Forbes | Opinion

Sorry Libertarian Anarchists, Capitalism Requires Government

Harry Binswanger , CONTRIBUTOR

I defend laissez-faire capitalism, using Ayn Rand's Objectivism.

Let's read a defense of "the State" by a Randian and see if the logic of the article truly supports the existence of "the State."

As it says next to my picture, I defend laissez-faire capitalism. “Anti-government” is the term Leftists use to smear this position. And, amazingly, some calling themselves “libertarians” are indeed anti-government across the board; they argue for what they call “anarcho-capitalism.”

We have staked the whole future of American civilization, not upon the power of government, far from it. We have staked the future of all of our political institutions upon the capacity of each and all of us to govern ourselves ... according to the Ten Commandments of God.

“Free competition works so well for everything else,” these anarchists say, “why not for governmental services, too?”

But that argument comes from an anti-capitalist premise. Like the Marxists, who prate about “exploitation” and “wage slavery,” the anarchists are ignoring the crucial, fundamental, life-and-death difference between trade and force.

Marxists claim that capitalistic acts use force. “Anarcho-capitalists” claim that acts of force can be capitalistic. Though they come at it from different directions, both ignore or evade the fact that producing and exchanging values is the opposite of physical force.

Anarchists are non-stop in proclaiming the fact that producing and exchanging values is the opposite of physical force. But let's continue reading.

Production is the creation of value, and trade is the voluntary exchange of value for value, to mutual benefit. Force is destruction, or the threat of it. It may be the destruction of a value, as when a hoodlum throws a rock through a store window. Or it may be the destruction of destruction, as when a policeman pulls a gun on that hoodlum and hauls him off to jail. But in either case, it is the opposite of wealth-creation and voluntary trade.

If you and I sign a contract in which I pay you to pull a gun on anyone who comes within 50 feet of me and physically remove that person from my presence, that is a voluntary trade. It doesn't necessarily produce "wealth," but it produces what I contracted for. We might call that "psychological wealth."

Force properly employed is used only in retaliation, but even when retaliatory, force merely eliminates a negative, it cannot create value. The threat of force is used to make someone obey, to thwart his will. The only moral use of force is in self-defense, to protect one’s rights.

It is only as retaliation that force may be used and only against the man who starts its use. No, I do not share his evil or sink to his concept of morality: I merely grant him his choice, destruction, the only destruction he had the right to choose: his own. He uses force to seize a value; I use it only to destroy destruction. A holdup man seeks to gain wealth by killing me; I do not grow richer by killing a holdup man. (Atlas Shrugged)

The wielding of force is not a business function. In fact, force is outside the realm of economics. Economics concerns production and trade, not destruction and seizure.

Ask yourself what it means to have a “competition” in governmental services. It’s a “competition” in wielding force, a “competition” in subjugating others, a “competition” in making people obey commands. That’s not “competition,” it’s violent conflict. On a large scale, it’s war.

How can a "capitalist" like Binswager be so confused about this?

Anarcho-capitalists do not advocate a competition among thieves and muggers. They advocate the right to choose to contract with those who would wield force.  

The shootout at the O.K. Corral was not a case of “competition.” Actual competition is a peaceful rivalry to gain dollars–dollars paid voluntarily in uncoerced trade.

Governments are necessary–because we need to be secure from force initiated by criminals, terrorists, and foreign invaders.

A monopoly on the provision of desired services ("government") is not "necessary." Let consumers choose voluntarily to trade with government's proposed solutions to crime vs. market solutions to crime.

As a Christian, I do not believe it is moral to use violence against "foreign invaders." See this.

The genius of the American system is that it limited government, reining it in by a Constitution, with checks and balances and the provision that no law can be passed unless it is “necessary and proper” to the government’s sole purpose: to protect individual rights–to protect them against their violation by physical force.

The anarchists do not object to retaliatory force, only to it being wielded by a government. Why? Because, they say, it excludes “competitors.” It sure does: it excludes vigilantes, lynch mobs, terrorists, and anyone else wanting to use force subjectively.

The issue is not whether violence is used "subjectively" rather than "objectively." The question is whether it is used morally or immorally.

“A government is the means of placing the retaliatory use of physical force under objective control–i.e., under objectively defined laws.” (Ayn Rand, Capitalism: The Unknown Ideal)

There can be only one supreme law of the land and only one government to enforce it. (State and local governments are necessarily subordinate to the federal government.)

Could conflict among “competing governments” be taken care of by treaties? Treaties?–enforced by whom? I once asked Ayn Rand about the feasibility of such treaties between sovereign “competing governments.” She looked at me grimly and said, “You mean like at the U.N.?”

A proper government functions according to objective, philosophically validated procedures, as embodied in its entire legal framework, from its constitution down to its narrowest rules and ordinances. Once such a government, or anything approaching it, has been established, there is no such thing as a “right” to “compete” with the government–i.e., to act as judge, jury, and executioner. Nor does one gain such a “right” by joining with others to go into the “business” of wielding force.

To carry out its function of protecting individual rights, the government must forcibly bar others from using force in ways that threaten the citizens’ rights. 

The government has to regard such private force as a threat–i.e., as a potential violation of individual rights. The threat of force is force. In barring such private force, the government is retaliating against that threat.

Note that a proper government does not prohibit a man from using force to defend himself in an emergency, when recourse to the government is not available; but it does, properly, require him to prove objectively, at a trial, that he was acting in emergency self-defense. Similarly, the government does not ban private guards; but it does, properly, bring private guards under its supervision by licensing them, and does not grant them any special rights or immunities: they remain subject to the government’s authority and its laws. They cannot make their own laws.

It is never the case that a majority of consumers in a free market can force a minority to patronize a certain business.

Nobody has a right to make "their own laws." "God is our Lawgiver" (Isaiah 33:22)

“There is only one basic principle to which an individual must consent if he wishes to live in a free, civilized society: the principle of renouncing the use of physical force and delegating to the government his right of physical self-defense, for the purpose of an orderly, objective, legally defined enforcement. Or, to put it another way, he must accept the separation of force and whim (any whim, including his own.)” (Ayn Rand, Capitalism: The Unknown Ideal)

The attempt to invoke individual rights to justify “competing” with the government collapses at the first attempt to concretize what it would mean in reality. Picture a band of strangers marching down Main Street, submachine guns at the ready. When confronted by the police, the leader of the band announces: “Me and the boys are only here to see that justice is done, so you have no right to interfere with us.” According to the anarchists, in such a confrontation the police are morally bound to withdraw, on pain of betraying the rights of self-defense and free trade.

Not just "according to anarchists," but "according to the Second Amendment."

Anarcho-capitalists believe that when a "band of strangers" starts marching down Main St. with machine guns, the private owner of Main St. has the right to eject the gun-wielding strangers off of his street. The merchants on Main St. have a right to protect their businesses from the gang. No "government" monopoly is needed.

Regarding the purported betrayal, one can only respond: if this be treason, make the most of it.

In fact, of course, there is no conflict between individual rights and outlawing private force: there is no right to the arbitrary use of force. No political or moral principle could require the police to stand by helplessly while others use force arbitrarily–i.e., according to whatever private notions of justice they happen to hold.

The question is whether consumers should have a choice in the selection of an agency to protect or retaliate against unrightful force.

Bear in mind that, in fact, those who would be granted the right to enforce their own notions of justice include Leftists who consider government intervention in the economy to be retaliation against business activities that the leftists claim is “economic force.” It would include Palestinian terrorists who claim that random slaughter is “retaliation” against “Zionist imperialism.” It would include those who hold abortion to be murder and bomb abortion clinics as “retaliation” in defense of the “rights” of the unborn, and Islamists who clamor to let “Sharia law” operate within Western nations.

In any society, disputes over who has the right to what are inescapable. Even strictly rational men will have disagreements of this kind, and the possibility of human irrationality, which is inherent in free will, multiplies the number of such disputes.

The issue, then is: how are political and legal disputes to be settled: by might or by right–by street fighting or by the application of objective, philosophically validated procedures?

The anarchists object to the very idea of a monopoly on force. That only shows that they cannot grasp what force is. Force is monopoly. To use force is to attempt to monopolize. The cop or the gunman says: “We’ll do it my way, not your way–or else.” There is no such thing as force that allows dissenters to go their own way.

If a man wants to have sex with a woman who doesn’t want it, only one of them can have their way. It’s either “Back off” or rape. Either way, it’s a monopoly.

A violent conflict ends in the victory of one side and the defeat of the other. Peaceful trade is the opposite: no side is vanquished; both parties to the trade gain. Trade is win-win. A business profits by selling the buyer something he would rather have than the money he spends for it. Barring a mistaken decision, both parties benefit.

Economic competition presupposes a free market. A free market cannot exist until after force has been barred. 

I added the words "single, monopoly" to Binswanger's sentence, because that is in fact what he is arguing.

The anarchist idea of putting law on “the market” cannot be applied even to a baseball game. It would mean that the rules of the game will be defined by whoever wins it.

This has not prevented the anarchists from speaking of “the market for liberty” (i.e., the market for the market).

• Morris and Linda Tannehill, The Market for Liberty, New York: Laissez Faire Books, 1984;
• Murray Rothbard, For a New Liberty, New York: Collier Books, 1978;
• Bruce L. Benson, The Enterprise of Law, San Francisco: Pacific Research Institute for Public Policy, 1990;
• David Friedman, The Machinery of Freedom: Guide to a Radical Capitalism, La Salle: Open Court, 1989 (2nd ed.);
• Llewellyn H. Rockwell Jr., Against the State: An Anarcho-Capitalist Manifesto, Rockwell Communication, 2014.
• Robert C. Ellickson, Order Without Law: How Neighbors Settle Disputes, Cambridge: Harvard University Press, 1991;
• Bruno Leoni, Freedom and the Law, Indianapolis: Liberty Fund, 1991 (3rd ed.);
• William Tucker, Vigilante: The Backlash Against Crime in America, New York: Stein and Day, 1985;
• J. Roland Pennock and John W. Chapman, eds., Anarchism (Nomos XIX, Yearbook of the American Society for Political and Legal Philosophy), NY: New York University Press, 1978;
• J. Roland Pennock and John W. Chapman, eds., Voluntary Associations (Nomos XI, Yearbook of the American Society for Political and Legal Philosophy), NY: Atherton Press, 1969.
• Jerold S. Auerbach, Justice Without Law? Resolving Disputes Without Lawyers, Oxford Univ. Press, 1983

By their talk of “competition” in the context of government, the anarchists among the libertarians endorse the statists’ equation of production and force. “Competition” refers to the voluntary exchange of values, not to the exchange of gunfire.

In terms of current events, anarchism means Lebanon, Somalia, and the Taliban. Nothing could discredit capitalism more than to link “freedom” with such horrors.

"Anarchism means the Taliban?"
I think Binswanger has now thoroughly discredited himself.