Saturday, September 28, 2013

The Anarchist Underpinnings of The State

For most people, it seems, The State "just is". While a lot of thought seems to have gone into the question of what the purpose of the state is, whether or not it is a desirable institution, I've not read a whole lot about the question of why The State exists in the first place, outside old assertions that it was originally brought about by a deity. In the following paragraphs, I hope to describe how The State is favored by market forces in the same fashion as productive enterprise, and in so doing advise caution when contemplating Anarchist Utopia.

Most analyses of market processes I have read contrast market action with violent action. It is presented as a choice: wealth acquisition by production and exchange OR by theft. But not everybody makes the same decision in that contrast: there will always be those who steal, and so people must have some means to defend themselves and their property. Even in this matter, there are many choices to make: to defend oneself and one's own property, to act in concert with others, to hire help, to rely upon the State. The ability to do violence, wither initial, defensive, or retaliatory, thus shapes the decisions market actors the same as the availability of capital, prices, and so on.

Let us suppose a situation of Anarchy, in which there is no State, but rather all relations are either voluntary or violent. What are the market incentives to various forms of violence?

First off, the distribution of violent capabilities must be considered. In some societies, the capacity for violence will be more generally distributed; in others, more concentrated in select individuals. I think it can be assumed that, ceteris paribus, the capacity for violence (for whatever purpose) will be more concentrated in societies with a more developed division of labor, less concentrated where the division of labor is lower. I don't believe there is anything special about the skills and tools associated with violence. In a society where few know how to grow, process, or preserve their own food, there will also be fewer who know how to use and maintain weapons. So while in a less economically developed society every person can be assumed to have access to and be familiar with the use of a serviceable weapon or two, in a more developed society there are and will inevitably be some who develop violent skills and arsenal to a point where they can make a living off them, and others who cringe at the thought of even handling a weapon (at the extremes). What professional use of weapons will the market favor in such a situation?

I divide the "professional" use of weapons into a spectrum bounded by two extremes. At one end you have the violent criminal: one who uses his capacity for violence purely for the satisfaction of his desires at the unwilling expense of others. On the other hand you have the virtuous mercenary: using violence only in exchange for payment, to prevent or remedy the violence of those at the other extreme. But ultimately, this is a spectrum. Even the most virtuous might succumb to the temptation, not necessarily to rob someone outright, but perhaps to bully a bit? Strongarm a deal? Maybe take a somewhat iffy contract, enforcing questionable property rights? On the other end of the spectrum, perhaps a robber might take pity on a pretty girl and protect her, instead of robbing her (or worse)? Maybe he has an aged mother who needs help with some of the local toughs? Maybe someone finally offers him enough money to take up legitimate employment... for a time? And then there's the middle of the spectrum, where you've got men of violence who are concerned purely with the money. If it is profitable to protect, they will protect. If it is profitable to rob, they will rob. This suggests the traditional "protection racket", a forerunner of The State if ever there was one. But which does the Market favor?

Consider the costs of living by violence. First, there is the material: the direct costs of maintaining weapons, a stock of ammunition, as well as the opportunity costs of developing and maintaining the skills of violence. There are the moral  (purely psychological and social) costs, which will be greater or lesser depending on the individual's level of aversion to the use of violence for various purposes. Finally, there is the cost of managing mortality risks. He who lives by the sword dies by the sword... but not necessarily right away if he is careful and clever. For whom will the gains be greatest relative to the costs?

We can assume that whomever is engaged in a particular kind of violence has found a way to minimize the moral costs of their particular kind of "business". While the moral cost is an important component when discussing cultural degeneration, the importance of tradition, religion and/or spirituality and such, I think it can be ignored for the purpose of economic analysis. But what about material costs and mortality risks?

The virtuous mercenary must defend his clients against both the ordinary thug and the operator of a protection racket. He must maintain a capacity for violence sufficient to deter both, and must risk retaliation and the hands of either. The operator of the protection racket, on the other hand, particularly if he has successfully "horizontally integrated" the various protection rackets in his area of operation, needs only maintain that capacity necessary to deter the basic thugs; his own enforcers can be kept in check with but a command. The virtuous mercenary will not be a problem unless he chooses to attack the mercenary's clients.

This brings us to a second factor: economies of scale. A larger business in protection (whether they allow their customers the choice or not) will, assuming they don't surpass the technical limits of effective coordination, be able to provide more protection for lower costs. This is due to their ability to concentrate more force than their competitors; the mere threat discourages violence they would otherwise have to remedy at full cost.

Of course, to be competitive in the market, firms must pass on a portion of their own savings to their customers. If one is in the market for protection, the services of a large firm who makes offers one "can't refuse", is not only the less risky option... it's also probably cheaper (assuming away the cost in personal pride, of course). The larger and more responsive to their "customers" such an operation is, the more "State-like" it becomes.

Thus, from a situation of anarchy, absent a culturally homogeneous population that is willing and able to incur the costs of excluding something like The State, The State will inevitably arise from nothing more than the primordial soup that is the market in a situation of anarchy. The process by which the State arises, however, is messy, as violence is as much a part of the process of "horizontal integration" as "production" itself, and violence, like other "industrial" processes, can have undesirable "byproducts" (read: "collateral damage").

1 comment:

Dan Sullivan said...

You are spot on. However, there are some major works that would shed more light on this.

One is The State (Der Staat), by Franz Oppenheimer, who theorizes that the first state arose because herdsmen were more mobile than farmers, and were able to plunder the farmers. (The discover of agriculture might have been what ancients were referring to as the "original sin.")

The other is Our Enemy, The State, by Albert Jay Nock. Nock's work is derivative of Oppenheimer's, but more accessible.