Monday, June 17, 2013

Anarcho-Capitalistic Dogmatism

(Image Courtesy of Google Images)

Yesterday I read a comment posted by an anarcho-capitalist that was truly mind boggling.  The comment that was made said they (the advocate of anarcho-capitalism) had more respect for the reasoning of the authoritarian than for the reasoning of the advocate (classic liberal/libertarian/paleo-conservative) for a limited government.

Basically, this anarcho-capitalist has more respect for the reasoning of Marx, Stalin, Lenin, Mao, and Hitler than for Locke, Bastiat, Jefferson, Ron Paul, Rand Paul, and Mises. 

Ladies and gentlemen, this is the product of the Neo-Austrian movement that is taking place.  While Ron Paul encouraged everyone dedicated to liberty to study the classic literature of limited government the Neo-Austrian/Neo-Rothbardian anarcho-capitalist is turning a rich intellectual heritage into slogans and intellectual quips.  They are doing to liberty what Sean Hannity has done to Conservatism. 

"You think government has a legitimate role in society!  Statist!"

"Oh, you are against monopolies?  So why do you support the monopoly of the state!?!?! Statist!"  

"You support the Constitution?  Don't you know that the Constitution allows for taxation and that all taxation is theft?!?!?! Statist!"  

"So you think the government will always exist?  That is like saying slavery will always exist! Statist!"  

"You think a consumption tax is voluntary?  Statist!"

This is what it amounts too - One extreme of a fascist, authoritarian, totalitarian state on one side or anarcho-capitalism on the other.  There is nothing reasonable in between.  This position, in my view, is an absurdly ridiculous position to argue on behalf of because it puts forth a false dilemma.  Slavery or freedom - meaning, any government possibly conceived of or freedom.  This is not free thinking.  This is mindlessly attaching yourself to an ideology with zero practical application to our current situation.

The philosophical hypocrisy is apparent when it is recognized that the Neo-Rothbardian anarcho-capitalist is supportive of folks like Mises and Ron Paul.  Mises emphatically denies the reality of a stateless society when he says this: 
"The anarchists overlook the undeniable fact that some people are either too narrow-minded or too weak to adjust themselves spontaneously to the conditions of social life.  Even if we admit that every sane adult is endowed with the faculty of realizing the good of social cooperation and of acting accordingly, there still remains the problem of the infants, the aged, and the insane.  We may agree that he who acts antisocially should be considered mentally sick and in need of care.  But as long as not all are cured, and as long as there are infants and the senile, some provision must be taken lest they jeopardize society.  An anarchistic society would be exposed to the mercy of every individual.  Society cannot exist if the majority is not ready to hinder, by the application or threat of violent action, minorities from destroying the social order.  This power is vested in the state or government. 
State or government is the social apparatus of compulsion and coercion.  It has the monopoly of violent action.  No individual is free to use violence or the treat of violence if the government has not accorded this right to him.  The state is essentially an institution for the preservation of peaceful interhuman relations.  However, for the preservation of peace it must be prepared to crush the onslaughts of peace-breakers." (Human Action, Mises, Pg. 149) 

Here are some of the flaws in the anarcho-capitalist reasoning.  They think since their society will be absent of taxation that the threat of force is somehow more legitimate because the institutions that exist to preserve social order will be subject to the market.  This is naive.  First, just because people voluntarily give their money to a police-like institution doesn't mean they are living in a "force-less" society because they are still sanctioning the institution to use force against those who partake in criminal activity.  It isn't force they have an issue with it is taxation, since force will still exist in the anarcho-capitalist society.

I want to say that again, the problem isn't really about force, it is taxation.

The question that needs to be addressed is whether or not it is possible to have taxation that is voluntary.

In my view this is possible.  Let us consider a society that has a limited government and within this society the Constitution is followed to the letter.  In order to provide funding for a police force, 100% of the citizens of this society vote in favor of a consumption tax placed on gasoline.  At this point, people are free to choose whether they want to consume gasoline or not.  In fact, if the police force gets out of line and starts to abuse their power, the society can go on a "gas-strike" and defund the police in order to demand a change in policy.

The anarcho-capitalists may retort and say that such a society does not exist in reality.  To that I say, welcome to political philosophy because neither does their version of the just society exist in reality.

Another problem that exists for the anarcho-capitalist is the problem of the preservation of their stateless society.  Our founders argued that if a Constitutional Republic is to remain viable the citizenry would have to embody certain virtuous attributes and if those virtues were left behind so would the Republic.  The same goes for the anarcho-capitalist, and I maintain that the virtues necessary for the Republic would be the same for the stateless society.  If these virtues are forgotten, so will the stateless society and their is nothing the market can do to re-establish virtue considering the fact that the market is nothing more than a derivative of the predominant individual virtues currently present within society.

Yet another problem is the Neo-Austrian/Neo-Rothbardian anarcho-capitalist rejects model theory in economics because they believe that models cannot properly capture reality.  So for example, the perfect competition model shows what an economy would look like given these assumptions:

  • Infinite buyers and sellers
  • Zero entry and exit barriers
  • Perfect mobility of goods and services
  • Perfect information
  • Zero transaction costs
  • Profit maximization
  • Homogeneous products  
  • Non-increasing returns to scale
  • Property rights               

All economists realize that these factors do not exist in real-time but nonetheless, it is a theory that can be utilized for advancement of a free society.

Here is the problem for the Neo-Austrian/Neo-Rothbardian anarcho-capitalist; while rejecting models for lack of realism, the perfect competition model IS the anarcho-capitalist theory of society.  This, of course, is highly problematic.  

The Neo-Austrian needs to get off of their intellectual high horse, get rid of their superiority complex, and start to solve the problems that exist in their own philosophy.  In addition to that, they need to engage intelligent and thoughtful folks dedicated to limited government in a more meaningful way.  Spouting platitudes and chanting statist is not sound argumentation.  

Updated Note - This is the original quote I was responding to:
"I have more respect for the reasoning of the authoritarian than I do for the advocate of 'small government'. 
The former believes that because the state is good, we should therefore have as much of it as possible. Makes sense, doesn't it? 
But the latter almost always admits that the state is bad, and then unbelievably declares that we most definitely should have it on some level. I am stumped."
NOTE - Here is a link to my response to Amanda BillyRock's rebuttal - The Truth About Anarchism - A Reply to Amanda BillyRock


  1. "Here is the problem for the Neo-Austrian/Neo-Rothbardian anarcho-capitalist; while rejecting models for lack of realism, the perfect competition model IS the anarcho-capitalist theory of society."

    Can you please provide some type of reference to the claim that Austro-libertarians/An-Caps believe in perfect competition?

    Also, what do you mean by the moniker "Neo-Austrian/Neo-Rothbarding"? How does that differ from an "Austrian/Rothbardian?"

  2. I am not saying that they believe in perfect competition. My point was that their view of society is basically the perfect competition model which is problematic because they reject model theory because for them, models do not capture reality. If anarcho-capitalism can be shown to be in line with this model, then the anarcho-capitalist should reject their own theory for the same reasons. That was my point.

    Honestly, I am not quite sure the argument works but I think I can make it work. The basic assumptions of the model itself fit quite nicely with the assumptions that are made for the anarcho-capitalist political theory.

    What I mean by a Neo-Austrian/Neo-Rothbardian are folks that are are new to the school of thought and really do not know anything about the school itself. These are the folks that will read articles on or (which there is nothing wrong with that) and consider themselves an expert in economics, political theory, philosophy, and mathematical economics. They do not actually wrestle with the works of Menger, Bawerk, Hayek, Mises, Hoppe, Rothbard, Higgs etc., they rely on secondary sources.

    I would argue that the difference between the Austrian and the Neo-Austrian, or the Rothbardian and the Neo-Rothbardian, is that the "non-neo" has adopted the school of thought but understands that it is not perfect and is working to advance it while refuting other views with charity and rigor. The "neo" doesn't really know what they are talking about and just argues off of secondary knowledge acquired from the articles they have read. They are the ones that will resort to the belligerent quips and slogans I mentioned in the article. Rothbard actually uses the term Neo-Austrian in his book "Economic Controversies" where he makes the case that the only true Austrian is Misesian.

    Here is the problem with Rothbard's claim and this is a problem for the Austrian School in general. To be Misesian is to be Kantian. If one rejects the Kantian metaphysics that Mises builds his economic views on top of is to reject Mises. A lot of current Austrians do this, including Rothbard, but still think they are being faithful to Mises. Rothbard does not agree with the the Kantian elements in Mises thought, so instead, he adopts an Aristotelian metaphysics. This is problematic if one is going to argue that Mises is the way forward for the Austrian School because Aristotelian metaphysics within the Austrian School is Mengerian, not Misesian.

    I have been studying Austrian economics for over two years and I have focused heavily on their method for the last 4 months. From what I can gather, there is quite a lot of philosophical confusion going on and it is a problem that Austrians either don't know about or do not want to address.

    Anyway, I hope this answers your questions.

    1. First, I just want to say that I do consider myself an Austro-libertarian and primarily a Hoppean/Rothbardian. I've been studying Austrian economics and other works on libertarian political theory/law/ethics as a hobby ever since 2007. I wanted to better understand the real cause of the Financial Collapse. I had no idea what it meant to be a Keynesian, Neo-Classical, or an Austrian. I don't pretend to be an expert, but I do a lively discussion with like-minded (open) people about this type of stuff. Also, I'm a software developer and it must be written in my DNA to problem solve and figure out puzzles.

      To your first answer to my question (regarding the claim that the Austro-libertarian's view of society is perfect competition), I'm not sure that is a correct statement at all. The perfect competition construct is predicated on perfect information and factor (of production) mobility. Since we live in a world of uncertainty and scarcity (which the Austrians hold as essential to their theoretical framework), how can you claim this is their theory? Maybe we have a different definition of perfect competition.

      Now, Mises and Rothbard discuss the Evenly Rotating Economy in both of their works as a mental construct and fictious system (similar to perfect competition) to discuss as a springboard into the necessity of entrepreneurship and profit/loss are how vital they are understanding the economy since our reality driven by human action (means/ends framework). This is important to reasoning why Austrians disregard econometrics and mathematical modeling of human action. This is the primary difference between the method Austrians use versus the Keynesians and Neo-Classicals/Chicago School. As you know, Austrians follow the framework of praxeology and deductive reasoning. Austrians do not believe it is possible to model interpersonal exchange and purposeful action of the individual pursuing means to achieve their ends. That is another difference, Austrians focus on the individual and some homogenous blob of people who are clones with the same thoughts, dreams, wishes, goals, etc. Humans are not atoms, elements, and substances that simply collide into each other. So, the method for studying the social sciences cannot apply the same method used with the natural science due to the epistemology problems. The same goes for studying Religion, Theology, and Philosophy.

    2. Would it be totally uncharitable to call "non-neo" Austrians.... welll .... just plain "Austrians"?

      The school of thought is not some monolithic consciousness that all walks in lock step together. There are disagreements, debates, critiques, rejoinders within the community. But, they all agree on certain things (for the most part) such as subjective value, deductive reasoning, methodological individualism, praxeology, economic calculation, opportunity cost, heterogeneity of the factors of production, and so on.

      Are there some areas of debate here and there? Sure - absolutely. And, yes I recognize there are some who (for example) think Hayek wasn't an Austrian especially for his political theory (i.e. his Constitution of Liberty). Mises and Rothbard even disagreed on certain things as you point out as well as on Monopoly. But, that doesn't make Mises or Rothbard a heretic or a non-Austrian. As you said Rothbard was an Aritotelian/Thomist where Mises was a Kantian. Mises was a Utilitarian as far as his thoughts on Ethics where Rothbard was a Natural Law theorist.

      A key piece within the Austro-libertarian movement is in political philosophy. Today there is a growing camp that is of the Rothbardian and Hoppean tradition (which I find very compelling in its arguments against the need or relevance the State). And, it appears this is what seems to draw the most of your ire.

      I'll leave you with this to say I appreciate your taking the time to share your thoughts on a blog and interact in a civil discourse with others about minarchism versus anarchism. So, I'll leave you with one question:

      Is the market economy capable of providing a system of law and order independent of the State (otherwise known as a territorial monopolist of ultimate decision making? Yes or No.

      If no, there are 2 books I'd recommend to you.

      1) Libertarian Anarchy by Gerard Casey and
      2) The Great Fiction by Hoppe

    3. A century of Keynesianism has brought us to the high inflationary, slow growth, high tax, welfare state which is 17 trillion dollars in the hole, yet you suggest Anarcho-Capitalists work out the bugs in their ideology? We've seen for a hundred years how conservative theories of "limited government" work. They don't. Government assumes more and more power, they do not adhere to any principle of limited government because elected officials are vote maximizers and learn quickly they do that by giving to their constituency and unelected government workers seek to justify their job by spending and creating reasons why they are necessary and need larger and larger budgets. Instead of attacking Rothbard and the Anarcho-Capitalist movement, maybe the conservative "limited government" Keynsians need to start showing how this viewpoint works in the real world because after 100 years it has not.

    4. Why do you automatically assume those that support limited governments are keynesians? Did you not see the Mises quote in the article. He is clearly not an anarchist or a Keynesian. He is a free market minarchist. Is Ron Paul a keynesian? Do you not see you are doing exactly what his article said anarchists do? He disagrees with you so you call him names.

      Just because there has not been the proper form of government yet doesn't mean there doesn't exist one? At this point in history there have been no anarchist states that have worked yet either? Furthermore, every anarchist state has resulted in government eventually, hence every anarchist state turns into the thing you abhor.

      So yes, anarchists need to work out the bugs in their ideology. If anarchists ever want to have a serious position in political philosophy they have to argue against Locke, Nozick, Mill etc. Anarchists have failed to do this yet.

    5. Jacob, you are correct in the statement that if you are a minarchist that doesn't make you Keynesian. But, you are mixing political philosophy/ethics and economics - one is normative while the other is not. I'm sure you know this but it is important to separate the two.

      Now, one's economics can inform them about what one ought to do (ethics/political philosophy), but one could be an Austrian-Communist or an Austrian-Fascist. If someone knew that free markets were the best way to organize society, but the person just hated humanity and wanted to see it burn to the ground, you could be a pinko-Commie who also adhered to Austrian economics.

      But, obviously if one follows and agrees with the the lessons learned from what economic theory informs us about reality and how BEST humanity can flourish (which Austrian economics does very convincingly), then it does follow one would most likely favor from a ethical standpoint a State-less society. Obviously, you guys will disgree with me on this and that is for further debate.

      Lastly, I find the argument that since anarcho societies never existed or will exist a rather specious argument. I could actually argue quite the opposite is true in the sense a minimal state is not possible nor can it remain limited in size/significance. The consolidation of power from a minimal State (territorial monopolist of ultimate decision/law making) to a larger State is typically the trend.

      But irregardless, the argument remains about what would be BEST and not what is feasible/possible/likely. What should be the ultimate guide post or goal?

      It's like arguing the need for minimal Slavery since Slavery existed for hundreds if not thousands of years in the course of human history (and still exists in some parts of the world - namely sex trafficing for example); therefore, we should advocate a little bit of slavery as the ultimate goal.

    6. My brother, nor I, are mixing economics, political philosophy, ethics etc. The people that are doing the mixing are the people we are attempting to address in these posts. That seems to be quite clear when examining the comments on this post and my rebuttal to Amanda BillyRock.

      Positive economics does not tell someone what they "ought" to do. When you state that "one's economics can tell them what they ought to do" you have just blurred the line between normative economics and positive economics. Language which utilizes the word "ought" with regard to action, is often placing a value judgement on various actions guided by intentions. When this occurs, positive economics is no longer taking place.

      The argument in your third paragraph is simply a non-sequitur It does not follow that if one studies economic theory that this will often lead a person to the ethical standpoint of a state-less society.

      You are mistaking what kind of governments have existed versus what governments have turned into. I believe the point my brother is making is that to argue that a minimal state turns into a totalitarian state does not give the anarcho-capitalist any high ground intellectually, considering any anarcho-capitalist society, or a Lockean state of nature, has turned into a minimal state. We are arguing theory, and the anarcho-capitalist theory is untenable. I am not arguing that it is untenable because it eventually turns into a minimal state. I am arguing that it is untenable because it is unworkable as a theory. This cannot be argued against the minarchist. If your move is to say that minimal forms of governments have turned into totalitarian governments then you are not dealing with the theory, rather, historical trends. And since you are an Austrian adherent, you should know that what happened in history "then" does not mean it will happen in history "later." What you have to argue is that the theory of minarchy is unworkable and I don't think you have a case.

      You are creating a false dichotomy. We do want what is best, but also, what is feasible given reality. What is BEST is completely irrelevant if it is contrary to reality, so far as society is concerned. It wold be BEST if there were no poverty, but that is impossible, so we do not want to try and eradicate poverty, rather, create the social conditions that allow for the alleviation of poverty by those who choose to free themselves from those shackles. You can argue that anarcho-capitalism is the BEST until the cows come home but if the theory is impossibly unworkable then you are fighting for a lost cause.

      The slavery argument at the end is simply absurd.

    7. I am confused as to where i mixed economics and political philosophy, it seems to me the commenter i was responding to mixed them. I agree that anarchy-societies never existing is not a good argument. My point in saying that was to prove ancap's saying there has never existed a small government that didn't expand is a bad argument.

    8. "Why do you automatically assume those that support limited governments are keynesians? Did you not see the Mises quote in the article. He is clearly not an anarchist or a Keynesian."

      Here you're mixing Mises the Economist versus Mises the political philosopher. I'm not saying you were mixing economics and ethics, but depicting was "mises" was from his ethics. Also, most people recognize Mises for his economic contributions as opposed to his political philosophy.

      On Economics, I disagree. Economics DOES provides us with universally true economics laws that inform about the logic of human action and the implications therein. Specifically, it provides us insight into the laws of voluntary interpersonal action as well as the law of involuntary interpersonal action where intervention occurs between voluntary interactions.

      You can call it a straw man or whatever, but it I know that the laws of gravity are true - I would most likely conclude a normative or "ought" policy to not jump off of a 1000 foot skyscraper without a parachute. A similar law understood by economic science is this: a strict application of preference demonstrated preference allows one to say that the participants to a voluntary exchange expect ex ante to benefit (Rothbard, 1956).

      Now, I know you are a positivist and would disregard these propositions/laws as necessarily true since we disagree on method.

      As for my paragraph on minarchy vs. anarchy, you are correct that history does not necessarily predict the future. I was simply trying to use the positivist's rules and apply their own reasoning to history. I guess it all comes back to monopoly and the fact gov't is the ultimate monopoly where a consolidation of power begets more power and this is an unfortunate trend in history. As Rothbard said in his intro to Conceived in Liberty - it is the great conflict between Liberty and Power that has plagued humanity. But, it is the liberty of the individual that we all must strive toward - or as Lord Acton would say the "highest political goal" is that of liberty. (I say this with my normative hat on and not my economics one).

      Lastly, again it pains me to see the veil of truth that echoes through your statement. You acknowledge the goal to seek the ultimate end that is good - yet you recant to settling for "what is feasible." Very disturbing words especially if you think a State-less society would be "best" but you dismiss it as a pipe dream.

      As for your example of poverty, we are born free in this world and we do live in a world of scarcity and not the garden of eden. This is a universal truth that cannot be denied. So, if you're goal is to eradicate poverty and/or allow for the highest possible degree of living standards, then economic science can inform us about the cause and effect of interpersonal exchange that allows for maximizing wealth and individual satisfaction for the attainment of ends through certain means. Living below the quote "poverty line" in the U.S. equates to having a car, shelter, clothes, tv, cell phone, a computer and maybe more.

      Slavery on the other hand is an act of aggression which existed for thousands of years and considered an acceptable norm within society. Yet, today it is considered an abomination and shunned by society. I am hopeful one day the same will same will be said about the State - or at least the modern State - and be proud that I did not stand idly to watch it depredations occur without a least doing something about it. I honestly believe you are trying to do the same, but I hope you and others will join me in acknowledging the insidious nature of the State and the virtue of a free society.

    9. Andy,

      I only recently noticed your comment so that is why my reply is a few days late.

      The reason my brother is "mixing" economics and political philosophy is because the person he is replying to initiated that mixture. That seems to be obvious.

      I don't think anybody who takes economics seriously would disagree that economics as a science is able to discover laws that are universally true. I certainly do not deny that.

      I think it is plainly obvious that you are confusing positive economics and normative economics. Economics as an objective science must be conducted utilizing the positive scientific method. How to apply the results of the findings of positive economics is an entirely different debate.

      I am not a positivist. This is where Austrian economists or adherents to the Austrian school of thought are unable to distinguish between the methods of a positive science and the philosophy of logical positivism. I can agree with the positive scientific method and not be a positivist. Mises and Rothbard conflated these two and the confusion has only gotten worse over time.

      What needs to be understood in this debate is whether or not metaphysical first principles apply to the sciences, including economics. As an Aristotelian/Thomist I would argue that there are metaphysical first principles that are not empirically verifiable. But my position is a far cry from arguing that ALL economic laws are a priori. That in my view is catastrophically misguided. The way that my position would differ from Mises is that the first principles are not embedded in the mind in a Kantian fashion as Mises claims. On my view, they are an objective and necessary part of reality independent of the mind. This is why my position is that of scientific realism and the Austrian position is that of anti-realism.

      The whole argument of "the monopoly of force" is a problem that even Rothbard concedes could exist in an ancap society. The anarcho-capitalist has no high ground on this argument.

      I don't think you understand what I meant with regard to my final argument since I did not recant on anything. We can imagine a world without poverty and that would would obviously be better than a world with poverty. But, the imagined world without poverty is impossible so the conservative position is that we must work to implement a political economy that will minimalize poverty. Even Hazlitt recognizes this in his book "The Conquest of Poverty."

      I am not sure where you get the idea that I say that anarcho-capitalism would be the best and then reject it because it not feasible. I said that YOU can argue that it is the best social/political theory all you want but if it is impossible then what is the point? My argument is basically that which would be BEST is that which is FEASIBLE in reality. Anarcho-capitalism is in my view, impossible, therefore, it is not the BEST social/political theory available.

      I am not sure why your last sentence seems to imply that I do not see the insidious nature of the State and the virtues of a free society? I would like to separate the term government with the term State. Government, as a term, would be utilized to describe the nature of a legitimate institution that is limited in its construction and is able to provide and keep peace and justice. The State, in my view, is when this institution grows beyond its legitimate purposes, therefore, becoming insidiously parasitic.

      All I ever do is debate people on the nature of a free society and the virtues of capitalism as an economic system. I have been doing it for quite a long time, so I do not need to "join" anything. I am already on that wagon.

      This is Luke but I signed in as my brother.

  3. This comment has been removed by the author.

  4. Great thoughts and content. I am going to work on a response because I think this is not only an important discussion to have but it is also a good example of how to conduct the conversation itself. Thanks for the thoughtful reply.

  5. I couldn't get my long comment to post so I am just going to message you with it.

  6. The major problem I have with your argument is the assertion that the problem of preservation is the same for both anarchism and minarchism. I disagree. I assume I don't have to link to the public choice literature here, but with a minimal government you have problems of concentrated benefits/dispersed costs, rational ignorance, regulatory capture etc.

    In fact, the literature seems to suggested that the "solution" to solving these public choice problems is to decentralize as much as possible in order to increase the competition each jurisdiction faces. The logical conclusion of this is a polycentric legal system where the cost of switching jurisdictions is basically zero.

    So again, I disagree that anarchism faces the same problems of preservation. So much so, that it was reading the public choice literature and pondering ways to "preserve" a free society that converted me to anarchism.

    If limited government requires people to embody certain virtuous attributes to work (and I agree that it does), then limited government will never exit. Again, rational ignorance on the part of the voters is particularly damning.

    To conclude I want to point you to this blog post from Bryan Caplan from earlier this year discussing sustainable anarchism: "Crazy Equilibria: From Democracy to Anarcho-Capitalism"

  7. "Slavery or freedom" - this is false. while their is a "neo-austrian" movement, the one extreme of this does not say "Slavery or freedom". the point is control vs self ownership. as morpheus said himself - "the matrix... is control". any form of control requires force to work. and if initiating force is immoral, then the choice becomes morality or corruption. total anarchy is the removal of force from society, the removal of control in favor of voluntary exchange. "slavery" is the monopoly over the money. "slavery" is the use of force to control opinion. freedom, is freedom from involuntary control. its s much a mental journey as a physical one. just as life is.

  8. Chris, thanks for the link to the Bryan Caplan post. I have read a few of his journal articles and I like what he has to say. I think we may have different ideas of preservation in our minds so if you can suggest some of the public choice literature you read that would be great.

    Devan (and Chris), I added a link to the bottom of this post that is a more thorough response to Amanda BillyRock as well as an expansion of what I wanted to say in this post. I don't think anarchism can workably exist without some kind of initiation of force, which of course, would not be anarchism. You can check out that post if you like.

    Thanks for your comments