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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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