Indirectly Improving Institutions: Agorism and Civil Society
Listening to this interview with Rad Geek about agorism reminded me somewhat of Arnold’s civil society. Both are focused on developing the sector we can affect – private institutions / civil society, rather than the sector we can’t – politics and public institutions. They differ in whether they are focused on white or black markets – Arnold gives examples like private schools, charities, and neighborhood associations, while Rad Geek mentions the market for drugs and p2p file-sharing (do I detect a generational gap here?).
There is a strong overlap between my beliefs and theirs, in that we all see it as a waste of time to influence the political sector directly, and believe it is better to influence it indirectly through the public sector. And this overlap is important, because even among those frustrated with the current political system, most people don’t seem to get the degree to which these problems are caused by systems of incentives.
But we all seem to have different views on how the indirect influence will work. Arnold wants “to boost the organizations of civil society that compete with government”. I think this is certainly a good idea, but has some substantial weaknesses, as I blogged earlier. Agorism seems to be based on the idea that an expanding black market will lead to the emergency of market anarchist institutions:
In a market anarchist society, law and security would be provided by market actors instead of political institutions. Agorists recognize that situation can not develop through political reform. Instead, it will arise as a result of market processes.
As the state is banditry, revolution culminates in the suppression of the criminal state by market providers of security and law. Market demand for such service providers is what will lead to their emergence. Development of that demand will come from economic growth in the sector of the economy that explicitly shuns state involvement (and thus can not turn to the state in its role as monopoly provider of security and law). That sector of the economy is the counter-economy – black and grey markets.
Despite my broad agreement with much of the underlying philosophy, I find this chain of events ludicrous – and I am not using the word lightly. Let us consider one of the largest black markets in the world, the market for illegal drugs, which has been thriving for decades. Has this resulted in market demand for protection agencies to replace the government? Um, no. It has resulted in exactly the opposite – a strengthening of the monopoly provider of security and law. It has given us the militarization of policy, legalized theft via civil asset forfeiture, and a well-funded DEA.
I agree that the direct effect of the black market for recreational drugs is to increase freedom – it provides something the government is trying to ban, thus ameliorating the effect of that ban. As an occasional user of illegal drugs, I think that’s fabulous. But to see black markets as the route to indirectly weakening and eventually toppling governments just doesn’t match up to the evidence. Coercive geographic monopolies on violence work, folks, much though we may hate it. They cannot simply be competed away locally by the vague hope of private defense agencies. We have a name for competition between local groups about the right to engage in violence – it’s called civil war. Does anyone really think we can win such a war against the most powerful military in the world, on its home ground?
I believe in a different indirect path: global competition between governments. Let’s hit states where they are weak – at providing good services to their customers, not where they are strong – at holding onto territory with violence. We can do this by competing for citizens and capital, not for territory. Whether this is done through seasteading, free zones, or some other method entirely, I think it is a far more plausible route to indirectly improving political institutions.
‘In a market anarchist society, law and security would be provided by market actors instead of political institutions. … As the state is banditry, revolution culminates in the suppression of the criminal state by market providers of security and law.”
Delusion is a powerful thing. How is it that they fail to grasp that the “market providers of security and law” must themselves be states?
Because they are not states, at least not by any definition that the market anarchists use. States are entities that make strong attempts at becoming territorial monopolists of the provision of defense services and dispute resolution, as well as entities with the ability to tax (i.e. rob) with impunity. I say “strong attempt” because I’m reminded by Dr. Long that states never really attain the monopoly status though they do try to greater or lesser extents.
Monopoly is used here in an Austrian sense rather than a neo-classical sense, which means “coercive barriers to entry into an industry” instead of just the “sole provider” definition.
You wrote, “the market for illegal drugs, which has been thriving for decades. Has this resulted in market demand for protection agencies to replace the government?”
The answer is yes, it has. And most drug dealers provide their own protection, often in concert with other dealers in their area. These private protection agencies are referred to as “gangs” and their leaders as “drug lords.” They employ violence to enforce contracts, control territory, and defend the sovereignty of their members.
Of course, you probably don’t wish to think of the state as a gang, its leaders as warlords and drug lords, its use of violence to enforce deals as no different from the gang’s, its turf as whatever part of the country it controls, and its defense of “rights” as something distinct from honor grudges. But, hey, a rose by any other name.
Moreover, the presence of gang violence in many places has led to development of private alternatives. I well remember the Guardian Angels in New York City’s subways – red berets were a welcome sight on many subway lines I traveled.
You also forget a critical concern – the ideology of the actors. The drug lords are competing for monopoly holds on the enforcement of arbitrary rules just the same as governments are. They have no libertarian bona fides. They don’t compete for customers, they kill whoever tries to compete with them, and, being stupid, get entangled in messy wars over turf and customers. They’re mini-states, not competing market participants.
Another important factor in the lack of a market for private defense in the black market (along with the excellent ones above) is opportunity costs. This important factor equally applies to the actually anarcho-capitalist economy of Somalia:
Hiring someone else to protect your property (instead of you) is only cost-effective if the expected loss from property-violation is less than the opportunity cost to you to defend it.
i.e. if you’re a poor Somalian farmer, it’s cheaper for you to buy a gun than hire a Personal Defense Company.
If you’re running a Telephone company, then it is cheaper to hire a Personal Defense Company (or mercenaries, whichever’s cheaper)
Thus, we’d only expect to see a profusion of PDCs in rich countries, and without a profusion of PDCs, there’s little need for Friedman-esque arbitration courts.
With regard to drug dealers, there are many who actually do compete for customers. Especially with regard to marijuana, markets are highly fragmented. It is extremely easy to enter the market, and many people grow their own in garages, basements, attics, etc. The highly fragmented market for pot is often served by divers players, most of whom are not moving enough volume to make it worthwhile to attempt to generate a monopoly. YMMV.
With regard to Somalia, I don’t understand why people seem to think it necessary to describe a country they’ve never visited as anarcho-capitalist. I’ve been there, and Somalis do not regard themselves as anarchist. They find the term highly insulting.
As I’ve been at some pains to explain to those few people who have impressed me as sincerely interested in visiting Somalia, there are basically two literate groups within the country. There are the state socialists who believe in a hierarchical government they have not yet restored, and the fundamentalist religious sorts who mainly read Somali language and Arabic language versions of the Koran. I can count on one hand and have met all of the Austrian-economics-interested Somalis.
Every Somali with a farm or a phone company has a rifle in his home. Every Somali with a motor vehicle has a .50 cal machine gun he can put in the truck bed. It should probably be noted that essentially all Somali vehicles are Toyota pickup trucks or Mercedes heavy trucks. It is idle to speak of Somalis needing to buy guns.
The point about pot dealers is a salient one, the costs of market entry are indeed very low, however the regulatory burden on growing enough to support any kind of major business is so great, and the transactions so straightforward, and the market so fragmented, that it’s not economical to form any type of Private Defense Company.
What Somalis regard themselves as is no object — the fact is that there is no central government, but there is a recognition of private property and a market economy. Isn’t this the very definition of market anarchism?
I confess all I know of Somalia is what I’ve read on the internet and seen on the news, but the level of gun ownership is about what I’d expect, and the point about opportunity costs still stands — people won’t hire other people to defend their property while it’s cheaper to do so themselves.
Interestingly, the opportunity-cost-in-defense is a damning critique of the Swiss military system where they have a small standing army and a large system of national service.
Just imagine investment bankers and stockbrokers leading a cavalry charge and you’ll see why it’s important in wealthy countries to leave the (defensive) use of force in defense of property to the professionals.
There are actually several central governments. The Republic of Somaliland regards itself as the central gov’t of what used to be British Somaliland (aka. Crown Protectorate of British Somaliland). It has meaningful control over the territories of the Isaaq and Samaron clans. It is run by a president, Dahir Riyale, who formerly tortured people to death as head of the secret police under Siad Barre.
There have been about 20 “peace conferences” sponsored by the UN and other outsiders and there have been roughly the same number of “transitional national governments” which have had power over some blocks in Mogadishu, some cities near Mogadishu, and claimed power over everyone else.
There have also been central governments under Islamic Courts movement and other fundamentalist groups.
It isn’t your country. Somalia is not your country, so what the Somalis regard themselves as is much more significant to me than what you say, or think, or do. Who cares what you think about Somalia? Why don’t you fix your own country?
There is some recognition of private property, but I again point out that there are significant portions of the literate population who are state socialists and significant portions who are fundamentalist religious persons. Some small portion of these groups are radical extremists, as well. The state socialists and the central governments don’t have any respect for private property, and the radical fundamentalists only respect the property of co-religionists.
There is also a difficulty you don’t understand about Somali culture, which is sexist, xenophobic, and often racially intolerant. If you don’t have a patron within a Somali clan, or if you aren’t married into the clan, you have no reason to expect protection from anyone. And, therefore, your property is fair game for theft.
Mind you, if you marry a Somali woman of child bearing years, you face the racially intolerant aspects of Somali culture much more directly. They do not like mixed-race children. An elderly man might marry an elderly Somali woman past menopause, and be accepted as “brother in law” in the clan. However, an elderly Western woman would face the sexism elements of their culture and be regarded as the chattel property of her husband.
I’m not confident that it is possible to set up free trade zones, free ports, toll roads, a fat pipe to bring in high speed internet, contemporary utilities, and a set of private colleges and a university. I will say that I worked on plans for all of these, informed by visiting Somalia for months at a time over a period of years. It might be possible, but there are some externalities that your clever private defense companies don’t yet address. The one major factor that ended our project was when NATO general Tommy Franks announced a policy in October 2001 that NATO should bomb all port facilities in Somalia.
I don’t believe I’ve made an argument countering your opportunity cost argument. I think that is a good one. Indeed, there are many reasons why people should invest in guns, ammo, body armor, etc.
I’m really not sure why you think a cavalry charge is called for. I will note that the Samaron clan of the Somalis had a world-renowned cavalry in 1895. The British insisted on vaccinating all their horses against hoof and mouth disease. Do you know that all the horses died a few weeks later? Devastating.
I do not think leaving defense services to the professionals makes any sense at all. I think that is hare-brained at best. Who shall guard us from the guards themselves?
Let every man be armed. There is no elite professionalism in the military, it is just a bunch of thugs who like to slaughter children. And wipe the blood off your chin.
Thanks for your measured and insightful description of Somalia. Clearly I had made many unfounded assumptions about the country. I’ve added you to my blogroll.
The point I was attempting to illustrate with the investment-banker-led cavalry charge was that it is well accepted that the division of labour within factories and between countries according to comparative advantage can bring great increases in efficiency.
Using National Service to force bankers to serve in the army is then inefficient, as the bankers time is better spent banking, and someone may be hired to serve in their place.
That said, I’m not arguing against a disarmed citizenry — as you so rightly said, “Quis custodiet ipsos custodes?”
“Despite my broad agreement with much of the underlying philosophy, I find this chain of events ludicrous – and I am not using the word lightly. Let us consider one of the largest black markets in the world, the market for illegal drugs, which has been thriving for decades. Has this resulted in market demand for protection agencies to replace the government? Um, no. It has resulted in exactly the opposite – a strengthening of the monopoly provider of security and law. It has given us the militarization of policy, legalized theft via civil asset forfeiture, and a well-funded DEA.”
You have actually named one of the mechanisms by which black markets undermine government: it causes the government to waste resources trying to shut them down (in the process making the product more profitable to black marketeers) and it morally undermines the government when everyone can see that illegal drugs are easy to get in spite of the billions wasted trying to eradicate them.
The drug trade has also resulted in huge networks of private service providers. Lots of people now have experience in manufacturing and distributing illicit items discreetly, not to mention dealing with overdose, handling disputes, etc.
I suspect that, like the old west, the drug trade is actually not nearly as violent as it’s portrayed. Most if not all of the violence I see in the news involves the government, at least in the US.
I’m not sold on agorism at all, but you’re failing to convince me of the other side here, Patri.
4ud37C ltnkyrsloofl, [url=http://cyesezvkxyso.com/]cyesezvkxyso[/url], [link=http://gkhesjcrwjhb.com/]gkhesjcrwjhb[/link], http://kvyeobatzgfi.com/