Costs, Benefits, and the Analysis of Predation in Political Economy

|Peter Boettke|

At a recent discussion of Ed Stringham's Anarchy, State and Public Choice with graduate students led by Nick Snow, the question was put to Pete Leeson and myself as to why in the early 1970s the public choice analysis of anarchism did not talk more about the positive political economy of self-governance.  The response --- that sort of work didn't exist at the time.  The work of Anderson and Hill, the work of Landa and Grief, the work of Ellickson and Benson -- all would appear in print after those discussions.  Instead, what existed was primarily normative analysis of a pure individualist society.  Of course, there was Friedman's Machinery and a few empirical studies of ancient societies that operated without a centralized state.  But there was not an accumulation on evidence that could disasuade a political economist from the necessity of the state to provide the framework of law and order that would permit the flourishing of economic activity and the creation of wealth.

But then the conversation moved to a more substantive discussion.  The weighing of the costs and benefits of mechanisms to curb private predation.  It is because of the threat of private predation that the state is called upon to curb the proclivities of mankind to cheat, steal, and act in general in an opportunistic manner with guile.  By creating a "geographic monopoly on coercision", however, the opportunity for public predation becomes a reality.  Public choice economists certainly understood the problems of public predation.  So what are the tacit presuppositions in their political economy?

First, they must believe that the costs of private predation are prohibitive to economic activity (e.g., the Hobbesian jungle). Second, they underestimate the benefits of mechanisms of self-governance to permit social cooperation under the division of labor to exist even outside the realm of a formal framework of law and order (e.g., the governing of the commons through community based rules).  Third, they overstate the benefits of constitutions to curb the predatory capacity of public actors (e.g., freedom in constitutional contract). And fourth, they understate the costs of public predation (e.g., the churning state).

If you recalculate given this new cost-benefit configuration, then public choice analysis of anarchism would shift in a different direction than the analysis contained in those early 1970s work.  You don't need normative analysis about rights, instead all you need is positive economic and political economy analysis.

What do you think?

Comments

[Ryan Langrill]

I am liking Weber's definition of the state less and less as time goes on. I think Weber meant it as an empirical observation of his time, rather than a theoretical category... Also, how do we talk about a geographic monopoly in legitimate force in light of Kirzner's definition of monopoly: the complete ownership of some resource necessary for production. Even today the state has a monopoly neither on the instruments of force nor on the instruments of legitimacy.

I also do not know whether 'public' and 'private' are useful categories for positive investigation, nor do I think coercion as a pre-defined praxeological category is particularly useful.

Too little time to complete my thought this morning! Merry Christmas!

[Troy Camplin]

We talk about "the state" as though it were the only form of government. It is not. Though the United States is moving more and more toward becoming a true state, it is arguably not yet one. There is a difference among states and other forms of governments. If anarchy does not imply an absence of governance, may there not be varieties of democratic governance that are not at all state-like? May such emerge once we have a separation of economy and state that mirrors our separations of church and state, the arts and state, and science and state?

[Vlad Tarko]

What you laid out there doesn't seem like a "positive economic and political economy analysis", but merely a utilitarian *normative* analysis.

A truly positive argument about anarchy would be something along Hayekian evolutionary lines, arguing about whether, as a matter of fact, there's a long-term tendency towards the replacement of all state institutions with private institutions and communal self-governance arrangements. The analysis about the costs and benefits of government in terms of curbing violence, would be just one part of such a positive evolutionary analysis. After all, perhaps that the long term sustainability of an institutional arrangement amounts to preserving some optimal level of violence (which does not tend to zero).

From a normative libertarian point of view one would see that as unfortunate, while from a positive point of view that would be just something to be decided whether it's true or false.

[Rafe Champion]

I think Ben Powell and his colleagues found that the Somalis did better without a central government.

[Bill Stepp]

Weber's defn. of the State (an organization with a legitimate monopoly of the use of force) overlooked the way in which it gets it resources, namely by taking them from the private sector. So his use of the word "legitimate" is illegitimate.
The State is an institution that arrogates a legalized monopoly of force over an arbitrarily circumscribed geographical area, and which obtains its resoureces by conscription.
I have no idea what a "true" state is--one that isn't false? The differences among states are institutional details.
All democratic governments are states; and all states are leaches on the economies they claim to rule.
There cannot be a separation of economy and state that mirrors the (theoretical) separation of church and state.
As for the separation of arts and the State, and science and the State, I'm glad to learn the NEA, DARPA, NSF, NASA, etc. don't exist, and that no artist ever got a taxpayer-conscripted subsidy from Washington or from one of the 50 state capitols. And no business employing a scientist ever got a R&D subsidy. No art or science teacher/professor ever got a paycheck from the government. Thanks for setting me straight.
"The population is gradually dividing into two types-Anarchists and criminals."
--Benjamin R. Tucker

[david]

Historical methods of governing a commons tended to use coercion too, albeit one not formally organized under a state. A mob, rather.

Which assembly gets to decide the 'community-based rules'?

[Barkley Rosser]

Good grief, are we misspelling Avner Greif's name yet again?

[Ryan]

Greif is a common victim of the autocorrect.

[Troy Camplin]

There are theocracies, monarchies, republics, states, etc. The state as a form of government is a recent phenomenon, and not all governments are states. Nations, too, are distinct from states.

[Bill Stepp]

There are different classifications of states, but they all share at least two things in common, namely asserting a monopoly of force over "their" territory, and obtaining "their" resources by theft-crookery.
There is no distinction between government and state. A nation can be described as a group of people, but this usually breaks down on close examination.
The Jews, for instance, are often described as a "nation" or a "people" but the fact of the matter is that they are a religion.
The term nation-state is a pleonasm.
All governments are criminal gangs.

[Brad W.]

For what it's worth, a good read on historical alternatives to the nation-state is Hendrick Spruyt's _The Sovereign State and Its Competitors_.

[Troy Camplin]

A nation shares a common culture. A state is a particular kind of government. Not all Jews are religious, but to the extent that they may nevertheless share the same culture, they are a nation -- but not necessarily a state (or religion).

[Bill Stepp]

I don't think there's such a thing as a homogeneous one-size-fits-all culture, certainly not in the U.S.
Also, what about Canada and the U.S.? Two central governments, over 60 state and provincial governments, too many local governments to count. How many cultures are there looking at these areas? One? Two?
Many? It's a weasal way of viewing this.

[Bill Stepp]

I should point out that society, culture, and nation are all outgrowths of the free market, whereas the State is a criminal gang with or without a "constitution."

[Troy Camplin]

No, a nation has a common culture. Thus, the U.S. is not a nation. Thankfully. Cultures are spillover of all the spontaneous orders. Civil society is the complex interaction of all the spontaneous orders.

[Bill Stepp]

In response to my point that s,c&n are outgrowths of the free market (which they certainly are, unlike the State), you write, "No, a nation has
a common culture. Thus the U.S. is not a nation."
[Huh?]
Then, "Cultures are spillover of all the spontaneous orders, etc." I agree with the last part, but not the first. The U.S. is generally considereed to be a nation, just as Mexico is. Everything in the voluntary sector of life like culture, society is a spontaneous order. Everything except the State.
I guess you are defining nation in terms of culture, whereas I'm defining it in terms of geography.
I don't see what any of this has to do about my original point about the defn. of the State.

[Bill Stepp]

Consider an American and a Canadian residing a quarter mile from each other in the U.S. and Canada respectively. Clearly they belong to different nations (one the U.S. and one Canada), but culturally they are the same. They might work at the same firm, attend the same church, go to the same clubs, eat lunch at each other's home, golf at the same course, etc. (Okay--one likes football with three downs, the other with four. Or maybe not.)