The Equanimist wrote a response to my post “Don’t Blame the Free Market”. He argues that “a perfect Free Market is anarchy and, as such, a perfect Free Market must be antithetical to civilized society.” I agree that a perfect Free Market would be anarchy, but is that necessarily a bad thing? As someone who leans towards Anarcho-Capitilism calling free markets anarchy is not really a good argument against free markets. If you know anything about Anarchy as a political philosophy you know that it is not “antithetical to civilized society”. “Lawlessness”, as he puts it, is not a tenant of Anarcho-Capitilism. Anarchy has taken on many definitions, but as a political theory it is “a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society.” Organized and ordered society is still the goal. The question is whether there should be a coercive monopoly over the laws (government), not whether laws should exist.
As I said, I lean towards Anarcho-Capitilism, but am not completely sold on the idea. I think a coercive monopoly over the laws (government) is most likely inevitable. I think I fall into what Terry L. Anderson and P.J. Hill called the “constitutionalist” or “social contractarian” school of Anarcho-Capitilism. They describe this school of thought as requiring “collective action” to establish a social contract or constitution which would outline “rights” and then “the only role for the state would be in the protection of those rights”. There would also be “a rule of higher law or constituition which specifies the protective and productive roles of the government.”
So, my idea of a free market would still require laws, a framework of sorts to prevent what The Equanimist refers to as being “swindled. That framework would be limited to be within the authority of whatever social contract we have at the time. At this time that contract would be our state and federal Constitutions. What I believe we have today goes beyond the authority of our social contract. We no longer have just a framework for which people can voluntarily interact in a mutually beneficial manner. Instead we have active governing of those interactions in a way that I believe prevents mutually beneficial behavior.
My best analogy for my brand of Anarcho-Capitilism would be the modern institution of marriage. The government has created the framework with the authority given to them by their state constitution. They have laid out the rules for getting into and getting out of a marriage and basic rules for how each must be treated (like you can’t hit your husband over the head with a leg of lamb), but there is no day-to-day governing of how that institution functions.
Marriage is successful when two people act in a mutually beneficial manner. It does not require strict rules imposed from an outside party. The rules are decided by a day-to-day renegotiation of the marriage “contract” by the two parties.
For example, the husband is hoping to get some action when his wife gets home, but he knows that if his wife is in a bad mood he will not get lucky. He also knows that leaving his socks on the floor puts his wife in a bad mood, so he is sure to pick up his socks. His wife gets home and sees that her floor is free of socks, she is in a good mood and her husband gets the action that he was wanting. They go on to live happily ever after.
The married couple that does not act in a mutually beneficial manner sees that there are more fish in the sea (competition). The wife has heard from friends that there are men out there that will pick up their socks and the husband has heard that there are women who don’t care if there are socks on the floor, so they dissolve their partnership. They then go on to find partners that can act in way that is beneficial to both and they live happily ever after. Yeah for Anarcho-Capitilist marriages!
But wait! A report comes out that says divorce has cost 1 trillion dollars in the last decade (yes this is a real report). The government decides they must do something. Since the government is mostly made up of men they decide that the best thing to do would be to make it a law that men do not have to pick up their socks and women must give their husbands some action once a week.
Some husbands are not satisfied with once a week so they go to the government for help. The government decides that wives will put out more if the socks are not on the floor, so they pay for someone to come and pick them up. All is well for a while until the government runs out of money and can no longer pay for someone to pick up the socks. The husband has become so dependent on the sock picker upper that he is no longer capable of picking them up himself. His wife is unhappy; he gets no action, so inevitably they split.
The government has propped up their non-mutually beneficial marriage so long that they have missed out on other options. They are past their prime, bitter and they die alone and miserable. Bummer, regulation sucks. It prevented them from acting in a mutually beneficial manner or finding someone else that would act in a mutually beneficial manner.
The Equanimist says “I do not throw my hands up in frustration or rail against the man or any other counter-productive thing. Instead, I ask you, how can we re-inspire the basic trust?” We must begin by not propping up those that will not pick up their socks. They need to be weeded out, allowed to fail, so that those who want a sock free floor can identify who will be able to provide that for them. We need to stop letting the government govern beyond their authority as outline in our social contract, the Constitution. They almost always choose wrong when attempting to govern away a problem. This is The Law of Unintended Consequences. The government will never be able to identify non-sock picker uppers or prevent someone from becoming a non-sock picker upper as well as the free market will be able to.