This article was originally published by George Ford Smith at The Mises Institute.
You think you’re the legitimate owner of your residence until you come back from vacation and find squatters have taken over. Call the police and have them removed? You might have to call a private service like Squatterhunters.com instead.
Americans long ago lost property rights to their income, the purchasing power of their money, their savings, and their lives. Is there no way for people to protect what is legitimately theirs?
Fortunately, both experience and theory say there is: The classic study by Terry L. Anderson and P. J. Hill, An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West, and Robert P. Murphy’s Chaos Theory.
Thanks to Hollywood and popular literature, the American West [1830-1900] is often portrayed as violent and lawless. As long as you had a fast gun and were willing to use it, you could get away with anything. The reason: weak or nonexistent government.
In their literature search, though, Anderson and Hill found ample evidence to the contrary. For example, W. Eugene Hollon in Frontier Violence: Another Look found that “the Western frontier was a far more civilized, more peaceful, and safer place than American society is today [the early 1970s].”
Another researcher, Frank Prassel, writing in the mid-1930s, found that if any conclusion can be drawn from recent crime statistics, it must be that this last frontier [the West] left no significant heritage of offenses against the person, relative to other sections of the country.
In the early West people protected their property and lives with private agencies. Significantly, these agencies understood that violence was a costly method of resolving disputes and usually employed lower-cost methods of settlement such as arbitration and courts. Nor was there a universal idea of justice common to these agencies. People had different ideas of what rules they wished to live under and were willing to pay for. Competition among the agencies provided a choice.
Anderson and Hill looked at four institutions in the early West that approximated anarcho-capitalism (AnCap), one of which was wagon trains.
Wagon Trains
Conestoga wagons rolling west in search of gold provide perhaps the best example of anarcho-capitalism in the American frontier.
Realizing they would be passing beyond the pale of the law, the pioneers “created their own law-making and law-enforcing machinery before they started.” In many cases, they created constitutions similar to the U.S. Constitution. Once the travelers were beyond the jurisdiction of the federal government, they elected officers to enforce the rules laid out in the document.
The constitutions also included eligibility for voting and decision rules for amendment, banishment of individuals from the group, and dissolution of the company.
What made this arrangement work, according to the authors, was a profound respect for property rights. Yet there was little mention of property rights in their constitutions. The inviolability of property rights was so thoroughly ingrained that the pioneers rarely resorted to violence even when starvation was imminent.
Certainly, the transient nature of these rolling communities made them more adaptable to anarcho-capitalism. The demand for “public goods” such as roads or schools never came up, for example, though they did have to protect themselves from Indian attacks without relying on the State. For the most part, their arrangements worked. People bought protection and justice, found competition among rules producers, and the result was an orderly society, unlike that generally associated with anarchy.
Murphy’s Case for Anarcho-Capitalism
In Chaos Theory, Robert P. Murphy sketches how market forces would operate to support the private production of justice and defense – two areas traditionally conceded to be the sole province of the State. Murphy contends that not only would the market be able to provide these services but would do so much more efficiently and equitably than the system we have now.
Here, we’ll look at a few key points he makes about the production of justice on the free market.
As with the Western pioneers and the world today, no single set of laws or rules is needed to bind everyone. People would enter into voluntary contracts that spell out the rules they agree to live by. “All aspects of social intercourse would be ‘regulated’ by voluntary contracts.”
Who makes the rules? Private legal experts, who would draft laws under open competition with rivals. The market deals with “justice” as it does with other services. As Murphy notes,
“[T]he market” is just shorthand for the totality of economic interactions of freely acting individuals. To allow the market to set legal rules really means that no one uses violence to impose his own vision on everyone else.
In an advanced AnCap society, insurance companies would play a major role. People would buy policies, for example, to indemnify their victims if they were ever found guilty of a crime. As they do now, insurance companies would employ experts to determine the risks of insuring a given individual. If a person were considered too great a risk he might be turned down, and this would be information others would use in deciding if and how they wished to interact with him.
Critics say this might work for peaceful, rational people but what about incorrigible thieves and ax murderers? How would market anarchy deal with them?
Murphy reminds us that “wherever someone is standing in a purely libertarian society, he would be on somebody’s property.” This allows for force to be used against criminals without violating their natural rights.
Would the Mafia Take Over?
People who support the State because they believe organized crime would take control of an AnCap society should consider that we’re already living under the “most ‘organized’ criminal association in human history.” Whatever crimes the Mafia has committed, they are nothing – nothing – compared to the wanton death and destruction states have perpetrated.
We need to consider, too, that the mob gets its strength from the government, not the free market.
All the businesses traditionally associated with organized crime – gambling, prostitution, loan sharking, drug dealing – are prohibited or heavily regulated by the state. In market anarchy, true professionals would drive out such unscrupulous competitors.
Applying AnCap
Murphy discusses several applications of anarcho-capitalism in today’s world, one of which is medical licensing. Almost everyone believes that without government regulation we would all be at the mercy of quacks:
Ignorant consumers would go to whatever brain surgeon charged the lowest price, and would be butchered on the operating table.
Therefore, we need the iron fist of government to restrict entry into the medical profession.
But this is pure fiction. Since the demand for safe and effective medicine is universal, the market would respond accordingly with voluntary organizations that would allow only qualified doctors into their ranks. Insurance companies, too, would only underwrite doctors who met their standards, since they would stand to lose millions in malpractice suits.
Regarding the ongoing controversy of gun control, Murphy sees legitimate points to both sides of the debate:
Certainly we cannot trust the government to protect us once it has disarmed us. But on the other hand, I feel a bit silly arguing that people should be able to stockpile atomic weapons in their basement.
How might AnCap resolve this? Let’s say Joe Smith wants an insurance company to agree to pay $10 million to the estate of anyone Smith happens to kill. “The company will be very interested to know whether Smith keeps sawed-off shotguns – let alone atomic weapons – in his basement.” In this way, truly dangerous weapons would be restricted to those willing to pay the high premiums for owning them.
Getting there from here
Establishing an AnCap society depends heavily on the history of the region. North Korean market anarchists, for example, might have to use violence to curtail that brutal regime, while in the United States, “a gradual and orderly erosion of the State is a wonderful possibility.”
The one thing all such revolutions would share is a commitment by the overwhelming majority to total respect of property rights.
We can build on intuitive notions of justice, just as newly arriving miners in California respected the claims of earlier settlers. To take a more modern example, even inner-city toughs unthinkingly obey the “rules” in a pickup game of basketball, despite the lack of a referee.
Conclusion
Those who defend the State as necessary to protect property rights should brush up on their history. As Murphy wraps up,
I ask that the reader resist the temptation to dismiss my ideas as “unworkable,” without first specifying in what sense the government legal system “works.”
