Response: Sorry Libertarian Anarchists, Capitalism Requires Government

This post is my response to Harry Binswanger's Forbes article, which can be found here

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In this article, Binswanger argues that to maintain a peaceful society, government is required. Unfortunately, Binswanger neglects to define exactly what he means by "government," which I think is a seed of our disagreement. Without a philosophically consistent definition of government, we're left with emotional definitions based on no objective standards. An organization is considered to be "government" if it generally looks and acts like one to the reader. Unfortunately, this leaves us with no consensus on whether a particular organization is government or not, and makes it impossible to discuss whether government is required.

So to set the board straight: my anarcho-capitalist definition of "government" is Any individual or organization which claims ex nihilo rights (in particular, the right to initiate violence) which other individuals or organizations do not possess. This includes all contemporary governments and, furthermore, it also includes organized extortion rackets, and a mugger on the street. In all of these cases, in a particular time and place, one person assumes the right to govern (coerce) another, but cannot philosophically argue why he is rightfully the master and the other is rightfully the slave.

Note that whether the reader agrees with this definition of the word is not relevant to the points being made. I do not hold this to be the only appropriate use of the word, and I welcome suggestions to refine the definition. I merely assert that when I use the word, this is what I mean by it.

The beginning of this article is excellent, and makes several good points which are clearly laid out and are, indeed, consistent with anarcho-capitalist philosophy. For example:

[P]roducing and exchanging values is the opposite of physical force.
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Force properly employed is used only in retaliation, but even when retaliatory, force merely eliminates a negative, it cannot create value. The threat of force is used to make someone obey, to thwart his will. The only moral use of force is in self-defense, to protect one’s rights.

Congratulations, Mr. Binswanger! If you consistently hold to this principle, you are an anarcho-capitalist! But in your article, you do not consistently hold to this principle, thus I advise you to work the inconsistencies out of your philosophy. In turn, if I have overlooked any inconsistencies in my philosophy, I request that they be brought to my attention as well.

Further developing his argument, Binswanger makes the following point:

The wielding of force is not a business function. In fact, force is outside the realm of economics. Economics concerns production and trade, not destruction and seizure.

Once again, I am left uncertain what exactly Binswanger means with a word, in this case, "economics." Anarcho-capitalists hold that all human action is economic in nature because the only reason a human acts is to create an outcome he finds more valuable (or desirable) than the situation which presently exists. If I attempt to rob another, this is indeed an economic transaction; namely, one which states that I view a world in which I possess what another has as more valuable than the world in which I currently exist. If I attempt to defend another against being robbed, I demonstrate that I view a world in which one's person and the product of his labor are protected against violent expropriation as more valuable than one in which they are not. These are value calculations, even if we do not bother to analyze them as such in the heat of the moment.

Note that this does not discount the possibility of irrational violence. Perhaps an emotionally unstable driver gets cut off by another motorist in a Ferrari, so he rams his vehicle into the offender's car. This is indeed a pointless act of destruction, but it is still the result of a value calculation (albeit an irrational one), namely that the driver believes he will feel better, somehow vindicated, for having destroyed the motorist's expensive car.

I encourage Binswanger to describe how he uses the term "economics" differently when he argues against the anarcho-capitalist position, so that we can determine whether there is any philosophical disagreement, or merely disagreement in how we each use certain words. I suspect, however, that Binswanger makes this point about economics because his philosophy depends on force not being the result of a value calculation:

Ask yourself what it means to have a “competition” in governmental services. It’s a “competition” in wielding force, a “competition” in subjugating others, a “competition” in making people obey commands. That’s not “competition,” it’s violent conflict. On a large scale, it’s war.

Only if we assume indiscriminate or emotional violence. In the ideal case, the competition of force is never used to determine who can use the most force (excepting certain voluntary competitions, i.e. boxing); rather, it is to determine who can use the least force to achieve the desired outcome. Competition to provide security against criminals cannot result in an escalation of conflict, as the only way to one-up the competition is to achieve the same result (security) with less violence! It's only when the conflict becomes irrational that the competition devolves into wanton destruction, because it has come unbound from the original value judgment: security is more valuable than insecurity.

The question then becomes, how can we ensure that the competition remains in pursuit of the stated goal: the protection of security? By introducing economics! If firms are created to protect security, it is because security is perceived as valuable. Thus any revenue the firms generate will be a function of how effectively and efficiently they protect security. Any force the firms employ will be a function of their revenue, as will their profits. Thus the instant a firm begins to deviate from actions which protect security with the least possible violence (which necessarily will result in a comparative loss of security, an observation the firm's competitors will trumpet from the rooftops), its revenues will suffer loss, and so too shall its capacity for force and its profits. Businesses tend to be rather fond of their profits, thus the aberrant behavior will soon be quelled. Even if the firm has abandoned all sanity and persists in its destructive path, its loss of revenue will soon starve out its capacity for violence.

In contrast, governments (in the anarcho-capitalist sense), even governments consisting of well-meaning people who want nothing more than to provide security, are extremely susceptible to losing their bearings and pursuing an irrational path of destruction rather than maximizing the economic good (security) they aim to protect. And because governments assume that they are rightfully the only producers of that good (and thus, they reason, it is their privilege and duty to compel the people to pay them for that good, via taxation), their profits are a function of their capacity for greater violence, through collecting higher taxes and punishing those who do not or cannot pay, which is the destruction of security.

Ironically, the government's tendency to destroy the security they sought to protect is the inevitable result of the attempt to divorce the concepts of force and economics. Furthermore, a government, no matter how well-intentioned, is unable to perceive their actions as counterproductive because they have lost their signal that they are acting irrationally (profit loss), as well as their kill-switch (revenue loss), and so they march ever onward believing if they can only do what they are now doing a little better, the problems will cease.

Throughout the remainder of his article, Binswanger makes a number of false conclusions which can be directly traced back to missing this point: one must not attempt to divorce the use of force from economics.

The second fatal flaw in Binswanger's calculus is that he assumes government is capable of existing as a separate entity from all other human endeavors, and is not subject to the same flaws:

A proper government functions according to objective, philosophically validated procedures, as embodied in its entire legal framework, from its constitution down to its narrowest rules and ordinances. Once such a government, or anything approaching it, has been established, there is no such thing as a “right” to “compete” with the government–i.e., to act as judge, jury, and executioner. Nor does one gain such a “right” by joining with others to go into the “business” of wielding force.
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Economic competition presupposes a free market. A free market cannot exist until after force has been barred. That means objective law, backed up by a government. To say it can be backed up by “competing” force-wielders is circular. There is no competition until there is a free market, and some agency has to protect its condition as a free market by the use of retaliatory force.

Actually, a free market is the default state of human existence. It is the case when only one human exists. It is the case when many humans exist, but no human acts. It is the case when humans act without interacting, and it is the case when humans interact under the assumption that they are fundamentally equal: no party to the interaction is a master and no party is a slave.

It is only when one initiates force that the freedom is lost. Any government which presumes to exist arises out of the free market, and in the process, destroys it by asserting an ex nihilo right to violence which no others possess: the rightful status of master over all others, the rightful slaves. Those who seek to extinguish that violence seek to restore the free market by returning humanity to its default state of freedom and equality.

The proposition that any person or group or government can rightfully, or inevitably, hold a monopoly on force necessarily implies that those who hold that monopoly are cut from a finer cloth than the rest of us; that they exist as objectively wise and benevolent gods while we, the soiled masses, have naught but to give tribute out of our gratitude that they have deigned to oversee our activities and facilitate our peaceful production. But this does not hold true to reality: governments are composed of people. People with their foibles and flaws, their subjective tendencies and emotional miscalculations.

Governments cannot do anything objectively any more than corporations can, because they are simply people. Given that this is the case, the worst thing we could possibly do is arbitrarily select some and voluntarily submit to them as rulers.

Now, there is a time and a place for having the humility to submit to a leader, one recognized as the best suited for a certain task, or the most familiar with the complexities at hand. I don't tell my auto mechanic which type of tubing is best to carry a particular fluid, and he doesn't tell me which programming language is best suited to a certain problem. And yes, there is certainly room for delegating responsibility even with respect to the use of force. But to grant a monopoly and violently suppress any attempt to do better is unwise and immoral and counterproductive.

It is my opinion that most if not all of the inconsistencies and false conclusions derived by Binswanger in his article stem from these two crucial errors: the assertion that force exists outside of economic calculations, and the assertion that any human organization can exist as an objective, philosophically consistent entity.

If I have made any errors in my analysis, I welcome corrections.

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Closing Note

As a follower of @sterlinluxan's work, I feel that I should acknowledge that in this article, I may seem to disregard emotion as harmful. That is not my intent. I have some thoughts on the value of emotion in human thought and behavior, and if the readers are interested in hearing these, I encourage them to let me know in the comments. I do assert, however, that when an individual allows emotion to rule their behavior, unchecked by the cold rational analysis of objectives and means of reaching them, they may act in ways deleterious to obtaining their stated goals. Perhaps the role of emotion is to choose worthy goals, and the role of cold analysis is to determine how obtain them?