Chapter 8. Can voluntary cooperation work?

Here are the topics in this chapter after this introductory section: The two main objections to the self-defense theory of justice are: (1) It won't work, and (2) It isn't fair. In this chapter I deal with the question of whether it can work. In the next chapter I deal with fairness.

Moral arguments are not enough to persuade some people who consider themselves to be realists. "Realists" are more interested in what works than what is right. Some of them will admit that the state is incompatible with basic rights, but they still support it, because they believe the state is necessary. They regard justice as a luxury that is trumped by the need to be practical.

When people first hear an anarchist calling for abolition of the state, they think of all the valuable services that their state provides, and they come to its defense, because they want those services to be continued. They may readily agree with the anarchist when he says taxes are too high, wars are evil, there are too many restrictive laws, and the government has taken away too much of our freedom. But they assume that abolition would entail foregoing all the valuable government services, and that is too high a price to pay for the additional freedom. They do not ask, "Who will systematically steal our wages? Who will start wars and conscript our young men to fight in them? Who will deprive us of our freedom after the state is abolished?" because they would like to do without these government services as much as the anarchist would. Instead, they criticize the anarchist for overlooking the positive contributions of the state. They think that the anarchist has not thought through the consequences of his position.

After a moment's consideration, the average person believes he has discovered insurmountable objections that the anarchist has not thought of. The average person then tries to show the holes in the anarchist position by asking a series of questions about practical matters. The dialog goes like this:

"If we abolish the state, who would collect the garbage, deliver the mail, and educate our children?"
"Garbagemen, mailmen, and teachers of course."
"Yes, but who would pay for it?"
"People who want their garbage collected, mail delivered, or children educated."
"Yes, but who would pay for the people who want these services and don't have the money?"
"Friends, neighbors, relatives, charitable organizations, or nobody."
"Can't you see that the government has to provide these services?"
"No."
Sooner or later the average person comes to the conclusion that the anarchist is hopelessly blind to the obvious need for the state, and goes away shaking his head.

One reason why the average person does not believe that free-market anarchism can work is that the average person has not studied economics, especially the Austrian school of economics. Austrian economics is particularly well suited for describing the unhampered market because Austrian economics is a logical science like mathematics that draws logical inferences from fundamental axioms and definitions. Other schools of economics try to imitate the physical sciences by gathering data and then trying to devise and test hypotheses to explain the data. Since no unhampered market exists from which economists can collect data, most economists are not equipped to explain how the free market would operate.

Fortunately, Austrian economists, especially Ludwig von Mises and Murray Rothbard, have used their logical approach to develop a nearly complete description of how the free market would work. In the next section, I summarize Rothbard's findings.

Scientific Findings About the Unhampered Market

The bulk of Murray Rothbard's two-volume treatise Man, Economy, and State consists of analysis of how the free market economy works. Here is a list of some of his most significant findings, minus the long chains of reasoning that he uses to support them: Furthermore, as explained in the next two sections, the risks of life will be minimized and the market will develop the means to defend itself.

The risks of life will be minimized.

The free market relieves risks as much as can possibly be done: (1) by allowing people to save and invest for the future, (2) by allowing entrepreneurship (voluntary risk taking) and futures markets (where hedging allows buyers and sellers of commodities to shift the risk of future price changes onto a body of specialized traders), (3) by insurance policies (which are a way to pool and abate risks), (4) by voluntary charity, which allows those who feel secure to donate some of their resources to those who are less secure, and (5) by providing security against aggression.

The unhampered market will defend itself.

In Power and Market, Rothbard explains how the market would protect property rights and thereby protect itself.
Defense agencies, police and judicial, would compete with one another in the same uncoerced manner as the producers of any other service on the market. The prices would be lower, the service more efficient. And, for the first and only time, the defense system would then be neutral in relation to the market. It would be neutral because it would be a part of the market itself! Defense service would at last be made fully marketable. No longer would anyone be able to point to one particular building or set of buildings, one uniform or set of uniforms, as representing "our government."

While "the government" would cease to exist, the same cannot be said for a constitution or a rule of law, which, in fact, would take on in the free society a far more important function than at present. For the freely competing judicial agencies would have to be guided by a body of absolute law to enable them to distinguish objectively between defense and invasion. This law, embodying elaborations upon the basic injunction to defend person and property from acts of invasion, would be codified in the basic legal code. Failure to establish such a code of law would tend to break down the free market, for then defense against invasion could not be adequately achieved. On the other hand, those neo-Tolstoyan nonresistors who refuse to employ violence even for defense would not themselves be forced into any relationship with the defense agencies.1

The Law Code of the purely free society would simply enshrine the libertarian axiom: prohibition of any violence against the person or property of another (except in defense of someone's person or property), property to be defined as self-ownership plus the ownership of resources that one has found, transformed, or bought or received after such transformation. The task of the Code would be to spell out the implications of this axiom (e.g., the libertarian sections of the law merchant or common law would be co-opted, while the statist accretions would be discarded). The Code would then be applied to specific cases by free-market judges, who would all pledge themselves to follow it.2
Although it is impossible to know in advance the exact structure of a future industry, Rothbard predicts that defense and judicial services would probably be sold "on an advance-subscription basis, with premiums paid regularly and services to be supplied on call."3 Insurance companies would be likely to supply these services, because it would be to their advantage to reduce crime. Many competing primary court systems, and a few Appeals Court systems, would arise because: "Every legal system needs some sort of socially-agreed cutoff point, a point at which judicial procedure stops and punishment against the convicted criminal begins."4

He predicts that a free society would adopt the convention of accepting the decision of an Appeals Court as binding on both the plaintiff and the defendant.5

Once competing police and judicial service firms are established, they check and balance each other, which would make it difficult to establish a state.6 If this takes place in a country with a government based on voluntary funding, Rothbard predicts the government will lose the competition and "wither away," because it has been demonstrated historically that co-operatives cannot compete successfully against stock-owned companies when both are equal before the law. So he predicts that joint-stock (i.e. corporate) defense agencies will become the prevailing market form.7

Most people want these results.

Murray Rothbard shows that a value-free description of the unhampered economy corresponds to the just society, because they are both consistent with the non-aggression principle. His economic analysis of this libertarian society shows that it leads to results that almost everyone would eagerly wish to see.

Superficial Arguments Against Voluntary Cooperation

Before dealing with the serious arguments against free-market anarchism, let me dispense with the weak arguments against it that are made by people who don't understand what it is.

Men are not good enough to live without government. Two points that people often bring up when they first hear about free-market anarchism are that man is not perfect, and there will always be crime. They assume that anarchists overlook these basic facts. This is particularly annoying, because free-market anarchism is fundamentally an anti-crime philosophy. The primary reason why most anarchists oppose the state is that the state is a criminal organization. It is precisely because we are aware of man's moral weakness that we want to make the powerful machinery of the state unavailable to evil men.

Anarchists oppose organization. Another annoying, superficial criticism is that free-market anarchists, being anarchists, must oppose all organizations, so it is inconsistent and hypocritical for anarchists to advocate private organizations or even to hold meetings or conferences. This is an argument against some other philosophy. Free-market anarchists, like most other anarchists, do not believe that there is anything wrong with organizations per se. In fact, free-market anarchists want to remove all coercive limits on organizations. The only organizations that free-market anarchists oppose are criminal organizations. It is the statists who oppose voluntary organizations, not the anarchists.

Anarchists do not really oppose government. The word government confuses some people when they hear it used by an anarchist. Free-market anarchists often use the word government as a synonym for the state, but most people think of the government as the police and the courts that provide law and order. It has never occurred to most people that law and order could be provided without a state. So when they hear anarchists advocate abolition, most people naturally ask how we would be protected from criminals.

When the free-market anarchist says that private policemen and private arbitrators could protect us, these people say we are advocating a kind of government. This confusion is caused by an inadequate definition of government. Defenders of government tend to define it in terms of the functions it typically performs. Anarchists define government in terms of its functions, and, more importantly, in terms of the coercive methods it uses to provide those functions. Anarchists are not opposed to all the functions that governments provide, but we are opposed to the coercive means that the state uses. In an anarchist society, some of the functions that governments provide would be provided by the free market, but that does not make those providers into a state, because the services would be provided voluntarily rather than by the political means.

There is no difference between voluntary and coercive organizations. Another argument sometimes used by the superficial critics closely follows the previous one, but it is even more exasperating. In this argument, the critic claims to see no difference between a voluntary organization and a coercive one. The difference is so clear to me that I can only interpret the denial of it as either a mental deficiency or a lie. This argument says, in effect, that the anarchist position is not even defined. It is an attempt to refute anarchism by saying that there is no distinctive anarchist position to attack or to defend, nothing to agree with or disagree with.

You have no right to force people to be free. Another argument anarchists often hear is that we have no right to force people to be free. If the majority of people believe in government, as they apparently do, what right do anarchists have to insist that the people give up their government? Usually, those who make this argument will acknowledge that anarchists have the right to disagree with the state's policies, but then they say that, in exchange for this right, anarchists should acknowledge everybody else's right to support the state. This argument tries to put anarchists on the defensive by making it sound as though anarchists are the ones who deny freedom of choice.

Of course, the truth is exactly the opposite. What these people are actually saying, whether they realize it or not, is that they will allow anarchists to believe the state is bad, but they will not allow anarchists to take any actions against the state, and in fair exchange for this freedom of thought, anarchists ought to allow everybody else to believe the state is good and allow them to force their statist beliefs on anarchists. When anarchists object to being forced to obey the state, these critics say we are trying to impose our beliefs on them!

Anarchists have no detailed plans. Radicals are often criticized for not offering alternative solutions to the problems of society. They are accused of being negative and destructive. It is appropriate to challenge the radical socialists and environmentalists to explain the plans that they want to impose on society, but it is not appropriate to ask anarchists for their plans. Some of us don't have any plans for solving social problems. Our lack of detailed blueprints for a better society can be explained, in part, by the anarchist philosophy itself. Anarchism entails the belief that people should be free to make their own plans rather than have plans imposed on them.

The individual anarchist does not claim that he, personally, has a better plan for collecting garbage, or delivering the mail, or curbing crime. All he claims is that it is wrong for anyone to impose his plans on us, because that denies us free choice and moral responsibility.

When the defenders of government ask for alternative plans, it is as if they are saying, "If you don't like the plans we are imposing, show us better ones and we will impose them and see how they work." By asking anarchists for their plans, they miss the point.

Free-market anarchists want to end coercive central planning. Consequently, it doesn't matter what plans, if any, a particular free-market anarchist favors. What he really wants is the maximum freedom for everyone to try their own plans. We trust the spontaneous order of the free market to provide the best solutions to social problems.

People who become radicals are usually motivated by moral considerations and emotions rather than by mundane considerations. When you are worried by the fact that more and more states have arsenals with nuclear weapons, it is difficult to think about a plan for preserving the bald eagle.

Another reason for the shortage of anarchist blueprints is that thinking about such things now is idle speculation, because we are not free to try alternative plans. The chances for freedom today do not offer enough incentive for people to speculate on what free men might do.

Now that these superficial arguments against free-market anarchism (voluntary cooperation) are out of the way, let's consider the serious objections to it that are raised by people who actually understand what it is.

The free market can provide more services than most people realize.

A common argument in behalf of the state is that some things are so important that the state must guarantee them. Police protection, defense against invading armies, arbitration of disputes, education, highways, and many other things are widely acknowledged to be so important that the state must provide them.

The anarchist's first response is to attack the morality of the statist's position. The anarchist might say, "Education is a good thing, but that doesn't justify compulsory school attendance laws or socialized education. Sharing is a good thing, but that doesn't justify stealing or government welfare programs. Families are a good thing, but that doesn't justify shotgun weddings. A consistent statist is the kind of person who, if he thought sex was a good thing, would advocate rape. (Not private, unplanned rape of course. It would have to be regulated somehow by the state.) "

When we are faced with an apparent conflict between justice and expediency, we should examine the alternatives carefully to see if the conflict is real. Most political theorists fail to do this, because they are so grounded in statism that they assume the alternative to the state is isolation, poverty, and disorder.

Many people regard the state as indispensable, because the state provides fundamental services without which society cannot function. Their reasoning is very simple: (1) Services such as police protection and arbitration of disputes are necessary. (2) The state provides these services. (3) Therefore, the state is necessary. (4) Since the state is absolutely necessary, moral arguments against the state are unrealistic and don't deserve to be taken seriously.

The implicit assumption in this argument is that only the state can provide these fundamental services. The way to argue against this amoral argument is to challenge its underlying assumption.

Contrary to popular belief, robbing people to finance a police force is not the best way to prevent crime. This method is illogical and impractical as well as unjust. Peace and cooperation can be achieved more readily by voluntary means than through coercion. Cooperation in the free market, which has improved the production and distribution of goods and services whenever it is permitted to operate, could, if allowed, provide a better system of protection from crime than governments have done.

What the average person doesn't realize is that the services he is concerned about have been provided privately in the past and could be provided privately again if the state didn't prevent it. Many attempts have been made to replace or circumvent the government by free-market alternatives only to be driven underground. In Uncle Sam the Monopoly Man, William Wooldridge provides historical examples of commercially successful private mail delivery companies in the 1840s that were put out of business only by special acts of Congress.8

Wooldridge also provides examples of successful private businesses engaged in minting coins, building and owning roads, providing education to poor children in urban ghettos, and even arbitrating disputes and dispensing justice in private courts. All of these businesses were able to compete successfully with the government despite the legislative roadblocks put in their way deliberately to discourage them.

However, there are some "services" that can only be provided by the state. If any of these "services" are necessary, then the state is necessary.

Some services cannot be provided by the free market.

The most common services that states sometimes try to provide and that the free market cannot provide are:
  1. Uniform and objective administration of punishment.
  2. Threat of nuclear retaliation as a defense against nuclear attacks by other states.
  3. Prohibition of various types of discrimination such as discrimination based on race, gender, age, religion, or ethnic origin.
  4. Mandatory discrimination such as discrimination based on race, gender, age, religion, or ethnic origin.
  5. Prohibition of victimless crimes.
  6. Guaranteed financing of health care, food, housing, education, and other goods and services up to at least some minimum acceptable level.
According to the self-defense theory of justice, the first five "services" are crimes. The sixth "service" is not itself a crime, but it is financed by theft. The common element in all of these services, and the reason they cannot be provided by the free market, is that they are all provided by invasion against nonaggressors and are, therefore, not market transactions. None of these services are necessary for society, civilization, or moral life.

For more about the morality and practicality of punishment, see the next section "Is punishment necessary?" See also Appendix B, "What good is punishment?" and The State as Jailer and Punisher in Appendix C.

For more about the morality and practicality of defense by nuclear weapons, see The State as the Only Defense Against Nuclear War in Appendix C.

For more about discrimination, see Discrimination can be just without being fair. in Chapter 9.

Is punishment necessary?

One argument against the self-defense paradigm goes like this:
  1. If criminals are not punished and not even forced to compensate their victims, they have nothing to lose by committing crimes.
  2. Since they have nothing to lose by committing crimes, more people will become criminals, and each criminal will commit more crimes.
  3. Society will fall apart.
My response to this argument is that the first premise is false. I admit that fear of punishment deters many people from committing crimes. I know this is true because fear of punishment works for me. It not only inhibits me from committing real crimes, it also inhibits me from committing victimless crimes that the state has decided to prohibit. I also admit that forcing criminals to compensate their victims would discourage many people from committing real crimes. But fear of punishment and forced compensation are not the only means to deter crime.

Remember that in the self-defense system of justice everyone has the right to use violence, if necessary, to defend his rights. We also have the right to help each other to defend our rights and to hire professionals to defend us. So it is not true that under the self-defense paradigm people have nothing to lose by committing crimes. They could lose their lives.

Under a system of law based on the self-defense paradigm people can own weapons. They can hire bodyguards, watchmen, and private investigators. They can install burglar alarms, keep their valuables in vaults, purchase insurance policies, and so on.

Protection agencies have a legitimate place in a society based on the self-defense paradigm. They do not have to know the past history of their clients in order to know that their clients have a right to be protected from all invaders. They only need to stipulate that they will protect each of their clients except while the client is breaking the peace. The protection agencies do not have to know whether their clients have ever committed crimes for which they have not been punished. The protection agencies only have to be concerned with their client's actions now.

Now is when the client wants protection from threats. Now is when all the pertinent facts are evident and can be evaluated. Now is the best time to make moral judgments, not later in a courtroom after the crisis is over and circumstances have changed, when the evidence is old and doesn't matter anymore.

We have the right to deputize others to defend us. This justifies private firms that, for a price, could provide such services as:

In this regime, the law is enforced privately by whoever chooses to enforce it. Private individuals and organizations offer to arbitrate disputes and assess compensations. There is no definitive repository of laws or legal rulings. The non-aggression principle is the only law. All other legitimate laws such as the laws against murder, assault, and theft are already implicit in the non-aggression principle. Everyone is free to expostulate on the meaning of the non-aggression principle, but no one's written laws need to be regarded as authoritative.

Arbitration companies might choose to publish their procedural rules, rules of evidence, and rules for assessing compensations. This would help disputants to decide which arbitrator to go to, if any.

Arbitrators will probably find it useful to study prior legal rulings, but they will always retain the option of reasoning directly from the non-aggression principle in each case. They will succeed or fail in their legal careers based on the reputations they earn for the wisdom of their decisions.

If I were involved in a contract dispute, I would prefer to use a judge who was familiar with the principles of contract law that were developed over the years in common-law courts. Arbitration companies would probably hire legal scholars to sort through case law and legal treatises. Instead of merely looking for legal precedents and loopholes, they would look for sound arguments developed in previous cases that might be useful in the future. They might compile their own databases and select their own rules of procedure from the best procedures used in the past. Competition among arbitration companies would encourage them to find and adopt legal principles and procedures that enhance their reputations for fairness and professionalism.

The free market will produce better methods of enforcing the non-aggression principle and settling disputes than any individual theorist could hope to do on his own.

The law administered by all courts in a free society would be the same. What would vary from one private court to another would be such things as their profits and losses, the quality of the services they provide, the prices they charge, and the technologies they use.

They would differ from states in that they would not be monopolies, and they would use the economic means instead of the political means. Consequently, they could not impose taxes, they could not suppress competition, they could not punish anybody against his will, they would not have suppoena power, and they could not empanel juries by brute force.

In a free society, no one could be dragged into a courtroom to testify, to judge, or to stand trial against his will. Any courts in a free society would be set up solely for the convenience of disputing parties who mutually agree to arbitration. No one would be obligated to use such courts.

Protection agencies might be hired by individuals or by insurance firms acting on behalf of their clients. The insurance companies would have a financial interest in returning stolen property to its rightful owners if they are obligated to pay compensation for stolen goods not returned. Insurance firms might hire detectives to retrieve stolen goods. They might hire guards and watchmen to prevent crime. They might finance the development of new methods to prevent or stop crime. They could hire scientists to invent methods for identifying insured property and finding it when it is lost or stolen. Perhaps an electronic device for detecting objects could be invented that could distinguish any particular registered piece of property from all others and make it easier to track it down.

If a person wants to be sure his stolen goods will be returned as quickly as possible, he should have an insurance policy that requires his insurance company to pay a high rate of interest on the insured value of the goods until they are returned. If an object is of special sentimental or esthetic value to a person, he should insure it for a great deal of money so that if it is stolen, the insurance company will have a special incentive to search diligently for it.

If you argue that it is crass to put a monetary price on the things that are most important to you, and that is why you do not take out an insurance policy on them, fine. That is a respectable position. But then don't ask for money in compensation when you lose those precious things. If you say that you value something highly, but have not insured it for a lot of money, why should anyone believe that your demands for a large sum of money for compensation are justified? The time to prove that you treasure something is when you have it in your possession, not after someone has taken it from you.

If possible, the insurance companies should return the same physical item that was stolen. If this is not possible, or if the property can only be returned in a damaged condition, then the insurance company should pay compensation. The insurance policy should spell out the method for determining compensation. Those insurance firms that gain renown for providing the best protection and the fairest settlements at the best prices will do the most business.

It is OK to take the law into your own hands.

If we associate punishment with law, the fear of people taking the law into their own hands is justified. There are no objective standards for punishment, so private citizens cannot administer punishment without creating fear and chaos. The state can protect us from lynch mobs. This is the grain of truth in the link between anarchy (the absence of the state) and chaos.

If we separate punishment and law, the idea of allowing people to take the law into their own hands becomes less terrifying. If law is simple justice, as defined by the non-aggression principle, then it is legitimate for people to take the law into their own hands.

In the free market, vindictive practices would be restricted, because no one would be forced to submit to any coercive punishments against his will. Anyone who tried to impose physical punishment by brute force would be recognized as a criminal, and everyone would have the right to use force to stop him.

Society is necessary for man. The state is not. Society is the peaceful, productive, voluntary relationships among men. The state is the opposite. The state is invasive, violent, and destructive. It is a criminal organization. It is ironic that so many people believe that human society depends on the state. The exact opposite is true. The state depends on society like a parasite depends on its host.

Free-market anarchism, rather than being opposed to all law, maintains that there are objective, eternal, and universally valid principles of law. Free-market anarchists use the natural law to judge the legitimacy of the various man-made laws. It is the statist, not the anarchist, who denies natural law and imposes an artificial, temporal, inconsistent, and often arbitrary set of "laws" on society. Any system of so-called "law" that opposes voluntary associations is opposed to the real laws of society.9

Free-market anarchism can be thought of as a philosophy of law and order. It really is, basically, an anti-crime philosophy. Like most other legal philosophies, free-market anarchism is opposed to private crimes such as murder, kidnapping, rape, assault, and robbery. However, anarchists differ from other people by continuing to oppose these activities even when they are engaged in by agents of the state. Free-market anarchists judge all actions by the same principles, whether the perpetrator is acting in behalf of the state or as a private citizen. It doesn't matter whether he wears a badge, or dog tags, or lives in the White House, a criminal is a criminal.

The amount of money stolen by private individuals each year in the United States probably totals several billion dollars. The money appropriated by the federal government in the form of taxes each year totals hundreds of billions of dollars. The number of victims of private kidnapings in the United States is tiny compared to the number of people locked in prisons by the state for committing victimless crimes. All of those people in prison for evading taxes, buying or selling drugs, selling sexual services, or gambling illegally are victims of state kidnappers.

The number of private murders committed by civilians does not approach the number of innocent people murdered by government agents. According to R. J. Rummel's book Death by Government, the Soviet state from 1917 to 1987 murdered 61,911,000 of its subjects ; Communist China from 1949 to 1987 murdered 35,236,000 Chinese people; the National Socialist German state from 1933 to 1945 murdered 20,946,000 people; Nationalist China from 1928 to 1949 murdered 10,076,000 subjects; the Japanese state from 1936 to 1945 murdered 5,964,000 civilians; the Cambodian government from 1975 to 1979 murdered 2,035,000 people; the state of Turkey from 1909 through 1918 murdered 1,883,000; the governments of Vietnam from 1945 through 1987 murdered 1,678,000; the government of North Korea from 1948 through 1987 murdered 1,663,000; The Polish government from 1945 through 1948 murdered 1,585,000; the state of Pakistan from 1944 through 1987 murdered 1,503,000; the Mexican government from 1900 through 1920 murdered 1,417,000 Mexicans; the Yugoslavian state from 1944 through 1987 murdered 1,072,000; Czarist Russia from 1900 through 1917 murdered 1,066,000 of its subjects. Overall, in the 20th century, states have murdered 169,198,000 of their subjects. If we add the military combatants who died in wars, the total is 203,000,000 people.10

The U.S.A. has a Department of "Defense" to plan mass murders, a "Selective Service System" to enslave young men, an "Internal Revenue Service" to steal billions of dollars each year from working people, and a system of federal prisons for punishing people who fail to live up to its moral standards.

What would you call an organization that murders thousands of innocent people, robs millions of people of their income, and locks thousands of peaceful people in prisons? Most people call it a legitimate government. Free-market anarchists call it a criminal organization. In fact, states are almost always the largest and most dangerous criminal organization in each country.

Free-market anarchists are accused of being utopian or unrealistic because we do not believe in the theories, fictions, and myths used to justify the state, all of which are attempts to obscure or deny the historical evidence that the state is a violent criminal organization. The people who deny the facts, the statists, are the unrealistic ones.

Voluntary cooperation works.

We do not have to resort to theoretical arguments to prove that the state is unnecessary. There are historical examples of societies that functioned quite well without the state. For example, the people of Ireland had a society for 1000 years without a state.11

Not only can free-market anarchism work, it can work better than any other system.


Go to Chapter 9. Is justice fair?

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