The Economic Limits of Anarchy
The Government is not static but in movement, and when thinking about the future of the flow of politics, it is necessary to consider the direction it will go. The end goal of democracy is liberty, and thus when discussing the future of democracy, it must be pointed to the goal of maximum individual liberty. However, at what point would liberty be pushed to the limits without breaking into chaos?
This essay will outline two examples of “maximum democracy” and explain how each relates to the idea of radical individualism and capitalism. By analysing post war Somalia and the Icelandic Commonwealth, the conclusion will be reached that free market anarchy can be achieved if done in a very specific context. Somalia had her government removed in the context of civil war and thus the current state it remains war torn and full of famine. The Icelandic Commonwealth however, was based on a complex delegation of power based on market forces and the economy.
In regards to anarchy, it is almost impossible to remove government completely, however, the removal of a federal state and coercion is within the realm of a realistic approach to the future of democracy. Government may be removed, but governance will remain strong and inevitable. Thus the conclusion is reached that there must remain a provisional government, but a community can feasibly operate without a state or federal oversight.
Throughout the ages, the chief questions in regards to civil structure and societal organization has revolved around the proper and just method of governance. All of human history has been a battleground between shifting ideologies concerning the relationship between authority and the common man. Central to politics has been the idea of individual liberty, and as history flows, so does the amount of freedom granted to the people. The course of history and current events proves the power of political philosophy. After all, many of the most diabolical crimes have been done in the name of the state.
The most common split in political world-views has been the concept of authoritarianism and libertarianism. Libertarians have been criticized as lacking in pragmatism and abundant in idealism. If the end of democracy results in liberty, the extent of liberty granted to men is of great concern, and the response has grave philosophical and tangible repercussions. If libertarian thinking is true, to what extent can it be logically and pragmatically be implemented without disrupting into an amoral chaos?
While possibly philosophically justified, there remains the economic and practical arguments against libertarianism as being nothing more than wishful thinking. However, according to economist Jack Hirshliefer, anarchy can create a “stable” system of ordering. (Hirshleifer 26) In his analysis of anarchy, he creates a sharp distinction between amorphy and anarchy. Amorphy, he claims, is a societal organization that has a “absence of form,” or alternately nicknamed the “scramble competition” as opposed to anarchy, which alternatively is based on “resource defense” in such a way that viably provides “For survival on the individual level or, in the case of larger contending units, for maintaining group integrity.” (Hirshleifer 27, 46) Under this definition, of Anarchy (or libertarianism) the rest of the analysis concludes that there are two threats to the institution, dynamic instability and income inviability. “The former is likely to lead to a vertical social contract (A State)” says Hirshliefer, and the latter “ provides no clear indication as to what is likely to happen next,” and therefore the economic environment must be at a goldilocks level, that is, at the “just right” amount. (Hirshleifer 46) Not too hot, not too cold. Hirshliefer concludes that for anarchy to be viable, there must be “reduced fighting within, complementarities in production, and an enhanced ability to fight outsiders” or else a state is likely to form. ( Hirshleifer 48)
While it seems good on paper, the real question is, has it ever happened historically? Yes. One of the most well documented and successful instances of near perfect libertarianism took place in the Icelandic Commonwealth Era from 930 to 1264 A.D. In contrast to most other societal mindsets where lawlessness was a sin against society, in the Icelandic Commonwealth, law enforcement was a completely private affair. According to American economist David Friedman (Son of Milton Freidman,) the very system seemed to be conjured up by a “ by a mad economist to test the lengths to which market systems could supplant government in its most fundamental functions,” and according to him, it worked well. (Friedman 400) While the concept of totally private government itself was at the time a peculiarly unique idea, the individual aspects can be seen in many separate societies such as Anglo-Saxon England, New Guinea, and even in America. Because court cases were a private affair, the cases themselves could also be sold off to someone else in the hopes that a profit might be turned. A reason for this might be that a prosecutor did not have enough funds to continue the case but still wanted justice served. The justice being a fiscal fine. Icelandic society used a fine as their method for punishment for many reasons, chief of which was it’s economic efficiency compared to execution, “which imposes cost but no corresponding benefit, or imprisonment, which imposes costs on both the criminal and the taxpayers,” thus creating a totally private law enforcement that lasted well over 200 years. (Friedman 408)
While the establishment of efficient civil law is possible, as established by Friedman, many argue that ideas like efficient infrastructure would be a factor ushered in by the rise of the industrial revolution, and thus nullifies the Iclelandic method of government under the pretense of its time period as being archaic. Public planner Anthony D. Sorensen, advocates otherwise saying that modern capitalism would use creativity and competition to create competent infrastructure. Local area codes and planning would not disappear, but instead Sorensen claims that they would “would rely more heavily on discursive style policy plans and place more emphasis on performance standards than physical specifications.” The method would change to “a greater emphasis on consumer choice and professional advice rather than professionally derived standards and coercion.” In order to do so, Sorensen pulls form the economic ideas of Friedrich Heyek, and lays forth some tenets of libertarian planning. The most important being that, “wherever infrastructure is supplied by the government in order to permit private development to proceed, the full costs in the case of multiple developments, an appropriate share, should be billed to the developer,” as opposed to the taxpayer, and thus law enforcement was a totally successful private affair.
However, not all libertarian situations are as successful as the Icelandic societies, most popular of examples being the current state (or lack thereof) in Somalia. Since January of 1991, Somalia has been without a functional central government, making it an obvious instance of total state annihilation. The government collapsed in context of war, and thus after the fall, the initial result was plunder, property disputes, famine and fighting. Nothing was left of Somalia, and anarchy was instituted. While not without its obvious failures, there remains some lessons to be learned of total government collapse and its implications. In his analysis of Somalia, Ken Menkhaus states that, “it is at the forefront of a poorly understood trend- the rise of informal systems of adaptation, security, and governance in response to the prolonged absence of a central government.” He calls this method of government “organic state building” (as opposed to “top-down” or “inorganic” statebuilding like those attempted by the U.N to no avail) and that local communities are creating their own methods of government with varying results. Despite the historical chaos, Menkaus is quick to point out that most communities have in fact enjoyed “real success,” and from which the state that might appear will not be like those seen in the West. Instead the central government will act as a “mediated state,” in which the federal government is only reliant on partnership (or at least coexistence) with a diverse range of local intermediaries and rival sources of authority to provide core functions of public security, justice, and conflict management.”
The confusion and inability to formally create a central state is due to the varying local groups who have their own agendas and interests. The U.N, local Militias, Islamists and businessmen are among the figures the wide ranging demographic scope of Somalian people. Under formal circumstances, these groups would refuse to cooperate. Such instance being the United Nations Operation in Somalia (UNOSOM) in which an attempt to institute an inorganic government failed drastically. The closest thing to a state is what Menkaus describes as a “mosaic of overlapping informal and formal systems” that effectively institutes ‘modicum of rule of law and predictability in a dangerous environment.” Such is the vision that most libertarians have, that seperate groups with differing agendas all acting in self interest will create spontaneous order via voluntary transactions. It is difficult for westerners to notice this as a success because they see a responsive and effective state is an essential prerequisite for development, a proposition enshrined in virtually every World Bank and UN strategy on de- velopment. Somalia dispels such claims and lays forth the libertarian response, being the state as a historical instrument of accumulation and domination, enriching and empowering those who control it and exploiting and harassing the rest of the population.
Still, many people point to warlords and bandits to nullify the obvious economic and social progress to demote to “prove” that libertarianism is a failed system of governance. Menkaus disagrees. He claims that the “violent crimes and level of impunity associated with the early 1990s are generally a thing of the past.” He points out that armed conflict has in fact declined in its “nature, duration and intensity.” In fact, the main catalyst in the decline of violent clan wars has been the free market. After the war, the warlord’s funds were depleted, and enforced a “tax” on businessmen. In response the coeorcean businessman “bought out the militiamen from beneath the warlords and assigned the gunmen to the command of local sharia courts.” The influence and power of these private security forces remained the largest and most successful source of security until 2006. Even since then, the private sector has taken over all of the previous industries previously seen as only governmental responsibilities. What then, is the reason between such drastic variations of success between Somalia and Iceland? The first is the climate in which the absence of a state was initiated. Icelandic communities were formed with cooperation, structure and a constitutional plan for law keeping. This is the libertarian notion that there remains a clear distinction between a state and a government. A state is an oligarchical coercive force whereas government is a communal, cooperative and voluntary system based on securing harmony and protecting the rights of individuals. In contrast to Iceland, Somalia was formed in lieu of war and chaos and lacked any structure after the coup. Iceland was designed intentionally whereas Somalia was done in some respects, by accident. Second is the “actors” in the arena of their stateless society. Different people groups with conflicting interests will almost always result in a clashing of ideologies. While Iceland was largely homogenous, Somalia lay destined for internal chaos due to the wide ranging people groups that live within the borders. Militiamen, businessman, religious extremists and foreign entities all with their own goals results in conflict and sometimes bloodshed.
In conclusion, the construction of an efficient, moral and long lasting libertarian government relies on a multitude of niche factors, and in order to achieve this “perfect democracy,” anthropology, political climate, economic development and structure must be considered.
Powell, Benjamin, and Edward P. Stringham. “Public Choice and the Economic Analysis of Anarchy: A Survey.” Public Choice, vol. 140, no. 3/4, 2009, pp. 503–538. JSTOR, www.jstor.org/stable/40270935. Leeson, Peter T., and Edward P. Stringham. “Is Government Inevitable? Comment on Holcombe’s Analysis.” The Independent Review, vol. 9, no. 4, 2005, pp. 543–549. JSTOR, www.jstor.org/stable/24562084. Hirshleifer, Jack. “Anarchy and Its Breakdown.” Journal of Political Economy, vol. 103, no. 1, 1995, pp. 26–52. JSTOR, www.jstor.org/stable/2138717.
Friedman, David. “Private Creation and Enforcement of Law: A Historical Case.” The Journal of Legal Studies, vol. 8, no. 2, 1979, pp. 399–415. JSTOR, www.jstor.org/stable/724116. Menkhaus, Ken. “Governance without Government in Somalia Spoilers, State Building, and the Politics of Coping.” International Security, vol. 31, no. 3, 2006, pp. 74–106. JSTOR, www.jstor.org/stable/4137508. Sorensen, Anthony D., and Richard A. Day. “Libertarian Planning.” The Town Planning Review, vol. 52, no. 4, 1981, pp. 390–402. JSTOR, www.jstor.org/stable/40103494.
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