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GOVERNMENT AS A MARKETABLE SERVICE Some Recent History in the Propagation of this Idea
Alvin Lowi, Jr. April 21, 2006
Mises Daily Article of 3/25/06 is economist
J. Huston McCulloch's 1977 translation of a 1849 essay in French entitled
"Production of Security."[1] The author of this essay
was the obscure laissez faire economist from
Gustave de Molinari (March 3, 1819 -
January 28, 1912) was born in
Molinari was unique among economists in his conviction that the economy did not need even constitutionally limited government protection. He was apparently the first intellectual to discover this possibility and advance a theory of society entirely devoid of political regimentation, i.e. a stateless society. His vision of a stable and humane social paradigm takes individual human liberty to the limit. It is a condition libertarians nowadays call individualist anarchy, market anarchism or anarcho-capitalism. Society without political statecraft has also been variously referred to as economic government, voluntary government or government via market-delivered property protection services.
By the time McCulloch’s translation of Molinari's "Production of Security" essay appeared (1977), Rothbard had already turned toward politics for social salvation. (Rothbard was influential in the formation of the Libertarian Party in 1973.) Had Rothbard taken Molinari’s advice to heart, he would not have taken this direction. Partisan politics was not recommended by Molinari. In fact, such a course of action was contrary to his vision of the future.
While Rothbard and his libertarian colleagues were preoccupied with their political project, Andrew Galambos was building ideological momentum for his non-political "natural republic," a societal condition based on economic and ethical knowledge that would supersede evolutionarily all coercive political institutions with voluntary, entrepreneurially-delivered property protection services via the marketplace.[2] It is curious that at the time of McCullough’s translation, Rothbard and Galambos, who were ideologically and intellectually congenial in most respects, are seen to be going in opposite ideological directions, opposite in terms of Molinari's "two ways of considering society" (see following).
Molinari put legislation and society (force and volition) in separate worlds where they belong. Galambos came to do likewise a century later, and by all accounts he apparently did so without a prompt from Molinari.
Reading the history and contents of Molinari's essay recalls the debates that occurred among the students of Galambos in the early days of the Free Enterprise Institute (FEI). Logical extrapolations of Galambos' earliest teachings began to reveal inconsistencies in the classical liberal treatment of society that called for a modicum of political government to maintain a legal framework of order based on private property protection. Such protection was presumed to require an authority that was superior to the market, i.e. a supernatural authority.
Galambos' teachings of laissez faire led to the inescapable conclusion that stable and progressive social institutions originated in voluntary human behavior and free association giving rise to autonomous specialization and exchange. Accordingly, whatever governmental institutions would come about would be by market demand subject to the spontaneous natural social order. Thus arose the contradiction presented by subsuming a free society under traditional American constitutionalism.
At the outset of his venture, Galambos was obsessed with American constitutionalism. For him, this was an intellectual game played with organizational structures contrived for limiting the scope of monopoly political government in keeping with the sentiments of the Declaration of Independence and other classical liberal arguments. However, no matter how liberal, creative or ingenious were these social contrivances of grand human design, they were inevitably political and therefore authoritarian, an implication not lost on Galambos’ students. Curiously, it was such an implication in Ayn Rand's “Objectivism” that alienated Galambos from that social movement. But Galambos defended his approach with the proviso that scientific method could be relied upon to avert such an outcome from his kind of administration. The physicist would see to it.
About this time (1963), Robert LeFevre came into the picture. His arguments reduced all political proceedings to absurdity.[3]
Galambos' conception of government was that it was nothing more than the collection of services devoted to the protection of private property. Therefore, it should not have been such a huge leap of faith to dump the political paradigm in favor of competitive enterprise property protection services rendered volitionally for profit in the marketplace. Yet, he was not the first to leap. The idea began to catch on first among his students. The initial awakening took place soon after the first offering of his Course 100 in 1961 in which he sanctioned limited political government. I reckon the sequence of discoveries occurred thereafter as follows.
Anthropologist Spencer Heath MacCallum gave a guest course for FEI in 1963 in which he introduced the idea of a proprietary community.[4],[5] His approach followed the work of his grandfather Spencer Heath, who would have presented the concept to FEI students himself a year earlier but for the intervention of a health crisis. Later, MacCallum also introduced E.C. Reigel's New Approach to Freedom to the FEI market, which suggested laissez faire competition in the marketplace is necessary and sufficient government.[6] Riegel's concept of “Private Enterprise Money” was another inspiration brought into the discussion of a wholly voluntary society by MacCallum.[7]
In his FEI guest lectures the same year, F.A. Harper introduced Molinari's vision of unregimented society to Galambos' market by offering to the attendees of his seminar some rare copies of Molinari's only book in English at the time entitled Society of Tomorrow.[8] Harper billed Molinari's proposal as a total alternative to the status quo, an emergent "grand alternative" to political government.
Out of this inquiry came various private enterprise extrapolations. First to my knowledge was the "the insurance industry is government" proposal of physicist-mathematician and FEI contractor Piet Bos.[9] Next to come was the vision of competing companies providing dispute resolution, patrol, security technology and bounty hunting services for fee or subscription as proposed by electrical engineer/entrepreneur/FEI contractor Charles R. Estes. Estes also proposed various private enterprise money and property restitution ventures. Subsequently, Andrew Galambos came out with his Course V201 containing his concept of the pure contractual corporation operating a clearinghouse for businesses utilizing intellectual property for profit. Galambos claimed this business would dispense with political government forever. Later, Robert Klassen, another FEI contractor, published his treatise "Economic Government."[10] By the time Robert LeFevre came to Los Angeles to give his seminar to the students of FEI, most of them had already shunned political government even as a transient lesser evil, preferring to take their chances with self-government in the marketplace.[11]
The libertarian editor of the Mises Institute refers to Molinari's vision as "anarcho-capitalism." This term is an unfortunate choice inasmuch as it suggests Molinari’s brand of capitalism is without rules of order. It also misleads the reader by insinuating that Molinari’s proposal has some sort of political significance, at least an anti-state argument. Not so. Molinari is among the select few to abstain from political contentions.
Galambos' intellectual descendent Klassen would use the term "Economic Government" to characterize Molinari’s proposal. This term is more descriptive of Molinari's positive prospect of security as a product of private enterprise operating in a wholly voluntary environment. “Economic government” also recognizes the important social contribution of proprietary administration in the practical realization and maintenance of a wholly voluntary society. Molinari, Heath and ultimately Galambos agreed on this point.
Molinari says "There are two ways of considering society.” He explains the “first way” as follows:
According to some, the development of human associations is not subject to providential, unchangeable laws. Rather, these associations, having originally been organized in a purely artificial manner by primeval legislators, can later be modified or remade by other legislators, in step with the progress of social science. In this system the government plays a preeminent role, because it is upon it, the custodian of the principle of authority, that the daily task of modifying and remaking society devolves.
Initially, Galambos' approach to society inclined toward Molinari's "first" way described above. He continued in this direction even after he became aware of Molinari's treatise "Society of Tomorrow," which was given to him by his esteemed guest lecturer, economist F. A. Harper. Galambos was convinced authentic social science (as he defined it), to be known as "volitional science" (named by Jay S. Snelson), would provide the legitimate authority and technology for designing and implementing the mechanisms, organizations and practices for the proper operation of society in the future. He believed his society of the future would be a technological achievement, which would lead to a wholly voluntary society in which every person would have 100% control over his own property, a condition he defined as freedom. Thus he would build a regime he called "the natural republic" (named by me) in a step-by-step process according to a design rendered beforehand; much like an architect would build a skyscraper (an analogy attributed to Galambos' architect father Joseph B. Galambos).[12] The contractors of the architect would come to the task by way of an ideological program, which the architect offered as a proprietary product. Thereby freedom would be "built," or perhaps, manufactured as a product by developing property protection and selling it as a product.
While Molinari also talked about "Production of Security," he rejected "social engineering," which Galambos’ ideological approach did seem to embrace. It fit the description of Molinari's first way of considering society.
However, Galambos emphasized comprehensive property protection as the keystone of human society, and he relied on competitive private enterprise for profit to deliver the service. This idea was consistent with Molinari's "second" approach, described by him as follows:
"According to others, on the contrary, society is a purely natural fact. Like the earth on which it stands, society moves in accordance with general, preexisting laws. In this system, there is no such thing, strictly speaking, as social science; there is only economic science, which studies the natural organism of society and shows how this organism functions."
Notwithstanding Molinari's rhetorical dismissal of "social science,” his organic view of society is remarkably consistent with Spencer Heath's "Socionomy." Whether Heath ever encountered Molinari's writings is unknown. But in his treatise, Heath defines "Socionomy" as follows:[13]
"Socionomy is the theory or formulation of the organic laws exemplified in the organization and development of society (Websters New International Dictionary)."
He also defined society as a natural phenomenon consisting of the strictly voluntary interactions of humans, advocating acceptance of it and learning how to get along in it as it is.
Molinari continues:
"We propose to examine, within the latter system ["economic science"], the function and natural organization of government – The Natural Order of Society. In order to define and delimit the function of government, it is first necessary to investigate the essence and object of society itself. What natural impulse do men obey when they combine into society? They are obeying the impulse, or, to speak more exactly, the instinct of sociability. The human race is essentially sociable. Like beavers and the higher animal species in general, men have an instinctive inclination to live in society."
Here Molinari depicts society as the natural habitat of man. That concept was familiar to students of Galambos who inspired FEI contractor Eric Szuter to chose it as his thesis topic for a PhD in "Human Ethology."
Molinari asks: "Why did this instinct [to live in society] come into being?" Galambos would object to such a question. He excluded "why" questions from scientific endeavor on epistemological grounds believing such questions called for theological answers and confessing he did not know anyone who could talk to God, the presumed creator of the universe. Galambos insisted that science, reliably informed by what can be gleaned of reality by the senses, can only deal with "how" questions. Thus, he would put Molinari's question in a scientific context as "How did this instinct develop?" Molinari was quite prepared to answer this question as well, offering a splendid series of observations as follows:
"Man experiences a multitude of needs, on whose satisfaction his happiness depends, and whose non-satisfaction entails suffering. Alone and isolated, he could only provide in an incomplete, insufficient manner for these incessant needs. The instinct of sociability brings him together with similar persons, and drives him into communication with them. Therefore, impelled by the self-interest of the individuals thus brought together, a certain division of labor is established, necessarily followed by exchanges. In brief, we see an organization emerge, by means of which man can more completely satisfy his needs than he could living in isolation. This natural organization is called society."
This argument demonstrates that Molinari was able to practice some dignified social science notwithstanding his dismissals to the contrary.
Late Hayek is consistent with this view.[14] Mises' economics is consistent as well.[15] But the "Political economy" of both is problematical because it deals with policy, public policy, etc., which presumes the existence of political authority over society. Mises accepted a ‘limited’ political monopoly (state) control of the means of defense, property protection, justice, etc., by "law" of course. Sadly, practical limits to political government are unknown to man.
The nature of man and his government is a long studied and little understood subject in the human curriculum. Molinari was perhaps the first person make a persuasive case for evolutionary natural social organization as the grand alternative to a Platonic state. Hopefully, with the relatively recent spreading of economic knowledge and know-how, it will not take economic government 2500 years overtake political government.
References
[1] “Weekend Read, Mises Daily Article.org, 3/25/06. The complete essay in English is at http://mises.org/story/2088#6. [2]
Andrew J. Galambos was an
astronomer and astrophysicist who left the government-dominated defense
industry in 1959 as the height of the Cold War to make the world safe for
astronauts. While a tenured professorship in physics, he launched his
campaign “Capitalism, the key to survival” in 1960 as a profit-seeking
education business in [3] Robert Lefevre, Must We Depend on Political Protection?—Yes…Edmund A. Opitz, No…Robert LeFevre, Studies in Human Action, Vol. II, No. 1, The Pine Tree Press, The Freedom School, Colorado Springs, CO, 1962. [4]
Spencer Heath, Citadel, Market and
Altar, Science of Society Foundation, [5] Spencer H. MacCallum, Art of Community, Institute for Humane
Studies, [6] E.C. Riegel. The New Approach to Freedom, The Heather
Foundation, [7] E.C. Riegel. Flight From Inflation: The Monetary Alternative,
The Heather Foundation, [8] Gustave de Molinari, The Society of Tomorrow, T. Fisher Unwin,
[9] Peter B. Bos, “The Societal Implications Of Risk Sharing,” Draft December 20, 1998. Pbbos@aol.com [10] Robert Klassen, Economic Government, http://www.amazon.com/gp/product/0595174035/103-7536333-3895865?v=glance&n=283155 [11] Robert LeFevre, “The Thinking Man’s Guide to
Politics,” Seminar, Free Enterprise Institute, [12]
Suzanne Galambos, More
Lasting Than Bronze, The Universal Scientific Publishing Co., Inc., [13] Spencer Heath, Citadel, Market and Altar, Science
of Society Foundation, [14] Friedrich A. Hayek, Denationalization of
Money—The Argument Refined, Third Edition, Institute of Economic Affairs,
[15] Ludwig von Mises, Human Action, Yale
University Press, |