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Ashish's Niti

Niti in Sanskrit means policy/strategy/vision. This blog hosts my political views, along with news and commentary. This blog has moved here.

Friday, April 01, 2005

Anarcho-Capitalism is not sustainable

Robert Murphy at Mises Economics Blog, attempts to clear the confusion surrounding anarchism.

One of the greatest proponent of anarchism, Roy Childs Jr., changed his mind about anarchism.

I believe that anarchism is unstable in practice.

Why haven't even one private defense agency has arisen to protect those believing in an anarcho-capitalist system? You can't "blame" the existing governments for not allowing private defense agencies as they are known to use force unjustly to maintain their monopoly. The real test of the system is not when there is no opposition to it or in absense of injustice. People have gained independence and freedom from tyrannical governments all the time. But invariably the result was not a anarcho-capitalist system but another government. For example, when India gained independence from British Raj, why it got split into multiple monopolistic governments instead of multiple private defense agencies?

Private defense agencies are perfectly capable of giving protection to its members. But invariably, there will be free-riders. Those non-members who receive benefit because of the law and order maintained by private defense agencies will not be under any obligation to pay the agency. Otherwise, the agency will be nothing but a monopolistic government. I think this situation prevents private defense agencies from arising. Or even if they arise, they degenerate into monopolistic governments.

Apart from non-members who intentionally refuse to pay for the benefits, free-riders can also arise if one private defense agency is so powerful as to automatically defend from external agression the members of the other private agencies in the same geographic area. In that case, its members will have to pay more fee to cover the expenses of developing and maintaining the extra power. Other private agencies can avoid doing the necessary investment for defense of their members and thus can afford to charge less. In that case, if the private agency refuses to force non-members (including members of other agencies) to pay for the defense then it will see a steady decline in its paying membership and ultimately bankrupt itself. If it forces non-members to pay for the defense from external agression then it becomes the government.

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