Sunday, August 21, 2016

Bob Murphy’s Solution to a Free Market in WMD

From Robert P. Murphy’s Chaos Theory: Two Essays on Market Anarchy:
“The insurance company makes its money by charging appropriate premiums, tailored to the individual client.

If Joe smith has been deemed guilty in the past of violent behavior, his insurance premiums will be accordingly higher. But there are other factors that an insurance company would take into account when setting premiums, besides past behavior. And one of these factors would undoubtedly be: what sort of weapons does this client keep around the house? After all, if the insurance company is going to agree to pay, say, $10 million to the estate of anyone Joe smith kills, the company will be very interested to know whether smith keeps sawed off shotguns—let alone atomic weapons—in his basement. Someone who keeps such weapons is much more likely to harm others, as far as the insurance company is concerned, and so his premiums will be that much higher. In fact, the risk of a client who kept nuclear (or chemical, biological, etc.) weapons would be so great that probably no policy would be offered.

This approach is superior to the governmental one. This approach is superior to the governmental one. Truly dangerous weapons would be restricted to individuals willing to pay the high premiums associated with their ownership; kids couldn’t buy bazookas at the local K-Mart.” (Murphy 2010: 36).
Well, that’s a relief.

I mean, I thought there might be a serious problem here, but Bob has clearly thought through the issues exhaustively….

But, to return to the real world, we are not talking about somebody with WMB in their basement. The issue with WMD in anarcho-capitalism is this: we are talking about the free production and sale of WMB by capitalists under anarcho-capitalism, where capitalists are free to produce and sell anything they want in free and voluntary exchanges.

Wouldn’t this lead to massive proliferation of these weapons?

What happens if your domestic capitalists are freely selling WMB to foreigners? Why would they or insurance companies care about what happens, say, in some far distant war in the Third World, which then goes nuclear?

And what if a high insurance premium or no insurance fails to stop capitalists from producing and selling WMD for huge profits? What if the companies are so rich and powerful they own their own insurance companies? What if they buy up insurance companies?

Or, alternatively, what if domestic capitalists are happily selling the various parts and materials to build WMD to foreigners or domestic citizens?

This latter point is just as important. Under anarcho-capitalism, there would be complete freedom to sell the parts and materials to make all kinds of WMD as well: so why would an insurance company care if a company is only making a product that might be used for other purposes, like nuclear power, but sells it to lunatics intent on making WMD?

It follows, as is intuitively obvious, that an anarcho-capitalist society would result in the massive proliferation of WMD.

Well, it turns out Bob has a solution:
“The case for private defense must deal with the possibility of nuclear blackmail. In modern warfare, it would seem that only a nation that can credibly threaten to obliterate its opponents is safe from a first strike.

The anarchist society would probably not develop or even own nuclear weapons. In the first place, the term defense has been adopted consciously in this essay, and is not the euphemism as used in government propaganda. Because they would gain nothing from foreign conquest—since this would constitute theft and would be fully prosecuted within the anarchist courts—the owners of defense agencies would have no reason to spend money on weapons that were ill-suited to tactical defense. Precision of weaponry would be of paramount importance, since battles would be fought near or amidst a defense agency’s customers.

Another, perhaps more significant, consideration is that defense agencies would most likely be legally prohibited from owning ‘weapons of mass destruction.’ The anarchist legal system would operate on the same principles of voluntary contract that underlay the defense industry. Insurance companies would vouch for individuals and pledge to compensate anyone victimized by their clients. In an effort to limit their liability, insurers would require certain concessions from their customers. It is hard to imagine that an insurance agency would pledge, say, $1 million for any (innocent) person killed by Defense Firm X, when Firm X held a stockpile of hydrogen bombs.

Despite its probable lack of nuclear weapons, the anarchist society remains a viable option.” (Murphy 2010: 59–60).
But how is a mere demand by an insurance company that their client not own WMD going to stop someone who is strongly intent on owning WMD? Why would such a person care?

Also, I fail to see how a mere private insurance contract demand for no WMD is in any sense a legal prohibition from owning them. It is no such thing.

It is also very strange that Bob Murphy states that the “case for private defense must deal with the possibility of nuclear blackmail,” but at the same time the “anarchist society would probably not develop or even own nuclear weapons.”

So what if, as could easily happen under anarcho-capitalism, China buys up vast territories in the United States, but suddenly becomes very aggressive against gated communities of Americans. Private defence contractors try and fight off these attacks, but the Chinese government threatens to use WMD – weapons the anarchist society is forbidden from having. So America gets conquered by China?

I also love this piece of fantasy-world optimism:
“These considerations also show why an anarchist society need not fear a foreign government using their own (advanced) weaponry against them. Private defense firms would likely sell their wares to foreign buyers (depending on the legal status of governments in the anarchist courts), but these would be designed for defensive use. There would likely be no aircraft carriers, long-range bombers or subs capable of transoceanic voyages.” (Murphy 2010: 59, n. 59).
What use is that when foreigners are perfectly capable of producing aircraft carriers, long-range bombers or submarines given the necessary money and technology? Did you think of that, Bob?

There is also this bizarre idea that no private companies would be interested in manufacturing and selling offensive weapons. Imagine if the America economy was totally privatised by libertarian government, which then abolished itself. Why would America’s arms manufacturers suddenly stop selling advanced offensive weapons, given the demand for them in the world today?

Murphy, Robert P. 2010. Chaos Theory: Two Essays on Market Anarchy (2nd edn.). Ludwig von Mises Institute, Auburn, Ala.


  1. 'Anarcho capitalism' is a nonsensical and entirely fraudulent ideology which has got nothing to do with genuine anarchism. The whole thing is just about using deceitful, superficially anarchist-sounding rhetoric in order to advocate a form of corporate/plutocratic dictatorship, or neo-feudalism.

  2. The idiocy of Bob Murphy's ideas is so enormous that you wouldn't be able to enumerate all the loopholes in one post.

    All his ideas are predicated on people being "nice" because they will face insurance problems otherwise. But that assumes that external powers with WMD will be countered by these self-disarmed insurance companies. Yes, local resistance would make it prohibitively expensive to conquer an ancap nation: unless you simply resort to extermination. We in the US have a history of doing that to the Native Americans. And you don't even have to go that far to be profitable: look at the Israelis and how they have marginalised the Palestinians. Or the Australians and how they have treated the Aborigines.

  3. anarchist courts? That smells like government. Don't you take my freedom away!

    Those AnCap knuckleheads are truly amusing. I wonder why their state of mind isn't recognized as a serious medical condition yet. They need help really.

  4. This is clearly an unassailable argument against anarchism. Nukes will always exist and in the absence of government to restrict their production and trade, the probability of nuclear war would become very great. Any lunatic individual or group with enough money could buy WMD's and hostile states could threaten the anarchist territory with them. I've never heard an anarcho-capitalist with a convincing response to this objection. Even ancap deity Rothbard didn't really have a position on nukes when he was asked about this problem;

    The whole idea of anarcho-capitalism is ridiculous, as is any "anarcho" suffix. Anarchism would be spontaneous and uncontrollable. Some areas may practice sharia law, some socialism, some racial nationalism and others libertarianism. The law in the local area would be determined by the private police and legal agencies i.e. the men with the most powerful weapons. Abolishing the state would certainly not bring about a libertarian result in Afghanistan, Detroit, the Paris ghetto's etc. The anarchists also do not explain how anarchy would be a permanent state of affairs. Isn't it perfectly possible that anarchic territories would decide to form a government? Maybe even to build a powerful army to dominate other anarchic territories?

    Anacho-capitalism, indeed anarchy generally, has so many weaknesses it shouldn't even be considered a serious political philosophy. Anarcho-capitalism has never existed in practice (which should tell the libertarians something) and hopefully it never will, although medieval Iceland and the most savage parts of Africa (!) are often held up by ancaps as models for how an anarchist society could work. You couldn't make it up.

  5. What if Joe Smith doesn't want insurance? Is there a public mandate that he has to get it?

    1. Nope. He'll just have to hope he is able to defend himself from bandits or that public-spirited vigilantes will protect him for free. If Joe doesn't have the money to pay for high-quality police protection and legal services, he's pretty much screwed.

    2. Yep. The only reason the Insurance Industry exists in such a large, lucrative fashion is because it's underwritten by government mandate. If there were no longer the practice of state licensing of auto drivers, the requirement to own insurance in order to drive would likely disappear also. Same with Health Insurance sold in countries that have an Individual Mandate. Insurance as we know it would all but cease to exist.

      Same thing if you got rid of the IRS. The power of the CPA lobby is what would fight you on that, and it would be another industry that would ravel up.

      Whether these things are good or bad is besides the point. The bottom line is, we're already more amalgamated and assimilated into Babylon more than we realize.

  6. I don't want these maniacs in the front row getting their hands on any weapons. In fact I want the security services keeping a very close eye on them:

  7. Robert Murphy and anyone who is serious about real solutions to transform society should look into the Green Parties' platform:

    It's based on the governmental philosophy of Communalism. "A prominent libertarian socialist, Murray Bookchin, defines communalism as 'a theory of government or a system of government in which independent communes participate in a federation.'"

    So for example, they would favor transferring ownership of the means of production to collectives or "Worker's Co-ops," as is all the rage right now in Argentina and parts of Spain. The much-lauded Mondragon Corp is another example. It's taken an unfortunate turn of having workers who are simply employees and not part-owners of the company they work for,as was the original vision. My guess is that it was seen as an expedient way to help people get jobs "right now." In any case, no ones driving a Rolls, but people report a high level of satisfaction and stabilization compared to Spain's high unemployment levels.

    Basically it's about "localism," or transferring the balance of power through subsidiarity, if I'm understanding it correctly.

    Other things favored: Consumer co-ops, credit unions,local economic development, etc.

    Economic Transformation:

    2014 platform: