But Wouldn't Warlords Take Over? ( Robert P. Murphy )

 On two separate occasions in the last couple of weeks, people have  asked me a familiar question:  “In a system of ‘anarcho-capitalism’ or  the free-market order, wouldn’t society degenerate into constant battles  between private warlords?”  Unfortunately I didn’t give adequate  answers at the times, but I hope in this article to prove the adage that  later is better than never.

APPLES AND ORANGES

When  dealing with the warlord objection, we need to keep our comparisons  fair. It won’t do to compare society A, which is filled with evil,  ignorant savages who live under anarchy, with society B, which is  populated by enlightened, law-abiding citizens who live under limited  government.  The anarchist doesn’t deny that life might be better in  society B.  What the anarchist does claim is that, for any given population,  the imposition of a coercive government will make things worse.  The  absence of a State is a necessary, but not sufficient, condition to  achieve the free society.To put the matter differently:  It is  not enough to demonstrate that a state of private-property anarchy could  degenerate into ceaseless war, where no single group is strong enough  to subjugate all challengers, and hence no one can establish “order.”   After all, communities living under a State degenerate into civil war all the time.  We should remember that the frequently cited cases of Colombia and now Iraq are not demonstrations of anarchy-turned-into-chaos, but rather examples of government-turned-into-chaos.For  the warlord objection to work, the statist would need to argue that a  given community would remain lawful under a government, but that the same community  would break down into continuous warfare if all legal and military  services were privatized.  The popular case of Somalia, therefore, helps  neither side.1   It is true that Rothbardians should be somewhat disturbed that the  respect for non-aggression is apparently too rare in Somalia to foster  the spontaneous emergence of a totally free market community.  But by  the same token, the respect for “the law” was also too weak to allow the original Somali government to maintain order.Now  that we’ve focused the issue, I think there are strong reasons to  suppose that civil war would be much less likely in a region dominated  by private defense and judicial agencies, rather than by a monopoly  State.  Private agencies own the assets at their disposal, whereas politicians (especially in democracies) merely exercise temporary control over the State’s military equipment.  Bill Clinton was perfectly willing to fire off dozens of cruise missiles when the Lewinsky scandal was picking up steam.   Now regardless of one’s beliefs about Clinton’s motivations, clearly  Slick Willie would have been less likely to launch such an attack if he  had been the CEO of a private defense agency that could have sold the  missiles on the open market for $569,000 each .2We  can see this principle in the case of the United States.  In the 1860s,  would large scale combat have broken out on anywhere near the same  scale if, instead of the two factions controlling hundreds of thousands  of conscripts, all military commanders had to hire voluntary mercenaries and pay them a market wage for their services?

CONTRACT THEORY OF GOVERNMENT

I  can imagine a reader generally endorsing the above analysis, yet still  resisting my conclusion.  He or she might say something like this:  “In a  state of nature, people initially have different views of justice.   Under market anarchy, different consumers would patronize dozens of  defense agencies, each of which attempts to use its forces to implement incompatible  codes of law.  Now it’s true that these professional gangs might  generally avoid conflict out of prudence, but the equilibrium would  still be precarious.”“To avoid this outcome,” my critic could  elaborate, “citizens put aside their petty differences and agree to  support a single, monopoly agency, which then has the power to crush all  challengers to its authority.  This admittedly raises the new problem  of controlling the Leviathan, but at least it solves the problem of  ceaseless domestic warfare.”There are several problems with this  possible approach.  First, it assumes that the danger of private  warlords is worse than the threat posed by a tyrannical central  government.  Second, there is the inconvenient fact that no such voluntary formation of a State ever occurred.   Even those citizens who, say, supported the ratification of the U.S.  Constitution were never given the option of living in market anarchy;  instead they had to choose between government under the Articles of  Confederation or government under the Constitution.But for our purposes, the most interesting problem with this objection is that, were it an accurate description, it would be unnecessary  for such a people to form a government.  If, by hypothesis, the vast  majority of people—although they have different conceptions of  justice—can all agree that it is wrong to use violence to settle their honest disputes, then market forces would lead to peace among the private police agencies.Yes,  it is perfectly true that people have vastly different opinions  concerning particular legal issues.  Some people favor capital  punishment, some consider abortion to be murder, and there would be no  consensus on how many guilty people should go free to avoid the false  conviction of one innocent defendant.  Nonetheless, if the contract  theory of government is correct, the vast majority of individuals can agree that they should settle these issues not through force, but rather through an orderly procedure (such as is provided by periodic elections).But  if this does indeed describe a particular population, why would we  expect such virtuous people, as consumers, to patronize defense agencies  that routinely used force against weak opponents?  Why wouldn’t the  vast bulk of reasonable customers patronize defense agencies that had  interlocking arbitration agreements, and submitted their legitimate  disputes to reputable, disinterested arbitrators?  Why wouldn’t the  private, voluntary legal framework function as an orderly mechanism to  settle matters of “public policy”?Again, the above description would not apply to every society in history.  But by the same token, such warlike people would also fail to maintain the rule of law in a limited State.

FREE RIDERS?

A  sophisticated apologist for the State—especially one versed in  mainstream economics—might come back with yet another justification:   “The reason a limited government is necessary is that we can’t trust the  market to adequately fund legitimate police forces.  It may be true  that 95 percent of a population would have similar enough views with  respect to justice such that peace would obtain if they all contributed substantially to defense agencies dedicated to enforcing their views.”“However,”  the apologist could continue, “if these police agencies have no right  to extract contributions from everyone who endorses their actions, then  they will be able to field a much smaller force.  The market fails  specifically because of the free rider problem:  When a legitimate firm  cracks down on a rogue agency, all law abiding people benefit, but in a  free market they would not be obliged to pay for this ‘public good.’   Consequently, rogue agencies, funded by malevolent outlaws, will have a  much wider scope of operation under anarchy.”Again, there are  several possible replies to such a position.  First, let us reflect that  a large standing army, ready to crush minority dissenters, is not an  unambiguously desirable feature of government.Second, the alleged  problem of free riders would not be nearly as disastrous as many  economists believe.  For example, insurance companies would “internalize  the externalities” to a large degree.  It may be true that an  “inefficient” number of serial killers would be apprehended if the  relevant detective and police agencies had to solicit contributions from  individual households.  (Sure, everyone gets a slight benefit from  knowing a serial killer has been caught, but whether or not one person  contributes probably won’t make the difference between capture or  escape.)Yet insurance companies that each held policies for  thousands of people in a major city would be willing to contribute hefty  amounts to eliminate the menace of a serial killer.  (After all, if he  kills again, one of these companies will have to pay out hundreds of  thousands of dollars to the estate of the victim.)  The same reasoning  demonstrates that the free market could adequately fund programs to  “contain” rogue agencies.Third, people need to really picture  the nightmare scenario to see how absurd it is.  Imagine a bustling  city, such as New York, that is initially a free market paradise.  Is it  really plausible that over time rival gangs would constantly grow, and  eventually terrorize the general public?3  Remember, these would be admittedly criminal organizations; unlike the city government of New York, there would be no ideological support for these gangs.We  must consider that in such an environment, the law-abiding majority  would have all sorts of mechanisms at their disposal, beyond physical  confrontation.  Once private judges had ruled against a particular rogue  agency, the private banks could freeze its assets (up to the amount of  fines levied by the arbitrators).  In addition, the private utility  companies could shut down electricity and water to the agency’s  headquarters, in accordance with standard provisions in their contracts.Of course, it is theoretically possible  that a rogue agency could overcome these obstacles, either through  intimidation or division of the spoils, and take over enough banks,  power companies, grocery stores, etc. that only full-scale military  assault would conquer it.  But the point is, from an initial position of  market anarchy, these would-be rulers would have to start from scratch.  In contrast, under even a limited government, the machinery of mass subjugation is ready and waiting to be seized.

CONCLUSION

The standard objection that anarchy would lead to battling warlords is unfounded.  In those communities where such an outcome would  occur, the addition of a State wouldn’t help.  Indeed, the precise  opposite is true:  The voluntary arrangements of a private property  society would be far more conducive to peace and the rule of law, than  the coercive setup of a parasitical monopoly government. 

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•  1.  Having made this concession, I should point out that anarcho-capitalists can see their theories borne out in Somalia to some extent.
• 2.   It’s true that this figure would be lower for a private defense firm,  since it would control costs much better than the Pentagon.  Nonetheless  it is still true that a private firm would husband its stockpile of  weapons better than State officials.
• 3.  Let us also keep in mind that currently, mob groups (1) do not extract  anywhere near as much money, nor kill as many people, as any government  in a typical day’s work, and (2) they derive their current strength from  government prohibitions (on gambling, drugs, prostitution,  loan-sharking, etc.) and hence are not representative at all of an  anarchist world.