The Relevance of Anarchy

One interesting thing about this entire exchange is that it was nominally organized as a discussion about anarchy, proclaiming “anarchy unbound,” and yet from the beginning anarchy has had little to do with the discussion. Leeson’s opening essay discussed actual stateless situations in a few poor countries, and Dani Rodrik responded by noting, “There is no example of a society that has become prosperous without a state machinery.”

The discussion following that revolved around how cooperative institutions can arise without government, and the role of government in the facilitation of international trade. As Rodrik noted in his most recent comment, he and Leeson don’t disagree on many specific points, but where does anarchy fit into all this?

Rodrik posed some interesting questions about policy recommendations in his last post. Let me throw in a few, too.

Pete, do you think that if Somalia remains in its stateless condition that it will emerge from poverty to prosperity? Do you think there is any practical way to eliminate governments in those areas that have bad governments, and actually leave them stateless? Governments are toppled all the time, but the bad governments that are toppled often are replaced by governments that are even worse.

And, with reference to anarchy we have been talking about poor countries with bad governments. If you had the option of completely eliminating government in the United States, relying entirely on voluntary agreements, would you do it? We live a pretty good life right now, so it would be a gamble, especially if my conjecture that anarchy is not a stable equilibrium has any merit.

The difficult thing about contemplating orderly anarchy in a prosperous society is that it is so far away from anything ever experienced. Economists are used to thinking about changes at the margin, and while a change from a bad government in a poor country to anarchy isn’t too big a change, the orderly anarchy that some libertarian anarchists have advocated is far from a marginal change. What do you think, Pete?

Also from this issue

Lead Essay

  • Everybody seems to know we need government … But pirates didn’t! How did they manage without the state? In this issue’s thought-provoking lead essay, Peter T. Leeson, the BB&T Professor for the Study of Capitalism at George Mason University, explores what pirate “constitutions,” credit institutions among 19th century African bandit traders, and the well-being of Somalians after the collapse of the Somalian state have to tell us about the possibility of practical anarchy. It works better than you think, Leeson concludes. “As long as there are unrealized gains to realize, people will find ways to realize them” — state or no state.

Response Essays

  • Bruce L. Benson, author of The Enterprise of Law: Justice Without the State, argues Peter Leeson’s defense of anarchy is too moderate. Governments in developed nations, Benson maintains, are not better than ordered anarchy. Drawing on Franz Oppenheimer’s classic account of the state as a protection racket, Benson argues that the state only seems necessary because it offers “solutions” to problems the state itself creates. Benson claims that even well-constrained states are essentially parasitic, leading him to conclude that “even when a relatively ‘good’ government exists, there still is way too much government and not nearly enough anarchy.”

  • Harvard economist Dani Rodrik is willing to accept a number of steps in Peter Leeson’s argument for anarchy, “but [Leeson’s] bottom line … represents a huge leap of faith.” Citing the work of several important thinkers, Rodrik argues that “the problem with self-enforcing agreements is that they do not scale up.” Both theory and data show that complex, well-functioning social and economic systems require the enforcement of rules by government. “Those societies in which markets work best are the ones where the reach of the state is longer, not shorter.”

  • Florida State University economist Randall Holcombe argues that even if Leeson is right about anarchy, it doesn’t much matter. “Regardless of its merits,” Holcombe writes, “anarchy has no prospect as an actual policy option.” The bottom line is that government is popular in developed nations. Furthermore, anarchy may not be a “stable equilibrium,” in which case it might “coalesce into governments … potentially more oppressive and more destructive than those we see in prosperous areas today.” According to Holcombe, if we’re going to get a government anyway, the best approach to policy is to “make it smaller, less intrusive, and more libertarian,” not to make it go away.