Limited Government: The Self-Defeating Nature of Minarchy

Fight Censorship, Share This Post!

This is a guest post by Dr. Vic McCracken, who is a Professor of Ethics and Theology at Abilene Christian University. Prior to his faculty appointment at ACU, Dr. McCracken served as Minister of Adult Discipleship at the Oak Hills Church in San Antonio, TX. His primary areas of interest include social ethics, Christian perspectives on peace and war, and political liberalism. In 2014 he co-authored and edited the book Christian Faith and Social Justice: Five Views.

In this post I discuss the self-defeating nature of limited government, known as minarchy. I’m going to foreground here my own non-libertarian conclusion about minarchism: while I find minarchism more defensible as an intellectual perspective than anarcho-capitalism, I also believe minarchism is self-defeating because it offers no philosophically consistent libertarian answer as to how a minimal state can exist that does not violate the NAP. It is the self-defeating nature of minarchism that makes anarcho-capitalism more interesting as a philosophical perspective, though a perspective that I find unpersuasive. That’s for a future post.

The self-defeating nature of minarchy

In earlier posts I have focused my attention on some basic features of libertarian thought. The impression these posts might give is that libertarianism is monolithic, with self-identifying libertarians sharing wide agreement on most issues. Spend enough time talking to libertarians, surfing their blogs, and perusing Tom Woods’s daily email messages to subscribers, however, and you’ll discover that there are substantial, sometimes quite contentious, disagreements among libertarians. In this post I want to explore the variety within libertarianism. My hope is that this exploration will illuminate some bedrock questions that libertarianism forces us to consider.

Recall from my last blog post that the non-aggression principle (NAP)–the respect of property rights, prohibits anyone from threatening or committing violence unless that person is acting in self-defense against unjust aggression. Libertarians argue that states regularly violate the NAP when they enact policies and tax citizens to fund programs that politicians deem necessary, all with the implicit threat of state violence hanging in the background. Following from this starting point, libertarians divide over the normative conclusion that this argument points us toward. If we assume for the moment that libertarians are correct that states regularly violate the NAP, what is the alternative? Here libertarianism divides into roughly two camps:

Minarchists argue that the alternative is to circumscribe the power of the state so that it plays a very limited role, far more limited than that of most modern states.

Anarchists (“Anarcho-capitalist”) argue that the alternative is to eliminate the state altogether, to fashion a society built entirely on voluntary contract and consensual exchange; all services are privatized.

Historically, minarchism has been the more prominent perspective in mainstream academic circles. This is the libertarianism of Milton Friedman, F.A. Hayek, and Robert Nozick. Institutionally, the Mont Pelerin Society (founded in 1947 by, among others, Ludwig Von Mises, Hayek, and Friedman) is a major intellectual source of minarchist thought, as is the Cato Institute.

Anarcho-capitalism, while less prominent in the mainstream, is a perspective embraced by a cluster of revisionists economists, historians, and scholars mostly affiliated with the Mises Institute, a libertarian think tank based in Auburn, AL. It’s fair to say that Murray Rothbard is the father figure of modern anarcho-libertarianism. Contemporary scholars who represent this perspective include Tom Woods, Robert Murphy, and Hans-Hermann Hoppe.

The line between minarchism and anarcho-capitalism can be overdrawn, and historically there have been strong alliances forged between libertarians on both sides of the divide that blur the philosophical boundary. Still, disagreements between minarchists and an-caps can get quite testy. I discovered this recently while browsing an article written by Hoppe in which he labels anyone who believes in the necessity of any state as a “fake libertarian” and goes on to ridicule those “honest but dim-witted libertarians” who vilify true libertarians (i.e. anarcho-capitalists) and have abandoned the foundational principles of the libertarian cause.

Minarchy: a limited government solution?

Libertarians are critical of the wide-ranging encroachment of the state in many spheres of life: healthcare, education, social welfare, housing, the labor market, to name just a few. The minarchist solution to this problem is to limit the state to a much narrower set of functions, to turn the modern welfare-state into a “minimal state.” A minimal state will not guarantee healthcare for all. It will not tell business owners a minimum wage they are required to pay their workers, nor will it promise poor families that they will receive tax-funded subsidies to buy food at the local supermarket.

All of this of course raises the question: if the state should not do these things, what should the state do? Often minarchist visions of the minimal state lean toward something resembling a “night-watchman state.” In the minarchist view, the state should provide a universal system of defense to members of the community: military and police protection. The state should also ensure that there is a legal system in place that can adjudicate property disputes and sanction individuals who violate the rights of others. That’s it.

This limited state should feel familiar to anyone who has kept up with conservative vs progressives debates in the United States over a host of public policy issues in the last two decades. Progressives typically advocate for expansive state involvement, while conservatives frequently criticize the state for its overreach.

The limited state has a role, but what?

For the purpose of understanding minarchism, the key point is this: both sides agree that the state has some legitimate role to play. In this debate minarchists are much closer to the conservative end of the spectrum than the progressive. The debate is about where the line between justifiable and unjustifiable state action should be drawn.

But here is the problem that minarchists face: minarchists themselves draw this line in very different places, and minarchists do not always offer clear justification for granting the state the power that minarchists themselves say the minimal state should wield. F.A. Hayek’s argument in The Road to Serfdom illustrates this problem. Hayek is one of the most influential economists of the 20th century, winner of the 1974 Nobel Memorial Prize in Economics.

Born and educated in Austria, Hayek is a major figure of the Austrian School and an ardent defender of free-market capitalism. Immigrating to Britain in 1931 to serve on the faculty of the London School of Economics, Hayek wrote The Road to Serfdom as a prophetic warning to British (and later, American) politicians enamored by the promises of socialism.

Hayek’s argument in Serfdom is relatively simple to summarize. Western societies value individual liberty. In their quest to promote social justice progressives embraced socialism and other derivatives of it, a program that threatens to undermine individual liberty. Socialism threatens democracy, and the utopianism that advocates of socialism embrace is totalitarian at its core. A capitalist system built on free-markets and private enterprise preserves individual liberty and in the long run will be more effective in furthering the social ends that progressives desire.

For Hayek then, states function properly when they preserve space wherein individuals are free to make their own choices, live their lives without external interference, and engage in uncoerced exchanges in a free and open market. States overreach when they interfere with markets in the name of “preserving equality” or “promoting social justice”:

“The dispute between the modern planners and their opponents is, therefore, not a dispute on whether we ought to choose intelligently between the various possible organizations of society; it is not a dispute on whether we ought to employ foresight and systematic thinking in planning our common affairs. It is a dispute about what is the best way of so doing.

The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether a rational utilization of our resources requires central direction and organization of all our activities according to some consciously constructed ‘blueprint.’” (85)

At first glance, then, The Road to Serfdom appears to offer up an alternative vision of a minimalist state: the community we should want is a liberal community in which the state exists solely for the purpose of protecting individual liberty, protection embodied in the state’s commitment to preserving the freedom of market exchange.

Says Hayek, “[i]t is necessary…that the parties in the market should be free to sell and buy at any price at which they can find a partner to the transaction and that anybody should be free to produce, sell, and buy anything that may be produced or sold at all” (86). Hayek also argues that a free market will ensure that all trades are open to individuals on equal terms and will prohibit all efforts to control prices or quantities of particular commodities in ways that interfere with competition.

Hayek is not a night-watchman state minarchist

Are government intrusions into the market justifiable?

But having offered up what first appears to be a textbook example of a Night-watchman state, Hayek proceeds to defend a much more expansive role for the state in community life. While free competition precludes setting prices or interfering with quantities, Hayek insists that there might be good reasons for other sorts of intrusions into the free market. He argues in support of restrictions on “the allowed methods of production,” for example, so long as these restrictions apply equally to all producers:

“Though all such controls of the methods of production impose extra costs (i.e., make it necessary to use more resources to produce a given output), they may be well worthwhile. To prohibit the use of certain poisonous substances or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition. The only question here is whether in the particular instance the advantages gained are greater than the social costs which they impose.” (86-87)

But Hayek’s claim here raises the question: on what grounds are these intrusions in the free market justifiable? If a factory owner is able to find individuals who consent to work 80 hours per week at an agreed upon wage, why is Hayek’s claim that it is acceptable to limit working hours not just another example of an overbearing state infringing on individual liberty?

If a laborer is willing to accept a higher wage from an employer knowing that he will be required to work with a poisonous substance for which there are limited safeguards, what basis does Hayek offer for saying it is acceptable for the state to interfere with this transaction? Hayek’s suggestion that we simply weigh costs and benefits raises yet another question: why not simply subject other market interventions–those price controls and minimum wage guarantees that Hayek rejects, for example–to the same calculus?

Hayek’s minimalist state does not stop at simply regulating the workplace. Hayek also asserts that there are some goods for which a competitive free market is ill-suited for coordinating the costs and benefits of exchange:

“Thus neither the provision of signposts on the roads nor, in most circumstances, that of the roads themselves can be paid for by every individual user. Nor can certain harmful effects of deforestation, of some methods of farming, or of the smoke and noise of factories be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation of the price mechanism.” (87)

Hayek concludes that in such cases we may well need “the direct regulation of authority.” This is a conclusion that any progressive could love! There is a pragmatic edge to Hayek’s minarchist vision. He speaks out against what he calls “the wooden insistence of some liberals” to the principle of laissez faire (71); for Hayek, social ends might well dictate some modest interventions are necessary. But finally, in what can be charitably described as an intellectual “pivot” (or, less charitably, as a glaring contradiction), Hayek himself leaves the door open for something resembling a state-subsidized social welfare system in his minimalist state.

Hayek and state-subsidized welfare

Social insurance as a preservation of freedom

In chapter nine of Serfdom, Hayek outlines two types of security that individuals seek: “first, security against severe physical privation, the certainty of a given minimum of sustenance for all; and, second, the security of a given standard of life, or of the relative position which one person or group enjoys compared with others; or, as we may put it briefly, the security of a minimum income and the security of the particular income a person is thought to deserve” (147-148). While no society can promise the second type of security to its members, Hayek insists that the first kind of security can be guaranteed:

“There is no reason why in a society which has reached the general level of wealth which ours has attained, the first kind of security should not be guaranteed to all without endangering general freedom. There are difficult questions about the precise standard which should thus be assured; there is particularly the important question whether those who thus rely on the community should indefinitely enjoy all the same liberties as the rest.

An incautious handling of these questions might well cause serious and perhaps even dangerous political problems; but there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. Indeed, for a considerable part of the population of England this sort of security has long been achieved.” (148)

Hayek proceeds to advocate for a state-sponsored system of comprehensive social insurance, insisting that there is no incompatibility between such a scheme and “the preservation of individual freedom.” But here again, Hayek’s argument begs the question: if a state-subsidized social insurance system is justifiable as a legitimate function of the minarchist state, what are the libertarian grounds for such a conclusion?

Are food stamps a limited government policy?

The conclusions that Hayek reaches here overlap with the conclusions of liberals influenced by thinkers like John Rawls, but Rawlsian liberalism offers a theoretical basis that allows us to answer why the state may rightly intervene. On what basis does Hayek reach this conclusion? Hayek is silent.

All of this points toward my own conclusion: I believe that minarchism is self-defeating. To illustrate what I mean, recall the conversation from my last blog post, the libertarian critique of the federal SNAP program. Libertarians argue that when the state taxes some people to pay for benefits other people receive that the state is redistributing private property in a way that violates the rights of taxpayers; this is institutional theft (once again, the Society for the Care of Cute and Furry Creatures looms large).

But if this is so, it is exceedingly difficult to figure out why the minimalist state that Hayek himself envisions is not itself subject to the same judgment. Set aside SNAP for the moment, and set aside Hayek’s own fairly expansive (at least by libertarian standards) state. Imagine a minarchist state that is much narrower, that Night-watchman state that is responsible only for protecting individual property rights. Even with this extremely circumscribed state, this is the exchange that minarchists are defending:

Minarchist: “Citizen X, we are requiring you to submit to the authority of the state, which will be taking responsibility for providing for your personal protection and upholding your right to your property. This state will provide protection to you and to all other individuals who live in your geographic area.

For this service you and other individuals will be required to pay a tax that will go to cover the cost of military defense and the police protection that the state guarantees to you. The taxes you pay will also go to cover the administrative costs of a legal system that will adjudicate any conflicts over property rights should they occur.”

Citizen X: “I don’t want to submit to your authority. I’m perfectly willing to purchase my own protection, and I’m more confident that a private personal defense contractor will provide better protective service to me than a bloated, inefficient state. Further, I object to your demand that I pay taxes to subsidize the cost of the protective services you are providing to others. If other people want your police protection, make them pay for it. I see no reason why I must pay so that other people get access to the services you are offering.”

Minarchist: “We are imposing only a minimal burden on you, Citizen X. We aren’t asking you to provide welfare benefits. We’re telling you that you are required to fund a police service and military that will be responsible for protecting your liberty. This burden won’t be yours alone.

All community members who pay taxes will fund this service. But to be clear, if you refuse to pay we will send the police to your door, and they will arrest you. Our legal system (which your tax funds will also subsidize) will hold you financially liable for your refusal to pay. You’ll end up paying even more than what we are telling you to pay. Better to accept this burden now and pay up.”

Citizen X: “I don’t care how minimal you think this burden is. It’s an unjustifiable burden. If I don’t want to pay to fund this military and police service, what is that to you? If other members of the community are volunteering to pay these taxes, why should I care? I do not consent, and I consider your threat of imprisonment and financial penalty to be an unjust act of aggression.”

What is the minarchist reply?

It’s not for a lack of trying

Minarchism itself offers no obvious way to explain why even the limited role that the minarchist state plays is not just another example of unjustifiable aggression. If aggression is defined as threatening or committing violence against another’s person or property, how is the minarchist exchange above not aggressive?

If the injustice of SNAP is that it is a program that redistributes the resources of some citizens in a way that benefits others, how is a universal system of police protection not just as redistributive when it guarantees that all individuals in the community will have access to police services irrespective of their ability to pay?

The state is mandating that citizen X pay taxes to fund a service that citizen X does not consent to. The fact that most of us might find his preference for a private defense service to be unwise does not make this act unaggressive. A free society does not protect individuals from their foolishness, does it?

While I do not think that minarchists like Hayek offer a compelling libertarian reason for affirming the actions of the minimalist state they defend, this is not to say that minarchists have neglected this challenge. In my next blog post I’ll be digging into Robert Nozick’s Anarchy, State, and Utopia.

Nozick has gone further than anyone in trying to make the case that a minimal state can exist that does not violate the rights of individuals. Following that, I’ll be turning my attention to anarcho-capitalism, a perspective that does not face the same self-defeating problems I have described here.