Anarchy, State, and Capitalism

Anarchy is the absence of central government and there are two kinds of definitions.

  1. A society without a large-scale government hierarchy that has a monopoly on legitimate force. By this definition, most tribal foraging societies and other small-scale societies have lived in anarchy. Although those societies had little hierarchy, they were still highly political and individuals were deeply constrained by norms and beliefs that are bizarre to outsiders because they were inculcated through extremely sheltered upbringing.
  2. A society of free individuals living without rules nor norms imposed by others. This is highly unstable and cannot last long because more organized societies are more productive and better at taking resources from “free” individuals and imposing rules upon them. When a government breaks-down, the social norms that had prevailed do not immediately vanish and rather than society descending into a chaos of free individuals, various forms of coalitions and gangs immediately organize.

Anarchists are utopians who generally idealize something like the first type of anarchy in which they imagine that consensus can organize social affairs. Anarchists unrealitically deny the coercive and violent nature of tribal societies and/or imagine that it might be possible to achieve an extreme form of direct democracy that eliminates coercion someday.  This is best viewed as a hypothetical idea because it has never existed outside of small-scale groups and it isn’t even particularly common nor durable in small-scale groups:

[“Anarchy”] mostly takes the form of an extremely slow-moving and highly rule-bound process of collective deliberation. Anarchy, paradoxically, means more rules, not fewer, and more collective responsibility, not less… The term “anarchy” literally means “without [a] ruler,” and not, as many believe, “no rules.” Although many anarchists want radical change, the change that most envision is not societal breakdown but rather people learning to collectively rule themselves (or in other words, direct democracy).

The basic premise guiding anarchist political philosophy is simple: Humans are fundamentally cooperative by nature and, when given the chance, flourish in …self-governance… in which every person has an unalienable right to participate fully in any political decision… and to leave any association that makes a decision they find unconscionable…

attempts at anarchist societies or collectives over the last two centuries have been numerous and persistent, if often short-lived. However, as anthropologists like to point out, humans organized themselves in stateless societies with great success for much of ancient history, and many continue to do so in various ways, without using the label “anarchy.” In fact, “state-level” societies have existed for only a fraction of the roughly 300,000 years modern humans have thrived—emerging an estimated 5,000 years ago—and should still be regarded as an experiment, with mixed results… meetings and planning sessions are characterized by complicated strategies and procedures aimed at establishing complete consensus.

There are several problems with this conception of human nature. Yes, humans are fundamentally cooperative by nature, but humans are also selfish at times and there are assholes that need to be coerced to prevent them from wreaking tragedy. Humans are also prone to cooperate in groups for the purpose of dominating other groups. This is one of the reasons that stateless societies have been mostly displaced by large-scale societies around the globe. Stateless societies cannot defend themselves from bigger and more productive societies. For a stateless society to be viable long term it has to be able to fend off domination from other societies like Russia that are run by imperialist assholes.

Thomas Hobbes famously claimed that life in stateless societies was “nasty, brutish, and short,” but he was 1/3 wrong. Tribal societies have always loved their way of life and clearly never considered it “nasty”. Although life was mostly pleasant for the short time tribal people expected to live, it was brutish and short with a high rate of violent death and brutally constraining tribal and religious social norms that shackled individual freedoms. People worried about witchcraft and evil spirits and endured numerous indignities of traditional initiations and small-scale hierarchy. There are abusive family relationships in all societies, but in tribal societies, family is all you have and it is much harder to escape an abusive relationship.

Modern people would not say that stateless societies were a “great success for much of ancient history”, because all stateless people have always endured lives of poverty and life expectancy in small-scale societies rarely exceeds the low 30s.  Stateless peoples have always had very little lifestyle choice because of extreme ignorance about the world and other possible ways of life.  Traditional peoples have had very limited knowledge about anything other than what they learn from the small number of people around them.  Although stateless people rarely leave to voluntarily join large-scale societies, that is partly due to their ignorance about other possibilities.  Nevertheless, across history there has been much more movement away from stateless societies than vice versa.  Today, almost nobody from a large-scale society would willingly trade places permanently with an average person in any small-scale society.

The other form of anarchy is in large-scale societies.  This can happen when governments break down, but the absence of government rules and enforcement is anything but liberating for most people because living standards plummet. In a long-term government breakdown, violence rises to the sort of high levels seen in tribal societies.  This doesn’t happen overnight because social norms and expectations take time to change so a temporary anarchy can be quite peaceful.  For example, when anarchy is temporarily caused by a natural disaster, humans commonly tend to be motivated to cooperate to help each other survive (although nonviolent looting is common). But in situations where people do not expect that the government will return, gangs and warlords typically arise to fill the political power vacuum.

Indeed, tribal societies are similar to gang societies, but tribal societies are typically spread out over a large geographic area which limits their opportunities for conflict. Rising population density increases the potential for conflict and hierarchies (governments) tend to arise to manage it.  Modern gang societies are different because they tend to originate in denser communities with towns and cities and they establish hierarchies to compete with other gangs and government forces.

In all the stable forms of social organization that have ever evolved, there is always some amount of hierarchy and rules that limit individual freedoms. There are three basic paradigms:

  1. Stable hierarchical national government.
    • Examples include all the modern nation states today that are members of the United Nations. Some are much better than others at producing health, prosperity, and individual freedoms. Some anthropologists argue that some early hierarchical chiefdoms arose before agriculture in some of the rare areas that supported high population density due to large concentrations of migrating salmon or other similarly dense food stocks.
  2. Unstable government where there is competition between warlords and/or gangs and/or stable neighboring governments. Critics of anarchy often point to this as an example of the problems of anarchy.
    • Examples include areas like Somalia that have no recognized national government or in parts of nations where there is weak government control such as in the jungles of Colombia where drug cartels operate with impunity.
  3. Tribal societies with low population density and little hierarchy, but strong constraints of social norms. Proponents of anarchy often idealize a sanitized version of tribal societies while ignoring problems like short lifespan.
    • Examples include nearly all of human history before the dawn of agriculture and many small-scale societies after agriculture. Today, tribal societies are rare and mostly only hang on in landscapes that have been incompatible with more intensive agriculture and which are still geographically isolated from major transportation and trade routes. Today, tribal societies exist within land that is formally claimed by national governments, but where there is very little actual government control.

In a way, all three of these paradigms are different forms of government. Every society is either a stable national government/chiefdom, a tribal government, or an unstable government/warlordism, or some combination of the three.

For example, the Italian mafia is an example of an unstable government because it arose as a substitute for weak government institutions in Southern Italy. Donald Cressey argues that that the US government recognizes that organized crime is a form of government because it has, defined territories, negotiated settlements and peace treaties with organized crime. Cressey says, “that because organized crime provides illicit goods and services demanded by legitimate society, it has become part of legitimate society.” US history arguably arose out of an unstable government according to John W. Tyler’s history of the Boston Tea Party. He claims that this group of patriots was a kind of loosely organized crime ring of tea smugglers and merchants who only became patriots rather than criminals when they won the war and were able to tell their history in a more favorable light.

Some regions of Colombia have been run by drug gangs for decades and those gangs fulfil many of the functions of government. They even use alternate forms of money because they don’t have enough government currency to run their economy:

…the only pharmacy in the stiflingly hot jungle town of Camelias, deep in southern Colombia, looks ordinary, with wide glass counters and shelves stacked high with medicines. Then the customer pays the bill.

The customer produces one of the clear plastic bags in which people here carry around coca paste. The pharmacist, Socrates Solis, scoops out a bit of the paste, weighs it on a digital scale and gives back change — the excess he had ladled out.

Welcome to the Caguan River valley, a swath of jungle towns and coca fields in …a part of Colombia with no government presence, only guerrillas. The economy is built on coca production, and coca paste has become a main currency.

In the pharmacy, for example, everything is priced in grams. Expensive antibiotics retail for 45 grams, worth roughly $36; a bottle of aspirin costs a little more than a gram, or $1; medical exams are given to prostitutes for 12 grams, or $10.

”I was speechless when people would drop by the pharmacy and pay for the doctor’s bills or their medicines with coca instead of money,” Mr. Solis, 35, [said]. ”The first three months I worked here [at the pharmacy] we collected six and a half kilos of base.” [Worth $6,500]

In this part of Colombia, the Revolutionary Armed Forces of Colombia run things, patrolling roads, punishing law breakers, even building bridges over creek beds. Perhaps most controversially, the rebels regulate and tax a thriving trade in coca leaves and coca paste. Traffickers buy the paste, process it into cocaine and ship it by the ton to quench the United States’ insatiable appetite for the drug. It is a business that …fortifies the rebel army and helps fuel Colombia’s brutal civil conflict.

But in … the region, coca paste is seen in much less nefarious terms. Paper money is in short supply, since conventional businesses are few. Instead, everything revolves around coca, as evidenced by thousands of acres of coca fields and the coca-processing laboratories in the jungles…

It feels quite normal for Wilber Rozas, 34, of Peãs Coloradas to spend 1.08 grams (worth 90 cents), for a large glass of juice at the Peñas Juicery. Or for villagers at the annual festival in Santa Fe to lug bags of coca paste to buy clothing from traveling salesmen or to bet in the cock fights. ”I would like to always take cash, but if I do not receive coca base I might as well shut down my restaurant,” said Selmira Vasquez, who owns the Buenos Aires restaurant in Peñas Coloradas.

As a currency, the coca paste is as good as gold. When traffickers arrive every few weeks to buy coca paste, they pay with a wad of bills — and soon money is flowing again. The merchants have cash. So do workers. The value of the paste, however, is unpredictable.

”The price of paste can go up or down…” explained Ms. Vasquez. ”When the dealers show up, the prices could be lower or higher than when I bought, so it is like gambling.”

The region’s bartering system does not mean the inhabitants themselves are cocaine addicts or gang members. The rebels keep the peace by prohibiting drug consumption. Those who violate the ban end up on road-paving or bridge-building duty.

The guerrillas also forbid those most susceptible to drug use — the young, single men who have come from across Colombia to pick coca leaves — to be paid in coca paste. They receive coupons they can cash once the traffickers arrive with money.

”That is the way it works in the Caguan river region,” explained Jose Sosias, 28, a villager. ”We are a coca culture. Our money, sometimes during the year, is coca base but we just use it as currency. No one here consumes the drug.”

The drug cartels sometimes impose the death penalty for disobeying their laws, including for drug addiction. During the coronavirus pandemic, the drug cartels imposed lockdowns to halt the spread of infection and they torched the vehicles or killed people who disobeyed. Other times they ordered sick people to leave:

“They have shut down transport between villages, and when someone is suspected to have Covid-19 they are told to leave the region or they will be killed,” one community leader in Colombia’s southern Putumayo province told the Guardian, on condition of anonymity for fear of reprisal. “And people have no choice but to obey because they never see the government here.”… The [Colombian] government has imposed lockdowns, both nationwide and locally, but they have never been as strict as those decreed by armed groups, and the consequences for breaking them nowhere near as grave.

Liberal anarchists vs. conservative anarchists

At the beginning of this essay I quoted a liberal anarchist who is inspired by diffuse tribal societies and hopes that someday our crowded cities can be ruled by pure consensus without any coercion. Confusingly, other anarchists have very different opinions about what true anarchism is because anarchists have a very difficult time achieving consensus about how to define anarchism nor even agree about common goals. Anarchists disagree about the fundamental nature of anarchy and it is hard to pin down what anarchists believe because anarchists have no central authority that could hope to define what they are about.

Communism was originally a form of liberal anarchism.  Communists believed that communism would cause the state to wither away until everyone just lives cooperatively without coercion. Today this sounds like a sick joke because the actual communists produced totalitarian societies that are as far away from anarchy as it is possible to get! Nobody ever achieved as much government coercion as communists (although some fascists came close).

Whereas the collapse of Soviet communism destroyed that particular utopian dream for many liberal anarchists, it boosted the utopian dreams of many conservative anarchists who call themselves  libertarians or anarcho-capitalists. Again, it is hard to pin down what libertarian anarchists believe because they are just as bad at reaching consensus as liberal anarchists, but conservative anarchists also dream that the state should wither away and leave only pure markets of capitalism.

Again, this is utopian because capitalism itself is dependent upon government to survive and there has never been a prosperous, innovative market society without a strong, stable government. Some libertarians recognize this and only want to minimize government in a way that they hypothesize would increase prosperity, but there has never been a libertarian paradise with as much prosperity as the US enjoys today with less government than what the US (or possibly Singapore) has.

Although libertarians are the polar opposite of communists, they both wish for the state to wither away.  Neither group can point to successful real-world societies that have a better economic record than places like the US, Canada, Singapore, and Switzerland.

The Banana Problem for anarchy

Could the free market get a banana to someone in Ohio in anarchy without government? There are many problems:

  • Without government there is no stock market and no limited liability corporation. Some argue that corporations are essential to capitalism, and this is one reason why capitalism requires government. Without corporations, who will produce, transport, and retail bananas?
  • Without government there are no public roads nor ports. How would we transport the bananas to Ohio?
  • Without government there is no electric power grid nor pipeline grid to bring the gas and electricity required to transport and refrigerate the bananas until they are ready to ripen at the store.
  • Without government there are no secure property rights to prevent bananas from getting stolen in route or to give entrepreneurs the confidence to build a supermarket.
  • Without government there are only mafias to provide finance, banking and insurance to help entrepreneurs amass the capital to build a supermarket and buy the refrigerated trucks to transport bananas. Mafias do produce these financial products, but they produce less than in any society with a stable government.
  • Without government there aren’t patents to give incentives to invent refrigeration, shipping technologies nor is there government research funding to do most of the basic agricultural research that has helped boost agricultural productivity.

I could go on and on, but the fact is that government-free markets couldn’t even get you a banana, much less support more complex economic activities like the automobile industry or public health innovations that have doubled life expectancy over the past century. Until an anarchist can explain to me how I can enjoy bananas in Ohio under anarchy, I’m not going to believe in anarchy.

Market failure IS government failure

Many liberals like to talk about market failures and many libertarians like to talk about government failures, but they are really one and the same.

Like the banana market, almost all markets depend upon government to exist, and that is why capitalism cannot exist without government. Even illegal markets like cocaine require airplanes and other machines that wouldn’t exist without capitalism and monetary systems that are created by governments and prosperous citizens in nations with stable well-run governments who can afford to buy cocaine. Without government, even something as simple as pencils would become nearly impossible to get.

Because capitalist markets depend upon governments, market failures are government failures. The markets wouldn’t fail without government because they wouldn’t even exist without government. Most people think pollution is a classic market failure, but there would be zero industrial pollution without governments, so it is really the government’s fault at root.

Posted in Development, Globalization & International, Public Finance

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