What is the correct size and proper function of the state?

Signing of the Constitution of the United States

Signing of the Constitution of the United States

This is a question that was posted to me by a journalist who has read my book and is following this website. He suggested I make it into a blog.

This essay is not directly about the fiat money crisis so it might at first look a bit “off message”, but I guess for everyone who has read Paper Money Collapse and has been reading this website, the connections are obvious enough. This is a big, big topic, and probably too ambitious for any single essay. Although the following is fairly long even by the standards of this website, it still cannot be an exhaustive treatment. Many questions will be left unanswered and many objections – including many I already anticipate – will not be addressed. I hope the reader still finds it worth the effort.

For a long time I considered myself a classical liberal – as did Ludwig von Mises who inspired much of my work. I do no longer think that this position is logically consistent. The classical liberal position, although advocating a much smaller state than today’s political consensus, still assigns too many powers to the state. Nevertheless, it offers a good starting point for the discussion. So let us start here.

Utilitarian arguments for the strictly limited state

The classical liberal position on the role of the state can approximately be described as follows: The state should stay completely out of the economy. There is no role for the state in industry, banking or money. Money is gold, or any other commodity chosen by the trading public. The supply of money is thus outside of political control, and banking and finance are entirely free market businesses with no state support, no guarantee nor any explicit or implicit backstops. (For an explanation of why such a system is not only possible but indeed more stable than our present system, and why it is even the only system that is compatible with the free market economy, please see my book Paper Money Collapse.)

Mises in his library

Ludwig von Mises; photo by mises.org

Additionally, all means of production are privately owned and their use is directed by market prices, and by the opportunity for profit and the risk of loss. Profit and loss are essential tools for the consumers to direct the activities of private enterprise so that they conform as much as possible to the wishes of the buying public. The state is not involved in education, health care or old age provision or any other so-called social services. All these activities are organized privately for the simple reason that all these activities require the use of scarce resource, including labor, and any rational allocation of scarce resources requires market prices. Only on the basis of market prices is rational economic planning possible. Only market prices convey the urgency that the public assigns to the various competing ends to which resources can be put at each point in time. But market prices can only be determined if the resources are privately owned and traded on free markets. Private property is thus the essential tool for extensive social co-operation. Private property allows trade and the formation of market prices. This then allows the rational and efficient employment of these resources by entrepreneurs. The whole process is the only one logically possible to facilitate an extensive division of labor and the constant accumulation of capital employed in private enterprise, and it is the system of extensive division of labor and the constant accumulation of capital that makes our high living standards and any further advances in living standards possible.

An example:

Britain’s National Health Service will never deliver a satisfactory service. This is not because the people who work in it are incompetent or lazy. They could be the most motivated, devoted and well-meaning people on the planet and they could still only deliver suboptimal results and do so at considerable cost. Why? Because the NHS has to deliver health services for an entire nation without the help of true market prices and profit and loss accounting. These are the tools of capitalism that – day in and day out – allow the private sector to make informed decisions about best resource use – ‘informed’ because reflecting the preferences and wishes of the customers, the consumers.

Despite the widespread sentimental attachment to the NHS and its superficially appealing motto of delivering health care “free of charge” (obviously not true for the majority of citizens), the fundamental shortcomings of any service organized along socialist lines should be glaringly obvious to anyone: While the still fairly unrestricted private mobile phone industry in Britain delivers the latest advances in telecommunications technology to people across the entire social spectrum with remarkable speed and at constantly falling prices, the nationalized health service bureaucracy has people wait in line even for many routine and long-established procedures and provides such service at ever more staggering cost to the taxpayer.

That health service and education are too important to be left to the private market is a common prejudice that puts economic logic on its head: Because they are important they should be allowed to employ the tools of the private market.

But what does that mean for those who are too poor or for whatever reason unable to obtain the market income to afford themselves even a minimum of these services? – I am not going to evade that question. It is, of course, a standard response. I will come back to it a bit later.

What does the argument so far mean for the size and role of the state? – The state would, of course, be rather small by today’s standard. It would only have one function: to protect private property, which necessarily includes property in ourselves. The state’s role would be to protect every citizen and his or her property from aggression, whether that aggression comes from inside the country or outside the country. The state would be reduced to what the German social democrats of the late 19th century derogatorily but still accurately called the ‘night-watchman state’. The state would provide security services, including police, army, courts and related services. Its only function would be to provide security and protection.  Those citizens who do not transgress against other peoples’ person or property or those who are not being transgressed against, would hardly ever come into contact with the state and its representatives. This would indeed be a minimal state.

Thus far, we have argued on the basis of utilitarian considerations. A prosperous society requires high degrees of division of labor and efficient resource use, which in turn require market prices, which in turn require private property. Under utilitarianism, private property is first and foremost a social convention, a means to an end. And the function of the state is to secure this means: private property, the existence of every individual’s inviolable private domain, as the basis for voluntary contractual cooperation and the spontaneous growth of society.

Ethical arguments for the strictly limited state

But such a minimal state can also be constructed on ethical grounds and considerations of justice. Every state is an institution that is based on compulsion and coercion. It can be seen as a depository of legalized, institutionalized and regulated force or threat of force. But what type of force is ethically defendable and could therefore provide an acceptable conceptual basis for institutionalized force? Only defensive or protective force fulfils that requirement.

U.S. Marshals knock and announce

U.S. Marshals knock and announce (Photo: U.S. Marshals Service)

To answer questions of ethics we need to start with the acting individual. In an otherwise peaceful, cooperative society, at what point am I justified to apply force or the threat of force when dealing with other people? Only if and when these people threaten my life, health or my property. This does not mean that any type of violent response is deemed justified in such situations, but it is clear that if force and violence can be justified at all, it must be in situations of self-defense, which include defense of property. If I am justified to defend myself from attack, I must also be allowed to defend those material goods that I have obtained through my work by applying my own body and mind. If this were not the case and if others were allowed to avail themselves of the fruits of my labor by simply taking them from me it would mean they could live off my work and thus practically enslave me, which would be equivalent to an attack on my person.

By transferring the individual’s right to self-protection and self-defense of life and property to a specialized organization that fulfils the task of looking after these rights for all members of the community, no new special rights have come into existence. It is not claimed that the state has any rights or powers that the individual citizen does not have already. In fact, the state’s legalized force would have its origin in a concept of natural rights that originate with the individual citizen and that that citizen would have even in a stateless society (although in such a society he would have to enforce these rights himself or in voluntary cooperation with others). The state could perhaps be thought of as a pooling of these individual rights to allow for their more organized, standardized and thus more predictable safeguarding.

The utilitarian case against the welfare state

We can now turn to the question of provision for poor citizens or for those who for any reason are unable to adequately support themselves. While good arguments can be made that those in society who are better off have moral obligations to give support to weaker members of society, it is clear from the reasoning above that the state should not enforce such support. Again, the state is an organization that operates through compulsion and coercion. By assuming ‘social’ responsibilities the state must redistributes income and property on an ongoing basis by application of force or the threat of force, and must thus be permanently in violation of its original mission, which was to protect rightfully gained private property from violent interference, and thus support the institution of private property that we identified as absolutely essential for any functioning society. The state cannot simply add a redistribution function to its property protection function – the former must always violate the latter. Both functions stand in logical conflict. Either the state is a property-protector or a property-re-distributor and property-re-allocator. The state cannot be both at the same time.

In the original concept of the state as organized force for the purpose of security provision, a person who rightfully obtained property through production or voluntary exchange with other members of the community should be able to rely on the state to protect his ownership from any violation by a third party. But the moment the state assumes any responsibilities for ‘social justice’ or ‘distributive justice’, the state has to become a private property invader itself, and every person has to fear that parts of their income and property – although lawfully obtained – will be taken by the state by force and reallocated to other members of the community.

It is clear that under a state that assumes ‘social’ responsibilities, any right to private property is ultimately conditional. Rights to property are only protected by the state as long as the state does not consider third parties more in need and morally more worthy of ownership of the property. Every piece of property in such a society is therefore under a cloud of uncertainty, and this stands in direct conflict to the original mission of the state. The element of uncertainty is magnified by the fact that while it is possible to lay down clear and universal rules for how property can be rightfully and legally obtained, and to therefore give every member of society clear rules that are known before the act of what constitutes rightful and what constitutes unlawful attainment of property, any notion of what constitutes ‘distributive justice’ after the acts of production and trade must necessarily be arbitrary and subject to considerable change over time. It should not be surprising that all states have greatly expanded their range of redistributive policies and social legislation and regulation in recent decades. Once the state has taken it upon itself to pursue the logically non-definable goal of social equality or justice, it can ask for ever more wide-reaching powers. The idea of a minimal state has now become utterly unrealistic.

By contrast, any redistribution of property or income through acts of charity stands in no conflict to the institution of private property. The giver and the recipient of charity both know who the rightful owner of the property is. The recipient is aware that he is being supported by the generosity of others. The giver also retains control over who he wants to support and to what extent he wants to support that person. All of this changes when the state as monopolist of legal coercion becomes the middleman. The recipient does no longer consider himself dependent on the economic success and charity of others but now has a legal claim on support from the state – receiving support becomes the person’s legally enforceable right. With at least a minimum of income now secured, the incentives to change one’s behavior to regain economic independence are weakened. The original owner of property, meanwhile, has no longer control over where his money goes and will probably lose any interest in the plight of those who require support. By having been taxed by the state, he considers all duties to society’s weaker members fully discharged of.

The defenders of the welfare state will argue that it is more just to introduce an element of uncertainty into the lives of the economically independent than to keep society’s weakest members subject to the complete uncertainty that poverty and dependency on charity inevitably entail. While this is an appealing argument and probably a widely shared sentiment, it cannot dispel concerns over the fundamental conflict between securing private property on the one hand and persistently redistributing private property on the other. A welfare state is, fundamentally and conceptually, a persistent threat to the notion of private property, and private property is undeniably the economic foundation of any society. Additionally, any concept of ‘social justice’ is by definition arbitrary and will be the source of tremendous strife whenever it is supposed to guide practical politics. Furthermore, a state that concerns itself with the distribution of income and property among its citizens will never be a small state, or even a limited state.

The ethical case against the welfare state

The argument has so far been based on utilitarian considerations. But we can base it also on theories of ethics and justice. We have argued that a state that confines itself to the protection of person and property of its citizens against any unprovoked acts of aggression bases its right to legal force on the rights to such force by its individual members. The state assumes no privileged position but simply exercises the rights that the individual citizen already has but that the citizen may consider to be secured and enforced better through a state organization. This view, however, is no longer tenable when the state enforces redistribution of income and property.

While it is certainly within generally accepted principles of justice if I use proportional force to stop my neighbor from stealing or damaging my property or from inflicting injury on me or anybody in my family, it is certainly outside the established norms of justice if I decided to force my neighbor to support third parties, chosen by me, who I think are deserving of my neighbor’s support. By making ‘social justice’ its goal, the state claims a right to legal force that none of its citizens has. The state has now become a law upon itself, a ‘higher’ entity whose standards of right and wrong no longer correspond to those of its individual citizens. Any idea that the state could simply represent a convenient and efficient pooling of individual rights for the purpose of their better protection is now untenable. The state can do and does what nobody outside the state can do. The state qua state defines its own notions of morality and forces them upon its citizens.

We have now explained why any state that assumes larger responsibilities than the minimal state which confines itself to articulating, clarifying and enforcing the rights of its individual citizens to their own life and property must be in violation of its citizens’ rights to their own life and property and can no longer justify its existence on the based of any ‘social contract’, for such a contract can only ever encompass the rights that individuals already have and which they may then voluntarily transfer to the state entity as part of entering such a contract. We have also seen that a state that gets involved in the distribution of income and property among its citizens must undermine the institution of private property, which is essential for human cooperation in a market economy and the basis of any prosperous society.

From classical liberalism to anarcho-libertarianism

While such a minimal state – a pure protector of life and property of its citizens, an enforcer of laws and a provider of courts to facilitate the resolution of conflicts and the further development of the laws – would be a much better guarantor of individual liberty and of peaceful cooperation than today’s heavily interventionist, constantly meddling and increasingly authoritarian state, and while most libertarians today would be happy to see a return to this classical liberal vision of the minimal state, even this concept is still flawed for as long as the organization that calls itself a state claims to have a territorial monopoly on providing protection and security services and a monopoly of ultimate decision making in its territory (this is in fact a very good definition of the state by Hans-Hermann Hoppe). If the state not only uses legal force to protect life and property of its citizens but if the state, as all states presently do, uses force to stop citizens from voluntarily exiting the state’s framework and establishing or joining different and competing arrangements on its territory, then we will have to also reject this minimal state on the basis of the analysis above.

First, again, are utilitarian considerations. Providing security services also necessitates the use of scare resources. How many resources are to be allocated to providing security, which resources should be used and to what extent, are essential questions. Without private property, market prices and free entry into the market of security provision, the results will again be far from optimal. Even in the area of security provision market-based solutions are undoubtedly superior. This important argument was first developed by the 19th century Belgian economist, Gustave de Molinari.

Second, we have considerations of ethics and justice. If the state claims to derive its legitimacy to use force from the individual citizen’s right to use force to defend his own life and property, this must mean that the individual’s rights are the origin of the state’s rights, and that the latter can never supercede the former. To put this differently, a state that claims a territorial monopoly on security provision and conflict resolution must argue that the individual who had the right to use force for defense of life and property in the first place has, by pooling these rights into a state-like organization, now forfeited these rights forever and is not to be permitted to reclaim these rights and enforce them by alternative means. This is logically an untenable position.

It seems fair to assume that law and security provision have a lot in common with money in that they, too, are subject to network effects. Just as the co-existence of many parallel monies is suboptimal, the co-existence of many different legal frameworks and security arrangements is inefficient. But none of this means that individuals have not the right to make alternative arrangements if they deem present arrangements to be insufficient or even a threat to their own life and property. We conclude that at a very minimum the minimal state must concede a universal and inviolable right of every individual or group of individuals to secede at any time.

Lysander Spooner

Lysander Spooner

A lot of what I argued above may appear to many like idle libertarian theorizing with little relevance to present political reality. But a crisis of the present state fiat money system is now inevitable. This crisis is part of a broader crisis of the welfare state and, in fact, of democracy. As these crises unfold, people will again revisit some fundamental questions about the size and role of the state and its relationship to the individual. Against this backdrop, discussions like this one could become very relevant indeed. As states everywhere go broke, as the promises of the cradle-to-grave welfare state are defaulted on, and as politicians lose control over their overstretched fiat money empires, citizens will again consider looking for and establishing more suitable and functioning alternatives to present state apparatuses.

I will finish this easy with a short extract from Lysander Spooner’s outstanding pamphlet No Treason, NO II from 1867, in which he delivers a fascinating interpretation of the American constitution that is an excellent presentation of the points I was trying to make toward the end of the above essay. Here is Spooner:

“The Constitution says:

‘We, the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.’

The meaning of this is simply: We, the people of the United States, acting freely and voluntarily as individuals, consent and agree that we will cooperate with each other in sustaining such a government as is provided for in this Constitution.

The necessity for the consent of “the people” is implied in this declaration. The whole authority of the Constitution rests upon it. If they did not consent, it was of no validity. Of course it had no validity, except as between those who actually consented. No one’s consent could be presumed against him, without his actual consent being given, any more than in the case of any other contract to pay money, or render service. And to make it binding upon any one, his signature, or other positive evidence of consent, was as necessary as in the case of any other contract. If the instrument meant to say that any of “the people of the United States” would be bound by it, who did not consent, it was a usurpation and a lie. The most that can be inferred from the form, “We, the people,” is, that the instrument offered membership to all “the people of the United States;” leaving it for them to accept or refuse it, at their pleasure.

The agreement is a simple one, like any other agreement. It is the same as one that should say: We, the people of the town of A??, agree to sustain a church, a school, a hospital, or a theatre, for ourselves and our children.

Such an agreement clearly could have no validity, except as between those who actually consented to it. If a portion only of “the people of the town of A??,” should assent to this contract, and should then proceed to compel contributions of money or service from those who had not consented, they would be mere robbers; and would deserve to be treated as such.

Neither the conduct nor the rights of these signers would be improved at all by their saying to the dissenters: We offer you equal rights with ourselves, in the benefits of the church, school, hospital, or theatre, which we propose to establish, and equal voice in the control of it. It would be a sufficient answer for the others to say: We want no share in the benefits, and no voice in the control of your institution; and will do nothing to support it.”

 

 

 

 

 

 

 

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Comments

  1. says

    Thought provoking indeed and for my part I see many advantages in a lightweight and small State. Sadly we are where we are, if we applied these rules, and how would we achieve that aim; it would follow very quickly that the wealthy minority would swamp the rest, I imagine. We might be back to a more feudal arrangement, since money buys support, i.e. power!

    If we were starting out afresh, the model above would be excellent! Therefore it follows, that we will continue as we have until it falls apart. The issue is further complicated by the interconnection of the supply of resources and vested interests in external dominions.

    Look at the ungodly mess that is the EU, the ultimate in statism! how do you unwind something like that, peacefully? I see only trouble ahead, because like you I firmly believe that fiat money has corrupted everything. Well that’s my immediate take on things, without spending too much time out!

    • Stephen Davis says

      Brian,

      If these rules were applied, how would the wealthy minority buy support? Contracts must be voluntary. No one can enter into a contract that compels another.

      As to your question about how to unwind a compulsory organization peacefully, my suggestion is to stop recognizing its legitimacy. If people threaten violence against you, it is perfectly reasonable to submit to their demands in order to enjoy the rest of your life; however, it is delusional to conflate a coercive relationship and a voluntary one. The first step toward freeing yourself from bondage is recognizing your chains. As Étienne de La Boétie wrote:

      “Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break into pieces.”

      • says

        I believe it would be easy to discover voluntary enforcers. A stroll into the centre of most major cities at a weekend will demostrate that there are many who are prepared to do the bidding of their masters for a fee. They strut outside the many licensed premises ready to take action… so that’s one bunch of mercinaries who would happily cleave you in two if requested, I suspect. Why would they do this? Because its an easy way to make money, and a lot of them enjoy violence, for its own sake.

        Regarding your second paragraph, and its follow on quote; I suppose in the modern parlance, “Get Real” might well be the cry! Have you tried to decline a TV licence?

        • Stephen Davis says

          Brian,

          No one is denying that there would be people seeking to use force against others in a free society. The point is that the State is the worst possible solution to this problem, since it is the institutionalization of such violence. There are great costs associated with engaging in destructive behavior, and the market economy punishes those who engage in such behavior. The State externalizes the costs of its aggression onto its citizens, and enables its favored interests to do the same.

          Regarding my second paragraph, I think you are missing the point. How do you think small minorities rule over vast majorities? The answer is not simply the threat of violence. I highly recommend reading “The Politics of Obedience: The Discourse of Voluntary Servitude” if you are interested in this topic.

    • S. Quade says

      “We might be back to a more feudal arrangement, since money buys support, i.e. power!”

      Dolt! Isn’t that what’s happening right this minute?!

  2. John Campbell says

    Bravo. Thank you for taking the time to share your political ideas. In the recent past I too would have described myself as a classical liberal, but the lack of logical consistency in that position made me prone to accepting many state interventions. The truth is that I had drifted towards a largely neo-conservative position on many (but not all!) issues. My first exposure to the radical ideas of freedom was Ayn Rand and I accepted her condemnation of libertarianism with too little thought.

    It was really your book that led me to examine my political ideas again. My shift to anarcho-libertarianism was swift and I cannot imagine what I was thinking before.

    Hoping that the state can be constrained within the limits of classical liberalism is analogous to hoping that Britain’s National Health Service can be reorganized or managed to provide excellent care that would match a privately contracted provider. I see now that this is simply not possible. All the state asks, all the people who crave power over their fellow citizens ask, is for us to grant them some limited powers, which cannot be denied or removed. Time and logic are now on their side to grow the state as much as they want. Once we have granted them those limited powers, our freedom will be lost, as state power expands.

    We are in for some very turbulent times as you have documented so well. It is critical that the libertarian message gets out there. People will be more open to these ideas than they ever have been, as the state is revealed to be morally and intellectually bankrupt. The demise of paper money must lead to the dismantling of the state and its overreach. There will be a lot of debate and discussion to come. We need people like you Detlev to lead the battle of ideas we are facing. Keep up the great work!

  3. Kevin Hughes says

    I am so glad you wrote this essay, thank you. I would be very interested to know if Murray Rothbard has had any influence in your thinking? Keep up the good work and all the best, Kevin.

  4. Michael Carax says

    So,”for those who for any reason are unable to adequately support themselves” well, that’s just too bad, tough luck, since no one in this kind of society is forced to be charitable. As an entrepreneur,I hardly worry about this but the thought has occurred to me, what would happen if I became so sick and after my insurance ran out, what I would do to survive in this sort of social Darwinist system.

    • Stephen Davis says

      Michael,

      It is important to understand the causes of the current state of affairs. The State is heavily involved in preventing the rational allocation of resources in the realms of medicine and insurance. We can hardly imagine the greater abundance and variety of goods and services that would emerge in a voluntary system. I see no reason why people could not have affordable catastrophic health insurance from birth, for example. (Keep in mind that insurance is the pooling of risk, and what is currently termed health “insurance” is nothing of the kind.)

      • Michael Carax says

        The planet’s resources are dwindling and the population is soaring and the chances that a voluntary system emerges to help those who are weaker,in my opinion,is highly unlikely as the world around us becomes more turbulent and people’s lives become more fragmented. It doesn’t take much of a crisis to prick the balloon of strategies or theories we like to hide behind. Technology won’t get us out of this mess either. I do like the idea of a free market based on a gold standard and the idea of a state that interferes, just enough, to make sure we don’t have “corporate personhoods” walking over real people’s rights. It’s nice to imagine how things could be but there are no angels in government or in large corporations.

        • Myno says

          As others have detailed, the main cause of resource imbalances is not population increase but freedom’s decrease. Progress under a free market has proven capable of steadily increasing efficiencies, quite sufficient to feed the world. Our hope is that out of political turbulence will arise a tide of self-sufficiency that will lead to free market reforms that will then efficiently address the problems created by its lack.

    • Myno says

      Aloha Michael,

      What our “modern” world has forgotten is the successful and traditional (pre-1900) role of private charities. Before government got in the lucrative business of taking so much of our money that it diminishes our willingness to give, private charities (mostly church based) provided for those who were having trouble providing for themselves. That model had the added benefit of being personal, in contrast to the impersonal state dole which tacitly encourages dependence. A truly free market would free up capital (not to mention making us all enough richer that we could afford to give more) for good works that now are left to the inefficiencies and corruption of the state. We are separated from that truth by 100 years of being conned that the state can do it better.

      • Michael Carax says

        “A truly free market … making us all enough richer” Although I am for a truly free market how can we possibly know this would actually happen? Be allowed to happen? And why would those few financial investment corporations like Goldman Sachs,who now control the global capitalistic markets want to change anything? We have been conned by both the state and the oligarchy that controls the state which in turn control the political parties which are nothing but administrators.

        • Myno says

          It is practically a tautology that a truly free market would maximize progress, which would vastly increase the standard of living of everyone. It is the very act of taking the chains off voluntary market exchanges that allows that to happen. Between that happy condition and our present statist nightmare lie many vested interests, notably including those you mention. But the difficulty of the task does not diminish the efficacy or moral integrity of the free market toward which we work.

  5. Stephen Davis says

    Detlev,

    This is a wonderful essay! You tackled a very difficult topic and presented a concise and powerful argument.

    I agree that anarcho-libertarianism is the only logically consistent position to hold regarding these matters. I hold this position and represent it to others to the best of my ability, and my life has changed dramatically as a result. I have found that when people are presented with logical arguments that they are not emotionally comfortable with, they abandon rationality and argument becomes impossible. It is, of course, very difficult to point out to someone that they are guilty of this behavior.

    I think it is important to recognize that winning the intellectual argument has not resulted in success. The great economists have proven that market prices are the only rational way to allocate scarce resources, yet the world continues to march along its current destructive path. I think that, at the end of the day, people support logically inconsistent ideas because they believe them to be moral. They are comfortable abandoning logic because they can retreat to what they believe to be the moral high ground. Our opponents understand this, and they are winning the battle because they exploit this weakness in people. As you have done in this essay, we need to stake our rightful position on the moral high ground.

  6. Richard Bailey says

    A thoughtful piece. However, you do evade arguments you don’t like.

    You evade the issue of the “undeserving poor”, those who cannot support themselves financially, despite saying you will not. What actually will happen, for example, to those cancer patients that can’t afford that chemotherapy drug? The reason various state-backed systems arose (not just the NHS) and gained in popularity was that the previous amalgam of private/charitable/voluntary solutions were not efficient or effective. Therefore the answer to this question is of great importance.

    You evade the regular descent of market systems into crisis and war, presenting instead a rose-tinted, utopian view of how free markets operate. Unregulated competition does not have a very creditable history and this cannot be wished away with waffle about private property and ethics.

    Your points about the NHS are quite incorrect. It is an amazingly cost efficient system compared to private sector alternatives. Its clinical outcomes are comparable to any private sector system and its overall cost compares favourably with private healthcare. To label it as “socialist” is patently untrue. It is a thoroughly capitalist system, although obviously within what many would call the “corporatist” tradition, and interfaces with the private sector (yes, with prices and profits too) on many levels. Its main function is/was to ensure a ready supply of healthy labour for capitalism at an affordable price (an acute problem in the UK circa 1948!). All the talk of socialism is best left to the deluded fools of the British left and US right. Socialism entails the complete destruction of the state, after all, if you go back to its founding texts.

    I don’t pretend to have a simple answer to any of the above. I’m too old to believe in simple answers where one solution (bow down to the free market and pray) solves all of society’s problems anyway. I offer my comments in the spirit of debate from a libertarian sympathiser.

    • Stephen Davis says

      Richard,

      What system of social organization could possibly address the issue of the “undeserving poor” better than a market economy?

      You assert that state programs arose because of the failure of private solutions, but what evidence do you have of this? You assert that market systems regularly descend into crisis and war, but can you elaborate on this?

      Regarding the NHS, what you are referring to as “private sector alternatives” are only nominally so. The State exerts massive control over the economy, and you cannot point to a heavily burdened “private” alternative as evidence that the State solution is superior.

  7. jaimie says

    This is a retro dissection of the state, which is like a living organism; isn’t it like dissecting a cuckoo?
    You have to go back much further to a hunter gatherer society, where there was no state and everybody was involved in food production.
    As soon as the more efficient sedentary farming society was able to release social operatives for other tasks, such as blacksmith…. chief, chief bodyguards, chief army etc then the state cuckoo was born.

  8. Zog says

    Maybe the approach here should be to first fully understand what human nature is (rather than what we think it ought to be), then go on to derive the appropriate political system which makes best use of what individuals do naturally.

    So, on the one hand, socialism is flawed at heart because, put simply, it depends upon the assertion that man is a “noble savage” whereas in fact each individual acts to maximise his own utility (even if sometimes this results in altruistic actions). Thus, as Detlev clearly explains, all government controlled activity is inefficient and misallocates resources when compared to private sector activity. It can also unfairly appropriate resources from citizens.

    On the other hand, without any form of government, human nature would lead to constant warfare as individuals seek to maximise their individual utility by sequestrating the assets (and lives) of their neighbours. Anthropological evidence from pre-civilisation society abounds to support this point.

    What form of government successfully reconciles these conflicts? To my mind, it has to be a version of democracy as other systems lead to absolute power oppressing individuals.

    Yet, our present system of social democracy is not working and, as Detlev argues, is bound to fail at some point. Politicians are principally interested in their own short term gain of becoming re-elected rather than promoting the good of society; they borrow at unsustainable levels, print money to meet deficits that even uncontrolled borrowing cannot cover, and make unsustainable pension commitments to appease public sector unions. Once these excesses are commited social democracy does not allow them to be reversed until external events do so; witness 1923 Germany or Greece as it is likely to be shortly.

    I do not have the answers to how democracy ought to be reconstructed. But I do think we should be thinking how it might be achieved. Ideas that spring to mind are; private control of money, as Detlev argues, or, if money is government controlled, a prohibition on fiat money; a prohibition on unfunded public sector pension commitments; eliminating career politicians by imposing a minimum age requirement (35?) on MPs; and electing MPs for a longer period (10 years?) with half the constituencies coming up for re-election every 5 years.

    I suspect that my thoughts are not radical enough to Detlev’s mind, but I am ready to be persuaded by any system that is likely to work given a true recognition of human nature!

    • Stephen Davis says

      Zog,

      Whatever qualities you ascribe to human beings, you have to ascribe to all human beings. If people are good, there is no need for a State. If people are evil, then a State is the most dangerous weapon imaginable.

      The reality is that people have the capacity for good and evil, and respond to incentives. As Oppenheimer discusses, people can only survive through labor and exchange (the economic means) or through the appropriation of the labor of others (the political means). The system of social organization must incentivize the peaceful activities of labor and exchange and disincentivize the violent activity of the appropriation of the labor of others. The market economy is the solution to the problem of social order.

      No form of democracy is a solution to the problem of social order, because democracy undermines private property. America was the great classical-liberal experiment, and it has been an epic failure. The smallest State in history grew into the largest. Constitutions do not restrain the growth of the State. The freest economy produces the greatest abundance, and when the State appropriates that abundance for its own purposes, the results are catastrophic for humanity.

    • John Campbell says

      Zog, your thoughtful post deserves a thorough discussion, which I am not qualified to provide, but I question your thesis. The fact that we humans have so successfully populated the planet with little or no formal government during most of that time disputes your conclusion.

      Humans are obviously social creatures and our success is probably more due to that social nature combined with our intelligence, than any other feature of our nature. Most aspects of biology are “bottom up”, and self-organizing phenomena – it is hard to imagine that we and our success are not products of the same processes. Government or no, it is simply not in my best interest to plunder my neighbors – it is in my best interest to cooperate and trade with my neighbors in peace. Although now that I think more of it, government often does make it in my best interest to plunder my neighbor. Wars have never been bigger and more destructive than with the large and powerful states we have seen in the last century.

      Criminals and rogues will always be an aspect of human existence and we will always need mechanisms to deal with them. Governments have done more to encourage those criminals and indeed to give them greater power over us. I do not believe that an exhaustive study of human nature is necessary to achieve a peaceful and preposterous society. I believe the evidence is clear from history as well from a priori conjecture that humans are very capable of organizing their lives in the most productive and peaceful way possible without an all-powerful bully in the playground. Life is too complex to do it any other way. The top down approach via the state is incapable of allowing humans to achieve what is required to progress and survive.

  9. Paul Marks says

    I tend to be dubious about the chances of victory of commecial competing “protection agencies” against government military forces (or even against passionate people who want to become a government).

    War is a very different thing from normal business. It is terrible and it is about destruction and slaughter – not selling productive goods and services.

    The “Sword of State” exists because it has proved very effective (at destruction – not at positive creation) over the centuries. Countries with weak governments do not tend to evolve into a situation of commercial competing protection companies – they tend to suffer a Revoliution or an invasion, and a new state (stronger and more ruthless than the old one)takes over.

    Of course the idea that the state can do positive good (as opposed to the “negative” role of defeating other forces of organized violence)is absurd – the libertarian arguments against the notion that the state can do positive good (once the costs of interventions are counted) are conclusive.

    However, HOW can the state be limited to its military function – how can the “Sword of State” be prevented from intervention in all aspects of civil society?

    I do not know.

    After all even the author of the classic minimal state text “On the Sphere and Duties of Government” ended up as the Prussian Minister of Education.

    And once government takes a stranglehold on education – all other aspects of civil society are likely to follow.

  10. Jamie says

    Apologies if I have missed something as this was quite long and I didn’t read it in detail, but as far as i can tell you are advocating a state which only provides a police force pretty much.

    What about the provision of public goods? Who is going to pay for roads for example? Collection of the dead who couldn’t afford private healthcare in your “charity for the poor” model?

    Would it be education only for those people or towns who can afford it, with the rest of the country illiterate paupers? Where would the trained workforce come from?

    I believe in a small state but this is going too far in my opinion.

    • Stephen Davis says

      There is no such thing as “public goods.” This is a myth made up to justify State intervention in the economy. All so-called “public goods” can be provided by the market, and historically have been.

      • Jamie says

        “And historically have been” – as far as I can see (and I may be incorrect – would appreciate something to back up your assertion though) you are correct only in the sense that historically most of the world did not have any infrastructure to speak of, until the last century (when it was built by the state). Otherwise, most infrastructure has been provided by the state, going right back to the Roman roads.

        • Stephen says

          Jamie,

          My first point is that there are no goods that the State can provide better than the market. How in the world can a compulsory monopoly serve the needs of consumers better than the market?

          Regarding roads, here are some things to check out:

          Turnpikes and Toll Roads in Nineteenth-Century America: http://eh.net/encyclopedia/article/klein.majewski.turnpikes

          The Role of Private Transportation in America’s 19th-Century “Internal Improvements” Debate: mises.org/journals/scholar/internal.pdf

          The Privatization of Roads and Highways: mises.org/books/roads_web.pdf

          A Self-Financing Road System by Gabriel Roth

          Paying for Roads: The Economics of Traffic Congestion by Gabriel Roth

          The Private Provision of Public Services in Developing Countries by Gabriel Roth

    • Paul Troon says

      If people want public goods (including healthcare for the destitute), most will pay for it – just like they do now, but by their own free choice. And those public goods will be more effectively for having been voluntarily and competitively chosen.

      I am reminded of the thought experiment of winning $1M from a lottery that must used for some public good – would you give the money to the government or a private charity?

      If people are able but unwilling to pay for a particular public good, then are you saying they are wrong to not pay? Do you know best what public goods should be supported? are you better able to know what your neighbor should support than he is? Be careful of the “illusory superiority” effect.

      If you make it transparent who voluntarily supports what, people will organize to exclude freeloaders, if that is your fear.

      • Jamie says

        1) You are saying if you don’t contribute “voluntarily” then you won’t get health care – how is that a free system!? Sounds like a tax to me!! The penalty for non payment in this case is no healthcare as opposed to going to prison in the current system.
        2) Besides even if you thought your proposed system better, I don’t agree that people organizing to exclude freeloaders would work. You are saying that I may use the “moral hazard” argument from when I was studying economics I think. However, people can just pay for their own insurance through a separate insurance company – unless you are planning for a centralized healthcare system – a bit like the NHS!

  11. Adriano says

    My gut feeling tells me that we are getting broke (badly) sooner than later.
    Of course I do hope I am wrong. I do hope losing money on the gold I bought.

    But, should the meltdown occur, will we be blaming ourselves for having had too a small government? For having not taken an even bigger public debt? For not having printed even more paper money?

    With all these discussions, I feel a couple of quotes (from Bastiat) fit really well:

    “Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

    “[The socialists declare] that the State owes subsistence, well-being, and education to all its citizens; that it should be generous, charitable, involved in everything, devoted to everybody; …that it should intervene directly to relieve all suffering, satisfy and anticipate all wants, furnish capital to all enterprises, enlightenment to all minds, balm for all wounds, asylums for all the unfortunate, and even aid to the point of shedding [French] blood, for all oppressed people on the face of the earth.
    Who would not like to see all these benefits flow forth upon the world from the law, as from an inexhaustible source? … But is it possible? … Whence does [the State] draw those resources that it is urged to dispense by way of benefits to individuals? Is it not from the individuals themselves? How, then, can these resources be increased by passing through the hands of a parasitic and voracious intermediary?
    …Finally…we shall see the entire people transformed into petitioners. Landed property, agriculture, industry, commerce, shipping, industrial companies, all will bestir themselves to claim favors from the State. The public treasury will be literally pillaged. Everyone will have good reasons to prove that legal fraternity should be interpreted in this sense: “Let me have the benefits, and let others pay the costs.” Everyone’s effort will be directed toward snatching a scrap of fraternal privilege from the legislature. The suffering classes, although having the greatest claim, will not always have the greatest success.” (sounds prophetic?)

    “It seems to me that this is theoretically right, for whatever the question under discussion- whether religious, philosophical, political, or economic; whether it concerns prosperity, morality, equality, right, justice, progress, responsibility, cooperation, property, labor, trade, capital, wages, taxes, population, finance, or government- at whatever point on the scientific horizon I begin my researches, I invariably reach this one conclusion: The solution to the problems of human relationships is to be found in liberty.”

  12. ajax says

    “In the meantime, the debasement of paper money continues.”

    Now the article is complete. Very disappointed you missed that Detlev.

  13. says

    A thoughtful and impressive piece.

    “It seems fair to assume that law and security provision have a lot in common with money in that they, too, are subject to network effects. Just as the co-existence of many parallel monies is suboptimal, the co-existence of many different legal frameworks and security arrangements is inefficient.”

    The obvious question which this poses is: inefficient compared to what?……

  14. Lloyd Smith says

    To clear a point or two in the comments.

    A proper government in a free society is (should be) set up as a Federalist Republic. The Democratic process is simply the means by which government “managers” are selected. In a Democracy, the RIGHTS of the individual can be trampled by the WISHES of the majority (see most of the world today). A Democracy should be feared as a plague should.

    A governmental system of checks and balances and it’s branches of executive,legislative and judicial is not enough. A proper philosophic foundation/system that insures man’s freedom to live his life as he sees fit and exist by-and-for his on sake must, and never has been, understood and accepted. A philosophic system that rejects altruism as its moral code and instead embraces individualism has already been discovered by Ayn Rand and her Objectivism.

    I submit that altruism lies at the base of the world’s plight today.

    and …Laissez Faire Capitalism is the only socio-economic system consistent with, and proper to, such a philosophic system.

  15. Dan Mosley says

    The biggest objection to these kind of arguments is democracy itself. Ever since universal suffrage was introduced in the early 1900s, western democracies have moved from essentially a ‘night watchman’ state to one that includes a welfare state (in my opinion quite rightly so). 

    For example, it is inconceivable that today’s electorate would vote to have ‘free’ healthcare and education taken away from them, which would make a large section of the population far worse off than they are today. Therefore the argument presented here does indeed have little relevance to present political reality. 

    The real question I would like to see addressed by those pushing for a ‘classical liberal’ or ‘anarcho-libertarian’ state is: would such a state even be possible under the current political construct (representative democracy/universal suffrage)? And a more interesting question: if not, under what political construct would it be viable – and therefore what is the preferred political construct? 

    Once some thought is put into the implications of these questions, anarcho libertarians tend to fall silent…

    • says

      I don’t see why democracy can be an argument against the case I laid out in my blog. We are talking about two different things here. The question I addressed was if and to what extent a state – defined as a territorial monopolist of legal force, a social arrangement under which some people have ultimate power over other people and their property – can be advocated or defended on the basis of economic rationality or justice. My argument was that, as long as the state is not an entirely voluntary arrangement from which individuals or groups of individuals can peacefully exit at any time, the state can ultimately not be defended on grounds of economic rationality and justice. A voluntary system is always more efficient and more just. Democracy is simply the process by which, in a society with a state, those who are in charge of the state are being chosen. The fact that today a majority of the population decides every four or five years which organized group will be in charge of the state apparatus does not change any aspects of my analysis – although I will admit that today many people think, erroneously, that democracy itself must make the state just and efficient. The underlying idea seems to be that the numerical majority qua majority must be just (morally superior) and economically sensible. What I argued is that for any social arrangement to be economically efficient and thus sustainable, and for it to be just, it has to be based on private property and inviolable private domain (respect for the individual), and that any state has to be in fundamental conflict with private property, whether that state legitimizes itself through periodic majority voting or not.
      A democratic state can easily (and has a tendency to) descend into organized mob rule, it can (and most certainly will) trample on the rights of individuals and certain minorities, and it is most certainly economically irresponsible. It also has a tendency to constantly grow, which means the violations of property and the individual (which are inherent in any state structure) will also grow over time, and its economic problems will get larger. Because we all live in such a system, I do think this is of relevance to us.
      You are right, I think, that the majority is unlikely to vote for a smaller state. This means we will most certainly drift towards some form of democratic despotism and the complete politicization of our society, coupled with larger economic crises.
      I am convinced that a stateless, voluntary society is possible and desirable, although present trends point to ever bigger states and an ever more extensive politicization of our lives.

    • Stephen Davis says

      Dan,

      It is ridiculous to say that “the argument presented here does indeed have little relevance to present political reality.” If someone in the 1700′s was arguing that slavery was wrong, would you say that the idea of blacks being free had “little relevance to the present political reality”? When something is unjust and irrational, it is unjust and irrational.

      The preferred political construct of anarcho-libertarians is no political construct. Anarcho-libertarians oppose the state entirely, since it is institutionalized violence, i.e., institutionalized aggression against property rights.

      • Dan Mosley says

        Stephen, you make a valid point re slavery; but the reason I made the argument about political reality is that, in my opinion, there is wide support for democracy and the welfare state and no signs of people wanting it to end. Of course, there is a chance I am wrong, but this is a very small probability in my view.

        You also seem to think that there is some absolute standard of justice and rationality against which all institutions/ laws can be judged, which I don’t accept. Life isn’t quite so simple as this.

        • Stephen Davis says

          Dan,

          I agree with your assessment of the current situation, but that has no bearing on the correctness of the argument. I believe at this point, unfortunately, the current system must collapse of its own weight.

          Can you elaborate on your last paragraph? I think that moral rules, to be valid, must apply equally to everyone across all places and times.

          • Dan Mosley says

            Stephen, I agree with your point about moral rules. To elaborate, I think notions such as ‘property rights’ or ‘keeping what you earn’ are quite abstract, utopian ideals without much philosophical or practical foundation behind them.

          • Stephen Davis says

            Dan,

            Yes, “property rights” are abstract because they do not exist in reality. To say that they don’t have have “much philosophical or practical foundation behind them,” however, doesn’t make any sense. The concept of “property” must emerge in a situation where conflict over scarce resources can possibly occur. Even in the Garden of Eden, human bodies and standing room are scarce, so conflicts can still occur. Social norms regarding property rights are not “utopian ideals”: they are necessary. In terms of philosophy, property is almost universally recognized, though property rights are assigned differently. Anarcho-libertarianism is the only philosophy that logically deduces social norms regarding property rights in a way that enables the peaceful resolution of all conflicts to be possible, even in theory. All other systems make logical errors and assign property rights in ways that make conflict unavoidable. Check out Chapter 2 of this book: http://www.hanshoppe.com/wp-content/uploads/publications/Soc&Cap.pdf.

  16. Dan Mosley says

    Detlev,

    What I was getting at is not how ‘ethical’ or ‘just’ a limited state is, but under what form of government it could be constituted.

    As you point out, it is unlikely that the majority would vote for a limited state. Therefore, the question is, under what form of government could a small state emerge? If not under a representative democracy, then you are probably thinking of some form of benevolent dictator, who will curb the ignorance of the masses and roll back the state. But if we have learnt anything about government, it is that a benevolent dictator does not exist; and down this road lies ruin. Representative democracy is far from perfect, but it is the best we have. 

    • says

      David, I certainly do not wish for a dictator, whether benevolent or otherwise. But our modern democracy is already drifting towards a dictatorship, the dictatorship of an ever more intrusive bureaucracy that legitimizes itself by appealing to the opinions and wishes of the majority. The dictatorship of the majority, if you like, with less and less room for the individual, for privacy, for independent thought, for the non-consensus – - and for private property, which, I stress again, is essential for even maintaining our living standards, let alone improve them. The masses will not vote for a smaller state. The state will get ever bigger and more intrusive. It will ultimately collapse under the weight of its own inconsistencies in a cataclysmic crisis. Maybe then there is a chance for alternative arrangements.

    • Stephen Davis says

      Dan,

      From the article: “For a long time I considered myself a classical liberal – as did Ludwig von Mises who inspired much of my work. I do no longer think that this position is logically consistent.” Therefore, he is not arguing for a limited state. He is arguing for no state.

      Also, I would argue that representative democracy is actually not the best we have. In many ways, monarchy is superior (this is not to say that I advocate monarchy). Under monarchy, there is at least a chance that the monarch is a decent person; there are no illusions among the public as to who is stealing their property; and there is no ability for members of the public to become exploiters. Under democracy, people believe such nonsense as “we are the government,” and so the line between exploiters and exploited is blurred. Also, under democracy, people can aspire to become exploiters themselves, opening up competition in the production of a “bad” (as opposed to a “good”). Thus, the democratic process virtually guarantees that the people who rise to the top will be skilled demagogues. In addition, under monarchy, the ruler considers the kingdom to be his property, and therefore has an interest in preserving its capital value for the future (the family even has an incentive to kill off a monarch who is acting recklessly). Under democracy, the rulers are only temporary caretakers, and thus have an incentive to exploit the population as quickly as possible.

      It is also important to note that it is no accident that democracy led to the rise of the Total State and of Total War. All states tend to be aggressive (since they externalize the costs of their aggression onto their subjects), but because monarchs are concerned with the value of their property relative to democratic leaders, war tends to be confined to land and inheritance disputes. Under monarchy, the public considers the war to be the monarch’s war, and does not feel the need to fight on behalf of their exploiter. Democracy, on the other hand, by convincing people that “they are the government,” deludes them into thinking that their interests are aligned with the interests of the government, and this gives rise to ideological war, or Total War: war that only ends in cultural, linguistic, or religious domination, subjugation and, if necessary, extermination. The past century should make clear that democratic states are the most aggressive, and that the more liberal they are internally, the more aggressive they are externally (since they have the most productive population to plunder).

      The bottom line is that violence does not solve social problems. We must pursue the truth relentlessly through the application of logic, and stand up for what is right. The State is the scourge of mankind, and one day people will look back upon its existence just as we look back upon the existence of slavery. Just as there is no reason why the Industrial Revolution could not have happened tens of thousands of years earlier than it did, there is no reason why the State must continue to be the boot on the neck of mankind.

      • Dan Mosley says

        Stephen, have you heard of a chap called Hitler and a bloke called Stalin?

        One of the many problems with Monarchy (and aristocracy) is that the government is hereditary rather than meritocracy. Therefore inherited stupidity becomes a problem. Not to mention the old line that ‘power corrupts’; put absolute power in the hands of a single person, and history shows that the result is tyranny.

        In any case, you seem to be saying that you don’t advocate Monarchy, and you don’t advocate democracy, so what do you advocate?

        • Stephen Davis says

          Dan,

          I have. I assume you know that Hitler rose to power through the democratic process and everything the Nazis did was legal? I assume you know that Stalin was an ally of the United States and that after WWII he ended up with 100 million more subjects than he did before? I’m not sure what your point is, or how it relates to the arguments presented above.

          I addressed everything in your second paragraph above. Your arguments are not in favor of democracy, as I pointed out.

          I advocate a free society. I advocate property rights. I advocate voluntary interaction among people. No one has the right to rule over others. Every single person must be subject to the same moral rules.

          • Dan Mosley says

            Stephen, my point is that you said that democracy led to the rise of the total state and total war. Three of the biggest proponents of the total state and total war last century (Russia, Germany, Japan) were not democracies at all. In two of those countries, it can’t even be argued that democracy led to the rise of the total state and total war.

          • Stephen Davis says

            Dan,

            You are not addressing the logic of the argument. What country is the only country to ever use atomic weapons? What country has military bases all over the planet? What country has been waging essentially constant war since WWII?

  17. E Harris says

    @ Steven Davis: I recognise some of these themes from H H Hoppe’s ‘Democracy’. What did you make of his anarcho-libertarian argument against free movement of labour across borders?

  18. Stephen Davis says

    E Harris,

    Yes, I pretty much restated Hoppe’s arguments about monarchy vs democracy above.

    Regarding immigration, I agree with his analysis, but since immigration only becomes an issue with the establishment of a territorial monopolist of coercion, I do not agree that one should support restricted immigration within the current democratic framework. If you accept a faulty premise, you will arrive at a faulty conclusion. Beyond this, I think that restricted immigration of the kind that Hoppe advocates would actually strengthen the State, since it would lead to a more productive population and would blur the distinction between taxpayers and tax consumers. Anarcho-libertarians should oppose any growth in State power.

    • Stephen Davis says

      Just to clarify one of my comments above, I am not saying that something that leads to a more productive population should be opposed simply because it would, in turn, lead to a more powerful State. That would be wrongheaded. My point is that the specific policies that Hoppe advocates require the State having more power over people’s lives, and that should be opposed.

  19. jaimie says

    jamie,
    what I mean is no self respecting Hunter Gatherer wants to go back to the Stone Age. And no sedentary Farmer wants to go back to Hunter Gathering. We all glimpse an imaginary state we will never get to.
    Just like Homer or Butch Cassidy or Don Genaro. Ok, I’m just name dropping, I never met Butch, but I like to see H Harriman’s paper money blow out of that box car!
    Jaimie

  20. Dan Mosley says

    Stephen,

    Yes, social norms regarding property rights are necessary. What I meant in terms of a utopian ideal is an absolute right to “keep what you earn”, i.e. no tax, and no power for a ruling authority (the government) to define what property rights are. 

    I don’t think that Anarcho-libertarianism would allow the peaceful resolution of all conflicts to be possible, and would likely lead to much more conflict between groups due to the lack of a central ruling authority. 

    My political philosophy is basically Rawlsian. We should try and create the type of society we would choose if we didn’t know in advance who we would be. And this means fairness – so much of what you are in life depends on your starting position, which you cannot be said to deserve in any way. If you are born into a rich family your life chances are vastly better than if you are born into a very poor one. Therefore in my view there is nothing immoral about the rich being forced to give some of their wealth to the poor to try and even out some of this injustice in life chances. 

    Re your post on the US, I don’t understand your point. The world has been a far more peaceful place (look at Europe!), in terms of state on state conflict, since the rise of democracy. 

    • Stephen Davis says

      Dan,

      You are just making assertions without arguments. It’s great that you “don’t think that anarcho-libertarianism would allow the peaceful resolution of all conflicts,” and that it “would likely lead to much more conflict,” but you have not presented a single argument. You need to deal with the arguments of anarcho-libertarianism, you can’t just dismiss them.

      There is no logic or principled approach presented in your second paragraph. It is nothing but intellectual mush that could be used to justify the worst atrocities that have been committed against mankind. Who determines what is “fair” and how do they determine it? Who are “the rich”? Who are “the poor”?

      Competition among states is eliminative. If there was only one state, state on state conflict would be eliminated. So what? Governments MURDERED 270 MILLION OF THEIR OWN PEOPLE in the 20th century.

  21. Rob says

    Interesting essay, as usual, Detlev. I would love to live in the state you propose. I understand that your are putting forward an ideal, but would you say there are any states in the world today that remotely approach this model of state power?

    I can’t think of any. The problem with this utopia is that it does not take account of the fallibility of human nature. For example Britain in 1793 probably closely resembled the state which you admire, devoted entirely to defence and law and order (albeit under a constitutional monarchy). However the demands of war with revolutionary and then imperial France drove a coach and horses through the carefully set up small state that Pitt the Younger had crafted (and of course departure from the gold standard for a time). Thus began income tax and the inexorable confiscation of private property by the state, until we reach the socialist nirvana of Britain today where the state takes more than 50% of everything we produce and then does a very bad job redistributing it.

    Utopia also does not allow for the fact that the rich will corrupt the state’s power ultimately and try and aggregate more power for themselves over the less rich/poor. It would also tend to entrench the rich due to educational advantage and access to capital and wealthy social networks.

    I suspect this is why it will not gain traction as an idea, even after we have the monetary meltdown which you predict. There will be a balancing position that might achieve the ideals of reasonably free markets with some measures to allow the poor to not remain permanently so and keep the rich in check, but usually politicians will tip that balance towards populism over time.

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