Friday, June 7, 2013

Coercion is the Basis of all Market Societies

This is a simple point, but important. All capitalist systems or systems based on markets – or indeed human society of any sort – require law and order and ultimately force and coercion to back up the law and the enforcement of the law. That is why a “pure” laissez faire society or economy in the strict sense is impossible, because it would reduce to a system without law, rules or the enforcement of law. It would be a literal anarchy with no rules. At a minimum, there needs to be respect for the law, property rights and the enforcement of non-fraudulent contracts when one party violates the contract or breaches a contract.

Even Rothbardianism, the most extreme laissez faire system dreamed up by libertarians, has as its foundation a private law code and private justice system, which would still ultimately require coercion and force to enforce and maintain that order. The only difference between a state-based system and a Rothbardian system is that in the latter the coercion and force is done by competing private protection agencies and a private justice system.

Obviously to decide what institutions (such as government) and practices are necessary, defensible and moral in any society in a prescriptive sense requires an ethical theory. At that point, debates about the ultimate basis of how a society enforces its laws and how and what laws it passes collapse into debates about philosophy of ethics.


  1. Its true of course, that coercion is the basis of law, unlike what the my crazy austrian cousins say.

    However, as a Market Monetarist and New Friedmanite, while i think that coercion cannot be completely abolished. it can be minimized, and that in itself is a worthy goal. Obviously where we disagree lies in the amount of coercion we favor.

  2. Do any anarchist libertarians disagree with this? As far as I can tell, coercion is only relevant in the context of taxation. Under AC, protection agencies will be based on private contract and customers may peacefully switch agencies. No such option exists under statism.

    1. "Do any anarchist libertarians disagree with this?"

      Perhaps you are not familiar with the hordes of internet Austrians who cannot see that their objection, logically, should not be to mere coercion per se to enforce laws, but -- under their theory -- state monopoly of force.

      But that just raises lots of issues. How will an an-cap system maintain many competing private protection agencies? By private law?

      If not, already problems emerge. Rothbard tells us that if some business obtains monopoly production of some product under a true an-cap system, then that is not even to be defined as a "monopoly", for the definition of monopoly is merely a right of exclusive production granted by the state to some entity (Rothbard 2009: 670*).

      But this effectively means that if, in an an-cap system, exclusive production of private protection emerged by one business, we would have a de facto government, but according to Rothbard, that's just fine! -- because it emerged on a free market.

      Therefore even the anarchist libertarian objection to state monopoly of force per se implodes.

      *Rothbard, M. N. 2009. Man, Economy, and State, with Power and Market: The Scholar's Edition, Ludwig von Mises Institute, Auburn, Ala.

    2. Under statism, coercion is present because the state prevents individuals from patronizing private firms that would be alternatives to state provided legal protection. The coercion that exists is taxation and forcible monopoly jurisdiction, or no right of secession if you will. Under libertarian anarchism, individuals would have the right to change firms if they choose to. This seems like a clear difference in coercion to me.

  3. I don’t find it useful to imagine one agency emerging through consent by every single person in existence. It’s not going to happen, but if it does, then yes, it would be legitimate since everyone agreed to it. But I’m sure some people will eventually want to patronize alternative and more efficient agencies. So what happens then? Can individuals hire different firms for protection? If not, then you have a coercive government. If so, then you have a competitive non-coercive society that libertarians support.

  4. "Under statism"

    Do you mean "in a society with shared laws"?

    "no right of secession"

    What you mean is you don't have the legal right to declare that you and your little patch of land are exempt from all laws other than those that you choose to make up yourself. Yes, that is correct.

    "coercion is present because the state prevents individuals from patronizing private firms that would be alternatives to state provided legal protection".

    You don't just get to make up your own laws willy-nilly on whatever basis happens to take your fancy at any given point in time. Why should you? A society is a place in which people live under shared laws. You can try to get those laws changed however, or you can choose to leave the jurisdiction.

    "The coercion that exists is taxation"

    By law, you are normally required to pay money which you owe. That includes money which you owe to the state.

    "and forcible monopoly jurisdiction"

    Laws have to be enforceable if they are to have any substance. Again, you can't just say "right you guys, I don't like your laws so from now on me and my property are exempt, ok?", whilst continuing to live within the jurisdiction. That's not how laws work.

    "Under libertarian anarchism, individuals would have the right to change firms if they choose to".

    Well if you think that's a good idea maybe you should try and get the law changed, you know, like through the democratic process or something. You could start your campaign by informing everyone that your aim, as a hard-right 'libertarian', is first and foremost to strip them of all their democratic rights.

  5. y- the system anarchists support is non coercive in regards to funding and force will be used against criminals who break the law. As a criminal, you can't decide to "opt out" to escape punishment. However, as a non-criminal, you may choose your own representation in contrast to statism. That you think this won't work is irrelevant to whether coercion exists or not.

    1. "the system anarchists support is non coercive in regards to funding and force will be used against criminals who break the law. "

      Oh really!?:

      In the Rothbardtopia a private law court cannot even issue a subpoena for a person against whom a charge has been filed. Some justice system.

  6. Rothbard also says "Indeed, in the basic legal code of the free society, there probably would be enshrined some such clause as that the decision of any two courts will be considered binding, i.e., will be the point at which the court will be able to take action against the party adjudged guilty".

    So a convicted criminal would be punished or detained by force.

    In fact, this is how international law works in a sense. When you say “some justice system”, do you think extradition laws are flawed?

    Randy Barnett discusses this point in “Pursuing Justice in a Free Society”.

    “Courts and judges have, therefore, traditionally found peaceful ways to resolve the two questions most likely to lead to conflict when multiple legal jurisdictions exist: Which court system is to hear the case when more than one might do so? And which law is to be applied when more than one law might be applied? Much of the court-made law of ‘civil procedure’ addresses the first question, and an entire body of law-called the conflict of laws-has arisen spontaneously (that is, it was not imposed by a higher authority) to provide a means of resolving the second of these two questions…

    … The argument that we need court systems with geography-based jurisdictional monopolies does not stop at the border of a nation-state. Any such argument suggests the need for a single world court system with one Super-Supreme Court to decide international disputes and its own army to enforce its decisions. After all, the logic of the argument against a competitive legal order applies with equal force to autonomous nations."

    1. Invoking international law on that point is ridiculous.

      International law is agreement between state-based justice systems, which pursue justice as a matter of principle -- not *for profit* private protection agencies in the business just to make money.

  7. It's not ridiculous- it serves a reminder that a final arbiter isn't needed to resolve disputes when jurisdictions overlap and conflict. "For profit" doesn't invalidate impartiality just as non-for-profit does not ensure it.

  8. "the system anarchists support is non coercive in regards to funding"

    As I said you should start the campaign for your hard-right so-called "libertarian" revolution by informing the electorate that your principle aim is to ruthlessly strip them and all future generations of their democratic rights, along with a whole host of other rights they currently enjoy.

  9. "the system anarchists support is non coercive in regards to funding"

    By anarchists you mean ultra-far-right-wing anarcho-capitalists.

    And by "non coercive in regards to funding" you mean that those who own the most wealth enjoy almost unlimited power, whilst those who have nothing are reduced to the status of beggars and serfs.

  10. "However, as a non-criminal, you may choose your own representation in contrast to statism"

    As I said, you want the right to make up your own laws on your own property with your own private police etc etc nonsense.

    "That you think this won't work is irrelevant to whether coercion exists or not".

    I don't particularly care whether you think it could work in theory or not. In my experience "libertarians" will believe any old crap. As I said, if you want to change the current system then you should try and sell your ideas to the electorate, and begin by informing them that the primary aim of your far-right movement is to strip them the many rights they currently enjoy as citizens. But please stop with all the sanctimonious garbage and tell people the truth.

  11. y- there's plenty of good, serious literature on the subject that is not sanctimonious (I assume you are referring to Rothbard here). See Bryan Caplan's "Non State Legal Systems", David Friedman's "The Machinery of Freedom”, Bruce Benson's "The Enterprise of Law: Justice Without the State", and Randy Barnett's "The Structure of Liberty". All are professors at respectable universities who teach either law or economics.

  12. Libertarians assume property rights as a starting point, and that's why they talk about freedom to hire the prefered enterprise to defend them against "criminals" and to decide juridical issues.

    But in practice the role of such enterprises is usually to define property rights by violating someone else's rights. That's normal in third-world countries where property rights are shady and itis only those rich or powerful enough whom can "legalize" their property rigths by expropriating others.

    In the globalized world many entrepreneurs, advocates of free markets and private property, see no problem in funding private armys in order to define favorable "legal" property rights in third-world countries.

    In a world where some areas have well defined property rights and others do not, anarcho-capitalism will have an unequal distribution of power since the beginning, and it will lead to ethically questionable social orders (and they could fail, as in Iceland).

  13. I wonder how people like Eric Charles can be so parallel to day to day realities of human relations that they can believe such bs, let alone support it publicly. Without a third party acting as arbiter - the two conflicting sides will only settle the issue through violence. The idea that two opposing sides will BOTH agree to 'choose' their arbiter from a bunch of competing arbiters is just plain bs. So so many a priori assumptions about human behavior - assumptions that are completely invalided by a posteriori reasoning (history) time and time again.