Mises Daily Articles
The Meaning of the Rumsfeld Memo
Donald Rumsfeld puts on a good face for the public, but a remarkable internal memo reveals startling confusion. "We lack metrics to know if we are winning or losing the global war on terror," he writes. "Is our current situation such that 'the harder we work, the behinder we get'?"
There you have it: a typical government program. Hundreds of billions down the drain, and nothing to show for it but confusion. Not only does Rumsfeld not know whether the government is winning or losing, he lacks any means ("metrics") to assess the question.
Imagine a private business admitting that it doesn't know if it is making profits or losses. Imagine blowing through a trillion dollars and not knowing whether you actually accomplished anything at all. That private firm would be doomed, but the warfare state just keeps chugging along.
Later in the memo, Rumsfeld asks obliquely: "Do we need a new organization?" In a word, yes, and it shouldn't be government.
In the war on terrorism, we’re dealing with the oldest political error: the belief that because everyone wants something (e.g. security and defense), government should or must provide it. If the error is pervasive, the result is the total state. If it is completely uprooted, the result is the purely free society.
For example, everyone agrees that the people of a nation need defending. If you believe it can't be done privately, that government should just do it, you run the risk of unleashing Hell. Thus has the US government presumed the right to shell out half a trillion of other people’s money every year, build and threaten the use of weapons of mass destruction, place troops in nearly 130 countries, and generally build the most well-funded, destructive, expansive, meddlesome military empire in all of human history. The result has been ever more threats, ever less actual defense, ever higher costs.
The political error described above is not universally applied, of course. Everyone needs to tell time but we don't suppose that government must issue everyone watches. We pretty much leave that to the private sector. With issues of food and housing, government has variously attempted mass provision but with obviously disastrous results: who wouldn't prefer private to public housing, grocery stores to K-rations? If the government had nationalized software production 10 years ago, you wouldn't be reading this article right now.
But defense is supposed to be different. We all want it. But something in the nature of things is said to prevent us from organizing it ourselves. We need government to do it because defense is a "public good," something the market can't provide for a variety of convoluted reasons (free rider problems, non-excludability, high cost, etc.). It is believed that we would rather be taxed to have bureaucrats defend us. This belief is held across the political spectrum. The arguments about defense and security and military budgets never go to the core.
What if the conventional theory is wrong? What if it turns out that the private sector can provide national defense, not in the sense of contracting with private companies to build bombs at taxpayer expense, but really provide it to paying customers at a profit? The argument of the explosive new book edited by Hans-Hermann Hoppe and published by the Mises Institute, is precisely that it can. If you have never before considered the idea, or considered it but wondered if you were crazy, you need The Myth of National Defense: Essays on the Theory and History of Security Production.
In the entire history of economic and political ideas, you can find only a handful of writings that argue along these lines, and nothing that makes the argument in this level of detail or with this level of theoretical and practical rigor. This volume is the best proof I've seen in years that intellectuals can perform essential services to society: shattering myths, causing a complete rethinking of widely held fallacies, assembling historical evidence in patterns that reveal certain theoretical truths, and making obvious the previously unthinkable.
The bias in favor of government provision of defense, and the taboo about other alternatives, has been, of course, entrenched, for hundreds, even thousands, of years. And certainly since Hobbes, just about every political philosopher has conjured up nightmare scenarios about the consequences of life without government defense, while ignoring the reality of the actual nightmare of government provision. As Hoppe writes, "the first person to provide a systematic explanation for the apparent failure of governments as security producers" was 19th century thinker Gustave de Molinari. In our own time, the only people doing serious work on this subject, perhaps the most important of our time, are the Austro-libertarians."
Government failure, yes, but private defense? Before you say this is an outlandish idea, remember that just about everything else done in the private sector sounds, at some level, implausible. What if I told you that oil needs to be extracted from the bottom of the ocean, converted and refined into gasoline, and then made available to every American not far from his house, on demand and at the price of bottled water?
It seems impossible. The first impulse might be to say that we need a government program to manage such a thing, but the non-intuitive reality is that government could never do such a thing on its own. Only the private sector can manage to coordinate the thousands of processes essential to such an undertaking.
Hoppe begins his argument with a quotation from Jefferson's Declaration of Independence. The British government had failed to protect the lives and liberties of the citizens of the colonies, and so it was the natural, God-given right (the Declaration argued) of the people to throw off that government and "provide new guards for their future security."
Not much has changed in the intervening years, Hoppe says, because today the US is not protecting the lives and liberties of Americans and thus it is our right to provide new guards. The remainder of the book explores how such guards can come about.
Hoppe draws attention to the core problem of orthodox defense theory. The presumption on the part of nearly everyone is that monopoly is a bad thing. It is inefficient. It robs society of the benefits of competition. It limits choice. It places too much power in the hands of producers and not enough in the hands of consumers. The second presumption is that defense must be provided by a monopoly. Philosophers and economists have long presumed that the first argument about monopoly is false when applied to defense, and so it must be thrown out. This book takes the reverse view: the first argument is true and the second one is false.
He goes further. He says that there is no way to make a government monopoly of any kind work well. Government cannot be limited once it is conceded that it must be the sole provider of defense. It will continue to raise the price of the "service" as it provides less and less. Democracy doesn't help, says Hoppe. Democracy is as likely to be as war-like and crushing of internal dissent as the total state (see, e.g., the American Civil War) – a theme further explored by Gerard Radnitzky in his contribution.
The sweep of this volume is nothing short of breathtaking. Marco Bassani and Carlo Lottieri reconstruct the history of medieval non-states and the rise of republican theory. Murray Rothbard explains how states use war and "defense" as tools to grab, retain, and build power over the people. Erik von Kuehnelt-Leddihn rethinks the monarchist idea of security. Bertrand Lemennicier examines whether the US is using arms control as nothing but a mechanism for monopoly enforcement.
On the practical side, Joseph Stromberg and Larry Sechrest explore actual historic cases of how private means have been used to provide national defense. Jeffrey Rogers Hummell explains how it is that government gained its monopoly privileges in the first place and how the will to be free is essential in undermining this monopoly. Walter Block demolishes the modern "public goods" rationale for state defense and Joerg Guido Huelsmann shows how the principle of voluntarism and the right to secession are critical institutions in preserving freedom. This is strong material that slices right through the core assumption of nearly all modern politics. To say it is controversial is obvious; what's remarkable is just how completely convincing it is.
Hoppe concludes: "Though the implications of the arguments made in this volume are radical and sweeping, the principles are quite simple at root." What are they? In economics, the contributors apply known market analysis to an area in which it is usually excluded. In politics, they seek only the application of the principle Jefferson presented in his Declaration of Independence. Hoppe admits that "these ideas represent a relatively unexplored application of traditional liberal theory." Yet "given the continued rise of the national-security state in our own time, the future of liberty itself may hinge on our willingness to push these principles to their fullest extent."
Meanwhile, the killing goes on, in the name of defense. A news item the other day said that al-Qae’da has recruited ever more into its ranks – precisely the opposite of what Bush claimed his war would yield. Who is complaining? What can be done? Even worse: from the government's point of view, this isn't failure. It is success, insofar as it provides more excuses for the expansion of power over the rest of us. If public provision of defense is to be replaced by private – and this volume convincingly shows that it should – the argument must begin.
Habits of mind are hard to break. Sometimes radical intellectual surgery is the only way. Get this book and read it to discover why socialism in defense of the nation works no better than socialism in any other area of life.