Our Constitution a Huge Mistake?

[american.swan]

I recently read the first four pages of an article on mises.org I think is seriously worth discussing.
On the Impossibility of Limited Government and the Prospects for a Second American Revolution
(http://mises.org/story/2874)

This article is LONG, but I post the important section.


The American Constitution

But what was the next step once independence from Britain had been won? This question leads to the third source of national pride — the American Constitution — and the explanation as to why this Constitution, rather than being a legitimate source of pride, represents a fateful error.

Thanks to the great advances in economic and political theory since the late 1700s, in particular at the hands of Ludwig von Mises and Murray N. Rothbard, we are now able to give a precise answer to this question. According to Mises and Rothbard, once there is no longer free entry into the business of the production of protection and adjudication, the price of protection and justice will rise and their quality will fall. Rather than being a protector and judge, a compulsory monopolist will become a protection racketeer — the destroyer and invader of the people and property that he is supposed to protect, a warmonger, and an imperialist.[6]

Indeed, the inflated price of protection and the perversion of the ancient law by the English king, both of which had led the American colonists to revolt, were the inevitable result of compulsory monopoly. Having successfully seceded and thrown out the British occupiers, it would only have been necessary for the American colonists to let the existing homegrown institutions of self-defense and private (voluntary and cooperative) protection and adjudication by specialized agents and agencies take care of law and order.

This did not happen, however. The Americans not only did not let the inherited royal institutions of colonies and colonial governments wither away into oblivion; they reconstituted them within the old political borders in the form of independent states, each equipped with its own coercive (unilateral) taxing and legislative powers.[7] While this would have been bad enough, the new Americans made matters worse by adopting the American Constitution and replacing a loose confederation of independent states with the central (federal) government of the United States.

This Constitution provided for the substitution of a popularly elected parliament and president for an unelected king, but it changed nothing regarding their power to tax and legislate. To the contrary, while the English king's power to tax without consent had only been assumed rather than explicitly granted and was thus in dispute,[8] the Constitution explicitly granted this very power to Congress. Furthermore, while kings — in theory, even absolute kings — had not been considered the makers but only the interpreters and executors of preexisting and immutable law, i.e., as judges rather than legislators,[9] the Constitution explicitly vested Congress with the power of legislating, and the president and the Supreme Court with the powers of executing and interpreting such legislated law.[10]

In effect, what the American Constitution did was only this: Instead of a king who regarded colonial America as his private property and the colonists as his tenants, the Constitution put temporary and interchangeable caretakers in charge of the country's monopoly of justice and protection.

These caretakers did not own the country, but as long as they were in office, they could make use of it and its residents to their own and their protégés' advantage. However, as elementary economic theory predicts, this institutional setup will not eliminate the self-interest-driven tendency of a monopolist of law and order toward increased exploitation. To the contrary, it only tends to make his exploitation less calculating, more shortsighted, and wasteful. As Rothbard explained,

while a private owner, secure in his property and owning its capital value, plans the use of his resource over a long period of time, the government official must milk the property as quickly as he can, since he has no security of ownership. … [G]overnment officials own the use of resources but not their capital value (except in the case of the "private property" of a hereditary monarch). When only the current use can be owned, but not the resource itself, there will quickly ensue uneconomic exhaustion of the resources, since it will be to no one's benefit to conserve it over a period of time and to every owner's advantage to use it up as quickly as possible. … The private individual, secure in his property and in his capital resource, can take the long view, for he wants to maintain the capital value of his resource. It is the government official who must take and run, who must plunder the property while he is still in command.[11]

Moreover, because the Constitution provided explicitly for "open entry" into state government — anyone could become a member of Congress, president, or a Supreme Court judge — resistance against state property invasions declined; and as the result of "open political competition" the entire character structure of society became distorted, and more and more bad characters rose to the top.[12]

Free entry and competition is not always good. Competition in the production of goods is good, but competition in the production of bads is not. Free competition in killing, stealing, counterfeiting, or swindling, for instance, is not good; it is worse than bad. Yet this is precisely what is instituted by open political competition, i.e., democracy.
"The Americans not only did not let the inherited royal institutions of colonies and colonial governments wither away into oblivion; they reconstituted them within the old political borders in the form of independent states, each equipped with its own coercive (unilateral) taxing and legislative powers."

In every society, people who covet another man's property exist, but in most cases people learn not to act on this desire or even feel ashamed for entertaining it.[13] In an anarchocapitalist society in particular, anyone acting on such a desire is considered a criminal and is suppressed by physical violence. Under monarchical rule, by contrast, only one person — the king — can act on his desire for another man's property, and it is this that makes him a potential threat. However, because only he can expropriate while everyone else is forbidden to do likewise, a king's every action will be regarded with utmost suspicion.[14] Moreover, the selection of a king is by accident of his noble birth. His only characteristic qualification is his upbringing as a future king and preserver of the dynasty and its possessions. This does not assure that he will not be evil, of course; at the same time, however, it does not preclude that a king might actually be a harmless dilettante or even a decent person.

In distinct contrast, by freeing up entry into government, the Constitution permitted anyone to openly express his desire for other men's property; indeed, owing to the constitutional guarantee of "freedom of speech," everyone is protected in so doing. Moreover, everyone is permitted to act on this desire, provided that he gains entry into government; hence, under the Constitution, everyone becomes a potential threat.

To be sure, there are people who are unafflicted by the desire to enrich themselves at the expense of others and to lord it over them; that is, there are people who wish only to work, produce, and enjoy the fruits of their labor. However, if politics — the acquisition of goods by political means (taxation and legislation) — is permitted, even these harmless people will be profoundly affected.

In order to defend themselves against attacks on their liberty and property by those who have fewer moral scruples, even these honest, hardworking people must become "political animals" and spend more and more time and energy developing their political skills. Given that the characteristics and talents required for political success — good looks, sociability, oratorical power, charisma, etc. — are distributed unequally among men, then those with these particular characteristics and skills will have a sound advantage in the competition for scarce resources (economic success) as compared with those without them.

Worse still, given that, in every society, more "have-nots" of everything worth having exist than "haves," the politically talented who have little or no inhibition against taking property and lording it over others will have a clear advantage over those with such scruples. That is, open political competition favors aggressive, hence dangerous, rather than defensive, hence harmless, political talents and will thus lead to the cultivation and perfection of the peculiar skills of demagoguery, deception, lying, opportunism, corruption, and bribery. Therefore, entrance into and success within government will become increasingly impossible for anyone hampered by moral scruples against lying and stealing.
"Instead of a king who regarded colonial America as his private property and the colonists as his tenants, the Constitution put temporary and interchangeable caretakers in charge of the country's monopoly of justice and protection."

Unlike kings then, congressmen, presidents, and Supreme Court judges do not and cannot acquire their positions accidentally. Rather, they reach their position because of their proficiency as morally uninhibited demagogues. Moreover, even outside the orbit of government, within civil society, individuals will increasingly rise to the top of economic and financial success, not on account of their productive or entrepreneurial talents or even their superior defensive political talents, but rather because of their superior skills as unscrupulous political entrepreneurs and lobbyists. Thus, the Constitution virtually assures that exclusively dangerous men will rise to the pinnacle of government power and that moral behavior and ethical standards will tend to decline and deteriorate over all.

Moreover, the constitutionally provided "separation of powers" makes no difference in this regard. Two or even three wrongs do not make a right. To the contrary, they lead to the proliferation, accumulation, reinforcement, and aggravation of error. Legislators cannot impose their will on their hapless subjects without the cooperation of the president as the head of the executive branch of government, and the president in turn will use his position and the resources at his disposal to influence legislators and legislation. And although the Supreme Court may disagree with particular acts of Congress or the president, Supreme Court judges are nominated by the president and confirmed by the Senate and remain dependent on them for funding. As an integral part of the institution of government, they have no interest in limiting but every interest in expanding the government's, and hence their own, power.[15]

[american.swan]

You can have the whole 20 pages read to you. It's an hour long mp3. http://mises.org/multimedia/mp3/audioarticles/2874_Hoppe.mp3

[american.swan]

I need to finish the other 10 pages of this article, but from what I have read so far, I want to know what the founders of this country SHOULD have done.

[FindLiberty]

Wow, great preamble or declaration of the problem of coercive government. (might add detail of the fiat money manipulation / hidden tax trick that’s used to reward their friends and punish their enemies.)

We need sound solutions or a new approach... before our entire system implodes all on its own, just because it exists.


A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with a result that a democracy always collapses over loose fiscal policy, always followed by dictatorship. The average age of the world s greatest civilizations has been 200 years. These nations have progressed through the following sequence:
>From bondage to spiritual faith;
>>From spiritual faith to great courage;
>>>From courage to liberty;
>>>>From liberty to abundance;
>>>>>From abundance to selfishness;
>>>>>>From selfishness to complacency;
>>>>>>>From complacency to apathy;
>>>>>>>>From apathy to dependency;
>>>>>>>>>From dependency back into bondage.

[Truth Warrior]

Shot the original Federalist " 'secret' coup co-conspirators" as traitors to the American Revolution, would have been one option.<IMHO>

[SevenEyedJeff]

The only problem with the Constitution is just that we don't follow it, and we let those who violate it continue to do so.

[Truth Warrior]

The only problem with the Constitution is just that we don't follow it, and we let those who violate it continue to do so.
And I have NO plans ever to follow it EITHER, BTW. Screw the SHEPHERDS! :p

[Uncle Emanuel Watkins]

I need to finish the other 10 pages of this article, but from what I have read so far, I want to know what the founders of this country SHOULD have done.

See how complex things can get by our not accepting that the founding fathers were Christian?

[Brian4Liberty]

I recently read the first four pages of an article on mises.org:

"In every society, people who covet another man's property exist, but in most cases people learn not to act on this desire or even feel ashamed for entertaining it. In an anarchocapitalist society in particular, anyone acting on such a desire is considered a criminal and is suppressed by physical violence."

This is very interesting...so "greed" does not exist in an Anarchocapitalist society?

I find it interesting that whenever someone attempts to "call out" greed and corruption in our current society, that it is always the Rothbardians who come out saying that the "crooks" (for example, Enron) are completely innocent (oh yeah, it's all the government's fault too). Seems to be a contradiction.

Either theft, fraud and corruption are immoral/criminal, or they aren't. All societies need to make those distinctions, it doesn't matter what the political system is called.

[american.swan]

See how complex things can get by our not accepting that the founding fathers were Christian?

Could you enlighten me on what your talking about?

[pdavis]

This is very interesting...so "greed" does not exist in an Anarchocapitalist society?

Hello, McFly?! He never claimed "greed" would not exist in a market anarchist society. Did you even read the passage you quoted? Here is the passage once more:


"In every society, people who covet another man's property exist, but in most cases people learn not to act on this desire or even feel ashamed for entertaining it. In an anarchocapitalist society in particular, anyone acting on such a desire is considered a criminal and is suppressed by physical violence."

He clearly states that in both our current and in market anarchist society that greed and jealousy would still exist. The difference is in our current society the very few, the elites (corporatists, mercantilists, and politicians) use the State to "obtain" property from others with perceived legitimacy through taxation and eminent domain; in a free market society this legitimacy would no longer exist and if anyone tried this they would be deemed criminals and/ or face armed resistance and arbitration.


I find it interesting that whenever someone attempts to "call out" greed and corruption in our current society, that it is always the Rothbardians who come out saying that the "crooks" (for example, Enron) are completely innocent (oh yeah, it's all the government's fault too). Seems to be a contradiction.

I will admit there are many market anarchist who defend our current economic conditions, businesses and their practices as market phenomenons even though we do not currently live in a free market (see: vulgar libertarianism).

[DriftWood]

I'm getting a bit tired of reading about anarcho-capitalists idealistic fantasies. Just like the communist fantasies could not work, neither can the anarcho-capitalist ones. They simply do not take human nature into account.

I'll spell it out again, no laws are respected without an authority. There are no rights without someone with the power to physically enforce them. Anyone with power to enforce laws, has the power to also create laws. Anyone with the power to enforce law, needs a monopoly on violence to be able to do so. Competition in the area of violence is civil war.

Eventually the meanest bully, or just the bully with the largest posse, will have competed their competitors off the market (aka killed them), or split the market between them (split the land into smaller countries). Their will, whatever it may be, will be the law of the land. The laws will be respected out of fear. However once there is a monopoly on violence, there is laws, police and peace. When there is peace people can trade, when people trade they grow wealthy, when people are wealthy they can bribe the authority to get more freedoms and eventually change the system to be less oppressive. The authority (with its monopoly on violence) will grow less oppressive, as it does not want to bite the hand that feeds it. It does not take all the wealth of the people, because that would be bleeding them dead. It just makes lots of small cuts, to keep them good and healthy cash cows.

Imagine what would happen there was lots of competing law systems out there, and different police forces running around enforcing conflicting laws, for its customers. What would happen if a customer of one group killed a customer of another group, it might be considered a crime according to one law system but not the other. Even if it would have been considered a crime in both groups, the fact is that the killer and the victim belonged to different protections groups. And the killers protection group would have no reason to punish him as he had not killed one of their own customers.

Anarcho-capitalism would lead into civil war.. just as surely as communism leads into authoritarianism.

Cheers

[nobody's_hero]

First we have to get back to obeying the Constitution, before we can determine whether it is working or not.

If it isn't working, we can amend it; ignoring it will not fix our problems.

[Truth Warrior]

If we have to get back to it. It's not working. :rolleyes:

:D

[nobody's_hero]

If we have to get back to it. It's not working. :rolleyes:

:D

But, that is not the fault of the document, itself.

It is just a piece of paper, unfortunately. It can't sprout a knee and arms, bend politicians over that knee, and spank them on the bum when they don't listen.

That duty is reserved to the people.

[Truth Warrior]

But, that is not the fault of the document, itself.

It is just a piece of paper, unfortunately. It can't sprout a knee and arms, bend politicians over that knee, and spank them on the bum when they don't listen.

That duty is reserved to the people.

Do documents even have faults? ;)

[nobody's_hero]

Do documents even have faults? ;)

Only the ones which were put into them by fallible human beings. That is why we have an amendment process.

[Truth Warrior]

The Illegality, Immorality, and Violence of All Political Action
http://users.aol.com/xeqtr1/voluntaryist/vopa.html

[DriftWood]

The Illegality, Immorality, and Violence of All Political Action
http://users.aol.com/xeqtr1/voluntaryist/vopa.html

Very good link.

I think its a way of arguing that the power of violence always trumps the power of any contract. It's a bit naive to think that we can control the govt by contract, or that we could control anyone else by contract that is providing us protection from violence services (like the free market anarchist utopia). Anyone that provides us protection from violence services, must have the power to do so. And anyone with enough power to do so will do as it pleases, no contract (or god) will stop it.

Cheers

[Truth Warrior]

Very good link.

I think its a way of arguing that the power of violence always trumps the power of any contract. It's a bit naive to think that we can control the govt by contract, or that we could control anyone else by contract that is providing us protection from violence services (like the free market anarchist utopia). Anyone that provides us protection from violence services, must have the power to do so. And anyone with enough power to do so will do as it pleases, no contract (or god) will stop it.

Cheers
Luckily the really violent ones are only a very minuscule and microscopic percentage of the overall world's total human populations.

That's why their antics tend to be, and make the news. ;)

Cheers!

[pdavis]

I'm getting a bit tired of reading about anarcho-capitalists idealistic fantasies. Just like the communist fantasies could not work, neither can the anarcho-capitalist ones. They simply do not take human nature into account.

I'll spell it out again, no laws are respected without an authority. There are no rights without someone with the power to physically enforce them.


Are you claiming that government gives us rights? If so these are just merely privileges and can be taken away at any time by the state (as is currently happening now) and only makes us subjects, serfs, and slaves.


Anyone with power to enforce laws, has the power to also create laws. Anyone with the power to enforce law, needs a monopoly on violence to be able to do so. Competition in the area of violence is civil war.

If this is the case why isn't there civil wars between Target and Wal-Mart, Mormons and Baptists, you and your neighbors? Do you and others not have different rules for property? The state isn't a god and therefore not everywhere and all knowing at all times.



Eventually the meanest bully, or just the bully with the largest posse, or will have competed their competitors off the market (aka killed them),
or split the market between them (split the land into smaller countries).

How would they go about doing this?



Their will, whatever it may be, will be the law of the land. The laws will be respected out of fear.

This can only happen with perceived legitimacy. (see: organized religion and monarchy)


However once there is a monopoly on violence, there is laws, police and peace.

This statement is a complete contradiction. How can there be peace if there is a monopoly on force. The state funds itself through extortion.



When there is peace people can trade, when people trade they grow wealthy,

When has there ever been free trade and free markets under the state?



when people are wealthy they can bribe the authority to get more freedoms and eventually change the system to be less oppressive.

The wealthy only bribe the state only for re-regulation giving "freedom" (oligopoly, oligopsony) for themselves.



The authority (with its monopoly on violence) will grow less oppressive, as it does not want to bite the hand that feeds it.

When has this ever happened?



It does not take all the wealth of the people, because that would be bleeding them dead. It just makes lots of small cuts, to keep them good and healthy cash cows.


What?


Imagine what would happen there was lots of competing law systems out there, and different police forces running around enforcing conflicting laws, for its customers.

The customers laws would only apply to their property.


What would happen if a customer of one group killed a customer of another group, it might be considered a crime according to one law system but not the other.

They would brought to arbitration. Again the customers laws only apply to their property, why aren't private security of one property owner today enforcing their rules on another persons property?



Even if it would have been considered a crime in both groups, the fact is that the killer and the victim belonged to different protections groups. And the killers protection group would have no reason to punish him as he had not killed one of their own customers.

The other protection group would.

[Brian4Liberty]

Hello, McFly?! He never claimed "greed" would not exist in a market anarchist society.
...
I will admit there are many market anarchist who defend our current economic conditions, businesses and their practices as market phenomenons even though we do not currently live in a free market (see: vulgar libertarianism).

You are correct. The quote did not say that greed would not exist in an Anarcho-capitalist scheme. I moved some sentences around (quick, bad edit), but what I was trying to say is that other defenders of anarcho-capitalism often debate as though it would not exist.


"In an anarchocapitalist society in particular, anyone acting on such a desire is considered a criminal and is suppressed by physical violence."

I am still thinking that this is a recipe for disaster. Depending on individuals to use "physical violence" to correct perceived thefts or wrongs would turn ugly quick. Does every man turn into judge, jury and executioner based on his own perception of wrongs and threats? In that case, I think the Bush administration must be anarcho-capitalists. ;) In a world full of paranoid people, pre-emption becomes pretty dangerous.

I will certainly read up on "vulgar libertarianism"...

[Mesogen]

This is also quite interesting.

The Constitution has no inherent authority or obligation. It has no authority or obligation at all, unless as a contract between man and man. And it does not so much as even purport to be a contract between persons now existing. It purports, at most, to be only a contract between persons living eighty years ago. And it can be supposed to have been a contract then only between persons who had already come to years of discretion, so as to be competent to make reasonable and obligatory contracts. Furthermore, we know, historically, that only a small portion even of the people then existing were consulted on the subject, or asked, or permitted to express either their consent or dissent in any formal manner. Those persons, if any, who did give their consent formally, are all dead now. Most of them have been dead forty, fifty, sixty, or seventy years. And the constitution, so far as it was their contract, died with them. They had no natural power or right to make it obligatory upon their children. It is not only plainly impossible, in the nature of things, that they could bind their posterity, but they did not even attempt to bind them. That is to say, the instrument does not purport to be an agreement between any body but “the people” then existing; nor does it, either expressly or impliedly, assert any right, power, or disposition, on their part, to bind anybody but themselves. Let us see. Its language is:

“We, the people of the United States (that is, the people then existing in the United States), in order to form a more perfect union, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

It is plain, in the first place, that this language, as an agreement, purports to be only what it at most really was, viz., a contract between the people then existing; and, of necessity, binding, as a contract, only upon those then existing. In the second place, the language neither expresses nor implies that they had any right or power, to bind their “posterity” to live under it. It does not say that their “posterity” will, shall, or must live under it. It only says, in effect, that their hopes and motives in adopting it were that it might prove useful to their posterity, as well as to themselves, by promoting their union, safety, tranquility, liberty, etc.
Look. No one needs a piece of paper to claim their freedom.

[hypnagogue]

Just like the communist fantasies could not work, neither can the anarcho-capitalist ones. They simply do not take human nature into account. Exactly. I believe it's called Utopianism.

[american.swan]

Solution as stated by the author in the OP.



IV - Two Hundred Years Later …

After more than two centuries of "constitutionally limited government," the results are clear and incontrovertible. At the outset of the American "experiment," the tax burden imposed on Americans was light, indeed almost negligible. Money consisted of fixed quantities of gold and silver. The definition of private property was clear and seemingly immutable, and the right to self-defense was regarded as sacrosanct. No standing army existed, and, as expressed in George Washington's Farewell Address, a firm commitment to free trade and a noninterventionist foreign policy appeared to be in place. Two hundred years later, matters have changed dramatically.[16]

Now, year in and year out, the American government expropriates more than 40 percent of the incomes of private producers, making even the economic burden imposed on slaves and serfs seem moderate in comparison. Gold and silver have been replaced by government-manufactured paper money, and Americans are being robbed continually through money inflation. The meaning of private property, once seemingly clear and fixed, has become obscure, flexible, and fluid. In fact, every detail of private life, property, trade, and contract is regulated and re-regulated by ever-higher mountains of paper laws (legislation). With increasing legislation, ever more legal uncertainty and moral hazards have been created, and lawlessness has replaced law and order.
"The meaning of private property, once seemingly clear and fixed, has become obscure, flexible, and fluid. In fact, every detail of private life, property, trade, and contract is regulated and re-regulated by ever-higher mountains of paper laws."

Last but not least, the commitment to free trade and noninterventionism has given way to a policy of protectionism, militarism, and imperialism. In fact, almost since its beginnings the US government has engaged in relentless aggressive expansionism and, starting with the Spanish-American War and continuing past World War I and World War II to the present, the United States has become entangled in hundreds of foreign conflicts and risen to the rank of the world's foremost warmonger and imperialist power. In addition, while American citizens have become increasingly more defenseless, insecure, and impoverished, and foreigners all over the globe have become ever more threatened and bullied by US military power, American presidents, members of Congress, and Supreme Court judges have become ever more arrogant, morally corrupt, and dangerous.[17]

What can possibly be done about this state of affairs? First, the American Constitution must be recognized for what it is — an error.

As the Declaration of Independence noted, government is supposed to protect life, property, and the pursuit of happiness. Yet in granting government the power to tax and legislate without consent, the Constitution cannot possibly assure this goal but is instead the very instrument for invading and destroying the right to life, property, and liberty. It is absurd to believe that an agency that may tax without consent can be a property protector. Likewise, it is absurd to believe that an agency with legislative powers can preserve law and order. Rather, it must be recognized that the Constitution is itself unconstitutional, i.e., incompatible with the very doctrine of natural human rights that inspired the American Revolution.[18]

Indeed, no one in his right mind would agree to a contract that allowed one's alleged protector to determine unilaterally, without one's consent, and irrevocably, without the possibility of exit, how much to charge for protection; and no one in his right mind would agree to an irrevocable contract which granted one's alleged protector the right to ultimate decision making regarding one's own person and property, i.e., of unilateral lawmaking.[19]

Second, it is necessary to offer a positive and inspiring alternative to the present system.

While it is important that the memory of America's past as a land of pioneers and an effective anarchocapitalist system based on self-defense and popular militias be kept alive, we cannot return to the feudal past or the time of the American Revolution. Yet the situation is not hopeless. Despite the relentless growth of statism over the course of the past two centuries, economic development has continued, and our living standards have reached spectacular new heights. Under these circumstances, a completely new option has become viable: the provision of law and order by freely competing private (profit-and-loss) insurance agencies.[20]

Even though hampered by the state, insurance agencies protect private property owners upon payment of a premium against a multitude of natural and social disasters, from floods and hurricanes to theft and fraud. Thus, it would seem that the production of security and protection is the very purpose of insurance. Moreover, people would not turn to just anyone for a service as essential as that of protection. Rather, as de Molinari noted,

Before striking a bargain with [a] producer of security … they will check if he is really strong enough to protect them … [and] whether his character is such that they will not have to worry about his instigating the very aggressions he is supposed to suppress.[21]

In this regard insurance agencies also seem to fit the bill. They are big and in command of the resources — physical and human — necessary to accomplish the task of dealing with the dangers, actual or imagined, of the real world. Indeed, insurers operate on a national or even international scale. They own substantial property holdings dispersed over wide territories and beyond the borders of single states and thus have a manifest self-interest in effective protection. Furthermore, all insurance companies are connected through a complex network of contractual agreements on mutual assistance and arbitration as well as a system of international reinsurance agencies representing a combined economic power that dwarfs most if not all contemporary governments. They have acquired this position because of their reputation as effective, reliable, and honest businesses.
"It is absurd to believe that an agency that may tax without consent can be a property protector. Likewise, it is absurd to believe that an agency with legislative powers can preserve law and order."

While this may suffice to establish insurance agencies as a possible alternative to the role currently performed by states as providers of law and order, a more detailed examination is needed to demonstrate the principal superiority of such an alternative to the status quo. In order to do this, it is only necessary to recognize that insurance agencies can neither tax nor legislate; that is, the relationship between the insurer and the insured is consensual. Both are free to cooperate or not to cooperate, and this fact has momentous implications. In this regard, insurance agencies are categorically different from states.

The advantages of having insurance agencies provide security and protection are as follows. First, competition among insurers for paying clients will bring about a tendency toward a continuous fall in the price of protection per insured value, thus rendering protection more affordable. In contrast, a monopolistic protector who may tax the protected will charge ever-higher prices for his services.[22]

Second, insurers will have to indemnify their clients in the case of actual damage; hence, they must operate efficiently. Regarding social disasters — crime — in particular, this means that the insurer must be concerned above all with effective prevention, for unless he can prevent a crime, he will have to pay up. Further, if a criminal act cannot be prevented, an insurer will still want to recover the loot, apprehend the offender, and bring him to justice, because in so doing the insurer can reduce his costs and force the criminal — rather than the victim and his insurer — to pay for the damages and cost of indemnification. In distinct contrast, because compulsory monopolist states do not indemnify victims and because they can resort to taxation as a source of funding, they have little or no incentive to prevent crime or to recover loot and capture criminals. If they do manage to apprehend a criminal, they typically force the victim to pay for the criminal's incarceration, thus adding insult to injury.[23]

Third and most important, because the relationship between insurers and their clients is voluntary, insurers must accept private property as an ultimate given and private property rights as immutable law. That is, in order to attract or retain paying clients, insurers will have to offer contracts with specified property and property damage descriptions, rules of procedure, evidence, compensation, restitution, and punishment, as well as intra- and interagency conflict resolution and arbitration procedures.

Moreover, out of the steady cooperation between different insurers in mutual interagency arbitration proceedings, a tendency toward the unification of law — of a truly universal or international law — will emerge. Everyone, by virtue of being insured, would thus become tied into a global competitive effort to minimize conflict and aggression. Every single conflict and damage claim, regardless of where and by or against whom, would fall into the jurisdiction of exactly one or more specific and enumerable insurance agencies and their contractually agreed-to arbitration procedures, thereby creating "perfect" legal certainty.
"Under these circumstances, a completely new option has become viable: the provision of law and order by freely competing private (profit-and-loss) insurance agencies."

In striking contrast, as tax-funded monopoly protectors, states do not offer the consumers of protection anything even faintly resembling a service contract. Instead, they operate in a contractual void that allows them to make up and change the rules of the game as they go along. Most remarkably, whereas insurers must submit themselves to independent third-party arbitrators and arbitration proceedings in order to attract voluntary paying clients, states, insofar as they allow for arbitration at all, assign this task to another state-funded and state-dependent judge.[24]

Further implications of this fundamental contrast between insurers as contractual versus states as noncontractual providers of security deserve special attention.

Because they are not subject to and bound by contracts, states typically outlaw the ownership of weapons by their "clients," thus increasing their own security at the expense of rendering their alleged clients defenseless. In contrast, no voluntary buyer of protection insurance would agree to a contract that required him to surrender his right to self-defense and be unarmed or otherwise defenseless. To the contrary, insurance agencies would encourage the ownership of guns and other protective devices among their clients by means of selective price cuts, because the better the private protection of their clients, the lower the insurers' protection and indemnification costs would be.

Moreover, because they operate in a contractual void and are independent of voluntary payment, states arbitrarily define and redefine what is and what is not a punishable "aggression" and what does and does not require compensation. By imposing a proportional or progressive income tax and redistributing income from the rich to the poor, for instance, states in effect define the rich as aggressors and the poor as their victims. (Otherwise, if the rich were not aggressors and the poor not their victims, how could taking something from the former and giving it to the latter be justified?) Or by passing affirmative action laws, states effectively define whites and males as aggressors and blacks and women as their victims. For insurance agencies, any such business conduct would be impossible for two fundamental reasons.[25]

First, all insurance involves the pooling of particular risks into risk classes. It implies that to some of the insured, more will be paid out than what they paid in, and to others, less. However — and this is decisive — no one knows in advance who the "winners" and who the "losers" will be. Winners and losers — and any income redistribution among them — will be randomly distributed. Otherwise, if winners and losers could be systematically predicted, losers would not want to pool their risk with winners but only with other losers because this would lower their insurance premium.
"Because compulsory monopolist states do not indemnify victims and because they can resort to taxation as a source of funding, they have little or no incentive to prevent crime or to recover loot and capture criminals."

Second, it is not possible to insure oneself against any conceivable risk. Rather, it is only possible to insure oneself against accidents, i.e., risks over whose outcome the insured has no control whatsoever and to which he contributes nothing. Thus, it is possible to insure oneself against the risk of death or fire, for instance, but it is not possible to insure oneself against the risk of committing suicide or setting one's own house on fire.

Similarly, it is impossible to insure oneself against the risk of business failure, of unemployment, of not becoming rich, of not feeling like getting up and out of bed in the morning, or of disliking one's neighbors, fellows or superiors, because in each of these cases one has either full or partial control over the event in question. That is, an individual can affect the likelihood of the risk. By their very nature, the avoidance of risks such as these falls into the realm of individual responsibility, and any agency that undertook their insurance would be slated for immediate bankruptcy.

Most significantly for the subject under discussion, the uninsurability of individual actions and sentiments (in contradistinction to accidents) implies that it is also impossible to insure oneself against the risk of damages that are the result of one's prior aggression or provocation. Rather, every insurer must restrict the actions of its clients so as to exclude all aggression and provocation on their part. That is, any insurance against social disasters such as crime must be contingent on the insured submitting themselves to specified norms of nonaggressive, civilized, conduct.

Accordingly, while states as monopolistic protectors can engage in redistributive policies benefiting one group of people at the expense of another, and while as tax-supported agencies they can even "insure" uninsurable risks and protect provocateurs and aggressors, voluntarily funded insurers would be systematically prevented from doing any such thing. Competition among insurers would preclude any form of income and wealth redistribution among various groups of insured, for a company engaging in such practices would lose clients to others refraining from them. Rather, every client would pay exclusively for his own risk, respectively that of people with the same (homogeneous) risk exposure that he faces.[26] Nor would voluntarily funded insurers be able to "protect" any person from the consequences of his own erroneous, foolish, risky, or aggressive conduct or sentiment. Competition between insurers would instead systematically encourage individual responsibility, and any known provocateur and aggressor would be excluded as a bad insurance risk from any insurance coverage whatsoever and be rendered an economically isolated, weak, and vulnerable outcast.

Finally, with regard to foreign relations, because states can externalize the costs of their own actions onto hapless taxpayers, they are permanently prone to becoming aggressors and warmongers. Accordingly, they tend to fund and develop weapons of aggression and mass destruction. In distinct contrast, insurers will be prevented from engaging in any form of external aggression because any aggression is costly and requires higher insurance premiums, implying the loss of clients to other, nonaggressive competitors. Insurers will engage exclusively in defensive violence, and instead of acquiring weapons of aggression and mass destruction, they will tend to invest in the development of weapons of defense and of targeted retaliation.[27]

what do you think about this? Is this really workable?

[Brian4Liberty]

Solution as stated by the author in the OP.

what do you think about this? Is this really workable?

Ah, Insurance, another form of collectivism... almost as good as the government at taking our money, siphoning off most of it, and giving us a little back when they feel we deserve it. And in a real disaster, they can just declare bankruptcy...

[american.swan]

I am not trying to defend the author of the book. But I'll play devils advocate for a bit. Instead of the constitution, what solution would you have advocated instead in 1780's and have it still survive today, if it is agreed the constitution was a bad idea.

[Truth Warrior]

What years was the USA EVER under-governed?

How much government does a free people need?

How many MORE new laws are required?

How much smaller could the Federal government be and still perform it's ESSENTIAL duties and services?

BTW, I've NEVER read ANY anarcho-capitalism work that EVER promised UTOPIA? :rolleyes: If you think that you've got one, then just SHOW ME! :p

[DriftWood]

Are you claiming that government gives us rights? If so these are just merely privileges and can be taken away at any time by the state (as is currently happening now) and only makes us subjects, serfs, and slaves.



If this is the case why isn't there civil wars between Target and Wal-Mart, Mormons and Baptists, you and your neighbors? Do you and others not have different rules for property? The state isn't a god and therefore not everywhere and all knowing at all times.



How would they go about doing this?



This can only happen with perceived legitimacy. (see: organized religion and monarchy)



This statement is a complete contradiction. How can there be peace if there is a monopoly on force. The state funds itself through extortion.



When has there ever been free trade and free markets under the state?



The wealthy only bribe the state only for re-regulation giving "freedom" (oligopoly, oligopsony) for themselves.



When has this ever happened?



What?



The customers laws would only apply to their property.



They would brought to arbitration. Again the customers laws only apply to their property, why aren't private security of one property owner today enforcing their rules on another persons property?



The other protection group would.

The reason your neigbour does not kill you while you sleep, or steal your things when you are not looking.. even if he wanted to is because the authority (aka the party with an monoply on violence aka the govt) has made rules forbidding it. If he did, he would get into serious trouble with the authority. In civil war, when there is no state with a monopoly on violence (take the ones in Africa or Iraq) meaning there is no law, and you get neigbours killing eachoter because there is no authority that that will punish these acts. Without an authority that protects peoples rights. You might kill and rob your neighbour just because you think he will do it if you dont. If people can get away with murder and stealing unpunished, that is what they will do. Its human nature.

I think it was when i read some summary book of the wealth of nations.. that i came across an explanation of how the live owned surfs gained their freedom from their (war) lords. The automatic mechanism behind it just made so much sense. It went something like this:

The war lords controlled some territory. By fighting with other wars lords they haf gained a monopoly on violence over some specific piece of land. They considered everything on this land as belonging to them, the land itself, the farms, the animals, the people. The will of the lords was the law of the land. The lord could do whatever it wanted with its property, it could steal from and kill the people without much explanation. Anyway this relationship between the surfs and their lords was not competely one sided. Some surfs actually voluntarily gave themselves to the lords.. because as a surf you avoided starvation, and you got protected from being killed by other war lords. The surfs got protection from violence, and food. Being a slave, beats being dead. Anyways this sounds like a pretty horrible state off affairs. How did the surfs manage to break free of their slavery, how did that kind of society turn into the freer societies that are european countries today?

Thats the uplifting part.. okay, so the surfs no longer had to fear being killed, they had to work on the farm and give the food to the lord. They could feed themselves on some of the food that they grew. The lord could not stop this. All he could do is kill them if they ate some of the crops and if thge lord did that it would not have any farmers.. and the lords themselves would starve.. so the lord just raided and plundered the farmers once in a while, and took anything of value. The farmers started expecting this and voluntarily started gathering the food and put it on the lords doorstep. This way they would not get beaten or killed buring the raids. This method was also better for the war lords, as they could concentrate on killing other war lords, and expanding their territory, instead of killing and raiding their own farmers all the time. Well once the farmers had the power to collect the lords cut of the food.. well then they had the power to keep more to themselves, without the lord finding out. A slave will work harder for himself than his owner.. you cant really fight this as its just human nature to look out for number one first. The farmers started trading the stuff thy had when the lord was not looking.. trading creates wealth.. and as the farmers/merchants grew wealthier, more money was also given to the lord. This kept the lord happy and let the farmers and merchants do their thing. The farmers and merchansts grew wealthier wich meant that they could give a smaller and smaller cut of the profits to the lord.. to keep him passive. You see? Its an amazing reversal of power. Eventually the fate of the lords was so dependent on the farmer and merchants ability to grow wealth.. that the merchants had the lords eating out of their hands. That is how the serfs grew out of their slavery, and how the lords grew into servants. At this point the people did not kill their lords.. as they still neeed them the lords for the protections from violence services. There always needs to be someone with a monopoly on violence, and the pople will pay whoever this is protection money for it services (taxes). Without a monopoly on violence, there is not one law, not one country but many. Borders between countries are needed because, that is where one law system, one monopoly on violence stops, and another one begins. There can be no mixing, as that would be a conflict between different authorities, it would mean civil war.

It goes something like this. Anarchy -> Slavery -> Peace -> Trade -> Wealth -> Self ownership

You cant stop this amazing force of human nature. The simple fact that people look our for themselves first and foremost, that slaves will work harder for themselves than for their owners.. the simple fact of individuals selfishness given enough time, will lead to a society where all individuals have about the same amount of power and freedom.

Cheers

[DriftWood]

What years was the USA EVER under-governed?

How much government does a free people need?

How many MORE new laws are required?

How much smaller could the Federal government be and still perform it's ESSENTIAL duties and services?

BTW, I've NEVER read ANY anarcho-capitalism work that EVER promised UTOPIA? :rolleyes: If you think that you've got one, then just SHOW ME! :p

The utopia is thinking that we can employ someone to protects our rights, without in the process giving away our power to ensure that this party does not abuse his power. The problem with free market anarcism is that there are no checks and balances that keeps the person/company who is employed to provide law enforcement, to staying a servant and not deciding he is a ruler. So how come private sequrity guards and bodyguards in todays market dont decide they are rulers and not servant? Well because there is a checks and balance, in the for of a government wich holds a monopoly on violence. If they started acting like little kings and slave owners.. the govt would send in the police or military to set them straight.

Imagine this, you and a group of people are on a deserted island. Everyone is given a job, and everyone is paid the same aount of bananas. One of the peoples work is to keep the law, asn he is given the only gun in order to do so. Its abit naive to think that just because you pay him bananas that he works for you. Him having a monopoly on violence will decide the rest of you work for him and he will take as many bananas as he likes. Well what if there was two guns on the island, and these where given to two different people, both of who are supposed to keep the law. Well one of them might just kill the other, and get all the bananas he wants. Or the two of them might start fearing eachother.. but still avoid a war by splitting the island and its people between echother. They would draw a line in the sand and agree that the people and the bananas on the other side belongs to the other person with the gun. There now are two govts and two countries on the island. Well thats a nice story and all but is this the way people really work?

Cheers

[Truth Warrior]

Solution as stated by the author in the OP.



what do you think about this? Is this really workable?
I think walls of text merely make my eyes glaze over. :D

[american.swan]

I think walls of text merely make my eyes glaze over. :D

In this rare case....no problem....
http://mises.org/multimedia/mp3/audioarticles/2874_Hoppe.mp3

[Truth Warrior]

The utopia is thinking that we can employ someone to protects our rights, without in the process giving away our power to ensure that this party does not abuse his power. The problem with free market anarcism is that there are no checks and balances that keeps the person/company who is employed to provide law enforcement, to staying a servant and not deciding he is a ruler. So how come private sequrity guards and bodyguards in todays market dont decide they are rulers and not servant? Well because there is a checks and balance, in the for of a government wich holds a monopoly on violence. If they started acting like little kings and slave owners.. the govt would send in the police or military to set them straight.

Imagine this, you and a group of people are on a deserted island. Everyone is given a job, and everyone is paid the same aount of bananas. One of the peoples work is to keep the law, asn he is given the only gun in order to do so. Its abit naive to think that just because you pay him bananas that he works for you. Him having a monopoly on violence will decide the rest of you work for him and he will take as many bananas as he likes. Well what if there was two guns on the island, and these where given to two different people, both of who are supposed to keep the law. Well one of them might just kill the other, and get all the bananas he wants. Or the two of them might start fearing eachother.. but still avoid a war by splitting the island and its people between echother. They would draw a line in the sand and agree that the people and the bananas on the other side belongs to the other person with the gun. There now are two govts and two countries on the island. Well thats a nice story and all but is this the way people really work?

Cheers
( unanswered questions: 4 of 4 ) :p

What ELSE is the government SUPPOSED to be, but is not? The STATE really needs no more lackey lapdog apologists.

Police don't PROTECT my or your rights, they ENFORCE the law ( sometimes ). That is why they are called "law enforcement officers".

What are private security guards?

What are private body guards?

How about thinking "outside the ( state ) box", for a change? :rolleyes:

Home work assignment: D of I.

[DriftWood]

( unanswered questions: 4 of 4 ) :p

What ELSE is the government SUPPOSED to be, but is not? The STATE really needs no more lackey lapdog apologists.

Police don't PROTECT my or your rights, they ENFORCE the law ( sometimes ). That is why they are called "law enforcement officers".

What are private security guards?

What are private body guards?

How about thinking "outside the ( state ) box", for a change? :rolleyes:

Home work assignment: D of I.

You asked what was the utopia with free market anarchism.. and I told it. You cant wish away the state. Where there is no state, someone will create one threw civil war.

Imagining that the state magically dissappeared overnight and a number of private companies where allowed to take its place. So the theory might go that instead of having a state charging for its protections service threw forced taxation, that the companies get payed for its protection services threw voluntarily payment. Well this is naive, because what is to keep these private companies from morfing into the state (or states). What is to keep them nice, and wait for customers voluntarily to pay them for their service, what is to keep them from force customers to pay it for its services (at gun point and threats of violence). What is to keep these companies from turning into mafias, gangs, militias and states? Nothing, because the guys with the guns make the rules. Waiving a contract or the law in their face, and telling them.. "but.. but you promised!" or "you work for me, remember?". Will get you nowhere. The only reason people and companies respects the law and contracts is because there is some bigger stronger authority than themselves with the power to violently punish rule breakers. In the market anarchist utopia there is no such authority. Law creation and law enforcement comes from the top down, you cant make it into a bottom up system, however nice that would be. You cant make the law (and payment for it) voluntary instead of mandatory, however nice sounds.

I mean its not so hard to imagine that without a state there is civil war, is it? And civil wars end when one party has become the state. Civil wars are free market competition in the are of violence and law, at the end of this process pops out a brand spanking new state. Like those weird birds eggs that hatch, and the strongest most violent chick kills all its competitor siblings. Well thats alittle like civil wars, the strongest most violent group wins and kills off all the other competition. The winner is called the state, because it now has a monopoly on violence.

Anyways, i'll not write more about this.. If you still think companies can take the place of the state (when it comes to law creation and law enforcement) without turning into the state.. then I got no more arguments.

Cheers