El Salvador before Bukele was effectively run by for profit gangs with the government exercising little control over the gangs. That's basically anarcho capitalism at work. And in that real world example Caplan and Hanania were thrilled to support an authoritarian Ceaser to put an end to the chaos.
I think the key point you make is that governments create natural monopolies over regions. I would guess that Caplan would rejoin that governmental services do not have to be regionally bound, but could be provided by businesses with overlapping, amorphous coverage. For instance, if you have a contract with an arbitration service with regards to certain cases, that service can cover quite a large area that is also covered by other similar services, and indeed you could go somewhere else and still be covered. A bit like car insurance. Likewise, FedEx, UPS and the USPS cover basically the same territory (all of it) simultaneously.
In theory at least regional control by government is sort of an accident of history, stemming from tribal control of a region and extending to settled farmers and little kingdoms. When governments started doing things other than "keeping people who don't live here from taking your stuff", it just rather happened that they were defined by where they lived and what land they controlled. Many of the services provided currently by governments don't have to be regionally provided. Possibly nearly all need not be.
Can you see a path from here to small (or at least smaller) government? Or does the weakness of the Thiebout competition entail ever bigger government?
I think we are seeing, in the exodus from urban areas to more rural and from blue states to red, Thiebout competition in action, and it seems to flow away from bigger, and less functional, government. It apparently takes quite a bit to get people to change, but maybe that is less a fixed part of human nature and more cultural, and now that it is more normal people will do it more? I don't know.
>How can we get from where we are now to anarcho-capitalism? I don’t see a path.
Just keep privatising (depoliticising) until there is no state/government left.
>And if we somehow find ourselves in anarcho-capitalism, my guess is that some predator organization would emerge that would overwhelm the anarcho-capitalist protection agencies, one by one.
This is failing to understand that libertarianism will be the pervasive culture. Just as most "democracies" are currently supported by "democratic cultures" and so not in imminent danger of flipping back to their even-more-authoritarian predecessors.
>To have liberty with decentralized government you need an exit option. Somebody who is unhappy with the way his polity is being run must be able to move to a different polity.
There doesn’t need to be “decentralized government”, even in a libertarian contractual sense of "government". Private competition, not limited to local firms (as Doctor Hammer notes), is possible among all services.
>the natural monopoly that accrues to a government in a particular territory.
Caplan points out that there are at present many different nations. Occasionally they commit aggression against each other, but for the most part they get along peacefully, with the global political situation becoming more peaceful over time. This development is probably driven by the widespread appreciation that there are gains from peaceful trade that outweigh the likely gains from attempted conquest. (Cf.: there is widespread opposition to slavery.) Next, Caplan suggests that the world system would be just as stable if the number of nations were much larger, with all these nations being small. In the limit, a “nation” would be just an individual person.
The public attitudes that make the present system rather stable did not always exist, and perhaps a further change in attitudes, in the same direction, would be needed to reach stable anarcho-capitalism. Also, firms will have to come into existence to meet the likely demand for private security. But just as our present peaceful world would have seemed unrealistic to people in the distant past, so a peaceful anarcho-capitalist world—while perhaps unrealistic right now—could exist if public attitudes were favorable, and *this might actually come about* in the future.
"From a legal perspective, societies of Status are not a distant Other. Instead, they are what liberal societies would quickly become, in a process of evolutionary reversion, if we lost our political will to maintain an effective state dedicated to public purposes."
Are wokes and the new right digital clans?
"To have liberty with decentralized government you need an exit option. Somebody who is unhappy with the way his polity is being run must be able to move to a different polity."
Digital decentralization is the key to keeping the digital clans at bay?
It seems to me that the relationships between governments are in a state of anarcho-capitalism. I would not characterize it as an unstable equilibrium. While some countries are larger and stronger, we haven't been seeing smaller countries fall to them one by one.
Geez, perhaps fealty to the US Constitution and its laying out of limited government makes more sense. Too bad it is being eviscerated and tenth amendment means very little these days, nor do the Federalist Papers, 10 and 51.
'But from a dynamic perspective, anarcho-capitalism seems like a classic case of an unstable equilibrium.'
Yep, that is kind of the point. Capitalism is an unstable equilibrium where a new competitor can break the status quo, governments are stable as long as they repress things that break the status quo. However governments collapse at a regular enough rate that governmental collapse should be seen as a trait of governments, not as an unlikely outcome.
'You cannot create a sufficiently competitive environment in government services for anything close to anarcho-capitalism to emerge.'
When government funding breaks (ie hyperinflation) you get anarcho capitalism for most government services. The issue historically has been channeling those into capitalistic cooperation and not having an autocracy take over in the choas.
I don’t believe that even under a Tiebout model with realized assumptions (no costs to exit) would be sufficient to realize effective AnCap.
The empirical literature shows that there are many non-economic costs to migration that prevent exit even when one’s earnings can be far higher by moving just a few miles (social connections, cultural factors, status quo bias, risk aversion etc.). People exit much less than pure economics would predict. And even if we do see ideal movements across localities, it wouldn’t be “full” AnCap since localities are still largely bound by state and federal laws, which would require global exit abilities to correct.
The purest way to AnCap would be to not have any state force at any level, which has its own overlooked issues as I argue below.
I am unclear why exit is hard. If the role of the government (for services that are not natural monopolies) were primarily to tax and distribute funds, then can’t I switch providers at will? I can exit a school and choose another, exit a library and use another, exit a park and use another. I suppose I could exit a building approval service and use another? Exit security services and use something else? Right now, I can choose from 3 garbage pickup services, 2 water sources, 7 electricity providers (although I’m stuck with one last mile service - not from my government), 4 delivery services, 3 high-speed internet services. I choose toll lane or congested lane on some roads. Courts seem hard to privatize. Zoning is ‘privatized’ by creating different jurisdictions, but I see no reason this couldn’t be further subdivided. DMV would be easy to privatize (some states have this). It seems that the notion that to make paying for services (that we think everyone needs) possible for everyone we have to bundle the transfer payment with service delivery is the source of the problem?
I've been wondering about the importance of exit lately. I agree it's important, but in the what's ultimately important is that you've got an alternative to exit to. As Arnold points out, moving from one medieval clan to another isn't all that hot. Exit seems like a double edged sword.
I also wonder about situations in which exit shouldn't be allowed. We don't want exit to be too easy for our anarcho-capitialistic corporations, for example. If they can simply cancel our contracts with little reputational harm, they won't protect us.
Easy exit also creates instability. Maybe a company or a bank can be saved, but if it's easy for me to sell my stock or switch my assets, I'm not going to stick around to find out. And neither does anyone else. This is probably a good thing in a big industry with lots of alternatives, but as the alternatives shrink, we quickly reach TBTF. A government market composed of various firms is likely to reach that point pretty quickly, since one of the whole points of governments is to socialize costs.
El Salvador before Bukele was effectively run by for profit gangs with the government exercising little control over the gangs. That's basically anarcho capitalism at work. And in that real world example Caplan and Hanania were thrilled to support an authoritarian Ceaser to put an end to the chaos.
I think the key point you make is that governments create natural monopolies over regions. I would guess that Caplan would rejoin that governmental services do not have to be regionally bound, but could be provided by businesses with overlapping, amorphous coverage. For instance, if you have a contract with an arbitration service with regards to certain cases, that service can cover quite a large area that is also covered by other similar services, and indeed you could go somewhere else and still be covered. A bit like car insurance. Likewise, FedEx, UPS and the USPS cover basically the same territory (all of it) simultaneously.
In theory at least regional control by government is sort of an accident of history, stemming from tribal control of a region and extending to settled farmers and little kingdoms. When governments started doing things other than "keeping people who don't live here from taking your stuff", it just rather happened that they were defined by where they lived and what land they controlled. Many of the services provided currently by governments don't have to be regionally provided. Possibly nearly all need not be.
Brilliant!
A more pressing question arises:
Can you see a path from here to small (or at least smaller) government? Or does the weakness of the Thiebout competition entail ever bigger government?
I think we are seeing, in the exodus from urban areas to more rural and from blue states to red, Thiebout competition in action, and it seems to flow away from bigger, and less functional, government. It apparently takes quite a bit to get people to change, but maybe that is less a fixed part of human nature and more cultural, and now that it is more normal people will do it more? I don't know.
>How can we get from where we are now to anarcho-capitalism? I don’t see a path.
Just keep privatising (depoliticising) until there is no state/government left.
>And if we somehow find ourselves in anarcho-capitalism, my guess is that some predator organization would emerge that would overwhelm the anarcho-capitalist protection agencies, one by one.
This is failing to understand that libertarianism will be the pervasive culture. Just as most "democracies" are currently supported by "democratic cultures" and so not in imminent danger of flipping back to their even-more-authoritarian predecessors.
>To have liberty with decentralized government you need an exit option. Somebody who is unhappy with the way his polity is being run must be able to move to a different polity.
There doesn’t need to be “decentralized government”, even in a libertarian contractual sense of "government". Private competition, not limited to local firms (as Doctor Hammer notes), is possible among all services.
>the natural monopoly that accrues to a government in a particular territory.
There is no such “natural monopoly”.
Caplan points out that there are at present many different nations. Occasionally they commit aggression against each other, but for the most part they get along peacefully, with the global political situation becoming more peaceful over time. This development is probably driven by the widespread appreciation that there are gains from peaceful trade that outweigh the likely gains from attempted conquest. (Cf.: there is widespread opposition to slavery.) Next, Caplan suggests that the world system would be just as stable if the number of nations were much larger, with all these nations being small. In the limit, a “nation” would be just an individual person.
The public attitudes that make the present system rather stable did not always exist, and perhaps a further change in attitudes, in the same direction, would be needed to reach stable anarcho-capitalism. Also, firms will have to come into existence to meet the likely demand for private security. But just as our present peaceful world would have seemed unrealistic to people in the distant past, so a peaceful anarcho-capitalist world—while perhaps unrealistic right now—could exist if public attitudes were favorable, and *this might actually come about* in the future.
"From a legal perspective, societies of Status are not a distant Other. Instead, they are what liberal societies would quickly become, in a process of evolutionary reversion, if we lost our political will to maintain an effective state dedicated to public purposes."
Are wokes and the new right digital clans?
"To have liberty with decentralized government you need an exit option. Somebody who is unhappy with the way his polity is being run must be able to move to a different polity."
Digital decentralization is the key to keeping the digital clans at bay?
It seems to me that the relationships between governments are in a state of anarcho-capitalism. I would not characterize it as an unstable equilibrium. While some countries are larger and stronger, we haven't been seeing smaller countries fall to them one by one.
Dr. Kling, you write: "How [...] to anarcho-capitalism? I don’t see a path."
Here's your path: https://www.amazon.com/dp/1947660853
Geez, perhaps fealty to the US Constitution and its laying out of limited government makes more sense. Too bad it is being eviscerated and tenth amendment means very little these days, nor do the Federalist Papers, 10 and 51.
'But from a dynamic perspective, anarcho-capitalism seems like a classic case of an unstable equilibrium.'
Yep, that is kind of the point. Capitalism is an unstable equilibrium where a new competitor can break the status quo, governments are stable as long as they repress things that break the status quo. However governments collapse at a regular enough rate that governmental collapse should be seen as a trait of governments, not as an unlikely outcome.
'You cannot create a sufficiently competitive environment in government services for anything close to anarcho-capitalism to emerge.'
When government funding breaks (ie hyperinflation) you get anarcho capitalism for most government services. The issue historically has been channeling those into capitalistic cooperation and not having an autocracy take over in the choas.
I don’t believe that even under a Tiebout model with realized assumptions (no costs to exit) would be sufficient to realize effective AnCap.
The empirical literature shows that there are many non-economic costs to migration that prevent exit even when one’s earnings can be far higher by moving just a few miles (social connections, cultural factors, status quo bias, risk aversion etc.). People exit much less than pure economics would predict. And even if we do see ideal movements across localities, it wouldn’t be “full” AnCap since localities are still largely bound by state and federal laws, which would require global exit abilities to correct.
The purest way to AnCap would be to not have any state force at any level, which has its own overlooked issues as I argue below.
https://open.substack.com/pub/neonomos/p/against-anarcho-capitalism?r=1pded0&utm_medium=ios&utm_campaign=post
I have always thought ancap would be the best system for beings who were impervious to injury and had no nutritional needs.
I am unclear why exit is hard. If the role of the government (for services that are not natural monopolies) were primarily to tax and distribute funds, then can’t I switch providers at will? I can exit a school and choose another, exit a library and use another, exit a park and use another. I suppose I could exit a building approval service and use another? Exit security services and use something else? Right now, I can choose from 3 garbage pickup services, 2 water sources, 7 electricity providers (although I’m stuck with one last mile service - not from my government), 4 delivery services, 3 high-speed internet services. I choose toll lane or congested lane on some roads. Courts seem hard to privatize. Zoning is ‘privatized’ by creating different jurisdictions, but I see no reason this couldn’t be further subdivided. DMV would be easy to privatize (some states have this). It seems that the notion that to make paying for services (that we think everyone needs) possible for everyone we have to bundle the transfer payment with service delivery is the source of the problem?
I've been wondering about the importance of exit lately. I agree it's important, but in the what's ultimately important is that you've got an alternative to exit to. As Arnold points out, moving from one medieval clan to another isn't all that hot. Exit seems like a double edged sword.
I also wonder about situations in which exit shouldn't be allowed. We don't want exit to be too easy for our anarcho-capitialistic corporations, for example. If they can simply cancel our contracts with little reputational harm, they won't protect us.
Easy exit also creates instability. Maybe a company or a bank can be saved, but if it's easy for me to sell my stock or switch my assets, I'm not going to stick around to find out. And neither does anyone else. This is probably a good thing in a big industry with lots of alternatives, but as the alternatives shrink, we quickly reach TBTF. A government market composed of various firms is likely to reach that point pretty quickly, since one of the whole points of governments is to socialize costs.