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H. E. Frech III - The Public Choice Theory of Murray N. Rothbard, A Modern Anarchist

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    Review: The Public Choice Theory of Murray N. Rothbard, a Modern AnarchistAuthor(s): H. E. Frech IIISource: Public Choice, Vol. 14 (Spring, 1973), pp. 143-154Published by: SpringerStable URL: http://www.jstor.org/stable/30022711

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    THE PUBLICCHOICETHEORY OF MURRAY N. ROTHBARD,A MODERN ANARCHIST*H. E. Frech ///

    In recent years, a smallbut growingradical ntellectual movement hasgaineda degree of prominence. The members of this loosely defined group are verydissatisfied with the power of the modern State. Consistingof conservativeswhohave become disillusionedwith conservativepolitical figuresand new Leftists whohave become disillusioned with governmentpower, the movement uses labels likeradicallibertarianism, narchism,and anarchocapitalism.Although not all of thosein this smallgroupareanarchists, he anarchistsare an important nfluence.

    One of the key intellectual leadersof the movementis MurrayN. Rothbard,who is one of the few U.S.-trainedanarchisteconomists. For severalyearshe editeda publicationcalledLeft and Right which wasdesignedto pull libertarian lementsof both groupstogether. Until recently he sharedthe editorshipof the LibertarianForum with KarlHess,a New Left anarchistwho once wasa speechwriter or BarryGoldwater.Rothbardacknowledgesan intellectual debt to the Austrianschool andto his mentor LudwigVon Mises,althoughhis analysisdiffers in many ways fromthat of Von Mises.

    Rothbard's challengingand unorthodox professional writings span a widerange of public choice topics including the stateless society, criticismsof publicchoice theorists,the theory of the State,democracy,externalitiesand publicgoods,monopoly, human and property rights, public and private coercion, and econo-mists' value judgments. His analyses are not always correct but they are oftenoriginalandinvariably timulating.Thispaperprovidesa criticalreviewof ProfessorRothbard's ittle knownpublicchoice theories.The Stateless Society

    In discussingthe necessity of government,Rothbard (1970a, Ch. 1) beginswith an excellent critique of the standard arguments for the necessity ofgovernment o settle conflict.First, a typical statementwould hold that the state is necessary o define and

    initially allocate property rights. Rothbard suggests the allocation of initialpropertyrightsto those who find andtransformnaturalresourcesby their labor.

    University of California, Los Angeles and the National Center for Health ServicesResearch and Development, DHEW. Thanks are due to Paul B. Ginsburg, Michigan StateUniversity, for many helpful comments on earlier drafts. The views expressed here are notnecessarily those of either affiliated institution.

    143

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    144 PUBLIC CHOICEA single, ultimate arbiter of conflicts (e.g., the U.S. Supreme Court) isconsidered non-essential.1 Citizens of different countries maintain successfulrelations without a final arbiter over them. In relation to each other, individuals of

    one country and individuals of another country exist in anarchy.The danger of a free-market defense and property right enforcing agency

    turning its physical power to criminal uses, perhaps colluding with a free-marketcourt of law to make fraudulent decisions is considered. He agrees that some suchorganizations will become criminal. Rothbard is not a romantic utopian, believingthat men will suddenly become full of goodness in a stateless society. The analysisis interesting precisely because he does not believe that conflicts of interest willevaporate when the State is abolished. He argues that in a stateless society:

    ... there would be no regular, legalized, channel for crime andagression, no government apparatus the control of whichprovides... for invasion of person and property ... a would-becriminal police or judiciary would find it very difficult to take power,since there would be no organized State apparatus to seize . . . Tocreate such an instrumentality de novo is very difficult . . .historically,it took State rulers centuries to establish a functioning State apparatus(1970a, p. 5).

    The author then argues that the checks and balances resulting from the existence offreely competitive defense agencies and judiciaries provide stronger protection thanthose of the American governmental system, where, after all, the institutions areagencies of the central government.

    Rothbard's model of free-market defense and conflict settlement is interest-ing. If Smith believes that he has been injured by Jones, he files suit or pressescharges within his own voluntary defense agency. Smith's defense agency holds atrial. If Jones disputes the verdict, there will be another trial either in a competitiveAppeals Court or in the defendant's (Jones') defense agency's court. The AppealsCourt decision or that of Jones' defense agency, if it agrees with Smith's agency,may "then be taken by the society (italics added) as binding." For as Rothbardnotes:

    Every legal system needs some sort of a social-agreed upon cutoff point,a point at which judicial procedure stops and punishment against theconvicted criminal begins. (1970a, p. 5)Further, in a footnote he asserts that:

    1However, as we shall see, Rothbard's own model of a voluntary society contains such afinal arbiter.

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    REVIEW ARTICLE 145The Law Code of the purely free society would simply enshrine thelibertarian axiom: prohibition of any violence against the person orproperty of another (except in defense of someone's person orproperty) ... and the implications of this axiom. The Code would thenbe applied to specific cases by the free-market judges, who would allpledge themselves to follow it. (1970a, p. 197)

    Thus, Professor Rothbard seems to accept the point made by Hayek, that a freesociety must be one under the rule of law so that the use of force is predictable(1944, 1970).

    However, the agent which applies this law when there is a dispute is"society," which acts when two courts agree, and accredits legitimate courts, ordecides how to initially allocate property on the basis of Rothbard's principle offirst use.2

    But the principle of first use is not a clear rule. What constitutes first use ofland? Setting foot on a continent? Hunting? Growing crops? What proportion ofthe land one claims must be physically used? There is no immediately obvious rule.The tasks of settling conflicts at this highest level of decision (the "society"

    level) are going to be formidable, even with many decisions being made at lowerlevels in the competitive court system. But we are told that "there is no such thingas 'society' apart from its constituent individuals" (1970a, p. 214, fn. 15). Whatthen is this mysterious "society" which performs the function of ultimate arbiter?There can be only one answer. Rothbard's society is simply an unorganized groupof individuals who threaten to use force against anyone who violates a widely heldprinciple or interpretation. Further, this group has a monopoly in the sanctioningor use of force. Although this group is unorganized and may vary in compositionaccording to the issue at hand, it meets the definition of a government. ProfessorRothbard has provided us with a highly imaginative model of a civilization whichhas no monopoly in the supply of defense services but it is not a model of astateless society.

    Another problem arises within this model of free market defense supply.Clearly certain kinds of defense are at least partially public goods wherein exclusionis difficult. For example, if one private defense agency sets up a defense againstnuclear missiles, it cannot exclude non-subscribers from the benefits provided.Thus, the classic free-rider problem will arise for some kinds of defense, leading to(perhaps catastrophic) underproduction of some defense services. Rothbard's