This was posted in response to a query about what was required for anarcho-capitalism to work, in contrast to what was required from an Objectivist minarchy to work.

Three conditions are necessary for anarcho-capitalism to be a stable and attractive system; two of them may already be satisfied:


1. There must be no public good problems whose private solution is catastrophically inadequate. The obvious candidate for such a problem is national defense. Unlike some anarchists (and Objectivists), I don't think there is a clear argument that shows one can always get adequate defense without coercing people into paying for it. When I wrote _Machinery of Freedom_, I thought that was the hardest problem, and was uncertain whether or not an anarcho-capitalist America in the setting of the U.S. c. 1970 could defend itself adequately. Since then the Soviet Union has conveniently collapsed, making national defense a much easier problem.

2. Economies of scale in law enforcement have to be small enough so that the market equilibrium produces enough enforcement agencies so that an enforcement agency cartel designed to reinvent government for its members' profit is unstable. My guess is that this condition is already met.

3. One has to have a set of working anarcho-capitalist institutions that people are used to.


Requirement 3 looks like a catch-22; how can you get such institutions if you have to already have them? But the answer is that societies evolve over time.


My preferred scenario is one in which more and more government actions get privatized, whether from above (voucher initiatives would be a partial step) or from below (UPS and FedEx). As more and more legal disputes are being handled by private arbitration, and more and more law enforcement is being done privately (still with at least nominal government permission), and the government is getting more and more short of money (for a variety of reasons, possibly including the growth of on-line commerce, which is hard to monitor, hence hard to tax), people get used to the idea that if you want your rights competently defended you hire a private enforcement agency, if you want disputes settled in this decade you go to private arbitration (already true for a lot of commercial disputes), that you therefore should be unwilling to support politicians who want to spend money for things you are already paying for yourself (the current attitude of parents whose children go to private schools), ... . There are other possible scenarios, including ones relying more heavily on cyberspace and encryption a la Tim May's ideas (I have a link to him on my web page).


The basic point here is that people in general are rationally conservative. What I mean by that is that they trust the institutions they are familiar with to function the way those institutions can be seen functioning. What I want to change is not some deep philosophical attitude--unlike many Objectivists, I don't think the society I live in is philosophically rotten to the core, nor do I think there is a set of answers to philosophical and political questions which any rational person, once shown, should accept. I simply want people to get used to the institutions I am in favor of, probably a little at a time--at which point they will take them for granted the way they currently take elections and Supreme Courts and Presidents for granted.


David Friedman


For a further discussion of anarcho-capitalism, see my book The Machinery of Freedom, several chapters of which are up on my web site.

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