I recently stumbled onto a critique of Anarcho-capitalism by the Objectivist, Harry Binswanger. Being a libertarian anarchist myself, I was curious of his arguments. Ultimately, I was disappointed. He consistently applies a double standard, presenting government as some neutral enforcer of objective truth, while any private actor is a practitioner of arbitrary violence. Binswanger, while echoing Ayn Rand’s sentiments that government should provide “objective” law, fails entirely to explain why any government would do such a thing. So, while he talks extensively of the risks that may accompany competitive law-making, he approaches government law-making with a naive assumption that its laws will be objectively correct.
Government as Force?
Binswanger never explicitly defines government, but he emphasizes that it uses force.
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.
He concludes that force is outside the realm of economics, and posits why government is necessary:
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. […] Governments are necessary–because we need to be secure from force initiated by criminals, terrorists, and foreign invaders.
Here we see Binswanger’s bias shine through clearly. While he sees the role of governments as defending from force, when he describes governmental services in the context of private production, he instead refers to it as subjugation and violent conflict. He does not address the possibility that competing firms, groups, or individuals could simply provide security and third party arbitration when there are disputes.
After all, we already live in a world where privately hired security vastly outnumber government police, and around 40% of homes in the U.S. are covered by neighborhood watch groups. Security personnel and volunteers are not involved in subjugating people. They are actively producing the economic good of security—something Binswanger claims is what proper governments do. We might even conclude that the private sector is providing more security than the government. The total expenditures for police and corrections is less than $190 billion. While a bit dated, a 2001 paper cites estimates of $300 billion for total private expenditures on crime prevention. When adjusted for inflation for the same year as the aforementioned government expenditures, the private sector total is around $460 billion. This does not include numerous acts of volunteered security, such as watch groups or efforts made toward personal protection. Total expenditures does not necessarily prove better results, but if we assume that government is more wasteful than the market (a reasonable assumption given private actors are spending their own time and money, and gov’t actors are spending others’ money), the private sector may actually be providing most of the domestic security in the U.S.
It would seem reality is close to the opposite of Binswanger’s claims. While an enormous sector exists in the U.S. for the private, competitive production of security from force, the government is the entity that engages in subjugation of its people, from punishments for myriad victimless crimes to extortion of large portions of people’s income.
Ideal Government vs Reality
Binswanger likes to talk about his ideal government:
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.
In the real world, however, this isn’t how governments behave. He refers to the American Constitutional system as a genius example of this type of government that protects individual rights … before mentioning how this “original American theory of government was breached, shelved, trashed long ago.” But why was it breached? Could it be that there are good, predictable reasons why governments disregard their limits and grow in scope and power? What, after all, is inherent in a government which predicts it will create good and just law? I know of nothing. It seems more likely a government will produce law that simply benefits special interests.
Binswanger’s arguments are only relevant in a fairy tale world where governments are perfect, objective protectors of individual rights, and anyone challenging a government’s edicts are simply exercising “arbitrary violence”. In the real world, governments have no principled objection to violating rights and are usually quite content to do much more, while the private production of security thrives.
Binswanger ends his critique of Anarcho-capitalism with a couple bad examples:
The anarchist idea of putting law on “the market” cannot be applied even to a baseball game. It would mean that the rules of the game will be defined by whoever wins it.
On the contrary, baseball is an example of order and rules being created without government. No top-down edicts detailing the rules of a baseball game are required in order for some neighborhood kids to enjoy a pickup game or even for an entire league to form.
And then of course, Binswanger brings up Somalia as an example of anarchism’s terrible results. Unfortunately for Binswanger’s narrative, Somalia after the fall of the Barre dictatorship in 1991 became one of the fastest growing economies in Africa. A 2007 study found that in the years after the fall of the central government 14 of 18 economic indicators had improved, even while foreign aid fell dramatically. Leeson points out that in the mid-80s the majority of GDP was from foreign aid, while 100% of education was financed by foreign aid. So, it appears the only 3 indicators that declined are the result of less outside aid rather than the loss of the state.
Similarly, Powell, Ford and Nowrasteh (2006) found that “Somalia’s living standards have improved generally … not just in absolute terms, but also relative to other African countries since the collapse of the Somali central government.” When Binswanger ventures out of theory and into the real world, we find that his example tend to provide evidence against his position rather that support it.
I believe if Harry Binswanger approached this topic with the reasonable assumption that both government actors and private actors are flawed human beings who are fairly self-interested and respond to incentives, he would come to a different conclusion. His entire position rests upon imagining the ideal government. He would do better to evaluate governments as they actually are. From there, they can be compared and contrasted with their private alternatives.