Voluntary Boundaries

February 24, 2013

PROPERTY RIGHTS IN CELTIC IRISH LAW

Filed under: Property, Private Law

Editor’s note: numbers enclosed in braces, e.g., {82}, represent the original pagination found in the PDF version of this document located at Mises.org.  Hyphenations have been removed.  Hyphenated words which were broken across page breaks are on the page before the break.


Journal of Libertarian Studies, Vol. I, No. 2, pp. 81-95. Pergamon Press 1977, Printed in Great Britain

{81}

PROPERTY RIGHTS IN CELTIC IRISH LAW*

JOSEPH R. PEDEN

Department of History, Baruch College of the City University of New York

"The laws which the Irish use are detestable to God and so contrary to all laws that they ought not to be called laws. . ."Edward l of England (1277)

"Leviathan in swaddling clothes"D. A. Binchy on the Irish Tuath

*This paper was given at a symposium on "The Origins and Development of Property Rights" sponsored by the Institute for Humane Studies at the University of San Francisco, 17-20January, 1973.

INTRODUCTION

It is impossible at the present time to present a systematic, coherent description of the ancient Irish law of property.  The reason is that a considerable portion of the sources have not been published in modern scientific textual editions and translations.  The principal sources used repeatedly by historians in the 19th and early 20th centuries are the multi-volumed editions of the old Irish law tracts edited and translated by Eugene O’Curry and John O’Donovan and published posthumously by other editors between 1864 and 1901.  While both these pioneer scholars were competent in their understanding of Middle and early Modern Irish, the language of the glosses and commentaries, neither was able to cope too successfully with the archaic and very technical terminology of the Early Irish texts of the law–the oldest and most valuable strata for understanding Irish legal concepts and principles.  The later editors of the O’Curry - O’Donovan transcriptions and translation were, with one exception, almost wholly ignorant of the Irish language, and the result was that their footnotes were misleading and inaccurate, their introductory essays teemed with misinterpretations, and the printed texts themselves were full of glaring errors.[1]

Scientific study of the Irish law tracts had to await the development of Celtic philology.  This was begun in the early 20th century through the interest of the German Celticist Rudolph Thurneysen, the English linguist Charles Plummer and the Irish historian Eoin MacNeill.  These three undertook the first really competent study of the difficult Old Irish texts, and more importantly, they trained and encouraged younger scholars to pursue the very difficult linguistic, historical and juristic studies which would prepare them for further study of the law tracts.

Unfortunately, many historians not specializing in the study of the ancient Irish law tracts have been unaware of the textual inaccuracies of the O’Curry - O’Donovan translations and have continued to incorporate their older unscientific work, and that of their editors, into their own work.  For example, one of the most commonly cited sources for early Irish history is Patrick Joyce’s A Social History of Ancient Ireland, first published in 1906 and republished in 1913 and again as late as 1968.[2]  This work is notoriously inaccurate; it has no sense of the fact that a chronology of at least 1000 years is being covered during which some changes in social and legal institutions took place.  Joyce’s book was used between 1914 - 1918 when the great French historian P.  Boissonade was preparing his epochal history of social life and work in medieval Europe.  Thus Boissonade speaks of "the soil of Ireland (belonging) to 184 tribes or clans. . . .the clans held the land in {82} common. . . .no man held individual property save his household goods, and each held only the right of usufruct over his strip of tribaldomain. . . in each district of Ireland the free population lived communistically in immense wooden buildings. . . . they lived and fed in common, seated on long benches, and all the families of the district slept there upon beds of reeds. . ."  One can see immediately that the writer is using the words "tribe", "clan", "tribal domain", "district" and "population": equivocally, leading to great confusion.  Almost every part of this passage is incorrect or very misleading.[3]

We might ignore Boissonade’s errors except they are typical of many other secondary sources including the Cambridge Economic History, whose editor Eileen Power, incidentally, translated Boissonade’s work into English in 1927.  Worse yet, this translation was reprinted as a Harper Torchbook in 1964 and circulates widely in American colleges, perpetuating errors dating back more than 60 years.

Even when native Irish authors like lawyer Daniel Coghlan attempted to write a systematic description of land law under the ancient law tracts, his work was described by a scholarly reviewer as "inaccurate and unreliable, of little value."[4]  Despite nearly 50 years of persistent and rewarding scientific study of the Irish law tracts by professionally competent philologists and jurist-historians, a recent historical work appeared which ignores all that has been published on the problem of Irish land law in the ancient law tracts, and in a chapter entitled "Celtic Communism" repeats all the inaccuracies of Joyce.[5]

Under these circumstances, conscious of my own lack of knowledge of the Irish language, and keenly aware of the shoals that await the historian who is not expert in this highly specialized field of study, I have deliberately avoided all reliance upon authorities who are not themselves trained in Irish language and history.  I am not presenting a coherent systematic review of the Irish law of property; I am presenting a review of what the most competent Irish scholars of the last half century have discovered since they applied modern scientific philological and historical standards of criticism to the ancient Irish law tracts.

My survey of the literature indicaies that (1) private ownership of property played a crucial and essential role in the legal and social institutions of ancient Irish society; (2) that the Irish law as developed by the professional jurists–the brehons–outside the institutions of the State, was able to evolve an extremely sophisticated and flexible legal respqnse to changing social and cultural conditions while preserving principles of equity and the protection of property rights; (3) that this flexibility and development can be best seen in the development of the legal capacity and rights of women and in the role of the Church in assimilating to native Irish institutions and law; (4) that the English invasion, conquest and colonization in Ireland resulted in the gradual imposition of English feudal concepts and common law which were incompatible with the principles of Irish law, and resulted in the wholesale destruction of the property rights of the Irish Church and the Irish people.

I

Irish law is almost wholly the product of a professional class of jurists called brithim or brehons.  Originally the Druids and later the filid or poets were the keepers of the law, but by historic times jurisprudence was the professional specialization of the brehons who often were members of hereditary brehonic families and enjoyed a social and legal status just below that of the kings.  The brehons survived among the native Irish until the very end of a free Irish society in the early 17th century.  They were particularly marked for persecution, along with the poets and historians, by the English authorities.  The statutes of Kilkenny (1366) specifically forbade the English from resorting to the brehon’s law, but they were still being mentioned in English documents of the early 17th century.[6]

The absence from the function of law-making of the Irish kings may seem startling.  But Irish kings were not legisiators nor were they normally involved in the adjudication of disputes unless requested to do so by the litigants.  A king was not a sovereign; he himself could be sued and a {83} special brehon was assigned to hear cases to which the king was a party.  He was subject to the law as any other freeman.  The Irish polity, thetuath, was, one distinguished modem scholar put it, "the state in swaddling clothes".  It existed only in "embryo".  "There was no legislature, no bailiffs or police, no public enforcement of justice . . . there was no trace of State-administered justice".  Certain mythological kings like Cormac mac Airt were reputed to be Iawgivers and judges, but turn out to be euhemerized Celtic deities.  When the kings appear in the enforcement of justice, they do so through the system of suretyship which was utilized to guarantee the enforcement of contracts and the decisions of the brehon’s courts.  Or they appear as representatives of the assembly of freemen to contract on their behalf with other tuatha or churchmen.  Irish law is essentially brehon’s law–and the absence of the State in its creation and development is one of the chief reasons for its importance as an object of our scrutiny.[7]

The bulk of the Irish law tracts were committed to writing in the late seventh and early eighth centuries, and though influenced somewhat by the impact of Christianity, they are basically reflective of the social and legal principles, practices and procedures of pagan Irish society.  In the early ninth century, the oldest texts were being glossed because the original meaning was no longer certain, or practice had in fact undergone developmental change.  By the 10th century elaborate commentaries were being added which indicate that the texts were either so obscure to the new generation as to be inexplicable, or change had become so marked that the commentaries often contradict the text itself.  Part of this confusion was due to the very archaic and technical language of the earliest texts and the subsequent change in the Irish language from what we call now Old Irish to Middle Irish.  If we recall the marked differences between the English of Chaucer and that of Shakespeare, we will understand the difficulties of the brehon jurists over a comparable period of time.[8]

To complicate matters further, the earliest Irish texts reflect the existence of several different schools of law, each producing its own particular code or tract.  While all the tracts are recognizably Irish in character, they do reflect local, perhaps regional differences; if the evidence were fuller, several local schools might be identified.  As of now it appears that a northern and a southern regional affinity can be detected.  The fact that in later historical times certain families of brehons were associated with specific tuatha or regions suggests that local variations in specific procedures and penalties were almost inevitable.  But from the tenth century, the legal fiction arose that the Irish law was a unity and all contradictions were to be explained away by the commentaries.  The multiple and competing law systems of the early period were now subjected to homogenization to produce what was considered to be a uniform law for the whole island.  And this fiction, like the equally unhistorical claim that there was a single High-King of Ireland–the King associated with Tara–retained its hold on historians down to the application of modern textual criticism in the 20th century.[9]

The conversion of the Irish to Christianity begun in the fifth century was bound to affect profoundly Irish life and institutions.  The Christian church was already very Romanized in its institutional and cultural conceptions.  It was urban-oriented and, thanks to St. Augustine, had reconciled itself to the Roman conception of the State as part of the natural (if sinful) order of the world.  In Ireland Romanized Christians found a wholly rural-oriented society with a barely embryonic conception of the State, and a well-developed legal tradition in which law making was the special function of essentially private persons–a professional class of jurisconsults and arbitrators known as the brehons.  Law and order, and the adjustment of conflicting interests, were achieved through the giving of sureties rather than State-monopolized coercion.  The Church could not depend upon the Irish kings to compel their people to convert to Christianity nor could they use the State to impose Christian law on an unwilling population.  Significantly, the conversion of the Irish was undertaken without State-directed compulsion and not a single martyrdom is associated with the Church’s triumphant success.[10]

Without the instrumentality of the State to {84} enforce its commands, the Church’s impact on Irish law was still very weak in the sixth century; canonical texts of this period forbid Christians to make use of the brehon’s court against one another.  They are to resort to the clergy to arbitrate among them as in the pre-Constantinian Church.  But the collapse of the Roman empire in the West, and the isolation from Roman influences, coupled with the rise of a wholly native clergy during the period, forced the Irish Church to integrate itself more fully into the native Irish institutions and culture.[11]

In legal tracts dating from the late seventh and early eighth centuries, the clergy are recognized in their seven ranks, with appropriate honor-prices, and other rights and obligations under the law.  The right of free men to bequeath property to the Church under certain conditions was recognized, and the right of women to give gifts was also approved by the jurists.  St. Patrick had mentioned the practice of newly baptized women placing their gold bracelets upon the altar as a gift, and his practice of returning them.  He may have done so to avoid litigation as to their right to make such a gift at this early period when their legal capacity was dubious.  The law also ruled out deathbed bequests to the Church as invalid due to possible mental impairment, and the laws on marriage and other sexual relations remained wholly pagan.[12]

The failure of the Church to impose its own will upon the Irish law is best appreciated if one considers the fact that the Church was compelled to create its own legal codes in which a wide variety of criminal and moral practices were outlawed and appropriate penalties assigned.  The so-called penitentials of the Irish Church were later carried by Irish missionaries to the continent and became a vital part of the judicial structure of the entire Western Christian Church.  Penalties ranged from set periods of prayer, fasting, abstinence, pilgrimage, hermitage, exclusion from the sacraments, and other spiritual acts, to a fixed scale of monetary commutations of these penalties.  The influence of Irish secular law, with its dependence upon monetary compensation for offenses under law, seems clear.[13]

One way in which the Church did influence Irish law was by seeking to have the Irish kings and assemblies accept a specific written code of law composed by an outstanding ecclesiastic.  The Annals of Ulster for A.D. 778 record that Bresal, Abbot of Iona, and Dunnchad, King of Southern O’Neill "confederacy", had agreed to accept the laws of St. Columcille, founder of Iona, as binding upon their peoples.  This was something akin to a treaty or compact governing internal and external relations.  The compact publicly committed the people represented here by their king to obey the new law.  This is the closest that the Irish got to legislating a system of law.  The law codes, always attributed to some saint, represent the intrusion of Christian moral practices into the customary law of the land-the brehons’ law.  They were largely concerned with ensuring better protection for the persons and property of the clergy, their households, clients, servants, tenants, and ordinary women and children.  There were also efforts to impose Sabbath laws.  But these new ecclesiastic-inspired codes were thoroughly Irish in structure and principles.  As Kathleen Hughes has put it: "The general effect of Christianity upon Irish law was to modify it without dislocating it; its rigidity was reduced and the result was a strengthening of native instittions".[14]

The study of the law texts and the canonical texts has suggested to at least one historian that the existence of two competing law systems in medieval Gaelic Ireland reflected a more subtle tendency in Irish jurisprudence and practice to conceive of Ecclesia and Tuath as separate and alternate entities with each having its own rights, and relations between the two governed by contract.  For example, a study of the development of the Church’s manner of holding land suggests that it seems to have controlled some of its property as a sovereign entity–outside and apart from the authority of any king and the jurisdiction of any tuath.  Some churches were very clearly held under lay proprietorship–the proprietor being a layman witb the right of patronage.  In other cases the lan d was given away without any restrictions at all–public or private–into absolute allodial ownership by an ecclesiatical corporation.  In some cases {85} familial land was donated with the consent of all the kindred but the abbot or cleric holding the benefice had to be chosen from the kindred of the donor.  For example, ten of the first eleven Abbots of Iona were kinsmen of the founder, St. Columcille.  Lastly, royal land–land which was attached to the public office of the king-ship–was donated to the church with the consent of the assembly of theTuath in return for the clergy performing spiritual offices without fee among the people.  These lands were apparently freed of all public obligations–to billet troops, answer a call to arms or give tribute to the king.[15]

The Church continually pressed to free itself of all obligations to lay owners or public authorities.  This effort accelerated during the 11th and early 12th century as part of the Gregorian reform movement and the investiture controversy.  But as early as the 6th century, many monasteries were operating as virtual ecclesiastical tuatha ruled by their abbots.  Daughter houses were established which recognized the abbot of the founding house as their "overlord" and the many houses and properties, tenants, clients and unfree dependents located over wide areas of the British isles and Ireland appear to be ecclesiastical principalities dealing with the secular tuatha as equals rather than subjects.  By the early seventh century the Archbishopric of Armagh heads a federation of churches spread across the north and west of Ireland, while the bishoprics of Kildare, and probably Cork and Emly in the south, are following suit.  Armagh claimed overlordship over any church that was free of obligations to an existing overlord–be he king, lay proprietor or abbot.  By the 8th century the bishops of Armagh and Kildare, and the Abbots of lona, Clonmacnois and Bangor were rulers over vast ecclesiastical principalities free of the rule of any secular authority.[16]

This situation continued in those parts of Ireland not subjected to English rule.  For example, when the native Irish archbishop of Armagh, Nicholas mac Moel Iosa, received the notorious papal bull Clericis laicos asserting the most extreme papal claims to immunity from State control (issued by Boniface VIII in 1296), he called a meeting of the kings of all the tuatha within his jurisdiction, explained the implications of the papal bull, and asked for their oaths of affirmation.  Apparently without any great conflict, they agreed to respect the immunity of the clergy, their property, tenants and artisans from any lay impositions–fiscal, alimentary or servile, and undertook to respect the right of the clergy to have all cases involving their delicts, debts or contracts heard in the bishop’s court rather than the brehon’s.  They further undertook the obligation of acting as sureties to the church for the apprehension of anyone in their jurisdiction who failed to appear before the episcopal courts.[17]

While the Archbishop had no difficulty in getting the Irish kings to recognize the immunities of the Church, he ran into grave difficulties with the English king Edward I whose rule extended over parts of the province of Armagh.  He was accused by Edward’s officials in Ireland of wholesale usurpation of the King’s rights over the Irish Church.  He had appropriated to himself the custody of the temporalities–properties–of vacant bishoprics and abbacies; he had consecrated new prelates for these offices without the king’s license; he had heard pleas in his court that by right belonged to the King’s court, to the detriment of the royal prerogatives and revenues.  Archbishop Nicholas defended himself by arguing that he had acted in accordance with the ancient rights (under Irish law) of his Church as in the days before the conquest, rights which the English king Henry II had sworn to uphold.  Edward replied to that argument by imposing a heavy fine and ordering that his officials make sure no Irishman ever was elected again as Archbishop of Armagh.[18]

This is but one clear instance in which the property rights and the freedom the Irish church achieved under Irish law were to be radically reduced under the impact of English feudal and common law traditions.  By the 14th century, the antagonism of the two peoples was so great that the English government forbade any religious order, monastery, collegiate church or cathedral to admit to its membership anyone of Irish nationality.  Moreover, anyone who was Irish presenting himself for ordination to clerical orders in a diocese under the English king’s jurisidiction was presumed to "have lived continuously {86} among evil people and to come from an evil background", and was to be denied sacred orders.  Thus were the native Irish dispossessed of their own churches in their own land to give places to foreign invaders.[19]

II

Let us now examine in some detail the character of Irish law and the role of in legal and social institutions.

Irish society was a precisely stratified, class-conscious society in which rank had legal and economic foundations, The earliest law tracts divide the population into two legal classes: the free and the unfree.  The free are the kings, nobles and commoners–all those who own land and thus enjoy the franchise, a place in the assembly of the tuath, and have a legal capacity to make contracts in their own right or through their father, husband or male kinsmen.  Possibly under the influence of the Church, which had seven orders of clergy, the jurists subdivided the kings into three grades, the nobles and commoners into seven each.  The grade or rank of a man was determined by the amount of property he owned and number of clients he had.  Since the clients varied according to his available wealth (see below), wealth was the principal basis for a man’s rank in Irish society.  The unfree were those who did not own land, thus did not have the franchise, and were usually household retainers or tenants at will of a landowner.

What is somewhat surprising is the fact that these ranks and categories were not fixed.  The law texts say that "the free may sit in the seat of the unfree" and "the unfree may sit in the seat of the free".  "Everyone may become free by his wealth and unfree by hid lips."  The free who become unfree are those who sell all their land or rights or body in service to another (slavery).  The unfree in the seat of the free are those who buy land or the right to the franchise by their art (skilled craftsmen), their talent (bards), or by husbandry (tenants at will). This social mobility is reflected in the legal maxim: A man is better than his birth. The only class excluded permanently from recovering their free status were those who had forfeited their lives for some crime, but were ransomed and kept as servile tenants by some freeman, But generally, wealth, talent or skilled oraftsmanship were enough to make free status possible.  In effect, economic self-sufficiency was the hall-mark of free status.[20]

While some historians have been dubious as to the reality of the fine distinctions in grade or rank which the law tracts reveal when applied to the actualities of everyday life, 1 do not share their view.  Admittedly medieval intellectuals in general, and the Irish jurists in particular, show a marked predilection for making numerically ordered distinctions in all sorts of situations.  But it must be remembered here that the assessment of a man’s property–its character and value (land, chattels, clients)–was absolutely necessary if he was to participate in the very elaborate system of suretyship which was the basic mechanism by which all law was enforced.  And it also was vital to assess his honor-price–another essential part of the Irish system of justice.[21]

The honor-price (dire or enclann) was the payment due to any free man if his honor or the rights were injured or impugned in any fashion by another person.  It might be invoked for the violation of any contract, any act of violence to his person or that of his dependents, any trespass on his rights or property, or even a malicious use of "satire" without cause which damaged his reputation (usually the work of a bard or poet).  In the oldest texts, honor-price varied in amount according to the rank of the victim, and the penalty for the offense varied, being fixed according to the seriousness of the offense at the amount of his honor-price or some multiple or fraction thereof.  At a later stage of legal development, the jurists established fiied penalties for specific crimes and enforced them equally regardless of the rank of the victim.  But in addition, the offender still had to pay the honor-price appropriate to the victim’s rank.

Honor price was also essential in the workings of the surety system by which means all judgments of the brehons’ courts were enforced.  Since law enforcement was not a function {87} of the state or king in the Irish tuath, it was entirely dependent upon each party in an action or suit providing himself with sureties who would guarantee that the judgment of the brehon’s court would be honored. If a person was about to bring suit, he sought sureties to help him in persuading the defendant to submit to peaceful adjudication of the dispute; this might involve applying the law of distraint in which the plaintiff seized some movable property of the defendant and impounded it under lawful procedures until the defendant gave surety that he would submit to adjudication.  If he refused to do so, the community would consider him an outlaw–and he and his property would lose the protection of the law.[22]

There were three kinds of surety: first, a surety might offer the plaintiff to join him in enforcing his claim against the defendant.  Since Irish law did not distinguish between tort and criminal actions, all crimes or suits were punished by payment of fines and honor-prices.  Thus the plaintiff–if he won his suit–became a creditor, the defendant became a debtor.  The surety guaranteed payment by pledging his own honor-price.  A second form of surety (aitire) had the surety pledge his person and freedom as a guarantee.  If the party defaulted on his obligations, the surety had to surrender himself to the aggrieved party and then begin to negotiate his freedom by paying the debt and also the honor-price of the creditor for this new injury.  Once freed he could of course try to recover his losses from the defaulter.  A third type of surety (rath) guaranteed that in the event the debtor defaulted the creditor would be paid out of the surety’s own property.  If the surety was subjected to loss, the debtor must pay his honor-price.  If he defaulted, his honor-price was forfeited and he lost his legal status.

Because of the vital role that it played in the surety system, honor-price was one of the chief attributes of a person’s rank and only men of full legal capacity possessed it in their own right.  Wives, children and sons living in their father’s house were protected by the honor-price of their husbands, fathers or male guardians.  Sureties and compurgators–persons who gave oaths as to the truthfulness of contestants in a legal dispute–had to have their honor-price assessed because they were forbidden to pledge payment of any debt beyond the value of their honor-price which was, of course, assessed on the basis of their rank which was in its turn based upon an assessment of their wealth.  Thus ownership of property in all its forms was the basis of a man’s legal status and marked the extent of his participation in and protection within the legal system.[23]

The Irish law recognized three distinct kinds of contract: sochordochor and michor.  A sochor was a "good contract" which had three qualities: it was a contract between two or more free men; these free men were legally capable to act (not insane or minors or otherwise restricted in legal capacity); and lastly, the objects exchanged were of "equal profitableness".  In contrast is the dochor or "bad contract" in which the first two qualities are present, but the third is lacking.  Here the seller has suffered some loss of value in the exchange.  What appears to be present here is the intrusion of the Christian concept of the "just price", perhaps an early influence of the Church upon the law.  But what is most significant is that, while failure to exchange at a just price renders a contract "bad", it does not render it invalid.  An invalid contract–called michor–is one which is illicit or void because one or more of the parties had not the legal capacity to act in his own right or was not a free man.  The moral dubiousness of the dochor is not the issue and has no direct legal impact.  However, as we shall see, the legal distinction did have legal impact in cases where women executed contracts in the absence of their husbands, or men without the consent of their wives in some instances.[24]

As in so many ancient societies, in Ireland many economic transactions took place under the guise of a contractual relationship known as clientship.  In Irish law, clientship was of two distinct types–free and base, distinguished from one another by the type of services required by each.  Free clientship (soer-celsine) was the grant by a king or noble to another free man of livestock in return for the payment of a "rent" of 1/3 of the value of the livestock to be {88} paid annually for 7 years.  At the end of that time, the client became sole and absolute owner of the livestock and his clientship terminated.  All classes of free men were eligible to become free clients without any loss of legal status, franchise or honor-price.  The only other obligations were that the free client did homage to his "lord" or creditor by standing in his presence and by attending him on certain ceremonial occasions.  Since a noble’s or a king’s rank depended in part on the number of clients that he had attending him, the Irish upper classes invested a large part of their assets in acquiring as many clients as they could afford. This gave them increased social and legal status, and probably increased their political power in the assemblies as well.  It also raised the value of their honor-price, thereby increasing tbeir capacity to act as sureties and compurgators.

The base client was also a free man, an owner of some land, but usually a commoner.  He received a grant of either stock or land from a person of higher rank in return for the payment of an annual rent in kind (a food-rent) proportionate in value to the value of the borrowed land or stock.  In addition he owed specified labor services to his "lord" or creditor, and this is why his clientship was "base".

The Irish apparently considered that laboring for another man somehow impugned one’s honor because the "lord" had to pay the base client upon the initiation of the contract the value of his honor-price.  In return the "lord" was entitled to receive a percentage of the base client’s honor-price and other compensation paid to him if he sustained any injury or violence resulting in a legal settlement.  The base client thus remained a free man and could terminate his base clientship at any time upon returning the "lord’s" property and compensating him for any possible losses.[25]

The Anglo-Norman invasion of Ireland in the late 12th century and the subsequent partial conquest of its territory was to have a detrimental effect upon the status and legal rights of the Irish clients, particularly on those who were base.  Neither form of Irish clientship was equivalent to Anglo-Norman vassalage.  Free clientship was essentially a form of commercial contract in which the purchaser bought livestock on a deferred time payment system.  He remained free in legal status and the contract was terminable at the end of seven years or even earlier if paid in full.  No one could mistake this for a feudal bond of vassalage or a fief despite the free client’s minimal social obligations to his creditor.  But base clientship, where manual labor services were required along with an annual food-rent, was more easily misunderstood by the Anglo-Normans as equivalent to English villeinage or serfdom.[26]

In Irish law among the ranks of the unfree were a specific class–the sen-chleithe–who are the legal equivalent of the English villeins.  They are hereditary holders of a parcel of land in return for uncertain service and pass as appurtenances of the land should it be alienated or sold.  They are included as part of the owner’s property for purposes of assessing his honor-price and rank.  Another class of the unfree are the fuidir who are not "villeins’ in Irish law but are tenants at will bound to uncertain services.  However, they are free to move or abandon their holding upon due notice to their landlord, and may rise in social status or fall to the rank of sen-chleithe if they have had ancestors living on the same land for nine generations–an unlikely situation.[27]

With the English occupation both the fuidir and the base clients were reduced to serfdom under English law.  They are called betaghs or betagius in the English documents from the 12th century onwards.  The fuidir lost the right to leave his holding and the possibility of rising in status.  The base client lost his personal status as a free man, his right to the ownership of his own land and moveable property, and the right to bequeath his property to the Church or others.  Even the free clients seem to have suffered some loss in status as the distinction between them and the base clients was often ignored by the English in their efforts to seize the properties of the conquered Irish.  Thus the English conquest meant a vast displacement and dispossession, and loss of status for most of the Irish landholding classes and tenantry as well.[28]

As we have already indicated, one of the most persistent myths of Irish history is the belief that a form of primitive communism {89} prevailed in landholding.  Due in part to the failure of the translators and editors of the law tracts published in the 19th century to use such words as "tribe", "clan" and "sept" precisely, later writers, particularly those dependent upon Patrick Joyce’s work as a source, confused the lands of the tuath with those of the fine or family.  In addition, Irish law recognized joint-ownership and cotenancy as well as co-operative work ventures.  All of these have been vaguely described in different places as "communal ownership" or communism.

In a very detailed critique of Joyce’s work, Eoin MacNeill, one of the first professional historians who was also able to read and interpret the law tracts from their manuscripts with competency in Old Irish, pointed out that there was no evidence whatever to suggest that the lands of the tuath were held in common or periodically redistributed.  Quoting Sir Henry Maine who had admitted that "all the Brehon writers seem to have had a bias towards private as distinguished from collective ownership", MacNeill wryly comments that it was hardly a bias–it was a reality.  It was a myth of collective ownership that was the product of bias.  There are only two kinds of land which seem to have been viewed as being without owners: mountain peaks and woodlands or forests which were not partitioned or appropriated.  There was also the land that belonged to the king by reason of his office.  But since the kingship was normally hereditary within a kindred or derbfine–four generations of males of which one had been a reigning king–even the royal domains had a semi-private character as they circulated in usufruct within the royal dynasty.[29]

The English government encouraged Irish rulers to surrender their tuath and its landed territory to the English Crown which would then regrant it in feudal tenure to the Irish king who thenceforth would be a feudal vassal.  The result of such a transaction in effect would be to transfer ownership of all lands from the allodial Irish owners to the English king and then as a fief to the new Irish vassal–dispossessing the people to the benefit of the Crown and the Irish former king.  Needless to say, such Irish kings were swiftly repudiated by their people.[30]

Ownership of property in Ireland was generally absolute; but some instances of limitations were recognized in the law tracts.  For example, there were three instances in which the rights of ownership were subject to adversative prescription.  If two successive generations of landowners failed to challenge the right of a millrace to cross their land without receiving some form of compensation for the infringement, the millrace became the absolute property of the mill owner(s).  The same rule applied to the construction of a fishing weir across a stream or estuary and the right of way of a bridge or plank roadway across a stream or bog.  Also, the law recognized that certain personal "necessities" suspended private property rights in particular instances: a man might take a single salmon from a stream or a single drawing of a net from a river or lake without infringing on the property rights of the owners; he could also cut a sapling for a riding crop or the shaft of a spear or commandeer a wagon to carry home a corpse.  The gathering of nuts or kindling from woodlands was free to all equally, provided the woodlands were not partitioned or appropriated for private use.  Seaweed could be taken also under the same restrictions.  As for wild beasts, they belonged to whoever killed them.[31]

A very common form of property holding was joint-tenancy.  This was especially common where the kindred were acting as a close economic unit in livestock raising or tilling the soil.  In a pastoral enterprise where summer and winter pasture were needed and large herds of cattle, sheep or kine required only a few persons to attend them in the fields, co-tenancy was a reasonable solution involving both division of labor and maximum utilization of land.  The Irish took a dim view of trespassing and neighbors were required to give each other sureties against trespass; in co-tenancy of land, the repair and maintenance of fencing was the responsibility of each co-tenant along the outer boundary of his own land; failure to keep it properly fenced compelled him to pay a fine to his co-tenants, and he probably forfeited his surety to his neighbor for trespass as well.  Each tenant was required to supply some tool which was stored in a common place; each {90} morning he was required to appear at a fixed time when the day’s work on the fencing would begin.  If late, another might take his tool for the day and he paid a fine.  The co-tenants also took turns in guarding their livestock.  To protect themselves against suit for negligtnce, the co-herders set limits to their personal liability before witnesses and gave sureties to each other.  The losses due to attacks by wolves, gorings, and wanderings into bogs were provided against by these contracts and individual responsibility for loss thus established.[32]

A form of joint-ownership was used in the construction of mills.  The owners were usually monasteries, kindred groups or individual jointowners.  If a mill was wholly within the lands of a single landowner that would obviate the need for joint-ownership.  But frequently the water for the millrace and pond had to be diverted from a distant lake or stream.  This meant that the owners of the source of the water, and the landowners through whose land the millrace ran, had to be compensated for the infringement of their property rights.  This might be done by payment of a single sum to the owners of the land or water resource, or else recognizing them as joint-owners with specific rights of use of the mill for set periods in varying proportions.  The owner of the mill and pond and the owner of the source of the waters got the largest share, with the landowners of the land through which the millrace passed getting proportionately less.  (It was noted elsewhere that the landowners had to allow the millrace and could lose their rights to compensation after two generations).[33]

The climate of Ireland is such that drainage is a major problem.  Thus ditches abound for drawing off water, and for keeping cattle impounded.  The occurrence of drownings was apparently so common that the jurists waived the liability of owners for drownings in ditches, or other accidental deaths in ditches surrounding cattle pens,-homesteads, churches, or grave mounds, or in millraces and ponds, peat bogs or from footbridges.  But if an accident was due to the failure to fence one’s fields, the owner was liable to be fixed.[34]

One of the more difficult problems in studying the Irish law of land ownership is the property of a family or kindred group.  MacNeill admits that here we may have "communal" ownership.  By this he means that certain land cannot be sold without the consent of the derbfine-all males descended from a common great-grandfather to the third generation.  Thus this group is also the normal range of inheritors and also entitled to the compensation for homicide for any of its members.  While each member held and disposed of the fruits of his own parcel of land, some residual control was exercised by the kinsmen.  When the land was redistributed is not clear, but some division must have taken place when a young man came of age, perhaps his share of his father’s patrimony was transferred at this time.  If he died without sons, it probably was redivided among his brothers.  Sons were the normal and equal heirs of their fathers, and their mothers.[35]

Whether land was distributed in proportional share upon the death of any kinsman amongst all the kinsmen seems dubious.  The fractionalization would seem very much against the interest of orderly management.  Some writers imply this was the case, but may have been misled by a law tract dealing with the division of compensation due a dead man levied on his murderer by an armed raid into another tuath.  In this tract, the deceased’s compensation is obviously movable–it had been captured and taken from another territory.  Also, it was divided first into three thirds–one went to the king and nobles of every grade above the deceased’s; a second third to the members of the hosting other than the above; and the last third to the deceased’s kindred.  This last third was then divided by a series of apportiohments by fractions among the kinsmen according to the closeness of their relationship to the dead man.  This legal rule for a specific type of blood-letting, should not be assumed to be the norm for the division of ordinary property.  Thus the actual distribution of landed property may well have been confined normally to the immediate male issue, while the more distant kinsmen retained residual rights of inheritance in case of failure of direct issue.[36]

One result of the English conquest was the displacement of the Irish law of inheritance.  Under the feudal customs of England the law {91} of primogeniture prevailed and was also applied to Ireland.  Certain 16th century legal agreements have Irishmen trying to preserve the old system of equal sharing among sons, but these were not recognized in English courts, thus disinheriting the normal Irish heirs.[37]

One last look at Irish concepts of property right may be revealing.  A 17th century manuscript reveals a poetic dialogue between two contestants before a brehon.  The first, representing the "men of Munster", claims they own the Shannon River and its resources on three grounds; the Shannon was conquered in the 11th century by the Munster king Brian Boru from the Vikings; that the river in its lower courses runs through their lands; and that in a previous case Brian’s rights were upheld.  The poet representing the "men of Connacht" bases his claim on the fact that the river was always recognized as theirs from the time of Patnck to that of Brian; that the passage of a river through the land of Munster does not make it the property of Munster, any more than a man travelling through Munster bed comes thereby a Munsterman; that the judgement in favor of Brian was invalid because made by a foreigner (thus unfamiliar with Irish law); and lastly that the river belonged to Connacht because it had its source in that land.

The brehon decided in favor of the poet of Connacht.  He held that "just as the offspring of every father belongs to the father and inherits his patrimony, the natural father of every stream is every unexhausted well from which it springs forth first".  As the Shannon has its source in Connacht, it and its resources belong to the men of Connacht.  The previous judgment on behalf of Brian is interesting also, and not repudiated explicitly.  Brian as presumptive owner of the river claimed ownership of a jewel found in the gullet of a fish taken from the river by a trespassing fisherman.  He won his claim since the fish in a lake or river belonged to its owner.

Rivers and streams and waters in Ireland are still held in private ownership–but by descendants of the English feudalists.[38]

 

III

A fair test of the sophistication of any legal system might be to examine the extent to which women enjoy legal capacity and property rights.  By this standard Irish law in the 8th century may have had more sophistication than English law in the days of Queen Victoria.

Irish law was typically Indo-European in that it was patriarchal in character at the dawn of the historical period.  In all the oldest legal texts women have no legal capacity to act or own property in their own right.  They are under the tutelage of some male–father, brother, husband or son–just as if they were children.

Yet even under this burden, women were in practice straining to break the bonds of the law.  The early law tracts found it necessary to mention that a husband has the right to rescind any contract made by his wife in his absence, even if she had found sureties to support it.  The contract was deemed invalid, and the sureties as well.  But the clear implication is that women were in fact making contracts in their husband’s name in his absence, and the jurist who composed the tract must have been under some pressure to acknowledge the practice, for he specified that such an invalid contract could be validated if the husband neglected to repudiate it within 15 days of his return home or of his being notified of its existence.[39]

The legal incapacity of women is also evident in the earliest forms of marriage contract in which the wife is under her husband’s tutelage.  But already a concession to her appears.  If she is of rank equal to him, she may interpose to prevent him making a dochor, a "bad" or disadvantageous contract (see above).  Her intervention does not invalidate the contract; it merely suspends its coming into force until her son or husband’s kinsmen can be informed and given time to act.  The implication is that her husband is about to alienate property that is not fully his to dispose of.  Even if she is only betrothed, a woman can intervene in some instances to prevent her future husband from acting, at least temporarily.[40]

{92} Another somewhat important breach which opened the way for extending women’s legal capacity was recognition of her right to give a gift of a value no greater that her honor-price–normally half that of her husband.  Gift-giving is not a contractual act, but it implies the capacity to own property in one’s own right.  Specifically she had the right to give the "product of her own hands" to the Church.[41]

The greatest departure from the system of male tutelage over women is found in the law tract called the Senchus Mor composed in the early 8th century and reflecting the teachings of a school of law operating in Northern Ireland.  There, as in so many other cases, one of the pressure points for granting women wider legal capacity was the natural desire of sonless fathers to wish to bequeath their property to their daughters.  In the SMdaughters are recognized as having the right to a life interest in the landed property of their father if he left no sons, or presumably grandsons of the male line.  But at the daughter’s death, the land, which appears to have been familial, reverted to the natural male heirs of the father’s fine or kindred.  As an heiress to such property, the daughter logically had to have the means to protect it; therefore she was recognized as having a variety of legal rights including the right to sue and be sued, to engage in distraint and even to make legal entry on disputed or unoccupied land by almost the same procedure as was open to males in the same circumstances.  Recognition of life interest in familial land in certain circumstances also implied that she had full ownership of the product of that land, and the right to dispose of it freely.  The older form of marriage contract in which the woman was under her husband’s tutelage did not lend itself to such a situation, and it now gave way to a new form of marital contract which soon became the norm among the propertied classes.  Called a marriage of "mutual portions", it required that each partner to a marriage bring to it a set portion of property which was to be held jointly by husband and wife, its profits being divided proportionately between them.  In this joint ownership-partnership, no contract was valid without the consent of each partner, except when the contract "advanced their common well-being".  If either party made a dochor or disadvantageous contract, it could be rescinded within IS days of the other partner returning home or receiving notificatioh of its having been made.  Specific types of contracts mentioned in the texts include the hire of land, the purchase of livestock, the purchase of necessary household equipment or supplies, and agreement between kinsmen for joint tillage of fields.  No object whose lack was disadvantageous to the joint household could be sold without mutual consent.[42]

In addition to the property which the marriage partners held jointly, each could own additional property, including the profits of their joint holding, in absolute single or sole ownership.  The only restriction on the profits of their joint enterprise was that the wife could dispose of her share only to the value of her honor-price which was half that of her husband.  This may have had some further restriction as to time limit but the texts are silent on it.  The husband’s share of the profits of their joint household was his sole property, but in certain instances his wife could dispose of it without his consent.  She could alienate it to his advantage, but was subject to a fine if she acfed without his consent.  If he incurred any loss in the transaction, and she somehow made a gain, she could be sued by her husband for theft.  This rule seems to envision embezzlement or fraud among partners.[43]

A woman could inherit property from her mother if there were no sons, but normally the sons were the natural heirs to their mother’s as well as their father’s property.  If childless, a woman’s property reverted to her nearest male kinsmen–not her husband–or she could bequeath it to the Church.

One of the most startling aspects of the Irish law was its treatment of the rights of women in various sexual relationships outside Christian marriage and their right to divorce.  In one legal tract no less than ten different kinds of sexual union between males and females are legally recognized–each having a very precise legal character, each partner enjoying specific property rights and obligations.  From a Christian {93} viewpoint, some of these relationships are clearly polygamous, others irregular, some even casual or violent.  Most legal systems in Christian Europe denied these women legal status and rights, and extended these deprivations to the children unless the father recognized them.  The Irish law recognized rights of maintenance and support which vary in degree and amount according to the character of the sexual union.  For example, in a marriage of mutual portions the cost of "fostering" or rearing a child is shared equally by the parents; but if the child is horn of a bondwoman, or as a result of rape, or in secret, the father is responsible solely for its rearing costs.  In some instances the male has some control over the woman’s property rights and a right to share in her honor-price; in others she controls some of his property rights and shares in his honor price.  The detail, extensiveness, balance and proportionality with which the rights and obligations of each partner are assigned in these very unchristian couplings is unique in the law tracts of Christian Europe.[44]

Although it has been suggested that this is another instance of the archaic and unreal character of the Irish law tracts, which could not have had validity in a Christianized Ireland, the evidence suggests otherwise.  Throughout the medieval period, both Irish clerical and foreign commentators frequently denounce the Irish for their failure to suppress sexual promiscuity and adhere to the marriage laws of the Church and "civilized" societies.  It is most unlikely that the Irish were more promiscuous than other peoples; but it was their unique practice of continuing to separate canon law from civil law that seemed so scandalous to other Europeans.[45]

Similarly, the Irish law recognized the right of divorce.  A man might repudiate his wife for dishonoring him, doing him some injury or willful abortion.  But, incredibly, the wife could initiate a divorce action against her husband!  She could charge consanguinity, incurable infirmity, sterility, cruelty evidenced by lasting injury, slanderous remarks as to her character, abandonment for another woman, willful neglect in supplying the necessities of life, or abandonment by reason of his entering a monastery.  None of the above except consanguinity was grounds for annulment in canon law.  There were also some eleven categories of legal separation with respective property rights and obligations regarding the care of children and distribution of property.  That these laws were not "obsolete" can be shown in the marital history of Gormflath.  Wife first of Olaf, Viking king of Dublin, widowed, she married Malachy, king of Meath and High-King of Tara A.D. 980.  Malachy repudiated her, and she later married and divorced Brian Boru, who also won the High-Kingship by replacing Malachy.  Thus she had two ex-husbands still living when she became betrothed to a third, Sigurd, Earl of Orkney.[46]

While the history of Irish law between the 8th and 17th centuries is very sketchy due to the lack of surviving historical materials, occasional references indicate that women continued to enjoy an exceptional standing in law with regard to their property rights down to the end of native Irish culture and independence in the early 17th century.  In the early 14th century there is reference to a woman acting as an agent for an English proprietor whose cattle have been "stolen" by some Irishmen.  She is commissioned to mediate for their return–the Irish having in their law invoked the law of distraint on the Englishmen’s cattle.  There is even a reference to a woman sitting as an arbitrator along with a brehon in a suit.  In the early 17th century the English observer Sir John Davies in his book investigating why the Irish were so hard to conquer remarks: that the Irish are so savage that "the wives of Irish lords and chieftains claim to have sole property in a certain portion of the goods during coverture with the power to dispose of such goods without the assent of their husbands; (therefore) it was resolved and declared by all the (English) judges that the property of such goods should he adjudged to be in the husbands and not in the wives as the (English) common law is in such cases".  This is but another example of the destructive and retrogressive effect of the imposition of English common law on the legal status and property rights of the Irish people.[47]

{94}

CONCLUSION AND SUMMARY

While a comprehensive survey of the Irish law of property and property rights cannot yet be written, we can already see that the idea of private ownership permeates those aspects of the law which have been subjected to recent study.  The Irish frankly and openly used assessments of property as the criterion for determining a man’s social and legal status, the extent of his capacity to act as a surety or compurgator, and to fix the amounts of compensation due him as a victim of crime or any kind of injury.  Ownership of land determined a man’s status as free or unfree and his right to participate in the public assembly.  The needs of the Church modified but did not alter the basic character of native Irish institutions and law.  While it secured for itself almost total freedom from lay ownership and secular obligations, it was never able to fully destroy the essentially secular character of Irish law as exemplified in the laws on marriage and divorce.  The legal capacity of women showed exceptional development and gave women property rights in the 8th century that were centuries ahead of those enjoyed by English women.  The fact that Irish law was the creation of private individuals who were professional, even hereditary, jurists, gave to the law both a conservative yet flexible and equitable character.  Their power rested upon the free consent of the community in choosing them as arbitrators in disputes; and this made equity and justice more likely than in royal courts where the interests of the State and its rulers are paramount.  The invasion and conquest of Ireland, the work of over 400 years before it was completed, was eventually fatal to the Irish system of law and the culture and civilization it expressed.  The English State was incompatible with the Irishtuath; the English common law was totally incompatible with the Irish law.  Ireland from the 12th century was a single land in which two nations and two laws and two cultures engaged in a constant struggle for survival.  The end came in the early 17th century with the flight bf the last Irish kings from Ulster and the new plantation of that region by Protestant Scots sent by James I-that most absolute of English Kings.

As for the native Irish and their ancient culture, the English official Sir John Davies thought he said it all:

"For if we consider the Nature of the Irish Customes, we shall finde that the people that docth use them, must of nedessitie be Rebelles to all good Government, destroy the commonwealth wherein they live, and bring Barbarisme and desolation upon the richest and most fruitfull Land of the world."[48]

 

 

NOTES

1.  The Ancient Laws of Ireland, 6 volumes.  1865 - 1901.  The most complete evaluation of the law tracts by a competent Irish philologist and jurist is D. A. Binchy’s Rhys Memorial Lecture before the British Academy entitled The Linguistic and Historical Value of the Irish Law Tracts (London. 1943). Also Binchy, "Ancient Irish Law", Irish Jurist NS 1(1966), 84 - 92.^

2.  Patrick W. Joyce, A Social History of Ancient Ireland (Dublin, 1906). 2 vols. Reprinted in 1913 and 1968.^

3.  P. Boissonade, Life and Work in Medieval Europe, trans. by Eileen Power (London, 1927). Harper Torch book edition (New York, 1964). See pp. 78 - 79 of the latter.^

4.  See the review of Daniel Coghlan’s Ancient Land Tenures of Ireland in Irish Law Times and Solicitors’ Journal (March 10, 1934). Further comments in July 14 and Sept. I5 issues. The reviewer is anonymous.^

5.  P. Bereford Ellis, A History ofthe Irish Working Class (London, 1972). The author ignores all modern scholarship on the subject and rejects MacNeill’s criticism of Joyce because he was pro-capitalist! ^

6.  Binchy, Historical Value of Irish Law Tracts, 22. Also, Gearoid Mac Niocaill, "Notes on Litigation in late Irish law", Irish Jurist NS 2(1967), 299 - 307, and G. J. Hand, "The Forgotten Statutes of Kilkenny", Irish Jurist NS 1(1966), 301.^

7.  D. A. Binchy in Early Irish Society (Dublin, 1954). 56 - 58. Also, Myles Dillon and Nora Chadwick; The Celtic Realms (London, 1967), 93 - 98.^

8.  Binchy, Irish Jurist NS 1(1968), 84 - 92.^

9.  Ibid. See also, Eoin MacNeill, "Prolegomena to a Study of the Ancient Laws of Ireland" Irish Jurist NS 2(1967), 106 - 115.^

10.  The most authoritative recent study of the Irish Church in the pre-conquest period is Kathleen Hughes, The Church in Early Irish Society (London, 1966). See chapters 4 and 5 in particular here.^

11.  Ibid. Chapter 12, pp. 123 - 133 and Chapter 5, pp. 45 - 55.^

12.  Ibid. Also, for St. Patrick, see R.P.C. Hawon, St. Patrick: His Origins and Career (New York, 1968), 139.^

13.  Ludwig Bieler, "The Irish Penitentials", Scriptores Latini Hiberniae (Dublin. 1963).^

14.  Hughes, Chapter 14, pp. 143 - 156. See especially 149 - 151.^

15.  See paper given to Columbia University Faculty Seminar {95} in Hislory of Legal and Political Thought (1966) by Prof. Charles Donohuc of Fordham University: On the Senchar Mor, an early 8th century tract including material on Church-State Relations. Also, Hughs, 161.^

16.  Hughs, Chapter 8, pp. 79-90 on monastic paruchiae and Chapter 11, pp. 111-122 on Armagh.^

17.  J. A. Watt. The Church and the Two Nations in Medieval Ireland (Cambridge, England, 1970). 160-169.^

18.  Ibid.^

19.  Ibid, 206-207 and2ll.^

20.  Eoin Mac Neill. "The Law of Status or Franchise", Proc. Royal Irish Academy 36C (1921-24), 265 - 316. See here p. 273.^

21.  Binchy expressed some doubt on this in his Historical Value, p. 33.^

22.  See Dillon and Chadwick, Celtic Realms (London, 1967), 98 - 99. Also, see Mac Neill, op. cit.^

23.  Ibid.^

24. Rudolf Thurneysen, "Sochor and Dochor’: Essays and Studies in Honor of Prof. Eoin Mac Neill, edited by John Ryan S. J. (Dublin, 1940), 158 - 159.^

25. For a discussion of clientship, see D. A. Binchy, Crith Gablach (Dublin. 1941). pp. 78, 80, 96 - 97 and 107. Also, Dillon and Chadwick, 95 - 96.^

26. Gearoid Mac Niocaill, "The Origins of the Betagh", Irish Jurist NS 1 (1966), 292-298. Liam Price disagrees wth Mac Nicoaill in Eriu 20 (1966), 185 - 190, but J. A. Hand is convinced by Mac Niocaill’s analysis in hisEnglish Law in Ireland 1290 - 1324 (Cambridge, 1967), 213.^

27. Binchy. Crith Gablach, 105.^

28. On fuidir, Ibid. 93. Otherwise, see op. cit.^

29. Eoin Mac Neill. Celtic Ireland (Dublin, l921), 144 - 151.^

30. On the policy of "surrender and re-grant" under Henry VllI see J. C. Becket, The Making of Modem Ireland (London, 1966), 18 - 19.^

31. D. A. Binchy, "Irish Law Tracts Re-edited: Coibnes Uisci Thairidne (AL IV, 206-222)," Eriu 17 (1955), see p. 81 n. 9 52ff. Also, Mac Neill, Celtic Ireland, 170 ff.^

32. Ancient Laws, IV, p. 372 ff.^

33. Op. cit.^

34. Ibid., 71 - 72.^

35. Mac Neill, Celtic Ireland, 152 - 176. Also, Mac Neill, "The Irish Law of Succession," Studies 8 (1919), 367 ff.^

36. Mac Neill, Studies 8 (1919, 376 - 377. Also, Kuno Meyer, in Eriu 1 (1904), 214 - 215.^

37. J. Otway-Ruthven, "The Native Irish and English Law in Medieval Ireland." Irish Historical Studies 8 (1950), 1 - 16.^

38. Brian O’Cuiv, "The Poctic Confrontatlon about the Shannon River." Eriu 19 (1962), 89 - 105. The poem is datcd to the 15th century.^

39. D. A. Binchy, cd. Studies in Early Irish Law (Dublin, 1936). This is the most complete study of the status of women in Irish law and the product of a seminar conducted by Rudolph Thurneysen, the distinguished Celticist. See here D. A. Binchv. "The Legal Capacity of Women in Regard to Contracts," SEIL pp 207 - 234, especially 207 - 216.^

40. Binchy, SEIL, 216 - 217 and 224 - 225.^

41. Ibid., 226-227 and on 209 note 1. Women could act as sureties under certain limitations, see pp. 232 - 234. On gifts see Myles Dillon, "The Relationship of Mother and Son, Father and Daughter and the Law of Iinheritance", SEIL, 129 - 179 passim.^

42. Binchy, SEIL, 226 - 228.^

43. Ibid. 227 - 230. Some texts indicate daughters may inherit some kinds of chattels from their fathers, Dillon, SEIL, 171, n3.^

44. Nancy Power, "Classes of Women Described in the Senchas Mor," Studies in Early Irish Law (SEIL), 81 - 108.^

45. For a discussion of Irish marriage law and 12th century criticisms of it, A. Gwynn, "The First Synod of Cashel", Irish Ecclesiastical Review 66 (1945), 81 - 92; 67 (1946). 109 - 122.^

46. August Knoch, "Die Eheschudung in alter Irischen Recht", Studies in Early Irish Law, 235 - 268. For Gormflath, see Edmund Curtis. A History of Ireland (Dublin, 1950). 28 - 30.^

47. A quotation from Sir John Davies on "The Irish Custome de Gravelkind" in a review of Studies in Irish Law edited by D. A. Binchy in The Irish Law Times, 15 August, 1936.^

48. Sir John Davies, A discovery of the true causes why Ireland was never entirely subdued (London, 1612),^

October 6, 2012

On the Impossibility of Limited Government

On the Impossibility of Limited Government and the Prospects for a Second American Revolution

by Hans-Hermann Hoppe

In a recent survey, people of different nationalities were asked how proud they were to be American, German, French, etc., and whether or not they believed that the world would be a better place if other countries were just like their own. The countries ranking highest in terms of national pride were the United States and Austria. As interesting as it would be to consider the case of Austria, we shall concentrate here on the United States and the question of whether and to what extent the American claim can be justified.

In the following, we will identify three main sources of American national pride, the first two of which are justified sources of pride, while the third actually represents a fateful error. Finally, we will look at how this error might be repaired. 

I - A Country of Pioneers

The first source of national pride is the memory of America’s not-so-distant colonial past as a country of pioneers.

In fact, the English settlers coming to North America were the last example of the glorious achievements of what Adam Smith referred to as "a system of natural liberty": the ability of men to create a free and prosperous commonwealth from scratch. Contrary to the Hobbesian account of human nature–homo homini lupus est–the English settlers demonstrated not just the viability but also the vibrancy and attractiveness of a stateless, anarchocapitalist social order. They demonstrated how, in accordance with the views of John Locke, private property originated naturally through a person’s original appropriation–his purposeful use and transformation–of previously unused land (wilderness). Furthermore, they demonstrated that, based on the recognition of private property, division of labor, and contractual exchange, men were capable of protecting themselves effectively against antisocial aggressors–first and foremost by means of self-defense (less crime existed then than exists now), and as society grew increasingly prosperous and complex, by means of specialization, i.e., by institutions and agencies such as property registries, notaries, lawyers, judges, courts, juries, sheriffs, mutual defense associations, and popular militias.

Moreover, the American colonists demonstrated the fundamental sociological importance of the institution of covenants: of associations of linguistically, ethnically, religiously, and culturally homogeneous settlers led by and subject to the internal jurisdiction of a popular leader-founder to ensure peaceful human cooperation and maintain law and order.

II - The American Revolution

The second source of national pride is the American Revolution.

In Europe there had been no open frontiers for centuries, and the intra-European colonization experience lay in the distant past. With the growth of the population, societies had assumed an increasingly hierarchical structure: of free men (freeholders) and servants, lords and vassals, overlords, and kings. While distinctly more stratified and aristocratic than colonial America, the so-called feudal societies of medieval Europe were also typically stateless social orders.

A state, in accordance with generally accepted terminology, is defined as a compulsory territorial monopolist of law and order (an ultimate decision maker). Feudal lords and kings did not typically fulfill the requirements of a state; they could only "tax" with the consent of the taxed, and on his own land every free man was as much a sovereign (ultimate decision maker) as the feudal king was on his. However, in the course of many centuries, these originally stateless societies had gradually transformed into absolute–statist–monarchies. While they had initially been acknowledged voluntarily as protectors and judges, European kings had at long last succeeded in establishing themselves as hereditary heads of state. Resisted by the aristocracy but helped along by the "common people," they had become absolute monarchs with the power to tax without consent and to make ultimate decisions regarding the property of free men.

These European developments had a twofold effect on America. On the one hand, England was also ruled by an absolute king, at least until 1688, and when the English settlers arrived on the new continent, the king’s rule was extended to America. Unlike the settlers’ founding of private property and their private–voluntary and cooperative–production of security and administration of justice, however, the establishment of the royal colonies and administrations was not the result of original appropriation (homesteading) and contract–in fact, no English king had ever set foot on the American continent–but of usurpation (declaration) and imposition.

On the other hand, the settlers brought something else with them from Europe. There, the development from feudalism to royal absolutism had not only been resisted by the aristocracy but it was also opposed theoretically with recourse to the theory of natural rights as it originated within Scholastic philosophy. According to this doctrine, government was supposed to be contractual, and every government agent, including the king, was subject to the same universal rights and laws as everyone else. While this may have been the case in earlier times, it was certainly no longer true for modern absolute kings. Absolute kings were usurpers of human rights and thus illegitimate. Hence, insurrection was not only permitted but became a duty sanctioned by natural law.

The American colonists were familiar with the doctrine of natural rights. In fact, in light of their own personal experience with the achievements and effects of natural liberty and as religious dissenters who had left their mother country in disagreement with the king and the Church of England, they were particularly receptive to this doctrine.

Steeped in the doctrine of natural rights, encouraged by the distance of the English king, and stimulated further by the puritanical censure of royal idleness, luxury, and pomp, the American colonists rose up to free themselves of British rule.

As Thomas Jefferson wrote in the Declaration of Independence, government was instituted to protect life, property, and the pursuit of happiness. It drew its legitimacy from the consent of the governed. In contrast, the royal British government claimed that it could tax the colonists without their consent. If a government failed to do what it was designed to do, Jefferson declared, "it is the right of the people to alter or abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness."

III - The American Constitution

But what was the next step once independence from Britain had been won? This question leads to the third source of national pride–the American Constitution–and the explanation as to why this Constitution, rather than being a legitimate source of pride, represents a fateful error.

Thanks to the great advances in economic and political theory since the late 1700s, in particular at the hands of Ludwig von Mises and Murray N. Rothbard, we are now able to give a precise answer to this question. According to Mises and Rothbard, once there is no longer free entry into the business of the production of protection and adjudication, the price of protection and justice will rise and their quality will fall. Rather than being a protector and judge, a compulsory monopolist will become a protection racketeer–the destroyer and invader of the people and property that he is supposed to protect, a warmonger, and an imperialist.

Indeed, the inflated price of protection and the perversion of the ancient law by the English king, both of which had led the American colonists to revolt, were the inevitable result of compulsory monopoly. Having successfully seceded and thrown out the British occupiers, it would only have been necessary for the American colonists to let the existing homegrown institutions of self-defense and private (voluntary and cooperative) protection and adjudication by specialized agents and agencies take care of law and order.

This did not happen, however. The Americans not only did not let the inherited royal institutions of colonies and colonial governments wither away into oblivion; they reconstituted them within the old political borders in the form of independent states, each equipped with its own coercive (unilateral) taxing and legislative powers. While this would have been bad enough, the new Americans made matters worse by adopting the American Constitution and replacing a loose confederation of independent states with the central (federal) government of the United States.

This Constitution provided for the substitution of a popularly elected parliament and president for an unelected king, but it changed nothing regarding their power to tax and legislate. To the contrary, while the English king’s power to tax without consent had only been assumed rather than explicitly granted and was thus in dispute, the Constitution explicitly granted this very power to Congress. Furthermore, while kings–in theory, even absolute kings–had not been considered the makers but only the interpreters and executors of preexisting and immutable law, i.e., as judges rather than legislators, the Constitution explicitly vested Congress with the power of legislating, and the president and the Supreme Court with the powers of executing and interpreting such legislated law.

In effect, what the American Constitution did was only this: Instead of a king who regarded colonial America as his private property and the colonists as his tenants, the Constitution put temporary and interchangeable caretakers in charge of the country’s monopoly of justice and protection.

These caretakers did not own the country, but as long as they were in office, they could make use of it and its residents to their own and their protégés’ advantage. However, as elementary economic theory predicts, this institutional setup will not eliminate the self-interest-driven tendency of a monopolist of law and order toward increased exploitation. To the contrary, it only tends to make his exploitation less calculating, more shortsighted, and wasteful. As Rothbard explained,

while a private owner, secure in his property and owning its capital value, plans the use of his resource over a long period of time, the government official must milk the property as quickly as he can, since he has no security of ownership….[G]overnment officials own the use of resources but not their capital value (except in the case of the "private property" of a hereditary monarch). When only the current use can be owned, but not the resource itself, there will quickly ensue uneconomic exhaustion of the resources, since it will be to no one’s benefit to conserve it over a period of time and to every owner’s advantage to use it up as quickly as possible….The private individual, secure in his property and in his capital resource, can take the long view, for he wants to maintain the capital value of his resource. It is the government official who must take and run, who must plunder the property while he is still in command.

Moreover, because the Constitution provided explicitly for "open entry" into state government–anyone could become a member of Congress, president, or a Supreme Court judge–resistance against state property invasions declined; and as the result of "open political competition" the entire character structure of society became distorted, and more and more bad characters rose to the top.

Free entry and competition is not always good. Competition in the production of goods is good, but competition in the production of bads is not. Free competition in killing, stealing, counterfeiting, or swindling, for instance, is not good; it is worse than bad. Yet this is precisely what is instituted by open political competition, i.e., democracy.

In every society, people who covet another man’s property exist, but in most cases people learn not to act on this desire or even feel ashamed for entertaining it. In an anarchocapitalist society in particular, anyone acting on such a desire is considered a criminal and is suppressed by physical violence. Under monarchical rule, by contrast, only one person–the king–can act on his desire for another man’s property, and it is this that makes him a potential threat. However, because only he can expropriate while everyone else is forbidden to do likewise, a king’s every action will be regarded with utmost suspicion. Moreover, the selection of a king is by accident of his noble birth. His only characteristic qualification is his upbringing as a future king and preserver of the dynasty and its possessions. This does not assure that he will not be evil, of course; at the same time, however, it does not preclude that a king might actually be a harmless dilettante or even a decent person.

In distinct contrast, by freeing up entry into government, the Constitution permitted anyone to openly express his desire for other men’s property; indeed, owing to the constitutional guarantee of "freedom of speech," everyone is protected in so doing. Moreover, everyone is permitted to act on this desire, provided that he gains entry into government; hence, under the Constitution, everyone becomes a potential threat.

To be sure, there are people who are unafflicted by the desire to enrich themselves at the expense of others and to lord it over them; that is, there are people who wish only to work, produce, and enjoy the fruits of their labor. However, if politics–the acquisition of goods by political means (taxation and legislation)–is permitted, even these harmless people will be profoundly affected.

In order to defend themselves against attacks on their liberty and property by those who have fewer moral scruples, even these honest, hardworking people must become "political animals" and spend more and more time and energy developing their political skills. Given that the characteristics and talents required for political success–good looks, sociability, oratorical power, charisma, etc.–are distributed unequally among men, then those with these particular characteristics and skills will have a sound advantage in the competition for scarce resources (economic success) as compared with those without them.

Worse still, given that, in every society, more "have-nots" of everything worth having exist than "haves," the politically talented who have little or no inhibition against taking property and lording it over others will have a clear advantage over those with such scruples. That is, open political competition favors aggressive, hence dangerous, rather than defensive, hence harmless, political talents and will thus lead to the cultivation and perfection of the peculiar skills of demagoguery, deception, lying, opportunism, corruption, and bribery. Therefore, entrance into and success within government will become increasingly impossible for anyone hampered by moral scruples against lying and stealing.

Unlike kings then, congressmen, presidents, and Supreme Court judges do not and cannot acquire their positions accidentally. Rather, they reach their position because of their proficiency as morally uninhibited demagogues. Moreover, even outside the orbit of government, within civil society, individuals will increasingly rise to the top of economic and financial success, not on account of their productive or entrepreneurial talents or even their superior defensive political talents, but rather because of their superior skills as unscrupulous political entrepreneurs and lobbyists. Thus, the Constitution virtually assures that exclusively dangerous men will rise to the pinnacle of government power and that moral behavior and ethical standards will tend to decline and deteriorate over all.

Moreover, the constitutionally provided "separation of powers" makes no difference in this regard. Two or even three wrongs do not make a right. To the contrary, they lead to the proliferation, accumulation, reinforcement, and aggravation of error. Legislators cannot impose their will on their hapless subjects without the cooperation of the president as the head of the executive branch of government, and the president in turn will use his position and the resources at his disposal to influence legislators and legislation. And although the Supreme Court may disagree with particular acts of Congress or the president, Supreme Court judges are nominated by the president and confirmed by the Senate and remain dependent on them for funding. As an integral part of the institution of government, they have no interest in limiting but every interest in expanding the government’s, and hence their own, power.

IV - Two Hundred Years Later …

After more than two centuries of "constitutionally limited government," the results are clear and incontrovertible. At the outset of the American "experiment," the tax burden imposed on Americans was light, indeed almost negligible. Money consisted of fixed quantities of gold and silver. The definition of private property was clear and seemingly immutable, and the right to self-defense was regarded as sacrosanct. No standing army existed, and, as expressed in George Washington’s Farewell Address, a firm commitment to free trade and a noninterventionist foreign policy appeared to be in place. Two hundred years later, matters have changed dramatically.

Now, year in and year out, the American government expropriates more than 40 percent of the incomes of private producers, making even the economic burden imposed on slaves and serfs seem moderate in comparison. Gold and silver have been replaced by government-manufactured paper money, and Americans are being robbed continually through money inflation. The meaning of private property, once seemingly clear and fixed, has become obscure, flexible, and fluid. In fact, every detail of private life, property, trade, and contract is regulated and re-regulated by ever-higher mountains of paper laws (legislation). With increasing legislation, ever more legal uncertainty and moral hazards have been created, and lawlessness has replaced law and order.

Last but not least, the commitment to free trade and noninterventionism has given way to a policy of protectionism, militarism, and imperialism. In fact, almost since its beginnings the US government has engaged in relentless aggressive expansionism and, starting with the Spanish-American War and continuing past World War I and World War II to the present, the United States has become entangled in hundreds of foreign conflicts and risen to the rank of the world’s foremost warmonger and imperialist power. In addition, while American citizens have become increasingly more defenseless, insecure, and impoverished, and foreigners all over the globe have become ever more threatened and bullied by US military power, American presidents, members of Congress, and Supreme Court judges have become ever more arrogant, morally corrupt, and dangerous.

What can possibly be done about this state of affairs? First, the American Constitution must be recognized for what it is–an error.

As the Declaration of Independence noted, government is supposed to protect life, property, and the pursuit of happiness. Yet in granting government the power to tax and legislate without consent, the Constitution cannot possibly assure this goal but is instead the very instrument for invading and destroying the right to life, property, and liberty. It is absurd to believe that an agency that may tax without consent can be a property protector. Likewise, it is absurd to believe that an agency with legislative powers can preserve law and order. Rather, it must be recognized that the Constitution is itself unconstitutional, i.e., incompatible with the very doctrine of natural human rights that inspired the American Revolution.

Indeed, no one in his right mind would agree to a contract that allowed one’s alleged protector to determine unilaterally, without one’s consent, and irrevocably, without the possibility of exit, how much to charge for protection; and no one in his right mind would agree to an irrevocable contract which granted one’s alleged protector the right to ultimate decision making regarding one’s own person and property, i.e., of unilateral lawmaking.

Second, it is necessary to offer a positive and inspiring alternative to the present system.

While it is important that the memory of America’s past as a land of pioneers and an effective anarchocapitalist system based on self-defense and popular militias be kept alive, we cannot return to the feudal past or the time of the American Revolution. Yet the situation is not hopeless. Despite the relentless growth of statism over the course of the past two centuries, economic development has continued, and our living standards have reached spectacular new heights. Under these circumstances, a completely new option has become viable: the provision of law and order by freely competing private (profit-and-loss) insurance agencies.

Even though hampered by the state, insurance agencies protect private property owners upon payment of a premium against a multitude of natural and social disasters, from floods and hurricanes to theft and fraud. Thus, it would seem that the production of security and protection is the very purpose of insurance. Moreover, people would not turn to just anyone for a service as essential as that of protection. Rather, as de Molinari noted,

Before striking a bargain with [a] producer of security…they will check if he is really strong enough to protect them…[and] whether his character is such that they will not have to worry about his instigating the very aggressions he is supposed to suppress.

In this regard insurance agencies also seem to fit the bill. They are big and in command of the resources–physical and human–necessary to accomplish the task of dealing with the dangers, actual or imagined, of the real world. Indeed, insurers operate on a national or even international scale. They own substantial property holdings dispersed over wide territories and beyond the borders of single states and thus have a manifest self-interest in effective protection. Furthermore, all insurance companies are connected through a complex network of contractual agreements on mutual assistance and arbitration as well as a system of international reinsurance agencies representing a combined economic power that dwarfs most if not all contemporary governments. They have acquired this position because of their reputation as effective, reliable, and honest businesses.

While this may suffice to establish insurance agencies as a possible alternative to the role currently performed by states as providers of law and order, a more detailed examination is needed to demonstrate the principal superiority of such an alternative to the status quo. In order to do this, it is only necessary to recognize that insurance agencies can neither tax nor legislate; that is, the relationship between the insurer and the insured is consensual. Both are free to cooperate or not to cooperate, and this fact has momentous implications. In this regard, insurance agencies are categorically different from states.

The advantages of having insurance agencies provide security and protection are as follows. First, competition among insurers for paying clients will bring about a tendency toward a continuous fall in the price of protection per insured value, thus rendering protection more affordable. In contrast, a monopolistic protector who may tax the protected will charge ever-higher prices for his services.

Second, insurers will have to indemnify their clients in the case of actual damage; hence, they must operate efficiently. Regarding social disasters–crime–in particular, this means that the insurer must be concerned above all with effective prevention, for unless he can prevent a crime, he will have to pay up. Further, if a criminal act cannot be prevented, an insurer will still want to recover the loot, apprehend the offender, and bring him to justice, because in so doing the insurer can reduce his costs and force the criminal–rather than the victim and his insurer–to pay for the damages and cost of indemnification. In distinct contrast, because compulsory monopolist states do not indemnify victims and because they can resort to taxation as a source of funding, they have little or no incentive to prevent crime or to recover loot and capture criminals. If they do manage to apprehend a criminal, they typically force the victim to pay for the criminal’s incarceration, thus adding insult to injury.

Third and most important, because the relationship between insurers and their clients is voluntary, insurers must accept private property as an ultimate given and private property rights as immutable law. That is, in order to attract or retain paying clients, insurers will have to offer contracts with specified property and property damage descriptions, rules of procedure, evidence, compensation, restitution, and punishment, as well as intra- and interagency conflict resolution and arbitration procedures.

Moreover, out of the steady cooperation between different insurers in mutual interagency arbitration proceedings, a tendency toward the unification of law–of a truly universal or international law–will emerge. Everyone, by virtue of being insured, would thus become tied into a global competitive effort to minimize conflict and aggression. Every single conflict and damage claim, regardless of where and by or against whom, would fall into the jurisdiction of exactly one or more specific and enumerable insurance agencies and their contractually agreed-to arbitration procedures, thereby creating "perfect" legal certainty.

In striking contrast, as tax-funded monopoly protectors, states do not offer the consumers of protection anything even faintly resembling a service contract. Instead, they operate in a contractual void that allows them to make up and change the rules of the game as they go along. Most remarkably, whereas insurers must submit themselves to independent third-party arbitrators and arbitration proceedings in order to attract voluntary paying clients, states, insofar as they allow for arbitration at all, assign this task to another state-funded and state-dependent judge.

Further implications of this fundamental contrast between insurers as contractual versus states as noncontractual providers of security deserve special attention.

Because they are not subject to and bound by contracts, states typically outlaw the ownership of weapons by their "clients," thus increasing their own security at the expense of rendering their alleged clients defenseless. In contrast, no voluntary buyer of protection insurance would agree to a contract that required him to surrender his right to self-defense and be unarmed or otherwise defenseless. To the contrary, insurance agencies would encourage the ownership of guns and other protective devices among their clients by means of selective price cuts, because the better the private protection of their clients, the lower the insurers’ protection and indemnification costs would be.

Moreover, because they operate in a contractual void and are independent of voluntary payment, states arbitrarily define and redefine what is and what is not a punishable "aggression" and what does and does not require compensation. By imposing a proportional or progressive income tax and redistributing income from the rich to the poor, for instance, states in effect define the rich as aggressors and the poor as their victims. (Otherwise, if the rich were not aggressors and the poor not their victims, how could taking something from the former and giving it to the latter be justified?) Or by passing affirmative action laws, states effectively define whites and males as aggressors and blacks and women as their victims. For insurance agencies, any such business conduct would be impossible for two fundamental reasons.

First, all insurance involves the pooling of particular risks into risk classes. It implies that to some of the insured, more will be paid out than what they paid in, and to others, less. However–and this is decisive–no one knows in advance who the "winners" and who the "losers" will be. Winners and losers–and any income redistribution among them–will be randomly distributed. Otherwise, if winners and losers could be systematically predicted, losers would not want to pool their risk with winners but only with other losers because this would lower their insurance premium.

Second, it is not possible to insure oneself against any conceivable risk. Rather, it is only possible to insure oneself against accidents, i.e., risks over whose outcome the insured has no control whatsoever and to which he contributes nothing. Thus, it is possible to insure oneself against the risk of death or fire, for instance, but it is not possible to insure oneself against the risk of committing suicide or setting one’s own house on fire.

Similarly, it is impossible to insure oneself against the risk of business failure, of unemployment, of not becoming rich, of not feeling like getting up and out of bed in the morning, or of disliking one’s neighbors, fellows or superiors, because in each of these cases one has either full or partial control over the event in question. That is, an individual can affect the likelihood of the risk. By their very nature, the avoidance of risks such as these falls into the realm of individual responsibility, and any agency that undertook their insurance would be slated for immediate bankruptcy.

Most significantly for the subject under discussion, the uninsurability of individual actions and sentiments (in contradistinction to accidents) implies that it is also impossible to insure oneself against the risk of damages that are the result of one’s prior aggression or provocation. Rather, every insurer must restrict the actions of its clients so as to exclude all aggression and provocation on their part. That is, any insurance against social disasters such as crime must be contingent on the insured submitting themselves to specified norms of nonaggressive, civilized, conduct.

Accordingly, while states as monopolistic protectors can engage in redistributive policies benefiting one group of people at the expense of another, and while as tax-supported agencies they can even "insure" uninsurable risks and protect provocateurs and aggressors, voluntarily funded insurers would be systematically prevented from doing any such thing. Competition among insurers would preclude any form of income and wealth redistribution among various groups of insured, for a company engaging in such practices would lose clients to others refraining from them. Rather, every client would pay exclusively for his own risk, respectively that of people with the same (homogeneous) risk exposure that he faces. Nor would voluntarily funded insurers be able to "protect" any person from the consequences of his own erroneous, foolish, risky, or aggressive conduct or sentiment. Competition between insurers would instead systematically encourage individual responsibility, and any known provocateur and aggressor would be excluded as a bad insurance risk from any insurance coverage whatsoever and be rendered an economically isolated, weak, and vulnerable outcast.

Finally, with regard to foreign relations, because states can externalize the costs of their own actions onto hapless taxpayers, they are permanently prone to becoming aggressors and warmongers. Accordingly, they tend to fund and develop weapons of aggression and mass destruction. In distinct contrast, insurers will be prevented from engaging in any form of external aggression because any aggression is costly and requires higher insurance premiums, implying the loss of clients to other, nonaggressive competitors. Insurers will engage exclusively in defensive violence, and instead of acquiring weapons of aggression and mass destruction, they will tend to invest in the development of weapons of defense and of targeted retaliation.

V - Revolution by Means of Secession

Even though all of this is clear, how can we ever succeed in implementing such a fundamental constitutional reform? Insurance agencies are presently restricted by countless regulations that prevent them from doing what they could and naturally would do. How can they be freed from these regulations?

Essentially, the answer to this question is the same as that given by the American revolutionaries more than two hundred years ago: through the creation of free territories and by means of secession.

In fact, under today’s democratic conditions, this answer is even truer than it was in the days of kings. For then, under monarchical conditions, the advocates of an antistatist liberal-libertarian social revolution still had an option that has since been lost. Liberal-libertarians in the old days could–and frequently did–believe in the possibility of simply converting the king to their view, thereby initiating a "revolution from the top." No mass support was necessary for this–just the insight of an enlightened prince.

However realistic this might have been then, this top-down strategy of social revolution would be impossible today. Political leaders are selected nowadays according to their demagogic talents and proven records as habitual immoralists, as has been explained above; consequently, the chance of converting them to liberal-libertarian views must be considered even lower than that of converting a king who simply inherited his position.

Moreover, the state’s protection monopoly is now considered public rather than private property, and government rule is no longer tied to a particular individual but to specified functions exercised by anonymous functionaries. Hence, the one-or-few-men-conversion strategy can no longer work. It does not matter if one converts a few top government officials–the president and some leading senators or judges, for instance–because within the rules of democratic government no single individual has the power to abdicate the government’s monopoly of protection. Kings had this power, but presidents do not. The president can resign from his position, of course, only to have it taken over by someone else. He cannot dissolve the governmental protection monopoly because according to the rules of democracy, "the people," not their elected representatives, are considered the "owners" of government.

Thus, rather than by means of a top-down reform, under the current conditions, one’s strategy must be one of a bottom-up revolution. At first, the realization of this insight would seem to make the task of a liberal-libertarian social revolution impossible, for does this not imply that one would have to persuade a majority of the public to vote for the abolition of democracy and an end to all taxes and legislation? And is this not sheer fantasy, given that the masses are always dull and indolent, and even more so given that democracy, as explained above, promotes moral and intellectual degeneration? How in the world can anyone expect that a majority of an increasingly degenerate people accustomed to the "right" to vote should ever voluntarily renounce the opportunity of looting other people’s property? Put this way, one must admit that the prospect of a social revolution must indeed be regarded as virtually nil. Rather, it is only on second thought, upon regarding secession as an integral part of any bottom-up strategy, that the task of a liberal-libertarian revolution appears less than impossible, even if it still remains a daunting one.

How does secession fit into a bottom-up strategy of social revolution? More important, how can a secessionist movement escape the Southern Confederacy’s fate of being crushed by a tyrannical and dangerously armed central government?

In response to these questions, it is first necessary to remember that neither the original American Revolution nor the American Constitution was the result of the will of the majority of the population. A third of the American colonists were actually Tories, and another third were occupied with daily routines and did not care either way. No more than a third of the colonists were actually committed to and supportive of the revolution, yet they carried the day. And as far as the Constitution is concerned, the overwhelming majority of the American public was opposed to its adoption, and its ratification represented more of a coup d’état by a tiny minority than the general will. All revolutions, whether good or bad, are started by minorities; and the secessionist route toward social revolution, which necessarily involves the breaking-away of a smaller number of people from a larger one, takes explicit cognizance of this important fact.

Second, it is necessary to recognize that the ultimate power of every government–whether of kings or caretakers–rests solely on opinion and not on physical force. The agents of government are never more than a small proportion of the total population under their control. This implies that no government can possibly enforce its will upon the entire population unless it finds widespread support and voluntary cooperation within the nongovernmental public. It implies likewise that every government can be brought down by a mere change in public opinion, i.e., by the withdrawal of the public’s consent and cooperation.

And while it is undeniably true that, after more than two centuries of democracy, the American public has become so degenerate, morally and intellectually, that any such withdrawal must be considered impossible on a nationwide scale, it would not seem insurmountably difficult to win a secessionist-minded majority in sufficiently small districts or regions of the country.

In fact, given an energetic minority of intellectual elites inspired by the vision of a free society in which law and order is provided by competitive insurers, and given furthermore that–certainly in the United States, which owes its very existence to a secessionist act–secession is still held to be legitimate and in accordance with the "original" democratic ideal of self-determination (rather than majority rule) by a substantial number of people, there seems to be nothing unrealistic about assuming that such secessionist majorities exist or can be created at hundreds of locations all over the country.

In fact, under the rather realistic assumption that the US central government as well as the social-democratic states of the West in general are bound for economic bankruptcy (much like the socialist people’s democracies of the East collapsed economically some years ago), present tendencies toward political disintegration will likely be strengthened in the future. Accordingly, the number of potential secessionist regions will continue to rise, even beyond its current level.

Finally, the insight into the widespread and growing secessionist potential also permits an answer to the last question regarding the dangers of a central government crackdown.

While it is important in this regard that the memory of the secessionist past of the United States be kept alive, it is even more important for the success of a liberal-libertarian revolution to avoid the mistakes of the second failed attempt at secession. Fortunately, the issue of slavery, which complicated and obscured the situation in 1861, has been resolved. However, another important lesson must be learned by comparing the failed second American experiment with secession to the successful first one.

The first American secession was facilitated significantly by the fact that at the center of power in Britain, public opinion concerning the secessionists was hardly unified. In fact, many prominent British figures such as Edmund Burke and Adam Smith openly sympathized with the secessionists. Apart from purely ideological reasons, which rarely affect more than a handful of philosophical minds, this lack of a unified opposition to the American secessionists in British public opinion can be attributed to two complementary factors. On the one hand, a multitude of regional and cultural-religious affiliations as well as of personal and family ties between Britain and the American colonists existed. On the other hand, the American events were considered far from home and the potential loss of the colonies as economically insignificant.

In both regards, the situation in 1861 was distinctly different. To be sure, at the center of political power, which had shifted to the northern states by then, opposition to the secessionist Southern Confederacy was not unified, and the Confederate cause also had supporters in the North. However, fewer cultural bonds and kinship ties existed between the American North and South than had existed between Britain and the American colonists, and the secession of the Southern Confederacy involved about half the territory and a third of the entire population of the United States and thus struck Northerners as close to home and as a significant economic loss. Therefore, it was comparatively easier for the Northern power elite to mold a unified front of "progressive" Yankee culture versus a culturally backward and "reactionary" Dixieland.

In light of these considerations, then, it appears strategically advisable not to attempt again what in 1861 failed so painfully–for contiguous states or even the entire South trying to break away from the tyranny of Washington, D.C.

Rather, a modern liberal-libertarian strategy of secession should take its cues from the European Middle Ages when, from about the 12th until well into the 17th century (with the emergence of the modern central state), Europe was characterized by the existence of hundreds of free and independent cities, interspersed into a predominantly feudal social structure.

Source: Mises.org

September 1, 2012

State or Private-Law Society

State or Private-Law Society

by Hans-Hermann Hoppe

The Problem of Social Order

Alone on his island, Robinson Crusoe can do whatever he pleases. For him, the question concerning rules of orderly human conduct—social cooperation—simply does not arise. This question can only arise once a second person, Friday, arrives on the island. Yet even then, the question remains largely irrelevant so long as no scarcity exists. Suppose the island is the Garden of Eden. All external goods are available in superabundance. They are "free goods," just as the air that we breathe is normally a "free" good. Whatever Crusoe does with these goods, his actions have no repercussions—neither with respect to his own future supply of such goods nor regarding the present or future supply of the same goods for Friday (and vice versa). Hence, it is impossible that a conflict concerning the use of such goods could arise between Crusoe and Friday. A conflict is possible only if goods are scarce; and only then is there a need to formulate rules that make orderly, conflict-free social cooperation possible.

In the Garden of Eden only two scarce goods exist: a person’s physical body and its standing room. Crusoe and Friday each have only one body and can stand only at one place at a time. Hence, even in the Garden of Eden conflicts between Crusoe and Friday can arise: Crusoe and Friday cannot occupy the same standing room simultaneously without coming into physical conflict with each other. Accordingly, even in the Garden of Eden rules of orderly social conduct must exist—rules regarding the proper location and movement of human bodies. Outside the Garden of Eden, in the realm of all-around scarcity, there must be rules that regulate the use not only of personal bodies, but of everything scarce, such that all possible conflicts can be ruled out. This is the problem of social order.

The Solution: The Idea of Private Property

In the history of social and political thought, myriad proposals have been offered as solutions to the problem of social order, and this multitude of mutually incompatible proposals has contributed to the widespread belief that the search for a single "correct" solution is futile and illusory. Yet a correct solution does exist. There is no reason to succumb to moral relativism. Indeed, the solution to the problem of social order has been known for hundreds of years. The solution is the idea of private property.

Let me formulate the solution first for the special case represented by the Garden of Eden and subsequently for the general case represented by the real world of all-around scarcity.

In the Garden of Eden, the solution is provided by the simple rule stipulating that everyone may place or move his own body wherever he pleases, provided only that no one else is already standing there and occupying the same space.

Outside of the Garden of Eden, in the realm of all-around scarcity, the solution is provided by four logically interrelated rules:

  1. Every person is the private (exclusive) owner of his own physical body. Indeed, who else, if not Crusoe, should be the owner of Crusoe’s body? Friday? Or Crusoe and Friday jointly? Yet that would not help avoid conflict. Rather, it would create conflict and make it permanent.

  2. Every person is the private owner of all nature-given goods that he has perceived as scarce and put to use by means of his body, before any other person. Again, who else, if not the first user, should be their owner? The second user? Or the first and the second user jointly? Yet such rulings again would be contrary to the very purpose of norms: of helping to avoid conflict, rather than to create it.

  3. Every person who, with the help of his body and his originally appropriated goods, produces new products thereby becomes the proper owner of these products, provided only that in the process of production he does not physically damage the goods owned by another person.

  4. Once a good has been first appropriated or produced, ownership in it can be acquired only by means of a voluntary, contractual transfer of its property title from a previous to a later owner.

I can spare myself here the task of providing a detailed ethical as well as economic justification of these rules. This has been done elsewhere. However, a few statements in this connection are in order.

Contrary to the frequently heard claim that the institution of private property is only a convention, it must be categorically stated: a convention serves a purpose, and it is something to which an alternative exists. The Latin alphabet, for instance, serves the purpose of written communication and there exists an alternative to it, the Cyrillic alphabet. That is why it is referred to as a convention.

What, however, is the purpose of action norms? If no interpersonal conflict existed—that is: if, due to a prestabilized harmony of all interests, no situation ever arose in which two or more people want to use one and the same good in incompatible ways—then no norms would be needed. It is the purpose of norms to help avoid otherwise unavoidable conflict. A norm that generates conflict rather than helping to avoid it is contrary to the very purpose of norms. It is a dysfunctional norm or a perversion.

With regard to the purpose of conflict avoidance, however, the institution of private property is definitely not just a convention, because no alternative to it exists. Only private (exclusive) property makes it possible that all otherwise unavoidable conflicts can be avoided. And only the principle of property acquisition through acts of original appropriation, performed by specific individuals at a specific time and location, makes it possible to avoid conflict from the beginning of mankind onward, because only the first appropriation of some previously unappropriated good can be conflict-free—simply, because—per definitionem—no one else had any previous dealings with the good.

The Enforcement of Social Order and the Protection of Private Property: The State

As important as this insight is—that the institution of private property, ultimately grounded in acts of original appropriation, is without alternative given the desideratum of conflict avoidance (peace)—it is not sufficient to establish social order. For even if everyone knows how conflict can be avoided, it is still possible that people simply do not want to avoid conflict, because they expect to benefit from it at the expense of others.

In fact, as long as mankind is what it is, there will always exist murderers, robbers, thieves, thugs and con artists, i.e., people not acting in accordance with the above-mentioned rules. Hence, every social order, if it is to be successfully maintained, requires institutions and mechanisms designed to keep such rule breakers in check. How to accomplish this task, and by whom?

The standard reply to this question is to say that this task, i.e., the enforcement of law and order, is the first and primary duty—indeed, the raison d’être—of the state. In particular, this is the answer also given by classical liberals such as my own intellectual master, Ludwig von Mises. Whether or not this answer is correct depends on how "state" is defined.

The state, according to the standard definition, is not a regular, specialized firm. Rather, it is defined as an agency characterized by two unique, logically connected features. First, the state is an agency that exercises a territorial monopoly of ultimate decision making. That is, the state is the ultimate arbiter in every case of conflict, including conflicts involving itself. It allows no appeal above and beyond itself. Second, the state is an agency that exercises a territorial monopoly of taxation. That is, it is an agency that unilaterally fixes the price that private citizens must pay for the state’s service as ultimate judge and enforcer of law and order.


The Fundamental Error of "Statism"

As widespread as the standard view regarding the necessity of the institution of a state as the provider of law and order is, it stands in clear contradiction to elementary economic and moral laws and principles.

First of all, among economists and philosophers two near-universally accepted propositions exist:

  1. Every "monopoly" is "bad" from the viewpoint of consumers. Monopoly is here understood in its classic meaning as an exclusive privilege granted to a single producer of a commodity or service, or as the absence of "free entry" into a particular line of production. Only one agency, A, may produce a given good or service, X. Such a monopoly is "bad" for consumers, because, shielded from potential new entrants into a given area of production, the price of the product will be higher and its quality lower than otherwise, under free competition.

  2. The production of law and order, i.e., of security, is the primary function of the state (as just defined). Security is here understood in the wide sense adopted in the American Declaration of Independence: as the protection of life, property, and the pursuit of happiness from domestic violence (crime) as well as external (foreign) aggression (war).

Both propositions are apparently incompatible with each other. This has rarely caused concern among philosophers and economists, however, and in so far as it has, the typical reaction has been one of taking exception to the first proposition rather than the second. Yet there exist fundamental theoretical reasons (and mountains of empirical evidence) that it is indeed the second proposition that is in error.

As a territorial monopolist of ultimate decision making and law enforcement, the state is not just like any other monopoly, such as a milk or a car monopoly that produces milk and cars of comparatively lower quality and higher prices. In contrast to all other monopolists, the state not only produces inferior goods, but "bads" (nongoods). In fact, it must first produce bads (such as taxes) before it can produce anything that might be considered a (inferior) good.

If an agency is the ultimate judge in every case of conflict, then it is also judge in all conflicts involving itself. Consequently, instead of merely preventing and resolving conflict, a monopolist of ultimate decision making will also cause and provoke conflict in order to settle it to his own advantage. That is, if one can only appeal to the state for justice, justice will be perverted in the favor of the state, constitutions and supreme courts notwithstanding.

These constitutions and courts are state constitutions and courts, and whatever limitations on state action they may set or find are invariably decided by agents of the very same institution under consideration. Predictably, the definition of property and protection will be continually altered and the range of jurisdiction expanded to the state’s advantage. The idea of some "given" eternal and immutable law that must be discovered will disappear and be replaced by the idea of law as legislation—as arbitrary, state-made law.

Moreover, as ultimate judge the state is also a monopolist of taxation, i.e., it can unilaterally, without the consent of everyone affected, determine the price that its subjects must pay for the state’s provision of (perverted) law. However, a tax-funded life-and-property protection agency is a contradiction in terms: an expropriating property protector. Motivated, as everyone is, by self-interest and the disutility of labor, but equipped with the unique power to tax, state agents will invariably strive to maximize expenditures on protection—and almost all of a nation’s wealth can conceivably be consumed by the cost of protection—and at the same time to minimize the actual production of protection. The more money one can spend and the less one must work for it, the better off one will be.

The Error Compounded: The Democratic State

Apart from the fundamental error of statism generally, additional errors are involved in the special case of a democratic state. A detailed treatment of this subject has been provided elsewhere, but a brief mention is indicated.

The traditional, premodern state form is that of a (absolute) monarchy. Yet monarchy was faulted, in particular also by classical liberals, for being incompatible with the basic principle of "equality before the law." Monarchy instead rested on personal privilege. Thus, the critics of monarchy argued, the monarchical state had to be replaced by a democratic one. In opening participation and entry into state government to everyone on equal terms, not just to a hereditary class of nobles, it was thought that the principle of the equality of all before the law had been satisfied.

However, this democratic equality before the law is something entirely different from and incompatible with the idea of one universal law, equally applicable to everyone, everywhere, and at all times. In fact, the former objectionable schism and inequality of a higher law of kings versus a subordinate law of ordinary subjects is fully preserved under democracy in the separation of "public" versus "private" law and the supremacy of the former over the latter.

Under democracy, everyone is equal insofar as entry into government is open to all on equal terms. Everyone can become king, so to say, not only a privileged circle of people. Thus, in a democracy no personal privileges or privileged persons exist. However, functional privileges and privileged functions exist. Public officials, as long as they act in an official capacity, are governed and protected by public law and occupy thereby a privileged position vis-à-vis persons acting under the mere authority of private law.

In particular, public officials are permitted to finance or subsidize their own activities through taxes. That is, they do not, as every private-law subject must, earn their income through the production and subsequent sale of goods and services to voluntarily buying or not-buying consumers. Rather, as public officials, they are permitted to engage in, and live off, what in private dealings between private-law subjects is considered "theft" and "stolen loot." Thus, privilege and legal discrimination—and the distinction between rulers and subjects—will not disappear under democracy. To the contrary. Rather than being restricted to princes and nobles, under democracy, privileges will be available to all: everyone can engage in theft and live off stolen loot if only he becomes a public official.

Predictably, then, under democratic conditions the tendency of every monopoly of ultimate decision making to increase the price of justice and to lower its quality and substitute injustice for justice and is not diminished but aggravated. As hereditary monopolist, a king or prince regards the territory and people under his jurisdiction as his personal property and engages in the monopolistic exploitation of his "property."

Under democracy, monopoly and monopolistic exploitation do not disappear. Rather, what happens with democracy is this: instead of a prince and a nobility who regard the country as their private property, a temporary and interchangeable caretaker is put in monopolistic charge of the country. The caretaker does not own the country, but as long as he is in office he is permitted to use it to his and his protégés’ advantage. He owns its current use—usufruct—but not its capital stock. This does not eliminate exploitation. To the contrary, it makes exploitation less calculating and carried out with little or no regard to the capital stock. Exploitation becomes shortsighted and capital consumption will be systematically promoted.

The Solution: Private-Law Society instead of State

If the state, and especially the democratic state, is demonstrably incapable of creating and maintaining social order; if, instead of helping avoid conflict, the state is the source of permanent conflict; and if, rather than assuring legal security and predictability, the state itself continuously generates insecurity and unpredictability through its legislation and replaces constant law with "flexible" and arbitrary whim, then inescapably the question as to the correct—obviously, nonstatist—solution to the problem of social order arises.

The solution is a private-law society, i.e., a society in which every individual and institution is subject to one and the same set of laws. No public law granting privileges to specific persons of functions (and no public property) exists in this society. There is only private law (and private property), equally applicable to each and everyone. No one is permitted to acquire property by any means other than through original appropriation, production, or voluntary exchange, and no one possesses a privilege to tax and expropriate. Moreover, in a private-law society no one is permitted to prohibit anyone else from using his property in order to enter any line of production he wishes and compete against whomever he pleases.

Specifically regarding the problem at hand: in a private-law society the production of security—of law and order—will be undertaken by freely financed individuals and agencies competing for a voluntarily paying (or not-paying) clientele, just as the production of all other goods and services.

It would be presumptuous to predict the precise shape and form of the security industry emerging within the framework of a private-law society. However, it is not difficult to predict a few central changes that would fundamentally—and favorably—distinguish a competitive security industry from the present, all-too-well-known statist production of (in)justice and (dis)order.

First, while in a complex society based on the division of labor self-defense will play only a secondary role (for reasons yet to be explained), it should be emphasized from the outset that in a private-law society everyone’s right to defend oneself from aggression against one’s person and property is entirely undisputed. In distinct contrast to the present, statist practice, which renders people increasingly unarmed and defenseless against aggressors, in a private-law society no restrictions on the private ownership of firearms and other weapons exist. Everyone’s elementary right to engage in self-defense to protect his life and property against invaders would be sacrosanct, and as one knows from the experience of The Not So Wild, Wild West, as well as numerous recent empirical investigations into the relationship between the frequency of gun ownership and crime rates, more guns imply less crime.

Just as in today’s complex economy we do not produce our own shoes, suits, and telephones, however, but partake in the advantages of the division of labor, so it is to be expected that we will also do so when it comes to production of security, especially the more property a person owns and the richer a society as a whole. Hence, most security services will without doubt be provided by specialized agencies competing for voluntarily paying clients: by various private police, insurance, and arbitration agencies.

If one wanted to summarize in one word the decisive difference and advantage of a competitive security industry as compared to the current statist practice, it would be this: contract. The state, as ultimate decision maker and judge, operates in a contractless legal vacuum. There exists no contract between the state and its citizens. It is not contractually fixed, what is actually owned by whom, and what, accordingly, is to be protected. It is not fixed, what service the state is to provide, what is to happen if the state fails in its duty, nor what the price is that the "customer" of such "service" must pay.

Rather, the state unilaterally fixes the rules of the game and can change them, per legislation, during the game. Obviously, such behavior is inconceivable for freely financed security providers. Just imagine a security provider, whether police, insurer, or arbitrator, whose offer consisted in something like this:

I will not contractually guarantee you anything. I will not tell you what specific things I will regard as your to-be-protected property, nor will I tell you what I oblige myself to do if, according to your opinion, I do not fulfill my service to you—but in any case, I reserve the right to unilaterally determine the price that you must pay me for such undefined service.

Any such security provider would immediately disappear from the market due to a complete lack of customers. Each private, freely financed security producer instead must offer its prospective clients a contract. And these contracts must, in order to appear acceptable to voluntarily paying consumers, contain clear property descriptions as well as clearly defined mutual services and obligations. Moreover, each party to a contract, for the duration or until the fulfillment of the contract, would be bound by its terms and conditions; and every change of terms or conditions would require the unanimous consent of all parties concerned.

Specifically, in order to appear acceptable to security buyers, these contracts must contain provisions about what will be done in the case of a conflict or dispute between the protector or insurer and his own protected or insured clients as well as in the case of a conflict between different protectors or insurers and their respective clients. And in this regard only one mutually agreeable solution exists: in these cases the conflicting parties contractually agree to arbitration by a mutually trusted but independent third party.

And as for this third party, it too is freely financed and stands in competition with other arbitrators or arbitration agencies. Its clients, i.e., the insurers and the insured, expect of it that it come up with a verdict that is recognized as fair and just by all sides. Only arbitrators capable of forming such judgments will succeed in the arbitration market. Arbitrators incapable of this and viewed as biased or partial will disappear from the market.

From this fundamental advantage of a private-law society all other advantages follow.

First, competition among police, insurers, and arbitrators for paying clients would bring about a tendency toward a continuous fall in the price of protection (per insured value), thus rendering protection increasingly more affordable, whereas under monopolistic conditions the price of protection will steadily rise and become increasingly unaffordable.

Furthermore, as already indicated, protection and security are goods and services that compete with others. If more resources are allocated to protection, fewer can be expended on cars, vacations, food, or drink, for example. Also, resources allocated to the protection of group A (people living along the Pacific, for instance), compete with resources expended on the protection of group B (people living along the Atlantic).

The state, as a tax-funded protection monopolist, will necessarily allocate resources arbitrarily. There will be overproduction (or underproduction) of security as compared to other competing goods and services, and there will be overprotection of some individuals, groups, or regions and underprotection of others.

In distinct contrast, in a system of freely competing protection agencies all arbitrariness of allocation (all over- and underproduction) would disappear. Protection would be accorded the relative importance that is has in the eyes of voluntarily paying consumers, and no person, group, or region would receive protection at the expense of any other one. Each and every one would receive protection in accordance with his own payments.

The most important advantage of a private, contract-based production of law and order, however, is of a qualitative nature.

First, there is the fight against crime. The state is notoriously inefficient in this regard, because the state agents entrusted with this task are paid out of taxes, i.e., independent of their productivity. Why should one work if one is also paid for doing nothing at all?

In fact, it can be expected that state agents will have an interest in maintaining a moderately high crime rate, because this way they can justify ever-increased funding. Worse, for state agents the victims of crime and the indemnification and compensation of such victims play an at best negligible role. The state does not indemnify the victims of crime. To the contrary, the harmed victims are still further insulted in making them, qua taxpayers, pay for the incarceration and "rehabilitation" of the criminal (should he be captured).

The situation in a private-law society is entirely different. Security providers, insurers in particular, have to indemnify their clients in the case of actual damage (otherwise they would find no clients) and hence, they must operate efficiently. They must be efficient in the prevention of crime, for unless they can prevent a crime, they would have to pay up. Further, even if a criminal act could not be prevented, they must be efficient in detecting and recovering stolen loot, because otherwise they must pay to replace these goods. In particular, they must be efficient in the detection and apprehension of the criminal, for only if the criminal is apprehended is it possible for them to make him pay for the compensation owed to the victim and thus reduce their costs.

Moreover, a private, competitive, and contract-based security industry has a general peace-promoting effect. States are, as already explained, by nature aggressive. They can cause or provoke conflict in order to then "solve" it to their own advantage.

Or, to put it differently, as tax-funded monopolists of ultimate decision making, states can externalize the costs associated with aggressive behavior onto others, i.e., the hapless taxpayers, and accordingly will tend to be more aggressive vis-à-vis their own population as well as "foreigners."

In distinct contrast, competing private insurers are by nature defensive and peaceful. On the one hand this is because every act of aggression is costly, and an insurance company engaged in aggressive conduct would require comparatively higher premiums, involving the loss of clients to cheaper nonaggressive competitors.

On the other hand, it is not possible to insure oneself against every conceivable "risk." Rather, it is only possible to insure oneself against "accidents," i.e., risks over whose outcome the insured has no control and to which he contributes nothing. Thus, it is possible to insure oneself against the risk of death and fire, for instance, but it is impossible to insure oneself against the risk of committing suicide tomorrow or setting one’s own house on fire.

Similarly, it is impossible to insure oneself against the risk of business failure, of unemployment, or of disliking one’s neighbors, for in each case one has some control over the event in question. Most significantly, the uninsurability of individual actions and sentiments (in contradistinction to accidents) implies that it is also impossible to insure oneself against the risk of damages resulting from one’s own prior aggression or provocation.

Instead, every insurer must restrict the actions of his clients so as to exclude all aggression and provocation on their part. That is, any insurance against social disasters such as crime must be contingent on the insured submitting themselves to specified norms of civilized, nonaggressive conduct.

Further, due to the same reasons and financial concerns, insurers will tend to require that their clients abstain from all forms of vigilante justice (except perhaps under quite extraordinary circumstances), for vigilante justice, even if justified, invariably causes uncertainty and provokes possible third-party intervention. By obliging their clients instead to submit to regular publicized procedures whenever they think they have been victimized, these disturbances and associated costs can be largely avoided.

Lastly, it is worthwhile pointing out that while states as tax-funded agencies can—and do—engage in the large-scale prosecution of victimless crimes such as "illegal-drug" use, prostitution, or gambling, these "crimes" would tend to be of little or no concern within a system of freely funded protection agencies. "Protection" against such "crimes" would require higher insurance premiums, but since these "crimes"—unlike genuine crimes against persons and property—do not create victims, very few people would be willing to spend money on such "protection."

Still more: while states, as already noted, are always and everywhere eager to disarm their populations and thus rob them of an essential means of self-defense, private-law societies are characterized by an unrestricted right to self-defense and hence by widespread private gun and weapon ownership. Just imagine a security producer who demanded of its prospective clients that they would first have to completely disarm themselves before it would be willing to defend the clients’ life and property. Correctly, everyone would think of this as a bad joke and refuse such on offer.

Freely financed insurance companies that demanded potential clients first hand over all of their means of self-defense as a prerequisite of protection would immediately arouse the utmost suspicion as to their true motives, and they would quickly go bankrupt. In their own best interest, insurance companies would reward armed clients, in particular those able to certify some level of training in the handling of arms, charging them lower premiums reflecting the lower risk that they represent. Just as insurers charge less if homeowners have an alarm system or a safe installed, so would a trained gun owner represent a lower insurance risk.

Last and most importantly, a system of competing protection agencies would have a twofold impact on the development of law. On the one hand, it would allow for greater variability of law. Rather than imposing a uniform set of standards onto everyone (as under statist conditions), protection agencies could compete against each other not just via price but also through product differentiation. There could exist side by side, for instance, Catholic protection agencies or insurers applying canon law, Jewish agencies applying Mosaic law, Muslim agencies applying Islamic law, and agencies applying secular law of one variety or another, all of them sustained by a voluntarily paying clientele. Consumers could choose the law applied to them and their property. No one would have to live under "foreign" law.

On the other hand, the very same system of private law-and-order production would promote a tendency toward the unification and harmonization of law. The "domestic"—Catholic, Jewish, Roman, etc.—law would apply only to the person and property of those who had chosen it. Canon law, for instance, would apply only to professed Catholics and deal solely with intra-Catholic conflict and conflict resolution.

Yet it is also possible, of course, that a Catholic might come into conflict with the subscriber of some other law code, e.g., a Muslim. If both law codes reached the same or a similar conclusion, no difficulties exist. However, if competing law codes arrived at distinctly different conclusion (as they would at least in some cases), a problem arises.

In this case, "domestic" (intragroup) law would be useless, but naturally every insured person would want protection against the contingency of intergroup conflicts as well. In this situation, it cannot be expected that one insurer and the subscribers of its law code simply subordinate their judgment to that of another insurer and its law. Rather, as I have already explained, in this situation there exists only one credible and acceptable way out of this predicament: from the outset, every insurer would have to be contractually obliged to submit itself and its clients to arbitration by an independent third party. This party would not only be independent but at the same time the unanimous choice of both parties.

It would be agreed upon because of its commonly perceived ability to find mutually agreeable (fair) solutions in cases of intergroup disagreement. If an arbitrator failed in this task and arrived at conclusions that were perceived as "unfair" or "biased" by either one of the insurers or their clients, this person or agency would not likely be chosen as an arbitrator in the future.

As a result of the constant cooperation of various insurers and arbitrators, then, a tendency toward the unification of property and contract law and the harmonization of the rules of procedure, evidence, and conflict resolution would be set in motion. Thus, in buying protection insurance, every insurer and insured becomes a participant in an integrated system of conflict avoidance and peacekeeping. Every single conflict and damage claim, regardless of where and by or against whom, would fall under the jurisdiction of one or more specific insurance agencies and would be handled either by an individual insurer’s "domestic" law or by the "international" or "universal" law provisions and procedures agreed upon by everyone in advance.

Hence, instead of permanent conflict, injustice, and legal insecurity—as under the present statist conditions—in a private-law society, peace, justice, and legal security would hold sway.

Source: Mises.org

March 10, 2012

The Solution

"Poor, wretched, and stupid peoples, nations determined on your own misfortune and blind to your own good! You let yourselves be deprived before your own eyes of the best part of your revenues; your fields are plundered, your homes robbed, your family heirlooms taken away. You live in such a way that you cannot claim a single thing as your own; and it would seem that you consider yourselves lucky to be loaned your property, your families, and your very lives.

"All this havoc, this misfortune, this ruin, descends upon you not from alien foes, but from the one enemy whom you yourselves render as powerful as he is, for whom you go bravely to war, for whose greatness you do not refuse to offer your own bodies unto death. He who thus domineers over you has only two eyes, only two hands, only one body, no more than is possessed by the least man among the infinite numbers dwelling in your cities; he has indeed nothing more than the power that you confer upon him to destroy you. Where has he acquired enough eyes to spy upon you, if you do not provide them yourselves? How can he have so many arms to beat you with, if he does not borrow them from you? The feet that trample down your cities, where does he get them if they are not your own? How does he have any power over you except through you? How would he dare assail you if he had no cooperation from you? What could he do to you if you yourselves did not connive with the thief who plunders you, if you were not accomplices of the murderer who kills you, if you were not traitors to yourselves? 

"You sow your crops in order that he may ravage them, you install and furnish your homes to give him goods to pillage; you rear your daughters that he may gratify his lust; you bring up your children in order that he may confer upon them the greatest privilege he knows is to be led into his battles, to be delivered to butchery, to be made the servants of his greed and the instruments of his vengeance; you yield your bodies unto hard labor in order that he may indulge in his delights and wallow in his filthy pleasures; you weaken yourselves in order to make him the stronger and the mightier to hold you in check. 

"From all these indignities, such as the very beasts of the field would not endure, you can deliver yourselves if you try, not by taking action, but merely by willing to be free. Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces."

Étienne de La Boétie - Discourse on Voluntary Servitude 

Source

July 9, 2011

An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West*

by Terry L. Anderson and P. J. Hill

Department of Economics, Montana State University

* This paper was written while Terry Anderson was a National Fellow at the Hoover Institution, 1977-78.  While retaining responsibility for any errors, the authors wish to thank Jon Christianson, Murray Rothbard, and Gordon Tullock for their valuable comments.  

The growth of government during this century has attracted the attention of many scholars interested in explaining that growth and in proposing ways to limit it.  As a result of this attention, the public choice literature has experienced an upsurge in the interest in anarchy and its implications for social organization. The work of Rawls and Nozick, two volumes edited by Gordon Tullock, Explorations in the Theory of Anarchy, and a book by David Friedman, The Machinery of Freedom, provide examples.  The goals of the literature have varied from providing a conceptual framework for comparing Leviathan and its opposite extreme to presenting a formula for the operation of society in a state of anarchy.  But nearly all of this work has one common aspect; it explores the "theory of anarchy."  The purpose of this paper is to take us from the theoretical world of anarchy to a case study of its application.  To accomplish our task we will first discuss what is meant by "anarcho-capitalism" and present several hypotheses relating to the nature of social organization in this world.  These hypotheses will then be tested in the context of the American West during its earliest settlement.  We propose to examine property rights formulation and protection under voluntary organizations such as private protection agencies, vigilantes, wagon trains, and early mining camps.  Although the early West was not completely anarchistic, we believe that government as a legitimate agency of coercion was absent for a long enough period to provide insights into the operation and viability of property rights in the absence of a formal state.  The nature of contracts for the provision of "public goods" and the evolution of western "laws" for the period from 1830 to 1900 will provide the data for this case study

The West during this time often is perceived as a place of great chaos, with little respect for property or life.  Our research indicates that this was not the case; property rights were protected and civil order prevailed.  Private agencies provided the necessary basis for an orderly society in which property was protected and conflicts were resolved.  These agencies often did not qualify as governments because they did not have a legal monopoly on "keeping order."  They soon discovered that "warfare" was a costly way of resolving disputes and lower cost methods of settlement (arbitration, courts, etc.) resulted.  In summary, this paper argues that a characterization of the American West as chaotic would appear to be incorrect.

Anarchy: Order or Chaos?

Though the first dictionary definition of anarchy is "the state of having no government," many people believe that the third definition, "confusion or chaos generally," is more appropriate since it is a necessary result of the first.  If we were to engage seriously in the task of dismantling the government as it exists in the U.S., the political economist would find no scarcity of programs to eliminate.  However, as the dismantling continued, the decisions would become more and more difficult, with the last "pubiic goods" to be dealt with probably being programs designed to define and enforce property rights.  Consider the following two categories of responses to this problem:

1) The first school we shall represent as the "constitutionalist" or "social contractarian" school.  For this group the important question is "how do rights re-emerge and come to command respect? How do ‘laws’ emerge that carry with them general respect for their ‘legitimacy’?"1  This position does not allow us to ‘jump over’ the whole set of issues involved in defining the rights of persons in the first place."2  Here collective action is taken as a necessary step in the establishment of a social contract or constitutional contract which specifies these rights.  To the extent that rights could be perfectly defined, the only role for the state would be in the protection of those rights since the law designed for that protection is the only public good.   If rights cannot be perfectly well defined, a productive role for the state will arise.  The greater the degree to which private rights cannot be perfectly defined, the more the collective action will be plunged into the "eternal dilemma of democratic government," which is "how can government, itself the reflection of interests, establish the legitimate boundaries of self-interest, and how can it, conversely carve out those areas of intervention that will be socially protective and collectively useful?"3  The contractarian solution to this dilemma is the establishment of a rule of higher law or a constitution which specifies the protective and productive roles of the government.  Since the productive role, because of the free rider problem, necessarily requires coercion, the government will be given a monopoly on the use of force.  Were this not the case, some individuals would choose not to pay for services from which they derive benefits.

2) The second school can be labeled "anarcho-capitalist" or "private property anarchist."  In its extreme form this school would advocate eliminating all forms of collective action since all functions of government can be replaced by individuals possessing private rights exchangeable in the market place.  Under this system all transactions would bevoluntary except in so far as the protection of individual rights and enforcement of contracts required coercion.  The essential question facing this school is how can law and order, which do require some coercion, be supplied with out ultimately resulting in one provider of those services holding a monopoly on coercion, i.e., government.   If adominant protective firm or association emerges after exchanges take place, we will have the minimal state as defined by Nozick and will have lapsed back into the world of the "constitutionalist."  The private property anarchist’s view that markets can provide protection services is summarized as follows:

The profit motive will then see to it that the most efficient providers of high quality arbitration rise to the top and that inefficient and graft-oriented police lose their jobs.  In short, the market is capable of providing justice at the cheapest price.  According to Rothbard, to claim that these services are "public goods" and cannot be sold to individuals in varying amounts is to make a claim which actually has little basis in fact.4

Hence, the anarcho-capitalists place faith in the profit seeking entrepreneurs to find the optimal size and type of protective services and faith in competition to prevent the establishment of a monopoly in the provision of these services.

There are essentially two differences between the two schools discussed above.  First, there is the empirical question of whether competition can actually provide the protection services.  On the anarcho-capitalist side, there is the belief that it can.  On the constitutionalists or "minimal state" side, there is the following argument.

Conflicts may occur, and one agency will win.  Persons who have previously been clients of losing agencies will desert and commence purchasing their protection from winning agencies.  In this manner a single protective agency or association will eventually come to dominate the market for policing services over a territory.  Independent persons who refuse to purchase protection from anyone may remain outside the scope of the dominant agency, but such independents cannot be allowed to punish clients of the agency on their own.  They must be coerced into not punishing.  In order to legitimize their coercion, these persons must he compensated, but only to the extent that their deprivation warrants.5

The second issue is more conceptual than empirical, and hence, cannot be entirely resolved through observation.  This issue centers on the question of how rights are determined in the first place; how do we get a starting point with all its status quo characteristics from which the game can be played.  Buchanan, a leading constitutionalist, criticizes Friedman and Rothbard, two leading private property anarchists, because "they simply ‘jump over’ the whole set of issues involved in defining the rights of persons in the first place."6  To the constitutionalist the Lockean concept of mixing labor with resources to arrive at "natural rights" is not sufficient.  The contractarian approach suggests that the starting point is determined by the initial bargaining process which results in the constitutional contract.  Debate over this issue will undoubtedly continue, but even Buchanan agrees that "if the distribution or imputation of the rights of persons (rights to do things, both with respect to other persons and to physical things) is settled, then away we go.  And aside from differences on certain specifics (which may be important but relatively amenable to analysis, e.g., the efficacy of market-like arrangements for internal and external peace-keeping), I should accept many of the detailed reforms that these passionate advocates propose."7

Our purpose in this paper is to discuss, in a historical context, some of the important issues that Buchanan says are amenable to analysis.  We do not plan to debate the issue of the starting point, but will be looking at the "efficacy of market-like arrangements for internal . . . peacekeeping."8  It does seem, for the time period and the geographical area which we are examining, that there was a distribution of rights which was accepted either because of general agreement to some basic precepts of natural law or because the inhabitants of the American West came out of a society in which certain rights were defined and enforced.  Such a starting point is referred to as a Schelling point, a point of commonality that exists in the minds of the participants in some social situation.9  Even in the absence of any enforcement mechanism, most members of the western society agreed that certain rights to use and control property existed.  Thus when a miner argued that a placer claim was his because he "was there first," that claim carried more weight than if he claimed it simply because he was most powerful.  Tastes, culture, ethics, and numerous other influences give Schelling point characteristics to some claims but not to others.  The long period of conflicts between the Indians and the settlers can be attributed to a lack of any such Schelling points.  We concentrate, however, on arrangements for peace-keeping and enforcement that existed among the non-indigenous, white population.

In the following pages we describe the private enforcement of rights in the West between the period of 1830 and 1900.  This description does allow one to test, in a limited fashion, some of the hypotheses put forth about how anarcho-capitalism might function.  We qualify the test with "limited" because a necessary feature of such a system is the absence of a monopoly on coercion.10  Various coercive agencies would exist hut none would have a legitimized monopoly on the use of such coercion.  The difficulty of dealing with this proposition in the American West is obvious.  Although for much of the period formal government agencies for the protection of rights were not present, such agencies were always lurking in the background.  Therefore, none of the private enforcement means operated entirely independent of government influence.  Also, one has to he careful in always describing private agencies as "non-government" because, to the extent that they develop and become the agency of legitimized coercion they also qualify as "government."  Although numerous descriptions of such private agencies exist, it is often times difficult to determine when they are enhancing competition and when they are reducing it.

Despite the above caveats, the West is a useful testing ground for several of the specific hypotheses about how anarcho-capitalism might work.  We use David Friedman’s The Machinery of Freedom as our basis for the formulation of hypotheses about the working of anarcho-capitalism because it is decidedly non-utopian and it does set out, in a fairly specific form, the actual mechanisms under which a system of non-government protective agencies would operate.  The major propositions are:

  1. Anarcho-capitalism is not chaos.  Property rights will be protected and civil order will prevail.
  2. Private agencies will provide the necessary functions for preservation of an orderly society.
  3. Private protection agencies will soon discover that "warfare" is a costly way of resolving disputes and lower-cost methods of settlement (arbitration, courts, etc.) will result.
  4. The concept of "justice" is not an immutable one that only needs to be discovered.  Preferences do vary across individuals as to the rules they prefer to live under and the price they are willing to pay for such rules.  Therefore, significant differences in rules might exist in various societies under anarcho-capitalism.
  5. There are not significant enough economies of scale in crime so that major "mafia" organizations evolve and dominate society.
  6. Competition among protective agencies and adjudication bodies will serve as healthy checks on undesirable behavior.  Consumers have better information than under government and will use it in judging these agencies.

Cases from the West

Before turning to specific examples of anarcho-capitalistic institutions in the American West, it is useful to examine the legendary characterization of the "wild, wild West." The potential for chaos is a major objection to trust in the market for enforcement of rights and many histories of the West seem to substantiate this argument.  These histories describe the era and area as characterized by gunfights, horse-thievery, and general disrespect for basic human rights.  The taste for the dramatic in literature and other entertainment forms has led to concentration on the seeming disparity between the westerners’ desire for order and the prevailing disorder.  If the Hollywood image of the West were not enough to taint our view, scholars of violence contributed with quotes such as the following: "We can report with some assurance that compared to frontier days there has been a significant decrease in crimes of violence in the United States."11

Recently, however, more careful examinations of the conditions that existed cause one to doubt the accuracy of this perception.  In his book, Frontier Violence: Another Look, W.  Eugene Hollon stated that the (sic) believed "that the Western frontier was a far more civilized, more peaceful, and safer place than American society is today."12  The legend of the "wild, wild West" lives on despite Robert Dykstra’s finding that in five of the major cattle towns (Abilene, Ellsworth, Wichita, Dodge City, and Caldwell) for the years from 1870 to 1885, only 45 homicides were reported–an average of 1.5 per cattle-trading season.13   In Abilene, supposedly one of the wildest of the cow towns, "nobody was killed in 1869 or 1870.  In fact, nobody was killed until the advent of officers of the law, employed to prevent killings."14  Only two towns, Ellsworth in 1873 and Dodge City in 1876, ever had five killings in any one year.15  Frank Prassel states in his book subtitled "A Legacy of Law and Order," that "if any conclusion can be drawn from recent crime statistics, it must be that this last frontier left no significant heritage of offenses against the person, relative to other sections of the country."16  Moreover, even if crime rates were higher, it should be remembered that the preference for order can differ across time and people.  To show that the West was more "lawless" than our present day society tells one very little unless some measure of the "demand for law and order" is available.  "While the frontier society may appear to have functioned with many violations of formal law, it sometimes more truly reflected community customs in conflict with superficial and at times alien standards."17  The vigilance committees which sprang up in many of the mining towns of the West provide excellent examples of this conflict.  In most instances these committees arose after civil government was organized.  They proved that competition was useful in cases where government was ineffective, as in the case of San Francisco in the 1850’s,18 where government became the province of criminals who used the legal monopoly o n coercion to further their own ends, as in Virginia City, Mont ana Territory in the 1860’s.19  Even in these cases, however, violence was not the standard modus operandi.  When the San Francisco vigilante committee was reconstituted in 1856, "the group remained in action for three months, swelling its membership to more than eight thousand.  During this period, San Francisco had only two murders, compared with more than a hundred in the six months before the committee was formed."20

To understand how law and order were provided in the American West, we now turn to four examples of institutions which approximated anarcho-capitalism.  These case studies of land claims clubs, cattlemens’ associations, mining camps, and wagon trains provide support for the hypotheses presented above and suggest that private rights were enforced and that chaos did not reign.

a. Land Clubs:

For the pioneer settlers who often moved into the public domain before it was surveyed or open for sale by the federal government, definition and enforcement of property rights in the land they claimed was always a problem.  "These marginal or frontier settlers (squatters as they were called) were beyond the pale of constitutional government.  No statute of Congress protected them in their rights to the claims they had chosen and the improvements they had made.  In law they were trespassers; in fact they were honest farmers."21  The result was the formation of "extra-legal" organizations for protection and justice.  These land clubs or claims associations, as the extra-legal associations came to he known, were found throughout the Middle West with the Iowa variety receiving the most attention.  Benjamin F. Shambaugh suggests that we view these clubs "as an illustrative type of frontier extra-legal, extra-constitutional political organization in which are reflected certain principles of American life and character."22  To Frederick Jackson Turner these squatters’ associations provided an excellent example of the "power of the newly arrived pioneers to join together for a common end without the intervention of governmental institutions. . . . "23

Each claims association adopted its own constitution and by-laws, elected officers for the operation of the organization, established rules for adjudicating disputes, and established the procedure for the registration and protection of claims.  The constitution of the Claim Association of Johnson County, Iowa offers one of the few records of club operation.  In addition to president, vice president, and clerk and record, that constitution provided for the election of seven judges, any five of whom could compose a court to settle disputes, and for the election of two marshals charged with enforcing rules of the association.  The constitution specified the procedure whereby property rights in land would be defined as well as the procedure for arbitrating claims disputes.  User charges were utilized for defraying arbitration expenses.

In such case of the place and time of holding such court and summons all witnesses that either of the parties may require the court made previous to their proceeding to investigate any case require the plaintiff and defendant to deposit a sufficient sum of money in their hands to defray the expenses of said suit or the costs of said suit, and should either party refuse to deposit such sum of money the court may render judgment against such person refusing to do. . . . 24

As a sanction against those who would not follow the rules of the association, violence was an option, but the following resolution suggests that less violent means were also used.

Resolved, that more effectually to sustain settlers in their just claims according to the custom of the neighborhood and to prevent difficulty and discord in society that we mutually pledge our honours to observe the following resolutions rigidly.  That we will not associate nor countenance those who do not respect the claims of settlers and further that we will neither neighbor with them. . .  Trade barter deal with them in any way whatever.  .  .  .25

That the constitutions, by-laws, and resolutions of all claims clubs were not alike suggests that preferences among the squatters did vary and that there were alternative forms of protection and justice available.  The most common justification for the clubs was stated as follows: "Whereas it has become a custom in the western states, as soon as the Indian title to the public lands has been extinguished by the General Government for the citizens of the United States to settle upon and improve said lands, and heretofore the improvement and claim of the settler to the extent of 320 acres, has been respected by both the citizens and laws of Iowa . . . ."26  Other justification "emphasized the need of protection against ‘reckless claim jumpers and invidious wolves in human form,’ or the need ‘for better security against foreign as well as domestic aggression.’"27  Some associations were formed specifically for the purpose of opposing "speculators" who were attempting to obtain title to the land.  The constitutions of these clubs as evidenced by the Johnson County document specifically regulated the amount of improvements which had to be made on the claim.  Other associations, however, encouraged speculation by making no such requirements.  These voluntary, extra-legal associations provided protection and justice without apparent violence and developed rules consistent with the preferences, goals, and endowments of the participants.

b. Cattlemens’ Associations:

Early settlement of the cattle frontier created few property conflicts, but as land became more scarce, private, voluntary enforcement mechanisms evolved.  Initially "there was room enough for all, and when a cattleman rode up some likely valley or across some well-grazed divide and found cattle thereon, he looked elsewhere for range."28  But even "as early as 1868, two years after the first drive, small groups of owners were or ganizing themselves in to protective associations and hiring stock detectives."29   The place of these associations in the formation of "frontier law" is described by Louis Pelzer.

From successive frontiers of our American history have developed needed customs, laws, and organizations.  The era of fur-trading produced its hunters, its barter, and the great fur companies; on the mining frontier came the staked claims and the vigilance committees; the camp meeting and the circuit rider were heard on the religious outposts; on the margins of settlement the claim clubs protected the rights of the squatter farmers; on the ranchmen’s frontier the millions of cattle, the vast ranges, the ranches, and the cattle companies produced pools and local, district, territorial and national cattle associations.30

As Ernest Staples Osgood tells us, it was "the failure of the police power in the frontier communities to protect property and preserve order," which "resulted over and over again in groups who represented the will of the law-abiding part of the community dealing out summary justice to offenders."31

Like the claims associations, the cattlemen’s associations drew up formal rules governing the group, but their means of enforcing private rights was often more violent than the trade sanctions specified by the claims associations.  These private protection agencies were quite clearly a market response to existing demands for enforcement of rights.

Expert gunmen–professional killers–had an economic place in the frontier West.  They turned up wherever there was trouble . . . Like all mercenaries, they espoused the side which made them the first or best offer . . . .32

Just why, when, and how he hooked up with the cattlemen around Fort Maginnis, instead of with the rustlers, is a trifle obscure, but Bill became Montana’s first stock detective.  Raconteurs of the period seem agreed that Bill’s choice was not dictated by ethics, but by the prospect of compensation.  At any rate, he became a hired defender of property rights, and he executed his assignments–as well as his quarry–with thoroughness and dispatch.33

The market-based enforcement agencies of the cattlemen’s frontier were different from modern private enforcement firms in that the earlier versions evidently enforced their own laws much of the time rather than serving as simply an extension of the government’s police force.  An often expressed concern about this type of enforcement is that 1) the enforcement will be ineffective or 2) the enforcement agencies will themselves become large-scale organizations that use their power to infringe upon individual rights.  We have argued above that there is little reason to believe that the first concern is justified.

It also appears that the second concern is not supported by the experience of the American West.  Major economies of scale did not seem to exist in either enforcement or crime.  Although there are numerous records of gunslingers making themselves available for hire, we find no record of these gunslingers discovering that it was even more profitable to band together and form a super-defense agency that sold protection and rode roughshod over private property rights.  Some of the individuals did drift in and out of a life of crime and sometimes did form loose criminal associations.  However, these associations did not seem to be encouraged by the market form of peace keeping, and in fact, seemed to be dealt with more quickly and more severely under private property protective associations than under government organization.

There were a few large private enforcement organizations, in particular the Pinkerton Agency and Wells Fargo, but these agencies seemed to serve mainly as adjuncts to government and were largely used in enforcing state and national laws.  Other large-scale associations, e.g., the Rocky Mountain Detective Association and the Anti-Horse Thief Association, were loose information providing and coordination services, and rarely provided on-the-spot enforcement of private rules.34


c. Mining Camps:

As the population of the U.S. grew, westward expansion was inevitable, but there can be little doubt that the discovery of gold in California in 1848 rapidly increased the rate of expansion.  Thousands of Easterners rushed to the most westward frontier in search of the precious metal, leaving behind their civilized world.  Later the same experience occurred in Colorado, Montana, and Idaho and, in each case, the first to arrive were forced into a situation where they had to write the rules of the game.

There was no constitutional authority in the country, and neither judge nor officer within five hundred miles.  The invaders were remitted to the primal law of nature, with, perhaps, the inherent rights of American citizenship.  Every gulch was filling with red-hot treasure hunters; every bar was pock-marked with "prospect holes"; timber, water-rights, and town-lots were soon to be valuable, and government was an imperative necessity.  Here was a fine field for theorists to test their views as to the origin of civil law.35

The early civil law which evolved from this process approximated anarcho-capitalism as closely as any other experience in the U.S.

In the absence of a formal structure for the definition and enforcement of individual rights, many of the groups of associates who came seeking their fortunes organized and made their rules for operation before they left their homes.  Much the same as company charters today, these voluntary contracts entered into by the miners specified financing for the operation as well as the nature of the relationship between individuals.  These rules applied only to the miners in the company and did not recognize any outside arbitrator of disputes; they did not "recognize any higher court than the law of the majority of the company."36

As Friedman’s theory predicts, the rules under which the companies were organized varied according to tastes and needs of the company.  "When we compare the rules of different companies organized to go to the mines, we find considerable variation."37  In addition to the rules listed above, company constitutions often specified arrangements for payments to be used for caring for the sick and unfortunate, rules for personal conduct including the use of alcoholic spirits, and fines which could be imposed for misconduct, to mention a few.38  In the truest nature of the social contract, the governing rules of the company were negotiated, and as in all market transactions unanimity prevailed.  Those who wished to purchase other "bundles of goods" or other sets of rules had that alternative.

Once the mining companies arrived at the potential gold sites, the rules were useful only insofar as questions of rights involved members of the company; when other individuals were confronted in the mining camps, additional negotiation was necessary.  Of course, the first issues to arise concerned the ownership of mining claims.  When the groups were small and homogeneous, dividing up the gulch was an easy task.  But when the numbers moving to the gold country reached the thousands, the problems increased.  The general solution was to hold a mass meeting and appoint committees assigned to drafting the laws.  Gregory Gulch in Colorado provides an example.

A mass meeting of miners was held June 8, 1859, and a committee appointed to draft a code of laws.  This committee laid out boundaries for the district, and their civil code, after some discussion and amendment, was unanimously adopted in mass meeting, July 16, 1859.  The example was rapidly followed in other districts, and the whole Territory was soon divided between a score of local sovereignties.39

The camps could not live in complete isolation from the established forms of government, but there is evidence that they were able to maintain their autonomy.  In California, military posts were established to take care of Indian troubles, but these governmental enforcement organizations did not exercise any authority over the mining camps.  General Riley in an 1849 visit to a California camp told the miners that "all questions touching the temporary right of individuals to work in particular localities of which they were in possession, should be left to the decision of the local authorities."40

No alcalde, no council, no justice of the peace, was ever forced upon a district by an outside power.  The district was the unit of political organization, in many regions, long after the creation of the state; and delegates from adjoining districts often met in consultation regarding boundaries, or matters of local government, and reported to their respective constituencies in open-air meeting, on hillside or river-bank.41

Moreover, the services of trained lawyers were not welcomed in many of the campus and even forbidden in districts such as the Union Mining District.

Resolved, that no lawyer be permitted to practice law in this district, under penalty of not more than fifty nor less than twenty lashes, and he forever banished from this district.42

In this way, the local camps were able to agree upon rules or individual rights and upon methods for enforcement thereof without coercion from U.S. authorities.  When outside laws were imposed upon the camps, there is some evidence that they increased rather than decreased crime.  One early Californian writes, "We needed no law until the lawyers came," and another adds, "There were few crimes until the courts with their delays and technicalities took the place of miners’ law."43

While the mining camps did not have private courts where individuals could take their disputes and pay for arbitration, they did develop a system of justice through the miners’ courts.  These courts seldom had permanent officers, although there were instances of justices of the peace.  The folk-moot system was common in California.  By this method a group of citizens was summoned to try a case.  From their midst they would elect a presiding officer or judge and select six or twelve persons to serve as the jury.  Most often their rulings were not disputed, but there was recourse when disputes arose.  For example, in one case involving two partners, after a ruling by the miners’ court, the losing partner called a mass meeting of the camp to plead his case and the decision was reversed.44  And if a larger group of miners was dissatisfied with the general rulings regarding camp boundaries or individual claim disputes, notices were posted in several places calling meeting of those wishing a division of the territory.  "If a majority favored such action, the district was set apart and named.  The old district was not consulted on the subject, but received a verbal notice of the new organization.  Local conditions, making different regulations regarding claims desirable, were the chief causes of such separations."45  "The work of mining, and its environment and conditions, were so different in different places, that the laws and customs of the miners had to vary even in adjoining districts."46

When disputes did arise and court sessions were called, any man in the camp might be called upon to he the executive officer.  Furthermore, any one who was a law-abiding citizen might he considered for prosecutor or defender for the accused.

In Colorado there is some evidence of competition among the courts for business, and hence, an added guarantee that justice prevailed.

The civil courts promptly assumed criminal jurisdiction, and the year 1860 opened with four governments in full blast.  The miners’ courts, people’s courts, and "provisional government" (a new name for "Jefferson") divided jurisdiction in the mountains; while Kansas and the provisional government ran concurrent in Denver and the valley.  Such as felt friendly to either jurisdiction patronized it with their business.  Appeals were taken from one to the other, papers certified up or down and over, and recognized, criminals delivered and judgments accepted from one court by another, with a happy informality which it is pleasant to read of.  And here we are confronted by an awkward fact: there was undoubtedly much less crime in the two years this arrangement lasted than in the two which followed the territorial organization and regular government.47

This evidence is consistent with Friedman’s hypothesis that when competition exists, courts will be responsible for mistakes and the desire for repeat business will serve as an effective check on "unjust" decisions.

d. Wagon Trains:

Perhaps the best example of private property anarchism in the American West was the organization of the wagon trains as they moved across the plains in search of California gold.  The region west of Missouri and Iowa was unorganized, unpatrolled, and beyond the jurisdiction of the United States law.  But to use the old trapper saying that there was "no law west of Leavenworth" to describe the trains would be inappropriate.  "Realizing that they were passing beyond the pale of the law, and aware that the tedious journey and the constant tensions of the trail brought out the worst in human character, the pioneers . . . created their own law making and law-enforcing machinery before they started."48  Like their fellow travelers on the ocean, the pioneers in their prairie schooners negotiated a "plains law" much like their counterparts’ "sea law."49  The result of this negotiation in many cases was the adoption of a formal constitution patterned after that of the U.S.  The preamble of the constitution of the Green and Jersey County Company provides an example.

We, the members of the Green and Jersey County Company of Emigrants to California, for the purpose of effectually protecting our persons and property, and as the best means of ensuring an expeditious and easy journey do ordain and establish the following constitution.50

From this and the other constitutions which have survived it is clear that these moving communities did have a basic set of rules defining how "the game would be played" during their journey.  Like the rules of the mining camps, the wagon train constitutions varied according to the tastes and needs of each organization, but several general tendencies do emerge.  Most often the groups waited until after they have been on the trail for a few days and out of the jurisdiction of the United States.  One of the first tasks was to select officers who would be responsible for enforcing the rules.  For the Green and Jersey County Company, which was not atypical, the officers included a Captain, Assistant Captain, Treasurer, Secretary, and an Officer of the Guard.  The constitutions also included eligibility for voting and decision rules for amendment, banishment of individuals from the group, and dissolution of the company.  Duties for each officer were often well specified as in the case of the Charleston, Virginia, Mining Company.51  In addition to these general rules, specific laws were enacted.  Again, the introduction of the Green and Jersey County Company is illustrative.

We, citizens and inhabitants of the United States, and members of the Green and Jersey County Company of Emigrants to California; about starting on a journey through a territory where the laws of our common country do not extend their protection, deem it necessary, for the preservation of our rights, to establish certain wholesome rules and regulations.  We, therefore, having first organized a constitution of government, for ourselves, do now proceed to enact and ordain the following laws; and in so doing we disclaim all desire or intention of violating or treating with disrespect, the laws of our country.52

The specific rules included organization of jury trials; regulation of Sabbath-breaking, gambling and intoxication; and penalties for failing to perform chores, especially guard duty.  In certain cases there were even provisions for the repair of road, building bridges, and protection of other "public goods."53

It has been argued that "these ordinances or constitutions . . . may be of interest as guides to pioneers’ philosophies about law and social organization, [but] they do not help answer the more essential question of how, in fact, not in theory, did the overland pioneer face problems of social disorder, crime, and private conflict."54  Nonetheless, it is clear that the travelers did negotiate from Schelling points to social contracts without relying upon the coercive powers of government.  And these voluntary contracts did provide the basis for social organization.

The Schelling points from which the individuals negotiated included a very well accepted set of private rights especially with regard to property.  One might expect that upon leaving the legal jurisdiction of the U.S.  with its many laws governing private property that the immigrants would have less respect for other’s rights.  Moreover, since the constitutions and by-laws seldom specifically mentioned individual property rights, we might infer that these were of little concern to the overlanders.  In his article, "Paying for the Elephant: Property Rights and Civil Order on the Overland Trail," John Phillip Reid convincingly argues that respect for property rights was paramount.  Even when food became so scarce that starvation was a distinct possibility, there are few examples where the pioneers resorted to violence.

Indeed, it is no exaggeration to say that the emigrants who traveled America’s overland trail gave little thought to solving their problems by violence or theft.  We know that some ate the flesh of dead oxen or beef with maggots while surrounded by healthy animals they cuuld have shot.  Those who suffured losses early in the trip and wcre able to go hack, did so.  The disappointment and embarrassment for some must have been extremely bitter, but hundreds returned.  They did not use weapons to force their way through.  While a few of those who were destitute may have employed tricks to obtain food, most begged, and those who were "too proud to beg" got along the best they could or employed someone to beg for them.  If they could not beg, they borrowed, and when they could not borrow they depended on their credit.55

The emigrants were property minded.  The fact that the constitution contained few references to individual property rights may well reflect the significance of private property Schelling points.

When crimes against property or person did occur, the judicial system which was specified in the contracts was brought into play.  "The rules of a traveling company organized at Kanesville, Iowa, provided: ‘Resolved, that in case of any dispute arising between any members of the Company, they shall be referred to three arbiters, one chosen by each party, and one by the two chosen, whose decision shall he final."56  The methods of settling disputes varied among the companies, but in nearly all cases some means of arbitration were specified to insure "that the rights of each emigrant are protected and enforced."57

In addition to the definition and enforcement of individual rights, the overlanders also were faced with the question of how to solve disputes involving contractual relations for business purposes.  For all of the same reasons that firms exist for the production of goods and services, individuals crossing the plains had incentives to organize into "firms" with one another.  Scale economies in the production of goods such as meals and services such as herding and in the provision of protection from Indians provided for gains from voluntary and collective action.  Again markets seemed to function well in providing several types of contractual arrangements for this production and protection.

A common form of organization on the overland trail was the "mess." Similar to share-cropping arrangements in agriculture, the mess allowed individuals to contribute inputs such as food, oxen, wagons, labor, etc.  for the joint production of travel or meals.  In this way, the mess, which allowed the property to remain privately owned, differed from the partnership where property was concurrently owned.  Since mess property was available for use by all members of the mess, the-potential for conflict was great.  When the conflicts occurred, renegotiation of the contract was sometimes necessary.   When new agreements could not be reached, the mess would have to be dissolved and property returned to individual owners.  Since ownership remained private, division was not difficult.  Moreover, since there were gains from trade to he obtained from combining inputs, it was usually possible to renegotiate when violations in the contract occurred.  There were, however, cases where renegotiation seemed impossible, as in the following example of a mess which found one of its members unwilling to do his share of the chores.

[W]e concluded the best thing we could do was to buy him out and let him go which accordingly we did by paying him one hundred doll[ar]s.  He shoulder[ed] his gun, carpet bag, and blanket and took the track to the prairie without saying good by to one of us.58

While other cases of dissolution of messes occurred, there is no evidence that coercive power was used to take property from rightful owners.  If an individual left one mess he could usually join another.

The other common type of organization on the overland routes was the joint stock company.  In this organization members contributed capital and other property which was held concurrently.  The Charlestown, Virginia, Mining Company provides an example of such a company and its constitution attests to the establishment of rules governing use of concurrent property.59  Again it should be emphasized that these rules were voluntary though coercion was used within the organization to enforce them.

Like the mess, when disagreements occurred within the joint stock company, renegotiation was necessary.  However, since the property was held concurrently this process was more complicated.  In the first place, an individual could not simply leave the company.  Most often withdrawal could only occur with the consent of a percentage of other members.  But even then withdrawal was complicated by the need to divide the property.  In at least one case this problem was solved by dividing all of the property and reorganizing into messes.

When the original joint stock company of sixty men dissolved, there was no mention of individual ownership.  The property was parcelled by assigning it to traveling units already in existence.  However, in executing the second division, the smaller group found it possible–perhaps even necessary–to utilize the concept of personal property.  In order to accomplish their purpose, the men first transmuted the common stock from "company" or partnership property into private property.  Then, by negotiating contracts, goods they briefly had held as individuals, were converted back into partnership or mess property.60

All of this occurred in the absence of coercion.

Perhaps an even more revealing example of anarcho-capitalism at work is found in the dissolution of the Boone County Company.  When the eight memhers of the company fell into rival factions of 3 and 5, dissolution became imminent.  Negotiations continued for some time until all the company property (note that none of the private property was divided) was divided between the two groups.  When negotiations appeared at an impasse because of the indivisibility of units and differences in quality, prices were assigned to units and the groups resolved the issue by trade.  However, a $75 claim of the majority group proved even harder to resolve.  The claim resulted from the fact that a passenger who owned two mules and a horse and who had been traveling with the company chose to take his property and go with the minority.  The disadvantaged majority demanded compensation.  Unable to settle the dispute, arbitration came from a "private court" consisting of "3 disinterested men," one chosen by each side and a third chosen by the two.  Their decision follows.

[W]e can see no just cause why the mess of 3 men should pay anything to the mess of 5 men.  It being . . . a mutual and sumultaneous agreement to dissolve the original contract.  The fact that Abhott joins in with the 3 men does not alter in our opinion the matter of the case–for the dessolution being mutually agreed upon, all the parties stand in the same relation to each other which they did, before any contract was entered into.  And Abbott might or not just as he chose unite with either party.  If he chose to unite with neither party, then clearly neither could claim of the other.  If he united with a foreign party then who could think of claiming anything of such a party.61

The important point of this example is that when the Boone County Company could not renegotiate its initial contract the members did not resort to force, but chose private arbitration instead.  The many companies which crossed the plains "were experiments in democracy and while some proved inadequate to meet all emergencies, the very ease with which the members could dissolve their bonds and form new associations without lawlessness and disorder proves the true democratic spirit among the Americ an frontiersmen rather than the opposite."62  Competition rather than coercion insured justice.

While the above evidence suggests that the wagon trains were guided by anarcho-capitalism, it should be noted that their unique characteristics may have contributed to the efficacy of the system.  First, the demand for public goods was probably not as great as found in more permanent communities.  If nothing else, the transient nature of these moving communities meant that schools, roads, and other goods which are publicly provided in our society were not needed, hence there was no demand for a government to form for this purpose.  Secondly, the short term nature of the organization meant that there was not a very long time for groups to organize to use coercion.  These were "governments" of necessity rather than ambition.  Nonetheless, the wagon trains on the overland trails did provide protection and justice without a monopoly on coercion, did allow competition to produce rules, and did not result in the lawless, disorder generally associated with anarchy.

Concluding Remarks

From the above descriptions of the experience of the American West, several conclusions consistent with Friedman’s hypotheses appear.

  1. The West, although often dependent upon market peace keeping agencies, was, for the most part, orderly.
  2. Different standards of justice did prevail and various preferences for rules were expressed through the market place.
  3. Competition in defending and adjudicating rights does have beneficial effects.  Market agencies provided useful ways of measuring the efficiency of government alternatives.  The fact that government’s monopoly on coercion was not taken as seriously as at present meant that when that monopoly was poorly used market alternatives arose.  Even when these market alternatives did become "governments" in the sense of having a virtual monopoly on coercion, the fact that such firms were usually quite small provided significant checks on their behavior.  Clients could leave or originate protective agencies on their own.  Without formal legal sanctions, the private agencies did face a "market test" and the rate of survival of such agencies was much less than under government.

The above evidence points to the overall conclusion that competition was very effective in solving the "public goods" problem of law and order in the American West.  However, this does not mean that there were no disputes that would cause one to doubt the efficacy of such arrangements.  Two examples of civil disorder are often mentioned in Western history and they must be dealt with.

The first is the very bitter feud between the Regulators and the Moderators in the Republic of Texas in the 1840’s.63  What started as a disagreement between two individuals in Shelby County escalated until it involved a significant number of people in a large area of east Texas.  In 1839 a loosely organized band, later to be known as the Moderators, was issuing bogus land papers, stealing horses, murdering, and generally breaking the "law" of Shelby County, Texas.  To counter this lawlessness a vigilance committee was formed under the name of Regulators.  Unfortunately, "bad elements soon infiltrated the Regulators, and their excesses in crime later rivaled those of the Moderators.  The situation evolved into a complexity of personal and family feuds, and complete anarchy existed until 1844."64  One citizen described the situation in a letter to a friend:

Civil war, with all its horror, has been raging in this community.  The citizens of the county are about equally divided into two parties, the Regulators and Moderators.  It is no uncommon sight to see brothers opposed to each other.  Every man’s interest in this county is seriously affected.65

During the period eighteen men were murdered and many more wounded.   Only when President Sam Houston called out the militia in 1844 did the feuding stop.  Thus, for whatever reasons, in this case it appears that dependence upon non-governmental forms of organization was not successful.

Another major civil disruption that should be considered is the Johnson County War in Northern Wyoming in 1892.  A group of stockgrowers and their hired guns entered Johnson County with the express purpose of wiping out the rustlers they believed to be prevalent there.  The citizens of the county, feeling they were being invaded by a foreign army, responded en masse and for a short period of time a "war" did result.  However, in this case the disorder seems to have been more a battle between two "legitimized" agencies of coercion, the state and the local government, than between strictly private enforcement agencies.  The invaders, while ostensibly acting as a private party, had the tacit approval of the state government and used that approval to thwart several attempts by the local authorities to secure state or federal intervention.  Those who responded to the invasion were under the leadership of the Johnson County sheriff and felt very much that they were acting appropriately under the existing laws of that time.66  Thus this incident sheds little light on the efficacy of market arrangements for maintaining order.

In conclusion, it appears in the absence of formal government, that the western frontier was not as wild as legend would have us believe.  The market did provide protection and arbitration agencies that functioned very effectively, either as a complete replacement for formal government or as a supplement to that government.  However, the same desire for power that creates problems in government also seemed to create difficulties at times in the West.  All was not peaceful.  Especially when Schelling points were lacking, disorder and chaos resulted, lending support to Buchanan’s contention that agreement on initial rights is important to anarcho-capitalism.  When this agreement existed, however, we have presented evidence that anarcho-capitalism was viable on the frontier.

NOTES

Editor’s note: The footnotes below are incomplete and garbled.  They will be corrected as time permits.

  1. James M.  Buchanan, "Before Public Choice," in G .  Tullock, e d .  , Explorotions in the Theory of Anarchy (Blacksburg, Va.: Center for the Study of Public Choice, 1972), p.  37.  
  2. James M .Buchanan, "Review o f David Friedman, R e Mochinrry ofFreedom: Guide to Radical Capitalism," The Journal of Economic Liferoture, Vol.  X11, N o .  3 (1974).  p.  915.  
  3. E .  A .  J .  Johnson, The Foundations of Americon Economic Freedom (Minneapolis: Univer- sity of Minnesota Press, 1973).  p .   305.  
  4. Laurence S .   Moss, "Private Properly Anarchism: An American Variant," in G .  Tullock, ed.  , Further Explorotions in the Theory of Anarchy (Blacksburg, Va.: Center for the Study of Public Choice, 1974), p.  26.  
  5. James M .  Buchanan, Freedom in Conslirutionol Confraet (College Sta.  , Tex.: Texas A&M University Press, 1977).  p.  52.  28 the J O U R N A L O F LIBERTARIAN S T U D I E S
  6. Buchanan, "Review of Machinery of Freedom," p.  915.  
  7. Ibid., emphasis a d d e d .  
  8. lbid.  
  9. For a longer discussion of Schelling points, see Thoma s C.  Schelling, The Slraregy of Conflict (Cambridge: Harvard University Press, l960), pp.   54-58; Buchanan, "Review of Machinery of Freedom," p.  914; and David Friedman, "Schelling Points, Self-Enforcing Cont r a c t s , and the Pa r adox of Order," (unpub.  Ms., Center for the Study of Public Choice, Virginia Polytechnic Institute).  
  10. David Friedman, The Machinery of Freedom: Guide lo Rodical Copirolism (New York: Ha rpe r & R a w , 1973), p.  152.  
  11. Gilbert Geis, "Violence in American Society," Current Hisrory, Vol.  L11 (1976), p.  357.  
  12. Eugene W.  Hollon, Fronrier Vio1ence;Another Look (New Yark: Oxford University Press, 1974).  o .  x . ,.  .  
  13. Robert A.  Dykstra.  The Coltle Towns (New York: Alfred A.  Knopf, 1968).  p.  144.  
  14. Paul I.  Wcllman, The Trampling Herd (New York: Carrick and Evans, 19391, p.  159.  
  15. Hol l an, Frontier Violence, p.  200.  
  16. Fr ank Prasscl, The Wesrern Peoee Officer (Norman, Okla.: University o f O k l a h o m a Press, 1937).  pp.   16-17.  
  17. Prassel.  Wenern Peace Officer, o.  7.
  18. See R. Stewart, Committe on Vigilance (Boston: Houghton Mifflin Co,. 1964); and Alan Valentine, Vigilante Justice (New York: Reynal and Co., 1956).
  19. Thomas J. Dinsdale, The Vigilantes of Montana (Norman, Okla,: University of Oklahoma Press, 1953).  
  20. Wayne C a r d , Fronrier Jusrice (Norman, Okl a .  : University of Okl ahoma Press, 1949), p.   165.  
  21. Benjamin F.  Shambaugh, "Frontier Land Clubs, or Claim Associations," Annual Reporr of the American Historical Association (1900).  p.  71.  
  22. Shambaugh, "Frontier Land Clubs," p.  69.  
  23. Frederick J a ckson Turne r , The Frontier in American Hisrory (New York: Henry Holt and Co..  1920).  p .  343.  
  24. Shambaugh, "Frontier Land Clubs," p.  77.  
  25. I b i d , pp.  77-78.  
  26. Quoted in Allan Bogue, "The Iowa Claim Clubs: Symbol and Substance," in V.  Carstensen, ed., The Public Lands (Madi son, Wisc.: University of Wisconsin Press, 19631, p.  50.  
  27. Ibid.  
  28. Ernest Staples Osgood, The Day of the Corrlemon (Minneapolis: University of Minnesota Press, 1929), p.  182.  
  29. I b i d , p.  118.  
  30. Louis Pelzer, The Cotrlemen’s Fronlier (Glendale, Calif.: A H .  Clark, 1936).  p.  87.  
  31. Osgoad, Day of Coltlemon, p.  157.  
  32. Wellman, Trampling He rd, p.  346.  
  33. Robe r t H , Fletcher, Free Cross to Fences: the Monrono Corlle Range Slory (New York: University Publishers, 1960).  p.  65.  
  34. Prassel, Wesrern Pcacp Officer, pp.  134-141.  
  35. J .  H .  Beadle, Western Wilds and the Men Who Redeem Them (Cincinatti: J o n e s Brothem, 1882).  p.  476.  
  36. Charles Howard Shinn.  Mining Comoi: A Studv in American Fronlipr Governmenl (New York: Alfred A .   ~ n o ~ f , 1948):~.  167 ~~
  37. lhid.~
  38. J o h n Phillip Reid, "Prosecuting the Elephant: Trials and Judicial Behavior on the Overland Trail," B Y U Low Review, V o l 77, No.  2 (1977).  pp.   335-336.  
  39. Beadle, Western Wilds, p.  477, emphasis added
  40. Quoted in Shinn, Mining Comps, p.  111 ~ ~
  41. Shinn, Mining Comps, p.  168.  
  42. Quoted in Beadle, Wesrern Wilds, p .  478.  
  43. Quoted in Shinn, Mining Camps, p.  113.  A N A M E R I C A N E X P E R I M E N T I N ANARCHO-CAPITALISM 29
  44. Marvin Lewis, ed., The Mining Frontier (Norman, Okla.: University of Okl ahoma Press, 1967).  pp.  10-18.  
  45. Shinn, Mining Camps, p.  118.  
  46. Ibid., p .   159.  
  47. Beadle, Western Wilds.  p.  477.  
  48. Ray Allen Billington, The Fur Western Fronlier, 1830-1860 (New York: Harper & Bros., 1956).  p.  99.  
  49. David Morris Potter, ed.  , Trail to Colifornio (New Haven: Yale University Press, 1945), pp.   ~ - 16-17.  
  50. Reprinted in Elizabeth Page, Wogon Wesl (New York:Fa r r a r & Rinehart, 1930).  Appendix C.  
  51. Constitution reprinted in Potter, Trail to California, Appendix A.  
  52. Page, W q o n W a r , p.  118.  
  53. Ihiri n 119 r .  ..-.  
  54. David J .   Langum, "Pioneer .lustice o n the Overland Trail," Weslern Hisrorical Quarterly, Vol.  5, No.  3 (1974).  p.  424, fn.  12.  
  55. J o h n Phillip Reid, "Paying for the Elephant: Property Rights and Civil Orde r on the Overland Trail." The Hunrinpton Librorv Ouarrerlv.  Vol.  XL I .   No.  1 (1977).   .  .  .  .  DD.  50-51.
  56. Reid, " ~ r o s e c u t i o g the ~ l e ~ h a n t , " p .   330.  -
  57. Quoted in Reid, "Prosecuting the Elephant," p.  330.  
  58. Quoted in J o h n Phillip Reid, "Dividing the Elephant: the Separation of Mess and J o i n t Stock Property on the Overland Trail," Hasrings Low Journal, Vol .28, No.  1 (1976), p.  77.  
  59. See Pot t e r , Trail lo Col f i rnio, Appendix A.  
  60. Reid, "Dividing the Elephant," p.  79.  
  61. Quoted in Reid, "Dividing the E l e p h a d , " p.  85.  
  62. Owen Cochr an Coy, The Great Trek (San Francisco: Powell Pub.  Co., 1931).  p.  117.  
  63. See C a r d , Frontier Justice; Hol lon, Fronlier Violence; and Hugh David Gr aham and Ted Robe r t Gurr, eds., The History of Videnee in America: Hislorieol ond Compororive Perspecrives (New York: Pr age r , 1969).  
  64. Hol lon, Frontier Violence, p.  53.  
  65. Quoted in C a r d , Fronlier Justice, pp.  35-36.  
  66. See Helen Huntington Smi th, The War on the Powder River: the Hixlory o f o n lnsurreclion (Lincoln, Neb.: University of Nebraska Press, 1966).  

February 7, 2011

Economics In A Nutshell

by Puck T. Smith

Whenever two (or more) people interact each party in the interaction is participating because each believes he will derive more value from the interaction than he would from not interacting. If that were not so the interaction would not occur in the first place. [This is not an opinion it is a priori truth. I invite you to refute it, but I warn you such an attempt is futile.]

When these interactions are voluntary each participant takes away more than he gives. This is how wealth is created. It is the ONLY way wealth is created.

Error comes in when people restrict the discussion of economics to monetary value. There are many other forms of value: emotional, spiritual and social.

When human interaction is voluntary and uncoerced all forms of value are increased and society becomes wealthier in all areas of value.

When human interaction is coerced wealth (value) is at best redistributed, more often it is destroyed and society is made poorer.

Allowing people to interact freely and uncoerced is the only moral approach to social organization. That it results in increased prosperity for society as whole is simply a side effect–a very good side effect–but the point is restricting peaceful, voluntary interaction is not a valid method of social organization, it is actually a method of social destruction.

February 3, 2011

Predictability: Does the Flap of a Butterfly’s Wings in Brazil Set Off a Tornado in Texas?

by Edward N. Lorenz

Presented before the American Association for the Advancement of Science, December 29, 1972

Lest I appear frivolous in even posing the title question, let alone suggesting it might have an affirmative answer, let me try to place it in proper perspective by offering two propositions.

1. If a single flap of a butterfly’s wing can be instrumental in generating a tornado, so also can all the previous and subsequent flaps of its wings, as can the flaps of the wings of millions of other butterflies, not to mention the activities of innumerable more powerful creatures, including our own species.

2. If the flap of a butterfly’s wings can be instrumental in generating a tornado, it can equally well be instrumental in preventing a tornado.

More generally, I am proposing that over the years minuscule disturbances neither increase nor decrease the frequency of occurrences of various weather events such as tornados; the most they may do is to modify the sequences in which they occur. The question which really interests us is whether they can do even this—whether, for example, two particular weather situations differing by as little as the immediate influence of a single butterfly will generally after sufficient time evolve into two situations differing by as much as the presence of a tornado. In more technical language, is the behavior of the atmosphere unstable with respect to perturbations of small amplitude?

The connection between this question and our ability to predict weather is evident. Since we do not know exactly how many butterflies there are, nor where they are located, let alone which ones are flapping their wings at any instant, we cannot, if the answer to our question is affirmative, accurately predict the occurrence of tornados at a sufficiently distant future time. More significantly, our general failure to detect systems as large as thunderstorms when they slip between weather stations may impair our ability to predict the general weather pattern even in the near future.

How can we determine whether the atmosphere is unstable? The atmosphere is not a controlled experiment; if we disturb it and then observe what happens, we shall never know what would have happened if we did not disturb it. Any claim that we can learn what would have happened by referring to the weather forecast would imply that the question whose answer we seek has already been answered in the negative.

The bulk of our conclusions are based upon computer simulation of the atmosphere. The equations to be solved represent our best attempts to approximate the equations actually governing the atmosphere by equations which are compatible with present computer capabilities. Generally two numerical solutions are compared. One of these is taken to simulate the actual weather, while the other simulates the weather which would have evolved from slightly different initial conditions, i.e., the weather which would have been predicted with perfect forecasting technique but imperfect observations. The difference between the solutions therefore simulates the error in forecasting. New simulations are continually being performed as more powerful computers and improved knowledge of atmospheric dynamics become available.

Although we cannot claim to have proven that the atmosphere is unstable, the evidence that it is so is overwhelming. The most significant results are the following.

1. Small errors in the courser structures of the weather pattern—those features which are readily resolved by conventional observing networks—tend to double in about three days. As the errors become larger the growth rate subsides. This limitation alone would allow us to extend the range of acceptable prediction by three days every time we cut the observation errors in half, and would offer the hope of eventually making good forecasts several weeks in advance.

2. Small errors in the finer structure—e.g., the positions of individual clouds—tend to grow much more rapidly, doubling in hours or less. This limitation alone would not seriously reduce our hopes for extended-range forecasting, since ordinarily we do not forecast the finer structure at all.

3. Errors in the finer structure, having attained appreciable size, tend to induce errors in the coarser structure. This result, which is less firmly established than the previous ones, implies that after a day or so there will be appreciable errors in the coarser structure, which will thereafter grow just as if they had been present initially. Cutting the observation error in the finer structure in half—a formidable task—would extend the range of acceptable prediction of even coarser structure only by hours or less. The hopes for predicting two weeks or more in advance are thus greatly diminished.

4. Certain special quantities such as weekly average temperatures and weekly total rainfall may be predictable at a range at which entire weather patters are not

Regardless of what any theoretical study may imply, conclusive proof that good day-to-day forecasts can be made at a range of two weeks or more would be afforded by any valid demonstration that any particular forecasting scheme generally yields good results at that range. To the best of our knowledge, no such demonstration has ever been offered. Of course, even pure guesses will be correct a certain percentage of the time.

Returning now to the question as originally posed, we notice some additional points not yet considered. First of all, the influence of a single butterfly is not only a fine detail—it is confined to a small volume. Some of the numerical methods which seem to be well adapted for examining the intensification of errors are not suitable for studying the dispersion of errors from restricted to unrestricted regions. One hypothesis, unconfirmed, is that the influence of a butterfly’s wings will spread in turbulent air, but not in calm air.

A second point is that Brazil and Texas lie in opposite hemispheres. The dynamical properties of the tropical atmosphere differ considerably from those of the atmosphere in temperate and polar latitudes. It is almost as if the tropical atmosphere were a different fluid. It seems entirely possible that an error might be able to spread many thousands of miles within the temperate latitudes of either hemisphere, while yet being unable to cross the equator.

We must therefore leave our original question unanswered for a few more years, even while affirming our faith in the instability of the atmosphere. Meanwhile, today’s errors in weather forecasting cannot be blamed entirely nor even primarily upon the finer structure of weather patterns. They arise mainly from our failure to observe even the coarser structure with near completeness, our somewhat incomplete knowledge of the governing physical principles, and the inevitable approximations which must be introduced in formulating these principles as procedures which the human mind or the computer can carry out. These short comings cannot be entirely eliminated, but they can be greatly reduced by an expanded observing system and intensive research. It is to the ultimate purpose of making not exact forecasts but the best forecasts which the atmosphere is willing to have us make that the Global Atmospheric Research Program is dedicated.

January 24, 2011

Markets and Wealth Creation

By Puck T. Smith 

The term free market has gotten as bad a rap as capitalism. The problem stems, at least in part, from people who are unfamiliar with Mises and Hayek and don’t grasp that markets are not simply the realm of commerce.

Market behavior is human behavior. The exchange of value in human interaction–be it emotional, spiritual, social or economic–is ubiquitous. People simply will not interact with others if they do not perceive a value in doing so. Every interaction is an exchange of value. When that interaction is voluntary the parties involved always walk away with more than they had even if a dollar sign is not involved. If that were not the case the exchange would never have taken place.

The beauty of voluntary exchange is that all parties get more than they give. Each walks away richer and society as a whole is wealthier. By this definition voluntarism always produces wealth–even if it is not tangible. By that same definition involuntary interaction merely transfers value in one direction at best. In the worst case value is destroyed and society is made poorer.

It’s a weird thing that it seems so self-evident once the idea is grasped, but until that point it seems incomprehensible. Sometimes I feel I’m trying to explain calculus to a dog.

An Argument for the Inviolability of Property

Filed under: Property, Puck T. Smith

By Puck T. Smith 

In a Robinson Crusoe situation where it takes one day’s labor to procure one day’s resources one may be willing to do without for a day in order to improve one’s method of procurement. If one is subsisting on fruit with either a thick stem or heavy rind one may decide to do without food one day and use the time not spent gathering and consuming fruit to fabricate a sharp stone tool which would enable the procurement of one day’s food in half a day. One deems the present sacrifice acceptable for future gain. From that one period of time expended every subsequent day produces half the value of that single day. In two days one would have recovered all one had given and every day after one gains half as much again.

Given now the surplus time, one could choose to work all day to procure twice as much food in anticipation of future need or use that time for leisure or further utilization of resources and time to increase productivity, comfort and surplus time. In this way one has alone converted time, energy and resources, each exclusively controlled, into items of subjective material value to oneself. In this way one has created wealth to which no other can have claim as no other contributed to its production and accumulation. Wealth so acquired can scarcely be considered other than inviolable. Its disposition is subject to none but the owner.

Some Important Terms

1) Anarchy: Without rulers, not without rules.

2) Capitalism: A system of social organization based on free choice, voluntary exchange and respect for property.

3) Market behavior: Voluntary human interaction in a social context.

4) Economics: The study of human choice and human action in the material world.

5) Property: The claim of exclusive control and use of resources.

6) Resources: Those things required for the continuation of life and the improvement of its quality, including, but not limited to, material, psychological, social and spiritual needs.

If the definition of a term is not clear discussion is not possible. The editor do not claim these are the "right" definitions or even the only ones, just that they are useful for expressing the ideas they signify as so defined. Semantic arguments should be addressed to Noam Chomsky.  

The editor would be remiss if he did not credit Ludwig Von Mises, Butler Shaffer and Abraham Maslow for the clarity they have brought to his thinking.

January 12, 2011

The Obviousness of Anarchy

The Obviousness of Anarchy

by John Hasnas*

"You see, but you do not observe." - Sherlock Holmes to Dr. John Watson in A Scandal in Bohemia

I. Introduction

In this article, I have been asked to present an argument for anarchy. This is an absurdly easy thing to do. In fact, it is a task that can be discharged in two words–look around. However, because most of us, like Dr. Watson, see without observing the significance of what we see, some commentary is required.

Anarchy refers to a society without a central political authority. But it is also used to refer to disorder or chaos. This constitutes a textbook example of Orwellian newspeak in which assigning the same name to two different concepts effectively narrows the range of thought. For if lack of government is identified with the lack of order, no one will ask whether lack of government actually results in a lack of order. And this uninquisitive mental attitude is absolutely essential to the case for the state. For if people were ever to seriously question whether government actions are really productive of order, popular support for government would almost instantly collapse.

The identification of anarchy with disorder is not a trivial matter. The power of our conceptions to blind us to the facts of the world around us cannot be gainsaid. I myself have had the experience of eating lunch just outside Temple University’s law school in North Philadelphia with a brilliant law professor who was declaiming upon the absolute necessity of the state provision of police services. He did this just as one of Temple’s uniformed private armed guards passed by us escorting a female student to the Metro stop in this crime-ridden neighborhood that is vastly underserved by the Philadelphia police force.

A wise man once told me that the best way to prove that something is possible is to show that it exists. That is the strategy I shall adopt in this article. I intend to show that a stable, successful society without government can exist by showing that it has, and to a large extent, still does.

II. Defining Terms and Limitations

I am presenting an argument for anarchy in the true sense of the term–that is, a society without government, not a society without governance. There is no such thing as a society without governance. A society with no mechanism for bringing order to human existence is oxymoronic; it is not "society" at all.

One way to bring order to society is to invest some people with the exclusive power to create and coercively enforce rules which all members of society must follow; that is, to create a government. Another way to bring order to society is allow people to follow rules that spontaneously evolve through human interaction with no guiding intelligence and may be enforced by diverse agencies. This article presents an argument for the latter approach; that is, for a spontaneously ordered rather than a centrally planned society.

In arguing for anarchy, I am arguing that a society without a central political authority is not only possible but desirable. That is all I am doing, however. I am not arguing for a society without coercion. I am not arguing for a society that abides by the libertarian non-aggression principle or any other principle of justice. I am not arguing for the morally ideal organization of society. I am not arguing for utopia. What constitutes ideal justice and the perfectly just society is a fascinating philosophical question, but it is one that is irrelevant to the current pursuit. I am arguing only that human beings can live together successfully and prosper in the absence of a centralized coercive authority. To make the case for anarchy, that is all that is required.

An additional limitation on my argument is that I do not address the question of national defense. There are two reasons for this. One is the logical one that a society without government is a society without nations. In this context, "national" defense is a meaningless concept. If you wish, you may see this as an assertion that an argument for anarchy is necessarily an argument for global anarchy. I prefer to see it merely as the recognition that human beings, not nations, need defense. The more significant reason, however, it that the I regard the problem of national defense as trivial for reasons I will expand upon subsequently.1

III. The Question

Whether government is necessary is not an abstract metaphysical question. It is an entirely practical question concerning the delivery of goods and services. The defenders of government argue that certain goods or services that are essential to human life in society can be supplied only by a government. Anarchists deny this. The question, then, is whether there are any essential goods or services that can be supplied only through the conscious actions of human beings invested with the power to enforce rules on all members of society.

Note that the question is not whether the "market" can supply all necessary goods and services, at least not the market as it is usually defined by economists. Some anarchists argue that the free market can supply all necessary goods and services. But the case for anarchy does not require that one assert this claim, and I do not. Anarchy requires, and I argue, only that no essential good or service must be supplied though the conscious actions of the agents of a coercively maintained monopoly. Properly understood, the question is whether there are some essential goods and services that must be provided politically or whether all such goods and services can be provided by non-political means.2

Many political theorists argue that there is a wide array of goods and services that must be provided by the state. In the present context, however, there is no need to consider whether the government must provide postal service, elementary schooling, or universal health insurance. The debate between anarchists and the supporters of a classical liberal, night watchman state concerns the core functions of government. The question thus resolves itself into whether these core functions can be supplied through non-political means.

IV. The Answer

A. Rules of Law

1. Creation

Supporters of government claim that government is necessary to provide the fundamental rules that bring order to human life in society. Without government to create rules of law, they contend, human beings are unable to banish violence and coordinate their actions sufficiently to produce a peaceful and prosperous society, and hence, are doomed to a Hobbesian existence that is "solitary, poor, nasty, brutish, and short."3

The proper response to this is: look around. Those of us residing in the United States or any of the British Commonwealth countries live under an extremely sophisticated and subtle scheme of rules, very few of which were created by government. Since almost none of the rules that bring peace and order to our existence were created by government, little argument should be required to establish that government is not necessary to create such rules. On the contrary, it is precisely the rules that were created by government that tend to undermine peace and order.

The Anglo-American legal system is often referred to as a common law legal system. This is unfortunate, given the anachronistic contemporary understanding of the term "common law." Currently, common law is associated with "judge-made" law. For most of the formative period of the common law, however, judges did not make the law, but merely presided over proceedings where disputes were resolved according to the accepted principles of customary law. Hence, describing the English common law as judge-made law is akin to describing the market as something created by economists.

English common law is, in fact, case-generated law; that is, law that spontaneously evolves from the settlement of actual disputes. Almost all of the law that provides the infrastructure of our contemporary society was created in this way. Tort law, which provides protection against personal injury; property law, which demarcates property rights; contract law, which provides the grounding for exchange; commercial law, which facilitates complex business transactions; and even criminal law, which punishes harmful behavior, all arose through this evolutionary process. It is true that most of our current law exists in the form of statutes. This is because much of the common law has been codified through legislation. But the fact that politicians recognized the wisdom of the common law by enacting it into statutes, hardly proves that government is necessary to create rules of law. Indeed, it proves precisely the opposite.

English law provides a nice illustration of how law evolves when not preempted by government. When people live together in society, disputes inevitably arise. There are only two ways to resolve these disputes; violently or peacefully. Because violence has high costs and produces unpredictable results, human beings naturally seek peaceful alternatives. The most obvious such alternative is negotiation. Hence, in Anglo-Saxon times, the practice arose of holding violent self-redress in abeyance while attempts were made to reach a negotiated settlement. This was done by bringing the dispute before the communal public assembly, the moot, whose members, much like present-day mediators, attempted to facilitate an accommodation that the opposing parties found acceptable. When reached, such accommodations resolved the dispute in a way that preserved the peace of the community.

The virtue of settling disputes in this way was that the moot had an institutional memory. When parties brought a dispute before the moot that was similar to ones that had been resolved in the past, someone would remember the previous efforts at settlement. Accommodations that had failed in the past would not be repeated; those that had succeeded would be. Because the moot was a public forum, the repetition of successful methods of composing disputes gave rise to expectations in the community as to what the moot would recommend in the future, which in turn gave the members of the community advance notice of how they must behave. As the members of the community conformed their behavior to these expectations and took them into consideration in the process of negotiating subsequent accommodations, rules of behavior gradually evolved. This, in turn, allowed for the transformation of the dispute settlement procedure from one dominated by negotiation to one consisting primarily in the application of rules. The repetition of this process over time eventually produced an extensive body of customary law that forms the basis of English common law.4

It is true that, beginning in the late twelfth century, the common law developed in the royal courts, but this does not imply that either the king or his judges made the law. On the contrary, for most of its history, the common law was entirely procedural in nature. Almost all of the issues of concern to the lawyers and judges of the king’s courts related to matters of jurisdiction or pleading; that is, whether the matter was properly before the court, and if it was, whether the issues to be submitted to the jury were properly specified. The rules that were applied were supplied by the customary law. As Harold Berman explains,

[T]he common law of England is usually said to be itself a customary law…. What is meant, no doubt, is that the royal enactments established procedures in the royal courts for the enforcement of rules and principles and standards and concepts that took their meaning from custom and usage. The rules and principles and standards and concepts to be enforced… were derived from informal, unwritten, unenacted norms and patterns of behavior.5

Thus, as late as 1765, Blackstone identified the common law with "general customs; which are the universal rule of the whole kingdom, and form the common law, in its stricter and more usual signification."6 Indeed, modern commercial law is derived almost entirely from the customary law merchant that Lord Mansfield engrafted onto the common law wholesale in the eighteenth century.7

The interesting thing about the common law process is that it creates law only where it is actually needed to allow human beings to live together peacefully. Consider the torts of assault and battery. Battery forbids one from intentionally making "harmful or offensive contact" with another. This prohibits not only direct blows, but snatching a plate out of someone’s hand or blowing smoke in his or her face. Assault forbids one from intentionally causing another to fear he or she is about to be battered, but it does not prohibit attempts at battery of which the victim is unaware or threats to batter someone in the future. These torts protect individuals against not only physically harmful contact, but against all offensive physical contact as well as the fear that such contact will be immediately forthcoming.

When I teach Torts, I ask the students to account for these rules. Being products of the legislative age, they inevitably launch into some theory of justice or moral desert or human rights, which invariably fails to account for the contours of the law. After all, attempting to batter someone is morally blameworthy whether or not the intended victim is aware of it, and one hardly has the right not to be offended.

The students fail because they think of the law as created by conscious human agency to serve an intended end. Thus, they miss the simpler evolutionary explanation. In earlier centuries, one of the most urgent social needs was to reduce the level of violence in society. This meant discouraging people from taking the kind of actions that were likely to provoke an immediate violent response. Quite naturally, then, when disputes arising out of violent clashes were settled, the resolutions tended to penalize those who had taken such actions. But what type of actions are these? Direct physical attacks on one’s person are obviously included. But affronts to one’s dignity or other attacks on one’s honor are equally if not more likely to provoke violence. Hence, the law of battery evolved to forbid not merely harmful contacts, but offensive ones as well. Furthermore, an attack that failed was just as likely to provoke violence as one that succeeded, and thus gave rise to liability. But if the intended victim was not aware of the attack, it could not provoke a violent response, and if the threat was not immediate, the threatened party had time to escape, enlist the aid of others, or otherwise respond in a nonviolent manner. Hence, the law of assault evolved to forbid only threats of immediate battery of which the target was aware.

This example shows how the common law creates the rules necessary for a peaceful society with minimal infringement upon individual freedom. Law that arises from the settlement of actual conflicts, settles conflicts. It does not create a mechanism for social control. Common law is law that is created by non-political forces. As such, it can give us rules that establish property rights, ground the power to make contracts, and create the duty to exercise reasonable care not to injure our fellows, but not those that impose a state religion, segregate races, prohibit consensual sexual activity, or force people to sell their homes to developers. Only government legislation, which is law that is consciously created by whatever constitutes the politically dominant interest, can give us rules that restrict the freedom of some to advance the interests or personal beliefs of others.

The unenacted common law provides us with rules that facilitate peace and cooperative activities. Government legislation provides us with rules that facilitate the exploitation of the politically powerless by the politically dominant. The former bring order to society; the latter tend to produce strife. Hence, not only is government not necessary to create the basic rules of social order, it is precisely the rules that the government does create that tend to undermine that order.

2. Uniformity

Supporters of government claim that government is necessary to ensure that there is one law for all and that the law applies equally to all citizens. If the government does not make the law, they contend, there would be no uniform code of laws. People in different locations or with different cultural backgrounds or levels of wealth would be subject to different rules of law.

The proper response to this is probably the one Woody Allen made to Diane Keeton in Annie Hall when she complained that her apartment had bad plumbing and bugs, which was: "You say that as though it is a negative thing." How persuasive is the following argument? Government is necessary to ensure that there is one style of dress for all and that all citizens are equally clothed. If the government does not provide clothes, there would be no uniform mode of dress. People in different locations or with different cultural backgrounds or levels of wealth would be clothed in garments of different styles and quality.

Why would anyone think that uniformity in law is any more desirable than uniformity in dress? The quest for uniformity leads us to treat the loving husband who kills his terminally ill wife to relieve her suffering the same way we treat Charles Manson, to apply the same rules of contracting to sophisticated business executives purchasing corporations and semi-literate consumers entering into installment contracts, and to act as though the slum lord in the Bronx and the family letting their spare room in Utica should be governed by the same rules of property law.

There are, of course, certain rules that must apply to all people; those that provide the basic conditions that make cooperative behavior possible. Thus, rules prohibiting murder, assault, theft, and other forms of coercion must be equally binding on all members of a society. But we hardly need government to ensure that this is the case. These rules always evolve first in any community; you would not even have a community if this were not the case.

The idea that we need government to ensure a uniform rule of law is especially crazy in the United States, in which the federal structure of the state and national governments is designed to permit legal diversity. To the extent that the law of the United States can claim any superiority to that produced by other nations, it is at least partially due the fact that it was generated by the common law process in the "laboratory of the states."8 Allowing the development of different rules in different states teaches us which rules most effectively resolve disputes. To the extent that the conditions that give rise to disputes are the same across the country, the successful rules tend to be copied by other jurisdictions and spread. This creates a fairly uniform body of law.9 To the extent that the conditions that give rise to disputes are peculiar to a particular location or milieu, they do not spread. This creates a patchwork of rules that are useful where applied, but would be irrelevant or disruptive if applied in other settings.

One of the beauties of the common law process is that it creates a body of law that is uniform where uniformity is useful and diverse where it is not. This is the optimal outcome. Government legislation, in contrast, creates uniformity by imposing ill-fitting, one-size-fits-all rules upon a geographically and ethnically diverse population. Once again, not only is government not necessary to the creation of a well-functioning body of law, it is a significant impediment to it. Please consider this the next time you find yourself wondering why all businesses must be closed on Sunday in the Orthodox Jewish sections of Brooklyn.

3. Accessibility

Supporters of government claim that government must make the law in order for it to be accessible to the citizens to be governed by it. The government promulgates its legislation in statute books that are available to all citizens. The unenacted rules of common law, they claim, are unintelligible to the lay person. Consisting of rules abstracted from cases over long periods of time, the common law is known only to the judges and lawyers who deal with it as part of their profession. A system of law that requires citizens to hire attorneys merely to find out what the law is is obviously unacceptable.

The proper response to this is: Are you serious? Look around. Please! Can any human being possibly be aware of the myriad of arcane government regulations to which he or she is subject? Have you ever seen the Code of Federal Regulations? When was the last time you tried to prepare your income tax return? Critics of the common law contend that lay people would need professionals to tell them what the law is. Yet, year after year, studies demonstrate that even most professional tax preparers and IRS employees cannot understand what the United States tax code requires. The common law rule that protects citizens against unintentional injury is the requirement to exercise the degree of care a reasonable person would employ to avoid causing harm to others. This is hardly inaccessible. Does anyone know what all the rules are that the Federal Trade Commission, the Consumer Product Safety Commission, and the National Highway Traffic Safety Administration have issued to accomplish the same end?

The common law consists of rules that have proven over time to be successful in resolving disputes. Only rules that are both intelligible to the ordinary person and correspond to the ordinary person’s sense of fairness can achieve this status. Rules which are inaccessible to those to be governed by them cannot be effective. This is why, for example, the common law rules of contract and commercial law specifically incorporate references to customary business practice and the duty to act in good faith. It is also why no legal expertise is required to know that the law of self-defense permits one to use deadly force to repel a life-threatening attack, but not to shoot the aggressor after the immediate danger has passed. Understanding the traditional rules of common law requires only that one be a member of the relevant community to which the rules apply, not that one be an attorney.

Government legislation, in contrast, need have no relationship to either the understanding or the moral sensibility of the ordinary person. Legislation is law created through the political process. As such, it is inherently responsive to political considerations. Such considerations can, and frequently do, produce rules that are not intelligible to the ordinary person. This is not merely because special interests can skew the legislative process. Even if legislators were selflessly devoted to the common good, they would still need some principle of justice or moral ideal to guide their law-making. But there is no guarantee that the measures necessary to effectuate such principles or ideals will correspond to the understanding of the ordinary person. The Civil Rights Act of 1964 may have been the noblest legislative effort of our age, but the ordinary person is unlikely to understand why requiring pizza delivery men to be clean shaven constitutes illegal racial discrimination10 or how a company with a work force consisting of almost all minorities can nevertheless be guilty of discrimination.11

Fraud, as it evolved at common law, consists of intentionally misrepresenting a material fact that another relies upon in parting with his or her property. It is not difficult for the ordinary person to appreciate that such action may be against the law. Fraud, as defined by federal legislation, consists of any scheme or artifice to defraud. It does not require a misrepresentation of fact. Any misleading statement or non-disclosure will do. It does not require that anyone actually be misled or rely on the statement or non-disclosure. It does not require that anyone suffer any loss.12 Martha Stewart was recently put on trial for securities fraud for the act of publicly declaring her innocence of insider trading.13 It is probably fair to say that the ordinary person would not know that Stewart’s comments to the media constituted a federal crime.

I understand the argument that if we had a night watchman state whose legislation was limited to simple, clear rules that are designed to secure individual rights, the law would be perfectly accessible. There are only two problems with this argument. The first is that in such a case, the legislation would merely reproduce the basic rules of common law. There is no need to create a government merely to publicize such rules. This can be, and is, done privately. The "restatements" of the common law are currently privately produced, easily accessible, and widely cited. The second is that it is impossible. The idea that there is a concise set of simple, clear rules that can preserve a peaceful, free society is a fantasy.14 This becomes apparent even with regard to the fundamental rules barring aggression as soon as one attempts to specify the conditions under which force may be used in self-defense or for the defense of others, or is excused by mistaken belief or insanity. And that is without considering that these fundamental rules must be supplemented by the rules of contract, property, and tort law that are necessary for people to coordinate their behavior well enough to engage in peaceful cooperation.

Legislation, even libertarian legislation, will either reproduce the common law or depart from it to gratify a political interest or realize some conception of justice. In the former case, it is precisely as accessible or inaccessible as the common law. In the latter, it will diverge from the common sense morality of the ordinary person, producing rules that are less accessible than the common law. Not only is government not necessary to ensure that the rules of law are accessible, it inevitably renders them less so.

B. Courts

Now that we have eliminated the legislature, what about the judiciary? Supporters of government claim that government is necessary to provide a system of courts for settling disputes. In the absence of the government provision of "a known and indifferent judge,"15 human beings would have no way to peacefully resolve interpersonal disputes. For "men being partial to themselves,"16 adverse parties would inevitably seek to employ judges who would favor their interests; and judges, who would receive their fees from the litigants, would naturally favor those who could pay the most. Hence, they would not be impartial. Because parties would be unable to agree on a neutral arbiter, they would be forced to resort to violence to resolve their disputes. Thus, without government courts, peaceful coexistence is impossible.

I know this is getting boring, but the proper response to this is: look around. This is the age of globalization. Business is contracted around the world among parties from virtually all countries. Although there is neither a world government nor world court, businesses do not go to war with each other over contract disputes. News is almost always the news of violent conflict. The very lack of reporting on international business disputes is evidence that international commercial disputes are effectively resolved without the government provision of courts. How can this be?

The answer is simplicity itself. The parties to international transactions select, usually in advance, the dispute settlement mechanism they prefer from among the many options available to them. Few choose trial by combat. It is too expensive and unpredictable. Many elect to submit their disputes to the London Commercial Court, a British court known for the commercial expertise of its judges and its speedy resolution of cases that non-British parties may use for a fee.17 Others subscribe to companies such as JAMS/Endispute or the American Arbitration Association that provide mediation and arbitration services. Most do whatever they can to avoid becoming enmeshed in the coils of the courts provided by the federal and state governments of the United States, which move at a glacial pace and provide relatively unpredictable results. The evidence suggests that international commercial law not only functions quite well without government courts, it functions better because of their absence.

But there is no need to focus on the international scene to observe that human beings do not need government courts to settle disputes peacefully. Labor contracts not only specify wage rates and working conditions; they create their own workplace judiciary, complete with due process guarantees and appellate procedures. Universities regularly provide their own judicial processes, as do homeowner associations. Stockbrokers agree to submit employment disputes to binding arbitration as a condition of employment.18 Religious groups regularly settle disputes among congregants by appeal to priest or rabbi. Disfavored groups, for whom prejudice makes trial in government courts a mockery, readily devise alternative mechanisms for settling disputes without violence.19 Insurance companies provide not only compensation for personal injury and property damage, but liability insurance, by which they assume the responsibility of resolving conflicts between their clients and those of other insurance companies according to antecedently specified agreements that allow them to avoid the morass of the government judicial system. And empirical evidence demonstrates that when potential litigants in the government court system are directed into mediation, a significant portion of the lawsuits are resolved without trial.20

But don’t just look around. Look back. Tax supported courts of general jurisdiction are an entirely modern phenomenon. Anglo-American law evolved in the context of a richly diverse set of competing jurisdictions. The royal courts, once they developed, existed in parallel with the antecedently extant hundred, shire, manorial, urban, ecclesiastical, and mercantile courts.21 These court systems had fluid jurisdictional boundaries, and because the courts collected their fees from the litigants, they competed with each other for business. Indeed, the law of contracts and trusts, which evolved in the ecclesiastical courts, and commercial law, which evolved in the mercantile courts, entered the common law as a result of this competition. Further, the royal courts themselves consisted of four different and competing courts: king’s bench, common pleas, exchequer, and chancery. These courts, like the others, collected their fees from the litigants, and hence, competed among themselves for clients. It was only with the Judicature Act of 1873 and 18 the Appellate Jurisdiction Act of 1876 that the British government assembled its courts into its present monolithic, hierarchical structure, with American courts following suit at varying intervals thereafter.

Further, focusing on the competition among the common law courts misleadingly underestimates the diversity of the dispute settlement mechanisms that were actually employed. Because the cost of utilizing the common law courts was too great for the typical working man, those courts were virtually irrelevant to the majority of the population. Most citizens resolved their disputes according to informal, customary procedures that varied with the location (urban or rural) and class of those employing them.22

Since our present relatively non-violent, capitalistic society evolved in the context of a diverse and competitive system of courts and dispute settlement mechanisms, it cannot be the case that government provision of courts is necessary for peaceful settlement of disputes. In fact, a comparison of the amount of rancorous dissatisfaction produced by the contemporary government-supplied judiciary (consider the tort reform movement) with that associated with the more variegated traditional system of resolving disputes suggests that the government provision of courts reduces rather than augments social peace.

C. Police

Regardless of whether a state is needed to supply law and courts, supporters of government are adamant that police must be supplied exclusively by government. It may be true that the market can adequately supply most goods and services, but police services are unique in that they inherently involve the use of coercion. Obviously, no civilized society can permit competition in the use of violence. Civil society is formed precisely to escape from that situation. Unless government brings the use of violence under its monopolistic control, peaceful coexistence is impossible, and life is indeed as "nasty, brutish, and short"23 as Hobbes contended.

Before I respond to this by suggesting that you look around, reflect for a moment on the silliness of this argument. For if civil society cannot exist without a government monopoly over the use of coercion, then civil society does not exist. Societies do not spring into existence complete with government police forces. Once a group of people has figured out how to reduce the level of interpersonal violence sufficiently to allow them to live together, entities that are recognizable as governments often develop and take over the policing function. Even a marauding band that imposes government on others through conquest must have first reduced internal strife sufficiently to allow it to organize itself for effective military operations. Both historically and logically, it is always peaceful coexistence first, government services second. If civil society is impossible without government police, then there are no civil societies.

In the 1960’s Broadway musical Oliver, there is a song called "Be Back Soon" in which Fagan’s boys sing the line "We know the Bow Street Runners." The Bow Street Runners were famous because they were London’s first government sponsored police force, organized in the latter half of the 18th century by the magistrates of the Bow Street court, Henry and John Fielding. I think it is fair to say that the formation of the Bow Street Runners does not represent the moment that London was transformed from a Hobbesian state of nature to a civil society.

Note also the conflation of police services with coercion. Coercion may be employed aggressively for purposes of predation or defensively to repel attempts at predation. Police services involve the use of coercion for defensive purposes only. Competition among aggressors is, indeed, a bad thing that is antithetical to the existence of civil society. But it is not competition for the provision of police services. If competition among those offering the defensive use of coercion inevitably resulted in the equivalent of aggressive gang warfare, then we would want to eschew such competition. But whether this occurs is the very question under consideration. Identifying competition among providers of police services with competition among aggressors is entirely question-begging. It is avoiding, rather than making, an argument.

But I digress. The proper response to the claim that government must provide police services is: look around. I work at a University that supplies its own campus police force. On my drive in, I pass a privately operated armored car that transports currency and other valuable items for banks and businesses. When I go downtown, I enter buildings that are serviced by private security companies that require me to sign in before entering. I shop at malls and department stores patrolled by their own private guards. While in the mall, I occasionally browse in the Security Zone store that sells personal and home protection equipment. I converse with attorneys and, once in a while with a disgruntled spouse or worried parent, who employ private detective agencies to perform investigations for them. I write books about how the United States Federal government coerces private corporations into performing criminal investigations for it.24 When I was younger, I frequented nightclubs and bars that employed "bouncers." Although it has never happened to me personally, I know people who have been contacted by private debt collection agencies or have been visited by repo men. Once in a while, I meet people who are almost as important as rock stars and travel with their own bodyguards. At the end of the day, I return home to my community that has its own neighborhood watch. I may be missing something, but I haven’t noticed any of these agencies engaging in acts of violent aggression to eliminate their competitors.

Ah, but that is because the government police force is in the background making sure that none of these private agencies step out of line, the supporters of government contend. Really? How does that explain London before the Bow Street Runners? The New York City police force was not created until 1845. The Boston Police Department, which describes itself as "the first paid, professional public safety department in the country"25 traces its history back only to 1838. What kept the non-political police services in line before these dates?

Regardless of Hobbes’ and Locke’s philosophical musings, for most of English history, there was little government provision of police services.26 It is true that as the kings of England learned how to collect revenue by declaring all violence and sinful activity a breach of the King’s peace for which they were owed payment, they began to develop an administrative machinery to facilitate the collection of fines for "criminal" activity. Thus, the local representative of the Crown, the shire reeve (later sheriff), became tasked with reporting and eventually apprehending offenders. But since the sheriffs were only interested in pursuing offenders with the means to pay the amercement, this never represented a significant portion of the police activity within the realm. The customary, non-political methods of policing provided security for most of the population of England until quite recently.

My father’s oldest brother, who was born in 1902, often told me about the tontine insurance arrangement my grandfather participated in through his fraternal organization that provided both term life insurance and an old age annuity. Since the advent of the federal social security program, you don’t hear much about tontine insurance. Most residents of New York, who assume that only the government can provide and maintain the city’s subway system, are puzzled as to why part of the system is named the BMT and part the IRT. They have no idea that in 1940, the City of New York purchased the privately built and operated Brooklyn-Manhattan Transit Corporation and the Interborough Rapid Transit Company to create the city-run Metropolitan Transportation Authority. When government begins providing services formerly provided non-politically, people soon forget that the services were ever provided non-politically and assume that only government can provide them. But just as this is not true for old age annuities and subway service, it is not true for police services. Traditionally, police services were not provided by government and, to a large extent, they still are not. Therefore, government is not necessary to provide police services.

Advocates of government can still argue that because of the special nature of police services, a government monopoly can provide such services more efficiently than non-political entities can. I must concede that there is nothing a priori wrong with this argument. It is certainly possible that when it comes to police services, a miracle occurs and investing a single politically-directed agency with the power to supply the desired services by exacting involuntary payment from all members of society actually produces a better result than allowing the services to be supplied by non-political means. I can, however, find no evidence for this in the real world. To all outward appearances, when police services are supplied by a politically-controlled monopoly, the public receives police services driven by political, rather than efficiency, considerations. Thus, disfavored, politically powerless groups are typically underserved, police resources are frequently directed toward politically favored ends (e.g., suppression of victimless crimes) rather than their most productive use (e.g., suppression of violence), and the nature of the service is determined by political budgetary concerns rather than actual need (e.g., SWAT teams in Wisconsin). Further, because government police are not dependant on voluntary contributions for their revenue, they are less likely to be responsive to the concerns of the public (e.g., police brutality) and more susceptible to corruption (see e.g., the Knapp Commission Report27 or just watch the movie Serpico).

Supporters of government often point to the high inner-city crime rate, the profusion of violent gangs, and the persistence of organized crime and drug cartels to argue that we dare not abandon the government monopoly on police services. I confess to being perplexed by this argument. How can highlighting the utter failure of the government system of policing possibly be an argument for its necessity?

It is worth noting that the contemporary crime problem is most severe where non-political methods of policing have been most completely displaced by government. The inner cities are the areas most dependant on government policing. Arguing that the high rate of inner-city crime and the presence of gangs implies that we must maintain a government monopoly on police services is a bit like arguing that the abysmal quality of inner-city public schools implies that we should not permit parents to use their tax money to send their children to private schools. And it can hardly be surprising that it is difficult to suppress the violent organizations that exist to exploit the black markets created by government prohibitions on the legal marketing of drugs, prostitution, gambling, and other "vices." But how any of this demonstrates the necessity of government provision of police is beyond me.

If a visitor from Mars were asked to identify the least effective method for securing individuals’ persons and property, he might well respond that it would be to select one group of people, give them guns, require all members of society to pay them regardless of the quality of service they render, and invest them with the discretion to employ resources and determine law enforcement priorities however they see fit subject only to the whims of their political paymasters. If asked why he thought that, he might simply point to the Los Angeles or New Orleans or any other big city police department. Are government police really necessary for a peaceful, secure society? Look around. Could a non-political, non-monopolistic system of supplying police services really do worse than its government-supplied counterpart?

D. Internalizing Externalities

Supporters of government often argue that government is essential to provide needed regulation of market activities. Individuals contracting with each other in a market often act in ways that impose harm or unconsented to costs on others. Manufacturers make and consumers purchase products whose use imposes an unacceptable risk of injury on third parties. For example, automobile companies can produce and drivers will purchase cars that can move at speeds or have handling properties that create an unreasonable risk of injury to pedestrians. Oil companies can ship oil to consumers in ways that create an unreasonable risk of spills that would pollute the land or body of water over which the oil is transported. More generally, because people do not bear the costs their activities impose on others, they will often act in ways that impose greater costs on society than are justified by the personal benefits they realize. These unconsidered costs to others are the social costs of market activity; what economists call negative externalities. Supporters of government contend that only government can regulate market activity to ensure that private contractors consider the social costs of their transaction. Thus, even if rules of law, courts, and police services could be supplied non-politically, government would nevertheless be essential to internalize externalities.

I must confess that I am at a loss as to how to respond to this argument. Look around is not enough. That this argument has any plausibility at all is a testament to how completely oblivious people can be to the world around them. In a world in which one of the dominant political issues is tort reform; in which businesses are continually complaining to Congress that they are over-regulated by the common law of tort and begging government to protect them from this non-political method of internalizing externalizes, how can anyone seriously assert that government regulation is needed to deal with the problem of social costs?

It is true that economists posit a fictitious realm in which human beings engage in voluntary transactions free of all forms of regulation. But they do so because such an idealized conception of the market is useful to their exploration of the science of human interaction in much the same way that the concept of a perfect vacuum is useful to physicists exploring the laws of nature; not because they think it corresponds to anything in reality. In the real world, human interaction is always subject to regulation; by custom, by people’s ethical and religious beliefs, and, in our legal system, by the common law. Tort law is precisely that portion of the law that evolved to protect individuals’ persons and property from the ill-considered actions of their fellows, that is, to internalize externalities. It is only by ignoring the existence of these forms of non-political regulation, that is, only by believing that the economists’ model of the market is a description of reality, that one could possibly believe that government is necessary to address the problem of social costs. Of course, one should never underestimate the power of a conceptual model to blind intellectuals to what is going on in the real world.

But, supporters of government claim, common law can never be an adequate regulatory mechanism because it is necessarily retroactive in operation. Lawsuits arise only after harm is done. Therefore, civil liability could never provide the type of proactive regulation necessary to prevent serious harm from occurring. Really? The basic rules of tort law prohibit individuals from intentionally harming others and require them to act with reasonable care to avoid causing harm inadvertently. There is nothing retroactive about this. It is true that precisely what constitutes reasonable care may have to be determined on a case by case basis, but in this respect, the common law is no different than government legislation that announces a general rule and then leaves it up to the courts to determine how it applies in particular cases. Furthermore, the common law can act prospectively in appropriate cases. The injunction, an order not to engage in a specified activity, evolved precisely to handle those cases in which one party’s conduct poses a high risk of irreparable harm to others.28 And by the way, government legislation is almost always retroactive as well. Limitations on human knowledge (not to mention public choice considerations) mean that legislators are rarely able to accurately anticipate future harm. Megan’s law required public notification when a known sex offender moves into a community. It is called Megan’s law because it was enacted after Megan was killed by a repeat sex offender who lived in her community. If I remember correctly, Sarbanes-Oxley was passed after Enron collapsed. And when was the USA Patriot Act passed? Oh, yes, after 9/11.

Until 1992, fast food restaurants served coffee at between 180 and 190 °F, a temperature at which the coffee can cause third degree burns in two to seven seconds if brought into contact with human skin. This posed a considerable risk of serious injury, given how often coffee served in styrofoam cups is spilled. I did not notice any proactive legislative regulation designed to internalize this externality. In 1992, Stella Liebeck won a judgment against McDonald’s for injuries received when she spilled coffee on herself equal to her medical expenses plus the amount of profit McDonald’s earned in two days from knowingly selling coffee at a dangerously high temperature.29 The next day every fast food restaurant in the United States served its coffee at 158 °F, a temperature at which it takes 60 seconds to cause third degree burns; a sufficient amount of time for customers to brush the coffee off their clothes or skin. There may be many things wrong with contemporary tort law,30 but being ineffective at internalizing externalities is most assuredly not among them. The only way to believe that government is necessary to resolve the problem of social costs is to be studiously blind to the nature of both common law and government legislation.

E. Public Goods

Supporters of government claim that government is necessary to produce "public goods;" goods that are important for human well-being but either cannot be produced or will be under-produced by the market. Public goods are goods that are both non-rivalrous in consumption; that is, its use by one person does not interfere with its use by others, and nonexclusive; that is, if the good is available to one person, it is available to all whether they help produce it or not. Supporters of government argue that such goods cannot be produced without government because, due to the free rider and assurance problems, individuals will not voluntarily contribute the capital necessary for their production. The free rider problem refers to the fact that because people can enjoy public goods without paying for them, many will withhold their contribution to the goods’ production and attempt to free ride on the contribution of others. The assurance problem refers to the fact that in the absence of some assurance that others will contribute enough to produce the good, people are more likely to regard their own contribution as a waste of money and withhold it. Therefore, government is necessary to ensure the production of important public goods.

The proper response to the argument that government is necessary to produce public goods is: Like what? Like lighthouses? The light they provide is available to all ships and its use by one does not impair its value to others. But wait, lighthouses can be and have been supplied privately.31 Like radio and television? A wag I know likes to say that he does something impossible every night by watching commercial television. After all, television signals are non-rivalrous in consumption and nonexclusive. Therefore, they cannot be produced by the market. Like the internet? But wait, that is privately funded also.

Perhaps like police and courts? Theorists frequently argue that police services and courts are public goods that must be supplied by government. With regard to police services, for example, the argument is made that:

Security of person is to a large degree a collective good…. [A]n important part of the service provided by public police and systems of criminal justice generally is to deter potential violators from harming people. And this deterrence is an indivisible nonexcludable good to neighbors and visitors…. In addition to deterrence, there may be the benefits that follow from incarceration of the thief–namely, incapacitation–benefits that are also indivisible and nonexcludable.

Social order, at least security of persons and possessions, then, is to a considerable degree a collective good. Accordingly, to the degree that this is the case, social order may not be efficiently provided in the absence of a state.32

Similarly, with regard to courts, it is argued that because the existence of definite and widely- known rules of behavior provides a nonexcludable benefit to all, private courts lack an incentive to establish the clear precedents that give rise to rules. Indeed, because clear precedents "would confer an external, an uncompensated benefit, not only on future parties, but also on competing judges,… judges might deliberately avoid explaining their results because the demand for their services would be reduced by rules that, by clarifying the meaning of the law, reduce the incidence of disputes."33 Hence, government courts are necessary for the development of rules of law.

These are perfectly logical theoretical arguments belied only by the facts of reality. The evidence that police services and courts are not public goods is that, like lighthouses, television, and the internet, they have been supplied non-politically for most of human history. It is true, of course, that if government exists and creates areas of unowned, politically-controlled, property that no private party has an interest in maintaining, police services are likely to be under-produced in these locations. Policing of this "public" property may indeed have to be supplied by the government. However, this is not because police services are a public good that cannot be supplied by the market, but because police services will not be supplied when the market has been suppressed by the government. And although it is certainly true that private police services produce an uncompensated positive externality in that their deterrent effects make even those who have not paid for them more secure, this can hardly be a reason for believing that such services will not be produced. It is actually quite difficult to think of any useful activity that does not produce some uncompensated positive externality. My using deodorant and going about clothed certainly do, but government is not required to pay me to induce me to bathe and dress. Further, it is at least odd to argue that a system of competitive courts will not produce rules of law in a common law legal system in which the rules on which our civilization rests actually arose out of just such a system.34

Like national defense? National defense is perhaps the archetypical public good. The security it provides is both non-rivalrous in consumption and benefits all members of society whether they pay for it or not. Can national defense be adequately supplied without government?

If ‘national defense’ refers to the type of military expenditures associated with contemporary national governments, the answer is an obvious ‘no.’ Once a state becomes invested with the power to expropriate the wealth of its citizenry to provide for national defense, almost any desired expenditure begins to look like a requirement for national defense. Before long propping up Southeast Asian dictators and overthrowing Middle Eastern ones are being characterized as urgent national defense concerns. The fact that there is no non-governmental way to raise sufficient capital to realize this conception of national defense proves nothing about the viability of anarchy, and, in fact, serves as one more argument in favor of markets.

However, if ‘national defense’ refers to only what is strictly necessary to protect the citizens of a nation against outside aggression, I am willing to admit that I do not know the answer to this question. I am not discomforted by this admission, however, because as I said at the outset, the question of national defense is, as a practical matter, a trivial one. No one believes that we can transition from a world of states to anarchy instantaneously. No reasonable anarchist advocates the total dissolution of government tomorrow. Once we turn our attention to the question of how to move incrementally from government to anarchy, it becomes apparent that national defense would be one of the last governmental functions to be de-politicized. If my argument for anarchy is flawed and anarchy is not a viable method of social organization, this will undoubtedly be revealed long before doing away with national defense becomes an issue. On the other hand, to the extent that the gradual transition from government to anarchy is successful, the need for national defense continually lessens.

Consider what it would mean for a nation to seriously undertake a process of de-politicization. Every reduction in the size and scope of government releases more of the creative energy of the population. The economic effects of this are well-known and are currently being demonstrated in China. As economists point out, revolutionary change can be wrought by marginal effects. Even a slow process of liberalization that is sustained over time will produce massively accelerated economic and technological growth. And the increase in freedom and prosperity in this nation would have profound external effects as well. Many of the bravest and most industrious residents of more repressive nations would attempt to immigrate to the liberalizing one, and some other nations would learn by the liberalizing nation’s example and begin to copy its policies.

As the economic and technological gap between the liberalizing nation and the rest of world widens, as the rest of the world becomes more dependent upon the goods and services manufactured and supplied by that nation, and as a greater number of other nations are moved to adopt liberalizing policies themselves, the threat the rest of the world poses to the liberalizing nation decreases. Evidence of this is supplied by the demise of the Soviet Union. Radical regimes and terrorist organizations may constitute a serious and continuing threat, but consider it in historical context. Such a threat is considerably less serious and less expensive to address than the threat of thermonuclear war.

Recall that we are considering the cost only of protecting citizens against aggression, not the cost of foreign adventures or "pre-emptive" warfare. How significant a threat of foreign invasion does the United States currently face? How much of its "national defense" spending is actually devoted to preventing such invasion? After years or decades of continual and sustained reduction in the size of government, how much wider will the economic and technological gap between the prenatal anarchy and the more repressive nations be? How much more sophisticated its defensive technology? How much more dependent will the repressive nations be on its goods and services? Let a nation begin to tread the path toward anarchy and by the time the question of whether national defense is a public good that must be supplied by government becomes relevant, it is very likely to be moot.

V. Conclusion

Aristotle called man the rational animal, identifying human beings’ ability to reason as their essential defining characteristic. I think this is a mistake. I think man is the imaginative animal. Human beings undoubtedly have the ability to reason, but they also have the ability to imagine that the world is different than it is, and the latter is a far more powerful force. People root for the Chicago Cubs because they can imagine the Cubs winning the World Series, despite all evidence to the contrary. People regularly get married because they can imagine that they will change their obviously incompatible partner into the ideal husband or wife. People devote their time, effort, and money to political campaigns because they can imagine that if only Bill Clinton or Bob Dole or George W. Bush or John Kerry were elected, Washington, DC would be transformed into Camelot. And more significantly, people volunteer to fight wars because they can imagine themselves running through a field of machine gun fire unscathed. Only the ability to imagine an afterlife for which they have absolutely no evidence can explain why human beings would strap explosives to themselves and blow themselves up in an effort to kill as many innocent people as possible.

Do you ever wonder why people believed in the divine right of kings, despite the fact that the monarchs of their time were patently not the type of individuals an all-knowing, all-good god would choose to reign over them? They believed in it because they were taught to believe in it and because they could imagine that it was so, regardless of all evidence to the contrary. We no longer believe in such silly things as the divine right of kings. We believe that government is necessary for an orderly peaceful society and that it can be made to function according to the rule of law. We believe this because we have been taught to believe it from infancy and because we can imagine that it is so, regardless of all contrary evidence.

One should never underestimate the power of abstract concepts to shape how human beings see the world. Once one accepts the idea that government is necessary for peace and order and that it can function objectively, one’s imagination will allow one to see the hand of government wherever there is law, police, and courts and render the non-political provision of these services invisible. But if you lay aside this conceptual framework long enough to ask where these services originated and where, to a large extent, they still come from, the world assumes a different aspect. If you want the strongest argument for anarchy, simply remove your self-imposed blinders and look around.


*Associate Professor, Georgetown University, J.D., Ph.D, LL.M. The author wishes to thank Ann C. Tunstall of SciLucent, LLC for her insightful comments and literary advice and Annette Hasnas of the Montessori School of Northern Virginia for a real world illustration of how rules evolve in tha absence of centralized authority. The author also wishes to thank Ava Hasnas of Falls Church, Virginia for her invaluable help with his time management skills.

1. See infra §III(E).

2. In this article, the term "political" will be used to refer to the output of government, and "non-political" to the product of all other forms of action.

3. T. HOBBES, LEVIATHAN 107 (H. Schneider ed., 1958) (1651).

4. For a fuller account of this process, see John Hasnas, Toward a Theory of Empirical Natural Rights, 22 SOCIAL PHILOSOPHY AND POLICY 111 (2005) and John Hasnas, Hayek, the Common Law, and Fluid Drive, 1 NEW YORK UNIVERSITY JOURNAL OF LAW & LIBERTY 79 (2005). See also ARTHUR R. HOGUE, ORIGINS OF THE COMMON LAW , ch.8 (1966).

5. HAROLD BERMAN , LAW AND REVOLUTION 81 (1983).

6. 1 WILLIAM BLACKSTONE, COMMENTARIES ON THE LAWS OF ENGLAND 67 (1765). See also FREDERICK POLLOCK, FIRST BOOK OF JURISPRUDENCE 254 (6th ed. 1929) ("[T]he common law is a customary law if, in the course of about six centuries, the undoubting belief and uniform language of everybody who had occasion to consider the matter were able to make it so.").

7. See LEON E. TRAKMAN , THE LAW MERCHANT: THE EVOLUTION OF COMMERCIAL LAW 27 (1983). The story of the evolution of modern commercial law from the customary law merchant is an often told tale. In addition to Trakman’s account, see also HAROLD BERMAN , LAW AND REVOLUTION ch.11 (1983), BRUCE BENSON , THE ENTERPRISE OF LAW 30-35 (1990), and John Hasnas, Toward a Theory of Empirical Natural Rights, 22 SOCIAL PHILOSOPHY AND POLICY 111, 130-31 (2005).

For a useful account of the customary nature of the English common law see, Todd Zywicki, The Rise and Fall of Efficiency in the Common Law: A Supply-Side Analysis, 97 NW. U. L. REV. 1551 (2003). See also J.H. BAKER , AN INTRODUCTION TO ENGLISH LEGAL HISTORY 72-74 (4th ed. 2002) and John Hasnas, Hayek, Common Law, and Fluid Drive, 1 N.Y.U. JOURNAL OF LAW & LIBERTY 79 (2005).

8. See New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).

9. Fairly, but not fetishistically. The law against homicide functions quite effectively despite the fact that the definitions of first and second degree murder and voluntary and involuntary manslaughter differ from state to state.

10. See Bradley v. Pizzaco of Nebraska, Inc., 7 F.3d 795 (8th Cir. 1993).

11. See Connecticut v. Teal 457 U.S. 440 (1982).

12. For a fuller account of the federal fraud statutes, see John Hasnas, Ethics and the Problem of White Collar Crime, 54 AMERICAN UNIVERSITY LAW REVIEW 579 (2005).

13. See Indictment, United States v. Stewart, 37 (S.D.N.Y. 2003) (No. 03 Cr. 717).

14. For more on this, see John Hasnas, The Myth of the Rule of Law, 1995 WISCONSIN LAW REVIEW 199 (1995).

15. John Locke, Second Treatise of Government, edited by C.B. Macpherson (Indianapolis, Indiana: Hackett Pub. Co., 1980) (1690), p. 66.

16. Id.

17. See Mary Heaney, Where Business is King: London’ Commercial Court Hears International Clashes, NAT’L L.J., June 5, 1995 , at C1; Campbell McLachlan, London Court Reigns as an International Forum: Parties in Cross-Border Disputes Welcome the Commercial Court’s Expertise, Neutrality, and Speed, NAT’L L.J., June 5, 1995 at C4.

18. Of course, this is mainly a measure designed to allow financial firms to escape from the quagmire of United States employment litigation.

19. See Yaffa Eliach, Social Protest in the Synagogue: the Delaying of the Torah Reading, in THERE ONCE WAS A WORLD 84-86.

20. See Joshua D. Rosenberg & H. Jay Folberg, Alternative Dispute Resolution: an Empirical Analysis, 46 STAN. L. REW. 1487 (1994).

21. See HAROLD BERMAN , LAW AND REVOLUTION (1983).

22. See E. P. THOMPSON , CUSTOMS IN COMMON : STUDIES IN TRADITIONAL POPULAR CULTURE (1993).

23. T. HOBBES, LEVIATHAN 107 (H. Schneider ed., 1958) (1651).

24. See JOHN HASNAS, TRAPPED : WHEN ACTING ETHICALLY IS AGAINST THE LAW (2006).

25. See Boston Police Department web site at: http://www.cityofboston.gov/police/glance.asp.

26. See BRUCE BENSON, THE ENTERPRISE OF LAW, 73-74 (1990).

27. See KNAPP COMMISSION , THE KNAPP COMMISSION REPORT ON POLICE CORRUPTION.

28. Note that to obtain an injunction at common law and thereby curtail another citizen’s freedom, one must meet a very high evidentiary threshold by establishing a high likelihod of irreparable harm. This is in contrast to government legislation that can curtail citizens’ freedom whenever the politically dominant faction of the legislature deems it necessary, even if only to effectuate the "precautionary principle." I leave it to the reader to decide which is the superior standard for addressing potential future harm.

29. The judgment was reduced by 20% to take account of Ms. Liebeck’s contributory negligence with regard to how she opened the cup. This amount was further reduced on appeal.

30. Almost all of which are attributable not [to] the way it evolved at common law, but to twentieth century efforts to improve upon the outcome of this evolution. See John Hasnas, What’s Wrong with a Little Tort Reform? 32 IDAHO LAW REVIEW 557 (1996).

31. See Ronald H. Coase, The Lighthouse in Economics, 17 JOURNAL OF LAW AND ECONOMICS 357 (1974).

32. CHRISTOPHER W. MORRIS, AN ESSAY ON THE MODERN STATE 60-61 (1998).

33. See William M. Landes & Richard A. Posner, Adjudication as a Private Good, 6 JOURNAL OF LEGAL STUDIES 235 (1979).

34. For the true intellectuals among my readers who simply cannot accept that facts should be allowed to undermine a perfectly good theoretical model, I refer you to DAVID SCMIDTZ, THE LIMITS OF GOVERNMENT: AN ESSAY ON THE PUBLIC GOODS ARGUMENT (1991). Schmidtz explains how the assurance problem can be handled by the assurance contract or money back guarantee and how the free rider problem can be cabined to a relatively small number of cases in which using coercion to produce the public good is ethically questionable.

January 8, 2011

Why Must The State Forbid The Duel?

Why Must The State Forbid The Duel?

by Ben Stone

January 7, 2011

The Duel

Before progressing, let us establish exactly what is and is not meant by the word "duel" for the purpose of this article. A duel is not a drunken fistfight. Nor is it to be confused with a trial by combat, although that would make a delightful subject to explore. As well, a duel, for our purposes here, is not the military clash of champions as in David/Goliath or Achilles/Hector.

We are referring here to the settling of a private dispute between two individuals. Private, meaning that for whatever reason, this dispute is taken to a neutral area and only viewed by individuals selected by the combatants as representatives or "seconds", attending the needs of and representing the combatants, and/or by those selected as witnesses. This form of duel comes to us in Western Culture from the ancient tradition expressed in the Scandinavian word holmgang, however it was by no means unique to northern Europe. The duel, then, being private combat executed by adults under prearranged circumstances and following agreed terms, for the purpose of permanently settling a private dispute. Duels were often staged on a river island or in a remote field. The seconds would arrange the place, time, style of combat, and conditions for settlement. Weapons, if used, would be available for inspection by the combatants and the seconds prior to the contest. Usually the combatants were the primary parties involved, but under some circumstances one or more of the primaries were represented in combat by a stand-in. Combat would commence upon signal and all combat would cease when an agreed stage had been reached, such as first to lose footing, first to draw blood, first to surrender, or on rare occasions, death. It should be emphasized here that death was rarely the goal of the duel. Upon completion of the duel the original matter of contention was considered settled and could not be appealed or revisited. The rules, conditions, and settlement of the duel were based on the honor of the participants and enforced by voluntary social contract. In other words, if someone cheated or reneged the witnesses were expected to expose the cheater and the community would shun that dishonored person in the manner of their customs. The duel, in its varying local forms, has been the basic method for honorable people to settle their private disputes from prehistory until the adoption of the modern state one hundred to two hundred years ago.

The duel had a variety of advantages in providing justice over other socialized measures. For example, as mentioned, it was private. No unnecessary information needed to be spread around the community and private or possibly embarrassing or perhaps family specific information could remain private. There was no need for police to investigate with their prying questions and intrusive searches. There was no reason to involve a judge or for a jury to hear your private information, and there were no attorneys to drag out facts, ask embarrassing questions, or badger someone into saying something publicly that they preferred to keep private. In addition to privacy concerns, by eliminating the police, investigators, judge, jury, and attorneys you eliminate the monetary cost of justice to the individuals and you eliminate the opportunity for one party to simply buy justice. Also, since this form of justice had no or very little cost it was available to rich or poor without being a burden on uninterested third parties by way of taxation. So then, the duel was an aspect of free market justice rather than socialized justice. Of course, the duel was not the answer for every dispute. As noted above, it had very narrow applications. But within the scope of its limitations, the duel provided a way to address grievances that no socialist based justice system can serve.

Advantages To The Duel

  1. Cost.
    As mentioned above, a private matter settled privately, with the limited cost paid by the interested parties, is vastly cheaper than involving the hordes of tax feeders that come with socialized law.
  2. Justice, without regard to individual position in life
    The State’s statue representing "Blind Justice" would be a sad joke if not for the State’s devastating effect on the lives of humans. I find it unnecessary to prove that State justice is based almost entirely on the social position of the accused and the social position of the accuser. This is so obvious that I will assume the point need not be labored. The duel, properly executed, is truly blind to social standing, family position, titles of honor, physical hardship, and net worth since the duel itself can be anything from physical combat to a quiet game of chess. An example of this fact was the very first duel recorded on American soil, just one year after the Puritans landed. Two bondservants dueled over a private matter using swords. Both men received minor injuries and the matter was closed.
  3. Vengeance and the desire to avenge is deferred to honor
    If two parties have a conflict, any solution provided by a third party utilizing force to inflict that solution cannot be satisfactory to both the conflicting parties and will leave at least one party vengeful. Since a satisfactory solution cannot be achieved, the conflict will continue no matter the force applied. If, on the other hand, the two conflicting parties agree on the terms of the duel, to object to the outcome after the duel is to admit dishonesty and therefore dishonor. So honor trumps vengeance in a properly administered duel.

What if I am wrong? What if the duel is less efficient, less equitable, and less successful at providing justice? What if every possible aspect of the duel were to be argued here in this article and the conclusion were clear that the duel fails in every practical way when compared to the socialized justice of the State? What then? The conclusion I would draw is that the State and its socialized systems are still immoral and any system based on immorality cannot produce justice. Therefore the duel is at least as good as the State even if it fails in its intended purposes.

But the question at hand is, "Why Must The State Forbid The Duel"

The word "sovereign" comes from the Latin for Super Reign and can literally indicate deistic qualities.

The existence of the duel in society in any form, used to garner justice in a private matter, threatens the sovereignty of the State. The State is a man made god, requiring unblinking faith in the central myth of its necessity to society. The State feigns omniscience, seeks omnipresence and lusts for omnipotence. The State demands that its plans and schemes be secret, but requires its subjects to reveal the most private aspects of their lives to it. If any individual has the right to true privacy then the sovereignty of the State’s right to that information comes into question. If two people can share private information regarding a conflict and settle that conflict entirely in private, the State cannot feign omniscience nor can it claim omnipresence. The duel by its very existence proves that justice can be privately achieved by honor without the boot of the State. Therefore when two people settle a conflict through duel the myth of the sovereignty of the State vanishes.

For this reason, the State could never come to full fruition as long as the duel existed. Many people mark the mid 1600’s as a turning point in the maturity of the State, and I would agree. But among other things, the continuing practice of the duel prevented the State from taking its godly seat as Provider of Justice. In the United States the duel faded from society about the same time Progressive politics, the Temperance Movement and government schools became all the rage. In Japan the duel and the tradition of honor it represented ceased with the Satsuma rebellion in 1877. In Russia, it died with the Tsar and his family. In a final tip of the hat to the duel, the renowned field marshal Günther von Kluge challenged general Heinz Guderian, father of the Blitzkrieg, to a duel. But alas Hitler forbid it.

Permission to reprint this article in in whole or in part with credit to the author are granted. All other rights reserved.

January 4, 2011

The Myth of the Rule of Law

THE MYTH OF THE RULE OF LAW

John Hasnas (1)

I.

Stop! Before reading this Article, please take the following quiz.

The First Amendment to the Constitution of the United States provides, in part:

"Congress shall make no law . . . abridging the freedom of speech, or of the press; . . . ." (2)

On the basis of your personal understanding of this sentence’s meaning (not your knowledge of constitutional law), please indicate whether you believe the following sentences to be true or false.

_____ 1) In time of war, a federal statute may be passed prohibiting citizens from revealing military secrets to the enemy.

_____ 2) The President may issue an executive order prohibiting public criticism of his administration.

_____ 3) Congress may pass a law prohibiting museums from exhibiting photographs and paintings depicting homosexual activity.

_____ 4) A federal statute may be passed prohibiting a citizen from falsely shouting "fire" in a crowded theater.

_____ 5) Congress may pass a law prohibiting dancing to rock and roll music.

_____ 6) The Internal Revenue Service may issue a regulation prohibiting the publication of a book explaining how to cheat on your taxes and get away with it.

_____ 7) Congress may pass a statute prohibiting flag burning.

Thank you. You may now read on.

In his novel 1984, George Orwell created a nightmare vision of the future in which an all-powerful Party exerts totalitarian control over society by forcing the citizens to master the technique of "doublethink," which requires them "to hold simultaneously two opinions which cancel[] out, knowing them to be contradictory and believing in both of them." (3) Orwell’s doublethink is usually regarded as a wonderful literary device, but, of course, one with no referent in reality since it is obviously impossible to believe both halves of a contradiction. In my opinion, this assessment is quite mistaken. Not only is it possible for people to believe both halves of a contradiction, it is something they do every day with no apparent difficulty.

Consider, for example, people’s beliefs about the legal system. They are obviously aware that the law is inherently political. The common complaint that members of Congress are corrupt, or are legislating for their own political benefit or for that of special interest groups demonstrates that citizens understand that the laws under which they live are a product of political forces rather than the embodiment of the ideal of justice. Further, as evidenced by the political battles fought over the recent nominations of Robert Bork and Clarence Thomas to the Supreme Court, the public obviously believes that the ideology of the people who serve as judges influences the way the law is interpreted.

This, however, in no way prevents people from simultaneously regarding the law as a body of definite, politically neutral rules amenable to an impartial application which all citizens have a moral obligation to obey. Thus, they seem both surprised and dismayed to learn that the Clean Air Act might have been written, not to produce the cleanest air possible, but to favor the economic interests of the miners of dirty-burning West Virginia coal (West Virginia coincidentally being the home of Robert Byrd, who was then chairman of the Senate Appropriations Committee) over those of the miners of cleaner-burning western coal. (4) And, when the Supreme Court hands down a controversial ruling on a subject such as abortion, civil rights, or capital punishment, then, like Louis in Casablanca, the public is shocked, shocked to find that the Court may have let political considerations influence its decision. The frequent condemnation of the judiciary for "undemocratic judicial activism" or "unprincipled social engineering" is merely a reflection of the public’s belief that the law consists of a set of definite and consistent "neutral principles" (5) which the judge is obligated to apply in an objective manner, free from the influence of his or her personal political and moral beliefs.

I believe that, much as Orwell suggested, it is the public’s ability to engage in this type of doublethink, to be aware that the law is inherently political in character and yet believe it to be an objective embodiment of justice, that accounts for the amazing degree to which the federal government is able to exert its control over a supposedly free people. I would argue that this ability to maintain the belief that the law is a body of consistent, politically neutral rules that can be objectively applied by judges in the face of overwhelming evidence to the contrary, goes a long way toward explaining citizens’ acquiescence in the steady erosion of their fundamental freedoms. To show that this is, in fact, the case, I would like to direct your attention to the fiction which resides at the heart of this incongruity and allows the public to engage in the requisite doublethink without cognitive discomfort: the myth of the rule of law.

I refer to the myth of the rule of law because, to the extent this phrase suggests a society in which all are governed by neutral rules that are objectively applied by judges, there is no such thing. As a myth, however, the concept of the rule of law is both powerful and dangerous. Its power derives from its great emotive appeal. The rule of law suggests an absence of arbitrariness, an absence of the worst abuses of tyranny. The image presented by the slogan "America is a government of laws and not people" is one of fair and impartial rule rather than subjugation to human whim. This is an image that can command both the allegiance and affection of the citizenry. After all, who wouldn’t be in favor of the rule of law if the only alternative were arbitrary rule? But this image is also the source of the myth’s danger. For if citizens really believe that they are being governed by fair and impartial rules and that the only alternative is subjection to personal rule, they will be much more likely to support the state as it progressively curtails their freedom.

In this Article, I will argue that this is a false dichotomy. Specifically, I intend to establish three points: 1) there is no such thing as a government of law and not people, 2) the belief that there is serves to maintain public support for society’s power structure, and 3) the establishment of a truly free society requires the abandonment of the myth of the rule of law.

II.

Imagine the following scene. A first-year contracts course is being taught at the prestigious Harvard Law School. The professor is a distinguished scholar with a national reputation as one of the leading experts on Anglo-American contract law. Let’s call him Professor Kingsfield. He instructs his class to research the following hypothetical for the next day.

A woman living in a rural setting becomes ill and calls her family physician, who is also the only local doctor, for help. However, it is Wednesday, the doctor’s day off and because she has a golf date, she does not respond. The woman’s condition worsens and because no other physician can be procured in time, she dies. Her estate then sues the doctor for not coming to her aid. Is the doctor liable?

Two of the students, Arnie Becker and Ann Kelsey, resolve to make a good impression on Kingsfield should they be called on to discuss the case. Arnie is a somewhat conservative, considerably egocentric individual. He believes that doctors are human beings, who like anyone else, are entitled to a day off, and that it would be unfair to require them to be at the beck and call of their patients. For this reason, his initial impression of the solution to the hypothetical is that the doctor should not be liable. Through his research, he discovers the case of Hurley v. Eddingfield, (6) which establishes the rule that in the absence of an explicit contract, i.e., when there has been no actual meeting of the minds, there can be no liability. In the hypothetical, there was clearly no meeting of the minds. Therefore, Arnie concludes that his initial impression was correct and that the doctor is not legally liable. Since he has found a valid rule of law which clearly applies to the facts of the case, he is confident that he is prepared for tomorrow’s class.

Ann Kelsey is politically liberal and considers herself to be a caring individual. She believes that when doctors take the Hippocratic oath, they accept a special obligation to care for the sick, and that it would be wrong and set a terrible example for doctors to ignore the needs of regular patients who depend on them. For this reason, her initial impression of the solution to the hypothetical is that the doctor should be liable. Through her research, she discovers the case of Cotnam v. Wisdom, (7) which establishes the rule that in the absence of an explicit contract, the law will imply a contractual relationship where such is necessary to avoid injustice. She believes that under the facts of the hypothetical, the failure to imply a contractual relationship would be obviously unjust. Therefore, she concludes that her initial impression was correct and that the doctor is legally liable. Since she has found a valid rule of law which clearly applies to the facts of the case, she is confident that she is prepared for tomorrow’s class.

The following day, Arnie is called upon and presents his analysis. Ann, who knows she has found a sound legal argument for exactly the opposite outcome, concludes that Arnie is a typical privileged white male conservative with no sense of compassion, who has obviously missed the point of the hypothetical. She volunteers, and when called upon by Kingsfield criticizes Arnie’s analysis of the case and presents her own. Arnie, who knows he has found a sound legal argument for his position, concludes that Ann is a typical female bleeding-heart liberal, whose emotionalism has caused her to miss the point of the hypothetical. Each expects Kingsfield to confirm his or her analysis and dismiss the other’s as the misguided bit of illogic it so obviously is. Much to their chagrin, however, when a third student asks, "But who is right, Professor?," Kingsfield gruffly responds, "When you turn that mush between your ears into something useful and begin to think like a lawyer, you will be able to answer that question for yourself" and moves on to another subject.

What Professor Kingsfield knows but will never reveal to the students is that both Arnie’s and Ann’s analyses are correct. How can this be?

III.

What Professor Kingsfield knows is that the legal world is not like the real world and the type of reasoning appropriate to it is distinct from that which human beings ordinarily employ. In the real world, people usually attempt to solve problems by forming hypotheses and then testing them against the facts as they know them. When the facts confirm the hypotheses, they are accepted as true, although subject to reevaluation as new evidence is discovered. This is a successful method of reasoning about scientific and other empirical matters because the physical world has a definite, unique structure. It works because the laws of nature are consistent. In the real world, it is entirely appropriate to assume that once you have confirmed your hypothesis, all other hypotheses inconsistent with it are incorrect.

In the legal world, however, this assumption does not hold. This is because unlike the laws of nature, political laws are not consistent. The law human beings create to regulate their conduct is made up of incompatible, contradictory rules and principles; and, as anyone who has studied a little logic can demonstrate, any conclusion can be validly derived from a set of contradictory premises. This means that a logically sound argument can be found for any legal conclusion.

When human beings engage in legal reasoning, they usually proceed in the same manner as they do when engaged in empirical reasoning. They begin with a hypothesis as to how a case should be decided and test it by searching for a sound supporting argument. After all, no one can "reason" directly to an unimagined conclusion. Without some end in view, there is no way of knowing what premises to employ or what direction the argument should take. When a sound argument is found, then, as in the case of empirical reasoning, one naturally concludes that one’s legal hypothesis has been shown to be correct, and further, that all competing hypotheses are therefore incorrect.

This is the fallacy of legal reasoning. Because the legal world is comprised of contradictory rules, there will be sound legal arguments available not only for the hypothesis one is investigating, but for other, competing hypotheses as well. The assumption that there is a unique, correct resolution, which serves so well in empirical investigations, leads one astray when dealing with legal matters. Kingsfield, who is well aware of this, knows that Arnie and Ann have both produced legitimate legal arguments for their competing conclusions. He does not reveal this knowledge to the class, however, because the fact that this is possible is precisely what his students must discover for themselves if they are ever to learn to "think like a lawyer."

IV.

Imagine that Arnie and Ann have completed their first year at Harvard and coincidentally find themselves in the same second-year class on employment discrimination law. During the portion of the course that focuses on Title VII of the Civil Rights Act of 1964, (8) the class is asked to determine whether § 2000e-2(a)(1), which makes it unlawful "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin," permits an employer to voluntarily institute an affirmative action program giving preferential treatment to African-Americans. Perhaps unsurprisingly, Arnie strongly believes that affirmative action programs are morally wrong and that what the country needs are color-blind, merit-based employment practices. In researching the problem, he encounters the following principle of statutory construction: When the words are plain, courts may not enter speculative fields in search of a different meaning, and the language must be regarded as the final expression of legislative intent and not added to or subtracted from on the basis of any extraneous source. (9) In Arnie’s opinion, this principle clearly applies to this case. Section 2000e-2(a)(1) prohibits discrimination against any individual because of his race. What wording could be more plain? Since giving preferential treatment to African-Americans discriminates against whites because of their race, Arnie concludes that § 2000e-2(a)(1) prohibits employers from voluntarily instituting affirmative action plans.

Perhaps equally unsurprisingly, Ann has a strong belief that affirmative action is moral and is absolutely necessary to bring about a racially just society. In the course of her research, she encounters the following principle of statutory construction: "It is a familiar rule, that a thing may be within the letter of [a] statute and yet not within the statute because not within its spirit, nor within the intention of its makers"’; (10) and that an interpretation which would bring about an end at variance with the purpose of the statute must be rejected. (11) Upon checking the legislative history, Ann learns that the purpose of Title VII of the Civil Rights Act is to relieve "the plight of the Negro in our economy" and "open employment opportunities for Negroes in occupations which have been traditionally closed to them." (12) Since it would obviously contradict this purpose to interpret § 2000e-2 to make it illegal for employers to voluntarily institute affirmative action plans designed to economically benefit African-Americans by opening traditionally closed employment opportunities, Ann concludes that § 2000e-2 does not prohibit such plans.

The next day, Arnie presents his argument for the illegality of affirmative action in class. Since Ann has found a sound legal argument for precisely the opposite conclusion, she knows that Arnie’s position is untenable. However, having gotten to know Arnie over the last year, this does not surprise her in the least. She regards him as an inveterate reactionary who is completely unprincipled in pursuit of his conservative (and probably racist) agenda. She believes that he is advancing an absurdly narrow reading of the Civil Rights Act for the purely political end of undermining the purpose of the statute. Accordingly, she volunteers, and when called upon, makes this point and presents her own argument demonstrating that affirmative action is legal. Arnie, who has found a sound legal argument for his conclusion, knows that Ann’s position is untenable. However, he expected as much. Over the past year he has come to know Ann as a knee-jerk liberal who is willing to do anything to advance her mushy-headed, left-wing agenda. He believes that she is perversely manipulating the patently clear language of the statute for the purely political end of extending the statute beyond its legitimate purpose.

Both Arnie and Ann know that they have found a logically sound argument for their conclusion. But both have also committed the fallacy of legal reasoning by assuming that under the law there is a uniquely correct resolution of the case. Because of this assumption, both believe that their argument demonstrates that they have found the objectively correct answer, and that therefore, the other is simply playing politics with the law.

The truth is, of course, that both are engaging in politics. Because the law is made up of contradictory rules that can generate any conclusion, what conclusion one finds will be determined by what conclusion one looks for, i.e., by the hypothesis one decides to test. This will invariably be the one that intuitively "feels" right, the one that is most congruent with one’s antecedent, underlying political and moral beliefs. Thus, legal conclusions are always determined by the normative assumptions of the decisionmaker. The knowledge that Kingsfield possesses and Arnie and Ann have not yet discovered is that the law is never neutral and objective.

V.

I have suggested that because the law consists of contradictory rules and principles, sound legal arguments will be available for all legal conclusions, and hence, the normative predispositions of the decisionmakers, rather than the law itself, determine the outcome of cases. It should be noted, however, that this vastly understates the degree to which the law is indeterminate. For even if the law were consistent, the individual rules and principles are expressed in such vague and general language that the decisionmaker is able to interpret them as broadly or as narrowly as necessary to achieve any desired result.

To see that this is the case, imagine that Arnie and Ann have graduated from Harvard Law School, gone on to distinguished careers as attorneys, and later in life find, to their amazement and despair, that they have both been appointed as judges to the same appellate court. The first case to come before them involves the following facts:

A bankrupt was auctioning off his personal possessions to raise money to cover his debts. One of the items put up for auction was a painting that had been in his family for years. A buyer attending the auction purchased the painting for a bid of $100. When the buyer had the painting appraised, it turned out to be a lost masterpiece worth millions. Upon learning of this, the seller sued to rescind the contract of sale. The trial court granted the rescission. The question on appeal is whether this judgment is legally correct.

Counsel for both the plaintiff seller and defendant buyer agree that the rule of law governing this case holds that a contract of sale may be rescinded when there has been a mutual mistake concerning a fact that was material to the agreement. The seller claims that in the instant case there has been such a mistake, citing as precedent the case of Sherwood v. Walker. (13) In Sherwood, one farmer sold another farmer a cow which both farmers believed to be sterile. When the cow turned out to be fertile, the seller was granted rescission of the contract of sale on the ground of mutual mistake. (14) The seller argues that Sherwood is exactly analogous to the present controversy. Both he and the buyer believed the contract of sale was for an inexpensive painting. Thus, both were mistaken as to the true nature of the object being sold. Since this was obviously material to the agreement, the seller claims that the trial court was correct in granting rescission.

The buyer claims that the instant case is not one of mutual mistake, citing as precedent the case of Wood v. Boynton. (15) In Wood, a woman sold a small stone she had found to a jeweler for one dollar. At the time of the sale, neither party knew what type of stone it was. When it subsequently turned out to be an uncut diamond worth $700, the seller sued for rescission claiming mutual mistake. The court upheld the contract, finding that since both parties knew that they were bargaining over a stone of unknown value, there was no mistake. (16) The buyer argues that this is exactly analogous to the present controversy. Both the seller and the buyer knew that the painting being sold was a work of unknown value. This is precisely what is to be expected at an auction. Thus, the buyer claims that this is not a case of mutual mistake and the contract should be upheld.

Following oral argument, Arnie, Ann, and the third judge on the court, Bennie Stolwitz, a non-lawyer appointed to the bench predominantly because the governor is his uncle, retire to consider their ruling. Arnie believes that one of the essential purposes of contract law is to encourage people to be self-reliant and careful in their transactions, since with the freedom to enter into binding arrangements comes the responsibility for doing so. He regards as crucial to his decision the facts that the seller had the opportunity to have the painting appraised and that by exercising due care he could have discovered its true value. Hence, he regards the contract in this case as one for a painting of unknown value and votes to overturn the trial court and uphold the contract. On the other hand, Ann believes that the essential purpose of contract law is to ensure that all parties receive a fair bargain. She regards as crucial to her decision the fact that the buyer in this case is receiving a massive windfall at the expense of the unfortunate seller. Hence, she regards the contract as one for an inexpensive painting and votes to uphold the trial court’s decision and grant rescission. This leaves the deciding vote up to Bennie, who has no idea what the purpose of contract law is, but thinks that it just doesn’t seem right for the bankrupt guy to lose out, and votes for rescission.

Both Arnie and Ann can see that the present situation bodes ill for their judicial tenure. Each believes that the other’s unprincipled political manipulations of the law will leave Bennie, who is not even a lawyer, with control of the court. As a result, they hold a meeting to discuss the situation. At this meeting, they both promise to put politics aside and decide all future cases strictly on the basis of the law. Relieved, they return to court to confront the next case on the docket, which involves the following facts:

A philosophy professor who supplements her academic salary during the summer by giving lectures on political philosophy had contracted to deliver a lecture on the rule of law to the Future Republicans of America (FRA) on July 20, for $500. She was subsequently contacted by the Young Socialists of America, who offered her $1000 for a lecture to be delivered on the same day. She thereupon called the FRA, informing them of her desire to accept the better offer. The FRA then agreed to pay $1000 for her lecture. After the professor delivered the lecture, the FRA paid only the originally stipulated $500. The professor sued and the trial court ruled she was entitled to the additional $500. The question on appeal is whether this judgment is legally correct.

Counsel for both the plaintiff professor and defendant FRA agree that the rule of law governing this case holds that a promise to pay more for services one is already contractually bound to perform is not enforceable, but if an existing contract is rescinded by both parties and a new one is negotiated, the promise is enforceable. The FRA claims that in the instant case, it had promised to pay more for a service the professor was already contractually bound to perform, citing Davis & Co. v. Morgan (17) as precedent. In Davis, a laborer employed for a year at $40 per month was offered $65 per month by another company. The employer then promised to pay the employee an additional $120 at the end of the year if he stayed with the firm. At the end of the year, the employer failed to pay the $120, and when the employee sued, the court held that because he was already obligated to work for $40 per month for the year, there was no consideration for the employer’s promise; hence, it was unenforceable. (18) The FRA argues that this is exactly analogous to the present controversy. The professor was already obligated to deliver the lecture for $500. Therefore, there was no consideration for the FRA’s promise to pay an additional $500 and the promise is unenforceable.

The professor claims that in the instant case, the original contract was rescinded and a new one negotiated, citing Schwartzreich v. Bauman-Basch, Inc. (19) as precedent. In Schwartzreich, a clothing designer who had contracted for a year’s work at $90 per week was subsequently offered $115 per week by another company. When the designer informed his employer of his intention to leave, the employer offered the designer $100 per week if he would stay and the designer agreed. When the designer sued for the additional compensation, the court held that since the parties had simultaneously rescinded the original contract by mutual consent and entered into a new one for the higher salary, the promise to pay was enforceable. (20) The professor argues that this is exactly analogous to the present controversy. When the FRA offered to pay her an additional $500 to give the lecture, they were obviously offering to rescind the former contract and enter a new one on different terms. Hence, the promise to pay the extra $500 is enforceable.

Following oral argument, the judges retire to consider their ruling. Arnie, mindful of his agreement with Ann, is scrupulously careful not to let political considerations enter into his analysis of the case. Thus, he begins by asking himself why society needs contract law in the first place. He decides that the objective, nonpolitical answer is obviously that society needs some mechanism to ensure that individuals honor their voluntarily undertaken commitments. From this perspective, the resolution of the present case is clear. Since the professor is obviously threatening to go back on her voluntarily undertaken commitment in order to extort more money from the FRA, Arnie characterizes the case as one in which a promise has been made to pay more for services which the professor is already contractually bound to perform, and decides that the promise is unenforceable. Hence, he votes to overturn the trial court’s decision. Ann, also mindful of her agreement with Arnie, is meticulous in her efforts to ensure that she decides this case purely on the law. Accordingly, she begins her analysis by asking herself why society needs contract law in the first place. She decides that the objective, nonpolitical answer is obviously that it provides an environment within which people can exercise the freedom to arrange their lives as they see fit. From this perspective, the resolution of the present case is clear. Since the FRA is essentially attempting to prevent the professor from arranging her life as she sees fit, Ann characterizes the case as one in which the parties have simultaneously rescinded an existing contract and negotiated a new one, and decides that the promise is enforceable. Hence, she votes to uphold the trial court’s decision. This once again leaves the deciding vote up to Bennie, who has no idea why society needs contract law, but thinks that the professor is taking advantage of the situation in an unfair way and votes to overturn the trial court’s ruling.

Both Arnie and Ann now believe that the other is an incorrigible ideologue who is destined to torment him or her throughout his or her judicial existence. Each is quite unhappy at the prospect. Each blames the other for his or her unhappiness. But, in fact, the blame lies within each. For they have never learned Professor Kingsfield’s lesson that it is impossible to reach an objective decision based solely on the law. This is because the law is always open to interpretation and there is no such thing as a normatively neutral interpretation. The way one interprets the rules of law is always determined by one’s underlying moral and political beliefs.

VI.

I have been arguing that the law is not a body of determinate rules that can be objectively and impersonally applied by judges; that what the law prescribes is necessarily determined by the normative predispositions of the one who is interpreting it. In short, I have been arguing that law is inherently political. If you, my reader, are like most people, you are far from convinced of this. In fact, I dare say I can read your thoughts. You are thinking that even if I have shown that the present legal system is somewhat indeterminate, I certainly have not shown that the law is inherently political. Although you may agree that the law as presently constituted is too vague or contains too many contradictions, you probably believe that this state of affairs is due to the actions of the liberal judicial activists, or the Reaganite adherents of the doctrine of original intent, or the self-serving politicians, or the _______________________________________ (feel free to fill in your favorite candidate for the group that is responsible for the legal system’s ills). However, you do not believe that the law must be this way, that it can never be definite and politically neutral. You believe that the law can be reformed; that to bring about an end to political strife and institute a true rule of law, we merely need to create a legal system comprised of consistent rules that are expressed in clear, definite language.

It is my sad duty to inform you that this cannot be done. Even with all the good will in the world, we could not produce such a legal code because there is simply no such thing as uninterpretable language. Now I could attempt to convince you of this by the conventional method of regaling you with myriad examples of the manipulation of legal language (e.g., an account of how the relatively straightforward language of the Commerce Clause giving Congress the power to "regulate Commerce . . . among the several States" (21) has been interpreted to permit the regulation of both farmers growing wheat for use on their own farms (22) and the nature of male-female relationships in all private businesses that employ more than fifteen persons (23)). However, I prefer to try a more direct approach. Accordingly, let me direct your attention to the quiz you completed at the beginning of this Article. Please consider your responses.

If your response to question one was "True," you chose to interpret the word "no" as used in the First Amendment to mean "some."

If your response to question two was "False," you chose to interpret the word "Congress" to refer to the President of the United States and the word "law" to refer to an executive order.

If your response to question three was "False," you chose to interpret the words "speech" and "press" to refer to the exhibition of photographs and paintings.

If your response to question four was "True," you have underscored your belief that the word "no" really means "some."

If your response to question five was "False," you chose to interpret the words "speech" and "press" to refer to dancing to rock and roll music.

If your response to question six was "False," you chose to interpret the word "Congress" to refer to the Internal Revenue Service and the word "law" to refer to an IRS regulation.

If your response to question seven was "False," you chose to interpret the words "speech" and "press" to refer to the act of burning a flag.

Unless your responses were: 1) False, 2) True, 3) True, 4) False, 5) True, 6) True, and 7) True, you chose to interpret at least one of the words "Congress," "no," "law," "speech," and "press" in what can only be described as something other than its ordinary sense. Why did you do this? Were your responses based on the "plain meaning" of the words or on certain normative beliefs you hold about the extent to which the federal government should be allowed to interfere with citizens’ expressive activities? Were your responses objective and neutral or were they influenced by your "politics"?

I chose this portion of the First Amendment for my example because it contains the clearest, most definite legal language of which I am aware. If a provision as clearly drafted as this may be subjected to political interpretation, what legal provision may not be? But this explains why the legal system cannot be reformed to consist of a body of definite rules yielding unique, objectively verifiable resolutions of cases. What a legal rule means is always determined by the political assumptions of the person applying it. (24)

VII.

Let us assume that I have failed to convince you of the impossibility of reforming the law into a body of definite, consistent rules that produces determinate results. Even if the law could be reformed in this way, it clearly should not be. There is nothing perverse in the fact that the law is indeterminate. Society is not the victim of some nefarious conspiracy to undermine legal certainty to further ulterior motives. As long as law remains a state monopoly, as long as it is created and enforced exclusively through governmental bodies, it must remain indeterminate if it is to serve its purpose. Its indeterminacy gives the law its flexibility. And since, as a monopoly product, the law must apply to all members of society in a one-size-fits-all manner, flexibility is its most essential feature.

It is certainly true that one of the purposes of law is to ensure a stable social environment, to provide order. But not just any order will suffice. Another purpose of the law must be to do justice. The goal of the law is to provide a social environment which is both orderly and just. Unfortunately, these two purposes are always in tension. For the more definite and rigidly- determined the rules of law become, the less the legal system is able to do justice to the individual. Thus, if the law were fully determinate, it would have no ability to consider the equities of the particular case. This is why even if we could reform the law to make it wholly definite and consistent, we should not.

Consider one of the favorite proposals of those who disagree. Those who believe that the law can and should be rendered fully determinate usually propose that contracts be rigorously enforced. Thus, they advocate a rule of law stating that in the absence of physical compulsion or explicit fraud, parties should be absolutely bound to keep their agreements. They believe that as long as no rules inconsistent with this definite, clearly-drawn provision are allowed to enter the law, politics may be eliminated from contract law and commercial transactions greatly facilitated.

Let us assume, contrary to fact, that the terms "fraud" and "physical compulsion" have a plain meaning not subject to interpretation. The question then becomes what should be done about Agnes Syester. (25) Agnes was "a lonely and elderly widow who fell for the blandishments and flattery of those who" ran an Arthur Murray Dance Studio in DesMoines, Iowa. (26) This studio used some highly innovative sales techniques to sell this 68-year-old woman 4,057 hours of dance instruction, including three life memberships and a course in Gold Star dancing, which was "the type of dancing done by Ginger Rogers and Fred Astair only about twice as difficult," (27) for a total cost of $33,497 in 1960 dollars. Of course, Agnes did voluntarily agree to purchase that number of hours. Now, in a case such as this, one might be tempted to "interpret" the overreaching and unfair sales practices of the studio as fraudulent (28) and allow Agnes to recover her money. However, this is precisely the sort of solution that our reformed, determinate contract law is designed to outlaw. Therefore, it would seem that since Agnes has voluntarily contracted for the dance lessons, she is liable to pay the full amount for them. This might seem to be a harsh result for Agnes, but from now on, vulnerable little old ladies will be on notice to be more careful in their dealings.

Or consider a proposal that is often advanced by those who wish to render probate law more determinate. They advocate a rule of law declaring a handwritten will that is signed before two witnesses to be absolutely binding. They believe that by depriving the court of the ability to "interpret" the state of mind of the testator, the judges’ personal moral opinions may be eliminated from the law and most probate matters brought to a timely conclusion. Of course, the problem then becomes what to do with Elmer Palmer, a young man who murdered his grandfather to gain the inheritance due him under the old man’s will a bit earlier than might otherwise have been the case. (29) In a case such as this, one might be tempted to deny Elmer the fruits of his nefarious labor despite the fact that the will was validly drawn, by appealing to the legal principle that no one should profit from his or her own wrong. (30) However, this is precisely the sort of vaguely-expressed counter-rule that our reformers seek to purge from the legal system in order to ensure that the law remains consistent. Therefore, it would seem that although Elmer may spend a considerable amount of time behind bars, he will do so as a wealthy man. This may send a bad message to other young men of Elmer’s temperament, but from now on the probate process will be considerably streamlined.

The proposed reforms certainly render the law more determinate. However, they do so by eliminating the law’s ability to consider the equities of the individual case. This observation raises the following interesting question: If this is what a determinate legal system is like, who would want to live under one? The fact is that the greater the degree of certainty we build into the law, the less able the law becomes to do justice. For this reason, a monopolistic legal system composed entirely of clear, consistent rules could not function in a manner acceptable to the general public. It could not serve as a system of justice.

VIII.

I have been arguing that the law is inherently indeterminate, and further, that this may not be such a bad thing. I realize, however, that you may still not be convinced. Even if you are now willing to admit that the law is somewhat indeterminate, you probably believe that I have vastly exaggerated the degree to which this is true. After all, it is obvious that the law cannot be radically indeterminate. If this were the case, the law would be completely unpredictable. Judges hearing similar cases would render wildly divergent decisions. There would be no stability or uniformity in the law. But, as imperfect as the current legal system may be, this is clearly not the case.

The observation that the legal system is highly stable is, of course, correct, but it is a mistake to believe that this is because the law is determinate. The stability of the law derives not from any feature of the law itself, but from the overwhelming uniformity of ideological background among those empowered to make legal decisions. Consider who the judges are in this country. Typically, they are people from a solid middle- to upper-class background who performed well at an appropriately prestigious undergraduate institution; demonstrated the ability to engage in the type of analytical reasoning that is measured by the standardized Law School Admissions Test; passed through the crucible of law school, complete with its methodological and political indoctrination; and went on to high-profile careers as attorneys, probably with a prestigious Wall Street-style law firm. To have been appointed to the bench, it is virtually certain that they were both politically moderate and well-connected, and, until recently, white males of the correct ethnic and religious pedigree. It should be clear that, culturally speaking, such a group will tend to be quite homogeneous, sharing a great many moral, spiritual, and political beliefs and values. Given this, it can hardly be surprising that there will be a high degree of agreement among judges as to how cases ought to be decided. But this agreement is due to the common set of normative presuppositions the judges share, not some immanent, objective meaning that exists within the rules of law.

In fact, however, the law is not truly stable, since it is continually, if slowly, evolving in response to changing social mores and conditions. This evolution occurs because each new generation of judges brings with it its own set of "progressive" normative assumptions. As the older generation passes from the scene, these assumptions come to be shared by an ever-increasing percentage of the judiciary. Eventually, they become the consensus of opinion among judicial decisionmakers, and the law changes to reflect them. Thus, a generation of judges that regarded "separate but equal" as a perfectly legitimate interpretation of the Equal Protection Clause of the Fourteenth Amendment (31) gave way to one which interpreted that clause as prohibiting virtually all governmental actions that classify individuals by race, which, in turn, gave way to one which interpreted the same language to permit "benign" racial classifications designed to advance the social status of minority groups. In this way, as the moral and political values conventionally accepted by society change over time, so too do those embedded in the law.

The law appears to be stable because of the slowness with which it evolves. But the slow pace of legal development is not due to any inherent characteristic of the law itself. Logically speaking, any conclusion, however radical, is derivable from the rules of law. It is simply that, even between generations, the range of ideological opinion represented on the bench is so narrow that anything more than incremental departures from conventional wisdom and morality will not be respected within the profession. Such decisions are virtually certain to be overturned on appeal, and thus, are rarely even rendered in the first instance.

Confirming evidence for this thesis can be found in our contemporary judicial history. Over the past quarter-century, the "diversity" movement has produced a bar, and concomitantly a bench, somewhat more open to people of different racial, sexual, ethnic, and socio-economic backgrounds. To some extent, this movement has produced a judiciary that represents a broader range of ideological viewpoints than has been the case in the past. Over the same time period, we have seen an accelerated rate of legal change. Today, long-standing precedents are more freely overruled, novel theories of liability are more frequently accepted by the courts, and different courts hand down different, and seemingly irreconcilable, decisions more often. In addition, it is worth noting that recently, the chief complaint about the legal system seems to concern the degree to which it has become "politicized." This suggests that as the ideological solidarity of the judiciary breaks down, so too does the predictability of legal decisionmaking, and hence, the stability of the law. Regardless of this trend, I hope it is now apparent that to assume that the law is stable because it is determinate is to reverse cause and effect. Rather, it is because the law is basically stable that it appears to be determinate. It is not rule of law that gives us a stable legal system; it is the stability of the culturally shared values of the judiciary that gives rise to and supports the myth of the rule of law.

IX.

It is worth noting that there is nothing new or startling about the claim that the law is indeterminate. This has been the hallmark of the Critical Legal Studies movement since the mid-1970s. The "Crits," however, were merely reviving the earlier contention of the legal realists who made the same point in the 1920s and 30s. And the realists were themselves merely repeating the claim of earlier jurisprudential thinkers. For example, as early as 1897, Oliver Wendell Holmes had pointed out:

The language of judicial decision is mainly the language of logic. And the logical method and form flatter that longing for certainty and for repose which is in every human mind. But certainty generally is illusion, and repose is not the destiny of man. Behind the logical form lies a judgment as to the relative worth and importance of competing legislative grounds, often an inarticulate and unconscious judgment, it is true, and yet the very root and nerve of the whole proceeding. You can give any conclusion a logical form. (32)

This raises an interesting question. If it has been known for 100 years that the law does not consist of a body of determinate rules, why is the belief that it does still so widespread? If four generations of jurisprudential scholars have shown that the rule of law is a myth, why does the concept still command such fervent commitment? The answer is implicit in the question itself, for the question recognizes that the rule of law is a myth and like all myths, it is designed to serve an emotive, rather than cognitive, function. The purpose of a myth is not to persuade one’s reason, but to enlist one’s emotions in support of an idea. And this is precisely the case for the myth of the rule of law; its purpose is to enlist the emotions of the public in support of society’s political power structure.

People are more willing to support the exercise of authority over themselves when they believe it to be an objective, neutral feature of the natural world. This was the idea behind the concept of the divine right of kings. By making the king appear to be an integral part of God’s plan for the world rather than an ordinary human being dominating his fellows by brute force, the public could be more easily persuaded to bow to his authority. However, when the doctrine of divine right became discredited, a replacement was needed to ensure that the public did not view political authority as merely the exercise of naked power. That replacement is the concept of the rule of law.

People who believe they live under "a government of laws and not people" tend to view their nation’s legal system as objective and impartial. They tend to see the rules under which they must live not as expressions of human will, but as embodiments of neutral principles of justice, i.e., as natural features of the social world. Once they believe that they are being commanded by an impersonal law rather than other human beings, they view their obedience to political authority as a public-spirited acceptance of the requirements of social life rather than mere acquiescence to superior power. In this way, the concept of the rule of law functions much like the use of the passive voice by the politician who describes a delict on his or her part with the assertion "mistakes were made." It allows people to hide the agency of power behind a facade of words; to believe that it is the law which compels their compliance, not self-aggrandizing politicians, or highly capitalized special interests, or wealthy white Anglo-Saxon Protestant males, or _______________ (fill in your favorite culprit).

But the myth of the rule of law does more than render the people submissive to state authority; it also turns them into the state’s accomplices in the exercise of its power. For people who would ordinarily consider it a great evil to deprive individuals of their rights or oppress politically powerless minority groups will respond with patriotic fervor when these same actions are described as upholding the rule of law.

Consider the situation in India toward the end of British colonial rule. At that time, the followers of Mohandas Gandhi engaged in nonviolent civil disobedience by manufacturing salt for their own use in contravention of the British monopoly on such manufacture. The British administration and army responded with mass imprisonments and shocking brutality. It is difficult to understand this behavior on the part of the highly moralistic, ever-so-civilized British unless one keeps in mind that they were able to view their activities not as violently repressing the indigenous population, but as upholding the rule of law.

The same is true of the violence directed against the nonviolent civil rights protestors in the American South during the civil rights movement. Although much of the white population of the southern states held racist beliefs, one cannot account for the overwhelming support given to the violent repression of these protests on the assumption that the vast majority of the white Southerners were sadistic racists devoid of moral sensibilities. The true explanation is that most of these people were able to view themselves not as perpetuating racial oppression and injustice, but as upholding the rule of law against criminals and outside agitators. Similarly, since despite the . 60s rhetoric, all police officers are not "fascist pigs," some other explanation is needed for their willingness to participate in the "police riot" at the 1968 Democratic convention, or the campaign of illegal arrests and civil rights violations against those demonstrating in Washington against President Nixon’s policies in Vietnam, or the effort to infiltrate and destroy the sanctuary movement that sheltered refugees from Salvadorian death squads during the Reagan era or, for that matter, the attack on and destruction of the Branch Davidian compound in Waco. It is only when these officers have fully bought into the myth that "we are a government of laws and not people," when they truly believe that their actions are commanded by some impersonal body of just rules, that they can fail to see that they are the agency used by those in power to oppress others.

The reason why the myth of the rule of law has survived for 100 years despite the knowledge of its falsity is that it is too valuable a tool to relinquish. The myth of impersonal government is simply the most effective means of social control available to the state.

X.

During the past two decades, the legal scholars identified with the Critical Legal Studies movement have gained a great deal of notoriety for their unrelenting attacks on traditional, "liberal" legal theory. The modus operandi of these scholars has been to select a specific area of the law and show that because the rules and principles that comprise it are logically incoherent, legal outcomes can always be manipulated by those in power to favor their interests at the expense of the politically "subordinated" classes. The Crits then argue that the claim that the law consists of determinate, just rules which are impartially applied to all is a ruse employed by the powerful to cause these subordinated classes to view the oppressive legal rulings as the necessary outcomes of an objective system of justice. This renders the oppressed more willing to accept their socially subordinated status. Thus, the Crits maintain that the concept of the rule of law is simply a facade used to maintain the socially dominant position of white males in an oppressive and illegitimate capitalist system.

In taking this approach, the Crits recognize that the law is indeterminate, and thus, that it necessarily reflects the moral and political values of those empowered to render legal decisions. Their objection is that those who currently wield this power subscribe to the wrong set of values. They wish to change the legal system from one which embodies what they regard as the hierarchical, oppressive values of capitalism to one which embodies the more egalitarian, "democratic" values that they usually associate with socialism. The Crits accept that the law must be provided exclusively by the state, and hence, that it must impose one set of values on all members of society. Their contention is that the particular set of values currently being imposed is the wrong one.

Although they have been subjected to much derision by mainstream legal theorists, (33) as long as we continue to believe that the law must be a state monopoly, there really is nothing wrong, or even particularly unique, about the Crits’ line of argument. There has always been a political struggle for control of the law, and as long as all must be governed by the same law, as long as one set of values must be imposed upon everyone, there always will be. It is true that the Crits want to impose "democratic" or socialistic values on everyone through the mechanism of the law. But this does not distinguish them from anyone else. Religious fundamentalists want to impose "Christian" values on all via the law. Liberal Democrats want the law to ensure that everyone acts so as to realize a "compassionate" society, while conservative Republicans want it to ensure the realization of "family values" or "civic virtue." Even libertarians insist that all should be governed by a law that enshrines respect for individual liberty as its preeminent value.

The Crits may believe that the law should embody a different set of values than liberals, or conservatives, or libertarians, but this is the only thing that differentiates them from these other groups. Because the other groups have accepted the myth of the rule of law, they perceive what they are doing not as a struggle for political control, but as an attempt to depoliticize the law and return it to its proper form as the neutral embodiment of objective principles of justice. But the rule of law is a myth, and perception does not change reality. Although only the Crits may recognize it, all are engaged in a political struggle to impose their version of "the good" on the rest of society. And as long as the law remains the exclusive province of the state, this will always be the case.

XI.

What is the significance of these observations? Are we condemned to a continual political struggle for control of the legal system? Well, yes; as long as the law remains a state monopoly, we are. But I would ask you to note that this is a conditional statement while you consider the following parable.

A long time ago in a galaxy far away, there existed a parallel Earth that contained a nation called Monosizea. Monosizea was remarkably similar to the present-day United States. It had the same level of technological development, the same social problems, and was governed by the same type of common law legal system. In fact, Monosizea had a federal constitution that was identical to that of the United States in all respects except one. However, that distinction was quite an odd one. For some reason lost to history, the Monosizean founding fathers had included a provision in the constitution that required all shoes manufactured or imported into Monosizea to be the same size. The particular size could be determined by Congress, but whatever size was selected represented the only size shoe permitted in the country.

As you may imagine, in Monosizea, shoe size was a serious political issue. Although there were a few radical fringe groups which argued for either extremely small or extremely large sizes, Monosizea was essentially a two-party system with most of the electorate divided between the Liberal Democratic party and the Conservative Republican party. The Liberal Democratic position on shoe size was that social justice demanded the legal size to be a large size such as a nine or ten. They presented the egalitarian argument that everyone should have equal access to shoes, and that this could only be achieved by legislating a large shoe size. After all, people with small feet could still use shoes that were too large (even if they did have to stuff some newspaper into them), but people with large feet would be completely disenfranchised if the legal size was a small one. Interestingly, the Liberal Democratic party contained a larger than average number of people who were tall. The Conservative Republican position on shoe size was that respect for family values and the traditional role of government required that the legal size be a small size such as a four or five. They presented the moralistic argument that society’s obligation to the next generation and government’s duty to protect the weak demanded that the legal size be set so that children could have adequate footwear. They contended that children needed reasonably well- fitting shoes while they were in their formative years and their feet were tender. Later, when they were adults and their feet were fully developed, they would be able to cope with the rigors of barefoot life. Interestingly, the Conservative Republican party contained a larger than average number of people who were short.

Every two years as congressional elections approached, and especially when this corresponded with a presidential election, the rhetoric over the shoe size issue heated up. The Liberal Democrats would accuse the Conservative Republicans of being under the control of the fundamentalist Christians and of intolerantly attempting to impose their religious values on society. The Conservative Republicans would accuse the Liberal Democrats of being misguided, bleeding-heart do-gooders who were either the dupes of the socialists or socialists themselves. However, after the elections, the shoe size legislation actually hammered out by the President and Congress always seemed to set the legal shoe size close to a seven, which was the average foot size in Monosizea. Further, this legislation always defined the size in broad terms so that it might encompass a size or two on either side, and authorized the manufacture of shoes made of extremely flexible materials that could stretch or contract as necessary. For this reason, most averaged-sized Monosizeans, who were predominantly politically moderate, had acceptable footwear.

This state of affairs seemed quite natural to everyone in Monosizea except a boy named Socrates. Socrates was a pensive, shy young man who, when not reading a book, was often lost in thought. His contemplative nature caused his parents to think of him as a dreamer, his schoolmates to think of him as a nerd, and everyone else to think of him as a bit odd. One day, after learning about the Monosizean Constitution in school and listening to his parents discuss the latest public opinion poll on the shoe size issue, Socrates approached his parents and said:

I have an idea. Why don’t we amend the constitution to permit shoemakers to manufacture and sell more than one size shoe. Then everyone could have shoes that fit and we wouldn’t have to argue about what the legal shoe size should be anymore.

Socrates’ parents found his naive idealism amusing and were proud that their son was so imaginative. For this reason, they tried to show him that his idea was a silly one in a way that would not discourage him from future creative thinking. Thus, Socrates’ father said:

That’s a very interesting idea, son, but it’s simply not practical. There’s always been only one size shoe in Monosizea, so that’s just the way things have to be. People are used to living this way, and you can’t fight city hall. I’m afraid your idea is just too radical.

Although Socrates eventually dropped the subject with his parents, he was never satisfied with their response. During his teenage years, he became more interested in politics and decided to take his idea to the Liberal Democrats. He thought that because they believed all citizens were entitled to adequate footwear, they would surely see the value of his proposal. However, although they seemed to listen with interest and thanked him for his input, they were not impressed with his idea. As the leader of the local party explained:

Your idea is fine in theory, but it will never work in practice. If manufacturers could make whatever size shoes they wanted, consumers would be at the mercy of unscrupulous business people. Each manufacturer would set up his or her own scale of sizes and consumers would have no way of determining what their foot size truly was. In such a case, profit-hungry shoe sales people could easily trick the unwary consumer into buying the wrong size. Without the government setting the size, there would be no guarantee that any shoe was really the size it purported to be. We simply cannot abandon the public to the vicissitudes of an unregulated market in shoes.

To Socrates’ protests that people didn’t seem to be exploited in other clothing markets and that the shoes manufactured under the present system didn’t really fit very well anyway, the party leader responded:

The shoe market is unique. Adequate shoes are absolutely essential to public welfare. Therefore, the ordinary laws of supply and demand cannot be relied upon. And even if we could somehow get around the practical problems, your idea is simply not politically feasible. To make any progress, we must focus on what can actually be accomplished in the current political climate. If we begin advocating radical constitutional changes, we’ll be routed in the next election.

Disillusioned by this response, Socrates approached the Conservative Republicans with his idea, explaining that if shoes could be manufactured in any size, all children could be provided with the well-fitting shoes they needed. However, the Conservative Republicans were even less receptive than the Liberal Democrats had been. The leader of their local party responded quite contemptuously, saying:

Look, Monosizea is the greatest, freest country on the face of the planet, and it’s respect for our traditional values that has made it that way. Our constitution is based on these values, and it has served us well for the past 200 years. Who are you to question the wisdom of the founding fathers? If you don’t like it in this country, why don’t you just leave?

Somewhat taken aback, Socrates explained that he respected the Monosizean Constitution as much as they did, but that did not mean it could not be improved. Even the founding fathers included a process by which it could be amended. However, this did nothing to ameliorate the party leader’s disdain. He responded:

It’s one thing to propose amending the constitution; it’s another to undermine it entirely. Doing away with the shoe size provision would rend the very fabric of our society. If people could make whatever size shoes they wanted whenever they wanted, there would be no way to maintain order in the industry. What you’re proposing is not liberty, it’s license. Were we to adopt your proposal, we would be abandoning the rule of law itself. Can’t you see that what you are advocating is not freedom, but anarchy?

After this experience, Socrates came to realize that there was no place for him in the political realm. As a result, he went off to college where he took up the study of philosophy. Eventually, he got a Ph.D., became a philosophy professor, and was never heard from again.

So, what is the point of this outlandish parable? I stated at the beginning of this section that as long as the law remains a state monopoly, there will always be a political struggle for its control. This sounds like a cynical conclusion because we naturally assume that the law is necessarily the province of the state. Just as the Monosizeans could not conceive of a world in which shoe size was not set by the government, we cannot conceive of one in which law is not provided exclusively by it. But what if we are wrong? What if, just as Monosizea could eliminate the politics of shoe size by allowing individuals to produce and buy whatever size shoes they pleased, we could eliminate the politics of law by allowing individuals to adopt whatever rules of behavior best fit their needs? What if law is not a unique product that must be supplied on a one-size-fits-all basis by the state, but one which could be adequately supplied by the ordinary play of market forces? What if we were to try Socrates’ solution and end the monopoly of law?

XII.

The problem with this suggestion is that most people are unable to understand what it could possibly mean. This is chiefly because the language necessary to express the idea clearly does not really exist. Most people have been raised to identify law with the state. They cannot even conceive of the idea of legal services apart from the government. The very notion of a free market in legal services conjures up the image of anarchic gang warfare or rule by organized crime. In our system, an advocate of free market law is treated the same way Socrates was treated in Monosizea, and is confronted with the same types of arguments.

The primary reason for this is that the public has been politically indoctrinated to fail to recognize the distinction between order and law. Order is what people need if they are to live together in peace and security. Law, on the other hand, is a particular method of producing order. As it is presently constituted, law is the production of order by requiring all members of society to live under the same set of state-generated rules; it is order produced by centralized planning. Yet, from childhood, citizens are taught to invariably link the words "law" and "order." Political discourse conditions them to hear and use the terms as though they were synonymous and to express the desire for a safer, more peaceful society as a desire for "law and order."

The state nurtures this confusion because it is the public’s inability to distinguish order from law that generates its fundamental support for the state. As long as the public identifies order with law, it will believe that an orderly society is impossible without the law the state provides. And as long as the public believes this, it will continue to support the state almost without regard to how oppressive it may become.

The public’s identification of order with law makes it impossible for the public to ask for one without asking for the other. There is clearly a public demand for an orderly society. One of human beings’ most fundamental desires is for a peaceful existence secure from violence. But because the public has been conditioned to express its desire for order as one for law, all calls for a more orderly society are interpreted as calls for more law. And since under our current political system, all law is supplied by the state, all such calls are interpreted as calls for a more active and powerful state. The identification of order with law eliminates from public consciousness the very concept of the decentralized provision of order. With regard to legal services, it renders the classical liberal idea of a market-generated, spontaneous order incomprehensible.

I began this Article with a reference to Orwell’s concept of doublethink. But I am now describing the most effective contemporary example we have of Orwellian "newspeak," the process by which words are redefined to render certain thoughts unthinkable. (34) Were the distinction between order and law well-understood, the question of whether a state monopoly of law is the best way to ensure an orderly society could be intelligently discussed. But this is precisely the question that the state does not wish to see raised. By collapsing the concept of order into that of law, the state can ensure that it is not, for it will have effectively eliminated the idea of a non-state generated order from the public mind. Under such circumstances, we can hardly be surprised if the advocates of a free market in law are treated like Socrates of Monosizea.

XIII.

I am aware that this explanation probably appears as initially unconvincing as was my earlier contention that the law is inherently political. Even if you found my Monosizea parable entertaining, it is likely that you regard it as irrelevant. You probably believe that the analogy fails because shoes are qualitatively different from legal services. After all, law is a public good which, unlike shoes, really is crucial to public welfare. It is easy to see how the free market can adequately supply the public with shoes. But how can it possibly provide the order-generating and maintaining processes necessary for the peaceful coexistence of human beings in society? What would a free market in legal services be like?

I am always tempted to give the honest and accurate response to this challenge, which is that to ask the question is to miss the point. If human beings had the wisdom and knowledge-generating capacity to be able to describe how a free market would work, that would be the strongest possible argument for central planning. One advocates a free market not because of some moral imprimatur written across the heavens, but because it is impossible for human beings to amass the knowledge of local conditions and the predictive capacity necessary to effectively organize economic relationships among millions of individuals. It is possible to describe what a free market in shoes would be like because we have one. But such a description is merely an observation of the current state of a functioning market, not a projection of how human beings would organize themselves to supply a currently non-marketed good. To demand that an advocate of free market law (or Socrates of Monosizea, for that matter) describe in advance how markets would supply legal services (or shoes) is to issue an impossible challenge. Further, for an advocate of free market law (or Socrates) to even accept this challenge would be to engage in self-defeating activity since the more successfully he or she could describe how the law (or shoe) market would function, the more he or she would prove that it could be run by state planners. Free markets supply human wants better than state monopolies precisely because they allow an unlimited number of suppliers to attempt to do so. By patronizing those who most effectively meet their particular needs and causing those who do not to fail, consumers determine the optimal method of supply. If it were possible to specify in advance what the outcome of this process of selection would be, there would be no need for the process itself.

Although I am tempted to give this response, I never do. This is because, although true, it never persuades. Instead, it is usually interpreted as an appeal for blind faith in the free market, and the failure to provide a specific explanation as to how such a market would provide legal services is interpreted as proof that it cannot. Therefore, despite the self-defeating nature of the attempt, I usually do try to suggest how a free market in law might work.

So, what would a free market in legal services be like? As Sherlock Holmes would regularly say to the good doctor, "You see, Watson, but you do not observe." Examples of non-state law are all around us. Consider labor-management collective bargaining agreements. In addition to setting wage rates, such agreements typically determine both the work rules the parties must abide by and the grievance procedures they must follow to resolve disputes. In essence, such contracts create the substantive law of the workplace as well as the workplace judiciary. A similar situation exists with regard to homeowner agreements, which create both the rules and dispute settlement procedures within a condominium or housing development, i.e., the law and judicial procedure of the residential community. Perhaps a better example is supplied by universities. These institutions create their own codes of conduct for both students and faculty that cover everything from academic dishonesty to what constitutes acceptable speech and dating behavior. In addition, they not only devise their own elaborate judicial procedures to deal with violations of these codes, but typically supply their own campus police forces as well. A final example may be supplied by the many commercial enterprises that voluntarily opt out of the state judicial system by writing clauses in their contracts that require disputes to be settled through binding arbitration or mediation rather than through a lawsuit. In this vein, the variegated "legal" procedures that have recently been assigned the sobriquet of Alternative Dispute Resolution (ADR) do a good job of suggesting what a free market in legal service might be like. (35)

Of course, it is not merely that we fail to observe what is presently all around us. We also act as though we have no knowledge of our own cultural or legal history. Consider, for example, the situation of African-American communities in the segregated South or the immigrant communities in New York in the first quarter of the twentieth century. Because of prejudice, poverty and the language barrier, these groups were essentially cut off from the state legal system. And yet, rather than disintegrate into chaotic disorder, they were able to privately supply themselves with the rules of behavior and dispute-settlement procedures necessary to maintain peaceful, stable, and highly structured communities. Furthermore, virtually none of the law that orders our interpersonal relationships was produced by the intentional actions of central governments. Our commercial law arose almost entirely from the Law Merchant, a non-governmental set of rules and procedures developed by merchants to quickly and peacefully resolve disputes and facilitate commercial relations. Property, tort, and criminal law are all the products of common law processes by which rules of behavior evolve out of and are informed by the particular circumstances of actual human controversies. In fact, a careful study of Anglo-American legal history will demonstrate that almost all of the law which facilitates peaceful human interaction arose in this way. On the other hand, the source of the law which produces oppression and social division is almost always the state. Measures that impose religious or racial intolerance, economic exploitation, one group’s idea of "fairness," or another’s of "community" or "family" values virtually always originate in legislation, the law consciously made by the central government. If the purpose of the law really is to bring order to human existence, then it is fair to say that the law actually made by the state is precisely the law that does not work.

Unfortunately, no matter how suggestive these examples might be, they represent only what can develop within a state-dominated system. Since, for the reasons indicated above, it is impossible to out-think a free market, any attempt to account for what would result from a true free market in law would be pure speculation. However, if I must engage in such speculation, I will try to avoid what might be called "static thinking" in doing so. Static thinking occurs when we imagine changing one feature of a dynamic system without appreciating how doing so will alter the character of all other features of the system. For example, I would be engaging in static thinking were I to ask how, if the state did not provide the law and courts, the free market could provide them in their present form. It is this type of thinking that is responsible for the conventional assumption that free market legal services would be "competing governments" which would be the equivalent of organized gang warfare. Once this static thinking is rejected, it becomes apparent that if the state did not provide the law and courts, they simply would not exist in their present form. This, however, only highlights the difficulty of describing free market order-generating services and reinforces the speculative nature of all attempts to do so.

One thing it seems safe to assume is that there would not be any universally binding, society-wide set of "legal" rules. In a free market, the law would not come in one-size-fits-all. Although the rules necessary to the maintenance of a minimal level of order, such as prohibitions against murder, assault, and theft, would be common to most systems, different communities of interest would assuredly adopt those rules and dispute-settlement procedures that would best fit their needs. For example, it seems extremely unlikely that there would be anything resembling a uniform body of contract law. Consider, as just one illustration, the differences between commercial and consumer contracts. Commercial contracts are usually between corporate entities with specialized knowledge of industrial practices and a financial interest in minimizing the interruption of business. On the other hand, consumer contracts are those in which one or both parties lack commercial sophistication and large sums do not rest upon a speedy resolution of any dispute that might arise. In a free market for legal services, the rules that govern these types of contracts would necessarily be radically different.

This example can also illustrate the different types of dispute-settlement procedures that would be likely to arise. In disputes over consumer contracts, the parties might well be satisfied with the current system of litigation in which the parties present their cases to an impartial judge or jury who renders a verdict for one side or the other. However, in commercial disputes, the parties might prefer a mediational process with a negotiated settlement in order to preserve an ongoing commercial relationship or a quick and informal arbitration in order to avoid the losses associated with excessive delay. Further, it is virtually certain that they would want mediators, arbitrators, or judges who are highly knowledgeable about commercial practice, rather than the typical generalist judge or a jury of lay people.

The problem with trying to specify the individuated "legal systems" which would develop is that there is no limit to the number of dimensions along which individuals may choose to order their lives, and hence no limit to the number of overlapping sets of rules and dispute resolution procedures to which they may subscribe. An individual might settle his or her disputes with neighbors according to voluntarily adopted homeowner association rules and procedures, with co-workers according to the rules and procedures described in a collective bargaining agreement, with members of his or her religious congregation according to scriptural law and tribunal, with other drivers according to the processes agreed to in his or her automobile insurance contract, and with total strangers by selecting a dispute resolution company from the yellow pages of the phone book. Given the current thinking about racial and sexual identity, it seems likely that many disputes among members of the same minority group or among women would be brought to "niche" dispute resolution companies composed predominantly of members of the relevant group, who would use their specialized knowledge of group "culture" to devise superior rules and procedures for intra-group dispute resolution. (36)

I suspect that in many ways a free market in law would resemble the situation in Medieval Europe before the rise of strong central governments in which disputants could select among several fora. Depending upon the nature of the dispute, its geographical location, the parties’ status, and what was convenient, the parties could bring their case in either village, shire, urban, merchant, manorial, ecclesiastical, or royal courts. Even with the limited mobility and communications of the time, this restricted market for dispute-settlement services was able to generate the order necessary for both the commercial and civil advancement of society. Consider how much more effectively such a market could function given the current level of travel and telecommunication technology. Under contemporary conditions, there would be an explosion of alternative order-providing organizations. I would expect that, late at night, wedged between commercials for Veg-o-matic and Slim Whitman albums, we would find television ads with messages such as, "Upset with your neighbor for playing rock and roll music all night long? Is his dog digging up your flower beds? Come to Acme Arbitration Company’s grand opening two for one sale."

I should point out that, despite my earlier disclaimer, even these suggestions embody static thinking since they assume that a free market would produce a choice among confrontational systems of justice similar to the one we are most familiar with. In fact, I strongly believe that this would not be the case. The current state-supplied legal system is adversarial in nature, pitting the plaintiff or prosecution against the defendant in a winner-take-all, loser-get-nothing contest. The reason for this arrangement has absolutely nothing to do with this procedure’s effectiveness in settling disputes and everything to do with the medieval English kings’ desire to centralize power. For historical reasons well beyond the scope of this Article, the Crown was able to extend its temporal power relative to the feudal lords as well as raise significant revenue by commanding or enticing the parties to local disputes to bring their case before the king or other royal official for decision. (37) Our current system of adversarial presentation to a third-party decisionmaker is an outgrowth of these early "public choice" considerations, not its ability to successfully provide mutually satisfactory resolutions to interpersonal disputes.

In fact, this system is a terrible one for peacefully resolving disputes and would be extremely unlikely to have many adherents in a free market. Its adversarial nature causes each party to view the other as an enemy to be defeated, and its winner-take-all character motivates each to fight as hard as he or she can to the bitter end. Since the loser gets nothing, he or she has every reason to attempt to reopen the dispute, which gives rise to frequent appeals. The incentives of the system make it in each party’s interest to do whatever he or she can to wear down the opponent while being uniformly opposed to cooperation, compromise, and reconciliation. That this is not the kind of dispute-settlement procedure people are likely to employ if given a choice is evidenced by the large percentage of litigants who are turning to ADR in an effort to avoid it.

My personal belief is that under free market conditions, most people would adopt compositional, rather than confrontational, dispute settlement procedures, i.e., procedures designed to compose disputes and reconcile the parties rather than render third party judgments. This was, in fact, the essential character of the ancient "legal system" that was replaced by the extension of royal jurisdiction. Before the rise of the European nation-states, what we might anachronistically call judicial procedure was chiefly a set of complex negotiations between the parties mediated by the members of the local community in an effort to reestablish a harmonious relationship. Essentially, public pressure was brought upon the parties to settle their dispute peacefully through negotiation and compromise. The incentives of this ancient system favored cooperation and conciliation rather than defeating one’s opponent. (38)

Although I have no crystal ball, I suspect that a free market in law would resemble the ancient system a great deal more than the modern one. Recent experiments with negotiated dispute-settlement have demonstrated that mediation 1) produces a higher level of participant satisfaction with regard to both process and result, 2) resolves cases more quickly and at significantly lower cost, and 3) results in a higher rate of voluntary compliance with the final decree than was the case with traditional litigation. (39) This is perhaps unsurprising, given that mediation’s lack of a winner-take-all format encourages the parties to seek common ground rather than attempt to vanquish the opponent and that, since both parties must agree to any solution, there is a reduced likelihood that either will wish to reopen the dispute. Given human beings’ manifest desire to retain control over their lives, I suspect that, if given a choice, few would willingly place their fate in the hands of third-party decisionmakers. Thus, I believe that a free market in law would produce a system that is essentially compositional in nature.

XIV.

In this Article, I have suggested that when it comes to the idea of the rule of law, the American public is in a state of deep denial. Despite being surrounded by evidence that the law is inherently political in nature, most people are nevertheless able to convince themselves that it is an embodiment of objective rules of justice which they have a moral obligation to obey. As in all cases of denial, people participate in this fiction because of the psychological comfort that can be gained by refusing to see the truth. As we saw with our friends Arnie and Ann, belief in the existence of an objective, non-ideological law enables average citizens to see those advocating legal positions inconsistent with their values as inappropriately manipulating the law for political purposes, while viewing their own position as neutrally capturing the plain meaning immanent within the law. The citizens’ faith in the rule of law allows them to hide from themselves both that their position is as politically motivated as is their opponents’ and that they are attempting to impose their values on their opponents as much as their opponents are attempting to impose their values on them. But, again, as in all cases of denial, the comfort gained comes at a price. For with the acceptance of the myth of the rule of law comes a blindness to the fact that laws are merely the commands of those with political power, and an increased willingness to submit oneself to the yoke of the state. Once one is truly convinced that the law is an impersonal, objective code of justice rather than an expression of the will of the powerful, one is likely to be willing not only to relinquish a large measure of one’s own freedom, but to enthusiastically support the state in the suppression of others’ freedom as well.

The fact is that there is no such thing as a government of law and not people. The law is an amalgam of contradictory rules and counter-rules expressed in inherently vague language that can yield a legitimate legal argument for any desired conclusion. For this reason, as long as the law remains a state monopoly, it will always reflect the political ideology of those invested with decisionmaking power. Like it or not, we are faced with only two choices. We can continue the ideological power struggle for control of the law in which the group that gains dominance is empowered to impose its will on the rest of society, or we can end the monopoly.

Our long-standing love affair with the myth of the rule of law has made us blind to the latter possibility. Like the Monosizeans, who after centuries of state control cannot imagine a society in which people can buy whatever size shoes they wish, we cannot conceive of a society in which individuals may purchase the legal services they desire. The very idea of a free market in law makes us uncomfortable. But it is time for us to overcome this discomfort and consider adopting Socrates’ approach. We must recognize that our love for the rule of law is unrequited, and that, as so often happens in such cases, we have become enslaved to the object of our desire. No clearer example of this exists than the legal process by which our Constitution was transformed from a document creating a government of limited powers and guaranteed rights into one which provides the justification for the activities of the all-encompassing super-state of today. However heart-wrenching it may be, we must break off this one-sided affair. The time has come for those committed to individual liberty to realize that the establishment of a truly free society requires the abandonment of the myth of the rule of law.


1. J.D., Ph.D., Philosophy, Duke University, LL.M., Temple University. Assistant Professor of Business Ethics, Georgetown University and Senior Research Fellow, Kennedy Institute of Ethics. An earlier version of this Article was presented as a lecture at the Institute for Humane Studies Liberty and Society Summer Seminar. Many thanks are owed to Ann C. Tunstall for her help.

2. U.S. Const. amend. I.

3. George Orwell, 1984, at 32 (Commemorative 1984 ed., The New Am. Library 1983) (1949).

4. See Iain McLean, Public Choice 71-76 (1987).

5. See Herbert Weschler, Toward Neutral Principles of Constitutional Law, 73 Harv. L. Rev. 1 (1959).

6. 59 N.E. 1058 (Ind. 1901).

7. 104 S.W. 164 (Ark. 1907).

8. 42 U.S.C. S 2000e-2 (1988).

9. See United Steelworkers v. Weber, 443 U.S. 193, 228 n.9 (1979) (Rehnquist, J., dissenting)

10. Id. at 201 (quoting Holy Trinity Church v. United States, 143 U.S. 457, 459 (1892)).

11. Id. at 202.

12. 110 Cong. Rec. 6548 (1964).

13. 33 N.W. 919 (Mich. 1887).

14. Id. at 923-24.

15. 64 Wis. 265, 25 N.W. 42 (1885).

16. Id. at 45.

17. 43 S.E. 732 (Ga. 1903).

18. Id. at 733.

19. 131 N.E. 887 (N.Y. 1921).

20. Id. at 890.

21. U.S. Const. art. I, § 8, cl. 3.

22. See Wickard v. Filburn, 317 U.S. 111, 128-29 (1942).

23. The federal government regulates sexual harassment in the workplace under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e(b) (1988), which was enacted pursuant to the Commerce Clause.

24. On this point, it may be relevant to observe that as I write these words, the President and Congress of the United States are engaged in a vigorous debate over what percentage of the American public must have health insurance for there to be universal coverage.

25. The facts of the case being described are drawn from Syester v. Banta, 133 N.W.2d 666 (Iowa 1965).

26. Id. at 668.

27. Id. at 671.

28. As the court did in the actual case. Id. at 674-75.

29. See Riggs v. Palmer, 22 N.E. 188 (N.Y. 1889).

30. As the court did in the actual case. Id. at 191.

31. U.S. Const. amend. XIV, § 1.

32. Oliver Wendell Holmes, The Path of the Law, 10 Harv. L. Rev. 457, 465-66 (1897).

33. The Crits have been accused of being intellectual nihilists and attacked for undermining the commitment to the rule of law that is necessary for the next generation of lawyers to engage in the principled, ethical practice of law. For this reason, their mainstream critics have suggested that the Crits have no business teaching in the nation’s law schools. See, e.g., Paul D. Carrington, Of Law and the River, 34 J. Legal Educ. 222, 227 (1984).

34. See Orwell, supra note 2, at 46.

35. The National Law Journal has noted, "Much of corporate America is creating its own private business .courts’ that are far removed from the public courthouses." William H. Schroder Jr., Private ADR May Offer Increased Confidentiality, Nat’l L.J., July 25, 1994, at C14.

36. I am fairly confident that the parties to such disputes will not choose to have them resolved by a panel composed almost exclusively of White Anglo-Saxon Protestants as is the case today.

37. The story of how royal jurisdiction came to supplant all others and why the adversarial system of litigation replaced the earlier methods of settling disputes is fascinating one, but one which obviously cannot be recounted here. Those interested in pursuing it may wish to consult Harold J. Berman, Law and Revolution (1983); Leonard W. Levy, Origins of the Fifth Amendment (1986).

38. Once again, any extended account of the roots of our legal system is beyond the scope of this Article. For a useful general description, see Berman, supra note 36, at 49-84.

39. See Joshua D. Rosenberg, Court Studies Confirm That Mandatory Mediation Works, Nat’l L.J., Apr. 11, 1994, at C7.

June 28, 2010

A Visit to Rhinegold

Filed under: Harry Browne

A VISIT TO RHINEGOLD

By Harry Browne

Once, in a fantasy, I had the opportunity to visit the mythical nation of Rhinegold. I was doing research for a book, and I’d heard there was a strange money system in Rhinegold–so I thought I should investigate.

Rhinegold is a very small country (about the size of Luxembourg–around 1,000 square miles) situated on the river Rhine in a little nook at the corner where France, Germany, and Switzerland would otherwise meet. There are about 160,000 inhabitants, all of whom speak the ancient tongue of Cash (at least that’s the only language they understand).

When I went there, I figured the best way to learn about the monetary system was to head for the capital city and speak to someone at the central bank. But no one I asked had ever heard of a central bank. In fact, no one even knew what the capital city was–an ignorance I was to come to understand only later.

So instead, I went to the city of Glitter, where I was able to make friends with a businessman named Brian Sell. Seeing my interest in finances, he arranged a luncheon meeting comprised of a leading banker (I. M. Solvent), a renowned economist (G. N. Product), Mr. Sell, and myself.

After the amenities had been completed, we began discussing the economy of Rhinegold.

It seems that the monetary unit there is the gram. Having written in the past about francs, Swiss francs, Belgian francs, Japanese yen, and even Qatar/Dubai riyals, I saw nothing strange about a government naming its currency the gram.

So I asked my first question: "What is the gram backed by?"

"Backed by?" replied Mr. Sell, rather quizzically. "What do you mean ‘backed by’?"

"I mean what is your monetary reserve–silver, U.S. dollars, SDRs, what?"

"But, Mr. Browne, the gram is not backed by anything."

"Not backed by anything? Well, it must be a very inflationary currency then. Many currencies are backed by gold, for instance."

"No, Mr. Browne, you do not understand. The gram is not backed by gold. It is gold. What do you think a gram is? The gram is a weight of gold–equal to .03215 ounces, consisting of one hundred centigrams or one thousand milligrams. Have you never heard of a gram?"

"Yes," I said. "But gold isn’t money; it’s only a backing for money."

"Maybe where you live, but not here. We would not dream of considering anything but gold as money."

"But you don’t actually exchange gold in daily trade, do you?"

"Of course we do. I cannot imagine anyone accepting anything else in payment."

"But isn’t that rather cumbersome?" I asked.

"Not at all," Mr. Sell replied. He reached into his pocket and extracted an assortment of things. "Here is a 100-gram bar of gold, for example. I would not ordinarily have this size bar with me; in fact, I was going to take it over to the warehouse of Mr. Solvent after lunch."

I turned to Mr. Solvent and said: "But I thought you were a banker."

"You may call me anything you choose," he said, shrugging. "A bank is merely a warehouse for gold."

Mr. Sell handed the gold bar to me, and I must admit I was impressed–holding gold in my hand for the first time in my life. It was a wafer-thin little bar, about two inches long and an inch wide. I looked at the inscription on it. It said, "Alberich’s Mint. 100 grams, .9999 fine. Assayed by I. M. Solvent." It turned out that Mr. Solvent’s warehouse included an assay office. He was highly respected in the country, as were his father and grandfather before him. "How much is the gold bar worth?" I asked.

"It is worth what 100 grams will buy in the marketplace," said Mr. Sell. "For example, I could buy a nice color television set, a bedroom suite, many things."

"But what is the price of a nice color television set?" I asked.

And with a straight face he replied, "The price is 100 grams."

"But how much is 100 grams?"

He became a little annoyed and said: "My dear sir, 100 grams is 100 grams. Are you trying to make fun of me?"

At that, Mr. Product, the economist, intervened. "I think what Mr. Browne wants to know is what 100 grams are worth in American paper currency. With U.S. dollars selling for about Vs of a gram orVisoof an ounce each, you could buy about 500 U.S. dollars with that gold bar–if you wanted to."

"Don’t you mean that gold is selling for about $150 an ounce?"

"My friend, you do not buy gold, you spend it. Gold is money. You might buy dollars (they are not money) if you had some reason for wanting them; but, offhand, I cannot think of any reason. You Americans have everything upside down."

Satisfied that my questions were prompted by ignorance, not malevolence, Mr. Sell continued showing me his money.

He displayed various coins–several more from Alberich’s Mint and a few from Miser’s Mint. They were denominated in 30 grams, 20 grams, 10 grams, 5 grams, and 1 gram.

I quickly tried to compute the value of each in the only terms I knew–U.S. dollars. It appeared that the 1-gram coin was worth about $5.00. It was a tiny thing, about half the size of an American dime.

He noticed my consternation at the small size of the 1 gram coin, and said, "Yes, it is a rather inconvenient coin-too easily lost. So we also have a 1-gram token; here is one of them."

I looked at the "token." It was a typical coppernickel coin (as I had always thought of the word "coin"), about the size of an American silver dollar. I noticed that the inscription on it said, "Good for one gold gram at Rhinemaiden Safekeeping Company, ‘Guardians of the Rhinegold.’"

"That is my warehouse," said Mr. Solvent. "Anyone can redeem that token for a gram of gold at any time."

Mr. Sell showed me some other tokens. They bore labels of 50 centigrams, 25 centigrams, 10 centigrams, 5 centigrams, 272 centigrams, 1 centigram, and 1/2 centigram. The first four had the same look of nickel about them that the 1-gram token had, decreasing in size along with the value. But the 2-1/2, 1, and 1/2 centigram tokens were plain copper, brown like American pennies; and so were a little larger since they were easily distinguishable from the more valuable tokens.

COINS AND TOKENS

Thinking I was one up on them, I said, "I’m surprised at you folks. With your apparent fetish for intrinsic value, why don’t you have silver coins?"

They each looked surprised, but then Mr. Solvent came to the rescue. "I think I understand your question. But I do not think you understand that tokens are not money. They should not have intrinsic value as gold coins do. A token is a money substitute, something you exchange for gold when you want to—just as your paper currency was once redeemable in gold.

"You would not think of printing money receipts on some special paper that was worth more than the money it represents. That would be a waste. The same thing is true for tokens. A one-gram token contains about one centigram’s worth of copper in it. It is merely a substitute. If we put silver in the token, the value of the silver might be greater than the amount of gold it is meant to represent."

"But we once had silver in our coins in America."

*Ah yes," Mr. Product broke in. "I have read about that. And that is precisely why you continually had so-called ‘coinage problems.’ The silver in the ‘coin,’ as you call it, was often worth more than the so-called ‘money’ it was supposed to represent. And when it was, people would not use them; they would hoard them. As more were minted, they would disappear from circulation immediately."

"But the coins had intrinsic value."

"Yes, that was their problem. You cannot have two kinds of money circulating, gold and silver; one will always be worth more proportionately than the other and so will not circulate. Your government would try to force people to accept them at the same value; how silly."

"What is a ‘government’?" Mr. Sell asked, but Mr. Product went on with what he was saying.

"If you offered me some silver, I would accept it– because silver is very valuable. But I would be calculating in my mind how much the silver is worth in terms of gold." Seeing his question wasn’t going to be answered, Mr. Sell shrugged and brought the rest of his money out of his pocket. In his hand was a wad of currency.

"And here we have money receipts. They are like tokens, exchangeable for gold but more convenient to handle in larger amounts."

He showed me the receipts. Many of them were from Mr. Solvent’s warehouse. They were somewhat similar to U.S. bills–finely engraved (probably to discourage counterfeiting), had denominations on them from 100 grams to 1 gram, and also had pictures of men and women. I leafed through them, looking at the unfamiliar faces-probably the former presidents of Rhinegold, I thought-until I came across the face of John D. Rockefeller! And there was one of Andrew Carnegie.

"Yes, Mr. Browne," said Mr. Solvent. "I grace my money receipts with honored men to lend a sense of prestige to my warehouse. People in Rhinegold are very grateful to John D. Rockefeller for what he did to make gasoline inexpensive for our motor cars."

At my request, he explained the warehouse business. He stored gold, gold coins, and money receipts for people. He offered demand deposits–a pure storage function–for which customers paid a small fee. And he also borrowed gold from people by setting up time deposits–whereby customers left gold with him for specific lengths of time, for which he paid them a fee. He, in turn, lent the gold to others for larger fees. As he put it, he was a loan broker.

FOREIGN EXCHANGE

He also offered a foreign trade department–which I later realized was similar to a foreign exchange business. Mr. Sell imported products to be sold in his stores and he handled the transactions through Mr. Solvent.

If Mr. Sell wanted to buy products from Germany, for example, he would get a price in German marks. But he kept no supply of German marks, so Mr. Solvent would check their value by determining the exchange rate between Swiss francs and German marks, and by getting a commitment from someone in Zurich to buy gold from Solvent’s warehouse. That way, he could tell Mr. Sell exactly how much gold was required to buy the products he would then handle the exchange transactions for Mr. Sell.

"As an exchange broker, I guess you stock various currencies, too "

"Very little," replied Mr. Solvent. "We have some business selling currencies to Rhinegolders who intend to travel to other countries, but I just keep a small inventory. I would never want to have a large supply of this strange paper that fluctuates in value."

Then I remembered that gold had gone up in value recently–rising from $35 per ounce to $150 per ounce in just the past four years. When I mentioned this, Mr. Product replied, "Yes, you people have had some strange ideas about gold. Your authorities kept dumping it on the market for years–trying to make your paper currencies more valuable. How ridiculous.

"But we knew you couldn’t do it indefinitely. And so most Rhinegolders restricted their purchases over the past few years, knowing things would change, holding onto as much gold as possible.

"We buy many things from other countries. You see, we do not produce many things here–some dairy products, a few cereals, potash, some agricultural products, a rather inferior quality of wine, and, of course, we have the power plant. So as long as you people had such contempt for gold, we would not buy very much from other countries. But now, now every gram of gold will buy about four times as much in foreign products. We are all far wealthier than we were four years ago; we are importing luxury cars, excellent French wines, and all sorts of other things we have always wanted."

"But if you’re importing so much, business must be terrible here."

"Oh no. I suppose most people are taking it a little easy for a while. And why not? They are enjoying the fruits of past labor. But no one expects to live the rest of his life off your follies. Meanwhile, we are buying many things we have always wanted."

"But what about your balance of payments?" I asked. "It must be in terrible shape."

"What is balance of payments?" Mr. Sell and Mr. Solvent asked in unison.

"You don’t know what balance of payments is? That’s the comparison between your imports and exports. Right now, you’re running at a deficit; it could ruin your money system."

"I do not understand," said Mr. Sell. "How could we run at a deficit? Our imports and exports are always equal; how can they be otherwise? No one is willing to give us anything without getting something in return. I do not understand what you mean by a deficit."

"I would look at it another way," said Mr. Solvent. "You could say that we always import more than we export. After all, an individual only exchanges when he gets back something of greater value than he gives up; otherwise he would not bother making the exchange. So, taking all our people as an aggregate, we always import things of greater value to us than we export. But then so do people of every other country. Is that what you mean?"

"No, that is not what he means," interrupted Mr. Product, the economist. "I’ve read about this balance of payments matter. It is really very simple. What they do in the United States is to buy on credit, in effect. They import products but do not pay for them with gold. Instead they give IOUs that are supposedly payable in gold–something like our money substitutes. But they issue far more IOUs than they actually have gold for.

"And so they are constantly besieged by creditors demanding payment in gold for the IOUs. As a result, they always hope they will export more food and cars and other things in exchange for other people’s IOUs (or to get their own IOUs back), thus keeping foreigners from asking for the gold that is not there.

"We do not have that problem here, because we do not deal in that kind of credit. Everything we buy is paid for with something immediately–potash, cheese, any of our other products, or gold. So every import is simultaneously an export, too.

"Occasionally, someone pays for an import with one of Mr. Solvent’s warehouse receipts–sort of the way you pay with ‘dollars’ (a strange term that denotes nothing specific). But any foreigner can exchange the receipts for gold in storage at the warehouse anytime he wants. And there is always gold there for every receipt; Mr. Solvent can prove it.

"So if everyone holding a receipt wanted to exchange it for gold at the same time, all the receipts would be redeemed. No one would be left out. The only problem might be that Mr. Solvent would have to hire a couple of extra clerks to handle the increased business that day."

"Ah, that would be no problem," said Mr. Solvent. "And if everyone took the gold they have stored with me, I would be able to take that vacation I have been putting off."

"But that’s not true," I said. "You couldn’t satisfy all the demands for gold. You’ve already told me that you’ve lent out some of the gold."

"Not that gold," he said. ‘I cannot lend gold that is covered by a receipt; that is dishonest. Two different people would be trying to spend the same money at the same time. The gold I lend is gold that is lent to me, not stored with me. No one who has lent gold to me has a claim upon it until the due date of the note I gave him. And before then, I will be paid back the gold by the person I lent it to. I could not possibly lend gold unless I have the exclusive right to it for a given period of time."

"That sounds like a very restrictive credit system to me. How can you stimulate business that way?"

"I do not understand. How would we have any more resources or workers by doubling the money substitutes? That is what would happen if I lent gold that someone else was spending with his receipts.

"All that is rather academic right now, anyway," he added. "No one has borrowed much gold the past few years. Everyone in Rhinegold knew the world’s respect for gold would be increasing. As long as gold was being dumped on the market by your authorities, gold was buying artificially small amounts of things temporarily. So our friends have been waiting, saving as much gold as they could, waiting until it would buy much more. No one wanted to borrow money and spend it at relatively high prices and then pay it back when prices would be much lower. In fact, the price for borrowing money has been around one percent a year for several years now."

"You mean prices are dropping?"

"Of course, you price U.S. goods in dollars. Well, until recently an ounce of gold would buy only about 35 ‘dollars’ worth’ of U.S. products. Now an ounce of gold will buy 150 ‘dollars’ worth’ of U.S. goods. Four years ago, it would have cost Mr. Sell 400 grams to buy that American color TV set; now it costs only 100 grams. And that, of course, has also forced local prices to go down, too, because foreign products can be bought so cheaply now.

"In fact, to facilitate the lower prices, I have recently started issuing a 2-1/2-milligram token. There are now some things that cost less than 1/2 centigram."

That sounded ominous to me. "Then you must be suffering a depression–if prices have dropped to one-fourth of what they were."

DEPRESSIONS?

"What is a depression?" asked Mr. Sell.

Calling upon my vast knowledge of economics, I said, "A depression is when you have to reduce your standard of living because of bad times."

"Oh yes, we had one of those," replied Mr. Sell. "During that ridiculous war you people had back in the 1940s. Most of the borders to other countries were closed and it seemed like nobody in any other country was producing anything of value. We could not buy automobiles from any other countries, for example; and we had to go without a lot of other things for several years. So we ate a lot of cheese and waited it out. Is that what you mean by a depression?"

"Well, sort of, I guess. I’m not really sure. Wars are supposed to be good for business. At least that’s what my economics textbook said. But I mean a real depression–like we had in the 1930s."

"I know what you mean," said Mr. Product. "We had something like that just after the war. When the war ended, Rhinegold was overrun with tourists from the United States. They wanted to buy all sorts of things–potash, cheese, sight-seeing, even our cheap wine since the French had been producing very little for several years.

"You see, we were so glad to see people from the outside world again, we did not ask many questions. And they had stacks of money substitutes–your ‘dollars’– which they said were ‘good as gold.’ So we took their word for it and accepted the dollars.

"When people took the money receipts to Mr. Solvent, he checked them out and found out that they were not as good as gold–not hardly. The people who had printed the receipts would not give you any gold for them; you had to get in a waiting line.

"So there we had given up a great deal of our production for something of much less value. We all suffered a bit from that–our standards of living went down for a while. It was like having worked for four years for nothing. That was our real depression."

"But wait a minute," interrupted Mr. Solvent. "We had another depression right after that, remember? When the people in Glitter City realized that the money substitutes were not exchangeable for real money, they had a big bonfire in the city square and burned all these phony receipts. The fire spread and a third of Glitter was destroyed by fire. It took some time to get back to normal living standards after that. So we have had two depressions–thanks to this funny money of yours."

WARS

Anxious to change the subject, I turned the conversation back to the war. "How in heaven’s name did you manage to stay out of World War Two? Here you are right between Germany and France. Didn’t the Nazis occupy Rhinegold while they were overrunning France?"

"They tried to." said Mr. Product. "A large band of soldiers in tanks moved in and said that Glitter City was now under Nazi occupation. That is, they tried to say it, but they could not find anyone to listen to them. They posted signs on the buildings and went looking for something called the ‘City Hall’ to take over the government."

"Then what happened?"

"You see, we do not have a government. No one here respects any authority except his own self-interest and the self-interest of any person with whom he might have some intercourse."

"By the way, what is a government?" asked Mr. Sell.

Ignoring him, Mr. Product went on with his story. "So that meant they would have to set up a government. They sent home for more troops; but since no one here had any concept of what a ‘government’ is, it meant they could control us only if they had one policeman for every Rhinegolder. At first, they tried stationing a soldier on every corner with a tommy gun–but people just went on about their own business.

"Finally, they realized they would have to have 160,000 soldiers here to guard 160,000 Rhinegolders. And for what? Just to say they had conquered a little country of 1,000 square miles. That did not make sense–even to them. So they stole some cheese and went on to France."

"That’s very inter–"

"Wait, that’s not all. In 1945, it happened again– sort of. Then the American soldiers came. They had even more tanks and soldiers than the Germans had. They rode into town and a man in uniform with some artificial silver stars on his shoulder stopped me on the street and said, Take me to your leader.’ So I took him home and introduced him to my wife.

"Well, either I had misunderstood or he misunderstood, because he threatened to shave my head and denounce me as a collaborator. Fortunately, he changed his mind–but I do not think he ever really comprehended our way of life here, and I certainly do not understand his.

"So after a couple of days, they stole some cheese and headed into Germany."

DEMOCRACY

This was all a little too much for me to grasp. "But you must have a government. Who decides when prices get too high or how much is a fair profit?"

"What is a government?" insisted Mr. Sell.

"We all decide such things," said Mr. Product.

"Oh," I said. "You mean you vote on such questions."

"I guess you could say that. I vote when I buy something. I am telling the seller that his price and profit are not prohibitive. If enough other people also vote for the product in that way, the seller keeps offering it. If not, he is voted into changing his prices or doing something else for a living. Is that what you mean?"

"No, but we’ll set that aside. Even if you don’t want a government to control your economy, you have to have one for national defense. If nothing else, that’s a necessity."

"I disagree with you. In fact, I see it to be exactly the reverse. If we had a government running our economy, we would survive. We would have to put up with the recurring price distortions of inflation and the inevitable depressions that you people take for granted. Our standard of living would go down considerably with such a government running our lives, but–as I said–we would still survive somehow.

"But the one thing we could not tolerate would be a government responsible for our defense. Depressions are bad enough–but wars! Wars that send our people off to fight the personal battles of some stupid politician; large shares of our production taken away from us to buy guns and fortifications; bombs raining on our cities. I am surprised that you imagine that we would want that."

"But how do you defend yourselves?"

"By minding our own business. Oh, we have had other people wanting to conquer us a few times. But a nation is conquered only when the government surrenders; then the people surrender. A people who do not respect any authority but themselves have no one to surrender for them. That means they would each individually have to surrender. No conqueror has the resources to waste trying to conquer 160,000 different and individual enemies.

Each time the foreigners have come to make war, they have left soon enough. And yes it is true that they killed a dozen people or so before they left. And we all mourned-because I doubt that there is a single person in Rhinegold who does not consider such deaths to be senseless.

But fortunately we did not have a government. If we had, the ‘great’ ruler would have called for blood and vengeance ‘on behalf of an injured nation.’ He would have drafted half the population and sent thousands off to die. If a dozen people killed is such a tragedy, then why bring on the even greater tragedy of thousands killed?

"No thank you, Mr. Browne, no national defense for us. It is too dangerous."

PROPERTY

I could see it was time to change the subject again.

"Tell me about your industry. I notice you have a pretty impressive power plant on the river. If you have no government, how was it built?"

Mr. Sell handled that one. "By production, of course. Some people worked, saved their money, and invested it in the building of the power plant–hoping enough people would want the electricity to make the investment pay off."

"But such things as power plants are too expensive to be built with private money. That’s why governments always have to put up the money."

"I do not know what is this thing you keep calling a ‘government,’ but I know one thing: If the people of Rhinegold are not rich enough to have the money, starting a government is not going to make them any richer."

"Well then, let’s talk about your other industry. I’ve seen some large farms. Who owns them?"

"Some of them are owned by local residents. And a few of them are owned by Germans. They do very well with them, too. I understand Herr Dorado made quite a profit last year."

"Doesn’t that bother you–Germans coming in here, buying up valuable property, making money on it, and taking the profits out of the country?"

"I do not understand; why should it? Evidently, the local people do not consider the property as valuable as the Germans do or they would offer prices that would buy them out. As for ‘taking profits out of the country,’ how can that hurt us? They only make their profits by offering something in return. They get the gold; we get the food we want. And when we sell something we produce, we get gold in return–or we don’t do business. What is the problem?"

"No problems, I guess. Well, I see the time is getting late. So we’d better break up this very informative meeting so you can get back to your businesses. I appreciate your taking the time to tell me about your rather strange money system. It’s really quite quaint, though a bit primitive."

"What is primitive about it?" asked Mr. Product. "We have no shooting wars, no trade wars, no balance of payments problem, no inflation, no depressions of the kind you take for granted, no borders really (just the borders of other countries), no one to prevent us from buying what we want from whomever we want at whatever price we can agree upon, no one to tell us what we can produce, what we can own, whom we can deal with. If that is primitive, I would rather be primitive than have to face the problems inherent in your contrived, ’sophisticated,’ controlled economy."

MONEY

I had been clearly outflanked and out-argued. They’d pushed me into an intellectual and ideological corner. It meant that I had to bring up the one thing that, out of courtesy, I’d wanted to avoid. 1 didn’t want to bring it up, but they’d forced the issue. I had to raise the ultimate argument–my coup de grace.

"All right, you’ve just made the most telling point about your system. Everything you think is so good about your system has to do with money. Money! That seems to be all you ever think about, all you can talk about. You’re so preoccupied with money, where’s the aesthetic interest, the spiritual concerns, the higher order of things that you have no time for because of your preoccupation with money? This is the most materialistic society I’ve ever seen."

They all looked surprised; clearly I’d gotten to them. Then Mr. Product spoke.

"Money? You think we are preoccupied with money. You invite us to lunch and ask one question after another about money–and then think that we are preoccupied with money. How very funny.

"We talk about money because you insist upon it. You have taken us away from our pleasures, our aesthetic enjoyments, and–yes–our businesses, because you, my friend, are the one who is totally absorbed in the subject.

"Why are you writing a book about money? Only because your own money system is in such terrible straits. If it worked right, you would be writing about something else. Our money system works precisely because no one ever sat down and invented it. It simply evolved over hundreds of years as thousands of individuals just did what was in the self-interest of each.

"We never became so preoccupied with money that we tried to invent it out of paper in a vain attempt to have more than we have earned.

"As a result, we understand money. We know what it is and we know what it is not. It is simply some commodity of such accepted value in the community that an individual is willing to hold it while he waits to purchase something else with it.

"And because we understand money and earn a lot of it, we are rich. And do you know what that means? It means we do not have to be preoccupied with it. We are free to enjoy many things in life that you cannot enjoy because you are too absorbed trying to figure your way out of the dilemmas your primitive money system has caused.

"We live fruitful lives here because we are not so pompous as to believe we know what is best for other people. So we do not take the earnings of one person to give to another we ‘judge’ to be more deserving.

"Mr. Solvent here gave up the matinee at the opera this afternoon to indulge your preoccupation with money. And Mr. Solvent regrets that–not because opera is culture but because opera is enjoyment.

"You talk of materialism as ‘opposed’ to spiritual and aesthetic values. But there is no opposition between them. What I have just said about money and the lack of the need to be preoccupied with it was not meant to disparage money. Quite the contrary.

"There are people here who go to church quite often. But I doubt that anyone of them thinks that Bibles are printed on paper by prayer. Nor do men like Mr. Solvent believe that operas are reproduced on gramophone records by aesthetic meditation. Those things are accomplished by effort, by productivity, by a sound understanding of what money is– so that one’s limited resources are not used up chasing after pieces of paper that have no durable value.

"When your country learns what money is, your people will be able to produce so well that the aesthetic and spiritual endeavors of your country will no longer be so expensive that you cannot afford them.

"I advise you to become so preoccupied with money that you learn to understand it, and to earn it, so that you can finally become preoccupied with something else."

When he finished, I said, "Well, I respect your position. Of course, I don’t have to accept it. Especially since my president said last week that everything will be much better next year–after the new controls have had a chance to work.

"And gentlemen, I appreciate your taking this time to talk with me." As I shook hands with each of them, I said, "Thank you, Mr. Brian Sell; thank you, Mr. I. M. Solvent; thank you Mr. G. N. Product. Oh, one other thing, Mr. Product; do you mind my asking what the initials G. N. stand for?"

He looked at me a bit surprised and said, "Why no; they stand for Gerald Nathan. Why do you ask?"

"Oh, no special reason. Thank you very much."

And so I left Rhinegold and headed back to the warm, reassuring, comforting homeland where I could deal with things I understood–strikes, food shortages, exchange controls, etc.

When I arrived, the customs official asked me, "Do you have anything to declare? Any money over $5,000? Any gold? Anything else?"

I thought of the 10-gram gold coin I’d bought on my way out of Rhinegold, which was now hidden in my shoe; I cleared my throat and said, "Er, no, not a thing. Uh, that is, except for some cheese."

June 6, 2010

Everyday Anarchy 16: Anarchism and Political Realities

EVERYDAY ANARCHY

By Stefan Molyneux

ANARCHISM AND POLITICAL REALITIES

Along with the anarchistic moral arguments against the use of force to solve problems come many well-developed economic arguments against the long-term stability of any democratic political system.

To take just one example, let’s look at the problem of unequal incentives.

In the United States, thousands of sugar producers receive massive state subsidies and coercive protection from foreign competitors–benefits which have been in place, for the most part, since close of the war of 1812. Although $1.2 billion was spent in 2005 subsidizing sugar production, the majority of the money goes to a few dozen growers.

These sugar subsidies cost the US economy billions of dollars annually, while netting major sugar producers millions of dollars a year each. The average American consumer would have to fight for years, spend untold hours and dollars attempting to overturn the subsidies in Congress–to save, what? A few dollars a year apiece? None but a lunatic would attempt it.

On the other hand, of course, these sugar growers will spend whatever time and money it takes to preserve their massive influx of cash. It is not that hard to figure out who will present stronger "incentives"–to say the least–to Congress. It is not that hard to figure out just who will donate as much as humanly possible to a Congressman’s run. It is embarrassingly easy to figure out who will keep calling the congressman at 2 a.m. with dire threats should he dare to question the value of the subsidies, and promises of money if he refrains.

Politicians, like so many of us, take the rational path of least resistance. A congressman will receive no thanks for killing these subsidies and returning a few unproven and ignored dollars to his average constituent’s pocket–such a "benefit" would scarcely even be noticed. However, the sugar growers would raise bloody hell to the very skies, as would all their employees, their hangers on, the professionals they employ, and anyone else who benefits from the concentration of illicit wealth that they enjoy.

Furthermore, should the subsidies be somehow cut, and the price of a candy bar dropped a nickel, all that would happen is that some other politician would impose a tax of, say, about a nickel on candy bars–to save the children’s teeth, of course–thus generating more cash for him to hand out and utterly nullifying any benefit to the consumer. Would any rational politician pursue a policy that would enrage his supporters, strengthen his enemies and win no new friends?

Of course not.

Thus it is clear to see that while no incentive exists to do the right thing, every conceivable incentive exists to do the wrong thing. In the case of sugar subsidies, the "sting" to the consumer is only a few dollars a year–multiply this, however, thousands and thousands of times over, for each special interest group, and we can see how the taxpayer will inevitably die a death not by beheading, but rather by the tiny bites of 10,000 mosquitoes, each feeding its young by feasting on a droplet of his blood.

No democratic government has ever survived without taking a monopoly control over the currency. The reason for this is simple–politicians need to buy votes, but that illusion is hard to sustain if those you give money to have to pay that money back within a few years in the form of higher taxes. Taxpayers would get wise to this sort of game very quickly, and so politicians need to find other ways to fog and befuddle taxpayers. Deficit financing is one way–give money to people in the present, then stick the bill to their children at some undefined point in the future, when you’re no longer around–perfect!

Another great way of pretending to give people money is to inflate their currency by printing more money. This way, you can give a man a hundred dollars today, and just reduce the purchasing power of his dollar by 5% next year by printing more. Not one person in a thousand will have any idea what’s really going on, and besides, you always have the business community to blame for "gouging" the consumer.

Another "solution" is to promise public-sector unions large increases in salary, which only really take effect toward the end of your office, so that the next administration gets stuck with the real bill. Also, you can sign perpetual contracts giving them plenty of medical and retirement benefits, the majority of which will only kick in when they get older, long after you are gone.

Alternatively, you can sell long-term bonds that give you the cash right now, while sticking future taxpayers in 10, 20 or 30 years with the bill for repaying your principle, and accumulated interest.

One other option is to start licensing everything in sight–building permits, hot dog stand permits, dog licenses and so on–thus grabbing a lot of cash up front, and leaving your successors to deal with the diminished tax base from lower economic activity in the future. Or you can buy the votes of apartment-dwellers with "rent control"–leaving the next few administrations to deal with the inevitable resulting apartment shortage.

This list can go on and on–it is a list as old as the Roman and Greek democracies–but the essential point is that democracy is always and forever utterly unsustainable.

A basic fact of economics is that people respond to incentives–the incentives in any statist society–democratic, fascist, communist, socialist, you name it–are always so unbalanced as to turn the public treasury into a kind of blood mad shark-driven feeding frenzy.

Well, say the defenders of democracy, but the people can always choose to vote in other people who will fix the system!

One of the wonderful aspects of working from first principles, and taking our evidence from the real world, is that we don’t have to believe pious nonsense anymore. Except directly after significant wars, when they need to re-grow their decimated tax bases, democratic governments simply never ever get smaller.

The logic of this remains depressingly simple, and just as depressingly inevitable. A central question that any voter who claims to wish to be informed must ask is: why is this man’s name on the ballot?

The standard answer is that he has a vision to fix the neighborhood, the city, or the country, and so he has nobly dedicated his life to public service, and needs your vote so that he can begin fixing the problem. He is a pragmatic idealist who knows that compromises must be made, but who can still make tangible improvements in your life.

Of course, this is all pure nonsense, as we can well see from the fact that things in a democracy always get worse, not better. Standards of living decline, national debt explodes, household debt increases, educational achivements plummet, poverty rates increase, incarceration rates increase, unfunded liabilities skyrocket–and yet, election after election, the sheep run to the polls and feverishly scribble their hopes on to the ballots, certain that this time, everything will turn around! (For those reading this in the future, we are currently right in the middle of "Obama-mania.")

The question remains–why is this man on the ballot?

We all know that it takes an enormous amount of money and influence to run for any kind of substantial office. The central question is, then: why do people give money to a candidate?

I’m not talking about a national presidential campaign, where obviously people give a lot of money to the candidate in the hopes of giving him power to achieve some sort of shared goals and so on.

No, I mean: where does the money to get started even come from?

Why would pharmaceutical companies, aerospace companies, engineering companies, manufacturing companies, farmers, and public-sector unions and so on give money and support to a candidate?

Clearly, these groups are not handing out cash for purely idealistic reasons, since they are in the business of making money, at least for their members. Thus they must be giving money to potential candidates in return for political favors down the road–preferential treatment, tax breaks, tariff restrictions on competitors, government contracts etc.

In other words, any candidate that you get to vote for must have already been bought and paid for by others.

Does this sound like an odd and cynical assertion? Perhaps–but it is very easy to figure out if a candidate has been bought and paid for.

Candidates will always talk in stirring tones about "sacrifice" and so on, but you surely must have noticed by now that no candidate ever talks specifically about the spending that he is going to cut. You never hear him say that he is going to balance the budget by cutting the spending of X, Y or Z. Everything is either couched in abstract terms, or specific promises to specific groups. (At the moment, the current fetish–in leftist circles–is to pretend that 47 million Americans can get "free" healthcare if the government lowers the tax breaks on a few billionaires.)

In other words, if you don’t see anyone else’s head on the chopping block, that is because it is your head on the chopping block.

Of course, if the government really wanted to help the economy at the expense of some very rich people, it would simply annul the national debt–in effect, declare bankruptcy, and start all over again.

Why does it not do this? Why does it never even approach this topic? We have seen price controls on a variety of goods and services over the past few generations–why not simply place a moratorium on paying interest on the national debt, at least for the time being? Well, the simple answer is that the government simply cannot survive without a constant infusion of loans, largely from foreign lenders.

This is a bit of a clue for you as to how important your vote really is, and how concerned your leaders are about your personal and particular issues–relative to, say, those of foreign lenders.

Ah, you might argue, but why would a pharmaceutical company, say, give money to a potential candidate, since no deal can possibly be put down in writing, and that potential candidate might well take the money, and then just not take the calls from that pharmaceutical company when he or she gets into power?

Well, this is a distinct possibility, of course, but it has a relatively simple solution. When a candidate is interested in taking a run at any reasonably high office, he goes around to various places and asks for money.

When you ask someone for a few thousand dollars, naturally, his first question is going to be: "What are you going to do for me in return?"

Early on in any particular political race, there are quite a number of candidates. Anyone who wants to donate money to a political candidate in the hopes of gaining political favors down the road is only going to do so if he believes that the candidate will fulfill the unwritten obligation–the "anti-social contract," if you like.

In politics, as in business, credibility is efficiency. Those who have built up reputations for keeping their promises end up being able to do business on a handshake, which keeps their costs down considerably. No new person entering a field will have the credibility or track record to be able to achieve this enviable efficiency, and so will have to earn it over the course of many years.

Thus we know for certain that when a company gives money to a political candidate, in the expectation of return favors in the future, that political candidate already has an excellent track record of doing just that. This kind of information will have been passed around certain communities–"Joe X is a man of his word!"–just as the reliability of a drug dealer and the quality of his product is passed around in certain other communities.

Thus we know that any candidate who receives significant funding from special interest groups is a man who has consistently proven his "integrity to corruptibility" in the past–for if he has no track record, or an inconsistent track record, no one will give him money to get started.

(Just as a side note, this is a very interesting example of exactly why anarchism will work–we do not need the state to enforce contracts, since the state itself functions on implicit contracts that can never be legally enforced.)

In other words, whenever you see a name on the ballot, you can be completely certain that that name represents a man who has already been bought and paid for over the course of many years, and that those who have paid for him do not have, let us say, your best interests at heart.

But we can go one step further.

Since all the money that moves around in a political system must come from somewhere–the millions of dollars that are given to the sugar farmers must come from taxpayers–we can be sure that just about every benefit that special interest groups seek to gain comes at your expense. Pharmaceutical companies want an extension on their patents so they can charge you more money. Domestic steel companies want to increase barriers against imported steel so they can charge you more money. If a government union wants additional benefits, that will cost you. If the police want to expand the war on drugs, that will cost you security, safety and money.

Whoever strives to benefit from the public purse has their hand groping towards your pocket.

Thus it is perfectly fair and reasonable to remind you that every name that you see on the ballot is diametrically opposed to your particular and personal interests, since they have been paid for by people who want to rob you blind.

Another aspect of "democricide" is the inevitable and constant escalation of public spending necessary to achieve or maintain political power.

Let us take the example of a mayor running for his second term. When he was running for his first term, sewage treatment workers donated $20,000 to his campaign, and in return he granted them a 10% raise. Now that he is running for his second term, and cannot give them another 10% raise, they have no reason to donate to his campaign. Thus he either has to offer the sewage treatment workers some other benefit, or he has to create some new program or benefit which he can dangle in front of some new group, in order to secure their donations. This is why political candidates always announce new spending when they throw their hats into the ring–the new spending is the rather unsubtle promise of benefits which will be granted to those who donate to his campaign. A new stadium, a new convention center, a new bridge, a new arts program, new housing projects, highway expansions and so on–all of these inevitably and permanently raise the "high water mark" of governmental spending, and are an absolute requirement of running for office.

Now, our aforementioned sewage treatment workers would of course prefer a permanent 10% raise rather than a one-time cash bonus. Thus they will always try to negotiate a permanent contract rather than continue to be at the mercy of the will and whim of their political masters.

As this process continues, the proportion of non-discretionary spending in any political budget grows and grows. This is another reason why new spending initiatives must always be created in order to secure new donations. Money cannot be shifted from one area to another, because it has permanently been earmarked for a particular group in return for a one-time political contribution in the past.

If the mayor who is running for his second term decides to attempt to roll back the 10% raise, in order to free up money which he can then offer to someone else in return for campaign contributions, he would be committing political suicide. He would be breaking a freely-signed contract, sticking it to the working man, and provoking a very smelly strike–but for his own particular self-interest, the effects would be even worse.

Remember, people will donate to a political campaign based on an implicit contract of future rewards from the public treasury. If a candidate attempts to "roll back" benefits that he has distributed previously in return for donations, not only will he incur the wrath of the existing special-interest group, but he will be revealed as a man who breaks his implicit and unenforceable "contracts." Since this candidate can no longer be relied upon to give public money back to those who donate to his campaign, he will find that his campaign donations dry up almost immediately, and his political career comes to an abrupt end.

Of course, ex-politicians are highly prized as lobbyists as well, but if this mayor breaks faith with a donator, he will no longer be valuable in that capacity either, and will forego significant income in his post-political career.

Finally, any political candidate who has channeled public money to past donators faces the problem of blackmail. If he attempts to cross any of his prior supporters, mysterious leaks to the press will start to emerge, talking about the sleazy backroom deals that got him in power–thus also effectively ending his political career. All the other candidates will piously deride his cynical corruption, while of course making their own sleazy backroom deals in turn.

(It is highly instructive to note that two well-known fictional portrayals of the political campaign process–"The West Wing" and "The Wire"–repeatedly portray the candidate begging for money, but never once show why he receives it–the motives of his donors. The reason for this is simple: they wish to portray an idealistic politician, and so they cannot possibly reveal the reasons why people are giving him money. If the fictional story were to follow the inevitable "laws" of democracy, the storyline would be abruptly truncated, or the lead character would be revealed as far less sympathetic. The candidate would ask for money, and then the potential donor would indicate the favor he wanted in return. Then, the candidate would either refuse, thus ending his campaign for lack of funds–or he would agree, thus ending any real sympathy we have for him. This basic truth–like so many in a statist society–can never be discussed, even on a show like "The Wire," which has little problem revealing corruption everywhere else. A policeman can be shown breaking a child’s fingers, but the true nature of the political process must be forever hidden…)

Thus we can see that–at least at the level of economics–democracy is a sort of slow-motion suicide, in which you are told that it is the highest civic virtue to approve of those who want to rob you.

I do not want this book to become a critique of democracy–but rather, as I have said before, my goal is simply to help you to understand the myriad contradictions involved in any logical or moral defense of a state-run society.

If you do not even know that society is sick, you will never be interested in a cure.

February 15, 2010

The State and Society

Franz OppenheimerIn the author’s preface to 1922 edition of The State, Franz Oppenheimer defines the State as "that summation of privileges and dominating positions which are brought into being by extra-economic power." He defines Society as "the totality of concepts of all purely natural relations and institutions between man and man…"  Society, he says "will not be fully realised until the last remnant of the creations of the barbaric "ages of conquest and migration," has been eliminated from community life."

February 10, 2010

Ceteris paribus

Filed under: Definitions

Ceteris paribus

Latin expression for "other things being equal." The term is used in economic analysis when the analyst wants to focus on explaining the effect of changes in one (independent) variable on changes in another (dependent) variable without having to worry about the possible offsetting effects of still other independent variables on the dependent variable under examination. For example, "an increase in the price of beef will result, ceteris paribus, in less beef being sold to consumers." [Putting aside the possibility that the prices of chicken, pork, fish and lamb simultaneously increased by even larger percentages, or that consumer incomes have also jumped sharply, or that CBS News has just announced that beef prevents AIDS, etc. — an increase in the price of beef will result in less beef being sold to consumers.]

http://www.auburn.edu/~johnspm/gloss/ceteris_paribus

January 24, 2010

The Pretense of Knowledge

Friedrich August von Hayek

Lecture to the memory of Alfred Nobel, December 11, 1974

The particular occasion of this lecture, combined with the chief practical problem which economists have to face today, have made the choice of its topic almost inevitable. On the one hand the still recent establishment of the Nobel Memorial Prize in Economic Science marks a significant step in the process by which, in the opinion of the general public, economics has been conceded some of the dignity and prestige of the physical sciences. On the other hand, the economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.

It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error. It is an approach which has come to be described as the "scientistic" attitude - an attitude which, as I defined it some thirty years ago, "is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed."1 I want today to begin by explaining how some of the gravest errors of recent economic policy are a direct consequence of this scientistic error.

The theory which has been guiding monetary and financial policy during the last thirty years, and which I contend is largely the product of such a mistaken conception of the proper scientific procedure, consists in the assertion that there exists a simple positive correlation between total employment and the size of the aggregate demand for goods and services; it leads to the belief that we can permanently assure full employment by maintaining total money expenditure at an appropriate level. Among the various theories advanced to account for extensive unemployment, this is probably the only one in support of which strong quantitative evidence can be adduced. I nevertheless regard it as fundamentally false, and to act upon it, as we now experience, as very harmful.

This brings me to the crucial issue. Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones. While in the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable, in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, for reasons which I shall explain later, will hardly ever be fully known or measurable. And while in the physical sciences the investigator will be able to measure what, on the basis of a prima facie theory, he thinks important, in the social sciences often that is treated as important which happens to be accessible to measurement. This is sometimes carried to the point where it is demanded that our theories must be formulated in such terms that they refer only to measurable magnitudes.

It can hardly be denied that such a demand quite arbitrarily limits the facts which are to be admitted as possible causes of the events which occur in the real world. This view, which is often quite naively accepted as required by scientific procedure, has some rather paradoxical consequences. We know: of course, with regard to the market and similar social structures, a great many facts which we cannot measure and on which indeed we have only some very imprecise and general information. And because the effects of these facts in any particular instance cannot be confirmed by quantitative evidence, they are simply disregarded by those sworn to admit only what they regard as scientific evidence: they thereupon happily proceed on the fiction that the factors which they can measure are the only ones that are relevant.

The correlation between aggregate demand and total employment, for instance, may only be approximate, but as it is the only one on which we have quantitative data, it is accepted as the only causal connection that counts. On this standard there may thus well exist better "scientific" evidence for a false theory, which will be accepted because it is more "scientific", than for a valid explanation, which is rejected because there is no sufficient quantitative evidence for it.

Let me illustrate this by a brief sketch of what I regard as the chief actual cause of extensive unemployment - an account which will also explain why such unemployment cannot be lastingly cured by the inflationary policies recommended by the now fashionable theory. This correct explanation appears to me to be the existence of discrepancies between the distribution of demand among the different goods and services and the allocation of labour and other resources among the production of those outputs. We possess a fairly good "qualitative" knowledge of the forces by which a correspondence between demand and supply in the different sectors of the economic system is brought about, of the conditions under which it will be achieved, and of the factors likely to prevent such an adjustment. The separate steps in the account of this process rely on facts of everyday experience, and few who take the trouble to follow the argument will question the validity of the factual assumptions, or the logical correctness of the conclusions drawn from them. We have indeed good reason to believe that unemployment indicates that the structure of relative prices and wages has been distorted (usually by monopolistic or governmental price fixing), and that to restore equality between the demand and the supply of labour in all sectors changes of relative prices and some transfers of labour will be necessary.

But when we are asked for quantitative evidence for the particular structure of prices and wages that would be required in order to assure a smooth continuous sale of the products and services offered, we must admit that we have no such information. We know, in other words, the general conditions in which what we call, somewhat misleadingly, an equilibrium will establish itself: but we never know what the particular prices or wages are which would exist if the market were to bring about such an equilibrium. We can merely say what the conditions are in which we can expect the market to establish prices and wages at which demand will equal supply. But we can never produce statistical information which would show how much the prevailing prices and wages deviate from those which would secure a continuous sale of the current supply of labour. Though this account of the causes of unemployment is an empirical theory, in the sense that it might be proved false, e.g. if, with a constant money supply, a general increase of wages did not lead to unemployment, it is certainly not the kind of theory which we could use to obtain specific numerical predictions concerning the rates of wages, or the distribution of labour, to be expected.

Why should we, however, in economics, have to plead ignorance of the sort of facts on which, in the case of a physical theory, a scientist would certainly be expected to give precise information? It is probably not surprising that those impressed by the example of the physical sciences should find this position very unsatisfactory and should insist on the standards of proof which they find there. The reason for this state of affairs is the fact, to which I have already briefly referred, that the social sciences, like much of biology but unlike most fields of the physical sciences, have to deal with structures of essential complexity, i.e. with structures whose characteristic properties can be exhibited only by models made up of relatively large numbers of variables. Competition, for instance, is a process which will produce certain results only if it proceeds among a fairly large number of acting persons.

In some fields, particularly where problems of a similar kind arise in the physical sciences, the difficulties can be overcome by using, instead of specific information about the individual elements, data about the relative frequency, or the probability, of the occurrence of the various distinctive properties of the elements. But this is true only where we have to deal with what has been called by Dr. Warren Weaver (formerly of the Rockefeller Foundation), with a distinction which ought to be much more widely understood, "phenomena of unorganized complexity," in contrast to those "phenomena of organized complexity" with which we have to deal in the social sciences.2 Organized complexity here means that the character of the structures showing it depends not only on the properties of the individual elements of which they are composed, and the relative frequency with which they occur, but also on the manner in which the individual elements are connected with each other. In the explanation of the working of such structures we can for this reason not replace the information about the individual elements by statistical information, but require full information about each element if from our theory we are to derive specific predictions about individual events. Without such specific information about the individual elements we shall be confined to what on another occasion I have called mere pattern predictions - predictions of some of the general attributes of the structures that will form themselves, but not containing specific statements about the individual elements of which the structures will be made up.3

This is particularly true of our theories accounting for the determination of the systems of relative prices and wages that will form themselves on a wellfunctioning market. Into the determination of these prices and wages there will enter the effects of particular information possessed by every one of the participants in the market process - a sum of facts which in their totality cannot be known to the scientific observer, or to any other single brain. It is indeed the source of the superiority of the market order, and the reason why, when it is not suppressed by the powers of government, it regularly displaces other types of order, that in the resulting allocation of resources more of the knowledge of particular facts will be utilized which exists only dispersed among uncounted persons, than any one person can possess. But because we, the observing scientists, can thus never know all the determinants of such an order, and in consequence also cannot know at which particular structure of prices and wages demand would everywhere equal supply, we also cannot measure the deviations from that order; nor can we statistically test our theory that it is the deviations from that "equilibrium" system of prices and wages which make it impossible to sell some of the products and services at the prices at which they are offered.

Before I continue with my immediate concern, the effects of all this on the employment policies currently pursued, allow me to define more specifically the inherent limitations of our numerical knowledge which are so often overlooked. I want to do this to avoid giving the impression that I generally reject the mathematical method in economics. I regard it in fact as the great advantage of the mathematical technique that it allows us to describe, by means of algebraic equations, the general character of a pattern even where we are ignorant of the numerical values which will determine its particular manifestation. We could scarcely have achieved that comprehensive picture of the mutual interdependencies of the different events in a market without this algebraic technique. It has led to the illusion, however, that we can use this technique for the determination and prediction of the numerical values of those magnitudes; and this has led to a vain search for quantitative or numerical constants. This happened in spite of the fact that the modern founders of mathematical economics had no such illusions. It is true that their systems of equations describing the pattern of a market equilibrium are so framed that if we were able to fill in all the blanks of the abstract formulae, i.e. if we knew all the parameters of these equations, we could calculate the prices and quantities of all commodities and services sold. But, as Vilfredo Pareto, one of the founders of this theory, clearly stated, its purpose cannot be "to arrive at a numerical calculation of prices", because, as he said, it would be "absurd" to assume that we could ascertain all the data.4 Indeed, the chief point was already seen by those remarkable anticipators of modern economics, the Spanish schoolmen of the sixteenth century, who emphasized that what they called pretium mathematicum, the mathematical price, depended on so many particular circumstances that it could never be known to man but was known only to God.5 I sometimes wish that our mathematical economists would take this to heart. I must confess that I still doubt whether their search for measurable magnitudes has made significant contributions to our theoretical understanding of economic phenomena - as distinct from their value as a description of particular situations. Nor am I prepared to accept the excuse that this branch of research is still very young: Sir William Petty, the founder of econometrics, was after all a somewhat senior colleague of Sir Isaac Newton in the Royal Society!

There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm in the economic field: but the present inflation and employment problems are a very serious one. Its effect has been that what is probably the true cause of extensive unemployment has been disregarded by the scientistically minded majority of economists, because its operation could not be confirmed by directly observable relations between measurable magnitudes, and that an almost exclusive concentration on quantitatively measurable surface phenomena has produced a policy which has made matters worse.

It has, of course, to be readily admitted that the kind of theory which I regard as the true explanation of unemployment is a theory of somewhat limited content because it allows us to make only very general predictions of the kind of events which we must expect in a given situation. But the effects on policy of the more ambitious constructions have not been very fortunate and I confess that I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false. The credit which the apparent conformity with recognized scientific standards can gain for seemingly simple but false theories may, as the present instance shows, have grave consequences.

In fact, in the case discussed, the very measures which the dominant "macro-economic" theory has recommended as a remedy for unemployment, namely the increase of aggregate demand, have become a cause of a very extensive misallocation of resources which is likely to make later large-scale unemployment inevitable. The continuous injection of additional amounts of money at points of the economic system where it creates a temporary demand which must cease when the increase of the quantity of money stops or slows down, together with the expectation of a continuing rise of prices, draws labour and other resources into employments which can last only so long as the increase of the quantity of money continues at the same rate - or perhaps even only so long as it continues to accelerate at a given rate. What this policy has produced is not so much a level of employment that could not have been brought about in other ways, as a distribution of employment which cannot be indefinitely maintained and which after some time can be maintained only by a rate of inflation which would rapidly lead to a disorganisation of all economic activity. The fact is that by a mistaken theoretical view we have been led into a precarious position in which we cannot prevent substantial unemployment from re-appearing; not because, as this view is sometimes misrepresented, this unemployment is deliberately brought about as a means to combat inflation, but because it is now bound to occur as a deeply regrettable but inescapable consequence of the mistaken policies of the past as soon as inflation ceases to accelerate.

I must, however, now leave these problems of immediate practical importance which I have introduced chiefly as an illustration of the momentous consequences that may follow from errors concerning abstract problems of the philosophy of science. There is as much reason to be apprehensive about the long run dangers created in a much wider field by the uncritical acceptance of assertions which have the appearance of being scientific as there is with regard to the problems I have just discussed. What I mainly wanted to bring out by the topical illustration is that certainly in my field, but I believe also generally in the sciences of man, what looks superficially like the most scientific procedure is often the most unscientific, and, beyond this, that in these fields there are definite limits to what we can expect science to achieve. This means that to entrust to science - or to deliberate control according to scientific principles - more than scientific method can achieve may have deplorable effects. The progress of the natural sciences in modern times has of course so much exceeded all expectations that any suggestion that there may be some limits to it is bound to arouse suspicion. Especially all those will resist such an insight who have hoped that our increasing power of prediction and control, generally regarded as the characteristic result of scientific advance, applied to the processes of society, would soon enable us to mould society entirely to our liking. It is indeed true that, in contrast to the exhilaration which the discoveries of the physical sciences tend to produce, the insights which we gain from the study of society more often have a dampening effect on our aspirations; and it is perhaps not surprising that the more impetuous younger members of our profession are not always prepared to accept this. Yet the confidence in the unlimited power of science is only too often based on a false belief that the scientific method consists in the application of a ready-made technique, or in imitating the form rather than the substance of scientific procedure, as if one needed only to follow some cooking recipes to solve all social problems. It sometimes almost seems as if the techniques of science were more easily learnt than the thinking that shows us what the problems are and how to approach them.

The conflict between what in its present mood the public expects science to achieve in satisfaction of popular hopes and what is really in its power is a serious matter because, even if the true scientists should all recognize the limitations of what they can do in the field of human affairs, so long as the public expects more there will always be some who will pretend, and perhaps honestly believe, that they can do more to meet popular demands than is really in their power. It is often difficult enough for the expert, and certainly in many instances impossible for the layman, to distinguish between legitimate and illegitimate claims advanced in the name of science. The enormous publicity recently given by the media to a report pronouncing in the name of science on The Limits to Growth, and the silence of the same media about the devastating criticism this report has received from the competent experts6, must make one feel somewhat apprehensive about the use to which the prestige of science can be put. But it is by no means only in the field of economics that far-reaching claims are made on behalf of a more scientific direction of all human activities and the desirability of replacing spontaneous processes by "conscious human control". If I am not mistaken, psychology, psychiatry and some branches of sociology, not to speak about the so-called philosophy of history, are even more affected by what I have called the scientistic prejudice, and by specious claims of what science can achieve.7

If we are to safeguard the reputation of science, and to prevent the arrogation of knowledge based on a superficial similarity of procedure with that of the physical sciences, much effort will have to be directed toward debunking such arrogations, some of which have by now become the vested interests of established university departments. We cannot be grateful enough to such modern philosophers of science as Sir Karl Popper for giving us a test by which we can distinguish between what we may accept as scientific and what not - a test which I am sure some doctrines now widely accepted as scientific would not pass. There are some special problems, however, in connection with those essentially complex phenomena of which social structures are so important an instance, which make me wish to restate in conclusion in more general terms the reasons why in these fields not only are there only absolute obstacles to the prediction of specific events, but why to act as if we possessed scientific knowledge enabling us to transcend them may itself become a serious obstacle to the advance of the human intellect.

The chief point we must remember is that the great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables - either particular facts or relative frequencies of events. This may even be the ultimate reason why we single out these realms as "physical" in contrast to those more highly organized structures which I have here called essentially complex phenomena. There is no reason why the position must be the same in the latter as in the former fields. The difficulties which we encounter in the latter are not, as one might at first suspect, difficulties about formulating theories for the explanation of the observed events - although they cause also special difficulties about testing proposed explanations and therefore about eliminating bad theories. They are due to the chief problem which arises when we apply our theories to any particular situation in the real world. A theory of essentially complex phenomena must refer to a large number of particular facts; and to derive a prediction from it, or to test it, we have to ascertain all these particular facts. Once we succeeded in this there should be no particular difficulty about deriving testable predictions - with the help of modern computers it should be easy enough to insert these data into the appropriate blanks of the theoretical formulae and to derive a prediction. The real difficulty, to the solution of which science has little to contribute, and which is sometimes indeed insoluble, consists in the ascertainment of the particular facts.

A simple example will show the nature of this difficulty. Consider some ball game played by a few people of approximately equal skill. If we knew a few particular facts in addition to our general knowledge of the ability of the individual players, such as their state of attention, their perceptions and the state of their hearts, lungs, muscles etc. at each moment of the game, we could probably predict the outcome. Indeed, if we were familiar both with the game and the teams we should probably have a fairly shrewd idea on what the outcome will depend. But we shall of course not be able to ascertain those facts and in consequence the result of the game will be outside the range of the scientifically predictable, however well we may know what effects particular events would have on the result of the game. This does not mean that we can make no predictions at all about the course of such a game. If we know the rules of the different games we shall, in watching one, very soon know which game is being played and what kinds of actions we can expect and what kind not. But our capacity to predict will be confined to such general characteristics of the events to be expected and not include the capacity of predicting particular individual events.

This corresponds to what I have called earlier the mere pattern predictions to which we are increasingly confined as we penetrate from the realm in which relatively simple laws prevail into the range of phenomena where organized complexity rules. As we advance we find more and more frequently that we can in fact ascertain only some but not all the particular circumstances which determine the outcome of a given process; and in consequence we are able to predict only some but not all the properties of the result we have to expect. Often all that we shall be able to predict will be some abstract characteristic of the pattern that will appear - relations between kinds of elements about which individually we know very little. Yet, as I am anxious to repeat, we will still achieve predictions which can be falsified and which therefore are of empirical significance.

Of course, compared with the precise predictions we have learnt to expect in the physical sciences, this sort of mere pattern predictions is a second best with which one does not like to have to be content. Yet the danger of which I want to warn is precisely the belief that in order to have a claim to be accepted as scientific it is necessary to achieve more. This way lies charlatanism and worse. To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm. In the physical sciences there may be little objection to trying to do the impossible; one might even feel that one ought not to discourage the over-confident because their experiments may after all produce some new insights. But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority. Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims. We are only beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based - a communications system which we call the market and which turns out to be a more efficient mechanism for digesting dispersed information than any that man has deliberately designed.

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, "dizzy with success", to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society - a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.


1. "Scientism and the Study of Society", Economica, vol. IX, no. 35, August 1942, reprinted in The Counter-Revolution of Science, Glencoe, Ill., 1952, p. 15 of this reprint.

2. Warren Weaver, "A Quarter Century in the Natural Sciences", The Rockefeller Foundation Annual Report 1958, chapter I, "Science and Complexity".

3. See my essay "The Theory of Complex Phenomena" in The Critical Approach to Science and Philosophy. Essays in Honor of K.R. Popper, ed. M. Bunge, New York 1964, and reprinted (with additions) in my Studies in Philosophy, Politics and Economics, London and Chicago 1967.

4. V. Pareto, Manuel d’économie politique, 2nd. ed., Paris 1927, pp. 223-4.

5. See, e.g., Luis Molina, De iustitia et iure, Cologne 1596-1600, tom. II, disp. 347, no. 3, and particularly Johannes de Lugo, Disputationum de iustitia et iure tomus secundus, Lyon 1642, disp. 26, sect. 4, no. 40.

6. See The Limits to Growth: A Report of the Club of Rome’s Project on the Predicament of Mankind, New York 1972; for a systematic examination of this by a competent economist cf. Wilfred Beckerman, In Defence of Economic Growth, London 1974, and, for a list of earlier criticisms by experts, Gottfried Haberler, Economic Growth and Stability, Los Angeles 1974, who rightly calls their effect "devastating".

7. I have given some illustrations of these tendencies in other fields in my inaugural lecture as Visiting Professor at the University of Salzburg, Die Irrtümer des Konstruktivismus und die Grundlagen legitimer Kritik gesellschaftlicher Gebilde, Munich 1970, now reissued for the Walter Eucken Institute, at Freiburg i.Brg. by J.C.B. Mohr, Tübingen 1975.

 

January 23, 2010

Everyday Anarchy 15: Anarchy and Exceptions

EVERYDAY ANARCHY

By Stefan Molyneux

ANARCHY AND EXCEPTIONS

At this point, you may be thinking that there are good reasons why political coercion is substituted for personal anarchy in particular situations. Perhaps there is some rule of thumb or principle which separates the two which, if it can be discovered, will lay this mystery bare.

If I break up with a girlfriend, for instance, I do not owe her anything legally. If I marry her, however, I do. When I take a new job, I may be subject to a probationary period of a few months, when I can be fired–or quit–with impunity. We can think of many examples of such situations–the major difference, however, is that these are all voluntary and contractual situations.

The justification for a government–particularly a democratic government–is really founded upon the idea of a "social contract." Because we happen to be born in a particular geographical location, we "owe" the government our allegiance, time, energy and money for the rest of our lives, or as long as we stay. This "contract" is open to renegotiation, insofar as we can decide to alter the government by getting involved in the political process–or, we can leave the country, just as we can leave a marriage or place of employment. This argument–which goes back to Socrates–is based upon an implied contract that remains in force as long as we ourselves remain within the geographical area ruled over by the government.

However, this idea of the "social contract" fails such an elemental test that it is only testament to the power of propaganda that it has lasted as a credible narrative for over 2,000 years.

Children cannot enter into contracts–and adults cannot have contracts imposed upon them against their will. Thus being born in a particular location does not create any contract, since it takes a lunatic or a Catholic to believe that obligations accrue to a newborn squalling baby.

Thus children cannot be subjected to–or be responsible for–any form of implicit social contract.

Adults, on the other hand, must be able to choose which contracts they enter into–if they cannot, there is no differentiation between imposing a contract on a child, and imposing a contract on an adult. I cannot say that implicit contracts are invalid for children, but then they magically become automatically valid when the child turns 18, and bind the adult thereby.

It is important also to remember that there is fundamentally no such thing as "the state." When you write a check to pay your taxes, it is made out to an abstract quasi-corporate entity, but it is cashed and spent by real life human beings. Thus the reality of the social contract is that it "rotates" between and among newly elected political leaders, as well as permanent civil servants, appointed judges, and the odd consultant or two. This coalescing kaleidoscope of people who cash your check and spend your money is really who you have your social contract with. (This can occur in the free market as well, of course–when you take out a loan to buy a house, your contract is with the bank, not your loan officer, and does not follow him when he changes jobs.)

However, to say that the same man can be bound by a unilaterally-imposed contract represented by an ever-shifting coalition of individuals, in a system that was set up hundreds of years before he was born, without his prior choice–since he did not choose where he was born–or explicit current approval, is a perfectly ludicrous statement.

We can generally accept as unjust any standard of justice that would disqualify itself. When we are shopping, we would scarcely call it a "sale" if prices had been jacked up 30%. We would not clip a "coupon" that added a dollar to the price of whatever we were buying–in fact, we would not call this a coupon at all!

If we examine the concept of the "social contract," which is claimed as a core justification for the existence of a government, it is more than reasonable to ask whether the social contract would justly enforce the social contract itself! In other words, if the government is morally justified because of the ethical validity of an implicit and unilaterally imposed contract, will the government defend implicit and unilaterally imposed contracts? If I start up a car dealership and automatically "sell" a car to everyone in a 10 block radius, and then send them a bill for the car they have "bought"–and send them the car as well, and bind their children for eternity in such a deal as well–would the government enforce such a "contract"?

I think that we all know the answer to that question…

If I attempted to bring a social contract to an agency that claims as its justification the existence and validity of the exact same social contract, it would laugh in my face and call me insane.

Are you beginning to get a clear idea of the kind of moral and logical contradictions that a statist system is based upon?

Many times throughout human history, certain societies have come to the valid conclusion that an institution can no longer be reformed, but must instead be abolished. The most notable example is slavery, but we can think of others as well, such as the unity of church and state, oligarchical aristocracy, military dictatorships, human or animal sacrifices to the gods, rape as a valid spoil of war, torture, pedophilia, wife abuse and so on. This does not mean of course that all of these practices and institutions have faded from the world, but it does mean that in many civilized societies, the essential debate is over, and was not settled with the idea of "reforming" institutions such as slavery. The origin of the phrase "rule of thumb" came from an attempt to reform the beating of wives, and restrict it to beating your wife with a stick no wider than your thumb. This practice was not reformed, but rather abolished.

However well-intentioned these reforms may have been, we can at best only call them ethical in terms of halting steps towards the final goal, which is the elimination of the concept of wife beating as a moral norm at all. In the same way, some reformers attempted to get slave owners to beat their slaves less, or at least less severely, but with the hindsight of history and our further moral development, we can see that slavery was not fundamentally an institution that could ever be reformed, but rather had to be utterly abolished. We can find encouragement in such "reforms" only to the degree that they reduced suffering in the present, while hopefully spurring on the goal of abolishing slavery.

Any moralist who said that getting rid of slavery would be a criminal and moral disaster of the first order, but instead encouraged slaves to attempt to work within the system, or counseled slave owners to voluntarily take on the goal of treating their slaves with less brutality, could scarcely be called a moralist, at least by modern standards. Instead, we would term such a "reformer" as a very handy apologist for the existing brutality of the system. By pretending that the evils inherent in slavery could be mitigated or eliminated through voluntary internal reform, these "moralists" actually slowed or stalled the progress towards abolition in many areas. By holding out the false hope that an evil institution could be turned to goodness, these sophists blunted the power of the argument from morality, which is that slavery is an inherent evil, and thus cannot be reformed.

The finger-wagging admonition, "Rape more gently," is oxymoronic. Rape is the opposite of gentle, the opposite of moral.

This is how many anarchists view the proposition that the existing system of political violence should be reformed somehow from within, rather than fundamentally opposed on moral terms, as an absolute evil, based on coercion and brutality, particularly towards children–with the inevitable consequence that its only salvation can come from being utterly abolished.

Everyday Anarchy 14: Anarchy and Reform

EVERYDAY ANARCHY

By Stefan Molyneux

ANARCHY AND REFORM

There is a great fear among people–or a great desire, to be more accurate–with regards to abandoning this system, when the perception exists that it can be reformed instead.

Democracy is messy, it is said–politicians pander to special interests, court voters with "free" goodies, manipulate the currency to avoid directly increasing taxes, create endless and intractable problems in the realms of education, welfare, incarceration and so on–but let’s not throw the baby out with the bathwater! If you have good ideas for improving the system, you should get involved, not sit back in your armchair and criticize everything in sight! One of the rare privileges of a living in a democracy is that anyone can get involved in the political process, from running for a local school board to prime minister or president of the entire country! Letter-writing campaigns, grassroots activism, blogs, associations, clubs–you name it, there are countless ways to get involved in the political process.

Given the degree of feedback available to the average citizen of a democracy, it makes little sense to agitate for changing the system as a whole. Since the system is so flexible and responsive, it is impossible to imagine that it can be replaced with any system that is more flexible–thus the practical ideal for anyone interested in social change is to bring his ideas to the "marketplace" of democracy, see who he can get on board, and implement his vision within the system–peacefully, politically, democratically.

This is a truly wonderful fairy tale, which has only the slight disadvantage of having nothing to do with democracy whatsoever.

When we think of a truly free market–otherwise known as the "free market"–we understand that we do not have to work for years and years, and give up thousands of hours and tens or hundreds of thousands of dollars, to satisfy our wishes. If I want to shop for vegetarian food, say, I do not have to spend years lobbying the local supermarket, or joining some sort of somewhat ineffective advisory Board, and pounding lawn signs, and writing letters, and cajoling everyone in the neighborhood–all I have to do is go and buy some vegetarian food, locally or over the Internet if I prefer.

If I want to date a particular woman, I do not have to lobby everyone in a 10 block radius, get them to sign a petition, make stirring speeches about my worthiness as a boyfriend, devote years of my life attempting to get collective approval for asking her out. All I have to do is walk up to her, ask her out and see if she says "yes."

If I want to be a doctor, I do not have to spend years lobbying every doctor in the country to get a majority approval for my application. Neither do I have to pursue this process when I want to move, drive a car, buy a book, plan for my retirement, change countries, learn a language, buy a computer, choose to have a child, go on a diet, start an exercise program, go into therapy, give to a charity and so on.

Thus it is clear that individuals are "allowed" to make major and essential life decisions without consulting the majority. The vast majority of our lives is explicitly anti-democratic, insofar as we vehemently reserve the right to make our own decisions–and our own mistakes–without subjecting them to the scrutiny and authority of others. Why is it that we are "allowed" to choose who to marry, whether to have children, and how to raise them–but we are violently not allowed to openly choose where they go to school? Why is every decision that leads up to the decision of how to educate a child is completely free, personal, and anti-democratic–but the moment that the child needs an education, a completely opposite methodology is enforced upon the family? Why is the free anarchy of personal decisions–in direct opposition to coercive authority–such a moral imperative for every decision which leads up to the need for a child’s education–but then, free anarchic choice becomes the greatest imaginable evil, and coercive authority must be substituted in its place?

There is a particularly cynical side of me–which is not to say that the cynicism is necessarily misplaced–which would argue that the reason that there is no direct interference in having children is because that way people will have more kids, which the state needs to grow into taxpayers, in the same way that a dairy farmer needs his cows to breed. Those who profit from political power always need new taxpayers, but they certainly do not want independently critical and rational taxpayers, since that is fundamentally the opposite of being a taxpayer. Thus they do not interfere with having children, only with the education of children–just as a goose farmer will not interfere with egg laying, but will certainly clip the wings of any geese he wishes to keep alive and profit from.

Get free blog up and running in minutes with Blogsome
Theme designed by Jay of onefinejay.com