Randians versus Rothbardians

Randians versus Rothbardians
Profile photo of Robert P. Murphy

It’s easy and often entertaining to take potshots at leftist progressives who want the federal government to run health care (sorry 4.1.1Canadians), or at right-wing neoconservatives who want the federal government to run the world (sorry Americans). But the truly interesting debate is between minarchism and anarcho-capitalism. If we want to put thinkers to these ideas, we can pit Ayn Rand versus Murray Rothbard. Both are stridently “free market,” but Rothbard thought the market could produce even law, police, and military defense, whereas Rand was an advocate of a “nightwatchman State.” She thought that by definition, the system of property rights and their enforcement couldn’t be something bought and sold on the market itself.

The classic essay here is Roy Childs’ open letter to Ayn Rand, in which he attempts to use her own principles to make the case for “free market anarchism.” For the present blog post, let me try something similar with a Forbes’ column by Harry Binswanger, which apparently ran in early 2014 but was making the social media rounds just recently. In his piece, Binswanger–a professed Objectivist–uses Rand’s work to (in his mind) explode the very notion of free-market law and military defense. I’ll show that Binswager’s case falls apart with just mild poking.

Binswanger opens his case by accusing the free-market anarchists of making a simplistic error, worthy of a Marxist:

Like the Marxists, who prate about “exploitation” and “wage slavery,” the [libertarian] anarchists are ignoring the crucial, fundamental, life-and-death difference between trade and force.

Marxists claim that capitalistic acts use force. “Anarcho-capitalists” claim that acts of force can be capitalistic. Though they come at it from different directions, both ignore or evade the fact that producing and exchanging values is the opposite of physical force.

Production is the creation of value, and trade is the voluntary exchange of value for value, to mutual benefit. Force is destruction, or the threat of it….

The wielding of force is not a business function. In fact, force is outside the realm of economics. Economics concerns production and trade, not destruction and seizure. 

Now hold on a second. Although Binswanger’s discussion at first seems quite sensible–particularly to a reader who already agrees with him–it’s actually nonsense. I could use the exact same argument to “prove” that we need a monopoly State to provide the services of hunting, building demolition, administering of antibiotics (the very term means “anti-life,” something that should alarm Randians), and boxing. All of these activities intrinsically involve acts of force and/or destruction.

Yet in all of those contexts, Binswanger’s mistake is obvious. We can clearly have a free market in building demolition, for example, even though this process necessarily involves destroying physical objects. And we can clearly have a free market in the service of destroying unwanted bacteria (whether in a kitchen or in a human’s body), even though this involves killing organisms.

Now to be sure, Binswanger and his allies would no doubt roll their eyes at my analogies, and say I’m missing the point. You can’t have a “free market” in building demolition, they would object, if that means people can go around blowing up any old building they want! And you can’t have a “free market” in destroying bacteria, they might continue, if you don’t first get the consent of the human into whose arm you want to inject the antibiotics.

Yet this is precisely what Rothbardians want when it comes to “free market police” or “free market defense.” Rothbard wasn’t suggesting that private defense agencies offer bribes to foreign invaders, to get them to walk away. No, he meant that if a defense organization wanted to, say, use a bunch of steel, fuel, and labor hours to construct a group of tanks in order to repel invading tanks, then the defense organization had to first get the consent of all of the people in its region before grabbing those resources.

I hope my discussion thus far has shown that there’s nothing about the application of force or the involvement of physical destruction per se that makes something disqualified from provision by the “free market.” Rather, the real issue here is that Binswanger doesn’t see how property titles could be defined, if we lack a monopoly agency. In other words, Binswanger thinks we need a monolithic State in order to coherently talk about (say) a building owner giving consent for the building to be demolished, or for the owners of steel to consent to it being used to build tanks.

Binswanger makes this point in his own words:

There can be only one supreme law of the land and only one government to enforce it. (State and local governments are necessarily subordinate to the federal government.)

Could conflict among “competing governments” be taken care of by treaties? Treaties?–enforced by whom? I once asked Ayn Rand about the feasibility of such treaties between sovereign “competing governments.” She looked at me grimly and said, “You mean like at the U.N.?”

A proper government functions according to objective, philosophically validated procedures, as embodied in its entire legal framework, from its constitution down to its narrowest rules and ordinances.

Already there is a disturbing implication in Binswanger’s discussion. If we really need one monopoly agency to stipulate the “supreme law of the land,” and we laugh at the idea of neighboring units coordinating peacefully with each other, then it’s not enough to stop at the present geographical borders of the United States (or Canada). Ultimately we will need one worldwide State laying down the supreme law of the land for planet Earth.

But the more fundamental problem is Binswanger’s mere assertion that in order to have a uniform legal code, we must have a single agency to promulgate and enforce it. First of all, we can ask empirically: Has the United States federal government (or the Canadian federal government) in fact, provided “the rule of law”? Binswanger himself admits elsewhere in his article that the U.S. government hasn’t obeyed the Constitution. Yet he seems unfazed by the fact that his proposed mechanism has failed miserably everywhere it has been tried.

Second and more striking: There are several areas of human intellect where a monopoly agency would clearly be detrimental. For example, consider mathematics. This is clearly a body of objective truth, ascertainable by reason, if ever there were one. So if we want mathematicians around the world to subscribe to “one supreme body of mathematical laws,” do we need a worldwide State to tell everybody what’s mathematical and what isn’t?

Of course not; such a procedure would actually be one of the few ways to prevent humans from producing a coherent and consistent body of mathematics. And we could make similar remarks about the natural sciences, or spoken languages. There are clearly experts and “authorities” in these fields, but their “definitive” publications merely codify what the broader community knows to be true. The Oxford English Dictionary can’t really change the meaning of English words.

Now for legal theorists who think that the legal code is an arbitrary thing, which merely rewards whatever interest group wields the most political power, it would be understandable if they rejected the idea that a competitive system of judicial rulings could work. But for Objectivists, this won’t do. They should understand better than most others that a judicial process that involved “open entry” would promote excellence and objectivity in rulings. Fellow judges would overturn clearly biased rulings, so that over time the body of case law would provide the “rule of law” that States do not actually provide us.

These are obviously weighty issues that will not be settled in a blog post. I refer the interested reader to my lecture on “The Market for Security,” my essay on private law, and my pamphlet on private law and private defense. Also apropos, see my review of Linda and Morris Tannehills’ The Market for Liberty, which is an Objectivist tract that argues for free-market provision of law and military defense.

  • musicblogging

    Moreover, the necessity for a monopoly on force is in no way disproved by the fact that previous incarnations have been corrupted or imperfectly implemented. To draw my own analogy, it would be like saying that because we cannot yet build a house that can withstand every kind of natural disaster then we should stop building houses altogether. The conclusion is a non-sequitur.
    This is clearly well thought out

  • dogmai

    Objectivist's define (true) values as objective, neither intrinsic nor subjective.

    If you don't believe that values are or can be objective, does that mean that you agree with Dr. Binswanger's thesis that Anarcho's and Marxists share the idea that force creates value and by implication, disagree with Mr. Murphy's post?

    If you want the Objectivist exposition as to how values can be objective, then I would be happy to refer you to the prodigious amount of literature on the subject however, I suspect your just trolling here.

  • dogmai

    This article completely misses the point. Objectivists define force as physically (or threatening) preventing someone from acting on their own judgment and it is in this context that Binswanger is comparing Marxists with Anarcho-capitalists. All acts of production presuppose that a person can act i.e. that force is absent, i.e. that the act of value creation can happen at all. It’s a precondition of cause and effect. The application of force nullifies (i.e. destroys) a person’s intellect, it’s as if he has none i.e. he can’t be a cause of producing a value effect. Ergo, force is anti-production, anti-trade, anti-economics, anti-capitalism. Its why the Anarcho-capitalist claim that acts of force (e.g. competing governments) can be “capitalistic” commits the fallacy of the stolen concept. The whole response of demolition and anti-biotic analogies merely knocks down a straw man.

    Observe that 1) Both Marxists and Anarcho-capitalists do not recognize that the production of values precludes force and 2) Both Marxists and Anarcho-capitalists believe that acts of force can produce values. Binswanger’s point was that both groups evade the fact that force negates values, that it negates production, that it negates trade, negates capitalism and negates economics altogether. An example of this principle is that of a policeman who returns a stolen wallet. The policeman provides a necessary service yes, but he did not “produce” any new value. He merely returned things to the state they were in prior to the theft. Payment for such a service is a necessary cost that must be born in order to continue the production process, without it, production ceases altogether, to the degree that force is present (e.g. a warzone).

    The main point not addressed by Mr. Murphy (and all other anarchists) is that “trade” in “force” is contradiction in terms. You can fantasize all day about theoretical legal institutions/organizations that “compete” with each other but the only way any of these agencies can effectively implement their laws in practice is to impose i.e. force their legal conclusions onto some dissenting party. Absent that force, the institution’s conclusions are both meaningless and ineffectual in resolving any kind of dispute, the logical result of which will either compel the aggrieved party to forgo any appeal to such institutions and just resolve the issue himself, either by letting the injustice stand as it is and thus encouraging more of the same, or find a large enough gang to do resolve it for him, by brute force. Thus, either way eventually you end up with a dictatorship not based on rights but on who has the biggest guns.

    Moreover, the necessity for a monopoly on force is in no way disproved by the fact that previous incarnations have been corrupted or imperfectly implemented. To draw my own analogy, it would be like saying that because we cannot yet build a house that can withstand every kind of natural disaster then we should stop building houses altogether. The conclusion is a non-sequitur.

    The necessity for a monopoly comes from the fact that the decision to initiate retaliatory force (i.e. enforce just laws) cannot be left open to a multitude of arbitrary agencies. Why? Because every person is essentially their own agency, every person has an opinion and any aggrieved person believes his position is just and by implication that retaliatory force is justified. That, by itself, does not make his position any less arbitrary or more objective. This fact does not go away by putting a gun in every person’s hand and telling everyone to “trade” each other’s least arbitrary opinions. If that sounds ludicrous, then you now understand the Objectivist’s distain for what passes for Anarcho-capitalist “Libertarian” thought because this “multiple competing agencies of force” is exactly what they think will cause people’s opinions to become somehow less arbitrary.

    What is needed here is not “competition” divorced from reality but a logical philosophy that can define objectively when force has occurred and when retaliatory force is objectively justified. Once you have that, implementing a government monopoly to protect everyone’s right to act is a piece of cake, no competition necessary.

    • PatSzar

      I don't really understand the meaning of objectivism. I've been curious though. Are you (dogmai) saying that value itself is objective? I feel this is a requirement for value to be created and for your whole theory as explained above to hold water. I just haven't ever heard a legit refutation of subjective value theory of the Misesian variety yet.

  • thejadedwarrior

    Well done. I was waiting for a takedown on that drivel…

  • Frank Zeleniuk

    I am yet a minarchist. I think a government has gone beyond its limits when it has usurped control over the money supply. When they do this it marks the point where actual destruction of the country begins. Until that point government is controllable if only by the constraint of its inability to print itself into the warfare/welfare state.Throughout history they have done this and they have been able to do it because even economists see no reason why money should be dug up from the ground and then hidden away in the ground somewhere else, essentially digging it up and burying it in a different place – shuffling it from a hole in the ground to a bank vault. Why can't it just be a piece of paper or even an electronic entry on a balance sheet? Why? Because it allows a "person" to be in charge of the creation of money which power invites abuse and the eventual destruction of the lifeblood of the society.

    I'm not an economist but when I read Milton Friedman's book "Monetary Mischief" I really wondered at his puzzlement over the adopted money system on the island of Yap. Did he not understand that money was simply an idea that held the confidence of the society to be a representation of wealth?

    Economists arguing over the concept of what constitutes sound money leaves the general populace in a state of confusion about it and it becomes easy for the State to then make laws to arrogate defining what it is by fiat and controlling its supply, eventually returning the fiat currency to its intrinsic value of zero, as Voltaire has said.

    • Andre Lalonde


      “It is no crime to be ignorant of economics [and the state ], which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”
      Murray N. Rothbard

      • Frank Zeleniuk

        Good Quote.

Profile photo of Robert P. Murphy

Robert P. Murphy is the Senior Economist at the Institute for Energy Research, and a Senior Fellow with the Fraser Institute. He holds a PhD in economics from New York University. Murphy is the author of Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) as well as numerous other books and hundreds of articles.

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