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How can anarchy sustain itself?

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RumblyElk Posted: Fri, May 3 2013 11:10 AM

Hey guys,

I'm studying economics right now as a hobby, focusing specifically on the Austrian school. Currently I'm reading Human Action.

I have a question about anarchy that I have never heard addressed. How can an anarchical society sustain itself? I understand the whole roads thing. I understand the privatization of law. I understand how it could all work. But it seems it would only last for a relativley short time, maybe 25-50 years.

In an anarchical society, the most likely scenario would be that there would exist buisnesses that own communities. In these communities, members would pay a rate, like a tax, but voluntary, for basic utilities and law enforcement. This is where I see problems arising.

Let's assume there is one such buisness, call it 'CommuniCorp', that is extremly popular. They have low rates, good service, the whole bit. Due to their popularity in the market, they soon start buying up other buisnesses and expanding their corporate empire. Before long, they own hundreds of square miles. After a few decades, they are the WalMart of the community buisness, owning thousands of square miles. At this time, there are only a few community buisnesses left, all equalling CommuniCorp in size and power. Switching between community providers is now much more dificult, as you would have to move literally thousands of miles to switch buisnesses.

At this point, CommuniCorp launches its own law enforcement branch. They start making their communities 'safer' by implementing all sorts of social and economic laws. They start to offer 'complimentary healthcare', although soon start to make it mandatory, saying that they need to keep the populace healthy in order to attract customers.

At this point, we would be back at square one; we would have states again. The only difference would be that they might be called buisnesses, and they are probably worse than the states we started out with.

As far as I know, this may have been addressed already in a book or other discussion. If so, could you please tell me where?

Thanks!

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z1235 replied on Fri, May 3 2013 11:24 AM

RumblyElk:
After a few decades, they are the WalMart of the community buisness, owning thousands of square miles. At this time, there are only a few community buisnesses left, all equalling CommuniCorp in size and power. Switching between community providers is now much more dificult, as you would have to move literally thousands of miles to switch buisnesses.

When switching would start to become even slightly difficult, current CommuniCorp customers would start switching before it became much more difficult. 

Are you implying that it is difficult to shop anywhere else but at Walmart today?

 

 

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Pluralistic governance is usually preceded by changes in the distribution of power. Pluralistic political institutions, such as democracy, would otherwise fail much sooner (as they often do, when they aren't preceded by changes in the distribution of power). Anarchic institutions will require this kind of continued re-distribution, a lot of which can be achieved through progress on the market (greater competition decreases market power, for example). And, any transition towards anarchy -- if there ever is such a transition -- would occur gradually (and imperfectly and non-linearly), and most likely simultaneously with changes in the distribution of power.

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The problem with switching is having to actually physically move. It would be much more complicated than just cancelling your subscription; you would have to leave your friends and job behind. Even if you just had to move across town, most people would probably rather put up with the beaurocracy of their own provider than have to do that.

I'm not implying it's hard to shop anywhere at Walmart, but again, it would be if WalMart was your only store unless you moved a few hundred miles.

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There aren't large economies of scale in the provision of protection.

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The only effective barrier to entry, even withing specific territories, is the use of violence. Modern states can find it profitable to use violence because they can extract society's resources to pay for the costs. If we're talking about a society that has reached the point of something like personal defense agencies, it's safe to assume that the constraints on resource extraction area stronger. Therefore, PDAs are going to find it increasingly unprofitable to protect their businesses by establishing territorial monopolies. Wars cost resources, and resources are scarce. In a world where you can't just extract these from somebody else, waging war becomes inefficient.

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The problem with switching is having to actually physically move. It would be much more complicated than just cancelling your subscription; you would have to leave your friends and job behind.

Well. That depends.

When you buy a piece of house, or property, and it is YOURS, YOU bought it and no one else. Then you have every right to ignore communicorp. The only way that communicorp has jurisdiction over your house, etc, is if you rent it from them, in which case it is their property and not yours.

“Since people are concerned that ‘X’ will not be provided, ‘X’ will naturally be provided by those who are concerned by its absence."
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Exactly, and I think it's pretty safe to assume that after a while community buisnesses would buy up a good portion of homes and land.

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As much as i want to live in a stateless society, I think that anarchy would not last because people will eventually want to form a govt again.

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This disregards anarchy as a process, and imagines it as a fixed point in time. To actually make it to anarchy, we'd need a cultural shift in the people's understanding. Once this cultural shift occurs, I find it highly unlikely that anyone would agree with the guy who says "hey, let's create one coercive entity that forces people to do things against their will and expropriates their earnings."

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You might find this article useful:

http://econlog.econlib.org/archives/2013/04/crazy_equilibri.html

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That's actually a really good point, I was assuming a fixed point in time rather than a process. However, I think the same argument applies to what you said too. You said "...the guy who says...", implying that the transition is sudden, without a process. As I said in my original post, it would take quite a while for the buisnesses to gain enough power to really become states.

The founding fathers, while not anarchists by any means, did value a small, non-intrusive government. It's taken a few hundred years, but society has degraded back to valuing a large, all-powerful govenment again. Forward is not the only way society can move. I see no reason why an anarchical society could not also be taught to revalue government.

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I think you overestimate the degree to which early America was libertarian. Certainly, the likes of Jefferson and Madison were. Yet you also had Hamilton and his own clique. The Constitution is an inherently flawed document, and the Civil War, and then the US's entry into WW1, both permanently scarred the country. To say that this regression is inevitable in anarchism is a form of fatalism, and I think it's akin to Chicken Little worrying about the sky falling. Let us try it and see what may come, and deal with it as and when, rather than submitting to the state because we fear the re-emergence of the *drumroll* state.

There aren't large economies of scale in the provision of protection.

Because economic calculation problem.
 

 

Freedom of markets is positively correlated with the degree of evolution in any society...

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Nick replied on Fri, May 3 2013 3:45 PM

So what you're worried about is

  • Walmart, with its 34.16 square miles of commercial real esate right now,
  • Would gather tens of thousands of square miles of low prices and Chinese-manufactured goods to sell to consumers,
  • By expanding its stores, remaining competitive in terms of prices,
  • And yet also somehow invest resources into a secret plan to build up an arsenal so it can develop a protection monopoly,
  • Then end up as strong and powerful as the US federal government, which can live off the resources contained within 3.79 million square miles,
  • Without any of its customers abandoning it long before that process turns it into the state of Walmartistan,
  • Thereby depriving it of the voluntarily given money that it would need to invest not only in low priced goods but also weaponry...

...right?

Is that the logical progression you're working with for your scenario?

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Hi RumblyElk, welcome to the forum!  I feel I can address your question.

RumblyElk:
In an anarchical society, the most likely scenario would be that there would exist buisnesses that own communities.

No, this is incorrect.  What you're envisioning is not anarchy, but a patchwork of small states.  In anarchy, the security/law providers do not own communities or people or land.  They offer a service and contract with customers.  Think of Internet Service Providers.  If one single ISP has a 90% market share in one town, we do not say the ISP owns the town, and that is true even if they have a 100% market share, as long as people can choose not to contract with their ISP, if they so wish. 

Just like with ISP's today, in anarchy you could have two neighbors who contract with two different security/law firms; there is no reason for the security providers' customers to be geographically contiguous with each other, necessarily.  A map of an anarchic land would look nothing like a map of states, not even crazy maps of medieval Germany with hundreds of small states.  A security-provider map in anarchy would look more like an ISP map today... full of multi-colored dots representing individuals, not areas of land, and many of them switching color often.  Unlike states, where the laws they produce apply to a certain area (i.e. it's territorial monopoly area) and all the individuals within that area, the security/law firms' laws apply to certain individuals, specifically those that have voluntarily contracted with the firm.  You do not have to move house to switch ISP, and in anarchy you won't have to move house to switch security provider.

So this 'Communicorp' isn't an anarchic security provider that becomes a state.  It is a state at the beginning of your scenario.

This means that your argument does not address the question 'how can anarchy sustain itself?' but a different one: 'how can a patchwork of small states avoid forming into a larger state?'.  And your argument is correct in that, yes, a patchwork of small states does tend to emalgamate into one larger state, e.g. the EU.

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z1235 replied on Fri, May 3 2013 4:17 PM

RumblyElk:
The problem with switching is having to actually physically move. It would be much more complicated than just cancelling your subscription; you would have to leave your friends and job behind.

Then, obviously, if this would be such a pain, you would be wise to consider it before you moved in (subscribed) with CommuniCorp or you sold your property to it. 

Even if you just had to move across town, most people would probably rather put up with the beaurocracy of their own provider than have to do that.

Depends on the disutility imposed on you by this "bureaucracy". Maybe you make this mistake once, and become more careful when shopping for your next protection provider. You seem to be implying that CommuniCorp would be all peaches and honey, accumulating happy-camper customers at an exponential clip, then once it has everyone corraled and duped, it turnes into a violent aggressor. How exactly does this happen?

I'm not implying it's hard to shop anywhere at Walmart, but again, it would be if WalMart was your only store unless you moved a few hundred miles. 

I guess there is a reason why it would be extremely difficult for Walmart to become the only food provider in a free market. The same would apply for CommuniCorp. 

What if someone bought the whole universe? We'd be all screwed. Hence, a state. QED. (?)

 

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Neodoxy replied on Fri, May 3 2013 4:27 PM

1. There's no reason to believe that such a large and centralized monopoly would ever come to power.

2. There's no reason to believe that people would submit to these laws. Anarchy would be nearly impossible to destroy from the inside because of the ideology that would have to exist for it to come about in the first place.

At last those coming came and they never looked back With blinding stars in their eyes but all they saw was black...
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z1235:
What if someone bought the whole universe? We'd be all screwed. Hence, a state. QED. (?)

yes

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Monroe replied on Fri, May 3 2013 5:40 PM

Wheylous:

This disregards anarchy as a process, and imagines it as a fixed point in time. To actually make it to anarchy, we'd need a cultural shift in the people's understanding. Once this cultural shift occurs, I find it highly unlikely that anyone would agree with the guy who says "hey, let's create one coercive entity that forces people to do things against their will and expropriates their earnings."

 

Exactly... Think about the amount of time that will be/is required to bring about the anarchy itself. I mean the age of enlightenment was necessary to bring about the revolution of America in the first place - which has slowly deteriorated from classically liberal to statist over the course of 237 years.

"...if there is one thing that stings people just enough to commit violence, it is the feeling of powerlessness." - Monroe "yes, I just quoted myself..." - Monroe
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Thanks Graham,

You raise a good point in that my question isn't really about anarchy, but more about many, many small states. Didn't think of it that way.

Toward the beginning, I think your scenario is quite likely. Individuals would pay security providers for their services. Before long, however, security providers would start offering 'block bundles' in which a group of houses can all use the same provider together and get a discount. This would be cheaper for the homeowners, and easier and more profitable for the provider.

I think it is likely that there would arise businesses, partnered with the security companies, that would buy and rent land. They would also likely be partnered with the power and water companies. The advantage to being a customer of these land renting businesses would be the same as the block bundles of the security companies; all members get their power, water, and security at a bargain price while water, power, and security companies would essentially have entire neighborhoods belonging solely to them.

Only after the businesses got sigificantly larger would they implement their own law enforcement, and it would be as a mere feature that the businesses offered. This would likely deprive the security company they had been using of most of their business, all but driving them out of business. The people who weren't members of communities at this point would suddenly not have law enforcement and would be all but forced to join a community.

Switching providers wouldn't be impossible, but it would require significat trouble, just as changing citizenship is now.

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RumblyElk:
Toward the beginning, I think your scenario is quite likely. Individuals would pay security providers for their services. Before long, however, security providers would start offering 'block bundles' in which a group of houses can all use the same provider together and get a discount. This would be cheaper for the homeowners, and easier and more profitable for the provider.

I think it is likely that there would arise businesses, partnered with the security companies, that would buy and rent land. They would also likely be partnered with the power and water companies. The advantage to being a customer of these land renting businesses would be the same as the block bundles of the security companies; all members get their power, water, and security at a bargain price

This is all possible, but is it likely?  As well as looking at the economies of 'block bundling' goods together, also look at the diseconomies of it.  Is there anything that you think could limit the size and/or number of industries that some mega-firm could dominate?  What today stops all firms just merging into one?

while water, power, and security companies would essentially have entire neighborhoods belonging solely to them.

No, I must disagree with this notion of the companies owning neighborhoods.  They have customers in that neighbourhood, that is all, just like a lot of other firms.  As long as individuals in the neighborhood are voluntarily paying the firm for services, and could stop paying at any time and create or join some competitor or just use self defense, then it is not a state, it is a firm... and it has customers, not owned subjects / citizens.

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Albert replied on Sat, May 4 2013 11:07 AM

Hi Rumblyelk.

Welcome to the boards.

In my opinion, you are still stuck in a basic economic fallacy. A common fear of free markets by the uninformed is that eventually everything will be owned by one or wo big guys. Thats what your scenario assumes.

We need to discuss this in detail before we can throw around guesses as to what may or may not happen in anarchy.

The economic premise is that it is nearly impossible (in my opinion completely impossible) for a monoploy to exist and expand indefinitely without being propped up by a government. And believe me many have tried to do it. (Many discussions in Mises archives and in audio/video library) Unlike what people think, it was usually free market competition that broke them up, not government protection. Competition from two or more other big fish or millions of little fish. It does not matter which.

Who would take out the garbage? If the Overlord owns all the oil refineries and all the car manufacturers and all the power stations, who would work these, manage these, repair these? He would have to pay others somehow. He would have bought these from another owner- what happens to that owner? He voluntarily becomes a serf, or he uses his cash to start a new business?They would have independant knowledge and money to start competing in little areas that the big guy cannot compete with. Geographic limitations become less and less restrictive as it becomes possible for people to shop and work online. In future innovation will make it possible for people to buy all their needs including power and other utilities from multiple sources, some local, some international, some remotely in the cloud.

Do you agree so far or do we have to examine this point more before discussing anarchy.

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It's possible for firms to own entire areas and operate them as cities, like Disneyland, but this is expensive and rare. Where it is profitable to do so, they will do so, yet there is certainly no inherent market trend towards this, and bear in mind the only reason large firms form in the first place is to overcome the transaction costs of outsourcing many of their functions. The cost of this is calculational efficiency. Smaller firms are more agile, as well. The socialist view that the market must, of necessity, lead to large monopolies is based ulitmately on fiction.

Another point to raise would be that even if some firms did own cities, ownership of these firms is open for anyone to purchase, and they will face competition from other firms in every other line of production, including their own. Finding willing consumers will be the only way such a model would work. If people want to incur the risk, that is their choice. I fail to see why it will be the norm though, or lead to the collapse of an anarchist society back into statism. It is an utterly far-fetched scenario.

Freedom of markets is positively correlated with the degree of evolution in any society...

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Clayton replied on Sun, May 5 2013 8:13 PM

My view is that you can't disentangle culture from a social order. In other words, there must be some kind of self-propagating culture attached to a "fully privatized" social order. In order for this to be possible, your social order must have some kind of boundary (not necessarily territorial or even geographical) by which people can be included or excluded on the basis of their conformance to the culture. This is essentially Hoppe's view.

This thought leads to a couple realizations. First, there already exist flourishing, fully private social orders - the Amish, Gypsies, certain Jewish sects, and so on. On a more relaxed definition, I think even religious groups like the Mormons or even Scientologists can be considered fully private social orders. You will note that all of these organizations are mostly non-territorial, that they have some kind of "home base" or "headquarters", that they have some kind of single leader even though he may far removed and may have no formal authority to enact his own ideas about any particular matter even in his own ambit, that they have strongly normed shared beliefs (dogmas) compliance with which is requisite to maintaining good standing, etc. The second realization is that - except for the overlapping of all the private benefits that accrue to private, informal friendships or formal membership in any particular organization (including governments, where we do not consider a mere resident or even a "citizen" to be a member) - there is a kind of "organizational tragedy of the commons" in the wider culture. And this must necessarily be so. The culture "out there" must always be un-maintained or, even worse, lorded over by vulture-like fiends seeking to lure and trap the unwary. So, unfiltered culture is shit - worse than shit, it is a coma-inducing toxin that renders you helpless to the predation of whoever it is that happens to be in the business of predating on uncultured incompetents. We could roughly approximate the State* as just such a predator.

To put it in very simple terms to convey the general idea, imagine that culture is nothing but teaching your children how to act. What is the benefit of doing this if they're not going to take care of you in your old age? And why will they take care of you in your old age if they have no cultural belief (i.e. taught when they were young) that they should do so? So, a social order with a culture that inculcates the values of taking care of those within the organization and which transfers this culture from generation to generation is self-sustaining and manages to "internalize" the benefits that result from the production of the culture itself (education, arts, community, entertainments, match-making, etc. etc. etc.) The wider culture, of course, has no beneficiaries, thus, no one has any interest in preserving the positive within the wider culture, or eliminating the negative from the culture. So this is why we have Lady Gaga, Sacha Baron Cohen and Kim Kardashian. These people are the embodiment of shit culture. Listening to them, watching them and patronizing them cannot benefit you nor does it contribute to your willingness to belong to a self-sustaining social order of which they are also a part. If anything, it lowers your consciousness and makes you more vulnerable to all forms of predation at the hands of private opportunists and the State apparatus.

In general, when you see the death of folk arts (folk music, folk stories, folk festivals, folk wisdom, etc.), you are witnessing the death of a social order. The only way to prevent this, in my opinion, is to have some kind of "cultural guardian" class within the social order (let's call them "the priests") that conscientiously manages membership within the society (by excluding "heretics", that is, those promulgating ideas that will sooner or later lead to the breakdown of the society) and filters the wider culture through the use of norms by which to guide the self-censorship of the members of the society.

Clayton -

*Including religion, military, business, academia and all the other cronies and parasites attached to the State apparatus...

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Monroe replied on Wed, May 8 2013 1:55 AM

Please elaborate more on your class system description and how the priests would be able to regulate members of society

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Jargon replied on Wed, May 8 2013 5:39 AM

Great post Clayton

Land & Liberty

The Anarch is to the Anarchist what the Monarch is to the Monarchist. -Ernst Jünger

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Clayton replied on Wed, May 8 2013 9:23 AM

Please elaborate more on your class system description and how the priests would be able to regulate members of society

It's probably easier for me to answer specific questions as I am using the terms very loosely, almost metaphorically.

Clayton -

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Monroe replied on Wed, May 8 2013 7:19 PM

Who knows what I meant; I just feel that sustainability comes down to how well humans uphold morality (not just what is in their best interest - i.e. incentives and consequentialism). Either privatization enables enforcement of contracts/prisons or we would still need a government.

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