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Beautiful Chaos

April 28, 2007

Tags Free MarketsInterventionismOther Schools of Thought

Conservative critics of the Bush Administration have correctly pointed out that, somewhere along the line, the "Republican Revolution" went awry. Following the crash of the Berlin Wall, the ranks of the Republican Party began to split further and further apart. Fiscally liberal Republicans, or "neoconservatives" as they were labeled, favored military intervention, open borders, and a vast array of federal programs that they calculated would garner them political support. Taxes were decreased by these politicians, but only in furtherance of an expanding federal government fed by the more productive private sector. Thus, it was shown in 2005 by the Cato Institute that the Bush Administration was the highest spending on domestic policies in over forty years.[1]

Many traditional, or "paleoconservatives," were offended by this calculated approach. They saw the "neocons" as pretenders to the throne created by Barry Goldwater and Ronald Reagan. Where the paleoconservatives embraced small government and the strictures of the US Constitution in many areas, the neocons embraced positivism, and higher spending on "services."

The paleoconservatives, in what they believed to be solid conservative approaches to law and order, and to the traditional "negativist," or protective, role provided by the Constitution, began to promote the economically backward policies of protective tariffs and blocks against immigration, continued to favor federal prohibitions on drug usage, sale, and possession, and favored unconstitutional wiretaps and military operations in Iraq and Afghanistan. For the paleoconservatives, such an approach was justified; for, according to the philosophy upon which the United States government was founded, legitimate government exists to protect us, not give things to us, as the neocons would suggest.

Unfortunately, many of the so-called "protective" government functions that the paleoconservatives assume are legitimate, are actually positive services, and they are as inefficient and deleterious to the United States economy as the more obvious government handouts and pork they oppose with all their might.

Many paleoconservatives would agree that today, the federal government, and even most state and local governments around the country have, as John Locke defined it in his ground-breaking Second Treatise of Government, imposed on us a "State of War" by infringing on our natural rights and retarding our economic development. Where government is only supposed to garner funds in order to protect us, it now acts as a thief and takes our property (both physical and non-physical assets) to give favors to others.

As tools to facilitate critical analysis of this modus operandi, paleoconservatives often use the historically valid underpinnings of American civics, most of which are based on the ideas set forth in the aforementioned Second Treatise. Of course, in doing so, the strength of the Lockean philosophy is rarely challenged. It appears to be a very workable system, and has been deemed acceptable by many proponents of individual liberty throughout history.[2]

But logically, and ethically, Locke's theory deserves more scrutiny, and such study leads one not only to question many of the assumptions underlying our contemporary political institutions, but also to postulate effective, moral alternatives. The basis of Locke's thesis is that you are created with, as Thomas Jefferson said in the Declaration of Independence, certain "unalienable rights." These are the right to life, liberty, and property (the "pursuit of happiness"); the latter two rights are essential for the fostering of the first, and all three are inextricably connected.

According to Locke and the intellectuals of the 18th century who turned his philosophical construct into a practical rule book for government, we form "the state" to protect these rights, and vest in government certain "police powers" based on the consent of the governed. These powers are to be used solely to protect our lives, liberty, and property from encroachments by others. Once a government begins to do that which a malicious person would do — namely threaten our lives, liberty, or property — it works against its very raison d'être, and is therefore invalidated.

But if, as we assume, legitimate government is created to stop us from plundering one another and threatening one another's lives, property, and freedom, how is it justifiable to take a person's property in order to fund the very government that is established to protect that property?

The inconsistency is obvious, and reminiscent of the Platonic conundrum of "who watches the watchers?"

How can we justify government confiscating some of our property in order to protect our property? How much is enough? How is that decided? What if one does not want to comply?

Locke's answers in support of his argument for individual liberty do not address these questions. He first states that "the supreme power cannot take from any man [singular] any part of his property without his own consent [italics added]." Later, however, while providing his rationale for granting government the police power, Locke explains that if a man enjoys the protection that the state provides, he is duty bound to give up some portion of his property in the support of it, concluding with this internally contradictory statement: "But still, it must be with his own consent, that is, the consent of the majority, giving it either by themselves, or their representatives, chosen by them [italics added]."

The problem here is clear. If one is to give his own consent, how does that correlate in any way to policy-making by the consent of the majority?

It does not. It does not support the rule of the majority, even for the establishment of the police power of the state. Individual consent is not reflected through majority rule. Individual consent would connote volition, thus voluntarism, and thus, the elimination of the state apparatus altogether. The "state," in its generic form, is only needed to institute force upon one unwilling to join or comply, and yet it is the prevention of force that is the rationale for establishing the state. If the state must use force on us in order to arrest force, what purpose does it really serve?

The Lockean dilemma is much larger than this logical inconsistency reflects, and its ethical and economic implications are closely linked. But before one analyzes the problems of Locke's rationale in favor of limited, "negative" government, it is important to study the larger panoply of government services, and praise Locke's powerful argument against "positivist" state action. This will allow us to see in a different light what we typically assume are justified, "negative" roles for the state.

The Conceit That Drives Positivism

As Locke might say, it is only with the greatest conceit that one attempts to force individuals to pay for a product or service after they have opted not to pay. Yet we see this happening in government all the time. A ski hill is failing in the private market because not enough people find it attractive to recreate there, and as a result, to "save" it from development, politicians propose using tax money to purchase the land and turn the area into a state park.[3] Inevitably, this park will not turn a profit, and more tax money will be used to keep it operational.

Or perhaps it is a particular industry, one which stands to lose to more efficient, foreign competition. American consumers might like to choose the foreign product, thus saving themselves money and letting them have more capital left over to purchase something else or invest. But politicians disagree. We "need this essential American industry," they might say, or "the 'trade imbalance' is enormous,"[4] and therefore the government must place tariffs on foreign products (this also applies to restrictions on immigration, based on the fallacious idea that foreign-born workers depress native wages).

In so many cases, the government is utilized to force us or our neighbors to pay for something we would not have paid for, or paid for in a different amount, had we had our druthers. This is coercive, malicious, and unsupportable in a free society. The ethics of forcing someone to pay against his will are clearly malignant and run contrary to the Golden Rule. Would you like it if you had an inescapable "buying buddy," who tagged along with you everywhere you went, and imposed his will each time you attempted to buy or sell a product? If you agreed to a certain price with a businessman, would you not find it the height of arrogance for your "buddy" to step in and tell you that you need to pay more, or to tell you as the seller you need to sell for less? What if you completed the purchase, and then the "buddy" told you to give that product, or the profit from its sales, to someone else? If such a person existed, he would be quickly shunned, and become nobody's buddy in very short notice, because the ethics of his actions are unacceptable. Yet this is what politicians try to be all the time, and they set up bureaus to act as our invisible "buying buddies" for every private transaction.

The Economic Drag of Positivism

As stated earlier, the ethics and economics of "positivism" are linked. On the economic side, government provision of goods and services has grave consequences as well, but these consequences often go overlooked. They fall victim to the dynamic of "opportunity costs," or what Frederic Bastiat called "what is not seen." While the public sees the gymnasium or wildlife refuge that is created through the taking of tax money and the application of that money to the purposes the majority chose, the same taxpaying public does not see the innumerable products left unproduced, the jobs not created, the productivity lost, due to this redirection of usable capital. As it turns out, the losses far outweigh the gains, for, as has been noted earlier, if the government forces people to pay for things they had already chosen not to buy — or would never choose to buy if given the freedom to decide — these expenditures are, by their nature, losses to the taxpayers, not gains. The aggregate economy is harmed, not helped.

Bastiat's argument was reinforced by the members of the Austrian School of economics. In the 19th and 20th centuries, men such as Ludwig von Mises, Carl Menger, and FA Hayek showed that the valuation of one's property is purely subjective. As a result, each of us creates our own definitions of what are efficient expenditures of our capital. We subsequently take those definitions and interact with others to get what we want in the market, and through those freely chosen transactions we create price information that helps other providers of products and services to attenuate their own actions most efficiently. This market process allows people to produce the most for the least amount of work, or buy the most for the least amount of money.

Without a fully functioning price mechanism created by free individuals, there cannot be a proper management of resources. Producers will not know how much to produce, prices will not reflect the real value of the product to consumers, and time and capital which could be spent in more efficient ways will be squandered on creating or buying products and services that people do not want. Life is not bettered in this manner. Living standards are not improved by taking away the prerogative of the individual to decide for himself whether to engage in a transaction with another person. By definition, waste is created, for would one not call something a waste of money if he had it taken from him and spent on things he did not want?

Bastiat, the Austrians, Adam Smith and other economists understood that living standards rise most rapidly when the individuals living their own lives get to define what betters their lives. If we trust our neighbors to use the fruits of their labor as we would like to be trusted with our own, not only are the ethics of the Golden Rule upheld, but the practical advantage of increased productivity is facilitated, and the lives of men are improved.

How Government Competition with Private Industry is More Widespread Than One Might Think

It is easy to overlook these kinds of long-held economic axioms when faced with a constant barrage of pro-government propaganda in the media. Likewise it is easy to forget that the acceptance of "positivist" government for certain goods or services leads to its use in regulating, cartelizing or monopolizing other areas of our lives that we don't immediately see as being tied to economics and market exchange. People begin to think it is appropriate for government to address other societal needs, needs we could fill ourselves through the use of private exchange and capitalism. As a result, the line between "protection" and "provision" becomes blurred.

Today, the government engages in activities we initially assume to be "protective" in nature — things such as restaurant health inspection, and building code inspection — but are, in reality, positivist provisions of services that crowd-out or openly exclude market participants from competing with government in these fields of endeavor.

Safety

Let's look at "safety" inspection as the first example. In the winter of 2003, a Rhode Island nightclub called "The Station" caught fire due to pyrotechnics being lit by a band on stage. Ninety-six people were killed. Shortly thereafter, politicians were calling for more stringent fire codes, this despite the fact that the fire began due to actions that were illegal in the first place. The laws did not stop the tragedy. In addition, many New England papers and broadcast media soon reported that their own state inspectors were finding all sorts of "safety" violations in their own visits to local clubs. Keen observers might have wondered why there was a sudden barrage of violations. Were the nightclubs working in concert to violate the codes at that specific time, or is it more likely that the increase in violations was due to a higher number of inspections? Perhaps the government bureaucrats who were suddenly finding all sorts of snow-blocked back doors and flammable materials at the nightclubs simply hadn't visited the clubs as they were supposed to have done, or their scheduled visits would have proven insufficient to police the standards. Seeing a sudden spike in violations just after a high-profile nightclub tragedy certainly seems driven by politics, not collusion on the part of nightclub owners to break fire codes.

Of course, none of this offers observers much confidence in the consistency or thoroughness of the inspection regime as operated by the government.

Add to that the historical fact that many nightclub owners bribe politicians, and many safety inspectors extort owners, and you have a recipe for an opaque, corrupt, inefficient, untrustworthy regime of so-called inspection that many people blithely trust to tell them they are "safe" in crowded bars, rather than a transparent, honest, efficient, trustworthy system of inspectors whose livelihoods depend on satisfying the customers who frequent the clubs and also depend on satisfying insurance agencies that offer protections against hazards.

This problem is repeated over and over, in field after field, from food inspection[5] to elevator inspection, from the licensing of nail stylists, to the licensing of gas pipe fitters. Government does not do the job properly, efficiently, or with accountability. Corrupt government employees and politicians use the safety codes and licensing laws to shake down competing businesses and help favorites exclude competition, and the populace is not only directly financially harmed by the interference in the competitive marketplace, it is also indirectly harmed by believing in the fantasy of government protection. The government inspectors certainly weren't around the night "The Station" became a deathtrap. Realistically speaking, it would be cost-prohibitive for them to be in every club. But the threats of lost business, liability suits and possible bankruptcy help inspire businesses to avoid such calamities before they occur.

Consumers have choices, and they will be the final deciders. Every consumer can approach a club employee, or talk to a nail "technician," or ask a friend about a doctor, and find out about how that person handles his safety issues. Each person's commercial exchange with anyone offering a product or service in the market is uniquely his to decide. The consumers themselves have the power to put people out of business simply by not doing business with them. Likewise, they have the power to make businessmen dazzlingly successful. The more comfortable one feels with the quality of a seller's product or service, the more likely he will be to engage in commerce. Businessmen recognize this, and, as a result, respond best to market incentives brought about by the consumer, not abstract regulations imposed by politicians.

Besides, who are politicians to decide for others how they live their lives when engaging in peaceful commercial interaction with others? Even if one posed a radical hypothetical wherein customers knew their safety was in jeopardy, but visited a club, or rode on rides, or ate meals, or drank drinks that could kill them, what business would it be of government to stop them? Rock clubs are also dangerously loud, does that mean government "sound inspectors" should be enlisted to check the levels of every amplifier about to be played by every guitarist in every club in a particular jurisdiction? Would the hearing problems people might encounter after concerts justify the government ordering all concert-goers to wear earplugs?

Whether the people are aware or unaware of the dangers, their lives are their own, and it is not the place of government to protect them from their own actions. Such activity by government is not protection at all. It impedes the natural growth of market participants and private watchdogs who would naturally cater to those who want to look out for themselves, and it encourages people to look to government to handle other areas of their lives that could better be handled by private industry.

Roads

Roads are an excellent example. For many Americans, indeed for many people all over the world, the assumption that only government can create and run roads is unquestioned. Government has always run roads, and it always will, they believe. The forced seizure of land through use of eminent domain, the widespread taxation of people who might not even use specific roads upon which the tax money will be showered, the inefficiency of upkeep, improper speeding laws and ticketing, and the mixing of bad drivers and good on the same pavement are all viewed as mere nuisances one must accept if one wants to be mobile. It is seen as virtually impossible for private interests to be able to surmount the huge costs and property hurdles any attempt to build a private road might present. How is it possible, then, that in the first half of the 19th century, private turnpikes not only existed, they flourished and turned sizable profits?

As economist Daniel Klein wrote:

"Between 1794 and 1840, 238 private New England turnpike companies built and operated about 3,750 miles of road. New York led all other states in turnpike mileage with over 4,000 as of 1821. Pennsylvania was second, reaching a peak of about 2,400 miles in 1832. New Jersey companies operated 500 miles by 1821…. Between 1810 and 1845 over 400 turnpikes were chartered and built."[6]

Despite popular misconceptions, private companies succeeded in building roads without having to coerce anyone to pay for them or give up land to build them. The argument offered by critics — even conservative critics — that only government can "generate" enough money to undertake such large and expensive projects is belied by the facts. Likewise, the red herring often tossed out by leftists, who argue that there is a "free rider" problem (wherein potential beneficiaries of a project will not participate in the investment if they know they can still reap benefits by being in close proximity to the project when it is complete) is shown by history to be inapplicable, because exclusivity and competition against other projects drives people to invest out of their own self-interest.

Unfortunately, the more government has insinuated itself into our lives in a "positivist" manner, the more services people expect government to provide, the more special interests are able to get government to provide such services to their special benefit, and the more people will eventually believe that the government must and always has provided such "services."

Marriage

Marriage is a perfect example. In this, the beginning of the 21st century, there is a clamor for state and national laws or constitutional amendments that would codify a legal "marriage" as a licensed union between one man and one woman. This has set off a firestorm of debate. Homosexuals are upset because marriage brings heterosexuals certain legal advantages they cannot acquire with the same ease. Heterosexuals counter that it is unjust to redefine a word that has meant only one thing for centuries. Marriage between one man and one woman is the bedrock of society, they say; it protects the children from abuse.

In fact, many "pro-marriage" activists have actually said that they want to legalize only heterosexual marriage because it is "the optimal environment for raising a child." In response, critics ask if all other, "sub-optimal" child-rearing situations would be outlawed. Would a single parent be unable to legally adopt, even though the living situation for the child might be better than a foster home or an orphanage? What about grandparents, or homosexual couples? What about heterosexual couples on the low end of the earning scale?

Homosexuals also point out that there have been cultures in the past that allowed for many kinds of "official" marriage situations. They want the state, in its generic sense, to recognize their "right" to be married under the same laws that heterosexuals employ. They want the state to recognize their "Fourteenth Amendment rights" to equal protection under the law.

Unfortunately, neither side is willing to acknowledge that state licensing of marriages is a relatively new phenomenon. They have had their minds blurred in two ways. First, they assume that because the state plays a certain role now, it has always done so. This is caused by simple ignorance of history. Why one reflexively turns to the state to get a license to wed another is a complete mystery, unless one acknowledges that most Americans don't know that marriage licenses and government involvement are relatively recent phenomena in the United States. George and Martha Washington did not ask permission from the government to get married. Marriage used to be the purview of one's church. The state has now been put before God in order of importance for the sanctioning of one's bond with another. But since Americans don't study the history of marriage, they don't question the implication of having the government get involved.

The problem is not that homosexuals want to encroach on a traditional area of heterosexual life; it is that heterosexuals have ceded to the state the power to grant permission for marriage and many other activities. Even if they are successful in passing laws or constitutional amendments that will define marriage the way they want it defined today, heterosexuals have to understand that by putting the power to define words and societal traditions in the hands of the state, they leave the definitions and traditions up to majority rule, and one cannot say with any sense of certainty that majorities even a few years down the line will believe as they believe at this time. The attempt to "preserve marriage" will last only as long as the vocal minority or the majority agrees, and then, so-called "traditionalists" will be sorry to see a dramatic change in what the word "marriage" means.

Since many special interest lobbyists do not look back at history to see the origins of what they assume to be a legitimate government purview (in this case, it was religious and racial animosity that fueled certain established churches in the United States to begin pushing for government licensing and for the exclusive power to marry people) the combatants in today's marriage debate are unable to see that there is a different way, a system that forgoes government in favor of private, voluntary association.

But there is a second factor revealed in the marriage debate, something more significant than simple laziness or ignorance of history, something that tells us about not only human nature, but also the flaw at the heart of Locke's Second Treatise. What is most revealing is that many Americans believe that the Fourteenth Amendment is applicable in the case of marriage, and in many other instances of "positivist" provision of government "services," or licensing thereof.

Read with strict scrutiny, the Fourteenth Amendment's "equal protection" clause is simply that. It requires that all citizens of all states be protected equally by the laws of their state and federal government. It does not mean, as is the common fantasy, that all citizens must be treated equally under the law. As much as one would like to think that all citizens should be treated equally, the clause does not use those terms, and no amount of legal wrangling can change this fact. This distinction between protection and treatment lies at the heart of the Lockean code. Government is only supposed to protect us, not offer goods and services such as legal arrangements like marriage that equate to treatment under the law. In any instance where such over-stepping of the Lockean system occurs, government has become illegitimate.

Protection

Unfortunately, the Lockean system's false assumption that the positive provision of the service of police protection is truly a "negative," and thus justified, role of government leaves open the possibility that other services will be viewed as justified, and, of course, if government can take a portion of our property in order to "protect" our property, why not expand the "protective" role of government beyond the police service?

Very few people in the field of political-philosophical disputation engage in this debate, but it is important, for the assumptions manifest themselves more and more, in many ways, and always undercut the efforts of those who try to hold the line in favor of limited, "negative" government established solely to protect our lives, property, and peaceful interactions.

Such problems lead one to question the wisdom of basing a governmental system on Locke's theory. But it is not enough to criticize or pick apart his paradigm. It is incumbent on those who would say that Locke's ideas do not go far enough — or rest upon contradictory statements, or open the Pandora's Box of larger government — to present a better alternative, a moral, ethical, and workable alternative that avoids the practical Lockean pitfalls.

In a word, that alternative is the market.

The free market, the organically created, spontaneous outgrowth of human individuality and peaceful human interaction, solves the ethical problems of Locke's theory. It allows every man to give his consent, avoids the pitfalls of government preying on the slothful side of human nature, and promotes man's positive attributes: creativity, work, and thrift. It allows us to get services, even police services, provided to us voluntarily, without forcing others to pay for something they do not want, or do not want to the same degree, and it fosters bonds between those in need of charity and those who provide it. It is truly the noblest achievement of society, and, at the same time, that which allows society to exist.

The Market Paradigm, and How It Can Replace Government

Recall Locke's excellent criticism of "positivist" government activity. It is simply not ethical to take someone's money to pay for something he could have voluntarily purchased in the market. Likewise, any product or service that people want can be provided, and provided most efficiently, through the market. If there is not enough demand for it in the market, there certainly is not a rationale for forcing those who would have chosen to spend their capital on other goods and services to pay for what politicians compel them to buy. By getting involved in these subjective decisions and trying to manage a constantly fluctuating, self-correcting market, the government retards productivity.

But how would those needs we have assumed only government can fulfill be better provided by markets? Surely people must be compelled to pay for the things that "only government can do."

People don't need to be compelled to pay for anything, ranging from building, food, and service safety, to road construction and maintenance, to marriage licensing, to trash collection, fire protection, and even the so-called rationale for government under the Lockean system, police protection.

There is a market for safe buildings, food, and services. People don't want to be poisoned, burned, or defrauded. Not only do food suppliers and restaurateurs, club owners and service providers know this, and know that the better they cater to the consumer desires the more prosperous they will be, other entrepreneurs know this as well, and will explore the market to see if there is a role for them to act as watchdogs for the consumer interest.

As opposed to government bureaucrats and politicians, who are insulated from the harm their bad decisions and lack of attention can do to their bottom lines, market watchdogs have great incentives to be thorough, sharp, open to analysis, and open to new ideas. They need to be honest, for any report of favoritism will deter future customers from giving them business, and the threat of competition will keep even the dominant watchdogs from abusing their positions.

Safety

Consumer Reports is an excellent example of a dominant watchdog service that has remained vigilant about its quality for decades. It is the "gold standard" of consumer magazines, and leads a pack of sector-specific publications that also give consumers excellent, unbiased advice one would never trust the government to give.[7]

Underwriters Laboratories is a private entity funded by people who work in the electric and construction businesses. As the watchdog on electric cable and component safety, it is unrivaled, and one would be hard-pressed to see any piece of electric equipment put into a house by a contractor if that piece did not have the "UL" seal of approval.

Walt Disney World is a private enterprise that sees thousands of people pass through its gates each day. It has highly complex pieces of machinery that entertain people repeatedly, day after day. Breakdowns mean dissatisfied customers; injuries and death lead to lawsuits, bad publicity, and lost business. Pleasurable experiences lead to good publicity and higher profits. As a result, Disney World has very high standards for its rides and employees, and as a result of those standards, Disney has had very few injuries or fatalities in its thirty years of operation. Compare the highly complex operation of Disney with the unmonitored, poorly maintained public playgrounds in your state or city. Not only are there more injuries per capita, but the public parks cannot sustain themselves without taking tax money from people who don't even use them.[8]

Roads

Disney also has its own roads, as do most shopping malls and private condominium complexes around the United States. Compare the maintenance of the private roads with the government roads, and take particular notice of the northern states in the winter. It is a very good bet that you will see the privately owned pavement cleared first, and better, than the government roads. After all, no one is forced to drive the roads and parking lots at the mall or in the condo associations. The safety paradigms are arranged by those who own them, based on how they want to cater to their clientele.

In California, certain stretches of highway are being returned to the private paradigm mentioned by Daniel Klein. They operate in the black, safely, and efficiently. Certainly many people who are excellent drivers stuck on a government highway that has to admit people with many levels of driving skills would prefer to have private highways that would allow them to get to their destinations without having to put up with those who are a drag on their own abilities. This seems a perfect allegory for many roles government takes on. By doing so, it impedes our abilities to excel at what we do best, be it driving, cooking, entertaining, or reporting on the services of others. Get this arrogant, political force out of our way, many of us say, and just let us do what we do best.

The Poor

Many people are skeptical of this approach. They believe that only the "elite" would receive safe goods and services if it weren't for government. The poor, they claim, are helped by having government rules for entrance in the market.

The trouble is that these government rules are the very things that often make it impossible for the poor to afford certain products and services. Regulations are expensive, and often arbitrary, having little to do with real safety. These expenses are passed on to the consumer, making it impossible for some to afford certain products, or restricting their ability to use leftover capital to buy other things they need. Licensure excludes competitors of lower skill, competitors who could, if allowed to, provide services to people of lesser means. By creating expensive licensing laws, government restricts the pool of people who can enter the market, and allows them to charge more because they have fewer potential competitors. Surely poor people would prefer having the choice of getting an inexpensive, though possibly inferior, product or service rather than not having the choice of buying anything because the price is artificially high due to conceited, egalitarian government intervention.

That's all well and good, some might say, but there are certain things that just cannot be left to the market. Sure, one can make an argument that even protection against bad food and dangerous buildings is not really protection in the "negative," Lockean tradition, and one can show how these services can be provided more fully by private entrepreneurs, but what about things like fire protection, police protection, and adjudication? Surely they fall into Locke's view of the acceptable "negative" role of government?

Protection

One wonders whether Locke would have supported government fire services. Within the Lockean construct, people do not form governments to protect them from naturally occurring phenomena. Fires, storms, earthquakes, and other dangers posed by life are just that. According to Locke, we form governments to prevent human beings from harming other human beings. Provision of fire fighting services is a "positivist" action by government. It is a provision of a service that is not legitimate under the Lockean paradigm.

Contemporary leftists claim that it would be impossible to secure market services for things like firefighting, because the "free rider" problem would inspire those who live nearby, and thus pose a threat if their property should catch fire, to simply not pay. These "riders" would know that neighbors who really want to protect their property would also try to stop a nearby fire, because that fire could spread and damage their own home.

But this overlooks many factors. First among them is liability. In a market society, neighbors will arrange liability paradigms, most of which will cover the possibility of fire. One neighbor in a market community will be inspired to work with another to make private arrangements for potential threats. Much like insurance companies work with clients to hedge against future liabilities, private firefighting forces would work with private communities to arrange broad coverage, and those living within would have an incentive to work together to make such a system work.

Additionally, history shows us that the "free rider" dilemma was not encountered when communities fought fires in the early United States. Instead, they formed volunteer firefighting teams, much like the volunteer philanthropic organizations that were created in town after town. In such cases, neighbors helped neighbors, volunteering their time or donating their money to a pool, upon which members in distress could call. When the need had passed, the neighbors who had been helped tried to return the favor, and thus the voluntary organization was sustained and fostered.

Firefighting is not something one need look to government to do. It can be done more efficiently, and cover only those who want it, by charging only those who want it, or by people working together voluntarily.

Police protection, that fundamental role of Locke's "legitimate state," operates under the same rules. Though many people might at first be skeptical, police protection is also a "positive" provision of a service,[9] and one that could be more efficiently supplied through private means.

First, one must acknowledge that a government-provided police force is rarely going to stop a crime. Even today, more crimes are stopped by private citizens brandishing private weapons than by police, simply due to the fact that police cannot be everywhere. Likewise, police protection is often uneven, and favoritism between politically connected parties and members of police forces is not uncommon.

But the provision of protection by an armed, or at least potentially physically injurious, force of men is still seen as a preventative, a deterrent against crime. That being the case, and acknowledging the erroneous nature of Locke's view that granting the state police power is a "negative," rather than "positive" act, one must provide an alternative that would work.

This alternative comes in the form of private police forces working for private communities, forces subject to the demands of the market, forces that must answer to customers with honesty and efficiency.

Just like any other service provider, those offering protection to potential customers would have reputations to uphold. They would have to do their jobs well and cheaply, answering to their clients.

But, one might ask, what if their clients are interested in preying upon their poorer neighbors, and hire the police force to invade and plunder. Meanwhile the poorer neighbor does not have the financial wherewithall to hire a strong enough police force to fight back? Couldn't "ganglandism" ensue, wherein the richest hire the strongest force to steal from those who cannot compete?

This is highly unlikely for numerous reasons.

War

History has shown that warfare is extremely expensive. "Warfare states" cannot sustain themselves against the forces of the market. In a market-governing society, comprised of many private communities, the very existence of the market communities would imply the understanding of this fact about war versus peaceful market exchange. The freer and more peaceful the community, the more prosperous it is, and the more it has to spend on its own defense. Take a look back at the United States and the USSR. The US, with its relatively free-market structure, was able to fund a military that surpassed that of the USSR in almost every regard. The USSR imploded after trying to invade nation after nation, all in an effort to keep its war machine funded. Admittedly, when one is painting a picture of a stateless society that provides for its own defense, the United States is not a perfectly analogous system because tax money was forcibly taken from the freer system in order to pay for the defense force. However, in a general sense, the higher prosperity of market-driven societies can not only outpace warlike societies in provision of food, clothing and leisure opportunities, it can also surpass the warlike societies in the provision of defense forces to insure the peace.

In addition, market structures that successfully provide goods and services, even services such as police protection and adjudication, require extraordinary degrees of sophisticated coordination that arise in response to consumer demand. In order to offer protection services to any community, of any size, a private police force would be required by the consumers to show that it could and would coordinate with, and be accepted by, the police and justice systems of other communities. Not only would these other community forces promise to remain peaceful, they would all work together to create emergency defense unions to repel any market participant who turns "rogue" and engages in aggressive activities.

The ability to unite and shun — the ability to exclude through mutually beneficial arrangements — is key to market operations in all fields. Often, it is not the stigma of breaking a statute that stops someone from committing a crime, it is the possibility that he or she will be caught, stigmatized for being a predator, and punished through financial means, imprisonment, or outright exclusion.

When novelist Janet Dailey admitted to copying in her book "Notorious" the work of fellow writer Nora Roberts, it was not the stigma of breaking any law that prompted her to publicly apologize, it was the humiliation of exposure to readers, and the possible loss of her livelihood. Support structures fall apart; goodwill of publishers, publicists, and bookstores disappears. The same is true for companies. Those that do not operate honestly in the market do not last long. Their reputations get around, not only to the consumers, but also to the suppliers of products upon which the offending company relies to stay in operation. Support structures erode due to the supporting companies turning to more reliable, honest, and stable buyers.

Integrated police and justice systems are essential for different communities to get along and prosper. It would run counter to human nature, and counter to the forces of the market, for a police force operating in "Toughville" to arbitrarily arrest and shakedown anyone entering the city. Obviously, no one would visit "Toughville"; "Toughvillians" interested in visiting other cities would not be welcome; and they would not receive reciprocal justice arrangements to protect them away from home.

This is not to say that rogue market societies would not arise. No system is perfect. The market is, however, blessed with certain advantages over the state. First, its police forces would have to be more addressable to consumer demands than are the forces of the state. The very process of majority rule, upon which Locke relies to fund the police power of the state, rarely, if ever, showers 100% approval on every government act. Different percentages of the populace want different things at different times. As a result, police forces cannot satisfy all of their consumer demands, cannot address new demands in an efficient manner, and have no way to match the feedback mechanism that provides information so quickly to market entrepreneurs.

Courts

The court systems tied to the police protection of each market-based community would also have to be more addressable to the public. Arbitration companies will not last long if they do not satisfy the consumers who demand some kind of assurance that disputes will be handled justly.

There are those who say that this is all fine for the "rich," who can afford to pay for the bests services, but they still distrust the market to provide justice to the poor. This is intriguing, for in all other aspects of our lives, we see market efficiency providing the essentials of life more and more cheaply. What used to take days of work to buy now takes hours. Televisions, once the playthings of only the richest Americans, can be purchased by teenagers working part-time for about a week. Computer capacity that used to cost millions and take up entire rooms in order to function properly now costs about $15 and fits in the palm of one's hand. How is it that all of these non-essentials can be provided with increasing efficiency, and with greater efficiency than the state can provide, yet we believe that the poor would be excluded from a useful and just police and court system?

A look back at history might be worthwhile, for, in fact, there was once a society that operated without even the Lockean paradigm that many in the United States assume is necessary for our protection.

It was located in Iceland, and was created and run by the Vikings beginning in the late 9th century. For nearly 400 years (during a time when Al Gore was not around to save the planet from man-made global warming), the Vikings survived and prospered in Iceland without a government, employing only voluntary defense and justice systems for protection and adjudication.

At the heart of the Viking order was the bundle of private property rights called the Godard. Cheiftans who built temples or areas of congregation held the primary Godard, and could sell their rights to others. This allowed people to join in a justice system whereby one could swear allegiance to a Chieftan and become a "Thingman." Your allegiance was voluntary, and permitted entrance into the network of voluntary justice houses the Chieftans set up from village to village. All Cheiftans had votes in the creation of the court system, and competed for the allegiance of the Thingmen.

Within the courts, every Thingman had an equal chance to get a fair hearing for a claim against another, and favoritism was avoided through the use of the market. As David Friedman explains:

"A claim for damages was a piece of transferable property. If you had injured me and I was too weak to enforce my claim, I could sell or give it to someone stronger. It was in his interest to enforce the claim in order to collect the damages and establish his own reputation for use in future conflicts."[10]

Of course, nowadays, it might surprise some Americans to know that the Vikings were more than a football team or the basis for comic book characters, but taking the time to look at how smoothly their society functioned without government is a rewarding task, and could go far to convince many that both "positive" and "negative" states are wasteful and unnecessary.

Marriage, Divorce, Childcare, and Abortion

Some will remain unconvinced. They worry about particular issues that they believe only the state can address. The heterosexual marriage proponents are an example of this kind of group. Many of them remain steadfast in their belief that the state must legalize only heterosexual marriages because they believe that the state has a justified role in protecting people from aggression, and they fear that children could be hurt if homosexual child rearing and adoption were allowed.

The trouble with this kind of thinking specifically — and in a general sense about other issues where people believe the government must be involved to afford us protection — is that it never addresses the Platonic conundrum of "who watches the watchers?"

If one cannot be trusted to handle his own life, and to raise his children peacefully and with care, then how is one to be trusted to vote for a distant politician with no ties to his life, or the life of his child, and to believe that the politician can not only better handle raising one's own child, but raising other peoples' children? As we have seen, such thinking leads to profound economic and ethical troubles, yet people continue to assume they need to get government involved.

As a perfect example, there is the other side of the marriage coin: divorce. In Indiana, a surprising court case recently arose involving two divorcing Wiccan parents. In the proceedings between Thomas E. Jones Jr. and Tammie U. Bristol, Marion County Superior Court Chief Judge Cale J. Bradford ordered that the parents "take such steps as are needed to shelter [their child] from involvement and observation of these non-mainstream religious beliefs and rituals." The judge decided that the nine year old child could not be taught Wicca, for "while the two of you are free to engage in any kind of behaviors you want to that are lawful, or that you don't get caught at," he said, "I suppose, where you've got a child involved, that freedom can be somewhat limited."[11]

Since the parents had gone to the state to get permission to marry, they also had to go to the state to get permission to divorce, and to have the state be the arbiter for their claims at the end of their legal relationship. They had not counted on a judge who did not like Wicca, and had not counted on the judge deciding how their son would be taught. The parents were forced to file an appeal to a higher court, where the new case was eventually decided in their favor. But the systematic problem is clear, regardless of the outcome in that instance. Systematically, the mechanism of state licensing of marriage presents the state with innumerable opportunities to regulate our lives, and we must recognize that the impact the state has is both emotional and economic.

If these Wiccan parents had not lived in a world where the state took it upon itself to grant licenses for marriage, where marriage was a private affair, with private contracts recognized by private arbiters and churches, all of their associations would have been voluntary, and thus the results of their actions would have been sanctioned by them from the start. Any arbitration organization, i.e., a private court system, adjudicating the case would have had to answer in the market for future clients, and thus the likelihood of its judges making rulings based on capriciousness or prejudice against the Wiccan religion, the Mormon religion, Catholicism, or any other, would be minimized. Reputations are established quickly in the private market, and businesses prosper or fail based on them. Satisfied customers return and recommend the businesses to their friends. Unsatisfied customers do not.

But this market feedback and information dissemination system does not exist under the government paradigm. In fact, the political mechanism increases the likelihood that decisions will be made contrary to the sense of justice for all parties involved. As has been shown time and time again, the insulating effect of political appointments and occasional elections based on the investments of mercantile special interests produces a perverse incentive for politicians and bureaucrats to rule not in the public interest, but in the interest of themselves and those who will help them retain power.

Bad decisions rarely cause a politician or bureaucrat to lose business. Just the opposite: when bureaus fail, politicians clamor for higher funding; they clamor for more staff members; and the cycle ratchets upwards. Amtrak has never turned a profit, NASA wastes billions, the Import-Export Bank hands out money for foreign advertising of US products, the Massachusetts food inspection team is a useless and wasteful bureaucracy, Social Security is a Ponzi scheme, yet the mantra is that they need more money to be successful. Is the public interest truly served in this manner?

As a matter of economic and ethical fact, the answer is no. The term "public interest" itself would best be defined by the individual members of society acting in the private market, for only when each of us decides for ourselves can one claim that anyone's "interest" has been reflected. Fifty-one percent majority rule does not reflect the interest of the other 49%. But each of those people could show his own interest if he were not prohibited by law to do so in the private market.

Many people take this example of the Wiccan divorce, and initially agree with the logic against state control of marriage. But then they think about the child, and they wonder, "Sure, perhaps these parents are responsible, and caring, and it was wrong for the judge to impose his prejudices in this area of the divorce. But we need the state to protect against other parents, ones who won't be so kind and loving towards their children. It is the presence of the state, with its police force and child protective services, that spreads a blanket of security, and curtails the likelihood of miscreants causing harm to their kids. Shouldn't we have the state establish certain parameters for child rearing and against abuse, so that the punishments dolled out for crimes against kids will act as deterrents for potentially abusive parents?"

First, one must ask about the definitions of "abuse" and "parameters for child rearing." When do parental actions constitute neglect or abuse? How do we write laws that define these under a state paradigm?

Second, one must reiterate this question: If we cannot trust our neighbors to raise their children in a loving and careful way; if we cannot rely on the people who, in most cases, gave birth to the child and are closest to him or her to take the best care of that child, then how can we rely on these untrustworthy people to not only vote for politicians and a system of bureaucrats to care for their child, but for their neighbor's child as well? Or, to put it another way: If we can trust people to elect politicians who will decide not only for them but for others how to raise their children, then why would we not have faith that the parents themselves, working in voluntary association with other parents, could form their own societies and their own market legal structures to address their needs and leave other people alone to address theirs?

If one were to live in a private community, established voluntarily, through market exchange and free association and succeeding or failing based on consumer satisfaction, would one not see the same kinds of checks against parental abuse? Would one not also see a more responsive, less expensive, judicial system based on what we already assume are the interests of good people?

One would think this is a convincing argument, but critics of laissez-faire societies might then bring up one more point: what does one do about abortion?

This is a fascinating question, for if, as John Locke and most proponents of individual liberty believe, we are created (be it by natural means or by supernatural means such as the work of God) with certain inalienable rights, and one of those is the right to life, then how does one protect the life of a created, yet unborn, human being still in the womb? Wouldn't that at least, be a rationale for the existence of a limited government? After all, the child in the womb is completely incapable of defending himself or herself. Certainly the child's existence justifies the provision of a police force to provide protection.

Unfortunately, like the example of education, one must realize that simply because people need something, and may be incapable of providing it for themselves, it does not mean that these people have a legal right to the fruits of another's labor in order to provide what is needed. We must remember that, like teaching services, police protection is a service, and must be provided by someone. If we can take money from person "A" to pay for the police protection for the unborn child of person "B," then we are, in fact, enslaving person "A" for a certain period of time to provide that payment. If that is the case, we can use the same rationale to simply enslave the protection force — the police, prosecutors, judges, etc. — and make them perform services at the behest of the government.

Ethically, this cannot be justified.

Practically, it does not work well, because once one admits that the state can have a role in monitoring and enforcing how a woman or couple care for their child upon conception, the door is left open to arbitrary standards for what constitutes proper care. In a recent New Hampshire court case, a woman who was taking cocaine while pregnant was going to be charged with child endangerment, yet if she had decided to abort that child, she would have been acting within the law and had no legal troubles. Clearly, the standards do not jibe. The state does not have a consistent position regarding what is a human life deserving of legal protection against injury or death caused by another.

If the state were to move in the direction many Lockeans would have it move, i.e., to protect the child against abortion, then the practical question arises: how far can the state insinuate itself in the pregnancy in order to insure the protection of the child? Certainly, stopping the mother from taking cocaine would be justified under this paradigm. But what about checking on the mother for other drugs, or alcohol, or cigarette smoking, which all have negative effects on the child? What about nutrition? Can the state make sure that a woman is eating properly, and if she is not, what will the state do? Will it provide food? The federal government and many states already do this for expectant mothers (the program is "WIC," which stands for "Women and Infant Children"). But what if the mother eats too much, or doesn't follow the state commands? What if she engages in risky behavior such as sports?

In all of these instances, we see the potential for the state to begin micromanaging a woman's life in ways that are completely contrary to what she might want, and what she and her partner might have agreed. Many conservatives think that pressure from the state to manipulate the minute activities of a pregnant woman would be attenuated by the "balancing forces of the majority," whom, the conservatives claim, we can trust to come up with reasonable restrictions and rules of conduct for expectant mothers, within the context of the justified state role in protecting the individual right to life.

The trouble is that these are the same people who often rail against government intervention in so many other aspects of our lives, and trust us to make decisions in them. Their stance is inconsistent. Mistakes by the state regarding parenting arise often, and conservatives are the first to promote the right of parents to care for and educate their children as they see fit. Why, then, do they not trust parents to make decisions for their children even when they are in the womb? For many, it is a matter of degree. But, while people believe the forces of politics can produce a workable paradigm under which rules for protecting the life of the unborn can be written and enforced without impinging on the expectant mother's prerogatives, the argument could just as easily be taken in the opposite direction.

Based on this supposition, it is possible that the state could make expectant mothers their wards, and, in the extreme, arrest and imprison them until their children are born. After all, the state has a role in protecting the child, and extensive police power insures such protection.

Obviously, this is not likely. However, it is worthwhile to consider the possibility that it could happen.

If one believes that the majority of people can be trusted to raise their children properly, because they care most for the children and know the most about their needs, then it is logical to assume that, left to their own devices, they could create voluntary associations that protect their children just as well, or better, than government can.

Through the creation of such market societies, people could insure that each participant agrees to certain checks on his behavior. All such voluntary restrictions would be policed by forces hired by the voluntary association, and would carry with them the right of the association to work with a private arbitration group to carry out judicial proceedings against wrongdoers. Be they expectant mothers who tried to have abortions, parents who mistreated their children, or criminals who had aggressed against other members of the association, the market society would have rules for entrance, and would retain the prerogative to act on those rules to insure the protection of the other members. Any legal framework inside which we live today could be replicated with greater efficiency, savings, and freedom through private societies competing with one another for participants. With the forces of exclusion and competition at work, there is no reason to think that we who treat our neighbors as we would like to be treated would not be able to live in peaceful, state-less societies that protect our natural rights to the fullest extent possible.

Conclusion

One understands that not all of these arguments will convince every individual to embrace the advantages of the market paradigm over the state. There are many circumstances that have not been addressed in this article. However, it is worthwhile to push any analysis of contemporary political issues as far as one can towards the market approach, and to see if one thinks such problems could best be solved by free individuals working within the capitalist system. Human morality and development depend on such an effort.

By conducting such an analysis, I have come to the conclusion that the ethical and practical operations of the market are superior to those of the state, but I understand that such a world is a long way off. Until then, I will be satisfied working within the constitutional parameters laid out by the founders of both the US and my home state of New Hampshire. With such frameworks, the thinkers of the 18th century created an approximation of market competition based on small spheres of government authority. If one did not like the operations of a town or state, he could move to another. He had the ability to leave, and he had constitutional rules laid out to protect his rights against infringement by the government.

While one might not be able to convince every reader that the market approach is optimal in every instance, at least he can point to the people who created our governments, and note that they did so in order to give us competing spheres of control, the right to exit, and a large measure of independence under the Lockean government paradigm.

It is possible that Jefferson and Madison, Paine and Mason did not go far enough in dismantling the apparatus of the state in its generic sense, but their efforts were remarkable, and one can be satisfied that they made their arguments very clear, set them down in plain text, and tried to insure for us that government would not interfere to a large extent in our lives.

It would be nice if both paleoconservatives and neoconservatives would honor their efforts, and expand the defense of individual liberty for future generations. Before they do, they need to understand the traps inherent in supporting even a limited government protecting our "natural rights." Only then can they warn themselves of the outcomes of policies that might look wise or politically expedient, but which do us all great harm in the end.

Notes

[1] For more on this ignominious distinction, please refer to the excellent Cato Tax and Budget Bulletin, "Bush Beats Johnson: Comparing the Presidents," published in October, 2005, by Steve Slavinski, of the Cato Institute (PDF).

[2] Locke's Two Treatises of Government is often best remembered for its Second Treatise. The First Treatise is notable as a refutation of the so-called "divine right of kings" as expressed by Robert Filmer, in his work Patriarcha, published in 1680. In Patriarcha, Filmer not only used what he viewed to be Biblical scholarship to defend the power of the Sovereign to rule, he also stated that to deny the God-granted authority of a King would be to deny Adam his dominion over Eve, and over the beasts of the Earth. Locke brilliantly tore Filmer's argument apart, revealing that the Old Testament says that God gave them — i.e., man, in general — dominion over the Earth, all human beings had this power, not just Adam and his male descendents. Filmer claimed that to deny the royal authority would be to make each man his own king, and, in fact, Locke came close to acknowledging and extolling that idea of pure autonomy. The First Treatise is a fascinating window into the practical religious and political thinking of that time. The Second Treatise moves much further, towards radical individualism. It does, however, stop short of promoting the elimination of the state entirely.

[3] This is the case in New Hampshire, circa 2007, where state Representative Ann Marie Irwin, of Peterborough, has proposed taking $400,000 from NH taxpayers in order to "save" Temple Mountain from "development." Temple Mountain has failed more than once to turn a profit as a ski hill and recreation spot, but Ms. Irwin does not seem to realize that this form of "development" has been rejected by the consumers and the mountain is most likely better suited (it is a small mountain, in the southern region of the state, and often lacks snow) for some other use. She does not want to form her own company to try to operate it for the sake off recreation. Instead, through taxation, she wants to force people to pay who already decided not to frequent it for that purpose.

[4] In his book The Fair Trade Fraud (New York, NY. St. Martin's Press, 1991), James Bovard conducts a thorough and systematic analysis of the economic effects of protectionism. In study after study, he notes that protectionist policies designed to lend favors to domestic businesses harm consumers up to eight times what they might bring in to the favored domestic businesses helped by this government intervention. This is money that could be used to buy other products, both domestic and foreign, and would expand our economy through the growth of vibrant, efficient and productive businesses. Our well-being is retarded by trade barriers imposed by our own government, but many people don't look at the issue as closely as they ought. Likewise, many people are not aware that when media pundits warn of a "trade deficit" with other countries, it merely means that our dollar is strong enough to buy a lot of foreign goods for a good price. The so-called deficit is nothing of the sort. It is American consumers buying foreign products with their own money, and this is only half of the equation, because the money the foreign businesses receive is in dollars, and must come back to the United States. It does so in capital investment, liquidity, which spurs even more growth of domestic US business, higher employment, and a stronger dollar. The trade "deficit" is a fallacy, promulgated by politicians and members of the media in order to gin up fears of foreign workers, and to promote domestic special interests. In fact, there is always a balance between the products we buy, and the investment that returns to the United States. That is why it's called the "balance of trade," but you will rarely hear this unless you are watching Lawrence Kudlow on television.

[5] On March 27, 2007, Jessica Fargen, of the Boston Herald, reported that auditors in Massachusetts found fewer than one food inspector working on any given day in the entire state. The auditors also revealed that local inspectors were often corrupt, and made special deals with those they were supposed to be monitoring.

[6] Daniel B. Klein, "The Voluntary Provision of Public Goods? The Turnpike Companies of Early America," Economic Inquiry, October 1990, 788–812. As quoted by Tomas J. DiLorenzo, in How Capitalism Saved America (New York, NY, Three Rivers Press, 2004) p. 84.

[7] Never trust a government ad campaign or a study funded by the government. Anytime one hears "brought to you by the Ad Council" in a broadcast commercial, he ought to be skeptical. Millions have been spent to tell people about nutrition, drugs, "fair housing," and race relations. Even NASA has spent thousands paying "performance artist" Laurie Anderson to do "works" promoting its agenda. In the past, people actually had the choice of whether to buy her CDs or pay for her concerts. Perhaps she wasn't making enough money when people could decide for themselves.

[8] For many years, the New Hampshire Department of Parks and Recreation operated on "license fees" and fees for entrance into parks. The "license fees" for fishing, use of snowmobiles, and hunting have increased and widened over the years, yet, as of 2007, the head of the department has asked for tax money to keep the system in the black. Despite this impending bankruptcy, more land is going to be added to the parks system for hiking trails and snowmobile use. If the parks system were a private entity, it would be selling off assets, not acquiring more to be a heavier burden.

[9] Hence the popular motto: "To Protect and Serve."

[10] Friedman, David. The Machinery of Freedom (La Salle, Ill, Open Court, 1995) p. 203.

[11] The Judge also thought that Wiccans worshipped Satan, which had to be corrected by Jones, who said, "I can't worship something I don't believe in." The Wiccan religion is based on the worship of nature.


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