The Liberty Papers

The seminal work of free-market anarchism is commonly held to be Gustave di Molinari’s The Production of Security. This document was one of the many great analyses of free-market economics to come out of France during the first half of the 19th century, and questioned the truth of the fundamental belief that

… to secure [their rights], Governments are instituted among Men, deriving their just Powers from the consent of the governed (1)

The essay is broken into the following segments:

I – The Natural Order of Society
II – Competition in Security
III – Security an Exception?
IV – The Alternatives
V – Monopoly and Communism
VI – The Monopolization and Collectivization of the Security Industry
VII – Government and Society
VIII – The Divine Right of Kings and Majorities
IX – The Regime of Terror
X The Free Market for Security

This is a fairly long essay, written in a different era, in a different language. Thus even the best translations can require a great deal of effort to read. However, I think it is a useful essay to walk through. Since it is so long and so radical, I thought I would break the document into little chunks and provide commentaries on one chunk at a time. This post will be a commentary on the first two sections, “The Natural Order of Society” and “Competition in Security”

I The Natural Order of Society
Here, Molinari discusses why people form societies:

What natural impulse do men obey when they combine into society? They are obeying the impulse, or, to speak more exactly, the instinct of sociability. The human race is essentially sociable. like beavers and the higher animal species in general, men have an instinctive inclination to live in society.
Why did this instinct come into being?

Man experiences a multitude of needs, on whose satisfaction his happiness depends, and whose non-satisfaction entails suffering. Alone and isolated, he could only provide in an incomplete, insufficient manner for these incessant needs. The instinct of sociability brings him together with similar persons, and drives him into communication with them. Therefore, impelled by the self-interest of the individuals thus brought together, a certain division of labor is established, necessarily followed by exchanges. In brief, we see an organization emerge, by means of which man can more completely satisfy his needs than he could living in isolation.

This natural organization is called society.

In other words, it impossible to enjoy a comfortable life if every person must grow his own food, make his own clothes, treat his own appendicitis and build his own house. Thus, people must come together to pool resources if they wish a comfortable life. If the best house builder builds the houses, then everyone will live in high quality houses. If the best hunter does the hunting, everyone will have better meat etc.

He then examines one of the most important needs that participation in a society provides, security:

Whether they live in isolation or in society, men are, above all, interested in preserving their existence and the fruits of their labor. If the sense of justice were universally prevalent on earth; if, consequently, each man confined himself to laboring and exchanging the fruits of his labor, without wishing to take away, by violence or fraud, the fruits of other men’s labor; if everyone had, in one word, an instinctive horror of any act harmful to another person, it is certain that security would exist naturally on earth, and that no artificial institution would be necessary to establish it. Unfortunately this is not the way things are. … Hence also the creation of establishments whose object is to guarantee to everyone the peaceful possession of his person and his goods.

These establishments were called governments.

Everywhere, even among the least enlightened tribes, one encounters a government, so universal and urgent is the need for security provided by government.

This need is understandable. Why waste the effort to build a nice house, if someone is likely to come along and chase you out of it? Why build up a large flock of particularly woolly sheep, if such prize sheep are guaranteed to atract rustlers and cut-throats? If you have a high chance of having the product of your labor destroyed or stolen, then it’s not worth your time to expend the energy to produce it.

At this point, Molinari is on a well-tread path that was previously walked down by Thomas Jefferson, Benjamin Franklin, John Locke, and Bastiat among others. However, here he takes an unexpected turn toward uncharted ground:

Even though this man might be asked to surrender a very considerable portion of his time and of his labor to someone who takes it upon himself to guarantee the peaceful possession of his person and his goods, wouldn’t it be to his advantage to conclude this bargain?

Still, it would obviously be no less in his self-interest to procure his security at the lowest price possible[my emphasis].

This is unprecedented, it is the earliest attempt I know of to consider the problem of providing security from a perspective of cost!

II – Competition in Security

In this section Molinari examines how people can assure that they get the security they need for the lowest price. It is important to note that this is another way of asking what is the most efficient way to produce security or what system would consume the fewest resources to provide some high level of security.

He starts with two axioms:

…in all cases, for all commodities that serve to provide for the tangible or intangible needs of the consumer, it is in the consumer’s best interest that labor and trade remain free, because the freedom of labor and of trade have as their necessary and permanent result the maximum reduction of price.

…the interests of the consumer of any commodity whatsoever should always prevail over the interests of the producer.

From these two axioms, he concludes:

That the production of security should, in the interests of the consumers of this intangible commodity, remain subject to the law of free competition. …

That no government should have the right to prevent another government from going into competition with it, or to require consumers of security to come exclusively to it for this commodity.

He spends the rest of the essay defending this proposition. I will review this defense in subsequent posts.