007 at 1:17 pm

Paul Edwards responds to my question, of his being unable to differentiate between two fundamentally different processes, by “Paul doesn’t understand this question. I wonder if Alen could come again in a different way, and if it involves a rhetorical question again, could he also explicitly state his point as well.”

One of the fundamental differences that a man knows is that there are some things that he *must* do (such as survive) and other things that he can *choose* to do (such as flourish). Rather than recognize this difference, in say government versus culture, Paul employs the fact that there is no absolute difference between such fundamentals.

OK, let me apply his reasoning. Paul does not want compulsion, but wants freedom. I then respond that there is no absolute difference between these categories (no more than between *must*, and *choose*). hence there is no difference between a state of tyranny and one of anarchy — after all, they are both states.

My point is straightforward. We learn about fundamentally different categories in life, knowing that there are no absolute differences between them (such as man/woman or must/choose). To deny the reality that these must be treated differently is to employ an ad hoc method of reasoning.

Michael A. Clem April 11, 2007 at 1:40 pm

Allen, from your perspective, insurance isn’t productive, either, since it’s a form of protection. Yet I would still rather have a private insurance industry instead of government acting as “insurer”, partly because they don’t have a clue as to how insurance works, and partly because even if they did, they would still not have the incentives the private industry has to handle it properly.

Paul Edwards April 11, 2007 at 6:40 pm

Alen,

“One of the fundamental differences that a man knows is that there are some things that he *must* do (such as survive) and other things that he can *choose* to do (such as flourish). Rather than recognize this difference, in say government versus culture, Paul employs the fact that there is no absolute difference between such fundamentals.”

I’m just saying whatever the difference; it isn’t relevant to our discussion. How much of what we think we must do, is actually what we choose to do? The fact is some of us might well be able to survive homeless and living on other people’s handouts, scraps and garbage. But we do not consider this an option at all. To us, we “must” go to work to pay the mortgage and buy groceries. This “must do/choose to do” distinction is simply not relevant to our discussion.

“OK, let me apply his reasoning. Paul does not want compulsion, but wants freedom. I then respond that there is no absolute difference between these categories”

Is this your position or are you being ironic for rhetorical purposes? I don’t recall you claiming there is no difference between compulsion and freedom. If this is your position, then we are fundamentally too far apart to discuss finer points; and if you’re being ironic, I’ll have to tell you it is not helping me to keep clear what you mean to say.

” (no more than between *must*, and *choose*). hence there is no difference between a state of tyranny and one of anarchy — after all, they are both states.”

Hmmm. At this rate, it would be crazy for me to again ask you to clarify. LOL!

“My point is straightforward.”

Then I admit I am dense. But I’m still trying to follow.

“We learn about fundamentally different categories in life, knowing that there are no absolute differences between them (such as man/woman or must/choose). To deny the reality that these must be treated differently is to employ an ad hoc method of reasoning.”

I think it is useful to understand when and why a difference between two things is significant and when it is not significant. In the case of our discussion I claim you are observing a distinction that strikes me as irrelevant to our argument. Analogies are confusing in this context. A direct response to why we don’t need the state to sweep the floors of our manufacturing plants, but we do need the state to protect us from aggression would be more helpful. As you can see, the two are very similar in that neither contributes directly to production, and yet both are quite necessary for production to continue. How is it that the state is not required to provide both services, only the one?

Paul Edwards April 11, 2007 at 9:03 pm

Allen,

Sorry for misspelling your name two out of three times. Why is Alan spelled with one l and Allen with two? Never mind, i’ll just try to do better from now on.

Allen Weingarten April 12, 2007 at 8:34 am

Michael Clem notes that from my perspective “insurance isn’t productive” yet it is best handled privately. That is true, and I never said that whatever isn’t productive should be handled by the government, nor that whatever is productive should be handled by industry. Michael could note, as did Paul Edwards, that with regard to government there is no absolute partition between its functions and those of culture. Such is the case with all dichotomies, such as man/woman, war/peace, or tyranny/anarchy. The Chinese were very clear about this, so that their symbol for yin/yang had a bit of yin in the yang, and a bit of yang in the yin. If one claims that unless a partition is absolute (such as occurs in mathematics) one cannot differentiate between such components, let him do so across the board, and be unable to differentiate between coercion and liberty.

Paul says that such differentiation as “must do/choose to do” is not pertinent in our discussion as though my example were intended to be the object of discussion. However, it was brought up to demonstrate Paul’s method of reasoning for rejecting a partition between protecting against aggression, and being productive.

Paul then responds to my statement that there is no distinction between compulsion and freedom, as being ironic or rhetorical. Perhaps I have not been clear about the lack of absolute partitions. If a man holds a gun to your head, and you hand him your wallet, you are being compelled. Yet within this compulsion, you could have used your right hand or your left hand, or done it quickly or slowly, so you were operating with some freedom. Again, this is not an ironic or rhetorical point, but a simple fact of existence. When Paul requires an absolute distinction between the role of government and the role of culture, I ask him to set that requirement across the board, and conclude for example that we cannot differentiate between men and women. Does Paul now reply that it is irrelevant to speak about men and women, for that “distinction is simply not relevant to our discussion.”

Paul correctly notes that we need to recognize when a distinction is significant and when it is not. Here, I claim once again, that one of the most fundamental distinctions in life is that between survival and flourishing. Unless there is the former, one cannot achieve the latter, yet the purpose is not the former, but the latter. *This difference in the purposes of the components in a dichotomy constitutes what is most important for making a distinction.* I thought that the example of constraints/objective function clarified the point. Yet if that is unfamiliar to the reader, I would note that even plants and animals function accordingly. So does the schoolboy, who has to resist bullies, in order to learn in class? Does Paul now say that it is irrelevant to speak about bullies and learning, for that “distinction is simply not relevant to our discussion.” Perhaps we need to return to kindergarten, and learn that there are boys & girls, teachers & pupils, leaders & followers, schooldays and vacation days. After such dualities are mastered, in third grade we can fathom the distinction between government and culture.

Paul asks for clarity as to why the state is needed to protect us from aggression. This is because it is geared to the use of power and force. It takes a different heritage and training to knock down the sand castle of an adversary, than to build one. I recommend “The Magnificent Seven” for illustrating the difference between the gunmen and the peasants.

Finally, I cannot forgive someone for misspelling my name, as it is an act of aggression to be handled by government. So may Pall Ed Warts be so chastised.

Alen

V Harris April 12, 2007 at 8:53 pm

Suppose all of North America enjoys near anarchistic nirvana while an autocratic belligerent rules all of South America. The Panama Canal is, of course, owned by private interests — as is all the territory on the North American side. Companies consider offering private defense insurance. They find little interest from owners with property located in the Canadian Provinces, but greater interest from owners the further south their property is located. The owners of the canal, along with owners of property bordering the canal have great interest. However, since there is such a small base across which to offer such insurance, the rate would be very high, meaning even though the interest in the insurance were high, the takers would still be few. Similar problems exist when the premium is adjusted for calculated risk. Although that would increase base of insured people, it would still be very high for those with high risk. This hypothetical illustrates how the free-rider problem might prove insurmountable. Those with high-risk property bear virtually all the cost of private defense while those with low-risk property bear little cost but enjoy equally the benefits. The market solution to this problem is that the high-risk property either ends up in the hands of someone willing to pay the price to defend his property rights, or, in the event of aggression, the property is ceded to the belligerent. This process continues until an equilibrium is reached where there is a sufficient at-risk owner base to finance the private defense. Finally, regarding assassination, if it can be accomplished, it might solve the problem, but it just as well might make the problem worse. Either way, the insurance company will be obligated to provide for the private defense of the property, and in the event of default, will be on the hook for the full replacement value of the expropriated property and possibly lost revenue, etc. Believe me, when private insurance companies write policies against loss of the entire Panama Canal, the premium won’t be peanuts, no matter how simple you consider the ‘solution’ to protect against aggressive warmongers.

Paul Edwards April 12, 2007 at 8:56 pm

Allen,

“Paul asks for clarity as to why the state is needed to protect us from aggression. This is because it is geared to the use of power and force.”

In fact, the state is geared to the initiation of force against its subjects first and foremost. It aggresses against its subjects, and follows this behavior up by asking its subjects to trust it to protect them from the aggression of others. And when it fails to do this, its subjects, half-awake from its ignorant slumber, for a fleeting moment wonders why.

“It takes a different heritage and training to knock down the sand castle of an adversary, than to build one.”

LOL. Perhaps. I just prefer these people, whatever their heritage, to protect me on a mutually voluntary, contractual basis, and not on the threat of violence against me should i decide to employ someone else for this service and not them.

“I recommend “The Magnificent Seven” for illustrating the difference between the gunmen and the peasants.”

I recommend Hoppe’s “A Theory of Socialism and Capitalism” illustrating the consequences of the unjustifiable state.

Paul Edwards April 12, 2007 at 9:40 pm

V,

“Suppose all of North America enjoys near anarchistic nirvana while an autocratic belligerent rules all of South America. The Panama Canal is, of course, owned by private interests — as is all the territory on the North American side. Companies consider offering private defense insurance. They find little interest from owners with property located in the Canadian Provinces, but greater interest from owners the further south their property is located. The owners of the canal, along with owners of property bordering the canal have great interest. However, since there is such a small base across which to offer such insurance, the rate would be very high, meaning even though the interest in the insurance were high, the takers would still be few. Similar problems exist when the premium is adjusted for calculated risk. Although that would increase base of insured people, it would still be very high for those with high risk.”

Check.

“This hypothetical illustrates how the free-rider problem might prove insurmountable. Those with high-risk property bear virtually all the cost of private defense while those with low-risk property bear little cost but enjoy equally the benefits.”

There are several weaknesses in this argument, which I will point out here, but preface my answer by pointing out that there are volumes of better formulated answers than mine.

1. There is a thriving actuarial business which helps competing insurance companies to provide coverage at a competitive price and yet at a profit. Together, these people do their very best to not over-charge one group to the benefit of another. Competition ensures that if a particular class of risk is unfairly treated to the benefit of another, a competing firm will out-bid and take away business of this unfairly treated insurance customer.

2. The high risk property owners will and should pay more for their high risk coverage. This is not a flaw in the free market in insurance; it’s a highly redeeming feature. I’m presuming you are not a socialist and can see my point.

3. In a free market, there is no such thing as low risk and high risk insurance risks getting merely equal benefit for disparate premiums. There is a cost associated with being a high risk. The insurance company is much more likely to pay out if you are high risk. This concept applies to smokers and non-smokers, sky-divers and non-skydivers etc.

4. Insurance companies will encourage high risk private property owners to acquire and train themselves on effective weapons of defense. It will reduce their premiums if they are able to defend their property more effectively.

5. Defense costs will be justifiably incident only on the property owner and his customers. Not on some poor shmuck living in Canada who has no interest in the Panama Canal, except that he likes their bananas. And, his payment for these bananas will in part be his contribution to the defense of the Panama Canal.

“The market solution to this problem is that the high-risk property either ends up in the hands of someone willing to pay the price to defend his property rights,”

Presto: this is THE solution.

” or, in the event of aggression, the property is ceded to the belligerent. This process continues until an equilibrium is reached where there is a sufficient at-risk owner base to finance the private defense.”

If the insurance companies are going to expect to get any repeat business in defense, they better have some ideas of how to recover their losses due to this. I’ve mentioned my preferred approach. It beats fighting a war.

“Finally, regarding assassination, if it can be accomplished, it might solve the problem, but it just as well might make the problem worse.”

I fail to see how it could make the problem worse. Why is it that just when justice and defense gets this interesting and satisfying that we want to turn back and rely on the mass-murdering state to not even half-assedly do the job?

“Either way, the insurance company will be obligated to provide for the private defense of the property,”

I tend to think it would be a team effort between the insurance company and the property owners.

” and in the event of default, will be on the hook for the full replacement value of the expropriated property and possibly lost revenue, etc.”

In this case, I am even more certain they will protect their investment to the full extent of their extensive capabilities.

“Believe me, when private insurance companies write policies against loss of the entire Panama Canal, the premium won’t be peanuts, no matter how simple you consider the ‘solution’ to protect against aggressive warmongers.”

The premiums should not be peanuts. And the volume of business that goes through the Panama Canal also is not peanuts. It’ll work its way out. They could handle the Panama Canal insurance job in anarchy, most certainly.

V Harris April 13, 2007 at 7:58 am

The question at hand is the efficacy of private vs socialized defense of private property rights, is it not? From the perspective of private property owners in Canada, bananas will still flow from, and ships will still flow through, Panama, regardless of whether it is controlled by the rightful owner or the warmongering autocrat. Thus, the only ‘interest’ the Canadian anarchist has in the nature of the ownership of Panama is in its worth as an anarchistic buffer zone between the Canadian and the South American autocrat. This ‘buffer’ premium is the only premium the Canadian might be willing to pay. Being located so far from South America, even when inexpensively priced, it likely will have few takers. This leaves the high-risk owners and the insurance company as those who bear the brunt of the cost of defending that buffer-zone property. When analyzing the cost-benefit ratio of defending a particular lot of property, the owner and insurance company will have to decide in each case whether the cost of defending the property against the aggressor is greater than the value of the property. If the cost is too high, the property is simply ceded to the aggressor and the insurance company settles with the previous owner. As long as the autocrat carefully chooses which property to expropriate next then those who are ‘safe’ have low risk (and low or no premiums) while the ‘targeted’ property owner has unacceptably high risk, ceding the property rather than bear the cost to defend it. The problem with private defense is this cost/benefit analysis. On the other hand, the problem with socialized defense is the ‘defense at any cost’ mindset. Neither is a good solution to defense. But at least the socialized defense method does defend borders, while in anarchism, there being no ‘borders’ to speak of, only private lots are defended by their owners/insurers — while all else enjoy the benefits of the buffer zone (while it lasts). This free-rider problem, I believe, is insurmountable with respect to private defense in anarchism.

Allen Weingarten April 13, 2007 at 10:49 am

Paul:

I characterized government as the communal mechanism for protection, in contrast with culture as the enhancement of the individual. This was grounded in history, for there has always existed a role for such protection against foreign and domestic aggression, in contrast with a culture, which when given that protection, has been able to develop. It was also grounded in the theory of the dichotomy of survival/flourishing, which I maintained as fundamental to life.

Now you may choose to characterize things differently, and say “the state is geared to the initiation of force against its subjects”. In so doing, you are presenting a different perspective. Yet note that you are then not examining the view I presented, but offering a different one entirely. It is as though I were building on the distinction between a man and an animal, while you took the view that they were essentially the same. Now you need not address my position, so let us instead address yours.

If I understand you correctly, the government is essentially aggression against its people. Let us put aside the problem this raises as to why such an organization has existed throughout history (since it provides no useful role) and take as given its existence as a purely destructive mechanism. Then your argument should be directed against Robert Murphy, who would (if I understand him correctly) treat government and culture in the same manner. Here, his view of doing things covered by both enterprises should conclude:

Government is aggression, with no useful role;
Government and culture (including industry) are the same;
Therefore culture has no useful role, and should also be abolished.

Alen Whine-Garden

Paul Edwards April 13, 2007 at 12:42 pm

V,

“The question at hand is the efficacy of private vs socialized defense of private property rights, is it not?”

I like to think the question also involves ethical considerations as well, since the question of the defense of private property is an ethical question. Correct?

“From the perspective of private property owners in Canada, bananas will still flow from, and ships will still flow through, Panama, regardless of whether it is controlled by the rightful owner or the warmongering autocrat.”

OK. But part of the price of control of the canal is its defense right? Ultimately, if the canal is to turn a profit, it must charge enough to cover all costs, including defense costs, including insurance costs, if any.

“Thus, the only ‘interest’ the Canadian anarchist has in the nature of the ownership of Panama is in its worth as an anarchistic buffer zone between the Canadian and the South American autocrat.”

He may have even less interest in it than that, but OK.

“This ‘buffer’ premium is the only premium the Canadian might be willing to pay.”

This buffer is a geographical fact of reality. I doubt he would be willing to pay for what he has reasonable cause to think he can have for free, unless you are talking about as a cost of doing business such as buying bananas that went through that canal.

“Being located so far from South America, even when inexpensively priced, it likely will have few takers. This leaves the high-risk owners and the insurance company as those who bear the brunt of the cost of defending that buffer-zone property.”

I agree. But, on the other hand, it leaves the Canadian to bear the brunt of the cost heating his house in the winter. Should the South Americans be asked to subsidize his heating bill?

“When analyzing the cost-benefit ratio of defending a particular lot of property, the owner and insurance company will have to decide in each case whether the cost of defending the property against the aggressor is greater than the value of the property.”

Yes! I like this kind of thinking. Is it really worth it – let the market decide, and let those whose will profit or lose from this speculation also take full responsibility for the costs.

“If the cost is too high, the property is simply ceded to the aggressor and the insurance company settles with the previous owner.”

That’s a possible outcome I suppose. Not one I would expect though.

“As long as the autocrat carefully chooses which property to expropriate next then those who are ‘safe’ have low risk (and low or no premiums) while the ‘targeted’ property owner has unacceptably high risk, ceding the property rather than bear the cost to defend it.”

I just think this underestimates the financial resources, and hence general resources of insurance companies needed to defend such a (presumably) valuable and profitable – that is productive – geographical location. Also, the safety of the lives of the aggressor and that of his conspirators is highly reduced. He can’t get insurance himself because of his aggressive nature. While private courts may be putting contracts out on their lives, insurance firms are also definitely not providing him with insurance and protection. That just sounds like a scary life.

“The problem with private defense is this cost/benefit analysis. On the other hand, the problem with socialized defense is the ‘defense at any cost’ mindset. Neither is a good solution to defense.”

I agree with you on the socialized defense, but differ with you regarding private defense. The problem is we tend to apply the state model of “defense” to the private world. Private defense would operate nothing at all like state defense does. State defense is mainly not defense at all but rather aggression. Private defense would be defensive, cost sensitive, and confrontation avoiding in tendency, because it would always be private investment on the line, with costs that cannot be distributed to disinterested tax-payers.

“But at least the socialized defense method does defend borders, while in anarchism, there being no ‘borders’ to speak of, only private lots are defended by their owners/insurers — while all else enjoy the benefits of the buffer zone (while it lasts).”

We differ on our assessment of the benefits of the existence of the state and their borders. I disagree that it is the existence of states and their borders that provide the buffer zone between violent South America and more peaceful North America.

“This free-rider problem, I believe, is insurmountable with respect to private defense in anarchism”

I think the free rider problem is a pure non-issue. But that is at least a several page essay to go through. I recommend you pick up some Austrian essays on the topic and study them with an open mind. They will give you new-found belief in the validity and justness of the free and unhampered market.

Paul Edwards April 13, 2007 at 1:20 pm

Allen,

“I characterized government as the communal mechanism for protection, in contrast with culture as the enhancement of the individual. This was grounded in history, for there has always existed a role for such protection against foreign and domestic aggression, in contrast with a culture, which when given that protection, has been able to develop. It was also grounded in the theory of the dichotomy of survival/flourishing, which I maintained as fundamental to life.”

I think it is far more accurate and useful to characterize government – the state – as an aggressive geographically based monopoly of jurisdiction. The key is that the state claims a legitimate right to initiate and threaten violence against its subjects including those who have not initiated violence against anyone else. Taxation is one of the fundamental outcomes of this. This is the principle on which the state is founded, and this is a principle of legitimized and institutionalized crime, made legitimate by false logic and age-old propaganda. The state is injustice. I can elaborate adnausium if you wish, but this has already been clearly expounded on by many great writers including Rothbard, Hoppe, and Block.

That we confuse the aggression of the state with justified violent defense is a result of the false logic and propaganda of which I just spoke. There is no real or useful similarity between the two. They are in fact opposites. The state is by its essential nature an aggressive criminal organization with a very thin veneer of legitimacy given to it by its court and academic mouthpieces.

“Now you may choose to characterize things differently, and say “the state is geared to the initiation of force against its subjects”. In so doing, you are presenting a different perspective.”

I think it is necessary to have a clear view of the nature of state so that the contradiction becomes starker to us when we start to speak of it as an entity that also purports to protect us from aggression. The state is an entity that is aggressive against us by its very nature. When this becomes plain to us, many other things that were blurred before start to become very clear as well.

“Yet note that you are then not examining the view I presented, but offering a different one entirely.”

Yes. I think it is a necessary first step.

“It is as though I were building on the distinction between a man and an animal, while you took the view that they were essentially the same. Now you need not address my position, so let us instead address yours.”

I really just think you need to seriously revise your view of the nature of the state in respect to its subjects. It is not any kind of a voluntary community association where everyone has voluntarily agreed to participate in supporting it in exchange for their defense. They have no choice, and to seriously attempt to exercise such a choice would result in financial ruin, imprisonment, or literally death. And from such an entity we think we will get justice and protection as well? Let’s all seriously look at the facts before we conclude such a thing – is all I’m saying.

“If I understand you correctly, the government is essentially aggression against its people.”

Bingo, yes sir.

“Let us put aside the problem this raises as to why such an organization has existed throughout history (since it provides no useful role) and take as given its existence as a purely destructive mechanism.”

Well, we can put it aside. But I’ll just say a little about that. Ever heard of “death and taxes” you can’t avoid either of them, right? Well it’s really a half truth made popular beyond dispute. It’s considered a wise saying. But is it true? Propaganda, backed by aggressive force is what makes people either believe in or acquiesce to such lies.

“Then your argument should be directed against Robert Murphy, who would (if I understand him correctly) treat government and culture in the same manner. Here, his view of doing things covered by both enterprises should conclude:
Government is aggression, with no useful role;”

I am pretty sure Murphy is an anarchist, so he might go that far with you.

“Government and culture (including industry) are the same;”

Presuming you are equating “Government” with “state”, I am very certain Murphy does not believe that Government and culture are the same. This would be diametrically opposite of his position.

“Therefore culture has no useful role, and should also be abolished.”

And hence this conclusion does not follow. I a very big way.

Allen Weingarten April 13, 2007 at 3:08 pm

Paul, I wrote “you are then not examining the view I presented, but offering a different one entirely” and you responded “Yes. I think it is a necessary first step.” In other words, you have presupposed that your position is correct and mine is wrong. Here we agree, for I am equally certain that my position is correct and yours is wrong.

As to my writing that according to Murphy “Government and culture (including industry) are the same” this was specifically based on his claiming that both government and industry should be measured by the same yardstick. The essential point of his article was that with regard to privatizing defense, we would apply the same approaches to government as we do to industry.

Paul Edwards April 13, 2007 at 6:57 pm

Allen,

“Paul, I wrote “you are then not examining the view I presented, but offering a different one entirely” and you responded “Yes. I think it is a necessary first step.” In other words, you have presupposed that your position is correct and mine is wrong. Here we agree, for I am equally certain that my position is correct and yours is wrong.”

Fair enough. But on what basis do you dispute me? Some people claim I am wrong because we can move to another country and avoid the aggression of the current state. Therefore, they say, the state is not actually aggressive because it has a social contract with its subjects that choose to stay, and that it has a right to tax and threaten violence if we don’t pay. My answer is the same applies to any mob or mafia of any neighborhood or town. The fact is the state cannot be justified any more than the mafia and its “protection” rackets can be justified. They are equally aggressive, if not equally legitimized by institutionalized propaganda.

“As to my writing that according to Murphy “Government and culture (including industry) are the same” this was specifically based on his claiming that both government and industry should be measured by the same yardstick. The essential point of his article was that with regard to privatizing defense, we would apply the same approaches to government as we do to industry.”

What he probably meant was if we expect a particular level of ethical and just behavior from a private defense firm, there is no logical reason to expect anything less from the state. And yet, the private firm must contract voluntarily with its customers and can claim no aggressively enforced monopoly of the market it deals in (without state intervention). In contrast, the state claims a right to aggressively enforce a monopoly of ultimate jurisdiction over the territory it claims for itself. Obviously, most people accept the two separate yardsticks and yet they hardly recognize they are doing it, nor for that matter why two yardsticks cannot be justified.

V Harris April 14, 2007 at 6:12 am

What power over property must government first surrender so that the private defense of property can thrive?

Allen Weingarten April 14, 2007 at 9:27 am

Paul:

You ask on what basis I can dispute you. Were we discussing your views, as in the past, I would address the non-survivability of anarchism in theory and history, as well as the nature of the human condition. (I would again address the poor effects of such positions that led Rothbard to support the Black Panthers, so as to attack our government.) In addition, I would advocate the views of Ayn Rand and von Mises on government. However, the context of our discourse was the position of Robert Murphy, so that discussion would be a digression.

Again, with regard to Murphy, his position was that we treat government and industry by the same yardstick, namely “productivity”. This I countered, for the reason that destroying another’s sand castle is fundamentally different from building one’s own. (That is, the components of a dichotomy have different purposes, which require different measures.) However, given that you did not care to discuss that philosophy, I said that from your point of view, Murphy should conclude that since government should be abolished, so too should industry. (Surely, you would not conclude that since industry should be expanded, so should government.) So again, since you accept two different yardsticks, your argument is with Murphy, and not with me.

V Harris April 15, 2007 at 7:32 am

The proof that private defense can’t work is demonstrated by the fact that it doesn’t work. If private defense could defend property against government expropriation, it would already be doing so. But when each property owner bears the full cost of defending his property rights against the initiation of force by an overwhelming governmental leviathan, the cost is too high and so the property right being usurped is simply ceded. The autocratic initiation of force is a winning strategy that can not be overcome over the long-term in anarchy. The best we can hope for is limited liberties as tenants on property for which the landlord unilaterally dictates the terms.

TLWP Sam April 15, 2007 at 8:18 am

I’d have guess there’d be three types paths to private defence:

1. Private Insurance-style Defence Forces – the guess factor could be one of pricing structure and availability, could pseudo-free-riders get a nasty surprise when only paying folk of Libertarian society get defended? Not to mention if such a company was concerned only with the possibilty of invasion then you have a few standing armies getting paid for squat until an invasion. Bit like now I s’pose sorta.

2. Hiring Mercenaries – these folk would be rather nomadic unless the Libertarian society was rather prone to attack. Then again mercenaries tend to go for the highest bidder and the invaders might offer a higher price . . . (if only to leave and move on)

3. Or best of all, just let people privately arm themselves, become soldier/citizens and let the individuals suppose the personal cost of what armaments would required to repel invaders. Especially for the large private operators with much to lose in an invasion would their hire own soldier/security forces to be on hand.

Michael A. Clem April 15, 2007 at 11:05 am

The proof that private defense can’t work is demonstrated by the fact that it doesn’t work.

There are various ways to respond to this. It’s a moral and cultural issue, as well as a political issue. As long as government is considered “legitimate” by a majority of people, then private defense isn’t given the chance to work.
And yet, it’s interesting that more people are turning to private security and private arbitration and mediation, even in the midst of government “protection”. Why? Isn’t government doing what it’s supposed to?
I predict that government protection will wither away over a period of time, out of sheer necessity. But the real breakthrough will be when people come to realize that government isn’t a necessary evil, but simply an evil. I can’t predict when that will occur, though.

Michael A. Clem April 15, 2007 at 11:22 am

C’mon, TWLP Sam, you’re just not being imaginative enough. One valid point is, just like a free market in other things, I could say that I have no idea what kind of market alternatives would be created, or which ones most people would prefer. The market is a process of discovery, not an end-state.
Nonetheless, we can always have fun making guesses. Suppose, for example, that “war games” were to become a spectator sport of sorts. Then a large part of military funding could actually come from the fans, much like the massive amounts of money that are paid for football, baseball, and basketball.
I’m sure creative people could come up with other interesting guesses. Yeah, I know, archists want guarantees, not guesses, but then, do they have any real guarantees now, from government?

Björn Lundahl April 15, 2007 at 2:23 pm

“The proof that private defense can’t work is demonstrated by the fact that it doesn’t work. If private defense could defend property against government expropriation, it would already be doing so.”

This statement is a logical fallacy. Because of the fact that the state is supported by the vast majority of the population, private defence agencies are powerless compared to the state. In a libertarian society, the situation would be the reverse, as in such a society the vast majority would support a libertarian ethic and the state would be powerless.

It is all a matter of support.

Björn Lundahl

TLWP Sam April 15, 2007 at 7:52 pm

Just saying that personal defence and being a soldier/citizen/militia type makes better sense economic sense than the other two alternatives.

Actually I hear news services makes lotsa money when conflict breaks out and they are there to cover it.

V Harris April 16, 2007 at 7:40 am

Björn, Property owners need private defense most when state power is greatest. If society gets increasingly libertarian, when private defense could finally develop, owners have less need for private defense. How useful is a private defense system that purports to defend property against aggressive elements of society that, to exist, first requires consent from that society? Owners need private defense now — when society generally believes there are no absolute property rights. If it can’t thrive when it’s most needed, it likely won’t thrive when less needed.

Björn Lundahl April 16, 2007 at 8:19 am

V Harris

“How useful is a private defense system that purports to defend property against aggressive elements of society that, to exist, first requires consent from that society?”

I think you should consider that the state too requires consent from society to exist and to be powerful. That is the prerequisite for any system.

Björn

Allen Weingarten April 16, 2007 at 8:42 am

I posted the following on ‘Can There Be a “Just Tax”? by Murray N. Rothbard’ but am repeating it here because it illustrates the same principle at issue with regard to ‘Private Defense Is No Laughing Matter’.

The subject of taxation is part of the broader issue of dealing with government (or if you prefer, the state). I wish to clarify this matter by an analogy. Consider that a ship sinks, and six people find themselves on a raft that can only hold five. Soon, unless one person is removed from the raft, all will perish. A moralist asks what would be a just decision, and investigates finding a volunteer to die, or ascertaining when people boarded the raft, or determining whose life is less worthwhile, etc. Yet none of these approaches lead to a morally justified outcome.

The realist proposes drawing straws, and recognizing that one or more of the passengers might not agree, stipulates that if someone is unwilling to participate, he should be the one thrown overboard. The moralist objects, for if morality means anything, it is freedom from coercion. The realist counters that the issue is not morality, but survival.

Consequently, the issue is not what is the moral thing to do, but whether to ensure survival or morality. When the moralist (or anarchist) insists on doing solely what is moral, he is implicitly saying that survival does not trump morality. Yet, if government is justified, it is not on the basis of guaranteeing moral requirements, but ensuring survival.

V Harris April 16, 2007 at 8:45 am

Michael, the state’s interest in ‘defending’ property lies primarily in preserving its ability to extract rents from those who occupy the property — and not necessarily in protecting them. That it why property ‘owners’ are not permitted to decline state-provided military or police protection nor decline paying for such, but are permitted to buy additional protection from private agencies. But being able to buying more than state-provided military or police protection is not the same as being able to buy protection *from* state-provided military or police ‘protection.’ The latter is the kind of protection libertarian owners seek — but it is not privately available. My contention is that it never will be privately available. As soon as one state regime is overthrown, a new regime emerges to again violently extract rents from those who occupy land and using those rents to defend its ‘territory.’ The regime in power will always have overwhelming force over libertarian-leaning property owners who seek to be free from rent-extraction, but who also bear the full cost of protecting their property from same. There may be brief respites, but the payment-of-protection-money regimes will soon develop again.

V Harris April 16, 2007 at 8:50 am

Björn, ‘consent of the governed’ is a romantic notion to which some US founding fathers aspired — nothing more. The reality is that those with sufficient power govern, whether with popular support or not.

Scott D April 16, 2007 at 9:44 am

V Harris,

How you define “consent” here is critically important. In a sense, you are correct. If most people actually recognized and understood what the state does to their lives, they would not support it at all. However, most people do not understand and give their consent out of ignorance.

billwald April 16, 2007 at 10:59 am

V Harris is correct. Americans think they are “free” because they vote on which of our owner’s representatives (Republicans or Democrats) collect the taxes and raise the armies.

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