Always Ask: ‘As Compared to What?’

by Don Boudreaux on July 27, 2009

in Complexity and Emergence, Law, Reality Is Not Optional

One of my brilliant young GMU colleagues, Pete Leeson, co-authored a fascinating paper with Claudia Williamson on anarchy and failed states.  It’s entitled “Anarchy and Development: An Application of the Theory of Second Best“; here’s the abstract:

Could anarchy be a constrained optimum for weak and failing states? Although a limited government that protects citizens’ property rights and provides public goods may be the first-best governance arrangement for economic development, among the poorest nations such “ideal political governance” is not an option. LDCs face a more sobering choice: “predatory political governance” or no government at all. Many predatory governments do more to damage their citizens’ welfare than to enhance it. In light of this, we show that conditional on failure to satisfy a key institutional condition required for ideal political governance—constrained politics—citizens’ welfare is maximized by departing from the other conditions required for this form of governance: state-supplied law and courts, state-supplied police, and state-supplied public goods. Since departing from these conditions produces anarchy and fulfilling them when government is unconstrained producers predatory political governance, anarchy is a second best.

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  • The proto-anarchy of Iceland in the middle ages survived three hundred years...

  • Kevin

    This is very interesting. The conventional wisdom seems to be that predatory governments can persist without simply overwhelming force because the oppressed citizenry perceives friction in revolution/anarchy sufficient to stay a rebellion. I also wonder if predatory governments are not equilibrium conditions that frequently emerge from anarchy.

  • Crusader

    The thing is in an immediate power vacuum, there might be anarchy for a short time until some ambitious man or woman rises to the top to lead. Then that's the end of anarchy. You can't really point to any extended periods of anarchy in human history lasting longer then a few years. One such power vacuum comes to mind during the Russian Civil War(1917-1921). But as we all know that ended very brutally for the Whites, and power was taken and held very solidly by the Bolsheviks for 70 years(some would say Putin is evidence they never lost it).

  • Dan Phillips

    I disagree with you, Crusader. American Indian tribes - especially the Plains Indians existed for centuries as anarchist societies. Individuals were free to come and go as they saw fit. They followed the wanderings of one group in the tribe, and if they disagreed with any aspect of their living conditions, they splintered off with another group, or formed their own group, all without the first group giving a hoot or a holler about it. There were no "leaders" per se, only Holy Men who advised the group about things like when to move on, when to burn the grass to encourage the return of the buffalo, where to settle next, etc. But the group was never obligated to take the advice. They lived this way for centuries, if not millenia. They prove beyond doubt that societies can survive quite nicely without the heavy hand of a state.

  • Crusader

    Dan - and because the tribes were anarchic and undeveloped, the White Man came and conquered them. Point proven.

  • Dan Phillips

    And another thing: the anarchy to which you refer is not really anarchy at all. You are confusing the chaos that ensues from the demise of a failing state with anarchy. Anarchy is not chaos. Chaos occurs as rival thuggish gangs battle over the pickings of an existing state apparatus. All the ingredients for a strong man to come in and take control are in place. The strong man doesn't come into a vacuum. He enters the picture with the means to oppress the people already in place. A strong man replaces a failing state. What difference is it to the people involved? What do they care whether a failing state enslaves them or a strong man? They're still slaves.

  • Dan Phillips

    With all due respect, Crusader, what point is proven? I don't understand. You said: "You can't really point to any extended period of anarchy in human history lasting longer than a few years." My point is that you can. I'm not advocating a return to native America. I'm just saying that anarchy has been proven to work - for centuries at a time. If the Stone Age American Indians could figure out a way to do it, then surely we sophisticated 21st century types ought to be able to do the same.

  • Dan Phillips -

    I'm not so sure about the noble savage picture you paint. And you don't even have to wait for the white man like Crusader suggests - look at the history of the Iroquois Confederacy and the havoc they wreaked on the Algonquian, who somewhat more closely approximated your anarchic picture. Or the Navajo and Apache. Someone was opining to me recently about how the Navajo are treated as second class citizens on their reservations - etc. etc.. And I asked them - have you ever stopped to think WHY the Navajo have the biggest reservation and the most populous tribe of all the other tribes that still have reservations in the U.S.? It's because they were anything but free, stateless, and tolerant. It's precisely because they conquered their neighbors before the cavalry came in and conquered them. I'm not insensitive to the condition, history, or treatment of Native Americans in this country - I just think the "noble savage", "they lived in peace with each other" myth does more harm than good - both as a matter of guidance for people today, and insofar as it trivializes what people like the Algonquian and the Pueblo experienced at the hands of the Iroquois and the Navajo. In other words - it's not just Crusaders point that "they were left defenseless when the Europeans came" - it's also that even within a region, without expansionary outsiders, anarchy is not an especially stable or bloodless system.


    That's not to say that I disagree with the general thrust of this post - I'm sure "anarchy" in the sense of no central state is a second best solution that is better than a predatory state. But I'd agree with Crusader that that has to be an incredibly tenuous arrangement. And often time, peace is kept by what amounts to the arbitrary fiat of gangs. It looks like a state-free existence when you look up "Somalia" on wikipedia and find out about the wonderous advance of telecom networks there... and the advance of markets in that environment is definitely something we should take note of - but that doesn't mean it's an especially pleasant existence for the people living there.

  • Pablo

    I would rather think that for failing states like Haiti or even my own (Honduras), anarchy is not much of an option. First, there is no rule of law in place, which I figure might help a whole lot the anarchist institutions that are required in your view of anarchy. Second, my choice for anarchist societies would stem from a developed nation not an LDC, for the same reason I gave earlier.


    I cannot really opine on the study since I have no access to it, but given my own personal experience I would say it is not a viable one for LDC´s. I would also like to add that I consider my self an anarcho-capitalist, so I have very little bias towards government run institutions. That being said in reality, you need a starting point for a real functioning anarchist society, which could probably stem from a working coercive system.

  • Dan Phillips

    I'm obviously not making myself clear. Nobody is painting a "noble savage" picture. My point remains that anarchism can work because it has worked in the past, for centuries at a time, by many American Indian tribes. That is the only point of my post. Daniel Kuehn, you agree that anarchism is a second best option over a predatory state. I don't know of a state in human history that has not been predatory.

  • Chuck

    "limited government that protects citizens' property rights"


    That's an oxymoron. Governments are funded by taxes which are incontrovertible violations of property rights.


    Disagree? Stop paying them and see what happens.

  • randall

    just compare Somalia to its neighbours... even as bad as it has been in the past 10 yrs, somalis have had it way way better than Kenians and Ethiopians... the comparison is even more striking if we look at the period before US backed ethiopian tanks invaded...

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