In The Contradiction in Anarchism Robert J. Bidinotto powerfully elaborates the central and most obvious problem with anarcho-capitalism – who will define the rules by which members of an an-cap society would abide and how competing court systems, competing police forces, and competing definitions of every term in the legal system would coordinate without degeneration into inner city gang war-fare….

[Which is of course the case already with the inter-state (international) system.]

“Today, a “legal monopoly” exists to put shady private detectives and private extortionists behind bars. It serves as a final arbiter on the use of force in society. We all agree it does a less-than-exemplary job much of the time; but it’s there. What happens when it isn’t? Or worse: when the shady detective or extortionist has replaced it, in a marketplace where profits depend on satisfying the subjective desires of emotional clients?

Anarchists say this scenario is unrealistically pessimistic: it assumes people are going to want to do the wrong thing. In fact, people “naturally” seek their rational self-interest, they declare, once government is out of the way. They would try to cooperate, work things out.

Well, if they did, why would they need any agency — governmental or private? Why wouldn’t five billion people naturally cooperate on this planet without any legal or institutional framework to resolve disputes?………

…….if the government has been constitutionally limited, the masses are typically thwarted in having their way at the expense of others.  They can’t use force to do anything they want. As private criminals, their acts are limited by the government. And government agents themselves are limited by the Constitution. Our Founders were geniuses at limiting power. It’s  taken lovers of coercion over 200 years to subvert our Founder’s system to its current state; and still, our system is far from being totalitarian.

[Lila: It is totalitarian already and became so in the last thirty years at top speed, but that’s irrelevant to his point]

In the market, by contrast, what’s to stop thugs, and by what standard? Surely no private company would deliberately handcuff itself, with separations and divisions of powers, and checks and balances. Such silly, inefficient “gridlock” and “red tape” would only make it less competitive…….

Anarchists proclaim faith that in the marketplace, all the “protection” companies would rationally work everything out. All companies in the private sector, they assert, have a vested interest in peace. Their reputations and profits, you see, rest on the need for mutual cooperation, not violence.

Oh? What about a reputation for customer satisfaction — and the profits that go with getting results? I guess anarchists have no experience in the private sector with shyster lawyers, protection rackets, software pirates and the like. Aren’t they, too, responding to market demand?

If the “demand” for peace is paramount, please explain the bloody history of the world.

Anarcho-capitalists forget their own Austrian economics. It was Von Mises who described the marketplace as the ultimate democracy, where “sovereign consumers voted with their dollars” to fulfill their desires. Not necessarily good desires, mind you: just “desires.” Whatever they happened to be. The market was itself amoral: it simply satisfied the desires of the greatest number. (That’s why Howard Stern sells better than Isaac Stern.)

[Lila: I believe that mechanisms might arise in a society of a different quality than the one we have now. That is, my disbelief in the viability of anarcho-capitalism is a practical one, resulting from my observation that people themselves lack the moral qualities and self-restraint necessary for society to function without government.  It is not a theoretical disbelief in the possibility of a functioning an-cap society, as it is with this author.]

* * *Anarchists think the “invisible hand” of the marketplace will work in the place of government. But read what Adam Smith had to say about businessmen in that famous “invisible hand” passage. Smith knew that government was a precondition of the market, and of the working of the “invisible hand.” Without government, the “invisible hand” becomes a closed fist, wielded by the most powerful gang(s) to emerge. Why? Because government prevents competing forces from defining — and enforcing — their own private “interests” subjectively and arbitrarily.

Even if 99 percent of “protection agents” behave rationally, all you’d need is one “secessionist” outlaw agency, with it’s own novel interpretation of “rights” and “justice,” tailored to appeal to some “customer base” of bigots, religious fanatics, disgruntled blue collar workers or amoral tycoons with money to burn. …..

Oops — did I say “outlaw?” Under anarchy, there is no final determiner of the law.” There would be no final standard for settling disputes, e. g., a Constitution. That would be a “monopoly legal system,” you see. That’s because anarchists support the unilateral right of any individual or group to secede from a governing framework. (After all — wrote anarchist Lysander Spooner a century ago — I didn’t sign the Constitution, did I?)

So whose laws, rules, definitions and interpretations are going to be final?

……From a practical standpoint, a “protection agency” which could not enforce retribution or restitution against a wrong-doer would be a paper tiger. Who would pay for such toothless “protection”? Who would stand to lose?

But who would stand to gain under this option? Only the thugs, who would unilaterally declare themselves immune from anyone’s arrest, prosecution or punishment. Either as individuals or in gangs, they would use force, unconstrained by the self- limitations adopted by the “good” agencies.

[Lila: That is already the case in criminal-capitalist America. The extent of judicial corruption and subversion of law by lawyers themselves, using the letter of the law to destroy its spirit, makes large parts of corporate America no more than gangland writ large.]

In short, under this option, the good would unilaterally restrain themselves, while the bad would assume the right to use force without self-limitation, and with no fear of retaliation. This option would mean de facto pacifism by the moral, in the face of the immoral.

[Lila: This is precisely what an-cap libertarians iend up advocating, whether they are aware of it or not. ]

…If you have no final arbiter, your de facto pacifism gives society’s thugs a carte blanche — which means society will be run by brute force and thugs — which is immoral.

If you do establish some final arbiter, with the power to enforce its verdicts against all “competitors,” then you have — voila! — a final “legal monopoly” on the proper use of force… which anarchists declare to be immoral.

Anarchists can’t evade this dilemma by making excursions to ancient Iceland or to science-fiction Utopias of the future. The fact that the Icelandic model didn’t last, ought to tell us something about the viability of any science-fiction model of the future.

[Lila: I have no problem with referencing ancient Icelandic or Irish or Indian societies that did not have government. In fact, I think we should be examining every possible variation of social organization we can find. But the idea that we we can eliminate government altogether when multinational corporations already operate like huge governments, as a law unto themselves, is deluded. Will these MNC’s simply restrain themselves or will their managements become more powerful, less accountable, and more likely to operate like bandits, looting from themselves as well as from their clients and rivals?  The answer is staring at us, in the form of such rapacious organizations as Goldman Sachs..]

So, who would really rule the anarcho-capitalist utopia? The same guys who rule it now. They would be elevated by the same popular constituency that now elects them. The only difference would be is that under anarcho-capitalism, there’d be no institutional limits on their behavior……

The answer to unlimited government is not the “unlimited democracy” of the Misesian marketplace. Mises knew better (read his Bureaucracy). But anarchist rationalists, like Rothbard, haven’t yet figured out that “force” is not just like any other good or service on the marketplace.

[Lila: I think Rothbard was smart enough to figure this out. I mean, this is  common sense.  No.  I figure there’s more going on with Rothbard – and the cult of Rothbard – than meets the eye.  Even David Friedman, another an-cap,  finds a certain dishonesty in the way Rothbard treats his material. And he’s not alone. I blogged a few years ago about misrepresentation of a Chinese thinker, Sima Qian, by Rothbard noted by Roderick Long. Then there is Rothbard’s treatment of Rand, and also of Adam Smith… ….]