Friday, January 27, 2017

Anarcho-capitalism VS Pragmatarianism

[Also posted on Medium: How To Train Your Leviathan]

Patrik Schumacher, who I blogged about yesterday, replied to my tweet...

It's super cool that he replied!

Murray Rothbard is largely acknowledged as the founder of anarcho-capitalism.  He really hated the government.  If there had been a button that would have entirely destroyed the government, then he would have pushed the button until his thumb blistered.

If Rothbard had pushed the button, then he, and he alone, would have answered the age old question... what is the proper scope of government?

Let's carefully consider what Herbert Spencer had to say about the proper scope of government...


To the assertion that the boundary line of State-duty as above drawn is at the wrong place, the obvious rejoinder is— show us where it should be drawn. This appeal the expediency-philosophers have never yet been able to answer. Their alleged definitions are no definitions at all. As was proved at the outset, to say that government ought to do that which is "expedient," or to do that which will tend to produce the "greatest happiness," or to do that which will subserve the "general good," is to say just nothing; for there are countless disagreements respecting the natures of these desiderata.  A definition of which the terms are indefinite is an absurdity. Whilst the practical interpretation of "expediency" remains a matter of opinion, to say that a government should do that which is "expedient," is to say that it should do, what we think it should do!

Still then our demand is—a definition. Between the two extremes of its possible action, where lies the proper limitation?  Shall it extend its interference to the fixing of creeds, as in the old times; or to overlooking modes of manufacture, farming operations, and domestic affairs, as it once did; or to commerce, as of late—to popular education, as now—to public health, as already—to dress, as in China—to literature, as in Austria—to charity, to manners, to amusements?  If not to all of them, to which of them?  Should the perplexed inquirer seek refuge in authority, he will find precedents not only for these but for many more such interferences.  If, like those who disapprove of master-tailors having their work done off the premises, or like those who want to prevent the produce of industrial prisons displacing that of the artizans, or like those who would restrain charity-school children from competing with seamstresses, he thinks it desirable to meddle with trade-arrangements, there are plenty of exemplars for him.  There is the law of Henry VII., which directed people at what fairs they should sell their goods; and that of Edward VI., which enacted a fine of £100 for a usurious bargain; and that of James I., which prescribed the quantity of ale to be sold for a penny; and that of Henry VIII., which made it penal to sell any pins but such as are "double headed, and their head soldered fast to the shank, and well smoothed; the shank well shaven; the point well and round-filed and sharpened."  He has the countenance, too, of those enactments which fixed the wages of labour; and of those which dictated to farmers, as in 1533, when the sowing of hemp and flax was made compulsory; and of those which forbade the use of certain materials, as that now largely-consumed article, logwood, was forbidden in 1597.  If he approves of so extended a superintendence, perhaps he would adopt M. Louis Blanc's idea that "government should be considered as the supreme regulator of production;" and having adopted it, push State-control as far as it was once carried in France, when manufacturers were pilloried for defects in the materials they employed, and in the textures of their fabrics; when some were fined for weaving of worsted a kind of cloth which the law said should be made of mohair, and others because their camlets were not of the specified width; and when a man was not at liberty to choose the place for his establishment, nor to work at all seasons, nor to work for everybody.  Is this considered too detailed an interference?  Then, perhaps, greater favour will be shown to those German regulations by which a shoemaker is prevented from following his craft until an inspecting jury has certified his competence; which disable a man who has chosen one calling from ever adopting another; and which forbid any foreign tradesman from settling in a German town without a licence. And if work is to be regulated, is it not proper that work should be provided, and the idle compelled to perform a due amount of it?  In which case how shall we deal with our vagrant population?  Shall we take a hint from Fletcher of Saltoun, who warmly advocated the establishment of slavery in Scotland as a boon to "so many thousands of our people who are at this day dying for want of bread"? or shall we adopt the analogous suggestion of Mr. Carlyle, who would remedy the distresses of Ireland by organizing its people into drilled regiments of diggers?  The hours of labour too—what must be done about these?  Having acceded to the petition of the factory-workers, ought we not to entertain that of the journeyman-bakers? and if that of the journeyman bakers, why not, as Mr. Oobden asks, consider the cases of the glass-blowers, the nightmen, the iron-founders, the Sheffield knife-grinders, and indeed all other classes, including the hardworked M.P.'s themselves?  And when employment has been provided, and the hours of labour fixed, and trade-regulations settled, we must decide how far the State ought to look after people's minds, and morals, and health.  There is this education question: having satisfied the prevalent wish for "government schools with tax-paid teachers, and adopted Mr. Ewart's plan for town-libraries and museums, should we not canvass the supplementary proposal to have national lecturers? and if this proposal is assented to, would it not be well to carry out the scheme of Sir David Brewster, who desired to have "men ordained by the State to the undivided functions of science"—"an intellectual priesthood," " to develop the glorious truths which time and space embosom*"? Then having established "an intellectual priesthood" to keep company with our religious one, a priesthood of physic, such as is advocated by certain feeless medical men, and of which we have already the germ in our union doctors, would nicely complete the trio. And when it had been agreed to put the sick under the care of public officials, consistency would of course demand the adoption of Mr. G. A. Walker's system of government funerals, under which "those in authority" are "to take especial care" that "the poorest of our brethren" shall have "an appropriate and solemn transmission" to the grave, and are to grant in certain cases "gratuitous means of interment."  Having carried out thus far the communist plan of doing everything for everybody, should we not consider the peoples' amusements, and, taking example from the opera-subsidy in France, establish public ball-rooms, and gratis concerts, and cheap theatres, with State-paid actors, musicians, and masters of the ceremonies: using care at the same time duly to regulate the popular taste, as indeed, in the case of the Art-Union subscribers, our present Government proposed to do?  Speaking of taste naturally reminds us of dress, in which sundry improvements might be enforced; for instance—the abolition of hats: we should have good precedents either in Edward IV., who find those wearing "any gown or mantell" not according to specification, and who limited the superfluity of peoples' boot-toes, or in Charles II., who prescribed the material for his subjects' grave-clothes. The matter of health, too, would need attending to; and, in dealing with this, might we not profitably reconsider those ancient statutes which protected peoples' stomachs by restricting the expenses of their tables; or, remembering how injurious are our fashionable late hours, might we not advantageously take a hint from the old Norman practice, and (otherwise prompted) fix the time at which people should put out their fires and go to bed; or might we not with benefit act upon the opinion of M. Beausobre, a statesman who said it was "proper to watch during the fruit season, lest the people eat that which is not ripe"? And then, by way of making the superintendence complete, would it not be well to follow the example of the Danish king who gave directions to his subjects how they should scour their floors, and polish their furniture?

* See Address to the British Association at Edinburgh, in 1850.


Lots of Kings have certainly had very different answers to the question of the government's proper scope.

Let's engage in some lateral thinking by asking this question... what is the proper scope of the private sector?  How many people answer this question?  How do they answer it?

Pretty much everybody helps to answer the question of the private sector's proper scope and they do so by spending their money.  Are cars within the proper scope of the private sector?  All the people who buy cars help to answer this question.  Same thing with all the people who invest their money in companies that produce cars.

Rothbard correctly argued that the market is the best way to determine what should be done.  But then he undermined his own argument when he was so happy to admit that he would have been very happy to push a button that would have abolished the government.  By happily pushing the button... he, rather than the market, would have determined what the government should do!  He would have answered the question for everybody!

Of course there isn't a single button that would abolish the government.  So anarcho-capitalism would have to be implemented another way.  It could certainly be implemented through democracy.  It could be implemented through revolution.  It could be implemented by a powerful enough ruler.  But there's only one single way that anarcho-capitalism could be implemented on the basis of its own premise.

If people could choose where their taxes go... aka "pragmatarianism"... then each and every person could use their tax dollars to answer the question... what is the proper scope of government?  Is public education within the proper scope of government?  All the people who gave their tax dollars to public schools would help to answer this question.  If too few people gave their tax dollars to public schools, then the market, rather than voters... or congress... or the president... or Rothbard, would have determined that public education is not within the proper scope of government.

What about compulsory taxation?  Is it within the proper scope of government?  Well... in a pragmatarian system... the IRS really wouldn't collect everybody's taxes.  If you wanted a public school to have your tax dollars... then you'd give your tax dollars directly to that school.  They'd give you a receipt and you'd keep all your receipts in case you needed to prove to the IRS that you had indeed paid your "fair" share.

Therefore, if you did give your tax dollars to the IRS... it would be because you wanted to help fund their efforts to ensure that everybody paid their fair share.  And in giving your tax dollars to the IRS... you would be helping to answer the question of whether compulsory taxation is within the proper scope of government.

So, with all of this in mind, if too few people gave their tax dollars to the IRS, then the market, rather than voters... or congress... or the president... or Rothbard, would have determined that compulsory taxation is not within the proper scope of government.  And voila!  We would have arrived at anarcho-capitalism by taking the only legitimate path.

It's entirely possible that anarcho-capitalism is the correct answer.  But it's essential that we do not leap to this conclusion.  It's imperative that we do not bypass the market process of everybody using their own money to answer the question of what should be done.  We have to understand how and why the market process is the correct process.  Then we can understand how and why the market process will produce the correct answer.  Will the correct answer be anarcho-capitalism?  Personally, I don't think that it will be.  But for sure I could be wrong.  In any case, I understand the market process which is why I will respect whatever answer it produces.  In no case will I feel comfortable overriding or overruling the answer that is produced by the market process.

To place any single possible answer... such as anarcho-capitalism... on any sort of pedestal... implies that the correct answer is easy to guess or divine.  This implication will most certainly cast a shadow over the market process.

While I am a big fan of Rothbard, in this regard I am a much bigger fan of Buchanan...


I want to argue that the "order" of the market emerges only from the process of voluntary exchange among the participating individuals. The "order" is, itself, defined as the outcome of the process that generates it. The "it," the allocation-distribution result, does not, and cannot, exist independently of the trading process. Absent this process, there is and can be no "order."

What, then, does Barry mean (and others who make similar statements), when the order generated by market interaction is made comparable to that order which might emerge from an omniscient, designing single mind? If pushed on this question, economists would say that if the designer could somehow know the utility functions of all participants, along with the constraints, such a mind could, by fiat, duplicate precisely the results that would emerge from the process of market adjustment. By implication, individuals are presumed to carry around with them fully determined utility functions, and, in the market, they act always to maximize utilities subject to the constraints they confront. As I have noted elsewhere, however, in this presumed setting, there is no genuine choice behavior on the part of anyone. In this model of market process, the relative efficiency of institutional arrangements allowing for spontaneous adjustment stems solely from the informational aspects.

This emphasis is misleading. Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossible for an omniscient designer to know, unless, of course, we are to preclude individual freedom of will. - James Buchanan, Order Defined in the Process of its Emergence


Giving people the freedom to choose where their taxes go will create a market within the public sector.  The market process of people trading their tax dollars for public goods will certainly produce some government "order".  But because I am really not omniscient, I really can't know, beforehand, exactly what the order will be.  However, I do understand the market process itself which is why I will respect the order that it produces far more than I would respect the order produced by any other process.

The order produced by a king?  I'd shit on it.  The order produced by congress and a president?  I'd shit on it.  The order produced by democracy?  I'd shit on it.  The order produced by Rothbard pushing a button?  I'd shit on it.  The order produced by the market?  I definitely wouldn't shit on it.

To be clear, democracy would be needed to implement pragmatarianism.  But democracy really wouldn't be determining the order of government... it would be choosing the system that determined the order of government.  Millions and millions of taxpayers spending their own tax dollars would determine the order of government.

How to get democracy to choose pragmatarianism?  We start small.  We persuade Netflix to allow its subscribers to choose where their fees go.  If we can't persuade Netflix that this process will produce a far superior order... then we'll have to start even smaller.  We'll create our own website where subscribers can choose which articles they spend their fees on.  Once everyone can clearly see that this order is indeed superior, then the NY Times will create a pragmatarian market, so will Netflix and the rest of the dominoes will quickly fall.  The last, and biggest, domino to fall will be the government.  But it will easily fall because by then every voter will clearly see that the order produced by the market is far superior to the order produced by any other system.

In my blog entry, Pushing For A Pubmar, I shared this relevant illustration that took all my artistic skills to create...

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