The Case of Anarchy, Case Closed: a comment on a talk by David Friedman.

“All human beings are born free and equal in dignity and rights”. At least as long as David Friedman’s dreams do not come true. In the anarcho-capitalist society he proposed in today’s talk rights are goods and services traded on markets. The rights you are born with are then those your parents are paying for. I invite you to think about the destiny of your dignity, if you are born in such a society without solvent and generous parents. It gives me the creeps just as David Friedman has done, when he indirectly preached against the first article of the Universal Declaration of Human Rights.

It was not only the lack of morality. It was also the lack of consistency. He may dream of a world without a government, but the system he sketched was not such. Publicly elected governments were just substituted by private ones individually selected on hypothetical markets. As if it was not bizarre enough that one has to purchase their basic rights just like one has to choose amongst hopefully affordable insurances, Friedman does not even hesitate to sketch the so-called law enforcement companies like organizations we know from Mafia films – sending strong men to protect their clients and punish their adversaries. We now know pretty well how ruling by private clans work out, from organized crime as well as from feudalism. We know that the “freedom of choice” often did not work out that well for those who tried to use it. We know about the economics of scale, network effects and corresponding concentration of power in cartels and monarchies. So, while I still have no clue how an anarcho-capitalist system should achieve a stable outcome in a world of externalities and asymmetric information, we can at least imagine the lack of liberty in a society where rights are distributed as unequally as property.

Money and bloodline already has enough influence on legislation, jurisdiction and execution. To me, giving up my one-vote-per-head democracy in favour of Friedman’s anarcho-capitalism seems just like the final resignation in favour of a sort of legitimised corruption. I cannot deny that governmental failure is obvious and the average voter knows too little about the true incentives, intentions and efforts of the politicians elected and electable. The transaction costs in favour of a well-informed decision, though, would not necessarily decrease only because the provider of law would be a private company instead of a public party. After all I am thankful for Friedman’s talk, which seems to be science fiction rather than scientific. Not only did he give insights into the theoretical and empirical shortcomings of libertarian thought, but he also encouraged me to stick to Winston Churchill’s quote: “democracy is the worst form of government, except for all the others.”