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"AND""OR"

Waller On Anarchism and Justice
I think that libertarian anarchists ought to take thoughtful criticisms like Dave Waller's seriously. How will anarchism handle the problem of wealthy criminals? It seems like anarchism makes the utopian demand that everyone voluntarily play by the rules. The comment is made more persuasive by examples from modern Columbia, medieval serfdom, and other situations where the wealthy have received and continue to receive unequal justice. I think that there are two levels of reply to criticisms of this sort. 1. First, the wealthy have extra influence under GOVERNMENT, too. Indeed, this is precisely what the Columbian and medieval situations were: wealthy individuals use their wealth to control or capture the government, then use it to bend the rules for their benefit. In order to criticize anarchism, it is not merely necessary to point out that such a system permits the wealthy to evade the law. Why? Government, even minarchy, must face the same problem. Surely minarchy free of corruption is just as utopian as anarchism free of murder-for-hire. In order for the argument from wealth to work, it would be necessary to show that government has a COMPARATIVE ADVANTAGE over competitive defense agencies with respect to equality under the law. 2. Second, GIVEN the general level of human depravity, anarchism probably does have a comparative advantage over government. Holding constant the level of human badness, we can merely look at the situation in terms of incentives. Under minarchy, the government faces only periodic competition in the form of voting; and voting is notoriously a pure public good, so voters will probably be unable to carefully monitor the government for corruption. If people find that the wealthy are securing unequal justice, their only alternative is to move to another country. In contrast, under anarchism there can be multiple suppliers of defense services in a single area. And the benefits of switching to an honest agency accrue to the consumer who switches, whereas the benefits of informed voting go to everyone equally. Now if a defense firm's consumer is wronged by a wealthy criminal, won't they just abandon him? No, for at least two reasons. First, a defense firm is really selling an insurance policy, a policy to defend the rights of their clients IF they are wronged. If word gets out that the firm abandons its clients when they come to demand the help they are entitled to, their insurance policy will be basically worthless. In essence, firms would want to protect clients even though the expected value of their case is negative, because otherwise their name brand would be seriously hurt. The second reason why the rich would have trouble securing unequal justice comes from the incentives of the rich person's firm. In insurance economics, there is a concept known as "adverse selection." This means that unless an insurer properly screens its customers, the most likely people to buy insurance are those who are most likely to demand benefits. For example, chronically sick people are most likely to buy health insurance, high-risk drivers are most likely (other things held constant) to buy auto insurance, and so on. But if most people buying insurance come from high-risk groups, then their premiums would have to be extremely high. Now what would happen if a defense firm acquired a reputation for defending wealthy clients to the death? It would face an adverse selection problem of the worst sort. Every criminally inclined wealthy person would want to sign up. The firm would have to pay out huge payoffs, either in the form of settlements to other firms, or to pay the cost of fighting wars with every honest firm. The cost of the policy would have to rise almost to the level of the cost of the crimes. However wealthy a client might be, there is a huge deterrent against accepting him as a customer regardless of his criminal behavior. In contrast, honest firms could sell very cheap policies, because the large majority of their clients would never require the services. This is just a standard application of insurance economics, which tells us that the firms that adequately monitor their clients can offer cheap premiums, even if benefits are high, since the probability of payout is low. Firms that indiscriminately defended wealthy criminals, in contrast, would have to charge very high premiums, since the probability of payout is high. Finally, since the number of honest people of ordinary means far exceeds the number of wealth criminals, the total number of trained police on the side of justice would vastly outnumber the number on the side of criminals. Much more could be said, but the incentive system of free-market anarchism definitely seems better able to control the problem of wealthy criminals that government or even minarchy. We don't need to assume that everyone under anarchism is good, because we can show that for ANY level of goodness, the incentives of anarchism are better than for minarchy

 



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