On the Need for a Final Arbiter
by Per Bylund
me as much as the minarchist argument that there is a need for a
final arbiter and that this arbiter must be external to the market.
Without a final arbiter there will be biases and problems of unjust
rulings, and therefore there must be a State, goes the argument.
Ayn Rand utilized
this argument, saying a market without a State would degenerate
into "civil war." This is the "obvious" result
of protection and "violence" services offered freely in
the market place – when firms selling coercive services compete,
they will use the resources at hand to stifle competition: violence.
seen in the light of Randolph Bourne’s famously stated truth that
"war is the health of the state," Rand’s assessment of
the market for protection services and the "need" for
a State seems ridiculous.
or not, it is still a common argument used by minarchists that the
market needs both rules and a ruler. The market sets its own standards
and rules, and that is all well, but the enforcement of such
rules is the problem. Minarchists cannot see the truth when someone
points out that a market might need contract enforcement services
and that as a last resort people might need to hire someone to protect
their rights to property.
if people would hire the people known to have guns today (except
for State thugs, of course) we would have a problem at our hands.
The people with guns today, i.e., the people actually using
guns on a daily basis as part of their "job," thrive off
other people’s misery. They are either State-employed thugs making
money forcing people to "obey" in their own "interest."
Or they are hired guns working for competing criminal organizations
such as the mafia. Both of them are known to kill people as they
see fit without remorse and without any responsibility.
But in a free
society there would be no State and no other criminal organizations;
such organizations couldn’t possibly profit off their line of "business"
without being able to hide behind the power of central government.
So enforcement, protection, and arbitration services would have
to be supplied by legit businesses, and as such they would be dependent
on providing valuable services to their clients and their reputation.
might accept this as a valid argument, but they would still have
a problem with the final arbiter in disputes. There needs
to be someone to make a final decision; someone to make sure rules
are followed and that property rights are fully protected in accordance
to natural or market law. And that someone needs to be completely
neutral to supply such services.
This last point,
that the final arbiter needs to be completely neutral, seems to
be what often confuses many minarchists. To them, for some reason,
this implies that the judge or court needs to be external to the
market. There is logic in this argument, but it is based on a false
understanding or definition of the market.
As is the case
today, when business firms cannot agree they turn to a third party
to settle the conflict. This third party might be the State, and
since the State doesn’t have much to do with business firms or other
market actors (leaving aside the corporate nature of the state and
the fascist regime for a moment) it is supposedly neutral and unbiased.
with this is that it is not the nature of the third party that makes
him or her unbiased – it is that party’s position with respect to
the conflicting parties. Two disagreeing antelopes might ask a baboon
to provide a solution to their disagreement, but it is not the fact
that the third party is a baboon that makes the baboon unbiased
– it is that this particular baboon has no prior relationships,
ties or indebtedness to any of the disagreeing antelopes.
friends disagreeing to such a degree that they cannot get past this
disagreement. Do they need to find a person to solve this conflict
who is not anybody’s friend? No, they need to find someone who isn’t
[secretly] a friend of one of them or has any other ties that would
make him/her possibly unbiased.
So would two
firms disagreeing on how to interpret a contract need to find a
non-firm to solve their problem? No, they would probably be able
to agree on any firm without ties to either of the parties – and
that firm could still be perfectly unbiased and fair. It is not
the nature of the arbiter that matters; it is the relations and
interests of that specific arbiter that counts.
In the world
of States this surely sounds strange. But this is the case simply
because States know States – and they would never trust another
State. Therefore they make alliances with whatever State is the
strongest and establish "international organizations"
to solve conflicts between States of equal strength. Even so, States
usually don’t obey their own rules or rulings of such organizations
they have themselves established.
insignificant States such as Sweden, the State that claims to be
my master, is repeatedly condemned by e.g. the European Court of
Human Rights for crimes against humanity (torture, for instance
– believe it or not). What is the result of such condemnations?
Absolutely nothing, except for, maybe, a very short article in one
or two newspapers; the people comprising the Swedish government
couldn’t care less.
But the fact
that States behave like villains (excuse me, are villains)
should not be an argument against profit-maximizing businesses in
a free society where there are no States.
The fact is
that the final arbiter can be whoever as long as that person or
organization is deemed unbiased and is approved by all disagreeing
or conflicting parties. That particular person might even have guns
without the situation necessarily degenerating into civil war. The
fact is, there are profits to earn in this world, but only for those
who serve one’s customers and show respect for potential customers.
States don’t have to bother about such things because they have
both guns and popular support to use them – including the
support of mini-statists or minarchists.
Per Bylund [send
him mail] is a Ph.D. student in economics at the University
of Missouri and the founder of Anarchism.net.
Visit his website www.PerBylund.com
or his blog where he
comments on this article and more.
© 2008 LewRockwell.com