A Day in Rothbardian Anarcho-Capitalist Paradise

Robert Murphy tries to defend libertarianism from the charge that, without the state, there would be problems with provision of public goods like roads.

First, it is important to note that the “libertarianism” we are talking about here is an extreme form called Rothbardian anarcho-capitalism which believes in the total abolition of the state and the privatisation of everything.

Unfortunately, the problems with such a system go far beyond the issue of who would build the roads.

What would such a society look like? What would you discover if you woke up and found yourself in such a society?

To answer this question, we can turn to the writings of Rothbard to see how he imagines his anarcho-capitalist world (Rothbard 2009; 2011), and we can also use inductive arguments by analogy to suggest probable outcomes in such a society, on the basis of instances in modern history where modern nations (usually during the 19th century) have left things to private enterprise.

First, would an anarcho-capitalist society have a good system of transportation, sanitation, drainage, water, and electricity infrastructure, if built from nothing?

The Rothbardians claim that the private sector would build all such infrastructure, but historical instances where these things are left to the private sector suggest that such a system has definite disadvantages: not enough provision of such goods/services, and often privatised services which are too expensive for many people to afford (e.g., health care).

A case in point: if you found yourself in a Rothbardian anarcho-capitalism system, I submit that you would quickly find serious problems with justice.

The anarcho-capitalism system abolishes the state and all state-based criminal law. There would no longer be any criminal laws at all (Rothbard 2011: 407).

All crimes – even the worst possible – would simply become offences only punishable under a system of private tort law. In “common law” nations, a tort is a wrongful or harmful act against a person other than breach of contract (in “civil law” nations torts are generally called “delicts”). Under tort law, the victim can obtain redress or justice only if they privately bring a law suit or legal action against the perpetrator or aggressor (Rothbard 2011: 407). But what if you do not know the perpetrator or aggressor? You would need to hire private investigators even before you can bring a law suit.

But, unfortunately, both private investigators and law suits require money, and probably a considerable amount of money: if a victim cannot afford legal services and the fees to bring a private law suit under tort law, then no trials or punishments of many criminals will ever happen in Rothbardian anarcho-capitalist paradise.

More importantly, the principle of no public investigation or punishment of crimes through criminal law when a criminal, even if caught, can simply buy off his victim strongly suggests that the rich and super-rich in Rothbard’s world will simply have a licence to commit crimes and bribe victims to stop prosecution. This is a world where justice has become a travesty and a joke.

Let us move on to social security. You would also find that, if there is no basic social security in society, people who cannot find work or successfully beg for private charity in such a society will be plunged into poverty or simply starve. There would presumably be insurance against unemployment and other social distress, but we are now back to the same problem as noted above: what if you cannot afford it?

Rothbardian anarcho-capitalism would also be horrible for many of the mentally ill or disabled. What would happen to people who are mentally ill or disabled who simply cannot pay for basic services they need to live? What if these people cannot find enough charity?

Rothbardian anarcho-capitalism has no restrictions on child labour. What is particularly stupid here is that some libertarians, agreeing that child labour is a bad thing, are anxious to argue that you do not need child labour laws to end employment and exploitation of children.

However, if you bother to read Rothbard, he was actually in favour of child labour (Rothbard 2009: 1111–1112). A Rothbardian anarcho-capitalist system, then, has no barrier to exploitation of children.

With no public health policies such as immunisation programs and disease control, you would probably find that a Rothbardian anarcho-capitalist system would see the return of serious epidemics, diseases, and other serious public health issues long since banished from the Western world.

With no regulation of who brings in plants and animals into the society, will visitors or tourists bring in plant and animal diseases causing serious problems to agriculture and the environment?

Finally, with no government regulations whatsoever on the production and sale of not only guns, but also advanced military weapons, chemical, biological, and nuclear weapons, it follows that any lunatic or religious fanatic with enough money can literally go and freely buy weapons of mass destruction, without anyone stopping them, in a Rothbardian anarcho-capitalist world.

Libertarians have a major problem: there are very few people indeed who would want such a society or think that it would be a good place to live in.

In reality, on the last issue alone (lack of any regulation on production and sale of the most destructive weapons imaginable), most people would conclude that such a society sounds completely, utterly, stark, raving mad – Rothbard’s bizarre fantasies and intellectually bankrupt natural rights ethics notwithstanding.

And they would be right too.



Further Reading
Debunking Austrian Economics 101 (Updated).

BIBLIOGRAPHY
Rothbard, M. N. 2009. Man, Economy, and State with Power and Market: The Scholar’s Edition (2nd edn.). Ludwig von Mises Institute, Auburn, Ala.

Rothbard, M. N. 2011. Economic Controversies. Ludwig von Mises Institute, Auburn, Ala.

Was Medieval Iceland an Example of Anarcho-Capitalism?

Some people appear to believe that it was:

“Medieval Iceland is perhaps the closest approximation of an anarchist or libertarian republic that the world is likely to see. Founded in the years between 870 and 930. when its Althing and legal system were established, Iceland was settled by people unwilling to submit to a more coercive and, as the sages describe it, tyrannical Norwegian monarchy.” (Pencak 1995: 1).

I will reserve the question of how close medieval Iceland really was to some kind of anarcho-capitalism system for another post.

But let us assume, for the sake of argument, that it was.

David Friedman (1979) studies the system of private law in medieval Iceland as an example of a real world “privatised” justice system.

However, Friedman appears to admit that “public” crimes existed in Icelandic society (a slight difficulty!). Furthermore, as far as I can see, the actual courts seem to have set up in a rather democratic manner as quasi-“public service” institutions, rather than as fee-taking private businesses.

But, again, let put these concerns aside for the moment.

Iceland had a system of wergild, a private custom and legal procedure by which a murder only results in the perpetrator paying a fine to the kin or family of the victim. I would contend that such a practice means that the rich can literally get away with murder.

And, lo and behold!, we read from Friedman himself that this is what actually happened:

“A second objection is that the rich (or powerful) could commit crimes with impunity, since nobody would be able to enforce judgment against them. Where power is sufficiently concentrated this might be true; this was one of the problems which led to the eventual breakdown of the Icelandic legal system in the thirteenth century. But so long as power was reasonably dispersed, as it seems to have been for the first two centuries after the system was established, this was a less serious problem.”
http://www.daviddfriedman.com/Academic/Iceland/Iceland.html

I am sorry, but did I read that correctly?

The private Icelandic legal system broke down by the 13th century as (presumably) inequalities of power and wealth resulted in just the type of problem critics complain would happen.

Apparently a real world privatised justice system would require a high degree of equality of power and wealth, which I submit to you is grossly unrealistic.

A final comment on the level of violence in medieval societies. I freely admit that I do not have proper estimates at hand for Iceland, but other evidence suggests that medieval societies were extremely violent by modern standards in the absence of strong state-based law enforcement and widespread private tort law.

Friedman himself actually cites a crude calculation of per capita homicide rates in medieval Iceland on the basis of some mere epic fictions, the “Sturlung sagas.” But that is an incredibly naive and unconvincing method of calculating real world historical homicide rates.

BIBLIOGRAPHY
Friedman, D. 1979. “Private Creation and Enforcement of Law – A Historical Case,” Journal of Legal Studies 8.2: 399–415.
http://www.daviddfriedman.com/Academic/Iceland/Iceland.html

Pencak, William. 1995. The Conflict of Law and Justice in the Icelandic Sagas. Rodopi, Amsterdam and Atlanta, GA.

Rothbard on Private Protection Agencies and Justice in his Libertarian World

The state of affairs Rothbard imagines is described here:

“Let us, then, examine in a little more detail what a free-market defense system might look like. It is, we must realize, impossible to blueprint the exact institutional conditions of any market in advance, just as it would have been impossible 50 years ago to predict the exact structure of the television industry today. However, we can postulate some of the workings of a freely competitive, marketable system of police and judicial services. Most likely, such services would be sold on an advance subscription basis, with premiums paid regularly and services to be supplied on call. Many competitors would undoubtedly arise, each attempting, by earning a reputation for efficiency and probity, to win a consumer market for its services. Of course, it is possible that in some areas a single agency would outcompete all others, but this does not seem likely when we realize that there is no territorial monopoly and that efficient firms would be able to open branches in other geographical areas. It seems likely, also, that supplies of police and judicial service would be provided by insurance companies, because it would be to their direct advantage to reduce the amount of crime as much as possible.

One common objection to the feasibility of marketable protection (its desirability is not the problem here) runs as follows: Suppose that Jones subscribes to Defense Agency X and Smith subscribes to Defense Agency Y. (We will assume for convenience that the defense agency includes a police force and a court or courts, although in practice these two functions might well be performed by separate firms. ) Smith alleges that he has been assaulted, or robbed, by Jones; Jones denies the charge. How, then, is justice to be dispensed?

Clearly, Smith will file charges against Jones and institute suit or trial proceedings in the Y court system. Jones is invited to defend himself against the charges, although there can be no subpoena power, since any sort of force used against a man not yet convicted of a crime is itself an invasive and criminal act that could not be consonant with the free society we have been postulating. If Jones is declared innocent, or if he is declared guilty and consents to the finding, then there if no problem on this level, and the Y courts then institute suitable measures of punishment. But what if Jones challenges the finding? In that case, he can either take the case to his X court system, or take it directly to a privately competitive Appeals Court of a type that will undoubtedly spring up in abundance on the market to fill the great need for such tribunals. Probably there will be just a few Appeals Court systems, far fewer than the number of primary courts, and each of the lower courts will boast to its customers about being members of those Appeals Court systems noted for their efficiency and probity. The Appeals Court decision can then be taken by the society as binding. 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.

Every legal system needs some sort of socially-agreed-upon cutoff point, a point at which judicial procedure stops and punishment against the convicted criminal begins. But a single monopoly court of ultimate decision-making need not be imposed and of course cannot be in a free society; and a libertarian legal code might well have a two-court cutoff point, since there are always two contesting parties, the plaintiff and the defendant.” (Rothbard 2009: 1051–1053).

So here we have a world where there are multiple competing protection services. Some protection services might have an in-house police force and law courts, although in practice these two functions might well be performed by separate firms.

The hypothetical scenario of privately provided justice that Rothbard envisages faces a bizarre problem:

“Jones is invited to defend himself against the charges, although there can be no subpoena power, since any sort of force used against a man not yet convicted of a crime is itself an invasive and criminal act that could not be consonant with the free society we have been postulating.”

In fact, there are two problems here.

Consider Rothbard’s defence of torture:

“ ... police may use such coercive methods provided that the suspect turns out to be guilty, and provided that the police are treated as themselves criminal if the suspect is not proven guilty. For, in that case, the rule of no force against non-criminals would still apply. Suppose, for example, that police beat and torture a suspected murderer to find information (not to wring a confession, since obviously a coerced confession could never be considered valid). If the suspect turns out to be guilty, then the police should be exonerated, for then they have only ladled out to the murderer a parcel of what he deserves in return; his rights had already been forfeited by more than that extent. But if the suspect is not convicted, then that means that the police have beaten and tortured an innocent man, and that they in turn must be put into the dock for criminal assault. In short, in all cases, police must be treated in precisely the same way as anyone else; in a libertarian world, every man has equal liberty, equal rights under the libertarian law. There can be no special immunities, special licenses to commit crime. That means that police, in a libertarian society, must take their chances like anyone else; if they commit an act of invasion against someone, that someone had better turn out to deserve it, otherwise they are the criminals.

As a corollary, police can never be allowed to commit an invasion that is worse than, or that is more than proportionate to, the crime under investigation. Thus, the police can never be allowed to beat and torture someone charged with petty theft, since the beating is far more proportionate a violation of a man’s rights than the theft, even if the man is indeed the thief.” (Rothbard 1998: 82–83).

But how can such torture of mere non-convicted suspects be consistent with Rothbard’s principle that “any sort of force used against a man not yet convicted of a crime is itself an invasive and criminal act that could not be consonant with the free society we have been postulating”? Apparently in the Rothbardian paradise a private law court cannot enforce or even issue a subpoena for a person against whom a suit has been brought or charge filed, but police can torture such a person! We have here a glaring, not to mention grotesque, contradiction.

The second problem is this. If Smith files charges against Jones with Defense Agency Y and their court system, but Jones simply refuses to appear or even respond to the charges, what can Defense Agency Y do to settle the dispute? The idea that a court can fairly and rightfully declare Jones innocent or guilty without Jones defending himself or responding to the charges is absurd (or perhaps trials in absentia will be a normal practice in Rothbard’s anarcho-capitalist world). Yet if Jones simply refuses to recognise the law court and accept its authority, the law court cannot issue a subpoena or force Jones to appear, since “any sort of force used against a man not yet convicted of a crime is itself an invasive and criminal act that could not be consonant with the free society we have been postulating”! We have a toothless and probably useless justice system.

Suppose the private law court finds Jones guilty in his absence and issues some punishment. But then Jones goes to his own law court and manages to get a ruling of “not guilty.” At the point, it is not clear that anything can be done. For which court’s ruling should be followed?

According to Rothbard, 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.” In this case, if there are two court rulings of “guilty” against Jones, then supposedly force can now be used. But it will presumably only be attempted by the court system or private protection agencies that Smith hires. No other court system or private protection agencies will bother bringing Jones to justice, for they have not been paid to do so.

Furthermore, suppose that Jones is a very wealthy and powerful man with his own private security. He could use force and violence to fend off any attempt to bring him to justice with private security personnel. What is to be done? Already this is a world that could collapse into violence and anarchy as those sufficiently rich enough simply refused to submit to specific private law courts or private protections agencies that ruled against them. It is more likely to be a world where the very rich and powerful are simply able to evade justice and those not wealthy enough will not be able to obtain justice.

On the latter point, we must also remember that in Rothbard’s anarcho-capitalist system there is no longer any criminal law in the current sense. All crimes, even the most heinous, would be mere matters for civil or private law, in which plaintiffs sue, or bring action for redress, under tort or contract law.

Any person who commits a crime under current criminal law would become a mere tortfeasor under Rothbard’s anarcho-capitalist justice system, and there would then be no obligation on society at large or any institution to arrest, try, or punish any criminal unless a plaintiff is willing and able to pay for a private law suit or tort (Rothbard 2011: 417). Needless to say, if any prospective plaintiff is too poor to afford legal fees, then no justice can be obtained. Even the worst crimes imaginable – murder, assault with grievous bodily harm, rape and so on – will not be punished if victims lack the money to bring a suit under private law. Hence the Rothbardian “justice” system would not even deserve that title. It would be a grotesque parody of justice.

Even more fundamentally, if you cannot even afford the cost of protection services, then you cannot even obtain basic police protection or basic protection under whatever private laws exist.

And what are we to make of this?:

“Of course, it is possible that in some areas a single agency would outcompete all others, but this does not seem likely when we realize that there is no territorial monopoly and that efficient firms would be able to open branches in other geographical areas.” (Rothbard 2009: 1052).

If there is a protection agency in some areas that outcompetes “all others” it is not difficult to see how such an agency would obtain a monopoly or near monopoly on “protection services” in that area, driving its competitors out of business. The barriers to entry in that area might make it highly unlikely that “efficient firms would be able to open branches” there. That can only mean that in certain areas there would have a de facto government, the very thing that Rothbardians say is the ultimate evil. The only difference is that, if cannot or do not want to pay the monopoly protection agency, you get no basic police or justice services, which means we would have a strange de facto government only interested in those rich enough to afford its services.

In fact, Rothbard’s theory of monopoly is a strange one. Rothbard thinks that true “monopoly” is really only a right of exclusive production granted by the state to some entity (Rothbard 2009: 670). But this effectively means that if, in an anarcho-capitalist system, exclusive production of private protection emerged by one business, we would have a de facto government, but, strictly speaking, according to Rothbard, it isn’t really an objectionable monopoly because it emerged on a free market. Therefore even Rothbardian libertarians could not really object to such a de facto government emerging in their utopian world.


BIBLIOGRAPHY

Rothbard, M. N. 1998. The Ethics of Liberty, New York University Press. New York, N.Y. and London.

Rothbard, M. N. 2009. Man, Economy, and State with Power and Market. The Scholar’s Edition (2nd edn.). Mises Institute, Auburn, Ala.

Rothbard, M. N. 2011. Economic Controversies. Ludwig von Mises Institute, Auburn, Ala.