Book:Practical Anarchy/3

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The question of roads always seems to arise as a central objection to a stateless society – which makes perfect sense in a way, because it is a form of public ownership that we have all experienced first-hand, and because it can be hard to picture what they may look like in the absence of a government.

The alternative to state-funded roads is generally conceived to be toll-based roads. This is considered a disastrous solution, because who wants to stop every block to put a quarter in a meter?

Remembering our methodology from above, it is essential that we put ourselves into the mind of a road developer, sitting on the other side of that table, attempting to sell us access to his roads.

Imagine that you have sunk your life savings into building a complicated network of roads. If you don’t attract drivers who are willing to pay to use them, you are finished – your children are going to cry themselves to sleep with hunger.

When you stand up to make a presentation to a group of potential customers – drivers – are you seriously going to tell them that in order to drive a half a mile to pick up a loaf of bread, they are going to have to stop a few times to put quarters into a toll meter?

Of course not.

So – how are you going to convince drivers to use your roads?

For those who have not spent any time – or blood – in the entrepreneurial world, this is exactly how almost all companies are funded. You take your business venture to a group of investors, who play a very serious game of “devil’s advocate,” trying to find holes in your business plan.

If your entire fortune hung in the balance, how would you answer these objections? If you cannot provide good answers, you will never get to sell your roads.

I am certainly no expert in construction – I was an entrepreneur in the software world – but I can give you some possible answers that I would explore in order to prepare for such a meeting. I can also tell you that none of them would involve having drivers stop every few minutes to push change into a slot.

If I desperately wanted to build roads in a stateless society, I would first approach construction companies who wanted to build houses or malls in some area not currently served by a road. If you want to build a mall a few miles out of town, you’re not likely to attract many investors unless your business plan includes road access to the mall, since there are very few people who enjoy the prospect of a bracing hike to and from a “Target” store.

If you are developing a housing complex, you will face exactly the same requirement – it is true that you can sell houses without road access, but you will not be able to sell them for more than it costs to build them.

So there are really two kinds of roads, in two kinds of environments – highways, intercity roads, already-existing roads, and new roads.

New Roads

It is easy for us to understand that highways to new places will be built in the free market, for the simple reason that if you cannot build a highway to that new place, that new place will never come into existence. Secondly, there is not much point building a highway to a new housing development, without building roads from the highway to, and within, the housing development.

Thus, anything that is built that is new will only be built if roads to access it are constructed at the same time.

If I want to buy a new house somewhere outside of town, and a new highway and new roads are built to accommodate my desire, I will certainly be very interested in the long-term quality of the roads that have been built, since so much of my property’s value hinges upon easy and comfortable access to it.

Thus, the long-term quality of these roads will be a significant factor – probably a deciding one – in my decision to buy a house. Road quality is as important as the house’s construction quality when it comes to evaluating the value of a property. How much would you pay for a million-dollar mansion in the middle of the Amazon forest, with no road access? Assuming you are not Howard Hughes, probably nothing at all.

What about the danger that someone sells me a house, and then jacks up the price of the road maintenance?

Knowing that this is a risk, when I was negotiating my mortgage, I would ensure that a built-in and fixed price for road maintenance was included in my mortgage terms. I would also want the right to demand an open bid on road maintenance services when the contract came up for renewal.

We can all understand that the construction and maintenance of new buildings – commercial or residential – can only occur with high quality road access.[1]

So really, the question of road construction and maintenance – as far as it is raised as an objection to a stateless society – only hinges on existing roads, not new ones.

The Statist Pony

Imagine some communist country which provided out of the public purse a pony for each girl on her sixteenth birthday. Now, imagine that some crazy capitalist thinker came along and said that this country should switch from communism to the free market.

Naturally, just about everyone would then demand: “But how will each girl get a free pony on her sixteenth birthday?”

Of course, the answer is that she will not – but it may very well be asked whether the pony is really such an absolute necessity for every girl.

Government roads are just such a kind of “statist pony” – they are extravagantly wasteful, badly planned and allocated, and facilitate all sorts of dangerous and inefficient behaviours, just like every other government program on the planet. There is thus no possibility that a free market system of roads will look exactly the same as a statist system – because drivers will have to pay for road use directly, rather than offloading the total costs to taxpayers as a whole.

Thus when picturing a free system of roads, the question becomes: what will we as drivers be happy to pay for?

Certainly we will pay for safety, which we currently do not receive. We get jolting and wasteful traffic lights instead of gentle and fluid roundabouts. We get endless predatory ticketing instead of road systems that promote safety. We get endless construction that does not take place in the dark of night, but rather in the agonising slow motion of rush hour. We get a sagging expansion of our cities, because developers do not have to pay for the costs of the roads that lead to their houses, office buildings, factories, and shopping malls. We get eighteen-wheeler trucks blaring and rocketing beside small passenger cars. We do not see businesses adapting to the monetary and social costs of rush hour, because they do not face increased demand in wages since travelling in rush-hour costs more. Thus everyone has to start at nine in the morning, or thereabouts.

Like every other government program, roads and traffic control are run for the profit of special interests – construction companies, unions, bureaucrats, and cops primarily – and not for the sake of the end users, the drivers. The tens of thousands of deaths – and hundreds of thousands of injuries – that occur annually in the United States alone, would be a completely unacceptable body count in any private industry. Experiments such as roundabouts, removing traffic signs and lanes, charging a premium for high-volume traffic and so on – all of which have been proven to increase efficiency and safety – simply do not spread across the system, any more than salmon steaks showed up in your average Stalinist store.

Existing City Roads

No matter what happens to the highway system in general, we all appreciate that city roads have to be maintained. How can this happen without a toll at every corner?

If we look at the average down-town core, it is largely composed of shops and businesses. Is it beyond the pale of human thought to imagine that the stores and businesses on a particular city block would be able to get together and all chip in for a relatively modest fund to maintain the roads and footpaths around them – particularly when they no longer have to pay property and profit taxes to the State?

If we do believe that this is impossible, then we face exactly the same problem that we faced before about democracy. The central idea of democracy is that citizens are able to put aside their own petty personal self-interest and vote according to their conscience, with an eye to the collective good of society. If we accept that human beings are capable of voting in this way, then surely we can accept that they can put a few bucks a month into a common pot to pay for the roads that bring customers and employees to them. If we do not think that human beings can organise themselves to take care of a few hundred meters of roads that they directly benefit from, then they will never be able to vote for political candidates with any thought for the common good, and democracy must be abolished.

Either way, we end up with a stateless society.

There are, of course, many other ways to charge for roads in a free society. GPS tracking devices can effortlessly monitor the movements of cars, and a single bill can be sent, and the proceeds apportioned out to the road companies involved.

Furthermore, non-dangerous advertising could very easily subsidise the cost of roads – one possibility that springs to mind is radio commercials that would be inserted into programs based on the location of drivers, so that they did not provide visual distractions.

A Predatory Road Monopoly?

All right, you may say, but what about the reality that highways – and city roads – are extremely non-competitive situations, since no one is going to build a highway next to another highway and compete with it?

That is somewhat true, although it is important to be precise in terms of what is meant by the word “competition.” Brad Pitt has a monopoly on Brad Pitt – or at least, he did before he got married. However, Brad Pitt still faces competition – not just with other actors, but rather with everything else that human beings could be doing instead of going to see a Brad Pitt film. He competes with bowling, sex, napping, reading books on anarchy – everything you could imagine! Thus, although he has a monopoly on Brad Pitt, he does not have a monopoly on you.[2]

In the same way, any particular highway may have a monopoly on getting from A to B in the straightest line – but that does not mean that it has a coercive and exclusive hold over everyone’s entire decision-making processes.

Let us take an example of an “evil capitalist highway robber baron” named Jacques, who decides to start jacking up the rates for any driver using his highway.

First of all, Jacques will not be making this decision in a vacuum. After roads become privatised, everyone who buys a house who relies on a particular highway will be fully aware of their vulnerability to increased road tolls in the future. As an enterprising construction capitalist, I would sweeten the pot for people in this regard by negotiating a twenty year guarantee with Jacques that he would not raise their prices any more than one or two percentage points a year.[3]

However, let us imagine that no binding contracts limit Jacques' ability to raise his prices, and one day he announces that his rates are going to triple.

What happens then?

Well, people are not about to move because the price of their road travel is going up, so that is not likely to be an issue – what they will do, however, is go to their bosses and say that they need a raise. Bosses – having been one myself – are notoriously cheap individuals, who do not want to pay a penny more than they have to for what they want. If I were a boss in this situation, I would explore other alternatives to giving raises.

For instance, I might offer them a day or two a week to work at home. Alternatively, since no doubt Jacques' prices are higher during rush-hour, I would also offer more flexible hours to those who wanted them, so that they would not have to pay a premium to come to work at a specific time.

If I were another kind of entrepreneur, I would set up a website dedicated to helping people find carpooling, so that people would end up paying less.

Also, the increased prices per vehicle might very well make it economically viable to start running buses along the highway.

In this way, Jacques might gain a temporary increase in his revenues, but consumers would simply adapt to his increased prices, in such a way that this increase could not be both significant and permanent.

In other words, by drastically raising his prices, all that Jacques is really doing is teaching people to find alternatives to using his highway. He is training them to avoid his service – and one of the terrible aspects of this practice is that once people get used to working at home or car pooling, not all of them will revert to their old habits if he drops his prices.

Jacques also creates another significant risk, which can easily escape the inexperienced eye.

By increasing the price of his highway, Jacques has reduced the collective wealth of entire neighbourhoods to a far greater degree than he has increased his own wealth specifically. Of course, no one expects Jacques to be motivated by some abstract considerations of social wealth, but nonetheless he is creating a very dangerous situation.

Almost all neighbourhoods have some sort of Business Association, where members meet to discuss a variety of collective concerns. This Association will certainly meet – and pointedly not invite Jacques – a day or two after he jacks up his prices, in order to figure out what they should do. They will likely decide to ostracise Jacques, which will certainly have a negative effect on his ability to move with ease and profit in the business world, since so many deals are consummated through existing relationships.

It is very possible that this form of business ostracism will cost Jacques more than he can possibly make by raising his rates, especially after the inevitable consumer adaptation.

However, perhaps Jacques doesn’t care about these particular business relationships – it does not matter, his ability to do business is still irretrievably harmed.

Whomever Jacques wants to do business with next will be fully aware that he has a habit of outrageously jacking up his prices without warning. Therefore, if someone has a choice about doing business with Jacques, he will very likely refrain.

Anyone who does end up wanting to – or having to – do business with Jacques will have to do far more due diligence and legal wrangling than before his fears were elevated by Jacques' deleterious and unpredictable business practices.

Thus it is enormously unlikely that jacking up his prices will end up having a permanent and positive effect on Jacques' profits.

However, to take the argument to its extreme case, let us say that Jacques does somehow end up creating a permanent and enormous profit.

His actions have created a large number of business people who have a direct interest in reducing those prices again – all those people whose property values and business expenses have been negatively impacted by Jacques' price increase.

The Business Association members would be highly motivated to plot and execute a takeover of Jacques' highway business, in order to restore their own property and business values. Whatever debts they may incur in this process will be more than recompensed by the increase in these values. Since the personal profits that Jacques is accruing remain far less than the collective costs he is inflicting on others, he remains highly vulnerable and exposed to a takeover bid, either hostile or friendly.

Of course, the Business Association members are unlikely to be experts at running a highway, so they would more likely act as investors for competing highway companies, to fund an expansion takeover, on the condition that this new company would guarantee a return to the original rates, along with a longer-term guarantee of reasonable rate increases.

Thus in general the instability, customer alienation, ostracism, and endless competitive risks introduced by sudden and large price increases do not pay off at all, and in fact threaten the viability of the business as a whole. In the example above, we have simplified the scenario by pretending that Jacques can make all of these decisions on his own, which would never be the case in any free market. Any industry that has a potential for a monopoly would require a large amount of capital investment and management, which comes with stockholders, investors, and a board of directors. Jacques would not have the right or the ability to make significant decisions about price without the support of the majority of the interested stakeholders – all of whom would view, and quite rightly too, the jacking up of prices as far too threatening to the long-term value of their investment.

My Way or the Highway?

We could imagine a scenario where Jacques is able to build a five hundred million dollar highway out of his own pocket, because he has inherited billions or something like that – but it seems very unlikely that his venture would succeed in the long run, because people would be hesitant to get into business with someone who does not have a multitude of other interested parties to temper his judgement, and who retains a tyrannical level of control over his own organisation. For instance, people do not want to get heavily involved in a company without a succession plan, and having a single “dictator” in a company does not bode well for its long-term success. If Jacques is not actively grooming a number of successors, and if he then gets hit by a bus, no one will be able to step into his shoes, and his company will fail. This level of risk would be too high for most other companies, since it would take a number of years to build his highway, and Jacques' company could collapse at any time, leaving bills unpaid, and orders unfulfilled. If Jacques insisted upon these conditions, all that he would be revealing would be his own lack of business judgement, which would also cause more experienced businesspeople to shy away from getting involved with him. Thus it seems exceedingly unlikely that Jacques would be able to build such a capital-intensive structure while retaining dictatorial control over the company.

I do apologise for the detailed and somewhat technical nature of the above explanation, but I do think that it is essential to understand that there are always two sides to every negotiation. In a free society, there are a near-infinite set of options available to peacefully address what could be considered sub-optimal business practices on the part of others.

Automobile Insurance

Finally, let us look at how the provision of automobile insurance would affect the safety of roads.

In most Western countries, automobile insurance is compulsory – I believe that this would continue to be the case in practice, if not in principle, in a free society.

I would much prefer to use someone’s roads if I could know for certain that all the other drivers carried insurance. Thus it seems very likely that insurance would be required for anyone travelling on a road.[4]

Naturally, the fewer car accidents there are, the more car insurance companies can make in profit. This direct correlation is one of the core foundations to the achievement of security in a stateless society. If, say, Jacques' roads are unsafe, then the car insurance companies will charge a premium for anyone who wants to drive on them – thus cutting into Jacques' profits considerably. This will drive Jacques to invest in road improvements.

At the moment, insurance companies have no direct control over government road policies, and so these companies can only compete on price, not on the proactive promotion of road safety. However, when competition for roads heats up through privatisation – and remember, the competition is not just between different road systems, but also between using roads and not using them – insurance companies will be forced to compete on creating the safest possible roads, in order to keep their prices as low as possible.

When the costs of roads are directly borne by the drivers, the benefits are both staggering and almost limitless. Without the ability to externalise the cost of roads to other taxpayers, drivers can make more informed and rational decisions about the costs and benefits of driving. Where to live, how far to commute, whether to drive in rush hour, whether to use public transit, whether to carpool, whether to work from home – all of these decisions are fundamentally driven by cost, but in a statist society, these decisions almost always turn out to be disastrous, because the simple and rational efficiency of the price mechanism is not allowed to function, to the detriment of resource consumption, the health of the environment, and the quality of life for literally hundreds of millions of people.

An example of private roads

If I were to say that roads should not only be provided by the free market, but also that they should be enclosed under a roof, cooled in the summer and heated in the winter, that all stairs should in fact be escalators, that all corners should be landscaped with plants and fountains, and patrolled by security guards – surely you would say that this would be an outlandish standard, which could never be achieved in the free market.

Well – that is exactly what a mall is.

Never underestimate what the free market can provide.

Health Care

The provision or subsidisation of health care is considered a foundational justification for State power, for a number of seemingly compelling reasons.

First of all, health care expenses can be both unexpected and enormous. Secondly, people undergoing an acute health crisis are scarcely in a position to negotiate, haggle, and wait. If you have been hit by a bus, and are bleeding out, you will not barter with whoever arrives to treat your injuries. Thirdly, health care providers are generally considered to be in a difficult position, insofar as they almost never refuse to treat someone who arrives in the emergency room, whether that person can pay or not. Fourthly, people have certain reservations or fears about the trustworthiness of medical advice, and so wish to ensure the quality and consistency of the instructions they receive. Finally, since doctors, pharmaceutical companies, and other healthcare providers currently profit from illness, rather than health, the incentives are considered reversed, in that pharmaceutical companies, for instance, are motivated to deliver medication, rather than discover alternatives to medication or prevent the problem in the first place.

The “solution” to the above problems has almost always been the creation and expansion of State power over the medical field. In all Western democracies except the United States, this has resulted in the socialisation of medicine, or the creation of a fundamentally communist monopoly that is funded by the taxes generated through the efficiency and productivity of the market. Those who are healthy are forced at gunpoint to pay for those who are sick. Furthermore, the State regulates the licensing of health care providers, creating significant legal barriers to entry to doctors, nurses, and other practitioners. The imperative of providing health care – the axiom that it is a “right” – is considered a justification for the violence of the State in a way that trumps just about every other consideration. Even those who would be willing to accept the substitution of private charities for public welfare find themselves hard-pressed to defend the idea that health care should be a for-profit industry, because of the fear that, as the song goes, “the rich stay healthy, the sick stay poor…”

Every empathetic person feels the utmost compassion for an innocent child born with some form of correctable birth defect, to poor parents perhaps, who might require tens of thousands of dollars of expert help to correct the problem. The sheer random misfortune of such a disaster truly stirs us with sympathy, because we all understand that this wounded child could easily have been us, or our own child. Similarly, those who are born with some genetic or congenital disorder are also “unjustly” inflicted with additional medical costs, through no fault of their own. A child whose teeth just happen to grow crooked requires thousands of dollars more in dental work than a child whose teeth just happen to grow straight.

When a person is struck down by an unexpected, unanticipated, or inevitable medical condition – as will happen to all of us, in the case of death itself – it feels excruciating to imagine that they would have to debate costs and benefits. Particularly in the case of parents, having to choose between the best medical care for a sick child, and the medical care that they can afford, seems brutal and inhumane. Michael Moore’s documentary “Sicko,” for instance, opened with the story of a man who, it is claimed, had to choose between replacing one finger or another, but could not afford both.

The vulnerability and fear that accompanies significant medical ailments should, we feel, not also be combined with cold calculations about costs and benefits. Should a man with cancer be forced to choose between chemotherapy and eating? Surely a just and compassionate society should do everything within its power to avoid inflicting such stark and ghastly choices upon its citizens.

Furthermore, since medical advice can be truly a matter of life or death, a compassionate society should take every conceivable step to ensure that medical practitioners go through a rigorous process of training and evaluation. Again, the vulnerability and fear involved in medical decisions should never be exacerbated by fears that the self-interest of the medical practitioner is not directly aligned with the self-interest of the patient.

Anarchism and Medical Care

There is no question that human beings are not possessed by innate sainthood. Doctors can be abrupt, greedy, false, and treacherous. Patients, as well, can be difficult, obstructive, non-compliant, litigious, and hypochondriacal. They can fake injuries in order to gain unjust benefits, and can also become addicted to certain medications such as painkillers, and become dangerously manipulative.

Anarchism recognises the empirical reality of human corruption in a way that statism simply does not. Anarchists recognise that power corrupts, while statists forever believe that power is the cure for corruption. Anarchists understand that the only valid and proven way to oppose human corruption is through voluntarism and competition – statists believe that the only way to oppose human corruption is to create a monopoly of violent power.

Fundamentally, anarchists believe that virtue results from a marketplace of voluntary interactions – statists believe that virtue is a dictatorial compulsion, created, and maintained at the point of a gun. Ideally, no matter what your political convictions, we can all recognise that medical care should be:

  • Focused on prevention, rather than cure.
  • As cheap as possible.
  • As competent as possible.
  • As accessible as possible.
  • Aligned with the interests of the patient.

Existing Systems

A basic law of economics is that whatever you subsidise, increases; and whatever you tax, decreases.

Statist health care “systems” follow the basic model that the doctor does not get paid when you are healthy, but only gets paid when you are sick.

In other words, the doctor has no direct economic incentive to prevent illness, but every incentive to treat it.

In statist health care systems, the doctor is paid per patient visit, not for a successful cure. Thus doctors do not make their money from curing patients, but rather from seeing patients – thus they have every economic incentive to keep consultations as short as possible, and to outsource any complicated “cures.”

Furthermore, in socialised medical systems in particular, it is actually illegal to collect and publish information about the quality and success rates of doctors. If I find out that I have prostate cancer, I cannot possibly find out which doctor has the greatest or best success rate in curing it.[5]

When you sit back and really think about it, this is staggering – absolutely staggering!

It is illegal to sell a food item without publishing the nutritional information. It is illegal to run a public company without publishing your financial information. It is illegal to sell a car without publishing its fuel efficiency. Hell, it is illegal to sell an item of clothing without publishing where it was made.

Every stupid and irrelevant piece of information is required by law – not only are the success rates of doctors not required, but you will actually go to jail for collecting and publishing this information!

Why is that?

This information is violently banned in most countries for two simple reasons – first, in any socialised system, this information would cause a stampede of sick people towards the most effective doctors. Since access to a doctor cannot be determined by price, the waiting times for good doctors would increase exponentially, while the incomes of bad doctors would decrease. Voters would go largely insane if they could not get access to the most competent doctors, and would demand immediate changes in the system. Unfortunately, the only way to limit general access to specific doctors in a socialist medical system is to allow those doctors to raise their prices – thus eliminating the communist aspect of the system.

The second reason that this information is unavailable in most medical systems is that it is already available to particular individuals, who specifically do not want it to be shared among the general population.

“Two-Tiered” Health Care

Whenever the “spectre” of privatised medical care is raised, every pundit on the planet starts wailing about the evils of a “two-tiered” medical system. Basically, this is the fear that if elements of privatisation are introduced to a public health care system, all the good doctors will flee to the private sector, leaving a dilapidated public area.

The fascinating aspect of this scare story is that these same pundits genuinely do not seem to imagine that a “tiered” medical system does not already exist within a socialised environment.

There are in fact four tiers in a socialised medical system; the first is inhabited by rich and prominent people, such as politicians, media personalities, pundits, and so on – who do not wait in line to get MRIs or consultations with the top specialists in the field. These people inhabit a sort of “Potemkin village” of “show medicine,” and are never allowed to fall through the cracks, for fear that they may write about or describe the true realities of the system. Those in the know will direct these people to the most competent medical specialists, and ensure that they are ushered into private consultations without the indignity of having sit in a waiting room. These patients then inevitably move to the front of the line for treatment, and remain immensely satisfied with the public health care system, because they do not actually have to deal with it, but rather remain quite happy to have everyone else pay for their elite private medical care.

The second tier is composed of those who are inside – or at least near – the medical profession itself. A gentleman I know who is a psychologist received the bad news that his father had colon cancer. Because he was relatively close to the medical profession, he could call on friends and immediately find out who was the best specialist in town for this disease. Then, he introduced himself to this doctor, saying that he was a friend of so-and-so, and thus inevitably vaulted to the front of the line – and this special treatment followed his father all the way through his diagnosis and chemotherapy. He always got the best doctors, and he rarely had to wait. This is not because doctors are evil, or innately corrupt, or anything like that, but rather because it is very uncomfortable to refuse a favour to a friend – and it is in fact easier to gather and keep friends when you can do favours for them, because then they will inevitably do favours for you as well.

The third tier is composed of rich people without political or medical contacts who can fly overseas for medical treatment, to the US or other more market-driven health care environments.

The fourth tier is composed of those who are not prominent, or do not wield power, are not rich, and who also do not have contacts within or near the medical profession. These hapless souls shuffle through the public health care maze, consistently displaced by those with more power, unable to gain even a scrap of information about the quality of the care that they are receiving, waiting with numb hope for the system to grace them with an appointment, with x-rays, with treatment, with advice – lost, helpless, dependent, frightened, ignorant – with no more actual “rights” than a forgotten cow lodged in a stall awaiting antibiotics.

Since a doctor is paid to see as many of these people as possible, they will impatiently rush them through their office, spending a documented average of about eighteen seconds listening to their symptoms – and by far their most common treatment option will be to write a prescription, or refer the patient to a specialist.

There are three main reasons that they write a prescription; the first is that it gets the patient out of their office as quickly as possible, as well as transferring the bulk of any potential liability to the pharmaceutical company. The second reason, which is directly related to the first, is that pharmaceutical companies shower them with gifts, trips, and seminars in order to promote their medications. The third reason is that a patient can be seen very rapidly if he or she is only coming in to get a refill of the prescription – “Are you still experiencing the same symptoms? Very well, here you go!” – thus ensuring continued high-volume billing.

Of course, referring a patient to a specialist is also a very rapid way of getting them out of your office, thus maintaining your billing rate.

The Anarchist “Solution”?

Imagine if I suggested the following as the solution to the problem of how to deliver healthcare in a stateless society:

The way that I see it working is this: one DRO should amass enough weaponry to violently drive all other medical DROs out of business. This DRO should then take about twenty percent of people’s income – and kidnap or shoot them if they do not give up their money – and then provide health care as it sees fit. This same DRO should also have complete control over how many doctors there are, and how a doctor should be trained, and how a doctor should be paid. Again, if anyone attempts to become a doctor without following the detailed and lengthy rules of this DRO, they can be kidnapped and/or shot.

This DRO should pay doctors per patient visit, to ensure that doctors would see as many patients as possible in any given day – and it should make sure that doctors are neither paid for successful treatments, nor penalised for any unsuccessful treatments. Doctors should not make any money whatsoever by preventing illness, but rather should get paid for treating as many illnesses as possible, as quickly as possible.

Furthermore, this DRO monopoly should be able to shoot or kidnap anyone who dares to collect and publicise any information about the success rates of its doctors.

In order to ensure that citizen feedback is available to this DRO, every couple of years, citizens should be able to appoint a representative of their choice to the Board of Directors. Whoever they choose should be paid by the existing doctors that the DRO controls, or by the pharmaceutical companies…

We could continue with this example, but I think that you can see the ridiculousness of this “solution.” If I put this forward as my answer, I would receive an unbelievable tsunami of incredulous and contemptuous e-mails, wondering just what particular drugs I had been on when I described this as the best possible solution to the problem of providing health care.

Inevitably – and again, ludicrously – these same people will also deluge me with incredulous and contemptuous e-mails when I suggest privatising the provision of health care.

How It Doesn’t Work: An Analogy

In socialised medicine – as in any socialised or communistic system – the consumers are not the customers. I talked about this in terms of academia in my previous book, “Everyday Anarchy,” but this reality has far more dire consequences in the realm of health care.

If automobile manufacturers were paid to produce automobiles by politicians, rather than by consumers, it is easy to imagine what the results would be. Since consumer input would be almost non-existent, the preferences and needs of the consumer would have almost no effect on what was produced.

If this statist monopoly also supported and protected a monopolistic public sector union, can we imagine what the efficiency and productivity of these workers would be?

What if these manufacturers were paid by the number of cars that were delivered, not the quality of each car? Can we imagine what would happen to the wheels when we attempted to drive the cars off the lot?

What if these car manufacturers were also heavily subsidised by the oil and petroleum industries – and those subsidies were directly proportional to the inefficient fuel consumption of their cars? Can we imagine that they would build energy-efficient cars, or would they want to increase their income by building inefficient cars?

Does anyone ever suggest that we should nationalise car production? Yet it is impossible to have a health care system without cars – or at least ambulances – since there is no easy way to deliver doctors, medicines, or patients without cars.[6]

It is hard to imagine why we would create such a horrendous system for health care, while rejecting it as ridiculous and inefficient in terms of car production.

Surely our health is far more important than our cars.

Any time a coercive agency intervenes on behalf of the consumer, that coercive agency then immediately and permanently becomes the consumer, and the needs and desires of the actual consumer are almost entirely eliminated from the equation.

How It Will Work

Ever since Blaise Pascal discovered the laws of probability, a singular human institution has arisen to help people deal with unpredictable risk – insurance.

Insurance is simply a way of playing the law of averages in order to create predictability. If one out of a hundred people is going to be randomly hit with a ten thousand dollar bill, it makes sense for everyone to have the option of paying a fixed amount of money in order to be insured against such a bill.[7]

The wonderful thing about insurance is that the interests of consumers are almost exactly aligned with the interests of providers, since both are directly motivated by the desire to decrease risk.

If I take out insurance against the dangers of smoking, the insurance company only has to pay out if I get sick from smoking – thus the insurance company will inevitably reduce my rates if I quit. In the same way, if I have taken out insurance against the danger and expense of diabetes, my insurance company will charge me less if I lose weight.[8]

Every sane individual prefers to prevent an illness rather than cure it – and this is exactly the same motivation that drives insurance companies as well, since they make the most profit from healthy people, rather than sick people.

Thus, in a free society, insurance companies provide two essential services – one that you have to pay for, and one that you get for free.

The service that you get for free is an objective and detailed risk analysis of various lifestyle options. If you want to know how dangerous hang gliding is, all you have to do is apply for insurance, tell them that you are a hang glider, and see what happens to your rates. You do not have to sign up in order to gain detailed information about the risks your habits and hobbies incur – all you have to do is apply. Insurance companies are invaluable sources of information about relative risk, since their entire livelihood is based upon a rational and sustainable evaluation of risk.

The service that you have to pay for is the alleviation of risk by spreading it around.[9]

In terms of health care, then, we can be sure that your insurance company wants to keep you as healthy as possible. The farmer who sells cows is interested in their long-term health, in a way that the butcher who disassembles them is not.

Due to this motivation, private insurance companies will be reasonably proactive in attempting to prevent health problems from developing, rather than merely curing them after they have occurred. They will be sure to pay doctors first for prevention, and then for successful cures, rather than for merely cycling as many patients through their offices as humanly possible.

In any situation where lifestyle choices can ameliorate health problems, those will be chosen in preference to endless medication. It does not cost the insurance company any money if you go for a walk or do some sit-ups; it does if you have to be on insulin for the rest of your life.

Conversely, medication is in general cheaper than surgery, all other things being equal, and so effective medications will be researched, developed, and prescribed more often than invasive and dangerous surgery.

Healthcare Information

Spending money on a pricey doctor is probably about the most cost-effective investment you will ever make. The most effective doctors are those who cure the most efficiently – and for sure, most customers of health care insurance would also purchase life insurance from the same company, so that any disastrously failed “cures” would cost the company an enormous amount of money.

In this way, returning a customer to health not only guarantees future health care payments, but it also postpones the payment of death benefits. In this way, the self-interest of the insurance company is directly aligned with the self-interest of the customer, who doubtless does not prefer to be either sick, or dead. If the doctor is also paid to prevent, cure, and keep alive, then all three parties have the same goal, which is the polar opposite of any statist system.

Thus whenever anyone starts evaluating which health care insurance company to go with, each company would be tripping over themselves to provide independently verified statistics about the long-term health of their customers – the number of ailments prevented, identified, and cured; the average life expectancy, successful pregnancies and births, and so on. These companies would be selling health to you, rather than inflicting repetitive treatments on you, which is the case with socialised medicine.

The proactive and dedicated partnership between insurance company and customer – designed to serve the self-interest of each – would create a very positive and prevention-based healthcare approach. In the same way that companies that sell dental insurance require you to go for bi-annual check-ups, proactive insurance companies would require regular health check-ups.[10]

In this way, the self-interest of the doctor – who normally gets paid for treatment, not cure – and that of the patient, who prefers prevention rather than treatment – can be productively aligned.

Health Care and the Poor

It is not a subject that many people are particularly comfortable with, but charity can be a very complex and dangerous thing.

We certainly want to help the unfortunate, but we do not wish to enable and subsidise bad decisions – this is only part of the complexity involved in helping others – which a statist society cannot distinguish or deal with at all.

If society gave everything that a poor person could possibly require in order to live comfortably, that would scarcely reduce the numbers of poor people, but would rather increase them considerably. On the other hand, the children of poor people are scarcely responsible for any bad decisions their parents may have made – however, if charities give a lot of money to poor people with children, more poor people will tend to have more children, which will only increase poverty.

This balancing act is one of the enormous and complex challenges of true charity – and yet another reason why a violent monopoly will never end up helping the poor in any substantive or permanent manner. When it comes to health care, there is no doubt whatsoever that the majority of people care about the provision of health care for those who cannot afford it. At a hospital I visited recently, I saw a placard on the wall thanking the five thousand volunteers who helped run the place.

Doctors as a whole will always treat someone who comes with an immediate injury, whether they can pay or not. If we assume that medical treatments for the genuinely deserving and needy poor would consume about ten percent of general health care spending, then we can be completely certain that this amount of money would be donated by concerned individuals, either in time or money. We can be certain of this because we know of a large number of religious organisations that require ten percent of people’s total income – twenty percent in fact, since this is pre-tax income – and people are quite happy to pay that.

Thus the medical needs of the poor would be entirely taken care of in a free society through charity and pro bono work. Charities would also compete to provide the most effective care for the poor, in order to gain the most donations. I would certainly prefer to give my money to an organisation that was best able to create and provide sustainable health practices and medical treatments for the poor. In this way, not only would the self-interest of doctors, insurance companies, and customers be aligned – but also the self-interest of donators, charities, and the poor they serve.

In a stateless society, the poor will be genuinely served by a far better system, composed of those whose self-interest is directly aligned with the health of the poor.

As has been shown over and over again, throughout history and across the world, benevolent self-interest, enhanced by free association and voluntary competition, is the only way to create sustainable compassion within society.

I am aware that I have not answered all possible objections to the question of how health care is provided in a free society. I am also aware that the possibility always exists that people can “fall through the cracks,” or that charities could conceivably make mistakes, and either fund the wrong people, or fail to fund the right people.

Once more, this possibility of corruption and/or error is often considered to be an airtight argument against anarchy, when in fact it is an airtight argument for anarchy, and against statism.

Competition and voluntarism are the only known methodologies for repairing and opposing the inevitable errors and corruptions that constantly creep into human relations. The fact that human beings can make mistakes – and are always susceptible to corruption – is exactly why they should never be given a monopoly power of violence over others.

When an entrepreneur – whether charitable or for-profit – makes a mistake by failing to provide value – others will immediately rush in to provide the missing benefit. It is this constant process of challenge and competition that allows the best solutions to be consistently discovered and reinvented in an ever-changing world.

Stateless Prisons

One of the great challenges of anarchistic philosophy is the problem of prisons, or the physical restraint of violent criminals. Let us examine the punitive mechanisms that might exist in the absence of a coercive State system.

First of all, we can assume that in the absence of a State, DROs will necessarily band together to deny the advantages of a modern economic life to those individuals who egregiously harm their fellow citizens. Such necessities as bank accounts, credit, transportation, lodging, food, and so on, can all be withheld from those who have been proven to have committed violent crimes. Also, in a stateless society, since there is no such thing as “public” property, violent criminals would have a tough time getting anywhere, since roads, parks, forests, and so on would all be privately owned. Anybody providing aid or comfort to a person convicted of a violent crime could face a withdrawal of services and protections from their own DRO, and so would avoid giving such help.

However, this solution alone has not been sufficient for some people, who still feel that sociopathic and violent criminals need to be physically restrained or imprisoned for society to be safe.

Before tackling this issue, I would like to point out that if the problem of violent sociopaths is very extensive, then surely any moral justifications for the existence of a State become that much more untenable. If society literally swarms with evil people, then those evil people will surely overwhelm the State, the police, and the military, and prey upon legally disarmed citizens to their hearts content. If, however, there are very few evil people, then we surely do not need a State to protect us from such a tiny problem. In other words, if there are a lot of evil people, we cannot have a State – and if there are few evil people, then we do not need a State.

Also, whenever punitive measures are discussed, fears arise about unjust punishments. What if DROs act against someone who has been wrongly convicted of a crime? Well, according to our usual methodology, we must remember to compare a stateless society not to some perfect utopia, but rather to existing statist societies. Are people currently unjustly sent to prison? You bet. Are non-violent drug users jailed? Yes, by the millions. Do some people pretend to confess to less grievous crimes because they are threatened with terrifying sentences if they do not? Of course. Do the police manufacture evidence? Yes. Are policemen rewarded for preventing crimes, or obtaining convictions? The latter.

And – are war criminals such as George Bush charged with their genocidal crimes? Of course not. They are given pensions and speaking tours.

If we live in a terrifyingly obese nation, saying we should not bother dieting because some thin people get diabetes is irrational to say the least.

The Rapist

Let us imagine what might happen to a rapist in a stateless society. All general DRO contracts will include “rape protection,” since DROs will want to avoid incurring the medical, psychological, and income costs of a rape for one of their own customers. Part of “rape protection” will be the provision of significant financial restitution to a rape victim.[11]

If a woman gets raped, she then applies to her DRO for restitution. The DRO then finds her rapist – using the most advanced forensic techniques available – and sends an agent to knock on his door. “Good morning, sir,” the agent will politely say. “You have been charged with rape, and I’m here to inform you of your options. We wish to make this process as painless and non-intrusive as possible for you, and so will schedule a trial at the time of your earliest convenience. If you do not attend this trial, or testify falsely, or attempt to flee, we shall apply significant sanctions against you, which are outlined in your existing DRO contract. Our agreement with your bank allows us to freeze your assets – except for basic living and legal expenses – the moment that you are charged with a violent crime. We also have agreements with airlines, road, bus, and train companies, as well as petrol stations, to prevent you from leaving town until this matter is resolved.

“You can represent yourself in this trial, choose from one of our lawyers, or we will pay for any lawyer you prefer, at standard rates. Also, as per our existing contract, we are to be allowed access to your home for purposes of investigation. You are free to deny us this access, of course, but then we shall assume that you are guilty of the crime, and will apply all the sanctions allowed to us by contract.

“If you are found to be innocent of this crime, we will pay you the sum of twenty thousand dollars, to be funded by the woman who has charged you with rape. We will also offer free psychological counselling for you, in order to help you avoid such accusers in the future.”

The trial will commence, and will return a verdict in due course.[12]

If the man is found guilty, he will receive another visit from his DRO representative.

“Good afternoon, sir,” the agent will say. “You have been found guilty of rape, and I’m here to inform you of your punishment. We have a reciprocal agreement with your bank, which has now put a hold on your accounts, and provided us limited access. We will be deducting double the costs of our investigation and trial from your funds, and will also be transferring half a million dollars to the woman that you raped. We are aware that you do not have sufficient funds to cover this cost, which we will address in a moment. We also have reciprocal agreements with the companies that provide water and electricity to your house, and those will now be cut off. Furthermore, no petrol station will sell you petroleum, and no train station, airline, or bus company will sell you a ticket. We have made arrangements with all of the local grocery stores to deny you service, either in person or online. If you set foot on the street outside your house, which is owned privately, you will be physically removed for trespassing. Your wife and children can leave at any time. If they have no place to go, we will cover their transition costs, and charge you for them.

“Of course, you have the right to appeal this sentence, and if you successfully appeal, we would transfer our costs to the woman who has accused you of rape, and pay you for the inconvenience we have caused you. If, however, your appeal fails, all additional costs will be added to your debt.

“I can tell you openly that if you choose to stay in your house, you will be unable to survive for very long. You will run out of food and water. You can attempt to escape your own house, of course, leaving all of your possessions. If you do successfully escape, be aware that you are now entered into a central registry, and no reputable DRO will ever represent you. Furthermore, all DROs which have reciprocal agreements with us – which is the vast majority of them – will withdraw services from their own customers if those customers provide you with any goods or services. For the rest of your life, it will be almost impossible for you to open a bank account, use centralised currency, carry a credit card, own a car, buy petrol, use a road – or any other form of transportation – and gaining food, water, and lodging will be a constant nightmare for you. You will spend your entire existence running, hiding, and begging, and will never find peace, solace, or comfort in any place.

“However, there is an option. If you come with me now, we will take you to a place of work for a period of ten years. During that time, you will be working for us in a capacity which will be determined by your skills. If you do not have any viable skills, we will train you. Your wages will go to us, and we will deduct the costs of your incarceration, as well as any of the costs I outlined above which are not covered by your existing funds. A small amount of your wages will be set aside to help get you started after your release.

“During your stay with us, we will do our utmost help you, because we do not want to have to go through all of this with again you in the future. You will take courses on ethics. You will take courses on anger management. You will take psychological counselling You will emerge from your work term a far better person. And when you do emerge, all of your rights will be fully restored, and you will be able to participate once more in the economic and social life of society.

“You have a choice now, and I want you to understand the full ramifications of that choice. If you come with me now, this is the best offer that I can give you. If you decide to stay in your house, and later change your mind, the penalties will be far greater. If you escape, and later change your mind, the penalties will be greater still. In our experience, almost all people who either run or stay end up changing their minds, and end up that much worse off. The rest? They commit suicide.

“The choice is now yours. Do the right thing. Do the wise thing. Come with me.”

Can we really imagine that anyone would choose to stay in his own house and die of thirst, unable to even flush his toilet? Can we imagine that anyone would choose a life of perpetual running, hiding, and begging? Even if the rapist had no interest in becoming a better person, surely the cost-benefit of the options outlined above would convince him.

There will always be a small number of truly evil or insane people within society. There are far better ways of dealing with them than our existing system of dehumanising, brutal, and destructive State gulags, which generally serve only to expand their criminal intent, skills, and contacts. Also, it is important to remember that the existing State prisons contain relatively few evil or insane people. The majority of those in jail are non-violent offenders, enslaved and in chains because they used recreational drugs, or gambled, or went to a prostitute, or did not pay all their taxes, or other such innocuous nonsense – or turned to crime because State “vice” prohibitions made crime so profitable, and State “education” kept them so ignorant.

Our choice, then, is between a system which removes the tiny minority of evil people from society, rehabilitates them if all possible, and makes them work productively to support their own confinement – or a State system which spends most of its time and energies enslaving innocent people, while letting the evil and insane roam free – or become Commander in Chief.


Another central justification for the existence of the State is the need for a stable and universal monetary system. In the absence of any general system for determining price and value, the argument goes, economic activity grinds to a standstill, since all that is left in the absence of cash and prices is self-sufficiency, barter, and/or an inefficient command economy of some kind.

If the government stops defining and promulgating the money supply, the argument goes, money would cease to exist, and the economy would collapse. Every group would come up with their own definition of money, and at the mall, you would have to try to negotiate with people who were using diamonds, gold, shark teeth, salt, spices, DVDs, and goodness knows what else as cash.

Our economic life would thus become an endless run-around of attempting to match a variety of currencies to a variety of products; the value of our salaries would be diminished – or perhaps eliminated – by the amount of labour that it would take to find someone who would accept our “currency.” Furthermore, given the enormous multiplicity of “currencies” in a stateless society, we would never be sure whether or not we were being ripped off in some manner, as someone tried to convince us that twelve shark’s teeth were in fact equal to our bag of cinnamon – and horror of horrors, we might get home and find out that those shark’s teeth were in fact fakes![13]

Like so many arguments against a stateless society, the above approach can be defined as the “idiot kindergarten” argument. In this view, society is composed of largely retarded adults, who find it impossible to cooperate for mutual advantage, but instead run around like chickens with their heads cut off, grabbing, and snatching at whatever value they can, eyeing each other with suspicion and hostility, and probably eating glue and stuffing plasticine up their noses.

The essential thing to understand about money is that cash is just another product, exactly like an iPod, a car, or a telephone line.

A telephone line is designed to facilitate communication in a “many to many” scenario – anyone who pays to access it can talk to anyone else who has paid to access it. From the standpoint of the consumer, a telephone line is an “invisible” medium for the exchange of conversation, from anyone, and to anyone.

In the same way, money is an “invisible” medium for the exchange of value in a market system. Money is only required because people wish to trade – I do not generally set a “market price” for the vegetables that I grow for my own consumption in my backyard.[14]

Money reflects the degree of actionable demand for goods and services – actionable because we all may want a Lamborghini, but very few of us actually have the money to purchase one.

Quite literally, money is a way of measuring apples versus oranges. How much of my economically productive time is a dozen oranges worth? How many oranges is a dozen apples worth? In the absence of money, the only alternative is direct trade, which is horribly inefficient, for the obvious reason that if I want to trade apples for oranges, I have to find someone who wants to trade oranges for apples.

Like any commodity, money has a price – and this price is called “interest.” If I want to rent a car, rather than buy it, then I do not have to outlay the entire capital cost of the car, but rather I can borrow the car (which really means borrowing the capital cost of the car, since someone else has to have already paid for it) and pay a rental fee.

In the same way, if I want to borrow money, then I have to pay a “rental fee,” which is interest, which equals the amount that I am willing to pay in order to have something sooner rather than later. “Interest” exists because time is the most precious commodity that we have, because it can never be replaced, and without it we are nothing.

I can save for twenty years in order to buy a house outright, but there is no particular value in that; it is true that if I take this approach, I have saved myself a loss of money and interest, but so what? I have only exchanged paying interest for paying rent on some other place to live – both of which are forms of non-recoverable income. Whether I hand my money to a bank or a landlord is immaterial.

If we are afraid that a stateless society will not be able to create or sustain any form of objective monetary system, then what we are really saying is that human beings will refuse to cooperate, even if their lack of cooperation means a complete collapse of the economic system, and the entire basis of their high living standard.

We can easily imagine that in the absence of cash, economic wealth, and growth would collapse by probably ninety-five percent. Let us say that the average annual income of a developed economy is about thirty-five thousand dollars a year – when we reject a stateless society for fear that it cannot sustain a monetary system, we are really saying that human beings would accept an annual drop in income from thirty-five thousand to one thousand, seven hundred fifty rather than cooperate with each other.

To put it another way, if I were willing to pay you thirty-three thousand, two hundred fifty a year – the difference between living in a mud shack and living in a comfortable home, between near starvation and having more than enough food, between plumbing and an outhouse – in order to cooperate with other human beings, would you say “no”?

Of course not.

If human beings do not possess enough rational self-interest to accept a twenty fold increase in their income simply for the sake of participating in some reasonable monetary system, then philosophy, medicine, and society of any kind would be utterly impossible, and you would not be able to read this, because you would have said to yourself that the effort of learning how to read is not worth it. I apologise if I am hammering the point perhaps too hard, but another way of understanding this is to imagine the following scenario.

The Anarchist Credit Card

Let us say that you make thirty-five thousand dollars a year, and one day, you get a letter in the mail from the Anarchist Credit Card Company:

Dear [You]:
We have a very exciting offer for you! If you agree to sign up for the Anarchist Credit Card (ACC), and agree to use it for at least eighty percent of your consumer purchases, we will deposit seven hundred thousand dollars into your ACC account every single year, free of charge, for you to spend as you see fit!
We will also only charge you one percent interest per year…
Would that be an offer that just might interest you? Seven hundred thousand dollars of free money every single year, just for signing up for and using a particular credit card?
Well, this is exactly the anarchist offer!

Given the massive incentives involved in participating in a voluntary monetary system, we can be certain that all but the insane will leap at the opportunity.

Entrepreneurs who can offer people an immediate and permanent twenty-fold increase in their income will not find any shortage of people willing to sign up for their services.

Thus, we can be absolutely and completely sure that a stateless society will have a stable and beneficial monetary system.

We can now spend some time examining how it might work.

What Problem are we Trying to Solve?

It is always fascinating to see what Ayn Rand used to call the “blank out,” which occurs when people defend the existing statist system of currency.

Government predation upon the economy through its monopoly on currency is one of the most savage and destructive aspects of a statist society.

The overprinting of money, which is used to bribe existing special interests, results in inflation, or the loss of purchasing power that results from too many dollars chasing too few goods and services.

If I wanted to start a credit card company, and sent out a business plan to investors informing them that my goal was to ensure that consumers paid five percent more per year for all their purchases, and use that as the basis for my profit, they would laugh at me as insane and ridiculous! “Who would sign up for such a vampiric credit card?” they would chortle, and probably send it around to each other as a joke. Then, these very same investors will run across an anarchist, and end up defending the existing statist currency system, without even noticing the rank contradiction.

This is the true strangeness of the world that only the anarchist can see.

Inflation is a brutal attack upon the poor; deficit financing is also a staggering predation upon the unborn, the financial equivalent of a farmer securing a loan by pledging his unborn future livestock. The reason that statist monetary systems always grow to collapse is the simple financial equation that lies at their root.

The reason that Mafia protection schemes “work” is because the costs of enforcement are far less than the rewards of intimidation. If you ask a restaurant owner for one thousand dollars a month in “protection,” but it only costs you one hundred dollars a month to pay a thug to threaten him, the economic benefit is clear. In effect, the thug’s wages are directly paid for by his victims, and the vast profits go to the thug’s leaders.

The limitation in the profits of organised crime is the balance of power between the thugs and the restaurant owners. If the Mafia predation becomes too great, the owners will simply sell their restaurants and set up shop elsewhere. Alternatively, they can hire their own security guards to protect their restaurants, thus starving the Mafia out of business – or hire their own thugs to threaten the Mafia thugs in return.[15]

However, governments are subject to no such “restrictions.” Moving out of Brooklyn is one thing; moving out of the United States is quite another, due to the time and expense involved. Furthermore, moving to another country does not solve the problem of taxation, because “protection money” will be violently extracted from you no matter where you end up living.

Furthermore, citizens cannot hire security guards to protect them against the police and the military, since they are so out-gunned Thus the limitations of evasion or retaliation simply do not exist in a statist society.

In addition, governments become less and less reliant on direct and immediate taxation over time, since their ability to print money and take out loans against future taxation diminishes the need to please the taxpayer in the short run.

Thus we can see that the Mafia would only continue to grow if they could somehow establish the following situations:

  • The restaurant owners could never leave.
  • The restaurant owners could never defend themselves.
  • The Mafia could take out legal loans against future “protection” profits.
  • The Mafia could print as much money as it wanted – whenever it wanted – and would never face any significant “counterfeit” competition.
  • The Mafia was well-paid to collect this protection money.

This situation would result in a cancerous growth in the size and power of the Mafia, because the significant imbalance between short-term gains and long-term pains would be so great that the deferral of immediate profits would never occur. We may as well expect a single and childless young man who knows that he has only two weeks to live to spend one of those weeks planning and investing in his retirement.

Of course, it is entirely natural and inevitable that the government defines its own actions as virtuous, and the exact same actions as evil and criminal if performed by others. Printing money is an essential and virtuous government function; the private printing of money is the evil act of “counterfeiting” – although both are the creation of fiat currency out of thin air for the private profiteering of particular individuals.

If you’re in the mood for a bit of intellectual fun, it is always enjoyable to try out the following approach when arguing for an anarchist society: describe how you think an anarchist society should run, but smuggle statist principles in, just to see if people notice the substitution.

In the case of currency, I would say something like this:

“The way that I see currency working in a stateless society is that one particular private agency should have the right to print as much money as it wants, whenever it wants – and it should use this power to pay for an army that it would then use to shoot anyone who tried printing competing currencies. This agency should have the right to create debts for people who have not even been born yet, and to charge whatever it wants to the citizenry as a whole, using the future income they will steal from them as collateral for spending in the here and now!”

Naturally, people are shocked and appalled when I propose such a system. They consider it corrupt and evil for money to be created and promulgated in this manner, and immediately respond with myriad examples of the endless and immoral consequences of my proposed system.

Then, they inevitably defend the Federal Reserve…

The “shock treatment” of this sudden reversal has at least the potential to jolt someone’s conscience into a kind of desperately-needed rationality, and help them finally see the savage amount of propaganda that has been inflicted on them.

Monetary Aspects of Stateless Money

It is impossible to know for certain how money will work in a stateless society, but I can at least tell you what I would prefer as a consumer.


One of the greatest – and unnecessary – challenges in existing statist societies is a near-complete inability to know what the future holds in terms of monetary stability. The interest rate goes up and down according to the whims of the leaders; more money is printed, and then less money is printed; the government scoops up more, then less, of available capital in terms of loans; bonds are issued with a variety of interest rates, and so on.

In particular industries, the business environment is even more random. Regulations swell and change, tariffs rise and alter, import restrictions grow and fall, union rules come and go – and the endless teasing possibility of government subsidies and contracts keeps many a faltering business around long after its natural expiry date.

Thus, the first guarantee that I would require from anyone wishing to enrol me in a monetary system would be stability. I do not want to have to worry about whether my money will be worth less next year, or whether its value is going to fluctuate in any substantial manner.


There is a reason that people tend to travel with credit cards, rather than with gift certificates for specific stores and restaurants. Since gift certificates are not as portable, they would have to carry a significant stack of them to spend money from place to place.

When travelling abroad, credit cards are generally preferable to cash, because they do not have to be converted, and are less convenient to steal.

In the same way, gold has been a common currency throughout history because it is rare, portable, strong enough to last (but soft enough to mould), universally valued, easily dividable, and does not lose value when it is split, like a diamond.

Thus, to get my business, any particular currency would have to offer portability. The cost savings for monetary systems tend to take the form of a bell curve – when a currency is not very portable, like a gift certificate, it remains very cheap to produce and consume. When a currency becomes somewhat portable, it operates in a kind of limbo – it is much more expensive than a gift certificate, but not as cheap as a currency that is very portable, which has economies of scale working for it.

For instance, it might be valuable for the retailers in my geographical region to offer me a form of subsidised currency that I could only spend in their stores. This already occurs in used-books stores; you can either take cash or credit – and the credit is much more lucrative, because the store owner gains the additional value of knowing that you will buy only from him.

However, localised currencies face the significant disadvantage of being unusable in transactions that require wider economic reach. It is unlikely that the company that provides your electricity resides in your county, in which case your “local dollars” could not be used to pay your electricity bill, which would cost you additional time and energy to pay the bill from a different account, using a more universal currency.

In a stateless society, your bank could also analyse your spending habits and pro-actively buy particular currencies. If you spend one hundred dollars a month at Store X, it could buy one hundred “Store X dollars” a month, getting a five percent discount, since Store X can book its unspent consumer dollars as an asset and guarantee of future earnings. The bank may charge you one percent for this service, but you would still be four percent ahead.

We must remember that inconvenience breeds entrepreneurs. In a stateless society, an obvious service would be a “transparent” way of paying your bills using the most advantageous currency available. I might have bank accounts with five different kinds of currency – and thus my bank would provide bill payments in a universal format; I would not need to know all the details, but the bank would complete my transaction using the most advantageous currency. In this way, I might have different kinds of money, but that difference would be largely invisible to me, except for the savings I would receive.[16]

Would it be cheaper for me to participate in a currency that would be accepted on the other side of the world? That is very hard to predict ahead of time, because there would be significant cost savings in a universal currency, but there would be significant costs as well. It is hard to imagine that a Chinese food seller would be interested in offering currency-based discounts to a teenager in Zimbabwe, and so the local incentive to provide subsidised currency would be diminished. On the other hand, the significant amount of technical resources required to run any currency would not have to be duplicated.

Of course, since inconvenience breeds entrepreneurs, it is certain that a number of enterprising souls would come up with a framework for running currencies that could be populated with any number of specific currencies, just as websites almost never write their own “shopping cart” code from scratch, but rather populate existing frameworks with their own products and prices.

This approach could very easily overcome the problem of duplicate investments in technical currency frameworks – this, combined with a transparent abstraction layer for bill-paying in multiple currencies, would create an enormously efficient and user-friendly currency system – or systems, to be more precise.


If the above two criteria were met, my next consumer question would be: how secure is this currency?

Security is always a delicate balance between usability and safety. Any online transaction could require you to enter ten unique passwords, each two hundred fifty-five characters long, which would then be virtually unbreakable – the problem is that no one would use it, for the same reason that very few people put twenty locks on their front door, and walk around like some sort of apartment superintendent, their key rings clanking like a suit of chain mail. It certainly is an inconvenience to be robbed, but it is also inconvenient to spend twenty minutes opening and locking your door every day.

I would not require that my currency be perfectly secure (if this were even possible) – I would prefer that this security at least match my preferences and requirements.

Some people are carefree; some people are cautious, and some people are downright paranoid. The paranoid people always prefer to shift the costs of securing their money to the carefree people; in the same way, the carefree people resent paying for all the extra security features that the paranoid prefer. Thus, any effective supplier of a monetary system would very likely have different levels of security and precautions, and would charge the appropriate costs for each level.

Carefree people might choose to have few if any security features at all, and thus pay the least for participating in a monetary system. On the other hand, the paranoid might require voice and fingerprint identification, as well as retina scans, specific dance moves and obscure Urdu phrases in order to complete a transaction. All this specialisation is part and parcel of the inevitable entrepreneurial obsession with providing the most possible value in every conceivable situation, in order to avoid leaving even one thin dime of potential profit on the table.

Of course, a central purpose of the free market is not to create profit, but rather to eliminate it, or at least make it as small as possible. Any firm which overcharges will inevitably be undercut, which is why profits even in successful companies are generally no more than a few percentage points. Thus we can be sure that there will be just the right number of currency systems in a free society – not so many that economic interactions become complicated and cumbersome, but not so few that a lack of competition will allow profits to inflate.

The majority of economic transactions in a free society will be performed electronically, because the transaction costs are far lower – however, cash will always be necessary, for a variety of reasons. The price of cash transactions, being higher, will be reflected in a lack of discounts – or a surcharge – in the price, which will discourage but not eliminate these kinds of interactions. It also seems likely that cash will not carry a guarantee of restitution in the case of loss or theft, in the way that electronic currency would, unless there was a way to electronically associate cash with a particular individual.

At the moment, it may seem that electronic transactions are subjected to a surcharge, while cash transactions are not – however, this is not the case at all.

Credit card companies do charge a few percentage points per transaction, while cash can get you certain kinds of discounts at computer stores, but in reality the exact reverse is true.

Currently, if you take your money and put it under a mattress, it will lose a few percentage points at least per year due to inflation. Furthermore, a certain percentage of your taxes is used to maintain and defend the statist monopoly on currency. It is quite likely – if we include debts and deficits – that you are paying at least ten percent of your income for the “privilege” of participating in a statist currency system. This system has all the characteristics of any brutal and violent monopoly, which is that it is exploitive, random, destructive, cancerous, and on a certain course toward annihilation.

I pay a percentage point or two on most of the donations I receive for Freedomain Radio, which come through PayPal. I assume that in a free market, this would be halved at least – thus I think it is safe to say that currency transactions would be very likely around one percent of the total value, or one tenth of the bare minimum of what you’re paying at the moment for the statist system.

A ninety percent reduction in cost, combined with far greater security features, guaranteed stability in the value of the currency, portability proportional to your requirement – as well as discount incentives to shop in particular areas – would result in an essentially “free” monetary system.[17]


What would happen, though, if a particular currency DRO ended up going bankrupt? Would everyone end up losing his or her life savings?

The standard cliché here – at least for older people – is the “bank run” scene in Depression-era films, where frantic people storm a bank desperate to get their money, once they hear that it might be going out of business.

Of course, this vision is always considered to be negative towards banks, rather than towards the relatively new Federal Reserve, which was in charge of the currency for the entire nation. In the same way, if a foreign enemy were to bomb farm fields in the Midwest, it is doubtless the greedy capitalist grocery store owners who would be blamed and vilified in perpetuity for the resulting price increases.

Let us say that some greedy or improvident DRO currency provider started running their company poorly – what would happen?

Well, the first thing that would happen is that their investors and board of directors would notice.

The first thing that I would require from the group in charge of any currency system I was involved in would be that they hold the majority of their savings in the currency system that they are trying to sell to me. I would demand external audits to ensure that at least eighty percent of their savings were in their own currency system. The moment that any of these people began to sell off their own currency holdings, it would be a clear indication that they no longer had faith in the long-term viability of what they were selling.

Secondly, I would require an immediate sale of the company should its asset/debt ratio exceed a very conservative number. How would a sale help me? Well, if someone wanted to buy a distressed currency company, he or she would only want to do so if the existing customer base could be retained. In other words, additional benefits would have to be offered to the customers in order to retain them – a fee holiday, some sort of cash bonus or something like that. In order to keep me from withdrawing my money from this currency system, someone would have to pay me to accept the increased risk if it was in distress.

Thirdly, I would demand that any significant losses come directly out of the bank accounts and assets of those in charge of the currency. If I ended up only being paid eighty cents on the dollar, because they had screwed up the business, I would make damn sure that they ended up with zero cents on the dollar, and living in a van down by the river as well!

This would eliminate the incentive for managers to prey upon the company for personal gain. No matter how badly their customers ended up, they would end up in a far worse situation.

Fourthly, I would demand the right to withdraw all of my money at any time I wanted.

Let us now trace the likely sequence of events that would occur if a currency company got into financial trouble.

As mentioned above, the leadership and investors would be very quickly aware of any potential problem, and would be equally if not painfully aware that if a whiff of scandal or instability leaked into the marketplace, their entire investment may very well go down the drain.

Since voluntarism and a free society is all about preventing problems, rather than curing them – the direct opposite of statism, which is all about inventing problems, and then exacerbating them – managers and investors would be hyper-vigilant in protecting the financial soundness of their organisation. The success of any voluntary money system starts and ends with credibility and trust – the moment that either becomes even remotely compromised, the entire system is called into question. Competitors will always be looking for weaknesses in other monetary systems, and will provide incentives to lure customers away. Thus the investors and managers would put every conceivable check and balance in place to ensure that the system remained trustworthy.

Should some upcoming problem escape them, however, and Company XYZ were to encounter real financial difficulties, what would happen?

Well, when any company hits a financial problem, it is either because it is no longer viable, or it is being badly run. Since we have already established the innate value of and requirement for currency, we know that XYZ cannot be in trouble because no one needs its services any more – thus its difficulties must result from being badly run.

If a company is being badly run, it can either reform itself from within, or it cannot.

If XYZ can reform its management practices from within, then bankruptcy will not be the result of its misstep – some firings, some dropped bonuses, and some cutbacks, but not bankruptcy. Customers might not even have a clear sense that anything is amiss at all.

Ah, but what happens if XYZ cannot reform itself from within?

In any free market system, there exists a plethora of so-called “raiders” who are constantly looking for poorly-run companies to snap up and improve. These raiders would doubtlessly and very quickly sniff out the problems within the company, and would try to take it over in some manner.

If I were one of these raiders, I would face a very difficult balancing act, which is that it would be advantageous for me to leak the problems XYZ was experiencing, in order to drive down the value of the company and pick it up for less money – however, such a leak would also create a panic among the customers, which could largely eliminate the value of the company.

Thus, my best strategy would be to leak the problems at XYZ – and simultaneously offer a guarantee to existing customers that their currency would be protected, as well as some sort of incentive or bonus to retain their allegiance. I would be willing to put all of this in writing, of course, in a binding contract, which would take effect the moment I got control of the company.

This would cause a temporary dip in the price of XYZ, thus allowing me to gain control of it more cheaply – and would at least help alleviate the fears of existing customers by providing a binding guarantee to retain the value of their money.

However, as a raider, I would be facing significant competition from another source – other currency companies.

Company ABC, on hearing about any possible problems with XYZ, would immediately take out full-page advertisements, offering significant bonuses to any XYZ customers who transferred their money to the ABC Company. There would be so many “lifeboat” companies offering to rescue XYZ customers at par or greater that such customers would doubtless be able to walk to shore!

It could be the case that whatever solution any individual customer chooses might not pan out – in other words, a raider might offer a five percent bonus to currency holdings, and then fail to deliver it, falter in their execution, and customers might end up having to pull out at eighty or ninety cents on the dollar.

Colour me cold, but I cannot see the innate tragedy in such a situation. Anyone who offers you “free” money does so with the implicit – though perhaps unspoken – background of risk. If I decide to leave my money in a troubled company, in the hopes of gaining five percent more, and I end up getting ten percent less, it is hard to see how that is significantly different from investing in a stock or a bond – or a horse, for that matter.

Thus, there is no conceivable situation in which currency customers would wake up one day to find their savings utterly wiped out – there is so much profit in customer retention, particularly in currency situations, that a literal stampede of entrepreneurs would attempt to insert themselves into the equation, to the benefit of the existing customers.

Compared to What?

Doubtlessly there are ten thousand churning minds out there at this very moment, chanting their heated way through every conceivable possibility that might result in financial ruin for customers of the XYZ Currency Company. And perhaps such a possibility exists – but again, this is an argument for anarchism, not against it.

Any farmer can fail to produce crops at any particular time – this is a natural reality and risk of farming, or indeed of any human endeavour.

Since any farmer can fail to produce crops, the only way that we can guarantee – as best as possible – the continual supply of crops is to have a large number of farmers. If we only have one farmer for the entire world – to take an exaggerated example – then the moment that the inevitable happens, and that farmer fails to produce crops, worldwide starvation inevitably results.

This distribution of risk is an essential part of any rational strategy to reduce danger. If you are only ever allowed to buy one stock your whole life long, then you may do very well, but you also may do very badly. Diversification is the key to minimising risk.

In the same way, when we have a State monopoly on currency, and we accept that currency organisations can fail from time to time – and certainly there is no shortage in history of examples of States corrupting and destroying their currencies – we have truly all of our eggs in one very precarious basket.

If we are truly concerned about currency failure in a free market system, then the worst possible solution we could come up with would be to create a violent monopoly over a single currency. If we are concerned about farm failures, then obviously the solution is to have as many farms as economically possible, so that those that fail can be shored up by those that succeed.

In other words, if currency failure is not a problem, then a stateless society is the best solution.

If currency failure is a problem – then a stateless society is the best solution.

Saving Children: The Stateless Society and the Protection of the Helpless

All moralists interested in improving society must answer the most essential questions about human motivation, and show how their proposed solutions will create a rational framework of incentives, punishments, and rewards that further moral goals generally accepted as good. The twentieth century clearly showed that there is no possibility for ideology to invent or create an “ideal human” – and that all such attempts generally create a hell on earth. Utopian thinkers must work with people as they are, and recognise the inevitability of self-interest and the positive responses to incentives that characterise the human soul.

In the previous chapters on the stateless society, I have shown how society can operate in the absence of a centralised government. One question that repeatedly arises in response to these possibilities has been the following:

In the absence of a centralised State-run police force and law/court system, how can child abuse be prevented, or at least minimised?

When discussing ethical issues, it is essential to deal with what is arguably the greatest evil within human society: the abuse of children by their parents or primary caregivers. If we can create a society that treats children better than they are currently treated, we have created a goal or a destination worthy of the considerable efforts it will take to achieve it.

In any post-tribal society, family life generally becomes very opaque. Great evils can be committed within the family home, in isolation from the general view of society, and children by their very nature can do almost nothing to protect themselves. Excepting grave or obvious physical injuries, governmental agencies rarely get involved – and even when such agencies do get involved, it is far from clear that their involvement results in a better situation for the victimised child.

As we know from totalitarian regimes, any situation which combines an extreme disparity in authority, with a lack of accountability for those in power, tends to increase abuse. This does not mean that all parents are abusive, of course, but it does mean that in situations where abusive tendencies do exist, the power differential between parents and children, combined with the reality that few parents face any legal or direct financial consequences for their abuse, tends to prolong and exacerbate child maltreatment.

Due to this situation, it is hard to say that the existing system works to maximise the protection and security of children. While there is no perfect utopia wherein all children will be loved, nurtured, and protected, any society which contains strong positive incentives for good parenting is a vast improvement over the current situation. Since children are by far the most vulnerable members of society, if a stateless society can protect them better than a statist society, it is perhaps the greatest moral benefit that anarchism can bring to bear on the human condition.

Before discussing how a stateless society can far better protect children, let us first look at how existing societies create problems for children.

  1. The existence of the welfare state has directly contributed to the rise of single-parent families. Abuse is generally more prevalent in single-parent families.
  2. The war on drugs has created extremely unstable, volatile, and violent social circumstances.
  3. Government-run housing projects have gathered together unstable single mothers and unstable drug dealers (in fact, housing projects are sometimes called “girlfriend farms” for such men) – thus exposing children to highly dysfunctional role models.
  4. Public school education often creates unstable and dangerous environments for children, where younger children in particular are easy prey for bullies.
  5. The rise of taxation has reduced take-home income to the point where, for many families, both parents need to work. This has left children vulnerable to abuse by outside caregivers – and often leads to an excess of unsupervised time for children in their early teens.
  6. Government-run social agencies are no better at protecting children than any other State agencies are at protecting the environment, helping the poor, healing the sick, or any of the other self-appointed “missions” that bureaucrats devise for themselves.
  7. If a badly-raised child becomes a criminal, parents are not directly liable for the resulting social, medical, legal or property costs.
  8. If, through their bad parenting, parents end up alienating their children, they face far fewer financial problems in their old age, due to State-run social security benefits.

It is clear, then, that the existing system has room for improvement, let us say. How, then, does a stateless society better encourage good parenting?

First of all, in a stateless society, disputes between people are mediated by DROs. Is there any way that DROs can profitably intervene in a situation where there are deteriorating relationships between parent and child, or where the child is being directly harmed?

One of the primary reasons for the existence of DROs is to protect citizens against unacceptable levels of risk. In a free society, if a child goes off the rails and begins hurting other people or damaging their property, DROs will hold the parents responsible. To take a true disaster scenario, if your child paralyses another child, you as a parent will be on the hook for a lifetime of medical bills, rehabilitation, and equipment. Given that childhood – even in the absence of malice – is a physically risky time, few parents would accept the risk of having no protection for any potential injuries their child might commit or experience.

Like any insurance company, DROs would lower rates for children who were less at risk. An insurance company would prefer that your child be active – or they would face the health problems which naturally arise from inactivity – but not that your child be aggressive, especially towards other children. Children who learned positive negotiation skills – or at least did not hit, throw, punch, or push other children – would be cheaper to insure. Parents who raised aggressive children would be charged far more in insurance than those who raise more peaceful offspring.

Some forms of child abuse do not generally result in destructive tendencies towards others, but rather towards the self. Anorexia nervosa, self-mutilation, excessive piercings, and hyper-dangerous activities are all signs that a child has experienced specific forms of abuse – usually sexual in nature. Given that DROs also provide health insurance, it seems likely that DROs would do as much as possible to prevent and detect these kinds of activities, since they scarcely profit from self-destructive behaviour.

At this point, you may be thinking that bad parents would scarcely stay in a DRO system, since it would be very expensive to insure their children. This is a natural response, but incorrect.

For instance, most parents prefer to have their children educated – even parents who abuse their children. Most schools would doubtless prefer DRO coverage for their students, because “unprotected” children would be more risky to have around. Thus, in order to get their children educated, parents have to have a DRO contract that protects them. If you are a bad parent, it will be almost impossible to avoid the significant costs imposed upon you.

Furthermore, I would prefer that my DRO refuse to insure parents without also insuring their children, because I care deeply about the health and well-being of children.

I am sure that I am not alone in this desire.

Proactive Protection

Currently, when you apply for medical insurance in the United States, you are subjected to a battery of tests aimed at determining your general level of health, and so your future medical risks. Similarly, life insurance costs usually depend on health indicators such as smoking, blood pressure, and cholesterol levels. Also, the earlier that you buy insurance, the lower your initial payments are.

Thus, we can imagine that a variety of DROs will approach new parents with a number of different insurance offers, all designed to protect their children.

These DROs will be eager to offer the lowest possible rates for the parents. How can they achieve that? When a young man applies for his first car insurance, the insurance company usually takes into account any driving courses that he has taken. Similarly, DROs will offer lower rates to parents who take specific training on how to best raise children to be peaceful, safe, and healthy members of society. DROs will also work hard to determine exactly which parenting practices are most likely to produce such happy children.

Children need very specific guidelines and parenting skills at different stages in their development. Given that parents are likely to want to keep insurance coverage on their children until they turn eighteen – and that DROs are very interested in preventing problems over the long run – it also seems likely that DROs will continue to provide lower-cost coverage if parents update their parenting skills periodically.

There are other significant indicators that parenting is becoming problematic. For instance, parental substance abuse virtually guarantees that the children will be abused or neglected. DROs will offer far lower rates to parents who have either never shown these tendencies, or if they have, are willing to subject themselves to rehabilitation and random testing to prove that they are still clean. Remember that these tests are in no way intrusive in nature – parents can always refuse to take such tests, and simply accept the consequences.

What about the children? Since prevention is by far the better part of cure, their insurance costs will remain the lowest if potential problems can be identified before they manifest themselves in costly antisocial behaviour. With the young in particular, early intervention is the key. How can DROs best keep the costs low for these children? Intermittent psychological and behavioural assessments would be a good start, as would proactive parenting classes. Naturally, no parents would ever be required to submit their children for assessment – they would just pay for the increased costs if they did not.

If a child displayed truly problematic behaviour, DROs would threaten to drop family coverage entirely unless the parents accepted intervention.

This combination of research, financial incentives, and constant updating creates three partners in the raising of children – parents who wish to keep their children happy and their insurance costs as low as possible, DROs who wish to prevent problems rather than pay for their re-mediation, and experts who constantly research and communicate best practices in parenting.

Parents who were themselves poorly raised often do not understand the best way to raise their own children. Lacking access to objective information and best practices, they often repeat the same mistakes that were inflicted upon them. Parents currently reluctant to “lift the blinds” on their parenting and familial circumstances would be presented with strong and positive financial incentives to do so. Parents who refused any kind of DRO coverage for their children – or who refused reasonable interventions to help them improve their parenting – would face negative repercussions from the DRO system, which have been discussed at length above. Thus it seems highly likely that a stateless society would create a wide variety of social interests all focused on improving the parenting of children, and ensuring the children were raised to be as peaceful, happy, and productive as possible.

A Parenting Fable

There is an old fable that goes something like this: the Sun and the Wind are having an argument as to which one of them is stronger. The Wind boasts that he is able to uproot trees, tear the roofs off houses, and throw down power lines. The Sun looks sceptical. Below them, as they argue, a man is walking along a country road. “Ah”, says the Wind, “I bet I can tear the cloak right off this man’s back!” “Go ahead,” smiles the Sun. The Wind goes down and tears around this man, attempting to pry his cloak off his back. Naturally, the man simply clutches his cloak tighter, and the Wind can find no purchase. Finally, exhausted, the Wind withdraws. “Let me show you how it’s done,” says the Sun. Bursting into full brilliance, the Sun generates enormous heat, and the man begins to sweat. After ten minutes or so, the man sighs, wipes his brow – and slowly shrugs off his cloak.

This parable contains a powerful message about the difference between a stateless society, and society ruled by centralised government. The government always tries to force people to do things, which only increases their resistance and secrecy with regard to State power. Human society, though, only advances when a multiplicity of competing voluntary agencies create and maintain circumstances which truly benefit virtue and punish vice. This is an apt description of the free market – and it is also a description of the manner in which a stateless society will continually work to improve the safety and happiness of children.

Preventing Tragedy – An Anarchic Analysis of Abortion

Abortion is always a tragedy, and one of the saddest occurrences on this earth. Government “solutions” are also always disastrous, and so it is hard to understand how combining a tragedy with a disaster can create any kind of positive outcome. Mixing arsenic with mercury does not solve the problem of poison – and combining the violent inefficiency of the State with the tragedy of abortion does not solve the problem of family planning.

All those wishing to reduce the incidence of abortion – surely all rational and sensitive souls – must recognise that giving the government the power to combat abortion also gives it the power to promote abortion, which it currently does to a hideous degree. The best way to reduce the incidence of abortion is to withdraw State subsidies and allow the economic and social consequences to accrue to those who engage in sexually risky behaviours.

Reducing the incidence of abortion is not very complicated, since it is subject to the same laws of supply and demand as any other human activity. Simply put, any activity that is subsidised will increase, and any activity that is taxed will decrease. The incidence of abortion will go down only when abortion is no longer subsidised – and when responsible family planning is no longer taxed.

Abortion is very rare in a stable marriage, and is generally only performed under an extremity of financial or medical distress. The vast majority of abortions occur to single women, or women in unstable relationships. Particularly over the past fifty-odd years, the role of sexuality has been forcibly separated from marriage and procreation. This is an entirely predictable – although perfectly horrible – development, given the role of the State in breaking down stable family structures.

Subsidising Abortion

In general, any program which subsidies pregnancy in the absence of a stable family structure will also tend to encourage abortion. In particular, State subsidies which encourage the pursuit of sexual pleasure in the absence of virtue, financial stability (or at least opportunity), and personal responsibility will also tend to increase the number of abortions. When the financial and social consequences of pregnancy are mitigated through State programs, risky sexual behaviours will inevitably increase – resulting in an increase of both pregnancies and abortions.

Controlling or mitigating the financial consequences of unwanted pregnancies directly alters the kinds of decisions that women make about sexual practices and partners. Having a child out of wedlock is one of the most costly decisions a woman can make, insofar as it tends to significantly arrest her educational, emotional, and career development. The physical impossibility of being able to work for money and care for an infant at the same time reduces most young single mothers to a life of dependency, exhaustion, and poverty. The chance of meeting a good man when already burdened with a baby lowers a single mother’s chances for a good marriage. Not only does she come with a baby and significant expenses, but she probably also has few economic skills to offer. Plus, it is hard to date when you are breastfeeding. For these and many other reasons, single mothers often end up settling for unstable, unreliable men, just to have any sort of man around. Inevitably, the chances of having another baby thus increase – sadly, without a corresponding increase in relational stability.

This is why, in the past, society expended considerable effort to ensure that women did not get pregnant before marriage. The staggering financial losses incurred by childbirth without commitment usually accrued to the new grandparents, and so it was those parents who tried to do their best to prevent such a disaster. This need, being common to all parents, was generally shared across society, creating a near-impenetrable web of sexual chaperoning.[18]

It currently costs about two hundred fifty thousand dollars to bring a child from birth to age eighteen, under the current system. In a free market environment, with fully privatised and charity-supported education, health care, housing, and so on, this cost will decrease of course (since all taxation would cease, and competition increase) – but it would still be considerable.

Babies, in short, are expensive. However, when the welfare state enters the equation, all of the above changes. Now, if a young woman gets pregnant out of wedlock, she can survive quite nicely. She will very likely never be rich – or probably even middle class – but she will be able to survive on some combination of any of the hundreds of State subsidies which directly benefit poor mothers.

In addition to the usual suspects – welfare, Medicare, child supplements, food stamps – there are many other ways she can lean on the State. When her child grows up, the State will also pay for his or her education. Does she need to take the bus? That is subsidised as well. Drop her child off for a story at the library? Subsidised day-care is subsidised as well, as is her apartment through rent control or public housing. Dental problems? No problem – subsidies take care of most if not all of the bills. The amount of money and resources provided to single mothers by the State is literally staggering! And when she gets old? Not to worry if she has been unable to save much money, or has alienated her children – Social Security will take care of her!

Since getting pregnant while unmarried is no longer a “life or death” issue, a young woman has far less incentive to keep her womb to herself until the right man comes along. She will not have a great life economically, but she will survive just fine – and also nicely avoid having to slave away at low-rent jobs. If you were staring at years of McJobs before you got any kind of decent career, “Plan B for Baby” might start looking pretty attractive, too!

Through such State-enforced subsidies, young women are seduced into self-destructive decisions, and sink into an underworld of dependent and dangerous lifestyles. If they have daughters, those girls will grow up in a world filled with unstable men, and without a loyal father’s love and guidance. What are the odds of such girls growing up to be sexually responsible? Not nil, certainly, but not high either.

As a result of the increasing subsidisation of poor sexual choices, the stage is set for rising numbers of abortions – and, since having an unnecessary abortion is one of the most egregious examples of preferring short-term gains to long-term gains, subsidising error is scarcely the best method of encouraging greater rationality.

Taxing Family Planning

It is very hard to make good decisions when everyone around you is making bad decisions. Either you go along, and jump right into their pit of error, or you withdraw, provoking social ostracism and, all too often, outright hostility. When, encouraged by the endless subsidies of State programs, a certain number of unplanned pregnancies are reached, they become the norm, and vaguely something “not to be criticised.” Young women, in order to keep their friends and not be attacked as “superior,” often decide that it is cool to engage in sexually risky activities. When combined with the financial incentives outlined above, the “social acceptance” motive proves overwhelming for far too many women.

What alternatives are available to those young women who decide to take the “straight and narrow” course and avoid risky behaviours? What kind of opportunities are out there? Minimum wages, State-monopoly unions, over-regulation, crippling taxation, mind-numbing apprenticeship programs, and a thousand other political factors have virtually killed off good job opportunities for the poor and unskilled. Jobs are scarce, taxes are high, and careers almost impossible. State schools fail to train poor youngsters for anything useful, and higher education is probably out of the picture as well. So it is fairly safe to say that productive and honourable lifestyles are as thwarted as irresponsibility and instant gratification are encouraged.

The Men

So far we have only been talking about women – but what about the men? How has male behaviour been affected by these fundamental reversals in social values? Well, as the negative effects of sexual indiscretion become smaller and smaller, men also become conditioned to expect, let us say, “short term” interactions with the fairer sex. As more and more women decide to engage in risky sex without requiring a commitment, the value of education, integrity, and hard work for men goes down proportionally. As male virtue becomes debased, other values, more sinister and shallow, take their place. Women go for “hot” guys, or guys with lots of cash to spend, or with the kind of predatory status that comes with gang membership. The entire ecosystem of sexual attraction and stable provision is turned upside down, and the men formerly viewed as losers become winners – and vice versa.

Thus, a woman looking for a “good” man faces a distinct scarcity of such paragons – and may also face the mockery of her peers if she chooses a geeky provider over a shifty stud-muffin. “Good men” become more scarce – and objects of ridicule to boot. Female attractiveness, formerly the coin that purchased male loyalty, now becomes a magnet for shallow and unstable man-boys looking for another notch in their belts.

Problems such as abortion are so complex that they cannot be solved without reference to the shifting nature of rewards and punishments created by an ever-growing and ever-violent State. Like most social problems, the solution must be voluntary, and based on the financial, social, and moral realities of biology and economics.


  1. We can see this kind of phenomenon, to a smaller degree, in the fact that almost no malls are built without parking spaces, or houses without driveways and garages.
  2. That is the difference between the government and the free market – the government does have a monopoly on you, because it initiates the use of force against you.
  3. This highlights again a very essential aspect of understanding how a stateless society works, which is that obvious worries will always be addressed and alleviated ahead of time. If people are afraid that someone is going to jack up their road prices, they will simply negotiate fixed fees ahead of time – which is the essence of mortgages and car payments of course.
  4. How could this be enforced? A number of options spring to mind, most notably that currency companies would not process petrol purchases from uninsured drivers.
  5. More importantly, if I have a family history of prostate cancer, I cannot find out which doctor has been most successful in preventing it from occurring.
  6. We could easily make the same arguments about the software and computer industry, with even more deleterious results!
  7. Please note that in this section, I am talking about the free market insurance companies of the future, not the mercantilist semi-statist monsters of the present.
  8. To be slightly more precise, the insurance company does not exactly want me to quit smoking, but rather wants to make money out of insuring me. An insurance company can as easily make money insuring smokers as it can non-smokers – however, insurance companies know that customers are more likely to stay if their rates can be reduced, which means creating incentives to quit smoking.
  9. This is an enormous topic, but I would briefly like to mention that any discussion of free-market health-care provision – and insurance companies in particular – will doubtless draw comparisons to the existing system within the United States. This “system” has very little to do with the free market, in that more than fifty cents of every health care dollar is spent by the government, which violently protects a monopolistic doctor’s union called the American Medical Association, and also hyper-regulates the medical field with literally hundreds of thousands of laws, rules, directives, and requirements. The incentive of private profit, combined with the corrupt largesse of a public purse, is technically called “fascism,” rather than freedom.
  10. I have experienced this directly in my career. Most investors require senior managers to be insured against illness, to protect their investment – in order to qualify for this, I had to go through a full check-up by a private agency, which reviewed my blood work, my history, and ran a wide battery of tests.
  11. Women who can’t afford “rape protection” will be subsidised by charities – or lawyers will represent them pro bono in return for a cut of the restitution.
  12. It seems highly likely that lie detectors will be admissible, since they are more than ninety percent accurate when used correctly, which is better than most witnesses. The reason that they are not admissible now is that they would make lawyers less valuable, and also would reveal the degree to which the State police lie.
  13. I hope that we are far enough along in our understanding to recognise an “Argument from Apocalypse” when we see it!.
  14. Although my time certainly has a form of “price” of course…
  15. In “The Godfather,” for instance, a young Corleone decided to kill a thug rather than pay him.
  16. Note that these different currencies would also be a disincentive for invasion, as mentioned above.
  17. It would also doubtless be the case that you could choose not to pay a penny in fees to use a currency, if you were willing to submit to advertisements on that currency!
  18. Social self-government based on individual incentives is the only way that social problems have been – or ever will be – solved to any degree of stability.