July 14, 2007
Anarcho Capitalism
In a comment way down at the bottom of the page, Harrison Bergeron offers a couple of links to Perry Eidlebus:
Peter Leeson of George Mason has done some interesting work on anarcho-capitalism that you might be interested in:
I recommend both papers highly. Both present solid theory that should be accessible to anyone. I enjoyed the excuse to dabble in a little more academic text than what I usually read. I can also "leave the room" on this, and let Perry and HB fight it out over who is the real libertarian.
This is fascinating, and Leeson's theories are well grounded. Introducing credit to the "game thoery" of the second paper is genius.
I will have to go back, however, to the comment that started this long discussion. I return to Professor Deepak Lal's "Reviving the Invisible Hand." Lal discusses the explosive wealth generation under expanded Liberal International Economic Orders (LIEOs). I do not see where Leeson's "big-G" anarchy can possibly scale up to provide the comparative advantage and wealth creation that the world has seen under Pax Britannia and Pax Americana.
There is a level of anarchy today in International trade -- but it is not the pure anarchy Leeson sees. If an American (or allied) businessperson is taken by pirates off Malaysia or kidnapped in Colombia, it is known and accepted that American force will be involved, starting as diplomatic and possibly escalating. That was true under the might of the 19th Century British Navy as well, and to a lesser extent under Pope Urban and Italian princes.
We've at least found a clear delimiter. I cannot cede that banditry is preferable to self-directed government. Perhaps in Leeson's little-G societies, but the United States is better served with its unwieldy Leviathan. I will still fight it at the margins, but I will not trade it in for Captain Jack Sparrow.
You're stating your case better here, but you still have too great a reliance on government, and it's a dangerous reliance to think government must take wealth from people so they can create more wealth. It's fine that people engage in commerce based on the trust that the government will step in after someone violates them. However, it's never been essential for commerce to exist and even flourish. People for thousands of years traveled the trade routes from the Middle East to India, Samarkand and China, trusting that they could protect themselves from bandits.
Now, are our militaries, particularly our navies patrolling the seas, responsible for more people trusting that they could ship things across the globe? In part, but the explosion of wealth we have today is principally from technology. It is important that economic actors believe that they can complete transactions, whether by defending themselves or relying on government, but that in itself is useless without entrepreneurs and technology to drive wealth creation in the first place. The mere enforcement of rights will not spark people to be innovative; it only encourages them to continue in innovation once they get an idea. On the other hand, technological advancement can inherently leads to better enforcement of rights: technological development spurs a group of people beyond others and could very well give them better means of defending themselves.
And like I said, which I wrote about on my blog in reference to Chiquita paying off paramilitary groups, sometimes it's cheaper to pay off bandits than to shell out huge taxes to the government.
Posted by: Perry Eidelbus at July 17, 2007 1:37 PMBTW, I find it improper to use "anarchy" -- to any extent -- to describe travel on the high seas. Several major governments are willing to step in here and there when someone is violated, so it's largely a high degree of freedom. Barring regulations like shipping lanes, it's probably as close to the proper role of government as you can get.
Posted by: Perry Eidelbus at July 17, 2007 1:41 PMYou say technology created wealth more than trade. I suggest Matthew Slaughter's editorial in the Wall Street Journal today, detailing how important globalization (I say LIEO) was to technology development:
Speaking of the iPod, I blogged that its 451 components are manufactured all over the world. That's a lot of pirates to pay off and terrorists to avoid. Posted by: jk at July 18, 2007 10:16 AM"You say technology created wealth more than trade."
No, that's only what you thought I said. I said it's technology that principally creates wealth, not a government system of policing. Frankly, I'm surprised you think I, of all people, disregard trade, but even then, it still starts with technology. Machines that harvest crops and weave cloth affording people more leisure time, and some people can then try to invent additional things that they beforehand couldn't. It's difficult to dream up a new device when you're worried about getting enough grain to eat.
Posted by: Perry Eidelbus at July 20, 2007 11:41 AMBTW, I'm not sure what pay cycle you have, but I paid the federal pirates last Friday and will again next week. They also have this thing about making me mail them forms every April to ensure I've given them all the booty they demand, otherwise they'll raid my home.
Pirates are willing to take less because you might not give in and instead fight them. Government knows it can charge you pretty much whatever it wants, because it has inherent authority over you, meaning that you have no right to resist it.
Posted by: Perry Eidelbus at July 20, 2007 11:46 AM | What do you think? [5]