When I see condemnation of the journalistic standards of “The Times of India” filling my newsfeed, a question posed by Gail Wynand whose media empire spread like bubonic plague comes back to me: “Do you think it took no talent to create the Banner?” Gail Wynand, the publisher of the New York Banner owned twenty-two newspapers, seven magazines, three news services and two newsreels. He burnt prodigious energy and will power to achieve perfection in serving every perverse need of his ultimate boss-the imbecile on the street who consumes news, gossip and lurid stories like drugs. It took spectacular talent for Wynand to achieve extraordinary perfection in the ordinary.
One of the most powerful scenes in “The Fountainhead” is when several newspapers cornered Gail Wynand, the publisher of New York Banner, to censure him for debasing public tastes. Gail Wynand replied in his characteristic manner: “You give them what they profess to like in public. I give them what they really like. It is not my function, to help people preserve a self-respect they haven’t got. Honesty is the best policy, gentlemen, though not quite in the sense you were taught to believe.”
In the New York Banner’s first public campaign, they appealed to the charitable sentiments of the public by displaying pictures of a pretty girl waiting for her illegitimate child, and a starving scientist side by side. The campaign raised one thousand and seventy-seven dollars for the unwed mother when the young scientist had to be content with nine dollars and forty-five cents. At the end of the campaign, Gail Wynand had decided how the Banner deserves to be run. Continue Reading →
While reading biographical accounts of Murray Rothbard, one thing becomes clear to me: He was very true to himself, more than most thinkers I have ever read of. Murray Rothbard was an honorable exception in a profession where even blind idealists find themselves being tempted to play by the rules. There was of course, a terrible price for being the greatest entertainer in the history of economic thought. Because, Manu Joseph’s take on Delhi is all the more true of the Economics profession: “Delhi, often, confuses seriousness with intelligence and humour with flippancy. People will not be taken seriously here if they are not, well, serious.”
If you have to be taken seriously by fellow academics, you have to be as dry, boring and confused. Rothbard’s lectures on the contrary, as Bryan Caplan opined, might as well have been named “The joy of Econ”. One of Bryan’s blog posts had an apt title, “History + Comedy = Rothbard”, because he was “Haha funny”. Then, as someone had said, he’d rather have a good laugh than a Nobel Prize.
Rothbard believed that an individualist born in this world “marked by fraud, folly and tyranny” has three ways to deal with it: Retire into one’s own cocoon, set out to reform the world or take immense delight in the nonsense he sees around. Rothbard , it seems, was among the very few who had a driving desire to reform the world and take delight in the spectacle of folly at the same time. He lacked the pessimism of H.L. Mencken who was not too much of a reformer. Mencken knew that his barbaric fellow beings were hopeless and beyond repair and reform. Even when Rothbard writes about the worst of tyrannies, it appeared that like H.L. Mencken, he felt far more delight than indignation. As readers, we feel nothing but amusement even when he cheerfully quotes the listing of monstrosities in the diary of a slave owner who imagined himself to be a kind taskmaster. Continue Reading →
Abstractions aside, we have come so far from the schoolyard!
Truth might be a bitter pill to swallow, but we are all better off with it. There are truths which many of us do not feel compelled to go overboard in stating, while some others state it cheerfully, as these are brutal facts their taste wouldn’t conceal. The economist David Friedman called the former ‘wimps’ and the latter ‘boors’. Or bullies and sissies. While wimps keep away from stating truths like that of the high rate of teenage pregnancy and criminal tendencies among blacks, boors state it with much enthusiasm and delight.
Like Friedman, I too have mixed feelings. It must be obvious that if rightly analyzed and interpreted, knowing all the Non-Politically Correct (Non-PC) facts will have a positive impact on the way many people look at economic policy in particular and the world in general. But, an incurable obsession with such issues is more often than not a sign of bigotry.
An excessive focus on gender, race, sexuality and nationality, whether legitimate or not, while turning a blind eye to war and immigration restrictions is like complaining of one’s mother-in-law’s nagging when someone is raping your wife and mugging your children. Needless to mention, it only means that your hatred for your mother in law trumps your hatred for explicit violence by a wide margin.
“On the Internet, nobody knows you’re a dog.”-Two dogs talking to each other, in a Peter Steiner cartoon
I owe almost everything good which happened to me since my late teens to the internet. I mean it. I got every job and freelancing assignment of mine over the internet. I cannot think of any relationship-virtual or real life- which would have flourished to the extent it had without the internet. The internet opened up a huge body of literature, which would have been otherwise inaccessible to me. In the absence of the web, would I have discovered libertarianism or have been able to study Economics in a way which is even remotely comparable to the way I do today? I seriously doubt. Would I have been able to interact with, and learn from some of the greatest minds of our generation with such ease? I think not. I started blogging around eight years back, when I was a boy. Would I have written as much as I have without knowing “that there is someone, somewhere, who wants it, too”? It never mattered that it could be just one. But, it mattered that the internet made it all the more possible. Continue Reading →
“At first, I kept wondering how it could be possible that the educated, the cultured, the famous men of the world could make a mistake of this size and preach, as righteousness, this sort of abomination—when five minutes of thought should have told them what would happen if somebody tried to practice what they preached. Now I know that they didn’t do it by any kind of mistake. Mistakes of this size are never made innocently.”-Ayn Rand Continue Reading →
With age, comes wisdom-and humility! Hopefully, I won’t be an exception. Certainly one reason I prefer a dowdy old hag who understands my insults to a pretty young girl who can’t tell Satire from Sartre, to make a general categorical statement not intended at anyone in particular. More than common honesty and common decency, I prefer common sense. One should at least cringe in shame. Continue Reading →
“Fools think that this is just nonsense. Something left over, old-fashioned. But there’s always a purpose in nonsense.”- Ayn Rand
The whole philosophy of libertarianism is based on the Non-Aggression principle. No man should have the right to initiate physical force or its derivatives like threat of force or fraud against another. Needless to mention, such a natural law is valid always, everywhere, irrespective of the time, place and circumstances. Unfortunately, many are unwilling to apply this principle in the context of the rights of children, the most vulnerable section of the society. Most people think that when it comes to innocent children who can’t hit back when they are hit, anything goes. Continue Reading →
“All property is theft”, said Proudhon. The very statement contradicts itself. An act could be called theft only if it involves taking the property of another which is legitimately owned. If no one legitimately owns any property, then how could it be termed as theft? If one could extort a grain of truth out of Proudhon’s statement, it would be that property was largely acquired through wrong means in the past. In India, in most cases land was forcefully appropriated by kings and distributed to Zamindars for the ease of tax collection. The Zamindars have no just claim to the land they acquired in this manner. There were cases of feudalism and slavery in the past. The crucial question is whether ownership claims to land possessed by the descendant of the looter have legitimacy or not. Should it be handed back to the descendants of the victims?
A few days back a reader of my blog posed this question to me: What if an industrialist who is creating wealth and providing jobs for millions is the descendant of a person who earned his wealth by loot? Should his right to property be respected? In all my readings I haven’t found a libertarian thinker deals with this aspect morally other than Murray Rothbard. Ayn Rand is said to have provided a moral basis to Capitalism. But she doesn’t deal with a crucial aspect –The initial allocation of property rights. Capitalism is a politico-economic system based on private property rights and this sort of evasion is hard to digest.
The question I was asked is quite valid. Take the case of Dalits. Most of them are poor. In the past property was acquired through wrong means and it can’t be denied that it has played a role in the poverty they suffer from. The same could be said of blacks in the United States. Should anything be done about it? I am not a fan of Arundhati Roy and was a strong critic of her views, but I shall quote a few interesting lines from Roy’s An Ordinary Person’s Guide To Empire “Even if it were true that there is a Hindu temple under every mosque in India, what was under the temple? Most likely an Adivasi Shrine. How deep shall we dig?” This is the reason I am not at all sympathetic towards Anti-Reservation activists.
I am of the strong opinion that Capitalism is the only moral and practical politico-economic system. There is nothing wrong with Capitalism as such. Capitalism is perfectly moral. It is only that some people suffer from the inequities of a wrong past system, which had nothing to do with Capitalism. Capitalism is incompatible with feudalism or slavery. The fact that in the past property was acquired through wrong means in no way means that people shouldn’t be allowed to keep the property they earned through right means. Two wrongs doesn’t make right. The fact that some of the wealthy inherited looted wealth doesn’t mean that all the wealthy should be taxed out of existence. It is not at all evident that all the wealthy got their wealth through wrong means. Past slavery and feudalism doesn’t make a valid case for Statism or Socialism. It is also not at all evident that confiscating all property and distributing among all would lead to a more prosperous society. It can only lead to poverty and chaos.
Let me quote some libertarian theorists in this issue. Rothbard writes in “Egalitarianism-As A Revolt Against Nature” that “It is not enough to call simply for defense of the “rights of private property”; there must be an adequate theory of justice in property rights, else any property that some State once decreed to be private” must now be defended by Libertarians, no matter how unjust the procedure or how mischievous its consequences.”
To quote Rothbard again, in the “Ethics of Liberty”: “Suppose, for example, that Henry Jones I stole a piece of land from its legitimate owner, James Smith. What is the current status of the title of current possessor Henry Jones X? Or of the man who might be the current possessor by purchasing the land from Henry Jones X? If Smith and his descendants are lost to antiquity, then title to the land properly and legitimately belongs to the current Jones (or the man who has purchased it from him), in direct application of our theory of property titles.” “Suppose that centuries ago, Smith was tilling the soil and therefore legitimately owning the land; and then that Jones came along and settled down near Smith, claiming by use of coercion the title to Smith’s land, and extracting payment or “rent” from Smith for the privilege of continuing to till the soil. Suppose that now, centuries later, Smith’s descendants (or, for that matter, other unrelated families) are now tilling the soil, while Jones’s descendants, or those who purchased their claims, still continue to exact tribute from the modern tillers. Where is the true property right in such a case? It should be clear that here, just as in the case of slavery, we have a case of continuing aggression against the true owners-the true possessors–of the land, the tillers, or peasants,by the illegitimate owner, the man whose original and continuing claim to the land and its fruits has come from coercion and violence. Just as the original Jones was a continuing aggressor against the original Smith, so the modern peasants are being aggressed against by the modern holder of the Jones-derived land title. In this case of what we might call “feudalism” or “land monopoly,” the feudal or monopolist landlords have no legitimate claim to the property. The current “tenants,” or peasants, should be the absolute owners of their property, and, as in the case of slavery, the land titles should be transferred to the peasants, without compensation to the monopoly landlord.”
Ludwig Von Mises’ ideas are entirely opposite in this regard. He writes in “Economic Freedom And Interventionism :“Under the conditions of the capitalistic market society this program of land reform no longer makes any sense. In the market economy the consumers daily decide anew who should own the material factors of production and how much anybody should own. By their buying or abstention from buying the consumers allot control of the material factors of production to those who know how to use them in the best and cheapest way for the satisfaction of the most urgent wants of the consumers. Ownership of land means in the market economy the sovereignty of the consumers. The owners are mandataries of the consumers as it were, bound to employ their property as if it were entrusted to them by the people. When they fail in this regard, they suffer losses. Then they are forced to improve their management or, finally, they go bankrupt. Others who know better how to serve the consumers replace them.”
I would have to state that I am totally in agreement with the views of Rothbard in this issue. Property appropriated wrongfully should be given back to the victims of his descendants wherever they can be traced.
Education is a valuable tool required for survival of which the formal education forms a very small part. There isn’t anything special about education which makes it a birth right. Yet, I have found that a lot many libertarians make exceptions for education. Inspired by economists like Milton Friedman, they support programs such as “School Choice”. It makes one wonder whether they have any real understanding of the market economy. If they really believed in the superiority of the market in providing for the society, they wouldn’t have supported School Vouchers. They would have let the market take care of the situation.
There are several problems with the voucher system. The most important one is that School Vouchers don’t eliminate taxation. Public funded education is the exemplification of the Marxian idea “From each according to his ability, to each according to his need”. Every one, including homeschooling parents, and childless ones are forced to pay for the education of the children who they may or may not care for. Tax payers pay according to their ability. Parents who recklessly produce children get according to their need. Nothing can be more monstrous than that. Taxation diverts production to fields which may not satisfy the needs which are more urgent for the people.
What most of the supporters of the voucher system pretend not to understand is that if Government is to fund the education of children in private schools through taxation, it is obvious that Government would have a say in how these funds are being utilized. One who pays the piper calls the tune. It would eventually lead to a total control of the education system by the Government. It goes without saying that under this system most of what children would be taught under this system in the name of Social sciences would be mostly Government propaganda. There wouldn’t be autonomy even in the case of private institutions. There would be a call for more accountability and regulation which would lead to stagnation and less innovation in the field of education.
On an entirely free market, schools would have to compete with each other in providing better education at a lower price. The voucher system clearly tampers with it. It reduces all incentives for cutting costs as the fee is not given out of the parent’s pocket, but from the Government. The result would be inefficiency and a high cost for maintaining the system. It in turn leads to less children receiving quality education.
Some schools would be out of business due to the voucher system. Schools which don’t accept the vouchers would find less people to pay for the education which it provides. Voucher system, needless to mention, breeds parasitism and dependency.
What most libertarians forget is that the voucher system is against the founding principle of libertarianism: The Non Aggression principle. No one has the right to take from other in the name of noble motives. To begin with, it is not a noble motive to take from the producer to give to the parasite. Coercion is hardly a libertarian principle.
It is interesting that the supporters of this program call it “School Choice”. What does that mean? Should the tax payer be molested in order to provide parents with enough choice? There are always enough options to choose from under a free market. The voucher program would only reduce this choices by leading to Government dictated syllabus and curriculum. It is utterly naïve to think that Government would fund the education without having a say in it. Notice the secret admission of the proponents of this policy that the government is a failure in providing its citizens with quality education.
Why are these libertarians calling for free food, housing or health care when it is well evident that these are more important and urgent needs than education? If they have real faith in the superiority of the market, why don’t they call for an all-out privatization? The answers are not obvious.
How Anarchy Would Work
Insurance companies would either sell defense or maintain proximity with Defense Companies. If we both are customers of Reliance Defense Company, and a dispute between us occurs, the dispute would be submitted to the court of Reliance Defense company, or a court patronized by Reliance Defense Company. The decision of the court would be respected. If you are found guilty, the Reliance Defense Company, or its Insurance Company would compensate me for the damages done by you. It will be then the task of Reliance Defense Company to get back their money by putting you in a debtor workhouse (prison) or by garnishing your wages. I, the Defense Company, and the Insurance Company would be in a position of inconvenience due to the damages caused by you. So, it would be in the rational self interest of Defense and Insurance companies to not deal with (Insurance companies might rate their insurance premiums up in some cases) you, or other people with criminal tendencies. If a person doesn’t have insurance, no sane person would deal with him in any manner, as they won’t be able to claim compensation in case a dispute occurs. Almost every one would have Insurance under anarchy, as without Insurance, one can’t get a job, rent a house, buy a car, travel through a private road or get into any other contractual situation.
In the case mentioned above, If I am a customer of Reliance Defense Company, and you are a customer of Tata Defense company, our dispute would first be set for arbitration in the court of the plaintiff (I)-which means: a court of, or patronized by Reliance Defense company. If the defendant (You) is found innocent, the matter has come to an end. If you are found guilty, then the arbitration would run in the Court of Tata Defense Company. If that court too finds you guilty, you would be punished. If it finds you innocent, the arbitration would move to an appeals court. The decision of the appeals court would be respected. If a person (defendant) refuses arbitration, the arbitration would be held in the court of the plaintiff, and the decision would be binding. So, a person who didn’t commit a crime will not refuse arbitration in normal cases. If he disagrees with the decision, he can take the case to his court, or a mutually consented appeals court. It is rational to assume that if the defendant and the plaintiff are customers of different Defense Companies, these Companies together might decide the court in which the arbitration would run. The courts would try to be as honest and objective as possible, as their profits depend on the number of cases they receive for arbitration. People won’t deal with dishonest Insurance companies, or their customers, as no sane person would want to be taken advantage of. So, a dishonest Insurance company would soon find it deserted by almost all its customers. An Insurance company which patronizes poor courts too would be soon deserted by its customers.
Wouldn’t Defense Companies battle?
Battles could be ruled out for two reasons. 1) Wars are costly and would result in high Insurance premiums. Most customers would desert Insurance Companies with high premiums. 2) People won’t deal with the customers of warring defense agencies as they would lose in any case. As of it, the customers of the warring agency would be forced to patronize another Insurance company, if they want to get into contracts with other people. A court too should be honest if they want more cases handed over to them. What if a rich person bribes the court of Insurance company? If that is the case, most people won’t use those courts and Insurance companies. Nothing like that happens in the case of Government courts. People are forced to use them, even if they don’t trust them.
Fraud under Anarchy
Fraud would be kept at minimum as Defense Companies would lose their profits if they don’t. If a defense company engages in fraud, most of its customers would desert it, as people won’t deal with the customers of such a defense company, as they don’t have a legal recourse in case of crimes.
Poor under Anarchy
It is often argued that poor will be defenseless under Anarcho-Capitalism. However, the argument completely lacks sense-For several reasons.
1) It is very unlikely-nearly impossible that there would be extreme poverty as of now under anarchy.
2) Under the present system, a rich person can easily bribe a bureaucrat or a judge and get his things done as bureaucrats and judges are not risking their own funds. A private judge is risking his own funds and profits, and he would lose his income or profits if he isn’t honest or objective. It is very unlikely that bribery is going to work.
3) Customers would desert courts which have a poor reputation.
4) Insurance companies selling defense wouldn’t patronize corrupt courts as, if they do, their customers would patronize another Insurance company. Such a court would be soon out of business. Nothing like this happens under statism.
5) One might argue that public courts can work with proper regulation. It will inevitably founder upon these questions-Who regulates the regulators? What is the incentive? How does such a system make profit and loss calculations? Without profit-loss calculations, how does one know whether job is being performed well or not?
6) As Roderick Long has pointed out, “any court that got the reputation of discriminating in favor of millionaires against poor people would also presumably have the reputation of discriminating for billionaires against millionaires. So, the millionaires would not want to deal with it all of the time.”
7) Under anarchy, the media won’t have to spend most of its space on politics. They would divert more of their energy to exposing corrupt institutions and extraordinary achievements of men. People won’t deal with customers of dishonest defense companies, and these customers will be forced to move to another Defense company.
A rich person who commits a crime would suffer from boycott by his clients and customers when insurance companies reject him. Such a boycott affects the rich more than the poor.
9) Even if a poor person can’t afford to file a case, he can sell that claim, or part of that claim to a rich person. Such a system existed in Iceland. That would make sure that eventually, all sorts of criminals are punished. One can’t commit a crime against a poor person and go unpunished. If someone murders a poor person, the person who has homesteaded the estate of that poor person can file a case and get compensation.
Do Anarchists assume a change in human nature?
No change in human nature is assumed here. We, libertarians don’t take a rosy view of human nature. We see human nature rightly, and admit all its flaws. Three things have to be pointed out-1) If you believe human nature is flawed, you have to admit that the politicians and bureaucrats chosen by these flawed creatures too would be of that sort, and there would be no excuse for state action. 2) A change in human nature is not necessary for libertarian anarchy to work. 3) People with power lust are more likely to rise to the top under statism. The state attracts all kinds of rascals.
What libertarian anarchy does is that it leads to a system in which criminal acts are hard to perform. It also punishes those who resort to such acts in a just manner. Under the present system, a judge has no financial incentive to be honest and objective. He has only a moral incentive. Under anarchy, he would have both financial and moral incentive. Ask yourself which system will deal with criminals better.
Why Anarchy?
Almost every major problem mankind faces can be traced back to the state. The state drags innocent people into war. Involuntary unemployment results when a minimum wage law is passed and labor union coercion is sanctioned. Price controls result in shortages. Protectionism leads to poverty and wars. High prices and poor quality products result when Government monopolizes certain industries. Taxation prevents capital accumulation. Credit expansion leads to inflations and depressions. Some estimates say that there were nearly 262 million deaths caused by the Government in the twentieth century. In the light of all this, I see no reason for a person who loves humanity to support the state. It should be obvious that in any sector, monopoly is bad. How do statists get around this fact? In any monopoly, there is an incentive problem. There is no incentive to provide better service at a low cost. It is not just that. There is no way to know whether the service is provided in the best possible manner in the absence of competition.
Isn’t voluntary taxation better?
Voluntary taxation is a contradiction in terms. Taxation implies that money is collected at the muzzle of a gun. How could it be voluntary? How could it be certain that money collected in this manner would be sufficient to provide defense and security? Moreover, the problem with monarchy isn’t just that state collects its revenues using coercion. State prevents anyone from competing with it.
Why do minarchists make an exception for defense, law and police? Some minarchists believe in the Non Aggression Principle. Why don’t they apply it to the case of Security? How monstrous is it to forcefully extort money from a person maintaining the pretense of protecting him? It could be argued that these are public goods and can’t be provided privately. But, this argument was refuted several times. In the past, most of the roads and lighthouses (Public goods theorists usually point out the case of light house. Ronald Coase has pointed out the fallacy. Light house owners charge people for using the harbor) were privately owned. By 1800 there were over 60 private road companies in the United States and by 1830 they had built over 400 private “turnpikes” (highways). Out of 46 Lighthouses in England in 1830, 36 were privately owned. There was privately produced law in the ancient Ireland and medieval Iceland, for instance. And several thinkers have envisioned how libertarian anarchy would work- and it sounds perfect.
Why do I want to impose anarchy on people against it?
Some argue if people don’t want Anarcho-Capitalism, imposing it over them would be violating their freedom. If you tell a thief to not rob from your house, will you be imposing your views on him? If someone takes your money by force, gives you stale food, forbidding you from buying food from anyone else, is that right or wrong? If you tell that person to not do it, will you be imposing your views on him? Will you be violating his freedom? That precisely is what Government does. It forcefully takes money, gives poor quality defense, and forbid us from buying the service from private organizations.
Is human nature consonant with anarchy?
State is a relatively new institution. Mankind has lived hundreds of thousands of years without a state. If so, is it true that human nature is not inclined to live under a state? How come we are living under a state then? Slavery and serfdom existed for a long time. Doesn’t that mean slavery is consonant with human nature? If so, how men got out of it? Obviously, when people realized the advantages of co-operation, people shifted to the present system. When people realize the advantages of anarchy, they would move into such a system. No change in human nature is required. Blaming human nature for being flawed doesn’t make any sense. People are mostly corrupt under the present system as people respond to incentives. Under statism, men have every incentive to be corrupt. To say that anarchy won’t work as human nature is flawed is tantamount to saying that capitalism won’t work as most people are poor. A person who makes such an argument fails to understand that it is precisely the lack of Capitalism which made the people poor.
Minarchy isn’t sustainable
There is no empirical or theoretical evidence to prove that a constitutionally limited government is sustainable. Government power has increased steadily in countries like United States and Britain. Tax experts like Irwin Schiff has pointed out that according to the law and constitution of United States, taxation is illegal. He is in jail now, and his book “Federal Mafia” is banned. That’s not an aberration, but the result of a limited Government. I admit that Anarcho-Capitalism was not the dominant form of social organization for the large part of human existence. But so wasn’t democracy or a limited Government. These are recent developments. The limited Government in United States broke down after 8 decades as of a civil war-But it took 1000 years for the near Anarcho-capitalistic system to break down in Celtic Ireland, and 290 years in Iceland. Who do minarchists support democracy and a limited Government then, when it is obvious that anarchy is far more workable?
How can one support Anarcho-Capitalism when it was never practiced anywhere?
It is true that pure Anarcho-Capitalism was never put into practice anywhere. However, that can’t be an argument against anarchy. A person who invents an electric bulb doesn’t have to prove that there were electric bulbs in the past. A new invention, innovation or theory is something which crushes all existing conceptions. It is unprecedented. I think this should be obvious and it makes no sense to argue against it.
Empirical Evidence for Anarcho Capitalism
Anarcho capitalism was not practiced in most parts of the world for most of the human history. However, there were societies which were really close to Anarcho-Capitalism. There was the law merchant in the past, as Bruce Benson has pointed out. Such a system has worked in Iceland, Celtic Ireland, American old west, British colonies in North America, Rhode Island, Albemarle, and Pennsylvania. There is a lot of historical evidence to prove that these societies worked really well and had sophisticated legal codes. Crime rates were strikingly low. In Celtic Ireland, it lasted for nearly thousand years. It was a civilized, advanced society as there was no Government administered justice. Even when these societies collapsed, it was not due to extreme anarchy, but due to contradictions in the anarchistic structure. Iceland is a classic example, where chieftains were granted more power, and religious issues led to a civil war.
Further Empirical Evidence: Present day Somalia
Somalia hadn’t a central Government since 1991. Yet, it has an efficient telephone system and mobile phone network, which is far better than that of its neighboring countries. The same is true of the electricity system. The situation is Somalia is much more peaceful than it was under the Government, and hence it is easier to do business there. There is a clan system which enforces contracts, though there isn’t a monopoly Government to enforce law. There was an improvement in 14 out of 18 development indicators after the collapse of the state in Somalia. One indicator was the same, and the other one, GDP, was blown up by the Government during its rule. Peter Leeson points out that “Under statelessness life expectancy in Somalia has grown, access to health facilities has increased, infant mortality has dropped, civil liberties have expanded, and extreme poverty has plummeted. In many parts of the country even security has improved. In these areas citizens are safer than they’ve been in three decades.” Even World Bank Economists like Tatiana Nenova and Tim Harford admit that things are getting better in Somalia. These Economists aren’t anarchists by any stretch of imagination.
A rich person who commits a crime would suffer from boycott by his clients and customers when insurance companies reject him. Such a boycott affects the rich more than the poor.